26 June 2024
Quantum
Blockchain Technologies Plc
(”QBT” or
”the Company”)
FINAL
RESULTS
QBT (AIM:
QBT), is pleased to announce its final results for the year ended
31 December 2023.
The
Company’s Annual General Meeting (“AGM”) will be held at Company’s
registered address, 1st
Floor, 1
Chancery Lane, London, WC2A 1LF at
12.00 pm on Wednesday, 31 July 2024.
The Annual
Report and Accounts together with the AGM Notice and Form of Proxy
(together the “Documents”) are available on the Company’s website
under the “Investor Relations – Annual Reports and Circulars”
section. The Documents will be posted shortly to those shareholders
who have requested to receive printed documents.
For
further information please contact:
Quantum
Blockchain Technologies Plc
Francesco Gardin, CEO and Executive Chairman
+39 335
296573
SP
Angel Corporate Finance (Nominated
Adviser & Broker)
Jeff Keating
+44 (0)20
3470 0470
Kasia Brzozowska
Leander
(Financial
PR)
Christian Taylor-Wilkinson
+44 (0)
7795 168 157
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.
CHAIRMAN’S
STATEMENT
I am
pleased to present the Group’s Final Results for the year ended
31 December 2023. The Group consists
of Quantum Blockchain Technologies PLC (the “Company” or “QBT”),
which undertakes the Group’s Research and Development (“R&D”)
Programme and holds the Legacy Assets, and its wholly owned
subsidiary, Clear Leisure 2017 Ltd (“CL17”), which deals with the
legal claims and related litigation.
During
2023, the main focus of the Company has been the R&D Programme,
launched in 2021, which aims to develop a proprietary disruptive
technology for mining Bitcoin through the development of Artificial
Intelligence (AI), Quantum Computing and a special architecture for
ASIC chips design for mining rigs. The capitalisation of the
Bitcoin market as at the date of this report exceeds USD1.3 trillion, therefore, a technology which
could bring a competitive advantage to existing Bitcoin miners is
considered by the Company as potentially valuable.
The
Company has several independent R&D teams working on each of
the above technologies, based in London (UK), Munich (Germany) and Milan (Italy).
The first
goal of QBT’s R&D Programme is to create AI software to improve
the mining power of existing Bitcoin mining rigs. By applying AI
and Machine Learning (ML) technologies, three different R&D
teams have independently achieved very promising results from
internal laboratory tests for the Company’s three proprietary
methods, called “A”, “B” and “C”. While they are materially
different, each method has substantiated the Company’s initial
assumption, i.e.,
that SHA-256, the core algorithm for mining of Bitcoin, is to some
extent predictable. Hence calculations can be limited only to those
cases where the chance of successfully mining Bitcoin is higher,
resulting in better overall performance of the mining
process.
The
Company is now working on adapting its three Bitcoin mining methods
to existing mining rigs in order to launch the first commercial QBT
products, as Software as a Service (“SaaS”) for Bitcoin
miners.
A second
goal, which has a mid to long term timeframe, is the development of
a proprietary mining chip which includes all the internal R&D
results, as per the two patent applications filed in 2021 and
2023.
Finally,
the third objective will be the implementation of “Quantum Mining”,
which is a proprietary quantum version of SHA-256 algorithm for
Bitcoin mining. A patent application for this implementation is in
the process of being drafted at the time of publication of this
report.
In order
to use QBT’s proprietary quantum algorithm for Bitcoin mining, a
quantum computer with more qubits than is currently commercially
available is required. Therefore, the Company is planning ahead to
be in a position to use this opportunity when such quantum computer
is available.
During
2023, the Company continued to deal with its Legacy Assets, with
special focus on the litigation against the former management and
internal audit committee of Sipiem in Liquidazione Spa (“Sipiem”),
which is held via CL17. In late 2022, the Venice Court ruled in favour of CL17 and
ordered Sipiem defendants to pay CL17 €6,274,000 in damages
(exclusive of interest and adjustments for inflation), and legal
fees (together the “Award Payment”).
The
Company also continued to deal with its other Legacy Assets, such
as the Sosushi Srl (“Sosushi”) €1m litigation, and Company’s
investments in PBV, Forcrowd and Geosim, although there are no
specific updates available at this time.
During the
period under review, as announced on 1 June
2023, QBT raised a total of £1 million (before expenses)
pursuant to the issue of 71,428,571 new ordinary shares of
0.25 pence each in the Company
(“Ordinary Shares”) at a price of 1.4
pence per Ordinary Share. Further to that, as announced on
30 October, the Company raised a total of £2 million (before
expenses) pursuant to the issue of 133,333,333 new Ordinary Shares
at a price of 1.5 pence per Ordinary
Share.
On
7 July 2023, the Company announced
that it had received a conversion notice from MC Strategies AG to
convert €1 million of the Zero-Coupon Bond into new Ordinary Shares
at a conversion price of 1 pence per
Ordinary Share (EUR: GBP exchange rate of 0.89 – fixed per terms
and conditions of the Zero-Coupon Bond) (as originally disclosed by
the Company on 9 November 2020). As a
result, the Company issued 89,000,000 new Ordinary Shares to MC
Strategies AG on 14 July
2023.
As
disclosed on 31 May 2023, QBT granted
seven million new options over new Ordinary Shares
to certain consultants, members of the R&D team and in-house
staff. As a
result, at the time of this report, the Company has outstanding
options over 133,500,000 new Ordinary Shares exercisable at
5 pence and outstanding options over
133,500,000 new Ordinary Shares exercisable at 10 pence, set to expire between December 2024 and December
2026.
In
conclusion, the Company believes that exciting times are ahead, as
it expects that its products, once available, could truly energise
the cryptocurrency mining industry, while eventually being able to
monetise its Legacy Assets through legal settlements.
Financial
Review
The Group
reported a total comprehensive loss of €4,206,000 for the year
ended 31 December 2023 (2022:
€5,026,000) and a loss before tax of €4,348,000 (2022: €5,252,000).
Operating losses for the period were €4,025,000 (2022: €4,547,000).
Included within administrative expenses are charges relating to the
recognition of share options totalling €416,000 (2022: €1,854,000)
and within finance costs are charges for the revaluation of
derivatives representing a profit of €9,000 (2022: loss of
€324,000). The movement in these items is dependent on the
volatility of the Company’s share price used for the calculation
according to the relevant accounting standards. The undiluted Net
Asset Value (“NAV”) of the Group decreased by €675,000 in 2023,
compared to a decrease of €398,000 in 2022. The Group had Net
Current Liabilities of €3.1m as at 31
December 2023 (2022: Net Current Assets €4.4m).
Post-Balance
Sheet Events
In
January 2024, the Company announced
it has agreed with MC Strategy S.A., the sole Bondholder of the
Company’s €3.5m Zero-Coupon Bond issued in 2020, to extend the
maturity of the Bond from 15 December
2024 to 15 December 2026. QBT
and MC Strategy S.A. have agreed to change the yield on maturity
from 1% to 3%.
With
regards to the Company’s Zero-Coupon Bond originally issued in
2013, at the Bondholders meeting held on 22
February 2024 (previously duly called on 18 January 2024) the bondholders agreed to extend
the maturity of the Zero-Coupon Bond from 15
December 2024 to 15 December
2026, and to amend the conversion price from £0.05 to
£0.03.
In
March 2024, the Company announced a
new development, called Method C, based on Machine Learning and
using predictive AI technology that is producing consistent results
during testing. In testing environments Method C had favourably
demonstrated predictive ability in c. 30% of instances where it was
input to SHA-256 producing a winning hash, resulting in a potential
saving of energy.
At the
same time, QBT announced that it had commenced development of a
proprietary ASIC chip. A working prototype is about to undergo
development to confirm performance levels, and the Company entered
into early-stage exploratory discussions with Bitcoin rig
manufacturers and US Bitcoin mining companies. Also in March, the
Company noted that the porting of Method A and Method B into
commercial rigs had proven to be very challenging.
The
R&D team engaged in testing different solutions for the final
stage in order to deliver a fully reliable product. Finally, per
the same announcement, QBT disclosed that its first two patent
applications (ASIC UltraBoost and ASIC EnhancedBoost) were making
positive headway and that a third patent application was being
drafted concerning the proprietary quantum version of
SHA-256.
In
May 2024, the Company announced that
at the end of April 2024, it reached
an agreement with certain of the Sipiem litigation co-liable
defendants who have settled their position for €700,000 (which, net
of certain costs, has been received by CL17) .
At the
same time, CL17 also reached an agreement with the Sipiem’s
receiver, acquiring its right to receive 30% of any sums collected
(net of legal and other costs) from the Sipiem litigation, as
envisaged in the 2019 claim purchase agreement (through which CL17
acquired the Sipiem litigation) for an amount of €170,000, giving
CL17 rights to all funds recovered, namely the €700,000 of the
above agreement and the balance amounting to €5.575 million plus
interest and augmentation for inflation, together (the
“Settlement”)
As
announced on 16 May 2024 the above
agreements were subject to the Venice Court scheduling of a hearing to
approve the Settlement, before the issue of the appeal
ruling.
In June,
QBT confirmed that the payment of €700,000 had been completed, and
that €170,000 has been paid by CL17 to Sipiem’s Receiver with
respect to the acquisition by CL17 of the Receiver’s right to
receive 30% of any further sums collected in connection with the
claim (net of legal fees).
Subsequently,
in June 2024, the Company announced
that the Venice Court of Appeal
confirmed the ruling of the 2022 lower court Judgment in favour of
CL17 (save for €105,412), amounting to €6,083,562 (plus interest
and adjustments for inflation) in damages, plus €134,166 for legal
expenses. As the appeal ruling has been issued prior to the
scheduling of the hearing regarding the Settlement, such settlement
is now deemed void.
While the
above matter is currently being assessed by the Company’s legal
team, the Company still hold the above Settlement funds, minus the
€170,000 paid to the Receiver for the 30% rights. In the meantime,
all the parties involved, namely the Receiver, the Sipiem’s
statutory auditor’s lawyers and the insurer’s lawyers are being
contacted to discuss the contractual implications of the voided
Settlement.
Outlook
The Board
remains committed to return value to its stakeholders
by:
-
continuing
to focus on its R&D Programme, which is providing promising and
consistent results for the disruption of the Bitcoin
market;
-
investing
in the technology sector (both in a direct and an indirect
manner);
-
managing
the legacy portfolio assets, where positive outcomes are expected
from the Company’s legal claims; and
-
further
reduction of the debt position (if and when the conditions are
deemed appropriate).
The Board
remains positive as the technology investments are deemed sound and
promising, while the legal claims have strong merit and against
defendants that are expected to remain solvent, thereby enhancing
the prospect of collection of the judgment debts.
Francesco Gardin
Chairman
25 June 2024
GROUP
STATEMENT OF COMPREHENSIVE INCOME
FOR
THE YEAR ENDED 31 DECEMBER
2023
|
|
Note
|
2023
|
2022
|
|
|
|
€’000
|
€’000
|
|
|
|
|
|
|
Revenue
|
|
-
|
-
|
|
|
|
-
|
-
|
|
|
|
|
|
|
Administrative
expenses
|
7
|
(4,025)
|
(4,547)
|
|
Other
income
|
|
-
|
-
|
|
Operating
loss
|
|
(4,025)
|
(4,547)
|
|
|
|
|
|
|
Other
gains and losses
|
|
32
|
-
|
|
Share of
loss from equity-accounted associates
|
8
|
(59)
|
(69)
|
|
Finance
costs
|
9
|
(296)
|
(636)
|
|
Loss
before tax
|
|
(4,348)
|
(5,252)
|
|
Tax
|
12
|
142
|
226
|
|
Loss
for the year
|
|
(4,206)
|
(5,026)
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
COMPREHENSIVE LOSS FOR THE YEAR
|
|
(4,206)
|
(5,026)
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per share:
|
|
|
|
|
Basic loss
per share (cents)
|
13
|
€0.382
|
€0.508
|
|
Diluted
loss per share (cents)
|
13
|
€0.256
|
€0.312
|
There was
no other comprehensive income during the year.
The
accounting policies and notes form an integral part of these
financial statements.
GROUP
AND COMPANY STATEMENTS
OF FINANCIAL POSITION
AS
AT 31 DECEMBER
2023
|
|
Notes
|
Group
2023
|
Group
2022
|
Company
2023
|
Company
2022
|
|
|
|
€’000
|
€’000
|
€’000
|
€’000
|
|
Non-current
assets
|
|
|
|
|
|
|
Intangible
assets
|
15
|
2
|
-
|
-
|
-
|
|
Property,
plant and equipment
|
14
|
169
|
226
|
-
|
-
|
|
Financial
assets at fair value through profit and loss
|
16
|
396
|
677
|
76
|
115
|
|
Investments
held at cost
|
16
|
-
|
-
|
11
|
10
|
|
Investments
in equity-accounted associates
|
8
|
7
|
60
|
7
|
-
|
|
Total
non-current assets
|
|
574
|
963
|
94
|
125
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Trade and
other receivables
|
17
|
3,243
|
4,626
|
946
|
1,056
|
|
Cash and
cash equivalents
|
18
|
2,057
|
463
|
2,041
|
449
|
|
Total
current assets
|
|
5,300
|
5,089
|
2,987
|
1,505
|
|
|
|
|
|
|
|
|
Total
assets
|
|
5,874
|
6,052
|
3,081
|
1,630
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Trade and
other payables
|
19
|
(413)
|
(465)
|
(390)
|
(577)
|
|
Borrowings
|
20
|
(7,451)
|
-
|
(7,451)
|
-
|
|
Derivative
financial instruments
|
21
|
(459)
|
-
|
(459)
|
-
|
|
Provisions
|
22
|
(98)
|
(210)
|
(98)
|
(210)
|
|
Total
current liabilities
|
|
(8,421)
|
(675)
|
(8,398)
|
(787)
|
|
|
|
|
|
|
|
|
Net
current (liabilities)/assets
|
|
(3,121)
|
4,414
|
(5,411)
|
718
|
|
|
|
|
|
|
|
|
Total
assets less current liabilities
|
|
(2,547)
|
5,377
|
(5,317)
|
843
|
|
|
|
|
|
|
|
|
Non-current
liabilities
|
|
|
|
|
|
|
Borrowings
|
20
|
-
|
(8,131)
|
-
|
(8,131)
|
|
Derivative
financial instruments
|
21
|
-
|
(468)
|
-
|
(468)
|
|
Total
non-current liabilities
|
|
-
|
(8,599)
|
-
|
(8,599)
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
(8,421)
|
(9,274)
|
(8,398)
|
(9,386)
|
|
|
|
|
|
|
|
|
Net
liabilities
|
|
(2,547)
|
(3,222)
|
(5,317)
|
(7,756)
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
Share
capital
|
23
|
9,219
|
8,378
|
9,219
|
8,378
|
|
Share
premium account
|
23
|
54,165
|
50,541
|
54,165
|
50,541
|
|
Other
reserves
|
25
|
14,228
|
13,812
|
5,903
|
5,487
|
|
Retained
losses
|
|
(80,159)
|
(75,953)
|
(74,604)
|
(72,162)
|
|
|
|
|
|
|
|
|
Total
equity
|
|
(2,547)
|
(3,222)
|
(5,317)
|
(7,756)
|
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 €2,442,000 (2022: loss of €4,550,000).
The
financial statements were approved by the board of directors and
authorised for issue on 25 June 2024,
on its behalf by:
GROUP
STATEMENT OF CHANGES IN EQUITY
FOR
THE YEAR ENDED 31 DECEMBER
2023
|
Group
|
Share
capital
€’000
|
|
Share
premium
account
€’000
|
Other
reserves
€’000
|
Retained
losses
€’000
|
Total
equity
€’000
|
|
At
1 January 2022
|
8,221
|
|
49,442
|
11,409
|
(71,896)
|
(2,824)
|
|
Total
present loss and comprehensive loss for the
year
|
-
|
|
-
|
-
|
(5,026)
|
(5,026)
|
|
Exercise
of warrants
|
157
|
|
1,099
|
-
|
969
|
2,225
|
|
Grant
of share options
|
-
|
|
-
|
1,854
|
-
|
1,854
|
|
Modification
of bond
|
-
|
|
-
|
549
|
-
|
549
|
|
At
31 December 2022
|
8,378
|
|
50,541
|
13,812
|
(75,953)
|
(3,222)
|
|
Total
comprehensive loss
for
the year
|
-
|
|
-
|
-
|
(4,206)
|
(4,206)
|
|
Issue
of shares
|
841
|
|
3,624
|
-
|
-
|
4,465
|
|
Grant
of share options
|
-
|
|
-
|
416
|
-
|
416
|
|
At
31 December 2023
|
9,219
|
|
54,165
|
14,228
|
(80,159)
|
(2,547)
|
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. Included within retained losses are movements
relating
to the grant, exercise, and fair value movement of the
warrants
issued during the year.
Other
reserves consist
of three reserves, as detailed in Note 25, 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 reporting date.
The
accounting policies and notes form part of these financial
statements.
COMPANY
STATEMENT OF CHANGES IN EQUITY
FOR
THE YEAR ENDED 31 DECEMBER
2023
|
Company
|
Share
capital
€’000
|
Share
premium
account
€’000
|
Other
reserves
€’000
|
Retained
losses
€’000
|
Total
€’000
|
|
At
1 January 2022
|
8,221
|
49,442
|
3,084
|
(68,581)
|
(7,834)
|
|
Total
present loss and comprehensive loss for the
year
|
-
|
-
|
-
|
(4,550)
|
(4,550)
|
|
Exercise
of warrants
|
157
|
1,099
|
-
|
969
|
2,225
|
|
Grant
of share options
|
-
|
-
|
1,854
|
-
|
1,854
|
|
Modification
of bond
|
-
|
-
|
549
|
-
|
549
|
|
At
31 December 2022
|
8,378
|
50,541
|
5,487
|
(72,162)
|
(7,756)
|
|
Total
comprehensive loss
for
the year
|
-
|
-
|
-
|
(2,442)
|
(2,442)
|
|
Issue
of shares
|
841
|
3,624
|
-
|
-
|
4,465
|
|
Grant
of share options
|
-
|
-
|
416
|
-
|
416
|
|
At
31 December 2023
|
9,219
|
54,165
|
5,903
|
(74,604)
|
(5,317)
|
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. Included within retained losses are movements
relating
to the grant, exercise, and fair value movement of the
warrants
issued during the year.
Other
reserves consist
of three reserves, as detailed in Note 25, 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 reporting date.
The
accounting policies and notes form part of these financial
statements.
GROUP
AND COMPANY STATEMENT OF CASH FLOWS
FOR
THE YEAR ENDED 31 DECEMBER
2023
|
|
Note
|
Group
2023
€’000
|
Group
2022
€’000
|
|
Company
2023
€’000
|
Company
2022
€’000
|
|
Cash
used in operations
|
|
|
|
|
|
|
|
Loss
before tax
|
|
(4,348)
|
(5,252)
|
|
(2,585)
|
(4,753)
|
|
Impairment
of investments
|
16
|
303
|
154
|
|
-
|
154
|
|
Share of
post-tax losses of equity accounted associates
|
8
|
59
|
69
|
|
59
|
69
|
|
Non cash
foreign exchange movements
|
16
|
-
|
(35)
|
|
-
|
-
|
|
Finance
charges
|
9
|
296
|
637
|
|
295
|
635
|
|
Depreciation
expense
|
14
|
55
|
49
|
|
-
|
-
|
|
Decrease
/(increase) in receivables
|
17
|
1,383
|
474
|
|
110
|
(196)
|
|
(Decrease)
/increase in payables
|
19
|
(164)
|
346
|
|
(298)
|
433
|
|
Impairment
of intercompany receivables
|
|
-
|
33
|
|
-
|
12
|
|
Share
based payments
|
|
416
|
1,854
|
|
416
|
1,854
|
|
R&D
tax credit received
|
|
154
|
-
|
|
154
|
-
|
|
Net
cash outflow from operating activities
|
|
(1,846)
|
(1,671)
|
|
(1,849)
|
(1,792)
|
|
|
|
|
|
|
|
|
|
Cash
flows from investing activities
|
|
|
|
|
|
|
|
Purchase
of investments
|
16
|
(22)
|
(50)
|
|
(22)
|
(50)
|
|
Purchase
of other investments
|
|
(5)
|
-
|
|
(6)
|
-
|
|
Purchase
of property, plant and equipment
|
14
|
-
|
(111)
|
|
-
|
-
|
|
Purchase
of intangible assets
|
15
|
(2)
|
-
|
|
-
|
-
|
|
Net
cash outflow from investing activities
|
|
(29)
|
(161)
|
|
(28)
|
(50)
|
|
|
|
|
|
|
|
|
|
Cash
flows from financing activities
|
|
|
|
|
|
|
|
Proceeds
from capital issue
|
|
3,465
|
-
|
|
3,465
|
-
|
|
Proceeds
from exercise of warrants
|
|
-
|
1,256
|
|
-
|
1,256
|
|
Net
interest paid
|
|
(9)
|
-
|
|
(9)
|
-
|
|
Net
cash (outflow)/inflow from financing activities
|
|
3,456
|
1,256
|
|
3,456
|
1,256
|
|
|
|
|
|
|
|
|
|
Net
(decrease) /increase in cash for the year
|
|
1,581
|
(576)
|
|
1,579
|
(586)
|
|
Cash and
cash equivalents at beginning of year
|
|
463
|
1,039
|
|
449
|
1,035
|
|
Exchange
differences
|
|
13
|
-
|
|
13
|
-
|
|
Cash
and cash equivalents at end of year
|
18
|
2,057
|
463
|
|
2,041
|
449
|
The
accounting policies and notes form part of these financial
statements.
NOTES
TO THE FINANCIAL STATEMENTS
FOR
THE YEAR ENDED 31 DECEMBER
2023
-
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 13.
-
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 United Kingdom adopted International Financial
Reporting Standards ("UK adopted IFRS") 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
functional and presentation of the entity rounded to the nearest
€’000.
The Group
has adopted the amendments to IAS 16 Property, Plant and Equipment
(issued in May 2020) in the current
year. This has not had a material impact on the Group financial
statements.
The Group
has adopted the amendments to IAS 16 IAS 37 Provisions, Contingent
Liabilities and Contingent Assets (issued in May 2020) in the current year. This has not had a
material impact on the Group financial statements.
Going
Concern
In 2023
the Group
incurred a
loss of €4,206,000 (2022: €5,026,000) and had net
current liabilities as
at 31 December 2023 of
€3,121,000
(2022: net
current assets of €4,414,000). Our
forecasts for the period to 30 June
2025 has been prepared on the prudent assumptions that the
Group will still be nonrevenue-generating, will not receive any
portion of its litigation claims, and will not receive any debtor
cash settlement specifically from Mediapolis Liquidation
proceedings. Nonetheless, on the basis of the equity funding raised
last 1 June 2023 and 30 October 2023 which raised a total of
EUR 2.74 million, and the extension
on our two convertible bond repayments from December 2024 to December
2026, we believe that the
Group, at the date of this report, may hold
sufficient liquidity to sustain its operational existence for the
following twelve months
without
the specific necessity to raise further funding either through an
equity placing on AIM, or through other external sources, unless
for additional specific investment opportunities or
ventures.
After
making due enquiries, the Directors have formed a judgement that
there is a reasonable expectation that, in the next twelve months,
there should
be no need
to secure further resources, but in case of new investment
opportunities the Group can secure further funds to sustain such
expenses and that adequate arrangements will be in place to enable
the settlement of their financial commitments, as and when they
fall due.
On this
note, the Directors continue to adopt the going concern basis in
preparing the financial statements.
Notwithstanding
the above, the Directors believe that due to the little headroom
existing within our budget at 30 June
2025 and the inherent commercial uncertainties in relation
to future events, a material uncertainty over the outcome of the
matters described exists and Group might be required to raise
further finance and note the uncertainty in relation to the group
being able to realise its assets and discharge its liabilities in
the normal course of business.
New
standards, interpretations and amendments not yet
adopted
The Group
decided not to early adopt the following amendments to standards
which are not yet mandatory.
Amendments
to IAS 1 Presentation of Financial Statements: Classification of
Liabilities as Current or Non-current (issued
January 2020)
The
amendments clarify that the classification of a liability as
current or non-current is based only on rights existing at the end
of the reporting period and the classification is not affected by
expectations about whether rights to settle or defer a liability
will be exercised. Further, the amendments clarify that the
settlement of a liability refers to the transfer of cash, equity
instruments, other assets, or services to the counterparty. This
amendment only affects presentation.
The
amendment is effective for financial years beginning on or after
1 January 2024 and is not yet adopted
in the United Kingdom.
The Group
does not expect a material impact on its consolidated financial
statements from these amendments.
Amendments
to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate
Benchmark Reform – Phase 2 (issued in
August 2020)
The
amendments are aimed at helping companies to provide investors with
useful information about the effects of the reform of interest rate
benchmarks on those companies’ financial statements.
The
amendments complement those issued in 2019 and focus on the effects
on financial statements when a company replaces the old interest
rate benchmark with an alternative benchmark rate as a result of
the reform. The Phase 2 amendments relate to:
-
changes
to contractual cash flows—a company
will not have to derecognise or adjust the carrying amount of
financial instruments for changes required by the reform, but will
instead update the effective interest rate to reflect the change to
the alternative benchmark rate;
-
hedge
accounting—a company
will not have to discontinue its hedge accounting solely because it
makes changes required by the reform, if the hedge meets other
hedge accounting criteria; and
-
disclosures—a
company is required to disclose information about new risks arising
from the reform and how it manages the transition to alternative
benchmark rates.
The Group
does not expect a material impact on its consolidated financial
statements from these amendments.
Amendments
to IAS 1 and IFRS Practice Statement 2 Disclosure of Accounting
Policies (issued
in February 2021)
The
amendments enhance the disclosure requirements relating to an
entity’s accounting policies and clarify that the notes to a
complete set of financial statements are required to include
material accounting policy information. Material accounting policy
information, when considered with other information included in the
financial statements, can reasonably be expected to influence
decisions that the primary users of financial statements make on
the basis of the financial statements. The amendments help
preparers determine what constitutes material accounting policy
information and notes that accounting policy information which
focuses on how IFRS has been applied to its own circumstances is
more useful for users of financial statements than standardised
information or information duplicating the requirements of
IFRS.
The
amendment also states that immaterial accounting policy information
need not be disclosed but when it is disclosed it shall not obscure
material accounting policy information. Further, if accounting
policy information is not deemed material this does not affect the
materiality of related disclosure requirements of IFRS.
The
disclosure of judgements made in applying accounting policies
should reflect those that have had the most significant effect on
items recognised in the financial statements.
The
amendment is effective for financial years beginning on or after
1 January 2023 and is not yet adopted
in the United Kingdom.
Amendments
to IAS 8 Definition of Accounting Estimates
(issued
in February 2021)
The
amendments define accounting estimates as monetary amounts in
financial statements that are subject to measurement uncertainty.
An accounting policy may require an item in financial statements to
be measured at a monetary amount that cannot be observed directly
so that in order to achieve the objective of an accounting policy,
an estimation is required.
The
amendments state that the development of an accounting estimate
requires the use of judgement or assumptions based on the latest
available reliable information and involve the use of measurement
techniques and inputs. Accounting estimates might then need to
change as a result of new information, new developments or more
experience.
A change
in input or measurement technique is a change in accounting
estimate which is applied prospectively unless the change results
from the correction of prior period errors.
The
amendment is effective for financial years beginning on or after
1 January 2023 and is not yet adopted
in the United Kingdom.
Amendments to IAS 12
Deferred Tax related to Assets and Liabilities arising from
a Single Transaction
(issued in May
2021)
The amendments specify how companies should account for deferred
tax on transactions such as leases and decommissioning
obligations.
In specified circumstances, companies are exempt from recognising
deferred tax when they recognise assets or liabilities for the
first time. Previously, there had been some uncertainty about
whether the exemption applied to transactions such as leases and
decommissioning obligations—transactions for which companies
recognise both an asset and a liability.
The amendments clarify that the exemption does not apply and that
companies are required to recognise deferred tax on such
transactions. The aim of the amendments is to reduce diversity in
the reporting of deferred tax on leases and decommissioning
obligations.
The amendments are effective for annual reporting periods beginning
on or after 1 January 2023, with
early application permitted and is not
yet adopted in the United
Kingdom.
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.
There is
alignment of accounting polices across all Group entities by using
uniform accounting policies for like transactions and other events
in similar circumstances.
The Group
attributes total comprehensive income or loss of subsidiaries
between the owners of the parent and the non-controlling interests
based on their respective ownership interests.
On
consolidation, the results of overseas operations are translated
into euros 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.
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 impairment
loss.
Investments
in associates
Investments
in associates are accounted for using the equity method less any
impairment loss.
The
carrying amount of the investment in associates is increased or
decreased to recognise the Group’s share of the profit or loss and
other comprehensive income of the associate, adjusted where
necessary to ensure consistency with the accounting policies of the
Group.
Unrealised
gains and losses on transactions between the Group and its
associates are eliminated to the extent of the Group’s interest in
those entities. Where unrealised losses are eliminated, the
underlying asset is also tested 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. This is applicable to non-monetary items.
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 profit or loss. 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 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.
To
determine whether to recognise revenue, the Group follows a 5-step
process:
- Identifying
the contract with a customer
- Identifying
the performance obligations
- Determining
the transaction price
- Allocating
the transaction price to the performance obligations, and
then
- Recognising
revenue when/as performance obligation(s) are
satisfied.
Revenue is
recognised 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.
Property,
plant and equipment
Property,
plant and equipment are initially measured at cost and subsequently
measured at cost or valuation, net of depreciation and any
impairment losses.
Depreciation
is recognised on a straight-line basis to write down the cost less
estimated residual value. The following useful lives are
applied:
Computers 5
years
The gain
or loss arising on the disposal of an asset is determined as the
difference between the sale proceeds and the carrying value of the
asset and is recognised in the profit or loss.
Impairment
of property, plant and equipment
At each
reporting end date, the company reviews the carrying amounts of its
property, plant and equipment to determine whether there is any
indication that those assets have suffered an impairment loss. If
any such indication exists, the recoverable amount of the asset is
estimated in order to determine the extent of the impairment loss
(if any). Where it is not possible to estimate the recoverable
amount of an individual asset, the company estimates the
recoverable amount of the cash-generating unit to which the asset
belongs.
Intangible
assets
Intangible
assets acquired separately from a business are recognised at cost
and are subsequently measured at cost less accumulated amortisation
and accumulated impairment losses.
Financial
instruments
Classification
and measurement
The Group
classifies its financial assets into the following categories:
those to be measured subsequently at fair value through profit or
loss (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 Group’s policy with regard to financial risk
management is set out in Note 21. Generally, the Group does not
acquire financial assets for the purpose of selling in the short
term.
The
Group’s business model is primarily that of “hold to collect”
(where assets are held in order to collect contractual cash flows).
When the Group 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.
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. For trade receivables, where there is no
significant financing component, fair value is normally the
transaction price.
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
Interest-bearing
borrowings are initially recorded at fair value net of attributable
transaction costs. Subsequent to initial recognition,
interest-bearing borrowings are stated at amortised cost with any
difference between proceeds and redemption value being recognised
in the profit or loss over the period of the borrowings on an
effective interest basis.
Trade
payables
Trade
payables are initially measured at fair value, and are subsequently
measured at amortised cost, using the effective interest rate
method.
Provisions,
contingent assets and contingent liabilities
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.
No
liability is recognised if an outflow of economic resources as a
result of present obligations is not probable. Such situations are
disclosed as contingent liabilities unless the outflow of resources
is remote.
Contingent
assets are possible assets whose existence will be confirmed by the
occurrence or non-occurrence of uncertain future events that are
not wholly within the control of the Group. Contingent assets are
not recognised, but they are disclosed when it is more likely than
not that an inflow of benefits will occur. When the inflow of
benefits is virtually certain an asset is recognised.
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, share option 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 share
option reserve represents the cumulative amounts charged to the
profit or loss in respect of employee share option arrangements
where the scheme has not yet been settled by means of an award of
shares to an individual.
-
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 in profit or loss over
the period in which the group recognises as expenses the related
costs for which the grants are intended to compensate.
Research
and development costs
Development costs are recognised as an asset only when all of the
following criteria are met:
|
(a)
|
the technical feasibility of completing the intangible asset so
that it will be available for use or sale.
|
|
(b)
|
its intention to complete the intangible asset and use or sell
it.
|
|
(c)
|
its ability to use or sell the intangible asset.
|
|
(d)
|
how the intangible asset will generate probable future economic
benefits. Among other things, the entity can demonstrate the
existence of a market for the output of the intangible asset or the
intangible asset itself or, if it is to be used internally, the
usefulness of the intangible asset.
|
|
(e)
|
the availability of adequate technical, financial and other
resources to complete the development and to use or sell the
intangible asset.
|
|
(f)
|
its ability to measure reliably the expenditure attributable to the
intangible asset during its development.
|
The
research and development expenditure that does not meet the
recognition criteria are not capitalised and are recognised as an
expense as incurred, as shown in Note 7.
-
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 and in other relevant notes in the financial
statements.
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 16, along with
sensitivities in Note 21.
-
Segment
information
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.
The
Directors are of the opinion that under IFRS 8 - "Operating
Segments" there are no identifiable business segments that are
subject to risks and returns different to the core
business of developing cheaper and faster bitcoin mining.
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.
-
Staff
costs
|
|
Group
|
Company
|
|
|
2023
€’000
|
2022
€’000
|
2023
€’000
|
2022
€’000
|
|
Staff
costs during the period including directors
comprise:
|
|
|
|
|
|
Wages and
salaries
|
217
|
188
|
217
|
188
|
|
Social
security costs and pension contributions
|
(90)
|
228
|
(90)
|
228
|
|
Share
options expense
|
416
|
1,854
|
416
|
1,854
|
|
|
543
|
2,270
|
543
|
2,270
|
In 2022
the social security costs and pension contributions included a
provision relating to the directors national insurance of €210,000.
Of this provision, €113,000 was subsequently reversed in 2023
contributing to the credit balance for the year.
-
Directors’
emoluments
|
|
2023
€’000
|
2022
€’000
|
|
|
|
|
|
Aggregate
emoluments
|
142
|
116
|
|
Share
options expense
|
416
|
1,728
|
|
|
558
|
1,844
|
Remuneration
of the highest paid Director was €69,000 (2022:
€57,000).
There are
no retirement benefits accruing to the Directors. Details of
directors’ remuneration are included in the Directors’
Report.
-
Expenses
by nature
|
|
2023
€’000
|
2022
€’000
|
|
Directors’
emoluments
|
462
|
1,844
|
|
Employee
emoluments
|
99
|
378
|
|
Professional
and legal fees
|
722
|
509
|
|
Audit
fees
|
56
|
86
|
|
Administrative
expenditure
|
201
|
216
|
|
Impairment
of assets (excluding investment)
|
1,527
|
618
|
|
Fundraising
fees
|
-
|
75
|
|
Research
and development costs
|
781
|
821
|
|
|
3,848
|
4,547
|
-
Investments
in associates
The Group
has a 41.17% equity interest in ForCrowd Srl.
Summarised
financial information of the Group’s share in this associate is as
follows:
|
|
2023
€’000
|
2022
€’000
|
|
Loss from
continuing operations
|
(59)
|
(69)
|
|
Impairment
|
-
|
(82)
|
|
Total
comprehensive loss
|
(59)
|
(151)
|
|
Aggregate
carrying amount of the Group’s interests in this
associate
|
7
|
60
|
-
Finance
(costs)/income
|
|
2023
€’000
|
2022
€’000
|
|
(Loss)/gain
on derivatives
|
9
|
(324)
|
|
Interest
on convertible bonds
|
(320)
|
(325)
|
|
Bank
revaluations
|
5
|
-
|
|
Interest
credit on modification of convertible bonds
|
-
|
9
|
|
Other
gains or losses
|
-
|
-
|
|
Interest
received
|
12
|
6
|
|
Bank
fees
|
(2)
|
(2)
|
|
|
(296)
|
(636)
|
-
Auditor’s
remuneration
|
|
2023
€’000
|
2022
€’000
|
|
Group
Auditor’s remuneration:
|
|
|
|
Fees
payable to the Group’s auditor for the audit of the Company and
consolidated financial statements:
|
56
|
56
|
|
Non
audit services:
|
|
|
|
Other
services (tax)
|
-
|
-
|
|
Subsidiary
Auditor’s remuneration
|
|
|
|
Other
services pursuant to legislation
|
-
|
-
|
|
|
56
|
56
|
-
Employee
numbers
|
|
Group
|
Company
|
|
|
2023
Number
|
2022
Number
|
2023
Number
|
2022
Number
|
|
|
|
|
|
|
|
The
average number of Company’s employees, including directors during
the period was as follows:
|
|
|
|
|
|
Management
and administration
|
3
|
4
|
3
|
4
|
-
Taxation
|
|
2023
€’000
|
2022
€’000
|
|
|
|
|
|
Corporation
tax - current period
|
(100)
|
(117)
|
|
Corporation
tax - prior period under provision
|
(41)
|
(86)
|
|
Foreign
tax
|
(1)
|
(23)
|
|
Deferred
taxation
|
-
|
-
|
|
Tax
charge for the year
|
(142)
|
(226)
|
The Group
has a potential deferred tax asset arising from unutilised trading
losses and 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 losses are as follows:
|
2023
€’million
|
2022
€’million
|
|
|
|
|
|
Trading
losses
|
4
|
2
|
|
Management
expenses
|
19
|
19
|
|
Non trade
loan relationship deficits
|
2
|
2
|
|
Capital
losses
|
9
|
8
|
The
standard rate of tax for the current year, based on the UK
effective rate of corporation tax is 23.5% (2022: 19%). The
standard rate of Research and Development Tax credit is 10%/14.5%
of the enhanced R&D expenditure. The actual rate for the
current and previous year varies from the standard rate for reasons
set out in the following reconciliation:
|
Continuing
operations
|
2023
€’000
|
2022
€’000
|
|
|
|
|
|
Loss
for the year before tax
|
(4,348)
|
(5,252)
|
|
Tax on
ordinary activities at standard rate
|
(1,022)
|
(998)
|
|
Effects
of:
|
|
|
|
Expenses
not deductible for tax purposes
|
497
|
595
|
|
R&D
enhancement
|
(168)
|
(153)
|
|
R&D
losses surrendered
|
344
|
270
|
|
R&D
Foreign Tax losses surrendered
|
11
|
11
|
|
Losses
brought forward claimed
|
-
|
-
|
|
Tax losses
available for carry forward against future profits
|
338
|
275
|
|
Total
tax payable
|
-
|
-
|
|
|
|
|
|
Enhanced
R&D expenditure
|
1,273
|
804
|
|
|
|
|
|
Total
tax repayable – current year
|
100
|
117
|
|
|
|
|
|
Corporation
tax - prior period under provision
|
41
|
86
|
|
Foreign
tax
|
1
|
23
|
|
|
|
|
|
Total
tax repayable
|
142
|
226
|
The UK
government has announced that the corporation tax rate will
increase from 19% to 25% with effect from 1
April 2023.
-
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, warrants
and convertible loans outstanding during the period.
The loss
and weighted average number of shares used in the calculation are
set out below:
|
|
2023
|
|
2022
|
|
|
Profit/
(Loss)
€’000
|
Weighted
average
no.
of
shares
000’s
|
Per
share
amount
Euro
Cent
|
|
Profit/
(Loss)
€’000
|
Weighted
average
no.
of
shares
000’s
|
Per
share
amount
Euro
Cent
|
|
Basic
earnings per share
|
|
|
|
|
|
Continuing
operations
|
(4,206)
|
1,102,309
|
(0.382)
|
|
(5,026)
|
989,497
|
(0.508)
|
|
Total
operations
|
(4,206)
|
1,102,309
|
(0.382)
|
|
(5,026)
|
989,497
|
(0.508)
|
|
|
|
|
|
|
|
Fully
diluted earnings per share
|
|
|
|
|
|
Continuing
operations
|
(4,424)
|
1,727,130
|
(0.256)
|
|
(5,091)
|
1,632,694
|
(0.312)
|
|
Total
operations
|
(4,424)
|
1,727,130
|
(0.256)
|
|
(5,091)
|
1,632,694
|
(0.312)
|
-
Property,
plant and equipment
|
Group
|
Computers
€’000
|
|
Total
€’000
|
|
|
|
|
|
|
Cost
|
|
|
|
|
At 1
January 2023
|
275
|
|
275
|
|
Additions
|
-
|
|
-
|
|
At 31
December 2023
|
275
|
|
275
|
|
|
|
|
|
|
Depreciation
and impairment
|
|
|
|
|
At 1
January 2023
|
49
|
|
49
|
|
Depreciation
charged in the year
|
57
|
|
57
|
|
At 31
December 2023
|
106
|
|
106
|
|
|
|
|
|
|
Carrying
amount
|
|
|
|
|
At 31
December 2023
|
169
|
|
169
|
|
At 31
December 2022
|
226
|
|
226
|
The
tangible fixed assets relate in full to the Group’s IT
infrastructure dedicated to the R&D Programme.
The Parent
Company held no tangible fixed assets during the years ended
31 December 2022 and 2023.
-
Intangible
assets
|
Group
|
Formation
Expenses
€’000
|
|
Total
€’000
|
|
|
|
|
|
|
Cost
|
|
|
|
|
At 1
January 2023
|
-
|
|
-
|
|
Additions
|
2
|
|
2
|
|
At 31
December 2023
|
2
|
|
2
|
|
|
|
|
|
|
Amortisation
|
|
|
|
|
At 1
January 2023
|
-
|
|
-
|
|
Amortisation
charged in the year
|
-
|
|
-
|
|
At 31
December 2023
|
-
|
|
-
|
|
|
|
|
|
|
Carrying
amount
|
|
|
|
|
At 31
December 2023
|
2
|
|
2
|
|
At 31
December 2022
|
-
|
|
-
|
The
intangible assets relate in full to formation expenses.
-
Investments
The
significant entities for which the Group owns shares, held at
31 December 2023, were as
follows:
|
Group
Companies
|
Ownership
|
Country
|
Company
Status
|
Net
Assets/ (Liabilities) €,000
|
Date
of latest accounts
|
Treatment
|
|
Brainspark
Associates Ltd
|
100.00%
|
UK
|
Trading
|
(36,169)
|
2022
|
Consolidated
|
|
Clear
Leisure 2017 Ltd
|
100.00%
|
UK
|
Trading
|
(537)
|
2022
|
Consolidated
|
|
QBT R&D
Srl
|
100.00%
|
Italy
|
Trading
|
(69)
|
2022
|
Consolidated
|
|
Milan
Digital Twin Ltd
|
100.00%
|
UK
|
Dormant
|
Nil
|
2022
|
Consolidated
|
|
London
Digital Twin Ltd
|
100.00%
|
UK
|
Dormant
|
Nil
|
2022
|
Consolidated
|
|
Miner One
Ltd
|
100.00%
|
UK
|
Dormant
|
Nil
|
2022
|
Consolidated
|
|
Clear
Holiday Srl
|
100.00%
|
Italy
|
Dormant
|
10
|
2014
|
Not
Consolidated
|
|
Mediapolis
Investment S.A
|
71.72%
|
Luxembourg
|
Inactive
|
(6,648)
|
2010
|
Not
Consolidated
|
|
Sosushi
Company Srl
|
99.30%
|
Italy
|
In
liquidation
|
654
|
2013
|
Not
Consolidated
|
|
Fallimento
Mediapolis Srl
|
84.04%
|
Italy
|
Liquidated
|
1,204
|
2016
|
Not
Consolidated
|
|
Sipiem in
Liquidazione Srl
|
50.17%
|
Italy
|
In
liquidation
|
645
|
2014
|
Not
Consolidated
|
|
ForCrowd
Srl
|
41.17%
|
Italy
|
Investment
|
(8)
|
2022
|
Equity-accounting
|
|
ClassFinance
in Liquidazione Srl
|
20.00%
|
Italy
|
Investment
|
(104)
|
2018
|
Held at
fair value
|
|
PBV
Monitor
|
10.00%
|
Italy
|
Investment
|
471
|
2022
|
Held at
fair value
|
|
Geosim
Systems
|
4.53%
|
Israel
|
Investment
|
(330)
|
2018
|
Held at
fair value
|
|
Beni
Immobili Srl
|
15.05%
|
Italy
|
Investment
|
14
|
2014
|
Held at
fair value
|
|
TLT
S.P.A
|
0.25%
|
Italy
|
Investment
|
(2,476)
|
2016
|
Held at
fair value
|
The
registered office of all UK companies is: First Floor, 1 Chancery
Lane, London, England, WC2A
1LF.
The
registered office for QBT R&D Srl is Via Mazzini 38, Rovigo
(RO), 45100.
The
registered office for Clear Holiday Srl is Viale Francesco Restelli
1/3, Milano (MI),
20124.
The
registered office for Mediapolis Investment S.A is Rue Val des Bons
Malades 231, 2121, Luxembourg-Kirchberg.
The
registered office for Sosushi Company Srl is Via Parravicini 40,
Monza (MB), 20900.
The
registered office for Fallimento Mediapolis Srl is Via Friuli 10,
Burtolo (TO), 10010.
The
registered office for Sipiem in Liquidazione Srl
is Via
Mazzini 38, Rovigo (RO), 45100.
The
registered office for Forcrowd Srl is Via Vincenzo Monti 52,
Milano (MI), 20123.
The
registered office for Class Finance Srl is Via Conservaorio 30,
20122, Milan.
The
registered office for PBV Monitor Srl is Via Matteotti 13, Brebbia
(VA), 21020.
The
registered office for Geosim Systems Limited is Granit St. Petach-Tikva 4951446, Israel.
The
registered office for Beni Immobili Srl is Via Torino 58, Biella
(BI), 13900.
The
registered office for TLT SPA is Via Trento 5, Biella (BI),
13900.
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 above. 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.
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.
QBT
R&D Srl
This
entity is a 100% owned subsidiary of the group incorporated in
Italy and has been included in the
consolidation.
Milan
Digital Twin Limited
This
entity is a 100% owned UK incorporated subsidiary of Quantum
Blockchain Technologies PLC. 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 incorporated subsidiary of Quantum
Blockchain Technologies PLC. 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. Although QBT hold all of
the shares, they do not have control of the company. Therefore,
this entity has not been consolidated on the basis that QBT do not
have control. 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 100% owned UK based entity. 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 2021 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.
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
in previous years. Therefore, the non-consolidation of this entity
is deemed to be immaterial to the group.
On
6 May 2021 Mediapolis Investment S.A.
had 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 was a 99.3% owned entity incorporated in Italy. On 24 June
2021, the Company received notification that Sosushi had
been declared bankrupt. Sosushi has not been consolidated as the
fair value has been determined as nil and all receivables from the
company have been fully impaired. The litigation is held via Clear
Leisure 2017.
Fallimento
Mediapolis Srl
Fallimento
Mediapolis Srl was an 84.04% equivalent owned entity incorporated
in Italy. Quantum Blockchain
Technologies Plc held directly 74.67% of the capital of the company
whilst a 13% stake was 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. There is
ongoing bankruptcy litigation however, the investment has been
fully impaired. Therefore, the financial information for Fallimento
Mediapolis Srl has not been consolidated into the group financial
statements.
Sipiem
In Liquidazione Srl
Sipiem in
Liquidazione Srl, previously Sipiem S.P.A., (“Sipiem”) was a 50.17%
owned entity incorporated in Italy. The entity had not been trading for a
number of years and was maintained due to ongoing legal matters
with the former directors. The company entered into liquidation in
2015. Therefore, this is the date from which control is deemed to
have been lost. Therefore, the financial information for Sipiem has
not been consolidated into the group financial statements. The
investment in Sipiem is accounted at fair value through profit or
loss. Furthermore, in August 2022 the
company was declared bankrupt by the Court of Rovigo, following a
petition filed by Sipiem’s liquidator with the support of its main
shareholder (Quantum Blockchain Technologies). Sipiem’s bankruptcy
does not impact the Company’s balance sheet, as the litigation is
held via Clear Leisure 2017.
In
November 2022, the Venice Court issued its final judgement in
respect of the Company’s legal claim against the previous
management, which is held via CL17 in which it ruled in favour of
CL17 and ordered the defendants to pay an aggregate amount of
€6,188,974 (plus interest and adjustments for inflation to accrue
from different dates until the date of payment) in damages, plus
€85,499 in legal expenses (together the “Award Payment”). The Award
Payment is subject to tax duties in Italy. It is worth noting that the exact
amount of the Award Payment that will be collected by the Company
and the timing of receipt of any such funds have not yet been
finalised.
In
March 2023, the Company announced
that at the hearing for the Sipiem litigation at the Venice Appeal
Court, the judge ruled in favour of CL17, thereby allowing CL17 to
seek enforcement of the Award Payment against the main Sipiem
defendant (a former director of Sipiem, who is individually liable
for the full amount of the Award Payment). The Appeal Court did,
however, grant the remaining Sipiem defendants’ request to enjoin
enforcement of the judgment against the members of the internal
audit committee and the main defendant’s family members.
In
May 2024 , the Company announced that
at the end of April 2024, it reached
an agreement with some of the Sipiem litigation co-liable
defendants who have settled their position for €700,000 (which, net
of certain costs, has been received by CL17).At the same time, CL17
also reached an agreement with the Sipiem’s receiver, acquiring its
right to receive 30% of any sums collected (net of legal and other
costs) from the Sipiem litigation, as envisaged in the 2019 claim
purchase agreement (through which CL17 acquired the Sipiem
litigation) for an amount of €170,000, giving CL17 rights to all
funds recovered.
On
18 June 2024, the Company announced
that the Venice Court of Appeal
confirmed the ruling of the 2022 lower court Judgment in favour of
CL17 (save for €105,412), amounting to €6,083,562 (plus interest
and adjustments for inflation) in damages, plus €134,166 for legal
expenses. As the appeal ruling has been issued prior to the
scheduling of the hearing regarding the €700,000 settlement, such
settlement is now deemed void. So is the €170,00 agreement with the
Receiver, as strictly connected to the above settlement. Through
its ruling, the Venice Court of
Appeal removed any opposition to the enforceability, by CL17, of
the above amounts against all defendants.
While the
above matter is currently being assessed by the Company’s legal
team, the Company still hold the above Settlement funds, minus the
€170,000 paid to the Receiver for the 30% rights. In the meantime,
all the parties involved, namely the Receiver, the Sipiem’s
statutory auditor’s lawyers and the insurer’s lawyers are being
contacted to discuss the contractual implications of the voided
Settlement.
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 since
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 2022 equity round. The
key assumptions underpinning the equity round at the start of 2022
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 (€320,000, 2022: €622,000) 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 2023 and 2022, attributable to an
impairment during the year.
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 is a 15.05% equivalent owned investment in an entity
incorporated in Italy. The shares
in this company are held via Sipiem 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, which
is in liquidation, the investment has not been 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, there has been a complete fair value
loss and the investment amount has been derecognised.
|
Carrying
value of investments
|
Group
|
Company
|
|
|
2023
€’000
|
2022
€’000
|
2023
€’000
|
2022
€’000
|
|
At as 1
January
|
677
|
664
|
65
|
298
|
|
Additions
|
22
|
50
|
22
|
50
|
|
Fair value
decrease
|
(303)
|
(72)
|
-
|
(283)
|
|
Foreign
exchange
|
-
|
35
|
-
|
-
|
|
Carrying
value at 31 December
|
396
|
677
|
87
|
65
|
An amount
of €320,000 (2022: €622,000) 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 €76,000 (2022: €55,000) 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 and has purchased more shares in
January and February 2022 to maintain
their 10% shareholding.
As part of
the initial 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.
|
Investments
held at cost
|
Group
|
Company
|
|
|
2023
€’000
|
2022
€’000
|
2023
€’000
|
2022
€’000
|
|
At as 1
January
|
-
|
-
|
10
|
10
|
|
Additions
|
-
|
-
|
1
|
-
|
|
Fair value
decrease
|
-
|
-
|
-
|
-
|
|
Foreign
exchange
|
-
|
-
|
-
|
-
|
|
Carrying
value at 31 December
|
-
|
-
|
11
|
10
|
The value
of the investment at cost represents €10,000 for QBT R&D and
€1,000 for BAL which was not previously recognised.
-
Trade and
other receivables
|
|
Group
|
Company
|
|
|
2023
€’000
|
2022
€’000
|
2023
€’000
|
2022
€’000
|
|
Trade
receivables
|
14
|
14
|
-
|
-
|
|
Other
receivables
|
3,154
|
4,537
|
189
|
280
|
|
Amounts
owed by related parties
|
75
|
75
|
757
|
776
|
|
|
3,243
|
4,626
|
946
|
1,056
|
|
|
|
|
|
|
|
|
|
Group
other receivables includes an amount of €132,000 (2022: €132,000)
due in relation to the Fallimento Mediapolis Srl bankruptcy
procedure; and an amount of €2,818,000 (2022: €4,037,000) due in
relation to the ongoing Sipiem legal claim, which is unsecured,
interest free and does not have fixed terms of repayment. The
balance also includes an amount of -€112,000 (2022: €0) in CL17 to
record the guarantee made against fellow group entity debtors. An
intercompany balance of €4,445,000 was fully impaired in the
year.
The
Directors consider that the carrying value of trade and other
receivables approximates to their fair value.
-
Cash and
cash equivalents
|
|
Group
|
Company
|
|
|
2023
€’000
|
2022
€’000
|
2023
€’000
|
2022
€’000
|
|
Bank
current accounts
|
2,057
|
463
|
2,041
|
449
|
|
|
2,057
|
463
|
2,041
|
449
|
The
Directors consider the carrying amounts of cash and cash
equivalents approximates to their fair value.
-
Trade and
other payables
|
|
Group
|
Company
|
|
|
2023
€’000
|
2022
€’000
|
2023
€’000
|
2022
€’000
|
|
Trade
payables
|
85
|
147
|
64
|
122
|
|
Other
payables
|
138
|
183
|
138
|
320
|
|
Accruals
|
190
|
135
|
188
|
135
|
|
Trade and
other payables
|
413
|
465
|
390
|
577
|
The
Directors consider that the carrying value of trade and other
payables approximates to their fair value.
Included
within other payables are intercompany balances that are not
eliminated on consolidation, PAYE, national insurance and pension
liabilities outstanding as at the year end, and unpaid salary
balances.
Accruals
relate to R&D, consulting and accountancy costs incurred by the
Group that had not been invoiced by the year end.
-
Borrowings
|
|
Group
|
Company
|
|
|
2023
€’000
|
2022
€’000
|
2023
€’000
|
2022
€’000
|
|
Zero rate
convertible bond 2015
|
5,202
|
5,148
|
5,202
|
5,148
|
|
Zero rate
convertible bond 2020
|
2,249
|
2,983
|
2,249
|
2,983
|
|
|
7,451
|
8,131
|
7,451
|
8,131
|
|
Disclosed
as:
|
|
|
|
|
|
Current
borrowings
|
7,451
|
-
|
7,451
|
-
|
|
Non-current
borrowings
|
-
|
8,131
|
-
|
8,131
|
|
|
7,451
|
8,131
|
7,451
|
8,131
|
Interest
on the bonds are accrued on a monthly basis. Presented in the bonds
line item above is the principal amount plus all interest accrued
as at 31 December 2023.
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
can convert at any time up to 15 December
2022 at a conversion price of £0.01 per share.
In
April 2022, QBT agreed with the sole
bondholder of the €3.5m 2020 Zero Coupon Bond to extend the
maturity date from December 2022 to
December 2024.
Also, with
regard to the 2015 Zero Coupon Bond, via a Bondholders’ meeting
held on 21 April 2022, the Company
extended the maturity date from 15 December
2022 to 15 December 2024 and
amended the conversion price into Company’s new ordinary shares
from 15p to 5p.
On
7 July 2023, the Company received a
conversion notice from MC Strategies AG to convert €1m of the 2020
Zero Coupon Bond into new ordinary shares of 0.025p each in the
Company. The conversion price was 1p per share an as a result, the
Company issued and allotted 89,000,000 New Shares. Following the
conversion, face value of the remaining Bond has decreased to
€2,493,575.
-
Financial
instruments
Key
Assumptions
The
derivative element of the Zero Coupon Bonds 2015 were valued at
each year end using the Black Scholes option pricing model. The
following assumptions were used at each period end.
Zero
Coupon Bonds 2015
|
|
|
2023
|
2022
|
|
Share
price
|
|
1.575p
|
1.125p
|
|
Expected
life
|
|
1
year
|
2
years
|
|
Volatility
|
|
146.2%
|
136%
|
|
Dividend
yield
|
|
0%
|
0%
|
|
Risk free
interest rate
|
|
3.46%
|
3.58%
|
|
Fair
value
|
|
0.45p
|
0.5p
|
The
Group’s financial instruments comprise cash, investments at fair
value through profit or loss, investments in equity-accounted
associates, 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:
|
|
2023
|
2022
|
|
|
€’000
|
€'000
|
|
Financial
assets:
|
|
|
|
Financial
assets held at fair value through profit and loss
|
396
|
677
|
|
Investments
in equity-accounted associates
|
7
|
60
|
|
Trade and
other receivables
|
3,243
|
4,284
|
|
Cash and
cash equivalents
|
2,057
|
463
|
|
|
5,703
|
5,484
|
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:
|
|
2023
|
2022
|
|
|
€'000
|
€'000
|
|
Financial
liabilities at amortised cost:
|
|
|
|
Trade and
other payables
|
413
|
465
|
|
Provisions
|
98
|
210
|
|
Borrowings
|
7,451
|
8,131
|
|
Derivative
|
459
|
468
|
|
|
8,421
|
9,274
|
Financial
instruments measured at fair value:
|
|
Level
1
|
Level
2
|
Level
3
|
|
|
€’000
|
€’000
|
€’000
|
|
As
at 31 December 2023
|
|
|
|
|
Investments
at fair value through profit or loss
|
-
|
-
|
396
|
|
|
-
|
-
|
396
|
|
|
|
|
|
|
As at 31
December 2022
|
|
|
|
|
Investments
at fair value through profit or loss
|
-
|
-
|
677
|
|
|
-
|
-
|
677
|
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
Instruments
|
Valuation
technique used
|
Significant
unobservable inputs (Level 3 only)
|
Inter
– relationship between key unobservable inputs and fair value
(level 3 only)
|
|
Investments
|
Based on
issue of shares in the investments held by the Group and directors
assessment on the recoverability of loans.
|
Assessment
of recoverability of loan.
|
If loan
was considered not to be recoverable this would result in the
reduction in the fair value of the investment.
|
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 and PBV
Monitor 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
€60,000 (2022: €102,000).
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 adequate cash balances at the
reporting date (refer to Note 2 – Basis of preparation and going
concern) to sustain the operational existence over the next twelve
months. The Group
expects to continue securing resources from disposals and
realisation of the “Legacy Assets”. Furthermore, the Company expect
to be able to start it commercial activity in the coming months,
although prudentially, no significant revenues have been included
in the short-term financial projections. This is an on-going
ongoing process and the directors are confident with their cash
flow models.
The
following are the undiscounted contractual maturities of financial
liabilities:
|
|
Carrying
Amount
|
Less
than 1 year
|
Between
1
and 5 years
|
Total
|
|
|
€’000
|
€’000
|
€’000
|
€’000
|
|
As
at 31 December 2023
|
|
|
|
|
|
Trade and
other payables
|
413
|
413
|
-
|
413
|
|
Provisions
|
98
|
98
|
-
|
98
|
|
Borrowings
|
7,451
|
7,451
|
-
|
7,451
|
|
Derivative
financial instruments
|
459
|
459
|
-
|
459
|
|
|
8,421
|
8,421
|
-
|
8,421
|
|
|
|
|
|
|
|
As at 31
December 2022
|
|
|
|
|
|
Trade and
other payables
|
465
|
465
|
-
|
465
|
|
Provisions
|
210
|
210
|
-
|
210
|
|
Borrowings
|
8,131
|
-
|
8,131
|
8,131
|
|
Derivative
financial instruments
|
468
|
-
|
468
|
468
|
|
|
9,274
|
675
|
8,599
|
9,274
|
Management
believes that based on the information provided in Note 2 – 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
|
|
|
2023
|
2022
|
2023
|
2022
|
|
|
|
€’000
|
|
€’000
|
|
Fixed
rate instruments
|
|
|
|
|
|
Financial
assets
|
3,472
|
5,021
|
194
|
222
|
|
Financial
liabilities
|
7,830
|
8,528
|
7,808
|
8,503
|
|
|
|
|
|
|
Change in
interest rates will affect the Group’s income statement as
follows:
|
|
Gain
/ (loss)
|
|
Group
|
2023
|
2022
|
|
|
€’000
|
€’000
|
|
|
|
|
|
Euribor
+0.5% / -0.5%
|
+10
/ -10
|
+2
/ -2
|
|
|
|
|
The
analysis was applied to cash and cash equivalents based on the
assumption that the amount of asset as at the reporting date was
available 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 £387,000 (2022:
£435,000) 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 £39,000 (2022: £44,000). 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 €3,243,000 (2022: €4,626,000)
comprising receivables during the period. About 87% (2022: 87%) of
total receivables are due from a single company. The ageing profile
of trade receivables was:
|
|
2023
|
2022
|
|
|
Total
book value
|
Allowance
for impairment
|
Total book
value
|
Allowance
for impairment
|
|
Group
|
€’000
|
€’000
|
€’000
|
€’000
|
|
Current
|
3,243
|
-
|
4,626
|
-
|
|
|
3,243
|
-
|
4,626
|
-
|
|
|
|
|
|
|
|
Company
|
|
|
|
|
|
Current
|
946
|
-
|
1,056
|
-
|
|
|
946
|
-
|
1,056
|
-
|
-
Provisions
|
|
Group
|
Company
|
|
|
2023
€’000
|
2022
€’000
|
2023
€’000
|
2022
€’000
|
|
Provision
for potential payroll tax liability
|
98
|
210
|
98
|
210
|
|
Provisions
|
98
|
210
|
98
|
210
|
The above
provision relates to a potential tax liability owed on the
directors’ remuneration from previous years.
-
Share
capital and share premium
|
ISSUED AND
FULLY PAID:
|
Number
of ordinary shares
|
Number
of
deferred
shares
|
Ordinary
share
capital
€’000
|
Deferred
share
capital
€’000
|
Share
premium
€’000
|
Total
€’000
|
|
At
1 January 2022
|
945,051,851
|
199,409,377
|
2,754
|
5,467
|
49,442
|
57,663
|
|
Issue of
shares
|
52,500,000
|
-
|
157
|
-
|
1,099
|
1,256
|
|
At
31 December 2022
|
997,551,851
|
199,409,377
|
2,911
|
5,467
|
50,541
|
58,919
|
|
Issue of
shares
|
293,761,904
|
-
|
841
|
-
|
3,624
|
4,465
|
|
At
31 December 2023
|
1,291,313,755
|
199,409,377
|
3,752
|
5,467
|
54,165
|
63,384
|
All
ordinary shares carry equal rights.
The
deferred shares have restricted rights such that they have no
economic value.
-
Share
based payments
On
26 May 2023, an employee was granted
options to subscribe for 1,000,000 new ordinary shares in the
Company at an exercise price of 5
pence per share and 1,000,000 new ordinary shares in the
Company at an exercise price of 10
pence per share. The options are exercisable for the period
between 1 November 2023 and
25 May 2025.
On
31 May 2023, two employees were
granted options to subscribe for 5,000,000 new ordinary shares in
the Company at an exercise price of 10
pence per share. The options are exercisable at any time
before 25 May 2025.
On
31 May 2023, the Company has extended
the exercise period for certain other options previously granted,
as follows:
|
Number
of Options
|
Exercise
Price
|
Previous
End of Exercise Period
|
New
End of Exercise Period
|
|
2,500,000
|
5p
|
06/05/2024
|
25/05/2025
|
|
2,500,000
|
5p
|
28/02/2023
|
25/05/2025
|
|
7,500,000
|
5p
|
31/03/2023
|
25/05/2025
|
|
5,000,000
|
10p
|
30/06/2023
|
25/05/2025
|
The total
share-based payment expense recognised in the income statement for
the year ended 31 December 2023 in
respect of the share options granted was €416,000 (2022:
€1,854,000).
The
significant inputs to the model in respect of the options granted
during the year were as follows:
|
|
|
5p
|
10p
|
|
Share
price
|
|
1.125p -
3.100p
|
1.175p -
3.050p
|
|
Expected
life
|
|
2 months -
3 years
|
6 months -
3 years
|
|
Volatility
|
|
130% -
137%
|
130% -
137%
|
|
Dividend
yield
|
|
0%
|
0%
|
|
Risk free
interest rate
|
|
0.76% –
4.27%
|
0.76% -
4.27%
|
|
Fair
value
|
|
0.0p –
2.1p
|
0.0p –
1.7p
|
The table
below discloses the movements in share options during the
year.
|
Number
of
options
at
1 Jan
2023
|
Granted
in the
year
|
Exercised
in the
year
|
Lapsed
in the
year
|
Number
of
options
at
31 Dec
2023
|
Exercise
Price,
pence
|
Expiry
date
|
|
105,000,000
|
|
|
|
105,000,000
|
5.00
|
06.05.2026
|
|
105,000,000
|
|
|
|
105,000,000
|
10.00
|
06.05.2026
|
|
5,000,000
|
|
|
|
5,000,000
|
5.00
|
06.05.2025
|
|
5,000,000
|
|
|
|
5,000,000
|
10.00
|
06.05.2025
|
|
2,500,000
|
|
|
|
2,500,000
|
5.00
|
25.05.2025
|
|
5,000,000
|
|
|
|
5,000,000
|
10.00
|
01.12.2026
|
|
2,500,000
|
|
|
|
2,500,000
|
5.00
|
15.12.2024
|
|
2,500,000
|
|
|
|
2,500,000
|
10.00
|
15.12.2024
|
|
2,500,000
|
|
|
|
2,500,000
|
5.00
|
15.12.2024
|
|
2,500,000
|
|
|
|
2,500,000
|
5.00
|
25.05.2025
|
|
2,500,000
|
|
|
|
2,500,000
|
5.00
|
25.05.2025
|
|
5,000,000
|
|
|
|
5,000,000
|
5.00
|
25.05.2025
|
|
5,000,000
|
|
|
|
5,000,000
|
10.00
|
25.05.2025
|
|
5,000,000
|
|
|
|
5,000,000
|
5.00
|
22.05.2025
|
|
5,000,000
|
|
|
|
5,000,000
|
10.00
|
22.05.2025
|
|
5,000,000
|
|
|
5,000,000
|
|
5.00
|
31.10.2023
|
|
|
1,000,000
|
|
|
1,000,000
|
5.00
|
25.05.2025
|
|
|
1,000,000
|
|
|
1,000,000
|
10.00
|
25.05.2025
|
|
|
5,000,000
|
|
|
5,000,000
|
10
|
25.05.2025
|
|
|
|
|
|
|
|
|
|
265,000,000
|
7,000,000
|
|
5,000,000
|
267,000,000
|
|
|
On
20 December 2022, Peter Fuhrman, a director, was granted options
to subscribe for 2,500,000 new ordinary shares in the Company at an
exercise price of 5 pence per share.
The options are exercisable for the period between 12 September 2022 and 15
December 2024. Peter Fuhrman
was also granted options to subscribe for 2,500,000 new ordinary
shares in the Company at an exercise price of 10 pence per share. The options are exercisable
for the period between 12 September
2022 and 15 December
2024.
On
20 December 2022, Mark Michael Trafeli, a director, was granted
options to subscribe for 2,500,000 new ordinary shares in the
Company at an exercise price of 5
pence per share. The options are exercisable for the period
between 1 September 2022 and
15 December 2024.
On
20 December 2022, a consultant was
granted options to subscribe for 2,500,000 new ordinary shares in
the Company at an exercise price of 5
pence per share. The options are exercisable for the period
between 20 December 2022 and
31 March 2023. Another consultant was
granted options to subscribe for 2,500,000 new ordinary shares in
the Company at an exercise price of 5
pence per share. The options are exercisable for the period
between 20 December 2022 and
31 March 2023. A third consultant was
granted options to subscribe for 5,000,000 new ordinary shares in
the Company at an exercise price of 5
pence per share. The options are exercisable for the period
between 20 December 2022 and
31 March 2023. The third consultant
was also granted options to subscribe for 5,000,000 new ordinary
shares in the Company at an exercise price of 10 pence per share. The options are exercisable
for the period between 1 January 2023
and 30 June 2023. A fourth consultant
was granted options to subscribe for 5,000,000 new ordinary shares
in the Company at an exercise price of 5
pence per share. The options are exercisable for the period
between 20 December 2022 and
22 May 2025. The fourth consultant
was also granted options to subscribe for 5,000,000 new ordinary
shares in the Company at an exercise price of 10 pence per share. The options are exercisable
for the period between 23 May 2023
and 22 May 2025. On 20 December 2022, a fifth
consultant was
granted options to subscribe for 5,000,000 new ordinary shares in
the Company at an exercise price of 5
pence per share. The options are exercisable for the period
between 20 December 2022 and
31 October 2023.
The total
share-based payment expense recognised in the income statement for
the year ended 31 December 2023 in
respect of the share options granted was €416,000 (2022:
€1,854,000).
The
significant inputs to the model in respect of the options granted
during the prior year were as follows:
|
|
|
5p
|
10p
|
|
Share
price
|
|
1.175p -
3.100p
|
1.175p -
3.050p
|
|
Expected
life
|
|
2 months -
3 years
|
6 months -
3 years
|
|
Volatility
|
|
130% -
136%
|
130% -
136%
|
|
Dividend
yield
|
|
0%
|
0%
|
|
Risk free
interest rate
|
|
0.76% –
3.58%
|
0.76% -
3.58%
|
|
Fair
value
|
|
0.0p –
2.1p
|
0.0p –
1.7p
|
The table
below discloses the movements in share options during
2022.
|
Number
of
options
at
1 Jan
2022
|
Granted
in the
year
|
Exercised
in the
year
|
Lapsed
in the
year
|
Number
of
options
at
31 Dec
2022
|
Exercise
Price,
pence
|
Expiry
date
|
|
105,000,000
|
|
|
|
105,000,000
|
5.00
|
06.05.2026
|
|
105,000,000
|
|
|
|
105,000,000
|
10.00
|
06.05.2026
|
|
10,000,000
|
|
|
10,000,000
|
|
5.00
|
15.08.2022
|
|
5,000,000
|
|
|
|
5,000,000
|
5.00
|
06.05.2025
|
|
5,000,000
|
|
|
|
5,000,000
|
10.00
|
06.05.2025
|
|
2,500,000
|
|
|
|
2,500,000
|
5.00
|
06.05.2024
|
|
5,000,000
|
|
|
|
5,000,000
|
10.00
|
01.12.2026
|
|
|
2,500,000
|
|
|
2,500,000
|
5.00
|
15.12.2024
|
|
|
2,500,000
|
|
|
2,500,000
|
10.00
|
15.12.2024
|
|
|
2,500,000
|
|
|
2,500,000
|
5.00
|
15.12.2024
|
|
|
2,500,000
|
|
|
2,500,000
|
5.00
|
31.03.2023
|
|
|
2,500,000
|
|
|
2,500,000
|
5.00
|
31.03.2023
|
|
|
5,000,000
|
|
|
5,000,000
|
5.00
|
31.03.2023
|
|
|
5,000,000
|
|
|
5,000,000
|
10.00
|
30.06.2023
|
|
|
5,000,000
|
|
|
5,000,000
|
5.00
|
22.05.2025
|
|
|
5,000,000
|
|
|
5,000,000
|
10.00
|
22.05.2025
|
|
|
5,000,000
|
|
|
5,000,000
|
5.00
|
31.10.2023
|
|
237,500,000
|
37,500,000
|
|
10,000,000
|
265,000,000
|
|
|
-
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
reserve
€’000
|
Loan
note equity reserve
€’000
|
Share
option reserve
€’000
|
Capital
redemption reserve
€’000
|
Total
other reserves
€’000
|
|
At
1 January 2022
|
8,325
|
462
|
2,622
|
-
|
11,409
|
|
Grant of
share options
|
-
|
-
|
1,854
|
-
|
1,854
|
|
Modification
of bond
|
-
|
-
|
-
|
549
|
549
|
|
At
31 December 2022
|
8,325
|
462
|
4,476
|
549
|
13,812
|
|
Grant of
share options
|
-
|
-
|
416
|
-
|
416
|
|
Modification
of bond
|
-
|
-
|
-
|
-
|
-
|
|
At
31 December 2023
|
8,325
|
462
|
4,892
|
549
|
14,228
|
|
Company
|
Loan
note equity reserve
€’000
|
Share
option reserve
€’000
|
Capital
redemption reserve
€’000
|
Total
other reserves
€’000
|
|
At
1 January 2022
|
462
|
2,622
|
-
|
3,084
|
|
Grant of
share options
|
-
|
1,854
|
-
|
1,854
|
|
Modification
of bond
|
-
|
-
|
549
|
549
|
|
At
31
December 2022
|
462
|
4,476
|
549
|
5,487
|
|
Grant of
share options
|
-
|
416
|
-
|
416
|
|
Modification
of bond
|
-
|
-
|
-
|
-
|
|
At
31 December 2023
|
462
|
4,892
|
549
|
5,903
|
-
Ultimate
controlling party
The Group
considers that there is no ultimate controlling party.
-
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:
|
|
2023
|
2022
|
2023
|
2022
|
|
Related
party
|
Group
|
Group
|
Company
|
Company
|
|
|
|
|
|
|
|
Clear
Leisure 2017 Limited
|
-
|
-
|
265,631
|
255,575
|
|
QBT
R&D Srl
|
-
|
-
|
410,881
|
448,655
|
|
Geosim
Systems Limited
|
49,874
|
49,605
|
55,386
|
49,605
|
|
ForCrowd
Srl
|
55,000
|
25,000
|
55,000
|
22,500
|
|
|
104,874
|
74,605
|
786,898
|
776,335
|
During the
year, Quantum Blockchain Technologies Limited made sales totalling
€10,000 (2022: €10,000) to QBT R&D Srl, for consulting
services.
During the
year, QBT R&D Srl made sales totalling €109,000 (2022:
€109,000) to Quantum Blockchain Technologies Plc, for consulting
and R&D services.
During the
year, Infusion 2009 Limited, a company in which F Gardin is a
Director, charged Quantum Blockchain Technologies Plc €288,000
(2022: €200,000) for consulting company fees for R&D
coordination. The amount owed to Infusion 2009 Limited at year end
is €nil (2022: €34,000).
Remuneration
of key management personnel
The
remuneration of the directors, who are the key personnel of the
group, is included in the Directors
Report and
within note 6. Under “IAS 24: Related party disclosures”, all their
remuneration is in relation to short-term employee
benefits.
-
Events
after the reporting date
During the
first months of 2024, the Company has been involved in the
following:
In January
the Company reported an extension of the maturity of the €3.5m 2020
Zero Coupon Bond from 15 December
2024 to December 2026 with the
sole Bondholder of the Company, MC Strategy S.A.
In
February a meeting was held on 22 February
2024 with regard to the 2013 Zero Coupon Bond. The Company
extended the maturity date from 15 December
2024 to 15 December 2026 and
modified the conversion price from 5p to 3p.
In
March 2024, the Company announced a
new development, called Method C, based on Machine Learning and
using predictive AI technology that is producing consistent results
during testing. In testing environments Method C had favourably
demonstrated predictive ability in c. 30% of instances where it was
input to SHA-256 producing a winning hash, resulting in a potential
saving of energy. At the same time, QBT announced that it had
commenced development of a proprietary ASIC chip. A working
prototype is about to undergo development to confirm performance
levels, and the Company entered into early-stage exploratory
discussions with Bitcoin rig manufacturers and US Bitcoin mining
companies. Also in March, the Company noted that the porting of
Method A and Method B into commercial rigs had proven to be very
challenging. The R&D team engaged in testing different
solutions for the final stage in order to deliver a fully reliable
product. Finally, per the same announcement, QBT disclosed that its
first two patent applications (ASIC UltraBoost and ASIC
EnhancedBoost) were making positive headway and that a third patent
application was being drafted concerning the proprietary quantum
version of SHA-256.
In
May 2024, the Company announced that
at the end of April 2024, it reached
an agreement with certain of the Sipiem litigation co-liable
defendants who have settled their position for €700,000 (which, net
of certain costs, has been received by CL17). Following this
agreement, the remaining value of the Award Payment is
approximately €5.575 million (plus interest and inflation
adjustment) which amount CL17 continues to pursue.
At the
same time, CL17 also reached an agreement with the Sipiem’s
receiver, acquiring its right to receive 30% of any sums collected
(net of legal and other costs) from the Sipiem litigation, as
envisaged in the 2019 claim purchase agreement (through which CL17
acquired the Sipiem litigation) for an amount of €170,000, giving
CL17 rights to all funds recovered, namely the €700,000 of the
above agreement and the balance amounting to €5.575 million plus
interest and augmentation for inflation.
In June,
QBT confirmed that the payment of €700,000 had been completed, and
that €170,000 has been paid by CL17 to Sipiem’s Receiver with
respect to the acquisition by CL17 of the Receiver’s right to
receive 30% of any further sums collected in connection with the
claim (net of legal fees).
Subsequently,
in June 2024, the Company announced
that the Venice Court of Appeal
confirmed the ruling of the 2022 lower court Judgment in favour of
CL17 (save for €105,412), amounting to €6,083,562 (plus interest
and adjustments for inflation) in damages, plus €134,166 for legal
expenses. As the appeal ruling has been issued prior to the
scheduling of the hearing regarding the Settlement, such settlement
is now deemed void. While
the above matter is currently being assessed by the Company’s legal
team,
the
Company still hold the above Settlement funds, minus the €170,000
paid to the Receiver for the 30% rights. In the meantime, all the
parties involved, namely the Receiver, the Sipiem’s statutory
auditor’s lawyers and the insurer’s lawyers are being contacted to
discuss the contractual implications of the voided
Settlement.
-ends-
