Final Results for the Year Ended 30 June 2023
28 December 2023
Tap Global Group plc
Final Results for the Year Ended 30 June 2023
Significant growth in user numbers and revenue following a transformative period
Tap Global Group Plc (AQSE: TAP), the cryptocurrency app bridging the gap between traditional finance and blockchain technology, is pleased to present its results for the year ended 30 June 2023 (“FY23”). References herein to “Tap Group”, the “Group” or the “Company” refer to Tap Global Group Plc (formerly Quetzal Capital Plc), whereas references to “Tap” refer to Tap Global Limited and/or Tap Technologies Limited which were acquired by the Group during FY23 on 9 January 2023 (see “Important note” below for further details).
Group Financial Highlights
|
| 2023 | 2022 |
|
| £ | £ |
| Trading Payment Volume* | 181,568,624 | - |
| Trading Revenue | 1,678,602 | - |
| Other Revenue | 337,484 | 50,000 |
| Total Revenue | 2,016,086 | 50,000 |
| Trading Margin | 0.92% | - |
| Adjusted EBITDA** | (363,363) | (313,169) |
| EBITDA | (782,838) | (321,793) |
| Loss After Tax | (1,074,640) | (306,163) |
- Group trading payment volume was £181.6m (2022: £0)
- Group total revenue was £2.0m (2022: £0.05m), reflecting six months of trading from Tap since January 2023
- Tap’s full year (1 July 2022 to 30 June 2023) revenue was £2.5m (FY22: £0.9m), an increase of 176%
- Group adjusted EBITDA loss was £0.4m (2022: £0.3m)
- An overall loss after tax of £1.1m for the year (2022: £0.3m), with Tap contributing a profit after tax whilst part of the Group, of £0.4m
- Cash position increased to £2.3 million (FY22: £1.1 million)
Operational Highlights
- Tap Group relisted on Aquis Stock Exchange via a Reverse Takeover (“RTO”) of Tap in January 2023 and raised £3.1 million in gross proceeds as part of the RTO, primarily from strategic investors already active in cryptocurrency projects and businesses
- Tap registered users increased by 82% to 162,000 (FY22: 89,000)
- Tap coins listed on the platform increased by 133%, taking the total to 42 cryptocurrencies (FY22: 18)
- Tap trading volume for the full year significantly increased by 335% to £207m (2022: £47m)
- Tap maintained its geographic footprint of 44 countries throughout the period
- Tap secured a deal with Bitfinex, one of the world’s leading crypto exchanges, in January 2023 for the provision of Cards as a Service to users of Bitfinex who can opt in for a Mastercard managed by Tap
- David Hunter was appointed as Group Chairman and Kriya Patel as Tap CEO in May 2023
Post Year-End Trading Update to 30 November 2023 & Outlook
- Revenue for the five-month period was £1.0m – lower than the recent run-rate reflecting a temporary pause in UK trading while Tap successfully adapted to the regulatory environment
- Cash at 30 November 2023 remained in line with year-end cash at £2.3m
- Registered users exceeded 250,000 at 30 November 2023
- Tap Group announced an agreement to launch in the US (expected to occur in Q1 2024) through a partnership with Zero Hash LLC, a Chicago-based B2B2C crypto infrastructure platform, ensuring the requisite regulatory coverage for the new US business
David Hunter, Chairman of Tap Group, commented:
“Since joining the Board, I have been highly impressed with a great deal of what I have seen in Tap Group. It enjoys an immensely dynamic and imaginative executive team that is constantly seeking to explore new initiatives and growth opportunities tempered with an acute awareness that the Company must avoid the pitfalls that have befallen an increasing number of other operators in the industry.
The Group’s financial status is in robust health with revenues for the year of £2.0 million, a cost base that is under control, and a healthy cash balance at year-end of £2.3 million. The Group’s adjusted EBITDA for the year was a loss of £0.4m, which was expected as the Group executes its growth strategy.
When comparing the full year trading of Tap (1 July 2022 to 30 June 2023), the revenue for the year was £2.5m, representing an increase of 176% on the prior year.
There is more to do to ensure Tap Group emerges as a force out of the current industry-wide maelstrom; but the foundations for huge scaling have been firmly laid and Tap Group is poised to become a truly global player in the fintech arena.”
The Directors of the Company accept responsibility for the contents of this announcement.
Notes
*Trading Payment Volume – the value of funds traded by customers when selling one currency for another
**Adjusted EBITDA - earnings before interest, tax, depreciation, amortisation and adjustments for realised or unrealised gains and losses on non-GBP transactions or holdings, fair value on investments and sales of assets
Important note
References throughout this report to “Tap Group” or the “Company” refer to Tap Global Group Plc (AQSE: TAP) (formerly Quetzal Capital Plc).
References throughout this report to “Tap” refer to Tap Global Limited and/or Tap Technologies Limited which are wholly owned subsidiaries of Tap Global Group Plc. Tap Global Limited is licensed and regulated by the Gibraltar Financial Services Commission under the Distributed Ledger Technology (DLT) with licence No. 25532.
Enquiries:
| Tap Global Group Plc | Via Vigo Consulting |
| Peterhouse Capital Limited (AQSE Growth Market Corporate Advisor) | +44 (0)20 220 9795
|
| Tennyson Securities (Broker) | +44 (0)20 7186 9030 |
| Vigo Consulting (Investor Relations) Ben Simons / Kendall Hill / Peter Jacob | +44 (0)20 7390 0230 |
About Tap Global Group Plc
The Tap group of companies provide an innovative and fully integrated fiat payments and crypto settlement service. A single regulatory registration, via the wholly owned operating business Tap Global Limited, provides Tap customers with access to several major crypto exchanges through the Tap App allowing them to purchase over 40 cryptocurrencies and store them directly in the customer’s wallet. The wallet can also store fiat currency denominated in Sterling, Euros and/or USD.
Through the single app, Tap’s over 250,000 users can access several major cryptocurrency exchanges and, utilising Tap’s proprietary Artificial Intelligence middleware, customers benefit from best-execution and pricing in real time. Through the Tap card (UK and Europe only), users can also convert their cryptocurrencies to fiat to spend at more than 37 million merchant locations worldwide.
Tap is one of only a handful of unified solutions operators fully regulated to provide Distributed Ledger Technology (DLT) services and was the first cryptocurrency FinTech company approved by Mastercard in Europe.
About Tap Global Limited
Tap Global Limited is registered in Gibraltar with the registration number 118724 and the registered office of Madison Building, Line Wall Road, Gibraltar, GX11 1AA. Tap Global Limited is licensed and regulated by the Gibraltar Financial Services Commission under the DLT with license No. 25532.
Learn more: www.withtap.com
Tap Global Group Plc
Chairman’s Statement
For the year ended 30 June 2023
It is my great pleasure to address you in our annual report; my first as Chairman of Tap Global Group Plc (the “Group”).
Tap Global Limited and its 100% owned subsidiaries (“Tap”) were acquired by Aquis-listed shell Quetzal Capital Plc in a Reverse Takeover transaction on 9 January 2023 (“RTO”). The Group readmitted to the market the following day as Tap Global Group Plc. As such, while this report covers the reporting period from 1 July 2022 to 30 June 2023, this includes only a little under six months’ contribution from Tap, post-acquisition. Those months since the Reverse Takeover have seen a seminal transformation, both in Tap and in the wider market and regulatory environment for cryptocurrencies and fintech. There have been as many threats as there have been opportunities, but Tap has shown itself to be extraordinarily well positioned to succeed in what remain stormy waters. This is key to the value creation opportunity inherent in the business.
The Group raised £3.1m of new expansion capital concurrent with the RTO just after the collapse of FTX and in the lead up to other notable failures in the cryptocurrency industry such as the demise of Silicon Valley Bank. I would like to pay tribute to those who delivered the successful listing of the Group amidst the most challenging of backdrops.
The ‘regulation first’ mantra that Tap has always adopted has ensured that Tap has not only managed to survive in the increasingly hostile regulatory environment that these high-profile failures have created, but to thrive, and grow, and continue to expand.
There are many reasons why we believe the Group outperforms its competitors - including best execution across a number of exchanges powered by our own AI algorithms, insured cold storage, and access to a pre-paid Mastercard - but primary among them is the regulated status of our operating company, Tap Global Limited, under a Distributed Ledger Technology (DLT) licence issued by the Gibraltar Financial Services Commission.
We welcome regulation in the cryptocurrency and fintech sectors; indeed, Tap established itself in Gibraltar from the outset exactly because it provided the most robust regulatory environment. We continue to act under our ‘regulation first’ approach and believe that the continued growth in our user numbers - now standing at over a quarter of a million - is in large part a result of a flight to safety of customers from other platforms perceived as carrying higher risk.
There have been many positive changes to the Group since it listed in January 2023. Chief among these has been the recruitment of Kriya Patel as the CEO of our operating company, Tap, in Gibraltar.
Kriya is instilling tremendous rigour in all Tap’s processes and ensuring that decisions are based on a thorough interrogation of the myriad data that we process. His operational experience across payments, e-money, and financial technology businesses has immediately been applied to Tap’s business and Tap is on a very strong footing to expand in the future.
Kriya is laser focused on growing the business in a manner that both protects our users and shareholders from as much risk as possible and in a sustainable way that does not inject the kinds of overheads that have become so destructive to other operators, particularly in the United Kingdom.
As a result, the Group’s financial status is in robust health with revenues for the year of £2.0 million, a cost base that is under control, and a healthy cash balance at year-end of £2.3 million. The Group’s adjusted EBITDA for the year was a loss of £0.4m, which was expected as the Group executes its growth strategy.
When comparing the full year trading of Tap (1 July 2022 to 30 June 2023), the revenue for the year was £2.5m, representing an increase of 176% on the prior year.
Geographic expansion has been a long-held ambition of Tap Group and plans to launch in the US have continued apace, despite the collapse and then subsequent withdrawal of several actors in that jurisdiction.
I would like to pay tribute to David Carr, the Group CEO, and Arsen Torosian, our Chief Strategy Officer, for the manner in which the partnership with Zero Hash, our launching partner in the US, has been secured amidst a constantly changing backdrop in what must be the most active regulatory jurisdiction in the world. It has been a significant challenge, but we believe we have the optimal launchpad to begin servicing the largest cryptocurrency market in the world from Q1 2024.
There are a number of other growth vectors that the Board is pursuing vigorously, including the further rolling out of the Cards as a Service product for other exchanges, following the signing of Bitfinex in January 2023 as the first client for this new service. This service enables companies to offer their customers a prepaid Mastercard to enhance their existing financial offering.
Since joining the Board, I have been highly impressed with a great deal of what I have seen in the Group. It enjoys an immensely dynamic and imaginative executive team that is constantly seeking to explore new initiatives and growth opportunities tempered with an acute awareness that the Company must avoid the pitfalls that have befallen an increasing number of other operators in the industry.
There is more to do to ensure the Group emerges as a force out of the current industry-wide maelstrom; but the foundations for huge scaling have been firmly laid and the Group is poised to become a truly global player in the fintech arena.
David Hunter
Non-Executive Chairman
Tap Group
Tap Global Group Plc
CEO’s Statement
For the year ended 30 June 2023
I am delighted to present the Group’s results for the year ended 30 June 2023, a period of significant financial and operational growth for the business and our first as a UK listed company.
The cryptocurrency market, unlike traditional stocks and shares, never sleeps, and, as the assets are global and can be bought by investors around the world, the fluctuation in prices is constant. Tap’s business is driven by activity and although the price of assets is not the key driver for Tap, movement in their prices is. The price of Bitcoin, which is the longest running cryptocurrency, drives activity across most of the other cryptocurrencies.
When I am asked how cryptocurrency prices affect Tap, I am always quick to point out that it is not pricing but market movement - up or down - that drives Tap revenues. Stagnant markets, when users are holding, are the worst kind for Tap. I am pleased to say that we have been seeing a sustained return of cryptocurrency trading volumes since the RTO in January 2023 and this has helped drive our revenues to £2.0m in the six months of trading that Tap was within the Group. On a full year basis (1 July 2022 to 30 June 2023), Tap’s revenue was £2.5m, an increase of 176% when compared to the previous financial year, which is a tremendous achievement and shows the investment funds being deployed effectively.
At our previous year end in June 2022, Tap, our regulated operating business, was providing access to 18 different crypto assets. At the end of June 2023, the different crypto assets available on the Tap App had more than doubled to 42 across a geographic footprint of 44 countries, with a US market entry in progress.
During the financial year, Tap grew at a steady rate with both onboarding and revenues progressing in line with expenditure on marketing campaigns. Since the end of the financial year, Tap has added even more cryptocurrencies, and the total available assets today stands at 46.
The Tap platform user numbers grew from 89,000 at the beginning of the financial year in July 2022 to 162,000 at the end of June 2023. The growth has continued post-year end and, in November 2023, the total registered users on the platform surpassed a quarter of a million.
The user base acquisition growth was one of the key reasons for the listing on Aquis. The additional raised capital was budgeted for use in driving the customer acquisition growth strategy and was initiated almost immediately. The user base began to increase simultaneously with these efforts and as such the user acquisition strategy has proven to be highly successful.
This customer growth was a catalyst for Tap to add operational staff in line with the additional user numbers and accordingly some strategic key additional hires were identified. Two of these people were Kriya Patel as a new CEO and Nigel Crome as the new Money Laundering Reporting Officer, both for Tap’s licensed operating entity in Gibraltar, Tap Global Limited.
These two individuals bring a wealth of fintech and compliance experience with them. Both individuals were vetted and approved by the Gibraltar Financial Services Commission as regulated individuals; this is a key process within the regulatory framework that Tap operates under.
Further headcount increases are planned over the coming months as Tap continues to build out key operational teams in support of the accelerated growth witnessed to date and expected product and market expansion planned.
In summary, the last financial year and remainder of 2023 has been focussed on delivery of strong financial performance, continued delivery of a better solution for customers and ensuring the Tap is operationally ready to continue growth in an ever-changing regulatory environment.
Operational Review
The revenue generating elements of the Tap service offering are primarily driven by a share of trading fees Tap charges to users. This accounted for circa 90% of the revenues during the period. A continued evaluation of our pricing strategy is undertaken to ensure we remain competitively priced whilst optimising on revenue generation opportunities from the services delivered.
The first client for Tap’s Cards as a Service product line (offering a white-labelled prepaid Mastercard underpinned by Tap’s infrastructure and regulated status) during the period was Bitfinex. This will be ready for a public launch in early 2024. It is anticipated that this launch will add a significant alternative revenue stream to Tap as this will not be based on the trading of assets directly within Tap. This launch, once fully completed, will demonstrate to the cryptocurrency and wider fintech market that Tap can provide a proven, operating tech and service stack that can accelerate the rollout of new services for commercial partners, powered by Tap.
Another element that has been in development is the provision of Crypto as a Service which, unlike the card service, is directly linked to trading activity. The ultimate concept of this product is to allow a commercial partner to leverage Tap’s crypto services as a product for their user base without having to develop the environment, and deliver on the regulatory standards required, themselves. This could again drive additional users to the Tap platform along with additional revenue as every transactional movement would incur a fee, for both Tap and the commercial partner without the acquisition costs associated with user growth via a direct to market approach.
Some operational developments have been necessarily curtailed both during the last financial year and after the reporting period end due to the increased efforts required to address new regulatory requirements and changes in wider fintech market critical supply chain. Change considerations and replanning priorities have also materialised following reaction from the industry and regulators to the collapse of some large well-known companies, which in some high-profile cases were not regulated at all. Tap continues to operate under the ‘regulation first’ principle that has ensured we have emerged from the recent market upheaval with a tremendously solid foundation still in place.
Nonetheless, Tap has delivered on over 55 key milestones in 2023, including revenue and customer growth, compliance with regulatory changes, optimising group company structure, application redesign, performance and service improvements, improved fraud protection and security measures, the development of greater redundancy, further automation of key processes and the introduction of greater business risk management and control toolkits. This has allowed Tap to plan better and deliver on change initiatives, such as the UK Financial Promotions Regime, and future proof our business for continued growth through a proactive, rather than reactive, resilience to change approach that inevitably impacts the cryptocurrency sector.
Outlook
Global cryptocurrency sector events have rightly raised alarm bells with regulators around the world and as a consequence some Tap expansion plans had been paused due to changes in the risk appetite of critical partners or market uncertainties. An example would be where Tap requires third party suppliers that need to be regulated locally in the countries in which we operate or plan to operate. Changes in local regulatory environments, specifically within key markets such as the UK, required Tap to pivot quickly following review of key partner relationships and the evaluation of new suppliers. Change decisions needed to be expedited, partners identified, and implementations thoroughly tested and integrated into existing operations - an exercise the business is well placed to deal with both now and in the future. Through this period of flux, the Group generated revenues of £1m for the five-month period to November 2023 and is well positioned to build on this in its current and new markets.
In October 2023, we announced the intention to launch the Group’s crypto asset offering into the United States. We are doing so via a wholly owned subsidiary, Tap Americas, through a partnership with Zero Hash LLC, a Chicago-based B2B2C crypto infrastructure platform. The US is the world’s largest cryptocurrency market. Through this partnership with Zero Hash, a well-established and regulated US entity, we identified a pathway to launch in the US whilst ensuring the requisite regulatory coverage for the new US business.
In Zero Hash, we have found a partner that shares our regulation-first approach and will be able to provide us with a platform for establishing a significant presence in the US. Tap Americas has already built a significant waiting list in the US, which has 45 million active cryptocurrency users. Tap Americas will offer its new users a secure, regulated and innovative alternative to the platforms currently falling under regulatory scrutiny for their imprudent approach to the safety of consumers and their digital assets. We are very excited to launch in the US in the new year.
The Group set up an operations hub in Greece in late 2023. This operation will be focussed on the areas of customer onboarding and compliance oversight as well operational support elements for the European operations. This team will be used to help facilitate the expansion into new regions by providing the required support in these areas as these come online. We are also evaluating whether our Greek centre of operations should also become the operational hub for the forthcoming MICA Regulations which come into force in 2024 and have been a key strategic area evaluated by Tap in 2023.
The Group’s public listing journey, although less than 12 months old, has been incredibly positive in terms of positioning Tap with the tools necessary to continue to grow in a regulation-first way which is one of the cornerstones of the Group. Tap continues to increase market presence and customers in existing markets and the expansion into other markets remains in process. 2024 is looking very positive, with continued user acquisition, expansion into other regions, and team growth planned.
As Tap expands into new markets, we also leverage on new partnerships with best-in-class service providers. This delivers opportunities for the Group to further mitigate key supplier dependency risks and could also facilitate further commercial diversification opportunities with additional white-labelling and managed utility as a service provisioning for new commercial partners.
Ensuring adoption of a regulated approach to each new market, I believe, will prove to be a sound decision as we see ever more regulation being considered and introduced in the digital asset industry. Using well established processes developed in meeting regulatory requirements since the inception of Tap positions the Company well in meeting these requirements both now and in the future.
Tap will be making a number of product enhancements in the coming year which will include the introduction of additional assets, further security enhancements and delivery of new user facing services and functionality. These will be led by the Chief Strategy Officer and co-founder of Tap, Arsen Torosian. His vision on the crypto environment has helped Tap to continue to grow even during what some called a “Crypto Winter”.
During 2023, the crypto market has fluctuated significantly both up and down, the price of Bitcoin at the time of the RTO was circa $17,700. By this month, the price of one Bitcoin had reached as high as $44,373. Similarly, the price of one Ethereum at the time of the RTO was circa $1,266 and again in December 2023 the price of this asset had been as high as $2,366. This price increase has driven additional trading activity from Tap account holders.
Our overall outlook is very positive, and I believe that the assembled team will help to achieve great things in the coming year.
David Carr
Chief Executive Officer
Tap Group
Tap Global Group Plc
CFO’s Statement
For the year ended 30 June 2023
I present my review and financial report for the year ended 30 June 2023 where I review in detail the consolidated statement of comprehensive income and the consolidated statement of financial position.
Review of Consolidated Comprehensive Income Statement
Overall, the Group made an adjusted EBITDA Loss of £363k (2022: £313k), with revenue increasing to £2.0m (2022: £50k) and adjusted operating costs increasing by £1.5m from £0.4m in 2022 to £1.9m in 2023. Cost of sales in 2023 was £494k (2022: 0).
The traded payment volume (value of funds traded by a customer) was £181.6m in the six months of trading, and with average trading margin of 0.92%, resulting in trading revenue of £1.7m and a further £0.3m of other revenue.
The increase in costs were due to the Group inheriting the costs of the Tap operating entities and a further investment in people, product and marketing to drive the growth strategy. Table 1 details the revenue and increase in costs explained above.
Table 1 – Income and Expense Account
| Year ended | Jun-23 | Jun-22 |
|
| £ | £ |
| Payment Volumes Traded | 181,568,624 | - |
| Trading Revenue | 1,678,602 | - |
| Other Revenue | 337,484 | 50,000 |
| Revenue -Total | 2,016,086 | 50,000 |
| Cost of sales | 494,488 | - |
| Gross Profit | 1,521,598 | 50,000 |
| Staff Costs | 455,792 | 97,459 |
| Share Option and Warrant Expenses | 378,631 | 4,979 |
| Marketing | 240,892 | 1,500 |
| Legal & Professional Fees | 257,829 | 216,515 |
| Other Expenses | 551,817 | 42,716 |
| Total Operating Costs | 1,884,961 | 363,169 |
| Adjusted EBITDA | (363,363) | (313,169) |
| RTO and Acquisition related costs | (419,917) | (88,840) |
| Fair Revaluation on Investments | (300,795) | (82,552) |
| Sales of Assets | - | 162,769 |
| Gain on Sales of Crypto Assets | 323,178 | - |
| Exchange Rate Variance | (21,941) | - |
| EBITDA | (782,838) | (321,793) |
| Depreciation & Amortisation | (290,168) | - |
| Interest Income/Expense | (1,634) | - |
| Tax | - | 15,629 |
| Net Loss | (1,074,640) | (306,164) |
Certain costs have been adjusted out of EBITDA due to the nature of the expense or on the basis that they are non-recurring. The acquisition related costs are specific to the acquisition of Tap and the re-listing of the Group and are therefore considered non-recurring. The decrease in the fair value on investments is due to the write down of historical investments held by the Group prior to the acquisition of Tap. The sale of assets in the year to June 2022 was due to shares sold in those investments. The gain on sales of crypto assets is based on the market value of the liquidity held by the Group in crypto assets during the year and at the year end. There was a gain on the sale of crypto assets of £323k in the six-month period but as Tap is holding this liquidity to facilitate customer trading and not for the purposes of propriety trading, this line item is considered to not be part of the business operating model and is adjusted out of the EBITDA.
As shown in Table 2 below, the Tap operating entities were profitable for the six months of trading that they were within the Group.
Table 2 Net Profit / (Loss) by Entity
| Entity Type | June-23 |
| Operating Entities: Tap Global & Tap Technologies Ltd | 419,502 |
| Holding Company: Tap Global Group PLC | (1,494,142) |
| Consolidated Net Loss | (1,074,640) |
In Table 3 is a breakdown of the revenue for Tap Global Limited for the years ended 30 June 2022 and 2023 respectively and for the six months of trading with the Group. As the table shows, £2.0m of the £2.5m revenue that was generated was in the first six months of 2023, following the acquisition and investment in marketing.
The Trade Revenue is the commission earned on the difference between the cost of currency sold and bought. The asset transfer revenue is a fee applied when a customer moves assets to or from the Tap platform. The Other Revenue relates to other usage fees applied such as card usage fees associated with the Tap prepaid card.
Table 3 – Tap Global Limited Historical Revenue
| Revenue Type | FY June 22 | FY June 23 | 6 Months to June-23 |
| Trade Revenue | 544,964 | 2,025,691 | 1,678,602 |
| Asset Transfer Fees | 233,244 | 412,082 | 323,510 |
| Other Revenue | 123,680 | 53,251 | 13,974 |
| Total Revenue | 901,888 | 2,491,024 | 2,016,086 |
Cost of Sales
These costs are directly related to customer activity around the three revenue streams described above and include fees incurred at currency liquidity providers, bank charges, costs for maintaining the prepaid card and customer onboarding costs.
Operating Costs
The significant costs are staff costs, marketing, legal and professional costs and share option and warrant expenses
Staff costs of £456k (2022: £97k) reflect the cost of the staff from the Tap operating entities plus the increase in headcount to drive the growth strategy. Marketing costs of £241k (2022: £2k) are primarily customer acquisition costs from the Tap operating entities. Legal and professional fees of £258k (2022: £216k) include audit and accountancy costs, regulatory costs and legal fees. The share option and warrant expense primarily relates to warrants issued at the time of the RTO in in January 2023.
Review of Consolidated Financial Position Statement
Please refer to the consolidated Statement of Financial Position for the Group. Overall, the net current assets for the Group, excluding goodwill, is £3.8m. Below I separately review each asset class.
Non-Current Assets
The tangible assets include a right of use asset of £104k which is the leased offices in Gibraltar, with the balance of tangible assets comprising computer equipment and office fixture and fittings.
The intangible assets include crypto assets held for investment and value of the software platform developed to operate the Tap operating model which is capitalised and amortised over the useful life of the software. The goodwill is the difference between the consideration paid of £20.25m and the book value of the Tap operating companies acquired which was a net liability of £1.6m. This net liability included the convertible loan note of £1.5m that the Group advanced to Tap in December 2021 and which was subsequently capitalised following the completion of the acquisition.
Current Assets
Cash at bank at is £2.3m (2022: £1.1m) with a further £1.2m in liquidity represented by crypto assets held for investment but reported in non-current assets. The increase in cash reflects the £3.1m equity raised in January 2023, less one-off payments relating to the RTO and the costs to fund the growth strategy which include funding crypto asset liquidity balances, investment in software development and customer acquisition costs.
Current Liabilities
Trade payables of £237k (2022: £42k) and Accruals of £197k (2022: £98k) reflect the increased activity within the Group following the RTO. The Directors’ current account of £679k is monies owed to the founder (Arsen Torosian) and is repayable on demand any time on or after 30 June 2025. The loan does not accrue interest.
Equity
The increase in the called-up share capital and the share premium account of £23.5m is detailed in Table 4 below. The increase primarily relates to the share issue and acquisition of Tap Global.
Table 4 – Changes in Ordinary Share Capital and Share Premium
|
| £ |
| Share Issue | 3,250,000 |
| Consideration for Tap Global | 20,250,000 |
| Issue of Share Options and Warrants | 20,000 |
| Total Change in Year | 23,520,000 |
The increase in the option and warrant reserve was primarily due to placement warrants issued against 40.4m shares at the time of the RTO which attracted an increase in the reserve of £314k and a charge to the income statement. The balance of the increase was due to share options issued in the year.
The loss after tax for the year of £1.1m increased the Profit and Loss Account deficit to £4.6m.
Outlook – Trading and Cash to November 2023
Revenue for the five-month period to November 2023 is £1.0m and Cash at Bank as at November 2023 is £2.3m. Revenue in Q3 2023 was down on the recent historical average due to the uncertainly in the UK market during the introduction of the new Financial Promotion rules on crypto assets. Following Tap’s successful registration to trade crypto assets in the UK, revenue returned to recent historical levels during the month of November 2023.
Tap Global Group Plc
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2023
|
| Notes |
| 2023 |
| 2022 |
|
|
|
| £ |
| £ |
|
|
|
|
|
|
|
| REVENUE |
|
|
|
|
|
| Revenue |
|
| 2,016,086 |
| 50,000 |
|
|
|
|
|
|
|
| Cost of sales |
|
| (494,488) |
| - |
|
|
|
|
|
|
|
| GROSS PROFIT |
|
| 1,521,598 |
| 50,000 |
|
|
|
|
|
|
|
| Operating expenses |
|
| (2,596,680) |
| (371,792) |
|
|
|
|
|
|
|
| Exchange difference |
|
| (21,941) |
| - |
|
|
|
|
|
|
|
| Fair value adjustments | 5 |
| (300,795) |
| - |
|
|
|
|
|
|
|
| Gain on sale of cryptoassets | 5 |
| 323,178 |
| - |
|
|
|
|
|
|
|
| Loss before income tax |
|
| (1,074,640) |
| (321,792) |
|
|
|
|
|
|
|
| Tax on loss | 9 |
| - |
| 15,629 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total comprehensive loss for the year |
|
| (1,074,640) |
| (306,163) |
|
|
|
|
|
|
|
| Loss per shares |
|
|
|
|
|
| Basic and diluted (Pence) | 20 |
| (0.248) |
| (0.018) |
|
|
|
|
|
|
|
Group operations are classed as continuing.
The exemption under section 408 of the Companies Act 2006 from presenting the Parent Company’s income statement has been taken. The Company’s loss for the year was £1,344,142 (2022: £306,163).
The notes form part of these consolidated financial statements.
Tap Global Group Plc
Company number 05840813
Consolidated Statement of Financial Position
For the year ended 30 June 2023
|
|
| Notes | 2023 |
| 2022 |
| ASSETS |
|
| £ |
| £ |
| Non-current assets |
|
|
|
|
|
| Tangible assets, including right-of-use assets |
| 10 | 103,873 |
| - |
| Investments |
| 12 | 16,512 |
| 1,987 |
| Intangible assets - cryptoassets held for investment |
| 13 | 1,221,451 |
| - |
| Intangible assets - website domains |
| 14 | 1,234,389 |
| - |
| Goodwill |
| 14 | 21,850,947 |
| - |
| Deferred tax asset |
| 9 | 12,517 |
| 12,517 |
|
|
|
| 24,439,689 |
| 14,504 |
| Current assets |
|
|
|
|
|
| Cash and cash equivalents |
| 16 | 2,335,375 |
| 1,066,912 |
| Financial assets |
|
| - |
| 1,815,320 |
| Trade and other receivables |
| 15 | 115,523 |
| 102,078 |
|
|
|
| 2,450,898 |
| 2,984,310 |
| Total assets |
|
| 26,890,587 |
| 2,998,814 |
|
|
|
|
|
|
|
| LIABILITIES AND EQUITY |
|
|
|
|
|
| Non-current liabilities |
|
|
|
|
|
| Lease liability |
| 11 | 61,925 |
| - |
|
|
|
| 61,925 |
| - |
| Current liabilities |
|
|
|
|
|
| Trade payables |
| 17 | 237,343 |
| 41,739 |
| Accruals |
|
| 197,250 |
| 98,225 |
| Director's current account |
| 18 | 679,451 |
| - |
| Lease liability |
| 11 | 31,776 |
| - |
|
|
|
| 1,145,820 |
| 139,964 |
| Equity |
|
|
|
|
|
| Capital and reserves |
|
|
|
|
|
| Called up share capital |
| 23 | 2,223,466 |
| 1,701,243 |
| Share premium |
|
| 27,685,458 |
| 4,687,681 |
| Option & warrant reserve |
|
| 374,898 |
| 14,099 |
| Profit and loss account |
|
| (4,600,980) |
| (3,544,173) |
| Equity shareholders' funds |
|
| 25,682,842 |
| 2,858,850 |
|
|
|
|
|
|
|
| Total liabilities and equity |
|
| 26,890,587 |
| 2,998,814 |
The consolidated financial statements were approved and authorised for issue by the Board and were signed on its behalf by:
Anthony Quirke
Director
Date: 27 December 2023
The notes form part of these consolidated financial statements.
Tap Global Group Plc
Consolidated Statement of Changes in Equity
For the year ended 30 June 2023
|
| Called up Share Capital | Share Premium | Option & Warrant Reserve | Profit and Loss Account | Total |
|
| £ | £ | £ | £ | £ |
| As at 1 July 2022 | 1,701,243 | 4,687,681 | 14,099 | (3,544,173) | 2,858,850 |
|
|
|
|
|
|
|
| Total comprehensive loss for the year |
|
|
| (1,074,640) | (1,074,640) |
|
|
|
|
|
|
|
| Issue of shares | 72,223 | 3,197,777 | - | - | 3,270,000 |
|
|
|
|
|
|
|
| Acquisition of subsidiaries | 450,000 | 19,800,000 | - | - | 20,250,000 |
|
|
|
|
|
|
|
| Forfeiture of share options | - | - | (17,833) | 17,833 | - |
|
|
|
|
|
|
|
| Option & warrant reserve | - | - | 378,632 | - | 378,632 |
|
|
|
|
|
|
|
| As at 30 June 2023 | 2,223,466 | 27,685,458 | 374,898 | (4,600,980) | 25,682,842 |
|
| Called up share capital | Share premium | Option & warrant reserve | Profit and loss account | Total |
|
| £ | £ | £ | £ | £ |
| As at 1 July 2021 | 1,701,243 | 4,687,681 | 9,120 | (3,238,010) | 3,160,034 |
|
|
|
|
|
|
|
| Total comprehensive loss for the year |
|
|
| (306,163) | (306,163) |
|
|
|
|
|
|
|
| Option & warrant reserve |
|
| 4,979 |
| 4,979 |
|
|
|
|
|
|
|
| As at 30 June 2022 | 1,701,243 | 4,687,681 | 14,099 | (3,544,173) | 2,858,850 |
The notes form part of these consolidated financial statements.
Tap Global Group Plc
Consolidated Statement of Cash Flows
For the year ended 30 June 2023
|
|
|
| 2023 |
| 2022 |
|
|
|
| £ |
| £ |
| Cash flow from operating activities |
|
|
|
|
|
| Loss after taxation for the year |
|
| (1,074,640) |
| (306,163) |
|
|
|
|
|
|
|
| Adjustment for: |
|
|
|
|
|
| Depreciation |
|
| 18,876 |
| -15,629 |
| Amortisation |
|
| 270,836 |
| - |
| Financing costs |
|
| 1,892 |
| - |
| Share option charge |
|
| 378,632 |
| 4,979 |
| Fair value change of investment |
|
| 300,795 |
| 82,552 |
| Gain on sale of cryptoassets |
|
| (323,178) |
| (162,769) |
|
|
|
|
|
|
|
| Change in: |
|
|
|
|
|
| Trade and other receivables |
|
| 94,115 |
| (27,338) |
| Trade and other payables |
|
| (1,283,699) |
| 119,594 |
| Cash generated from operations |
|
| (1,616,371) |
| (304,774) |
| Tax paid |
|
| - |
| (3,112) |
| Net cash used in operating activities |
|
| (1,616,371) |
| (307,886) |
|
|
|
|
|
|
|
| Cash flow from investing activities |
|
|
|
|
|
| Acquisition of subsidiaries |
|
| 323,840 |
| - |
| Proceeds from cryptoassets |
|
| 4,318,385 |
| - |
| Additions of cryptoassets |
|
| (4,660,607) |
| - |
| Purchase of intangible assets |
|
| (338,558) |
| - |
| Purchase of tangible assets |
|
| (11,726) |
| - |
| Purchase of convertible loan note |
|
| - |
| (1,500,000) |
| Purchase of investment |
|
| - |
| (612,875) |
| Sale of investments |
|
| - |
| 645,994 |
| Net cash used in investing activities |
|
| (368,666) |
| (1,466,881) |
|
|
|
|
|
|
|
| Cash flow from financing activities |
|
|
|
|
|
| Repayment of lease liabilities |
|
| (16,500) |
| - |
| Issued capital |
|
| 3,270,000 |
| - |
| Net cash used in financing activities |
|
| 3,253,500 |
| - |
|
|
|
|
|
|
|
| Increase/(decrease) in cash and cash equivalents |
|
| 1,268,463 |
| (1,774,767) |
| Cash and cash equivalents at the beginning of the year |
|
| 1,066,912 |
| 2,841,679 |
| Cash and cash equivalents at the end of the year |
|
| 2,335,375 |
| 1,066,912 |
The notes form part of these consolidated financial statements.
1. General Information
Tap Global Group PLC (formerly Quetzal Capital Plc) (the “parent company”) is a public company limited by shares and incorporated in England and Wales. The parent company y is domiciled in the UK and its shares are admitted to trading on AQSE, a market operated by The London Stock Exchange. These consolidated financial statements comprise the parent company and its subsidiaries (together referred to as the “group”). The group’s consolidated financial statements for the year ended 30 June 2023 were authorised for issue by the Board of Directors on 27 December 2023.
2. Summary of Significant Accounting Policies
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented unless otherwise stated.
Statement of Compliance
The Consolidated group’s Financial Statements have been prepared in accordance with UK-adopted international accounting standards in accordance with the requirements of the Companies Act 2006.
The parent company financial statements of Tap Global Group Plc (formerly Quetzal Capital Plc) have been prepared in compliance with United Kingdom Accounting Standards, including Financial Reporting Standard 102, “The Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland” (“FRS 102”) and the Companies Act 2006.
Basis of Preparation
The consolidated financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss.
The consolidated financial statements are prepared in sterling, which is the functional currency of the parent company. All amounts have been rounded to the nearest GBP.
Going concern
Details of the group’s business activities, results, cash flows and resources, together with the risks it faces and other factors likely to affect its future development, performance and position are set out in the strategic report.
Consideration has been given to whether there is sufficient liquidity and financing to support the business, the post balance sheet trading of the group, the regulatory environment and the effectiveness of risk management policies. The Board, therefore, has a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future and therefore the financial statements are prepared on a going concern basis.
3.1 Basis of consolidation and significant accounting policies
The consolidated financial statements comprise the financial statements of all group subsidiaries as at 30 June each year using consistent accounting policies. Acquisition-related costs are expensed as incurred unless they result from the issuance of shares, in which case they are offset against the premium on those shares within equity.
Where considered appropriate, adjustments are made to the financial information of subsidiaries to bring the accounting policies used into line with those used by other members of the group. All intercompany transactions and balances between group enterprises are eliminated on consolidation.
Business combinations
The consolidated financial statements for business combinations using the acquisition method when control is transferred to the group. The consideration transferred in the acquisition is measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognised in profit or loss immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss.
Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent consideration that meets the definition of a financial instrument is classified as equity, then it is not re-measured, and settlement is accounted for within equity. Otherwise, other contingent consideration is re-measured at fair value at each reporting date and subsequent changes in the fair value of the contingent consideration are recognised in profit or loss.
Subsidiaries
Subsidiaries are entities controlled by the group. The group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. In assessing control, the group takes into consideration potential voting rights. The acquisition date is the date on which control is transferred to the acquirer. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. A non-controlling interest is recognised, representing the interests of minority shareholders in subsidiaries not wholly owned by the group.
Transactions eliminated on consolidation
Intra-group balances and transactions and any unrealised income and expenses arising from intra-group transactions are eliminated. On publishing the parent company financial statements here, together with the consolidated financial statements, the parent company is taking advantage of exemption in section 408 of the Companies Act 2006 not to present the individual income statement and related notes of the parent company which form part of these approved financial statements.
3.2 Foreign currency
In preparing these financial statements, transactions in currencies other than the parent company and group’s presentational currency (“foreign currencies”) are recorded at the rates of exchange prevailing on the dates of the transaction. At each statement of financial position date, monetary items in foreign currencies are translated into the presentational currency at the exchange rate prevailing at statement of financial position date. Exchange differences arising on the settlements of monetary items and on the retranslation of monetary items are included in the consolidated statement of comprehensive income for the year.
3.3 Revenue Recognition
The group applies IFRS 15 Revenue from Contracts with Customers for the recognition of revenue. IFRS 15 established a comprehensive framework for determining whether, how much and when revenue is recognised. It affects the timing and recognition of revenue items, but not generally the overall amount recognised the performance obligations of all revenue streams are satisfied on the transaction date or by the provision of the service for the period described in the contract. Revenue is not recognised where there is evidence to suggest that customers do not have the ability or intention to pay. The group does not have any contracts with customers where the performance obligations have not been fully satisfied. How the group recognises revenue for its significant revenue streams is described below:
Trading fees
This service relates to the facility to buy and sell currency, including digital currency (crypto currency). A contract is identified when a payment is approved by the group and the customer. Performance obligations and transaction prices are set out in the contract. Revenue is recognised on the transaction date.
Account fees
This service relates to the provision of account services. A contract is identified when a customer enters an agreement with the group for an account. Performance obligations and transaction prices are set out in the contract. Revenue related to monthly account fees are recognised during the month the account is provided.
Card fees
A contract is identified when it is approved by relevant parties and when the card is issued to the customer. Performance obligations and transaction prices are set out in the contract. Revenue from provision of card services is recognised over period in which they are provided. ATM transaction and out-of-currency variable fees are constrained to the amount not expected to be reversed. Variable revenue is recognised at the point at which it is unlikely to be reversed, typically the transaction date.
3.4 Investments
(a) Classification
Fair value through profit and loss equity investments are classified in this category if acquired principally for the purpose of trading or selling in the short term. Investments in this category are classified as current assets if expected to be settled within 12 months; otherwise, they are classified as non-current.
(b) Recognition and Measurement
Regular purchases and sales of fair value through profit and loss equity investments are recognised on the trade date – the date on which the group commits to purchasing or selling the asset. They carried at fair value through profit or loss is initially recognised at fair value, and transaction costs are expensed in the Income Statement. They are measured at fair value using the fair value hierarchy, as disclosed at note 24.
Fair value through profit and loss equity investments are derecognised when the rights to receive cash flows from the assets have expired or have been transferred, and the group has transferred substantially all of the risks and rewards of ownership.
Gains or losses arising from changes in the fair value of fair value through profit and loss equity investments at fair value through profit or loss are presented in the Income Statement.
3.5 Impairment of assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at reporting date. For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. For impairment testing of goodwill, the goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the group are assigned to those units.
3.6 Financial Assets
(a) Classification
The group classifies its financial assets in the following categories: at amortised cost including trade receivables and other financial assets at amortised cost, at fair value through other comprehensive income and at fair value through profit or loss, loans and receivables, and available-for-sale. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.
(b) Recognition and measurement
Amortised cost
Trade and other receivables are recognised initially at the amount of consideration that is unconditional, unless they contain significant financing components, in which case they are recognised at fair value. The group holds the trade and other receivables with the objective of collecting the contractual cash flows, and so it measures them subsequently at amortised cost using the effective interest method.
The group classifies its financial assets as at amortised cost only if both of the following criteria are met:
• the asset is held within a business model whose objective is to collect the contractual cash flows; and
• the contractual terms give rise to cash flows that are solely payments of principal and interest.
Fair value through profit or loss
The group classifies the following financial assets at fair value through profit or loss (FVPL):
• debt instruments that do not qualify for measurement at either amortised cost (see above) or FVOCI;
• equity investments that are held for trading; and
• equity investments for which the entity has not elected to recognise fair value gains and losses through OCI.
Information about the methods and assumptions used in determining fair value is provided in note 24. For information about the methods and assumptions used in determining fair value refer to note 24. The group does not hold any financial assets that meet conditions for subsequent recognition at fair value through other comprehensive income (“FVTOCI”).
(c) Impairment of financial assets
The group recognises an allowance for expected credit losses (“ECL”s) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the group expects to receive, discounted at an approximation of the original Effective Interest Rate (“EIR”). The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
For trade receivables and other receivables due in less than 12 months, the group applies the simplified approach in calculating ECLs, as permitted by IFRS 9. Therefore, the group does not track changes in credit risk, but instead, recognises a loss allowance based on the financial asset’s lifetime ECL at each reporting date.
The group considers a financial asset to be in default when internal or external information indicates that the group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows and usually occurs when past due for more than one year and not subject to enforcement activity.
At each reporting date, the group assesses whether financial assets carried at amortised cost are credit impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.
(d) Derecognition
The group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognised in profit or loss.
3.7 Financial Liabilities
All financial liabilities are recognised initially at fair value, net of directly attributable transaction costs. The group’s financial liabilities include trade and other payables.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Trade and other payables
Trade and other payables are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.
Trade and other payables are recognised initially at fair value, and subsequently measured at amortised cost using the effective interest method.
Derecognition
A financial liability is derecognised when the associated obligation is discharged or cancelled or expires.
3.8 Expenditure
Expenses are recognised on the accrual basis.
3.9 Tangible assets
Tangible assets are stated at cost less accumulated depreciation and accumulated impairment losses. Such costs include costs directly attributable to making the asset capable of operating as intended. Depreciation is calculated at the following annual rates so as to write off the cost of fixed assets over their estimated useful lives using the reducing balance method:
Computer equipment 25%
Furniture and fittings 15%
On disposal, the difference between the net disposal proceeds and the carrying amount of the item sold is recognised in statement of comprehensive income and included in other operating income. The carrying values of the tangible assets are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. All subsequent repairs, renewals and maintenance costs are charged to the statement of comprehensive income when incurred.
3.10 Leases
At inception of a contract, the group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the group uses the definition of a lease in IFRS 16.
As a lessee
At commencement or on modification of a contract that contains a lease component, the group allocates the consideration in the contract to each lease component on the basis of its relative stand-alone prices. However, for the leases of property the group has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the group by the end of the lease term or the cost of the right-of-use asset reflects that the group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability. During the year, the right-of-use asset was depreciated over 6 years, which represented the unexpired portion of the lease.
The lease liability is initially measured at the present value of the expected future lease payments as at the commencement date of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the group’s incremental borrowing rate. Generally, the group uses its incremental borrowing rate as the discount rate. The group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.
Lease payments included in the measurement of the lease liability comprise the following: – fixed payments, including in-substance fixed payments; – variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date; – amounts expected to be payable under a residual value guarantee; and – the exercise price under a purchase option that the group is reasonably certain to exercise, lease payments in an optional renewal period if the group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the group is reasonably certain not to terminate early.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero. The group presents right-of-use assets that do not meet the definition of investment property in 'property, plant and equipment, including right of use assets’ and lease liabilities as disclosed on the face of the statement of financial position.
Short-term leases and leases of low-value assets
The group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-term leases. The group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
3.11 Cryptoassets
Cryptoassets are held principally for the purpose of trading in the near term or used in operations (hereafter called “Cryptoassets held for trading”) or held for investment purposes. The group accounts for cryptoassets at their initial cost and subsequently re-measures the carrying amounts it owns at the end of the reporting period based on the quoted price published on the cryptocurrency exchanges.
Cryptoassets owned by the group are derecognized when the group has transferred all the risks and rewards of ownership by selling to verified third parties or through exchanges to obtain fiat currency delivered to its banking accounts, utilized by paying its vendors and personnel who accept this form of payment, or otherwise, losing control and therefore, access to the economic benefits associated with ownership of cryptoassets.
The IFRS Interpretations Committee (“IFRIC”) published a tentative agenda decision: Holding of Cryptocurrencies - Agenda Paper 12, in 2019, which clarifies how to apply the holdings of cryptocurrencies’ classification, recognition and measurement within issued IFRS Standards.
"The IFRIC observed that a holding of cryptocurrency meets the definition of an (1) intangible asset in IAS 38 on the grounds that (a) it is capable of being separated from the holder and sold or transferred individually; and (b) it does not give the holder a right to receive a fixed or determinable number of units of currency; or (2) in certain circumstances, inventory in accordance with IAS 2. Based on this conclusion, the classification, recognition and measurement, and disclosure requirements of IAS 38 or IAS 2 should be applied in regards to Bitcoin. Management has assessed the impact of the IFRIC’s agenda decision and determined that the group’s policies are consistent with the IFRIC decision.
The group’s cryptoassets held for trading are accounted under IAS 2 Inventories under the guidance for broker-traders since the group holds cryptocurrencies for sale in the ordinary course of business. The cyrptoassets held for trading is initially measured at fair value less cost to sell and subsequently being remeasured using fair value less cost to sell with the changes in profit or loss. The group has determined that costs to sell are negligible and immaterial to the financial statements.
Cyrptoassets is considered Level 1 in accordance with the fair value hierarchy as it is based on a quoted (unadjusted) market price in an active market for identical assets. "
3.12 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and time, call and current balances with banks and similar institutions, which are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value.
3.13 Provisions
Provisions are recognised for liabilities of uncertain timing or amount when the group has a present legal or constructive obligation arising as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made. Where the time value of money is material, provisions are stated at the present value of the expenditures expected to settle the obligation.
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events are also disclosed as contingent liabilities unless the probability of outflow is remote.
3.14 Intangible assets – computer software and website development
Computer software development expenditure is capitalised only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the group intends to and has sufficient resources to complete development and to use or sell the asset. Otherwise, it is recognised in the statement of comprehensive income as incurred. Subsequent to initial recognition, development expenditure is measured at cost less accumulated amortisation and any accumulated impairment losses.
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognised in statement of comprehensive income as incurred. Amortisation is calculated to write off the cost of computer software less their estimated residual values using the straight-line method over their estimated useful lives and is generally recognised in the statement of comprehensive income.
The estimated useful lives for current and comparative periods are as follows:
Computer software - 4 years
Website development - 4 years
Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
Impairment of intangible assets – computer software and website development
At each reporting date, the group reviews the carrying amounts of its non-financial assets (other than inventories and deferred tax assets) to determine whether there is any indication of impairment.
If any such indication exists, then the asset’s recoverable amount is estimated. An impairment loss is recognised if the carrying amount of an asset exceeds its recoverable amount. Impairment losses are recognised in profit or loss. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
3.15 Intangible assets - Goodwill
Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating units (CGUs) that are expected to benefit from that business combination. Where goodwill has been allocated to a cash-generating unit (“CGU”) that CGU is tested for impairment annually to determine whether the carrying amount of the CGU may not be recoverable. An impairment loss in respect of goodwill is not reversed.
The group has recognised one CGU, called Crypto Asset Brokerage. This represents the lowest level at which goodwill is monitored for internal management purposes.
Management estimates discount rates using pre-tax rate that reflects the current market assessment of the time value of money and the specific risks associated with the asset for which the future cash flow estimates have not been adjusted. The rate used to discount the forecast cash flows are based upon the CGU’s weighted average cost of capital (WACC). The WACC for the Crypto Asset Brokerage CGU was 14.0%, based on a WACC used by a listed business for a similar business model – see Appendix B for details.
The group prepared cash flow forecasts derived from the most recent financial budgets approved by management for the next five years. For the purpose of the value in use calculation the management forecasts were extrapolated into perpetuity using a growth rate of 2.0%, representing the expected long-run rate of inflation in the UK. The forecasts assume growth rates in acquisitions which in turn drive the forecast collections and cost figures.
The value in use of the crypto asset brokerage CGU was £24.2m which is in excess of the goodwill of £21.8m by £2.4m, more than 10%. Based on this analysis, the group has determined that the value in use of Crypto Asset Brokerage is in excess of the goodwill on the balance sheet and therefore no impairment of the goodwill is required.
3.16 Share Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
3.17 Income Tax
Tax is recognised in the profit and loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
Deferred income tax is recognised, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax is determined using tax rates (and laws) that have been enacted, or substantially enacted, by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised, or the deferred income tax liability is settled.
Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.
Deferred income tax assets are recognised on deductible temporary differences only to the extent that it is probable the temporary difference will reverse in the future and there is sufficient taxable profit available against which the temporary difference can be utilised.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities, and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
3.18 Share Based Payments
The group operates an equity-settled share-based scheme, under which the entity receives services from employees or third-party suppliers as consideration for equity instruments (shares, options and warrants) of the group. The group may also issue warrants to share subscribers as part of a share placing. The fair value of the equity-settled share based payments is recognised as an expense in the income statement or charged to equity depending on the nature of the service provided or instrument issued. The total amount to be expensed or charged in the case of options is determined by reference to the fair value of the options or warrants granted:
• including any market performance conditions;
• excluding the impact of any service and non-market performance vesting conditions (for example, profitability or sales growth targets, or remaining an employee of the entity over a specified time period); and
• including the impact of any non-vesting conditions (for example, the requirement for employees to save).
In the case of shares and warrants the amount charged to the share premium account is determined by reference to the fair value of the services received if available. If the fair value of the services received is not determinable the shares are valued by reference to the market price and the warrants are valued by reference to the fair value of the warrants granted as described previously.
Non-market vesting conditions are included in assumptions about the number of options or warrants that are expected to vest. The total expense or charge is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the income statement or equity as appropriate, with a corresponding adjustment to another reserve in equity.
When the warrants or options are exercised, the group issues new shares. The proceeds received, net of any directly attributable transaction costs, are credited to share capital (nominal value) and share premium when the warrants or options are exercised.
3.19 Related parties
(A) A person or a close member of that person’s family is related to the group if that person:
(i) has control or joint control over the group;
(ii) has significant influence over the group; or
(iii) is a member of the key management personnel of the group or of a parent of the group.
(B) An entity is related to the group if any of the following conditions applies:
(i) The entity and the group are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).
(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).
(iii) Both entities are joint ventures of the same third party.
(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity.
(v) The entity is a post-employment benefit plan for the benefit of employees of either the group or an entity related to the group. If the group is itself such a plan, the sponsoring employers are also related to the group.
(vi) The entity is controlled or jointly controlled by a person identified in (A).
(vii) A person identified in (A)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).
The entity, or any member of a group of which it is a part, provides key management personnel services to the group or to a parent of the Company.
3.20 Employee benefits
(i) Employee leave entitlements
Employee entitlements to annual leave and long service leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave and long service leave as a result of services rendered by employees up to the end of the reporting period.
Employee entitlements to sick leave and maternity leave are not recognised until the time of leave.
(ii) Pension obligations
The group contributes to defined contribution retirement schemes which are available to all employees. Contributions to the schemes by the group and employees are calculated as a percentage of employees’ basic salaries. The retirement benefit scheme cost charged to profit or loss represents contributions payable by the group to the funds.
(iii) Termination benefits
Termination benefits are recognised at the earlier of the dates when the group can no longer withdraw the offer of those benefits and when the group recognises restructuring costs and involves the payment of termination benefits.
3.21 Events after the reporting period
Events after the reporting period that provide additional information about the group’s position at the end of the reporting period or those that indicate the going concern assumption is not appropriate are adjusting events and are reflected in the financial statements. Events after the reporting period that are not adjusting events are disclosed in the notes to the financial statements when material.
4. Judgements And Key Sources Of Estimation And Uncertainty
The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the date of the financial statements.
If in the future such estimates and assumptions which are based on management’s best judgement at the date of the financial statements, deviate from the actual circumstances, the original estimates and assumptions will be modified as appropriate in the year in which the circumstances change. Where necessary, the comparatives have been reclassified or extended from the previously reported results to take into account presentational changes.
5. Operating Profit
Operating profit or loss is stated after charging/crediting:
|
|
|
| Group | ||
|
|
|
| 2023 |
| 2022 |
|
|
|
| £ |
| £ |
| Fair value adjustment of listed shares |
|
| (300,795) |
| - |
| Gains on cryptocurrency assets |
|
| 323,178 |
| - |
|
|
|
|
|
|
|
| Total |
|
| 22,383 |
| - |
|
|
|
|
| ||
6. Auditors Remuneration
|
|
| Group | ||
|
|
| 2023 |
| 2022 |
|
|
| £ |
| £ |
| Fees payable for the audit of the financial statements |
| 78,590 |
| - |
|
|
|
|
|
|
|
|
| 78,590 |
| - |
7. Interest Payable And Similar Expenses
|
|
| Group | ||
|
|
| 2023 |
| 2022 |
|
|
| £ |
| £ |
| Interest on lease liability |
| 1,892 |
| - |
|
|
|
|
|
|
|
|
| 1,892 |
| - |
8. Employees And Directors
| The average monthly number of persons employed by the group during the year was as follows: | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Group | ||
|
|
|
|
|
| 2023 |
| 2022 |
| Directors |
|
|
|
| 8 |
| 0 |
| Employees |
|
|
|
| 4 |
| 0 |
|
|
|
|
|
|
|
|
|
| The aggregate payroll costs |
|
|
|
|
|
|
|
| incurred during the year, relating |
|
|
|
| Group | ||
| to the above, were: |
|
|
|
| 2023 |
| 2022 |
|
|
|
|
|
| £ |
| £ |
| Directors |
|
|
|
| 665,821 |
| - |
| Employees |
|
|
|
| 168,602 |
| - |
9. Taxation
The group’s taxation charge or credit is the composite of:
- Corporation tax credit arising on losses in the financial year; and
- Deferred taxation arising on temporary and permanent timing differences and losses carried forward, to the extent that the group believes these to be recoverable from future taxable profits.
At 30 June 2023, the group had tax losses available to be offset against future taxable profits of [(£1,074,640)]
| Major components of tax expense |
|
|
|
| Group | ||
|
|
|
|
|
| 2023 |
| 2022 |
| Current tax |
|
|
|
| £ |
| £ |
| UK current tax expense |
|
|
|
| - |
| - |
|
|
|
|
|
|
|
|
|
| Deferred tax |
|
|
|
|
|
|
|
| Revaluation of listed investment |
|
|
|
| 12,517 |
| 12,517 |
10. Tangible Assets – Right-Of-Use Assets
|
|
|
|
|
|
|
|
|
|
| Right-of-use |
| Computer |
| Fixtures & |
| Total |
|
| asset |
| equipment |
| Fittings |
|
|
| Cost | £ |
| £ |
| £ |
| £ |
| Upon acquisition | 190,650 |
| 12,882 |
| 3,735 |
| 207,267 |
| Additions | - |
| 9,972 |
| 1,754 |
| 11,726 |
| Balance as at 30 June 2023 | 190,650 |
| 22,854 |
| 5,489 |
| 218,993 |
|
|
|
|
|
|
|
|
|
| Depreciation |
|
|
|
|
|
|
|
| Upon acquisition | 87,381 |
| 7,462 |
| 1,401 |
| 96,244 |
| Charge for the period | 15,888 |
| 2,643 |
| 346 |
| 18,876 |
| At 30 June 2023 | 103,269 |
| 10,105 |
| 1,747 |
| 115,120 |
|
|
|
|
|
|
|
|
|
| Net book value |
|
|
|
|
|
|
|
| At 30 June 2023 | 87,381 |
| 12,749 |
| 3,743 |
| 103,873 |
| At 30 June 2022 | - |
| - |
| - |
| - |
|
|
|
|
|
|
|
|
|
|
11. Lease liability |
|
|
|
| 2023 |
| 2022 |
|
|
|
|
|
| £ |
| £ |
| Upon acquisition |
|
|
|
| 108,309 |
| - |
| Interest expense |
|
|
|
| 1,892 |
| - |
| Payments |
|
|
|
| (16,500) |
| - |
|
|
|
|
|
|
|
|
|
| At the end of the year |
|
|
|
| 93,701 |
| - |
| Current |
|
|
|
| 31,776 |
| - |
| Non-current |
|
|
|
| 61,925 |
| - |
12. Tangible Assets - Investments
|
|
|
|
|
| Group | ||
|
|
|
|
|
| 2023 |
| 2022 |
|
|
|
|
|
| £ |
| £ |
|
|
|
|
|
|
|
|
|
| As at 1 July 2022 |
|
|
|
| 1,987 |
| 1,987 |
| Transfer from financial assets |
|
|
|
| 315,320 |
| - |
| Revaluations |
|
|
|
| (300,795) |
| - |
|
|
|
|
|
|
|
|
|
| At the end of the year |
|
|
|
| 16,512 |
| 1,987 |
13. Intangible Assets – Cryptoassets Held for Investment
|
|
|
|
|
| Group | |||
|
|
|
|
|
| 2023 |
| 2022 | |
|
|
|
|
|
| £ |
| £ | |
|
|
|
|
|
|
|
|
| |
| Cryptoassets |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
| Upon acquisition |
|
|
|
| 556,049 |
| - | |
| Additions |
|
|
|
| 4,660,607 |
| - | |
| Disposals |
|
|
|
| (4,318,383) |
| - | |
| Gain on sale of cryptoassets |
|
|
|
| 323,178 |
| - | |
|
|
|
|
|
|
|
|
| |
| At the end of the year |
|
|
|
| 1,221,451 |
| - | |
14. Intangibles – Other Intangibles
|
|
|
|
|
| Group | ||
|
|
|
|
|
| 2023 |
| 2022 |
| Website & software development |
|
|
| £ |
| £ | |
| Upon acquisition |
|
|
|
| 1,166,667 |
| - |
| Additions |
|
|
|
| 338,558 |
| - |
| Amortisation |
|
|
|
| (270,836) |
| - |
|
|
|
|
|
|
|
|
|
| At the end of the year |
|
|
|
| 1,234,389 |
| - |
|
|
|
|
|
|
|
|
|
| Intangible assets - goodwill |
|
|
|
|
|
|
|
|
|
|
|
|
| Group | ||
|
|
|
|
|
| 2023 |
| 2022 |
| Goodwill |
|
|
|
| £ |
| £ |
| Upon acquisition |
|
|
|
| 21,850,947 |
| - |
| Impairment |
|
|
|
| - |
| - |
|
|
|
|
|
|
|
|
|
| Net book value |
|
|
|
| 21,850,947 |
| - |
15. Trade And Other Receivables
|
|
|
|
|
| Group | ||
|
|
|
|
|
| 2023 |
| 2022 |
|
|
|
|
|
| £ |
| £ |
| Prepayments |
|
|
|
| 112,481 |
| - |
| Other debtors |
|
|
|
| 3,042 |
| - |
|
|
|
|
|
|
|
|
|
| At the end of the year |
|
|
|
| 115,523 |
| - |
16. Cash And Cash Equivalents
|
|
|
|
|
| Group | ||
|
|
|
|
|
| 2023 |
| 2022 |
|
|
|
|
|
| £ |
| £ |
| Cash at bank |
|
|
|
| 2,335,375 |
| 1,066,912 |
|
|
|
|
|
|
|
|
|
17. Trade Payables
|
|
|
|
|
| Group | ||
|
|
|
|
|
| 2023 |
| 2022 |
| Trade payables |
|
|
|
| £ |
| £ |
|
|
|
|
|
|
|
|
|
| Trade creditors |
|
|
|
| 237,343 |
| 41,739 |
| At the end of the year |
|
|
|
| 237,343 |
| - |
18. Related Party Transactions
Directors current account
|
|
|
|
|
| Group | ||
|
|
|
|
|
| 2023 |
| 2022 |
|
|
|
|
|
| £ |
| £ |
| Balance upon acquisition |
|
|
|
| 1,994,975 |
| - |
| Transactions during the year |
|
|
|
| (1,315,524) |
| - |
|
|
|
|
|
|
|
|
|
| At the end of the year |
|
|
|
| 679,451 |
| - |
19. Acquisitions
On 10 January 2023, the Group acquired Tap Global Limited and its subsidiaries. The total consideration was £20.25m, satisfied by the issue of shares. Tap Global Limited was providing an App and trading platform that allow customers to hold and trade crypto currencies and conduct fiat FX.
The fair value of the identifiable assets and liabilities of the above company as at its date of acquisition is as follows:
|
| £ |
| Cash and cash equivalents | 323,840 |
| Trade and other receivables | 107,561 |
| Tangible Assets | 111,023 |
| Intangible Assets | 1,166,667 |
| Crypto Currency Assets | 556,049 |
| Trade Payables | (195,782) |
| Accruals | (67,021) |
| Lease liability | (108,309) |
| Investment Quetzal Liability | (1,500,000) |
| Director's current account | (1,994,975) |
|
| (1,600,947) |
| Share consideration | 20,250,000 |
| Goodwill | - 21,850,947 |
20. Loss Per Share
The calculation of basic loss per share has been based on the loss attributable to ordinary shareholders. The loss after tax attributable to ordinary shareholders of the group is, £1,074,640 (2022: £306,163).
Loss per share is calculated by dividing the loss for the year attributable to ordinary shareholders of the parent by the number of ordinary and deferred shares outstanding during the year.
The effect of all potential ordinary shares are anti-dilutive for the year ended 30 June 2023 and 2022.
21. Subsidiary Undertakings
|
|
|
|
|
|
|
|
|
| The parent company holds the share capital (both directly and indirectly) of the following companies | |||||||
|
|
|
|
|
|
|
|
|
| Subsidiary | Country of registration / incorporation |
| Class |
| Shares Held % | ||
| Tap Global Ltd | Gibraltar |
|
|
| Ordinary |
| 100 |
| Tap Technologies Limited* | Gibraltar |
|
|
| Ordinary |
| 100 |
| Tap Global Pty Ltd* | Australia |
|
|
| Ordinary |
| 100 |
| Tap Americas LLC* | United States of America |
| Ordinary |
| 100 | ||
|
|
|
|
|
|
|
|
|
| *denotes held indirectly |
|
|
|
|
|
|
|
22. Share Options And Share Warrants
The group grants share options to employees as part of the remuneration of key management personnel and directors to enable them to purchase ordinary shares in the group. Under the plan, 1,125,000 options were granted for no cash consideration for a period of 2 years expiring on an extended date of 31 December 2023. The share options outstanding at 30 June 2023 had a weighted average remaining contractual life of 0.5 years (2022: 0.75). Maximum term of new options granted was 2 years from the grant date. The weighted average exercise price of share options as at the date of exercise is £0.00427 (2022: £0.0064).
John Taylor holds the following options:
| Number | Exercise Price | Expiry Date | Vesting Conditions |
| 150,000 | £0.06 | 31 December 2023 | Fully Vested |
| 150,000 | £0.08 | 31 December 2023 | Fully Vested |
| 150,000 | £0.10 | 31 December 2023 | Fully Vested |
Fungai Ndoro retains the following share options granted to her:
| Number | Exercise Price | Expiry Date | Vesting Conditions |
| 112,500 | £0.06 | 31 December 2023 | Fully Vested |
| 112,500 | £0.08 | 31 December 2023 | Fully Vested |
| 112,500 | £0.10 | 31 December 2023 | Fully Vested |
Simon Grant-Rennick retained the following share options granted to him on 10 March 2021. 75% of the original grant lapsed on Simon’s resignation:
| Number | Exercise Price | Expiry Date | Vesting Conditions |
| 37,500 | £0.06 | 31 December 2023 | Fully Vested |
| 37,500 | £0.08 | 31 December 2023 | Fully Vested |
| 37,500 | £0.10 | 31 December 2023 | Fully Vested |
Anthony Quirke holds the following options:
| Number | Exercise Price | Expiry Date | Vesting Conditions |
| 75,500 | £0.06 | 31 December 2023 | Fully Vested |
| 75,500 | £0.08 | 31 December 2023 | Fully Vested |
| 75,500 | £0.10 | 31 December 2023 | Fully Vested |
Share Warrants
The group has 37,500,000 share warrants with each warrant giving the holder the right to subscribe for one ordinary share in the group at a price of £0.08 per share and will expire on 31 December 2023.
Additionally, the group has a further 39,444,445 share warrants with each warrant giving the holder the right to subscribe for one ordinary share in the group at a price of £0.08 per share and will expire on 10 January 2026.
Furthermore, the group as an additional 1,000,000 share warrants with each warrant giving the holder the right to subscribe for one ordinary share in the group at a price of £0.045 per share and will expire on 10 January 2028.
The fair value of these share options expensed during the year was £378,632, being the value of the options and warrants attributable to the vesting periods to 30 June 2023 (2022: £4,979). The volatility is set by reference to the historic volatility of the share price of the Company.
23. Called Up Share Capital
|
| 2023 | 2022 | ||
| COMPANY AND GROUP | No. | £ | No. | £ |
|
|
|
|
|
|
| Ordinary shares of £0.001 each | 693,409,624 | 693,410 | 171,187,399 | 171,187 |
| Deferred shares of £0.099 each | 15,455,115 | 1,530,056 | 15,455,115 | 1,530,056 |
|
|
|
|
|
|
|
| 708,864,739 | 2,223,466 | 186,642,514 | 1,701,243 |
24. Fair value measurements
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following disclosures of fair value measurements use a fair value hierarchy that categorises into three levels the inputs to valuation techniques used to measure fair value:
Level 1 inputs: quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at the measurement date.
Level 2 inputs: inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3 inputs: unobservable inputs for the asset or liability.
The group’s policy is to recognise transfers into and transfers out of any of the three levels as of the date of the event or change in circumstances that caused the transfer.
Disclosures of level in fair value hierarchy:
|
| Fair value measurements using: | Total | ||
| Description | Level 1 | Level 2 | Level 3 | 2023 |
|
| HK$ | HK$ | HK$ | HK$ |
| Recurring fair value measurements: |
|
|
|
|
| Investments at fair value through profit or loss |
|
|
|
|
| Listed securities | 16,512 | - | - | 16,512 |
|
| Fair value measurements using: | Total | ||
| Description | Level 1 | Level 2 | Level 3 | 2022 |
|
| HK$ | HK$ | HK$ | HK$ |
| Recurring fair value measurements: |
|
|
|
|
| Investments at fair value through profit or loss |
|
|
|
|
| Listed securities | 317,307 | - | - | 317,307 |
25. Events After The End Of The Reporting Period
No other matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the group, the results of those operations or the state of affairs of the group in future financial years.
Tap Global Group Plc
Company number 05840813
Parent Company Statement of Financial Position
Year Ended 30 June 2023
|
|
|
| 2023 | 2022 |
|
| Note |
| £ | £ |
| Fixed assets |
|
|
|
|
| Investments | 6 |
| 16,512 | 1,987 |
| Investments in subsidiaries | 6 |
| 20,250,000 | - |
|
|
|
| 20,266,512 | 1,987 |
| Current assets |
|
|
|
|
| Debtors | 7 |
| 12,997 | 102,078 |
| Financial assets | 8 |
| - | 1,815,320 |
| Cash and cash equivalents |
|
| 567,414 | 1,066,912 |
|
|
|
| 580,411 | 2,984,310 |
|
|
|
|
|
|
| Creditors: amounts falling due within one year | 9 |
| 96,100 | 139,964 |
|
|
|
|
|
|
| Net current assets |
|
| 484,311 | 2,844,346 |
|
|
|
|
|
|
| Total assets less current liabilities |
|
| 20,750,823 | 2,846,333 |
|
|
|
|
|
|
| Provisions | 10 |
| 12,517 | 12,517 |
|
|
|
|
|
|
| Net assets |
|
| 20,763,340 | 2,858,850 |
|
|
|
|
|
|
| Capital and reserves |
|
|
|
|
| Called up share capital | 12 |
| 2,223,466 | 1,701,243 |
| Share premium |
|
| 27,685,458 | 4,687,681 |
| Option & warrant reserve |
|
| 374,898 | 14,099 |
| Capital reserves |
|
| (4,500,000) | - |
| Profit & loss accounts |
|
| (5,020,482) | (3,544,173) |
|
|
|
|
|
|
| Shareholders’ funds |
|
| 20,763,340 | 2,858,850 |
The Parent Company financial statements were approved and authorised for issue by the Board and were signed on its behalf by:
Anthony Quirke
Director
Date: 27 December 2023
The notes form part of these Parent Company financial statements.
Tap Global Group Plc
Parent Company Statement of Changes in Equity
Year Ended 30 June 2023
|
| Called up Share Capital | Share Premium | Option & Warrant Reserves | Capital Reserves | Profit & Loss Account | Total |
|
| £ | £ | £ | £ | £ | £ |
|
|
|
|
|
|
|
|
| As at 1 July 2022 | 1,701,243 | 4,687,681 | 14,099 | - | (3,544,173) | 2,858,850 |
|
|
|
|
|
|
|
|
| Total comprehensive loss for the year | - | - | - | - | (1,494,142) | (1,344,142) |
|
|
|
|
|
|
|
|
| Issue of shares | 522,223 | 3,177,777 | - | - | - | 3,700,000 |
|
|
|
|
|
|
|
|
| Acquisition of subsidiaries | - | 19,820,000 | - |
| - | 19,820,000 |
|
|
|
|
|
|
|
|
| Deemed contribution | - | - | - | (4,500,000) | - | (4,500,000) |
|
|
|
|
|
|
|
|
| Forfeiture of share option | - | - | (17,833) | - | 17,833 | - |
|
|
|
|
|
|
|
|
| Option & warrant reserve | - | - | 378,632 | - | - | 378,632 |
|
|
|
|
|
|
|
|
| Balance at 30 June 2023 | 2,223,466 | 27,685,458 | 374,898 | (4,500,000) | (5,020,482) | 20,763,340 |
|
| Called up Share Capital | Share Premium | Option & Warrant Reserves | Profit & Loss Account | Total |
|
| £ | £ | £ | £ | £ |
|
|
|
|
|
|
|
| As at 1 July 2021 | 1,701,243 | 4,687,681 | 9,120 | (3,238,010) | 3,160,034 |
|
|
|
|
|
|
|
| Total comprehensive loss for the year | - | - | - | (306,163) | (360,163) |
|
|
|
|
|
|
|
| Option & warrant reserve | - | - | 4,979 | - | 4,979 |
|
|
|
|
|
|
|
| Balance at 30 June 2022 | 1,701,243 | 4,687,681 | 14,099 | (3,544,173) | 2,858,850 |
The following describes the nature and purpose of each reserve within owners’ equity:
| Reserve | Description and purpose |
|
Called Up Share Capital |
This represents the nominal value of shares issued. |
|
Share Premium |
Amount subscribed for share capital in excess of nominal value. |
|
Profit & Loss Account |
Cumulative net gains and losses recognised in the statement of comprehensive income.
|
| Other Reserve | Cumulative fair value of options granted
|
The notes form part of these Parent Company financial statements.
Tap Global Group Plc
Parent Company Statement of Cash Flows
Year Ended 30 June 2023
|
|
|
|
| 2023 | 2022 |
|
|
|
|
| £ | £ |
| Cash flows from operating activities |
|
|
|
|
|
| Loss after taxation for the financial year |
|
|
| (1, 494,142) | (306,163) |
| Adjustments for: |
|
|
|
|
|
| Tax on loss |
|
|
| - | (15,629) |
| Share option charge |
|
|
| 378,632 | 4,979 |
| Fair value adjustment of listed shares |
|
|
| - | 82,552 |
| Loss / (profit) on disposal of investments |
|
|
| 300,795 | (162,769) |
|
|
|
|
|
|
|
| Changes in: |
|
|
|
|
|
| Trade and other debtors |
|
|
| (2,910,919) | (27,338) |
| Trade and other creditors |
|
|
| (43,864) | 119,594 |
|
|
|
|
|
|
|
| Net cash used in operating activities |
|
|
| (3,769,498) | (304,774) |
|
|
|
|
|
|
|
| Cash flows from investing activities |
|
|
|
|
|
| Purchase of Convertible Loan Note |
|
|
| - | (1,500,000) |
| Purchase of investments |
|
|
| - | (612,875) |
| Sales of investments |
|
|
| - | 645,994 |
| Net cash used in investing activities |
|
|
| - | (1,466,881) |
|
|
|
|
|
|
|
| Cash flows from financing activities |
|
|
|
|
|
| Tax paid |
|
|
| - | (3,112) |
| Share issue |
|
|
| 3,700,000 | - |
| Share issue expenses paid |
|
|
| (430,000) | - |
| Net cash used in financing activities |
|
|
| 3,270,000 | (3,112) |
|
|
|
|
|
|
|
| Decrease in cash and cash equivalents |
|
|
| (499,498) | (1,774,767) |
| Cash and cash equivalents at beginning of the year |
|
|
| 1,066,912 | 2,841,679 |
| Cash and cash equivalents at the end of the year |
|
|
| 567,414 | 1,066,912 |
The notes form part of these Parent Company financial statements.
Tap Global Group Plc
Notes to the Parent Company Financial Statements
Year Ended 30 June 2023
1. General information
The Parent Company is a public company limited by shares, registered in England and Wales. The address of the registered office is 6th Floor, 60 Gracechurch Street, London, EC3V 0HR, United Kingdom.
2. Statement of compliance
The Parent Company financial statements of Tap Global Group Plc (formerly Quetzal Capital Plc) have been prepared in compliance with United Kingdom Accounting Standards, including Financial Reporting Standard 102, “The Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland” (“FRS 102”) and the Companies Act 2006.
3. Summary of significant accounting policies
The significant accounting policies applied in the preparation of these Parent Company financial statements are set out below. These policies have been consistently applied to all years presented unless otherwise stated.
Basis of preparation
The Parent Company financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss.
The Parent Company financial statements are prepared in sterling, which is the functional currency of the entity.
Going Concern
The Parent Company made a loss for the year of £1,494,142 (2022: £306,163) and has net asset position of £20,763,340 (2022: £2,858,850). The directors continue to adopt the going concern basis of accounting in preparing the Parent Company financial statements.
The directors believe it is appropriate to prepare the Parent Company financial statements on a going concern basis as the Parent Company will have sufficient funds to finance its operations for the next 15 months from the approval of these Parent Company financial statements.
Judgements and key sources of estimation uncertainty
The preparation of the Parent Company financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Significant judgements
The are no judgements (apart from those involving estimations) that management has made in the process of applying the entity's accounting policies and that have a significant effect on the amounts recognised in the Parent Company financial statements.
Key sources of estimation uncertainty
Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. There are no key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.
Investments
Fixed asset investments are initially recorded at cost, and subsequently stated at cost less any accumulated impairment losses.
Listed investments are measured at fair value with changes in fair value being recognised in profit or loss.
Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.
For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets.
For impairment testing of goodwill, the goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Parent Company are assigned to those units.
Financial instruments
A financial asset or a financial liability is recognised only when the Parent Company becomes a party to the contractual provisions of the instrument.
Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.
Debt instruments are subsequently measured at amortised cost.
Where investments in non-convertible preference shares and non-puttable ordinary shares or preference shares are publicly traded or their fair value can otherwise be measured reliably, the investment is subsequently measured at fair value with changes in fair value recognised in profit or loss. All other such investments are subsequently measured at cost less impairment.
Other financial instruments, including derivatives, are initially recognised at fair value, unless payment for an asset is deferred beyond normal business terms or financed at a rate of interest that is not a market rate, in which case the asset is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.
Other financial instruments are subsequently measured at fair value, with any changes recognised in profit or loss, with the exception of hedging instruments in a designated hedging relationship.
Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately.
For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets are either assessed individually or grouped on the basis of similar credit risk characteristics.
Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised.
4. Auditors remuneration
|
| 2023 | 2022 |
|
| £ | £ |
|
|
|
|
| Fees payable for the audit of the Parent Company financial statements | 25,000 | 7,100 |
5. Employees and directors
The average monthly number of persons employed by the Parent Company during the year was as follows:
|
|
|
| 2023 | 2022 |
|
|
|
|
|
|
| Directors |
|
| 5 | 3 |
| Employees |
|
| 1 | - |
The aggregate payroll costs incurred during the year, relating to the above, were:
|
|
|
| 2023 | 2022 |
|
|
|
| £ | £ |
|
|
|
|
|
|
| Directors |
|
| 269,007 | 99,115 |
| Employees |
|
| 33,333 | - |
As in previous years this disclosure did not include social security costs, however, in 2023 this amounted to an additional £19,595. Currently all employees and directors are opted-out of a workplace pension and no pension contributions are made by the Parent Company on their behalf.
6. Investments
|
| Shares in group undertakings | Other investments other than loans | Total
|
|
| £ | £ | £ |
|
|
|
|
|
|
|
|
|
|
| As at 1 July 2022 | - | 1,987 | 1,987 |
| Additions | 20,250,000 | - | 20,250,000 |
| Transfer from financial assets | - | 315,320 | 315,320 |
| Revaluations | - | (300,795) | (300,795) |
| Balance at 30 June 2023 | 20,250,000 | 16,512 | 20,266,512 |
|
| Shares in group undertakings | Other investments other than loans | Total
| ||||||||
| Carrying amount | £ | £ | £ | ||||||||
|
|
|
|
| ||||||||
| As at 30 June 2022 | - | 1,987 | 1,987 | ||||||||
| As at 30 June 2023 | 20,250,000 | 16,512 | 20,266,512 | ||||||||
| The Parent Company holds the share capital (both directly and indirectly) of the following companies | |||||||||||
|
|
|
|
|
|
|
|
| ||||
| Subsidiary | Country of registration / incorporation |
| Class |
| Shares Held % | ||||||
| Tap Global Ltd | Gibraltar |
|
|
| Ordinary |
| 100 | ||||
| Tap Technologies Limited* | Gibraltar |
|
|
| Ordinary |
| 100 | ||||
| Tap Global Pty Ltd* | Australia |
|
|
| Ordinary |
| 100 | ||||
| Tap Americas LLC* | United States of America |
| Ordinary |
| 100 | ||||||
|
|
|
|
|
|
|
|
| ||||
| *denotes held indirectly |
|
|
|
|
|
|
| ||||
7. Debtors
|
|
|
| 2023 | 2022 |
|
|
|
| £ | £ |
|
|
|
|
|
|
| Prepayments and accrued income |
|
| 12,997 | 23,092 |
| VAT liability |
|
| - | 21,057 |
| Other debtors |
|
| - | 57,929 |
|
|
|
|
|
|
|
|
|
| 12,997 | 102,078 |
£296 (2022: £24,817) of other debtors represent funds held as a cash balance in a brokerage account.
8. Financial assets
|
| 2023 | 2022 |
|
| £ | £ |
| At fair value |
|
|
| Available for sale listed and unlisted investments | - | 1,815,320 |
|
|
|
|
|
| - | 1,815,320 |
9. Creditors falling due within one year
|
|
|
| 2023 | 2022 |
|
|
|
| £ | £ |
|
|
|
|
|
|
| Trade creditors |
|
| 7,450 | 41,739 |
| Accruals |
|
| 88,650 | 98,225 |
|
|
|
|
|
|
|
|
|
| 96,100 | 139,964 |
10. Provisions
|
| Deferred tax |
| Carrying amount | £ |
|
|
|
| As at 1 July 2022 | (12,517) |
|
|
|
| Movement | - |
|
|
|
| Balance at 30 June 2023 | (12,517) |
11. Deferred tax
The deferred tax included in the statement of financial position is as follows:
|
| 2023 | 2022 |
|
| £ | £ |
|
|
|
|
| Included in provision (note 10) | (12,517) | (12,517) |
|
|
|
|
|
| (12,517) | (12,517) |
The deferred tax account consists of the tax effect of timing differences in respect of:
|
| 2023 | 2022 |
|
| £ | £ |
|
|
|
|
| Revaluation of listed investments / financial assets | (12,517) | (12,517) |
|
|
|
|
|
| (12,517) | (12,517) |
12. Called up share capital
|
| 2023 | 2022 | ||
| COMPANY AND GROUP | No. | £ | No. | £ |
|
|
|
|
|
|
| Ordinary shares of £0.001 each | 693,409,624 | 693,410 | 171,187,399 | 171,187 |
| Deferred shares of £0.099 each | 15,455,115 | 1,530,056 | 15,455,115 | 1,530,056 |
|
|
|
|
|
|
|
| 708,864,739 | 2,223,466 | 186,642,514 | 1,701,243 |
13. Share options and share warrants
The Parent Company grants share options to employees as part of the remuneration of key management personnel and directors to enable them to purchase ordinary shares in the Parent Company. Under the plan, 1,125,000 options were granted for no cash consideration for a period of 2 years expiring on an extended date of 31 December 2023. The share options outstanding at 30 June 2023 had a weighted average remaining contractual life of 0.5 years (2022: 0.75). Maximum term of new options granted was 2 years from the grant date. The weighted average exercise price of share options as at the date of exercise is £0.00402 (2022: £0.0064).
John Taylor hold the following options:
| Number | Exercise Price | Expiry Date | Vesting Conditions |
| 150,000 | £0.06 | 31 December 2023 | Fully Vested |
| 150,000 | £0.08 | 31 December 2023 | Fully Vested |
| 150,000 | £0.10 | 31 December 2023 | Fully Vested |
Fungai Ndoro retains the following share options granted to her:
| Number | Exercise Price | Expiry Date | Vesting Conditions |
| 112,500 | £0.06 | 31 December 2023 | Fully Vested |
| 112,500 | £0.08 | 31 December 2023 | Fully Vested |
| 112,500 | £0.10 | 31 December 2023 | Fully Vested |
Simon Grant-Rennick retained the following share options granted to him on 10 March 2021. 75% of the original grant lapsed on Simon’s resignation:
| Number | Exercise Price | Expiry Date | Vesting Conditions |
| 37,500 | £0.06 | 31 December 2023 | Fully Vested |
| 37,500 | £0.08 | 31 December 2023 | Fully Vested |
| 37,500 | £0.10 | 31 December 2023 | Fully Vested |
Anthony Quirke hold the following options:
| Number | Exercise Price | Expiry Date | Vesting Conditions |
| 75,500 | £0.06 | 31 December 2023 | Fully Vested |
| 75,500 | £0.08 | 31 December 2023 | Fully Vested |
| 75,500 | £0.10 | 31 December 2023 | Fully Vested |
Share Warrants
The Parent Company has 37,500,000 share warrants with each warrant giving the holder the right to subscribe for one ordinary share in the Parent Company at a price of £0.08 per share and will expire on 31 December 2023.
Additionally the Parent Company has a further 39,444,445 share warrants with each warrant giving the holder the right to subscribe for one ordinary share in the Parent Company at a price of £0.08 per share and will expire on 10 January 2026.
Furthermore, the Parent Company as an additional 1,000,000 share warrants with each warrant giving the holder the right to subscribe for one ordinary share in the Parent Company at a price of £0.045 per share and will expire on 10 January 2028.
The fair value of these share options and warrants expensed during the year was £378,632, being the value of the options and warrants attributable to the vesting periods to 30 June 2023 (2022: £4,979).
The volatility is set by reference to the historic volatility of the share price of the Parent Company.
14. Events after the end of the reporting period
No other matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the group, the results of those operations or the state of affairs of the group in future financial years.
15. Related party transactions
All transactions with Directors are included within Notes 5 and 13.
16. Controlling party
The directors consider that there is no ultimate controlling party.
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