REG-Quantum Blockchain Technologies Plc: Final Results
26/06/2024 07:15
26 June 2024
Quantum Blockchain Technologies Plc
(”QBT” or ”the Company”)
FINAL RESULTS
QBT (AIM: QBT), is pleased to announce its final results for the year ended 31
December 2023.
The Company’s Annual General Meeting (“AGM”) will be held at Company’s
registered address, 1st Floor, 1 Chancery Lane, London, WC2A 1LF at 12.00 pm
on Wednesday, 31 July 2024.
The Annual Report and Accounts together with the AGM Notice and Form of Proxy
(together the “Documents”) are available on the Company’s website under
the “Investor Relations – Annual Reports and Circulars” section. The
Documents will be posted shortly to those shareholders who have requested to
receive printed documents.
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 2023. The Group consists of Quantum Blockchain Technologies PLC (the
“Company” or “QBT”), which undertakes the Group’s Research and
Development (“R&D”) Programme and holds the Legacy Assets, and its wholly
owned subsidiary, Clear Leisure 2017 Ltd (“CL17”), which deals with the
legal claims and related litigation.
During 2023, the main focus of the Company has been the R&D Programme,
launched in 2021, which aims to develop a proprietary disruptive technology
for mining Bitcoin through the development of Artificial Intelligence (AI),
Quantum Computing and a special architecture for ASIC chips design for mining
rigs. The capitalisation of the Bitcoin market as at the date of this report
exceeds USD1.3 trillion, therefore, a technology which could bring a
competitive advantage to existing Bitcoin miners is considered by the Company
as potentially valuable.
The Company has several independent R&D teams working on each of the above
technologies, based in London (UK), Munich (Germany) and Milan (Italy).
The first goal of QBT’s R&D Programme is to create AI software to improve
the mining power of existing Bitcoin mining rigs. By applying AI and Machine
Learning (ML) technologies, three different R&D teams have independently
achieved very promising results from internal laboratory tests for the
Company’s three proprietary methods, called “A”, “B” and “C”.
While they are materially different, each method has substantiated the
Company’s initial assumption, i.e., that SHA-256, the core algorithm for
mining of Bitcoin, is to some extent predictable. Hence calculations can be
limited only to those cases where the chance of successfully mining Bitcoin is
higher, resulting in better overall performance of the mining process.
The Company is now working on adapting its three Bitcoin mining methods to
existing mining rigs in order to launch the first commercial QBT products, as
Software as a Service (“SaaS”) for Bitcoin miners.
A second goal, which has a mid to long term timeframe, is the development of a
proprietary mining chip which includes all the internal R&D results, as per
the two patent applications filed in 2021 and 2023.
Finally, the third objective will be the implementation of “Quantum
Mining”, which is a proprietary quantum version of SHA-256 algorithm for
Bitcoin mining. A patent application for this implementation is in the process
of being drafted at the time of publication of this report.
In order to use QBT’s proprietary quantum algorithm for Bitcoin mining, a
quantum computer with more qubits than is currently commercially available is
required. Therefore, the Company is planning ahead to be in a position to use
this opportunity when such quantum computer is available.
During 2023, the Company continued to deal with its Legacy Assets, with
special focus on the litigation against the former management and internal
audit committee of Sipiem in Liquidazione Spa (“Sipiem”), which is held
via CL17. In late 2022, the Venice Court ruled in favour of CL17 and ordered
Sipiem defendants to pay CL17 €6,274,000 in damages (exclusive of interest
and adjustments for inflation), and legal fees (together the “Award
Payment”).
The Company also continued to deal with its other Legacy Assets, such as the
Sosushi Srl (“Sosushi”) €1m litigation, and Company’s investments in
PBV, Forcrowd and Geosim, although there are no specific updates available at
this time.
During the period under review, as announced on 1 June 2023, QBT raised a
total of £1 million (before expenses) pursuant to the issue of 71,428,571 new
ordinary shares of 0.25 pence each in the Company (“Ordinary Shares”) at a
price of 1.4 pence per Ordinary Share. Further to that, as announced on 30
October, the Company raised a total of £2 million (before expenses) pursuant
to the issue of 133,333,333 new Ordinary Shares at a price of 1.5 pence per
Ordinary Share.
On 7 July 2023, the Company announced that it had received a conversion notice
from MC Strategies AG to convert €1 million of the Zero-Coupon Bond into new
Ordinary Shares at a conversion price of 1 pence per Ordinary Share (EUR: GBP
exchange rate of 0.89 – fixed per terms and conditions of the Zero-Coupon
Bond) (as originally disclosed by the Company on 9 November 2020). As a
result, the Company issued 89,000,000 new Ordinary Shares to MC Strategies AG
on 14 July 2023.
As disclosed on 31 May 2023, QBT granted seven million new options over new
Ordinary Shares to certain consultants, members of the R&D team and in-house
staff. As a result, at the time of this report, the Company has outstanding
options over 133,500,000 new Ordinary Shares exercisable at 5 pence and
outstanding options over 133,500,000 new Ordinary Shares exercisable at 10
pence, set to expire between December 2024 and December 2026.
In conclusion, the Company believes that exciting times are ahead, as it
expects that its products, once available, could truly energise the
cryptocurrency mining industry, while eventually being able to monetise its
Legacy Assets through legal settlements.
Financial Review
The Group reported a total comprehensive loss of €4,206,000 for the year
ended 31 December 2023 (2022: €5,026,000) and a loss before tax of
€4,348,000 (2022: €5,252,000). Operating losses for the period were
€4,025,000 (2022: €4,547,000). Included within administrative expenses are
charges relating to the recognition of share options totalling €416,000
(2022: €1,854,000) and within finance costs are charges for the revaluation
of derivatives representing a profit of €9,000 (2022: loss of €324,000).
The movement in these items is dependent on the volatility of the Company’s
share price used for the calculation according to the relevant accounting
standards. The undiluted Net Asset Value (“NAV”) of the Group decreased by
€675,000 in 2023, compared to a decrease of €398,000 in 2022. The Group
had Net Current Liabilities of €3.1m as at 31 December 2023 (2022: Net
Current Assets €4.4m).
Post-Balance Sheet Events
In January 2024, the Company announced it has agreed with MC Strategy S.A.,
the sole Bondholder of the Company’s €3.5m Zero-Coupon Bond issued in
2020, to extend the maturity of the Bond from 15 December 2024 to 15 December
2026. QBT and MC Strategy S.A. have agreed to change the yield on maturity
from 1% to 3%.
With regards to the Company’s Zero-Coupon Bond originally issued in 2013, at
the Bondholders meeting held on 22 February 2024 (previously duly called on 18
January 2024) the bondholders agreed to extend the maturity of the Zero-Coupon
Bond from 15 December 2024 to 15 December 2026, and to amend the conversion
price from £0.05 to £0.03.
In March 2024, the Company announced a new development, called Method C, based
on Machine Learning and using predictive AI technology that is producing
consistent results during testing. In testing environments Method C had
favourably demonstrated predictive ability in c. 30% of instances where it was
input to SHA-256 producing a winning hash, resulting in a potential saving of
energy.
At the same time, QBT announced that it had commenced development of a
proprietary ASIC chip. A working prototype is about to undergo development to
confirm performance levels, and the Company entered into early-stage
exploratory discussions with Bitcoin rig manufacturers and US Bitcoin mining
companies. Also in March, the Company noted that the porting of Method A and
Method B into commercial rigs had proven to be very challenging.
The R&D team engaged in testing different solutions for the final stage in
order to deliver a fully reliable product. Finally, per the same announcement,
QBT disclosed that its first two patent applications (ASIC UltraBoost and ASIC
EnhancedBoost) were making positive headway and that a third patent
application was being drafted concerning the proprietary quantum version of
SHA-256.
In May 2024, the Company announced that at the end of April 2024, it reached
an agreement with certain of the Sipiem litigation co-liable defendants who
have settled their position for €700,000 (which, net of certain costs, has
been received by CL17) .
At the same time, CL17 also reached an agreement with the Sipiem’s receiver,
acquiring its right to receive 30% of any sums collected (net of legal and
other costs) from the Sipiem litigation, as envisaged in the 2019 claim
purchase agreement (through which CL17 acquired the Sipiem litigation) for an
amount of €170,000, giving CL17 rights to all funds recovered, namely the
€700,000 of the above agreement and the balance amounting to €5.575
million plus interest and augmentation for inflation, together (the
“Settlement”)
As announced on 16 May 2024 the above agreements were subject to the Venice
Court scheduling of a hearing to approve the Settlement, before the issue of
the appeal ruling.
In June, QBT confirmed that the payment of €700,000 had been completed, and
that €170,000 has been paid by CL17 to Sipiem’s Receiver with respect to
the acquisition by CL17 of the Receiver’s right to receive 30% of any
further sums collected in connection with the claim (net of legal fees).
Subsequently, in June 2024, the Company announced that the Venice Court of
Appeal confirmed the ruling of the 2022 lower court Judgment in favour of CL17
(save for €105,412), amounting to €6,083,562 (plus interest and
adjustments for inflation) in damages, plus €134,166 for legal expenses. As
the appeal ruling has been issued prior to the scheduling of the hearing
regarding the Settlement, such settlement is now deemed void. While the
above matter is currently being assessed by the Company’s legal team, the
Company still hold the above Settlement funds, minus the €170,000 paid to
the Receiver for the 30% rights. In the meantime, all the parties involved,
namely the Receiver, the Sipiem’s statutory auditor’s lawyers and the
insurer’s lawyers are being contacted to discuss the contractual
implications of the voided Settlement.
Outlook
The Board remains committed to return value to its stakeholders by:
1. continuing to focus on its R&D Programme, which is providing promising and
consistent results for the disruption of the Bitcoin market;
2. investing in the technology sector (both in a direct and an indirect
manner);
3. managing the legacy portfolio assets, where positive outcomes are expected
from the Company’s legal claims; 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, while the legal claims have strong merit and against defendants
that are expected to remain solvent, thereby enhancing the prospect of
collection of the judgment debts.
Francesco Gardin
Chairman
25 June 2024
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
Note 2023 2022
€’000 €’000
Revenue - -
- -
Administrative expenses 7 (4,025) (4,547)
Other income - -
Operating loss (4,025) (4,547)
Other gains and losses 32 -
Share of loss from equity-accounted associates 8 (59) (69)
Finance costs 9 (296) (636)
Loss before tax (4,348) (5,252)
Tax 12 142 226
Loss for the year (4,206) (5,026)
TOTAL COMPREHENSIVE LOSS FOR THE YEAR (4,206) (5,026)
Earnings per share:
Basic loss per share (cents) 13 €0.382 €0.508
Diluted loss per share (cents) 13 €0.256 €0.312
There was no other comprehensive income during the year.
The accounting policies and notes form an integral part of these financial
statements.
GROUP AND COMPANY STATEMENTS OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
Notes Group 2023 Group 2022 Company 2023 Company 2022
€’000 €’000 €’000 €’000
Non-current assets
Intangible assets 15 2 - - -
Property, plant and equipment 14 169 226 - -
Financial assets at fair value through profit and loss 16 396 677 76 115
Investments held at cost 16 - - 11 10
Investments in equity-accounted associates 8 7 60 7 -
Total non-current assets 574 963 94 125
Current assets
Trade and other receivables 17 3,243 4,626 946 1,056
Cash and cash equivalents 18 2,057 463 2,041 449
Total current assets 5,300 5,089 2,987 1,505
Total assets 5,874 6,052 3,081 1,630
Current liabilities
Trade and other payables 19 (413) (465) (390) (577)
Borrowings 20 (7,451) - (7,451) -
Derivative financial instruments 21 (459) - (459) -
Provisions 22 (98) (210) (98) (210)
Total current liabilities (8,421) (675) (8,398) (787)
Net current (liabilities)/assets (3,121) 4,414 (5,411) 718
Total assets less current liabilities (2,547) 5,377 (5,317) 843
Non-current liabilities
Borrowings 20 - (8,131) - (8,131)
Derivative financial instruments 21 - (468) - (468)
Total non-current liabilities - (8,599) - (8,599)
Total liabilities (8,421) (9,274) (8,398) (9,386)
Net liabilities (2,547) (3,222) (5,317) (7,756)
Equity
Share capital 23 9,219 8,378 9,219 8,378
Share premium account 23 54,165 50,541 54,165 50,541
Other reserves 25 14,228 13,812 5,903 5,487
Retained losses (80,159) (75,953) (74,604) (72,162)
Total equity (2,547) (3,222) (5,317) (7,756)
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 €2,442,000
(2022: loss of €4,550,000).
The financial statements were approved by the board of directors and
authorised for issue on 25 June 2024, on its behalf by:
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Group Share capital €’000 Share premium account €’000 Other reserves €’000 Retained losses €’000 Total equity €’000
At 1 January 2022 8,221 49,442 11,409 (71,896) (2,824)
Total present loss and comprehensive loss for the year - - - (5,026) (5,026)
Exercise of warrants 157 1,099 - 969 2,225
Grant of share options - - 1,854 - 1,854
Modification of bond - - 549 - 549
At 31 December 2022 8,378 50,541 13,812 (75,953) (3,222)
Total comprehensive loss for the year - - - (4,206) (4,206)
Issue of shares 841 3,624 - - 4,465
Grant of share options - - 416 - 416
At 31 December 2023 9,219 54,165 14,228 (80,159) (2,547)
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 25, 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 2023
Company Share capital €’000 Share premium account €’000 Other reserves €’000 Retained losses €’000 Total €’000
At 1 January 2022 8,221 49,442 3,084 (68,581) (7,834)
Total present loss and comprehensive loss for the year - - - (4,550) (4,550)
Exercise of warrants 157 1,099 - 969 2,225
Grant of share options - - 1,854 - 1,854
Modification of bond - - 549 - 549
At 31 December 2022 8,378 50,541 5,487 (72,162) (7,756)
Total comprehensive loss for the year - - - (2,442) (2,442)
Issue of shares 841 3,624 - - 4,465
Grant of share options - - 416 - 416
At 31 December 2023 9,219 54,165 5,903 (74,604) (5,317)
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 25, 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.
GROUP AND COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
Note Group 2023 €’000 Group 2022 €’000 Company 2023 €’000 Company 2022 €’000
Cash used in operations
Loss before tax (4,348) (5,252) (2,585) (4,753)
Impairment of investments 16 303 154 - 154
Share of post-tax losses of equity accounted associates 8 59 69 59 69
Non cash foreign exchange movements 16 - (35) - -
Finance charges 9 296 637 295 635
Depreciation expense 14 55 49 - -
Decrease /(increase) in receivables 17 1,383 474 110 (196)
(Decrease) /increase in payables 19 (164) 346 (298) 433
Impairment of intercompany receivables - 33 - 12
Share based payments 416 1,854 416 1,854
R&D tax credit received 154 - 154 -
Net cash outflow from operating activities (1,846) (1,671) (1,849) (1,792)
Cash flows from investing activities
Purchase of investments 16 (22) (50) (22) (50)
Purchase of other investments (5) - (6) -
Purchase of property, plant and equipment 14 - (111) - -
Purchase of intangible assets 15 (2) - - -
Net cash outflow from investing activities (29) (161) (28) (50)
Cash flows from financing activities
Proceeds from capital issue 3,465 - 3,465 -
Proceeds from exercise of warrants - 1,256 - 1,256
Net interest paid (9) - (9) -
Net cash (outflow)/inflow from financing activities 3,456 1,256 3,456 1,256
Net (decrease) /increase in cash for the year 1,581 (576) 1,579 (586)
Cash and cash equivalents at beginning of year 463 1,039 449 1,035
Exchange differences 13 - 13 -
Cash and cash equivalents at end of year 18 2,057 463 2,041 449
The accounting policies and notes form part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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.
1. 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
Financial Reporting 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
functional and presentation of the entity rounded to the nearest €’000.
The Group has adopted the amendments to IAS 16 Property, Plant and Equipment
(issued in May 2020) in the current year. This has not had a material impact
on the Group financial statements.
The Group has adopted the amendments to IAS 16 IAS 37 Provisions, Contingent
Liabilities and Contingent Assets (issued in May 2020) in the current year.
This has not had a material impact on the Group financial statements.
Going Concern
In 2023 the Group incurred a loss of €4,206,000 (2022: €5,026,000) and
had net current liabilities as at 31 December 2023 of €3,121,000 (2022:
net current assets of €4,414,000). Our forecasts for the period to 30 June
2025 has been prepared on the prudent assumptions that the Group will still be
nonrevenue-generating, will not receive any portion of its litigation claims,
and will not receive any debtor cash settlement specifically from Mediapolis
Liquidation proceedings. Nonetheless, on the basis of the equity funding
raised last 1 June 2023 and 30 October 2023 which raised a total of EUR 2.74
million, and the extension on our two convertible bond repayments from
December 2024 to December 2026, we believe that the Group, at the date of
this report, may hold sufficient liquidity to sustain its operational
existence for the following twelve months without the specific necessity to
raise further funding either through an equity placing on AIM, or through
other external sources, unless for additional specific investment
opportunities or ventures.
After making due enquiries, the Directors have formed a judgement that there
is a reasonable expectation that, in the next twelve months, there should be
no need to secure further resources, but in case of new investment
opportunities the Group can secure further funds to sustain such expenses and
that adequate arrangements will be in place to enable the settlement of their
financial commitments, as and when they fall due.
On this note, the Directors continue to adopt the going concern basis in
preparing the financial statements.
Notwithstanding the above, the Directors believe that due to the little
headroom existing within our budget at 30 June 2025 and the inherent
commercial uncertainties in relation to future events, a material uncertainty
over the outcome of the matters described exists and Group might be required
to raise further finance and note the uncertainty in relation to the group
being able to realise its assets and discharge its liabilities in the normal
course of business.
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 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.
There is alignment of accounting polices across all Group entities by using
uniform accounting policies for like transactions and other events in similar
circumstances.
The Group attributes total comprehensive income or loss of subsidiaries
between the owners of the parent and the non-controlling interests based on
their respective ownership interests.
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.
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 impairment loss.
Investments in associates
Investments in associates are accounted for using the equity method less any
impairment loss.
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.
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. This is
applicable to non-monetary items. 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 profit or loss. 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 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.
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.
To determine whether to recognise revenue, the Group follows a 5-step process:
1. Identifying the contract with a customer
2. Identifying the performance obligations
3. Determining the transaction price
4. Allocating the transaction price to the performance obligations, and then
5. Recognising revenue when/as performance obligation(s) are satisfied.
Revenue is recognised 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 on a straight-line basis to write down the cost
less estimated residual value. The following useful lives are applied:
Computers 5 years
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 property, plant and equipment
At each reporting end date, the company reviews the carrying amounts of its
property, plant and equipment 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.
Intangible assets
Intangible assets acquired separately from a business are recognised at cost
and are subsequently measured at cost less accumulated amortisation and
accumulated impairment losses.
Financial instruments
Classification and measurement
The Group 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 Group’s policy with regard to financial risk management is
set out in Note 21. Generally, the Group does not acquire financial assets for
the purpose of selling in the short term.
The Group’s business model is primarily that of “hold to collect” (where
assets are held in order to collect contractual cash flows). When the Group
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.
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.
Provisions, contingent assets and contingent liabilities
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.
No liability is recognised if an outflow of economic resources as a result of
present obligations is not probable. Such situations are disclosed as
contingent liabilities unless the outflow of resources is remote.
Contingent assets are possible assets whose existence will be confirmed by the
occurrence or non-occurrence of uncertain future events that are not wholly
within the control of the Group. Contingent assets are not recognised, but
they are disclosed when it is more likely than not that an inflow of benefits
will occur. When the inflow of benefits is virtually certain an asset is
recognised.
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 in profit or loss 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.
1. 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 and in other relevant notes in the
financial statements.
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 16, along with sensitivities in Note 21.
1. Segment information
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.
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 developing cheaper and faster
bitcoin mining. 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.
1. Staff costs
Group Company
2023 €’000 2022 €’000 2023 €’000 2022 €’000
Staff costs during the period including directors comprise:
Wages and salaries 217 188 217 188
Social security costs and pension contributions (90) 228 (90) 228
Share options expense 416 1,854 416 1,854
543 2,270 543 2,270
In 2022 the social security costs and pension contributions included a
provision relating to the directors national insurance of €210,000. Of this
provision, €113,000 was subsequently reversed in 2023 contributing to the
credit balance for the year.
1. Directors’ emoluments
2023 €’000 2022 €’000
Aggregate emoluments 142 116
Share options expense 416 1,728
558 1,844
Remuneration of the highest paid Director was €69,000 (2022: €57,000).
There are no retirement benefits accruing to the Directors. Details of
directors’ remuneration are included in the Directors’ Report.
1. Expenses by nature
2023 €’000 2022 €’000
Directors’ emoluments 462 1,844
Employee emoluments 99 378
Professional and legal fees 722 509
Audit fees 56 86
Administrative expenditure 201 216
Impairment of assets (excluding investment) 1,527 618
Fundraising fees - 75
Research and development costs 781 821
3,848 4,547
1. Investments in associates
The Group has a 41.17% equity interest in ForCrowd Srl.
Summarised financial information of the Group’s share in this associate is
as follows:
2023 €’000 2022 €’000
Loss from continuing operations (59) (69)
Impairment - (82)
Total comprehensive loss (59) (151)
Aggregate carrying amount of the Group’s interests in this associate 7 60
1. Finance (costs)/income
2023 €’000 2022 €’000
(Loss)/gain on derivatives 9 (324)
Interest on convertible bonds (320) (325)
Bank revaluations 5 -
Interest credit on modification of convertible bonds - 9
Other gains or losses - -
Interest received 12 6
Bank fees (2) (2)
(296) (636)
1. Auditor’s remuneration
2023 €’000 2022 €’000
Group Auditor’s remuneration:
Fees payable to the Group’s auditor for the audit of the Company and consolidated financial statements: 56 56
Non audit services:
Other services (tax) - -
Subsidiary Auditor’s remuneration
Other services pursuant to legislation - -
56 56
1. Employee numbers
Group Company
2023 Number 2022 Number 2023 Number 2022 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
2023 €’000 2022 €’000
Corporation tax - current period (100) (117)
Corporation tax - prior period under provision (41) (86)
Foreign tax (1) (23)
Deferred taxation - -
Tax charge for the year (142) (226)
The Group has a potential deferred tax asset arising from unutilised trading
losses and management expenses available for carry forward and relief against
future taxable profits. 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: 2023 €’million 2022 €’million
Trading losses 4 2
Management expenses 19 19
Non trade loan relationship deficits 2 2
Capital losses 9 8
The standard rate of tax for the current year, based on the UK effective rate
of corporation tax is 23.5% (2022: 19%). The standard rate of Research and
Development Tax credit is 10%/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 2023 €’000 2022 €’000
Loss for the year before tax (4,348) (5,252)
Tax on ordinary activities at standard rate (1,022) (998)
Effects of:
Expenses not deductible for tax purposes 497 595
R&D enhancement (168) (153)
R&D losses surrendered 344 270
R&D Foreign Tax losses surrendered 11 11
Losses brought forward claimed - -
Tax losses available for carry forward against future profits 338 275
Total tax payable - -
Enhanced R&D expenditure 1,273 804
Total tax repayable – current year 100 117
Corporation tax - prior period under provision 41 86
Foreign tax 1 23
Total tax repayable 142 226
The UK government has announced that the corporation tax rate will increase
from 19% to 25% with effect from 1 April 2023.
1. 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:
2023 2022
Profit/ (Loss) €’000 Weighted average no. of shares 000’s Per share amount Euro Cent Profit/ (Loss) Weighted average no. of shares 000’s Per share amount Euro Cent
€’000
Basic earnings per share
Continuing operations (4,206) 1,102,309 (0.382) (5,026) 989,497 (0.508)
Total operations (4,206) 1,102,309 (0.382) (5,026) 989,497 (0.508)
Fully diluted earnings per share
Continuing operations (4,424) 1,727,130 (0.256) (5,091) 1,632,694 (0.312)
Total operations (4,424) 1,727,130 (0.256) (5,091) 1,632,694 (0.312)
1. Property, plant and equipment
Group Computers €’000 Total €’000
Cost
At 1 January 2023 275 275
Additions - -
At 31 December 2023 275 275
Depreciation and impairment
At 1 January 2023 49 49
Depreciation charged in the year 57 57
At 31 December 2023 106 106
Carrying amount
At 31 December 2023 169 169
At 31 December 2022 226 226
The tangible fixed assets relate in full to the Group’s IT infrastructure
dedicated to the R&D Programme.
The Parent Company held no tangible fixed assets during the years ended 31
December 2022 and 2023.
1. Intangible assets
Group Formation Expenses €’000 Total €’000
Cost
At 1 January 2023 - -
Additions 2 2
At 31 December 2023 2 2
Amortisation
At 1 January 2023 - -
Amortisation charged in the year - -
At 31 December 2023 - -
Carrying amount
At 31 December 2023 2 2
At 31 December 2022 - -
The intangible assets relate in full to formation expenses.
1. Investments
The significant entities for which the Group owns shares, held at 31 December
2023, 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 (36,169) 2022 Consolidated
Clear Leisure 2017 Ltd 100.00% UK Trading (537) 2022 Consolidated
QBT R&D Srl 100.00% Italy Trading (69) 2022 Consolidated
Milan Digital Twin Ltd 100.00% UK Dormant Nil 2022 Consolidated
London Digital Twin Ltd 100.00% UK Dormant Nil 2022 Consolidated
Miner One Ltd 100.00% UK Dormant Nil 2022 Consolidated
Clear Holiday Srl 100.00% Italy Dormant 10 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
Sipiem in Liquidazione Srl 50.17% Italy In liquidation 645 2014 Not Consolidated
ForCrowd Srl 41.17% Italy Investment (8) 2022 Equity-accounting
ClassFinance in Liquidazione Srl 20.00% Italy Investment (104) 2018 Held at fair value
PBV Monitor 10.00% Italy Investment 471 2022 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 Held at fair value
TLT S.P.A 0.25% Italy Investment (2,476) 2016 Held at fair value
The registered office of all UK companies is: First Floor, 1 Chancery Lane,
London, England, WC2A 1LF.
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 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 Sipiem in Liquidazione Srl is Via Mazzini 38,
Rovigo (RO), 45100.
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
above. 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 and
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. Although QBT hold all of the shares, they do not have control of the
company. Therefore, this entity has not been consolidated on the basis that
QBT do not have control. 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.
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. had 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 had been declared
bankrupt. Sosushi has not been consolidated as the fair value has been
determined as nil and all receivables from the company have been fully
impaired. The litigation is held via Clear Leisure 2017.
Fallimento Mediapolis Srl
Fallimento Mediapolis Srl was an 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. There is ongoing
bankruptcy litigation however, the investment has been fully impaired.
Therefore, the financial information for Fallimento Mediapolis Srl has not
been consolidated into the group financial statements.
Sipiem In Liquidazione Srl
Sipiem in Liquidazione Srl, previously Sipiem S.P.A., (“Sipiem”) was a
50.17% owned entity incorporated in Italy. The entity had not been trading for
a number of years and was maintained due to ongoing legal matters with the
former directors. The company entered into liquidation in 2015. Therefore,
this is the date from which control is deemed to have been lost. Therefore,
the financial information for Sipiem has not been consolidated into the group
financial statements. The investment in Sipiem is accounted at fair value
through profit or loss. Furthermore, in August 2022 the company was declared
bankrupt by the Court of Rovigo, following a petition filed by Sipiem’s
liquidator with the support of its main shareholder (Quantum Blockchain
Technologies). Sipiem’s bankruptcy does not impact the Company’s balance
sheet, as the litigation is held via Clear Leisure 2017.
In November 2022, the Venice Court issued its final judgement in respect of
the Company’s legal claim against the previous management, which is held via
CL17 in which it ruled in favour of CL17 and ordered the defendants to pay an
aggregate amount of €6,188,974 (plus interest and adjustments for inflation
to accrue from different dates until the date of payment) in damages, plus
€85,499 in legal expenses (together the “Award Payment”). The Award
Payment is subject to tax duties in Italy. It is worth noting that the exact
amount of the Award Payment that will be collected by the Company and the
timing of receipt of any such funds have not yet been finalised.
In March 2023, the Company announced that at the hearing for the Sipiem
litigation at the Venice Appeal Court, the judge ruled in favour of CL17,
thereby allowing CL17 to seek enforcement of the Award Payment against the
main Sipiem defendant (a former director of Sipiem, who is individually liable
for the full amount of the Award Payment). The Appeal Court did, however,
grant the remaining Sipiem defendants’ request to enjoin enforcement of the
judgment against the members of the internal audit committee and the main
defendant’s family members.
In May 2024 , the Company announced that at the end of April 2024, it reached
an agreement with some of the Sipiem litigation co-liable defendants who have
settled their position for €700,000 (which, net of certain costs, has been
received by CL17).At the same time, CL17 also reached an agreement with the
Sipiem’s receiver, acquiring its right to receive 30% of any sums collected
(net of legal and other costs) from the Sipiem litigation, as envisaged in the
2019 claim purchase agreement (through which CL17 acquired the Sipiem
litigation) for an amount of €170,000, giving CL17 rights to all funds
recovered.
On 18 June 2024, the Company announced that the Venice Court of Appeal
confirmed the ruling of the 2022 lower court Judgment in favour of CL17 (save
for €105,412), amounting to €6,083,562 (plus interest and adjustments for
inflation) in damages, plus €134,166 for legal expenses. As the appeal
ruling has been issued prior to the scheduling of the hearing regarding the
€700,000 settlement, such settlement is now deemed void. So is the €170,00
agreement with the Receiver, as strictly connected to the above settlement.
Through its ruling, the Venice Court of Appeal removed any opposition to the
enforceability, by CL17, of the above amounts against all defendants.
While the above matter is currently being assessed by the Company’s legal
team, the Company still hold the above Settlement funds, minus the €170,000
paid to the Receiver for the 30% rights. In the meantime, all the parties
involved, namely the Receiver, the Sipiem’s statutory auditor’s lawyers
and the insurer’s lawyers are being contacted to discuss the contractual
implications of the voided Settlement.
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 since 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 (€320,000, 2022: €622,000) 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 2023 and 2022, attributable to
an impairment during the year.
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 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, 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, there has been a complete fair value loss and the
investment amount has been derecognised.
Carrying value of investments Group Company
2023 €’000 2022 €’000 2023 €’000 2022 €’000
At as 1 January 677 664 65 298
Additions 22 50 22 50
Fair value decrease (303) (72) - (283)
Foreign exchange - 35 - -
Carrying value at 31 December 396 677 87 65
An amount of €320,000 (2022: €622,000) 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 €76,000 (2022: €55,000) 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 and has purchased more shares in January and February 2022 to
maintain their 10% shareholding. As part of the initial 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.
Investments held at cost Group Company
2023 €’000 2022 €’000 2023 €’000 2022 €’000
At as 1 January - - 10 10
Additions - - 1 -
Fair value decrease - - - -
Foreign exchange - - - -
Carrying value at 31 December - - 11 10
The value of the investment at cost represents €10,000 for QBT R&D and
€1,000 for BAL which was not previously recognised.
1. Trade and other receivables
Group Company
2023 €’000 2022 €’000 2023 €’000 2022 €’000
Trade receivables 14 14 - -
Other receivables 3,154 4,537 189 280
Amounts owed by related parties 75 75 757 776
3,243 4,626 946 1,056
Group other receivables includes an amount of €132,000 (2022: €132,000)
due in relation to the Fallimento Mediapolis Srl bankruptcy procedure; and an
amount of €2,818,000 (2022: €4,037,000) due in relation to the ongoing
Sipiem legal claim, which is unsecured, interest free and does not have fixed
terms of repayment. The balance also includes an amount of -€112,000 (2022:
€0) in CL17 to record the guarantee made against fellow group entity
debtors. An intercompany balance of €4,445,000 was fully impaired in the
year.
The Directors consider that the carrying value of trade and other receivables
approximates to their fair value.
1. Cash and cash equivalents
Group Company
2023 €’000 2022 €’000 2023 €’000 2022 €’000
Bank current accounts 2,057 463 2,041 449
2,057 463 2,041 449
The Directors consider the carrying amounts of cash and cash equivalents
approximates to their fair value.
1. Trade and other payables
Group Company
2023 €’000 2022 €’000 2023 €’000 2022 €’000
Trade payables 85 147 64 122
Other payables 138 183 138 320
Accruals 190 135 188 135
Trade and other payables 413 465 390 577
The Directors consider that the carrying value of trade and other payables
approximates to their fair value.
Included within other payables are intercompany balances that are not
eliminated on consolidation, PAYE, national insurance and pension liabilities
outstanding as at the year end, and unpaid salary balances.
Accruals relate to R&D, consulting and accountancy costs incurred by the Group
that had not been invoiced by the year end.
1. Borrowings
Group Company
2023 €’000 2022 €’000 2023 €’000 2022 €’000
Zero rate convertible bond 2015 5,202 5,148 5,202 5,148
Zero rate convertible bond 2020 2,249 2,983 2,249 2,983
7,451 8,131 7,451 8,131
Disclosed as:
Current borrowings 7,451 - 7,451 -
Non-current borrowings - 8,131 - 8,131
7,451 8,131 7,451 8,131
Interest on the bonds are accrued on a monthly basis. Presented in the bonds
line item above is the principal amount plus all interest accrued as at 31
December 2023.
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.
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.
On 7 July 2023, the Company received a conversion notice from MC Strategies AG
to convert €1m of the 2020 Zero Coupon Bond into new ordinary shares of
0.025p each in the Company. The conversion price was 1p per share an as a
result, the Company issued and allotted 89,000,000 New Shares. Following the
conversion, face value of the remaining Bond has decreased to €2,493,575.
1. Financial instruments
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
2023 2022
Share price 1.575p 1.125p
Expected life 1 year 2 years
Volatility 146.2% 136%
Dividend yield 0% 0%
Risk free interest rate 3.46% 3.58%
Fair value 0.45p 0.5p
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:
2023 2022
€’000 €'000
Financial assets:
Financial assets held at fair value through profit and loss 396 677
Investments in equity-accounted associates 7 60
Trade and other receivables 3,243 4,284
Cash and cash equivalents 2,057 463
5,703 5,484
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:
2023 2022
€'000 €'000
Financial liabilities at amortised cost:
Trade and other payables 413 465
Provisions 98 210
Borrowings 7,451 8,131
Derivative 459 468
8,421 9,274
Financial instruments measured at fair value:
Level 1 Level 2 Level 3
€’000 €’000 €’000
As at 31 December 2023
Investments at fair value through profit or loss - - 396
- - 396
As at 31 December 2022
Investments at fair value through profit or loss - - 677
- - 677
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 €60,000 (2022: €102,000).
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
adequate cash balances at the reporting date (refer to Note 2 – Basis of
preparation and going concern) to sustain the operational existence over the
next twelve months. The Group expects to continue securing resources from
disposals and realisation of the “Legacy Assets”. Furthermore, the Company
expect to be able to start it commercial activity in the coming months,
although prudentially, no significant revenues have been included in the
short-term financial projections. This is an on-going ongoing 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 2023
Trade and other payables 413 413 - 413
Provisions 98 98 - 98
Borrowings 7,451 7,451 - 7,451
Derivative financial instruments 459 459 - 459
8,421 8,421 - 8,421
As at 31 December 2022
Trade and other payables 465 465 - 465
Provisions 210 210 - 210
Borrowings 8,131 - 8,131 8,131
Derivative financial instruments 468 - 468 468
9,274 675 8,599 9,274
Management believes that based on the information provided in Note 2 – 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
2023 2022 2023 2022
€’000 €’000
Fixed rate instruments
Financial assets 3,472 5,021 194 222
Financial liabilities 7,830 8,528 7,808 8,503
Change in interest rates will affect the Group’s income statement as
follows:
Gain / (loss)
Group 2023 2022
€’000 €’000
Euribor +0.5% / -0.5% +10 / -10 +2 / -2
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 £387,000 (2022: £435,000) 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 £39,000 (2022: £44,000). 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 €3,243,000 (2022: €4,626,000) comprising receivables during the period.
About 87% (2022: 87%) of total receivables are due from a single company. The
ageing profile of trade receivables was:
2023 2022
Total book value Allowance for impairment Total book value Allowance for impairment
Group €’000 €’000 €’000 €’000
Current 3,243 - 4,626 -
3,243 - 4,626 -
Company
Current 946 - 1,056 -
946 - 1,056 -
1. Provisions
Group Company
2023 €’000 2022 €’000 2023 €’000 2022 €’000
Provision for potential payroll tax liability 98 210 98 210
Provisions 98 210 98 210
The above provision relates to a potential tax liability owed on the
directors’ remuneration from previous years.
1. 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 2022 945,051,851 199,409,377 2,754 5,467 49,442 57,663
Issue of shares 52,500,000 - 157 - 1,099 1,256
At 31 December 2022 997,551,851 199,409,377 2,911 5,467 50,541 58,919
Issue of shares 293,761,904 - 841 - 3,624 4,465
At 31 December 2023 1,291,313,755 199,409,377 3,752 5,467 54,165 63,384
All ordinary shares carry equal rights.
The deferred shares have restricted rights such that they have no economic
value.
1. Share based payments
On 26 May 2023, an employee was granted options to subscribe for 1,000,000 new
ordinary shares in the Company at an exercise price of 5 pence per share and
1,000,000 new ordinary shares in the Company at an exercise price of 10 pence
per share. The options are exercisable for the period between 1 November 2023
and 25 May 2025.
On 31 May 2023, two employees were 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 at any time before 25 May 2025.
On 31 May 2023, the Company has extended the exercise period for certain other
options previously granted, as follows:
Number of Options Exercise Price Previous End of Exercise Period New End of Exercise Period
2,500,000 5p 06/05/2024 25/05/2025
2,500,000 5p 28/02/2023 25/05/2025
7,500,000 5p 31/03/2023 25/05/2025
5,000,000 10p 30/06/2023 25/05/2025
The total share-based payment expense recognised in the income statement for
the year ended 31 December 2023 in respect of the share options granted was
€416,000 (2022: €1,854,000).
The significant inputs to the model in respect of the options granted during
the year were as follows:
5p 10p
Share price 1.125p - 3.100p 1.175p - 3.050p
Expected life 2 months - 3 years 6 months - 3 years
Volatility 130% - 137% 130% - 137%
Dividend yield 0% 0%
Risk free interest rate 0.76% – 4.27% 0.76% - 4.27%
Fair value 0.0p – 2.1p 0.0p – 1.7p
The table below discloses the movements in share options during the year.
Number of options at 1 Jan 2023 Granted in the year Exercised in the year Lapsed in the year Number of options at 31 Dec 2023 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
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 25.05.2025
5,000,000 5,000,000 10.00 01.12.2026
2,500,000 2,500,000 5.00 15.12.2024
2,500,000 2,500,000 10.00 15.12.2024
2,500,000 2,500,000 5.00 15.12.2024
2,500,000 2,500,000 5.00 25.05.2025
2,500,000 2,500,000 5.00 25.05.2025
5,000,000 5,000,000 5.00 25.05.2025
5,000,000 5,000,000 10.00 25.05.2025
5,000,000 5,000,000 5.00 22.05.2025
5,000,000 5,000,000 10.00 22.05.2025
5,000,000 5,000,000 5.00 31.10.2023
1,000,000 1,000,000 5.00 25.05.2025
1,000,000 1,000,000 10.00 25.05.2025
5,000,000 5,000,000 10 25.05.2025
265,000,000 7,000,000 5,000,000 267,000,000
On 20 December 2022, Peter Fuhrman, a director, 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
12 September 2022 and 15 December 2024. Peter Fuhrman was also granted options
to subscribe for 2,500,000 new ordinary shares in the Company at an exercise
price of 10 pence per share. The options are exercisable for the period
between 12 September 2022 and 15 December 2024.
On 20 December 2022, Mark Michael Trafeli, a director, 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
1 September 2022 and 15 December 2024.
On 20 December 2022, a consultant 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 20 December 2022
and 31 March 2023. Another consultant 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 20 December 2022
and 31 March 2023. A third consultant 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 20 December 2022
and 31 March 2023. The third consultant 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 1 January
2023 and 30 June 2023. A fourth consultant 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 20
December 2022 and 22 May 2025. The fourth consultant 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 23 May 2023 and 22 May 2025. On 20 December 2022, a fifth consultant
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 20 December 2022 and 31 October 2023.
The total share-based payment expense recognised in the income statement for
the year ended 31 December 2023 in respect of the share options granted was
€416,000 (2022: €1,854,000).
The significant inputs to the model in respect of the options granted during
the prior year were as follows:
5p 10p
Share price 1.175p - 3.100p 1.175p - 3.050p
Expected life 2 months - 3 years 6 months - 3 years
Volatility 130% - 136% 130% - 136%
Dividend yield 0% 0%
Risk free interest rate 0.76% – 3.58% 0.76% - 3.58%
Fair value 0.0p – 2.1p 0.0p – 1.7p
The table below discloses the movements in share options during 2022.
Number of options at 1 Jan 2022 Granted in the year Exercised in the year Lapsed in the year Number of options at 31 Dec 2022 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
2,500,000 2,500,000 5.00 15.12.2024
2,500,000 2,500,000 10.00 15.12.2024
2,500,000 2,500,000 5.00 15.12.2024
2,500,000 2,500,000 5.00 31.03.2023
2,500,000 2,500,000 5.00 31.03.2023
5,000,000 5,000,000 5.00 31.03.2023
5,000,000 5,000,000 10.00 30.06.2023
5,000,000 5,000,000 5.00 22.05.2025
5,000,000 5,000,000 10.00 22.05.2025
5,000,000 5,000,000 5.00 31.10.2023
237,500,000 37,500,000 10,000,000 265,000,000
1. 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 Capital redemption reserve €’000 Total other reserves €’000
At 1 January 2022 8,325 462 2,622 - 11,409
Grant of share options - - 1,854 - 1,854
Modification of bond - - - 549 549
At 31 December 2022 8,325 462 4,476 549 13,812
Grant of share options - - 416 - 416
Modification of bond - - - - -
At 31 December 2023 8,325 462 4,892 549 14,228
Company Loan note equity reserve €’000 Share option reserve €’000 Capital redemption reserve €’000 Total other reserves €’000
At 1 January 2022 462 2,622 - 3,084
Grant of share options - 1,854 - 1,854
Modification of bond - - 549 549
At 31 December 2022 462 4,476 549 5,487
Grant of share options - 416 - 416
Modification of bond - - - -
At 31 December 2023 462 4,892 549 5,903
1. Ultimate controlling party
The Group considers that there is no ultimate controlling party.
1. 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:
2023 2022 2023 2022
Related party Group Group Company Company
Clear Leisure 2017 Limited - - 265,631 255,575
QBT R&D Srl - - 410,881 448,655
Geosim Systems Limited 49,874 49,605 55,386 49,605
ForCrowd Srl 55,000 25,000 55,000 22,500
104,874 74,605 786,898 776,335
During the year, Quantum Blockchain Technologies Limited made sales totalling
€10,000 (2022: €10,000) to QBT R&D Srl, for consulting services.
During the year, QBT R&D Srl made sales totalling €109,000 (2022:
€109,000) to Quantum Blockchain Technologies Plc, for consulting and R&D
services.
During the year, Infusion 2009 Limited, a company in which F Gardin is a
Director, charged Quantum Blockchain Technologies Plc €288,000 (2022:
€200,000) for consulting company fees for R&D coordination. The amount owed
to Infusion 2009 Limited at year end is €nil (2022: €34,000).
Remuneration of key management personnel
The remuneration of the directors, who are the key personnel of the group, is
included in the Directors
Report and within note 6. Under “IAS 24: Related party disclosures”, all
their remuneration is in relation to short-term employee benefits.
1. Events after the reporting date
During the first months of 2024, the Company has been involved in the
following:
In January the Company reported an extension of the maturity of the €3.5m
2020 Zero Coupon Bond from 15 December 2024 to December 2026 with the sole
Bondholder of the Company, MC Strategy S.A.
In February a meeting was held on 22 February 2024 with regard to the 2013
Zero Coupon Bond. The Company extended the maturity date from 15 December 2024
to 15 December 2026 and modified the conversion price from 5p to 3p.
In March 2024, the Company announced a new development, called Method C, based
on Machine Learning and using predictive AI technology that is producing
consistent results during testing. In testing environments Method C had
favourably demonstrated predictive ability in c. 30% of instances where it was
input to SHA-256 producing a winning hash, resulting in a potential saving of
energy. At the same time, QBT announced that it had commenced development of a
proprietary ASIC chip. A working prototype is about to undergo development to
confirm performance levels, and the Company entered into early-stage
exploratory discussions with Bitcoin rig manufacturers and US Bitcoin mining
companies. Also in March, the Company noted that the porting of Method A and
Method B into commercial rigs had proven to be very challenging. The R&D team
engaged in testing different solutions for the final stage in order to deliver
a fully reliable product. Finally, per the same announcement, QBT disclosed
that its first two patent applications (ASIC UltraBoost and ASIC
EnhancedBoost) were making positive headway and that a third patent
application was being drafted concerning the proprietary quantum version of
SHA-256.
In May 2024, the Company announced that at the end of April 2024, it reached
an agreement with certain of the Sipiem litigation co-liable defendants who
have settled their position for €700,000 (which, net of certain costs, has
been received by CL17). Following this agreement, the remaining value of the
Award Payment is approximately €5.575 million (plus interest and inflation
adjustment) which amount CL17 continues to pursue.
At the same time, CL17 also reached an agreement with the Sipiem’s receiver,
acquiring its right to receive 30% of any sums collected (net of legal and
other costs) from the Sipiem litigation, as envisaged in the 2019 claim
purchase agreement (through which CL17 acquired the Sipiem litigation) for an
amount of €170,000, giving CL17 rights to all funds recovered, namely the
€700,000 of the above agreement and the balance amounting to €5.575
million plus interest and augmentation for inflation.
In June, QBT confirmed that the payment of €700,000 had been completed, and
that €170,000 has been paid by CL17 to Sipiem’s Receiver with respect to
the acquisition by CL17 of the Receiver’s right to receive 30% of any
further sums collected in connection with the claim (net of legal fees).
Subsequently, in June 2024, the Company announced that the Venice Court of
Appeal confirmed the ruling of the 2022 lower court Judgment in favour of CL17
(save for €105,412), amounting to €6,083,562 (plus interest and
adjustments for inflation) in damages, plus €134,166 for legal expenses. As
the appeal ruling has been issued prior to the scheduling of the hearing
regarding the Settlement, such settlement is now deemed void. While the
above matter is currently being assessed by the Company’s legal team,
the Company still hold the above Settlement funds, minus the €170,000 paid
to the Receiver for the 30% rights. In the meantime, all the parties involved,
namely the Receiver, the Sipiem’s statutory auditor’s lawyers and the
insurer’s lawyers are being contacted to discuss the contractual
implications of the voided Settlement.
-ends-
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