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