24 January 2025
ChallengerX
plc
(“ChallengerX”, “CX"
or
the
"Company")
Final
Results
for the
Period Ended
30 June
2024
ChallengerX (AQUIS: CXS) announces
its Audited
Annual
Report
and financial
statements
for the
year
ended
30 June
2024 (the
“Annual
Report”).
An
extract
of the
Company’s
audited
report and
accounts
can
be
found below.
A
full copy
of
the
Annual
Report,
which
should
be
read in
full, and
will shortly be
available
from the
Company’s
website
https://challengerx.io/investors/
and
will be
sent
to
all
shareholders.
The audit
opinion on the financial statements for the year ended 30 June 2024 is qualified due to the subsidiary
Sports X SAS, a company incorporated in France, being in administration. The auditors
were unable to obtain sufficient financial information and
subsequent audit evidence to satisfy themselves concerning the
financial results of that subsidiary, as at 30 June 2024. Consequently, those results are not
consolidated within the financial statements despite the fact they
were required to be under the Companies Act 2006 and the Financial
Reporting Standard 102. In accordance with Rule 4.3 of the AQSE
Growth Market Access Rulebook, the Company will announce management
statements within one month of the quarter end for each quarter
until an audit report is published without modification.
Accordingly, the Company will release the following quarterly
reports:
-
A
report
for the
quarters
ended 30 September
and
31 December 2024 by 31
January
2025
-
A
report
for the
quarter
ending
31 March
2025
by
30
April
2025
-
A
report
for the
quarter
ending
30 June
2025
by
31
July
2025
This
announcement contains
inside
information
for the
purposes of
the
UK
Market Abuse
Regulation and
the
Directors of
the
Company
are
responsible
for the
release of
this
announcement.
For
further information,
please
contact:
Enquiries:
|
ChallengerX
plc
|
|
John
May,
Chairman
|
jmay@city-westminster.com
|
|
|
|
CHALLENGER
X PLC
– REGISTERED
NUMBER
13440398 STRATEGIC REPORT (EXTRACT)
FOR
THE
PERIOD
ENDED
30
JUNE
2024
The
directors
present
their
strategic
report
for
the
year
ended
30
June
2024.
Principal
activity
The
principal activity of the Company in the period was to employ both
traditional and non-traditional marketing strategies to rapidly
“professionalise” amateur and semi-professional sports clubs around
the
world.
Review
of
business
The
results show
a loss of
£0.778m (2023: £0.392m)
during the period with total Net Liabilities of £0.187m (2023:
£0.033m), of which £0.002m (2023: £0.048m) was in the form
of
cash.
The
Company’s Ordinary Shares were admitted to trading on the Access
segment of Aquis Stock Exchange
Growth Market (AQSE) in London, UK
on 23 December 2021.
Following
the resignation of its corporate adviser, trading in the Company's
ordinary shares on AQSE were suspended on 6
June 2024.
The
Company is aware of its continuing obligations under the AQSE
rules.
On
17 August 2023 the Company announced
it had entered into an exclusive licence agreement with Flash Corp
Technologies Ltd (“Flash Corp”) by which the Company acquired a
renewable 13-month license over the rights of FlashBet Wheel App’s
design and technology in UK and Europe, for a consideration satisfied by
80,000,000 new ordinary shares of £0.001 each issued at market
price of 0.55p in ChallengerX (“New Shares”), and a value of
£440,000 on Challenger X balance sheet.
Despite
significant efforts made during the period of the licence agreement
to enhance the FlashBet Wheel App’s design and technology with a
view to getting it to market and
generating
revenues; the Board
were
increasingly of the view that it would be unlikely in the
foreseeable term that by continuing to follow its progression it
was unlikely to generate the revenues that had been projected.
Indeed, no revenue was generated within the 13 months. Accordingly
the Board were of the view that it was not in the interests of the
Company to renew or extend the licence agreement nor acquire the
exclusive rights to the intellectual property; and further agreed
that the carrying value of the initial cost of £440,000 be impaired
in full in the accounts to 30 June
2024.
Post
year end
On 8
January the Company announced
it had
raised a total of £120,000 through the issuance of a Convertible
Loan Note (“CLN” or “Loan”). The Company will pay interest on the
Loan at an annual rate of 5%, with the first payment due on
30 June 2025 and subsequent payments
every six months thereafter. The Loan will be automatically
converted into 120,000,000 ordinary shares of
£0.001
each in
the Company upon the relisting of ChallengerX Shares on the Aquis
Stock Exchange. If the Automatic Conversion does not take place,
ChallengerX has to repay the Loan having been given 30 days' notice
by the Lender.
On 20
January the Company further announced it is in active negotiations
with the owners of Nyce International Limited and Virya VC Limited,
with the aim to acquire their entire issued share capital. In
addition, as part of this transaction, the Company intends to enter
into a perpetual, irrevocable licensing agreement in relation to an
instance of Reelsoft AB’s Vision RGS (Remote Gaming Server) and
Game Aggregation Platform (together, the "Potential
Acquisitions").
The
Company is at an advanced stage of its legal and financial due
diligence process and negotiation of the share purchase agreements
and licensing agreements. The consideration for the Potential
Acquisitions is expected to be satisfied fully in the issue of new
ordinary shares of £0.001 each.
The Board
is also negotiating certain new board appointments and working
alongside an Aquis Corporate Adviser to conduct a review of the
potential candidates’ experience and background as well as of the
enlarged group’s suitability, following completion of the Potential
Acquisitions and readmission to trading on the Aquis Stock
Exchange.
It is not
expected that the Potential Acquisitions would constitute a Reverse
Takeover under Rule 3.6 of the Access Rulebook.
The
Potential Acquisitions are subject to a number of conditions,
including the completion of due diligence to the satisfaction of
all parties, the lifting of the suspension to trading of
ChallengerX Shares by Aquis Stock Exchange, the issue and admission
of the new Ordinary Shares to trading, and completion of a
fundraise in a sufficient amount to satisfy the enlarged group’s
working capital requirement.
The
completion of Potential Acquisitions and relisting of ChallengerX
Shares on the Aquis Stock Exchange cannot be guaranteed.
More
details surrounding activities following the year end are at Note
14.
The
Directors
have
overall
responsibility
for determining
the Company’s purpose, values and
strategy
and
for ensuring
high standards of governance. The primary aim of the Directors is
to promote the long-term sustainable success of the Company,
generating value for stakeholders and contributing to the wider
society. In the future, the Board will continue to review and
challenge how the Company can improve its engagement with its
stakeholders and employees.
ON
BEHALF
OF
THE
BOARD:
Stuart
Adam
,
Director
Date:
24
January
2025
CHALLENGER
X
PLC
– REGISTERED
NUMBER
13440398
INDEPENDENT
AUDITOR’S
REPORT
TO
THE
MEMBERS
OF
CHALLENGERX
PLC (EXTRACT)
FOR
THE
PERIOD
ENDED
30
JUNE
2024
Qualified
Opinion
We have
audited the financial statements of ChallengerX PLC (the 'company')
for the period ended 30 June 2024
which comprise the Statement of Comprehensive Income, the Statement
of Financial Position, the Statement of Changes in Equity, the
Statement of Cash Flows and notes to the financial statements,
including significant accounting policies. The financial reporting
framework that has been applied in their preparation is applicable
law and United Kingdom Accounting Standards, including Financial
Reporting Standard 102 “The Financial Reporting Standard applicable
in the UK and Republic of Ireland” (United Kingdom Generally
Accepted Accounting Practice).
In
our
opinion,
except
for
the
effects of
the
matter
described
in
the
basis
for
qualified
opinion
section of our report, the financial statements:
•
give
a
true
and
fair
view of
the
state
of
the
company's affairs
as
at
30
June 2024
and
of
its loss
for the period then ended;
•
have
been
properly
prepared
in
accordance
with
and
United
Kingdom
Generally
Accepted
Accounting Practice; and
•
have
been
prepared
in
accordance
with
the
requirements
of
the
Companies
Act
2006.
Basis
for
qualified
opinion
Due to the
subsidiary Sports X SAS, a company incorporated in France, being in administration, we were
unable to obtain sufficient financial information and subsequent
audit evidence to satisfy ourselves concerning the financial
results of that subsidiary, as at 30 June
2024. Consequently, their results are not consolidated
within these financial statements despite the fact they were
required to be under Companies Act 2006 and the Financial Reporting
Standard 102.
In
addition, were these financial results included within the
financial statements, the Strategic report and Directors' report
would also need to be amended. The directors therefore present
single entity financial statements for Challenger X PLC.
We
conducted our audit in accordance with International Standards on
Auditing (UK) (ISAs (UK)) applicable law. Our responsibilities
under those standards are further described in the Auditor’s
responsibilities for the audit of the financial statements section
of our report. We are independent of the company in accordance with
the ethical requirements that are relevant to our audit of the
financial statements in the UK, including the FRC's Ethical
Standard as applied to listed entities, and we have fulfilled our
other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
opinion.
Material
uncertainty
relating
to
going
concern
The
company incurred a net loss of £778,000 during the period ended
30 June 2024 and, as of that date,
the company's accumulated profit and loss reserves were in deficit
by £2,406,600 and the cash balance was £2,000. As stated in note 2,
these events or conditions along with other matters as set forth in
note 2, indicate that a material uncertainty exists that may cast
significant doubt on the company's ability to continue as a going
concern. Our opinion is not modified in respect of this
matter.
In
auditing the financial statements, we have concluded that the
directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our
evaluation of the directors assessment of the entity’s ability to
continue to adopt the going concern basis of accounting
included:
•
Reviewing
the
cash
flow
forecasts
prepared
by
management
for
the
period
up
to
January 2026, providing challenge to key assumptions and
reviewing for reasonableness;
•
Reviewing
post-year
end
RNS
announcements
and
held
discussions
with
management
on
expenditure plans and
•
Reviewing
the documentation and cash flow forecasts for the potential
enlarged group including Potential Acquisitions disclosed in note
14; and
•
Assessing
the
adequacy
of
going
concern
disclosures
within
the
financial
statements.
Our
responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections of
this report.
Mohammed
Haque
(Senior
Statutory
Auditor) 2nd
Floor
for
and
on
behalf
of 154
Bishopsgate
MAH,
Chartered
Accountants London
Statutory
Auditor EC2M
4LN
24
January
2025
CHALLENGER
X PLC
– REGISTERED
NUMBER
13440398 STATEMENT OF COMPREHENSIVE INCOME
FOR
THE
PERIOD
ENDED
30
JUNE
2024
|
|
Note
|
2024
|
2023
|
|
|
|
£’000
|
£’000
|
|
Expenses
|
|
|
|
|
Administrative
expenses
|
|
(778)
|
(392)
|
|
Operating
loss
|
4
|
(778)
|
(392)
|
|
(Loss)
before
tax
|
|
(778)
|
(392)
|
|
Taxation
|
6
|
-
|
-
|
|
(Loss)
for
the
financial
year
|
|
(778)
|
(392)
|
|
Total
comprehensive
loss
|
|
(778)
|
(392)
|
|
(Loss)
per
share
(pence)
from
|
|
|
|
|
continuing
operations
attributable
to
owners
of
the
company-
basic
&
diluted
|
7
|
(0.19)
|
(0.13)
|
|
|
|
|
|
The
notes
on
pages
27
to
38
form
part
of
these
financial
statements.
CHALLENGER
X PLC
– REGISTERED
NUMBER
13440398 STATEMENT OF FINANCIAL POSITION
AS
AT
30 JUNE
2024
|
ASSETS
|
|
Notes
|
2024
£’000
|
2023
£’000
|
|
Current
assets
Trade
and
other
receivables
|
|
8
|
8
|
15
|
|
Cash
and
cash
equivalents
|
|
|
2
|
48
|
|
Total
current
assets
|
|
|
10
|
63
|
|
TOTAL
ASSETS
|
|
|
10
|
63
|
|
LIABILITES
AND
EQUITY
Current
liabilities
|
|
|
|
|
|
Trade
and
other
payables
|
|
9
|
197
|
96
|
|
Total
current
liabilities
|
|
|
197
|
96
|
|
Capital
and
reserves
|
|
|
|
|
|
Share
capital
|
|
10
|
433
|
343
|
|
Share
premium
|
|
|
1,786
|
1,252
|
|
Retained
earnings
|
|
|
(2,406)
|
(1,628)
|
|
Total
equity
|
|
|
(187)
|
(33)
|
|
TOTAL
LIABILITIES
AND
EQUITY
|
|
|
10
|
63
|
The
financial
statements
were
approved
by
the
Board
of
Directors
on
24 January 2025 and signed
on its behalf by:
...............................................................................
Stuart Adam
Director
The
notes
on
pages
27
to
38
form
part
of
these
financial
statements.
CHALLENGER
X PLC
– REGISTERED
NUMBER
13440398 STATEMENT OF CHANGES IN EQUITY
FOR
THE
PERIOD
ENDED
30
JUNE
2024
|
|
Share
capital
|
Share
premium
|
Retained
earnings
|
Total
|
|
|
£’000
|
£’000
|
£’000
|
£’000
|
|
Balance
as at 1 July 2023
|
343
|
1,252
|
(1,628)
|
(33)
|
|
(Loss) for
the year
|
-
|
-
|
(778)
|
(778)
|
|
Total
comprehensive loss
|
-
|
-
|
(778)
|
(778)
|
|
Issue of
shares (net of costs)
|
90
|
534
|
-
|
624
|
|
Total
transaction with owners
|
90
|
534
|
-
|
624
|
|
As
at 30 June 2024
|
433
|
1,786
|
(2,406)
|
(187)
|
|
|
Share
capital
|
Share
premium
|
Retained
earnings
|
Total
|
|
|
£’000
|
£’000
|
£’000
|
£’000
|
|
Balance
as at 1 July 2022
|
288
|
1,230
|
(1,236)
|
282
|
|
(Loss)
for
the
year
|
-
|
-
|
(392)
|
(392)
|
|
Total
comprehensive
loss
|
-
|
-
|
(392)
|
(392)
|
|
Issue
of
shares
(net
of
costs)
|
55
|
22
|
-
|
77
|
|
Total
transaction
with
owners
|
55
|
22
|
-
|
77
|
|
As
at
30
June
2023
|
343
|
1,252
|
(1,628)
|
(33)
|
The
notes
on
pages
27
to
38
form
part
of
these
financial
statements.
CHALLENGER
X PLC
– REGISTERED
NUMBER
13440398 STATEMENT OF CASH FLOWS
FOR
THE
PERIOD
ENDED
30
JUNE
2024
|
Cash
from
operating
activities
|
2024
£’000
|
2023
£’000
|
|
(Loss)
before
tax
|
(778)
|
(392)
|
|
Adjustments
for:
Decrease/(Increase)
in
trade
and
other
receivables
|
7
|
(8)
|
|
Increase/(Decrease)
in
trade
and
other
payables
|
101
|
(14)
|
|
Impairment of assets
|
440
|
-
|
|
Net
cash
used
in
operating
activities
|
(230)
|
(414)
|
|
Cash
flows from
financing
activities
Issue
of
shares
|
74
|
82
|
|
Adjustment
to
share
issue
cost
|
-
|
(5)
|
|
Loans
received
|
110
|
-
|
|
Net
cash
provided
by
financing
activities
|
184
|
77
|
|
Net
cash
flows
for
the
year
|
(46)
|
(337)
|
|
Cash
and
cash
equivalents
at
beginning
of
year
|
48
|
385
|
|
Cash
and
cash
equivalents
at
end
of
year
|
2
|
48
|
|
Net
change
in
cash
and
cash
equivalents
|
(46)
|
(337)
|
|
Cash
and
cash
equivalents
comprise:
Cash
at
bank
and
in
hand
|
2
|
48
|
The
notes
on
pages
27
to
38
form
part
of
these
financial
statements.
CHALLENGER
X PLC – REGISTERED NUMBER 13440398 NOTES TO THE FINANCIAL
STATEMENTS
FOR
THE PERIOD ENDED 30 JUNE
2024
-
General information
ChallengerX
PLC is a public limited company limited by shares and was
incorporated in England on
7 June 2021 with company number
13440398. Its registered office is 16 Great Queen Street,
London, WC2B 5DG.
The
Company's shares are listed on the Aquis Stock Exchange Growth
Market under ticker CXS and ISIN number GB00BMD0WG01. Trading in
the Company's ordinary shares on AQSE were suspended on
6 June 2024.
The
Company is aware of its continuing obligations under the AQSE
rules.
The
Company's trading strategy is to focus on employing both
traditional and non-traditional marketing strategies to rapidly
“professionalise” amateur and semi-professional sports clubs around
the world.
The
Company has been actively pursuing potential strategic
transactions.
Accounting
policies
Basis
of
preparation
The
financial statements of ChallengerX 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.
These
financial statements are prepared on a going concern basis, under
the historical cost convention, as modified by the recognition of
listed investments at fair value.
The
financial statements are presented in Pounds Sterling, which is the
Company's presentation and functional currency.
The
preparation of the financial statements requires the use of certain
critical accounting estimates. It also requires management to
exercise its judgment in the process of applying the Company's
accounting policies. The areas involving a higher degree of
judgment and complexity, or areas where assumptions and estimates
are significant to the financial statements are disclosed in Note 3
to the financial statements.
The
financial statements have been prepared on the historical cost
basis and are presented in £'000 unless otherwise
stated.
Going
concern
As at
30 June 2024, the Company had cash of
£2,000 (2023: £48,000). The Company has limited operating cash flow
and is dependent on the performance of development of trading
activities or raising further capital and its cash balances for its
working capital requirements.
As at
21 January 2025, the Company had
approximately £96,000 of cash at bank.
In making
their assessment of going concern, the Directors, having made due
and careful enquiry, are of the opinion that the Company will have
access to adequate working capital to meet its obligations for the
period of at least 12 months from the date of approval of the
financial statements. The Directors, have discussed the Company's
position with its investors and professional advisors. The
Directors believe strongly in the Company's potential. However, the
success of securing funding has been identified as a material
uncertainty which may cast significant doubt over the going concern
assessment. Whilst acknowledging this uncertainty, based upon the
expectation of completing a successful fundraising and the
Potential Acquisitions disclosed in note 14 in the near future, and
the continued support of its investors, the Directors consider it
appropriate to continue to prepare the financial statements on a
going concern basis.
Taxation
Taxation
expense for the period comprises current and deferred tax
recognised in the reporting period.
The
Company's liability for current tax is calculated using tax rates
that have been enacted or substantively enacted by the end of the
reporting period and is the amount of income tax payable in respect
of the taxable profit for the year or prior year.
Deferred
tax is recognised on all timing difference between the carrying
amounts of assets and liabilities in the financial statements and
the corresponding tax bases used in the computation of taxable
profit. The carrying amount of deferred tax assets is reviewed at
the end of each reporting period and reduced to the extent that it
is no longer probable that sufficient taxable profits will be
available to allow all or part of the asset to be
recovered.
Deferred
tax
assets
and
liabilities
Liabilities
are measured at the tax rates that are expected to apply in the
period in which the liability is settled or the asset realised,
based on tax rates (and tax laws) that have been enacted or
substantively enacted by the end of the reporting
period.
Intangible assets
Externally
acquired intangible assets are initially recognised at cost and
subsequently amortised on a
straight-line
basis over their useful economic lives. They are reviewed for
impairment annually.
Provisions
Where a
measurable obligation exists at the accounting date, but which is
dependent upon a set of conditions realistically being able to be
satisfied, a provision to accommodate that obligation is charged to
the income statement and maintained in the balance sheet until such
time as the obligation is either crystallised or
reversed.
Financial
instruments
The
Company has elected to apply the provisions of Section 11 'Basic
Financial Instruments' and Section 12 'Other Financial Instruments
Issues' of FRS 102 to all of its financial instrument.
Financial
assets
Basic
financial assets, including trade and other receivables and cash
and cash equivalents balances, are initially recognised at
transaction price, unless the arrangement constitutes a financing
transaction, where the transaction is measured at the present value
of the future receipts discounted at a market rate of
interest.
Such
assets are subsequently carried at amortised cost using the
effective interest method.
At the end
of each reporting period financial assets measured at amortised
cost are assessed for objective evidence of impairment. If an asset
is impaired the impairment loss is the difference between the
carrying amount and the present value of the estimated cash flows
discounted at the asset's original effective interest rate. The
impairment loss is recognised in profit or loss.
If there
is decrease in the impairment loss arising from an event occurring
after the impairment was recognised the impairment is reversed. The
reversal is such that the current carrying amount does not exceed
what the carrying amount would have been had the impairment not
previously been recognised.
Any
impairment
reversal
is
recognised
in
profit
or
loss.
Financial
assets are derecognised when (a) the contractual rights to the cash
flows from the asset expire or are settled, or (b) substantially
all the risks and rewards of the ownership of the asset are
transferred to another party or (c) control of the asset has been
transferred to another party who has the practical ability to
unilaterally sell the asset to an unrelated third party without
imposing additional restrictions.
Financial
liabilities
Basic
financial
liabilities
include
trade
and
other
payables.
Trade
payables are obligations to pay for goods or services that have
been acquired in the ordinary course of business from suppliers.
Payables are classified as current liabilities if payment is due
within one year. If not, they are presented as non-current
liabilities. Trade payables are recognised initially at transaction
price and subsequently measured at amortised cost using the
effective interest method.
Share
Capital
Share
Capital
consists
of
one
class
of
ordinary
shares.
Incremental
costs directly attributable to the issue of new ordinary shares or
options are shown in equity as a deduction, net of tax, from the
proceeds.
Ordinary
shares
bestow
full
rights
on
shareholders.
Warrants
Warrants
are an option to acquire shares between two future dates at a fixed
price. They are occasionally issued to third parties that invest in
the Company's equity and are granted at the time of that equity
investment.
If the
warrant options are exercised, the Company issues new shares. The
proceeds received net of any directly attributable transaction
costs are credited to share capital (nominal value) and share
premium.
Exceptional
Items
The
Company classifies certain one-off charges or credits that have a
material impact on the Company's financial results as 'exceptional
items'. These are disclosed separately to provide further
understanding of the financial performance of the
Company.
Cash
and
cash
equivalents
Cash
and
cash
equivalents
comprise
cash
at
hand
and
current
balances
at
banks.
Foreign
currencies
Functional
and
presentation
currency
The
financial statements are presented in Pounds Sterling, which is the
Company's presentation and functional currency.
Transactions
and
balances
Transactions
in foreign currencies are converted into the functional currency on
initial recognition, using the exchange rates approximating to
those ruling at the transaction dates. At each period end foreign
currency monetary items are translated using the rates ruling as of
that date. Non-monetary assets and liabilities are not
retranslated. All exchange differences are recognised in profit or
loss.
3.
Critical
accounting
estimates and
judgements
Management
makes certain estimates and assumptions regarding the future.
Estimates and judgements are continually evaluated based on
historical experience and other factors, including the expectations
of future events that are believed to be reasonable under the
circumstances. In the future, actual experience may differ from
these estimates and assumptions. The estimates and assumptions that
have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next
financial year are discussed below.
Critical
judgements
in
applying
the
entity's
accounting
policies
(a)
Carrying
value
of
investments
in
subsidiary
The
Company is required to make judgments over the carrying value of
investments in unquoted companies where fair values cannot be
readily established and evaluate the size of any impairment
required.
The
carrying value of such investments cannot always be substantiated
by comparison with independent markets and, in many cases, may not
be capable of being realised immediately. Management's significant
judgement in this regard is that the value of their investment
represents their cost less previous impairment.
The
unlisted
investments
have
been
fully
impaired
in
a
previous
accounting
period.
(b)
Carrying
value
of
intangible assets
The
Company is required to make judgments over the carrying value of
intangible assets and evaluate the size of any impairment
required.
During the
year the Company acquired and then fully impaired intangible assets
of £440,000 relating to the Flash Corp licence disclosed in note
10.
4.
Operating loss
The
operating loss is stated after charging:
|
|
2024
|
2023
|
|
|
£’000
|
£’000
|
|
Auditors’
remuneration:
|
|
|
|
Audit
fees
|
12
|
12
|
|
|
|
|
|
Other
expenses:
|
|
|
|
Impairment
losses (note 10)
|
440
|
-
|
5.
Staff costs
|
|
2024
|
2023
|
|
The
average number of persons (including directors) employed by the
Company during the year
|
4
|
3
|
|
|
2024
£’000
|
2023
£’000
|
|
Wages
and salaries (including directors) employed
Social
security costs
|
120
-
|
133
-
|
|
Directors
remuneration
Salaries
and fees
|
120
|
133
|
6.
Taxation
|
|
2024
£’000
|
2023
£’000
|
|
Reconciliation
of tax charges
|
|
|
|
(Loss) on
ordinary activities before taxation
|
(778)
|
(392)
|
|
Current
tax on loss for the year at standard rate of UK Corporation tax of
25% (2023: 19%)
|
(195)
|
(74)
|
|
Expenses
not deductible for tax purposes
|
-
|
-
|
|
Losses
carried forward
|
195
|
74
|
|
|
|
|
|
Tax in the
income statement
|
-
|
-
|
The
Company now has tax losses of approximately £2.406 million (2023:
£1.628 million) to carry
forward
against
future
profits. The
Directors have
not
recognised
a
deferred tax
asset
of
£0.407 million (2023:
£0.309 million) on the losses to date due to the uncertainty of
recovery.
The
corporation tax rate in the UK increased to 25% on 1 April
2023.
7.
Earnings per share
|
|
2024
£’000
|
2023
£’000
|
|
Earnings
|
|
|
|
(Loss) for
the period
|
(778)
|
(392)
|
|
|
|
|
|
Number
of shares
|
|
|
|
Weighted
average number of shares for the purposes of basic and diluted
earnings per share
|
412,994,364
|
308,132,945
|
|
|
|
|
|
(Loss) per
share (pence)
|
(0.19)
|
(0.13)
|
8.
Trade and other receivables
|
|
2024
£’000
|
2023
£’000
|
|
|
|
|
|
Other
Debtors
|
8
|
15
|
|
Total
|
8
|
15
|
- Trade
and
other
payables
|
|
2024
£’000
|
2023
£’000
|
|
Trade
payables
|
177
|
79
|
|
Other
payables
|
8
|
2
|
|
Accruals
and
other
payables
|
12
|
15
|
|
Total
|
197
|
96
|
- Share
capital
|
|
2024
|
2023
|
|
Allotted,
issued
and
fully
paid:
|
£’000
|
£’000
|
|
Beginning
of
the
year
|
343
|
288
|
|
New
shares
issued
|
90
|
55
|
|
At
30
June
: 432,580,556 ordinary
shares
of
£0.001
(2023:
|
433
|
343
|
|
343,140,556
ordinary
shares
of
£0.001)
|
|
|
In
February 2023, the Company issued 55,555,556 ordinary shares of
£0.0010 at a cash price of £0.0045 per share on Subscription and
Admission to trading on the Access segment of the Aquis Exchange
Growth Market. Following non-payment of all the amounts due under
the Subscription, the Company forfeited the remaining 33,226,343
Shares, in accordance with the process set out in the Company’s
Articles of Association. The Company placed 33,226,343 shares in
the Treasury.
During the
year 31,680,002 of Treasury shares were allocated to satisfy some
of the Company’s liabilities.
The
balance of shares in Treasury at 30 June 2024 was
1,546,341.
On 17
August 2023 the Company issued 80,000,000 ordinary shares of £0.001
at a price of £0.0055 per share for a value of £440,000 having
entered into
an
exclusive licence agreement with Flash Corp Technologies Ltd
(“Flash Corp”) by which the Company acquired a renewable 13-month
license over the rights of FlashBet Wheel App’s design and
technology in UK and Europe. Despite significant efforts made
during the period of the licence agreement to enhance the FlashBet
Wheel App’s design and technology with a view to getting it to
market and
generating
revenues; the Board
were
increasingly of the view that it would be unlikely in the
foreseeable term that by continuing to follow its progression it
was unlikely to generate the revenues that had been projected.
Indeed, no revenue was generated within the 13 months. Accordingly
the Board were of the view that it was not in the interests of the
Company to renew or extend the licence agreement nor acquire the
exclusive rights to the intellectual property; and further agreed
that the carrying value of the initial cost of £440,000 be impaired
in full in the accounts to 30 June 2024.
On 24 June
2024 the Company allotted 9,440,000 ordinary shares of £0.001 at a
price of £0.0045 by way of settlement of liabilities owed to the
Company.
The
Company also granted a total of 55,555,556 warrants to subscribe
for new ordinary shares of GBP0.001 each (‘Warrants’). The Warrants
being exercisable at 0.45 pence per ordinary share, and for a
period of 5 years from the date of issue. These warrants have been
withdrawn.
Warrants
of 2,875,000 to acquire ordinary shares were issued immediately
following Admission on 23 December 2021 and remain outstanding. The
warrants are exercisable at £0.02 per share for a period of 5 years
from date of issue.
On 23
March 2022 warrants of 2,600,000 to acquire ordinary shares were
granted as a performance based commercial incentive program to the
Commissioner of the largest American soccer league in the USA /
Mexico.
The
warrants
were
issued
with
the
following
terms:
•
100,000
warrants
fully
vested
and
exercisable
for
a
period
of
5
years
at
£0.05
per
share
however subject to a two-year lock-in from date of
issue;
•
500,000
warrants
vesting
when
the
number
of
teams
referred
by
the
recipient
exceed
100, and
exercisable at £0.05 for a period of 5 years from the date of
issue;
•
1,000,000
warrants
vesting
when
the number
of
teams
referred
by
the
recipient
exceed
400, and exercisable at £0.07 for a period of 5 years from the date
of issue;
•
1,000,000
warrants
vesting
when
revenues
from
all
teams
referred
to
the
Company
by
the
recipient exceed
$50,000
in any
calendar
month,
and
exercisable
at
£0.10
for a
period of
5 years
from the date of issue.
-
Reserves
The
Company's
reserves
are
as
follows:
The
share
capital
comprises
the
issued
ordinary
shares
of
the
company
at
par.
The share
premium represents premiums received on the initial issuing of the
share capital. Any transaction costs associated with the issuing of
shares are deducted from share premium, net of any related income
tax benefits.
Retained
earnings include all current and prior period results as disclosed
in the statement of comprehensive income.
-
Financial Instruments
The
Company raises finance through equity issues and places surplus
cash on short term deposits. The policies for managing this risk
are kept under review by the directors.
The
carrying
values
of
the
Company's
financial
assets
and
liabilities
are
summarised
below:
|
|
2024
|
2023
|
|
£’000
|
£’000
|
|
Carrying
amount
of
financial
assets
Cash
and
bank
balance
|
2
|
48
|
|
Carrying
amount
of
financial
liabilities
Trade
payables
|
177
|
79
|
Credit
risk
Credit
risk is the risk of financial loss to the Company if a customer or
counterparty to a financial instrument fails to meet its
contractual obligations. The Company is subject to credit risk on
its investments and cash. In accordance with the Company's policy,
the Board of Directors monitors the Company's exposure to credit
risk on an ongoing basis.
Liquidity
risk
Liquidity
risk arises from the Company's management of working capital. It is
the risk that the Company will encounter difficulty in meeting its
financial obligations as they fall due.
The
Company's policy is to ensure that it will always have sufficient
cash to allow it to meet its liabilities when they become due. To
achieve this aim, it seeks to maintain cash balances to meet
expected requirements for a period of at least 30 days.
Currency
risk
The
Company holds Euro and US dollar denominated accounts but has no
material exposure to currency risk due to its limited cash
reserves. The Directors manage its exposure to currency risk within
its cash reserves.
13.
Related party transactions Ultimate
controlling party
The
Directors
do
not
consider
there
to
be
a
single
ultimate
controlling
party.
Key
management
personnel
compensation
Key
management are considered to be the directors of the Company.
Details of their remuneration and equity holdings are disclosed in
the Directors Report.
The
related
party
disclosures
in
respect
of
this
remuneration
are
disclosed
below:
|
|
2024
£’000
|
2023
£’000
|
|
Fees for
the consultancy services supplied by City & Westminster
Corporate Finance LLP, an LLP controlled by John May and Stuart
Adam.
|
60
|
52
|
|
|
|
|
|
Fees for
the consultancy services supplied by Happy Consulting LLC, an LLC
owned and controlled by Lucas Caneda.
|
48
|
44
|
|
|
|
|
|
Fees for
the consultancy services supplied by Crowdraise 360 Inc , a company
owned and controlled by Brian Connell ( a director who resigned on
3 May 2022 ).
|
-
|
3
|
At the
year end the above related parties were owed £93,600 (2023:
£17,000) in relation to unpaid director fees included within trade
creditors.
14.
Post
balance
sheet
events
On 8
January the Company announced
it had
raised a total of £120,000 through the issuance of a Convertible
Loan Note (“CLN” or “Loan”). The Company will pay interest on the
Loan at an annual rate of 5%, with the first payment due on 30 June
2025 and subsequent payments every six months thereafter. The Loan
will be automatically converted into 120,000,000 ordinary shares of
£0.001
each in
the Company upon the relisting of ChallengerX Shares on the Aquis
Stock Exchange. If the Automatic Conversion does not take place,
ChallengerX has to repay the Loan having been given 30 days' notice
by the Lender. Additionally, the Loan may be converted into
120,000,000 Ordinary Shares at any time following 31 January 2025
upon receiving a Voluntary Conversion Notice from the lender. In
the event that the Ordinary Shares’ suspension from trading is not
lifted by 20 March 2025, the lender will be entitled to purchase
further new Ordinary Shares at £0.001 up to a cap of taking the
lender's overall shareholding to 29.95%. The CLN is also subject to
customary events of default. The funds raised through the issuance
of the CLN will be used to cover costs relating to the due
diligence on potential acquisitions and to the lifting of the
suspension of the Ordinary Shares from trading on Aquis Stock
Exchange.
On 20
January the Company further announced it is in active negotiations
with the owners of Nyce International Limited and Virya VC Limited,
with the aim to acquire their entire issued share capital. In
addition, as part of this transaction, the Company intends to enter
into a perpetual, irrevocable licensing agreement in relation to an
instance of Reelsoft AB’s Vision RGS (Remote Gaming Server) and
Game Aggregation Platform (together, the "Potential
Acquisitions").
The
Company is at an advanced stage of its legal and financial due
diligence process and negotiation of the share purchase agreements
and licensing agreements. The consideration for the Potential
Acquisitions is expected to be satisfied fully in the issue of new
ordinary shares of £0.001 each. The Board is also negotiating
certain new board appointments and working alongside an Aquis
Corporate Adviser to conduct a review of the potential candidates’
experience and background as well as of the enlarged group’s
suitability, following completion of the Potential Acquisitions and
readmission to trading on the Aquis Stock Exchange.
It is not
expected that the Potential Acquisitions would constitute a Reverse
Takeover under Rule 3.6 of the Access Rulebook.
The
Potential Acquisitions are subject to a number of conditions,
including the completion of due diligence to the satisfaction of
all parties, the lifting of the suspension to trading of
ChallengerX Shares by Aquis Stock Exchange, the issue and admission
of the new Ordinary Shares to trading, and completion of a
fundraise in a sufficient amount to satisfy the enlarged group’s
working capital requirement.
The
completion of Potential Acquisitions and relisting of ChallengerX
Shares on the Aquis Stock Exchange cannot be guaranteed.
