Eight Capital Ptnrs. - Final Results for the year ended 31 December 2023
02/07/2024 07:00
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RNS Number : 7074U Eight Capital Partners PLC 02 July 2024
02 July 2024
Eight Capital Partners plc
("ECP", "Eight Capital" or "the Company")
Annual Report and Financial Statements
For the year ended 31 December 2023
Eight Capital Partners plc (AQSE: ECP), the financial services operating
company that aims to grow revenue through businesses engaged in "Fintech"
operations including in the digital banking and lending sectors, announces is
pleased to announce its final results for the year ended 31 December 2023. An
extract from the Company's audited report and accounts can be found below.
The complete annual report and accounts will shortly be available from the
Company's website and will be sent to all shareholders.
A separate announcement providing details of the 2023 Annual General Meeting
will be made in the next days.
Following publication of these results, the Company's shares will be restored
to trading on the AQSE Growth Market shortly.
The Directors of the Company accept responsibility for the content of this
announcement.
For further information, please visit www.eight.capital or contact:
This announcement contains inside information for the purposes of the UK
Market Abuse Regulation and the Directors of the Company are responsible for
the release of this announcement.
Eight Capital Partners plc info@eight.capital
Dominic White, Chairman
Luciano Maranzana, Group CEO
Cairn Financial Advisers LLP +44 20 7213 0880
AQSE Corporate Adviser
Jo Turner / Liam Murray
About Eight Capital Partners:
Eight Capital partners plc is a financial services operating company that aims
to grow revenue through businesses engaged in "Fintech" operations including
in the digital banking and lending sectors.
ECP seeks to grow its group revenue in these high growth fintech sub-sectors,
which it expects to also increase in value, such that they generate an
attractive rate of return for shareholders, predominantly through capital
appreciation.
www.eight.capital (http://www.eight.capital)
Eight Capital Partners operates two subsidiary businesses:
Epsion Capital:
Epsion Capital is an independent corporate advisory firm based in London with
an extensive experience in UK and European capital markets. The team of senior
and experienced ECM and M&A professionals is specialised across multiple
markets, sectors and geographies and it prides itself on a commercial approach
that allows the clients to achieve their growth ambitions.
www.epsioncapital.com (http://www.epsioncapital.com/)
Innovative Finance:
Innovative Finance is a corporate finance advisory business that develops
mergers and acquisitions and financing solutions across multiple sectors,
primarily in Europe, with access to international transactions. It focuses on
investments in Europe which are linked to technological developments in the
financial services industry. www.innovfinance.com
(http://www.innovfinance.com)
Dear Shareholder,
This is the report on Eight Capital Partners Plc (the Group or ECP) financial
results for the year ended 31 December 2023 and on a number of corporate
developments that have occurred during the year and since the year end.
Vision
2023 was an important year for Eight Capital. Having successfully transitioned
into a financial services group in July 2021, it completed a reorganisation of
its debt, converting the major part into equity and thereby strengthening its
Balance Sheet considerably. It has a clear strategy in place for the
transformation of the business in terms of its size, market value and
influence within the fintech sector of financial services.
ECP's strategy centres around digital lending and other services to SMEs.
The over-riding theme is that there is an inadequate provision of SME lending
at reasonable pricing compared to high and increasing demand. The Company
intends to create a pan-European (including the UK) SME digital lending
platform with a banking licence, with the aim of establishing itself as a
top-three SME working capital solutions and service provider in each of its
core markets. It is working to achieve this through the acquisition of a
growing digital SME lender and the acquisition and process integration of a
NeoBank. Together this would form an integrated capital sourcing, product
manufacturing and distribution machine. This may happen through minority or
majority investments.
There are successful examples of fast growing digital lending fintech
businesses that own banks in the B2C lending space, such as Klarna. ECP's
plan is to deliver a similar business model into the B2B arena in the medium
term.
The Company believes that SMEs continue to be under served by the traditional
financial services sector and are sometimes overlooked by larger funding
institutions, or, when managed through a traditional banking process, are
perceived as difficult to underwrite and therefore expensive to fund. There
are significant benefits for SMEs using fintech systems and innovatively
structured capital solutions to better access capital, either for direct
investment or to assist with their working capital management.
ECP's objective is to own and integrate product manufacturing and distribution
through a fintech digital lender with capital origination and management
through a NeoBank to deliver to B2B customers faster, cheaper and more
efficient capital solutions through the use of technology.
The Company has reviewed a number of opportunities in the last 12 months
including starting due diligence on three specific acquisitions. One of
these, a fintech operator, has been rejected by the Company and one of the two
others, a European NeoBank, remains a potential acquisition. The pipeline is
strong following fintech market changes over the last 24 months which have
reduced pricing and increased availability.
Given the size of the potential opportunity and need to move quickly once an
agreement has been made by the Company to acquire a business, ECP has started
discussions with its current and a series of potential new shareholders and
funding partners relating to raising acquisition equity and debt finance.
2023 Results
Through its two subsidiaries, the Group recorded revenues for the year under
review of £602,000 (2022: £895,000). This income was further supplemented
by ECP itself providing management services to certain investees and thereby
recovering £40,000 (2022: £84,000) of overhead costs. Finance income less
finance expenses was a net surplus of £264,000 (2022: surplus £1,979,000).
The Company together with its advisors has reviewed its investment holdings
and expects to recover much of the value associated with them. However,
given the environment of higher inflation, higher interest rates as well as
geopolitical uncertainty that are resulting in economic commercial headwinds,
as well as the perceived instability of some of its debtors, the Company has
applied fair value adjustments and impairment charges where necessary. The
net movement in fair value of both realised and unrealised gains and losses on
investments at fair value was a loss of £14,562,000 (2022: £2,638,000 gain)
comprising £14,010,000 of unrealised fair value loss for the year in relation
to the 1AF2 bond (explained further below), and £552,000 in relation to other
investments. An impairment of other receivables of £554k held at amortised
cost was recognised (2022: £nil).
Expenses for the year increased to £2,019,000 from £1,119,000 in 2022 mainly
due to higher levels of external corporate finance and due diligence activity
relating to the execution of the strategy, and foreign exchange losses; and
the Group result for the year was a loss before taxation of £18,946,000
(2022: profit before tax of £4,638,000).
Subsidiary activities
Epsion Capital Ltd ("Epsion"), our wholly owned UK Corporate Finance
subsidiary, derived its income primarily from advising on M&A transactions
generating £174,000 intra group revenue. Innovative Finance S.r.l
("InnFin") our wholly owned Italian Corporate Finance subsidiary also
generated advisory fees totalling circa £596,000 in the year (2022:
£630,000). At the end of 2023, it was decided to merge the activities of
Epsion and InnFin under the Epsion umbrella through a transfer of activities
and subsequent closing of the Italian subsidiary. This is expected to
deliver both operating efficiencies and cost savings. Activities have now
consolidated under Epsion, and the Italian entity has started its solvent
liquidation. During the year management assessed the value of the combined
Epsion and InnFin business and a goodwill impairment loss of £2,717k (2022:
£1,150k) was recognised.
Update on key asset: 1AF2 Bond repayment 2024
During 2021, the Company invested €40 million into a bond issued by 1AF2
Ltd, yielding 2.5% per annum with a repayment date of 22 July 2024. In the
current year, the Discounted Cash Flow ("DCF") valuation methodology has been
based on cash flows available from the underlying security package of listed
securities which has valued the bond at £13.5m. This has been used as the
fair value at year end. The bond remains live until 22 July 2024 which is its
natural expiry date and the Company understands that the liquidation of the
security package is not the issuer's intended method of repayment of the
bond. However, based on management's judgement and estimates at year end,
given the proximity of the bond's expiry date, and based on conversations with
the issuer which are ongoing, the Company has used the market valuation of the
public assets held in the security package as the basis for the 1AF2 bond
valuation in these accounts, a fair value loss of £14.0m in the year. In
the year the Company received a number of coupon interest payments in the form
of listed shares as per the bond agreement.
Changes in Management Team
During the year under review, the Group has seen a number of changes to its
Senior team.
In February 2023, Luciano Maranzana was appointed as Group CEO having been
Managing Director of Innovative Finance since August 2022.
Mr Maranzana has over 30 years of experience, primarily in real estate asset
management where he has held several leading positions such as Managing
Director, in Italy and Spain for UK property group, Hammerson plc and as Fund
Manager at Pirelli Real Estate Sgr. where he was responsible for a quoted real
estate fund, launching, structuring and managing the property portfolio,
investor relations and liquidity investments / divestments. Mr Maranzana was
Managing Director of Valore Reale Sgr Spa, a closed-end real estate fund
management company with 20 funds underwritten and fully invested with combined
assets under management of more than £1.8 billion and Director of Negentropy
Capital Partners Italia, a London-based alternative investment management and
advisory company focused on opportunistic credit and real estate assets.
Also in February 2023, Gemma Godfrey was appointed to the board as an
independent non executive director. Ms Godfrey is an experienced non executive
director and independent consultant, having founded two digital businesses.
As a former founder and CEO of an FCA regulated digital investing business
that was acquired by a global insurer, she went on to launch a digital media
service on behalf of News UK.
Dominic White
Chairman
02 July 2024
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2023
2023 2022
£000 £000
Revenue 602 895
Other operating income 40 84
Corporate advisory fees (599) -
Foreign exchange (losses) / gains (244) 259
General expenses (402) (358)
Legal and professional fees (355) (420)
Rent and rates (84) (107)
Staff costs (335) (493)
Net change in unrealised/realised gains and losses on investments at fair (14,562) 2,638
value through profit or loss
Goodwill impairment (2,717) (1,150)
Impairment of other receivables recognised at amortised cost (554) -
Release of contingent consideration - 1,311
(Loss) / profit from operations (19,210) 2,659
Finance income 874 876
Finance expense including debt modification gain or loss (610) 1,103
(Loss) / profit before tax (18,946) 4,638
Taxation - -
(Loss) / profit for the year (18,946) 4,638
Other comprehensive income - -
Total comprehensive income (18,946) 4,638
2023 2022
Pence Pence
Earnings per share attributable to the ordinary equity holders of the parent
(0.01) 0.02
Basic
Diluted (0.01) 0.02
A summary of the restatement of the 2022 Consolidated Statement of Profit or
Loss and Other Comprehensive Income is set out in the notes.
The notes form part of these financial statements.
Consolidated Statement of Financial Position
As at 31 December 2023
2023 2022
£000 £000
Assets
Non‑current assets
Property, plant and equipment 15 22
Intangible assets - 2,728
Trade and other receivables - 311
15 3,061
Current assets
Trade and other receivables 487 1,062
Cash and cash equivalents 35 22
Current asset investments 14,517 28,785
15,039 29,869
Total assets 15,054 32,930
Liabilities
Non‑current liabilities
Loans and borrowings - 402
Long term bonds 897 5,807
897 6,209
Current liabilities
Trade and other liabilities 1,362 468
Loans and borrowings - 970
1,362 1,438
Total liabilities 2,259 7,647
Net assets 12,795 25,283
Issued capital and reserves attributable to owners of the parent
20,042 17,484
Share capital
21,999 18,099
Share premium reserve
84 84
Convertible debt option reserve
(29,330) (10,384)
Retained earnings
TOTAL EQUITY
12,795 25,283
The financial statements were approved and authorised for issue by the board
of directors on 2 July 2024 and were signed on its behalf by:
Dominic White
Chairman
The notes form part of these financial statements.
Consolidated Statement of Changes in Equity
For the year ended 31 December 2023
Share capital Share premium Convertible debt option reserve Retained earnings Total equity
Total attributable to equity holders of parent
£000 £000 £000 £000 £000 £000
17,484 18,099 84 (10,384) 25,283 25,283
At 1 January 2023
Comprehensive income for the year
- - - (18,946) (18,946) (18,946)
Loss for the year
- - - (18,946) (18,946) (18,946)
Total comprehensive income for the year
Contributions by and distributions to owners
2,558 3,900 - - 6,458 6,458
Issue of share capital
2,558 3,900 - - 6,458 6,458
Total contributions by and distributions to owners
At 31 December 2023 20,042 21,999 84 (29,330) 12,795 12,795
Share capital Share premium Convertible debt option reserve Foreign exchange reserve Other reserves Retained earnings Total equity
Total attributable to equity holders of parent
£000 £000 £000 £000 £000 £000 £000 £000
1,453 2,068 84 (4) 15 (15,037) (11,421) (11,421)
At 1 January 2022
Comprehensive income for the year
- - - - - 4,638 4,638 4,638
Profit for the year
- - - - - 4,638 4,638 4,638
Total comprehensive income for the year
Contributions by and distributions to owners
16,031 16,031 - - - - 32,062 32,062
Issue of share capital
- - - 4 - - 4
4
Other movements
Share based payment - - - - (15) 15 - -
16,031 16,031 - 4 (15) 15 32,066 32,066
Total contributions by and distributions to owners
At 31 December 2022 17,484 18,099 84 - (10,384) 25,283 25,283
-
The notes form part of these financial statements.
Consolidated Statement of Cash Flows
For the year ended 31 December 2023
2023 2022
£000 £000
Cash flows from operating activities
(18,946) 4,638
(Loss) / profit for the year
Adjustments for
Depreciation of property, plant and equipment 7 3
Amortisation of intangible fixed assets 11 2
Equity settled current liability 41 -
Finance income (874) (882)
Finance expense 610 (1,103)
Net change in unrealised/realised gains and losses on investments at fair 14,562 (1,488)
value through profit or loss
Goodwill impairment 2,717 -
Impairment of other receivables at amortised cost 554 -
Release of contingent consideration - (1,311)
Net foreign exchange loss / (gain) 244 (411)
(552)
(1,074)
Movements in working capital:
Decrease in trade and other receivables 113 65
Increase in trade and other payables 266 243
Cash used in operations
(695) (244)
(244)
Net cash used in operating activities (695)
Cash flows from investing activities
Purchases of property, plant and equipment - (1)
Proceeds on sale of financial assets 26 -
Interest received 839 675
Net cash from investing activities 865 674
Cash flows from financing activities
Repayment of loans (20) -
Proceeds from borrowings 73 471
Interest paid (210) (1,081)
Net cash used in financing activities (157) (610)
Net increase / (decrease) in cash and cash equivalents 13 (180)
22 202
Cash and cash equivalents at the beginning of year
Cash and cash equivalents at the end of the year
35 22
The notes form part of these financial statements.
Notes to the consolidated financial statements
For the year ended 31 December 2023
1. Accounting policies
1.1. General information
Eight Capital Partners Plc ("the Company") is a public limited company limited
by shares and incorporated in England. Its registered office is Kemp House,
160 City Road, London, EC1V 2NX.
The Company's shares are traded on the Aquis Stock Exchange Growth Market
under ticker ECP and ISIN number GB00BYT56612.
The consolidated financial statements of the Company consist of the following
companies (together "the Group"):
Eight Capital Partners
plc
UK registered company
Epsion Capital
Limited
UK registered company
Innovative Finance S.r.l ("InnFin")
Italian registered company
The Group's principal activity is to provide corporate finance services and
investment funds to quoted and unquoted entities principally in the technology
and financial services sectors with the objective of generating an attractive
rate of return for its shareholders, predominantly through corporate advisory
fee income from its subsidiaries, and new revenue streams and capital
appreciation from investment in "fintech" businesses.
1.2. Basis of preparation
These consolidated financial statements have been prepared and approved by the
Directors in accordance with UK adopted international accounting standards.
The Company was classified as an investment vehicle for the period to 30 June
2021. On 1 July 2021 Eight Capital Plc changed its status from an investment
vehicle to an operating company. As a result, and in accordance with IFRS 10,
the Company's investments in subsidiaries have been consolidated from this
date.
These consolidated financial statements are prepared on a going concern basis,
under the historical cost convention, as modified by the recognition of listed
and unlisted investments at fair value.
These consolidated financial statements are presented in Pounds Sterling,
rounded to the nearest thousand (£'000), which is the Company's presentation
and functional currency.
The presentational currency for Epsion Limited is Pounds Sterling and for
InnFin is Euro as the subsidiary is registered in Italy.
The preparation of financial statements in conformity with IFRS requires the
use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Group's accounting
policies. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the consolidated
financial statements are disclosed in note 2.
1.3. Basis of consolidation
The Group financial statements consolidate the financial statements of the
Company and all its subsidiaries ("the Group").
Subsidiaries include all entities over which the Group is exposed, or has
rights, to variable returns from its involvement with the investee and has the
ability to affect those returns through its power over the investee. The
existence and effect of potential voting rights that are currently exercisable
or convertible are considered when assessing whether the Group controls
another entity. Subsidiaries are consolidated from the date on which control
commences until the date that control ceases. Intra‑group balances and any
unrealised gains and losses on income or expenses arising from intra‑group
transactions, are eliminated in preparing the consolidated financial
statements.
The acquisition method of accounting is used to account for business
combinations. The cost of an acquisition is measured as the fair value of the
assets given, equity instruments issued, and liabilities incurred or assumed
at the date of exchange, and the equity interests issued. Identifiable assets
acquired, and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair value at the acquisition
date. Acquisition related costs are expensed as incurred. Where necessary,
amounts reported by subsidiaries have been adjusted to conform with the
Group's accounting policies.
1.4. Going concern
At 28 June 2024, the Group had cash balances of approximately £60k and
contractually agreed receivables over the next 12 months of circa £0.75
million. In addition, during the same period it expects to receive funds
from the expiry and repayment of principal of the 1AF2 bond which for the
purposes of evaluating Going Concern, has been conservatively estimated as a
minimum cash-inflow of £1.7m.
In July 2024, Eight Capital Partners plc (ECP) is due to be repaid more than
£30m when the 1AF2 bond matures. Of the £30m falling due for repayment,
taking the entirety of the security package into consideration, almost £15m
was covered by listed investments as at 31 December 2023. This figure reduces
to £13.5m when discounted back to the 2023 year end from the July 2024
settlement date. At the date of this report the board noted that the value of
the security package of listed investments had reduced to approximately £4.0m
(based on closing share price as of 28 June 2024). The board also notes the
temporary suspension of Regtech Open Project (RTOP) shares on 28 June 2024 on
the London Stock Exchange. Since the RTOP shares formed £4.3m of the 1AF2
bond security package at year end, this temporary suspension will impact the
Company's ability to liquidate the shares in the security package. However,
the Company will be able to liquidate the Supply@Me shares within the security
package, valued at £2.3m at 28 June 2024. The board also noted that as at
31 March 2024 the group providing the security package, The AvantGarde Group
S.p.A (TAG), had declared in its security package valuation update a combined
value of privately held assets and public securities of over €67m. There are
ongoing conversations with TAG's sole director Alessandro Zamboni regarding
the expiry of the 1AF2 bond, who recognises the obligation to fully repay the
bond.
The Company is also aware that TAG and its director operate with a diverse
group of investors that are involved with a number of public and private
businesses that have the potential to provide them with cash, and whilst this
provides no guarantee of payment of the 1AF2 bond, the board feels that such
connections further strengthen the Company's overall position in terms of
future bond principal repayments. These items together provides the board
with confidence that there will be cash and other liquid assets forthcoming
from TAG and the Company's other operating activities, to provide sufficient
working capital for ECP for at least the next 12 months.
The Group's funding requirements (costs plus current creditors, offset by fees
to be earned from the opportunities in the sales pipeline) are not expected to
exceed £1.4 million in the next 12 months. The Group plans to fund the
forecasted cash outflow requirements through existing cash resources,
contractual receivables, and the estimated cash inflows from the repayments of
1AF2 bond principal. At the time of this note there is no capex committed.
The Directors are therefore of the opinion that the Group has adequate
financial resources to enable it to continue in operation for the foreseeable
future. For this reason, it continues to adopt the going concern basis in
preparing the financial statements.
1.5 New standards, amendments and interpretations not yet adopted
There are no IFRSs or IFRIC interpretations that are effective for the first
time for the financial year beginning 1 January 2023 that have had a material
impact on the Group.
Certain new accounting standards and interpretations have been issued but have
not been applied by the Group in preparing these financial statements as they
are not as yet effective. These standards are not expected to have a material
impact on the Group in the current or future periods and on foreseeable future
transactions.
2. Earnings per share
(i) Basic earnings per share
2023 2022
Pence Pence
(0.01) 0.02
From continuing operations attributable to the ordinary equity holders of the
Company
Total basic earnings per share attributable to the ordinary equity holders of (0.01) 0.02
the Company
(ii) Weighted average number of shares used as the denominator
2023 2022
Number Number
Weighted average number of ordinary shares used as the denominator in 169,533,235,805 19,290,857,985
calculating basic earnings per share
Weighted average number of ordinary shares and potential ordinary shares used 169,533,235,805 19,290,857,985
as the denominator in calculating diluted earnings per share
3. Investments in subsidiaries
Company
Shares in group undertakings
Cost £000
At 1 January 3,810
2022
Impairment of Innovative Finance (1,151)
S.r.l
At 31 December 2022 2,659
Impairment of Innovative Finance S.r.l and Epsion Capital Limited (2,659)
At 31 December 2023 -
At 31 December 2023, the Group consisted of a parent company, Eight Capital
Partners plc, registered in England and Wales and its two wholly owned
subsidiaries.
Subsidiaries
Epsion Capital Limited
Registered Office: 8‑10 Hill Street, London, United Kingdom, W1J 5NG
Nature of business: Financial intermediation.
Class of shares % holding
Ordinary shares 100 (2022:100)
2023 2022
£000 £000
Aggregate capital and (313) 246
reserves
The Company has guaranteed all outstanding liabilities of the subsidiary
company as at 31 December 2023, this provides the subsidiary company with an
exemption from audit under Section 479A of the Companies Act 2006.
Innovative Finance S.r.l
Registered Office: Via Turati 26 20121 Milano Italy
Nature of business: Financial Advisory
Class of shares % holding
Ordinary shares 100 (2022: 100)
2023 2022
£000 £000
Aggregate capital and (232) 68
reserves
As at 31 December 2023 the Board assessed the investment value of the two
subsidiaries based on current projections and took the decision to impair the
value of the investment by £2.66m (2022: £1.15m). Current projections
include an intention post year end to transfer the Innovative Finance S.r.l
business into Epsion Capital and to dissolve Innovative Finance S.r.l.
4. Current asset investments
The table below sets out the fair value measurements. Categorisation has been
determined on the basis of listed or unlisted investments as follows:
Group Unlisted Investments Listed Investments Total
£000 £000 £000
Fair value at 1 January - 24,734 24,734
2022
Fair value gain on listed - 2,671 2,671
investments
Foreign exchange - 1,380 1,380
adjustment
Fair value at 31 December - 28,785 28,785
2022
Additions - 810 810
Disposals - (26) (26)
Fair value loss on - (14,562) (14,562)
investments
Foreign exchange - (490) (490)
adjustment
Fair value at 31 December - 14,517 14,517
2023
Gains / (losses) on investments held at fair value through profit or loss
Year end 31 December
2022
Fair value (33) 2,671 2,638
adjustment
Net gain / (loss) on investments held at fair value through profit or loss (33) 2,671 2,638
Year end 31 December
2023
Fair value - (14,562) (14,562)
adjustment
Net loss on investments held at fair value through profit or loss - (14,562) (14,562)
Company Unlisted Investments Listed Investments Total
£000 £000 £000
Fair value at 1 January - 24,734 24,734
2022
Fair value gain on listed 2,671 2,671
investments -
Foreign exchange - 1,380 1,380
adjustment
Fair value at 31 December - 28,785 28,785
2022
Disposals - (26) (26)
Fair value loss on - (14,188) (14,188)
investments
Foreign exchange - (489) (489)
adjustment
Fair value at 31 December - 14,082 14,082
2023
Gains / (losses) on investments held at fair value through profit or loss
Year end 31 December
2022
Fair value (33) 2,671 2,638
adjustment
Net gain / (loss) on investments held at fair value through profit or loss (33) 2,671 2,638
Year end 31 December
2023
Fair value - (14,188) (14,188)
adjustment
Net loss on investments held at fair value through profit or loss - (14,188) (14,188)
5. Related party transactions
Administrative services
During the year, the Company was invoiced £13,200 (2022: £21,400) for
administrative services provided by Marker Management Services Ltd, a company
controlled by Martin Groak, a director of Eight Capital.
Income
During the year, the Group received income from entities connected to the
Company's Chairman, Dominic White. £457,000 (2022: £580,000) was received
from Sifal Limited (formerly Dispensa Group Plc) £nil (2022: £17,699) from
Bella Dispensa SRL and £nil (2022: £22,550) from Maximum Return Systems
Ltd.
In the prior year, the Group received income from entities connected to the
Company's former Director, David Bull. During the period David Bull was a
director of the Company, the Company received £3,351 (2021: nil) from
Suppy@me Capital plc.
Related party funding
Included within current borrowing at year end was:
£nil shareholder loan from IWEP Ltd (2022: £582,666); and
£nil vendor loan in relation to the €40m IAF2 bond acquisition from IWEP
Ltd (2022: £387,102).
Included in non‑current borrowing at year end was: £5,953 (2022: £6,074)
loan from Concreta Srl, a shareholder in the company; and
£nil (2022: £290,885) vendor loan from DB Investor in connection to the
acquisition of Innovative Finance S.r.l.
6. Post balance sheet events
1AF2 Bond
The Company has continued dialog with 1AF2 Ltd, the issuer of the 1AF2 bond
regarding its expiry and principal repayment obligation in July 2024.
Provisions have been made against the bond in these accounts, although the
Company believes that much of the bond's value can be recovered. The second
bondholder IWEP Ltd, a company controlled by Dominic White the Company's
Chairman, has agreed at the date of this document to subordinate its pro-rata
call on the 1AF2 Ltd security package to the Company to support such
recoverability.
The bond's issuer has made the Company aware of a number of positive
activities being taken to enable it to deliver a series of cash principal
repayments supported by an enhanced security package. Due to the commercial
sensitivity of this negotiation further updates will be provided once
agreements have been finalised, and in any case, as key data relating to the
bond's expiry are received.
The Company further updates that post year end the value of the listed
securities in the security package has fallen further. The value of the
listed (only) part of the security package as at 28 June 2024 is now €4.63m
compared to €15.53m at 31 December 2023. The bond issuer continues to
maintain that it does not intend to repay the principal through the
liquidation of the security package and that therefore other routes to payment
of principal will be forthcoming. Eight Capital is proceeding in order to
optimise its ability to recover the highest possible value from its bond
investment.
Value of other quoted investments
The value of other quoted investments held by the company has fallen post year
end from £574k at year end (2022: £778k) to £175k at 25 June 2024.
Regtech Open Project (RTOP) shares in 1AF2 bond security package
Regtech Open Project Plc shares at the year end formed £4.3m of the value of
the 1AF2 bond security package and the value on 28 June 2024 was £1.8m.
On 28 June 2024 RTOP announced that the listing of the Company's ordinary
shares on the Main Market of the London Stock Exchange has been temporarily
suspended. RTOP intends to apply to the FCA for a restoration of its listing
following receipt of $2.5m in funding and the publication of the Company's
annual report and accounts for the period ending 30 June 2024 which is
expected to be on or shortly before 31 October 2024.
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