REG - Mode Global Holdings - Audited Financial Results to 31 December 2022
04/07/2023 12:00
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RNS Number : 9353E Mode Global Holdings PLC 04 July 2023
Mode Global Holdings Plc
("Mode")
Audited Financial Results to 31 December 2022
STRATEGIC REPORT
Business Review
Since day one, Mode has grown through the strength, passion, and innovation of
its people. From developers to shareholders, the evolution of Mode can be
credited to a collaboration of thinkers each focused on the same core goal:
reforming the financial ecosystem for the better and creating genuine value
for both businesses and consumers through the use of cutting-edge technology.
Across bot h traditional finance and crypto, there are still huge challenges
to overcome and gaps to be filled when it comes to trust, transparency, and
user experience, which has remained a major driving force for us to continue
on our mission and succeed in our vision.
We have seen significant volatility during 2022 in both equity and the crypto
markets, driven by a number of contributing factors and a challenging economic
year on a global scale but that has not stopped Mode from delivering value to
our users. We launched our unique Bitcoin Cashback programme in May enabling
users to earn Bitcoin every time they shopped from leading UK retailers
through the Mode app, including Samsung, Farfetch and The Range to name a few.
The new rewards product was well received. Additionally, Mode has expanded the
number of Bitcoin Payroll clients onboarded as businesses realise the value of
being able to pay their employees in Bitcoin.
During the second half of the year, Mode began rolling out it's multi-token
offering including Ethereum, Polkadot and Solana. Mode ended the year with a
collection of products that cater to the different crypto personas. Our
trading, payments, rewards and payroll products were all seen to be
significant in Mode's planned roadmap.
Mode in 2023
Due to difficult economic circumstances and the collapse of high profile
Crypto businesses like FTX, Mode has decided to cease it's crypto and payment
operations and shut down all customer facing activities including it's phone
applications. This has been done to maintain cash reserves whilst the Board
considers the future of the Group.
Mode continues to work with the FCA and partners to return all fiat and crypto
deposits to its customers over a winding down process.
During Q1 2023 and continuing today, the Mode Board of Directors entered Mode
Global Limited into a Company Voluntary Arrangement ("CVA") with it's
creditors. This was agreed on the 5(th) April 2023.
To secure a longer-term future of the Mode Global Holding PLC status, the
Board of Directors are in conversations with multiple parties to raise funds
and to therefore enable the vehicle to invest in future ventures as they seem
appropriate at the time. The parent and it's subsidiaries (except for Mode
Global Limited) have sufficient funds to cover costs and meet liabilities as
they fall due for a period of 12 months from the signing of the accounts.
These cash reserves give the Group the ability to identify and agreed on the
most appropriate future plan.
Additionally £1.6 million of convertible loan notes have expired on 28 June
2023. The directors are in discussions with the holders of the convertible
loan notes to extend the term of the loan notes as the Group does not
currently have sufficient funds to settle these loan notes in full. The
directors are confident of being able to extend and renegotiate the terms of
the loans.
For these reasons, they continue to adopt the going concern basis of
accounting in preparing the annual financial statements. The financial
statements do not include any adjustments that would result from the going
concern basis of preparation being inappropriate.
The directors are aware of the risks and uncertainties facing the business,
but the assumptions used are the directors' best estimates of the future
development of the business.
Financial Review
Performance of the business during the period and the position at year end.
Revenue for the year decreased slightly from £1,313k to £1,081k, a drop of
£232k, this was driven primarily by the significant drop in crypto revenues
from £656k in 2021 to £154k in 2022, a fall of 77%. The market for Crypto
trading in 2022 saw a significant downturn which impacted Mode's top line.
Our Global Services payments platform (JGOO), saw a significant increase in
payments activity, as UK merchants took advantage of the online ecommerce
payment platform to connect with the sizable Chinese consumer base via WeChat
and Alipay. This grew from £721k in 2021 to £926k in 2022, growth of 28%.
Administrative expenses were £6,938k (2021: £9,382k) reducing by £2,444k
(26%) during the year. This was driven a Group wide cost review exercise
resulting in significantly greatly efficiencies, reduced headcount and greatly
reduced marketing spend.
Cash Balances ended the year at £814k (2021: £4,155k). The significant
reduction reflects the increase in net cash losses from operations of £5,302k
incurred to continue to grow the business partly offset by the issuance of a
convertible loan note in July 2022 which raised £2,000k.
EXTRACT FROM INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MODE GLOBAL HOLDINGS PLC
Material uncertainty related to going concern
We draw attention to the going concern note in the accounting policies,
concerning the Group's ability to continue as a going concern.
The matters explained indicate that the Group needs to raise further funds to
enable the Group to invest in future ventures as they deem appropriate at the
time.
Additionally, £1.6 million of convertible loan notes have expired on 28 June
2023. The directors are in discussions with the holders of the convertible
loan notes to extend the term of the loan notes as the Group does not
currently have sufficient funds to settle these loan notes in full.
As at the date of approval of these financial statements there are no legally
binding agreements relating to securing the extension. These events or
conditions along with the matters set forth in in the accounting policies
indicate the existence of a material uncertainty which may cast significant
doubt over the Group's ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
MODE GLOBAL HOLDINGS PLC
GROUP FINANCIAL STATEMENTS
Consolidated Statement of Income
FY FY
31-Dec-2022 31-Dec-2021
Note £'000 £'000
Continuing operations
Revenue 4 1,081 1,313
Cost of sales (1,012) (1,151)
Gross profit 69 162
Administrative expenses 5 (6,938) (9,382)
Operating Loss (6,869) (9,220)
Investment Revenue - 5
Finance costs (64) -
Loss before taxation (6,933) (9,215)
Taxation 7 520 269
Loss for the period (6,413) (8,946)
Basic and diluted loss per share (pence) 8 (6) (10)
Consolidated Statement of Comprehensive Income
FY FY
31-Dec-2022 31-Dec-2021
Note £'000 £'000
Loss for the period (6,413) (8,946)
Other Comprehensive Income:
Reclassified to profit or loss when specific conditions are met (194) (261)
Total Comprehensive Loss for the year (6,607) (9,207)
Consolidated Statement of Financial Position
FY FY
31-Dec-2022 31-Dec-2021
Audited Audited
Note £'000 £'000
Assets
Non-current Assets
Property, plant and equipment 10 11 33
Intangible Non-Current Assets
Software 21 57
Intangible Current Assets
Treasury BTC 9 - 463
Current Assets
Inventory - Crypto 45 -
Trade and other receivables 11 176 1,260
Cash and cash equivalents 12 814 4,155
Total Assets 1,067 5,967
Equity and Liabilities
Equity attributable to equity holders of the Group
Share Capital - Ordinary shares 14 1,029 915
Share Premium account 14 17,050 16,721
Profit and Loss Account (20,152) (14,719)
Group Reorganisation Reserve 454 454
Revaluation Reserve - 194
Share Option Reserve 15 77 1,058
Total Equity (1,542) 4,623
Current Liabilities
Convertible Loan Notes 16 1,622 -
Current trade and other payables 13 987 1,344
Total Liabilities 2,609 1,344
Total Equity and Liabilities 1,067 5,967
Consolidated Statement of Changes in Equity
Share capital Share premium Accumulated deficit Group Reorganisation Reserves Revaluation Reserve Share Option Reserve Convertible loan note Total equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
As at 31 December 2020 805 11,091 (6,878) 454 455 315 - 6,242
Shares issued 109 5,632 - - - - - 5,741
Share Option Reserve - - - - - 743 - 743
Gain on sale of Bitcoin assets - - 1,105 - - - - 1,105
Total Comprehensive Loss for the year - - (8,946) - (261) - - (9,207)
As at 31 December 2021 914 16,723 (14,719) 454 194 1,058 - 4,623
Shares issued 114 329 - - - - - 443
Share Option Lapsing - - 981 - - (981) - -
Total Comprehensive Loss for the year - - (6,413) - (194) - - (6,607)
As at 31 December 2022 1,029 17,050 (20,151) 454 - 77 - (1,540)
Consolidated Statement of Cashflows
FY FY
31-Dec-2022 31-Dec-2021
Audited Audited
£'000 £'000
Cash flows from operating activities
Operating loss (6,933) (9,220)
(Increase)/decrease in receivables 1,082 (797)
Increase/(decrease) in payables (356) 908
Finance Income - (5)
Finance Costs 64 -
Adjustment for:
Depreciation and amortisation 16 28
Share based payment - 743
Impairment of BTC 369 -
Interest (paid) / received (64) 5
Research and development tax credit claim 520 269
Net cash generated from operations (5,302) (8,069)
Cash flows from investing activities
Purchase of Property, plant & equipment - (29)
Purchase of BTC Treasury - (1,933)
Net cash from financing activities - (1,952)
Cash flows from financing activities
Sale of BTC Treasury - 3,064
Issue of shares - 5,741
Convertible loan note issue 2,000 -
Net cash from financing activities 2,000 8,805
Net increase in cash and cash equivalents (3,302) (1,216)
Cash and cash equivalents at the beginning of the period 4,155 5,365
Effect of exchange rate changes on cash and cash equivalents (39) 6
Cash and cash equivalents at end of period 814 4,155
Represented by: Bank balances and cash 814 4,155
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
1. General information
Mode Global Holdings is the holding company for a group of companies that
trade under the name 'Mode Global'. Mode Global Holdings was incorporated on 5
August 2020 under the laws of England with a registered number of 12794676.
Mode Global Holdings is in the financial services business. Its business
address is Finsgate, 5-7 Cranwood Street, London, United Kingdom, EC1V 9EE.
Mode Global Holdings wholly owns Mode Global Limited ("Mode Global"), which in
turn owns 100% of JGOO Limited ("JGOO®"), 100% of Greyfoxx Limited
("Greyfoxx") and 100% of Fibere Limited ("Fibere"). Greyfoxx wholly owns
Fibermode Limited ("MODE®"). Mode Global Holdings, together with its
subsidiaries, are referred to herein as the "Group". All the limited companies
are incorporated and domiciled in England. The registered company numbers of
these companies are 09768854 (Mode Global Limited) 10805100 (JGOO Limited),
12123111 (Greyfoxx Limited), 12408852 (Fibere Limited) and 11085143 (Fibermode
Limited).
Name Country of incorporation Holding Ownership Nature of Business
Mode Global Limited United Kingdom Direct 100% Holding Company
JGOO Limited United Kingdom Indirect 100% Global Payments Platform
Fibermode Limited United Kingdom Indirect 100% Mode Digital Wallet (including Cryptocurrency)
Greyfoxx Limited United Kingdom Indirect 100% Mode for Business
Fibere Limited United Kingdom Indirect 100% Mode Store
Mode provides customers the ability to manage their traditional (fiat) money
and their digital assets (cryptocurrency) using the same mobile (or web)
application. Through MODE's mobile interface, customers have an
all-encompassing view of their traditional fiat and cryptocurrency balances
and will be able to initiate various transactions in both.
JGOO is a payment processing, marketing and advertising company. It aims to
provide the next generation of a social media and mobile payments platform,
enabling consumers, merchants, and brands to make and receive payments without
the need for card platforms, using their mobile phones to make and accept
payments. JGOO's initial focus has been on enabling British brands to engage
with Chinese shoppers, both face-to face and online, but will widen its
markets in the future.
Greyfoxx became a Financial Conduct Authority (FCA) authorised electronic
money institution as of 23(rd) June 2021, meeting various conditions set out
by the FCA. Greyfoxx aims to provide e-money services to both JGOO and MODE.
Fibere Limited is the Mode Clothing Store where customers can get Bitcoin
cashback for buying items that advertise Mode as a brand.
The Group's principal activity is to invest in fintech companies. Its core
platform, 'Mode', is a financial services ecosystem which is a fully
regulated, UK-based institution, providing the full scope of banking and
financial services to the holders of both traditional and crypto-assets.
The consolidated financial statements comprised of the Company and its
subsidiaries (together referred to as "the Group") as at 31 December 2022 and
for the year to 31 December 2022.
2. Accounting policies
The principal accounting policies applied in the preparation of the
consolidated financial statements are set out below. These policies have been
consistently applied to all periods presented, unless otherwise stated.
Basis of preparation
This financial information has been prepared in accordance with IFRS,
including IFRS Interpretations Committee (IFRIC) interpretations issued by the
International Accounting Standards Board (IASB) as adopted by the UK and with
those parts of the Companies Act 2006 applicable to companies reporting under
IFRS. The financial information has been prepared under the historical cost
convention. The principal accounting policies adopted are set out below and
these policies have been consistently applied.
The preparation of financial statements, in compliance with adopted IFRSs,
requires the use of certain critical accounting estimates. It also requires
the Group's management to exercise judgment in applying the Group's accounting
policies. The areas where significant judgments and estimates have been made
in preparing the financial statements and their effect are disclosed below.
Basis of consolidation
The consolidated financial statements include the results of the Group as if
they formed a single entity for the full period or, in the case of
acquisitions, from the date control is transferred to the Group. The Company
controls an entity when the Company has the power, either directly or
indirectly, to govern the financial and operating policies of another entity
or business so as to obtain benefits from its activities, whereby it is
classified as a subsidiary. Intercompany transactions and balances between
Group companies are therefore eliminated in full.
The existence and effect of potential voting rights that are currently
exercisable or convertible are considered when assessing whether the Group
controls another entity. Subsidiaries are fully consolidated from the date on
which control is transferred to the Company. They are de-consolidated from the
date that control ceases.
Subsidiaries are all entities over which Mode Global Holdings plc has the
power to govern the financial and operating policies, generally accompanying a
shareholding of more than one half of the voting rights. All subsidiaries have
a reporting date of 31 December.
Changes in accounting policies and disclosures
The accounting policies adopted are consistent throughout the financial
period. Standards and amendments to IFRS effective as of 01 January 2021 have
been applied by the Group.
There were a number of standards and interpretations which were in issue at 31
December 2021 but were not effective at 31 December 2022 and have not been
adopted for these Financial Statements.
These include:
● Amendments to IFRS 3 Business Combinations - change in
reference to the conceptual framework (applicable on or after 1 January 2022)
● Amendments to IFRS 17 Insurance Contracts - measurement of
insurance liabilities (applicable on or after 1 January 2023)
● Amendments to IAS 1 Presentation of Financial Statements -
further disclosure requirements including additional detail around accounting
policies (applicable on or after 1 January 2023)
● Amendments to IAS 8 Accounting Policies, Changes in
Accounting Estimates and Errors - definition of accounting estimates
(applicable on or after 1 January 2023)
● A number of narrow-scope amendments to IFRS 3, IAS 16, IAS
17, IAS 37 and some annual improvements on IFRS 1, IFRS 9, IAS 41 and IFRS 16
(applicable on or after 1 January 2022)
The Directors have assessed the impact of these accounting changes on the
Group. To the extent that they may be applicable, the Directors have concluded
that none of these pronouncements will cause material adjustments to the
Group's Financial Statements.
There are no other IFRS or IFRIC interpretations that are effective for the
first time in this financial year that would be expected to have a material
impact on the Group.
Going concern
The consolidated financial statements are prepared on the going concern basis.
As expected for any start-up, the Group has incurred significant operating
losses and negative cashflows.
The Directors have created multiple scenarios for Mode Global Holdings PLC's
cash forecasts over the next 12 months. This process included a base case
scenario which shows that the Group, through careful management of it's
balance sheet and cash spend, will be able to continue to operate for a period
of greater than 12 months.
As part of this process, The Group's board approved for Mode Global Limited to
enter into a Company Voluntary Arrangement with it's creditors. The process is
continuing but Directors are confident that they come to an positive
arrangement for the Group and external creditors.
To secure a longer-term future of the Mode Global Holding PLC status, the
Board of Directors are in conversations with multiple parties to raise funds
and to therefore enable the vehicle to invest in future ventures as they seem
appropriate at the time.
Additionally £1.6 million of convertible loan notes have expired on 28 June
2023. The directors are in discussions with the holders of the convertible
loan notes to extend the term of the loan notes as the Group does not
currently have sufficient funds to settle these loan notes in full. The
directors are confident of being able to extend and renegotiate the terms of
the loans.
For these reasons, we continue to adopt the going concern basis of accounting
in preparing the annual financial statements. The financial statements do
not include any adjustments that would result from the going concern basis of
preparation being inappropriate.
The directors are aware of the risks and uncertainties facing the business,
but the assumptions used are the directors' best estimates of the future
development of the business.
Foreign currency
The functional currency of the Group and subsidiaries are Pound Sterling (£).
The presentational currency of the Group and subsidiaries are £ because a
significant amount of its transactions is in £.
Transactions entered by the Group's entities in a currency other than the
reporting currency are recorded at the rates ruling when the transaction
occurs. Foreign currency monetary assets and liabilities are translated at the
rates ruling at the statement of financial position date. Exchange differences
arising on the re-translation of outstanding monetary assets and liabilities
are also recognised in the income statement.
Share capital
The costs directly associated with the issue of new ordinary shares or options
are shown in equity as a deduction, net of tax, from the proceeds. For the
options, these have been detailed below as share based payments.
Revenue recognition
Digital Wallet - Fibermode
Revenue is recognised at the fair value of the consideration received or
receivable for goods and services provided in the normal course of business.
Revenue represents commission on customer trading activities and includes
interest received on Bitcoin holdings lent out to a third-party Network.
Commission is recognised on the day the trade completes.
Global Services - JGOO
Revenue is recognised in accordance with IFRS 15 'Revenue from Contracts with
Customers'. The Company recognises revenue on the transfer of services to
customers in an amount that reflects the consideration to which the entity
expects to be entitled, in exchange for those services. This core principle is
delivered in a five-step model framework:
1. Identify the contract(s) with the customer;
2. Identify the performance obligations in the contract;
3. Determine the transaction price;
4. Allocate the transaction price to the performance obligations in the
contract; and
5. Recognise revenue when (or as) the entity satisfies a performance
obligation.
Revenue is recognised on service contracts at the point at which the service
has been completed, or for contracts covering a period of time, monthly over
the period of the contract. Revenues exclude intra-group sales and value added
taxes and represent funds received on a gross basis, as the
transaction revenue is received by JGOO as the principal in respect of
completing the payment transaction. We control the service of completing
payments on our payments platform and bear primary responsibility for the
fulfilment of the payment service. JGOO has full discretion in determining
fees charged to UK merchants, which is independent of the revenue we receive
from Alipay and WeChat Pay. We therefore bear the risk when completing
transactions and report these items as separate transactions.
Employee benefits
(i) Short-term benefits
Wages, salaries, paid annual leave and sick leave and non-monetary benefits
are accrued in the period in which the associated services are rendered by
employees of the Company.
(ii) Defined contribution plan
As at year ended 31 December 2022, the Company had a defined contribution
pension scheme for employees with Scottish Widows. For this defined
contribution plan, the Company pays contributions to a privately administered
pension insurance plan on a mandatory basis. The contributions are recognised
as an employee benefit expense when they are due.
Operating leases
The Group has elected not to recognise right-of-use assets and lease
liabilities for its leases, all of which qualify as short-term leases. The
Group recognises the lease payments associated with these leases as an expense
on a straight-line basis over the lease term.
Current taxation:
Current tax is the amount of income tax payable (or refundable) in respect of
the taxable profit (or loss) for the year or prior years. Tax is calculated on
the basis of the tax rates and laws that have been enacted or substantively
enacted by the period end. Research and development tax credits are recognised
on a cash basis due to the uncertainty around whether claims will be approved
by the UK tax authorities.
Deferred taxation
Deferred tax assets and liabilities are recognised where the carrying amount
of an asset or liability in the statement of financial position differs from
its tax base, except for differences arising on:
● the initial recognition of goodwill;
● the initial recognition of an asset or liability in a transaction
which is not a business combination and at the time of the transaction affects
neither accounting or taxable profit; and
● investments in subsidiaries where the Group is able to control the
timing of the reversal of the difference and it is probable that the
difference will not reverse in the foreseeable future.
Recognition of deferred tax assets is restricted to those instances where it
is probable that taxable profit will be available against which the difference
can be utilised.
The amount of the asset or liability is determined using tax rates that have
been enacted or substantially enacted by the balance sheet date and are
expected to apply when the deferred tax liabilities or assets are settled or
recovered. Deferred tax balances are not discounted.
Deferred tax assets and liabilities are offset when the Group has a legally
enforceable right to offset current tax assets and liabilities.
The Group is entitled to a tax deduction on the exercise of certain employee
share options. A share-based payment expense is recorded in the income
statement over the period from the grant date to the vesting date of the
relevant options. As there is a temporary difference between the accounting
and tax bases, a deferred tax asset may be recorded. The deferred tax asset
arising on share option awards is calculated as the estimated amount of tax
deduction to be obtained in the future (based on the Group's share price at
the balance sheet date) pro-rated to the extent that the services of the
employee have been rendered over the vesting period. If this amount exceeds
the cumulative amount of the remuneration expense at the statutory rate, the
excess is recorded directly in equity, against retained earnings. Similarly,
current tax relief in excess of the cumulative amount of the Share-based
payments expense at the statutory rate is also recorded in retained earnings.
Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held on call,
together with other short term highly liquid investments which are not subject
to significant changes in value and have original maturities of less than
three months.
Equity instruments
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from proceeds. Dividends on ordinary shares are
recognised as liabilities when approved for distribution.
Share-based payments
The Company operates an unapproved share-based compensation plan, under which
the company receives services from employees as consideration for equity
instruments (options) of Mode Global Holdings PLC. The awards were granted, on
two separate dates being October 27(th) 2020 and 4(th) November 2020, by Mode
Global Holdings PLC, and the fair value of the employee services received in
exchange for the grant of the options is recognised as an expense under IFRS
2. A credit is recognised directly in equity (Share Option Reserve). The total
amount to be expensed was determined by reference to the fair value of the
total options granted using the Black Scholes model - see Note 15.
No options were able to be exercised prior to April 2021. Since then, no
options have been exercised as the share price remains below the original
strike price.
The latest date that the options can be exercised is the tenth anniversary of
the Grant Date, and if not exercised before then the options would
automatically lapse.
Intangible assets - Software
Software has a finite life and is therefore carried at cost less accumulated
amortisation. Amortisation is calculated using a straight-line method to
allocate the cost of software and websites over their estimated useful lives
of three years.
Accounting for cryptocurrencies
The Group's cryptocurrencies are held for the purpose of liquidity and
settling customer trades in a timely manner. As a result, we account for
cryptocurrencies as inventory under IAS2. Inventory is held at the lower of
cost and net realisable value. Impairments are taken to the Profit and Loss
account.
Property, plant and equipment
Property, plant and equipment are stated at historical cost less subsequent
accumulated depreciation and accumulated impairment losses, if any. Historical
cost includes expenditure that is directly attributable to the acquisition of
the assets.
Subsequent costs are included in the asset's carrying amount, or recognised as
a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Company and the
cost of the item can be measured reliably. All other repairs and maintenance
are charged to profit or loss during the financial period in which they are
incurred.
Depreciation on property, plant and equipment is calculated using the
straight-line method to write off their cost over their estimated useful lives
at the following annual rates:
Computer equipment: 33% straight-line
Plant and machinery: 33% straight-line
Financial assets and liabilities
Recognition and initial
measurement
The Group initially recognises loans and advances, trade and other
receivables/payables, and borrowings plus or minus transactions costs, when
and only when the Group becomes party to the contractual provisions of the
instruments.
Financial assets at amortised cost
The Group's financial assets at amortised cost comprise trade and other
receivables. These represent debt instruments with fixed or determinable
payments that represent principal or interest and where the intention is to
hold to collect these contractual cash flows. They are initially recognised at
fair value, included in current and non-current assets, depending on the
nature of the transaction, and are subsequently measured at amortised cost
using the effective interest method, less any provision for impairment.
Financial liabilities at amortised cost
Financial liabilities at amortised cost comprise trade and other payables.
They are classified as current and non-current liabilities depending on the
nature of the transaction, and are subsequently measured at amortised cost
using the effective interest method.
Financial assets
The Group derecognises a financial asset when the contractual rights to the
cash flows from the financial asset expire, or when it transfers the rights to
receive the contractual cash flows in a transaction in which substantially all
of the risks and rewards of ownership of the financial asset are transferred,
or in which the Group neither transfers nor retains substantially all of the
risks and rewards of ownership and it does not retain control of the financial
asset.
On derecognition of a financial asset, the difference between the carrying
amount of the asset (or the carrying amount allocated to the portion of the
asset derecognised) and the sum of (i) the consideration received (including
any new asset obtained less any new liability assumed) and (ii) any cumulative
gain or loss that had been recognised in OCI is recognised in profit or loss.
Financial liabilities
The Group derecognises a financial liability when its contractual obligations
are discharged, cancelled, or expire.
Summary of critical accounting estimates and judgements
The preparation of financial information, in conformity with IFRS, requires
the use of certain critical accounting estimates. It also requires the
directors to exercise their judgement in the process of applying the
accounting policies which are detailed above. These judgements are continually
evaluated by the directors and management, and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.
The key estimates and underlying assumptions concerning the future, and other
key estimated uncertainties at the date of the financial statements, that have
a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial period, are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in the period
in which the estimate is revised if the revision affects only that period, or
in the period of the revision and future periods if the revision affects both
current and future periods.
Management do not believe there to be estimates or judgements which have a
significant risk of causing a material adjustment to the carrying amount of
assets and liabilities within the next financial year.
Share-based payments
The basis for the share-based payments expense for 2022 has been set out in
Note 15. In accounting for the fair value of options and warrants, the Company
makes assumptions regarding share price volatility, risk free rate, and
expected life, in order to determine the amount of associated expense to
recognise.
3. Financial risk management
Financial instruments
Financial assets 31-Dec-22 31-Dec-21
£'000 £'000
Cash and cash equivalents 814 4,155
Treasury BTC 45 463
Trade receivables - net of provision - 13
Other receivables 176 1,116
Financial assets 1,035 5,747
Financial liabilities
Convertible Loan Notes 1,622 -
Trade payables 805 708
Other payables 143 127
Accruals 40 508
Financial liabilities 2,609 1,344
Fair value hierarchy
All the financial assets and financial liabilities recognised in the financial
statements which are short-term in nature are shown at the carrying value,
which also approximates the fair values for short-term financial instruments.
Therefore, no separate disclosure for fair value hierarchy is required. The
disclosure on fair value hierarchy does not apply to the financial leases.
The Group's activities expose it to a variety of financial risks, mainly
credit risk, liquidity risk and interest rate risk.
Credit risk
Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in financial loss to the Group. In order to
minimise this risk, the Group endeavours only to deal with companies which are
demonstrably creditworthy.
The aggregate financial exposure is continuously monitored. The maximum
exposure to credit risk is the value of the Group's outstanding bank balances.
The Group's exposure to credit risk on cash and cash equivalents is considered
to be low as the bank accounts are with banks with high credit ratings.
Liquidity risk
The Group currently holds cash and Bitcoin balances to manage trading activity
and is managed centrally. Trade and other payables are monitored as part of
normal management operations.
The below, for 2022, is predominantly made up of accrued costs and tax
liabilities relating to payroll:
2022 Within 1 year 1-2 years 2-5 years
£'000 £'000 £'000
Trade and other payables 2,609 - -
Total 2,609 - -
2021 Within 1 year 1-2 years 2-5 years
£'000 £'000 £'000
Trade and other payables 1,344 - -
Total 1,344 - -
Market risk - interest rate risk
The Group carries no interest rate risk at the respective year ends.
Capital risk management
The Group's capital management objectives are to ensure that the Group
continues to operate as a going concern, and provide an adequate return to
shareholders by pricing products and services commensurate with the level of
risk.
To meet these objectives, the Company reviews the budgets and forecasts on a
regular basis to ensure there is sufficient capital to meet the needs of the
Company through to profitability, and achieve a positive cash flow.
All working capital requirements are financed from existing cash resources.
4. Segment information
The Group's Revenue is made up of the trading commission on cryptocurrency
assets (Fibermode), as well as bespoke payment and marketing solutions on its
Global Services platform (JGOO).
The Group currently only operates in the UK and so for now the presentation of
a geographical split is not applicable.
31-Dec-22
JGOO Fibermode Other Total
£'000 £'000 £'000 £'000
Revenue 927 154 - 1,081
Cost of sales (916) (96) - (1,012)
Gross Profit 11 58 - 69
Administrative expenses (414) (762) (5,762) (6,938)
Operating Loss (405) (704) (5,762) (6,869)
Assets 68 619 380 1,067
Liabilities 3,366 6,428 (7,185) 2,609
Equity (3,298) (5,809) 7,565 (1,542)
Total Liabilities & Equity 68 619 380 1,067
31-Dec-21
JGOO Fibermode Other Total
£'000 £'000 £'000 £'000
Revenue 721 656 (64) 1,313
Cost of sales (694) (452) (5) (1,151)
Gross Profit / (Loss) 27 204 (69) 162
Administrative expenses (936) (2,466) (5,980) (9,382)
Operating Loss (909) (2,262) (6,049) (9,220)
Assets 188 911 4,868 5,967
Liabilities 2,585 5,040 (6,281) 1,344
Equity (2,397) (4,129) 11,149 4,623
Total Liabilities & Equity 188 911 4,878 5,967
5. Loss from operations
Year to 31 December 2022 Year to 31 December 2021
£'000 £'000
Operating loss is stated after charging:
Directors Fees 150 132
Consulting and advisory fees 1,367 530
Premises 102 80
Software costs 669 872
Advertising 182 1,394
Legal and professional fees 556 639
Audit fees 35 26
Share option expense - 743
Other administrative expenses 3,879 4,966
Total administrative expenses 6,938 9,382
6. Employment costs & directors
The average number of employees (including directors) during the period was
made up as follows:
Year ended Year ended
31-Dec-22 31-Dec-21
Number Number
Directors (including non-executive directors) 6 6
Administrative 33 38
Total 39 44
2022 Male Female
Number Number
Directors (including non-executive directors) 5 1
Administrative 19 14
Total 24 15
The cost of employees (including directors) during the period was made up as
follows:
Year ended Year ended
31-Dec-22 31-Dec-21
£'000 £'000
Salaries and wages (including directors) 2,226 3,048
Social security costs 280 335
Pension Costs 28 36
Share Based Remuneration (981) 743
Staff costs 1,553 4,162
The compensation of key management personnel, principally directors of Mode
Global Holdings PLC, for the period were as follows:
Year ended Year ended
31-Dec-22 31-Dec-21
£'000 £'000
Salaries/fees 295 484
Social security costs 40 45
Other benefits and pension contributions 3 5
Share Based Remuneration - 389
Total 338 923
The above remuneration (including share-based payments) of directors includes
the following amounts paid to the highest paid Director:
Year ended Year ended
31-Dec-22 31-Dec-21
£'000 £'000
Highest paid Director 172 374
No directors or key management personnel received termination benefits upon
their departure.
7. Taxation
Year ended 31 December 2022 Year ended 31 December 2021
£'000 £'000
Total current tax (Relief for R&D) (520) (269)
Factors affecting the tax charge for the period
Loss on ordinary activities before taxation (6,933) (9,215)
Loss on ordinary activities before taxation multiplied by standard rate of UK (1,317) (1,751)
corporation tax of 19% (2020: 19%)
Effects of:
Non-deductible expenses - 143
Depreciation 54 5
Research & Development tax credits (520) (269)
Tax losses carried forward 1,264 1,602
Current tax charge/(credit) for the period (520) (269)
Changes in tax rates
The UK small company's corporation tax rate has been maintained at 19% for the
two periods. Accordingly, the deferred tax asset has been calculated based
on the rate of 19% at the balance sheet date. Future enacted tax rates of 19%
will apply from 1 April 2020 and from 1 April 2021. No liability to UK
corporation tax arose on ordinary activities for the current period.
The Group has estimated tax losses of £19,093,000 (2021: £12,752,000)
available for carry forward against future trading profits.
The tax losses have resulted in a deferred tax asset of approximately
£3,638,000 (2021: £2,423,000) which has not been recognised in the financial
statements due to the uncertainty of the recoverability of the amount.
8. Earnings per share (EPS)
Year ended Year ended
31-Dec-22 31-Dec-21
Basic and diluted
Loss for the period and earnings used in basic & diluted EPS (£)
(6,414,636) (8,946,882)
Weighted average number of shares used in basic and diluted EPS
104,791,280 89,593,045
Loss per share (p) (6) (10)
Basic earnings per share is calculated by dividing the loss attributable to
equity holders of the Company by the number of ordinary shares in issue at the
end of the period.
9. Intangible assets - Treasury BTC
31-Dec-22 31-Dec-21
£'000 £'000
At period start (1 January) 463 832
Additions 41 1,933
Revaluation (369) (261)
Disposals - (2,041)
Reclassification to inventory (135) -
At period end (31 December) - 463
10. Tangible assets
31-Dec-22 31-Dec-21
£'000 £'000
At period start (1 January) 33 14
Additions - 29
Revaluation (6) -
Depreciation (16) (10)
At period end (31 December) 11 33
Tangible Assets comprises of computer equipment.
11. Trade and other receivables
31-Dec-22 31-Dec-21
£'000 £'000
Trade receivables - 13
Other receivables 86 1,117
Prepayments - 40
VAT Receivable 90 90
Total 176 1,260
12. Cash and cash equivalents
Where cash at bank earns interest, the interest accrues at floating rates
based on daily bank deposit rates. The fair value of the cash and cash
equivalents is as disclosed below. For the purpose of the cash flow statement,
cash and cash equivalents comprise of the amounts shown below.
31-Dec-22 31-Dec-21
£'000 £'000
Cash at bank and in hand 814 4,155
13. Trade and other payables
31-Dec-22 31-Dec-21
£'000 £'000
Trade payables 805 708
Other payables 143 127
Accruals 40 509
987 1,344
14. Share capital
Ordinary shares Nominal value/share Share capital Share premium Total consideration
Number £ £'000 £'000 £'000
At 31 December 2021 91,446,096 0.01 915 16,721 17,636
Ordinary Shares issued on Placing 11,455,147 0.01 114 329 443
At 31 December 2022 102,901,243 0.01 1,029 17,050 18,080
All shares of the Company rank pari passu in all respects.
15. Share-based remuneration
The parent operates an unapproved share option plan for all employees of the
Group.
In accordance with standard vesting terms, the full award will vest four years
after the start of the vesting date (5th October 2021), with 20% vesting on
the initial IPO date and a further 5% of the options vested on each
three-month anniversary. If the options remain unexercised after a period of
ten years from the date of grant, the options expire. Options are forfeited if
the employee leaves the Group before the options vest.
The details of the movements in the share scheme are as follows:
Unapproved Options
Number of share options (millions) Average Exercise price per share (£)
Outstanding as at 31 December 2021 8,737,063 0.50
Granted during the period 5,100,000 0.075
Exercised during the period - -
Forfeited during the period (13,414,244) 0.075
Outstanding as at 31 December 2022 422,819 0.50
No options were exercisable at the end of the period. No share-based payments
were settled during the period and therefore the method of settlement is not
applicable.
The weighted average fair values of the options granted under the unapproved
options scheme were £0.18 per option using the Black Scholes model.
In September 2022, new employees were granted 5.1m options at an exercise
price of £0.075 and all existing options were modified to have an exercise
price of £0.075 also. Based on a fair value assessment of the share option
modification it was assessed that the fair value had decreased however, in
line with IFRS 2, we continued to account for the share options of the
original grant at the original fair value. The significant inputs into the
model are as follows:
Current Price (£) on date issued 0.55
Option Exercise Price (£) 0.5
Expected Life of Options in years 4
Volatility 59%
Dividend Yield -
Risk free interest rate 0.72%
Adjustment for sub-optimal exercise factor 20%
The expected volatility was determined using the trading prices for MGH plc
from the period it listed until February 16(th) 2021 to allow for sufficient
time to provide enough scope. The reason for only considering MGH is that
there were no other similar companies listed in the UK with comparable
operations to MGH.
Following the year end, all options (except for two ex-employees) were lapsed
following the discontinued operations. Any charge booked in 2022 was therefore
reversed in year and for prior year grants, the charge booked in prior years
was reversed through the share option reserve and retained earnings.
16. Convertible Loan Notes
In July 2022, £2.0m convertible loans notes were issues repayable in July
2023. This attracted interest at a rate of 8% pa.
The notes shall be converted by the Company on the earlier to occur of:
i). a change of control (in respect of which the Company shall have provided
the Noteholders with reasonable notice to allow it to exercise its conversion
rights hereunder); or
ii). a qualifying financing being completed; or
iii). the maturity date (28 June 2023).
The convertible loan has been treated as a short term liability as the
maturity date is less than 12 month. Interest has been accrued on a quarterly
basis.
During the year, £441k of loan notes were converted for 11,455,147 shares in
Mode Global Holdings PLC.
Note, management believe the requirement for the separation of the derivative
element of the CLN share conversion term to be immaterial and have therefore
not accounted for this separately.
17. Reserves
The following describes the nature and purpose of each reserve within equity:
Share premium Amount subscribed for share capital in excess of nominal value.
Retained earnings Retained earnings represent all other net gains and losses and transactions
with shareholders (example dividends) not recognised elsewhere.
Revaluation Reserve Revaluation Reserve is the excess over nominal value for the purchased
Intangible Bitcoin Assets
Group Reorganisation Reserve The consolidation of Mode Global Limited and its subsidiaries resulted in the
elimination of the parent's investment in the subsidiaries, and the
recognition of a group reorganisation reserve
Share Based Payment Reserve Cumulative estimated expense amount based on the price of MGH's share options
The Other Reserves noted on the Statement of Changes in Equity include Group
Reorganisation Reserve, Share Based Payments Reserve and the Revaluation
Reserve.
18. Capital commitments
The Company has no capital commitments at the years ended 31 December 2022 and
31 December 2021.
19. Related Party Transactions
During the year the following related parties transactions were entered into.
These were at an arm's length received no favourable terms.
On the 13 July 2022, the following related parties subscribed to the
Convertible Loan Note issuance. See Note 16 for more details on the
Convertible Loan Note terms.
Related Party Convertible Loan Note Subscribed (£) Outstanding Convertible Loan Notes (£)
Liwathon Limited £550,000 £436,067
Linley Limited £500,000 £305,944
Rita Liu (Chief Executive Officer) £20,000 £20,000
Michael Robertson (Non-executive director) £20,000 £20,000
David Shrier (Non-executive director) £25,000 £25,000
Note, Liwathon Ltd and Linley Limited are controlled by close Rowland Family
members and management deem them to be related parties for this purpose.
19. Events after the reporting date
Post year end the Group made the decision to cease operations and wind down
all subsidiaries in order to maximise cash reserves in the parent Company.
The Board of Directors also approved a Company Voluntary Arrangement ("CVA")
for Mode Global Limited and this was approved by the courts on the 5(th) April
2023.
Management are in the process on settling creditors and employee claims in
line with this agreement.
Fibermode Limited has agreed with the Financial Conduct Authority ("FCA") a
plan for winding down the customer operations and returning customers fiat and
crypto deposits over an extended period of time deemed sufficient by both
parties.
20. Ultimate controlling party
There is no ultimate controlling party of the Company.
MODE GLOBAL HOLDINGS PLC
Company Statement of Financial Position
2022 2021
Note £'000 £'000
Assets
Non-current Assets
Net amounts due from subsidiaries 3.1 - -
Investment in group companies 3.3 - -
Current Assets
Trade and other receivables 101 169
Cash and cash equivalents 7 3,307
Total Assets 108 3,476
Equity and Liabilities
Equity attributable to equity holders of the Group
Share Capital - Ordinary shares 1,029 914
Share Premium account 17,050 16,723
Profit and Loss Account (46,917) (42,197)
Merger Relief Reserve 26,940 26,940
Share Option Reserve 77 1,058
Total Equity (1,822) 3,438
Current Liabilities
Convertible Loan Notes 1,622 -
Current trade and other payables 308 38
Total Liabilities 1,930 38
Total Equity and Liabilities 108 3,476
The Company profit and loss account has been approved by the directors, and
the use of the exemption under s408 of the Companies Act has been applied to
publish an individual profit & loss statement.
These financial statements were approved and authorised for issue by the board
of directors on 30(th) June 2023 and were signed on its behalf by:
Jonathan Rowland
Chairman
Company Statement of Changes in Equity
Note Share capital Merger Relief Reserve Share premium Accumulated deficit SBP Reserve Total equity
£'000 £'000 £'000 £'000 £'000
As at 31 December 2020 806 26,940 11,091 (278) 315 38,874
Shares issued (incl Placing) 108 - 5,632 - - 5,740
Share Option Reserve - - - - 743 743
Loss for Year - - - (41,919) - (41,919)
As at 31 December 2021 915 26,940 16,723 (42,197) 1,058 3,438
Shares issued 114 - 327 - - 442
Share Option Reserve - - - 981 (981) -
Loss for Year - - - (5,701) - (5,701)
As at 31 December 2022 1,029 26,940 17,050 (46,917) 77 (1,821)
Share capital is the amount subscribed for shares at nominal value.
Merger relief reserve is the excess over the nominal value for shares issued
as part of a share-for-share exchange.
The accompanying notes are an integral part of these financial statements.
NOTES TO THE COMPANY FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
1. General information
Mode Global Holdings Plc is an investment company incorporated by shares in
the United Kingdom. The address of the registered office is Finsgate, 5-7
Cranwood Street, London, United Kingdom, EC1V 9EE. The Company was
incorporated and registered in England and Wales on 5(th) August 2020 as a
public limited company.
As at 31 December 2022 the Company had shareholdings in five entities, a
direct holding in Mode Global Limited, and indirect holdings in JGOO Limited
100%, Greyfoxx Limited 100%, Fibermode Limited (100%) & Fibere Limited
(100%).
2. Accounting policies
Basis of preparation
The financial statements of the parent company have been prepared in
accordance with Financial Reporting Standard 101 'Reduced Disclosure
Framework' ("FRS101") and the requirements of the Companies Act 2006 in
accordance with applicable accounting standards.
These policies have been consistently applied.
The company has taken advantage of the following disclosure exemptions under
FRS 101:
• the requirements of IFRS 7 Financial Instruments: Disclosures;
• the requirements of paragraphs 91-99 of IFRS 13 Fair Value
Measurement;
• the requirements of paragraphs 10(d), 10(f), 16, 38A to 38D, 40A
to 40D, 111 and 134 to 136 of IAS 1 Presentation of Financial Statements;
• the requirements of IAS 7 Statement of Cash Flows;
• the requirements of paragraphs 30 and 31 of IAS 8 Accounting
Policies, Changes in Accounting Estimates and Errors;
• the requirements of paragraphs 17 and 18A of IAS 24 Related
Party Disclosures;
• the requirements in IAS 24 Related Party Disclosures to disclose
related party transactions entered into between two or more members of a
group, provided that any subsidiary which is a party to the transaction is
wholly owned by such a member ; and
• the requirements of paragraphs 130(f)(ii), 130(f)(iii), 134(d)
to 134(f), and 135(c) to 135(e) of IAS 36 Impairment of Assets.
The Company has also taken advantage of the exemption under Section 408 of the
Companies Act 2006 from presenting its own profit and loss account.
The preparation of financial statements, in conformity with FRS101, requires
the use of certain critical accounting estimates. It also requires management
to exercise its judgement in the process of applying the Company's accounting
policies. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the financial
statements, are disclosed in the Company statement of financial position.
Although these estimates are based on management's experience and knowledge of
current events and actions, actual results may ultimately differ from these
estimates.
The estimates and underlying assumptions are reviewed on an on-going basis.
Revisions to accounting estimates are recognised in the period in which the
estimates are revised if the revision affects only that period, or in the
period of the revision and future periods if the revision affects both current
and future periods.
(a) Changes in accounting policies and disclosures
(a) New, amended standards, interpretations not adopted by the Company
● Amendments to IFRS 3 Business Combinations - change in
reference to the conceptual framework (applicable on or after 1 January 2022)
● Amendments to IFRS 17 Insurance Contracts - measurement of
insurance liabilities (applicable on or after 1 January 2023)
● Amendments to IAS 1 Presentation of Financial Statements -
further disclosure requirements including additional detail around accounting
policies (applicable on or after 1 January 2023)
● Amendments to IAS 8 Accounting Policies, Changes in
Accounting Estimates and Errors - definition of accounting estimates
(applicable on or after 1 January 2023)
● A number of narrow-scope amendments to IFRS 3, IAS 16, IAS
17, IAS 37 and some annual improvements on IFRS 1, IFRS 9, IAS 41 and IFRS 16
(applicable on or after 1 January 2022)
* Subject to endorsement
Management has not yet fully assessed the impact of this standard, but does
not believe it will have a material impact on the financial statements.
Financial instruments
Financial assets and financial liabilities are recognised in the statement of
financial position when the Company becomes party to the contractual
provisions of the instrument. Financial assets are derecognised when the
contractual rights to the cash flows from the financial asset expire or when
the contractual rights to those assets are transferred. Financial liabilities
are derecognised when the obligation specified in the contract is discharged,
cancelled or expired.
Trade and other receivables
Trade receivables are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method, less provision
for impairment. Appropriate provisions for estimated irrecoverable amounts are
recognised in the statement of comprehensive income using the expected credit
loss method. The carrying amount of these assets approximates their fair
value.
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, 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.
The carrying amount of these assets approximates their fair value.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the
assets of an entity after deducting all of its liabilities. Equity instruments
issued by the Company are recorded at the proceeds received, net of direct
issue costs.
Trade and other payables
Trade payables are obligations to pay for goods or services that have been
acquired in the ordinary course of business from suppliers. Trade payables are
recognised initially at their fair value and are subsequently measured at
their amortised cost using the effective interest rate method. Due to the
short‑term nature of these balances, the carrying amount of trade payables
approximates to their fair value.
Share capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new ordinary shares or
options are shown in equity as a deduction, net of tax, from the proceeds.
Critical accounting estimates and judgments
The Company makes certain judgements and estimates which affect the reported
amount of assets and liabilities. Critical judgements and the assumptions used
in calculating estimates 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.
In the process of applying the Company's accounting policies, which are
described above, the directors do not believe that they have had to make any
assumptions or judgements that would have a material effect on the amounts
recognised in the financial information.
Financial risk management
The Company's activities may expose it to some financial risks. The Company's
overall risk management programme focuses on the unpredictability of financial
markets and seeks to minimise potential adverse effects on the Company's
financial performance.
Capital risk
The Company takes great care to protect its capital investments. Significant
due diligence is undertaken prior to making any investment. Investments are
closely monitored.
Investments in subsidiary companies
The Company's investment in its subsidiaries is carried at cost less provision
for any impairment. Investments denominated in foreign currency are recorded
using the rate of exchange at the date of acquisition.
Impairment of investments in subsidiaries
The Company assesses investments for impairment whenever events or changes in
circumstances indicate that the carrying value of an investment may not be
recoverable. If any such indication of impairment exists, the Company makes an
estimate of the recoverable amount. If the recoverable amount of the
cash-generating unit is less than the value of the investment, the investment
is considered to be impaired and is written down to its recoverable amount. An
impairment loss is recognised immediately in the profit and loss account.
3. Notes to the financial statements
3.1 Net amounts due from subsidiaries
Year ended Year ended
31-Dec-22 31-Dec-21
£'000 £'000
Amounts due from subsidiaries 19,740 13,394
Impairment provision (19,740) (13,394)
Net amounts due from subsidiaries - -
During the period, management reviewed the future cash flow projections and
market value of Mode Group Holdings Plc's subsidiary undertakings and deemed
it appropriate to pass an impairment provision to reduce their values to nil.
Management will continue to review the forecasts of the subsidiary
undertakings and assess whether it is appropriate to reverse this impairment
charge in future periods.
3.2 Capital risk management
The directors' objectives when managing capital are to safeguard the Company's
ability to continue as a going concern in order to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital. At the date of this financial
information, the Company had been financed by the introduction of capital. In
the future, the capital structure of the Company is to consist of borrowings
and equity attributable to equity holders of the Company, comprising issued
share capital and reserves.
3.3 Investments in subsidiary undertakings
The principal undertakings in which the Company has an interest at the
period-end is as follows:
Name Country of incorporation Holding Ownership Nature of Business
Mode Global Limited United Kingdom Direct 100% Holding Company
JGOO Limited* United Kingdom Indirect 100% Global Payments Platform
Fibermode Limited** United Kingdom Indirect 100% Mode Digital Wallet (including Cryptocurrency)
Greyfoxx Limited* United Kingdom Indirect 100% Mode for Business
Fibere Limited* United Kingdom Indirect 100% Mode Apparel Store
*- direct 100% investments of Mode Global Limited
**-direct 100% investment of Greyfoxx Limited
Share in group undertakings
31-Dec-22 31-Dec-21
£'000 £'000
At period start (1 January) - 27,490
Additions 5,805 -
Impairment (5,805) (27,490)
At period end (31 December) - -
During the period, management reviewed the future cash flow projections and
market value of Mode Group Holdings Plc's subsidiary undertakings and deemed
it appropriate to pass an impairment to reduce their values to nil. Management
will continue to review the forecasts of the subsidiary undertakings and
assess whether it is appropriate to reverse this impairment charge in future
periods.
3.4 Share capital
For details of the share capital see Note 14 of the consolidated financial
statements.
3.5 Related party transactions
During the year ended 31 December 2022 and 2021, there were no related party
transactions that occurred other than disclosed in note of the consolidated
financial statements.
3.6 Merger relief reserve
The merger relief reserve was created to recognise the excess over par value
of the shares issued as part of the share-for-share exchange with the previous
shareholders of Mode Global Limited.
3.7 Share-based payment reserve
See Note 15 of the consolidated financial statements.
3.8 Contingent liabilities
The Company has no contingent liabilities in respect of legal claims arising
from the ordinary course of business.
3.9 Capital commitments
There was no capital expenditure contracted for at the end of the reporting
period but not yet incurred.
3.10 Ultimate controlling party
There is no ultimate controlling party of the Company.
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