TIDMQBT
25 June 2021
Quantum Blockchain Technologies Plc
("QBT" or "the Company")
FINAL RESULTS
The board of Quantum Blockchain Technologies (AIM: QBT) is pleased to report
its final results for the year ended 31 December 2020.
HIGHLIGHTS
* Favourably settled Mediapolis court claim for ?1.5 million
* Sipiem legal claim approaching it conclusion, with a valuation of ?7.8
million to be paid out should the result be in favour of Clear Leisure 2017
Ltd
* PBV Monitor, ForCrowd and GeoSim all moving forward positively
* Operating loss reduced to ?1.1 million (2019: ?1.4 million)
* Net Current Assets of ?4.9 million (2019: ?2.4 million)
POST BALANCE SHEET HIGHLIGHTS
* Raised £1.68 million through two placings
* Name change from Clear Leisure Plc to Quantum Blockchain Technologies Plc
to reflect the change in strategy
* Appointed cryptography expert to join the in-house R&D team to develop new
blockchain strategy
Francesco Gardin, Executive Chairman of QBT, commented, "2020 was, as for many
companies, a challenging year and yet the focus of the Company, to preserve the
stability of its operations and investments, should be seen as a success by
shareholders. Our commitment to return value to shareholders was strengthened
in the year by favourable results in certain legal cases, but mostly by the
groundwork we have laid in positioning the Company squarely within the quantum
computing, blockchain and cryptocurrencies sectors; the results of which, we
expect to be seen in 2021 and beyond."
The Company advises that the 2020 Report and Accounts will be posted out to
shareholders, together with the AGM notice and form of proxy. The AGM will be
held at Company's legal address, 22 Great James Street London WC1N 3ES, at 12pm
on Monday, 19 July 2020. In light of current Government social distancing
measures relating to Covid-19, this year's AGM will run as a closed meeting,
with only the quorum necessary for a valid meeting. Shareholders will not be
permitted to attend. We are therefore strongly encouraging Shareholders to vote
by electing the Chairman of the Company as proxy.
For further information please contact:
Quantum Blockchain Technologies Plc +39 335 296573
Francesco Gardin, CEO and Executive Chairman
SP Angel Corporate Finance
(Nominated Adviser & Broker) +44 (0)20 3470 0470
Jeff Keating
Leander (Financial PR) +44 (0) 7795 168 157
Christian Taylor-Wilkinson
About Quantum Blockchain Technologies Plc
QBT (AIM: QBT) is an AIM listed investment company which has recently realigned
its strategic focus to technology related investments, with special regard to
Quantum computing, Blockchain, Cryptocurrencies and AI sectors. The Company
has commenced an aggressive R&D and investment programme in the dynamic world
of Blockchain Technology, which includes cryptocurrency mining and other
advanced blockchain applications.
For further information, please visit, www.quantumblockchaintechnologies.co.uk
CHAIRMAN'S STATEMENT
I am pleased to present the Group's Final Results for the year ended 31
December 2020.
Following the shareholder approval at the General Meeting held by the Company
on 6 May 2021, the Company has changed its name from Clear Leisure Plc to
Quantum Blockchain Technologies Plc. Although this report is dedicated, in the
main, to the 2020 financial year, which is prior to the change of name, the
Company will be referred to as Quantum Blockchain Technologies Plc (the
"Company" or "QBT").
Operational Review
2020 was an extremely challenging year during which the Company and the Group
had to contend with the business consequences of the Covid-19 pandemic.
In this difficult economic environment, the focus of the board was to preserve
the stability of the Company, its investee companies, and its litigation
related assets, whilst continuing to explore for new potential investments and
projects.
Without doubt, the single most important event of 2020 was the successful
conclusion, in June, of the Mediapolis bankruptcy process, for which the wholly
owned subsidiary, Clear Leisure 2017 ("CL17"), settled with the receiver for ?
1,663,000, of which ?1,480,933, was received during the year. The balance of ?
182,067 is due at the closure of the bankruptcy process. Additionally, the
receiver awarded CL17 a claim against former Mediapolis directors and members
of its internal audit committee, previously valued by the receiver at above ?
20m. The Company has paid ?50,000 to enter this claim, the payment will be
deducted from any amount received under the claim.
The Group's other litigation assets (held by CL17) have moved further along the
determination process. In respect of the Sosushi Srl ("Sosushi") legal claim
(valued up to ?1.03m), the Bologna Court has elected to continue the case
through an arbitration process, which is expected to be concluded within the
end of 2021. The action for liability against former management and internal
audit committee (valued at ?10.8m by the Company, and later in 2021 confirmed
by the Court appointed independent expert up to a value of ?7.8m) undertaken by
Sipiem in Liquidazione SpA ("Sipiem") is also gradually drawing to close.
The Company maintains a positive outlook for the realisation of these assets,
and they have been valued in the accounts at a fair value of ?4.4 million.
With regard to its technology assets, the Company's focus has been to assist
investee companies in the development of their strategy and sustain the value
of the initial investment.
As announced on 28 January 2020, PBV Monitor Srl ("PBV") successfully completed
a ?300,000 fund raise from an Italian investment company. The transaction
effectively valued PBV at ?3m (post-money). The Company has retained its 10%
shareholding in PBV. Despite Covid-19 delaying the company's strategy by a few
months, PBV continued to develop its roadmap, expanding its legal directory
services and commercial partnerships. In October 2020 it launched its "Market
Intelligence Service" which is receiving encouraging early results.
QBT supported ForCrowd Srl, ("ForCrowd") the Italian crowdfunding platform, in
its early stages, leading to the launch of its first crowdfunding campaign in
May 2020, followed by a second one in July. Due to the difficult economic
situation in Italy, the two campaigns were not successfully completed.
However, continuing into 2021, a few interesting crowdfunding projects, remain
in the company's pipeline. QBT is working to increase interest in these
projects by exploiting the synergies in its portfolio with those of ForCrowd
and its clients.
Geosim Systems Ltd ("Geosim"), the Israeli 3D virtual mapping company,
delivered, in the first half of 2020, the Digital Twin model of one of the
largest international airports in Asia. In the second half of the year, Geosim
focused on obtaining new contracts in North America, which led to the
finalisation of an important contract with a major airport in early 2021.
As announced in August 2020, QBT engaged Sapphire Capital Partners LLP, an FCA
approved and regulated investment management partner, to act as the Investment
Manager for the proposed launch of an Enterprise Investment Scheme fund ("EIS
fund") in which the Company intends to operate as Investment Advisor.
Another important event was the renegotiation of all Eufingest SA ("Eufingest")
loans in November 2020, converting them into a Zero-Coupon Bond ("2020 Zero
Coupon Bond"), convertible at 1p per new ordinary share of 0.25 pence each in
the Company ("Ordinary Shares") and carrying an implied yield to maturity of 1%
and, as such, lowering its cost of capital.
Subsequent to the year end, the Company also changed its investment strategy,
with a focus on Quantum Computing, Blockchain, Cryptocurrencies and Artificial
Intelligence sectors. In conjunction with this, QBT commenced a research and
development ("R&D") and investment programme. The Company's R&D is focused on
Cryptography; bringing together the most advanced implementation techniques and
functions, along with quantum computing technologies and AI deep learning, to
develop a new and disruptive approach to blockchain technology. The investment
programme is focused on selecting the most innovative and out-of-the-box
start-ups in the Blockchain and cryptocurrency sector.
Financial Review
The group reported a total comprehensive loss of ?1.2m for the year ended 31
December 2020: (2019 restated: ?0.6m loss). Operating losses for the period
were ?1,087,000 (2019 restated: ?1,384,000 loss). The undiluted Net Asset Value
("NAV") of the Group as of 31 December 2020 was -?2.4m (2019 restated: -?1.6m).
The Group had Net Current Assets of ?4.9m million as at 31 December 2020, an
improvement of ?2.5m since last year (2019 restated: ?2.4 million).
The comparative 2019 values have been restated, to correctly represent the
equity and derivative components of the Company's Bonds. For further details
please see Note 25 in the Notes to the Financial Statements section.
Portfolio Companies
As at 31 December 2020, the Group comprised of a diverse portfolio of companies
in several growth sectors; primarily leisure and technology. The portfolio
included (percentage of equity held is shown in parenthesis):
PBV Monitor Srl (pbvmonitor.com) (10%): PBV Monitor is an Italian company
specialising in the acquisition and dissemination of data for the legal
services industry, utilising proprietary market intelligence tools and
dedicated search software. In 2020 PBV launched its market intelligence service
- "PBV Intelligence", whilst also establishing new commercial partnerships.
Sipiem SpA (50.17%): is a minority shareholder in T.L.T. SaS and owns a number
of real estate assets in Italy, including a minority stake in the Ondaland
Waterpark. It has issued a claim for ?10.8m against the previous management
team and audit committee. In 2019, the claim was acquired by CL17.
As announced in May 2021 the court-appointed independent expert confirmed the
economic merit of the claim for ?7.8m. The next procedural steps are as follow:
* The judge will schedule a further hearing to comment the independent expert
valuation.
* Following this hearing, each party's lawyers will have 80 days ("Conclusive
Briefs Period") to file their conclusive briefs to the Judge.
* The judge's ruling is then expected within 60 days following the conclusion
of the Conclusive Briefs Period.
GeoSim Systems Ltd ("Geosim") (geosimcities.com) (4.53%): is an Israel based
company that develops 3D modelling software. At the beginning of 2020, Geosim
has delivered on its project in Asia to build a Digital Twin model of an
international airport despite the inevitable delays due to Covid-19. In 2021,
Geosim is working at the completion of a first Phase in the development of a
similar 3D Reality Model for a major North American airport.
Mediapolis Srl (84.04%): Currently in bankruptcy procedure. In June 2020, CL17
reached a settlement agreement with the Mediapolis Receiver to the amount of ?
1,663,000 payable to CL17. CL17 received ?1,480,933 in August 2020, with final
balance of ?182,067 (less ?50,000 used to purchase a legal claim against former
director and internal audit team) payable at the end. Once the final payment is
received, CL17 will have no further claim against Mediapolis. This represents a
very important milestone in the Company's life, bringing a successful
conclusion to a very complicated issue inherited from the previous management
of the Company.
Clear Leisure 2017 Ltd (100%): CL17 holds the remaining rights on the auction
proceeds, amounting to ?182,067 (less ?50,000 used to purchase a legal claim
against former director and internal audit team) with ?1,480,933 already paid
in August 2020. The legal claim had been originally valued by Mediapolis
receiver above ?20 million.
Furthermore, CL17 is the holder of other potentially important assets: the ?
10.8m action for liability against Sipiem's previous management and audit
committee (in 2021 the economic merit has been confirmed for a value up to ?
7.8m by a Court appointed independent expert) and the ?1.03m action for
liability against Sosushi's previous management.
ForCrowd Srl (ForCrowd.com) (20%): During 2020, despite the Covid-19 pandemic,
ForCrowd started its first campaigns ("B4TECH" and "Meta Wellness Srl"), as
reported above. The investment in ForCrowd is part of a strategy of the Company
allowing other portfolio companies to have an easy access to the crowdfunding
resources whilst entitling QBT to potential revenue streams (1% of funds
received by investors on projects introduced and 3% on funds introduced). In
2021, the Company increased its stake in ForCrowd, moving from 20% to 41.17%
for a consideration of ?34,000, whilst ForCrowd launched a new crowdfunding
campaign.
Miner One Limited (100%): Subsequently the change of Company's name and
investment strategy, Miner One will become the vehicle through which QBT will
carry out its crypto-mining operations. The container containing the datacentre
together with the mining machines are still located in Serbia. It remains on
care and maintenance as machines ought to be updated.
Post-Balance Sheet Events
At the start of the year the Company was notified that the Bologna Court
elected to continue CL17 ?1.03 million legal claim against the previous
management of Sosushi through an arbitration process, which will provide a
legally binding decision on the matter. The arbitration process formally
started on 18th January 2021.
In the same period, CL17 (at the conclusion of the mandatory public bidding
process), was assigned a legal claim against Mediapolis former management and
internal audit committee, for a consideration of ?50,000 to be deducted from
the amount still receivable from the Mediapolis Bankruptcy procedure.
In relation to Sipiem's legal claim, in May, the Court appointed independent
expert filed his report on the economic merit of the damages suffered by Sipiem
at an amount of up to ?7.8 million, subject to the Judge ruling that the
conduct of Sipiem's former board and internal audit committee was unlawful.
Furthermore, as one of the defendants has sadly passed away, CL17 was required
to take a few additional mandatory procedural steps that have slightly delayed
the proceedings. The Court of Venice has then scheduled the hearing for 10
November 2021 during which the Judge will receive the parties' comments on the
report of the independent expert.
In February, via two separate equity placings, the Company raised £680,000 and
£1,000,000 (both amounts before expenses), to sustain the Company's running
costs and specifically to launch a new Investment Strategy focused on R&D about
Blockchain, Cryptocurrency and Quantum computing.
On 14 April 2021, the Company issued a Notice of General Meeting to seek
approval to:
* Amend the Company's Investing Policy to be focused on Blockchain,
Cryptocurrency, Quantum Computing and AI.
* Change the Company's name from Clear Leisure to Quantum Blockchain
Technologies plc.
* Authorise the granting of options to the CEO and current and future
management team of the Company.
* Grant authorities to the directors to issue shares in the Company.
At the General Meeting shareholders voted to approve the above and therefore
the Company changed its name to Quantum Blockchain Technologies plc.
On this note, in June 2021, the Company announced the launch and progress of
the in-house R&D programme in respect of advanced proprietary techniques for
Bitcoin mining. The Company entered into a one-year service agreement with a UK
based international cryptography expert whose specialism is cryptocurrency
mining blockchain optimisations.
The aim of this work is to improve the efficiency of Bitcoin mining, targeting
a material reduction in energy usage and faster hash processing, which will
increase the probability of successful mining.
As part of the one-year service agreement, the consultant has been awarded
share options over 10,000,000 new ordinary shares of 0.25 pence each in the
Company at an exercise price of 5p each, which can be exercised between 15
February 2022 and 15 August 2022.
Outlook
The Board remains committed to return value to its stakeholders by:
* Positioning the Company in the Quantum Computing, Blockchain and
Cryptocurrency sectors, both via the investment activity and in-house R&D
projects.
* Realisation of the legacy assets, for which positive outcomes are expected
from claims of the Company.
* Further reduction of the debt position (if and when the conditions are
deemed appropriate).
The Board maintains a positive outlook with the Company's new investment
strategy focused on Quantum Computing, Blockchain and Cryptocurrency now in
place in combination with its existing technology investments and remaining
legal claims which the Company believes are drawing towards a positive
conclusion.
GROUP INCOME STATEMENT AND STATEMENT OF COMPREHENSIVE INCOME FOR THE YEARED
31 DECEMBER 2020
Note 2020 2019
(restated)
?'000 ?'000
Continuing operations
Revenue 12 13
12 13
Administration expenses 7 (1,123) (1,397)
Other operating income 24 -
Operating loss (1,087) (1,384)
Finance (costs)/income 8 (121) 760
Loss before tax (1,208) (624)
Tax 11 - -
Loss from continuing operations (1,208) (624)
TOTAL COMPREHENSIVE LOSS FOR THE YEAR (1,208) (624)
Earnings per share:
Basic and fully diluted loss per share (cents) 12 ?0.182 ?0.101
The accounting policies and notes form part of these financial statements.
GROUP AND COMPANY STATEMENTS OF FINANCIAL POSITION
AS AT 31 DECEMBER 2020
Notes Group Group Company Company
2020 2019 2020 2019
(restated) (restated)
?'000 ?'000 ?'000 ?'000
Non-current assets
Investments 13 980 1,117 434 521
Total non-current assets 980 1,117 434 521
Current assets
Trade and other receivables 14 5,191 6,604 841 1,493
Cash and cash equivalents 15 - - - -
Total current assets 5,191 6,604 841 1,493
Total assets 6,171 7,721 1,275 2,014
Current liabilities
Trade and other payables 16 (334) (396) (327) (339)
Borrowings 17 - (3,691) - (3,691)
Derivative financial instruments 18 - (121) - (121)
Total current liabilities (334) (4,208) (327) (4,151)
Net current assets/(liabilities) 4,857 2,396 514 (2,658)
Total assets less current 5,837 3,513 948 (2,137)
liabilities
Non-current liabilities
Borrowings 17 (8,212) (5,142) (8,212) (5,142)
Total non-current liabilities (8,212) (5,142) (8,212) (5,142)
Total liabilities (8,545) (9,350) (8,539) (9,290)
Net (liabilities)/assets (2,375) (1,629) (7,264) (7,279)
Equity
Share capital 19 7,397 7,397 7,397 7,397
Share premium account 19 47,124 47,124 47,124 47,124
Other reserves 21 8,787 8,376 462 51
Retained losses (65,683) (64,526) (62,247) (61,851)
Total equity (2,375) (1,629) (7,264) (7,279)
An income statement for the parent company is not presented in accordance with
the exemption allowed by S408 of the Companies Act 2006. The parent company's
comprehensive loss for the financial year amounted to ?447,000 (2019: restated
?144,000 profit).
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2020
Share Share Other Retained Total
Group capital premium reserves losses equity
account
?'000 ?'000 ?'000 ?'000 ?'000
At 1 January 2019 7,227 47,038 8,376 (62,416) 225
Prior year adjustment (note - - - (1,486) (1,486)
25)
At 1 January 2019 (restated) 7,227 47,038 8,376 (63,902) (1,261)
Total comprehensive loss - - - (624) (624)
for the year
Issue of shares 170 86 - - 256
At 31 December 2019 7,397 47,124 8,376 (64,526) (1,629)
(restated)
Total comprehensive loss - - - (1,208) (1,208)
for the year
Lapsed share options - - (51) 51 -
Equity portion of convertible - - 462 - 462
loan notes
At 31 December 2020 7,397 47,124 8,787 (65,683) (2,375)
The following describes the nature and purpose of each reserve:
Share capital represents the nominal value
of equity shares.
Share premium amount subscribed for share
capital in excess of the nominal value.
Retained losses cumulative net gains and losses less distributions made and
items of other comprehensive income not accumulated in another separate
reserve.
Other reserves consist of three reserves, as
detailed in Note 21, see below:
Merger reserve relates to the difference in consideration and nominal value of
shares issued during a merger and the fair value of assets transferred in an
acquisition of 90% or more of the share capital of another entity.
Loan note equity reserve relates to the equity portion
of the convertible loan notes.
Share option reserve fair value of the employee and
key personnel equity settled share option scheme as accrued at the statement of
financial position date.
The accounting policies and notes form part of these financial statements.
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2020
Share Share Other Retained Total
Company capital premium reserves losses
account
?'000 ?'000 ?'000 ?'000
?'000
At 1 January 2019 7,227 47,038 51 (60,509) (6,193)
Prior year adjustment (note - - - (1,486) (1,486)
25)
At 1 January 2019 (restated) 7,227 47,038 51 (61,995) (7,679)
Total comprehensive profit - - - 144 144
for the year
Issue of shares 170 86 - - 256
At 31 December 2019 7,397 47,124 51 (61,851) (7,279)
(restated)
Total comprehensive loss - - - (447) (447)
for the year
Lapsed share options - - (51) 51 -
Equity portion of convertible - - 462 - 462
loan notes
At 31 December 2020 7,397 47,124 462 (62247) (7,264
The following describes the nature and purpose of each reserve:
Share capital represents the nominal value
of equity shares.
Share premium amount subscribed for share
capital in excess of the nominal value.
Retained losses cumulative net gains and losses less distributions made and
items of other comprehensive income not accumulated in another separate
reserve.
Other reserves consist of two reserves, as
detailed in Note 21, see below:
Loan note equity reserve relates to the equity portion of
the convertible loan notes.
Share option reserve fair value of the employee and key
personnel equity settled share option scheme as accrued at the statement of
financial position date.
The accounting policies and notes form part of these financial statements.
GROUP AND COMPANY STATEMENT OF CASH FLOWS FOR THE YEARED 31 DECEMBER 2020
Note Group Group Company Company
2020 2019 2020 2019
(restated) (restated)
?'000 ?'000 ?'000 ?'000
Cash used in operations
Loss before tax (1,208) (624) (447) 144
Fair value changes in 27 - 40
investments
Impairment of investments 89 - 89 -
Other gains and losses 50 - - -
Finance charges 247 (760) 247 (760)
Decrease /(increase) in 1,417 882 655 (95)
receivables
(Decrease) /increase in payables (61) (78) (10) 118
Decrease in derivatives (121) - (121) -
Net cash outflow from operating 413 (553) 413 (553)
activities
Cash flows from investing
activities
Purchase of investments 13 (2) - (2) -
Net cash outflow from investing - - (2) -
activities
Cash flows from financing
activities
Proceeds from borrowing 150 291 150 291
Repayment of borrowings (561) - (561) -
Interest paid - (5) - (5)
Net cash (outflow)/inflow from (411) 286 (411) 286
financing activities
Net (decrease)/increase in cash - (267) - (267)
for the year
Cash and cash equivalents at - 267 - 267
beginning of year
Cash and cash equivalents at end 15 - - - -
of year
The accounting policies and notes form part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2020
1. General Information
Quantum Blockchain Technologies plc is a company incorporated in the United
Kingdom under the Companies Act 2006. The Company's ordinary shares are traded
on AIM of the London Stock Exchange. The address of the registered office is
given on the Company Information page. The nature of the Group's operations and
its principal activities are set out in the Directors' report on page 12.
2. Accounting policies
The principal accounting policies are summarised below. They have all been
applied consistently throughout the period covered by these consolidated
financial statements.
Basis of preparation
The consolidated Financial Statements of Quantum Blockchain Technologies plc
have been prepared in accordance with International Financial Reporting
Standards (IFRS) and International Financial Reporting Interpretations
Committee (IFRIC) in conformity with the requirements of the Companies act 2006
and the parts of Companies Act 2006 applicable to companies reporting under
IFRS.
The financial statements have been prepared under the historical cost
convention as modified by the revaluation of assets and liabilities held at
fair value.
The preparation of Financial Statements in conformity with IFRS requires the
use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Group's accounting
policies. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the consolidated
Financial Statements are disclosed in Note 3.
The Consolidated Financial Statements are presented in Euros (?), the
presentational and functional currency, rounded to the nearest ?'000.
Basis of consolidation
Where the company has control over an investee, it is classified as a
subsidiary. The company controls an investee if all three of the following
elements are present: power over the investee, exposure to variable returns
from the investee, and the ability of the investor to use its power to affect
those variable returns. Control is reassessed whenever facts and circumstances
indicate that there may be a change in any of these elements of control.
The consolidated financial statements present the results of the company and
its subsidiaries as if they formed a single entity. Intercompany transactions
and balances between group companies are therefore eliminated in full. All
subsidiaries have a reporting date of December.
The consolidated financial statements incorporate the results of business
combinations using the acquisition method. In the statement of financial
position, the acquiree's identifiable assets, liabilities and contingent
liabilities are initially recognised at their fair values at the acquisition
date. The results of acquired operations are included in the consolidated
statement of comprehensive income from the date on which control is obtained.
They are deconsolidated from the date on which control ceases.
On consolidation, the results of overseas operations are translated into pounds
sterling at rates approximating to those ruling when the transactions took
place. All assets and liabilities of overseas operations, including goodwill
arising on the acquisition of those operations, are translated at the rate
ruling at the reporting date. Exchange differences arising on translating the
opening net assets at opening rate and the results of overseas operations at
actual rate are recognised in other comprehensive income and accumulated in the
foreign exchange reserve.
Exchange differences recognised profit or loss in Group entities' separate
financial statements on the translation of long-term monetary items forming
part of the Group's net investment in the overseas operation concerned are
reclassified to other comprehensive income and accumulated in the foreign
exchange reserve on consolidation.
On disposal of a foreign operation, the cumulative exchange differences
recognised in the foreign exchange reserve relating to that operation up to the
date of disposal are transferred to the consolidated statement of comprehensive
income as part of the profit or loss on disposal.
Investments in subsidiaries
Investments in subsidiaries are stated at cost less any provision for
impairment.
Foreign currency
The functional currency is Euro. Foreign currency transactions are translated
into the functional currency using the exchange rates prevailing at the dates
of the transactions or valuation where items are re-measured. Exchange gains
and losses resulting from the settlement of such transactions and from the
translation at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the Statement of
Comprehensive Income. Exchange gains and losses that relate to borrowings and
cash and cash equivalents are presented in the income statement within 'finance
income or costs'. All other exchange gains and losses are presented in the
income statement within 'other (losses)/gains - net'.
Changes in the fair value of monetary securities denominated in foreign
currency classified as available for sale are analysed between translation
differences resulting from changes in the amortised cost of the security and
other changes in the carrying amount of the security. Translation differences
related to changes in amortised cost are recognised in profit or loss, and
other changes in carrying amount are recognised in other comprehensive income.
Taxation
The tax expense represents the sum of the tax currently payable and any
deferred tax.
Current taxes are based on the results of the Group companies and are
calculated according to local tax rules, using the tax rates and laws that have
been enacted or substantially enacted by the reporting date.
Deferred tax is provided in full using the financial position liability method
for all taxable temporary differences arising between the tax bases of assets
and liabilities and their carrying values for financial reporting purposes.
Deferred tax is measured using currently enacted or substantially enacted tax
rates and laws. Deferred tax is the tax expected to be payable or recoverable
on differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation of
taxable profit and is accounted for using the statement of financial position
liability method. Deferred tax liabilities are generally recognised for all
taxable temporary differences and deferred tax assets are recognised to the
extent that it is probable that taxable profits will be available against which
deductible temporary differences can be utilised. Such assets and liabilities
are not recognised if the temporary difference arises from goodwill or from the
initial recognition (other than in a business combination) of other assets and
liabilities in a transaction that affects neither the taxable profit nor the
accounting profit.
Deferred tax assets are recognised to the extent the temporary difference will
reverse in the foreseeable future and that it is probable that future taxable
profit will be available against which the asset can be utilised. Deferred tax
is recognised for all deductible temporary differences arising from investments
in subsidiaries and associates, to the extent that it is probable that the
temporary difference will reverse in the foreseeable future and taxable profit
will be available against which the temporary difference can be utilised.
Revenue
The Group provides consultancy services, which are invoiced at the point of the
provision of the service. Revenue is recognised as earned at a point in time on
the unconditional supply of these services, which are received and consumed
simultaneously by the customer. The Group measures revenues at the fair value
of the consideration received or receivable for the provision of consultancy
services net of Value Added Tax.
Interest income
Interest income is accrued on a time basis, by reference to the principal
outstanding and at the effective interest rate applicable, which is the rate
that exactly discounts estimated future cash receipts through the expected life
of the financial asset to that asset's net carrying amount on initial
recognition.
Financial instruments
Classification and measurement
The Company classifies its financial assets into the following categories:
those to be measured subsequently at fair value through the income statement
(FVPL) and those to be held at amortised cost.
Classification depends on the business model for managing the financial assets
and the contractual terms of the cash flows.
Management determines the classification of financial assets at initial
recognition. The Company's policy with regard to financial risk management is
set out in Note 18. Generally, the Company does not acquire financial assets
for the purpose of selling in the short term.
The Company's business model is primarily that of "hold to collect" (where
assets are held in order to collect contractual cash flows). When the Company
enters into derivative contracts, these transactions are designed to reduce
exposures relating to assets and liabilities, firm commitments or anticipated
transactions.
Financial Assets held at amortised cost
The classification applies to debt instruments which are held under a hold to
collect business model and which have cash flows that meet the "solely payments
of principal and interest" (SPPI) criteria.
At initial recognition, trade receivables that do not have a significant
financing component, are recognised at their transaction price. Other
financial assets are initially recognised at fair value plus related
transaction costs, they are subsequently measured at amortised costs using the
effective interest method. Any gain or loss on derecognition or modification
of a financial asset held at amortised cost is recognised in the income
statement.
Financial Assets held at fair value through profit or loss (FVPL)
The classification applies to the following financial assets. In all cases,
transaction costs are immediately expensed to the income statement.
* Debt instruments that do not meet the criteria of amortised costs or fair
value through other comprehensive income. The Company has a significant
proportion of trade receivables with embedded derivatives for professional
pricing. These receivables are generally held to collect but do not meet
the SPPI criteria and as a result must be held at FVPL. Subsequent fair
value gains or losses are taken to the income statement.
* Equity investments which are held for trading or where the FVOCI election
has not been applied. All fair value gains or losses and related dividend
income are recognised in the income statement.
* Derivatives which are not designated as a hedging instrument. All
subsequent fair value gains or losses are recognised in the income
statement.
Trade and other receivables
Trade and other receivables are measured at initial recognition at fair value
and are subsequently measured at amortised cost using the effective interest
rate method. A provision is established when there is objective evidence that
the Group will not be able to collect all amounts due. The amount of any
provision is recognised in the income statement.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits and other
short-term highly liquid investments that are readily convertible to a known
amount of cash and are subject to an insignificant risk of changes in value
with maturities of three months or less from inception.
Impairment of financial assets
A forward looking expected credit loss (ECL) review is required for: debt
instruments measured at amortised costs are held at fair value through other
comprehensive income: loan commitments and financial guarantees not measured at
fair value through profit or loss; lease receivables and trade receivables that
give rise to an unconditional right to consideration.
As permitted by IFRS9, the Company applies the "simplified approach" to trade
receivable balances and the "general approach" to all other financial assets.
The general approach incorporates a review for any significant increase in
counter party credit risk since inception. The ECL reviews including
assumptions about the risk of default and expected loss rates. For trade
receivables, the assessment takes into account the use of credit enhancements,
for example, letters of credit. Impairments for undrawn loan commitments are
reflected as a provision.
Financial liabilities
Borrowings and other financial liabilities (including trade payables but
excluding derivative liabilities) are recognised initially at fair value, net
of transaction costs incurred, and are subsequently measured at amortised
costs.
Convertible bonds
Convertible bonds are regarded as compound instruments, consisting of a
liability component and an equity component. At the date of issue, the fair
value of the liability component is estimated using the prevailing market
interest rate for similar non-convertible debt. The difference between the
proceeds of issue of the convertible loan notes and the fair value assigned to
the liability component, representing the embedded option to convert the
liability into equity of the Group, is included in equity.
Issue costs are apportioned between the liability and equity components of the
convertible loan notes based on their relative carrying amounts at the date of
issue. The portion relating to the equity component is charged directly against
equity.
The interest expense on the liability component is calculated by applying the
prevailing market interest rate for similar non-convertible debt to the
liability component of the instrument. The difference between this amount and
the interest paid is added to the carrying amount of the convertible loan note.
Borrowings costs
Borrowing costs are recognised in profit or loss in the period in which they
are incurred.
Trade payables
Trade payables are initially measured at fair value, and are subsequently
measured at amortised cost, using the effective interest rate method.
Segmental reporting
In identifying its operating segments, management generally follows the Group's
service lines, which represent the main products and services provided by the
Group. The measurement policies the Group uses for segment reporting under IFRS
8 are the same as those used in its financial statements. The disclosure is
based on the information that is presented to the chief operating decision
maker, which is considered to be the board of Quantum Blockchain Technologies
plc.
Provisions
Provisions are recognised when the Group has a present obligation (legal or
constructive) as a result of a past event, it is probable that the Group will
be required to settle that obligation and a reliable estimate can be made of
the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration
required to settle the present obligation at the year-end date, taking into
account the risks and uncertainties surrounding the obligation.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the
assets of the Group after deducting all of its liabilities. Equity instruments
issued by the Group are recorded at the proceeds received net of direct issue
costs.
Share capital account represents the nominal value of the shares issued.
The share premium account represents premiums received on the initial issuing
of the share capital. Any transaction costs associated with the issuing of
shares are deducted from share premium, net of any related income tax benefits.
Retained losses include all current and prior period results as disclosed in
the statement of comprehensive income.
Other reserves consist of the merger reserve, revaluation reserve, exchange
translation reserve and loan equity reserve.
* the merger reserve represents the premium on the shares issued less the
nominal value of the shares, being the difference between the fair value of
the consideration and the nominal value of the shares.
* the revaluation reserve represents the difference between the purchase
costs of the available for sale investments less any impairment charge and
the market or fair value of those investments at the accounting date.
* the exchange translation reserve represents the movement of items on the
statement of financial position that were denominated in foreign before
translation
* the loan equity reserve represents the value of the equity component of the
nominal value of the loan notes issued.
Government Grants
Grants from the government are recognised at their fair value where there is
reasonable assurance that the grant will be received and the group will comply
with all attached conditions. Government grants which are revenue in nature are
recognised on a systematic basis within Other operating income in the Statement
of Comprehensive income over the period in which the group recognises as
expenses the related costs for which the grants are intended to compensate.
3. Critical accounting judgements and key sources of estimation
uncertainty
The preparation of Financial Statements in conformity with IFRSs requires
management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities, income
and expenses. Estimates and judgements are continually evaluated and are based
on historical experience and other factors including expectations of future
events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting
accounting estimates will, by definition, seldom equal the related actual
results. The estimates and assumptions that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities within
the next financial year are discussed below.
Fair value measurement
Management uses valuation techniques to determine the fair value of financial
instruments (where active market quotes are not available) and non-financial
assets. This involves developing estimates and assumptions consistent with how
market participants would price the instrument. Management bases its
assumptions on observable data as far as possible, but this is not always
available. In that case management uses the best information available.
Estimated fair values may vary from the actual prices that would be achieved in
an arm's length transaction at the reporting date.
In order to arrive at the fair value of investments a significant amount of
judgement and estimation has been adopted by the Directors as detailed in the
investments accounting policy. Where these investments are un-listed and there
is no readily available market for sale the carrying value is based upon future
cash flows and current earnings multiples for which similar entities have been
sold. The nature of these assumptions and the estimation uncertainty as a
result is outlined in Note 13, along with sensitivities in Note 18.
Going Concern
The Group's activities generated a loss of ?1,208,000 (2019: ?624,000) and had
net current assets of ?4,857,000 as at 31 December 2020 (2019: ?2,396,000). The
Group's operational existence is still dependent on the ability to raise
further funding either through an equity placing on AIM, or through other
external sources, to support the on-going working capital requirements.
After making due enquiries, the Directors have formed a judgement that there is
a reasonable expectation that the Group can secure further adequate resources
to continue in operational existence for the foreseeable future and that
adequate arrangements will be in place to enable the settlement of their
financial commitments, as and when they fall due.
For this reason, the Directors continue to adopt the going concern basis in
preparing the financial statements. Whilst there are inherent uncertainties in
relation to future events, and therefore no certainty over the outcome of the
matters described, the Directors consider that, based upon financial
projections and dependant on the success of their efforts to complete these
activities, the Group will be a going concern for the next twelve months. If it
is not possible for the Directors to realise their plans, over which there is
significant uncertainty, the carrying value of the assets of the Group is
likely to be impaired.
In relation to the impact of Covid-19 on the Company, the Company's employees
can carry out their duties remotely, via the network infrastructure in place.
As a result, there was no disruption to the operational activities of the
Company during the Covid-19 social distancing and working from home
restrictions. All key business functions continue to operate at normal
capacity.
Notwithstanding the above, the Directors note the material uncertainty in
relation to the Group being unable to realise its assets and discharge its
liabilities in the normal course of business.
4. Segment information
The Directors are of the opinion that under IFRS 8 - "operating segment" there
are no identifiable business segments that are subject to risks and returns
different to the core business of investment management. The information
reported to the Directors, for the purposes of resource allocation and
assessment of performance is based wholly on the overall activities of the
Group. Therefore, the Directors have determined that there is only one
reportable segment under IFRS 8.
The Group has not generated a material level of income and has no major
customers.
5. Staff costs
Group Company
2020 2019 2020 2019
?'000 ?'000 ?'000 ?'000
Staff costs during the period including directors
comprise:
Wages and salaries 373 277 373 277
Social security costs and pension contributions 2 5 2 5
375 282 375 282
6. Directors Emoluments
2020 2019
?'000 ?'000
Aggregate emoluments 323 176
323 176
Remuneration of the highest paid Director was £267,000 (2019: £134,000)
There are no retirement benefits accruing to the Directors. Details of
directors' remuneration are included in the Directors' Report.
7. Expenses by nature
2020 2019
(restated)
?'000 ?'000
Directors emoluments 323 176
Employee emoluments 80 106
Legal and professional fees 419 337
Audit and accountancy fees 38 64
Administrative expenditure 174 240
Impairment of assets 89 474
1,123 1,397
8. Finance (costs)/income
2020 2019
(restated)
?'000 ?'000
Gain on derivatives (note 25B) 126 1,018
Interest on convertible bonds (note 25B) (247) (253)
Bank fees & revaluations
- (5)
(121) 760
9. Auditor's remuneration
2020 2019
?'000 ?'000
Group Auditor's remuneration:
Fees payable to the Group's auditor for the audit of the 28 35
Company and consolidated financial statements:
Non audit services:
Other services (tax) 10 -
Subsidiary Auditor's remuneration
Other services pursuant to legislation 10
38 45
10. Employee numbers
Group Company
2020 2019 2020 2019
Number Number Number Number
The average number of Company's employees,
including directors during the period was as
follows:
Management and administration 4 4 4 4
11. Taxation
2020 2019
?'000 ?'000
Current taxation - -
Deferred taxation - -
Tax charge for the year - -
The Group has a potential deferred tax asset arising from unutilised management
expenses available for carry forward and relief against future taxable profits.
The deferred tax asset has not been recognised in the financial statements in
accordance with the Group's accounting policy for deferred tax.
The Group's unutilised management expenses and capital losses carried forward
at 31 December 2020 amount to approximately ?18 million (2019: ?22 million) and
?8 million (2019: ?9 million) respectively.
The standard rate of tax for the current year, based on the UK effective rate
of corporation tax is 19% (2019: 19%). The actual tax for the current and
previous year varies from the standard rate for the reasons set out in the
following reconciliation:
Continuing operations 2020 2019
(restated)
?'000 ?'000
Loss for the year before tax (1,208) (624)
Tax on ordinary activities at standard rate (229) (118)
Effects of:
Expenses not deductible for tax purposes 65 -
Foreign taxes -
Tax losses available for carry forward against future profits 164 118
Total tax - -
The UK government has announced that the corporation tax rate will increase
from 19% to 25% with effect from 1 April 2023.
12. Earnings per share
The basic earnings per share is calculated by dividing the loss attributable to
equity shareholders by the weighted average number of ordinary shares in issue
during the period. Diluted earnings per share is computed using the weighted
average number of shares during the period adjusted for the dilutive effect of
share options and convertible loans outstanding during the period.
The loss and weighted average number of shares used in the calculation are set
out below:
2020 2019
Profit/ Weighted Per share Profit/ Weighted Per share
(Loss) average no. Amount (Loss) average no. Amount
of shares Euro (restated) of shares Euro
?'000 000's ?'000 000's
Basic and fully diluted earnings per share
Continuing operations (1,208) 662,371 (?0.182) (624) 618,891 (?0.101)
Total operations 1,208) 662,371 (?0.182) (624) 618,891 (?0.101)
IAS 33 requires presentation of diluted earnings per share when a company could
be called upon to issue shares that would decrease earnings per share. In
respect of 2020 and 2019 the diluted loss per share is the same as the basic
loss per share as the loss for each year has an anti-dilutive effect.
13. Investments
The significant entities for which the Group owns shares, including the parent
company, held at 31 December 2020 were as follows:
Group Companies Ownership Country Company Net Assets/ Date of Treatment
Status (Liabilities) latest
?,000 accounts
Quantum 100.00% UK Parent (6,753) 2019 Consolidated
Blockchain Company
Technologies PLC
Brainspark 100.00% UK Trading (669) 2019 Consolidated
Associates Ltd
Clear Leisure 100.00% UK Trading 36,245 2019 Consolidated
2017 Ltd
Milan Digital 100.00% UK Incorporated Nil N/A Consolidated
Twin Ltd in 2019
London Digital 100.00% UK Incorporated Nil N/A Consolidated
Twin Ltd in 2019
Clear Holiday 100.00% Italy Dormant/ 10 2014 Not
Srl Inactive Consolidated
Miner One 100.00% UK Dormant - 2018 Consolidated
Alnitak S.A 100.00% Luxembourg Inactive (8) 2014 Not
Consolidated
Mediapolis 71.72% Luxembourg Inactive (6,648) 2010 Not
Investment S.A Consolidated
Sosushi Company 99.30% Italy In 654 2013 Not
Srl liquidation Consolidated
Fallimento 84.04% Italy Liquidated 1,204 2016 Not
Mediapolis Srl Consolidated
ORH S.P.A 73.40% Italy Liquidated 1,718 2012 Not
Consolidated
Birdland Srl 52.00% Italy In (288) 2016 Not
liquidation Consolidated
Sipiem S.P.A 50.17% Italy In 645 2014 Not
liquidation Consolidated
Bibop Srl 36.94% Italy Liquidated (211) 2017 No fair
value
ForCrowd Srl 20.00% Italy Investment 74 2018 Held at fair
value
PBV Monitor 10.00% Italy Investment 166 2019 Held at fair
value
Geosim Systems 4.53% Israel Investment (330) 2018 Held at fair
value
Beni Immobili 15.05% Italy Investment 14 2014 No fair
Srl value
TLT S.P.A 0.25% Italy Investment (2,476) 2016 No fair
value
The directors have assessed the group's interests in other entities on an
individual basis and come to the overall conclusions as detailed in the table
below. Please see the note narrative for additional information on an entity by
entity basis.
Quantum Blockchain Technologies PLC
This entity is the UK based group parent and has therefore been included in the
consolidation.
Brainspark Associates Limited
This entity is a 100% owned UK incorporated subsidiary of Quantum Blockchain
Technologies PLC and has been included in the consolidation.
Clear Leisure 2017 Limited
This entity is a 100% owned UK incorporated subsidiary of Quantum Blockchain
Technologies PLC and has been included in the consolidation.
Milan Digital Twin Limited
This entity is a 100% owned UK company which has been incorporated on 30
December 2019 with its first accounts made up to 31 December 2020. This entity
only includes unpaid share capital and has not begun operating. It has been
included in the consolidation with an overall impact of nil.
London Digital Twin Limited
This entity is a 100% owned UK company which has been incorporated on 30
December 2019 with its first accounts made up to 31 December 2020. This entity
only includes unpaid share capital and has not begun operating. It has been
included in the consolidation with an overall impact of nil.
Clear Holiday Srl
Clear Holiday Srl is a 100% owned subsidiary of the group incorporated in
Italy. However, this entity has not been consolidated on the basis that it is
immaterial to the group financial statements. The balances held within the
company are not with external third parties and therefore the overall impact on
the accounts would be trivial.
Miner One Limited
Miner One Limited is a UK based entity, which was initially set up as a 50%
joint venture with 64Bit. During the year, the other 50% shareholding has been
acquired from the partner and now it is 100% owned. The entity itself was
initially set up with the hope of transferring certain assets, notably a data
centre located in Serbia into its possession. However, due to disputes with the
previous joint venture partner this did not materialise. In 2019 this entity
remained dormant and did not trade during the year. This entity only includes
unpaid share capital and has not begun operating, it has been included in the
consolidation with an overall impact of nil.
Alnitak S.A.
Alnitak S.A. is a 100% owned subsidiary incorporated in Luxemburg. The company
itself is inactive, being kept registered mainly because of a claim filed by
the former sole Director. The initial ruling, after losing the case in the
first instance has been appealed by Alnitak S.A., but is similar to another
claim previously won by Quantum Blockchain Technologies in the Rome court where
all legal costs were settled by the claimant.
Although the entity is inactive, there is no active management in Luxemburg and
therefore Quantum Blockchain Technologies has also had difficulty formally
liquidating the company. The net liability position of Alnitak S.A is
immaterial to the group and the balances are largely internal. Therefore, the
non-consolidation of this entity is deemed to be immaterial to the group.
On 25 February 2021 Alnitak S.A. has entered a liquidation process and the
Group does not expect any further assets or liabilities to arise from these
proceedings.
Mediapolis Investment S.A.
Mediapolis Investment S.A. is a 71.72% owned subsidiary incorporated in
Luxembourg. The company itself is inactive and is not trading. Previous
management failed to pay accountants and local directors for the previous six
years and no financial statements have been filed for over seven years.
Although this entity is inactive and
71.72% of the shares are held by the group, there is no active management in
Luxembourg, and this has led to a difficulty in finalizing a liquidation.
The most recent accounts available were produced in 2010 and the main asset
held by the entity is the investment of 13% of the capital in another former
group company, Fallimento Mediapolis Srl, which has been liquidated. This
investment is carried at approximately EUR6.6m and has been impaired to nil.
Therefore, the non-consolidation of this entity is deemed to be immaterial to
the group.
On 6 May 2021 Mediapolis Investment S.A. has entered a liquidation process and
the Group does not expect any further assets or liabilities to arise from these
proceedings.
Sosushi Company Srl
Sosushi Company Srl is a 99.3% owned entity incorporated in Italy. The company
is in the process of liquidation and will be liquidated once certain ongoing
legal matters have been resolved. No accounts have been approved for this
company since 2014, when the process of liquidation begun. Accounting
information was never passed to the sole director despite several requests to
the accountant. Further actions have now been taken to resolve the issues
around accounting information and a new accountant has been appointed. Due to
the liquidation, it is deemed that there is no control by the group over the
entity and therefore the financial information for Sosushi Company Srl has not
been consolidated into the group financial statements. The investment in
Sosushi Company Srl is accounted at fair value through profit or loss.
On 24 June 2021, the Company received notification that Sosushi has been
declared bankrupt. The Company is now considering if appeal or not.
Sosushi's bankruptcy will have no impact on the Company's balance sheet, as the
receivables remain collectable, and the litigation is held via Clear Leisure
2017.
Fallimento Mediapolis Srl
Fallimento Mediapolis Srl is a 84.04% equivalent owned entity incorporated in
Italy. Quantum Blockchain Technologies Plc holds directly 74.67% of the capital
of the company whilst a 13% stake is held via Mediapolis Investment S.A as
noted above. The company was liquidated in 2017 and therefore this is the date
from which control is deemed to have been lost. Therefore, the financial
information for Fallimento Mediapolis Srl has not been consolidated into the
group financial statements. The investment in Fallimento Mediapolis Srl is
accounted at fair value through profit or loss.
ORH S.P.A
ORH S.P.A was a 73.4% owned entity incorporated in Italy. The company was
liquidated in 2013 and therefore this is the date from which control is deemed
to have been lost. Therefore, the financial information for ORH S.P.A has not
been consolidated into the group financial statements. The investment in ORH
S.P.A is accounted at fair value through profit or loss.
Birdland Srl
Birdland Srl is a 52% owned entity incorporated in Italy. The stake in the
entity is indirectly owned via Brainspark Associates Limited. The company was
placed into liquidation in 2017 and therefore this is the date from which
control is deemed to have been lost. Therefore, the financial information for
Birdland Srl has not been consolidated into the group financial statements. The
investment in Birdland Srl is accounted at fair value through profit or loss.
Sipiem S.P.A
Sipiem S.P.A is a 50.17% owned entity incorporated in Italy. The entity has not
been trading for a number of years and has only been maintained due to the
ongoing legal matters with the former directors. An amount receivable has been
recognised at the group level relating to the part of the claim which is
payable to Quantum Blockchain Technologies PLC. The company is now in
liquidation which commenced in 2015. Therefore, this is the date from which
control is deemed to have been lost. Therefore, the financial information for
Sipiem S.P.A has not been consolidated into the group financial statements. The
investment in Sipiem S.P.A is accounted at fair value through profit or loss.
Bibop Srl
Bibop Srl is a 36.94% equivalent owned investment in a company incorporated in
Italy. Birldand Srl holds a majority stake in the capital of the company. As
Birdland Srl is in liquidation the group does not control or exercise
significant influence on Bipop Srl and, accordingly the company is not
consolidated, or equity accounted in the group financial statements. As the
investment is not held directly by the group, no value is recognised in the
financial statements.
ForCrowd Srl
ForCrowd Srl is a 20% owned investment in an entity incorporated in Italy. This
is a new investment which has been acquired during the year and has been
recognised in the accounts at its fair value.
The value of the investment under equity accounting approximates its cost, as
the associate has not started significant operations prior to 31 December 2019.
Under this method the amount recognised is ?132,000 (2019: ?221,090).
This cost has been assessed in relation to the last (and only) equity round of
the company in October 2019, in which the entire post money valuation of the
company was ?1,105,450, with Quantum Blockchain Technologies directly holding
the 20% of such amount.
PBV Monitor Srl
PBV Monitor Srl is a 10% owned investment in an entity incorporated in Italy.
The investment has been recognised in the accounts at its fair value.
The Fair Value of PBV Monitor ?302,000, (2019: ?300,000) has been assessed in
relation to the last equity round of the company in early 2020, in which the
entire post money valuation of the company was ?3,020,000, with Quantum
Blockchain Technologies directly holding the 10% of such amount.
The post money valuation at which the Company invested in 2018 was ?340,000,
which also represented the Company's valuation of PBV in Pre Covid-19
conditions. The difference between this original value and the current Fair
Value is not attributable to a change of fundamentals to the business.
Similarly, the progress made in 2020 has not highlighted any significant
divergence from the original business plan.
The difference in the valuation is therefore attributable to lower value
attributed to the company during the 2020 equity round. The key assumptions
underpinning the equity round at the start of 2020 remain applicable.
The Fair Value assessment of PBV Monitor, is directly related to the company's
valuation in future rounds.
Geosim Systems Limited
Geosim Systems Limited is a 4.53% owned investment in an entity incorporated in
Israel. The investment has been recognised in the accounts through its fair
value and is held via Brainspark Associates Limited.
The Fair Value of Geosim (?546,212, 2019: ?596,045) has been assessed in
relation to the last equity round of the company in 2018, in which Quantum
Blockchain Technologies' 533,990 Geosim shares have been valued at $1.25 each.
The difference in the valuation between 2020 and 2019, attributable to the
variance in the EUR/USD exchange rate.
The Fair Value assessment of Geosim is directly related to the company's
valuation in future rounds and to the EUR/USD exchange rate.
Beni Immobili Srl
Beni Immobili Srl a 15.05% equivalent owned investment in an entity
incorporated in Italy. The shares in this company are held via Sipiem S.P.A. No
fair value is recognised for this investment as the entity has minimal net
assets and the valuation would be trivial to the consolidated financial
statements. Moreover, as the investment is held via Sipiem S.P.A, which is in
liquidation, the investment should not be recognised as an asset.
TLT S.P.A
TLT S.P.A is a 0.25% owned investment based in Italy. No fair value is
recognised for this investment as the entity has a large net liability position
and due to the small shareholding, any potential valuation would be trivial to
the consolidated financial statements. Moreover, as the investment is held via
Sipiem S.P.A, which is in liquidation, the investment should not be recognised
as an asset.
Group Company
2020 2019 2020 2019
?'000 ?'000
At as 1 January 1,117 923 521 340
Additions 2 221 2 221
Foreign exchange (50) - - -
Impairment of investments (89) (27) (89) (40)
Carrying value at 31 December 980 1,117 434 521
An amount of ?546,212 (2019: ?596,045) included within Group investments held
for trading is a level 3 investment and represents the fair value of 533,990
shares in GeoSim Systems Ltd. GeoSim Systems Ltd is an Israeli company seeking
to establish itself as the world leader in building complete and photorealistic
3D virtual cities and in delivering them through the Internet for use in local
searches, real estate and city planning, homeland security, tourism and
entertainment. Quantum Blockchain Technologies owns 4.53% of GeoSim Systems
Ltd.
An amount of ?302,000 (2019: ?300,000) included within Company investments held
for trading is a level 3 investment and represents the fair value of a 10%
interest in PBV Monitor Srl ("PBV"). PBV is an Italian company specialising in
the acquisition and dissemination of data for the legal services industry,
utilising proprietary market intelligence tools and dedicated search
software. Quantum Blockchain Technologies acquired 10% of PBV in December
2018. As part of the investment agreement, Quantum Blockchain Technologies was
granted a seat on the board of PBV and was appointed as exclusive advisor to
PBV regarding the possible sale of PBV from 1 January 2020 for a period of four
years and will be entitled to a 4% commission fee on the proceeds of any sale.
13A. Trade and other receivables
Group Company
2020 2019 2020 2019
?'000 ?'000 ?'000 ?'000
Trade receivables 9 5 -
-
Other receivables 4,620 6,102 40 45
Amounts owed by related parties 562 497 1,448
801
5,191 6,604 841 1,493
Group other receivables includes and amount of ?4,445,000 (2019: ?4,445,000)
due in relation to the ongoing Sipiem legal claim, which is unsecured, interest
free and does not have fixed terms of repayment; and an amount of ?132,000
(2019: ?1,613,000) due in relation to the Fallimento Mediapolis Srl bankruptcy
procedure.
The Directors consider that the carrying value of trade and other receivables
approximates to their fair value.
14. Cash and cash equivalents
Group Company
2020 2019 2020 2019
?'000 ?'000 ?'000 ?'000
Cash at bank and in hand - - - -
- - - -
The Directors consider the carrying amounts of cash and cash equivalents
approximates to their fair value.
15. Trade and other payables
Group Company
2020 2019 2020 2019
?'000 ?'000 ?'000 ?'000
Trade payables 124 205 124 205
Other payables 143 124 141 72
Accruals 67 67 62 62
Trade and other payables 334 396 327 339
The Directors consider that the carrying value of trade and other payables
approximates to their fair value.
16. Borrowings
Group Company
2020 2019 2020 2019
(restated) (restated)
?'000 ?'000 ?'000 ?'000
Zero rate convertible bond 2015 5,197 5,142 5,197 5,142
Zero rate convertible bond 2020 3,015 - 3,015 -
Convertible loan note - 3,691 - 3,691
Other borrowings - - - -
8,212 8,833 8,212 8,833
Disclosed as: - 3,691 - 3,691
Current borrowings
Non-current borrowings 8,212 5,142 8,212 5,142
8,212 8,833 8,212 8,833
Interest on the bonds is payable annually on 31 March each year. The bonds at
31 December 2020 include all interest accrued to that date. The unpaid interest
together with accrued interest to 31 December 2020 is included within current
liabilities.
On 25 March 2013 the Company issued ?3,000,000 nominal value of zero rate
convertible bonds at a discount of 22%. The bonds are convertible at 15p per
share and have a redemption date of 15 December 2015.
During 2014 the Company issued ?1,885,400 zero bonds in settlement of £
1,563,000 7% bonds (see above). Also ?600,000 zero bonds were issued in
settlement of a debt of ?518,000 and ?450,000 bonds were issued for cash
realising ?412,000 before expenses.
On 15 December 2015 the bondholders meeting approved the amendments on the Zero
Rate Convertible Bond 2015, originally due on 15 December 2015; Under new terms
the final maturity date of the Bond is 15 December 2017 and the interest has
been reduced from 9.5% to 7%.
On 15 December 2016 the bondholders meeting approved the amendments on the Zero
Rate Convertible Bond 2015, originally due on 15 December 2017; Under new terms
the final maturity date of the Bond is 15 December 2018 and the interest has
been reduced from 7% to 1%.
On 19 June 2018, the holders of its ?9.9m Bonds agreed to extend the final
maturity date of the Bonds from 15 December 2018 to 15 December 2022. The
Company is now able to convert the Bonds into new ordinary shares of 0.25p
each.
On 28 December 2018, bonds with a face value of ?2,100,000 plus cumulative
interest were converted into 50,992,826 new ordinary shares of 0.25 pence at a
price of 3.76 pence per share.
On 5 October 2020, Eufingest SA agreed to extend the repayment date of all
loans advanced to the company amounting to ?3,375,000 and £30,000 to 31 October
2020.
On 9 November 2020 Eufingest SA agreed to convert all outstanding loans and
accrued interest amounting to ?3,423,707 into Zero rate convertible bond 2020.
The Zero Coupon Bonds 2020 accrue interest at a rate of 2% per annum.
Bondholders and convert at any time up to 15 December 2022 at a conversion
price of £0.01 per share. The Zero rate convertible bond 2020 is accounted for
as a financial instrument with both debt and equity characteristics. The debt
element was valued using a market rate assessed by the Directors of 7.99%.
Key Assumptions
The derivative element of the Zero Coupon Bonds 2015 and the Convertible loans
were valued at each year end using the Black Scholes option pricing model. The
following assumptions were used at each period end.
Convertible loans
2020 2019
Share price N/A 0.3p
Expected life N/A 3 years
Volatility N/A 60%
Dividend yield N/A 0%
Risk free interest N/A 0.55%
rate
Fair value N/A 0.0343p
During 2020 the convertible loan were converted Zero Coupon Bonds 2020
Zero Coupon Bonds 2015
2020 2019
Share price 0.0265p 0.3p
Expected life 3 years 3 years
Volatility 70% 60%
Dividend yield 0% 0%
Risk free interest (0.03)% 0.55%
rate
Fair value 0p 0p
17. Financial instruments
The Group's financial instruments comprise cash, investments at fair value
through profit or loss, trade receivables, trade payables that arise from its
operations and borrowings. The main purpose of these financial instruments is
to provide finance for the Group's future investments and day to day
operational needs.
The Group does not enter into any derivative transactions such as interest rate
swaps or forward foreign exchange contracts, as the Group's exposure to
movements in foreign exchange rates is not considered significant (see Foreign
currency risk management). The main risks faced by the Group are limited to
interest rate risk on surplus cash deposits and liquidity risk associated with
raising sufficient funding to meet the operational needs of the business.
The Board reviews and agrees policies for managing these risks and they are
summarised below.
FINANCIAL ASSETS BY CATEGORY
The categories of financial assets included in the statement of financial
position and the headings in which they are included are as follows:
2020 2019
?'000 ?'000
Financial assets:
Financial assets held at fair value through profit 980 1,117
and loss
Trade and other receivables 5,191 6,604
Cash and cash equivalents - -
6,171 7,721
FINANCIAL LIABILITIES BY CATEGORY
The categories of financial liabilities included in the statement of financial
position and the headings in which they are included are as follows:
2020 2019
(restated)
?'000 ?'000
Financial liabilities at amortised cost:
Trade and other payables 334 396
Borrowings 8,212 8,883
Derivative - 121
8,546 9,400
Financial instruments measured at fair value:
Level 1 Level 2 Level 3
?'000 ?'000 ?'000
As at 31 December 2020
Investments at fair value through profit or - - 980
loss
- - 980
As at 31 December 2019
Investments at fair value through profit or - - 1,117
loss
Derivatives at fair value through profit or - (121) -
loss
- (121) 1,117
The valuation techniques and significant unobservable inputs used in
determining the fair value measurement of level 2 and level 3 financial
instruments, as well as the inter-relationship between key unobservable inputs
and fair value, are set out in the table below.
Financial Valuation Significant Inter -
Instruments technique used unobservable relationship
inputs (Level 3 between key
only) unobservable
inputs and fair
value (level 3
only)
Investments Based on issue of Assessment of If loan was
shares in the recoverability of considered not to
investments held loan. be recoverable
by the Group and this would result
directors in the reduction
assessment on the in the fair value
recoverability of of the investment.
loans.
Derivative Black Scholes Not applicable Not applicable
valuation model
was used to
calculate value of
options at the
year end
The Group has adopted fair value measurements using the IFRS 7 fair value
hierarchy.
Categorisation within the hierarchy has been determined on the basis of the
lowest level of input that is significant to the fair value measurement of the
relevant asset as follows:
Level 1: valued using quoted prices in active markets for identical assets;
Level 2: valued by reference to valuation techniques using observable inputs
other than quoted prices included in Level 1;
Level 3: valued by reference to valuation techniques using inputs that are not
based on observable markets criteria.
The Level 3 investment refers to an investment in GeoSim Systems Ltd, PBV
Monitor Srl, and ForCrowd Srl.
Capital risk management
The Group manages its capital to ensure that entities in the Group will be able
to continue as going concerns while maximising the return to stakeholders
through optimisation of the debt and equity balance. The capital structure of
the Group consists of debt attributable to convertible bondholders, borrowings,
cash and cash equivalents, and equity attributable to equity holders of the
Group, comprising issued capital, reserves and retained earnings, all as
disclosed in the Statement of Financial Position.
Significant accounting policies
Details of the significant accounting policies and methods adopted, including
the criteria for recognition, the basis of measurement and the basis on which
income and expenses are recognised, in respect of each class of financial
asset, financial liability and equity instrument disclosed in Note 2 to the
financial statements.
Financial risk management objectives
The Company is exposed to a variety of financial risks which result from both
its operating and investing activities. The Group's risk management is
coordinated by the board of directors and focuses on actively securing the
Company's short- and medium-term cash flows by raising liquid capital to meet
current liability obligations.
Market price risk
The Company's exposure to market price risk mainly arises from movements in the
fair value of its investments held for trading. The Group manages the
investment price risk within its long-term investment strategy to manage a
diversified exposure to the market. If the investments were to experience a
rise or fall of 15% in their fair value, this would result in the Group's net
asset value and statement of comprehensive income increasing or decreasing by ?
160,000 (2019: ?167,000).
Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board of
Directors, which monitors the Group's short, medium and long-term funding and
liquidity management requirements on an appropriate basis. The Group has
minimal cash balances at the reporting date (refer to Note 2 - Basis of
preparation and going concern). The Group continues to secure future funding
and cash resources from disposals as and when required in order to meet its
cash requirements. This is an on-going process and the directors are confident
with their cash flow models.
The following are the undiscounted contractual maturities of financial
liabilities:
Carrying Less than 1 Between
Amount year 1 and 5 Total
years
?'000 ?'000 ?'000 ?'000
As at 31 December 2020
Trade and other payables 334 334 - 334
Borrowings - - 8,633 8,633
334 334 8,633 8,967
As at 31 December 2019
Trade and other payables 396 396 - 396
Borrowings (restated) - 3,750 5,149 8,899
396 4,146 5,149 9,295
Management believes that based on the information provided in Notes 2 and 3 -
in the 'Basis of preparation' and 'Going concern', that future cash flows from
operations will be adequate to support these financial liabilities.
Interest rate risk
The Group and Company manage the interest rate risk associated with the Group
cash assets by ensuring that interest rates are as favourable as possible,
whilst managing the access the Group requires to the funds for working capital
purposes.
The Group's cash and cash equivalents are subject to interest rate exposure due
to changes in interest rates. Short-term receivables and payables are not
exposed to interest rate risk. The borrowings are at fixed interest rates.
Group Company
2020 2019 2020 2019
?'000 ?'000
Fixed rate instruments
Financial assets 6,171 7,721 1,275 2,014
Financial liabilities 8,212 8,428 8,212 8,428
Change in interest rates will affect the Group's income statement as follows:
Gain / (loss)
Group 2020 2019
?'000
Euribor +0.5% / -0.5% - / - -/-
The analysis was applied to financial liabilities based on the assumption that
the amount of liability outstanding as at the reporting date was outstanding
for the whole year.
Foreign currency risk management
The Group undertakes certain transactions denominated in currencies other than
Euro, hence exposures to exchange rate fluctuations arise. Amounts due to
fulfil contractual obligations of £Nil (2019: £Nil) are denominated in
sterling. An adverse movement in the exchange rate will impact the ultimate
amount payable, a 10% increase or decrease in the rate would result in a profit
or loss of £Nil (2019: £Nil). The Group's functional and presentational
currency is the Euro as it is the currency of its main trading environment, and
most of the Group's assets and liabilities are denominated in Euro. The parent
company is located in the sterling area.
Credit risk management
The Group's financial instruments, which are subject to credit risk, are
considered to be trade and other receivables. There is a risk that the amount
to be received becomes impaired. The Group's maximum exposure to credit risk is
?5,191,000 (2019: ?6,604,000) comprising receivables during the period. About
67% (2018: 59%) of total receivables are due from a single company. The ageing
profile of trade receivables was:
2020 2019
Total Allowance for Total book Allowance
book impairment value for
value impairment
Group ?'000 ?'000 ?'000 ?'000
Current 5,191 - 6,604 -
Overdue more than one year - - - -
5,191 - 6,604 -
Company
Current 841 - 1,493 -
Overdue more than one year - - - -
841 1,493 -
18. Share capital and share premium
ISSUED AND FULLY Number of Number of Ordinary Deferred Share Total
PAID: ordinary deferred share share premium
shares shares capital capital ?'000 ?'000
?'000 ?'000
At 1 January 2019 604,152,600 199,409,377 1,760 5,467 47,038 54,265
Issue of shares 4,000,000 - 12 - 23 35
Issue of shares 54,218,847 - 158 - 63 221
At 31 December 2019 662,371,447 199,409,377 1,930 5,467 47,124 54,521
Issue of shares - - - - - -
At 31 December 2020 662,371,447 199,409,377 1,930 5,467 47,124 54,521
All ordinary shares carry equal rights.
The deferred shares have restricted rights such that they have no economic
value.
Shares issued for the year ended 31 December 2019:
On 29 August 2019, 4,000,000 new ordinary shares of 0.25 pence per share were
issued to F Gardin, in settlement of part of his 2018 remuneration.
On 3 October 2019, the Company issued 54,218,847 new ordinary shares of 0.25p
as consideration for the acquisition of 20% interest in ForCrowd Srl, an
Italian equity crowdfunding platform based in Milan.
19. Share based payments
The total share-based payment expense recognised in the income statement for
the year ended 31 December 2020 in respect of the share options granted was ?
Nil (2019: ?Nil).
The tables below disclose the movements in share options during the year.
Number of Lapsed Number of Exercise
options at Granted Exercised in the year options at Price, pence Expiry
1 Jan 2020 in the year in the year 31 Dec 2020 date
10,000,000 - - 10,000,000 - N/A N/A
3,000,000 - - 3,000,000 - N/A N/A
13,000,000 - - 13,000,000 - N/A N/A
Number of Cancelled Number of Exercise
options at Granted Exercised in the year options at Price, pence Expiry
1 Jan 2019 in the year in the year 31 Dec 2019 date
10,000,000 - - - 10,000,000 1.25 31.07.2020
3,000,000 - - - 3,000,000 1.25 31.07.2020
13,000,00 - - - 13,000,000
The remaining contractual life at 31 December 2020 is nil years (31 December
2019 - 0.5 years).
The share options have now lapsed and share based reserve has now been
transferred to retained earnings.
20. Other reserves
The Group considers its capital to comprise ordinary share capital, share
premium, retained losses and its convertible bonds. In managing its capital,
the Group's primary objective is to maintain a sufficient funding base to
enable the Group to meet its working capital and strategic investment needs. In
making decisions to adjust its capital structure to achieve these aims, through
new share issues, the Group considers not only their short-term position but
also their long-term operational and strategic objectives.
Group Merger Loan note Share Total other
reserve equity option reserves
reserve reserve ?'000
?'000 ?'000 ?'000
At 1 January 2019 8,325 43 51 8,419
Transfer of reserves - (43) - (43)
At 31 December 2019 8,325 - 51 8,376
Transfer of reserves - - (51) (51)
Equity portion of - 462 - 462
convertible loan notes
At and 31 December 2020 8,325 462 - 8,787
Company Loan note Share Total other
equity option reserves
reserve reserve
?'000 ?'000 ?'000
At 1 January 2019 and 31 December 2019 - 51 51
Transfer of reserves - (51) (51)
Equity portion of convertible loan notes 462 - 462
At 31 December 2020 462 - 462
Transfers to reserve relate to share based payments on share options that have
now lapsed.
21. Ultimate controlling party
The Group considers that there is no ultimate controlling party.
22. Related party transactions
Transactions between the company and its subsidiaries, which are related
parties have been eliminated on consolidation, but are disclosed where they
relate to the parent company. These transactions along with transactions
between the company and its investment holdings are disclosed in the table
below, with all amounts being presented in Euros and being owed to the Group:
2020 2019 2020 2019
Related party Group Group Company Company
Clear Leisure 2017 - - 180,691 951,243
Limited
Sipiem S.P.A 386,697 340,017 386,697 340,017
Sosushi Company Srl 118,033 107,402 118,033 107,402
PBV Monitor Srl - 5,000 - 5,000
Geosim Systems Limited 46,068 44,671 46,068 44,671
64-Bit Limited (JV - - -
partner)
550,798 497,091 731,489 1,448,334
On 29 August 2019, 4,000,000 new ordinary shares of 0.25 pence per share were
issued to F Gardin at a price of 0.75 pence per share, in settlement of part of
his 2018 remuneration.
During the year, Metals Analysis Limited, a company in which R Eccles is a
Director, charged Quantum Blockchain Technologies Plc ?33,679 (2019: ?49,833)
for consultancy fees. The amount owed from Metals Analysis Limited at year end
is ?3,563 (2019: ?14,631).
In 2019 the shareholder loan as disclosed in Note 17 'Borrowings' is a loan
provided by Eufingest which has a 14.28% shareholding also has an outstanding
loan for ?3,750,000.
Included in trade and other payables is an amount of ?Nil (2019; ?14,427) owed
to Mr F Gardin, Director.
Remuneration of key management personnel
The remuneration of the directors, who are the key personnel of the group, is
included in the Directors Report. Under "IAS 24: Related party disclosures",
all their remuneration is in relation to short-term employee benefits.
23. Events after the reporting date
The Company, at the beginning of the year, was notified that the Bologna Court
elected to continue CL17 ?1.03 million legal claim against the previous
management of Sosushi through an arbitration process, which will provide a
legally binding decision on the matter that formally started on 18th January
2021.
In the same period, CL17 (at the conclusion of the mandatory public bidding
process), was assigned a legal claim against Mediapolis former management and
internal audit committee, for a consideration of ?50,000 to be deducted from
the amount still receivable from the Mediapolis Bankruptcy procedure.
On 11 February 2021, the Company raised £680,000 (before expenses) through the
placing of 113,333,333 new ordinary shares of 0.25p each at a price of 0.60p
per share.
On 22 February 2021, the Company raised £1,000,000 (before expenses) through
the placing of 100,000,000 new ordinary shares of 0.25p at a price of 1p per
share to an individual investor, John Story. Mr Story was also granted
100,000,000 warrants over the Company's shares which will entitle the warrant
holder to one new share at a price of 2p per share. The warrants are
exercisable for a period of 2 years.
On the same date the Company issued 10,526,316 and 11,320,755 Ordinary Shares
in the Company to Francesco Gardin, respectively at a price of 0.285 pence per
new Ordinary Share (closing price at 31/12/2019) in settlement of £30,000 being
his 2019 remuneration payable through the issue of Ordinary Shares, and at a
price per share of 0.265 pence per new Ordinary Share (closing price at 31/12/
2020) in settlement of £30,000 being his 2020 remuneration payable through the
issue of Ordinary Shares.
24. Events after the reporting date (continued)
On 14 April 2021, the Company issued a Notice of General Meeting to seek
approval to:
* Amend the Company's Investing Policy to be focused on Blockchain,
Cryptocurrency, Quantum Computing and AI.
* Change the Company's name from Clear Leisure to Quantum Blockchain
Technologies plc.
* Authorise the granting of options to the CEO and current and future
management team of the Company.
* Grant authorities to the directors to issue shares in the Company.
At the General Meeting shareholders voted to approve the above and therefore
the Company changed its name to Quantum Blockchain Technologies plc.
In relation to Sipiem's legal claim, in May, the Court appointed independent
expert filed his report on the economic merit of the damages suffered by Sipiem
at an amount of up to ?7.8 million, subject to the Judge ruling that the
conduct of Sipiem's former board and internal audit committee was unlawful.
In June 2021, the Company announced the launch and progress of the in-house R&D
programme in respect of advanced proprietary techniques for Bitcoin mining. The
Company entered into a one-year service agreement with a UK based international
cryptography expert whose specialism is cryptocurrency mining blockchain
optimisations. As part of the one-year service agreement, the consultant has
been awarded share options over 10,000,000 new ordinary shares of 0.25 pence
each in the Company at an exercise price of 5p each, which can be exercised
between 15 February 2022 and 15 August 2022.
Also in June 2021, QBT announced that it increased its stake in Forcrowd to
41.17%, having purchased an additional 21.17% stake in ForCrowd held by
minority shareholders for a total consideration of ?34,000,
25. Prior year adjustment
The comparative figures for the year ended 31 December 2019 have been restated
as set out in the tables below:
Restated Group Income and Statement of Comprehensive Income for the year ended
31 December 2019
2019 Restatement 2019
Ref. Restated
?'000 ?'000 ?'000
Continuing operations
Revenue 13 - 13
13 - 13
Administration expenses (1,397) - (1,379)
Exceptional items - - -
Operating loss (1,384) - (1,366)
Finance charges B (200) 960 760
Loss before tax (1,584) 960 (606)
Tax - -
Loss from continuing operations (1,584) 960 (606)
Other comprehensive (loss)
Loss on translation of overseas B (1,584) 960 (606)
subsidiaries
TOTAL COMPREHENSIVE LOSS FOR THE YEAR (1,584) 960 (606)
Earnings per share:
Basic and fully diluted loss per share (?0.003) - (?0.101)
(cents)
Restated Group Statement of Financial Position as at 31 December 2019
Ref. Group Restatement Group
2019 2019 2019
(restated)
?'000 ?'000 ?'000
Non-current assets
Investments 1,117 - 1,117
Total non-current assets 1,117 - 1,117
Current assets
Trade and other receivables 6,604 - 6,604
Cash and cash equivalents - - -
Total current assets 6,604 - 6,604
Total assets 7,721 - 7,721
Current liabilities
Trade and other payables (396) - (396)
Borrowings C (3,750) 59 (3,691)
Derivative liability D - (121) (121)
Total current liabilities (4,146) (62) (4,208)
Net current assets/(liabilities) 2,458 (62) 2,396
Total assets less current 3,575 (62) 3,513
liabilities
Non-current liabilities
Borrowings E (4,678) (464) (5,142)
Total non-current liabilities (4,678) (464) (5,142)
Total liabilities (8,824) (526) (9,350)
Net assets (1,103) (526) (1,629)
Equity
Share capital 7,397 - 7,397
Share premium account 47,124 - 47,124
Other reserves 21 8,376 - 8,376
Retained losses (64,000) (526) (64,526)
Total equity (1,103) (526) (1,629)
Restated Company Statement of Financial Position as at 31 December 2019
Ref. Company Restatement Company
2019 2019 2019
(restated)
?'000 ?'000 ?'000
Non-current assets
Investments 521 - 521
Total non-current assets 521 - 521
Current assets
Trade and other receivables 1,493 - 1,493
Cash and cash equivalents - - -
Total current assets 1,493 - 1,493
Total assets 2,014 - 2,014
Current liabilities
Trade and other payables (339) - (339)
Borrowings C (3,750) 59 (3,691)
Derivative liability D - (121) (121)
Total current liabilities (4,089) (62) (4,151)
Net current assets/(liabilities) (2,596) (62) (2,658)
Total assets less current (2,075) (62) (2,137)
liabilities
Non-current liabilities
Borrowings E (4,678) (464) (5,142)
Total non-current liabilities (4,678) (464) (5,142)
Total liabilities (8,767) (464) (9,290)
Net (liabilities)/assets (6,753) (526) (7,279)
Equity
Share capital 7,397 - 7,227
Share premium account 47,124 - 47,124
Other reserves 21 51 - 51
Retained losses (61,325) (526) (61,851)
Total equity (6,753) (526) (7,279)
Restated Group Statement of Cash Flows for the year ended 31 December 2019
Group Restatement Group
2019 2019 2019
(restated)
?'000 ?'000 ?'000
Cash used in operations
Loss before tax (1,584) 960 (624)
Fair value changes in investments 27 - 27
Finance charges 200 (960) (760)
Decrease in receivables 882 - 882
Decrease in payables (78) - (78)
Net cash outflow from operating (553) - (553)
activities
Cash flows from financing activities
Proceeds from borrowing 291 - 291
Interest paid (5) - (5)
Net cash inflow from financing 286 - 286
activities
Net decrease in cash for the year (267) - (267)
Cash and cash equivalents at beginning 267 - (267)
of year
Cash and cash equivalents at end of - - -
year
Restated Company Statement of Cash Flows for the year ended 31 December 2019
Company Restatement Company
2019 2019 2019
(restated)
?'000 ?'000 ?'000
Cash used in operations
Loss before tax (816) 960 144
Fair value changes in investments 40 - 40
Finance charges 200 (960) (760)
Increase in receivables (95) - (95)
Increase in payables 118 - 118
Net cash outflow from operating (553) - (553)
activities
Cash flows from financing activities
Proceeds from borrowing 291 - 291
Interest paid (5) - (5)
Net cash inflow from financing 286 - 286
activities
Net increase in cash for the year 267 - 267
Cash and cash equivalents at beginning (267) - (267)
of year
Cash and cash equivalents at end of - - -
year
Notes to prior year restatement tables
Group and Company
In previous periods the Group had incorrectly accounted for Zero Coupon Bonds
2015 and Other convertible loan notes (see note 17). Both these loans included
embedded derivatives which were required to be valued at inception with the
balance being amortised over the life of the loan. The embedded derivative
portion of the loan was required to be valued at each year end with any change
in value being included in finance income/costs in the Income statement.
Pre 1 Jan 2019 Adjustments
A. As the above loans commenced prior to 1 January 2019 the
correction also effected prior periods resulting in an additional loss of ?
1,486,000 being recognised in the group and company balances split between an
increase in the derivative liability of ?1,140,000 and an increase in the
combined loan balances of ?346,000.
2019 Adjustments
B. This is the gain in the derivative element of the Zero Coupon Bond
2015 and other convertible loans of ?1,019,000 less additional interest on the
above loans of ?59,000.
C. This represents increase in the above loan balances as a result of
the accrued interest of ?59,000
D. This represents the balance on the derivative element of the above
loans as a result of the movement described in 1 above.
E. This represents the increase in the Zero Coupon Bond balance as
the result of adjustments in 2018 and accrued interest in 2019.
-ends-
END
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