REG - Satsuma Tech PLC - Unaudited Interim Results
28/11/2025 13:45
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RNS Number : 4942J Satsuma Technology PLC 28 November 2025
This announcement contains information which, prior to its disclosure, was
inside information as stipulated under Regulation 11 of the Market Abuse
(Amendment) (EU Exit) Regulations 2019/310 (as amended). Upon the publication
of this announcement via a Regulatory Information Service, this inside
information is now considered to be in the public domain.
Satsuma Technology Plc
('Satsuma' or the 'Company')
Unaudited Interim Results
for the Period 1 March 2025 to 31 August 2025
Satsuma Technology PLC (LSE: SATS), a publicly listed technology company, with
diverse Bitcoin operations, today announces unaudited interim financial
statements for the period from 1 March 2025 to 31 August 2025.
Operational and financial highlights
· £169 million raised via convertible loan notes ("CLNs")
· Treasury holdings include 1,153.328 Bitcoin plus cash and cash
equivalents of approximately £60.6 million as at 31 August 2025
· Higher utilisation of the Tao subnet and increasing revenues with plans
for further expansion of operating businesses
· 73,567,665 warrants were exercised during the period
Corporate highlights
· Significant progress made in establishing the highest standards of
infrastructure and governance
· Appointment of Andrew Smith as CFO and Michael Jadeja as General
Counsel, bringing FTSE100 and FTSE250 experience to the business
· Appointment of BDO LLP as Company auditors
Listing and conversion of CLNs
· Appointment of Canaccord Genuity Limited and Latham & Watkins
as Sponsor and legal advisor (respectively), to advise on its proposed move to
the Equity Shares (Commercial Companies) Category of the Official List
("Uplisting") of the Financial Conduct Authority ("FCA")
· Ongoing discussions with FCA regarding the Uplisting; Satsuma aims
to complete the Uplisting on or before 30 December 2025
· 53% of CLN 2 and 100% of CLN 1 holders have extended the long-stop
date from 30 September 2025 to 30 December 2025 and whose CLNs will
automatically convert into shares on completion of the Uplisting
Henry K. Elder, CEO, commented:
"These results reflect a period of significant operational and financial
evolution for Satsuma. We have strengthened our treasury with substantial
Bitcoin and cash reserves, while simultaneously putting in place the
governance structures and advisory team required for a company of our
ambition. With this institutional foundation now established, we are fully
focused on the finalisation of the Uplisting process."
Update on CLNs and Admission
On 25 September 2025 the Company announced that it would seek the Uplisting,
being the admission to the Equity Shares (Commercial Companies) segment of the
Official List of the FCA. This requires the Company to prepare an FCA-approved
prospectus, appoint a sponsor and meet the FCA's eligibility criteria for
admission to the Equity Shares (Commercial Companies) segment of the Official
List of the FCA. Since then, the Company has appointed Andrew Smith as CFO,
Canaccord Genuity as sponsor, retained Latham and Watkins as legal adviser and
appointed BDO as its auditor and reporting accountants. It has also appointed
Michael Jadeja, ex FTSE100 and FTSE250, as General Counsel. The Company
remains in discussions to strengthen its board of Directors with further
non-executive directors with appropriate experience and expertise.
The Board and its advisers have made significant progress with the Uplisting,
have submitted drafts of the prospectus to the FCA over recent weeks and
remain in discussion with the FCA on eligibility and the approval of the
Prospectus. The Board continues to work towards completing the Uplisting by 30
December 2025, subject to regulatory approvals.
As previously announced, conversion of the CLNs was conditional upon, among
other things, a prospectus being approved by the FCA for the admission of the
ordinary shares to be issued in connection with the CLNs to trading on the
London Stock Exchange's main market for listed securities by 30 September 2025
(i.e the 'Long Stop Date') which was not achieved. The original Long Stop Date
of CLN 1 was 31 August 2025 but was subsequently amended to 30 September 2025
through a deed of amendment. Subject to the further discussions with the CLN
holders (see below), all of the CLNs would mature and require repayment on 30
and 31 December respectively.
Scenario 1 - an FCA-approved prospectus is published on or before 30 December
2025
In the announcement of 25 September 2025, the Board anticipated that a
significant number of CLN holders by value would elect to convert to ordinary
shares notwithstanding their entitlement to repayment on 31 December 2025.
This has proven to be the case and as at 27 November 2025, being the latest
practicable date prior to the publication of this announcement, £91.8 million
by nominal value representing 53% of the CLN 2, and 100% of CLN 1, have
irrevocably committed to convert into ordinary shares on the same terms,
conditional on the FCA approving the Prospectus for the admission of the
Ordinary shares to be issued in connection with the CLNs to trading on the
London Stock Exchange plc's main market for listed securities on or prior to
30 December 2025.
The Company remains in discussion with a number of CLN holders to obtain
further irrevocable undertakings. Based on the current level of irrevocable
undertakings on approval of a prospectus by the FCA on or before 30 December
2025 for the admission of the ordinary shares to be listed in connection with
the CLNs to trading on the London Stock Exchange plc's main market for listed
securities, the Company would remain liable to repay the CLNs which do not
convert, which would require the Company to make a payment of £77.7 million
on 31 December 2025. The Company intends to fund this payment from its cash
reserves and raising finance against, or ultimately selling, some of its BTC
holdings.
Scenario 2 - an FCA-approved prospectus is not published by the Company on or
before 30 December 2025
If a prospectus is not approved on or before 30 December 2025 all of the CLNs
will mature on 30(th) December and require repayment on 31 December 2025,
unless there is a further agreement with the CLN holders. The total repayment
due on 31 December would amount to £168.9 million.
As at 27 November 2025 date, following the recent fall in the price of BTC,
the Company had BTC holdings of £82.9 million (being 1,199 BTC at a price of
£69.1k) and cash of £30.4 million. In addition to the BTC and cash holdings,
the Company also has £19.4 million held in a stablecoin (USDC) pegged to the
dollar which is instantly convertible into cash and which the board considers
to be equivalent to cash. This represents a shortfall of approximately £36.2
million against the obligation to repay investors. However, the Board notes
that the price of BTC can vary significantly and this shortfall may increase
or reduce depending on the prevailing price of BTC.
While the company is working diligently to complete the Uplisting, the
Uplisting is subject to approval by the FCA of the Company's prospectus and
eligibility for admission to the Equity Shares (Commercial Companies) segment
of the Official List of the FCA. Therefore, there is no certainty that it will
proceed or will be completed on or prior to 30 December 2025. If a prospectus
for the admission of the ordinary shares to be issued in connection with the
CLNs to trading on the London Stock Exchange's main market for listed
securities is not approved by the FCA by 30 December 2025, and absent an
alternative agreement with the CLN holders, the Company would be required to
repay £168.9 million. If there were no alternative funding available to the
Company nor significant appreciation in the price of BTC, the Company would
have to consider some form of insolvency proceedings and investors are
unlikely to receive full repayment of the amounts owed to them pursuant to the
CLNs.
Principal Risks and Uncertainties
Principal risks and uncertainties have evolved since the FY25 annual report
due to the adoption of the Company's Bitcoin treasury management strategy, the
issuance of convertible loan notes, and the planned admission to the Equity
Shares (Commercial Companies) segment of the Official List of the FCA and to
trading on the London Stock Exchange plc's main market for listed securities.
These include significant market volatility in digital assets, execution of
the admission process, and liquidity management. Further details can be found
in Notes 3, 4 and below.
The principal risks and uncertainties that have changed since the previous
audited financial statements are described as follows:
Bitcoin Price Volatility & Digital Asset risk
· The Company's Bitcoin accumulation strategy exposes the Company to
various risks, including risks associated with Bitcoin that could have a
material adverse impact on the Company's business, financial condition,
results or future operations.
· Bitcoin and other digital assets are novel assets, and are subject
to significant legal, commercial, regulatory and technical uncertainty which
could adversely impact their price.
Liquidity and Treasury Management Risk
· The Company's Bitcoin holdings are less liquid than the Company's
existing cash and may not be able to serve as a source of liquidity for the
Company to the same extent as cash.
· Execution of the Company's Bitcoin accumulation strategy may impact
liquidity.
Counterparty and Custody Risk
· The Company is subject to counterparty risks, particularly in
relation to its custodians and non-performance by such counterparties may
impact the Company's operations.
Business Model & Early-Stage Operational Risk
· The business of the Company is at an early stage and there is no
guarantee it will be successful.
· Risks associated with the Company's ongoing Uplisting process, and
the potential risk that it may not be successful.
Responsibility statement
The condensed consolidated interim financial statements ("interim financial
statements") have been prepared in accordance with UK-adopted International
Accounting Standard (IAS) 34 Interim Financial Reporting and the relevant
requirements of the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority.
The interim management report detailed above includes a fair review of the
Company and any required related-party disclosures.
Andrew Smith
Director
Enquiries
Satsuma Technology PLC +44 (0)20 3855 8888
Matt Lodge, Chairman
Data Counsel satsuma@datacounsel.uk (mailto:satsuma@datacounsel.uk)
Steffan Williams +44 (0)7767 345 563
William Barker +44 (0)7534 068 657
INDEPENDENT REVIEW REPORT TO SATSUMA TECHNOLOGY PLC
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed consolidated set of financial statements in the
half-yearly financial report for the six months ended 31 August 2025 is not
prepared, in all material respects, in accordance with UK adopted
International Accounting Standard 34 and the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct Authority.
We have been engaged by the group to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 31
August 2025 which comprises the condensed consolidated statement of
comprehensive income, the condensed consolidated statement of financial
position, the condensed consolidated statement of changes in equity, the
condensed consolidated statement of cash flows and the notes to the condensed
financial statements.
Basis for conclusion
We conducted our review in accordance with the International Standard on
Review Engagements (UK) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" ("ISRE (UK) 2410"). A
review of interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting matters, and
applying analytical and other review procedures. A review is substantially
less in scope than an audit conducted in accordance with International
Standards on Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit opinion.
As disclosed in note 1, the annual financial statements of the group are
prepared in accordance with UK adopted international accounting standards. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with UK adopted International
Accounting Standard 34, "Interim Financial Reporting.
Material Uncertainty related to going concern
We draw attention to Note 3 to the financial statements which indicates that
there is uncertainty regarding whether or not the group will be able to settle
it's convertible loan note (CLN) financial obligations as they fall due. There
is uncertainty over the quantum of CLNs that will be required to be settled in
cash, the timing of these cash flows and the approach the group will use to
settle these liabilities. As stated in Note 3, these events or conditions,
along with other matters as set forth in Note 3, indicate that a material
uncertainty exists that may cast significant doubt on the group's ability to
continue as a going concern. The financial statements do not include any
adjustments that would result from the basis of preparation being
inappropriate.
Our opinion is not modified in respect of this matter.
Based on the review procedures performed in accordance with ISRE (UK) 2410, we
have concluded that the Director's use of the going concern basis of
accounting in the preparation of the financial statements is appropriate.
Responsibilities of directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible
for assessing the group's ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the group
or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the review of the financial information
In reviewing the half-yearly report, we are responsible for expressing to the
group a conclusion on the condensed set of financial statement in the
half-yearly financial report. Our conclusion, including our Conclusions
Relating to Going Concern, are based on procedures that are less extensive
than audit procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
Our report has been prepared in accordance with the terms of our engagement to
assist the group in meeting the requirements of the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct Authority and for
no other purpose. No person is entitled to rely on this report unless such a
person is a person entitled to rely upon this report by virtue of and for the
purpose of our terms of engagement or has been expressly authorised to do so
by our prior written consent. Save as above, we do not accept responsibility
for this report to any other person or for any other purpose and we hereby
expressly disclaim any and all such liability.
BDO LLP
Chartered Accountants
London, UK
28 November 2025
BDO LLP is a limited liability partnership registered in England and Wales
(with registered number OC305127).
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE 6 MONTH PERIOD ENDING 31 AUGUST 2025
Unaudited Unaudited
Period ending 31 August 2025 Period ending 31 August 2024 Year ending
28 Feb 2025
Notes £'000 £'000 £'000
Continuing Operations
Revenue 10 - 1
Cost of Sales - - -
Gross Profit 10 - 1
Administrative expenses (2,110) (383) (709)
Revaluation loss on cryptocurrencies 6 (8,822) - -
Operating loss (10,922) (383) (708)
Finance Costs 12 (2,899) - -
Fair value loss on derivative financial instruments 13 (11,583) - -
Foreign Currency (loss) (531) - -
Loss before taxation (25,935) (383) (708)
Taxation on loss of ordinary activities - - -
Loss for the period from continuing operations (25,935) (383) (708)
Other comprehensive income (24) - -
Total comprehensive loss for the period attributable to shareholders from
continuing operations
(25,959) (383) (708)
Basic loss per share (pence) 5 (5.49) (0.10) (0.18)
Diluted loss per share (pence) 5 (1.14) (0.10) (0.18)
The notes set-out below form an integral part of the condensed interim
financial statements.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 AUGUST 2025
Company No. 13279459
Unaudited Unaudited
As At As at As At
31 August 2025 31 August 2024 28 Feb 2025
Notes £'000 £'000 £'000
NON-CURRENT ASSETS
Intangible assets 6 92,489 - 45
Investments 7 - - 250
Investments - Held for Sale 7 250 - -
TOTAL NON-CURRENT ASSETS 92,739 - 295
CURRENT ASSETS
Cash and cash equivalents 60,554 318 31
Trade and other receivables 8 143 32 25
TOTAL CURRENT ASSETS 60,697 350 56
TOTAL ASSETS 153,436 350 351
EQUITY
Share capital 9 528 379 454
Share Premium 9 6,020 4,880 4,880
Warrants Reserve 10 426 704 743
Revaluation Reserve 21 - 45
Other reserves 30 - -
Convertible loan note reserve 12 7,852 - -
Retained Earnings (31,853) (5,910) (6,235)
TOTAL EQUITY (16,976) 53 (113)
CURRENT LIABILITIES
Trade and other payables 11 2,707 297 464
Convertible Loan Note 1 12 4,876 - -
Convertible Loan Note 2 12 151,246 - -
TOTAL CURRENT LIABILITIES 158,829 297 464
NON-CURRENT LIABILITIES
CLN 1 - Seed Warrants Derivative Liability 12 10,313 - -
Broker Warrants - Derivative Liability 12 1,270 - -
TOTAL LIABILITIES 170,412 297 464
TOTAL EQUITY AND LIABILITIES 153,436 350 351
The notes on set-out below form an integral part of the condensed interim
financial statements.
The condensed interim financial statements were approved and authorised by the
Board of Directors on 28 November 2025 and were signed on its behalf by:
Andrew Smith Director
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE 6 MONTH PERIOD ENDING 31 AUGUST 2025
Share Capital Share Premium Warrants reserve Revaluation Reserve Other reserves Convertible Loan Note reserve Retained Earnings Total Equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance as at 1 March 2024 379 4,880 704 - - - (5,527) 436
Loss for period - - - - - - (383) (383)
Other comprehensive income - - - - - - - -
Total comprehensive income for period - - - - - - (383) (383)
Balance as at 31 August 2024 379 4,880 704 - - - (5,910) 53
Loss for period - - - - - - (325) (325)
Other comprehensive income - - - - - - - -
Total comprehensive income for period - - - - - - (325) (325)
Transactions with owners in own capacity:
Ordinary shares issued 75 - - - - - - 75
Share based payments - - 39 - - - 39
Changes in reserves - - - 45 - - - 45
Total transactions with owners in own capacity 75 - 39 45 - - - 159
Balance as at 28 February 2025 454 4,880 743 45 - - (6,235) (113)
Loss for period - - - - - - (25,935) (25,935)
Other comprehensive income - - - (24) - - - (24)
Total comprehensive income for period - - - (24) - - (25,935) (25,959)
Transactions with owners in own capacity
Ordinary shares issued 74 1,140 - - - - - 1,214
Exercise of warrants (317) - 317 -
Convertible Loan Note reserve - - - - - 7,852 - 7,852
Changes in reserves - - - - 30 - 30
Total transactions with owners in own capacity 74 1,140 (317) - 30 7,852 317 9,096
Balance as at 31 August 2025 528 6,020 426 21 30 7,852 (31,841) (16,976)
CONDENSED CONSOLIDATED STATEMENT OF CASHFLOWS
FOR THE 6 MONTH PERIOD ENDING 31 AUGUST 2025
Unaudited Unaudited
Period ending 31 August 2025 Period ending 31 August 2024 Year ending
28 Feb 2025
£'000 £'000 £'000
Cash flows from operating activities
Loss for period (25,959) (383) (707)
Adjustments for:
Impairment - - 45
Revaluation loss on cryptocurrencies 8,846 - -
Services settled by issue of warrants 266 - 39
Finance Costs (non-cash unwinding of CLN discount) 2,899 - -
Fair value loss on derivative financial instruments 11,583
Changes in working capital:
(Increase)/Decrease in trade and other receivables (118) 23 30
Increase in trade and other payables 543 113 279
Net cash used in operating activities (1,940) (247) (314)
Cash flows used in investing activities
Purchase of intangible assets (4,500) - (45)
Investments - - (250)
Net cash flows used in investing activities (4,500) - (295)
Cash flows from financing activities
Share issue, net of issue costs 973 - 75
Cash proceeds from Issue of Convertible Loan Notes 66,035 - -
Net cash flows generated from financing activities 67,008 25 -
Net increase/(decrease) in cash and cash equivalents 60,568 (247) (534)
Cash and cash equivalents at beginning of the period 31 565 565
Foreign exchange impact on cash (45) - -
Cash and cash equivalents at end of the period 60,554 318 31
Non-cash financing transaction: Part of the proceeds relating to the
Convertible Loan Notes (CLN 2) were satisfied through the transfer of Bitcoin.
This non-cash component is excluded from the cash flow statement in accordance
with IAS 7. Further details are provided in Note 12.
During the period, £1.7 million of transaction costs relating to the CLN
financing were transferred from the condensed consolidated statement of
comprehensive income to the carrying amount of the convertible loan note in
accordance with IFRS 9. This adjustment is non-cash in nature and is therefore
excluded from the operating and financing cash flows presented above.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR THE 6 MONTH PERIOD ENDING 31 AUGUST 2025
1 General information
Satsuma Technology Plc (formerly TAO Alpha Plc) is a public limited company
incorporated in England and Wales and domiciled in the United Kingdom. The
registered office and principal place of business is 9(th) Floor, 16 Great
Queen Street, London WC2B 5DG. The Company was incorporated on 19 March 2021.
On 2 July 2025, the Company announced its intention to change its name to
Satsuma Technology PLC (Ticker SATS). The Company's TIDM has changed from
"TAO" to "SATS" from 14 July 2025. The Company's website has been changed
to www.satsuma.digital.
The Company is a publicly listed technology company with diverse operations in
the decentralised digital cryptocurrency known as Bitcoin ("BTC"). The Company
currently operates a decentralised artificial intelligence ("AI") business
focused on publicly traded companies known to hold Bitcoin, and is developing
a Bitcoin staking business. The Company's strategy is to continue to develop
or acquire operating businesses that support the accumulation and utilisation
of Bitcoin held in the Company's treasury. The Company is currently working
towards admission of the ordinary shares to listing on the Equity Shares
(Commercial Companies) segment of the Official List of the FCA, and to trading
on the main market for listed securities of the London Stock Exchange, from
the equity shares (Transition) category (the 'Uplisting').
During the period a new subsidiary entity, Satsuma Technology Pte Ltd (now
called STT1 PTE Ltd) was incorporated in Singapore for the purposes of
supporting the Group's treasury operations in a tax and regulatorily
favourable jurisdiction. STT1 PTE Ltd is a wholly owned subsidiary of
Satsuma Technology Plc, and its results have been consolidated in accordance
with applicable accounting standards, aligned with the accounting policies
adopted and implemented by the Group. The figures for the period represent the
consolidated results for the period since incorporation of the subsidiary to
and at the Balance Sheet date.
Significant events and transactions
During the period, the Group has entered into a number of transactions, and
experienced events, that are significant to understanding the changes in its
financial position and performance since the end of the last annual reporting
period. These include the impact of its acquired Bitcoin treasury reserve, and
movements within, alongside significant transactions associated in relation to
financing these, most notably being the CLNs. Further information on the
extent of these transactions can be found further above and further below.
The Group has experienced significant events, some of which remain ongoing,
which have a significant impact on the Group's current financial position. The
most notable events are described in at the beginning of these interim
financial statements.
2 Accounting policies
IAS 8 requires that management shall use its judgement in developing and
applying accounting policies that result in information which is relevant to
the economic decision-making needs of users, that are reliable, free from
bias, prudent, complete and represent faithfully the financial position,
financial performance and cash flows of the entity.
Details of the Group's Accounting Policies can be found in the audited annual
financial statements ("annual financial statements") for the year ended 28(th)
February 2025. Further information on the significant accounting policies
applied when preparing these condensed consolidated interim financial
statements can be found within Note 2.1 below.
2.1 Basis of preparation
The condensed consolidated interim financial statements ("interim financial
statements") have been prepared in accordance with UK-adopted International
Accounting Standard (IAS) 34 Interim Financial Reporting and the relevant
requirements of the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority. The interim financial
statements have been prepared on the historical cost basis, except for assets
and liabilities measured at fair value through profit and loss, and are
presented in pounds sterling (£). All amounts have been rounded to the
nearest £'000, unless otherwise stated.
The condensed interim financial statements have been prepared on a going
concern basis. As described in Note 3 - Going concern, certain events and
conditions indicate the existence of a material uncertainty which may cast
significant doubt upon the Group's ability to continue as a going concern.
Notwithstanding this material uncertainty, the Directors consider that the
going concern basis of preparation remains appropriate for these condensed
interim financial statements for the reasons set out in Note 3.
The interim financial statements have not been audited. The interim financial
statements do not constitute statutory accounts within the meaning of section
434 of the Companies Act 2006. The figures have been prepared using applicable
accounting policies and practices consistent with those adopted in the audited
annual financial statements for the year ended 28 February 2025.
The interim financial statements are for the six months ending 31 August 2025,
being six months from the financial year end for the Company being 28 February
2025. The interim financial statements do not include all the information and
disclosures required in the annual financial statements and should be read in
conjunction with the Company's annual financial statements for the period
ended 28 February 2025. The Company has disclosed comparative information for
the period from 1(st) March 2024 to 31 August 2024, as well as audited figures
from the annual financial statements.
The functional currency for the Company is determined as the currency of the
primary economic environment in which it operates. Both the functional and
presentational currency of the Company is Pounds Sterling (£).
The functional currency of the Company's subsidiary, STT1 PTE Ltd, is the
Singapore Dollar (SGD), reflecting the primary economic environment in which
it operates. For the purpose of the Group's interim consolidated financial
statements prepared in accordance with IAS 34 Interim Financial Reporting, the
results and financial position of the subsidiary are translated into GBP in
accordance with the requirements of IAS 21 The Effects of Changes in Foreign
Exchange Rates.
· Income and expenses of the subsidiary are translated at the
average exchange rate for the reporting period, unless such average is not a
reasonable approximation of the rates prevailing on the transaction dates, in
which case the spot rate at the transaction date is used.
· Assets and liabilities are translated at the closing exchange
rate at the reporting date.
· Share capital and other components of equity are translated at
the historical rates prevailing on the dates of the original transactions.
· Exchange differences arising from the translation of the
subsidiary's financial statements are recognised in Other Comprehensive Income
(OCI) and accumulated in the foreign currency translation reserve within
equity. These translation differences are not reclassified to profit or loss
except on disposal of the foreign operation.
The translation methodology has been applied consistently throughout the
interim period.
A number of new or amended accounting standards and interpretations became
effective for the current interim period; however, none of these had a
material effect on the Group's accounting policies, methods of computation, or
reported amounts in these condensed interim financial statements.
No new standards or amendments issued but not yet effective have been early
adopted by the Group.
Intangible Assets
Cryptocurrencies, including Bitcoin, are classified as intangible assets in
accordance with IAS 38 Intangible Assets. They are identifiable non-monetary
assets without physical substance and do not meet the definition of cash or a
financial asset. The Group holds cryptocurrencies for treasury and strategic
purposes rather than for sale in ordinary course of business.
Cryptocurrencies are initially recognised at cost, comprising the purchase
price and any directly attributable transaction costs. As an active market (as
defined in IAS 38.8, see Note 4) exists for the Group's cryptocurrency
holdings, they are subsequently measured using the revaluation model. Under
this model, cryptocurrencies are carried at fair value at each reporting date,
with fair value being determined by reference to quoted prices in the active
market at the reporting date.
Upward revaluation movements are recognised in Other Comprehensive Income
(OCI) and accumulate in the Revaluation Reserve, except to the extent they
reverse a previous downwards revaluation recognised in profit or loss.
Downward revaluation movements are recognised in profit or loss, except to the
extent that they reverse a previous upward revaluation relating to the same
asset, in which case the decrease is recognised in OCI.
On disposal of cryptocurrencies, any related balance within the Revaluation
Reserve is transferred directly to retained earnings and not recycled through
profit or loss.
Under the revaluation model, cryptocurrencies are not amortised but are
subject to an impairment review when there is an indication of impairment.
Impairment losses are recognised in profit or loss unless they reverse
previous upward revaluations relating to the same asset, in which case the
loss is recognised in OCI.
Purchases and disposals in cryptocurrencies are classified as investing
activities.
Cash and cash equivalents
Cash and cash equivalents comprise cash held with banks and are available for
immediate use. There were no significant restrictions, changes in credit risk,
or other matters requiring additional disclosure for the interim period.
As required by IAS 34, only information relevant to understanding the Group's
financial position and performance for the current interim period has been
presented. No further disclosures have been provided as there have been no
material changes to the nature, composition or risk profile of cash and cash
equivalents since the last annual reporting date.
The Group does not hold cash equivalents with significant risk of changes in
value.
Financial Instruments - General
The Group recognises financial assets and financial liabilities when it
becomes a party to the contractual provisions of an instrument, in accordance
with IFRS 9 Financial Instruments. All financial instruments are initially
measured at fair value. Subsequent measurement depends on the classification
of each instrument, determined by reference to the Group's business model and
the contractual cash flow characteristics.
Where relevant, fair value measurement is performed in accordance with IFRS 13
Fair Value Measurement, which requires valuation techniques that maximise the
use of observable inputs. Where observable inputs are unavailable, Level 3
unobservable inputs are applied using market-participant assumptions.
Convertible Loan Notes (CLNs)
The Group assesses the classification and measurement of its Convertible Loan
Notes ("CLNs") in accordance with IAS 32 Financial Instruments: Presentation
and IFRS 9. Depending on their terms, a CLN may contain:
· a liability component, where the Group has a contractual
obligation to deliver cash;
· an equity component, where the conversion feature meets the
fixed-for-fixed criterion in IAS 32; and
· an embedded or freestanding derivative, where settlement outcomes
are variable or depend on non-market or contingent conditions.
Compound financial instruments
Where a CLN contains both liability and equity components, it is classified as
a compound financial instrument. The liability component is initially
recognised at the present value of future contractual cash flows discounted at
a market rate for a comparable non-convertible instrument. The equity
component represents the residual amount and is recognised directly in equity;
it is not remeasured subsequently.
Embedded and freestanding derivatives
Features that do not meet the fixed-for-fixed requirement or whose value is
determined by non-market or contingent events are assessed to determine
whether they represent:
· an embedded derivative that must be separated from the host
instrument; or
· a standalone (freestanding) derivative liability.
Material embedded or freestanding derivatives are measured at fair value
through profit or loss ("FVPL").
CLN 1 - Liability Instrument with Freestanding Derivative (Seed Warrants)
CLN 1 was issued on 17 June 2025 with a principal amount of £5,000,000. It
contains:
· a fixed-price conversion feature contingent upon the satisfaction
of listing conditions, including publication of a prospectus and admission of
the conversion shares to the London Stock Exchange's Main Market; and
· a warrant entitlement ("Seed Warrants") linked to the level of
subscriptions achieved under CLN 2.
Classification
At initial recognition:
· the fixed-price conversion feature met the fixed-for-fixed
requirement;
· the associated equity component was assessed as immaterial; and
· the warrant feature was contingent on the outcome of CLN 2 and
therefore was not yet a legally enforceable obligation.
CLN 1 is presented as a host liability measured at amortised cost, with a
related equity component recognised at inception. Following the completion of
CLN 2, the contingent warrant entitlement under CLN 1 became a legally
enforceable obligation and is now recognised separately as a freestanding
derivative liability. The warrant derivative is not a component of the CLN 1
host instrument and is measured at fair value through profit or loss.
Transaction costs relating to CLN 1 were immaterial and expensed as incurred.
CLN 2 - Compound Financial Instrument
CLN 2 was issued on 28 July 2025 with a principal amount of £163,949,000. It
contains:
· a host debt liability; and
· a fixed-price conversion feature that meets the fixed-for-fixed
requirement and is therefore classified as an equity component.
The liability component is initially recognised at the present value of
contractual cash flows discounted at a market interest rate (management
estimate: 11%).
Transaction costs
Directly attributable transaction costs incurred in relation to the issue of
CLN 2 have been recognised in accordance with IFRS 9 5.1.1, where relevant
amounts were allocated between the liability and equity components of CLN 2 in
proportion to their respective initial fair values, in accordance with IFRS 9
and IAS 32. The portion allocated to the liability component is included in
its initial carrying amount and is amortised using the effective interest
method. The portion allocated to the equity component has been recognised
directly in equity and is not subsequently remeasured.
CLN 2 carries no contractual coupon. Accordingly, subsequent finance charges
represent only the unwinding of the initial discount and transaction costs
using the effective interest method.
The liability is derecognised on repayment or conversion. The equity component
remains within equity.
Warrant Derivatives (Seed Warrants and Broker Warrants)
Upon the closing of CLN 2, holders of CLN 1 became entitled to Seed Warrants.
These warrants:
· have fixed exercise prices,
· contain no obligation for the Company to deliver cash,
· are settled in equity instruments, and
· have legally enforceable terms established once CLN 2 closed.
Because the fair value of the warrants fluctuates with the Company's share
price, the Seed Warrants meet the definition of a freestanding derivative
liability and are measured at fair value through profit or loss.
Broker Warrants were also contractually agreed during the period in connection
with CLN 2. These are recognised as separate derivative liabilities at FVPL.
Where the contractual terms provide for cashless exercise, the fair value
incorporates the "intrinsic value" form of settlement as required by IFRS 13.
Both sets of warrants are Level 3 fair value measurements given the reliance
on unobservable inputs (volatility, credit spread and expected term).
Fair Value Measurement (IFRS 13)
Fair value is determined using valuation techniques appropriate to the
instrument's characteristics. Where applicable, the Group uses a Black-Scholes
option pricing model to measure warrant derivatives. Key valuation inputs
include:
· spot price of the Company's shares;
· exercise price;
· expected volatility;
· risk-free rate;
· expected term; and
· an adjustment for the Group's own credit risk.
Inputs that are not observable in active markets are classified as Level
3.Given the nature of the instruments, significant estimation uncertainty
exists and is disclosed in Note 4.
Interim Reporting (IAS 34)
IAS 34 requires the use of the same accounting policies as the annual
financial statements, subject to the use of reasonable estimates that reflect
the information available at the reporting date. Fair value measurements of
the warrant derivatives reflect conditions existing as at 31 August 2025 and
therefore incorporate significant estimation uncertainty. Such estimates will
be reassessed at year-end when further information becomes available.
2.2 Risks and uncertainties
The principal risks and uncertainties have changed materially due to the
change in business activities since the release of the annual financial
statements for the period ending 28 February 2025. Refer to page 2 for further
information on new risks and uncertainties in addition to referencing the
strategic report contained within the annual financial statements, which were
released on 27 June 2025 and are available on the Company's website. Further
information regarding uncertainties can be found within Notes 3 and 4
accordingly.
3. Going Concern
The condensed interim financial statements have been prepared on a going
concern basis. In forming this judgement, the Directors have considered the
Group's updated cash flow forecasts, available financing facilities and the
reasonably foreseeable risks and material uncertainties facing the business
over a period of at least twelve months from the date of approval of these
financial statements.
As part of this assessment, the Directors have taken into account:
· the Group's cash resources at the reporting date and its forecast
working capital requirements;
· the planned readmission to the London Stock Exchange including the
expected timetable and current status of the planned relisting and associated
fundraising; and
· reasonably possible downside scenarios, including cash outflows
relating to the settlement of Convertible Loan Notes.
The CLNs
The CLNs were originally only automatically converted into shares if listed by
30 September (the "long-stop date"). As at 27 November 2025, 100% of CLN 1
holders have extended the long-stop date from 30 September 2025 to 30 December
2025 (the ("Extending CLN1s"). 53% of CLN 2 holders have extended the
long-stop date from 30 September 2025 to 30 December 2025 (the "Extending
CLN2s"), (together the "Extending CLNs").
As at 27 November 2025 2025, 47% of CLN 2 holders have not yet extended the
long-stop date (the "Non-Extending CLNs").
Scenario 1 - Uplisting completed by 30 December 2025
The Group has continued to make progress with regards to its Uplisting and its
aim remains for this to be completed by 30 December 2025, subject to
regulatory approvals.
On completion of the Uplisting, the Extending CLNs will be converted into
shares. Subject to further discussions, the Non-Extending CLNs will need to be
repaid by 30 December 2025.
If the Uplisting is completed by 30 December 2025, the Group's cash flow
forecasts indicate that it will have sufficient resources to meet liabilities
as they fall due, subject to the timing and amount of any outflows required to
settle the Convertible Loan Notes and the Bitcoin price at the time.
Scenario 2 - Uplisting not completed by 30 December 2025
Should the Uplisting not happen by 30 December 2025, all CLNs will need to be
repaid, subject to further discussions with the CLNs holders. The Group's
resources to meet liabilities as they fall due will be subject to the timing
and amount of any outflows required to settle the CLNs and the Bitcoin price
at the time.
Going concern
The Directors note that both the timing and the quantum of the potential
outflows in both Scenario 1 and Scenario 2 gives rise to uncertainty.
Should the Group not have sufficient cash resources it will consider external
financing arrangements prior to the 30 December 2025 in order to meet any
potential funding shortfalls in relation to settling these liabilities. If
required, the Group will dispose of a % of its Bitcoin holdings in order to
fund these outflows. Adverse decreases in the Bitcoin to £ value may, if
required, in absence of any new external funding facilities be introduced,
have a significant impact on the amount of Bitcoin the Group will need to
dispose of should financing arrangements not be utilised.
The Directors are actively pursuing the financing measures necessary to
support the Group's working capital requirements. They have received strong
indications of support from existing loan note holders, as well as expressions
of interest from external finance providers, to provide the funding required.
Given the lack of certainty of the Uplisting and as a result of the matters
discussed immediately above (including the prevailing Bitcoin price), it is
unclear whether or not the Group will be able to settle its convertible loan
note (CLN) financial obligations as they fall due. There is uncertainty over
the quantum of CLNs that will be required to be settled in cash, the timing of
these cash flows and the approach the Group will use to settle these
liabilities. This gives rise to a material uncertainty related to events
or conditions that may cast significant doubt on the Group's ability to
continue as a going concern and, therefore, that it may be unable to realise
its assets and discharge its liabilities in the normal course of business.
Notwithstanding this material uncertainty, given the progress made on the
Uplisting together with the number of CLN holders who have already elected to
extend the long-stop date and the volatility in the Bitcoin price, the
Directors believe that the Group has appropriate plans and actions available
to manage its working capital position and therefore consider the use of the
going concern basis of preparation to remain appropriate.
These conditions indicate the existence of a material uncertainty that may
cast significant doubt on the Group's ability to operate as a going concern.
No adjustments have been made to the carrying amounts of assets and
liabilities in these condensed interim financial statements that would be
required if the Group were unable to continue as a going concern.
4 Critical accounting estimates and judgements
In the application of the Company's accounting policies, the directors are
required to make judgements, estimates and assumptions about the carrying
amount of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual
results may differ from these estimates.
The estimates and underlying assumptions 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. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are significant to the
financial statements, are disclosed below:
Warrants Payments
The Company measures the cost of equity-settled transactions by reference to
the fair value of the equity instruments at the date at which they are
granted. The fair value is determined by using the Black-Scholes model taking
into account the terms and conditions upon which the instruments were granted.
The accounting estimates and assumptions relating to equity-settled warrants
payments would have no impact on the carrying amounts of assets and
liabilities within the next annual reporting period but may impact profit or
loss and equity. There have been no dilutive instruments issued in the period
and the value remains equal to that in the annual financial statements as at
the last reporting period.
Intangible Assets
The Company holds significant balance in cryptocurrencies (as detailed in Note
6). The accounting for cryptocurrencies is an area that involves judgement, as
there is currently no specific IFRS that directly addresses their treatment.
The Group has determined that its cryptocurrency holdings meet the definition
of intangible assets under IAS 38 Intangible Assets, as they are identifiable
non-monetary assets without physical substance and are not financial
instruments. Management has assessed that the cryptocurrencies are not held
for sale in the ordinary course of business and therefore are not classified
as inventory under IAS 2.
Where an active market exists for a particular cryptocurrency held by the
company, the company initially recognises the asset at cost and subsequently
applies a revaluation model. Increases are recognised in Other Comprehensive
Income and accumulated in the Revaluation Reserve, except to the extent that
they reverse a revaluation decrease on the same asset previously recognised in
profit or loss. Decreases in carrying amounts are recognised in profit and
loss except to the extent that they reverse previous upward revaluations
recognised in equity.
The determination of whether an active market exists for a particular
cryptocurrency involves judgement, including an assessment of trading volume,
bid/ask spread, and market participant activity.
Seed Warrants - Valuation uncertainty
The Seed Warrants represent a Level 3 derivative liability. Fair value has
been estimated using an option-pricing model that requires significant
unobservable inputs, including:
· expected share price volatility;
· expected warrant term, based on the date the obligation became
enforceable;
· the Group's own credit risk; and
· the relationship between the contractual exercise price and the
underlying share price.
These inputs involve significant estimation uncertainty, and reasonably
possible changes in assumptions could materially affect the resulting fair
value. The valuation reflects the best information available at the reporting
date.
Broker Warrants - Cashless exercise and fair value estimation
Broker Warrants issued in connection with CLN 2 include cashless-exercise
mechanics. Determining fair value required judgement in:
· selecting an appropriate valuation technique (Black-Scholes
with a cashless-exercise overlay);
· identifying the economic impact of net-share settlement; and
· estimating unobservable inputs similar to the Seed Warrants.
These instruments are also classified as Level 3 under IFRS 13, and the
valuation is subject to the same estimation uncertainties noted above. Refer
to Notes 12 and 13 for further information.
5 Earnings per share
The basic earnings per share is calculated by dividing the loss attributable
to equity shareholders by the weighted average number of shares in issue.
Basic loss per share
Unaudited as at Unaudited as at As at
31 August 2025 31 August 2024 28 Feb 2025
Loss for the period from continuing operations (£'000) (25,959) (383) (708)
Weighted average number of ordinary shares in issue 472,883,263 378,523,683 399,075,001
Basic loss per share for continuing operations (pence) (5.49) (0.10) (0.18)
Diluted loss per share
Unaudited as at Unaudited as at As at
31 August 2025 31 August 2024 28 Feb 2025
Loss for the period and dilutive effect of warrants (25,959) (383) (708)
Weighted average number of ordinary shares and potential shares 2,271,017,575 378,523,683 399,075,001
Diluted loss per share for continuing operations (pence) (1.14) (0.10) (0.18)
Diluted loss per share reflects the impact of dilutive potential ordinary
shares arising from the Group's outstanding Seed and Broker warrants. The
warrants are treated as dilutive in accordance with IAS 33 and have been
included in the calculation of diluted loss per share using the treasury stock
method, which increases the weighted average number of ordinary shares and
potential shares, compared with basic loss per share.
6 Intangible assets
As at 31 August 2025
Intangible asset Type As at 1 March 2025 Additions Revaluations As at 31 August 2025
£'000 £'000 £'000 £'000
Cryptocurrencies 45 101,266 (8,822) 92,489
Total 45 101,266 (8,822) 92,489
As at 28 February 2025
Intangible asset Type As at 1 March 2024 Additions Revaluations As at 28 February 2025
£'000 £'000 £'000 £'000
Cryptocurrencies - 1 44 45
Total - 1 44 45
As at 31 August 2025 the Group held the following Cryptocurrencies in
Treasury:
Cryptocurrency Number Fair Value as at 31 August 2025 £
Bitcoin (BTC) 1,153.32762392 £92,468,042
AROK Tokens 50,000,000 £21,053
£92,489,095
7 Investments
Unlisted Investments Unaudited as at 31 August 2024 As at 28 Feb 2025
Unaudited as at 31 August 2025
£'000 £'000 £'000
Roundhouse Digital - - 250
Roundhouse Digital - Held for sale 250 - -
250 - 250
8 Trade and other receivables
Unaudited At Unaudited At As at
31 August 2025 31 August 2024 28 Feb 2025
£'000 £'000 £'000
Prepayments and other receivables 8 18 11
Social security and other taxation 135 14 14
Total trade & other receivables 143 32 25
9 Share capital and share premium
Ordinary Share Share
Shares Capital Premium Total
# £'000 £'000 £'000
At 28 February 2025 453,732,535 454 4,880 5,334
Issue of share capital 500,000 - 24 24
Issue of share capital 73,567,665 74 1,116 1,190
At 31 August 2025 527,800,200 528 6,020 6,548
The share capital disclosures above relate to issued and fully paid ordinary
shares with a nominal value of £0.001 each. The Company is authorised to
issue share capital of up to £320k, comprising 320,069,912 ordinary shares of
£0.001 each.
At 31 August 2025, the Company was party to contractual arrangements that give
rise to potential future issuances of equity instruments, including Seed
Warrants issued in connection with CLN 1 and Broker Warrants issued in
connection with CLN 2 (see Note 12). These arrangements provide for the future
issue of up to approximately 2.2 billion ordinary shares, subject to the
terms of the respective agreements and satisfaction of all applicable exercise
conditions. No shares relating to these instruments were issued prior to the
reporting date.
The Company did not, at the reporting date, have sufficient unissued share
capital or shareholder authorities in place to settle all such warrants
through the existing headroom. Settlement of these instruments, if exercised,
will therefore require the Company to publish a prospectus and obtain the
necessary approvals.
10 Warrants reserves
The following warrants over ordinary shares have been granted by the Company
and are outstanding at 31 August 2025:
Grant date Expiry date Exercise price Exercisable as at 31 August 2025
18 October 2021 04 January 2026 £0.010 6,700,000
05 January 2023 04 January 2026 £0.060 45,499,000
05 January 2023 04 January 2028 £0.030 5,020,000
26 June 2023 27 June 2026 £0.025 3,333,333
21 November 2024 20 November 2027 £0.002 500,000
04 February 2025 03 February 2028 £0.010 5,000,000
66,052,333
Warrants Reserve As at As at As at
31 August 2025 31 August 2024 28 Feb 2025
£'000 £'000 £'000
Opening balance 743 704 704
Warrants issued in the period - - 39
Warrants exercised in the period (317) - -
Balance at the end of the period 426 704 743
During the period a number of warrants were exercised as detailed in the
table below:
Exercise date Exercise price Number of warrants exercised
24 June 2025 £0.025 6,666,666
25 June 2025 £0.025 9,999,999
9 July 2025 £0.030 1,400,000
12 July 2025 £0.010 15,000,000
12 July 2025 £0.060 4,501,000
25 July 2025 £0.002 20,000,000
25 July 2025 £0.020 11,000,000
25 July 2025 £0.010 5,000,000
73,567,665
The fair value of the share warrant rights granted are valued using the
Black-Scholes option pricing model. The option pricing model assumptions can
be referenced in the annual financial statements.
11 Trade and other payables
Unaudited At Unaudited At As at
31 August 2025 31 August 2024 28 Feb 2025
£'000 £'000 £'000
Trade creditors 1,986 206 311
Accruals 721 91 153
Total trade & other payables 2,707 297 464
The directors consider the carrying value of trade and other payables is equal to their fair value.
12 Financing Instruments
During the period two Convertible Loan Notes were issued (CLN 1 and CLN 2).
CLN 1 is measured at the principal amount outstanding. CLN 2 is measured at
amortised cost using the effective interest method. Refer to Note 2 and Note 4
for further information.
A portion of the proceeds relating to CLN 2 were satisfied through the
transfer of Bitcoin rather than cash and cash equivalents. Accordingly, the
movement in the CLN liability does not correspond directly to the cash flows
presented in the condensed interim statement of cash flows. The Bitcoin
contribution represents a non-cash financing activity and is therefore
excluded from cash flows in accordance with IAS 7.
CLN 1 - Compound Financial Instrument (Liability + Equity)
On 17 June 2025, the Company issued CLN 1 with a principal value of
£5,000,000.
CLN 1 contains:
· a host liability measured at amortised cost;
· an equity component, recognised at inception under the IAS 32
residual method; and
· a warrant entitlement ("Seed Warrants"), which became a
freestanding derivative liability following the completion of CLN 2.
The notes carry no coupon and mature on 30 December 2025. They are secured by
a first-ranking debenture over the assets of the Company. In July 2025, the
Group entered into an agreement with loan-note holders to extend the maturity
date from 30 November 2025 to 30 December 2025, in addition to extending the
'Long Stop' date from 30 August 2025 to 30 September 2025. This modification
was assessed under IFRS 9 and was determined not to result in a substantial
modification of the liability. Accordingly, no changes were required to be
made.
Conversion terms
CLN 1 converts at a fixed price of £0.002 per share upon satisfaction of the
required listing conditions, including publication of a prospectus and
admission of the relevant shares to the London Stock Exchange's Main Market.
Prior to the long-stop date, conversion is mandatory upon the successful
admission event; thereafter, conversion becomes optional for both the Company
and the holder.
Seed Warrants (derivative liability)
Under the terms of CLN 1, holders became entitled to Seed Warrants once CLN 2
raised more than £100 million. CLN 2 closed during the period with
subscriptions of £163,949,000, resulting in the crystallisation of the Seed
Warrants and creating a legally enforceable present obligation.
Because the obligation arose after the initial recognition of CLN 1 and is no
longer contingent, the Seed Warrants are no longer an embedded feature of CLN
1 and are instead recognised as a freestanding derivative liability measured
at fair value through profit or loss.
The fair value of the Seed Warrant derivative at 31 August 2025 is disclosed
in Note 13 (Fair Value Measurement).
Measurement
· The host liability is carried at amortised cost.
· The equity component recognised at inception remains in equity.
· The Seed Warrant derivative is measured at fair value through
profit or loss (see Note 13).
Transaction costs associated with CLN 1 were immaterial and expensed as
incurred.
CLN 2 - Compound Financial Instrument (Liability + Equity)
Overview
On 28 July 2025, the Group issued CLN 2 with a principal value of
£163,949,000. The notes carry no coupon and mature on 30 December 2025. CLN 2
is secured by first-ranking debentures over the assets of the Company and its
wholly owned subsidiary, STT1 PTE Ltd.
Conversion terms
CLN 2 converts at a fixed price of £0.01 per share, contingent on:
· the publication of a prospectus prepared under the Prospectus
Regulation; and
· admission of the relevant shares to the London Stock Exchange's
Main Market (Equity Shares (Transition) category).
Prior to the long-stop date, conversion is mandatory upon admission;
thereafter, conversion becomes optional for both parties. If conversion does
not occur, the notes are repayable at par on maturity.
Classification and Initial Measurement
CLN 2 has been classified as a compound financial instrument containing:
· A liability component, measured initially at the present value
of contractual cash flows discounted at a market rate for similar
non-convertible debt (estimate: 12%).
· An equity component, representing the fixed-price conversion
feature and recognised directly in equity.
Transaction costs
Directly attributable transaction costs of £6,174,000 were rolled into CLN 2
liability. The relevant amounts were allocated between the liability and
equity components of CLN 2 in proportion to their respective initial fair
values, in accordance with IFRS 9 and IAS 32. The portion allocated to the
liability component is included in its initial carrying amount and is
amortised using the effective interest method. The portion allocated to the
equity component has been recognised directly in equity and is not
subsequently remeasured.
Directly attributable transaction costs of £1,592,000, in relation to
placement fees, were recognised as a transaction cost and remain unpaid at the
reporting date, forming part of Accruals disclosed as per Note 11.
The relevant amounts were allocated between the liability and equity
components of CLN 2 in proportion to their respective initial fair values, in
accordance with IFRS 9 and IAS 32. The portion allocated to the liability
component is included in its initial carrying amount and is amortised using
the effective interest method. The portion allocated to the equity component
has been recognised directly in equity and is not subsequently remeasured.
This amount forms part of the non-cash financing cost referred to below the
condensed consolidated statement of cash flows.
Subsequent Measurement
Because CLN 2 carries no coupon, the finance cost recognised in profit or loss
represents solely the unwinding of the initial discount and related
transaction costs using the effective interest method.
The liability is derecognised upon repayment or conversion; the equity
component remains within equity.
Seed Warrants - Quantification of Entitlement
Following the completion of CLN 2, holders of CLN 1 became entitled to
1,599,225,000 Seed Warrants to subscribe for ordinary shares at £0.002 per
share. The fair value of these warrants is measured in accordance with IFRS 13
and presented in Note 13.
As no additional consideration was payable by the noteholders on grant of the
Seed Warrants, no warrant reserve has been recognised in equity.
Carrying Amounts at 31 August 2025
Instrument Classification Carrying Amount (£)
CLN 1 - host liability Amortised cost 4,876,000
CLN 1 - equity component Equity 213,000
Seed Warrant derivative FVPL (Level 3) 10,313,000
CLN 2 - liability component Amortised cost 151,246,000
CLN 2 - equity component Equity 7,852,000
Broker Warrant derivative FVPL (Level 3) 1,270,000
13 Fair Value Measurement
The Group holds two Level 3 derivative liabilities measured at fair value
through profit or loss ("FVPL"):
1. Seed Warrant derivative liability arising from CLN 1
2. Broker Warrant derivative liability issued in connection with CLN 2
Both instruments require valuation using significant unobservable inputs and
are measured in accordance with IFRS 13 Fair Value Measurement. They are
presented separately due to differences in contractual terms, valuation
drivers, and sensitivity behaviour (including the effect of cashless exercise
on the Broker Warrants).
All other financial assets and liabilities are carried at amounts that
approximate fair value.
Valuation Techniques
Seed Warrants (CLN 1)
Valued using the Black-Scholes option pricing model, which reflects:
· fixed exercise price,
· European-style exercise profile,
· no cashless exercise mechanism, and
· a short, expected life from when the obligation became enforceable.
Broker Warrants
Broker Warrants permit cashless (net-share) exercise. Accordingly, valuation
follows a two-step market-participant approach:
1. Black-Scholes fair value of a cash-settled option, then
2. Adjustment for net-share settlement, using the standard proportional
factor:
This adjustment produces a more conservative fair value and reflects the
economic value transferred on net settlement. This approach is consistent with
IFRS 13's market-participant principle and widely used in practice.
Key Inputs and Level 3 Assumptions
Input Seed Warrants Broker Warrants
Spot share price £0.024 £0.024
Exercise price £0.002 £0.0115
Expected term 60 months 60 months
Volatility 80% - 160% 80% - 160%
Risk-free rate ~4.5% ~4.5%
Own-credit spread 10% - 30% 10% - 30%
Dividend yield 0% 0%
Cashless exercise No Yes - cashless factor applied
Fair Value Hierarchy
Instrument Classification Level Valuation approach
Seed Warrant derivative FVPL liability Level 3 Black-Scholes
Broker Warrant derivative FVPL liability Level 3 Black-Scholes + cashless overlay
Fair Value at 31 August 2025
Instrument £
Seed Warrant derivative 10,313,439
Broker Warrant derivative 1,270,147
Total warrant derivative liabilities 11,583,586
Reconciliation of Level 3 Movements
Seed Warrants Broker Warrants £ Total
£ £ £
Opening balance - - -
Initial recognition 10,313,439 1,270,147 11,583,586
Fair value movement (P&L) 10,313,439 1,270,147 11,583,586
Closing balance 10,313,439 1,270,147 11,583,586
Fair value gains/losses are recognised within Fair value loss on derivative
financial instruments.
Sensitivity Analysis
Seed Warrants (CLN 1) - Sensitivity Analysis
The Seed Warrant liability is most sensitive to movements in the Company's
share price and discounting for own credit. The instruments are deep
in-the-money with a relatively short, expected term, meaning volatility has
limited effect.
Seed Warrants - Sensitivity Table
Input Change Effect on FV (£)
Share price +25% 9,592,350
Share price +10% 3,836,940
Share price -10% (3,836,940)
Share price -25% (9,592,350)
Credit spread +10% (4,059,736)
Credit spread +20% (6,521,415)
Expected term +3 months (725,862)
Expected term -3 months 795,085
Volatility change (160% → 80%) 20,401
Broker Warrants - Sensitivity Analysis (Cashless Exercise)
Because of net-share settlement, the Broker Warrants exhibit:
· lower delta than Seed Warrants,
· reduced sensitivity to volatility,
· a more pronounced sensitivity to spot price movements, and
· a muted response to changes in expected term (due to cashless
structure).
Broker Warrants - Sensitivity Table
Input Change Effect on FV (£)
Share price +25% 2,789,305
Share price +10% 1,093,007
Share price -10% (1,051,165)
Share price -25% (2,513,529)
Credit spread +10% (499,975)
Credit spread +20% (803,142)
Expected term +12 months (250,266)
Expected term -12 months 303,217
Volatility change (160% → 80%) (97,522)
Due to the cashless exercise mechanism, the Broker Warrants' value is capped
relative to the underlying share value. As a result, changes in volatility and
expected term have a dampened effect, while changes in spot price and credit
spread remain the most significant valuation drivers.
Judgements Applied
Significant judgement was required in:
· selecting volatility assumptions in the absence of historical
trading data;
· determining an appropriate credit spread for a newly formed
entity with crypto-linked treasury assets;
· applying a cashless-exercise overlay consistent with
market-participant assumptions, and;
· determining the expected life of each warrant class.
These assumptions are inherently uncertain and may change materially as
further information becomes available. Refer to Note 4 for further
information.
IAS 34 Considerations
Fair value measurements as at 31 August 2025 reflect the best information
available at the reporting date.
The exercise of these warrants is subject to the Company having sufficient
shareholder authorities and any required FCA approvals at the time of
exercise. At the reporting date, the Company does not have sufficient
share-issuance headroom to settle all outstanding warrants; however, this does
not impact the recognition or classification of the warrants under IAS 32 and
IFRS 9. Settlement of warrants will therefore require the Company publish a
prospectus.
Accordingly, the assumptions and information and will be reassessed at
year-end when additional observable inputs become available (e.g., prospectus
milestones, updated share pricing information, market volatility).
14 Related Party Transactions
The Group's related parties include key management personnel and entities
controlled by them.
Key management remuneration, including amounts paid through service companies,
totalled £293,170 for the period. Amounts outstanding with related parties at
the reporting date were £238,385, all of which were unsecured and entered
into on normal commercial terms.
During the period, certain members of key management personnel subscribed to
the Group's convertible loan notes on the same commercial terms as other
investors. The total subscriptions by key management personnel and their
related entities amounted to £100,000.
During the period, certain members of key management personnel exercised
46,000,000 warrants for a value of £450,000. The warrants were exercised on
the same terms as other holders. 5,000,000 warrants were outstanding at the
end of the reporting period in relation to key management personnel, alongside
42,866,000 warrants outstanding in relation to affiliated parties.
15 Capital Commitments and Contingent Liabilities
There were no capital commitments or contingent liabilities as at 31 August
2025.
16 Events subsequent to the period end
Subsequent to the reporting date, Bitcoin prices, relative to GBP have
continuously decreased, being approximately 20% since the end of the reporting
date. The Group acquired c~1,153 BTC at a total cost of £101,850k through-out
the period with a pooled average cost of £88.3k. Revaluation losses
recognised in the period have been disclosed within the condensed consolidated
statement of comprehensive income. The subsequent decrease in the value of
Bitcoin after the reporting date is a non-adjusting event.
On 1st September 2025 the Group purchased additional Bitcoin with a total
consideration of £3.8million, translating to approximately 46 BTC, at a cost
of £83.3k, bringing its total holdings to 1,199 Bitcoin. The subsequent
decrease in Bitcoin prices after year-end, as noted above, being approximately
20% also impact this transaction. This is a non-adjusting event.
On 12 September 2025 the Company announced the resignation of Kreston Reeves
LLP. On 23 October 2025 the Company announced that BDO LLP had been appointed
as Group auditors.
Through-out September and October 2025, the Company has signed agreements
within 53% of the CLN 2 investors and 100% of the CLN 1 investors to amend the
Long Stop dates to 30 December 2025, from 30 September 2025, as referred to in
Note 3.
On 14 October 2025 the Company announced that Andrew Smith was appointed as
Chief Financial Officer of the Group, effective 1 November 2025.
On 7th November 2025, the Group exchanged cash totalling £19.1m ($25.4m) for
USDC, a stablecoin pegged to the dollar which is instantly convertible into
cash and which the board considers to be equivalent to cash.
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