The
information contained within this announcement is deemed by the
Company to constitute inside information as stipulated under the
Market Abuse Regulation (EU) No. 596/2014 as it forms part
of
UK
domestic law by virtue of the European Union (Withdrawal) Act 2018
("MAR")
28/06/2024
Valereum Plc ("Valereum" or
the "Company")
Results for the 12 months
ended 31 December 2023
Valereum Plc (AQSE: VLRM), a
company focused on unlocking capital and creating value in
tokenised digital markets as both a marketplace operator and
leading provider of technology solutions, today announces its
results for the twelve months ended 31 December
2023.
Key highlights in 2023:
·
Significant reduction in losses to £0.3m from a loss of £4.3m in
2022. This follows gains from the Company's holding in Vinanz Ltd,
a listed asset which was received during the year, together with a
reduced level of impairments of previous investments.
·
Total assets increased to £2.4m (2022: £1.2m) due to the receipt of
the Vinanz holding in 2023.
·
Net debt reduced to £0.2m (2022: £1.3m) following a £1.3m decrease
in the convertible loans owed by the Company. This was achieved
through a combination of conversions, repayments and negotiated
reductions.
·
Expanded Board of Directors from 3 to 6, including 2 Non-Executive
Directors. This now provides greater bandwidth and experience
following the replacement of the previous management team to
support business growth and development.
James Formolli, Chairman, added:
I am greatly encouraged by the advancements made in the last
quarter of 2023 and I look forward to building on this progress and
delivering value for all of Valereum's stakeholders in 2024 and
beyond.
The Company's audited
financial results for the 12-month period to 31 December 2023 can
be found at www.vlrm.com
For further information, please
contact:
Enquiries:
Valereum Plc
James Formolli,
Chairman
Tel: +971 4584 6284
Stanford Capital
Partners
Tel: 023 3650 3650
Bob Pountney
Patrick Claridge
AQSE Corporate
Adviser
First Sentinel Corporate
Finance
Brian Stockbridge
Tel: +44 20 3855 5551
Further updates to follow in due
course.
The Directors of the Company
accept responsibility for the contents of this
announcement.
For more information, please
visit www.vlrm.com
Chairman's Statement
Year ended 31 December 2023
Dear Shareholders,
I am delighted to report on a year
which resulted in significant changes for Valereum Plc ("Valereum"
or "the Company") and its subsidiary (together with the Company,
"the Group") as at 31 December 2023.
The Group ended 2023 with an
enhanced platform from which to establish a meaningful position in
the substantial and rapidly growing asset tokenisation market. The
expanded management team with extensive sector knowledge and the
agreed acquisition in 2024 of the deep know-how, technologies and
relationships held by the GSX Group, provided a solid base for
future success.
From this platform, Valereum has
quickly developed a compelling vision and strategy built on strong
core values of integrity, respect and reputation. The Group is well
placed to deliver its plans having made solid progress so far with
a strengthening capital position having reached agreement for
additional funding of £2.3m so far during 2024 and holding a listed
investment valued at £3.5m based on the current listed price (as at
25 June 2024), whilst wholly removing all the convertible debt
raised in 2022.
Acquisition of the GSX Group in 2024
The successful acquisition of the
GSX Group in January 2024 positions Valereum as a key player in the
asset tokenisation sector. Through the acquisition, Valereum has
secured considerable intellectual property including technology,
know-how, partnerships with sector leading technology providers,
prospective long-term users of its solutions and a team which have
decades of collective experience within tier-one institutions,
specialising in stock exchanges, capital markets and associated
technologies, becoming early adopters of the power of blockchain
technology in the application of securities settlement.
The acquisition of the entire GSX
Group, which supersedes the previous option held by the Group to
acquire the GSX Group's stock exchange business, was agreed
following the expiry of the deadline for the acquisition of the GSX
stock exchange business which was enforced by the Gibraltar
Financial Services Commission ("GFSC"). The deadline could no
longer be met after delays in the Group's fundraising process,
following the temporary suspension of Valereum Plc's shares trading
on Aquis due to the deemed reverse takeover.
The rich pool of resources
acquired enable Valereum to accelerate its vision to roll-out 'The
Bridge' technology platform and Valereum's blockchain powered
solutions.
Investment in Vinanz Ltd
During 2023, the Group received
27.3 million shares in Vinanz Ltd as consideration for the sale of
its Bitcoin assets which were valued at £273k. These shares were
subsequently listed on London's Aquis Stock Exchange and increased
in value to £2.3m on 31 December 2023 and have reached a current
valuation of £3.5m (as at 25 June 2024).
Financing and Markets
The Group's capital position is
strengthening following its agreement to raise a further £2.3m
through the issue of shares.
During 2023 arrangements were made
to fully extinguish the Group's remaining outstanding convertible
loans through a combination of repayment and write off such that
they were fully extinguished in April 2024.
Further in 2023, the Group
cancelled 5,000,000 share warrants from its General Share Option
Scheme. The warrants outstanding, other than those issued during
the year, have not been fully established by the Directors and
continue to be assessed by them. In the meantime, from a
conservative perspective, the Directors have reflected these
warrants at the carrying value of £649,300.
The Group has applied for its
shares to be publicly cross traded on the OTCQB Market based in the
US, which upon approval, would make Valereum's shares more widely
available to North American investors, aligning with the Group's
aims to deliver shareholder value and increase the business
footprint globally.
Board and Governance
During the final quarter of 2023,
Valereum's Board of Directors was strengthened and established
enhanced levels of Governance.
The Board expanded from 3 to 6,
following the resignation of Richard Poulden as Executive Chairman
in October 2023. The executive appointments of Nicholas Cowan as
CEO, Karl Moss as CFO, and Peter Sekhon as Investor Relations
Director, alongside myself as Executive Chairman were complemented
by the appointment of Gary Cottle and Simon Brickles as
Non-Executive Directors. All members of the Board have complemented
each other well and have made significant contributions to
Valereum's progress since joining the Group.
Immediately after formation, a
governance review was performed resulting in the expansion of the
Group's Governance protocols including the establishment of Audit,
Nomination and Remuneration Committees consisting of a majority of
Non-Executive directors.
Rebranding
Valereum has also completed a
transformation of the brand's public image, aligned with its
enhanced vision and its updated core focused on integrity, respect
and reputation.
Outlook and our focus for the year ahead
Valereum's highly capable and
experienced management team and workforce is focused on grasping
the considerable opportunities in the asset tokenisation market and
is excited about ensuring that Valereum
stands at the forefront of advancements in the financial landscape,
leveraging its resources for sustained growth and future
success.
We aim to promote our values of
integrity, respect and reputation to make
a real impact on the legacy challenges that face the capital
markets, building a global blockchain infrastructure to transform
finance, unlock capital and create value as more institutional
players increasingly adopt innovative solutions and incorporate
blockchain-powered applications into their operations.
Our principal aim is to deliver
attractive and sustainable returns for the benefit of our
shareholders and other stakeholders in the medium and long
term.
I would particularly like to thank
all stakeholders for their (immense) support and effort during
recent months. We will continue to announce news in due course as
our plans materialise.
James Formolli
Chairman
28 June 2024
Directors' Report
Year ended 31 December 2023
The Directors are delighted to
present their report together with audited consolidated financial
statements of Valereum Plc ("VLRM" or "the Company") and its
subsidiary (together with the Company, "the Group") for the year
ended 31 December 2023.
Principal activities
The main focus for VLRM is to
unlock capital and create value in tokenised digital markets, as an
exchange and market operator and a leading provider of technology
solutions. It aims to capitalise on the regulatory shifts and
rapidly expanding adoption of blockchain technology together with
its deep knowledge, expertise and technology to deliver an enhanced
experience to issuers and investors and other users across
financial markets.
Results
The Group's results for the year
are shown in the Statement of Total Comprehensive Income on page
17.
The Directors do not recommend the
payment of a dividend for the year ended 31 December
2023.
Business review
Please refer to the Chairman's
Statement on page 5.
Principal risks and uncertainties
The principal risks and
uncertainties facing the Group are those of the pace of adoption of
its innovative technology solutions. Following the expansion of
management and its workforce and the acquisition of the GSX Group
in 2024 including its intellectual property across the sector, the
Group possesses deep knowledge, experience and relationships in the
sector including developing and operating exchanges and developing
their underlying technology.
Financial risk management policies
Note 15 sets out the Group's
financial risk management policies for its exposure to various
risks.
Post balance sheet events
Post balance sheet events are
disclosed in note 21.
Directors
The Directors who served during
the year and their remuneration and consultancy fees were as
follows:
|
|
Consultancy
fees
|
Remuneration
|
|
|
|
£
|
£
|
|
|
Richard O'Dell Poulden
|
166,667
|
-
|
|
|
Patrick L Young
|
344,000
|
-
|
|
|
Alan David Gravett
|
22,014
|
-
|
|
|
James Formolli
|
-
|
20,000
|
|
|
Peter Sekhon
|
-
|
15,000
|
|
|
Nicholas Cowan
|
-
|
10,000
|
|
|
Simon Brickles
|
-
|
-
|
|
|
Gary Cottle
|
-
|
-
|
|
|
Karl Moss
|
-
|
5,000
|
|
|
|
532,681
|
50,000
|
|
Consultancy fees paid to Richard
Poulden include fees paid to Black Swan FZE of which he is also the
Chairman. The directors claimed expenses they had incurred on
behalf of the Group of £15,346 (2022: £84,779).
The Directors have the following
interests in the issued share capital of the Group:
|
|
|
Number of
|
|
|
ordinary
shares
|
|
James Formolli
|
10,614,286
|
|
Nicholas Cowan
|
|
596,774
|
|
Peter Sekhon
|
|
787,184
|
|
Karl Moss
|
|
80,596
|
Corporate governance
The Directors have, so far as is
practicable given the Group's size and the constitution of the
board, complied with all corporate governance provisions. On 2
September 2018, the Group adopted a new Code of Governance based on
the QCA Corporate Governance Code on a comply or explain basis,
with the appropriate disclosures as required by Aquis Access
Rulebook. This code is available on the Group's website and has
been updated for the current year.
On 2 February 2024, the Directors
enhanced the level of compliance with the QCA Corporate Governance
Code including establishing and adopted terms of reference for an
Audit Committee, a Nomination Committee and a Remuneration
Committee.
The audit committee is comprised
of James Formolli, Gary Cottle and Simon Brickles and is chaired by
Simon Brickles. It is responsible for a wide range of matters
including monitoring the integrity of the consolidated financial
statements of the Group and any other formal announcement relating
to its financial performance. It also has oversight of the
relationship with the financial auditor.
The nominations committee is
comprised of James Formolli, Gary Cottle and Simon Brickles and is
chaired by James Formolli. Its key responsibilities are to assess
the skills of Directors, and to ensure succession planning for all
Group Boards and Committees and identifying and selecting
candidates as required.
The remuneration committee is
comprised of James Formolli, Gary Cottle and Simon Brickles and is
chaired by Gary Cottle. It is responsible for assessing and
reviewing the remuneration packages of the Directors. The
remuneration policy of the Executive Directors is designed
carefully to attract, retain and motivate Directors to execute
effectively the strategic objectives of the Group to enhance
shareholder returns.
Going Concern
Although the Group's total loss
before tax narrowed significantly to £353,315 for the year ended 31
December 2023 (2022: £4,245,160), the Group continues to incur
losses as it develops its technology and prepares for the launch of
its technology solutions. At the end of the year, the accounts show
that the Group held 27,325,171 shares in Vinanz Ltd, a listed
equity investment of £2,322,639 (2022: £nil) based on its closing
price of 8.5p per share on 31 December 2023 (which has subsequently
increased to £3.5m based on 12.875p per share as at 25 June 2024),
cash balances totaling £31,932 (2022: £92,528) and current
liabilities of £2,085,099 (2022: £1,946,556). Administrative costs,
excluding share-based payments expense and impairment loss during
the year were £1,526,154 (2022: £1,839,680).
Since October 2023, the Group has
undergone a significant transformation following the replacement of
the entire management team with an expanded new team, the
acquisition of GSX Group Limited in 2024, the full settlement of
the convertible loans and the raising of £2,300,000 funding from
its Chairman which have all been well received by the markets. It
is noted that £300,000 has already been received and the £2,000,000
is due to be received in July 2024. The Directors also plan to
maximise the realisation of the Company's investments whenever
appropriate. In addition, the Group is in discussion with a number
of potential investors and is confident that it will secure
additional funding in 2024. This funding provides the Group with
working capital to create the platform for future growth.
Furthermore, the liabilities as at 31 December 2023 are expected to
be reduced following the conclusion of ongoing negotiations with
creditors which have been taking place during 2024. The going
concern relies on the above matters.
The Directors believe that the
Group can continue to manage its business risks as it continues to
develop quickly and have a reasonable expectation that it can
continue to have operational existence for the foreseeable future
and in particular the next twelve months from the date of signing
these consolidated financial statements. Accordingly, the Group
continues to adopt the going concern basis in preparing the
consolidated financial statements.
Events after the reporting year
Since 31 December 2023, the Group
has raised £2,300,000 of funding through the following
subscriptions for ordinary shares:
· On 28 March 2024, the
Group raised £300,000 from James Formolli through issuing 5,000,000
new ordinary shares of £0.001 each at a price of £0.06 per share
and issued Warrants over new ordinary shares of £0.001 at par.
· On 31 May 2024, the
Group entered into an unconditional agreement to raise £2,000,000
from James Formolli through issuing 55,411,752 new ordinary shares
of £0.001 each at a price of £0.036 per share.
The Group has settled £157,669 of
the loans outstanding as at 31 December 2023 as follows:
On 28 March 2024, the Group repaid
in full the loan of £40,000 outstanding to James
Formolli.
On 4 April 2024, the Group repaid in
full the loan of £117,669 outstanding to the convertible loan note
holders.
On 30 January 2024, the Group
acquired the entire share capital of the GSX Group Ltd for a
consideration of 5,000,000 ordinary shares of £0.001 each in
Valereum plc and the issue of Warrants over 10,000,000 ordinary
shares of £0.001 each in Valereum plc at an exercise price of £0.01
per share.
On 3 January 2024, the Group's
acquired 0.2% of share capital of its subsidiary Valereum
Collections Limited for a consideration of 2,517,857 ordinary
shares of £0.001 each and now owns 100% of Valereum Collections
Ltd.
In 2024, agreements have been
reached with certain creditors to settle the recorded liabilities
as at 31 December 2023 for reduced amounts.
Statement regarding disclosure of information to the
Auditors
Each Director of the Group has
confirmed that, in fulfilling their duties as a director, they are
aware of no relevant audit information of which the Auditors are
not aware of and that they have taken all the steps that they ought
to have taken as a director to make themselves aware of any
relevant audit information and to establish that the Auditors are
aware of that information.
This information is given and
should be interpreted in accordance with the provisions of
Gibraltar Companies Act 2014.
Auditors
The statutory auditors are RSM
Audit (Gibraltar) Limited.
A resolution for the reappointment
of RSM Audit (Gibraltar) Limited will be put to the members at the
annual general meeting.
By order of the board
James Formolli
Director
28 June 2024
Statement of Directors' Responsibilities
The Directors are responsible for
preparing the Directors' Report and the consolidated financial
statements in accordance with applicable law and
regulations.
Company law requires the Directors
to prepare consolidated financial statements for each financial
year, which give a true and fair view of the state of affairs and
of the profit or loss of the Group for that year. In preparing
those consolidated financial statements, the Directors are required
to:
a.
select suitable accounting policies and then apply them
consistently;
b.
make judgements and estimates that are reasonable and
prudent;
c.
state whether applicable accounting standards have been followed,
subject to any material departures; and
d.
prepare the consolidated financial statements on the going concern
basis unless it is inappropriate to presume that the Group will
continue in business.
The Directors are responsible for
keeping proper accounting records, which disclose, with reasonable
accuracy at any time, the financial position of the Group and to
enable them to ensure that the consolidated financial statements
comply with the requirements of the Gibraltar Companies Act 2014.
Specifically, pursuant to section 248 of the Companies Act, the
Directors have elected to follow International Financial Reporting
Standards as adopted by the United Kingdom. The Directors are also
responsible for safeguarding the assets of the Group and hence for
taking reasonable steps for the prevention and detection of fraud
and other irregularities.
The Directors are responsible for
the maintenance and integrity of the corporate consolidated
financial statements included on the Group's website. Legislation
in Gibraltar governing the preparation and dissemination of
accounts may differ from legislation in other
jurisdictions.
James Formolli
Director
28 June 2024
Independent auditor's report
To the shareholders of Valereum Plc
Report on the audit of the consolidated financial
statements
Opinion
We have audited the consolidated
financial statements of Valereum Plc (the "Company") and its
subsidiary ("the Group"), which comprise the consolidated statement
of financial position and company statement of financial position
as at 31 December 2023, and the consolidated statement of total
comprehensive income, consolidated statement of changes in equity
and consolidated statement of cash flows for the year then ended 31
December 2023, and notes to the company and consolidated financial
statements, including a summary of significant accounting
policies.
In our opinion, the accompanying
consolidated financial statements:
· give a true and fair
view of the state of the Group's affairs as at 31 December 2023 and
of the Group's loss and cash flows for the year then ended;
· have been properly
prepared in accordance with International Financial Reporting
Standards as adopted for use in the United Kingdom ("IFRS");
and
· have been prepared in
accordance with the Companies Act 2014.
Basis for opinion
We conducted our audit in
accordance with International Standards on Auditing (ISAs).
Our responsibilities under those standards are further described in
the Auditor's Responsibilities for the Audit of the Financial
Statements section of our report. We are independent of the
Group in accordance with the International Ethics Standards Board
for Accountants Code of Ethics for Professional Accountants (IESBA
Code), and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Material uncertainty
related to going concern
The consolidated financial statements have been
prepared on the assumption that the Group will continue as a going
concern. As discussed in note 2 to the consolidated financial
statements, the Group has incurred a net loss for the year and has
accumulated losses from prior years.
The going concern ability of the Group relies on a
number of matters including the ability to raise further capital,
realisation of its investments, and successfully develop its
business. These circumstances and conditions raise doubts about the
Group's ability to continue as a going concern.
Management's plans are described in note 2 together
with the disclosures in the Directors' Report and Chairman's
Statement.
The consolidated financial statements do not include
any adjustments that might result from the outcome of this
uncertainty.
Our opinion is not modified in respect of this
matter.
Key Audit Matters
Key audit matters are those
matters that, in our professional judgement, were of most
significance in our audit of the consolidated financial statements
of the current period. These matters were addressed in the context
of our audit of the consolidated financial statements as a whole,
and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
|
Risk
|
Our response to the risk
|
Key observations communicated to the audit
committee
|
|
Going concern assessment
· As disclosed in Note
2, the consolidated financial statements have been prepared on a
going concern basis.
· As at 31 December
2023, the Group has net current liabilities of £1,971,943 (2022:
net current liabilities of £1,631,326 as restated). In addition,
the Group continues to incur losses. For the year ended 31 December
2023, the Group also has a total loss before tax of £353,315 (2022:
£4,245,160). At the end of the year, the accounts show that the
Group held cash balances totaling £31,932 (2022: £92,528).
Administrative costs, excluding interest expense, share-based
payments expense, and impairment loss during the year, were
£1,526,154 (2022: £1,839,216). This would normally indicate that
Group may not be able to cover the Group's expenses for the next
twelve months from the date of the approval of the consolidated
financial statements.
· The going concern
ability of the Group relies on a number of matters including the
ability to raise further capital, realisation of its investments,
and successfully develop its business.
· There is a risk that a
material uncertainty could exist related to events or conditions
that, individually or collectively, may cast significant doubt on
the Group's ability to continue as a going concern.
· The Group closely
monitors and manages its capital position and liquidity risk
regularly throughout the year to ensure that it has sufficient
funds to meet forecast cash requirements and satisfy the working
capital requirements and acquisitions. Taking into account the
ability of the Group to raise adequate funding, the Board of
Directors is confident that the Group has access to sufficient
funds to enable the Group to meet its liabilities as and when they
fall due for at least the next twelve months.
|
Our procedures in relation to
management's going concern assessment included:
· We identified that the
most significant assumptions in assessing the Group's ability to
continue as a going concern were its ability to raise further
capital, realisation of its investments, and successfully develop
its business. The calculations supporting the assessment require
management to make highly subjective judgements. The assessments
are based on estimates of future events and are fundamental in
determining the suitability of the basis adopted for the
preparation of the consolidated financial statements. We have
reviewed these assumptions and calculations;
· We noted that the
Group relies on the injection of funds by its Chairman. It is noted
that £300,000 funding has already been received and £2,000,000 is
due to be received in July 2024;
· The Group's liquidity
also depends on the realisation of its investments in shares;
· The Group relies on
additional capital from potential investors and is confident that
it will secure additional funding in 2024; and,
· The liabilities as at
31 December 2023 are expected to be reduced following the
conclusion of ongoing negotiations with creditors which have been
taking place during 2024.
|
We concluded that no further
disclosures relating to the Group's ability to continue as a going
concern need to be made in the financial statements. We
nevertheless believe that there is material uncertainty and
therefore, we included a material uncertainty related to going
concern paragraph in our audit report.
|
Materiality
The concept of materiality is
fundamental to the preparation of the Group's consolidated
financial statements and the audit process. Materiality is an
expression of the relative significance or importance of a
particular matter in the context of the financial statements as a
whole.
For the purposes of an audit,
misstatements, including omissions, are considered to be material
if they, individually or in the aggregate, could reasonably be
expected to influence the economic decisions of users taken on the
basis of the financial statements. Materiality is considered
at both the overall financial statement level ("financial statement
materiality") and, if applicable, in relation to individual account
balances, classes of transactions and disclosures ("element
materiality") and is used as a threshold or benchmark against which
errors or differences of opinion between management and ourselves
can be evaluated.
The consolidated financial
statement materiality calculated for the Group is £24,500 which was
determined on the basis of 7% of the Group's net assets as at 31
December 2023.
Other information
The directors are responsible for
the other information. The other information comprises the
information included in the annual report, but does not include the
consolidated financial statements and our auditor's report
thereon.
Our opinion on the consolidated
financial statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of
the consolidated financial statements, our responsibility is to
read the other information and, in doing so, consider whether the
other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit, or otherwise
appears to be materially misstated. If, based on the work we have
performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact. We
have nothing to report in this regard.
Responsibilities of the directors for the consolidated
financial statements
The directors are responsible for
the preparation of the consolidated financial statements that give
a true and fair view in accordance with applicable law in Gibraltar
and IFRS, and for such internal control as the directors determine
is necessary to enable the presentation of consolidated financial
statements that are free from material misstatement, whether due to
fraud or error.
In preparing the consolidated
financial statements, 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.
The directors are responsible for
overseeing the Group's financial reporting process.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain
reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether
due to fraud or error, and to issue an auditor's report that
includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in
accordance with ISAs will always detect a material misstatement
when it exists.
Misstatements can arise from fraud
or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these
consolidated financial statements.
As part of an audit in accordance
with ISAs, we exercise professional judgement and maintain
professional scepticism throughout the audit. We also:
· Identify and assess
the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
· Obtain an
understanding of internal control relevant to the audit in order to
design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the
effectiveness of the Group's internal control.
· Evaluate the
appropriateness of accounting policies used and the reasonableness
of accounting estimates and related disclosures made by the
directors.
· Conclude on the
appropriateness of the directors' use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a
material uncertainty exists related to events or conditions that
may cast significant doubt on the Group's ability to continue as a
going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditor's report to the
related disclosures in the consolidated financial statements or, if
such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date
of our auditor's report. However, future events or conditions may
cause the Group to cease to continue as a going concern.
· Evaluate the overall
presentation, structure and content of the financial statements,
including the disclosures, and whether the consolidated financial
statements represent the underlying transactions and events in a
manner that achieves fair presentation.
We communicate with the directors
regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our
audit.
We also provide the directors with
a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them
all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with
the directors, we determine those matters that were of most
significance in the audit of the financial statements of the
current period and are therefore the key audit matters. We describe
these matters in our auditor's report unless law or regulation
precludes public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public
interest benefits of such communication.
Report on other legal and regulatory
requirements
Opinion on other matter
prescribed by the Companies Act 2014
In our opinion, based on the work
undertaken in the course of the audit:
· the information given
in the Directors' Report for the financial year for which the
consolidated financial statements are prepared is consistent with
the financial statements; and
· the Directors' Report
has been prepared in accordance with the requirements of the
Companies Act 2014.
· In the light of the
knowledge and understanding of the Group, and its environment
obtained in the course of the audit, we have not identified any
material misstatements in the Directors' Report.
Matters on which we are
required to report by exception
We have nothing to report in
respect of the matter where the Companies Act 2014 requires us to
report to you if, in our opinion, we have not received all the
information and explanations we require for our audit.
Use of our report
This report, including the
opinion, has been prepared for and only for the Group's members as
a body in accordance with Section 257 of the Companies Act 2014 and
for no other purpose. We do not, in giving these opinions, accept
or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it may come
save where expressly agreed by our prior consent in
writing.
SVM Cohen
Statutory auditor
For and on behalf of
RSM Audit (Gibraltar) Limited
21 Engineer Lane
Gibraltar
28 June 2024
Consolidated Statement of Total Comprehensive
Income
for the year ended 31 December 2023
|
|
|
Year
ended
|
|
Year ended
|
|
|
Notes
|
31 December
2023
|
|
31 December
2022
|
|
|
|
£
|
|
£
|
|
|
|
|
|
|
|
Administrative expenses
|
|
(2,637,954)
|
|
(4,277,717)
|
|
|
|
|
|
|
|
Operating loss
|
4
|
(2,637,954)
|
|
(4,277,717)
|
|
|
|
|
|
|
|
Gain on revaluation of financial
asset
|
11
|
2,049,388
|
|
-
|
|
Interest income
|
|
19,432
|
|
31,021
|
|
Interest expense
|
|
(581)
|
|
-
|
|
Foreign exchange gain
|
|
1,313
|
|
1,536
|
|
Other income
|
|
215,087
|
|
-
|
|
|
|
|
|
|
|
Loss before taxation
|
|
(353,315)
|
|
(4,245,160)
|
|
|
|
|
|
|
|
Tax on loss
|
6
|
-
|
|
-
|
|
|
|
|
|
|
|
Loss for the financial year
|
|
(353,315)
|
|
(4,245,160)
|
|
|
|
|
|
|
|
Other comprehensive income (loss)
|
|
|
|
|
|
Items that may not be reclassified subsequently to profit or
loss:
|
|
|
|
|
|
Unrealised gain/(loss) on crypto
assets
|
|
58,677
|
|
(23,677)
|
|
Other comprehensive income (loss) for the
year
|
|
58,677
|
|
(23,677)
|
|
|
|
|
|
|
|
Total comprehensive loss for the year
|
|
(249,638)
|
|
(4,268,837)
|
|
|
|
|
|
|
|
Total comprehensive loss for the year attributable
to:
|
|
|
|
|
|
Equity holders of the
parent
|
|
(249,638)
|
|
(4,268,837)
|
|
Non-controlling
interests
|
|
-
|
|
-
|
|
Total comprehensive loss for the year
|
|
(249,638)
|
|
(4,268,837)
|
|
|
|
|
|
|
|
Basic and diluted loss per
share
|
7
|
(0.003)
|
|
(0.057)
|
There are no recognised gains or
losses other than disclosed above and there have been no
discontinued activities during the year.
The notes on pages 22 to 36 form
part of these consolidated financial statements.
Consolidated Statement of
Financial Position
as at 31 December 2023
|
|
Notes
|
31 December
2023
|
|
Restated
31 December
2022
|
|
|
|
£
|
|
£
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
Loans and other
receivables
|
8
|
81,224
|
|
222,792
|
|
Cash and cash equivalents
|
|
31,932
|
|
92,528
|
|
|
|
113,156
|
|
315,320
|
|
Non-current assets
|
|
|
|
|
|
Property, plant and
equipment
|
9
|
-
|
|
61,010
|
|
Intangible asset
|
10
|
-
|
|
62,280
|
|
Investments
|
11
|
2,322,639
|
|
750,000
|
|
|
|
2,322,639
|
|
873,290
|
|
|
|
|
|
|
|
Total assets
|
|
2,435,795
|
|
1,188,610
|
|
|
|
|
|
|
|
Current liabilities
|
12
|
2,085,099
|
|
1,946,556
|
|
Equity
|
|
|
|
|
|
Share capital
|
13
|
4,148,640
|
|
4,131,220
|
|
Share premium
|
13
|
23,842,357
|
|
22,888,797
|
|
Revaluation reserve
|
10
|
-
|
|
62,280
|
|
Translation reserve
|
|
257,478
|
|
257,478
|
|
Share-based payments
reserve
|
14
|
649,300
|
|
377,500
|
|
Accumulated losses
|
|
(28,617,579)
|
|
(28,475,221)
|
|
|
|
280,196
|
|
(757,946)
|
|
Non-controlling interest
|
11
|
70,500
|
|
-
|
|
Total equity
|
|
350,696
|
|
(757,946)
|
|
|
|
|
|
|
|
Total equity and liabilities
|
|
2,435,795
|
|
1,188,610
|
|
|
|
|
|
|
The consolidated financial
statements were approved by the board and authorised for issue on
28 June 2024 and signed on its behalf by:
James Formolli
Karl
Moss
Director
Director
The notes on pages 22 to 36 form
part of these consolidated financial statements.
Company Statement of Financial Position
as at 31 December 2023
|
|
Notes
|
31 December
2023
|
|
Restated
31 December
2022
|
|
|
|
£
|
|
£
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
Loans and other
receivables
|
8
|
81,224
|
|
222,792
|
|
Cash and cash equivalents
|
|
31,932
|
|
92,528
|
|
|
|
113,156
|
|
315,320
|
|
Non-current assets
|
|
|
|
|
|
Property, plant and
equipment
|
9
|
-
|
|
61,010
|
|
Intangible asset
|
10
|
-
|
|
62,280
|
|
Investments
|
11
|
2,322,639
|
|
750,000
|
|
|
|
2,322,639
|
|
873,290
|
|
|
|
|
|
|
|
Total assets
|
|
2,435,795
|
|
1,188,610
|
|
|
|
|
|
|
|
Current liabilities
|
12
|
2,155,599
|
|
1,946,556
|
|
Equity
|
|
|
|
|
|
Share capital
|
13
|
4,148,640
|
|
4,131,220
|
|
Share premium
|
13
|
23,842,357
|
|
22,888,797
|
|
Revaluation reserve
|
10
|
-
|
|
62,280
|
|
Translation reserve
|
|
257,478
|
|
257,478
|
|
Share-based payments
reserve
|
14
|
649,300
|
|
377,500
|
|
Accumulated losses
|
|
(28,617,579)
|
|
(28,475,221)
|
|
Total equity
|
|
280,196
|
|
(757,946)
|
|
|
|
|
|
|
|
Total equity and liabilities
|
|
2,435,795
|
|
1,188,610
|
|
|
|
|
|
|
The company financial statements
were approved by the board and authorised for issue on 28 June 2024
and signed on its behalf by:
James Formolli
Karl
Moss
Director
Director
The notes on pages 22 to 36 form
part of these consolidated financial statements.
Consolidated Statement of Cash Flows
Year ended 31 December 2023
|
|
|
Year
ended
|
|
Year
ended
|
|
|
Notes
|
31 December
2023
|
|
31 December
2022
|
|
|
|
£
|
|
£
|
|
Cash flows from operating activities
|
|
|
|
|
|
Loss for the year
|
|
(294,638)
|
|
(4,268,837)
|
|
Reconciliation to cash generated
from operations:
|
|
|
|
|
|
Unrealised loss on crypto
assets
|
10
|
-
|
|
23,677
|
|
Realised gain on crypto
assets
|
10
|
(58,677)
|
|
-
|
|
Revaluation gain on equity
investments
|
11
|
(2,049,388)
|
|
-
|
|
Equity settled share-based payments
expense
|
14
|
361,800
|
|
224,000
|
|
Gain on disposal of fixed
asset
|
9
|
(103,093)
|
|
-
|
|
Impairment of
investments
|
11
|
750,000
|
|
2,214,501
|
|
Depreciation
|
9
|
11,808
|
|
47,233
|
|
Decrease in receivables
|
|
141,569
|
|
57,979
|
|
(Decrease)/Increase in
payables
|
|
(1,457)
|
|
1,721,608
|
|
Net cash flow from operating activities
|
|
(1,242,076)
|
|
20,161
|
|
Cash flows from investing activities
|
|
|
|
|
|
Payment for acquisition of
investments
|
11
|
-
|
|
(2,187,500)
|
|
Net cash flow from investing activities
|
|
-
|
|
(2,187,500)
|
|
Cash flows from financing activities
|
|
|
|
|
|
Loan proceeds
|
12,19
|
140,000
|
|
-
|
|
Issue of shares
|
13
|
1,041,480
|
|
827,490
|
|
Net cash flow from financing activities
|
|
1,181,480
|
|
827,490
|
|
Net decrease in cash
|
|
(60,596)
|
|
(1,339,849)
|
|
Cash at bank and in hand at the
start of the year
|
|
92,528
|
|
1,432,377
|
|
Cash at bank and in hand at the end
of the year
|
|
31,932
|
|
92,528
|
The notes on pages 22 to 36 form
part of these consolidated financial statements.
Notes to the Consolidated Financial
Statements
for the year ended 31 December 2023
1 General
Information
Valereum Plc ("VLRM" or "the
Company"), previously known as Upper Thames Holdings Plc and
thereafter Valereum Blockchain Plc, is incorporated in Gibraltar.
The registered office is 6.20 World Trade Center, 6 Bayside Road,
GX11 1AA, Gibraltar.
These consolidated financial
statements as at 31 December 2023 and for the year then ended
comprise the Company and its subsidiary, Valereum Collections Ltd
(together referred to as the "the Group").
2 Accounting
Policies
The principal accounting policies
adopted by the Group in the preparation of its consolidated
financial statements for the year ended 31 December 2023 with
comparatives for the year ended 31 December 2022 is set out below.
The accounting policies have been consistently applied, unless
otherwise stated.
Basis of
preparation
The consolidated financial
statements of the Group have been prepared in accordance with
International Financial Reporting Standards ("IFRSs") and
Interpretations issued by the IFRS Interpretations Committee
("IFRIC") as adopted by the United Kingdom and with those parts of
the Gibraltar Companies Act applicable to companies reporting under
IFRS. These are the standards, subsequent amendments and related
interpretations issued and adopted by the International Accounting
Standards Board ("IASB") that have been endorsed by the United
Kingdom at the year-end. The consolidated financial statements have
been prepared under the historical cost convention.
Going
concern
Although the Group's total loss
before tax narrowed significantly to £353,315 for the year ended 31
December 2023 (2022: £4,245,160), the Group continues to incur
losses as it develops its technology and prepares for the launch of
its technology solutions. At the end of the year, the accounts show
that the Group held 27,325,171 shares in Vinanz Ltd, a listed
equity investment of £2,322,639 (2022: £nil) based on its closing
price of 8.5p per share on 31 December 2023 (which has subsequently
increased to £3.5m based on 12.875p per share as at 25 June 2024),
cash balances totaling £31,932 (2022: £92,528) and current
liabilities of £2,085,099 (2022: £1,946,556). Administrative costs,
excluding share-based payments expense and impairment loss during
the year were £1,526,154 (2022: £1,839,216).
Since October 2023, the Group has
undergone a significant transformation following the replacement of
the entire management team with an expanded new team, the
acquisition of GSX Group Limited in 2024, the full settlement of
the convertible loans and the raising of £2,300,000 funding from
its Chairman which have all been well received by the markets. It
is noted that £300,000 has already been received and the £2,000,000
is due to be received in July 2024. The Directors also plan to
maximise the realisation of the Company's investments whenever
appropriate. In addition, the Group is in discussion with a number
of potential investors and is confident that it will secure
additional funding in 2024. This funding provides the Group with
working capital to create the platform for future growth.
Furthermore, the liabilities as at 31 December 2023 are expected to
be reduced following the conclusion of ongoing negotiations with
creditors which have been taking place during 2024. The going
concern relies on the above matters.
The Directors believe that the
Group can continue to manage its business risks as it continues to
develop further and have a reasonable expectation that it can
continue to have operational existence for the foreseeable future
and in particular the next twelve months from the date of signing
these consolidated financial statements. Accordingly, the Group
continues to adopt the going concern basis in preparing the
consolidated financial statements.
Basis of
consolidation
Subsidiaries are all entities
(including structured entities) over which the group has control.
The group controls an entity when the group is exposed to, or has
rights to, variable returns from its involvement with the entity
and can 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 group. They are
deconsolidated from the date that control ceases. The acquisition
method of accounting is used to account for business combinations
by the Group.
Intercompany transactions, balances
and unrealised gains on transactions between group companies are
eliminated. Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the transferred
asset. Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by the
Group.
Non-controlling interests in the
results and equity of subsidiaries are shown separately in the
consolidated statement of profit or loss, statement of
comprehensive income, statement of changes in equity and balance
sheet, respectively.
Functional and presentational
currencies
The individual financial
information of the entity is measured and presented in the currency
of the primary economic environment in which the entity operates
(its functional currency). Since 1 January 2021, the functional
currency of the Group has been Pounds Sterling ("£") as The Board
of Directors consider that the Group's assets and liabilities are
predominantly £ denominated and that reporting in £ reduces
exposure to exchange differences in its reported
results.
The consolidated financial
statements are presented in £ including the comparative figures.
All amounts are recorded in the nearest £, except when otherwise
indicated.
Foreign
currencies
Monetary assets and liabilities
have been translated at rates in effect at the statement of
financial position date, with any exchange adjustments being
charged or credited to profit or loss.
In the cash flow statement, cash
flows denominated in foreign currencies are translated into the
presentational currency of the Group at the average exchange rate
for the period or at the prevailing rate at the time of the
transaction where more appropriate.
Financial
instruments
Financial assets and financial
liabilities are recognised on the statement of financial position
when VLRM becomes a party to the contractual provisions of the
instrument.
Loans and
receivables
Loans and receivables are
initially recognised at transaction price including any transaction
costs and subsequently measured at amortised cost determined using
the effective interest method, less provision for
impairment.
Financial assets at fair
value through profit or loss (FVTPL)
At initial recognition, the Group
measures a financial asset at its fair value plus, in the case of a
financial asset not at fair value through profit or loss (FVTPL),
transactions costs that are directly attributable to the
acquisition of the financial asset. Transactions costs of financial
assets carried at FVTPL are expensed in profit or loss. Fair value
at initial recognition is best evidenced by the transaction price.
A gain or loss on initial recognition is only recorded if there is
a difference between fair value and transaction price which can be
evidenced by other observable current market transactions in the
same instrument or by a valuation technique whose inputs include
only data from observable market.
Financial assets at fair
value through profit or loss (FVTPL) (continued)
Financial assets at FVTPL are
measured at fair value at the end of each reporting period, with
any fair value gains or losses recognised in profit or loss. The
net gain or loss recognised in profit or loss includes any dividend
or interest earned on the financial asset. Investments in equity
instruments are classified as at FVTPL.
Impairment of financial
assets
The Group has adopted the expected
credit loss model ("ECL") in IFRS 9. The ECL is to be measured
through a loss allowance at an amount equal to:
· the
12-month expected credit losses (expected credit losses that result
from those default events on the financial instrument that are
possible within 12 months after the reporting date); or
· full
lifetime expected credit losses (expected credit losses that result
from all possible default events over the life of the financial
instrument).
The Group only holds trade and
other receivables with no financing component and therefore has
adopted an approach similar to the simplified approach to
ECLs.
Provision for impairment (or the
ECL) is established based from full lifetime ECL and when there is
objective evidence that the Group will not be able to collect all
amounts due according to the original terms of the
receivable.
The amount of the impairment is
the difference between the asset's carrying amount and the present
value of the estimated future cash flows, discounted at effective
interest rate.
Trade and other
payables
Trade and other payables are
initially measured at fair value and are subsequently measured at
amortised cost using the effective interest rate method.
Financial liabilities and
equity
Financial liabilities and equity
instruments are classified according to the substance of the
contractual arrangements entered into. An equity instrument is any
contract that evidences a residual interest in the assets of the
Group after deducting all of its liabilities. Equity instruments
issued by the Group are recorded at the proceeds received, net of
direct issue costs.
Equity comprises the
following:
Share capital represents amounts
subscribed for shares at nominal value.
Share premium represents amounts
subscribed for share capital in excess of nominal value.
Accumulated losses represent the
accumulated profits and losses attributable to equity
shareholders.
Other reserves include translation
reserve, revaluation reserve, and share-based payments
reserve.
Intangible
assets
The intangible assets relate to
virtual currencies held by the entity on its own behalf. The
virtual currencies held by the Group until 20 April 2023 were
Bitcoins, which have active markets. These have been recognised at
fair value, and subsequently revalued in accordance with the
revaluation provisions of IAS 38. Under the revaluation model, the
intangible assets are initially recognised at cost and subsequently
measured at fair value, with movements above cost (i.e., unrealised
gains) recognised as other comprehensive income in the statement of
total comprehensive income and accumulated in revaluation reserve
within equity, while movements below cost (i.e., unrealised losses)
recognised in the profit and loss account. When an intangible asset
is disposed of, the realised gain or loss on disposal is included
in the profit and loss account.
Property, plant and
equipment
Property, plant and equipment is
stated at cost less accumulated depreciation. Cost is depreciated
on a straight-line basis over their expected useful lives as
follows:
Computer equipment
3 years
Share-based
payments
The Group has historically issued
warrants and share options in consideration for services.
Equity-settled share-based payment transactions
with parties other than employees are measured at the fair value of
the goods or services received, except where that fair value cannot
be estimated reliably, in which case they are measured at the fair
value of the equity instruments granted, measured at the date the
entity obtains the goods or the counterparty renders the
service.
Taxation
Current tax is provided at amounts
expected to be paid (or recovered) using the tax rates and laws
that have been enacted or substantively enacted by the year end
date.
Deferred taxation is provided in
full, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying
amounts in the consolidated financial statements. However, if the
deferred tax arises from the initial recognition of an asset or
liability in a transaction other than a business combination that
at the time of the transaction affects neither accounting, nor
taxable profit or loss, it is not accounted for. Deferred tax is
determined using tax rates and laws that have been enacted (or
substantively enacted) by the year end date and are expected to
apply when the related deferred tax asset is realised or the
deferred tax liability is settled.
Deferred tax assets are recognised
to the extent that it is probable that future taxable profit will
be available against which the temporary differences can be
utilised.
Standards, amendments and
interpretations to existing standards that are effective in
2023
The following new standards,
amendments and interpretations to existing standards have been
adopted by the Group during the year but have had no significant
impact on the consolidated financial statements of the
Group:
Amendments to IAS 1, 'Presentation
of Financial Statements' (effective from 01 January 2023). The
amendment provides guidelines on disclosures of accounting policies
and material judgements in the financial statements.
Amendments to IAS 8, 'Accounting
Policies, Changes in Accounting Estimates and Errors (effective
from 01 January 2023). The amendment provides additional guidance
on the definition of accounting estimates, application of changes
in estimates and distinction of errors between
estimates.
New standards, amendments and
interpretations to existing standards that are not yet effective or
have not been early adopted by the Group
At the date of authorisation of
these consolidated financial statements, the following standards
and interpretations were in issue but not yet mandatorily effective
and have not been applied in these consolidated financial
statements:
Amendments to IFRS 16, 'Lease
Liability in a Sale and Leaseback' (effective from 1 January 2024).
The amendments. The amendments require seller-lessee to apply the
subsequent measurement requirements for lease liabilities unrelated
to a sale and leaseback transaction to lease liabilities arising
from a leaseback in a way that it recognises no amount of the gain
or loss related to the right of use that it retains. The amendments
will require seller-lessee to reassess and potentially restate sale
and leaseback transactions entered since 2019.
New standards, amendments and
interpretations to existing standards that are not yet effective or
have not been early adopted by the Group
(continued)
IAS 1 (Amendments), 'Presentation
of Financial Statements - Classification of Liabilities at Current
or Non-current' (effective from 1 January 2024). The amendments aim
to promote consistency in applying the requirements by helping
companies determine whether, in the statement of financial
position, debt and other liabilities with an uncertain settlement
date should be classified as current (due or potentially due to be
settled within one year) or non-current.
Lack of Exchangeability (Amendment
to IAS 21, The Effects of Changes in Foreign Exchange Rates)
applies when one currency cannot be
exchanged into another. This may occur, for example, because of
government-imposed controls on capital imports and exports, or a
limitation on the volume of foreign currency transactions that can
be undertaken at an official exchange rate. The amendments clarify
when a currency is considered exchangeable into another currency,
and how an entity estimates a spot rate for currencies that lack
exchangeability. The amendments introduce new disclosures to help
financial statement users assess the impact of using an estimated
exchange rate.
The Group assessed that there is no
significant impact of the adoption of the new or amended Accounting
Standards and Interpretations on the Group's consolidated financial
statements. The Group has not early adopted any other standard,
interpretation or amendment that has been issued but is not yet
effective.
3 Critical accounting estimates
and judgements
Critical judgements in
applying the Group's accounting policies
The following are the critical
judgements, apart from those involving estimations uncertainty (see
below) that management has made in the process of applying the
Group's accounting policies and which have the significant effect
on the amounts recognised in the consolidated financial
statements.
Going
concern
The preparation of the consolidated
financial statements is based on the going concern assumption as
disclosed in note 2. The Board of Directors, after taking into
consideration the planned business activity and forecasts, believe
the going concern assumption is appropriate.
Measurement of fair
values
When measuring the fair value of an
asset or liability, the Group uses observable market data as far as
is possible. As at 31 December 2023, the Group owned 27,325,171 shares in Vinanz Ltd, a company listed
on London's AQUIS Stock Exchange which were valued at £2,322,639
based on Vinanz Ltd's closing share price of 8.5p per share on 31
December 2023.
Assessment of significant
influence
Although the Group owns more than
20% percent of the outstanding shares of its investees as at 31
December 2023, the Group believes that there is no significant
influence in accordance with the considerations enumerated in the
standards.
Determination of functional
currency
As disclosed in note 2, the Group
changed its functional and presentational currencies with effect
from 1 January 2021. The Directors considers £ to be the currency
that most faithfully represents the economic effect of the
underlying transactions, cash flows, events and conditions of the
Group. The £ is the currency in which the Group measures its
performance and reports its results, as well as the currency in
which it assesses the viability of projects.
Key sources of estimation
uncertainty
The key assumptions concerning the
future and other key sources of estimation uncertainty at the end
of the financial period, that have a significant risk of causing a
material adjustment to the carrying amounts of assets and
liabilities within the next financial period include the
following.
Expected credit losses of
loan receivables and provision for impairment of
investments
Under IFRS 9, a provision should be
made for expected credit losses that result from default events on
the financial instruments. Default events are events that trigger
impairment such as:
financial covenant
breach
insolvency of the
counterparty
counterparty credit rating
downgrade to the lowest rating given by a credit rating agency
(e.g. Moody's, S&P, Fitch).
As at 31 December 2023, the Group
recognized an impairment loss of £750,000 to fully write off the
remaining
investment cost of GSX Ltd.
Share-based payment
transactions
The Group measures the cost of
equity-settled transactions with non-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 market available
information and methods as well as 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. Share-based payments
calculations inherently require judgements and assumptions in
calculating the fair value. Share based payments expense during the
year amounted to £361,800 (2022: £224,000). As disclosed in note
14, the fair value of share warrants granted in 2023 was £361,800
(2022: £224,000) and the fair value of the share warrants exercised
during the year was nil (2022: £nil). The fair value of share
warrants outstanding as at 31 December 2023 is £649,300 (2022:
£377,500).
The warrants outstanding, other
than those issued during the year, have not been fully established
by the Directors and continue to be assessed by them. In the
meantime, from a conservative perspective, the Directors have
reflected these warrants at the carrying value of
£649,300.
4 Operating loss
Operating loss is
stated after charging the following:
|
|
|
31 December
2023
|
|
31 December
2022
|
|
|
|
£
|
|
£
|
|
Fees payable to the Group's auditor
for the audit of the consolidated financial statements
|
|
35,950
|
|
29,950
|
|
Remuneration of directors of the
Group
|
|
582,681
|
|
585,000
|
|
Share-based payment
expense
|
|
361,800
|
|
224,000
|
|
Impairment loss
|
|
750,000
|
|
2,214,501
|
|
|
|
|
|
|
5 Staff costs
During the year ended 31 December
2023, excluding Directors, the average number of people employed by
the Group was nil (2022: nil). During the year ended 31 December
2023, the Group paid wages and salaries of £50,000 (2022: £nil).
Until 25 October 2023, the Group employed a Chief Financial Officer
and a General Manager as consultants.
No staff other than the directors
are considered key management personnel.
6 Taxation
The Group is subject to
corporation tax in Gibraltar on any profits, which are accrued in
or derived from Gibraltar or any passive income which is taxable.
The corporation tax rate in Gibraltar is 12.5%. The Group has no
operations in Gibraltar which are taxable.
The Group has taxable losses to
carry forward, consequently no provision for corporate tax has been
made in these consolidated financial statements.
As at 31 December 2023 and 31
December 2022, the Group has not recognised deferred tax assets and
has no deferred tax liabilities.
7 Basic and diluted loss per
share
|
|
|
31 December
2023
|
|
31 December
2022
|
|
|
|
£
|
|
£
|
|
|
|
|
|
|
|
Loss attributable to ordinary
shareholders
|
|
(294,638)
|
|
(4,268,837)
|
|
Weighted average number of new
ordinary shares at
end of the period
|
|
79,224,628
|
|
73,598,453
|
|
Issued ordinary shares at the
beginning of the period
|
|
79,224,628
|
|
73,598,453
|
|
Effect of share issued during the
year
|
|
12,285,625
|
|
75,019,425
|
|
Weighted average number of new
ordinary shares at
31 December
|
|
91,510,253
|
|
75,019,425
|
|
Basic loss per share
|
|
(0.003)
|
|
(0.057)
|
Basic loss per share has been
calculated by dividing the net results attributable to ordinary
shareholders by the weighted average number of shares in issue
during the period. Due to the Group being loss making, any warrants
are anti-dilutive.
8 Loans and other
receivables
|
|
|
31 December
2023
|
|
Restated
31 December
2022
|
|
Group and Company
|
|
£
|
|
£
|
|
|
|
|
|
|
|
Loan receivable
|
|
79,784
|
|
221,352
|
|
Prepayments and accrued
income (note 20)
|
|
1,440
|
|
1,440
|
|
|
|
81,224
|
|
222,792
|
The loan receivable is payable on
demand and attracts an interest of 12% per annum.
9 Property, plant and
equipment
|
|
|
31 December
2023
|
|
31 December
2022
|
|
Group and Company
|
|
£
|
|
£
|
|
Cost
|
|
|
|
|
|
As at 1 January
|
|
141,700
|
|
141,700
|
|
Additions during the
year
|
|
-
|
|
-
|
|
Disposals during the
year
|
|
(141,700)
|
|
-
|
|
|
|
|
|
|
|
As at 31 December
|
|
-
|
|
141,700
|
|
|
|
|
|
|
|
Accumulated Depreciation
|
|
|
|
|
|
As at 1 January
|
|
80,690
|
|
33,457
|
|
Depreciation charges during the
year
|
|
11,808
|
|
47,233
|
|
Disposals during the
year
|
|
(92,498)
|
|
-
|
|
|
|
|
|
|
|
As at 31 December
|
-
|
|
80,690
|
|
|
|
|
|
|
|
Net Book Value
|
|
|
|
|
|
As at 31 December
|
|
-
|
|
61,010
|
The property, plant and equipment
consisted of computer equipment used in mining Bitcoin crypto
assets. In April 2023, the equipment together with the Bitcoin
crypto assets were disposed by the Group to Vinanz Ltd in exchange
for its 27,325,171 ordinary shares as disclosed in note 11. The
gain on disposal amounted to £103,093.
10 Intangible assets
|
|
|
31 December
2023
|
|
31 December
2022
|
|
Group and Company
|
|
£
|
|
£
|
|
Cost
|
|
|
|
|
|
As at 1 January
|
|
62,280
|
|
85,957
|
|
Revaluation
|
|
58,677
|
|
(23,677)
|
|
Disposals during the
year
|
|
(120,957)
|
|
-
|
|
|
|
|
|
|
|
As at 31 December
|
|
-
|
|
62,280
|
|
|
|
|
|
|
The intangible assets consisted of
Bitcoin crypto assets which were mined by the Group. These assets
were disposed during the year as disclosed in notes 9 and
11.
11 Investments
|
|
|
31 December
2023
|
|
31 December
2022
|
|
Group and Company
|
|
£
|
|
£
|
|
Cost
|
|
|
|
|
|
As at 1 January
|
|
750,000
|
|
777,001
|
|
Additions
|
|
273,251
|
|
2,187,500
|
|
Impairment
|
|
(750,000)
|
|
(2,214,501)
|
|
Revaluation to fair
value
|
|
2,049,388
|
|
-
|
|
|
|
|
|
|
|
As at 31 December
|
|
2,322,639
|
|
750,000
|
|
|
|
|
|
|
On 21 April 2023, the Group
disposed its computer equipment to Vinanz Ltd ("Vinanz") in
exchange for its 27,325,171 ordinary shares with no par value at a
valuation of £0.01 per share. These shares were subsequently listed
on London's AQUIS Stock Exchange and increased in value to
£2,322,639 based on Vinanz' closing share price of 8.5p per share
on 31 December 2023.
An impairment charge of £750,000
was recognised during 2023 (2022: £2,212,501) in respect of the
Group's residual investment in GSX Limited after the conditions met
by the Gibraltar Financial Services Commission were not met by the
deadline of 28 September 2023 and accordingly the acquisition was
not concluded.
As at 31 December 2022, the
Directors believe that the value of the investments in GSX
representing 50% share in the Company is £750,000. Accordingly, an
impairment loss to £2,212,501 was recognized.
In 2022, the Group also wrote off
£2,000 of capitalised option fees after deciding not to proceed
with the purchase of the entire issued share capital of Juno
Holdings Limited.
On 6 December 2022, the Company
established Valereum Collections Ltd. The cost of the investment is
negligible and has not been recognized. On 31 March 2023, Valereum
Collections Ltd issued a total of 11,280 new ordinary shares of
£0.0001 each at a price of £6.25 per share which raised £70,500 and
as at 31 December 2023, the Group owned 99.8% of Valereum
Collections Ltd.
12 Current liabilities
|
|
|
31 December
2023
|
|
31 December
2022
|
|
Group
|
|
£
|
|
£
|
|
|
|
|
|
|
|
Other payables including taxation
and social security
|
|
1,787,436
|
|
446,329
|
|
Loan from noteholders
|
|
117,669
|
|
1,400,409
|
|
Other loans
|
|
100,000
|
|
-
|
|
Due to related party undertakings
(Note 19)
|
|
40,000
|
|
65,501
|
|
Accruals and deferred
income
|
|
39,994
|
|
34,317
|
|
|
|
2,085,099
|
|
1,946,556
|
|
|
|
31 December
2023
|
|
31 December
2022
|
|
Company
|
|
£
|
|
£
|
|
|
|
|
|
|
|
Other payables including taxation
and social security
|
|
1,787,436
|
|
446,329
|
|
Loan from noteholders
|
|
117,669
|
|
1,400,409
|
|
Other loans
|
|
100,000
|
|
-
|
|
Due to related party undertakings
(Note 19)
|
|
71,000
|
|
65,501
|
|
Accruals and deferred
income
|
|
39,494
|
|
34,317
|
|
|
|
2,155,599
|
|
1,946,556
|
The Group entered into an
investment agreement with YA II PN, Ltd and Riverfort Global
Opportunities PCC Limited on 26 January 2022. The noteholders
agreed to advance a total of up to $10,000,000 to the Group. The
purpose of this investment funding facility was to finance the
exercise of the option to acquire the issued share capital of GSX
Limited and serve as general working capital of the Group. The loan
was convertible into ordinary shares of the Group at the discretion
of the noteholders. As at 31 December 2022, the Group had advanced
a total amount of $3,000,000. At 31 December 2023, the outstanding
balance was £117,669 (2022: £1,400,409) following conversions as
detailed in note 13 together with repayments of £199,767 (2022:
nil). An amount of £111,994 (2022: nil) was written off following a
repayment agreement reached with noteholders on 24 November
2023.
On 13 December 2023, the Group
entered into a loan agreement for £100,000 repayable on 31 January
2024 with a fixed interest rate of 1% per month.
Other payables include amounts due
to current and previous directors amounting to £840,347 (2022:
£261,666) in respect of their remuneration as disclosed in note
19.
Other payables as at 31 December
2023 are expected to be reduced following the conclusion of
on-going negotiations with creditors which have been taking place
during 2024 as disclosed in note 21.
13 Share capital
|
|
|
|
31 December
2023
|
31 December
2022
|
|
|
Authorised:
|
|
|
£
|
£
|
|
|
|
Ordinary shares of GBP 0.001
each
|
|
6,000,000
|
6,000,000
|
|
|
|
|
|
|
|
|
|
|
|
Allotted and called up:
|
|
|
|
|
|
|
|
31 December
2023
Number of
shares
|
31 December
2023
Share
capital
£
|
31 December
2023
Share
premium
£
|
31 December
2022
Number of
shares
|
31 December
2022
Share
capital
£
|
31 December
2022
Share
premium
£
|
|
|
|
|
|
|
|
|
|
|
As at 1 January
|
79,224,628
|
4,131,220
|
22,888,797
|
73,598,453
|
4,125,594
|
22,066,933
|
|
|
Issued during the year
|
22,420,080
|
17,420
|
953,560
|
5,626,175
|
5,626
|
821,864
|
|
|
Warrants exercised during the
year
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
As at 31 December
|
101,644,708
|
4,148,640
|
23,842,857
|
79,224,628
|
4,131,220
|
22,888,797
|
|
|
|
|
|
|
|
|
|
|
| |
On 16 January 2023, the Group
issued 1,849,225 new ordinary shares of 0.1 pence each at a price
of 8.8448 pence per share which totals to £163,560 (US$200,000)
following the conversion notice received by the Group under the
terms of the funding facility as discussed in note 12.
On 20 February 2023, the Group
issued 2,197,844 new ordinary shares of 0.1 pence each at a price
of 7.5847 pence per share which totals to £166,660 (US$200,000)
following the conversion notice received by the Group under the
terms of the funding facility as discussed in note 12.
On 27 March 2023, the Group issued
2,836,002 new ordinary shares of 0.1 pence each at a price of
5.7687 pence per share which totals to £163,600 (US$200,000)
following the conversion notice received by the Group under the
terms of the funding facility as discussed in note 12.
On 21 April 2023, the Group issued
3,425,425 new ordinary shares of 0.1 pence each at a price of
4.7112 pence per share which totals to £161,380 (US$200,000)
following the conversion notice received by the Group under the
terms of the funding facility as discussed in note 12.
On 16 May 2023, the Group issued
3,690,575 new ordinary shares of 0.1 pence each at a price of
4.3289 pence per share which totals to £159,760 (US$200,000)
following the conversion notice received by the Group under the
terms of the funding facility as discussed in note 12.
On 16 June 2023, the Group issued
3,421,349 new ordinary shares of 0.1 pence each at a price of
4.5602 pence per share which totals to £156,020 (US$200,000)
following the conversion notice received by the Group under the
terms of the funding facility as discussed in note 12.
14 Share-based
payments
Details of the share warrants and
options in issue during the year ended 31 December are as
follows:
|
|
Number of
warrants/options
2023
|
Average exercise price
2023
|
Number of
warrants/options
2022
|
Average exercise price
2022
|
|
|
No
|
£
|
No
|
£
|
|
|
|
|
|
|
|
Outstanding at 1 January
|
37,030,317
|
0.2131
|
35,764,285
|
0.2127
|
|
Issued during the year
|
3,300,000
|
0.0100
|
1,266,032
|
0.3412
|
|
Cancelled during the
year
|
(5,000,000)
|
0.0500
|
-
|
-
|
|
Expired during the year
|
(1,000,000)
|
0.2000
|
-
|
-
|
|
Outstanding at 31
December
|
34,330,317
|
0.2177
|
37,030,317
|
0.2131
|
The fair value of share warrants
granted in 2023 was £361,800 (2022: £224,000) and the fair value of
the share warrants exercised during the year was nil (2022: nil).
The fair value of share warrants outstanding as at 31 December 2023
is £649,300 (2022: £377,500). The fair value is determined by using
market available information and methods as well as taking into
account the terms and conditions upon which the instruments were
granted.
During the year, the Group
cancelled 5,000,000 share warrants from its General Share Option
Scheme. The warrants outstanding, other than those issued during
the year, have not been fully established by the Directors and
continue to be assessed by them. In the meantime, from a
conservative perspective, the Directors have reflected these
warrants at the carrying value of £649,300.
15 Financial instruments and financial risk
management
The Group's principal financial
instruments comprise cash and cash equivalents, loans and other
receivables, investments in equity instruments and trade and other
payables. The Group's accounting policies and methods adopted,
including the criteria for recognition, the basis on which income
and expenses are recognised in respect of each class of financial
asset, financial liability and equity instrument are set out in
note 2. The Group does not use financial instruments for
speculative purposes.
The principal financial
instruments used by the Group, from which financial instrument risk
arises, are as follows:
|
|
|
December
2023
|
|
Restated
December
2022
|
|
|
|
£
|
|
£
|
|
Financial assets:
|
|
|
|
|
|
Loan receivable
|
|
79,784
|
|
221,352
|
|
Cash and cash
equivalents
|
|
31,932
|
|
92,528
|
|
Investments
|
|
2,322,639
|
|
750,000
|
|
|
|
2,434,355
|
|
1,063,880
|
|
Financial liabilities:
|
|
|
|
|
|
Loan from noteholders
|
|
117,669
|
|
1,400,409
|
|
Other loans
|
|
100,000
|
|
-
|
|
Due to related party
undertaking
|
|
40,000
|
|
65,501
|
|
Other creditors
|
|
1,787,436
|
|
446,329
|
|
Accruals and deferred
income
|
|
39,994
|
|
34,317
|
|
|
|
2,085,099
|
|
1,946,556
|
Capital risk management
The Group's objective when managing
capital is to ensure that adequate funding and resources are
obtained to enable it to develop its projects through to
profitability, while in the meantime safeguarding the Group's
ability to continue as a going concern. This is aimed at enabling
it, once the projects come to fruition, to provide attractive
returns for shareholders and benefits for other stakeholders.
Capital is sourced from equity and from borrowings, as
appropriate.
No changes were made in the
objectives, policies or processes during the year ended 31 December
2023, nor the year ended 31 December 2022.
The Group's activities expose it to
a variety of financial risks: market risk (including currency risk,
fair value interest rate risk and cash flow risk), credit risk and
liquidity risk. The Group's overall risk management programme seeks
to minimise potential adverse effects on the Group's financial
performance.
Financial risk
management
(a) Market
risk
Foreign exchange
risk - The Group undertakes
certain transactions in foreign currencies. Hence, exposure to
exchange rate fluctuations arises.
The Group incurs foreign currency
risk on transactions denominated in currencies other than its
functional currency. The currency other than the functional
currency that gives rise to this risk at Group level is the GBP. At
the year end, the Group's exposure to the currency is minimal;
accordingly any increase or decrease in the exchange rates relative
to the functional currency would not have a significant effect on
the consolidated financial statements.
Fair value interest rate risk
and cash flow risk - The fair values
of financial assets and financial liabilities approximate the
carrying amounts of those assets and liabilities reported in the
statement of financial position. The Group has interest rate risk
with the financial institutions and cash flow risk with its
investment in equity securities.
(b) Credit
risk
Credit risk arises from cash and
cash equivalents and deposits with banks and financial
institutions, loans and other receivables, investment in equity
instruments, as well as committed transactions. Individual risk
limits are set based on limits set by the board. Credit risk refers
to the risk that counterparty will default on its contractual
obligations resulting in financial loss to the Group. The Group has
adopted a policy of only dealing with creditworthy counterparties.
Cash is placed with an authorised and regulated electronic money
institution. The Group's investment in equity is publicly listed in
London's Aquis Stock Exchange. The Group's exposure and the
credit ratings of its trading counterparties are monitored by the
board of Directors to ensure that the aggregate value of
transactions is spread amongst approved counterparties.
The maximum exposure to credit risk
is represented by the carrying amount of each financial asset in
the statement of financial position.
(c) Liquidity
risk
Liquidity risk arises from the
Group's management of working capital. It is the risk that the
Group will encounter difficulty in meeting its financial
obligations as they fall due.
The Group's policy is to ensure
that it will always have sufficient cash to allow it to meet its
liabilities when they become due. The principal liabilities of the
Group arise in respect of the ongoing development programs, trade
and other payables. Trade and other payables are all payable within
12 months.
The board receives cash flow
projections on a regular basis as well as information on cash
balances.
The overriding financial risk to
the Group during the year was that of liquidity. At the current
stage of the Group's development, the major source of funds is
likely to be through the injection of new equity capital or a debt
facility, or a combination of such sources.
16 Commitments
The Group had
no capital commitments as at 31 December 2023.
17 Contingencies
As at 31 December 2023, the Group
had a claim which the Directors aggressively disagree, as they
believe that the validity of the claim against the Group is weak.
Any provision, as necessary, have been reflected in the financial
statements.
18 Controlling
party
At 31 December 2023, the Directors
do not believe there to be any single controlling party.
19 Related party
transactions
Transactions with related parties
in respect of consultancy fees and remuneration of Directors during
the year were as follows:
|
|
Balance as
at
|
Consultancy
|
|
Settled in
|
Balance as
at
|
|
|
1 January
2023
|
fees
|
Remuneration
|
cash
|
31 December
2023
|
|
|
£
|
£
|
£
|
£
|
£
|
|
Richard O'Dell Poulden
|
133,333
|
166,667
|
-
|
-
|
300,000
|
|
Patrick L Young
|
120,000
|
344,000
|
-
|
-
|
464,000
|
|
Alan David Gravett
|
8,333
|
22,014
|
-
|
-
|
30,347
|
|
James Formolli
|
-
|
-
|
20,000
|
-
|
20,000
|
|
Peter Sekhon
|
-
|
-
|
15,000
|
(4,000)
|
11,000
|
|
Nicholas Cowan
|
-
|
-
|
10,000
|
-
|
10,000
|
|
Karl Moss
|
-
|
-
|
5,000
|
-
|
5,000
|
|
|
261,666
|
532,681
|
50,000
|
(4,000)
|
840,347
|
Consultancy fees paid to Richard
Poulden includes fees paid to Black Swan Plc of which he is also
the Chairman. During the year, the Directors claimed expenses they
had incurred on behalf of the Group of £15,346 (2022: £84,779).
Balance still due to the Directors as at 31 December 2023 in
relation to claimed expenses amounted to £82,163 (2022:
67,422).
As at 31 December 2023, the Group
owed £40,000 (2022: nil) to James Formolli in respect of a
temporary loan.
As at 31 December 2023, there is
an outstanding balance due by the Company to Valereum Collections
Ltd amounting £71,000 (2022: £65,501) for funds the Company
received on behalf of the subsidiary.
20 Restatement of prior year results
and balances
Certain amounts in the comparative
financial statements and note disclosures have been restated to
correct prior period errors. Legal expenses, which was prepaid,
amounting £51,560
was not recorded in the financial statements as at and for the year
ended 31 December 2021. Accordingly, an adjustment led to a
decrease in prepayments within trade and other receivables as at 31
December 2021 and 2022 from £53,000 to £1,440. Consequently, the opening
retained earnings for the year ended 31 December 2023 has been
adjusted by £51,560.
21 Subsequent
events
Since 31 December 2023, the Group
has raised £2,300,000 through the following subscriptions for
ordinary shares:
On 28 March 2024, the Group raised
£300,000 from James Formolli through issuing 5,000,000 new ordinary
shares of £0.001 each at a price of £0.06 per share and
issued 5,000,000 Warrants over new ordinary
shares of £0.001 at par.
On 31 May 2024, the Group entered
into an unconditional agreement to raise £2,000,000 from James
Formolli through issuing 55,411,752 new ordinary shares of £0.001
each at a price of £0.036 per share.
The Group has settled £157,669 of
the loans outstanding as at 31 December 2023 as follows:
On 28 March 2024, the Group repaid
in full the loan of £40,000 outstanding to James Formolli as at 31
December 2023.
On 4 April 2024, the Group repaid
in full the loan of £117,669 outstanding to the convertible loan
note holders as at 31 December 2023.
On 30 January 2024, the Group
acquired the entire share capital of the GSX Group Ltd for a
consideration of 5,000,000 Ordinary shares of £0.001 each in the
Company and the issue of warrants over 10,000,000 ordinary shares
of £0.001 each in the Company at an exercise price of £0.01 per
share.
In 2024, agreements have been
reached with certain creditors to settle the recorded liabilities
as at 31 December 2023 for reduced amounts.
22 Availability of
accounts
The full report and accounts are
being posted on the Group's website, www.vlrm.com.