Interim Results
28/07/2023 07:00
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RNS Number : 4633H AQRU plc 28 July 2023
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.
28 July 2023
AQRU PLC
("AQRU" or "the Company")
Interim results
AQRU PLC (AQSE: AQRU), an incubator specialising in opportunities in
decentralised finance ("DeFi"), announces its unaudited financial results for
the six months ended 30 April 2023 ("H1 2023").
The Directors of AQRU plc take responsibility for this announcement.
For further information, please contact:
AQRU
Chief Executive Via First Sentinel +44 203 989 2200
Philip Blows
Tennyson Securities
Corporate Broker
Peter Krens +44 207 186 9030
First Sentinel
AQSE Corporate Adviser +44 203 989 2200
Brian Stockbridge
About AQRU plc:
AQRU is an incubator specialising in opportunities in decentralised finance
(DeFi), a disruptive technology using blockchain and cryptocurrencies to
remove financial intermediaries from transactions, creating a cheaper, more
efficient and more secure way of providing financial services. Listed on the
Aquis Exchange in London, we apply our expertise to the business operations
and strategic plans of FinTech companies in the UK, USA and Canada, and act as
an accelerator for start-ups and early-stage companies. www.aqruplc.com
(http://www.aqruplc.com)
Financial Highlights
- Turnover of £106k (H1 2022: £554k)
- Loss Before Tax of £1.263m (H1 2022: £2.316m)
- Net cash of £7.4m as at 30 April 2023 (30 April 2022: £30.2m) of
which £5.8m (30 April 2022: £24.1m) related to deposits by customers on the
AQRU.io online retail platform
Operating highlights
- Investment into Streak.ai IPO, a conversational gaming and social
platform leveraging ChatGPT and other large language models to capitalise on
the exploding market of AI adoption.
- Completed business streamlining cutting headcount and marketing
expenses.
- Stopped further development of ByBrix, Blocklender, and Daxiom
brands awaiting further demand in the digital asset market.
- Increased the minimum account size to $250,000 for our AQRU app
reducing assets on the platform and streamlining customer service costs.
- Launched our receivables financing strategy on the Maple Finance
DeFi platform.
Post-period highlights
- Scaled the Maple Finance platform assets to $9.3m of new deposits
with returns stable at 12% gross of which AQRU receives 1.5%
- Our portfolio company, NFT Investment PLC, announced their
intention to buy back shares towards the Bitcoin halving event scheduled for
around April 2024. AQRU holds 30 million shares of NFT Investments PLC. The
Board of AQRU note the recent RNS release by NFT Investments plc where it
confirmed that its unaudited crypto holdings at 29 June 2023 were 2.72p per
share
Outlook
Digital asset prices have recovered since the lows of 2022, however, Bitcoin
and Ether both remain around 60% lower than their peak of Autumn 2021. 2023
has seen the market stabilise and larger institutional interest appears to be
slowly entering the space as demonstrated by a recent Blackrock Bitcoin ETF
application.
Regulatory headwinds in the US have been the main drag on increased adoption
and the return of retail investors with the SEC taking action against both
Coinbase and Binance who are among the largest exchanges in the sector. The
SEC had a setback in their case against Ripple which the market has taken
positively but the landscape remains unclear with many exchanges now heading
offshore.
The AQRU retail app has struggled to gain further traction in this challenging
environment and the board are looking at potential avenues to realise any
value contained in this asset which could be either via a sale or fundraising
for this business unit. The board continue to explore options and will update
the market in due course.
It was against this challenging backdrop that AQRU diversified its product and
investment portfolio to gain exposure to the exploding conversational AI
space. The performance of the investment in the Streaks.ai IPO will be a key
value driver for AQRU investors.
Commenting on the results, Philip Blows, Chief Executive of AQRU said: "AQRU
has weathered a particularly challenging period in the digital asset space
with many investors exiting the market as asset prices remain depressed.
Although this is consistent with previous cycles in the digital asset sector,
we remain cautious, reducing costs wherever possible and halting development
of non-performing business units.
We are delighted with the progress made by the Streaks.ai team and the launch
of their conversational social and gaming platforms following our
participation in their IPO. The AI sector continues to go from
strength-to-strength and giving our stakeholders direct exposure to this
market was a key strategy going into 2023. We will continue to evaluate all of
our investments and operational activities with a strong focus on delivering
long-term growth and value creation for our shareholders."
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE 6 MONTH PERIOD ENDING 30 April 2023
Unaudited Unaudited Audited
Period ending Period ending Year ending 31 Oct
30 Apr 30 Apr 2022
2023 2022
Note £'000 £'000 £'000
Revenue 106 554 708
Cost of sales (122) (807) (648)
Gross Profit (15) (254) 60
Administrative expenses (1,149) (2,333) (4,015)
Depreciation & amortisation (98) - (28)
Loss on trading stock - - (970)
Operating loss (1,263) (2,587) (5,053)
Fair value gains/ (losses) on investments - 271 (890)
Loss before taxation (1,263) (2,316) (5,943)
Taxation on loss of ordinary activities - - -
Loss for the year from continuing operations (1,263) (2,316) (5,943)
Other comprehensive income 138 177 208
Total comprehensive loss for the year attributable to shareholders from
continuing operations
(1,124) (2,139) (5,735)
Basic & dilutive earnings per share - pence (0.10) (0.19) (0.49)
The notes on page 12-21 form an integral part of the condensed interim
financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 MAY 2022
Unaudited Unaudited Audited
As At 30 Apr As At 30 Apr As At 31 Oct 2022
2023 2022
Note £'000 £'000 £'000
NON-CURRENT ASSETS
Property, plant and equipment 11 17 15
Intangible assets 627 16,243 2,286
Investments 6 3,594 2,346 1,116
TOTAL NON-CURRENT ASSETS 4,233 18,606 3,417
CURRENT ASSETS
Cash 1,611 4,350 4,885
Cash equivalents - cryptocurrencies 5,821 25,886 7,630
Trade and other receivables 89 183 313
TOTAL CURRENT ASSETS 7,521 30,420 12,828
TOTAL ASSETS 11,753 49,026 16,245
EQUITY
Share Capital 4 1,211 1,211 1,211
Share Premium 4 9,817 9,817 9,817
Share Based Payment Reserve 5 923 923 923
Other Reserves 239 208 239
Retained Earnings (6,758) (2,004) (5,633)
TOTAL EQUITY 5,432 10,154 6,557
CURRENT LIABILITIES
Trade and other payables 6,321 38,872 9,688
TOTAL CURRENT LIABILITIES 6,321 38,872 9,688
TOTAL LIABILITIES 6,321 38,872 9,688
TOTAL EQUITY AND LIABILITIES 11,753 49,026 16,245
The notes on page 12-21 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 27 July 2023 and were signed on its behalf by:
Nicholas Lyth
Director
COMPANY STATEMENT OF FINANCIAL POSITION AS AT 31 MAY 2022
Unaudited Unaudited Audited
As At 30 Apr As At 30 Apr As At 31 Oct
2023 2022 2022
Note £'000 £'000 £'000
NON-CURRENT ASSETS
Property, plant and equipment 0 1 1
Intangible assets - 24 -
Investments 4,898 3,640 2,410
TOTAL NON-CURRENT ASSETS 4,898 3,665 2,411
CURRENT ASSETS
Cash 140 2,828 3,440
Cash equivalents - cryptocurrencies - 3,273 -
Trade and other receivables 109 1,546 3,878
TOTAL CURRENT ASSETS 249 7,648 7,318
TOTAL ASSETS 5,147 11,313 9,729
EQUITY
Share capital 5 1,221 1,221 1,221
Share Premium 5 9,817 9,817 9,817
Share Based Payment Reserve 6 239 208 239
Other reserves 923 923 923
Retained Earnings (2,763) (927) (2,552)
TOTAL EQUITY 9,427 11,232 9,638
CURRENT LIABILITIES
Trade and other payables (4,281) 81 91
TOTAL CURRENT LIABILITIES (4,281) 81 91
TOTAL LIABILITIES (4,281) 81 91
TOTAL EQUITY AND LIABILITIES 5,147 11,313 9,729
The notes on page 12-21 form an integral part of the condensed interim
financial statements.
The company interim financial statements were approved and authorised by the
Board of Directors on 27 July 2023 and were signed on its behalf by:
Nicholas Lyth Director
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE 6 MONTH PERIOD ENDING 30
April 2023
Share Capital Share Premium Share Other Reserves Retained Earnings Total Equity
£ £ based payment reserve £ £
£
Balance as at 1st November 2021 1,211 9,817 854 31 312 12,224
Loss for period - - - - (2,316) (2,316)
Other comprehensive income - - - 177 - 177
Total comprehensive income for year - - - 177 (2,316) (2,139)
Share-based payments - - 69 - - 69
Ordinary shares issued - - - - - -
Advisor warrants issued - - - - - -
Balance at 30th April 22 1,211 9,817 923 208 (2,004) 10,154
Loss for period - - - - (3,628) (3,628)
Other comprehensive income - - - 31 - 31
Total comprehensive income for year - - - 31 (3,628) (3,597)
Share-based payments - - - - - -
Ordinary shares issued - - - - - -
Advisor warrants issued - - - - - -
Balance at 31st Oct 22 1,211 9,817 923 239 (5,632) 6,558
Loss for period - - - - (1,126) (1,126)
Other comprehensive income - - - - -
Total comprehensive income for year - - - - (1,126) (1,126)
Share-based payments - - - - - -
Ordinary shares issued - - - - - -
Balance at 30th April 23 1,211 9,817 923 239 (6,758) 5,432
COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE 6 MONTH PERIOD ENDING 30 April
2023
Share Capital Share Premium Share Other Reserves Retained Earnings Total Equity
£ £ based payment reserve £ £
£
Balance as at 1st November 2021 1,211 9,817 854 31 (600) 11,312
Loss for period - - - - (327) (327)
Other comprehensive income - - - 177 - 177
Total comprehensive income for year - - - 177 (327) (150)
Share-based payments - - 69 - - 69
Ordinary shares issued - - - - - -
Advisor warrants issued - - - - - -
Balance at 30th April 22 1,211 9,817 923 208 (927) 11,232
Loss for period - - - - (1,626) (1,626)
Other comprehensive income - - - 31 - 31
Total comprehensive income for year - - - 31 (1,626) (1,595)
Share-based payments - - - - - -
Ordinary shares issued - - - - - -
Advisor warrants issued - - - - - -
Balance at 31st Oct 22 1,211 9,817 923 239 (2,553) 9,637
Loss for period - - - - (210) (210)
Other comprehensive income - - - - -
Total comprehensive income for year - - - - (210) (210)
Share-based payments - - - - - -
Ordinary shares issued - - - - - -
Balance at 30th April 23 1,211 9,817 923 239 (2,763) 9,427
CONSOLIDATED STATEMENT OF CASHFLOWS FOR THE 6 MONTH PERIOD ENDING 30 April
2023
Unaudited Unaudited Audited
6 month period 6 month period 12 month
ended 30 Apr ended 30 Apr period ended 31 Oct
2023 2022 2022
Note £'000 £'000 £'000
Cash flow from operating activities
Cash used by operations (2,421) (36,238) (2,991)
Net cash outflow from operating activities (2,421) (36,238) (2,991)
Cash flows from investing activities
Purchase of intangible assets (134) (16,212) (302)
Purchase of property, plant and equipment - (10) (12)
Disposal/(purchase) of cryptocurrencies held to collect 1,620 - 3,363
Fair value gains from crypto currencies - 177 208
Investments (2,340) - -
Net cash flow from investing activities (854) (16,045) 3,257
Cash flows from financing activities
Proceeds from Issue of Shares - - -
Share Issue Costs - - -
Net cash flow from financing activities - - -
Net increase in cash and cash equivalents (3,275) 20,193 266
Cash and cash equivalents at beginning of the period 4,885 10,044 4,618
Foreign exchange impact on cash - - -
Cash and cash equivalents at end of the period 1,611 30,237 4,884
COMPANY STATEMENT OF CASHFLOWS
FOR THE 6 MONTH PERIOD ENDING 30 April 2023
Unaudited Unaudited Audited
6 month period 6 month period 12 month
ended 30 Apr ended 30 Apr period ended 31 Oct
2023 2022 2022
Note £'000 £'000 £'000
Cash flow from operating activities
Cash used by operations (812) (468) (4,690)
Net cash outflow from operating activities (812) (468) (4,690)
Cash flows from investing activities
Purchase of intangible assets - (6) -
Purchase of property, plant and equipment - - -
Disposal/(purchase) of cryptocurrencies held to collect (2,626) - 5,444
Fair value gains from crypto currencies 138 177 208
Interest received - - -
Loans to other group undertakings - (1,505) -
Net cash flow from investing activities (2,488) (1,344) 5,652
Cash flows from financing activities
Proceeds from Issue of Shares - - -
Share Issue Costs - - -
Net cash flow from financing activities - - -
Net increase in cash and cash equivalents (3,300) (1,802) 962
Cash and cash equivalents at beginning of the period 3,440 7,903 2,478
Foreign exchange impact on cash - - -
Cash and cash equivalents at end of the period 140 6,102 3,440
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 6 MONTH PERIOD ENDING 30 April 2023
1 STATUTORY INFORMATION
AQRU plc (formerly known as Dispersion Holdings plc) is a public limited
company incorporated in England and Wales, registration number 12291603. The
registered office of the company is 9(th) Floor 16, Great Queen Street, London
WC2B 5DG.
The company was set up to identify and assist other companies in the
Decentralised Finance space (DeFi). Its shares are listed on the Access
segment of Aquis Stock Exchange Growth Market in London, UK.
The principal activity of the company and the group is that of the incubation
of companies specialising in Decentralised Finance ("DeFi").
2 ACCOUNTING POLICIES
Basis of preparation
These financial statements have been prepared in accordance with International
Financial Reporting Standards and IFRIC interpretations and with those parts
of the Companies Act 2006 applicable to companies reporting under IFRS. The
financial statements have been prepared under the historical cost convention
as modified by the revaluation of certain assets.
Basis of consolidation
The consolidated financial statements incorporate the assets and liabilities
of all subsidiaries of AQRU plc ('company' or 'parent entity') as at 30 April
2022 and the results of all subsidiaries for the period then ended. AQRU plc
and its subsidiaries together are referred to in these financial statements as
the 'consolidated entity'.
Subsidiaries are all those entities over which the consolidated entity has
control. The consolidated entity controls an entity when the consolidated
entity is exposed to, or has rights to, variable returns from its involvement
with the entity and has the ability to affect those returns through its power
to direct the activities of the entity. Subsidiaries are fully consolidated
from the date on which control is transferred to the consolidated entity.
Intercompany transactions, balances and unrealised gains on transactions
between entities in the consolidated entity are eliminated. Unrealised losses
are also eliminated unless the transaction provides evidence of the impairment
of the asset transferred. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with the policies adopted by the
consolidated entity.
The acquisition of subsidiaries is accounted for using the acquisition method
of accounting. A change in ownership interest, without the loss of control, is
accounted for as an equity transaction, where the difference between the
consideration transferred and the book value of the share of the
non-controlling interest acquired is recognised directly in equity
attributable to the parent.
Business combinations and related goodwill
The group accounts for business combinations using the acquisition method when
control is transferred to the group. The consideration transferred in the
acquisition is generally measured at fair value, as are the identifiable net
assets acquired. Acquisition related costs are generally recognised in profit
or loss as incurred.
Any contingent consideration payable is measured at fair value at the
acquisition date. If the contingent consideration is classified as equity,
then it is not remeasured and settlement is accounted for within equity.
Otherwise, subsequent changes in the fair value of the contingent
consideration are recognised in profit or loss.
The excess of the consideration transferred over the fair value of the net
identifiable assets, liabilities and contingent liabilities acquired is
capitalised as goodwill. Any gain on the bargain purchase is recognised in
profit and loss immediately. Goodwill is not amortised but tested for
impairment at least annually and upon the occurrence of an indication of
impairment.
On disposal of a subsidiary, associate or jointly controlled entity, the
attributable amount of goodwill is included in the determination of the profit
or loss on disposal.
Foreign operations
The results and financial position of all the group entities (none of which
has the currency of a hyperinflationary economy) that have a functional
currency different from the presentation currency are translated into the
presentation currency as follows:
(i) assets and liabilities for each statement of financial position
presented are translated at the closing rate at the date of that statement;
(ii) income and expenses for each income statement are translated at spot
exchange rates (unless the spot is not a reasonable approximation of the
cumulative effect of the rates prevailing on the transaction dates, in which
case income and expenses are translated at the rate on the dates of the
transactions); and
(iii) all resulting exchange differences are recognised in the Statement of
Comprehensive Income and accumulated in the translation reserve in equity.
When a foreign operation is disposed of in its entirety or partially such that
control is lost, the cumulative amount in the translation reserve related to
that foreign operation is reclassified to profit or loss as part of the gain
or loss on disposal.
New standards, interpretations and amendments
IFRS standards, amendments and interpretations applicable after 2021 and not
applied early by the Group:
- IFRS 17 "Insurance Contracts"
- Amendments to IAS 1 - Presentation of financial statements -
Classification of current and non-current liabilities
- Amendment to IAS 37 Provisions
- Amendment to IAS 16 Property, plant and equipment
- 2018-2020 cycle of annual IFRS improvements
The above are not expected to have a material impact on the entity.
Interest receivable recognition
Interest receivable is recognised in the period in which it is earned.
Cash and cash equivalents
Cash represents cash in hand and deposits held on demand with financial
institutions. Cash equivalents are short-term, highly-liquid investments with
original maturities of three months or less (as at their date of acquisition).
Cash equivalents are readily convertible to known amounts of cash and subject
to an insignificant risk of change in that cash value.
In the presentation of the Statement of Cash Flows, cash and cash equivalents
also include bank overdrafts. Any such overdrafts are shown within borrowings
under 'current liabilities' on the Statement of Financial Position.
Intangible assets
Development costs
Development costs are initially recognised at cost where it is probable that
there will be future economic benefits from the asset and the cost of the
asset can be reliably measured. The cost of internally generated intangible
assets is only recognised in the development phase of an internal project,
with the cost of the research phase and maintaining or running the day-to-day
operations recognised as an expense. These capitalised costs comprise all
directly attributable costs necessary to create, produce, and prepare the
asset to be capable of operating in the manner intended by management.
After recognition, under the cost model, intangible assets are measured at
cost less any accumulated amortisation and any accumulated impairment losses.
Capitalised development costs are amortised on a straight-line basis over a
period of 7 years from the date that the product is brought into first use.
All intangible assets are considered to have a finite useful life. If a
reliable estimate of the useful life cannot be made, the useful life shall not
exceed ten years.
At each reporting date the company assesses whether there is any indication of
impairment. If such indication exists, the recoverable amount of the asset is
determined which is the higher of its fair value less costs to sell and its
value in use. An impairment loss is recognised where the carrying amount
exceeds the recoverable amount.
The assets' residual values, useful lives and amortisation methods are
reviewed, and adjusted prospectively if appropriate, or if there is an
indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with
the carrying amount and are recognised in the Statement of Profit or Loss and
Other Comprehensive Income.
Crypto currencies
Non-stable crypto currencies held are accounted for as intangible assets with
an indefinite life.
These assets are initially recognized on the balance sheet at cost and are
remeasured at fair value at the end of each period.
Any gains or losses in the value of crypto currencies held as intangible
assets are recognised in the Statement of Profit and Loss and Other
Comprehensive Income and transferred to a separate Fair Value reserve under
equity.
Property, plant and equipment
Items of property, plant and equipment are measured at cost less accumulated
depreciation and any accumulated impairment losses.
If significant parts of an item or property, plant and equipment have
different useful lives, then they are accounted for as separate items (major
components) of property, plant and equipment. Any gain or loss on disposal of
an item of property, plant and equipment is recognised in profit and loss.
Subsequent expenditure is capitalised only if it is probable that the future
economic benefits associated with the expenditure will flow to the Group.
Depreciation is provided on all other items of property, plant and equipment
so as to write off their carrying value over their expected useful economic
lives. It is provided for at:
Computer equipment 3 years straight line
Financial instruments
Recognition, derecognition and offsetting
Financial assets and financial liabilities are recognised when the group
becomes a party to the contractual provisions of the instrument.
The group derecognises financial assets when the contractual rights to cash
flows from the asset expire, or it transfers the rights to receive the
contractual cash flows in the transaction in which substantially all of the
risks and rewards of ownership does not regain control over the transferred
asset. The group derecognises a financial liability when its contractual
obligations are discharged, cancelled or expire.
Financial assets and financial liabilities are offset and the net amount
presented in the statement of financial position when, and only when, the
group has a legal right to offset the amounts and intends either to settle
them on a net basis or to realise the asset and settle the liability
simultaneously.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. These assets
are initially recognised at fair value plus any directly attributable costs.
Subsequent to initial recognition, they are measured at amortised cost using
the effective interest method less any impairment.
Other financial liabilities
Other financial liabilities are non-derivative financial liabilities initially
recognised at fair values less any directly attributable transaction costs.
Subsequent to initial recognition, these liabilities are measured at amortised
cost using the effective interest method.
Current and deferred taxation
The tax expense represents the sum of the tax currently payable and deferred
tax. The liability for current tax is calculated using tax rates and laws that
have been enacted or substantively enacted by the reporting date.
Deferred tax is the tax expected to be payable or recoverable on temporary
differences between the carrying amounts of assets and liabilities in the
group or parent company financial statements and the corresponding tax bases
used in the computation of taxable profit and is accounted for using the
balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible
temporary differences can be recognised. Such assets and liabilities are not
recognised if the temporary difference arises from the initial recognition of
goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit.
Deferred tax is calculated at the tax rates and laws that are expected to
apply in the period when the liability is settled, or the asset is recognised
based on tax laws and rates that have been enacted at the reporting date.
Deferred tax is charged or credited in the income statement, except when it
relates to items charged or credited in other comprehensive income, in which
case the deferred tax is also dealt with in other comprehensive income.
Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at
the rates of exchange ruling at the statement of financial position date.
Transactions in foreign currencies are translated into sterling at the rate of
exchange ruling at the date of transaction. Exchange differences are taken
into account in arriving at the operating result.
Investments
Investments and other financial assets are initially measured at fair value.
Where shares are publicly traded or the fair value can otherwise be measured
reliably, any changes in fair value are recognised in profit or loss. When it
is not possible to measure their fair value reliably, these investments are
instead measured at cost less impairment.
Transaction costs are included as part of the initial measurement, except for
financial assets at fair value through profit or loss. Such assets are
subsequently measured at either amortised cost or fair value depending on
their classification. Classification is determined based on both the business
model within which such assets are held and the contractual cash flow
characteristics of the financial asset unless an accounting mismatch is being
avoided.
Cash and cash equivalents
Cash and cash equivalents include cash on hand, stable coin crypto currencies
pegged to a relatively stable underlying asset or commodity, deposits held at
call with financial institutions, other short-term, highly liquid investments
with original maturities of three months or less that are readily convertible
to known amounts of cash and which are subject to an insignificant risk of
changes in value.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently
measured at amortised cost using the effective interest method, less any
allowance for expected credit losses. Trade receivables are generally due for
settlement within 30 days.
Trade and other payables
These amounts represent liabilities for goods and services provided to the
consolidated entity prior to the end of the financial year and which are
unpaid. Due to their short-term nature, they are measured at amortised cost
and are not discounted. The amounts are unsecure and are usually paid within
30 days of recognition.
Share based payments
Equity-settled and cash-settled share-based compensation benefits are provided
to employees.
Equity-settled transactions are awards of shares, or options over shares, that
are provided to employees in exchange for the rendering of services.
Cash-settled transactions are awards of cash for the exchange of services,
where the amount of cash is determined by reference to the share price.
The cost of equity-settled transactions is measured at fair value on grant
date. Fair value is independently determined using the Black-Scholes option
pricing model that takes into account the exercise price, the term of the
option, the impact of dilution, the share price at grant date and expected
price volatility of the underlying share, the expected dividend yield and the
risk free interest rate for the term of the option, together with non-vesting
conditions that do not determine whether the consolidated entity receives the
services that entitle the employees to receive payment. No account is taken of
any other vesting conditions.
The cost of equity-settled transactions is recognised as an expense with a
corresponding increase in equity over the vesting period. The cumulative
charge to profit or loss is calculated based on the grant date fair value of
the award, the best estimate of the number of awards that are likely to vest
and the expired portion of the vesting period. The amount recognised in profit
or loss for the period is the cumulative amount calculated at each reporting
date less amounts already recognised in previous periods.
The cost of cash-settled transactions is initially, and at each reporting date
until vested, determined by applying the Black-Scholes option pricing model,
taking into consideration the terms and conditions on which the award was
granted. The cumulative charge to profit or loss until settlement of the
liability is calculated as follows:
- during the vesting period, the liability at each reporting date is
the fair value of the award at that date multiplied by the expired portion of
the vesting period.
- from the end of the vesting period until settlement of the award,
the liability is the full fair value of the liability at the reporting date.
All changes in the liability are recognised in profit or loss. The ultimate
cost of cash-settled transactions is the cash paid to settle the liability.
Market conditions are taken into consideration in determining fair value.
Therefore, any awards subject to market conditions are considered to vest
irrespective of whether or not that market condition has been met, provided
all other conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised
as if the modification has not been made. An additional expense is recognised,
over the remaining vesting period, for any modification that increases the
total fair value of the share-based compensation benefit as at the date of
modification.
If the non-vesting condition is within the control of the consolidated entity
or employee, the failure to satisfy the condition is treated as a
cancellation. If the condition is not within the control of the consolidated
entity or employee and is not satisfied during the vesting period, any
remaining expense for the award is recognised over the remaining vesting
period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on
the date of cancellation, and any remaining expense is recognised immediately.
If a new replacement award is substituted for the cancelled award, the
cancelled and new award is treated as if they were a modification.
Interest receivable recognition
Interest receivable is recognised in the period in which it is earned.
GOING CONCERN
The Directors, having made due and careful enquiry, are of the opinion that
the group has adequate working capital to meet its obligations over the
assessed period to the end of April 2023. Having raised £11,200,000 before
expenses on 30 April 2021 at the Company's IPO, the Directors have made an
informed judgement, at the time of approving the financial statements, that
there is a reasonable expectation that the Company has adequate resources to
continue in operational existence for the foreseeable future. As a result, the
Directors have adopted the going concern basis of accounting in the
preparation of the annual financial statements.
3 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of the financial statements requires management to make
judgements, estimates and assumptions that affect the reported amounts in the
financial statements. Management continually evaluates its judgements and
estimates in relation to assets, liabilities, contingent liabilities, revenue
and expenses. Management bases its judgements, estimates and assumptions on
historical experience and on other various factors, including expectations of
future events, management believes to be reasonable under the circumstances.
The resulting accounting judgements and estimates will seldom equal the
related actual results. The judgements, estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities (refer to the respective notes) within the next
financial year are discussed below.
Share-based payment transactions
The group measures the cost of equity-settled transactions with employees 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 either 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 share-based 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.
Crypto currencies
As stated within the accounting policies, the Group has applied two different
accounting policies to what it determines to be two different types of
cryptocurrencies. The Group holds a variety of cryptocurrencies as at the
reporting date and these have been differentiated between non-stable-coins and
stable coins.
The Group has determined that most cryptocurrency assets are highly volatile
financial instruments which are most commonly recognised in accordance with
IAS 38 - Intangible Assets. The Group holds both Bitcoin (BTC) and Ethereum
(ETH). These non-stable coins will be held within Intangible Assets and
revalued at each reporting date through Other Comprehensive Income, as
explained within the accounting policies.
Furthermore, the Group has determined that some cryptocurrency assets are far
less volatile and could therefore demonstrate the following characteristics in
accordance with IAS 7 - Statement of Cashflows:
- highly liquid
- readily convertible to known amounts of cash
- subject to an insignificant risk of changes in value
These stable-coins are cryptocurrency assets that have a value which is pegged
to an internationally accepted and traded fiat currency. The Group holds
Tether (USDT) and USD Coin (USDC). The value of which is pegged on a 1:1 basis
against the US Dollar fiat currency.
However, it is important to note that this asset is a virtual currency and is
not guaranteed by tangible assets or backed by a government institution.
Investments
Investments are classified as listed or unlisted. The valuation of listed
investments is determined with reference to published share prices. The
valuation of unlisted investments is assessed by the group at each reporting
date using any available financial information or reports available to them at
that time. The group's assessment of these valuations is subjective and may
therefore impact profit and loss and equity in future periods.
Internally generated intangible assets
The group has determined the amounts of development expenditure be recognised
as intangible assets at each reporting date. In making their judgement, the
directors have considered the progress of each project and whether there is
sufficient certainty that the product under development will be economically
viable and that the economic benefits will flow to the group.
4 Share capital and share premium
Ordinary Share Share
Shares Capital Premium Total
# £ £ £
At 31 October 2022 1,211,225,646 1,211,226 9,816,612 11,027,838
At 30 Apr 2023 1,211,225,646 1,211,226 9,816,612 11,027,838
There were no shares issued in the 6 months ending 30 Apr 2023.
5 Share based payments reserve
As at 30 As at 30
Apr 2023 Apr 2022
£ £
Advisor warrants 922,909 922,909
Total 922,909 922,909
The following warrants over ordinary shares have been granted by the Company
and are outstanding at 30 Apr 2023:
Number of Warrants Exercise Price Expiry date
On incorporation - - -
Issued on 4 March 2021 23,500,000 £0.01 4 March 2024
Issued on 30 April 2021 8,000,000 £0.01 30 April 2024
Issued on 30 April 2021 9,100,000 £0.03 30 April 2026
Issued on 8 January 2022 55,600,000 £0.045 8 January 2026
At 31 May 2022 96,200,000
There were no dilutive instruments issued in the 6 month period ending 30 Apr
2023.
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.
6 Investments
The following Listed Investments were made in the in the 6 month period ending
30 Apr 2023
At 31 Oct 2022 Additions in period Valuation gain / (losses) in period At 30 Apr 2023
£ £ £ £
NFT Investments PLC 273,000 - 214,500 487,500
SportsX SAS 468,750 - - 468,750
LawBEAM Ltd - 50,000 - 50,000
Streaks Gaming PLC - 2,289,960 (76,332) 2,213,628
Sporting Icons 28,777 - - 28,777
ePIC Blockchain Technologies Inc 215,471 - - 215,471
Big Head Club 130,149 - - 130,149
Total investments 1,116,147 2,339,960 138,168 3,594,275
7 Financial commitments & contingent liabilities
There were no capital commitments or contingent liabilities pertaining to the
Company at 30 Apr 2023.
8 Related party transactions
The company made payments to the following companies in relation to directors'
fees:
Period 1 Nov to 30 Apr 2023 Year ended 31 Oct 2023
£ £
Briarmount - TV Le Druillenec - 32,100
Carraway Corp - RM Rutledge 18,100 36,000
Dark Peak Services Ltd - NJ Lyth 16,500 35,500
Marallo Holdings - MS Edwards 48,000 96,000
82,500 199,600
9 Events subsequent to period end
There were no material events subsequent to period end that require
disclosure.
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