TIDMMODE
RNS Number : 9353E
Mode Global Holdings PLC
04 July 2023
Mode Global Holdings Plc
("Mode")
Audited Financial Results to 31 December 2022
STRATEGIC REPORT
Business Review
Since day one, Mode has grown through the strength, passion, and
innovation of its people. From developers to shareholders, the
evolution of Mode can be credited to a collaboration of thinkers
each focused on the same core goal: reforming the financial
ecosystem for the better and creating genuine value for both
businesses and consumers through the use of cutting-edge
technology. Across bot h traditional finance and crypto, there are
still huge challenges to overcome and gaps to be filled when it
comes to trust, transparency, and user experience, which has
remained a major driving force for us to continue on our mission
and succeed in our vision.
We have seen significant volatility during 2022 in both equity
and the crypto markets, driven by a number of contributing factors
and a challenging economic year on a global scale but that has not
stopped Mode from delivering value to our users. We launched our
unique Bitcoin Cashback programme in May enabling users to earn
Bitcoin every time they shopped from leading UK retailers through
the Mode app, including Samsung, Farfetch and The Range to name a
few. The new rewards product was well received. Additionally, Mode
has expanded the number of Bitcoin Payroll clients onboarded as
businesses realise the value of being able to pay their employees
in Bitcoin.
During the second half of the year, Mode began rolling out it's
multi-token offering including Ethereum, Polkadot and Solana. Mode
ended the year with a collection of products that cater to the
different crypto personas. Our trading, payments, rewards and
payroll products were all seen to be significant in Mode's planned
roadmap.
Mode in 2023
Due to difficult economic circumstances and the collapse of high
profile Crypto businesses like FTX, Mode has decided to cease it's
crypto and payment operations and shut down all customer facing
activities including it's phone applications. This has been done to
maintain cash reserves whilst the Board considers the future of the
Group.
Mode continues to work with the FCA and partners to return all
fiat and crypto deposits to its customers over a winding down
process.
During Q1 2023 and continuing today, the Mode Board of Directors
entered Mode Global Limited into a Company Voluntary Arrangement
("CVA") with it's creditors. This was agreed on the 5(th) April
2023.
To secure a longer-term future of the Mode Global Holding PLC
status, the Board of Directors are in conversations with multiple
parties to raise funds and to therefore enable the vehicle to
invest in future ventures as they seem appropriate at the time. The
parent and it's subsidiaries (except for Mode Global Limited) have
sufficient funds to cover costs and meet liabilities as they fall
due for a period of 12 months from the signing of the accounts.
These cash reserves give the Group the ability to identify and
agreed on the most appropriate future plan.
Additionally GBP1.6 million of convertible loan notes have
expired on 28 June 2023. The directors are in discussions with the
holders of the convertible loan notes to extend the term of the
loan notes as the Group does not currently have sufficient funds to
settle these loan notes in full. The directors are confident of
being able to extend and renegotiate the terms of the loans.
For these reasons, they continue to adopt the going concern
basis of accounting in preparing the annual financial statements.
The financial statements do not include any adjustments that would
result from the going concern basis of preparation being
inappropriate.
The directors are aware of the risks and uncertainties facing
the business, but the assumptions used are the directors' best
estimates of the future development of the business.
Financial Review
Performance of the business during the period and the position
at year end.
Revenue for the year decreased slightly from GBP1,313k to
GBP1,081k, a drop of GBP232k, this was driven primarily by the
significant drop in crypto revenues from GBP656k in 2021 to GBP154k
in 2022, a fall of 77%. The market for Crypto trading in 2022 saw a
significant downturn which impacted Mode's top line.
Our Global Services payments platform (JGOO), saw a significant
increase in payments activity, as UK merchants took advantage of
the online ecommerce payment platform to connect with the sizable
Chinese consumer base via WeChat and Alipay. This grew from GBP721k
in 2021 to GBP926k in 2022, growth of 28%.
Administrative expenses were GBP6,938k (2021: GBP9,382k)
reducing by GBP2,444k (26%) during the year. This was driven a
Group wide cost review exercise resulting in significantly greatly
efficiencies, reduced headcount and greatly reduced marketing
spend.
Cash Balances ended the year at GBP814k (2021: GBP4,155k). The
significant reduction reflects the increase in net cash losses from
operations of GBP5,302k incurred to continue to grow the business
partly offset by the issuance of a convertible loan note in July
2022 which raised GBP2,000k.
EXTRACT FROM INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF MODE
GLOBAL HOLDINGS PLC
Material uncertainty related to going concern
We draw attention to the going concern note in the accounting
policies, concerning the Group's ability to continue as a going
concern.
The matters explained indicate that the Group needs to raise
further funds to enable the Group to invest in future ventures as
they deem appropriate at the time.
Additionally, GBP1.6 million of convertible loan notes have
expired on 28 June 2023. The directors are in discussions with the
holders of the convertible loan notes to extend the term of the
loan notes as the Group does not currently have sufficient funds to
settle these loan notes in full.
As at the date of approval of these financial statements there
are no legally binding agreements relating to securing the
extension. These events or conditions along with the matters set
forth in in the accounting policies indicate the existence of a
material uncertainty which may cast significant doubt over the
Group's ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
MODE GLOBAL HOLDINGS PLC
GROUP FINANCIAL STATEMENTS
Consolidated Statement of Income
FY FY
31-Dec-2022 31-Dec-2021
Note GBP'000 GBP'000
Continuing operations
Revenue 4 1,081 1,313
Cost of sales (1,012) (1,151)
------------ ------------
Gross profit 69 162
Administrative expenses 5 (6,938) (9,382)
------------ ------------
Operating Loss (6,869) (9,220)
Investment Revenue - 5
Finance costs (64) -
------------ ------------
Loss before taxation (6,933) (9,215)
Taxation 7 520 269
------------ ------------
Loss for the period (6,413) (8,946)
------------ ------------
Basic and diluted loss per share
(pence) 8 (6) (10)
------------ ------------
Consolidated Statement of Comprehensive Income
FY FY
31-Dec-2022 31-Dec-2021
Note GBP'000 GBP'000
Loss for the period (6,413) (8,946)
Other Comprehensive Income:
Reclassified to profit or loss
when specific conditions are
met (194) (261)
------------ ------------
Total Comprehensive Loss for
the year (6,607) (9,207)
Consolidated Statement of Financial Position
FY FY
31-Dec-2022 31-Dec-2021
Audited Audited
Note GBP'000 GBP'000
Assets
Non-current Assets
Property, plant and equipment 10 11 33
Intangible Non-Current Assets
Software 21 57
Intangible Current Assets
Treasury BTC 9 - 463
Current Assets
Inventory - Crypto 45 -
Trade and other receivables 11 176 1, 260
Cash and cash equivalents 12 814 4,155
------------ ------------
Total Assets 1,067 5, 967
------------ ------------
Equity and Liabilities
Equity attributable to equity holders
of the Group
Share Capital - Ordinary shares 14 1,029 91 5
Share Premium account 14 17,050 16,72 1
Profit and Loss Account (20,152) (14,719)
Group Reorganisation Reserve 454 454
Revaluation Reserve - 194
Share Option Reserve 15 77 1,058
------------ ------------
Total Equity (1,542) 4,62 3
Current Liabilities
Convertible Loan Notes 16 1,622 -
------------ ------------
Current trade and other payables 13 987 1,344
------------ ------------
Total Liabilities 2,609 1, 344
Total Equity and Liabilities 1,067 5, 967
------------ ------------
Consolidated Statement of Changes in Equity
Group Share
Share Share Accumulated Reorganisation Revaluation Option Convertible Total
capital premium deficit Reserves Reserve Reserve loan note equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 31
December 2020 80 5 11,09 1 (6,878) 454 455 315 - 6,242
--------- --------- ------------ --------------- ------------ --------- ------------ ---------
Shares issued 109 5,63 2 - - - - - 5,74 1
Share Option
Reserve - - - - - 743 - 743
Gain on sale
of Bitcoin
assets - - 1,105 - - - - 1,105
Total
Comprehensive
Loss for the
year - - (8,946) - (261) - - (9,207)
As at 31
December 2021 91 4 16,72 3 (14,719) 454 194 1,058 - 4,62 3
--------- --------- ------------ --------------- ------------ --------- ------------ ---------
Shares issued 114 329 - - - - - 443
Share Option
Lapsing - - 981 - - (981) - -
Total
Comprehensive
Loss for the
year - - (6,413) - (194) - - (6,607)
As at 31
December 2022 1,029 17,050 (20,151) 454 - 77 - (1,540)
--------- --------- ------------ --------------- ------------ --------- ------------ ---------
Consolidated Statement of Cashflows
FY FY
31-Dec-2022 31-Dec-2021
Audited Audited
GBP'000 GBP'000
Cash flows from operating activities
Operating loss (6,933) (9,220)
(Increase)/decrease in receivables 1,082 ( 797)
Increase/(decrease) in payables (356) 908
Finance Income - (5)
Finance Costs 64 -
Adjustment for:
Depreciation and amortisation 16 28
Share based payment - 743
Impairment of BTC 369 -
Interest (paid) / received (64) 5
Research and development tax credit claim 520 269
Net cash generated from operations (5,302) (8, 069)
------------ ------------
Cash flows from investing activities
Purchase of Property, plant & equipment - ( 29)
Purchase of BTC Treasury - (1,933)
Net cash from financing activities - (1,952)
------------ ------------
Cash flows from financing activities
Sale of BTC Treasury - 3,064
Issue of shares - 5,74 1
Convertible loan note issue 2,000 -
------------ ------------
Net cash from financing activities 2,000 8,805
------------ ------------
Net increase in cash and cash equivalents (3,302) (1,216)
Cash and cash equivalents at the beginning
of the period 4,155 5,365
------------ ------------
Effect of exchange rate changes on cash
and cash equivalents (39) 6
Cash and cash equivalents at end of period 814 4,155
------------ ------------
Represented by: Bank balances and cash 814 4,155
------------ ------------
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARED 31 DECEMBER
2022
1. General information
Mode Global Holdings is the holding company for a group of
companies that trade under the name 'Mode Global'. Mode Global
Holdings was incorporated on 5 August 2020 under the laws of
England with a registered number of 12794676. Mode Global Holdings
is in the financial services business. Its business address is
Finsgate, 5-7 Cranwood Street, London, United Kingdom, EC1V
9EE.
Mode Global Holdings wholly owns Mode Global Limited ("Mode
Global"), which in turn owns 100% of JGOO Limited ("JGOO(R)"), 100%
of Greyfoxx Limited ("Greyfoxx") and 100% of Fibere Limited
("Fibere"). Greyfoxx wholly owns Fibermode Limited ("MODE(R)").
Mode Global Holdings, together with its subsidiaries, are referred
to herein as the "Group". All the limited companies are
incorporated and domiciled in England. The registered company
numbers of these companies are 09768854 (Mode Global Limited)
10805100 (JGOO Limited), 12123111 (Greyfoxx Limited), 12408852
(Fibere Limited) and 11085143 (Fibermode Limited).
Name Country of Holding Ownership Nature of Business
incorporation
Mode Global Limited United Kingdom Direct 100% Holding Company
JGOO Limited United Kingdom Indirect 100% Global Payments
Platform
Fibermode Limited United Kingdom Indirect 100% Mode Digital
Wallet (including
Cryptocurrency)
Greyfoxx Limited United Kingdom Indirect 100% Mode for Business
Fibere Limited United Kingdom Indirect 100% Mode Store
Mode provides customers the ability to manage their traditional
(fiat) money and their digital assets (cryptocurrency) using the
same mobile (or web) application. Through MODE's mobile interface,
customers have an all-encompassing view of their traditional fiat
and cryptocurrency balances and will be able to initiate various
transactions in both.
JGOO is a payment processing, marketing and advertising company.
It aims to provide the next generation of a social media and mobile
payments platform, enabling consumers, merchants, and brands to
make and receive payments without the need for card platforms,
using their mobile phones to make and accept payments. JGOO's
initial focus has been on enabling British brands to engage with
Chinese shoppers, both face-to face and online, but will widen its
markets in the future.
Greyfoxx became a Financial Conduct Authority (FCA) authorised
electronic money institution as of 23(rd) June 2021, meeting
various conditions set out by the FCA. Greyfoxx aims to provide
e-money services to both JGOO and MODE.
Fibere Limited is the Mode Clothing Store where customers can
get Bitcoin cashback for buying items that advertise Mode as a
brand.
The Group's principal activity is to invest in fintech
companies. Its core platform, 'Mode', is a financial services
ecosystem which is a fully regulated, UK-based institution,
providing the full scope of banking and financial services to the
holders of both traditional and crypto-assets.
The consolidated financial statements comprised of the Company
and its subsidiaries (together referred to as "the Group") as at 31
December 2022 and for the year to 31 December 2022.
2. Accounting policies
The principal accounting policies applied in the preparation of
the consolidated financial statements are set out below. These
policies have been consistently applied to all periods presented,
unless otherwise stated.
Basis of preparation
This financial information has been prepared in accordance with
IFRS, including IFRS Interpretations Committee (IFRIC)
interpretations issued by the International Accounting Standards
Board (IASB) as adopted by the UK and with those parts of the
Companies Act 2006 applicable to companies reporting under IFRS.
The financial information has been prepared under the historical
cost convention. The principal accounting policies adopted are set
out below and these policies have been consistently applied.
The preparation of financial statements, in compliance with
adopted IFRSs, requires the use of certain critical accounting
estimates. It also requires the Group's management to exercise
judgment in applying the Group's accounting policies. The areas
where significant judgments and estimates have been made in
preparing the financial statements and their effect are disclosed
below.
Basis of consolidation
The consolidated financial statements include the results of the
Group as if they formed a single entity for the full period or, in
the case of acquisitions, from the date control is transferred to
the Group. The Company controls an entity when the Company has the
power, either directly or indirectly, to govern the financial and
operating policies of another entity or business so as to obtain
benefits from its activities, whereby it is classified as a
subsidiary. Intercompany transactions and balances between Group
companies are therefore eliminated in full.
The existence and effect of potential voting rights that are
currently exercisable or convertible are considered when assessing
whether the Group controls another entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the
Company. They are de-consolidated from the date that control
ceases.
Subsidiaries are all entities over which Mode Global Holdings
plc has the power to govern the financial and operating policies,
generally accompanying a shareholding of more than one half of the
voting rights. All subsidiaries have a reporting date of 31
December.
Changes in accounting policies and disclosures
The accounting policies adopted are consistent throughout the
financial period. Standards and amendments to IFRS effective as of
01 January 2021 have been applied by the Group.
There were a number of standards and interpretations which were
in issue at 31 December 2021 but were not effective at 31 December
2022 and have not been adopted for these Financial Statements.
These include:
-- Amendments to IFRS 3 Business Combinations - change in
reference to the conceptual framework (applicable on or after 1
January 2022)
-- Amendments to IFRS 17 Insurance Contracts - measurement of
insurance liabilities (applicable on or after 1 January 2023)
-- Amendments to IAS 1 Presentation of Financial Statements -
further disclosure requirements including additional detail around
accounting policies (applicable on or after 1 January 2023)
-- Amendments to IAS 8 Accounting Policies, Changes in
Accounting Estimates and Errors - definition of accounting
estimates (applicable on or after 1 January 2023)
-- A number of narrow-scope amendments to IFRS 3, IAS 16, IAS
17, IAS 37 and some annual improvements on IFRS 1, IFRS 9, IAS 41
and IFRS 16 (applicable on or after 1 January 2022)
The Directors have assessed the impact of these accounting
changes on the Group. To the extent that they may be applicable,
the Directors have concluded that none of these pronouncements will
cause material adjustments to the Group's Financial Statements.
There are no other IFRS or IFRIC interpretations that are
effective for the first time in this financial year that would be
expected to have a material impact on the Group.
Going concern
The consolidated financial statements are prepared on the going
concern basis. As expected for any start-up, the Group has incurred
significant operating losses and negative cashflows.
The Directors have created multiple scenarios for Mode Global
Holdings PLC's cash forecasts over the next 12 months. This process
included a base case scenario which shows that the Group, through
careful management of it's balance sheet and cash spend, will be
able to continue to operate for a period of greater than 12
months.
As part of this process, The Group's board approved for Mode
Global Limited to enter into a Company Voluntary Arrangement with
it's creditors. The process is continuing but Directors are
confident that they come to an positive arrangement for the Group
and external creditors.
To secure a longer-term future of the Mode Global Holding PLC
status, the Board of Directors are in conversations with multiple
parties to raise funds and to therefore enable the vehicle to
invest in future ventures as they seem appropriate at the time.
Additionally GBP1.6 million of convertible loan notes have
expired on 28 June 2023. The directors are in discussions with the
holders of the convertible loan notes to extend the term of the
loan notes as the Group does not currently have sufficient funds to
settle these loan notes in full. The directors are confident of
being able to extend and renegotiate the terms of the loans.
For these reasons, we continue to adopt the going concern basis
of accounting in preparing the annual financial statements. The
financial statements do not include any adjustments that would
result from the going concern basis of preparation being
inappropriate.
The directors are aware of the risks and uncertainties facing
the business, but the assumptions used are the directors' best
estimates of the future development of the business.
Foreign currency
The functional currency of the Group and subsidiaries are Pound
Sterling (GBP). The presentational currency of the Group and
subsidiaries are GBP because a significant amount of its
transactions is in GBP.
Transactions entered by the Group's entities in a currency other
than the reporting currency are recorded at the rates ruling when
the transaction occurs. Foreign currency monetary assets and
liabilities are translated at the rates ruling at the statement of
financial position date. Exchange differences arising on the
re-translation of outstanding monetary assets and liabilities are
also recognised in the income statement.
Share capital
The costs directly associated with the issue of new ordinary
shares or options are shown in equity as a deduction, net of tax,
from the proceeds. For the options, these have been detailed below
as share based payments.
Revenue recognition
Digital Wallet - Fibermode
Revenue is recognised at the fair value of the consideration
received or receivable for goods and services provided in the
normal course of business.
Revenue represents commission on customer trading activities and
includes interest received on Bitcoin holdings lent out to a
third-party Network. Commission is recognised on the day the trade
completes.
Global Services - JGOO
Revenue is recognised in accordance with IFRS 15 'Revenue from
Contracts with Customers'. The Company recognises revenue on the
transfer of services to customers in an amount that reflects the
consideration to which the entity expects to be entitled, in
exchange for those services. This core principle is delivered in a
five-step model framework:
1. Identify the contract(s) with the customer;
2. Identify the performance obligations in the contract;
3. Determine the transaction price;
4. Allocate the transaction price to the performance obligations
in the contract; and
5. Recognise revenue when (or as) the entity satisfies a
performance obligation.
Revenue is recognised on service contracts at the point at which
the service has been completed, or for contracts covering a period
of time, monthly over the period of the contract. Revenues exclude
intra-group sales and value added taxes and represent funds
received on a gross basis, as the transaction revenue is received
by JGOO as the principal in respect of completing the payment
transaction. We control the service of completing payments on our
payments platform and bear primary responsibility for the
fulfilment of the payment service. JGOO has full discretion in
determining fees charged to UK merchants, which is independent of
the revenue we receive from Alipay and WeChat Pay. We therefore
bear the risk when completing transactions and report these items
as separate transactions.
Employee benefits
(i) Short-term benefits
Wages, salaries, paid annual leave and sick leave and
non-monetary benefits are accrued in the period in which the
associated services are rendered by employees of the Company.
(ii) Defined contribution plan
As at year ended 31 December 2022, the Company had a defined
contribution pension scheme for employees with Scottish Widows. For
this defined contribution plan, the Company pays contributions to a
privately administered pension insurance plan on a mandatory basis.
The contributions are recognised as an employee benefit expense
when they are due.
Operating leases
The Group has elected not to recognise right-of-use assets and
lease liabilities for its leases, all of which qualify as
short-term leases. The Group recognises the lease payments
associated with these leases as an expense on a straight-line basis
over the lease term.
Current taxation:
Current tax is the amount of income tax payable (or refundable)
in respect of the taxable profit (or loss) for the year or prior
years. Tax is calculated on the basis of the tax rates and laws
that have been enacted or substantively enacted by the period end.
Research and development tax credits are recognised on a cash basis
due to the uncertainty around whether claims will be approved by
the UK tax authorities.
Deferred taxation
Deferred tax assets and liabilities are recognised where the
carrying amount of an asset or liability in the statement of
financial position differs from its tax base, except for
differences arising on:
-- the initial recognition of goodwill;
-- the initial recognition of an asset or liability in a
transaction which is not a business combination and at the time of
the transaction affects neither accounting or taxable profit;
and
-- investments in subsidiaries where the Group is able to
control the timing of the reversal of the difference and it is
probable that the difference will not reverse in the foreseeable
future.
Recognition of deferred tax assets is restricted to those
instances where it is probable that taxable profit will be
available against which the difference can be utilised.
The amount of the asset or liability is determined using tax
rates that have been enacted or substantially enacted by the
balance sheet date and are expected to apply when the deferred tax
liabilities or assets are settled or recovered. Deferred tax
balances are not discounted.
Deferred tax assets and liabilities are offset when the Group
has a legally enforceable right to offset current tax assets and
liabilities.
The Group is entitled to a tax deduction on the exercise of
certain employee share options. A share-based payment expense is
recorded in the income statement over the period from the grant
date to the vesting date of the relevant options. As there is a
temporary difference between the accounting and tax bases, a
deferred tax asset may be recorded. The deferred tax asset arising
on share option awards is calculated as the estimated amount of tax
deduction to be obtained in the future (based on the Group's share
price at the balance sheet date) pro-rated to the extent that the
services of the employee have been rendered over the vesting
period. If this amount exceeds the cumulative amount of the
remuneration expense at the statutory rate, the excess is recorded
directly in equity, against retained earnings. Similarly, current
tax relief in excess of the cumulative amount of the Share-based
payments expense at the statutory rate is also recorded in retained
earnings.
Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held
on call, together with other short term highly liquid investments
which are not subject to significant changes in value and have
original maturities of less than three months.
Equity instruments
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from proceeds.
Dividends on ordinary shares are recognised as liabilities when
approved for distribution.
Share-based payments
The Company operates an unapproved share-based compensation
plan, under which the company receives services from employees as
consideration for equity instruments (options) of Mode Global
Holdings PLC. The awards were granted, on two separate dates being
October 27(th) 2020 and 4(th) November 2020, by Mode Global
Holdings PLC, and the fair value of the employee services received
in exchange for the grant of the options is recognised as an
expense under IFRS 2. A credit is recognised directly in equity
(Share Option Reserve). The total amount to be expensed was
determined by reference to the fair value of the total options
granted using the Black Scholes model - see Note 15.
No options were able to be exercised prior to April 2021. Since
then, no options have been exercised as the share price remains
below the original strike price.
The latest date that the options can be exercised is the tenth
anniversary of the Grant Date, and if not exercised before then the
options would automatically lapse.
Intangible assets - Software
Software has a finite life and is therefore carried at cost less
accumulated amortisation. Amortisation is calculated using a
straight-line method to allocate the cost of software and websites
over their estimated useful lives of three years.
Accounting for cryptocurrencies
The Group's cryptocurrencies are held for the purpose of
liquidity and settling customer trades in a timely manner. As a
result, we account for cryptocurrencies as inventory under IAS2.
Inventory is held at the lower of cost and net realisable value.
Impairments are taken to the Profit and Loss account.
Property, plant and equipment
Property, plant and equipment are stated at historical cost less
subsequent accumulated depreciation and accumulated impairment
losses, if any. Historical cost includes expenditure that is
directly attributable to the acquisition of the assets.
Subsequent costs are included in the asset's carrying amount, or
recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item
will flow to the Company and the cost of the item can be measured
reliably. All other repairs and maintenance are charged to profit
or loss during the financial period in which they are incurred.
Depreciation on property, plant and equipment is calculated
using the straight-line method to write off their cost over their
estimated useful lives at the following annual rates:
Computer equipment: 33% straight-line
Plant and machinery: 33% straight-line
Financial assets and liabilities
Recognition and initial measurement
The Group initially recognises loans and advances, trade and
other receivables/payables, and borrowings plus or minus
transactions costs, when and only when the Group becomes party to
the contractual provisions of the instruments.
Financial assets at amortised cost
The Group's financial assets at amortised cost comprise trade
and other receivables. These represent debt instruments with fixed
or determinable payments that represent principal or interest and
where the intention is to hold to collect these contractual cash
flows. They are initially recognised at fair value, included in
current and non-current assets, depending on the nature of the
transaction, and are subsequently measured at amortised cost using
the effective interest method, less any provision for
impairment.
Financial liabilities at amortised cost
Financial liabilities at amortised cost comprise trade and other
payables. They are classified as current and non-current
liabilities depending on the nature of the transaction, and are
subsequently measured at amortised cost using the effective
interest method.
Financial assets
The Group derecognises a financial asset when the contractual
rights to the cash flows from the financial asset expire, or when
it transfers the rights to receive the contractual cash flows in a
transaction in which substantially all of the risks and rewards of
ownership of the financial asset are transferred, or in which the
Group neither transfers nor retains substantially all of the risks
and rewards of ownership and it does not retain control of the
financial asset.
On derecognition of a financial asset, the difference between
the carrying amount of the asset (or the carrying amount allocated
to the portion of the asset derecognised) and the sum of (i) the
consideration received (including any new asset obtained less any
new liability assumed) and (ii) any cumulative gain or loss that
had been recognised in OCI is recognised in profit or loss.
Financial liabilities
The Group derecognises a financial liability when its
contractual obligations are discharged, cancelled, or expire.
Summary of critical accounting estimates and judgements
The preparation of financial information, in conformity with
IFRS, requires the use of certain critical accounting estimates. It
also requires the directors to exercise their judgement in the
process of applying the accounting policies which are detailed
above. These judgements are continually evaluated by the directors
and management, and are based on historical experience and other
factors, including expectations of future events that are believed
to be reasonable under the circumstances.
The key estimates and underlying assumptions concerning the
future, and other key estimated uncertainties at the date of the
financial statements, that have a significant risk of causing a
material adjustment to the carrying amounts of assets and
liabilities within the next financial period, are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period, or in the period of the revision and future
periods if the revision affects both current and future
periods.
Management do not believe there to be estimates or judgements
which have a significant risk of causing a material adjustment to
the carrying amount of assets and liabilities within the next
financial year.
Share-based payments
The basis for the share-based payments expense for 2022 has been
set out in Note 15. In accounting for the fair value of options and
warrants, the Company makes assumptions regarding share price
volatility, risk free rate, and expected life, in order to
determine the amount of associated expense to recognise.
3. Financial risk management
Financial instruments
Financial assets 31-Dec-22 31-Dec-21
GBP'000 GBP'000
-------------------------------------- ---------- ----------
Cash and cash equivalents 814 4,155
Treasury BTC 45 463
Trade receivables - net of provision - 13
Other receivables 176 1,116
Financial assets 1,035 5,747
-------------------------------------- ---------- ----------
Financial liabilities
-------------------------------------- ---------- ----------
Convertible Loan Notes 1,622 -
Trade payables 805 708
Other payables 143 127
Accruals 40 508
-------------------------------------- ---------- ----------
Financial liabilities 2,609 1, 344
-------------------------------------- ---------- ----------
Fair value hierarchy
All the financial assets and financial liabilities recognised in
the financial statements which are short-term in nature are shown
at the carrying value, which also approximates the fair values for
short-term financial instruments. Therefore, no separate disclosure
for fair value hierarchy is required. The disclosure on fair value
hierarchy does not apply to the financial leases.
The Group's activities expose it to a variety of financial
risks, mainly credit risk, liquidity risk and interest rate risk
.
Credit risk
Credit risk refers to the risk that a counterparty will default
on its contractual obligations resulting in financial loss to the
Group. In order to minimise this risk, the Group endeavours only to
deal with companies which are demonstrably creditworthy.
The aggregate financial exposure is continuously monitored. The
maximum exposure to credit risk is the value of the Group's
outstanding bank balances. The Group's exposure to credit risk on
cash and cash equivalents is considered to be low as the bank
accounts are with banks with high credit ratings .
Liquidity risk
The Group currently holds cash and Bitcoin balances to manage
trading activity and is managed centrally. Trade and other payables
are monitored as part of normal management operations.
The below, for 2022, is predominantly made up of accrued costs
and tax liabilities relating to payroll:
2022 Within 1 year 1-2 years 2-5 years
GBP'000 GBP'000 GBP'000
------------------------- -------------- ---------- ----------
Trade and other payables 2,609 - -
------------------------- -------------- ---------- ----------
Total 2,609 - -
------------------------- -------------- ---------- ----------
2021 Within 1 1-2 years 2-5 years
year
GBP'000 GBP'000 GBP'000
------------------------- --------- ---------- ----------
Trade and other payables 1,344 - -
Total 1,344 - -
------------------------- --------- ---------- ----------
Market risk - interest rate risk
The Group carries no interest rate risk at the respective year
ends.
Capital risk management
The Group's capital management objectives are to ensure that the
Group continues to operate as a going concern, and provide an
adequate return to shareholders by pricing products and services
commensurate with the level of risk.
To meet these objectives, the Company reviews the budgets and
forecasts on a regular basis to ensure there is sufficient capital
to meet the needs of the Company through to profitability, and
achieve a positive cash flow.
All working capital requirements are financed from existing cash
resources.
4. Segment information
The Group's Revenue is made up of the trading commission on
cryptocurrency assets (Fibermode), as well as bespoke payment and
marketing solutions on its Global Services platform (JGOO).
The Group currently only operates in the UK and so for now the
presentation of a geographical split is not applicable.
31-Dec-22
JGOO Fibermode Other Total
------- ---------- -------- ------------
GBP'000 GBP'000 GBP'000 GBP'000
-------- --------- -------- ------------
Revenue 927 154 - 1,081
Cost of sales (916) (96) - (1,012)
------------------------------------ -------- --------- -------- ------------
Gross Profit 11 58 - 69
Administrative expenses (414) (762) (5,762) (6,938)
------------------------------------ -------- --------- -------- ------------
Operating Loss (405) (704) (5,762) (6,869)
Assets 68 619 380 1,067
Liabilities 3,366 6,428 (7,185) 2,609
Equity (3,298) (5,809) 7,565 (1,542)
------------------------------------ -------- --------- -------- ------------
Total Liabilities & Equity 68 619 380 1,067
31-Dec-21
JGOO Fibermode Other Total
------- ---------- -------- ------------
GBP'000 GBP'000 GBP'000 GBP'000
-------- --------- -------- ------------
Revenue 721 656 (64) 1,313
Cost of sales (694) (452) (5) (1,151)
------------------------------- -------- --------- -------- ------------
Gross Profit / (Loss) 27 204 (69) 162
Administrative expenses (936) (2,466) (5,980) (9,382)
------------------------------- -------- --------- -------- ------------
Operating Loss (909) (2,262) (6,049) (9,220)
Assets 188 911 4,868 5,967
Liabilities 2,585 5,040 (6,281) 1,344
Equity (2,397) (4,129) 11,149 4,623
------------------------------- -------- --------- -------- ------------
Total Liabilities & Equity 188 911 4,878 5,967
5. Loss from operations
Year to 31 December Year to 31 December
2022 2021
GBP'000 GBP'000
Operating loss is stated after
charging:
Directors Fees 150 132
Consulting and advisory fees 1,367 530
Premises 102 80
Software costs 669 872
Advertising 182 1,394
Legal and professional fees 556 639
Audit fees 35 26
Share option expense - 743
Other administrative expenses 3,879 4,966
-------------------- --------------------
Total administrative expenses 6,938 9,382
-------------------- --------------------
6. Employment costs & directors
The average number of employees (including directors) during the
period was made up as follows:
Year ended Year ended
31-Dec-22 31-Dec-21
Number Number
------------------------------------ ----------- -----------
Directors (including non-executive
directors) 6 6
Administrative 33 38
------------------------------------ ----------- -----------
Total 39 44
------------------------------------ ----------- -----------
2022 Male Female
Number Number
------------------------------------ ------- -------
Directors (including non-executive
directors) 5 1
Administrative 19 14
------------------------------------ ------- -------
Total 24 15
------------------------------------ ------- -------
The cost of employees (including directors) during the period
was made up as follows:
Year ended Year ended
31-Dec-22 31-Dec-21
GBP'000 GBP'000
------------------------------------------ ----------- -----------
Salaries and wages (including directors) 2,226 3,048
Social security costs 280 335
Pension Costs 28 36
Share Based Remuneration (981) 743
Staff costs 1,553 4,162
------------------------------------------ ----------- -----------
The compensation of key management personnel, principally
directors of Mode Global Holdings PLC, for the period were as
follows:
Year ended Year ended
31-Dec-22 31-Dec-21
GBP'000 GBP'000
------------------------------------------ ----------- -----------
Salaries/fees 295 484
Social security costs 40 45
Other benefits and pension contributions 3 5
Share Based Remuneration - 389
Total 338 923
------------------------------------------ ----------- -----------
The above remuneration (including share-based payments) of
directors includes the following amounts paid to the highest paid
Director:
Year ended Year ended
31-Dec-22 31-Dec-21
GBP '000 GBP '000
----------------------- ----------- -----------
Highest paid Director 172 374
----------------------- ----------- -----------
No directors or key management personnel received termination
benefits upon their departure.
7. Taxation
Year ended 31 Year ended 31
December 2022 December 2021
GBP'000 GBP'000
Total current tax (Relief for R&D) (520) (269)
--------------- ---------------
Factors affecting the tax charge
for the period
Loss on ordinary activities before
taxation (6,933) (9,215)
--------------- ---------------
Loss on ordinary activities before
taxation multiplied by standard
rate of UK corporation tax of 19%
(2020: 19%) (1,317) ( 1,751)
Effects of:
Non-deductible expenses - 143
Depreciation 54 5
Research & Development tax credits (520) (269)
Tax losses carried forward 1,264 1,602
Current tax charge/(credit) for
the period (520) (269)
--------------- ---------------
Changes in tax rates
The UK small company's corporation tax rate has been maintained
at 19% for the two periods. Accordingly, the deferred tax asset has
been calculated based on the rate of 19% at the balance sheet date.
Future enacted tax rates of 19% will apply from 1 April 2020 and
from 1 April 2021. No liability to UK corporation tax arose on
ordinary activities for the current period.
The Group has estimated tax losses of GBP 19,093,000 (2021:
GBP12,752,000) available for carry forward against future trading
profits.
The tax losses have resulted in a deferred tax asset of
approximately GBP3,638,000 (2021: GBP 2,423,000) which has not been
recognised in the financial statements due to the uncertainty of
the recoverability of the amount.
8. Earnings per share (EPS)
Year ended Year ended
------------------------------------
31-Dec-22 31-Dec-21
------------------------------------
Basic and diluted
Loss for the period and earnings
used in basic & diluted EPS (GBP) (6,414,636) (8,946,882)
Weighted average number of shares
used in basic and diluted EPS 104,791,280 89, 593,045
Loss per share (p) (6) (10)
------------------------------------ -------------- --------------
Basic earnings per share is calculated by dividing the loss
attributable to equity holders of the Company by the number of
ordinary shares in issue at the end of the period.
9. Intangible assets - Treasury BTC
31-Dec-22 31-Dec-21
GBP'000 GBP'000
------------------------------- ---------- ----------
At period start (1 January) 463 832
Additions 41 1,933
Revaluation (369) (261)
Disposals - (2, 041)
Reclassification to inventory (135) -
------------------------------- ---------- ----------
At period end (31 December) - 463
10. Tangible assets
31-Dec-22 31-Dec-21
GBP'000 GBP'000
----------------------------- ---------- ----------
At period start (1 January) 33 14
Additions - 29
Revaluation (6) -
Depreciation (16) (10)
----------------------------- ---------- ----------
At period end (31 December) 11 33
Tangible Assets comprises of computer equipment.
11. Trade and other receivables
31-Dec-22 31-Dec-21
GBP'000 GBP'000
------------------- ---------- ----------
Trade receivables - 13
Other receivables 86 1,117
Prepayments - 40
VAT Receivable 90 90
---------- ----------
Total 176 1, 260
------------------- ---------- ----------
12. Cash and cash equivalents
Where cash at bank earns interest, the interest accrues at
floating rates based on daily bank deposit rates. The fair value of
the cash and cash equivalents is as disclosed below. For the
purpose of the cash flow statement, cash and cash equivalents
comprise of the amounts shown below.
31-Dec-22 31-Dec-21
GBP'000 GBP'000
-------------------------- ---------- ----------
Cash at bank and in hand 814 4,155
-------------------------- ---------- ----------
13. Trade and other payables
31-Dec-22 31-Dec-21
GBP'000 GBP'000
---------------- ---------- ----------
Trade payables 805 708
Other payables 143 127
Accruals 40 50 9
987 1, 344
---------------- ---------- ----------
14. Share capital
Ordinary Nominal Share
shares value/share capital Share premium Total consideration
Number GBP GBP '000 GBP '000 GBP '000
-------------------- ------------ ------------- --------- -------------- --------------------
At 31 December
2021 91,446,096 0.01 915 16,721 17,636
-------------------- ------------ ------------- --------- -------------- --------------------
Ordinary Shares
issued on Placing 11,455,147 0.01 114 329 443
-------------------- ------------ ------------- --------- -------------- --------------------
At 31 December
2022 102,901,243 0.01 1,029 17,050 18,080
-------------------- ------------ ------------- --------- -------------- --------------------
All shares of the Company rank pari passu in all respects.
15. Share-based remuneration
The parent operates an unapproved share option plan for all
employees of the Group.
In accordance with standard vesting terms, the full award will
vest four years after the start of the vesting date (5th October
2021), with 20% vesting on the initial IPO date and a further 5% of
the options vested on each three-month anniversary. If the options
remain unexercised after a period of ten years from the date of
grant, the options expire. Options are forfeited if the employee
leaves the Group before the options vest.
The details of the movements in the share scheme are as
follows:
Unapproved Options
Number of share options Average Exercise
(millions) price per share
(GBP)
------------------------------- ------------------------ -----------------
Outstanding as at 31 December
2021 8,737,063 0.50
Granted during the period 5,100,000 0.075
Exercised during the period - -
Forfeited during the period (13,414,244) 0.075
------------------------------- ------------------------ -----------------
Outstanding as at 31 December
2022 422,819 0.50
No options were exercisable at the end of the period. No
share-based payments were settled during the period and therefore
the method of settlement is not applicable.
The weighted average fair values of the options granted under
the unapproved options scheme were GBP0.18 per option using the
Black Scholes model.
In September 2022, new employees were granted 5.1m options at an
exercise price of GBP0.075 and all existing options were modified
to have an exercise price of GBP0.075 also. Based on a fair value
assessment of the share option modification it was assessed that
the fair value had decreased however, in line with IFRS 2, we
continued to account for the share options of the original grant at
the original fair value. The significant inputs into the model are
as follows:
Current Price (GBP) on date issued 0.55
Option Exercise Price (GBP) 0.5
Expected Life of Options in years 4
Volatility 59%
Dividend Yield -
Risk free interest rate 0.72%
Adjustment for sub-optimal exercise factor 20%
The expected volatility was determined using the trading prices
for MGH plc from the period it listed until February 16(th) 2021 to
allow for sufficient time to provide enough scope. The reason for
only considering MGH is that there were no other similar companies
listed in the UK with comparable operations to MGH.
Following the year end, all options (except for two
ex-employees) were lapsed following the discontinued operations.
Any charge booked in 2022 was therefore reversed in year and for
prior year grants, the charge booked in prior years was reversed
through the share option reserve and retained earnings.
16. Convertible Loan Notes
In July 2022, GBP2.0m convertible loans notes were issues
repayable in July 2023. This attracted interest at a rate of 8%
pa.
The notes shall be converted by the Company on the earlier to
occur of:
i). a change of control (in respect of which the Company shall
have provided the Noteholders with reasonable notice to allow it to
exercise its conversion rights hereunder); or
ii). a qualifying financing being completed; or
iii). the maturity date (28 June 2023).
The convertible loan has been treated as a short term liability
as the maturity date is less than 12 month. Interest has been
accrued on a quarterly basis.
During the year, GBP441k of loan notes were converted for
11,455,147 shares in Mode Global Holdings PLC.
Note, management believe the requirement for the separation of
the derivative element of the CLN share conversion term to be
immaterial and have therefore not accounted for this
separately.
17. Reserves
The following describes the nature and purpose of each reserve
within equity:
Share premium Amount subscribed for share capital in excess
of nominal value.
Retained earnings Retained earnings represent all other net
gains and losses and transactions with shareholders
(example dividends) not recognised elsewhere.
Revaluation Reserve Revaluation Reserve is the excess over nominal
value for the purchased Intangible Bitcoin
Assets
Group Reorganisation Reserve The consolidation of Mode Global Limited
and its subsidiaries resulted in the elimination
of the parent's investment in the subsidiaries,
and the recognition of a group reorganisation
reserve
Share Based Payment Reserve Cumulative estimated expense amount based
on the price of MGH's share options
The Other Reserves noted on the Statement of Changes in Equity
include Group Reorganisation Reserve, Share Based Payments Reserve
and the Revaluation Reserve.
18. Capital commitments
The Company has no capital commitments at the years ended 31
December 2022 and 31 December 2021.
19. Related Party Transactions
During the year the following related parties transactions were
entered into. These were at an arm's length received no favourable
terms.
On the 13 July 2022, the following related parties subscribed to
the Convertible Loan Note issuance. See Note 16 for more details on
the Convertible Loan Note terms.
Related Party Convertible Loan Note Outstanding Convertible
Subscribed (GBP) Loan Notes (GBP)
Liwathon Limited GBP550,000 GBP436,067
---------------------- ------------------------
Linley Limited GBP500,000 GBP305,944
---------------------- ------------------------
Rita Liu (Chief Executive GBP20,000 GBP20,000
Officer)
---------------------- ------------------------
Michael Robertson (Non-executive GBP20,000 GBP20,000
director)
---------------------- ------------------------
David Shrier (Non-executive GBP25,000 GBP25,000
director)
---------------------- ------------------------
Note, Liwathon Ltd and Linley Limited are controlled by close
Rowland Family members and management deem them to be related
parties for this purpose.
19. Events after the reporting date
Post year end the Group made the decision to cease operations
and wind down all subsidiaries in order to maximise cash reserves
in the parent Company.
The Board of Directors also approved a Company Voluntary
Arrangement ("CVA") for Mode Global Limited and this was approved
by the courts on the 5(th) April 2023.
Management are in the process on settling creditors and employee
claims in line with this agreement.
Fibermode Limited has agreed with the Financial Conduct
Authority ("FCA") a plan for winding down the customer operations
and returning customers fiat and crypto deposits over an extended
period of time deemed sufficient by both parties.
20. Ultimate controlling party
There is no ultimate controlling party of the Company.
MODE GLOBAL HOLDINGS PLC
Company Statement of Financial Position
2022 2021
Note GBP'000 GBP'000
Assets
Non-current Assets
Net amounts due from subsidiaries 3.1 - -
Investment in group companies 3.3 - -
Current Assets
Trade and other receivables 101 169
Cash and cash equivalents 7 3,307
---------- ---------
Total Assets 108 3,476
---------- ---------
Equity and Liabilities
Equity attributable to equity holders of
the Group
Share Capital - Ordinary shares 1,029 914
Share Premium account 17,050 16,723
Profit and Loss Account ( 46,917) (42,197)
Merger Relief Reserve 26,940 26,940
Share Option Reserve 77 1,058
---------- ---------
Total Equity (1,822) 3,438
Current Liabilities
Convertible Loan Notes 1,622 -
Current trade and other payables 308 38
---------- ---------
Total Liabilities 1,930 38
Total Equity and Liabilities 108 3,476
---------- ---------
The Company profit and loss account has been approved by the
directors, and the use of the exemption under s408 of the Companies
Act has been applied to publish an individual profit & loss
statement.
These financial statements were approved and authorised for
issue by the board of directors on 30(th) June 2023 and were signed
on its behalf by:
Jonathan Rowland
Chairman
Company Statement of Changes in Equity
Merger
Share Relief Share Accumulated Total
Note capital Reserve premium deficit SBP Reserve equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 31 December
2020 806 26,940 11,091 (278) 315 38,874
--------- --------- --------- ------------ ------------ ----------
Shares issued
(incl Placing) 108 - 5,632 - - 5,740
Share Option
Reserve - - - - 743 743
Loss for Year - - - ( 41,919) - (4 1,919)
As at 31 December
2021 91 5 26,940 16,723 ( 42,197) 1,058 3,438
--------- --------- --------- ------------ ------------ ----------
Shares issued 114 - 327 - - 442
Share Option
Reserve - - - 981 (981) -
Loss for Year - - - (5,701) - (5,701)
As at 31 December
2022 1,029 26,940 17,050 (46,917) 77 (1,821)
------ ------- ------- --------- ------ --------
Share capital is the amount subscribed for shares at nominal
value.
Merger relief reserve is the excess over the nominal value for
shares issued as part of a share-for-share exchange.
The accompanying notes are an integral part of these financial
statements.
NOTES TO THE COMPANY FINANCIAL STATEMENTS FOR THE YEARED 31
DECEMBER 2022
1. General information
Mode Global Holdings Plc is an investment company incorporated
by shares in the United Kingdom. The address of the registered
office is Finsgate, 5-7 Cranwood Street, London, United Kingdom,
EC1V 9EE. The Company was incorporated and registered in England
and Wales on 5(th) August 2020 as a public limited company.
As at 31 December 2022 the Company had shareholdings in five
entities, a direct holding in Mode Global Limited, and indirect
holdings in JGOO Limited 100%, Greyfoxx Limited 100%, Fibermode
Limited (100%) & Fibere Limited (100%).
2. Accounting policies
Basis of preparation
The financial statements of the parent company have been
prepared in accordance with Financial Reporting Standard 101
'Reduced Disclosure Framework' ("FRS101") and the requirements of
the Companies Act 2006 in accordance with applicable accounting
standards.
These policies have been consistently applied.
The company has taken advantage of the following disclosure
exemptions under FRS 101:
-- the requirements of IFRS 7 Financial Instruments: Disclosures;
-- the requirements of paragraphs 91-99 of IFRS 13 Fair Value Measurement;
-- the requirements of paragraphs 10(d), 10(f), 16, 38A to 38D,
40A to 40D, 111 and 134 to 136 of IAS 1 Presentation of Financial
Statements;
-- the requirements of IAS 7 Statement of Cash Flows;
-- the requirements of paragraphs 30 and 31 of IAS 8 Accounting
Policies, Changes in Accounting Estimates and Errors;
-- the requirements of paragraphs 17 and 18A of IAS 24 Related Party Disclosures;
-- the requirements in IAS 24 Related Party Disclosures to
disclose related party transactions entered into between two or
more members of a group, provided that any subsidiary which is a
party to the transaction is wholly owned by such a member ; and
-- the requirements of paragraphs 130(f)(ii), 130(f)(iii),
134(d) to 134(f), and 135(c) to 135(e) of IAS 36 Impairment of
Assets.
The Company has also taken advantage of the exemption under
Section 408 of the Companies Act 2006 from presenting its own
profit and loss account.
The preparation of financial statements, in conformity with
FRS101, requires the use of certain critical accounting estimates.
It also requires management to exercise its judgement in the
process of applying the Company's accounting policies. The areas
involving a higher degree of judgement or complexity, or areas
where assumptions and estimates are significant to the financial
statements, are disclosed in the Company statement of financial
position. Although these estimates are based on management's
experience and knowledge of current events and actions, actual
results may ultimately differ from these estimates.
The estimates and underlying assumptions are reviewed on an
on-going basis. Revisions to accounting estimates are recognised in
the period in which the estimates are revised if the revision
affects only that period, or in the period of the revision and
future periods if the revision affects both current and future
periods.
(a) Changes in accounting policies and disclosures
(a) New, amended standards, interpretations not adopted by the
Company
-- Amendments to IFRS 3 Business Combinations - change in
reference to the conceptual framework (applicable on or after 1
January 2022)
-- Amendments to IFRS 17 Insurance Contracts - measurement of
insurance liabilities (applicable on or after 1 January 2023)
-- Amendments to IAS 1 Presentation of Financial Statements -
further disclosure requirements including additional detail around
accounting policies (applicable on or after 1 January 2023)
-- Amendments to IAS 8 Accounting Policies, Changes in
Accounting Estimates and Errors - definition of accounting
estimates (applicable on or after 1 January 2023)
-- A number of narrow-scope amendments to IFRS 3, IAS 16, IAS
17, IAS 37 and some annual improvements on IFRS 1, IFRS 9, IAS 41
and IFRS 16 (applicable on or after 1 January 2022)
* Subject to endorsement
Management has not yet fully assessed the impact of this
standard, but does not believe it will have a material impact on
the financial statements.
Financial instruments
Financial assets and financial liabilities are recognised in the
statement of financial position when the Company becomes party to
the contractual provisions of the instrument. Financial assets are
derecognised when the contractual rights to the cash flows from the
financial asset expire or when the contractual rights to those
assets are transferred. Financial liabilities are derecognised when
the obligation specified in the contract is discharged, cancelled
or expired.
Trade and other receivables
Trade receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method, less provision for impairment. Appropriate
provisions for estimated irrecoverable amounts are recognised in
the statement of comprehensive income using the expected credit
loss method. The carrying amount of these assets approximates their
fair value.
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, demand
deposits, and other short -- term highly liquid investments that
are readily convertible to a known amount of cash and are subject
to an insignificant risk of changes in value. The carrying amount
of these assets approximates their fair value.
Equity instruments
An equity instrument is any contract that evidences a residual
interest in the assets of an entity after deducting all of its
liabilities. Equity instruments issued by the Company are recorded
at the proceeds received, net of direct issue costs.
Trade and other payables
Trade payables are obligations to pay for goods or services that
have been acquired in the ordinary course of business from
suppliers. Trade payables are recognised initially at their fair
value and are subsequently measured at their amortised cost using
the effective interest rate method. Due to the short -- term nature
of these balances, the carrying amount of trade payables
approximates to their fair value.
Share capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new
ordinary shares or options are shown in equity as a deduction, net
of tax, from the proceeds.
Critical accounting estimates and judgments
The Company makes certain judgements and estimates which affect
the reported amount of assets and liabilities. Critical judgements
and the assumptions used in calculating estimates are continually
evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be
reasonable under the circumstances.
In the process of applying the Company's accounting policies,
which are described above, the directors do not believe that they
have had to make any assumptions or judgements that would have a
material effect on the amounts recognised in the financial
information.
Financial risk management
The Company's activities may expose it to some financial risks.
The Company's overall risk management programme focuses on the
unpredictability of financial markets and seeks to minimise
potential adverse effects on the Company's financial
performance.
Capital risk
The Company takes great care to protect its capital investments.
Significant due diligence is undertaken prior to making any
investment. Investments are closely monitored.
Investments in subsidiary companies
The Company's investment in its subsidiaries is carried at cost
less provision for any impairment. Investments denominated in
foreign currency are recorded using the rate of exchange at the
date of acquisition.
Impairment of investments in subsidiaries
The Company assesses investments for impairment whenever events
or changes in circumstances indicate that the carrying value of an
investment may not be recoverable. If any such indication of
impairment exists, the Company makes an estimate of the recoverable
amount. If the recoverable amount of the cash-generating unit is
less than the value of the investment, the investment is considered
to be impaired and is written down to its recoverable amount. An
impairment loss is recognised immediately in the profit and loss
account.
3. Notes to the financial statements
3.1 Net amounts due from subsidiaries
Year ended Year ended
31-Dec-22 31-Dec-21
GBP'000 GBP'000
----------------------------------- ----------- -----------
Amounts due from subsidiaries 19,740 13,394
Impairment provision (19,740) (13,394)
----------------------------------- ----------- -----------
Net amounts due from subsidiaries - -
During the period, management reviewed the future cash flow
projections and market value of Mode Group Holdings Plc's
subsidiary undertakings and deemed it appropriate to pass an
impairment provision to reduce their values to nil. Management will
continue to review the forecasts of the subsidiary undertakings and
assess whether it is appropriate to reverse this impairment charge
in future periods.
3.2 Capital risk management
The directors' objectives when managing capital are to safeguard
the Company's ability to continue as a going concern in order to
provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce
the cost of capital. At the date of this financial information, the
Company had been financed by the introduction of capital. In the
future, the capital structure of the Company is to consist of
borrowings and equity attributable to equity holders of the
Company, comprising issued share capital and reserves.
3.3 Investments in subsidiary undertakings
The principal undertakings in which the Company has an interest
at the period-end is as follows:
Name Country of Holding Ownership Nature of Business
incorporation
Mode Global Limited United Kingdom Direct 100% Holding Company
JGOO Limited * United Kingdom Indirect 100% Global Payments
Platform
Fibermode Limited* United Kingdom Indirect 100% Mode Digital
* Wallet (including
Cryptocurrency)
Greyfoxx Limited* United Kingdom Indirect 100% Mode for Business
Fibere Limited* United Kingdom Indirect 100% Mode Apparel
Store
*- direct 100% investments of Mode Global Limited
**-direct 100% investment of Greyfoxx Limited
Share in group undertakings
31-Dec-22 31-Dec-21
GBP'000 GBP'000
----------------------------- ---------- ----------
At period start (1 January) - 27,490
Additions 5,805 -
Impairment (5,805) (27,490)
----------------------------- ---------- ----------
At period end (31 December) - -
During the period, management reviewed the future cash flow
projections and market value of Mode Group Holdings Plc's
subsidiary undertakings and deemed it appropriate to pass an
impairment to reduce their values to nil. Management will continue
to review the forecasts of the subsidiary undertakings and assess
whether it is appropriate to reverse this impairment charge in
future periods.
3.4 Share capital
For details of the share capital see Note 14 of the consolidated
financial statements.
3.5 Related party transactions
During the year ended 31 December 2022 and 2021, there were no
related party transactions that occurred other than disclosed in
note of the consolidated financial statements.
3.6 Merger relief reserve
The merger relief reserve was created to recognise the excess
over par value of the shares issued as part of the share-for-share
exchange with the previous shareholders of Mode Global Limited.
3.7 Share-based payment reserve
See Note 15 of the consolidated financial statements.
3.8 Contingent liabilities
The Company has no contingent liabilities in respect of legal
claims arising from the ordinary course of business.
3.9 Capital commitments
There was no capital expenditure contracted for at the end of
the reporting period but not yet incurred.
3.10 Ultimate controlling party
There is no ultimate controlling party of the Company.
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END
FR BGGDRDUGDGXS
(END) Dow Jones Newswires
July 04, 2023 06:56 ET (10:56 GMT)
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