REG - Mobile Streams plc - Final Results
27/12/2023 07:00
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RNS Number : 8474X Mobile Streams plc 27 December 2023
27 December 2023
Mobile Streams plc
("MOS" or "the Company")
Audited Results for the year to 30 June 2023, and Notice of AGM
The Company is pleased to announce its audited results for the year to 30 June
2023.
The Company will publish the Accounts and the Notice of Annual General Meeting
("AGM") on its website later today. These, and the accompanying Form of Proxy
in relation to the AGM and Accounts, are being posted to Shareholders. The AGM
will be held at noon on 31 January 2023 at Panmure Gordon, 40 Gracechurch
Street, London, EC3V 0BT. Extracts of the audited results are set out below.
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) No. 596/2014, as it forms part of UK Domestic
Law by virtue of the European Union (Withdrawal) Act 2018. Upon the
publication of this announcement, this inside information is now considered to
be in the public domain.
For further information, please contact:
Mobile Streams plc
Nigel Burton, Adviser
+44 77 8523 4447
www.mobilestreams.com
Beaumont Cornish (Nominated Adviser)
James Biddle and Roland Cornish
+44 (0) 20 7628 3396
Panmure Gordon (UK) Limited (Broker)
Simon J French, James Sinclair-Ford, Ivo Macdonald
+44 (0) 20 7886 2500
AUDITED RESULTS FOR THE YEAR TO 30 JUNE 2023
Chairman's Statement
The Board of Mobile Streams plc presents its audited accounts for the
financial year ended 30 June 2023.
In the year to 30 June 2023 Mobile Streams continued to offer games and other
content direct to consumers across a wide range of mobile devices in three
emerging markets, whilst focusing resources on the growth of Streams Data, the
data insight and intelligence platform launched in 2020 as well as building
new business from the sale of Non-Fungible Tokens ("NFTs"). The net revenues
of Streams Data grew to £1,525k in 2023 (2022: £799k).
Group revenue for the year ended 30 June 2023 was £1.8m, a 79% increase on
the prior year (2022: £1.0m). Whilst the legacy revenues continued to decline
to £105k (2022: £223k), revenues from new sources increased to £1,719k
(2022: £799k). The new revenue sources from Streams Data comprised £1,495k
from International Gaming Systems ("IGS") and £30k from other revenue sources
(Streams Bespoke and SaaS, LiveScores and other). New revenues from the sale
of NFTs totalled £182k. The increase in revenue is due to the marketing of
new products and services, with the increase in marketing spend reallocated
throughout the year to reflect the most promising products and services. The
loss before tax was £3.8m (2022 (restated): £2.5m loss).
The Directors do not propose payment of a dividend (2022: £Nil). At 30 June
2023, the Group had a net cash balance of £0.9m, with a bank debt (Bounce
Back Loan) of £41k (2022: £1.7m cash, with bank debt of £47k).
The Group historically delivers world class gaming content to a global
audience, through its LiveScores and mobilegaming.com platforms, in
partnership with long-standing carrier relationships in countries including
India, Argentina and Mexico.
Our Streams data insight, intelligence and visualisation services and
marketing optimisation tools support the content business, as well as serving
enterprise level bespoke clients and the Streams SaaS ("Software as a
Service") self-service platform. Our strategy is to deliver next-generation
content including sports, gaming and related Non-Fungible Tokens ("NFTs") to a
global audience.
A significant part of the growth in revenues during the year came from the
major strategic partnership contract with International Gaming Systems ("IGS")
announced in January 2022. This contract was subsequently extended to 30
June 2023 and has now been completed.
During the year the Group announced various multi-year contracts to be the
exclusive global producer and provider of NFTs for a number of prominent
football teams and sports individuals, delivered both through their own
websites and our https://heroesnftclub.com/ site. The Board believes that the
LiveScores services, Streams Data offering and the Group's sports NFT business
create significant opportunities for the Company to deliver growth in
shareholder value via newly developed products and services. The Board
continues to examine additional sources to broaden the appeal of its content
business.
Since the completion of the IGS contract on 30th June 2023, the business has
continued its journey of transition from the sale of legacy products to new
product offerings including the sale of NFTs. On 12th December 2023 the
Group announced the completion of a further funding round raising £675,000
via the issue of shares and the entry into a new business segment in Mexico,
being publishing, online sports betting, online casino operations and media
ownership. The development of these new business segments will take a little
time and inevitably gives rise to some uncertainty in relation to the timing
of certain cash flows. As an accounting formality the Board has taken the
prudent decision to impair the carrying values of all intangible assets at
30th June 2023 to £nil by means of a £708,000 impairment charge in the
Consolidated Statement of Comprehensive Income. This by no means reflects
the Board's considered view of the long-term valuation of these assets but a
combination of the constraints of the accounting valuation methodology and a
prudent assessment of the global NFT and crypto market as of June 2023. The
Board will now explore how best to value the groups assets. We note that other
NFT businesses have significant platform valuations even at the pre-revenue
stage and want to ensure we value our assets appropriately in line with these
comparables, making sure their value is clear to investors. The Board
remains confident that the group can reach the position of becoming cash
generative within the next 12 months as the level of trade in these new
segments begins to build.
The Directors have prepared a cashflow projection which indicates that the
cash balances of £0.9m at 30 June 2023 and anticipated cashflows including
the £675,000 proceeds from the recent funding round are expected to cover the
Company's working capital requirements for the foreseeable future.
Bob Moore
Chairman
22 December 2023
Operating review
Mobile Streams' performance during the financial year ended 30 June 2023
combined continued decrease in revenues from the legacy content business with
growth in revenues from the Streams Data platform.
Group revenue for the year ended 30 June 2023 was £1.8m (2022: £1.0m).
Whilst the legacy revenues continued to decline to £105k (2022: £223k),
revenues from new sources increased to £1,719k (2022: £799k). The new
revenue sources from Streams Data are comprised of £1,495k from International
Gaming Systems ("IGS") which extended to 30(th) June 2023 and has now ceased,
and £30k from other revenue sources (Streams Bespoke and SaaS, LiveScores and
other). The new sales of NFTs amounted to £182k. The profit attributable to
the IGS contract in the period was approximately £370k. The increase in
revenue is due to the marketing of new products and services, with the
significant increase in marketing spend reallocated throughout the year to
reflect the most promising products and services.
The gross profit of £12k (2022: £450k) decreased substantially. The gross
profit margin decreased from 44% to 1%, reflecting the inclusion of
significant upfront royalties on NFT contract revenues. These royalties are
for multi-year contracts and so margins are expected to increase significantly
in the coming years.
Mobile Operator sales
Mobile Operator revenues from the legacy content business were generated
mainly in Argentina, with small contributions from Mexico and India. The
Argentine Peso devalued significantly during the period, affecting the
revenues when expressed in GBP. We continue to work with our longest standing
billing partner locally, and throughout the year this remained the foundation
of the legacy content business.
Sales by Territory
Revenues in the UK generated by Streams Data grew to £1,525k (2022: £799k),
representing 84% of Group revenues. A further £182k of revenues (representing
10% of Group revenues) arose from the sale of NFTs to consumers across various
geographies and these were booked in the UK.
Financial review
Group revenue for the year ended 30 June 2023 was £1.8m, a 79% increase on
the previous year (2022: £1.0m).
Gross profit was £12k, a substantial decrease during the year (2022: £450k).
The gross profit margin decreased from 44% to 1%, reflecting the inclusion of
significant upfront royalties on NFT contract revenues. These royalties are
for multi-year contracts and so margins are expected to increase significantly
in the coming years.
Marketing costs increased significantly to £877k, (2022: £264k) to support
the launch of new services and the IGS contract. IT and other overheads
decreased to £136k (2022: £187k).
The amortisation charge was £296k (2022: £262k) comprising Streams Data
intangibles: £148k and Krunch intangibles: £148k with these assets being
amortised across an expected useful life of 5 years. At 30(th) June 2023 the
Directors reviewed the carrying value of all intangible assets and goodwill in
the light of global NFT trading levels and elected to impair all assets to
£nil value, resulting in an impairment charge of £708k representing £348k
impairment of intangible assets and a £360k impairment of Goodwill. This by
no means reflects the Board's considered view of the long-term valuation of
these assets but a combination of the constraints of the accounting valuation
methodology and a prudent assessment of the global NFT and crypto market as of
June 2023. The Board will now explore how best to value the groups assets. We
note that other NFT businesses have significant platform valuations even at
the pre-revenue stage and want to ensure we value our assets appropriately in
line with these comparables, making sure their value is clear to investors.
The Group recorded a loss after tax of £3.8m for the year ended 30 June 2023
(2022 loss (restated): £2.5m). Basic earnings per share decreased to a loss
of 0.093 pence per share (2022 (restated): loss of 0.092 pence per share).
The Group had cash of £0.9m at 30 June 2023, with a bank debt of £41k (2022:
£1.7m cash, with bank debt of £47k).
Prior Year Adjustment
The year-ending 30(th) June 2022 Statement of Comprehensive Income, Statement
of Financial Position, Statement of Changes in Equity and Cashflow Statement
have been restated in respect of broker options which were issued as part of
the fundraising during March 2022. The linked expense in respect of this was
estimated at £255,000 however a post balance sheet review has identified that
the linked expense should have been zero as these instruments were ultimately
issued to investors.
Key performance indicators ("KPI's")
The KPIs used by the Group are Gross profit as a percentage of revenue,
Trading EBITDA**, and variances in revenue and profit. These KPIs are reviewed
on a regular basis, at both the business unit and country level, and managed
largely by reference to budgets and reforecasts.
Earnings before tax, interest, amortisation, depreciation, share compensation
expense and impairment of assets (Trading EBITDA) is calculated by adding back
all tax, interest, amortisation, depreciation, share compensation expense and
impairment of assets entries in the consolidated income statement to profit
after tax.
Gross profit as a percentage of revenue is a measure of our profitability.
Gross profit was just £12k for the year ended on 30 June 2023 (2022: £450k).
The Gross profit margin was 1% for the year ended on 30 June 2022 (2022: 44%),
reflecting the inclusion of significant upfront royalties on NFT contract
revenues. These royalties are for multi-year contracts and so margins are
expected to increase significantly in the coming years.
Trading EBITDA** was a loss of £2.8m for the year ended on 30 June 2023
(2022: loss of £1.4m).
**Trading EBITDA is a non-IFRS measure and is calculated as profit before tax,
interest, amortisation, depreciation, share compensation expense and
impairment of assets.
Strategy
The Group strategy is to create a world class sports media group.
Historically the Group has delivered world class gaming content to a global
audience. This is delivered through its mobilegaming.com platform, in
partnership with our long-standing carrier relationships in countries
including India, Argentina and Mexico. The Group expanded on this to create
its HeroesNFTclub brand delivering licensed digital sporting merchandise
globally. As announced on 12th December 2023 the Group has now rolled out the
next stage in its strategy by investing in a Mexican company Capital Media
Sports to create with its partners one of the leading sports media groups in
Mexico. In addition, with its partners the Group will launch online sports
betting and online casino operations as well as sports podcast services
utilising the media brands within Capital Media Sports. The group today has
now evolved into a multi play sports media business currently focused on the
Mexican market.
Our Streams data insight, intelligence and visualisation services and
marketing optimisation tools support the content business, as well as serving
enterprise level bespoke clients and the Streams SaaS ("Software as a
Service") self-service platform. Our strategy is to deliver world class
content including gaming and related NFTs to a global audience.
Share Issue
In July 2022 the Group issued 5,434,581 shares at 0.37 pence per share and
172,413,792 shares at 0.29 pence per share.
In October 2022 the Group issued 666,666,666 shares at 0.18 pence per share
via a share placing, and 111,111,111 shares at 0.18 pence per share via a
Broker offer.
In October 2022 the Group issued 25,930,446 shares at 0.18 pence per share.
In February 2023 the Group issued 30,483,696 shares at 0.2711 pence per share
and 72,025,285 shares at 0.1899 pence per share.
Principal risks and uncertainties
The Directors have set out below the principal risks facing the business.
Contracts with Mobile Network Operators (MNOs)
While Mobile Streams maintains relationships with numerous MNOs in the various
territories, a small number of operators account for a high portion of the
Group's business. The Group is seeking to mitigate this risk by broadening its
overall offering, by entering a new business segment in Mexico.
Contracts with rights holders
The majority of content provided by Mobile Streams is licensed from rights
holders. While Mobile Streams is not dependent on any single rights holder for
its entertainment content, termination, non-renewal or significant
renegotiation of a contract could result in lower revenue. The Group seeks to
enter into new content licensing arrangements to mitigate these risks.
Competition
Competition from alternative providers could adversely affect operating
results through either price pressures, or lost custom. Products and pricing
of competitors are continuously monitored to ensure the Group is able to react
quickly to changes in the market.
General macro-economic environment
Economic conditions resulting from significant monetary and fiscal
interventions by Governments and Central Bank policies in many countries,
designed to stabilise the economy and combat rising inflation have resulted in
lower growth and difficult conditions in both stock and bond markets. To date,
these policies and interventions have not directly affected the company or its
markets, but a sustained period of recession or low growth may create risk for
the Group's business and strategy.
Fluctuations in currency exchange rates
Approximately 6% of the Group's revenue relates to operations outside the UK.
The Group is therefore partially exposed to foreign currency fluctuations and
the financial condition of the Group may be adversely impacted by foreign
currency fluctuations, although costs are largely incurred in the same
currencies as revenues which helps mitigate the net impact of these risks.
Argentina had an inflation rate of 115% for the period July 2022 to June 2023
(and 60% in the previous year) and the Argentinian economy is designated as
hyper-inflationary. See note 18 "Foreign currency risk".
The Group has operations in Latin America and India. As a result, it faces
both translation and transaction currency Since the year end, the Group has
been engaged in corporate development discussions with key companies to create
one of the leading sports groups in Mexico. The Company will partner with a
major player in this industry to enter the publishing and media market through
the co-ownership of a major Mexican heritage sports publication. Together with
our partners we will also set-up new Mexican companies to launch online sports
betting and online casino operations as well as sports podcast services
utilising the media brands within Capital Media Sports. The Group will provide
services to the new venture in respect of marketing and development, and the
Directors expect to grow their current NFT business by taking advantage of
synergies with the new businesses. Further details are included within the
Events after the Balance Sheet Note 24. Currency exposure is not currently
hedged, though the Board continuously reviews its foreign currency risk
exposure and potential means of combating this risk.
Dependencies on key Executives and personnel
The success of the business is substantially dependent on the Directors and
senior management team. The risks have been mitigated by addressing the
remuneration and incentives for the management team during the year.
Technology risk
A significant portion of the future revenues are dependent on the Group's
technology platforms. Instability or interruption of availability for an
extended period could have an adverse impact on the Group's financial
position.
Mobile Streams makes use of market leading cloud based infrastructure, and
where necessary has invested in resilient hardware architecture, and continues
to maintain software control processes to minimise this risk. Further relating
to technology is the fact that customers are spending less on streaming
content due to cyber-security issues experienced in the last years.
Management controls and reporting procedures and execution
The ability of the Group to implement its strategy in a competitive market
requires effective planning and management control systems. The Group's
future growth will depend upon its ability to expand whilst improving exposure
to operational, financial and management risk.
Going concern risk
In common with the Going Concern disclosures in the Group Financial
Statements, the Company Financial Statements have been prepared on a going
concern basis, which assumes that the Group and the Company will continue in
operational existence for the foreseeable future, being 12 months from the
date of sign-off of these accounts.
The Group and Company use annual budgeting, forecasting and regular
performance reviews to assess the longer-term profitability of the Group and
make strategic and commercial changes as required to ensure that cash
resources are maintained.
Although there was a significant loss for the year ending 30 June 2023, the
Directors kept costs carefully controlled whilst continuing to grow the
Streams data insight and intelligence platform. The Streams business provides
bespoke services to the B2B (business to business) market and targets
customers in the US, LatAm and Europe. The Board believes that the LiveScores
services, Streams Data offering, the sports NFT business and the forthcoming
Mexican sports betting business create significant opportunities for the
Company to deliver growth in shareholder value via newly developed products
and services. The Board continues to examine additional sources to broaden
the appeal of its content business. The main focus for the current year will
be growing and developing the product and sales pipelines for these
businesses. The Group's forecasts assume that the Group's growing sports NFT
business and the Mexican sports betting business, will represent a growing
proportion of revenues.
After consideration of the above, and with inclusion of the uncertainties as
explained in greater detail in the Directors' Report and Note 1 of these
accounts, the Directors consider that the continued adoption of the going
concern basis is appropriate.
Financial risk management objectives and policies
The Group uses various financial instruments. These include cash and various
items, such as trade receivables and trade payables that arise directly from
its operations. The numerical disclosures relating to these policies are set
out in the notes to the Financial Statements.
The existence of these financial instruments exposes the Group to a number of
financial risks, which are described in more detail below. The Group does
not currently use derivative products to manage foreign currency or interest
rate risks.
The main risks arising from the Group's financial instruments are market risk,
currency risk, liquidity risk and credit risk. The Directors review, and agree
policies for managing each of these risks and they are summarised below. These
policies have remained unchanged from previous periods.
Market risk
Market risk encompasses three types of risk, being currency risk, fair value
interest rate risk and price risk. In this review interest rate and price risk
have been ignored as they are not considered material risks to the business.
Liquidity risk
The Group seeks to manage financial risk by ensuring sufficient liquidity is
available to meet foreseeable needs and to invest cash assets safely and
profitably.
Other than the £41k balance of the Bounce Back Loan taken out by KrunchData
to use for working capital needs, the Group currently has no borrowing
arrangements in place. The Group prepares cash flow forecasts which are
reviewed at Board meetings to monitor liquidity.
Credit risk
The Group's principal financial assets are bank deposits, cash and trade
receivables. The credit risk associated with the bank deposits and cash is
limited as the counterparties have high credit ratings assigned by
international credit-rating agencies. The principal credit risk arises
therefore from the Group's trade receivables. Most of the Group's trade
receivables are large mobile network operators or media groups. Whilst
historically credit risk has been low management continuously monitors its
financial assets and performs credit checks on prospective partners.
Future developments
Since the year end, the Group has been engaged in corporate development
discussions with key companies to create one of the leading sports groups in
Mexico. The Company will partner with a major player in this industry to
enter the publishing and media market through the co-ownership of a major
Mexican heritage sports publication. Together with our partners we will also
set-up new Mexican companies to launch online sports betting and online casino
operations as well as sports podcast services utilising the media brands
within Capital Media Sports. The Group will provide services to the new
venture in respect of marketing and development, and the Directors expect to
grow their current NFT business by taking advantage of synergies with the new
businesses. Further details are included within the Events after the Balance
Sheet Note 24.
Section 172 Companies Act disclosure
When making decisions, the Directors of the Company must act in a way they
consider, in good faith, is most likely to promote the success of the Company
for the benefit of its members as a whole, while also considering the broad
range of stakeholders who interact with and are impacted by the business.
Throughout the year, while discharging their duties, section 172(1) requires a
Director to have regard, amongst other matters, to the:
· likely consequences of any decisions in the long term
· interests of the company's employees
· need to foster the company's business relationships with
suppliers, customers and others
· impact of the company's operations on the community and
environment
· desirability of the company maintaining a reputation for high
standards of business conduct, and
· need to act fairly as between members of the company.
In discharging their section 172(1) duties, the Directors have had regard to
the factors set out above, as well as other factors relevant to the decisions
being made. The Board acknowledges that not all decisions made will
necessarily result in a positive outcome for all stakeholders, nevertheless
the Board aims to ensure that the decisions made are consistent and intended
to promote the Company's long-term success.
Examples of how the Directors have engaged with the Company's stakeholders
with regard to section 172(1) are detailed below:
· Regular operating and financial updates through the Regulatory
News Service ("RNS")
· Holding an Annual General Meeting ("AGM") where shareholders can
cast their vote on resolutions
· Investor presentation for existing and potential shareholders,
and corresponding Q&A session
· Regular contact from the board of directors with existing
shareholders
These actions were designed to ensure the appropriate standards of governance
and to protect and enhance value for shareholders.
Shareholders
The Board aims to build long term shareholder value by pursuing the stated
strategy. RNS updates are provided as required, and in addition Directors
provide regular interviews and updates, and respond to all queries received
from investors, all within the necessary regulatory and commercial
constraints.
Employees
The Board strives to maintain and develop a culture where all employees feel
valued and included. The Company supports the professional and personal
development of employees, which are viewed as fundamental to the continued
success of the company.
Business conduct, ethics and anti-corruption
It is the Group's policy to conduct its business in an honest and transparent
way without the use of corrupt practices or acts of bribery to obtain an
unfair advantage. The group has a zero tolerance approach to bribery and
corruption. Any breach of these rules results in disciplinary actions which
may include dismissal.
Suppliers, customers and others
The Board recognises that it is crucial that the company delivers a reliable
service to its customers. Strong relationships with suppliers are maintained,
including by seeking to pay suppliers within their agreed terms wherever
possible.
The Board regards compliance with all relevant regulatory frameworks with the
upmost importance. As a data and communications business, it is essential that
the company fully complies with data protection and other regulations across
all territories in which it operates. Audit and Compliance functions report to
the Board on a regular basis. Training and monitoring are continually
developed and open communication between the Board and stakeholders is
encouraged.
Community and environment
Mobile Streams is aware of the different environments in which it operates.
The Strategic Report was approved by the Board and signed on its behalf by:
Bob Moore
Chairman
22 December 2023
DIRECTORS' REPORT
Items dealt with in the Strategic Report
• Business review
• Principal risks and uncertainties
• Future developments
The principal activities of the Group are the sale of content for distribution
on mobile devices and provision of data insight and intelligence platforms and
services. The Company is registered in England and Wales under company
number 03696108.
Results and dividends
The trading results and the Group's financial position for the year ended 30
June 2023 are shown in the attached Financial Statements, and are discussed
further in the Strategic Report.
The Directors have not proposed a dividend for this year (2022: £Nil).
Shareholder interests
The table below shows all significant shareholders who have disclosed holdings
above 3.0% of the issued share capital, and the current holdings of Directors
and PDMR at the date of this report.
Ordinary Percentage
shares of holding
0.01 pence each
Mark Barry 323,653,487 7.16%
John Barker 220,000,000 4.87%
David Maclean 176,000,000 3.89%
Nigel Burton (including family holdings) 169,375,241 3.75%
Annabel Hembry 110,115,964 2.44%
Mark Epstein 109,185,995 2.41%
Tom Gutteridge 109,185,995 2.41%
Charles Goodfellow 45,853,143 1.01%
Directors and their interests
The Directors of the Company (the "Board" or the "Directors"), who served
during the year, together with their beneficial interests in the ordinary
shares of the Group, as at 30 June 2023, are set out below. All Directors
served on the Board throughout the year.
Ordinary Ordinary
shares of shares of
0.01 pence each 0.01 pence each
30 June 2023 30 June 2022
DIRECTORs
Mark Epstein 109,185,995 103,036,017
Charles Goodfellow 45,853,143 40,301,360
Bob Moore (appointed 23 July 2021) - -
Sri Ramakrishna Uthayanan (appointed 23 July 2021) - -
PDMRs
Nigel Burton 169,375,241 161,413,736 169,375,241 161,413,736
Tom Gutteridge 109,185,995 103,036,017
Annabel Hembry 110,115,964 104,564,181
169,375,241
161,413,736
Tom Gutteridge
109,185,995
103,036,017
Annabel Hembry
110,115,964
104,564,181
The remuneration of each of the Directors and Senior Management for the period
ended 30 June 2023 is set out below:
Year to 30 June 2023 Year to 30 June 2022
Salary Fees Benefits Post-employment benefits Other Long Term benefits Termination Benefits Total Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
M Epstein 82.5 - - - 3.5 - 86.0 70
T Gutteridge (#) 82.5 - - - 3.5 - 86.0 70
C Goodfellow 30 - - - - - 30 30
N Burton * 60 - - - 3.5 - 63.5 70
R Moore - 30 - - - - 30 15
R Uthayanan 30 48 - - - - 78 77
A Hembry 15 - - - - - 15 30
Total 300 78 - - 10.5 - 388.5 362
(#) Senior management (non-Board role)
Other Long Term benefits comprise the fair value of share options granted
during the year.
The three Directors appointed in November 2019, namely Nigel Burton, Charles
Goodfellow and Mark Epstein and two senior employees Annabel Hembry and Tom
Gutteridge, all agreed to annual remuneration of £30,000 each, and also
agreed to accept payment for their services in Ordinary Shares, subject to
deduction and payment of all necessary taxes, until such time as the Directors
are satisfied that the Company is able to make these payments out of operating
cashflow. With effect from 1 July 2021, the above named Directors and senior
employees reverted to their original contractual arrangements, which state
that until such time as the Board determines otherwise, fees will be paid
quarterly or half yearly in Ordinary Shares, priced at the Volume Weighted
Average Price ("VWAP") of the Ordinary Shares for the period to which the
payment relates, after deduction and payment of all necessary taxes. As
announced on 4 January 2022, based on the budget and cash projections, the
Board now considers that the Company is in a position to pay salaries in cash,
although one Director (Charles Goodfellow) and two senior managers (Annabel
Hembry and Nigel Burton) have elected to continue to be paid in shares.
Going Concern
In common with the Going Concern disclosures in the Group Financial
Statements, the Company Financial Statements have been prepared on a going
concern basis, which assumes that the Group and the Company will continue in
operational existence for the foreseeable future, being 12 months from the
date of sign-off of these accounts.
The Group and Company use annual budgeting, forecasting and regular
performance reviews to assess the longer-term profitability of the Group and
make strategic and commercial changes as required to ensure that cash
resources are maintained. Although the Group remained loss-making in the year
ending 30 June 2023, the Group actively manages its use of cash, particularly
marketing and other expenditure.
Management have prepared projections for the Group's ongoing business covering
the 12 month period following the date of approval of the financial
statements. These forecasts make certain assumptions in respect of predicted
revenue to be received from development of the new Mexican sports betting
business and expected synergies for the existing NFTs revenue stream. The
directors note that these revenue streams are uncontracted and have no
historical data at present upon which to base the revenue forecasts. As such,
the directors note that there is an element of uncertainty surrounding these
forecasts. However, the directors believe the revenue forecast targets to be
achievable and reasonable due to management's expertise and experience in the
industry.
In July 2022 the Company launched its business as the exclusive global
producer and provider of Non Fungible Tokens ("NFTs") for several prominent
football teams and sports professionals, which developed initial revenues
during the year-ending 30th June 2023. The company seeks to expand this
business and sees this as a major driver of revenue across the coming 18
months with further potential contracts under negotiation. Whilst uncertain,
the growth in revenue from the NFT business is predicted to more than offset
the decline in the revenues from the International Gaming Systems partnership.
The market for NFTs has proven to be less successful than initially
anticipated. The Group is however, hoping that the development of the new
Mexican business segment, being publishing, online sports betting, online
casino operations and media ownership, will lead to operational synergies
which will enable the group to reach a larger target market for NFT sales. At
present the success of the NFT revenue stream is thus also uncertain.
For the group to achieve the target forecast and maintain sufficient cash
balances to fund working capital, the group's revenue forecasts will need to
be achieved. Should the revenue targets not be achieved, the group will
require additional funding to enable the group to meet its working capital
requirements for the going concern period.
The Directors have modelled significant downside scenarios, including where
predicted revenues are reduced by more than 40%. Discretionary spending,
including investment in growth, will be carefully controlled and will be
reduced to the extent that gross and net revenues do not match budget
expectations. The various scenarios indicate how sensitive the forecasts are
to adverse changes in revenue forecasts.
These conditions and events indicate the existence of a material uncertainty
that may cast significant doubt upon the Group's ability to continue as a
going concern and the Group companies may therefore be unable to realise their
assets and discharge their liabilities in the ordinary course of business. The
auditors make reference to going concern in their audit report by way of a
material uncertainty. These financial statements do not include the
adjustments that would result if the Group were unable to continue as a going
concern.
Directors' responsibilities statement
The Directors are responsible for preparing the Strategic Report, the
Director's Report and the Financial Statements in accordance with applicable
laws and regulations.
Company law requires the Directors to prepare Financial Statements for each
financial year. Company law requires the Directors to prepare Group and
Company Financial Statements for each financial year. The Directors are
required by the AIM Rules of the London Stock Exchange to prepare Group
Financial Statements in accordance with International Accounting Standards
("IAS") as adopted by the United Kingdom ("UK") and have elected under company
law to prepare the Company Financial Statements in accordance with UK GAAP.
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 and profit or loss of the Company and Group for that period. In
preparing these Financial Statements, the Directors are required to:
· select suitable accounting policies and then
apply them consistently,
· make judgements and estimates that are reasonable
and prudent,
· state whether applicable UK-adopted Internal
Accounting Standards and UK GAAP regulations have been followed, subject to
any material departures disclosed and explained in the Financial Statements,
and
· prepare the Financial Statements on the going
concern basis unless it is inappropriate to presume that the Group and the
Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group's and the Company's transactions and
disclose with reasonable accuracy at any time the financial position of the
Group and the Company and enable them to ensure that the Financial Statements,
and the Directors' Remuneration Report comply with the Companies Act 2006 and
Article 4 of the IAS Regulation. They are also responsible for safeguarding
the assets of the Group and Company and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
The Directors confirm that:
· so far as each Director is aware, there is no
relevant audit information of which the Group's auditor is unaware, and
· the Directors have taken all steps that they
ought to have taken as Directors to make themselves aware of any relevant
audit information and to establish that the auditor is aware of that
information.
This confirmation is given pursuant to section 418 of the Companies Act 2006
and should be interpreted in accordance with and subject to those provisions.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Group's website.
Legislation in the United Kingdom governing the preparation and dissemination
of Financial Statements may differ from legislation in other jurisdictions.
Auditor
PKF Littlejohn UK LLP have indicated their willingness to continue in office.
Corporate Governance Statement
The Board is committed to maintaining high standards of corporate governance.
The Company's Corporate Governance Statement, which includes full details of
the recognised corporate governance code which the Company complies with and
an explanation of any departure from the code, is maintained on its website,
as required by AIM rules. The information is reviewed at least once per annum
and the website includes the date on which the information was last reviewed.
The most recent review has been undertaken during the process of preparing the
Annual Report and Financial Statements.
As a company whose shares are traded on AIM, the Board seeks to comply with
the Quoted Companies Alliance's Corporate Governance Code ("the QCA Code"). In
addition, the Directors have adopted a code of conduct for dealings in the
shares of the Company by Directors and employees and are committed to
maintaining the highest standards of corporate governance. Bob Moore, in his
capacity as Non-Executive Director, has assumed responsibility for ensuring
that the Company has appropriate corporate governance standards in place and
that these requirements are followed and applied within the Company as a
whole. The corporate governance arrangements that the Board has adopted are
designed to ensure that the Company delivers long term value to its
shareholders and that shareholders have the opportunity to express their views
and expectations for the Company in a manner that encourages open dialogue
with the Board. The Board recognises that its decisions regarding strategy and
risk will impact the corporate culture of the Company as a whole and that this
will impact the performance of the Company. The Board is very aware that the
tone and culture set by the Board will greatly impact all aspects of the
Company as a whole and the way that employees behave. A large part of the
Company's activities is centred upon what needs to be an open and respectful
dialogue with employees, clients and other stakeholders. Therefore, the
importance of sound ethical values and behaviours is crucial to the ability of
the Company to successfully achieve its corporate objectives. The Board places
great importance on this aspect of corporate life and seeks to ensure that
this flows through all that the Company does.
No material governance related matters occurred during the financial year
ended 30 June 2023.
The Company's Corporate Governance report, which can also be found on the
website, follows.
Corporate Governance Report
The QCA Code sets out 10 principles that should be applied. These are listed
below together with a short explanation of how the Company applies each of the
principles:
Principle One
Business Model and Strategy
The Board has concluded that the highest medium and long term value can be
delivered to its shareholders by the adoption of a single strategy for the
Company. The Company will seek to grow its business by entering into new
business segments where the Board believe will benefit the growth of the
Company (as disclosed in the Strategic Report), and will seek out further
complementary partnerships and acquisitions that create enhanced value.
Principle Two
Understanding Shareholder Needs and Expectations
The Board is committed to maintaining good communication and having
constructive dialogue with its shareholders. The Company has close ongoing
relationships with its private shareholders. Institutional shareholders and
analysts have the opportunity to discuss issues and provide feedback at
meetings with the Company. In addition, all shareholders are encouraged to
attend the Company's Annual General Meeting. Investors also have access to
current information on the Company through its website, www.mobilestreams.com,
and via Mark Epstein, CEO who is available to answer investor relations
enquiries.
Principle Three
Considering wider stakeholder and social responsibilities
The Board recognises that the long-term success of the Company is reliant upon
the efforts of the employees of the Company and its contractors, suppliers,
regulators and other stakeholders. The Board has put in place a range of
processes and systems to ensure that there is close oversight and contact with
its key resources and relationships. For example, all employees of the Company
participate in a structured Company-wide annual assessment process which is
designed to ensure that there is an open and confidential dialogue with each
person in the Company to help ensure successful two way communication with
agreement on goals, targets and aspirations of the employee and the Company.
These feedback processes help to ensure that the Company can respond to new
issues and opportunities that arise to further the success of employees and
the Company. The Company has close ongoing relationships with a broad range of
its stakeholders and provides them with the opportunity to raise issues and
provide feedback to the Company.
Principle Four
Risk Management
In addition to its other roles and responsibilities, the Audit and Compliance
Committee is responsible to the Board for ensuring that procedures are in
place and are being implemented effectively to identify, evaluate and manage
the significant risks faced by the Company. The risk assessment matrix below
sets out those risks, and identifies their ownership and the controls that are
in place. This matrix is updated as changes arise in the nature of risks or
the controls that are implemented to mitigate them. The Audit and Compliance
Committee reviews the risk matrix and the effectiveness of scenario testing on
a regular basis. The following principal risks and controls to mitigate them,
have been identified:
Activity Risk Impact Control(s)
Management Recruitment and retention of key staff Reduction in operating capability Stimulating and safe working environment
Balancing salary with longer term incentive plans
Regulatory adherence Breach of rules Censure or withdrawal of authorisation Strong compliance regime instilled at all levels of the Company
Strategic Damage to reputation Inability to secure new capital or clients Effective communications with shareholders coupled with consistent messaging
to our customers
Robust compliance
Secure off-site storage of data
Inadequate disaster recovery procedures Loss of key operational and financial data
Financial Liquidity, market and credit risk Inability to continue as going concern Robust capital management policies and procedures
Reduction in asset values Appropriate authority and investment levels as set by Treasury and Investment
Policies
Inappropriate controls and accounting policies Incorrect reporting of assets
Audit and Compliance Committee
The Directors have established procedures, as represented by this statement,
for the purpose of providing a system of internal control. An internal audit
function is not considered necessary or practical due to the size of the
Company and the close day to day control exercised by the Executive Directors.
However, the Board will continue to monitor the need for an internal audit
function. The Board works closely with and has regular ongoing dialogue with
the Company financial controller and has established appropriate reporting and
control mechanisms to ensure the effectiveness of its control systems.
Principle Five
A Well-Functioning Board of Directors
As at the date hereof the Board comprised, the CEO Mark Epstein, Finance
Director Sri Ramakrishna Uthayanan and two Non-Executive Directors, Bob Moore
(Chairman) and Charles Goodfellow. Biographical details of the current
Directors are set out within Principle Six below. Executive and Non-Executive
Directors are subject to re-election at intervals of no more than three years.
The letters of appointment of all Directors are available for inspection at
the Company's registered office during normal business hours.
The Board meets at least eight times per annum. It has established an Audit
and Compliance Committee a Remuneration Committee, and a Nominations
Committee, particulars of which appear hereafter. The Non-Executive Directors
are considered to be part time but are expected to provide as much time to the
Company as is required. The Board notes that the QCA recommends a balance
between Executive and Non-Executive Directors and recommends that there be two
independent non-Executives. Bob Moore and Charles Goodfellow are considered to
be Independent Directors. Further commentary in relation to the Board's
assessment of independence is set out within Principle Six below.
As the Company grows and develops the Board will periodically review its
corporate governance framework to ensure it remains appropriate for the size,
complexity and risk profile of the Company.
Attendance at Board and Committee Meetings
The Company shall report annually on the number of Board and committee
meetings held during the year and the attendance record of individual
Directors. To date in the current financial year the Directors have a 100%
record of attendance at such meetings. In order to be efficient, the Directors
meet formally and informally both in person and by telephone. During the year
there were 8 Board meetings, with all Directors being present at all meetings.
The volume and frequency of such meetings is expected to continue at a similar
rate. The Audit and Compliance Committee met three times and the Remuneration
Committee, met twice, in each case with all members present.
Principle Six
Appropriate Skills and Experience of the Directors
The Board currently consists of five Directors led by Chairman Bob Moore and,
in addition, the Company has contracted the outsourced services of Pennsec
Limited to act as the Company Secretary. The Company believes that the current
balance of skills in the Board as a whole, reflects a very broad range of
commercial and professional skills across geographies and industries and each
of the Directors has experience in public markets. As demonstrated below in
the descriptions of each Director, the Board has the necessary commercial,
financial and legal skills required for the effective leadership of the Group.
The Board recognises that it currently has a limited diversity and this will
form a part of any future recruitment consideration if the Board concludes
that replacement or additional Directors are required.
Each Director undertakes a mixture of formal and informal continuing
professional development as necessary to ensure that their skills remain
current and relevant to the needs of the Group.
Mr Bob Dennis Moore, Non-Executive Chairman
Bob is a UK qualified lawyer (Barrister, called to the bar at Middle Temple
1981) with over 35 years' business, commercial and legal experience, including
as Head of International Legal Affairs at Enterprise Oil plc (a UK FTSE 100
company until its acquisition by Shell in 2002) and as Co-founder and
Commercial Director of Granby Oil & Gas plc, which was listed on AIM from
2005 until its sale in 2008. Bob has subsequently co-founded, and is Managing
Director of, several private engineering and energy businesses based in the UK
and Luxembourg.
Mr Charles Edouard Goodfellow, Non-Executive Director
Charles Goodfellow has over 30 years' experience in the London capital
markets, having worked initially in equity sales and then in corporate finance
for various London investment banks and corporate finance specialists. He
specialises in assisting smaller companies across a range of sectors in
raising growth capital, as well as targeting industry partners capable of
taking strategic stakes and control.
Mr Mark Alexander Epstein, Chief Executive Officer
Mark is an experienced CEO, Director, entrepreneur, expert in marketing,
communications, technology and mobile. Mark is the co-founder of Krunch.ai a
next generation insight and intelligence platform, IgniteAMT a digital
transformation company and IgniteCAP an incubation and investment business.
Mark also co-founded and was CEO on its AIM listing of The People's Operator
PLC, a cause-based mobile phone network that had operations in the UK and USA.
Prior to that Mark co-founded Mass1 which he grew into one of the UK's most
successful campaign agencies. He has also held numerous senior management
positions in his career.
Sri Ramakrishna Uthayanan, Finance Director
Rama is a UK qualified accountant with over 35 years' audit and accounting
experience, including as Finance Director of AIM listed The People's Operator
plc from 2016 until 2019. He has been Finance Director at KrunchData Limited,
the Company's subsidiary since December 2018.
Mr Moore and Mr Goodfellow are considered to be independent Directors of the
Company. In coming to this conclusion, the Board has taken a number of matters
into consideration including:
· the absence of previous employment or material business
relationships with the Company and its Shareholders;
· that none are party to any performance related share schemes; and
service length with the Company.
Principle Seven
Evaluation of Board Performance
The Board has undertaken an internal review of the Board, the Committees and
individual Directors, in the form of peer appraisal and discussions, to
determine their effectiveness and performance as well as the Directors'
continued independence.
The evaluation concluded that the Board demonstrates the appropriate level of
skills, knowledge and performance for the size and nature of the Group. The
Directors will continue to review the need to strengthen the Board as the
Group develops.
Principle Eight
Corporate Culture
The Board recognises that its decisions regarding strategy and risk will
impact the corporate culture of the Company as a whole and that this will
impact the performance of the Company. The corporate governance arrangements
that the Board has adopted are designed to ensure that the Company delivers
long term value to its shareholders and that shareholders have the opportunity
to express their views and expectations for the Company in a manner that
encourages open dialogue with the Board. The Board recognises that their
decisions regarding strategy and risk will impact the corporate culture of the
Company as a whole and that this will impact the performance of the Company.
The Board is very aware that the tone and culture set by the Board will
greatly impact all aspects of the Company as a whole and the way that
employees behave. A large part of the Company's activities is centred upon
what needs to be an open and respectful dialogue with employees, clients and
other stakeholders. Therefore, the importance of sound ethical values and
behaviours is crucial to the ability of the Company to successfully achieve
its corporate objectives.
The Board places great import on this aspect of corporate life and seeks to
ensure that this flows through all that the Company does. The Directors
consider that at present the Company has an open culture facilitating
comprehensive dialogue and feedback and enabling positive and constructive
challenge. There is frequent dialogue between the Directors and senior
management of the principal operating subsidiaries. The Board monitors the
corporate culture through a mix of formal and informal feedback, based on
which the Board is confident that a healthy culture consistent with the
principles adopted exists.
The Company has adopted, with effect from the date on which its shares were
admitted to AIM, a code for Directors' and employees' dealings in securities
which is appropriate for a company whose securities are traded on AIM and is
in accordance with the requirements of the Market Abuse Regulation which came
into effect in 2016.
Principle Nine
Maintenance of Governance Structures and Processes
Ultimate authority for all aspects of the Company's activities rests with the
Board, the respective responsibilities of the Chairman and Chief Operating
Officer arising as a consequence of delegation by the Board. The Board has
adopted appropriate delegations of authority which set out matters which are
reserved to the Board. The Chairman is responsible for the effectiveness of
the Board, while management of the Company's business and primary contact with
shareholders has been delegated by the Board to the Chief Executive Officer.
Audit and Compliance Committee
The Audit and Compliance Committee comprises Bob Moore, who chairs this
committee, and Charles Goodfellow. The Audit and Compliance Committee has
primary responsibility for monitoring the quality of internal controls and
ensuring that the financial performance of the Company is properly measured
and reported. It receives reports from the Executive management and auditors
relating to the interim and annual accounts and the accounting and internal
control systems in use throughout the Company. The Audit and Compliance
Committee shall meet not less than twice in each financial year and it has
unrestricted access to the Company's auditors.
Remuneration Committee
The Remuneration Committee comprises Bob Moore, who chairs this committee, and
Charles Goodfellow. The Remuneration Committee reviews the performance of the
Executive Directors and employees and makes recommendations to the Board on
matters relating to their remuneration and terms of employment. The
Remuneration Committee also considers and approves the granting of share
options pursuant to the share option plan and the award of shares in lieu of
bonuses pursuant to the Company's Remuneration Policy.
Nominations Committee
The Nominations Committee comprises Bob Moore, who chairs this committee, and
Charles Goodfellow.
Non-Executive Directors
The Board has adopted guidelines for the appointment of Non-Executive
Directors which have been in place and which have been observed throughout the
year. These provide for the orderly and constructive succession and rotation
of the Chairman and Non-Executive Directors insofar as both the Chairman and
Non-Executive Directors will be appointed for an initial term of three years
and may, at the Board's discretion believing it to be in the best interests of
the Company, be appointed for subsequent terms. The Chairman may serve as a
Non-Executive Director before commencing a first term as Chairman.
In accordance with the Companies Act 2006, the Board complies with: a duty to
act within their powers; a duty to promote the success of the Company; a duty
to exercise independent judgement; a duty to exercise reasonable care, skill
and diligence; a duty to avoid conflicts of interest; a duty not to accept
benefits from third parties and a duty to declare any interest in a proposed
transaction or arrangement.
Principle Ten
Shareholder Communication
The Board is committed to maintaining good communication and having
constructive dialogue with its shareholders. The Company responds to all
shareholders who contact the Directors, and as a result has positive ongoing
relationships with a wide range of shareholders. All shareholders and analysts
have the opportunity to discuss issues and provide feedback at meetings with
the Company. The Company also provides shareholder updates whenever
appropriate using both regulatory and other channels. In addition, all
shareholders are encouraged to attend the Company's Annual General Meeting.
Investors also have access to current information on the Company through its
website, www.mobilestreams.com, and via Mark Epstein, CEO, who is available to
answer investor relations enquiries.
The Company includes, when relevant, in its annual report, any matters of note
arising from the audit or remuneration committees.
On behalf of the Board
Bob Moore
Chairman
22 December 2023
REPORT OF THE INDEPENDENT AUDITOR TO THE MEMBERS OF MOBILE STREAMS PLC
Opinion
We have audited the group financial statements of Mobile Streams Plc (the
'group') for the year ended 30 June 2023 which comprise the Consolidated
Statement of Comprehensive Income, the Consolidated Statement of Financial
Position, the Consolidated Statement of Changes in Equity and the Consolidated
Statement of Cash Flows and notes to the financial statements, including a
summary of significant accounting policies. The financial reporting framework
that has been applied in their preparation is applicable law and UK-adopted
international accounting standards.
In our opinion, the group financial statements:
· give a true and fair view of the state of the group's affairs as
at 30 June 2023 and of its loss for the year then ended;
· have been properly prepared in accordance with UK-adopted
international accounting standards; and
· have been prepared in accordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We are independent of
the group in accordance with the ethical requirements that are relevant to our
audit of the financial statements in the UK, including the FRC's Ethical
Standard as applied to listed entities, and we have fulfilled our other
ethical responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to the accounting policies in the group financial
statements, which indicates that the group needs to achieve its operating
targets, and may require further financing to meet its commitments as they
fall due. As stated in the accounting policies, the group's forecasts are
dependent on revenue streams which are uncontracted and have no historical
data at present upon which to base the revenue forecasts. As such there is
currently uncertainty regarding the group achieving such operating targets as
the forecasts are dependent on factors beyond the control of the group. As
stated in the accounting policies, these events or conditions indicate that a
material uncertainty exists that may cast significant doubt on the group's
ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
In auditing the group financial statements, we have concluded that the
director's use of the going concern basis of accounting in the preparation of
the group financial statements is appropriate. Our evaluation of the
directors' assessment of the group's ability to continue to adopt the going
concern basis of accounting included:
• consideration of the group's objectives, policies and processes in
managing its working capital as well as exposure to financial, credit and
liquidity risks;
• reviewing the cash flow forecasts for the ensuing twelve months
from the date of approval of these group financial statements and assessment
thereof;
• performing sensitivity analysis on the cash flow forecast prepared
by management, and challenging the assumptions included thereto;
• reviewing the management's going concern memorandum assessment and
discussing with management regarding the future and availability of funding;
and
• reviewing the adequacy and completeness of disclosures in the
group financial statements.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Our application of materiality
The group materiality for the financial statements as a whole was set at
£223,000 (2022: £112,280) based on 7% of loss before tax (2022: 7% of loss
before tax). We have used this benchmark to determine our materiality, which
we believe is the key metric of the group used by shareholders, as the group
seeks to reduce their cost base and refocus their business strategy. The Group
performance materiality was set at 70% (2022: 70%) of materiality for the
financial statements as a whole equating to £156,000 (2022: £78,590). In
determining performance materiality of the group, we considered the risk
profile of the listed entity including the increased losses in the financial
period.
We have agreed with those charged with governance that we would report any
individual audit difference in excess of £11,150 (2022: £5,690) as well as
differences below this threshold that, in our view, warranted reporting on
qualitative grounds.
Materiality for the significant components of the group ranged from £34,000
(2022: £1,763) to £200,000 (2022: £63,133) based on 7% of loss before tax
for each component.
Our approach to the audit
In designing our audit, we determined materiality and assessed the risk of
material misstatement in the group financial statements. In particular, we
looked at areas involving significant accounting estimates and judgements by
the directors including the valuation of share options. These areas were
however not considered to constitute key audit matters. We also addressed the
risk of management override of internal controls, including evaluating whether
there was evidence of bias by the directors that represented a risk of
material misstatements due to fraud. Of the seven reporting components of the
group, a full scope audit was performed on the complete financial information
of four components (Mobile Streams Plc, Streams Data Limited, Krunch Data
Limited and Mobile Streams Mexico) and, for the other components, a limited
scope review was performed.
The group's key accounting function is based in Argentina and our audit was
performed remotely from our London office with regular contact with relevant
personnel throughout. No component auditors were used in the audit.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. In addition to the matter
described in the Material uncertainty related to going concern section we have
determined the matters described below to be the key audit matters to be
communicated in our report.
Key Audit Matter How our scope addressed this matter
Accounting Treatment of Non Fungible Tokens ("NFTs") - see Group Accounting
Policies
During the year, the group entered into a number of licence agreements with Our work in this area included:
sporting teams to have the right to sell various intellectual properties of
the teams (e.g. logos) in the form of NFTs. These agreements all comprise - Obtaining and reviewing the NFT agreements
royalty rates with upfront guaranteed minimum royalties ("GMR's") defined for
year 1 and, for most agreements, further minimum royalties defined for years - Applying the guidance included within IAS 38 - Intangible Assets, to
2-5. ascertain if the transactions are within scope of the standard and require
capitalising
The accounting treatment must be considered, to establish whether these
upfront payments should be capitalised and amortised over the period of the - Reviewing management's application of accounting treatment and
agreement, whether it should be accounted for as a prepaid expense or whether critically assess for appropriateness
it should be expensed during the year.
- Recalculating and reperforming any calculations derived from the
agreements
- Assessing management's forecasts of future NFT revenues to quantify
potential liabilities in respect of royalty payments
- Ensuring that the appropriate disclosures are made within the
financial statements.
We have concluded that the accounting treatment of these payments are
materially correct and have been presented truly and fairly.
Other information
The other information comprises the information included in the annual report,
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information contained within the
annual report. Our opinion on the group financial statements does not cover
the other information and, except to the extent otherwise explicitly stated in
our report, we do not express any form of assurance conclusion thereon. Our
responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit or otherwise
appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
· the information given in the strategic report and the directors'
report for the financial year for which the group financial statements are
prepared is consistent with the group financial statements; and
· the strategic report and the directors' report have been prepared
in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and its
environment obtained in the course of the audit, we have not identified
material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept, or returns
adequate for our audit have not been received from branches not visited by us;
or
· the financial statements are not in agreement with the accounting
records and returns; or
· certain disclosures of directors' remuneration specified by law
are not made; or
· we have not received all the information and explanations we
require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the
directors are responsible for the preparation of the group financial
statements and for being satisfied that they give a true and fair view, and
for such internal control as the directors determine is necessary to enable
the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the group financial statements, the directors are responsible for
assessing the group's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the group or to
cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
· We obtained an understanding of the group and the sector in which
it operates to identify laws and regulations that could reasonably be expected
to have a direct effect on the financial statements. We obtained our
understanding in this regard through discussions with management and
application of cumulative audit knowledge and experience of the sector.
· We determined the principal laws and regulations relevant to the
group in this regard to be those arising from AIM rules, Companies Act 2006
and local employment law.
· We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-compliance by the group
with those laws and regulations. These procedures included, but were not
limited to:
o enquiries of management and review of minutes.
· We also identified the risks of material misstatement of the
financial statements due to fraud. We considered, in addition to the
non-rebuttable presumption of a risk of fraud arising from management override
of controls, that the potential for management bias was identified in relation
to:
o the impairment of goodwill and intangible assets and we addressed this by
challenging the assumptions and judgements made by management when auditing
these significant accounting estimates; and
· As in all of our audits, we addressed the risk of fraud arising
from management override of controls by performing audit procedures which
included, but were not limited to: the testing of journals; reviewing
accounting estimates for evidence of bias; and evaluating the business
rationale of any significant transactions that are unusual or outside the
normal course of business.
Because of the inherent limitations of an audit, there is a risk that we will
not detect all irregularities, including those leading to a material
misstatement in the financial statements or non-compliance with regulation.
This risk increases the more that compliance with a law or regulation is
removed from the events and transactions reflected in the financial
statements, as we will be less likely to become aware of instances of
non-compliance. The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities
(http://www.frc.org.uk/auditorsresponsibilities) . This description forms part
of our auditor's report
Other matter
We have reported separately on the parent company financial statements of
Mobile Streams Plc for the year ended 30 June 2023.
Use of our report
This report is made solely to the company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company's members those matters we
are required to state to them in an auditor's report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone, other than the company and the company's members as
a body, for our audit work, for this report, or for the opinions we have
formed.
Timothy Harris (Senior Statutory Auditor)
15 Westferry Circus
For and on behalf of PKF Littlejohn
LLP
Canary Wharf
Statutory
Auditor
London E14 4HD
22 December 2023
Consolidated STATEMENT OF comprehensive income
Year ended Year ended
30 June 2023 30 June 2022
(restated)
Note £000's £000's
Revenue 3 1,824 1,022
Cost of sales 3 (1,812) (572)
Gross profit 12 450
Selling and marketing costs 3 (876) (264)
Administrative expenses 3 (2,220) (1,979)
Impairment of Goodwill 4 (360) -
Quanta convertible loan impairment 4 - (414)
Quanta revenue bad debt provision 4 - (201)
Impairment of intangibles 4 (348) (104)
Operating Loss (3,792) (2,513)
Finance income 3 3 4
Loss before tax (3,789) (2,509)
Tax expense 5 - -
Loss for the year (3,789) (2,509)
-
Comprehensive Loss for the year (3,789) (2,509)
Attributable to:
Equity shareholders of Mobile Streams plc (3,789) (2,509)
(3,789) (2,509)
Other comprehensive income
Other comprehensive income - -
Total comprehensive loss for the year attributable to equity (3,789) (2,509)
shareholders of Mobile Streams plc
Earnings per share
Pence per share Pence per share
Basic earnings per share 6 (0.093) (0.092)
Diluted earnings per share 6 (0.093) (0.092)
Consolidated STATEMENT OF FINANCIAL POSITION
Year ended Year ended
30 June 2023 30 June 2022
(restated)
Note £000's £000's
Assets
Non- Current
Intangible assets 9 - 326
Goodwill 9 - 360
Other Assets 10 - 170
- 856
Current
Trade and other receivables 11 148 162
Cash and cash equivalents 12 913 1,675
1,061 1,837
Total assets 1,061 2,693
Equity
Equity attributable to equity holders of Mobile Streams plc
Called up share capital 13 768 659
Share premium 21,331 19,334
Translation reserve (3,050) (3,050)
Share Based Payment reserve 25 13
Retained earnings (18,541) (14,752)
Equity attributable to equity holders of Mobile Streams plc 533 2,204
Non-controlling interest - -
Total equity 533 2,204
Liabilities
Non-Current
Bank debt - 40
- 40
Current
Trade and other payables 14 487 442
Bank debt 41 7
528 449
Total liabilities 528 449
Total equity and liabilities 1,061 2,693
Company Registration Number: 03696108
The Financial Statements were approved by the Board of Directors on 22
December 2023 and are signed on its behalf by:
Bob Moore
Chairman
Consolidated STATEMENT OF CHANGES IN EQUITY
Equity attributable to equity holders of Mobile Streams plc
Called up share capital Share premium Translation reserve Share-based payment reserve Retained earnings Non- Controlling Interest Total Equity
£000's £000's £000's £000's £000's £000's £000's
Balance at 1 July 2021 567 16,765 (3,050) 13 (11,480) 1 2,816
Loss for the year - - - (2,764) - (2,764)
Comprehensive Loss for the year - - - (2,764) - (2,764)
Warrants charge - - - 255 - - 255
Issue of shares 92 2,569 - - - 2,661
Acquisition of 51% of KrunchData Limited - - - (763) (1) (764)
-
Transactions with shareholders 92 2,569 - 255 (763) (1) 2,204
Balance at 30 June 2022 659 19,334 (3,050) 268 (15,007) - 2,204
At 1(st) July 2022 as previously reported 659 19,334 (3,050) (15,007) - 2,204
268
Prior Year Adjustment (Note 23) - - - (255) 255 - -
Balance at 1 July 2022 (restated) 659 19,334 (3,050) 13 (14,752) - 2,204
Loss for the year - - - - (3,789) - (3,789)
Comprehensive loss for the year - - - - (3,789) - (3,789)
Share option charge - - - 12 - - 12
Issue of shares 109 1,997 - - - - 2,106
Transactions with Shareholders 109 1,997 - 12 - - 2,118
Balance at 30 June 2023 768 21,331 (3,050) 25 (18,541) - 533
consolidated CASH FLOW statement
Year ended Year ended
30 June 30 June
2023 2022
(restated)
Note £000's £000's
Operating activities
Loss before taxation (3,789) (2,509)
Adjustments:
Amortization of intangible assets 9 296 262
Impairment of intangible assets 9 708 106
Impairment losses of financial assets 10 - 80
Impairment of receivables 11 (15) 283
Impairment of convertible loan 4 - 414
Profit on disposals of investments 10 (22) -
Share Based Payments expense 16 12 -
Remuneration paid to Directors and Senior Managers in shares 67 -
Consultant fees paid in shares 719 -
Finance income (3) (4)
Changes in trade and other receivables 11 28 (120)
Changes in trade and other payables 14 45 89
Total cash generated in operating activities (1,954) (1,399)
Investing activities
Additions intangible assets 9 (318) -
Acquisitions - consideration (cash) - (265)
Acquisitions - other investments - (414)
Proceeds from sale of Gfinity shares 10 192 -
Finance income 3 4
Net Cash used in investing activities (123) (675)
Financing activities
Equity fund-raise (net of expenses paid) 1,320 2,015
(Repayment) of Bank loans 15 (6) (3)
Net Cash generated from financing activities 1,314 2,012
Net change in cash and cash equivalents (763) (62)
Exchange (losses) on cash and cash equivalents 1 22
Cash and cash equivalents at beginning of year 1,675 1,715
Cash and cash equivalents, end of year 12 913 1,675
Reconciliation of net debt is shown in Note 15.
Significant non-cash transactions that occurred during the period relate to
payments made to individuals in relation to the NFT contracts as well as to
directors as directors fees and some fees to senior managers.
Mobile Streams plc (the 'Company') and its subsidiaries (together 'the Group')
delivers gaming content to a global audience, through its websites and
platforms, where long-standing carrier relationships are in countries
including India, Argentina and Mexico. The Streams data insight, intelligence
and visualisation services and marketing optimisation tools support the
content business, as well as serving enterprise level bespoke clients and the
Streams SaaS ("Software as a Service") self-service platform. The Group's
strategy is to deliver next-generation content including gaming, Esports and
related NFTs to a global audience. The Group has recently announced it will be
expanding its operations in Mexico into publishing, betting and media
ownership, which complements its existing content portfolio of products and
services, through the acquisition of a 10% interest in Capital Media Sports
S.A ("Capital Media Sports"), a newly created company.
The Company is a public limited company incorporated and domiciled in the
United Kingdom. The address of its registered office is 125 Wood Street,
London, EC2V 7AW.
The Company is listed on the London Stock Exchange's Alternative Investment
Market.
These consolidated Financial Statements were approved for issue by the Board
of Directors on 22 December 2023.
Summary of significant accounting policies
Basis of preparation
The Group Financial Statements consolidate those of the parent company and all
of its subsidiary undertakings drawn up to 30 June 2023. They have been
prepared in accordance with applicable International Accounting Standards as
adopted by the UK and with the Companies Act 2006. The Financial Statements
have been prepared under the historical cost convention, with investments
being valued under fair value through profit or loss.
Business combinations
The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognises any non--controlling interest in the acquire on an acquisition -by -acquisition basis, either at fair value or at the non--controlling interest's proportionate share of the recognised amounts of acquiree's identifiable net assets. Acquisition- related costs are expensed as incurred.
Consolidation
Control is achieved where the Company is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability to
affect those returns through its power over the entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the Group. They
are de-consolidated from the date on which control is lost.
Intercompany transactions, balances and unrealised gains on transactions
between group companies are eliminated in full. Unrealised losses are also
eliminated unless the transaction provides evidence of an impairment of the
asset transferred. Subsidiaries' accounting policies have been changed where
necessary to ensure consistency with the policies adopted by the Group.
Identifiable assets acquired and liabilities and contingent liabilities
assumed in a business combination are, with limited exceptions, measured
initially at their fair values at the acquisition date. The Group recognises
any non-controlling interest in the acquired entity on an
acquisition-by-acquisition basis either at fair value or at the
non-controlling interest's proportionate share of the acquired entity's net
identifiable assets.
The separate Financial Statements and related notes of the Company follow the
Financial Statements and related notes of the Group, and are prepared in
accordance with FRS 101.
Foreign currency translation
(a) Presentational currency
The consolidated and parent company Financial Statements are presented in
British pounds. The functional currency of the parent entity is also British
pounds. The subsidiaries of the parent company and their respective functional
currencies are as follows: Mobile Streams de Argentina SRL (Argentine Peso),
Mobile Streams Columbia Limitada (Columbian Peso), Mobile Streams of Mexico de
CV (Mexican Peso), Mobile Streams India Private Limited (Rupee), Streams Data
Limited (British Pounds), KrunchData Limited (British Pounds).
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing at the date the transaction occurs. Any
exchange gains or losses resulting from these transactions and the translation
of monetary assets and liabilities at the consolidated statement of financial
position date are recognised in the consolidated income statement, except to
the extent that a monetary asset or liability represents a net investment in a
subsidiary when exchange differences arising on translation are recognised in
equity within the translation reserve. Amount due from or to subsidiaries are
treated as part of net investment in the subsidiary when settlement is neither
planned nor likely to occur in the foreseeable future. Upon settlement,
amounts that have arisen are taken directly to profit or loss.
Foreign currency balances are translated at the year-end using exchange rate
prevailing at the year-end.
(c) Group companies
The financial results and position of all group entities that have a
functional currency different from the presentation currency of the Group are
translated into the presentation currency as follows:
i assets and liabilities for each consolidated
statement of financial position are translated at the closing exchange rate at
the date of the consolidated statement of financial position.
ii income and expenses for each consolidated income
statement are translated at average exchange rates (unless it is not a
reasonable approximation to the exchange rate at the date of transaction).
iii all resulting exchange differences are recognised
as a separate component of equity (cumulative translation reserve).
Hyper-inflationary currencies
The Argentinian economy is designated as a hyper-inflationary. The Financial
Statements of the Argentinian subsidiary are stated in terms of the purchasing
power at the end of the reporting period through the selection of a general
price index before translation into the Group's presentation currency being
GBP.
Goodwill
Goodwill arising on the acquisition of a subsidiary undertaking is determined
as the difference between the fair value of the assets, including any
intangible assets arising on acquisition, and liabilities acquired, and the
fair value of consideration paid. Goodwill, which is classified as an
intangible asset with an indefinite life, is subject to an annual impairment
review. Further detail of the goodwill arising on the acquisition of
KrunchData Limited can be found in note 9: Goodwill and Intangible Assets.
Intangible assets
An intangible asset arising from the Company's product development is
recognised if, and only if, the Company can demonstrate all of the following:
• the technical feasibility of completing the intangible asset so
that it will be available for use or sale
• its intention to complete the intangible asset and use or sell
it
• its ability to use or sell the intangible asset
• how the intangible asset will generate probable future economic
benefits
• the availability of adequate technical, financial and other
resources to complete the development and to use or sell the intangible asset
• its ability to measure reliably the expenditure attributable to
the intangible asset during its development
Intangible assets are amortised on a straight line basis over their useful
lives of up to five years. Amortisation is charged to the income statement
from when the asset becomes available to use. Where no internally generated
intangible asset can be recognised, development expenditure is recognised as
an expense in the period in which it is incurred.
Going Concern
The Financial Statements have been prepared on a going concern basis, which
assumes that the Group and the Company will continue in operational existence
for the foreseeable future, being 12 months from the date of sign-off of these
accounts.
The Group and Company use annual budgeting, forecasting, scenario planning and
regular performance reviews to assess the longer-term profitability of the
Group and make strategic and commercial changes as required to ensure that
cash resources are maintained.
Management have prepared forecasts for the Group's ongoing business covering
the 12 month period following the date of approval of the financial
statements. These forecasts make certain assumptions in respect of predicted
revenue to be received from development of the new Mexican Sports betting
segment and expected synergies for the existing NFTs revenue stream. The
directors note that these revenue streams are uncontracted and have no
historical data at present upon which to base the revenue forecasts. As such,
the directors note that there is an element of uncertainty surrounding these
forecasts. However, the directors believe the revenue forecast targets to be
achievable and reasonable due to management's expertise and experience in the
industry.
In July 2022 the Company launched its business as the exclusive global
producer and provider of Non Fungible Tokens ("NFTs") for several prominent
football teams and sports professionals, which developed initial revenues
during the year-ending 30th June 2023. The company seeks to expand this
business and sees this as a major driver of revenue across the coming 18
months with further potential contracts under negotiation. Whilst uncertain,
the growth in revenue from the NFT business is predicted to more than offset
the decline in the revenues from the International Gaming Systems partnership.
The market for NFTs has proven to be less successful than initially
anticipated. The Group is however, hoping that the development of the new
Mexican sports betting segment will lead to operational synergies which will
enable the group to reach a larger target market for NFT sales. At present the
success of the NFT revenue stream is thus also uncertain.
For the group to achieve the target forecast and maintain sufficient cash
balances to fund working capital, the group's revenue forecasts will need to
be achieved. Should the revenue targets not be achieved, the group will
require additional funding to enable the group to meet its working capital
requirements for the going concern period.
The Directors have modelled significant downside scenarios, including where
predicted revenues are reduced by more than 40%. Discretionary spending,
including investment in growth, will be carefully controlled and will be
reduced to the extent that gross and net revenues do not match budget
expectations. The various scenarios indicate how sensitive the forecasts are
to adverse changes in revenue forecasts.
These conditions and events indicate the existence of a material uncertainty
that may cast significant doubt upon the Group's ability to continue as a
going concern and the Group companies may therefore be unable to realise their
assets and discharge their liabilities in the ordinary course of business. The
auditors make reference to going concern in their audit report by way of a
material uncertainty. These financial statements do not include the
adjustments that would result if the Group were unable to continue as a going
concern.
After consideration of the above, the Directors consider that the continued
adoption of the going concern basis is appropriate.
New standards and interpretations not yet adopted
At the date of approval of these Financial Statements, the following standards
and interpretations which have not been applied in these Financial Statements
were in issue but not yet effective (and in some cases have not yet been
adopted by the UK):
· Onerous Contracts: Cost of Fulfilling a Contract (Amendments to
IAS 37).
· COVID-19: Related Rent Concessions (Amendment to IFRS 16).
· Property, Plant and Equipment: Proceeds before Intended Use
(Amendments to IAS 16).
· Reference to Conceptual Framework (Amendments to IFRS 3).
· Classification of Liabilities as Current or Non-current
(Amendments to IAS 1).
· Insurance Contracts and amendments to Insurance Contracts
(Amendment to IFRS 17).
· Disclosure of Accounting policies (Amendment to IAS 1 and IFRS
Practice Statement 2).
· Deferred Tax related to Assets and Liabilities arising from a
Single Transaction (Amendments to IAS 12)
The new and amended Standards and Interpretations which are in issue but not
yet mandatorily effective are not expected to be material.
Taxation
Current tax is the tax currently payable based on taxable profit for the year.
Deferred income tax is provided, using the liability method, on temporary
differences arising between the tax base of assets and liabilities and their
carrying amounts in the consolidated Financial Statements. However, deferred
tax is not provided on the initial recognition of goodwill, nor on the initial
recognition of an asset or liability unless the related transaction is a
business combination or affects tax or accounting profit. Deferred tax on
temporary differences associated with shares in subsidiaries is not provided
if reversal of these temporary differences can be controlled by the Group and
it is probable that reversal will not occur in the foreseeable future.
Deferred income tax is determined using tax rates known by the consolidated
statement of financial position date and that are expected to apply when the
deferred income tax asset is realised, or the deferred income tax liability is
settled. Deferred income tax assets are recognised only to the extent that it
is probable that future taxable profit will be available against which the
temporary differences can be utilised. Deferred tax liabilities are provided
in full. There is no discounting of assets or liabilities.
Changes in deferred tax assets or liabilities are recognised as a component of
the tax expense in the consolidated income statement, except where they relate
to items that are charged or credited directly to equity or other
comprehensive income, in which case the related deferred tax is also charged
or credited directly to equity or other comprehensive income.
Provisions
Provisions, including those for legal claims, are recognised when the Group
has a present legal or constructive obligation as a result of past events, it
is probable that an outflow of economic benefits will be required to settle
the obligation and the amount can be reliably estimated.
Provisions are measured at the present value of management's best estimate of
the expenditure required to settle the present obligation at the consolidated
statement of financial position date. The discount rate used to determine the
present value reflects current market assessments of the time value of money
and the risks specific to the liability.
Financial Assets
Classification
A number of the Company's accounting policies and disclosures require the
determination of fair value, for both financial and non-financial liabilities.
Fair values have been determined for measurement and/or disclosure purposes
based on the following methods. When applicable, further information about the
assumptions made in determining fair values is disclosed in the notes specific
to that asset or liability.
Classification of fair value financial instruments
The Company classified the fair value of its financial instruments measured at
fair value according to the following hierarchy based on the amount of
observable inputs used to value the instrument.
Level 1: Quoted prices in active markets for identical assets and liabilities.
Level 2: Inputs other than the quoted prices included in level 1 that are
observable for the asset or liability either directly or indirectly.
Level 3: Inputs for the asset or liability that are not based on observable
market data.
The company's investments in public companies are considered Level 1.
a) Financial assets and financial liabilities are recognised in the
consolidated statement of financial position when the Company becomes party to
the contractual provisions of the instrument. Financial assets are
de-recognised when the contracted rights to the cash flows from the financial
asset expire or when the contracted rights to those assets are transferred.
Financial liabilities are de-recognised when the obligation specified in the
contract is discharged, cancelled or expired. Financial assets and financial
liabilities are initially measured at their fair value. Transaction costs
attributable to the acquisition of a financial asset or financial liability
are added or deducted from the fair value of the financial asset or financial
liability. At each reporting date, financial assets are reviewed to assess
whether there is objective evidence of impairment. If any such evidence
exists, impairment loss is determined and recognised based on the
classification of the financial asset.
b) Loans and receivables (including trade receivables, prepayments,
deposits, loans and other receivables, cash and bank balances) are
non-derivative financial assets with fixed or determinable payments that are
not quoted on an active market. At each reporting date subsequent to initial
recognition, loans and receivables are carried at amortised cost using the
effective interest method, unless when there is objective evidence that the
asset is impaired. Impairment is measured as the difference between the
asset's carrying amount and the present value of estimated future cash flows
discounted at the original effective interest rate. Impairment losses are
reversed in subsequent periods when an increase in the asset's recoverable
amount can be related objectively to an event occurring after the impairment
is recognised, subject to a restriction that the carrying amount of the asset
at the date the impairment is reversed does not exceed what the amortised cost
would have been had the impairment not been recognised.
c) Trade and other receivables are recognised at their fair value.
Appropriate provisions for estimated irrecoverable amounts are recognised in
the statement of comprehensive income when there is objective evidence that
the assets are impaired.
d) Cash and cash equivalents comprise cash on hand and demand deposits
held on call with banks. Cash and cash equivalents are shown in note 12.
Receivables
Receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. They are included in current
assets, except for maturities greater than 12 months after the Statement of
Financial Position date. These are classified as non-current assets. The
Group's receivables comprise trade and other receivables and cash and cash
equivalents in the Statement of Financial Position.
Recognition and Measurement
Financial assets are initially measured at fair value plus transactions costs.
Receivables are subsequently carried at amortised cost using the effective
interest method, except for short term receivables.
Impairment of Financial Assets
The Group assesses at the end of each reporting period whether there is
objective evidence that a financial asset, or a group of financial assets, is
impaired. A financial asset, or a group of financial assets, is impaired, and
impairment losses are incurred, only if there is objective evidence of
impairment as a result of one or more events that occurred after the initial
recognition of the asset (a "loss event"), and that loss event (or events) has
an impact on the estimated future cash flows of the financial asset, or group
of financial assets, that can be reliably estimated.
The criteria that the Group uses to determine that there is objective evidence
of an impairment loss include:
· significant financial difficulty of the issuer or
obligor;
· a breach of contract, such as a default or
delinquency in interest or principal repayments;
· the disappearance of an active market for that
financial asset because of financial difficulties;
· observable data indicating that there is a
measurable decrease in the estimated future cash flows from a portfolio of
financial assets since the initial recognition of those assets, although the
decrease cannot yet be identified with the individual financial assets in the
portfolio; or
· for assets classified as available-for-sale, a
significant or prolonged decline in the fair value of the security below its
cost.
Assets carried at amortised cost
The amount of impairment is measured as the difference between the asset's
carrying amount and the present value of estimated future cash flows
(excluding future credit losses that have not been incurred), discounted at
the financial asset's original effective interest rate. The asset's carrying
amount is reduced, and the loss is recognised in the Statement of
Comprehensive Income. As a practical expedient, the Group may measure
impairment on the basis of an instrument's fair value using an observable
market price.
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 (such as an improvement in the debtor's credit
rating), the reversal of the previously recognised impairment loss is
recognised in the Statement of Comprehensive Income.
Financial Liabilities
Financial liabilities are obligations to pay cash or other financial assets
and are recognised when the Group becomes a party to the contractual
provisions of the instruments. Financial liabilities are initially measured at
fair value, net of transactions costs. They are subsequently measured at
amortised cost using the effective interest method.
Financial liabilities are derecognised when the Group or Company's contractual
obligations expire, are cancelled or are discharged. The Group's financial
liabilities consist of trade and other payables.
Cash and Cash Equivalents
For the purpose of the cash flow statements, cash and bank overdrafts comprise
cash at bank and in hand.
Revenue recognition
Under IFRS 15, Revenue from Contracts with Customers, five key points to
recognise revenue have been assessed:
Step 1: Identify the contract(s) with a customer;
Step 2: Identify the performance obligations in the contracts;
Step 3: Determine the transaction price;
Step 4: Allocate the transaction price to the performance obligations in the
contract; and
Step 5: Recognise revenue when (or as) the entity satisfies a performance
obligation.
The Group recognises revenue when the amount of revenue can be reliably
measured, it is probable that future economic benefits will flow to the
entity, and specific criteria have been met for each of the Group's
activities, as described below.
The Group bases its estimates on historical results, taking into consideration
the type of customer, the type of transaction and the specifics of each
arrangement. Where the Group makes sales relating to a future financial
period, these are deferred and recognised under 'deferred revenue' on the
Statement of Financial Position.
The Group has two material streams of revenue, being the subscription (legacy)
business and Streams Data revenues. Revenue from the legacy business is
recognised in accordance with IFRS15: content subscriptions are purchased by
the customer through the carrier phone contract, creating the obligation to
provide content access to the customer. The transaction price is determined
and communicated to the customer during the subscription process. When the
customer has obtained access and the ability to use it, the revenue is
recognised on a monthly basis.
The Streams Data business comprises several principal revenue streams.
a) ("Software as a Service") platform
Customers are charged via credit card for a digital marketing and
communications content package. Payments are processed by Stripe, a secure
online payment processing platform. Customers pay online via credit or debit
card and Stripe collects all payments and generates monthly reporting sheets
on the transactions, revenue and fee components. Monthly reconciliations are
provided to Streams Data which are reviewed and nominal ledger entries to
record the net revenue and sales tax are posted and contra posted to Stripe
trade debtor account. Payments are made from Stripe to the Streams Data bank
account 30 days in arrears covering the previous 30 days of transaction funds
collected less Stripe fee for using the payment platform.
b) the Streams bespoke data insight, intelligence, and visualisation
service
Enterprise customers who Streams provide data insight, intelligence and
visualisation services to be invoiced directly from Streams Data and charged
on a mixture of fixed monthly fees and on an hourly rate basis for technical
platform support. Enterprise customers revenue is collected on a 30 day
payment term basis.
c) the IGS (International Gaming Systems) revenue share and strategic
agreement
IGS provides MOS with content for the use on its various platforms. Revenue
generated from the content IGS supplies is subject to a revenue share
agreement between MOS and IGS. MOS deducts any costs incurred in the setup,
delivery and marketing of the content or services that IGS supplies. MOS
invoices IGS for the gross monthly revenue, and IGS invoices MOS for its
portion of the total revenue, both on a monthly basis.
d) the sporting NFT revenue stream
Streams provides the technology platform upon which the trading of NFTs take
place. Revenue generated from the sale of NFTs is subject to a revenue share
agreement between MOS and the artwork owners. MOS receives the proceeds from
the sale of NFTs to consumers (via a 3(rd) party consumer facing partner) and
pays the contracted share of these proceeds (as a royalty) to the artwork
owner. In the year ended 30 June 2023, the Group incurred costs in respect
of upfront royalties of first year target revenues. Where the Directors deemed
that these royalties could not be allocated over the life of the contract, due
to revenue projections as at the balance sheet date, the upfront costs were
expensed to the profit and loss account. MOS revenues arise daily and
settlement of the revenue share is conducted monthly on a manual basis.
Loans and borrowings
After initial recognition, interest bearing loans and borrowings are
subsequently measured at amortised cost using the effective interest rate
method. Gains and losses are recognised in the income statement when the
liabilities are derecognised as well as through the effective interest rate
method (EIR) amortisation process. Amortised cost is calculated by taking into
account any discount or premium on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortisation is included in finance costs in
the income statement.
Share based payments
Employees (including Directors) of the Group receive remuneration in the form
of share-based payment transactions, whereby employees render services in
exchange for shares or rights over shares ('equity-settled transactions').
Service providers also may receive settlement for their services in the form
of share-based payments.
The Group has applied the requirements of IFRS 2 Share-Based Payments to all
grants of equity instruments.
The cost of equity settled transactions with employees is measured by
reference to the fair value at the grant date of the equity instruments
granted. The fair value is determined by using the Black-Scholes model. The
cost of services provided to the Company settled by share-based payments are
either fair valued in same manner as those for employees or, if available, by
reference to the cash equivalent of those services.
The cost of equity-settled transactions is recognised in the consolidated
income statement, together with a corresponding increase in retained earnings,
over the periods in which the performance conditions are fulfilled, ending on
the date on which the relevant employees become fully entitled to the award
('vesting date'). At each consolidated statement of financial position date
before vesting the cumulative expense is calculated, representing the extent
to which the vesting period has expired and management's best estimate of the
achievement or otherwise of non-market conditions and of the number of equity
instruments that will ultimately vest. Market conditions are taken into
account in determining the fair value of the options granted, at grant date,
and are subsequently not adjusted for. The movement in cumulative expense
since the previous consolidated statement of financial position date is
recognised in the consolidated income statement, with a corresponding entry in
equity.
No expense or increase in equity is recognised for awards that do not
ultimately vest. Awards where vesting is conditional upon a market condition
are treated as vesting irrespective of whether or not the market condition is
satisfied, provided that all other performance conditions are satisfied.
Share capital
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of new shares or options are charged to the share
premium account.
Operating leases are leases in which the risks and rewards of ownership are not transferred to the lessee.
Equity balances
a) Called up share capital
Called up share capital represents the aggregate nominal value of ordinary
shares in issue.
b) Share premium
The share premium account represents the incremental paid up capital above the
nominal value of ordinary shares issued.
c) Translation Reserve
The translation reserve represents the cumulative translation adjustments on
translation of foreign operations.
d) Share based payments reserve in accordance with International Financial
reporting Standard 2 (IFRS2).
Determination of fair values
A number of the Company's accounting policies and disclosures require the
determination of fair value, for both financial and non-financial liabilities.
Fair values have been determined for measurement and/or disclosure purposes
based on the following methods. When applicable, further information about the
assumptions made in determining fair values is disclosed in the notes specific
to that asset or liability.
Classification of fair value financial instruments
The Company classified the fair value of its financial instruments measured at
fair value according to the following hierarchy based on the amount of
observable inputs used to value the instrument.
Level 1: Quoted prices in active markets for identical assets and liabilities.
Level 2: Inputs other than the quoted prices included in level 1 that are
observable for the asset or liability either directly or indirectly.
Level 3: Inputs for the asset or liability that are not based on observable
market data.
The company's investments in public companies are considered Level 1.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Critical accounting estimates, judgements AND ASSUMPTIONS
When applying the Group's accounting policies, it is necessary that management
makes a number of accounting estimates, judgements and assumptions about the
future. Estimates and judgements are evaluated on a regular basis and are
based on historical experience and other factors, such as expectations of
future events that are believed to be reasonable under the circumstances.
The critical judgements that have been made in arriving at the amounts
recognised in the consolidated Financial Statements are discussed below. The
Directors of the Group have determined that there are no critical accounting
estimates, judgements and assumptions associated with the Group's activities,
other than as outlined below
Valuation and asset lives of separately identifiable intangible assets
Based on the information available, the management have made the appropriate
judgements in respect of the estimated useful economic lives of the intangible
assets, which are typically judged to be 5 years from the point at which the
assets become available for use. These judgements are compared with available
comparative information of similar businesses. See Note 9: Goodwill and
Intangible assets.
The assets' residual values and useful economic lives are reviewed and
valuations are adjusted, if appropriate, at each balance sheet date.
Valuation of acquired assets at fair value
Intangible assets acquired through a business combination are initially
measured at fair value at the acquisition date and then amortised over their
useful economic lives. Subsequent expenditure is capitalised only when it
increases the future economic benefits embodied in the specific asset to which
it relates.
Impairment of goodwill and other intangible assets
Management make judgements as to whether or not goodwill or other intangible
assets are impaired. The calculation of the value requires the Directors to
estimate the future cash flows expected to arise from the cash-generating
unit. According to the NPV model used, the management needs to use a suitable
discount rate in order to calculate present value.
The carrying amount of intangibles was £nil following the impairment, given
the global NFT market. This by no means reflects the Board's considered view
of the long-term valuation of these assets but a combination of the
constraints of the accounting valuation methodology and a prudent assessment
of the global NFT and crypto market as of June 2023. The Board will now
explore how best to value the groups assets. We note that other NFT businesses
have significant platform valuations even at the pre-revenue stage and want to
ensure we value our assets appropriately in line with these comparables,
making sure their value is clear to investors. The model used was a
sensitivity analysis of a discounted cash flow, using a discount rate of 15%
per year and an average revenue growth rate of 6% per year.
The Directors have reviewed the value of Goodwill acquired through the Krunch
transaction. Taking a conservative view, the Directors have elected to
impair the intangible assets to £nil carrying value.
See Note 9: Goodwill and Intangible Assets.
Capitalisation of development costs
Included within Intangible Assets, Note 9, are costs capitalised in connection
with KrunchData platform. These costs are based on management's view of the
development team's time spent on the projects and considering the requirements
of IAS 38 "Intangible Assets". Development costs are amortised over the life
of the project once it has been released to the commercial environment. The
carrying value is tested for impairment when there is an indication that the
value of the assets might be impaired.
The key estimates involved include the time spent by personnel on development
of the projects, and the judgement of management that the costs will be
recovered in future based on the success of these developments.
2. Services provided by the group's auditor
The Group (including its overseas subsidiaries) obtained the following
services from the Group's auditor and network firms:
Year ended Year ended
2023 2022
£000's £000's
Fees payable to the Company's auditor and its associates for the audit of the 96 75
parent company and consolidated accounts
Non-Audit services:
Fees payable to the Company's auditor and its associates for other services:
Interim statement review - -
Tax compliance - -
96 75
3. Segmental reporting
As at 30 June 2023, the Group was organised into 4 geographical segments:
Europe, North America, Latin American, and Asia Pacific. The operating
segments are organised, managed and reported to the Board of Directors.
Revenues are from external customers only and generated from two principal
business activities: the sale of mobile content through Multi-National
Organisation's (Mobile Operator Services), and the provision of data insight
and intelligence platforms and services (Other Service Fees).
All operations are continuing, and all inter-segment transactions are priced
and carried out at arm's length.
The segmental results for the year ended 30 June 2023 were as follows:
£000's Europe Asia Pacific North America Latin America Consol entries Group
Mobile Operator Services - 10 - 95 - 105
Mobile Internet Services - - - - -
Other Service fees 1,944 - - - (225) 1,719
Total Revenue 1,944 10 - 95 (225) 1,824
Cost of sales (1,772) - - (39) - (1,812)
Gross profit 172 10 - 56 (225) 12
Selling, marketing and administration expenses (2,399) - - (404) - (2,803)
Trading EBITDA* (2,227) 10 - (348) (225) (2,790)
Depreciation, amortisation and impairment (841) - - - (148) (989)
Share based compensation (12) - - - - (12)
Profit (loss) for derecognition of subsidiaries - - - - - -
Finance income - - - 3 - 3
Finance expense - - - - - -
Loss before tax (3,080) 10 - (345) (373) (3,789)
Minority Interest - -
Taxation - - - - - -
Loss after tax (3,080) 10 - (345) (373) (3,789)
The segmental results for the year ended 30 June 2022 (restated) were as
follows:
£000's Europe Asia Pacific North America Latin America Consol entries Group
Mobile Operator Services - 6 - 217 - 223
Mobile Internet Services - - - - -
Other Service fees 1,275 - - - (476) 799
Total Revenue 1,275 6 - 217 (476) 1,022
Cost of sales (417) - - (155) - (572)
Gross profit 858 6 - 62 (476) 450
Selling, marketing and administration expenses (1,734) (12) - (72) - (1,818)
Trading EBITDA* (876) (6) - (10) (476) (1,368)
Depreciation, amortisation and impairment (997) - - - (148) (1,145)
Share based compensation - - - - - -
Profit (loss) for derecognition of subsidiaries - - - - -
Finance income - - - 4 4
Finance expense - - - - - -
Loss before tax (1,873) (6) - (6) (624) (2,509)
Minority Interest - -
Taxation - - - - - -
Loss after tax (1,873) (6) - (6) (624) (2,509)
* Earnings before interest, tax, depreciation, amortisation, impairments of
assets and share compensation
4. Operating loss
Operating loss is stated after charging the following items: Year ended Year ended
2023 2022
(restated)
Notes £000's £000's
Amortisation 9 296 262
Loss on foreign currency (6) (50)
Loss in fair value of investments held - 80
Impairment of intangibles 9 348 125
Impairment of goodwill 9 360 -
Quanta loan bad debt provision - 414
Quanta receivables bad debt provision - 201
Other bad debt provisions (15) 82
Share-based payments expense 12 -
995 1,114
Current year administrative expenses were £2.9m and prior year expenses were
£2.7m. There were a number of one-off expenses in the prior year listed above
that were no longer incurred in the current year. Comparatively, the current
year expenses of £2.9m were £0.3m higher than prior year expenses net of the
non-recurring items listed above.
5. income tax
The tax (credit)/charge is based on the profit before tax for the year and
represents:
2023 2022
£'000 £'000
Foreign tax on profits of the period - -
Total current tax - -
Deferred tax:
Origination & reversal of timing differences: (Deferred tax - -
charge/(credit))
Total Deferred tax - -
Total Tax benefit - -
2023 2022
Factors affecting the tax charge for the period £'000 £'000
Loss on ordinary activities before tax (3,789) (2,509)
Loss multiplied by weighted average tax rate applicable
of corporation tax in the United Kingdom of 19% (720) (477)
Adjustment in respect of prior years - foreign tax - -
Prior year tax adjustments - deferred tax - -
Deferred tax not recognized 720 477
Tax credit - -
Tax loss carried forward 7,500 4,728
No deferred tax asset has been recognised due to uncertainty as to when future
profits will be generated against which to relieve said assets.
6. EARNINGS PER SHARE ('EPS')
Basic earnings per share is calculated by dividing the loss or profit
attributable to equity holders of the company by the weighted average number
of ordinary shares in issue during the period. For the years ended 30 June
2023 and 30 June 2022, options over ordinary shares have been excluded from
the calculations of earnings per share; the options were non-dilutive in both
years as the company was loss-making.
Reconciliations of the earnings and weighted average number of shares used in
the calculations are set out below.
The adjusted EPS figures have been calculated to reflect the underlying
performance of the business by excluding non-cash charges for depreciation,
amortisation, impairments and share compensation charges.
Year ended Year ended
2023 2022
(restated)
Pence per share Pence per share
Basic loss per share (0.093) (0.092)
Diluted loss per (0.093) (0.092)
share
Reconciliations of the earnings and weighted average number of shares used in
the calculations are set out below.
2023 2022
(restated)
£000's £000's
(3,789) (2,509)
Loss for the year
For adjusted earnings per share £000's £000's
Loss for the year (3,789) (2,509)
Add back: share compensation expense 12 -
Add back: depreciation and amortisation 296 262
Adjusted loss for the year (3,481) (2,247)
Weighted average number of shares
Number of shares Number of shares
For basic earnings per share 4,079,974,110 2,717,045,225
Exercisable share options - -
For diluted earnings per share 4,079,984,110 2,717,045,225
Pence per share Pence per share
Adjusted Loss per share (0.085) (0.083)
Adjusted diluted Loss per share (0.085) (0.083)
7. Directors' and Officers' remuneration
The Directors are regarded as the key management personnel of Mobile Streams
plc. Charges in relation to remuneration received by key management personnel
for services in all capacities during the year ended 30 June 2023 are detailed
in the Directors Report.
8. Directors and employees
Staff costs including Directors during the year were as follows:
2023 2022
(restated)
£000's £000's
Wages and salaries 461 503
Social security costs 15 59
Share Based Payments 12 -
488 562
Share options costs in respect of staff costs were £12,000 during the period
(2022: Nil).
The average number of employees during the year was as follows:
Year ended Year ended
2023 2022
Number Number
Management 6 6
6 6
9. GOODWILL AND INTANGIBLE ASSETS
The goodwill reflects the retention of the economic value accruing to the
Company from its acquisition of KrunchData Limited.
Intangibles acquired Intangibles added internally Subtotal Goodwill Total
Platform development and software Streams
£000's £000's £000's £000's £000's
Cost
At 1 July 2022 485 308 793 360 1,153
Additions - 318 318 - 318
At 30 June 2023 485 626 1,111 360 1,471
Accumulated amortisation and impairment
At 1 July 2022 (274) (193) (467) - (467)
Amortisation (167) (129) (296) - (296)
Impairment (44) (304) (348) (360) (708)
At 30 June 2023 (485) (626) (1,111) (360) (1,111)
Net book value at 30 June 2023 - - - - -
Intangibles and goodwill up to 30 June 2022:
Intangibles acquired Intangibles added internally Subtotal Goodwill Total
Platform development and software Streams
£000's £000's £000's £000's £000's
Cost
At 1 July 2021 360 308 668 360 1,028
Additions -LiveScore 125 - 125 - 125
At 30 June 2022 485 308 793 360 1,153
Accumulated amortisation and impairment
At 1 July 2021 - (99) (99) - (99)
LiveScores Impairment (106) - (106) - (106)
Amortisation (168) (94) (262) - (262)
At 30 June 2022 (274) (194) (467) - (467)
Net book value at 30 June 2022 211 115 326 360 686
The Company's internally developed software relates to the Streams Data
platform. The Group tests intangibles and goodwill annually for impairment, or
more frequently if there are indications that the asset might be impaired. The
recoverable amount is determined from value in use calculations. The key
assumptions, which are the long-term growth rates, the discount rates and the
cash flow forecasts were derived from the most recent financial budgets
approved by management covering a three-year period.
A sensitivity analysis was performed using a range of lower growth and higher
discount rate assumptions. The central case rates applied were:
• Long term (three year) average growth rate 6% per year
• Discount rate / cost of capital 15%
The discount rates used are based on comparative businesses weighted average
cost of capital. As a result of this exercise, as an accounting formality, the
Directors concluded at 30(th) June 2023 that the carrying values of all
intangible assets was impaired given the current global NFT market. The Group
is also in a state of transition from legacy products to new products. Whilst
expectations remain positive in relation to the future growth of the sale of
NFTs and the prospects of the new Mexican business segment (being publishing,
online sports betting, online casino operations and media ownership), the
Directors have taken the prudent decision to impair the intangible assets and
acquisition goodwill to £nil value and an impairment charge of £708,000 has
been recognised in the Statement of Comprehensive Income for the year ending
30(th) June 2023. This by no means reflects the Board's considered view of the
long-term valuation of these assets but a combination of the constraints of
the accounting valuation methodology and a prudent assessment of the global
NFT and crypto market as of June 2023. The Board will now explore how best to
value the group's assets. We note that other NFT businesses have significant
platform valuations even at the pre-revenue stage and want to ensure we value
our assets appropriately in line with these comparables, making sure their
value is clear to investors.
10. OTHER ASSETS
Shares in UK public companies 30 June 2023 30 June 2022
£000's £000's
Fair Value of Share b/f 170 -
Shares of UK public companies acquired in year - 250
Shares of UK public companies disposed in year (170) -
Year-end fair value adjustment - (80)
Fair Value of Shares c/f - 170
The Group purchased 20m shares of Gfinity plc on 14 March 2022 at 1.25 pence
per share. The value at June 30 2022 was £170,000. A loss of £80,000 was
written off to Profit and Loss in the prior year. The shares were sold in
August 2022 for £191,701 and resulted in a small gain in the current year of
£21,701 versus their carrying value.
Convertible Loan Note issued to Quanta ("QCLN") 30 June 2023 30 June 2022
£000's £000's
QCLN b/f - 250
QCLN issued in year - 164
QCLN impaired in year - (414)
QCLN at year-end - -
During 2021 and 2022 the Group issued convertible loan notes to Quanta in the
cumulative amount of £414,000. During 2022 the Directors elected to provide
in full against the recoverability of these loan notes. This £414,000
impairment was expensed within the statement of Comprehensive Income,
The Group classified the fair value of its financial instruments measured at
fair value according to the following hierarchy based on the amount of
observable inputs used to value the instrument:
Level 1: quoted prices in active markets for identical assets and liabilities;
Level 2: inputs, other than the quoted prices included in Level 1, that are
observable for the asset or liability, either directly or indirectly;
Level 3: inputs for the asset or liability that are not based on observable
market data. The company's investments in public companies are considered
Level 1 in the hierarchy.
11. Trade and other receivables
2023 2022
£000's £000's
Trade receivables 50 96
Other debtors 6 5
Other receivables 91 61
147 162
The carrying value of receivables is considered a reasonable approximation of
fair value.
In addition, some of the unimpaired trade receivables are overdue as at the
reporting date. The age profile of trade receivables is as follows:
2023 2022
Within terms £000's £000's
Not more than 30 days 5 6
Overdue
Not more than 3 months 5 108
More than 3 months but not more than 6 months 42 77
More than 6 months but not more than 1 year 40 84
More than 1 year 98 37
Provision for doubtful debts (140) (216)
50 96
2023 2022
£000's £000's
Opening provision for doubtful debts 216 29
Change in provision during the year - utilisation (61) (96)
Change in provision during the year - charge /(release) into statement of (15) 283
comprehensive income
Closing provision for doubtful debts 140 216
Trade and other receivables that are not impaired are considered to be
collectible within the Group's payment terms, negotiated with each customer.
12. Cash and cash equivalents
Cash and cash equivalents include the following components:
2023 2022
£000's £000's
Argentina´s cash at bank and in hand 8 11
Other companies 905 1,664
Cash at bank and in hand 913 1,675
The balances are: £882,000 in British pounds, £3,000 in Indian Rupees,
£8,000 in Argentine pesos and £20,000 in Mexican pesos.
The majority of cash (£0.8m) is held with NatWest Group plc, the long term
credit rating of which is P-2 (Moody's) and A-2 (S&P).
13. SHARE CAPITAL and RESERVES
2023 2022
(restated)
£000's £000's
Ordinary Share capital 768 659
Share premium 21,331 19,334
Translation Reserve (3,050) (3,050)
Share Based Payment reserve 25 13
Retained earnings (18,541) (14,752)
533 2,204
The total number of Ordinary Shares in issue as at 30 June 2023 was
4,369,655,903 with a par value of 0.01 pence per share (30 June 2022:
3,285,590,326 with a par value of 0.01 pence per share). All issued shares are
fully paid. In addition, there are 140,753,533 Deferred Shares of 0.19 pence
nominal value each in issue. The Deferred Shares, as their name suggests, have
very limited rights which are deferred to the Ordinary Shares and effectively
carry no value as a result. Accordingly, the holders of the Deferred Shares
are not entitled to receive notice of, attend or vote at general meetings of
the Company, nor are they entitled to receive any dividends or any payment on
a return of capital until at least £10,000,000 has been paid on each Ordinary
Share. The Deferred Shares will not be admitted to trading on AIM or any other
market.
The Group's main source of capital is the parent company's equity shares. The
Group's policy is to retain sufficient authorised share capital so as to be
able to issue further shares to fund acquisitions, settle share-based
transactions and raise new funds. Share based payments relate to employee
share options schemes. The schemes have restrictions on headroom so as not
to dilute the value of issued shares of the Company. The Group has not
raised debt financing in the past and does not expect to do so in the
future.
Allotted, called up and fully paid Year ended Year ended
2023 2022
In issue at 1 July 3,285,590,326 2,354,549,845
Issued during year 1,084,065,577 931,040,481
In issue at 30 June 4,369,655,903 3,285,590,326
The balance in the share premium account represents the proceeds received
above the nominal value on the issue of the Company's equity share capital.
In July 2022 the Group issued 5,434,581 shares at 0.37 pence per share and
172,413,792 shares at 0.29 pence per share.
In October 2022 the Group issued 666,666,666 shares at 0.18 pence per share
via a share placing, and 111,111,111 shares at 0.18 pence per share via a
Broker offer.
In October 2022 the Group issued 25,930,446 shares at 0.18 pence per share.
In February 2023 the Group issued 30,483,696 shares at 0.2711 pence per share
and 72,025,285 shares at 0.1899 pence per share.
In October 2022 the Group issued 666,666,666 Warrants with a strike price of
0.30 pence per share and exercisable up to 18(th) April 2024.
In April 2023 the Group issued 340,000,000 Options over Ordinary Shares to
senior management with a strike price of 0.11 pence and exercisable up to
April 2033.
14. Trade and other payables
2023 2022
£000's £000's
Trade payables 246 112
Other payables 104 277
Accruals and deferred income 137 53
487 442
All amounts are current. The carrying values are considered to be a reasonable
approximation of fair value.
15. LOANS AND BORROWINGS
The Directors believe the book value of loans and borrowings approximates fair
values. Book values are:
2023 2022
Current £ £
Bounce Back Loan 40,809 6,571
Non-Current - 40,351
Total Loans and borrowings 40,809 46,922
Prior to its acquisition by the Group, KrunchData Limited obtained a Bounce
Back Loan from Metro Bank PLC. The purpose of the Loan is to finance working
capital and investment in the business and to support trading or commercial
activity in the United Kingdom. The duration of this fixed sum loan agreement
is 72 months from the loan drawdown date. The interest rate which applies to
the loan agreement is 2.5% (fixed) per annum. No repayments of capital or
interest are required during the first 12 months after the date draw down, as
the loan is under the terms of the Bounce Back Loan scheme offered by the UK
Government, which covers the interest payments on behalf of the Company for
that period.
16. Share-based payments
The Group operates three share option incentive plans - an Enterprise
Management Incentive Scheme, a Global Share Option Plan and an ISO Sub Plan -
in order to attract and retain key staff. The remuneration committee can
grant options over shares in the Company to employees of the Group. Options
are granted with a fixed exercise price equal to the market price of the
shares under option at the date of grant and are equity settled, the
contractual life of an option is 10 years. Exercise of an option is subject to
good and bad leaver provisions. Options are valued at the date of grant
using the Black-Scholes option pricing model. Directors did not exercise any
options during the period.
On 28 April 2023 the group issued 340,000,000 share options to senior staff as
part of their remuneration. These options have an exercise price of 0.11p
per share but are only exercisable if the volume weighted share price reaches
0.3p measured over any 10 consecutive business days. They are exercisable up
to 27 April 2033. It is the opinion of the Directors that the market
condition would be reached in 4 years.
The inputs into the Black-Scholes model for issuance of stock options were as
follows for 2023:
2023 2022
Weighted average share price / pence 0.11 n/a
Weighted average exercise price / pence 0.11 n/a
Weighted average expected volatility / % 124% n/a
Weighted average expected life / years 4 n/a
Weighted average risk-free rate / % 3.684% n/a
a) The risk-free rate is based on the UK gilt rate as at the grant date
with a period to maturity commensurate with the expected term of the relevant
option tranche.
b) The fair value charge is spread evenly over the period between the
grant of the option and the earliest exercise date.
c) The expected volatility is based on the historical volatility of share
prices over the previous period of equivalent length as the option's expected
life. The expected life used in the model has been adjusted, based on
management's best estimate, for the effects of non-transferability, exercise
restrictions and behavioural considerations. The range of comparable companies
has been reviewed for grants in the current year resulting in the decrease in
expected volatility.
The table below illustrates the number and weighted average exercise price of
share options
OPTIONS 2023 Weighted Remaining 2022 Weighted Remaining
Number of Average Life in Number of average Life in
share options Exercise years share options exercise years
Price (p) Price (p)
At start of year 4,501,000 0.5593 1.37 4,501,000 0.5593 2.37
Issued in year 340,000,000 0.1100 9.83 - - -
Exercised - - - - - -
Forfeited - - - - - -
At end of year 344,501,000 0.1159 9.71 4,501,000 0.5593 1.37
The total charge for the year relating to employee share-based payment plans
was £12,000 (2022: £Nil) and is included in administrative expenditure in
the Statement of Comprehensive Income.
17. Capital commitments
The Group had no capital commitments as at 30 June 2023 (30 June 2022:
£nil). As detailed in Note 24 Events After the Reporting Date, the Group is
currently committed to investing approximately £228,000 into its new Mexican
business segment.
18. RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group is exposed to currency and liquidity risk, which result from both
its operating and investing activities. The Group's risk management is
coordinated in close co-operation with the Board and focuses on actively
securing the Group's short to medium term cash flows by minimising the
exposure to financial markets. The most significant financial risks to which
the Group is exposed are described below. Also refer to the accounting
policies.
Foreign currency risk
The Group is exposed to transaction foreign exchange risk. The currencies
where the Group is most exposed to volatility are Argentine Peso, Mexican Peso
and Indian Rupee.
Currently no hedging instruments are used. The Company will continue to review
its currency risk position as the overall business profile changes.
Foreign currency denominated financial assets and liabilities, which are all
short-term in nature and translated into local currency at the closing rate,
are as follows.
2023 2022
000's 000's
USD ARS Other USD ARS Other
Nominal amounts £ £ £ £ £ £
Financial assets - 30 99 - 82 17
Financial liabilities (5) (25) (483) (5) (50) (85)
Short-term exposure (5) 14 (384) (5) 32 (68)
Percentage movements for the period in the exchange rates for the British
Pound to US Dollar and Argentine Peso are below. These percentages have been
determined based on the average exchange rates during the period.
2023 2022
US Dollar -9.5% -13.9%
Argentine Peso +35.8% +12.8%
During the period the USD continued to strengthen against the pound and the
Argentine peso continued to weaken.
Liquidity risk
The Group seeks to manage financial risk by ensuring sufficient liquidity is
available to meet foreseeable needs. Management prepares cash flow forecasts
which are reviewed at Board meetings to ensure liquidity. The Group has no
borrowing arrangements.
As at 30 June 2023, the Group's financial liabilities were all current and
have contractual maturities as follows:
30 June 2023 Within 6 months 6 to 12 months
£000's £000's
Trade and other payables 247 -
The maturity of the Group's financial liabilities, which were all current at
the previous year end, was as follows:
30 June 2022 Within 6 months 6 to 12 months
£000's £000's
Trade and other payables 112 -
Capital Management Disclosures
Management assesses the Group's capital requirements in order to maintain an
efficient overall financing structure while avoiding excessive leverage. The
Group manages the capital structure and makes adjustments to it in the light
of changes in economic conditions and the risk characteristics of the
underlying assets. In order to maintain or adjust the capital structure, the
Group could issue new shares.
19. FINANCIAL INSTRUMENTS
A number of the Company's accounting policies and disclosures require the
determination of fair value, for both financial and non-financial assets and
liabilities. Fair values have been determined for measurement and/or
disclosure purposes based on the following methods. When applicable, further
information about the assumptions made in determining fair values is disclosed
in the notes specific to that asset or liability.
Classification of fair value of financial instruments
The Company classified the fair value of its financial instruments measured at
fair value according to the following hierarchy based on the amount of
observable inputs used to value the instrument:
Level 1: quoted prices in active markets for identical assets and liabilities;
Level 2: inputs, other than the quoted prices included in Level 1, that are
observable for the asset or liability, either directly or indirectly;
Level 3: inputs for the asset or liability that are not based on observable
market data;
The company's investments in public companies (note 10) are considered Level 1
in the hierarchy.
The Company's financial instruments comprise primarily cash and various items
such as trade debtors and trade payables which arise directly from operations.
The main purpose of these financial instruments is to provide working capital
for the Company's operations. The Company does not utilise complex financial
instruments or hedging mechanisms.
Financial assets and financial liabilities (except the investment in public
companies, see note 10) are initially measured at amortised cost. Transaction
costs attributable to the acquisition of a financial asset or financial
liability are added or deducted from the value of the financial asset or
financial liability.
The tables below set out the Group's accounting classification of each class
of its financial assets and liabilities.
2023 2022
£000's £000's
Financial Assets
Accrued Receivables 4 5
Trade receivables 50 96
Cash and Cash equivalents 913 1,675
967 1,776
Financial Liabilities
Trade Creditors (247) (112)
Accrued content costs (25) (48)
Other Accrued liabilities (113) (5)
(385) (165)
All receivables are expected to be received in full, and all payables are
expected to be paid in full. Cash and cash equivalents comprise cash on hand
and demand deposits held on call with banks. Therefore, in the view of
management, all of the above financial assets' carrying values are stated at
their amortised cost, as at 30 June 2023 and 2022.
20. Related party transactions
Key Management
Key management personnel consist of the Directors and senior management and their remuneration is disclosed in the Remuneration Committee Report. The shareholdings of key management are shown within the Director's Report. During the year key management were issued with 300,000,000 options over ordinary shares as per Note 16.
Related Parties
IgniteAMT Limited is a company where Mark Epstein is a Board Member and has a
beneficial interest and Sri Ramakrishna Uthayanan is the Finance Director
without beneficial interest and Tom Gutteridge is a Person of Significant
Control. During the year Company made payments of £172,200 excluding VAT to
IgniteAMT Limited. At June 30 2023, the company owed IgniteAMT Limited
£25,280.
Rama Uthayanan received £48,000 for fees from KrunchData, which is disclosed
in the Remuneration Committee report.
21. EXCHANGE DIFFERENCES ON TRANSLATING FOREIGN OPERATIONS
During FY 2020, 5 subsidiaries were closed (Singapore, Australia, Chile,
Appitalism (USA) and The Nickels Group (USA)). These entities had Foreign
Exchange equity reserves recorded due to Intercompany transactions, according
to IAS 21. The effect of the derecognition was disclosed in the FY 2020
Financial Statements comprehensive income.
During FY 2021, FY 2022 and FY 2023 the FX reserve transactions are Nil, as no
subsidiaries were closed during these years, all the remaining subsidiaries
remain operational.
22. ULTIMATE CONTROLLING PARTY
The Directors do not consider there to be an ultimate controlling party due to
the composition of the share register.
23. PRIOR YEAR ADJUSTMENT
The year-ending 30 June 2022 Statement of Comprehensive Income, Statement of
Financial Position, Statement of Changes in Equity and Cashflow Statement have
been restated in respect of broker options which were issued as part of the
fundraising during March 2022. The linked expense in respect of this was
originally estimated at £255,000 on the understanding that the instruments
had been issued to the broker in exchange for services rendered. Upon review
it was determined that these instruments had been issued to the broker for
redistribution to investors for participation in the funding round and
therefore were not in exchange for any goods or services and thus, are not
within the scope of IFRS 2: Share Based Payments. As such a prior year
restatement has been recognised at 30th June 2022 to reverse the prior year's
£255,000 share-based payment charge and movement on the share-based payment
reserve.
Signed Accounts as of 30(th) June 2022 Adjustment Restated as of 30(th) June 2022
Statement of Comprehensive income
Loss per signed accounts at 30(th) June 2022 £(2,764,000) £255,000 £(2,509,000)
Earnings Per Share
Basic Earnings per Share (0.102)p +0.01p (0.092)p
Group Statement of Financial Position
Share-Based Payment reserve £268,000 £(255,000) £13,000
Retained Earnings £(15,007,000) £255,000 £(14,752,000)
Company Statement of Financial Position
Share Based Payment Reserve £268,000 £(255,000) £13,000
Retained Earnings £(16,302,000) £255,000 £(16,047,000)
24. EVENTS AFTER THE REPORTING DATE
Following the year-end, a further £675,000 (before expenses) was raised
during December 2023 by issue of new Ordinary Shares. These funds will be
used to boost working capital and expand the revenues derived from the Group's
technology platform into a new business segment engaged in sports betting,
publishing and media ownership in Mexico,. The Group has for several months
been engaged in corporate development discussions with key companies engaged
in this high growth business segment and this fundraising enables the
opportunity for the group to enter contracts to broaden the revenues derived
from its Streams technology platform. The Group will acquire a 10% interest in
Capital Media Sports S.A ("Capital Media Sports"), a newly created company.
The intention is to create one of the largest Sports Media Groups in Mexico,
by partnering with one of the largest media publishers in Mexico, namely
Capital Media Group, together with the co-owner of Necaxa football club, the
co-owner of Atlante football club, the co-owners of Capital Media Group and
the Neme business family which owns Alive Sports Entertainment, one of
Mexico's biggest sports event businesses.
The Group's existing wholly owned Mexican subsidiary, Mobile Streams of
Mexico, S.de R.I, intends to pay MXN 5m (approximately £228k) to obtain a 10%
shareholding in Capital Media Sports, which has a strategy seeking to acquire
a number of sporting publications under which it has signed heads to terms to
acquire Estadio, a major existing heritage sports media publication in Mexico
formerly owned by Capital News S.A ("Capital News" and part of the Capital
Media Group), as the first of these. Capital Media Sports will, according to
the HOT (Heads of Terms), acquire all associated IP for the print and digital
operations of the publication.
Initially Capital Media Sports will acquire the assets and IP of Estadio.
Following the acquisition of the interest in Capital Media Sports, MOS and its
partners will, subject to regulatory approvals, then fund the launch of two
associated companies, Estadio Bet ("Bet") and Estadio Talk ("Talk"), in which
MOS will have a 25% interest (together the "Investment"). Bet will be a
betting company using the sports publication brand to deliver online gambling
and betting services to Mexican consumers and Talk will be a 'Talk Sport'
style podcast service, also utilising the brand.
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MOBILE STREAMS PLC
Opinion
We have audited the financial statements of Mobile Streams Plc (the 'parent
company') for the year ended 30 June 2023 which comprise the parent company
Statement of Financial Position, the parent company Statement of Changes in
Equity and notes to the financial statements, including a summary of
significant accounting policies. The financial reporting framework that has
been applied in their preparation is applicable law and UK-adopted
international accounting standards, including Financial Reporting Standard 101
Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting
Practice).
In our opinion, the parent company financial statements:
· give a true and fair view of the state of the parent company's
affairs as at 30 June 2023 and of its loss for the year then ended;
· have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and
· have been prepared in accordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We are independent of
the parent company in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed entities, and we have fulfilled
our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to the accounting policies in the group financial
statements, which indicates that the group needs to achieve its operating
targets, and may require further financing to meet its commitments as they
fall due. As stated in the accounting policies, the group's forecasts are
dependent on revenue streams which are uncontracted and have no historical
data at present upon which to base the revenue forecasts. As such there is
currently uncertainty regarding the group achieving such operating targets as
the forecasts are dependent on factors beyond the control of the group. As
stated in the accounting policies, these events or conditions indicate that a
material uncertainty exists that may cast significant doubt on the group's
ability to continue as a going concern.
In auditing the company financial statements, we have concluded that the
director's use of the going concern basis of accounting in the preparation of
the company financial statements is appropriate. Our evaluation of the
directors' assessment of the company's ability to continue to adopt the going
concern basis of accounting included:
• consideration of the group's objectives, policies and processes in
managing its working capital as well as exposure to financial, credit and
liquidity risks;
• reviewing the cash flow forecasts for the ensuing twelve months
from the date of approval of these group financial statements and assessment
thereof;
• performing sensitivity analysis on the cash flow forecast prepared
by management, and challenging the assumptions included thereto;
• reviewing the management's going concern memorandum assessment and
discussing with management regarding the future and availability of funding;
and
• reviewing the adequacy and completeness of disclosures in the
group financial statements.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Our application of materiality
The parent company materiality for the financial statements as a whole was set
at £200,000 (2022: £63,133) based on 7% of loss before tax (2022: 7% of loss
before tax). We have used this benchmark to determine our materiality, which
we believe is the key metric of the company used by shareholders, as the
company seeks to reduce their cost base and refocus their business strategy.
Performance materiality was calculated at 70% (2022: 70%) of materiality for
the financial statements as a whole equating to £140,000 (2022: £44,193). In
determining performance materiality of the group, we considered the risk
profile of the listed entity including the increased losses in the financial
period.
We have agreed with those charged with governance that we would report any
individual audit difference in excess of £10,000 (2022: £5,614) as well as
differences below this threshold that, in our view, warranted reporting on
qualitative grounds.
Our approach to the audit
In designing our audit, we determined materiality and assessed the risk of
material misstatement in the parent company financial statements. In
particular, we looked at areas involving significant accounting estimates and
judgements by the directors including the valuation of share options. These
areas were however not considered to constitute key audit matters. We also
addressed the risk of management override of internal controls, including
evaluating whether there was evidence of bias by the directors that
represented a risk of material misstatements due to fraud.
The parent company's key accounting function is based in London and our audit
was performed remotely from our London office with regular contact with
relevant personnel throughout.
Key audit matters
Except for the matter described in the 'Material uncertainty related to going
concern' section, we have determined that there are no other key audit matters
to communicate in our report.
Other information
The other information comprises the information included in the annual report,
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information contained within the
annual report. Our opinion on the parent company financial statements does not
cover the other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance conclusion
thereon. Our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the course of the audit or
otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
· the information given in the strategic report and the directors'
report for the financial year for which the parent company financial
statements are prepared is consistent with the parent company financial
statements; and
· the strategic report and the directors' report have been prepared
in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the parent company and its
environment obtained in the course of the audit, we have not identified
material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept, or returns
adequate for our audit have not been received from branches not visited by us;
or
· the financial statements are not in agreement with the accounting
records and returns; or
· certain disclosures of directors' remuneration specified by law
are not made; or
· we have not received all the information and explanations we
require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the
directors are responsible for the preparation of the parent company financial
statements and for being satisfied that they give a true and fair view, and
for such internal control as the directors determine is necessary to enable
the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the parent company financial statements, the directors are
responsible for assessing the parent company's ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to
liquidate the parent company or to cease operations, or have no realistic
alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud.
The extent to which our procedures are capable of detecting irregularities,
including fraud is detailed below:
· We obtained an understanding of the parent company and the sector
in which it operates to identify laws and regulations that could reasonably be
expected to have a direct effect on the financial statements. We obtained our
understanding in this regard through discussions with management and
application of cumulative audit knowledge and experience of the sector.
· We determined the principal laws and regulations relevant to the
parent company in this regard to be those arising from AIM rules, Companies
Act 2006 and local employment law.
· We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-compliance by the parent
company with those laws and regulations. These procedures included, but were
not limited to:
o enquiries of management;
o reviews of board minutes; and
o Review of legal accounts.
· We also identified the risks of material misstatement of the
financial statements due to fraud. We considered, in addition to the
non-rebuttable presumption of a risk of fraud arising from management override
of controls, that the potential for management bias was identified in relation
to:
o Revenue recognition;
o the impairment of goodwill and intangible assets and we addressed this by
challenging the assumptions and judgements made by management when auditing
these significant accounting estimates; and
· As in all of our audits, we addressed the risk of fraud arising
from management override of controls by performing audit procedures which
included, but were not limited to: the testing of journals; reviewing
accounting estimates for evidence of bias; and evaluating the business
rationale of any significant transactions that are unusual or outside the
normal course of business.
Because of the inherent limitations of an audit, there is a risk that we will
not detect all irregularities, including those leading to a material
misstatement in the financial statements or non-compliance with regulation.
This risk increases the more that compliance with a law or regulation is
removed from the events and transactions reflected in the financial
statements, as we will be less likely to become aware of instances of
non-compliance. The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities
(http://www.frc.org.uk/auditorsresponsibilities) . This description forms part
of our auditor's report
Other matter
We have reported separately on the Group financial statements of Mobile
Streams plc for the year ended 30 June 2023. That report includes details of
the Group Key Audit Matters; how we applied the concept of materiality in
planning and performing our audit; and an overview of the scope of our audit.
Use of our report
This report is made solely to the company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company's members those matters we
are required to state to them in an auditor's report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone, other than the company and the company's members as
a body, for our audit work, for this report, or for the opinions we have
formed.
Tim Harris (Senior Statutory
Auditor)
15 Westferry Circus
For and on behalf of PKF Littlejohn
LLP
Canary Wharf
Statutory
Auditor
London E14 4HD
22 December 2023
COMPANY STATEMENT OF FINANCIAL POSITION
30 June 2023 30 June 2022
(restated)
£000's £000's
Fixed assets Note
Intangible assets 1 - -
Other assets 2 - 170
Investments in subsidiaries 3 - 1,500
Total fixed assets - 1,670
Current assets
Debtors 4 4 964
Cash and cash equivalents 865 1,616
Total current assets 869 2,580
Creditors
Creditors: amounts falling due within one year 5 (233) (290)
Current Liabilities (233) (290)
Net assets 635 3,960
Capital and reserves
Called up share capital 6 768 659
Share premium 7 21,331 19,333
Share Based Payment reserve 25 13
Profit and loss account (21,489) (16,047)
Shareholders deficit / Shareholders funds 635 3,960
The parent Company has taken advantage of Section 408 of the Companies Act
2006 and has not included its own Statement of Comprehensive Income account in
these Financial Statements. The parent Company's recognised loss for the year
ended 30 June 2023 was £5.44m.
The company registration number is 03696108
The notes on pages 61 to 64 form part of these Financial Statements.
The Financial Statements were approved by the Board of Directors on 22
December 2023.
Bob Moore
Chairman
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2023
Share Share Share Based Profit
capital premium Payment and loss
account account Reserve Account Total
£000 £000 £000 £000 £000
At 1 July 2021 567 16,765 13 (14,318) 3,027
New equity issue 92 2,568 - - 2,661
Loss for the year - - - (1,985) (1,985)
Warrant charge - - 255 - 255
At 30 June 2022 659 19,333 268 (16,302) 3,960
At 1 July 2022 as previously stated 659 19,333 268 (16,302) 3,960
Prior Year Adjustment (Group Note 23) - - (255) 255 -
At 1 July 2022 (restated) 659 19,333 13 (16,047) 3,960
New equity issue 108 1,997 - - 2,105
Loss for the year - - - (5,442) (5,442)
Share based payments - options - - 12 - 12
At 30 June 2023 768 21,331 25 (21,489) 635
summary of significant accounting policies
Statement of compliance
These Financial Statements have been prepared in accordance with applicable
accounting standards and in accordance with Financial Reporting Standard 101 -
"Reduced Disclosure Framework" (FRS 101) The principal accounting policies
adopted in the preparation of these Financial Statements are set out below.
These policies have all been applied consistently throughout the year unless
otherwise stated.
The Financial Statements have been prepared on a historical cost basis. The
Financial Statements are presented in Sterling (£) and have been presented in
round thousands (£'000).
In preparing these Financial Statements the Company has taken advantage of all
disclosure exemptions conferred by FRS 101. Therefore, these Financial
Statements do not include:
1. A statement of cash flows and related notes
2. The requirements of IAS 24 related party disclosures to disclose
related party transactions entered in to between two or more members of the
group as they are wholly owned within the group.
3. The effect of future accounting standards not adopted.
4. Certain share based payment disclosures.
5. Disclosures in relation to impairment of assets.
6. Disclosures in respect of financial instruments (other than
disclosures required as a result of recording financial instruments at fair
value).
Additionally, the consolidated Group prepares accounts under IFRS which should
be read in conjunction with these statements specifically in respect of the
judgements and estimates used in considering the impairment of investments
which is considered alongside that of impairment of intangible assets.
Basis of preparation
The Financial Statements have been prepared on the historical cost basis with
investments being valued under fair value through profit or loss. The
principal accounting policies are set out below. The Company has applied the
exemption under section 408 of the Companies Act 2006 and has not included the
individual profit and loss account statement in the Financial Statements.
Going concern
The Financial Statements have been prepared on a going concern basis, which
assumes that the Group and the Company will continue in operational existence
for the foreseeable future, being 12 months from the date of sign-off of these
accounts. The Directors are aware of a material uncertainty in the magnitude
of future revenues and this is discussed further in the Going Concern section
of Note 1 of the Group Financial Statements on page 31.
Investments IN SUBSIDIARIES
Investments in subsidiaries are stated in the Company's statement of financial
position at cost less provisions for impairment. The recoverability of
investments is considered to be a key judgement and estimate and these are
considered alongside those considered at a Group level in respect of the
recoverability of Intangible assets (See 1.1). Intercompany receivables
and stated in the Company's statement of financial position at the estimated
recoverable amount less provisions for impairment.
COMpany profit and loss account
The parent Company has taken advantage of Section 408 of the Companies Act
2006 and has not included its own profit and loss account in these Financial
Statements. The parent Company's recognised loss for the year ended 30 June
2023 was £5,442k (2022 (restated): £1,730k).
1. INTANGIBLES
Investment in LiveScores 30 June 2023 30 June 2022
£000's £000's
Cost - -
Additions - 125
Amortisation in year - (21)
Impairment in year - (106)
Net Book Value at 30(th) June - -
The addition comprised the investment in LiveScores. This was subsequently
amortised and impaired to £nil book value during the prior year.
2. Other ASSETS
Shares in UK public companies 30 June 2023 30 June 2022
£000's £000's
Fair Value of Share b/f 170 -
Shares of UK public companies acquired in year - 250
Shares of UK public companies disposed in year (170) -
Year-end fair value adjustment - (80)
Fair Value of Shares c/f - 170
The company purchased 20m shares of Gfinity plc on 14 March 2022 at 1.25
pence per share. The value at June 30 2022 was £170,000. A loss of £80,000
was written off to Profit and Loss in the prior year. The shares were sold
in August 2022 for £191,701 and resulted in gain of £21,701 in the current
year versus their carrying value.
Convertible Loan Note issued to Quanta ("QCLN") 30 June 2023 30 June 2022
£000's £000's
QCLN b/f - 250
QCLN issued in year - 164
QCLN impaired in year - (414)
QCLN at year-end - -
During 2021 and 2022 the company issued convertible loan notes to Quanta in
the cumulative amount of £414,000. During 2022 the Directors elected to
provide in full against the recoverability of these loan notes. This
£414,000 impairment was expensed within the statement of Comprehensive Income
in the prior year.
3. Investment in subsidiary companies
Investments in subsidiaries are reviewed for impairment when events indicate
the carrying amount may not be recoverable and are accounted for in the
Company's Financial Statements at cost less accumulated impairment losses.
During the year the Directors impaired the carrying value of the investment in
Krunch Data Limited by £1,500,000. This was a result of the impairment
exercise conducted across all group intangibles as per Note 9 of the Group
Financial Statements which took into account the current level of business.
In the prior year Mobile Streams Plc completed its 100% acquisition of
KrunchData Ltd and recorded the investment at cost being £1.5 million.
Management assessed the recoverability of investments at year ended 30 June
2023 and an impairment indicator was identified as a result of the loss of the
significant contract with customer, IGS, and due to the global NFT and crypto
markets NFT revenues did not perform as expected. Although the directors are
of the opinion that the investment in KrunchData Ltd is equivocal to its
original cost, as it underpins the Group's business model, since the future
revenue streams are uncontracted and since there is no historical data to
support the forecasts, the directors deem it prudent to impair the investment
in KrunchData in full.
Investments in Subsidiary undertakings comprise:
Proportion held
Subsidiary Directly by Mobile Streams plc By other Group companies Total held by Group Country of incorporation Status
Mobile Streams Inc. 100% - 100% USA Dormant
Mobile Streams de Argentina SRL 50% 50% 100% Argentina Active
Mobile Streams Columbia Limitada. 50% 50% 100% Colombia Dormant
Mobile Streams of Mexico de CV 50% 50% 100% Mexico Active
Mobile Streams India Private Limited 99.99% - 99.99% India Active
Streams Data Limited 100% - 100% UK Active
KrunchData Limited 100% - 100% UK Active
All the subsidiaries' issued shares were ordinary shares and their principal
activities were the distribution of licensed mobile phone content and/or the
provision of data insight and intelligence platforms and services.
The registered offices addresses are:
Mobile Streams plc
125 Wood Street
London
EC2V 7AW
Mobile Streams, Inc.
PO Box 471191
Celebration
FL 34747-4679
KrunchData Limited
125 Wood Lane
London
EC2V 7AW
Mobile Streams Argentina SRL
Viamonte 1815 3rd Floor appt G
Ciudad Autonoma de Buenos Aires
Republica Argentina
Mobile Streams India:
2106, Wing A, Bldg/2, Raheja Willows, CHS
L,
Birchwood, Akruli Rd, Kandivali East, Maharashtra,
India
Mobile Streams Colombia
AV. CRA 13 No. 69-74 OF. 701
Municipio Bogota D.C..
Colombia
Mobile Streams Mexico
Calle Florencia No. 57, 3° Piso,
Colonia Juarez, Delegacion Cuauhtemoc, Ciudad de Mexico, C.P. 06600.
Mexico
Streams Data Limited
125 Wood Street
London
EC2V 7AW
4. DEBTORS 2023 2022
£000's £000's
Trade debtors 1 79
Other debtors 3 5
Intercompany debtors 2,598 880
Provision for Intercompany debtors (2,598) -
4 964
Management assessed the recoverability of intercompany debtors at year ended 30 June 2023. Due to a reduction in the revenue derived from the legacy business and as future revenue growth is based on uncertain and uncontracted revenue from the new business segment, the directors have raised a provision against intercompany debtors in full. In respect of this the charge to the profit and loss account amounts to £2,598k.
5. CREDITORS
Creditors: amounts falling due within one year
2023 2022
£000's £000's
Trade creditors 86 8
Accruals and deferred income 147 282
233 290
6. SHARE CAPITAL
For details of share capital refer to note 13 to the Group Financial
Statements.
7. share premium account
For details of share capital refer to note 13 to the Group Financial
Statements.
8. Capital commitments
The Company has no capital commitments at 30 June 2023 (2022: Nil). As
detailed in Note 24 to the Group Financial Statements - Events After the
Reporting Date, the Group is currently committed to investing approximately
£228,000 into its new Mexican business segment.
9. Contingent liabilities
As at 30 June 2023 there were no contingent liabilities (2022: Nil).
10. Related party transactions
During the year the Company remunerated the Directors and Officers as
disclosed in the Remuneration Report.
Related Parties
IgniteAMT Limited is a company where Mark Epstein is a Board Member and has a
beneficial interest and Sri Ramakrishna Uthayanan is the Finance Director
without beneficial interest and Tom Gutteridge is a Person of Significant
Control. During the year Company made payments of £172,200 excluding VAT to
IgniteAMT Limited. At June 30 2023, the company owed IgniteAMT Limited
£25,280.
Rama Uthayanan received £48,000 for fees from KrunchData, which is disclosed
in the Remuneration Committee report.
The Company is taking advantage of the exemption per IAS 24 which does not
require disclosure of transactions entered into between members of a group
when one of the transacting parties is a wholly owned subsidiary.
11. Directors and employees
The average number of employees during the year to 30 June 2023 was as
follows:
Year-ended Year ended
2023 2022
Number Number
Management 5 5
5 5
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