REG-Quantum Blockchain Technologies Plc: Final Results
30/06/2022 07:15
30 June 2022
Quantum Blockchain Technologies Plc
(“QBT” or “the Company”)
FINAL RESULTS
The board of Quantum Blockchain Technologies (AIM: QBT) is pleased to report
its final results for the year ended 31 December 2021.
The 2021 Annual Report and Accounts will be posted today, together with the
AGM notice and form of proxy to those shareholders who have requested to
receive printed documents.
The Annual Report and Accounts, AGM notice and form of proxy will also be
available on the Company's website under the “Investor Relations – Annual
Reports and Circulars” section.
The AGM will be held at Company’s legal address, 22 Great James Street
London WC1N 3ES, at 12.00 pm on Friday, 22 July 2021.
For further information please contact:
Quantum Blockchain Technologies Plc
Francesco Gardin, CEO and Executive
Chairman
+39 335 296573
SP Angel Corporate Finance (Nominated Adviser & Broker)
Jeff
Keating
+44 (0)20 3470 0470
Kasia Brzozowska
Leander (Financial PR)
Christian
Taylor-Wilkinson
+44 (0) 7795 168 157
About Quantum Blockchain Technologies Plc
QBT (AIM: QBT) is an AIM listed investment company which has recently
realigned its strategic focus to technology related investments, with special
regard to Quantum computing, Blockchain, Cryptocurrencies and AI sectors. The
Company has commenced an aggressive R&D and investment programme in the
dynamic world of Blockchain Technology, which includes cryptocurrency mining
and other advanced blockchain applications.
CHAIRMAN’S STATEMENT
I am pleased to present the Group’s Final Results for the year ended 31
December 2021.
It has been a transformational year for the Company, setting new foundations
and starting to build new perspectives for the future. On this basis, the
Company’s name changed from Clear Leisure to Quantum Blockchain Technologies
Plc.
The new strategy (approved by shareholders at the General Meeting held on 6
May 2021) focused on addressing the goal of cheaper and faster Bitcoin mining
as a result of advanced Research and Development (“R&D”) on Quantum
Computing, Artificial Intelligence, and state of the art ASIC chip design. The
Company believes there are tangible and disruptive optimisations that can be
made at multiple levels within the end-to- end Bitcoin mining process. This
led to QBT launching an intense in-house R&D programme aimed at creating
advanced proprietary techniques for Bitcoin mining, with the primary goal to
encounter and exploit new important efficiencies of the mining process.
We believe QBT’s approach differs from other crypto currency miners. Our
choice has been driven by the consideration that the current crypto-currency
mining sector is a very “capital intensive” market, due to the
never-ending necessity of continuously updating the miners’ fleet. We aim to
disrupt this market feature, changing it into “knowledge intensive” with
the Company occupying a leading position by exploiting special features that
we are discovering within the BTC mining algorithm to unlock faster and
cheaper mining processes.
The first milestone in implementing the above strategy has been the setup of
an excellent R&D team comprising nearly 20 experts selected from across the UK
and the EU, including highly skilled professionals, PhD students and
university professors with expertise in Quantum Computing, Machine Learning,
Cryptography and Algorithm Optimisation Theory.
The R&D team is working on the following promising research areas:
* Quantum Computing
* Cryptographic Optimisation
* Deep Learning and Artificial Intelligence (“AI”)
* Field-programmable gate array (“FPGA”) / application-specific integrated
circuit (“ASIC”) Design
* Algebraic and Boolean Equation Reduction
* Very Large Big Data
* High performance computing architectures
The R&D team delivered its first important accomplishment in September 2021,
when the Company filed the patent application for the ASIC UltraBoost. The
ASIC UltraBoost is an improvement of the Bitcoin mining process, which
eliminates redundant computation of a key part of the Bitcoin mining
algorithm, resulting in a faster and more efficient mining process as it
reduces the number of operations across the three iterations of SHA256 by
approximately 7%.
The Company is also working on other patent applications, including an update
of the ASIC UltraBoost and another patent application derived from the work of
the AI and Quantum Computing team.
At the same time, a number of Bitcoin algorithm core architectures for an FPGA
chip have been selected. Initial tests have been strategically performed on an
FPGA chip to keep the testing cost low. As a result, the Company is now in a
much better position to assess the performance projection of its SHA256
Bitcoin mining architectures options, before transfering this solution over to
an ASIC chip. Moreover, access to ASIC synthesis tools allows early assessment
of final performance on different nanometres (“nm”) scales, including the
5nm current Company target.
As announced in November 2021, a non-disclosure agreement was signed with an
international research &
(https://en.wikipedia.org/wiki/Research_and_development) development
(https://en.wikipedia.org/wiki/Research_and_development) organisation, which
is active in the field of nanoelectronics,
(https://en.wikipedia.org/wiki/Nanoelectronics) to give the Company access to
one of the few 5nm semiconductor fabrication plant
(https://en.wikipedia.org/wiki/Semiconductor_fabrication_plant)s currently
operational in the world.
QBT is researching multiple alternative routes to cheaper and faster Bitcoin
mining. On this note it is also important to mention that the initial internal
assessment shows promising results for other research areas. For instance,
early experimental applications of AI techniques to multiply by several
factors the speed of computing the Bitcoin mining algorithm, which would make
even an FPGA chip a competitive Bitcoin mining tool. Should this route be
successful, the same principle could apply to ASIC, materially improving the
performance of already existing machines, and most importantly it would
represent a quick way to commence the mining operations.
Furthermore, the Company’s Quantum Computing internal team has explored two
main Quantum Computing paradigms: quantum annealing, and logic quits based
quantum algorithms. While tests confirm the theoretical quantum supremacy
nature of the approach, namely orders of magnitude compared to classic
computers to compute SHA-256, the quantum hardware technology is still
evolving to become practically usable. Meanwhile the Company intends to secure
patents to protect the algorithms developed, while waiting for quantum
computers to become available with enough computing elements of a quality
required for sustainable quantum computations.
To support the R&D activity, QBT purchased advanced computing facilities in a
data center in Northern Italy, which include Computer Processing Units
(“CPUs”) with more than 256 cores, Graphics Processing Units (“GPUs”)
in excess of 55,000 cores, two top of the range FPGA, several Terabytes of
Random-Access Memory (“RAM”) and 2 Petabytes of storage for Very Large Big
Data to be analysed. Moreover, cloud access to a quantum computer and other
cloud computing facilities makes the development environment a state-of-art IT
development platform for QBT’s R&D Team.
Investments in R&D during the year under review, since the launch of the
programme in mid-2021, amount altogether to €406,000, of which €164,000
has been invested in hardware equipment supporting R&D and €226,000 in costs
related to cloud services and consultants.
The launch of this new strategy has been facilitated by the £3.3m (before
expenses) in funds raised by the Company during the year under review via two
equity placings and pursuant to the exercise of most of the warrants granted
to the Company’s investor as part of the second 2021 placing announced on 22
February 2021.
As a strong motivational element to deliver results under the new strategy,
the Company issued 237.5m share options to its directors and staff at prices
of 5p and 10p per new ordinary share of 0.25 pence each in the Company
(“Ordinary Shares”) being a premium of 61% and 222% of the share price as
of 31 December 2021).
Finally, in respect of its “Legacy Assets”, the Company, via its wholly
owned subsidiary Clear Leisure 2017 Limited (“CL17”) continues to pursue
the legal claim against the previous management and internal audit committee
of Sipiem in Liquidazione S.p.A’s (“Sipiem”) . A crucial step forward
was achieved during the year: in May 2021 the Venice Court appointed
independent expert valued damages suffered by Sipiem at up to €7.8m (subject
to the Judge ruling that the conduct of Sipiem’s former board and internal
audit committee was unlawful). Furthermore, in November 2021, the Judge
granted CL17’s request to file additional relevant documentation giving
evidence of further damages of up to €1m, which the Court appointed
independent expert did not previously take into consideration, bringing the
value of the claim up to €8.8m.
CL17 is also continuing its claim against Sosushi S.r.l’s (“Sosushi”)
former management team, valued at €1.03m, and assessing the launch of a
€20m legal action against Mediapolis S.p.A’s (“Mediapolis”) previous
management and internal audit committee. For accounting purposes these claims
carry a fair value of €4.4m.
In June 2021 the Company increased its stake in Forcrowd S.r.l
(“Forcrowd”) to 41.17%. Moreover, in December 2021, Forcrowd concluded its
first equity crowdfunding campaign (104% overfunded) for Make Me Srl.. With
this first success, Forcrowd will soon start hosting mini-bond campaigns
looking with confidence for new projects to finance.
PBV Monitor S.r.l (“PBV”) continued its focus on enlarging its editorial
and directory business and finding new partnerships for its intelligence
service, while Geosim System Ltd (“Geosim”) continued working on the
completion of 3D Reality Model for a major North American airport.
In conclusion, the business re-positioning completed in 2021 has not been easy
but pushed the Company back into a growth trajectory. The first results of
this new strategy are already promising, although they represent only a
fraction of what QBT hopes and intends to achieve going forward.
In the meantime, we are also pleased and proud of having returned value to our
long-term shareholders, as QBT’s share price increased by an astonishing
1070% during 2021, making us the best performing share on AIM in 2021.
Financial Review
The Group reported a total comprehensive loss of €5,396,000 for the year
ended 31 December 2021 (2020: €1,208,000) and a loss before tax of
€5,449,000 (2020: €1,208,000). Operating losses for the period were
€4,970,000 (2020: €1,087,000).
Included within administrative expenses are charges relating to the
recognition of share options totaling €2,622,000 (2020: nil) and within
finance costs are charges for the revaluation of derivatives totaling
€143,000 (2020: €126,000). The increase of these items is strictly
dependent on the high volatility of the Company’s share price during 2021,
used for the calculation according to the relevant accounting standards.
The undiluted Net Asset Value (“NAV”) of the Group has decreased by
€601,000 in 2021, compared to an increase of €2.5m in 2020. The Group had
Net Current Liabilities of €3.9m as at 31 December 2021 (2020: assets of
€4.9m), a decrease of €8.8m.
Post-Balance Sheet Events
On 11 January 2022, the Company received £700,000 (before expenses) resulting
from the exercise of 35 million warrants over 35 million new Ordinary Shares
at a price of 2p each. Similarly, £350,000 (before expenses) was received on
31 March, as a result of the exercise of 17.5 million warrants over 17.5
million new Ordinary Shares at a price of 2p each.
On 30 March 2022, the Company called a Bondholders Meeting, with regard to the
Zero-Coupon Bond originally issued in 2013 (“Bond”) which was held on 21
April 2022, to seek Bondholders’ approval to extend the maturity date of the
Bond from December 2022 to 15 December 2024 and change the conversion price of
the Bond into the Company’s new Ordinary Shares from 15p to 5p.
On 6 April 2022, QBT also announced it had agreed with MC Strategy S.A. (an
Eufingest S.A. demerged Company), the sole bondholder of the €3.5m 2020 Zero
Coupon Bond to extend its maturity date from 15 December 2022 to 15 December
2024.
On 21 April 2022, at the Bondholder’s meeting all resolutions were passed.
On 5 May 2022, the Company provided an update regarding Sipiem court
proceedings. Following the 4th May 2022 Court Hearing, the parties have now 60
days to file their final written arguments and then a further 20 days to file
their written replies. The Company expects the Court to pass its final
judgement by the end of 2022.
On 23 May 2022, QBT provided an update on the In-house R&D Programme and its
recent findings. On this note, the Company announced the launch of
experimental Bitcoin mining using proprietary knowledge-based algorithms.
Outlook
The Board remains committed to return value to its stakeholders by:
1. continuing focusing on its R&D programme, which is providing promising and
consistent results;
2. investing in the technology sector (both in direct and indirect manner);
3. managing of the legacy portfolio assets, where positive outcomes are
expected from claims of the Company; and
4. further reduction of the debt position (if and when the conditions are
deemed appropriate).
The Board remains positive as the technology investments are deemed sound and
promising, and the legal claims have strong merit with counterparties that are
expected to be solvent.
GROUP INCOME STATEMENT AND STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
Note 2021 2020
€’000 €’000
Continuing operations
Revenue 9 12
9 12
Administrative expenses 7 (4,985) (1,123)
Other income 6 24
Operating loss (4,970) (1,087)
Share of loss from equity-accounted associates 8 (33) -
Finance costs 9 (446) (121)
Loss before tax (5,449) (1,208)
Tax 12 53 -
Loss from continuing operations (5,396) (1,208)
TOTAL COMPREHENSIVE LOSS FOR THE YEAR (5,396) (1,208)
Earnings per share:
Basic loss per share (cents) 13 €0.621 €0.182
Diluted loss per share (cents) 13 €0.354 -
The accounting policies and notes form part of these financial statements.
GROUP AND COMPANY STATEMENTS OF FINANCIAL POSITION
AS AT 31 DECEMBER 2021
Notes Group 2021 Group 2020 (restated) Company 2021 Company 2020 (restated)
€’000 €’000 €’000 €’000
Non-current assets
Property, plant and equipment 14 164 - - -
Investments 15 664 980 298 434
Investments in equity-accounted associates 8 211 - - -
Total non-current assets 1,039 980 298 434
Current assets
Trade and other receivables 16 4,905 5,191 665 841
Cash and cash equivalents 17 1,039 - 1,035 -
Total current assets 5,944 5,191 1,700 841
Total assets 6,983 6,171 1,998 1,275
Current liabilities
Trade and other payables 18 (329) (334) (354) (327)
Borrowings 19 (8,365) - (8,365) -
Derivative financial instruments 20 (1,113) - (1,113) -
Total current liabilities (9,807) (334) (9,832) (327)
Net current (liabilities)/assets (3,863) 4,857 (8,132) 514
Total assets less current liabilities (2,824) 5,837 (7,834) 948
Non-current liabilities
Borrowings 19 - (8,060) - (8,060)
Total non-current liabilities - (8,060) - (8,060)
Total liabilities (9,807) (8,394) (9,832) (8,387)
Net liabilities (2,824) (2,223) (7,834) (7,112)
Equity
Share capital 21 8,221 7,397 8,221 7,397
Share premium account 21 49,442 47,124 49,442 47,124
Other reserves 23 11,409 8,787 3.084 462
Retained losses (71,896) (65,531) (68,581) (62,095)
Total equity (2,824) (2,223) (7,834) (7,112)
An income statement for the parent company is not presented in accordance with
the exemption allowed by S408 of the Companies Act 2006. The parent
company’s comprehensive loss for the financial year amounted to €5,517,000
(2020: loss of €447,000).
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
Group Share capital €’000 Share premium account €’000 Other reserves €’000 Retained losses €’000 Total equity €’000
At 1 January 2020 7,397 47,124 8,376 (64,526) (1,629)
Prior year adjustment (note 28) - - - 152 152
At 1 January 2020 (restated) 7,397 47,124 8,376 (64,374) (1,477)
Total comprehensive loss for the year - - - (1,208) (1,208)
Lapsed share options - - (51) 51 -
Equity portion of convertible loan notes - - 462 - 462
At 31 December 2020 (restated) 7,397 47,124 8,787 (65,531) (2,223)
Total comprehensive loss for the year - - - (5,396) (5,396)
Grant of warrants - - - 1,447 1,447
Exercise of warrants 119 831 - (2,416) (1,466)
Issue of shares 705 1,487 - - 2,192
Grant of share options - - 2,622 - 2,622
At 31 December 2021 8,221 49,442 11,409 (71,896) (2,824)
The following describes the nature and purpose of each reserve:
Share capital represents the nominal value of equity shares.
Share premium amount subscribed for share capital in excess of the
nominal value.
Retained losses cumulative net gains and losses less distributions
made and items of other
comprehensive income not accumulated in another separate reserve.
Included within retained losses are movements relating to the grant, exercise,
and fair value movement of the warrants issued during the year.
Other reserves consist of three reserves, as detailed in Note 23,
see below:
Merger reserve relates to the difference in consideration and nominal
value of shares issued
during a merger and the fair value of assets transferred in an acquisition of
90% or more of the share capital of another entity.
Loan note equity reserve relates to the equity portion of the
convertible loan notes.
Share option reserve fair value of the employee and key
personnel equity settled share option scheme as accrued at the reporting date.
The accounting policies and notes form part of these financial statements.
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
Company Share capital €’000 Share premium account €’000 Other reserves €’000 Retained losses €’000 Total €’000
At 1 January 2020 7,397 47,124 51 (61,851) (7,279)
Prior year adjustment (note 28) - - - 152 152
At 1 January 2020 (restated) 7,397 47,124 51 (61,699) (7,127)
Total comprehensive loss for the year - - - (447) (447)
Lapsed share options - - (51) 51 -
Equity portion of convertible loan notes - - 462 - 462
At 31 December 2020 (restated) 7,397 47,124 462 (62,095) (7,112)
Total comprehensive loss for the year - - - (5,517) (5,517)
Grant of warrants - - - 1,447 1,447
Exercise of warrants 119 831 - (2,416) (1,466)
Issue of shares 705 1,487 - - 2,192
Grant of share options - - 2,622 - 2,622
At 31 December 2021 8,221 49,442 3,084 (68,581) (7,834)
The following describes the nature and purpose of each reserve:
Share
capital
represents the nominal value of equity shares.
Share
premium
amount subscribed for share capital in excess of the nominal value.
Retained
losses
cumulative net gains and losses less distributions made and items of other
comprehensive income not accumulated in another separate reserve. Included
within retained losses are movements relating to the grant, exercise, and fair
value movement of the warrants issued during the year.
Other
reserves
consist of two reserves, as detailed in Note 23, see below:
Loan note equity reserve relates to the
equity portion of the convertible loan notes.
Share option reserve fair
value of the employee and key personnel equity settled share option scheme as
accrued at the reporting date.
.
GROUP AND COMPANY STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER
2021
Note Group 2021 €’000 Group 2020 €’000 Company 2021 €’000 Company 2020 €’000
Cash used in operations
Loss before tax (5,449) (1,208) (5,570) (447)
Impairment of investments 15 167 89 200 89
Share of post-tax losses of equity accounted associates 8 33 - - -
Non cash foreign exchange movements 15 (41) 50 - -
Finance charges 9 305 247 305 247
Decrease /(increase) in receivables 16 340 1,417 230 655
(Decrease) /increase in payables 18 (5) (61) 27 (10)
Loss /(gain) on derivatives 143 (121) 143 (121)
Share based payments 2,694 - 2,694
Net cash outflow from operating activities (1,813) 413 (1,971) 413
Cash flows from investing activities
Purchase of investments 15 (54) (2) (64) (2)
Purchase of property, plant and equipment 14 (164) - - -
Net cash outflow from investing activities (218) (2) (64) (2)
Cash flows from financing activities
Proceeds from borrowing - 150 - 150
Repayment of borrowings - (561) - (561)
Proceeds from capital issue 3,070 - 3,070 -
Net cash (outflow)/inflow from financing activities 3,070 (411) 3,070 (411)
Net increase in cash for the year 1,039 - 1,035 -
Cash and cash equivalents at beginning of year - - - -
Cash and cash equivalents at end of year 17 1,039 - 1,035 -
The accounting policies and notes form part of these financial statements.
NOTES FOR THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
1.General Information
Quantum Blockchain Technologies plc is a company incorporated in the United
Kingdom under the Companies Act 2006. The Company’s ordinary shares are
traded on AIM of the London Stock Exchange. The address of the registered
office is given on the Company Information page. The nature of the Group’s
operations and its principal activities are set out in the Directors’ report
on page 13.
2.Accounting policies
The principal accounting policies are summarised below. They have all been
applied consistently throughout the period covered by these consolidated
financial statements.
Basis of preparation
The consolidated Financial Statements of Quantum Blockchain Technologies plc
have been prepared in accordance with United Kingdom adopted international
accounting standards ("UK adopted IFRS") and the parts of Companies Act 2006
applicable to companies reporting under IFRS.
The financial statements have been prepared under the historical cost
convention as modified by the revaluation of assets and liabilities held at
fair value.
The preparation of Financial Statements in conformity with IFRS requires the
use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Group’s accounting
policies. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the consolidated
Financial Statements are disclosed in Note 3.
The Consolidated Financial Statements are presented in Euros (€), the
presentational and functional currency, rounded to the nearest €’000.
The Group has adopted the ‘interest rate benchmark reform’ phase 1 in the
current year. This has not had a material impact on the Group financial
statements.
New standards, interpretations and amendments not yet adopted
The Group decided not to early adopt the following amendments to standards
which are not yet mandatory.
Amendments to IAS 1 Presentation of Financial Statements: Classification of
Liabilities as Current or Non- current (issued January 2020)
The amendments clarify that the classification of a liability as current or
non-current is based only on rights existing at the end of the reporting
period and the classification is not affected by expectations about whether
rights to settle or defer a liability will be exercised. Further, the
amendments clarify that the settlement of a liability refers to the transfer
of cash, equity instruments, other assets, or services to the counterparty.
This amendment only affects presentation.
The amendment is effective for financial years beginning on or after 1 January
2024 and is not yet adopted in the United Kingdom.
The Group does not expect a material impact on its consolidated financial
statements from these amendments.
Amendments to IAS 16 Property, Plant and Equipment (issued in May 2020)
The amendments require any proceeds from selling items produced (and related
production costs) in the course of bringing an item property, plant and
equipment into operation to be recognised in profit or loss clarifying that
such items are not reflected in the cost of the asset.
The amendment is effective for financial years beginning on or after 1 January
2022 and is not yet adopted in the United Kingdom.
The Group does not expect a material impact on its consolidated financial
statements from these amendments.
Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets
(issued in May 2020)
The amendments clarify that the cost of fulfilling a contract are costs that
relate directly to that contract. Such costs can be the incremental costs of
fulfilling that contract or an allocation of other costs directly related to
fulfilling that contract.
The amendment is effective for financial years beginning on or after 1 January
2022 and is not yet adopted in the United Kingdom.
The Group does not expect a material impact on its consolidated financial
statements from these amendments.
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate
Benchmark Reform – Phase 2 (issued in August 2020)
The amendments are aimed at helping companies to provide investors with useful
information about the effects of the reform of interest rate benchmarks on
those companies’ financial statements.
The amendments complement those issued in 2019 and focus on the effects on
financial statements when a company replaces the old interest rate benchmark
with an alternative benchmark rate as a result of the reform. The Phase 2
amendments relate to:
* changes to contractual cash flows—a company will not have to derecognise
or adjust the carrying amount of financial instruments for changes required by
the reform, but will instead update the effective interest rate to reflect the
change to the alternative benchmark rate;
* hedge accounting—a company will not have to discontinue its hedge
accounting solely because it makes changes required by the reform, if the
hedge meets other hedge accounting criteria; and
* disclosures—a company is required to disclose information about new risks
arising from the reform and how it manages the transition to alternative
benchmark rates.
The Group does not expect a material impact on its consolidated financial
statements from these amendments.
Amendments to IAS 1 and IFRS Practice Statement 2 Disclosure of Accounting
Policies (issued in February 2021)
The amendments enhance the disclosure requirements relating to an entity’s
accounting policies and clarify that the notes to a complete set of financial
statements are required to include material accounting policy information.
Material accounting policy information, when considered with other information
included in the financial statements, can reasonably be expected to influence
decisions that the primary users of financial statements make on the basis of
the financial statements. The amendments help preparers determine what
constitutes material accounting policy information and notes that accounting
policy information which focuses on how IFRS has been applied to its own
circumstances is more useful for users of financial statements than
standardised information or information duplicating the requirements of IFRS.
The amendment also states that immaterial accounting policy information need
not be disclosed but when it is disclosed it shall not obscure material
accounting policy information. Further, if accounting policy information is
not deemed material this does not affect the materiality of related disclosure
requirements of IFRS.
The disclosure of judgements made in applying accounting policies should
reflect those that have had the most significant effect on items recognised in
the financial statements.
The amendment is effective for financial years beginning on or after 1 January
2023 and is not yet adopted in the United Kingdom.
Amendments to IAS 8 Definition of Accounting Estimates (issued in February
2021)
The amendments define accounting estimates as monetary amounts in financial
statements that are subject to measurement uncertainty. An accounting policy
may require an item in financial statements to be measured at a monetary
amount that cannot be observed directly so that in order to achieve the
objective of an accounting policy, an estimation is required.
The amendments state that the development of an accounting estimate requires
the use of judgement or assumptions based on the latest available reliable
information and involve the use of measurement techniques and inputs.
Accounting estimates might then need to change as a result of new information,
new developments or more experience.
A change in input or measurement technique is a change in accounting estimate
which is applied prospectively unless the change results from the correction
of prior period errors.
The amendment is effective for financial years beginning on or after 1 January
2023 and is not yet adopted in the United Kingdom.
Amendments to IAS 12 Deferred Tax related to Assets and Liabilities arising
from a Single Transaction (issued in May 2021)
The amendments specify how companies should account for deferred tax on
transactions such as leases and decommissioning obligations.
In specified circumstances, companies are exempt from recognising deferred tax
when they recognise assets or liabilities for the first time. Previously,
there had been some uncertainty about whether the exemption applied to
transactions such as leases and decommissioning obligations—transactions for
which companies recognise both an asset and a liability.
The amendments clarify that the exemption does not apply and that companies
are required to recognise deferred tax on such transactions. The aim of the
amendments is to reduce diversity in the reporting of deferred tax on leases
and decommissioning obligations.
The amendments are effective for annual reporting periods beginning on or
after 1 January 2023, with early application permitted and is not yet adopted
in the United Kingdom.
Basis of consolidation
Where the company has control over an investee, it is classified as a
subsidiary. The company controls an investee if all three of the following
elements are present: power over the investee, exposure to variable returns
from the investee, and the ability of the investor to use its power to affect
those variable returns. Control is reassessed whenever facts and circumstances
indicate that there may be a change in any of these elements of control.
The consolidated financial statements present the results of the company and
its subsidiaries as if they formed a single entity. Intercompany transactions
and balances between group companies are therefore eliminated in full. All
subsidiaries have a reporting date of December.
The consolidated financial statements incorporate the results of business
combinations using the acquisition method. In the statement of financial
position, the acquiree's identifiable assets, liabilities and contingent
liabilities are initially recognised at their fair values at the acquisition
date. The results of acquired operations are included in the consolidated
statement of comprehensive income from the date on which control is obtained.
They are deconsolidated from the date on which control ceases.
On consolidation, the results of overseas operations are translated into euros
at rates approximating to those ruling when the transactions took place. All
assets and liabilities of overseas operations, including goodwill arising on
the acquisition of those operations, are translated at the rate ruling at the
reporting date. Exchange differences arising on translating the opening net
assets at opening rate and the results of overseas operations at actual rate
are recognised in other comprehensive income and accumulated in the foreign
exchange reserve.
Exchange differences recognised profit or loss in Group entities' separate
financial statements on the translation of long-term monetary items forming
part of the Group's net investment in the overseas operation concerned are
reclassified to other comprehensive income and accumulated in the foreign
exchange reserve on consolidation.
On disposal of a foreign operation, the cumulative exchange differences
recognised in the foreign exchange reserve relating to that operation up to
the date of disposal are transferred to the consolidated statement of
comprehensive income as part of the profit or loss on disposal.
Investments in subsidiaries
Investments in subsidiaries are stated at cost less any provision for
impairment.
Investments in associates
Investments in associates are accounted for using the equity method.
The carrying amount of the investment in associates is increased or decreased
to recognise the Group’s share of the profit or loss and other comprehensive
income of the associate, adjusted where necessary to ensure consistency with
the accounting policies of the Group.
Unrealised gains and losses on transactions between the Group and its
associates are eliminated to the extent of the Group’s interest in those
entities. Where unrealised losses are eliminated, the underlying asset is also
tested for impairment.
In the year ended 31 December 2020, the investment in ForCrowd Srl was carried
at cost, which was not materially different to its fair value at that time. In
the prior year accounts, it was shown within Investments in the Statement of
Financial Position.
Foreign currency
The functional currency is Euro. Foreign currency transactions are translated
into the functional currency using the exchange rates prevailing at the dates
of the transactions or valuation where items are re-measured. Exchange gains
and losses resulting from the settlement of such transactions and from the
translation at year- end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the Statement of
Comprehensive Income. Exchange gains and losses that relate to borrowings and
cash and cash equivalents are presented in the income statement within
‘finance income or costs’. All other exchange gains and losses are
presented in the income statement within ‘other (losses)/gains – net’.
Changes in the fair value of monetary securities denominated in foreign
currency classified as available for sale are analysed between translation
differences resulting from changes in the amortised cost of the security and
other changes in the carrying amount of the security. Translation differences
related to changes in amortised cost are recognised in profit or loss, and
other changes in carrying amount are recognised in other comprehensive
income.2. Accounting policies (continued)
Taxation
The tax expense represents the sum of the tax currently payable and any
deferred tax.
Current taxes are based on the results of the Group companies and are
calculated according to local tax rules, using the tax rates and laws that
have been enacted or substantially enacted by the reporting date.
Deferred tax is provided in full using the financial position liability method
for all taxable temporary differences arising between the tax bases of assets
and liabilities and their carrying values for financial reporting purposes.
Deferred tax is measured using currently enacted or substantially enacted tax
rates and laws. Deferred tax is the tax expected to be payable or recoverable
on differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation
of taxable profit and is accounted for using the statement of financial
position liability method. Deferred tax liabilities are generally recognised
for all taxable temporary differences and deferred tax assets are recognised
to the extent that it is probable that taxable profits will be available
against which deductible temporary differences can be utilised. Such assets
and liabilities are not recognised if the temporary difference arises from
goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit.
Deferred tax assets are recognised to the extent the temporary difference will
reverse in the foreseeable future and that it is probable that future taxable
profit will be available against which the asset can be utilised. Deferred tax
is recognised for all deductible temporary differences arising from
investments in subsidiaries and associates, to the extent that it is probable
that the temporary difference will reverse in the foreseeable future and
taxable profit will be available against which the temporary difference can be
utilised.
Revenue
The Group provides consultancy services, which are invoiced at the point of
the provision of the service. Revenue is recognised as earned at a point in
time on the unconditional supply of these services, which are received and
consumed simultaneously by the customer. The Group measures revenues at the
fair value of the consideration received or receivable for the provision of
consultancy services net of Value Added Tax.
Interest income
Interest income is accrued on a time basis, by reference to the principal
outstanding and at the effective interest rate applicable, which is the rate
that exactly discounts estimated future cash receipts through the expected
life of the financial asset to that asset’s net carrying amount on initial
recognition.
Property, plant and equipment
Property, plant and equipment are initially measured at cost and subsequently
measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets
less their residual values over their useful lives on the following bases:
Computers 25% on cost
The gain or loss arising on the disposal of an asset is determined as the
difference between the sale proceeds and the carrying value of the asset, and
is recognised in the profit or loss.
Impairment of tangible assets
At each reporting end date, the company reviews the carrying amounts of its
tangible assets to determine whether there is any indication that those assets
have suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine the extent
of the impairment loss (if any). Where it is not possible to estimate the
recoverable amount of an individual asset, the company estimates the
recoverable amount of the cash-generating unit to which the asset belongs.
Financial instruments
Classification and measurement
The Company classifies its financial assets into the following categories:
those to be measured subsequently at fair value through profit or loss (FVPL)
and those to be held at amortised cost.
Classification depends on the business model for managing the financial assets
and the contractual terms of the cash flows.
Management determines the classification of financial assets at initial
recognition. The Company’s policy with regard to financial risk management
is set out in Note 20. Generally, the Company does not acquire financial
assets for the purpose of selling in the short term.
The Company’s business model is primarily that of “hold to collect”
(where assets are held in order to collect contractual cash flows). When the
Company enters into derivative contracts, these transactions are designed to
reduce exposures relating to assets and liabilities, firm commitments or
anticipated transactions.
Financial Assets held at amortised cost
The classification applies to debt instruments which are held under a hold to
collect business model and which
have cash flows that meet the “solely payments of principal and interest”
(SPPI) criteria.
At initial recognition, trade receivables that do not have a significant
financing component, are recognised at their transaction price. Other
financial assets are initially recognised at fair value plus related
transaction costs, they are subsequently measured at amortised costs using the
effective interest method. Any gain or loss on derecognition or modification
of a financial asset held at amortised cost is recognised in the income
statement.
Financial Assets held at fair value through profit or loss (FVPL)
The classification applies to the following financial assets. In all cases,
transaction costs are immediately expensed to the income statement.
* Debt instruments that do not meet the criteria of amortised costs or fair
value through other comprehensive income. These receivables are generally held
to collect but do not meet the SPPI criteria and as a result must be held at
FVPL. Subsequent fair value gains or losses are taken to the income statement.
* Equity investments which are held for trading or where the FVOCI election
has not been applied. All fair value gains or losses and related dividend
income are recognised in the income statement.
* Derivatives which are not designated as a hedging instrument. All subsequent
fair value gains or losses are recognised in the income statement.
Trade and other receivables
Trade and other receivables are measured at initial recognition at fair value
and are subsequently measured at amortised cost using the effective interest
rate method. For trade receivables, where there is no significant financing
component, fair value is normally the transaction price. A provision is
established when there is objective evidence that the Group will not be able
to collect all amounts due. The amount of any provision is recognised in the
income statement.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits and other
short-term highly liquid investments that are readily convertible to a known
amount of cash and are subject to an insignificant risk of changes in value
with maturities of three months or less from inception.
Impairment of financial assets
A forward looking expected credit loss (ECL) review is required for: debt
instruments measured at amortised costs are held at fair value through other
comprehensive income: loan commitments and financial guarantees not measured
at fair value through profit or loss; lease receivables and trade receivables
that give rise to an unconditional right to consideration.
As permitted by IFRS9, the Company applies the “simplified approach” to
trade receivable balances and the “general approach” to all other
financial assets. The general approach incorporates a review for any
significant increase in counter party credit risk since inception. The ECL
reviews including assumptions about the risk of default and expected loss
rates. For trade receivables, the assessment takes into account the use of
credit enhancements, for example, letters of credit. Impairments for undrawn
loan commitments are reflected as a provision.
Financial liabilities
Borrowings and other financial liabilities (including trade payables but
excluding derivative liabilities) are recognised initially at fair value, net
of transaction costs incurred, and are subsequently measured at amortised
costs.
Convertible bonds
Convertible bonds are regarded as compound instruments, consisting of a
liability component and an equity component. At the date of issue, the fair
value of the liability component is estimated using the prevailing market
interest rate for similar non-convertible debt. The difference between the
proceeds of issue of the convertible loan notes and the fair value assigned to
the liability component, representing the embedded option to convert the
liability into equity of the Group, is included in equity.
Issue costs are apportioned between the liability and equity components of the
convertible loan notes based on their relative carrying amounts at the date of
issue. The portion relating to the equity component is charged directly
against equity.
The interest expense on the liability component is calculated by applying the
prevailing market interest rate for similar non-convertible debt to the
liability component of the instrument. The difference between this amount and
the interest paid is added to the carrying amount of the convertible loan
note.
Borrowings costs
Interest-bearing borrowings are initially recorded at fair value net of
attributable transaction costs. Subsequent to initial recognition,
interest-bearing borrowings are stated at amortised cost with any difference
between proceeds and redemption value being recognised in the profit or loss
over the period of the borrowings on an effective interest basis.
Trade payables
Trade payables are initially measured at fair value, and are subsequently
measured at amortised cost, using the effective interest rate method.
Segmental reporting
In identifying its operating segments, management generally follows the
Group's service lines, which represent the main products and services provided
by the Group. The measurement policies the Group uses for segment reporting
under IFRS 8 are the same as those used in its financial statements. The
disclosure is based on the information that is presented to the chief
operating decision maker, which is considered to be the board of Quantum
Blockchain Technologies plc.
Provisions
Provisions are recognised when the Group has a present obligation (legal or
constructive) as a result of a past event, it is probable that the Group will
be required to settle that obligation and a reliable estimate can be made of
the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration
required to settle the present obligation at the year-end date, taking into
account the risks and uncertainties surrounding the obligation.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the
assets of the Group after deducting all of its liabilities. Equity instruments
issued by the Group are recorded at the proceeds received net of direct issue
costs.
Share capital account represents the nominal value of the shares issued.
The share premium account represents premiums received on the initial issuing
of the share capital. Any transaction costs associated with the issuing of
shares are deducted from share premium, net of any related income tax
benefits.
Retained losses include all current and prior period results as disclosed in
the statement of comprehensive income.
Other reserves consist of the merger reserve, share option reserve and loan
equity reserve.
* the merger reserve represents the premium on the shares issued less the
nominal value of the shares, being the difference between the fair value of
the consideration and the nominal value of the shares.
* the share option reserve represents the cumulative amounts charged to the
profit or loss in respect of employee share option arrangements where the
scheme has not yet been settled by means of an award of shares to an
individual
* the loan equity reserve represents the value of the equity component of the
nominal value of the loan notes issued.
Government Grants
Grants from the government are recognised at their fair value where there is
reasonable assurance that the grant will be received and the group will comply
with all attached conditions. Government grants which are revenue in nature
are recognised on a systematic basis within other income in the Statement of
Comprehensive Income over the period in which the group recognises as expenses
the related costs for which the grants are intended to compensate.
Research and development costs
Development costs are recognised as an asset only when all of the following
criteria are met:
(a) the technical feasibility of completing the intangible asset so that it will be available for use or sale.
(b) its intention to complete the intangible asset and use or sell it.
(c) its ability to use or sell the intangible asset.
(d) how the intangible asset will generate probable future economic benefits. Among other things, the entity can demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset.
(e) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset.
(f) its ability to measure reliably the expenditure attributable to the intangible asset during its development.
The research and development expenditure that does not meet the recognition
criteria are not capitalised and are recognised as an expense as incurred, as
shown in note 7.
3.Critical accounting judgements and key sources of estimation uncertainty
The preparation of Financial Statements in conformity with IFRSs requires
management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities, income
and expenses. Estimates and judgements are continually evaluated and are based
on historical experience and other factors including expectations of future
events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting
accounting estimates will, by definition, seldom equal the related actual
results. The estimates and assumptions that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities within
the next financial year are discussed below.
Fair value measurement
Management uses valuation techniques to determine the fair value of financial
instruments (where active market quotes are not available) and non-financial
assets. This involves developing estimates and assumptions consistent with how
market participants would price the instrument. Management bases its
assumptions on observable data as far as possible, but this is not always
available. In that case management uses the best information available.
Estimated fair values may vary from the actual prices that would be achieved
in an arm’s length transaction at the reporting date.
In order to arrive at the fair value of investments a significant amount of
judgement and estimation has been adopted by the Directors as detailed in the
investments accounting policy. Where these investments are un- listed and
there is no readily available market for sale the carrying value is based upon
future cash flows and current earnings multiples for which similar entities
have been sold. The nature of these assumptions and the estimation uncertainty
as a result is outlined in Note 15, along with sensitivities in Note 20.
Going Concern
The Group’s activities generated a loss of €5,396,000 (2020: loss of
€1,208,000) and had net current liabilities of €3,863,000 as at 31
December 2021 (2020: net assets of €4,857,000). The Group’s operational
existence is still dependent on the ability to raise further funding either
through an equity placing on AIM, or through other external sources, to
support the on-going working capital requirements.
After making due enquiries, the Directors have formed a judgement that there
is a reasonable expectation that the Gro up can secure further adequate
resources to continue in operational existence for the foreseeable future and
that adequate arrangements will be in place to enable the settlement of their
financial commitments, as and when they fall due.
For this reason, the Directors continue to adopt the going concern basis in
preparing the financial statements. Whilst there are inherent uncertainties in
relation to future events, and therefore no certainty over the outcome of the
matters described, the Directors consider that, based upon financial
projections and dependant on the success of their efforts to complete these
activities, the Group will be a going concern for the next twelve months. If
it is not possible for the Directors to realise their plans, over which there
is significant uncertainty, the carrying value of the assets of the Group is
likely to be impaired.
Notwithstanding the above, the Directors note the material uncertainty in
relation to the Group being unable to realise its assets and discharge its
liabilities in the normal course of business.
4.Segment information
The Directors are of the opinion that under IFRS 8 - "Operating Segments"
there are no identifiable business segments that are subject to risks and
returns different to the core business of investment management. The
information reported to the Directors, for the purposes of resource allocation
and assessment of performance is based wholly on the overall activities of the
Group. Therefore, the Directors have determined that there is only one
reportable segment under IFRS 8.
The Group has not generated a material level of income and has no major
customers.
5.Staff costs
Group Company
2021 €’000 2020 €’000 2021 €’000 2020 €’000
Staff costs during the period including directors comprise:
Wages and salaries 555 373 555 373
Social security costs and pension contributions 3 2 3 2
Share options expense 2,622 - 2,622 -
3,180 375 3,180 375
1. Directors’ emoluments
2021 €’000 2020 €’000
Aggregate emoluments 525 323
Share options expense 2,444 -
2,969 323
Remuneration of the highest paid Director was €327,000 (2020: €267,000).
There are no retirement benefits accruing to the Directors. Details of
directors’ remuneration are included in the Directors’ Report.
7.Expenses by nature
2021 €’000 2020 €’000
Directors’ emoluments 2,969 323
Employee emoluments 210 80
Professional and legal fees 441 419
Audit fees 50 38
Administrative expenditure 156 174
Impairment of assets 769 89
Fundraising fees 192 -
Research and development costs 198 -
4,985 1,123
With regard to the total R&D expenditure, as of 31 December 2021 the Company
also purchased property, plant and equipment for €164,000 (see note 14).
Further expenditure occurred at the beginning of 2022.
8.Investments in associates
The Group has a 41.17% equity interest in ForCrowd Srl.
Summarised financial information of the Group’ share in this associate is as
follows:
2021 €’000 2020 €’000
Loss from continuing operations (33) -
Total comprehensive loss (33) -
Aggregate carrying amount of the Group’s interests in this associate 211 -
In the prior year, this investment was carried at fair value through profit or
loss and categorised on the Statement of Financial Position with other
non-current investments.
9.Finance (costs)/income
2021 €’000 2020 €’000
(Loss)/gain on derivatives (143) 126
Interest on convertible bonds (305) (247)
Other gains or losses (4) -
Interest received 6 -
(446) (121)
1. Auditor’s remuneration
2021 €’000 2020 €’000
Group Auditor’s remuneration:
Fees payable to the Group’s auditor for the audit of the Company and consolidated financial statements: 50 28
Non audit services:
Other services (tax) - 10
Subsidiary Auditor’s remuneration
Other services pursuant to legislation - -
50 38
11.Employee numbers
Group Company
2021 Number 2020 Number 2021 Number 2020 Number
The average number of Company’s employees, including directors during the period was as follows:
Management and administration 3 4 3 4
1. Taxation
2021 €’000 2020 €’000
Current taxation (53) -
Deferred taxation - -
Tax charge for the year (53) -
The Group has a potential deferred tax asset of €7,775k arising from
€31,100k of unutilised trading losses, capital losses, and management
expenses available for carry forward and relief against future taxable
profits. The deferred tax asset has been measured at 25% (2020: 19%) being the
rate substantially enacted at the year end. The deferred tax asset has not
been recognised in the financial statements in accordance with the Group's
accounting policy for deferred tax.
The Group's unutilised losses are as follows:
2021 € 2020 €
Trading losses 1,461,436 -
Management expenses 18,803,688 18,506,562
Non trade loan relationship deficits 1,487,350 1,473,816
Capital losses 8,359,975 8,282,901
The standard rate of tax for the current year, based on the UK effective rate
of corporation tax is 19% (2020: 19%). The standard rate of Research and
Development Tax credit is 14.5% of the enhanced R&D expenditure. The actual
rate for the current and previous year varies from the standard rate for
reasons set out in the following reconciliation:
Continuing operations 2021 €’000 2020 €’000
Loss for the year before tax (5,449) (1,208)
Tax on ordinary activities at standard rate (1.035) (229)
Effects of:
Expenses not deductible for tax purposes 751 65
Foreign taxes - -
R&D enhancement (39) -
R&D claimed 70 -
Losses brough forward claimed (10) -
Tax losses available for carry forward against future profits 263 164
Total tax - -
Enhanced R&D expenditure 368 -
Total tax repayable at the R&D tax credit rate 53 -
The UK government has announced that the corporation tax rate will increase
from 19% to 25% with effect from 1 April 2023.
13.Earnings per share
The basic earnings per share is calculated by dividing the loss attributable
to equity shareholders by the weighted average number of ordinary shares in
issue during the period. Diluted earnings per share is computed using the
weighted average number of shares during the period adjusted for the dilutive
effect of share options, warrants and convertible loans outstanding during the
period.
The loss and weighted average number of shares used in the calculation are set
out below:
2021 2020
Profit/ (Loss) €’000 Weighted average no. of shares 000’s Per share amount Euro Cent Profit/ (Loss) €’000 Weighted average no. of shares 000’s Per share amount Euro Cent
Basic earnings per share
Continuing operations (5,396) 869,339 (0.621) (1,208) 662,371 (0.182)
Total operations (5,396) 869,339 (0.621) (1,208) 662,371 (0.182)
Fully diluted earnings per share
Continuing operations (5,328) 1,503,440 (0.354) - - -
Total operations (5,328) 1,503,440 (0.354) - - -
14.Tangible fixed assets
Group Computers €’000 Total €’000
Cost
At 1 January 2021 - -
Additions 164 164
At 31 December 2021 164 164
Depreciation and impairment
At 1 January 2021 - -
Eliminated in respect of disposals - -
At 31 December 2021 - -
Carrying amount
At 31 December 2021 164 164
At 31 December 2020 - -
No depreciation has been charged in the year as the computer was still in the
construction stage of completion.
The tangible fixed assets relate in full to the Group’s IT infrastructure
dedicated to the R&D programme.
The Company held no tangible fixed assets during the years ended 31 December
2020 and 2021.
15.Investments
The significant entities for which the Group owns shares, including the parent
company, held at 31 December 2021 were as follows:
Group Companies Ownership Country Company Status Net Assets/(Liabilities) €,000 Date of latest accounts Treatment
Brainspark Associates Ltd 100.00% UK Trading (36,255) 2020 Consolidated
Clear Leisure 2017 Ltd 100.00% UK Trading (49) 2020 Consolidated
QBT R&D Srl 100.00% Italy Incorporated in 2021 N/A N/A Consolidated
Milan Digital Twin Ltd 100.00% UK Dormant Nil 2020 Consolidated
London Digital Twin Ltd 100.00% UK Dormant Nil 2020 Consolidated
Miner One Ltd 100.00% UK Dormant Nil 2020 Consolidated
Clear Holiday Srl 100.00% Italy Dormant 10 2014 Not Consolidated
Alnitak S.A 100.00% Luxembourg Inactive (8) 2014 Not Consolidated
Mediapolis Investment S.A 71.72% Luxembourg Inactive (6,648) 2010 Not Consolidated
Sosushi Company Srl 99.30% Italy In liquidation 654 2013 Not Consolidated
Fallimento Mediapolis Srl 84.04% Italy Liquidated 1,204 2016 Not Consolidated
ORH S.P.A 73.40% Italy Liquidated 1,718 2012 Not Consolidated
Birdland Srl 52.00% Italy In liquidation (288) 2016 Not Consolidated
Sipiem S.P.A 50.17% Italy In liquidation 645 2014 Not Consolidated
Bibop Srl 36.94% Italy Liquidated (211) 2017 No fair value
ForCrowd Srl 41.17% Italy Investment 74 2018 Equity-accounting
ClassFinance in Liquidazione Srl 20.00% Italy Investment (104) 2018 No fair value
PBV Monitor 10.00% Italy Investment 166 2019 Held at fair value
Geosim Systems 4.53% Israel Investment (330) 2018 Held at fair value
Beni Immobili Srl 15.05% Italy Investment 14 2014 No fair value
TLT S.P.A 0.25% Italy Investment (2,476) 2016 No fair value
The registered office of all UK companies is: 22 Great James Street, London,
England, WC1N 3ES.
The registered office for QBT R&D Srl is Via Mazzini 38, Rovigo (RO), 45100.
The registered office for Clear Holiday Srl is Viale Francesco Restelli 1/3,
Milano (MI), 20124. The registered office for Alnitak S.A. is L-1212,
Luxembourg, 3, Rue de Bains.
The registered office for Mediapolis Investment S.A is Rue Val des Bons
Malades 231, 2121, Luxembourg- Kirchberg.
The registered office for Sosushi Company Srl is Via Parravicini 40, Monza
(MB), 20900.
The registered office for Fallimento Mediapolis Srl is Via Friuli 10, Burtolo
(TO), 10010.
The registered office for ORH Spa is Via Ponte Vetero 21, Milano (MI), 20121.
The registered office for Birdland Srl is Via Quaranta 40, Milano (MI), 20139.
The registered office for Sipiem SPA is Via Mazzini 38, Rovigo (RO), 45100.
The registered office for Bibop Srl is Via Bernardo Quaranta 40, Milano (MI),
20139.
The registered office for Forcrowd Srl is Via Vincenzo Monti 52, Milano (MI),
20123.
The registered office for Class Finance Srl is Via Conservaorio 30, 20122,
Milan.
The registered office for PBV Monitor Srl is Via Matteotti 13, Brebbia (VA),
21020.
The registered office for Geosim Systems Limited is Granit St. Petach-Tikva
4951446, Israel.
The registered office for Beni Immobili Srl is Via Torino 58, Biella (BI),
13900.
The registered office for TLT SPA is Via Trento 5, Biella (BI), 13900.
The directors have assessed the group’s interests in other entities on an
individual basis and come to the overall conclusions as detailed in the table
below. Please see the note narrative for additional information on an entity
by entity basis.
Quantum Blockchain Technologies PLC
This entity is the UK based group parent.
Brainspark Associates Limited
This entity is a 100% owned UK incorporated subsidiary of Quantum Blockchain
Technologies PLC and has been included in the consolidation.
Clear Leisure 2017 Limited
This entity is a 100% owned UK incorporated subsidiary of Quantum Blockchain
Technologies PLC and has been included in the consolidation.
QBT R&D Srl
This entity is a 100% owned subsidiary of the group incorporated in Italy
which has been incorporated on 7 July 2021 with its first accounts made up to
31 December 2021. This entity has been included in the consolidation.
Milan Digital Twin Limited
This entity is a 100% owned UK incorporated subsidiary of Quantum Blockchain
Technologies PLC. This entity only includes unpaid share capital and has not
begun operating. It has been included in the consolidation with an overall
impact of nil.
London Digital Twin Limited
This entity is a 100% owned UK incorporated subsidiary of Quantum Blockchain
Technologies PLC. This entity only includes unpaid share capital and has not
begun operating. It has been included in the consolidation with an overall
impact of nil.
Clear Holiday Srl
Clear Holiday Srl is a 100% owned subsidiary of the group incorporated in
Italy. However, this entity has not been consolidated on the basis that it is
immaterial to the group financial statements. The balances held within the
company are not with external third parties and therefore the overall impact
on the accounts would be trivial.
Miner One Limited
Miner One Limited is a 100% owned UK based entity. The entity itself was
initially set up with the hope of transferring certain assets, notably a data
centre located in Serbia into its possession. However, due to disputes with
the previous joint venture partner this did not materialise. In 2021 this
entity remained dormant and did not trade during the year. This entity only
includes unpaid share capital and has not begun operating, it has been
included in the consolidation with an overall impact of nil.
Alnitak S.A.
Alnitak S.A. is a 100% owned subsidiary incorporated in Luxemburg. The entity
remained inactive during 2021 and in February 2022 it was discontinued
following the conclusion of a liquidation process begun on 25 February 2021.
Mediapolis Investment S.A.
Mediapolis Investment S.A. is a 71.72% owned subsidiary incorporated in
Luxembourg. The company itself is inactive and is not trading. Previous
management failed to pay accountants and local directors for the previous six
years and no financial statements have been filed for over seven years.
Although this entity is inactive and 71.72% of the shares are held by the
group, there is no active management in Luxembourg, and this has led to a
difficulty in finalizing a liquidation.
The most recent accounts available were produced in 2010 and the main asset
held by the entity is the investment of 13% of the capital in another former
group company, Fallimento Mediapolis Srl, which has been liquidated. This
investment is carried at approximately EUR6.6m and has been impaired to nil in
previous years. Therefore, the non-consolidation of this entity is deemed to
be immaterial to the group.
On 6 May 2021 Mediapolis Investment S.A. has entered a liquidation process and
the Group does not expect any further assets or liabilities to arise from
these proceedings.
Sosushi Company Srl
Sosushi Company Srl was a 99.3% owned entity incorporated in Italy. On 24 June
2021, the Company received notification that Sosushi has been declared
bankrupt. Sosushi’s bankruptcy does not impact on the Company’s balance
sheet, as the receivables remain collectable, and the litigation is held via
Clear Leisure 2017.
Fallimento Mediapolis Srl
Fallimento Mediapolis Srl was a 84.04% equivalent owned entity incorporated in
Italy. Quantum Blockchain Technologies Plc held directly 74.67% of the capital
of the company whilst a 13% stake was held via Mediapolis Investment S.A as
noted above. The company was liquidated in 2017 and therefore this is the date
from which control is deemed to have been lost. Therefore, the financial
information for Fallimento Mediapolis Srl has not been consolidated into the
group financial statements.
ORH S.P.A
ORH S.P.A was a 73.4% owned entity incorporated in Italy. The company was
liquidated in 2013 and therefore this is the date from which control is deemed
to have been lost. Therefore, the financial information for ORH S.P.A has not
been consolidated into the group financial statements.
Birdland Srl
Birdland Srl was a 52% owned entity incorporated in Italy. The stake in the
entity was indirectly owned via Brainspark Associates Limited. The company was
discontinued on 28 December 2020 following a liquidation process commenced
during 2017. Therefore, the financial information for Birdland Srl has not
been consolidated into the group financial statements.
Sipiem S.P.A
Sipiem S.P.A is a 50.17% owned entity incorporated in Italy. The entity has
not been trading for a number of years and has only been maintained due to the
ongoing legal matters with the former directors. An amount receivable has been
recognised at the group level relating to the part of the claim which is
payable to Quantum Blockchain Technologies PLC. The company is now in
liquidation which commenced in 2015. Therefore, this is the date from which
control is deemed to have been lost. Therefore, the financial information for
Sipiem S.P.A has not been consolidated into the group financial statements.
The investment in Sipiem S.P.A is accounted at fair value through profit or
loss.
Bibop Srl
Bibop Srl was a 36.94% equivalent owned investment in a company incorporated
in Italy that was held via Birldand Srl. As Birdland Srl was liquidated the
group does not control or exercise significant influence on Bipop Srl and,
accordingly the company is not consolidated, or equity accounted in the group
financial statements. As the investment is not held directly by the group, no
value is recognised in the financial statements.
ForCrowd Srl
ForCrowd Srl is a 41.17% owned investment in an entity incorporated in Italy.
The group has determined that it holds significant influence over this
associate given the voting rights arising from its shareholding. Consequently,
this investment has been categorised in the accounts within "Investments in
equity-accounted associates" and is carried in the accounts at the Group's
share of the associate's net assets, with the Group’s share of the profit or
loss and other comprehensive income of the associate being brought into the
Group's results for the year.
Previously, this investment was categorised in the financial statements within
"Investments" and hence has been re-categorised in the year ended 31 December
2021.
ClassFinance in Liquidazione Srl
ClassFinance in Liquidazione Srl is a 20% owned investment of the group
incorporated in Italy. No fair value is recognised for this investment as the
entity has not been trading for a number of years. The company was placed into
liquidation in 2015. The investment in ClassFinance in Liquidazione Srl is
accounted at fair value through profit or loss.
PBV Monitor Srl
PBV Monitor Srl is a 10% owned investment in an entity incorporated in Italy.
The investment has been recognised in the accounts at fair value through
profit or loss.
The Fair Value of PBV Monitor (€77,000, 2020: €302,000) has been assessed
in relation to the last equity round of the company in January 2022, in which
the entire post money valuation of the company was €770,000, with Quantum
Blockchain Technologies directly holding the 10% of such amount.
The post money valuation at which the Company invested in 2018 was €340,000,
which also represented the Company’s valuation of PBV in Pre Covid-19
conditions. The difference between this original value and the current Fair
Value is not attributable to a change of fundamentals to the business.
Similarly, the progress made in 2020 has not highlighted any significant
divergence from the original business plan.
The difference in the valuation is therefore attributable to lower value
attributed to the company during the 2022 equity round. The key assumptions
underpinning the equity round at the start of 2022 remain applicable.
The Fair Value assessment of PBV Monitor, is directly related to the
company’s valuation in future rounds.
Geosim Systems Limited
Geosim Systems Limited is a 4.53% owned investment in an entity incorporated
in Israel. The investment has been recognised in the accounts through its fair
value and is held via Brainspark Associates Limited.
The Fair Value of Geosim (€587,000, 2020: €546,000) has been assessed in
relation to the last equity round of the company in 2018, in which Quantum
Blockchain Technologies’ 533,990 Geosim shares have been valued at $1.25
each. The difference in the valuation between 2020 and 2019, attributable to
the variance in the EUR/USD exchange rate.
The Fair Value assessment of Geosim is directly related to the company’s
valuation in future rounds and to the EUR/USD exchange rate.
Beni Immobili Srl
Beni Immobili Srl is a 15.05% equivalent owned investment in an entity
incorporated in Italy. The shares in this company are held via Sipiem S.P.A.
No fair value is recognised for this investment as the entity has minimal net
assets and the valuation would be trivial to the consolidated financial
statements. Moreover, as the investment is held via Sipiem S.P.A, which is in
liquidation, the investment has not been recognised as an asset.
TLT S.P.A
TLT S.P.A is a 0.25% owned investment based in Italy. No fair value is
recognised for this investment as the entity has a large net liability
position and due to the small shareholding, any potential valuation would be
trivial to the consolidated financial statements. Moreover, as the investment
is held via Sipiem S.P.A, which is in liquidation, the investment should not
be recognised as an asset.
Group Company
2021 €’000 2020 €’000 2021 €’000 2020 €’000
At as 1 January 848 896 434 521
Additions - 2 64 2
Fair value decrease (225) - (200) (89)
Foreign exchange 41 (50) - -
Carrying value at 31 December 664 848 298 434
An amount of €587,000 (2020: €546,000) included within Group investments
held for trading is a level 3 investment and represents the fair value of
533,990 shares in GeoSim Systems Ltd. GeoSim Systems Ltd is an Israeli company
seeking to establish itself as the world leader in building complete and
photorealistic 3D virtual cities and in delivering them through the Internet
for use in local searches, real estate and city planning, homeland security,
tourism and entertainment. Quantum Blockchain Technologies owns 4.53% of
GeoSim Systems Ltd.
An amount of €77,000 (2020: €302,000) included within Company investments
held for trading is a level 3 investment and represents the fair value of a
10% interest in PBV Monitor Srl (“PBV”). PBV is an Italian company
specialising in the acquisition and dissemination of data for the legal
services industry, utilising proprietary market intelligence tools and
dedicated search software. Quantum Blockchain Technologies acquired 10% of PBV
in December 2018. As part of the investment agreement, Quantum Blockchain
Technologies was granted a seat on the board of PBV and was appointed as
exclusive advisor to PBV regarding the possible sale of PBV from 1 January
2020 for a period of four years and will be entitled to a 4% commission fee on
the proceeds of any sale.
16.Trade and other receivables
Group Company
2021 €’000 2020 €’000 2021 €’000 2020 €’000
Trade receivables 58 9 - -
Other receivables 4,769 4,620 144 40
Amounts owed by related parties 78 562 521 801
4,905 5,191 665 841
Group other receivables includes an amount of €4,445,000 (2020:
€4,445,000) due in relation to the ongoing Sipiem legal claim, which is
unsecured, interest free and does not have fixed terms of repayment; and an
amount of €132,000 (2020: €132,000) due in relation to the Fallimento
Mediapolis Srl bankruptcy procedure.
The Directors consider that the carrying value of trade and other receivables
approximates to their fair value.
17.Cash and cash equivalents
Group Company
2021 €’000 2020 €’000 2021 €’000 2020 €’000
Cash at bank and in hand 1,039 - 1,035 -
1,039 - 1,035 -
The Directors consider the carrying amounts of cash and cash equivalents
approximates to their fair value.
18.Trade and other payables
Group Company
2021 €’000 2020 €’000 2021 €’000 2020 €’000
Trade payables 128 124 126 124
Other payables 91 143 91 141
Accruals 110 67 137 62
Trade and other payables 329 334 354 327
The Directors consider that the carrying value of trade and other payables
approximates to their fair value.
19.Borrowings
Group Company
2021 €’000 2020 (restated) €’000 2021 €’000 2020 (restated) €’000
Zero rate convertible bond 2015 5,100 5,045 5,100 5,045
Zero rate convertible bond 2020 3,265 3,015 3,265 3,015
8,365 8,060 8,365 8,060
Disclosed as:
Current borrowings 8,365 - 8,365 -
Non-current borrowings - 8,060 - 8,060
8,365 8,060 8,365 8,060
Interest on the bonds is payable annually on 31 March each year. The bonds at
31 December 2021 include all unpaid interest and interest accrued to that
date.
On 25 March 2013 the Company issued €3,000,000 nominal value of zero rate
convertible bonds at a discount of 22%. The bonds are convertible at 15p per
share and have a redemption date of 15 December 2015.
During 2014 the Company issued €1,885,400 zero bonds in settlement of
£1,563,000 7% bonds (see above). Also €600,000 zero bonds were issued in
settlement of a debt of €518,000 and €450,000 bonds were issued for cash
realising €412,000 before expenses.
On 15 December 2015 the bondholders meeting approved the amendments on the
Zero Rate Convertible Bond 2015, originally due on 15 December 2015; Under new
terms the final maturity date of the Bond is 15 December 2017 and the interest
has been reduced from 9.5% to 7%.
On 15 December 2016 the bondholders meeting approved the amendments on the
Zero Rate Convertible Bond 2015, originally due on 15 December 2017; Under new
terms the final maturity date of the Bond is 15 December 2018 and the interest
has been reduced from 7% to 1%.
On 19 June 2018, the holders of its €9.9m Bonds agreed to extend the final
maturity date of the Bonds from 15 December 2018 to 15 December 2022. The
Company is now able to convert the Bonds into new ordinary shares of 0.25p
each.
On 28 December 2018, bonds with a face value of €2,100,000 plus cumulative
interest were converted into 50,992,826 new ordinary shares of 0.25 pence at a
price of 3.76 pence per share.
On 5 October 2020, Eufingest SA agreed to extend the repayment date of all
loans advanced to the company amounting to €3,375,000 and £30,000 to 31
October 2020.
On 9 November 2020 Eufingest SA agreed to convert all outstanding loans and
accrued interest amounting to €3,423,707 into Zero rate convertible bond
2020. The Zero Coupon Bonds 2020 accrue interest at a rate of 2% per annum.
Bondholders can convert at any time up to 15 December 2022 at a conversion
price of £0.01 per share. The Zero rate convertible bond 2020 is accounted
for as a financial instrument with both debt and equity characteristics. The
debt element was valued using a market rate assessed by the Directors of
7.99%.
In April 2022, QBT agreed with the sole bondholder of the €3.5m 2020 Zero
Coupon Bond to extend the maturity date from December 2022 to December 2024.
Also, with regard to the 2015 Zero Coupon Bond, via a Bondholders’ meeting
held on 21 April 2022, the Company extended the maturity date from 15 December
2022 to 15 December 2024 and amended the conversion price into Company’s new
ordinary shares from 15p to 5p.
Key Assumptions
The derivative element of the Zero Coupon Bonds 2015 were valued at each year
end using the Black Scholes option pricing model. The following assumptions
were used at each period end.
Zero Coupon Bonds 2015
2021 2020
Share price 3.100p 0.265p
Expected life 1 year 3 years
Volatility 130% 70%
Dividend yield 0% 0%
Risk free interest rate 0.76% (0.03)%
Fair value 0.4p 0.0p
1. Financial instruments
The Group’s financial instruments comprise cash, investments at fair value
through profit or loss, investments in equity-accounted associates, trade
receivables, trade payables that arise from its operations and borrowings. The
main purpose of these financial instruments is to provide finance for the
Group’s future investments and day to day operational needs.
The Group does not enter into any derivative transactions such as interest
rate swaps or forward foreign exchange contracts, as the Group’s exposure to
movements in foreign exchange rates is not considered significant (see Foreign
currency risk management). The main risks faced by the Group are limited to
interest rate risk on surplus cash deposits and liquidity risk associated with
raising sufficient funding to meet the operational needs of the business.
The Board reviews and agrees policies for managing these risks and they are
summarised below.
FINANCIAL ASSETS BY CATEGORY
The categories of financial assets included in the statement of financial
position and the headings in which they are included are as follows:
2021 2020
€’000 €'000
Financial assets:
Financial assets held at fair value through profit and loss 664 980
Investments in equity-accounted associates 211 -
Trade and other receivables 4,862 5,191
Cash and cash equivalents 1,039 -
6,776 6,171
FINANCIAL LIABILITIES BY CATEGORY
The categories of financial liabilities included in the statement of financial
position and the headings in which they are included are as follows:
2021 2020 (restated)
€'000 €'000
Financial liabilities at amortised cost:
Trade and other payables 353 334
Borrowings 8,365 8,060
Derivative 1,113 -
9,831 8,394
Financial instruments measured at fair value: Level 1 €’000 Level 2 €’000 Level 3 €’000
As at 31 December 2021
Investments at fair value through profit or loss - - 664
- - 664
As at 31 December 2020
Investments at fair value through profit or loss - - 980
- - 980
The valuation techniques and significant unobservable inputs used in
determining the fair value measurement of level 2 and level 3 financial
instruments, as well as the inter-relationship between key unobservable inputs
and fair value, are set out in the table below.
Financial Instruments Valuation technique used Significant unobservable inputs (Level 3 only) Inter – relationship between key unobservable inputs and fair value (level 3 only)
Investments Based on issue of shares in the investments held by the Group and directors assessment on the recoverability of loans. Assessment of recoverability of loan. If loan was considered not to be recoverable this would result in the reduction in the fair value of the investment.
The Group has adopted fair value measurements using the IFRS 7 fair value
hierarchy.
Categorisation within the hierarchy has been determined on the basis of the
lowest level of input that is significant to the fair value measurement of the
relevant asset as follows:
Level 1: valued using quoted prices in active markets for
identical assets;
Level 2: valued by reference to valuation techniques using
observable inputs other than quoted prices included in Level 1;
Level 3: valued by reference to valuation techniques using
inputs that are not based on observable markets criteria.
The Level 3 investment refers to an investment in GeoSim Systems Ltd and PBV
Monitor Srl.
Capital risk management
The Group manages its capital to ensure that entities in the Group will be
able to continue as going concerns while maximising the return to stakeholders
through optimisation of the debt and equity balance. The capital structure of
the Group consists of debt attributable to convertible bondholders,
borrowings, cash and cash equivalents, and equity attributable to equity
holders of the Group, comprising issued capital, reserves and retained
earnings, all as disclosed in the Statement of Financial Position.
Significant accounting policies
Details of the significant accounting policies and methods adopted, including
the criteria for recognition, the basis of measurement and the basis on which
income and expenses are recognised, in respect of each class of financial
asset, financial liability and equity instrument disclosed in Note 2 to the
financial statements.
Financial risk management objectives
The Company is exposed to a variety of financial risks which result from both
its operating and investing activities. The Group’s risk management is
coordinated by the board of directors and focuses on actively securing the
Company’s short- and medium-term cash flows by raising liquid capital to
meet current liability obligations.
Market price risk
The Company’s exposure to market price risk mainly arises from movements in
the fair value of its investments held for trading. The Group manages the
investment price risk within its long-term investment strategy to manage a
diversified exposure to the market. If the investments were to experience a
rise or fall of 15% in their fair value, this would result in the Group’s
net asset value and statement of comprehensive income increasing or decreasing
by €97,000 (2020: €160,000).
Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board of
Directors, which monitors the Group’s short, medium and long-term funding
and liquidity management requirements on an appropriate basis. The Group has
minimal cash balances at the reporting date (refer to Note 2 – Basis of
preparation and going concern). The Group continues to secure future funding
and cash resources from disposals as and when required in order to meet its
cash requirements. This is an on-going process and the directors are confident
with their cash flow models.
The following are the undiscounted contractual maturities of financial
liabilities:
Carrying Amount Less than 1 year Between 1 and 5 years Total
€’000 €’000 €’000 €’000
As at 31 December 2021
Trade and other payables 329 329 - 329
Borrowings 8,365 8,365 - 8,365
Derivative financial instruments 1,113 1,113 - 1,113
9,807 9,807 - 9,807
As at 31 December 2020
Trade and other payables 334 334 - 334
Borrowings (restated) 8,060 - 8,060 8,060
8,394 334 8,060 8,394
Management believes that based on the information provided in Notes 2 and 3
– in the ‘Basis of preparation’ and ‘Going concern’, that future
cash flows from operations will be adequate to support these financial
liabilities.
Interest rate risk
The Group and Company manage the interest rate risk associated with the Group
cash assets by ensuring that interest rates are as favourable as possible,
whilst managing the access the Group requires to the funds for working capital
purposes.
The Group’s cash and cash equivalents are subject to interest rate exposure
due to changes in interest rates. Short-term receivables and payables are not
exposed to interest rate risk. The borrowings are at fixed interest rates.
Group Company
2021 2020 (restated) 2021 2020 (restated)
€’000 €’000
Fixed rate instruments
Financial assets 4,845 6,171 605 1,275
Financial liabilities 8,718 8,060 8,743 8,060
Change in interest rates will affect the Group’s income statement as
follows:
Gain / (loss)
Group 2021 2020
€’000 €’000
Euribor +0.5% / -0.5% +5 / -5 -/-
The analysis was applied to cash and cash equivalents based on the assumption
that the amount of asset as at the reporting date was available for the whole
year.
Foreign currency risk management
The Group undertakes certain transactions denominated in currencies other than
Euro, hence exposures to exchange rate fluctuations arise. Amounts due to
fulfil contractual obligations of £208,000 (2020: £Nil) are denominated in
sterling. An adverse movement in the exchange rate will impact the ultimate
amount payable, a 10% increase or decrease in the rate would result in a
profit or loss of £21,000 (2020: £Nil). The Group’s functional and
presentational currency is the Euro as it is the currency of its main trading
environment, and most of the Group’s assets and liabilities are denominated
in Euro. The parent company is located in the sterling area.
Credit risk management
The Group’s financial instruments, which are subject to credit risk, are
considered to be trade and other receivables. There is a risk that the amount
to be received becomes impaired. The Group’s maximum exposure to credit risk
is €4,905,000 (2020: €5,191,000) comprising receivables during the period.
About 91% (2020: 67%) of total receivables are due from a single company. The
ageing profile of trade receivables was:
2021 2020
Total book value Allowance for impairment Total book value Allowance for impairment
Group €’000 €’000 €’000 €’000
Current 4,905 - 5,191 -
4,905 - 5,191 -
Company
Current 665 - 841 -
665 - 841 -
21.Share capital and share premium
ISSUED AND FULLY PAID: Number of ordinary shares Number of deferred shares Ordinary share capital €’000 Deferred share capital €’000 Share premium €’000 Total €’000
At 1 January 2020 662,371,447 199,409,377 1,930 5,467 47,124 54,521
Issue of shares - - - - - -
At 31 December 2020 662,371,447 199,409,377 1,930 5,467 47,124 54,521
Issue of shares 282,680,404 - 824 - 2,318 3,142
At 31 December 2021 945,051,851 199,409,377 2,754 5,467 49,442 57,663
All ordinary shares carry equal rights.
The deferred shares have restricted rights such that they have no economic
value.
22.Share based payments
On 14 April 2021, Francesco Gardin, a director, was granted options to
subscribe for 100,000,000 new ordinary shares in the Company at an exercise
price of 5 pence per share. The options are exercisable for the period between
6 May 2022 and 6 May 2026. Francesco Gardin was also granted options to
subscribe for 100,000,000 new ordinary shares in the Company at an exercise
price of 10 pence per share. The options are exercisable for the period
between 6 May 2023 and 6 May 2026.
On 2 June 2021, a consultant was granted options to subscribe for 10,000,000
new ordinary shares in the Company at an exercise price of 5 pence per share.
The options are exercisable for the period between 15 May 2022 and 15 August
2022.
On 27 September 2021, an employee was granted options to subscribe for
5,000,000 new ordinary shares in the Company at an exercise price of 5 pence
per share. The options are exercisable for the period between 6 May 2022 and 6
May 2025. The same employee was also granted options to subscribe for
5,000,000 new ordinary shares in the Company at an exercise price of 10 pence
per share. The options are exercisable for the period between 6 May 2023 and 6
May 2025. Another employee was granted options to subscribe for 5,000,000 new
ordinary shares in the Company at an exercise price of 5 pence per share. The
options are exercisable for the period between 6 May 2022 and 6 May 2026. The
second employee was also granted options to subscribe for 5,000,000 new
ordinary shares in the Company at an exercise price of 10 pence per share. The
options are exercisable for the period between 6 May 2023 and 6 May 2026. A
third employee was granted options to subscribe for 2,500,000 new ordinary
shares in the Company at an exercise price of 5 pence per share. The options
are exercisable for the period between 6 May 2022 and 6 May 2024.
On 15 December 2021, Reginald Eccles, a director, was granted options to
subscribe for 5,000,000 new ordinary shares in the Company at an exercise
price of 10 pence per share. The options are exercisable for the period
between 1 December 2021 and 1 December 2026.
The total share-based payment expense recognised in the income statement for
the year ended 31 December 2021 in respect of the share options granted was
€1,160,000 (2020: €Nil).
The significant inputs to the model in respect of the options granted during
the year were as follows:
5p 10p
Share price 1.175p - 3.100p 1.175p - 3.050p
Expected life 1 - 3 years 3 years
Volatility 130% 215%
Dividend yield 0% 0%
Risk free interest rate 0.76% 0.76%
Fair value 0.4p – 2.1p 1.0p – 2.7p
The tables below disclose the movements in share options during the year.
Number of options at 1 Jan 2021 Granted in the year Exercised in the year Lapsed in the year Number of options at 31 Dec 2021 Exercise Price, pence Expiry date
- 105,000,000 - - 105,000,000 5.00 06.05.2026
- 105,000,000 - - 105,000,000 10.00 06.05.2026
- 10,000,000 - - 10,000,000 5.00 15.08.2022
- 5,000,000 - - 5,000,000 5.00 06.05.2025
- 5,000,000 - - 5,000,000 10.00 06.05.2025
- 2,500,000 - - 2,500,000 5.00 06.05.2024
- 5,000,000 - - 5,000,000 10.00 01.12.2026
- 237,500,000 - - 237,500,000
Number of options at 1 Jan 2020 Granted in the year Exercised in the year Lapsed in the year Number of options at 31 Dec 2020 Exercise Price, pence Expiry date
10,000,000 - - 10,000,000 - N/A N/A
3,000,000 - - 3,000,000 - N/A N/A
13,000,000 - - 13,000,000 - N/A N/A
23.Other reserves
The Group considers its capital to comprise ordinary share capital, share
premium, retained losses and its convertible bonds. In managing its capital,
the Group’s primary objective is to maintain a sufficient funding base to
enable the Group to meet its working capital and strategic investment needs.
In making decisions to adjust its capital structure to achieve these aims,
through new share issues, the Group considers not only their short-term
position but also their long-term operational and strategic objectives.
Group Merger reserve €’000 Loan note equity reserve €’000 Share option reserve €’000 Total other reserves €’000
At 1 January 2020 8,325 - 51 8,376
Transfer of reserves - - (51) (51)
Equity portion of convertible loan notes - 462 - 462
At 31 December 2020 8,325 462 - 8,787
Grant of share options - - 2,622 2,622
At 31 December 2021 8,325 462 2.622 11,409
Company Loan note equity reserve €’000 Share option reserve €’000 Total other reserves €’000
At 1 January 2020 - 51 51
Transfer of reserves - (51) (51)
Equity portion of convertible loan notes 462 - 462
At 31 December 2020 462 - 462
Grant of share options - 2,622 2,622
At 31 December 2021 462 2,622 3,084
1. Warrants
On 22 February, the Company raised £1,000,000 (before expenses) through the
placing of 100,000,000 Ordinary Shares at a price of 1 pence per share to an
individual investor, Mr John Story. Mr Story was also granted 100,000,000
warrants over 100,000,000 new Ordinary Shares exercisable at a price of 2
pence per Ordinary Shares until 26/02/2023.
In October QBT issued 17,500,000 new Ordinary Shares at a price of 2 pence per
share, following the exercise of 17,500,000 warrants of the 100,000,000
warrants granted to Mr John Story, raising £350,000 (before expenses). In
December the Company issued 30,000,000 new Ordinary Shares at a price of 2
pence per share, following the exercise of 30,000,000 warrants of the
100,000,000 warrants granted to Mr John Story, receiving £600,000 (before
expenses).
At the year-end date, 52,500,000 outstanding warrants were held by Mr Story
and these were valued at €969,000 at the year end. This amount is included
within ‘Derivative Financial Instruments’ in the Statement of Financial
Position.
25.Ultimate controlling party
The Group considers that there is no ultimate controlling party.
26.Related party transactions
Transactions between the company and its subsidiaries, which are related
parties have been eliminated on consolidation, but are disclosed where they
relate to the parent company. These transactions along with transactions
between the company and its investment holdings are disclosed in the table
below, with all amounts being presented in Euros and being owed to the Group:
2021 2020 2021 2020
Related party Group Group Company Company
Clear Leisure 2017 Limited - - 132,067 180,691
QBT R&D Srl - - 311,389 -
Sipiem S.P.A - 386,697 - 386,697
Sosushi Company Srl - 118,033 - 118,033
PBV Monitor Srl 22,609 - 22,609 -
Geosim Systems Limited 55,156 46,068 55,156 46,068
77,765 550,798 521,221 731,489
During the year, Quantum Blockchain Technologies Limited made sales totalling
€4,000 (2020: €Nil) to QBT
R&D Srl.
During the year, QBT R&D Srl made sales totalling €27,500 (2020: €Nil) to
Quantum Blockchain Technologies Limited.
During the year, Metals Analysis Limited, a company in which R Eccles is a
Director, charged Quantum Blockchain Technologies Plc €66,000 (2020:
€53,000) for consultancy fees. The amount owed to Metals Analysis Limited at
year end is €3,000 (2020: €4,000).
Remuneration of key management personnel
The remuneration of the directors, who are the key personnel of the group, is
included in the Directors Report.
Under “IAS 24: Related party disclosures”, all their remuneration is in
relation to short-term employee benefits.
27.Events after the reporting date
During the first months of 2022, the Company has been involved in the
following:
In January the Company issued 35,000,000 new Shares at a price of 2 pence per
share, following the exercise of 35,000,000 warrants of the 100,000,000
warrants granted to Mr John Story, receiving £700,000 (before expenses).
In March the Company issued 17,500,000 new Shares at a price of 2 pence per
share, following the exercise of 17,500,000 warrants of the 100,000,000
warrants granted to Mr John Story, receiving £350,000 (before expenses).
In April, QBT agreed with the sole bondholder of the €3.5m 2020 Zero Coupon
Bond to extend the maturity date from December 2022 to December 2024.
Also, with regard to the 2015 Zero Coupon Bond, via a Bondholders’ meeting
held on 21 April 2021, the Company extended the maturity date from 15 December
2022 to 15 December 2024 and amended the conversion price into Company’s new
ordinary shares from 15p to 5p.
On 11 February 2022, Alnitak S.A., a 100% owned subsidiary was liquidated
following the conclusion of a liquidation process which begun on 25 February
2021.
28.Prior year adjustment
The comparative figures for the year ended 31 December 2020 have been restated
as set out in the tables below:
Restated Group Statement of Financial Position as at 1 January 2020
Ref. Group 1 Jan 2020 €’000 Restatement 1 Jan 2020 €’000 Group 1 Jan 2020 (restated) €’000
Non-current assets
Investments B 1,117 -221 896
Investments in equity-accounted investments B - 221 221
Total non-current assets 1,117 - 1,117
Current assets
Trade and other receivables 6,604 - 6,604
Cash and cash equivalents - - -
Total current assets 6,604 - 6,604
Total assets 7,721 - 7,721
Current liabilities
Trade and other payables (396) - (396)
Borrowings (3,691) - (3,691)
Derivative liability (121) - (121)
Total current liabilities (4,208) - (4,208)
Net current assets/(liabilities) 2,396 - 2,396
Total assets less current liabilities 3,513 - 3,513
Non-current liabilities
Borrowings A (5,142) 152 (4,990)
Total non-current liabilities (5,142) 152 (4,990)
Total liabilities (9,350) 152 (9,198)
Net assets (1,629) 152 (1,477)
Equity
Share capital 7,397 - 7,397
Share premium account 47,124 - 47,124
Other reserves 8,376 - 8,376
Retained losses A (64,526) 152 (64,374)
Total equity (1,629) 152 (1,477)
Restated Company Statement of Financial Position as at 1 January 2020
Ref. Company 1 Jan 2020 €’000 Restatement 1 Jan 2020 €’000 Company 1 Jan 2020 (restated) €’000
Non-current assets
Investments 521 - 521
Total non-current assets 521 - 521
Current assets
Trade and other receivables 1,493 - 1,493
Cash and cash equivalents - - -
Total current assets 1,493 - 1,493
Total assets 2,014 - 2,014
Current liabilities
Trade and other payables (339) - (339)
Borrowings (3,691) - (3,691)
Derivative liability (121) - (121)
Total current liabilities (4,151) - (4,151)
Net current assets/(liabilities) (2,658) - (2,658)
Total assets less current liabilities (2,137) - (2,137)
Non-current liabilities
Borrowings A (5,142) 152 (4,990)
Total non-current liabilities (5,142) 152 (4,990)
Total liabilities (9,293) 152 (9,141)
Net (liabilities)/assets (7,279) 152 (7,127)
Equity
Share capital 7,397 - 7,397
Share premium account 47,124 - 47,124
Other reserves 51 - 51
Retained losses A (61,851) 152 (61,699)
Total equity (7,279) 152 (7,127)
Restated Group Statement of Financial Position as at 31 December 2020
Ref. Group 31 Dec 2020 €’000 Restatement 31 Dec 2020 €’000 Group 31 Dec 2020 (restated) €’000
Non-current assets
Investments B 980 -132 848
Investments in equity-accounted associates B - 132 132
Total non-current assets 980 - 980
Current assets
Trade and other receivables 5,191 - 5,191
Cash and cash equivalents - - -
Total current assets 5,191 - 5,191
Total assets 6,171 - 6,171
Current liabilities
Trade and other payables (334) - (334)
Borrowings - - -
Derivative financial instruments - - -
Total current liabilities (334) - (334)
Net current assets/(liabilities) 4,857 - 4,857
Total assets less current liabilities 5,837 - 5,837
Non-current liabilities
Borrowings A (8,212) 152 (8,060)
Total non-current liabilities (8,212) 152 (8,060)
Total liabilities (8,546) 152 (8,394)
Net assets (2,375) 152 (2,223)
Equity
Share capital 7,397 - 7,397
Share premium account 47,124 - 47,124
Other reserves 8,787 - 8,787
Retained losses A (65,683) 152 (65,531)
Total equity (2,375) 152 (2,223)
Restated Company Statement of Financial Position as at 31 December 2020
Ref. Company 31 Dec 2020 €’000 Restatement 31 Dec 2020 €’000 Company 31 Dec 2020 (restated) €’000
Non-current assets
Investments 434 - 434
Total non-current assets 434 - 434
Current assets
Trade and other receivables 841 - 841
Cash and cash equivalents - - -
Total current assets 841 - 841
Total assets 1,275 - 1,275
Current liabilities
Trade and other payables (327) - (327)
Borrowings - - -
Derivative financial instruments - - -
Total current liabilities (327) - (327)
Net current assets/(liabilities) 514 - 514
Total assets less current liabilities 948 - 948
Non-current liabilities
Borrowings A (8,212) 152 (8,060)
Total non-current liabilities (8,212) 152 (8,060)
Total liabilities (8,539) 152 (8,387)
Net (liabilities)/assets (7,264) 152 (7,112)
Equity
Share capital 7,397 - 7,397
Share premium account 47,124 - 47,124
Other reserves 462 - 462
Retained losses A (62,247) 152 (62,095)
Total equity (7,264) 152 (7,112)
Notes to prior year restatement tables Group and Company
In previous periods, the Group had incorrectly accounted for the Zero Coupon
Bonds 2015 and these were subject to a prior year adjustment in the year
ended 31 December 2020 as detailed in the accounts. Following renegotiations
in December 2018, this loan included a redemption premium which was required
to be amortised over the life of the loan, with annual charges included in
finance costs in the Income Statement. The initial accounting for this was
incorrect.
Pre 1 January 2020 Adjustments
1. The fair value of the loan recognised at the outset has been reduced by
€152,000, representing a change in the underlying value of the Zero Coupon
Bond 2015, with the corresponding credit recognised in retained losses. This
error relates to an incorrect calculation in the prior year adjustment in the
year ended 31 December 2020. This correction has had no material impact on the
Income Statement and Statement of Comprehensive Income of the year ended 31
December 2020.
2. As disclosed in Note 8, the Group investment in ForCrowd Srl has been
reclassified in the Statement of Financial Position to show as investments in
equity-accounted associates. This reclassification has had no material impact
on the Income Statement and Statement of Comprehensive Income of the year
ended 31 December 2020.
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