TIDMMOS
RNS Number : 9743X
Mobile Streams plc
27 December 2023
There was a typographical error in the "Final Results"
announcement released on 27 December 2023 at 7am under RNS No 8474X
and accordingly the following amendment has been made:
The AGM date has been changed from 31 January 2023 to 31 January
2024.
All other details remain unchanged.
The full amended text is shown below.
27 December 2023
Mobile Streams plc
("MOS" or "the Company")
Audited Results for the year to 30 June 2023, and Notice of
AGM
The Company is pleased to announce its audited results for the
year to 30 June 2023.
The Company will publish the Accounts and the Notice of Annual
General Meeting ("AGM") on its website later today. These, and the
accompanying Form of Proxy in relation to the AGM and Accounts, are
being posted to Shareholders. The AGM will be held at noon on 31
January 2024 at Panmure Gordon, 40 Gracechurch Street, London, EC3V
0BT. Extracts of the audited results are set out below.
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No. 596/2014, as
it forms part of UK Domestic Law by virtue of the European Union
(Withdrawal) Act 2018. Upon the publication of this announcement,
this inside information is now considered to be in the public
domain.
For further information, please contact:
Mobile Streams plc
Nigel Burton, Adviser
+44 77 8523 4447
www.mobilestreams.com
Beaumont Cornish (Nominated Adviser)
James Biddle and Roland Cornish
+44 (0) 20 7628 3396
Panmure Gordon (UK) Limited (Broker)
Simon J French, James Sinclair-Ford, Ivo Macdonald
+44 (0) 20 7886 2500
AUDITED RESULTS FOR THE YEAR TO 30 JUNE 2023
Chairman's Statement
The Board of Mobile Streams plc presents its audited accounts
for the financial year ended 30 June 2023.
In the year to 30 June 2023 Mobile Streams continued to offer
games and other content direct to consumers across a wide range of
mobile devices in three emerging markets, whilst focusing resources
on the growth of Streams Data, the data insight and intelligence
platform launched in 2020 as well as building new business from the
sale of Non-Fungible Tokens ("NFTs"). The net revenues of Streams
Data grew to GBP1,525k in 2023 (2022: GBP799k).
Group revenue for the year ended 30 June 2023 was GBP1.8m, a 79%
increase on the prior year (2022: GBP1.0m). Whilst the legacy
revenues continued to decline to GBP105k (2022: GBP223k), revenues
from new sources increased to GBP1,719k (2022: GBP799k). The new
revenue sources from Streams Data comprised GBP1,495k from
International Gaming Systems ("IGS") and GBP30k from other revenue
sources (Streams Bespoke and SaaS, LiveScores and other). New
revenues from the sale of NFTs totalled GBP182k. The increase in
revenue is due to the marketing of new products and services, with
the increase in marketing spend reallocated throughout the year to
reflect the most promising products and services. The loss before
tax was GBP3.8m (2022 (restated): GBP2.5m loss).
The Directors do not propose payment of a dividend (2022:
GBPNil). At 30 June 2023, the Group had a net cash balance of
GBP0.9m, with a bank debt (Bounce Back Loan) of GBP41k (2022:
GBP1.7m cash, with bank debt of GBP47k).
The Group historically delivers world class gaming content to a
global audience, through its LiveScores and mobilegaming.com
platforms, in partnership with long-standing carrier relationships
in countries including India, Argentina and Mexico.
Our Streams data insight, intelligence and visualisation
services and marketing optimisation tools support the content
business, as well as serving enterprise level bespoke clients and
the Streams SaaS ("Software as a Service") self-service platform.
Our strategy is to deliver next-generation content including
sports, gaming and related Non-Fungible Tokens ("NFTs") to a global
audience.
A significant part of the growth in revenues during the year
came from the major strategic partnership contract with
International Gaming Systems ("IGS") announced in January 2022.
This contract was subsequently extended to 30 June 2023 and has now
been completed.
During the year the Group announced various multi-year contracts
to be the exclusive global producer and provider of NFTs for a
number of prominent football teams and sports individuals,
delivered both through their own websites and our
https://heroesnftclub.com/ site. The Board believes that the
LiveScores services, Streams Data offering and the Group's sports
NFT business create significant opportunities for the Company to
deliver growth in shareholder value via newly developed products
and services. The Board continues to examine additional sources to
broaden the appeal of its content business.
Since the completion of the IGS contract on 30th June 2023, the
business has continued its journey of transition from the sale of
legacy products to new product offerings including the sale of
NFTs. On 12th December 2023 the Group announced the completion of a
further funding round raising GBP675,000 via the issue of shares
and the entry into a new business segment in Mexico, being
publishing, online sports betting, online casino operations and
media ownership. The development of these new business segments
will take a little time and inevitably gives rise to some
uncertainty in relation to the timing of certain cash flows. As an
accounting formality the Board has taken the prudent decision to
impair the carrying values of all intangible assets at 30th June
2023 to GBPnil by means of a GBP708,000 impairment charge in the
Consolidated Statement of Comprehensive Income. This by no means
reflects the Board's considered view of the long-term valuation of
these assets but a combination of the constraints of the accounting
valuation methodology and a prudent assessment of the global NFT
and crypto market as of June 2023. The Board will now explore how
best to value the group's assets. We note that other NFT businesses
have significant platform valuations even at the pre-revenue stage
and want to ensure we value our assets appropriately in line with
these comparables, making sure their value is clear to investors.
The Board remains confident that the group can reach the position
of becoming cash generative within the next 12 months as the level
of trade in these new segments begins to build.
The Directors have prepared a cashflow projection which
indicates that the cash balances of GBP0.9m at 30 June 2023 and
anticipated cashflows including the GBP675,000 proceeds from the
recent funding round are expected to cover the Company's working
capital requirements for the foreseeable future.
Bob Moore
Chairman
22 December 2023
Operating review
Mobile Streams' performance during the financial year ended 30
June 2023 combined continued decrease in revenues from the legacy
content business with growth in revenues from the Streams Data
platform.
Group revenue for the year ended 30 June 2023 was GBP1.8m (2022:
GBP1.0m). Whilst the legacy revenues continued to decline to
GBP105k (2022: GBP223k), revenues from new sources increased to
GBP1,719k (2022: GBP799k). The new revenue sources from Streams
Data are comprised of GBP1,495k from International Gaming Systems
("IGS") which extended to 30(th) June 2023 and has now ceased, and
GBP30k from other revenue sources (Streams Bespoke and SaaS,
LiveScores and other). The new sales of NFTs amounted to GBP182k.
The profit attributable to the IGS contract in the period was
approximately GBP370k. The increase in revenue is due to the
marketing of new products and services, with the significant
increase in marketing spend reallocated throughout the year to
reflect the most promising products and services.
The gross profit of GBP12k (2022: GBP450k) decreased
substantially. The gross profit margin decreased from 44% to 1%,
reflecting the inclusion of significant upfront royalties on NFT
contract revenues. These royalties are for multi-year contracts and
so margins are expected to increase significantly in the coming
years.
Mobile Operator sales
Mobile Operator revenues from the legacy content business were
generated mainly in Argentina, with small contributions from Mexico
and India. The Argentine Peso devalued significantly during the
period, affecting the revenues when expressed in GBP. We continue
to work with our longest standing billing partner locally, and
throughout the year this remained the foundation of the legacy
content business.
Sales by Territory
Revenues in the UK generated by Streams Data grew to GBP1,525k
(2022: GBP799k), representing 84% of Group revenues. A further
GBP182k of revenues (representing 10% of Group revenues) arose from
the sale of NFTs to consumers across various geographies and these
were booked in the UK.
Financial review
Group revenue for the year ended 30 June 2023 was GBP1.8m, a 79%
increase on the previous year (2022: GBP1.0m).
Gross profit was GBP12k, a substantial decrease during the year
(2022: GBP450k). The gross profit margin decreased from 44% to 1%,
reflecting the inclusion of significant upfront royalties on NFT
contract revenues. These royalties are for multi-year contracts and
so margins are expected to increase significantly in the coming
years.
Marketing costs increased significantly to GBP877k, (2022:
GBP264k) to support the launch of new services and the IGS
contract. IT and other overheads decreased to GBP136k (2022:
GBP187k).
The amortisation charge was GBP296k (2022: GBP262k) comprising
Streams Data intangibles: GBP148k and Krunch intangibles: GBP148k
with these assets being amortised across an expected useful life of
5 years. At 30(th) June 2023 the Directors reviewed the carrying
value of all intangible assets and goodwill in the light of global
NFT trading levels and elected to impair all assets to GBPnil
value, resulting in an impairment charge of GBP708k representing
GBP348k impairment of intangible assets and a GBP360k impairment of
Goodwill. This by no means reflects the Board's considered view of
the long-term valuation of these assets but a combination of the
constraints of the accounting valuation methodology and a prudent
assessment of the global NFT and crypto market as of June 2023. The
Board will now explore how best to value the group's assets. We
note that other NFT businesses have significant platform valuations
even at the pre-revenue stage and want to ensure we value our
assets appropriately in line with these comparables, making sure
their value is clear to investors.
The Group recorded a loss after ta x of GBP3.8m for the year
ended 30 June 2023 (2022 loss (restated): GBP2.5m). Basic earnings
per share decreased to a loss of 0.093 pence per share (2022
(restated): loss of 0.092 pence per share).
The Group had cash of GBP0.9m at 30 June 2023, with a bank debt
of GBP41k (2022: GBP1.7m cash, with bank debt of GBP47k).
Prior Year Adjustment
The year-ending 30(th) June 2022 Statement of Comprehensive
Income, Statement of Financial Position, Statement of Changes in
Equity and Cashflow Statement have been restated in respect of
broker options which were issued as part of the fundraising during
March 2022. The linked expense in respect of this was estimated at
GBP255,000 however a post balance sheet review has identified that
the linked expense should have been zero as these instruments were
ultimately issued to investors.
Key performance indicators ("KPI's")
The KPIs used by the Group are Gross profit as a percentage of
revenue, Trading EBITDA**, and variances in revenue and profit.
These KPIs are reviewed on a regular basis, at both the business
unit and country level, and managed largely by reference to budgets
and reforecasts.
Earnings before tax, interest, amortisation, depreciation, share
compensation expense and impairment of assets (Trading EBITDA) is
calculated by adding back all tax, interest, amortisation,
depreciation, share compensation expense and impairment of assets
entries in the consolidated income statement to profit after
tax.
Gross profit as a percentage of revenue is a measure of our
profitability. Gross profit was just GBP12k for the year ended on
30 June 2023 (2022: GBP450k) . The Gross profit margin was 1% for
the year ended on 30 June 2022 (2022: 44%), r eflecting the
inclusion of significant upfront royalties on NFT contract
revenues. These royalties are for multi-year contracts and so
margins are expected to increase significantly in the coming
years.
Trading EBITDA** was a loss of GBP2.8m for the year ended on 30
June 2023 (2022: loss of GBP1.4m).
**Trading EBITDA is a non-IFRS measure and is calculated as
profit before tax, interest, amortisation, depreciation, share
compensation expense and impairment of assets.
Strategy
The Group strategy is to create a world class sports media
group. Historically the Group has delivered world class gaming
content to a global audience. This is delivered through its
mobilegaming.com platform, in partnership with our long-standing
carrier relationships in countries including India, Argentina and
Mexico. The Group expanded on this to create its HeroesNFTclub
brand delivering licensed digital sporting merchandise globally. As
announced on 12th December 2023 the Group has now rolled out the
next stage in its strategy by investing in a Mexican company
Capital Media Sports to create with its partners one of the leading
sports media groups in Mexico. In addition, with its partners the
Group will launch online sports betting and online casino
operations as well as sports podcast services utilising the media
brands within Capital Media Sports. The group today has now evolved
into a multi play sports media business currently focused on the
Mexican market.
Our Streams data insight, intelligence and visualisation
services and marketing optimisation tools support the content
business, as well as serving enterprise level bespoke clients and
the Streams SaaS ("Software as a Service") self-service platform.
Our strategy is to deliver world class content including gaming and
related NFTs to a global audience.
Share Issue
In July 2022 the Group issued 5,434,581 shares at 0.37 pence per
share and 172,413,792 shares at 0.29 pence per share.
In October 2022 the Group issued 666,666,666 shares at 0.18
pence per share via a share placing, and 111,111,111 shares at 0.18
pence per share via a Broker offer.
In October 2022 the Group issued 25,930,446 shares at 0.18 pence
per share.
In February 2023 the Group issued 30,483,696 shares at 0.2711
pence per share and 72,025,285 shares at 0.1899 pence per
share.
Principal risks and uncertainties
The Directors have set out below the principal risks facing the
business.
Contracts with Mobile Network Operators (MNOs)
While Mobile Streams maintains relationships with numerous MNOs
in the various territories, a small number of operators account for
a high portion of the Group's business. The Group is seeking to
mitigate this risk by broadening its overall offering, by entering
a new business segment in Mexico.
Contracts with rights holders
The majority of content provided by Mobile Streams is licensed
from rights holders. While Mobile Streams is not dependent on any
single rights holder for its entertainment content, termination,
non-renewal or significant renegotiation of a contract could result
in lower revenue. The Group seeks to enter into new content
licensing arrangements to mitigate these risks.
Competition
Competition from alternative providers could adversely affect
operating results through either price pressures, or lost custom.
Products and pricing of competitors are continuously monitored to
ensure the Group is able to react quickly to changes in the
market.
General macro-economic environment
Economic conditions resulting from significant monetary and
fiscal interventions by Governments and Central Bank policies in
many countries, designed to stabilise the economy and combat rising
inflation have resulted in lower growth and difficult conditions in
both stock and bond markets. To date, these policies and
interventions have not directly affected the company or its
markets, but a sustained period of recession or low growth may
create risk for the Group's business and strategy.
Fluctuations in currency exchange rates
Approximately 6% of the Group's revenue relates to operations
outside the UK. The Group is therefore partially exposed to foreign
currency fluctuations and the financial condition of the Group may
be adversely impacted by foreign currency fluctuations, although
costs are largely incurred in the same currencies as revenues which
helps mitigate the net impact of these risks. Argentina had an
inflation rate of 115% for the period July 2022 to June 2023 (and
60% in the previous year) and t he Argentinian economy is
designated as hyper-inflationary. See note 18 "Foreign currency
risk".
The Group has operations in Latin America and India. As a
result, it faces both translation and transaction currency Since
the year end, the Group has been engaged in corporate development
discussions with key companies to create one of the leading sports
groups in Mexico. The Company will partner with a major player in
this industry to enter the publishing and media market through the
co-ownership of a major Mexican heritage sports publication.
Together with our partners we will also set-up new Mexican
companies to launch online sports betting and online casino
operations as well as sports podcast services utilising the media
brands within Capital Media Sports. The Group will provide services
to the new venture in respect of marketing and development, and the
Directors expect to grow their current NFT business by taking
advantage of synergies with the new businesses. Further details are
included within the Events after the Balance Sheet Note 24.
Currency exposure is not currently hedged, though the Board
continuously reviews its foreign currency risk exposure and
potential means of combating this risk.
Dependencies on key Executives and personnel
The success of the business is substantially dependent on the
Directors and senior management team. The risks have been mitigated
by addressing the remuneration and incentives for the management
team during the year.
Technology risk
A significant portion of the future revenues are dependent on
the Group's technology platforms. Instability or interruption of
availability for an extended period could have an adverse impact on
the Group's financial position.
Mobile Streams makes use of market leading cloud based
infrastructure, and where necessary has invested in resilient
hardware architecture, and continues to maintain software control
processes to minimise this risk. Further relating to technology is
the fact that customers are spending less on streaming content due
to cyber-security issues experienced in the last years.
Management controls and reporting procedures and execution
The ability of the Group to implement its strategy in a
competitive market requires effective planning and management
control systems. The Group's future growth will depend upon its
ability to expand whilst improving exposure to operational,
financial and management risk.
Going concern risk
In common with the Going Concern disclosures in the Group
Financial Statements, the Company Financial Statements have been
prepared on a going concern basis, which assumes that the Group and
the Company will continue in operational existence for the
foreseeable future, being 12 months from the date of sign-off of
these accounts.
The Group and Company use annual budgeting, forecasting and
regular performance reviews to assess the longer-term profitability
of the Group and make strategic and commercial changes as required
to ensure that cash resources are maintained.
Although there was a significant loss for the year ending 30
June 2023, the Directors kept costs carefully controlled whilst
continuing to grow the Streams data insight and intelligence
platform. The Streams business provides bespoke services to the B2B
(business to business) market and targets customers in the US,
LatAm and Europe. The Board believes that the LiveScores services,
Streams Data offering, the sports NFT business and the forthcoming
Mexican sports betting business create significant opportunities
for the Company to deliver growth in shareholder value via newly
developed products and services. The Board continues to examine
additional sources to broaden the appeal of its content business.
The main focus for the current year will be growing and developing
the product and sales pipelines for these businesses. The Group's
forecasts assume that the Group's growing sports NFT business and
the Mexican sports betting business, will represent a growing
proportion of revenues.
After consideration of the above, and with inclusion of the
uncertainties as explained in greater detail in the Directors'
Report and Note 1 of these accounts, the Directors consider that
the continued adoption of the going concern basis is
appropriate.
Financial risk management objectives and policies
The Group uses various financial instruments. These include cash
and various items, such as trade receivables and trade payables
that arise directly from its operations. The numerical disclosures
relating to these policies are set out in the notes to the
Financial Statements.
The existence of these financial instruments exposes the Group
to a number of financial risks, which are described in more detail
below. The Group does not currently use derivative products to
manage foreign currency or interest rate risks.
The main risks arising from the Group's financial instruments
are market risk, currency risk, liquidity risk and credit risk. The
Directors review, and agree policies for managing each of these
risks and they are summarised below. These policies have remained
unchanged from previous periods.
Market risk
Market risk encompasses three types of risk, being currency
risk, fair value interest rate risk and price risk. In this review
interest rate and price risk have been ignored as they are not
considered material risks to the business.
Liquidity risk
The Group seeks to manage financial risk by ensuring sufficient
liquidity is available to meet foreseeable needs and to invest cash
assets safely and profitably.
Other than the GBP41k balance of the Bounce Back Loan taken out
by KrunchData to use for working capital needs, the Group currently
has no borrowing arrangements in place. The Group prepares cash
flow forecasts which are reviewed at Board meetings to monitor
liquidity.
Credit risk
The Group's principal financial assets are bank deposits, cash
and trade receivables. The credit risk associated with the bank
deposits and cash is limited as the counterparties have high credit
ratings assigned by international credit-rating agencies. The
principal credit risk arises therefore from the Group's trade
receivables. Most of the Group's trade receivables are large mobile
network operators or media groups. Whilst historically credit risk
has been low management continuously monitors its financial assets
and performs credit checks on prospective partners.
Future developments
Since the year end, the Group has been engaged in corporate
development discussions with key companies to create one of the
leading sports groups in Mexico. The Company will partner with a
major player in this industry to enter the publishing and media
market through the co-ownership of a major Mexican heritage sports
publication. Together with our partners we will also set-up new
Mexican companies to launch online sports betting and online casino
operations as well as sports podcast services utilising the media
brands within Capital Media Sports. The Group will provide services
to the new venture in respect of marketing and development, and the
Directors expect to grow their current NFT business by taking
advantage of synergies with the new businesses. Further details are
included within the Events after the Balance Sheet Note 24.
Section 172 Companies Act disclosure
When making decisions, the Directors of the Company must act in
a way they consider, in good faith, is most likely to promote the
success of the Company for the benefit of its members as a whole,
while also considering the broad range of stakeholders who interact
with and are impacted by the business. Throughout the year, while
discharging their duties, section 172(1) requires a Director to
have regard, amongst other matters, to the:
-- likely consequences of any decisions in the long term
-- interests of the company's employees
-- need to foster the company's business relationships with suppliers, customers and others
-- impact of the company's operations on the community and environment
-- desirability of the company maintaining a reputation for high
standards of business conduct, and
-- need to act fairly as between members of the company.
In discharging their section 172(1) duties, the Directors have
had regard to the factors set out above, as well as other factors
relevant to the decisions being made. The Board acknowledges that
not all decisions made will necessarily result in a positive
outcome for all stakeholders, nevertheless the Board aims to ensure
that the decisions made are consistent and intended to promote the
Company's long-term success.
Examples of how the Directors have engaged with the Company's
stakeholders with regard to section 172(1) are detailed below:
-- Regular operating and financial updates through the Regulatory News Service ("RNS")
-- Holding an Annual General Meeting ("AGM") where shareholders
can cast their vote on resolutions
-- Investor presentation for existing and potential
shareholders, and corresponding Q&A session
-- Regular contact from the board of directors with existing shareholders
These actions were designed to ensure the appropriate standards
of governance and to protect and enhance value for
shareholders.
Shareholders
The Board aims to build long term shareholder value by pursuing
the stated strategy. RNS updates are provided as required, and in
addition Directors provide regular interviews and updates, and
respond to all queries received from investors, all within the
necessary regulatory and commercial constraints.
Employees
The Board strives to maintain and develop a culture where all
employees feel valued and included. The Company supports the
professional and personal development of employees, which are
viewed as fundamental to the continued success of the company.
Business conduct, ethics and anti-corruption
It is the Group's policy to conduct its business in an honest
and transparent way without the use of corrupt practices or acts of
bribery to obtain an unfair advantage. The group has a zero
tolerance approach to bribery and corruption. Any breach of these
rules results in disciplinary actions which may include
dismissal.
Suppliers, customers and others
The Board recognises that it is crucial that the company
delivers a reliable service to its customers. Strong relationships
with suppliers are maintained, including by seeking to pay
suppliers within their agreed terms wherever possible.
The Board regards compliance with all relevant regulatory
frameworks with the upmost importance. As a data and communications
business, it is essential that the company fully complies with data
protection and other regulations across all territories in which it
operates. Audit and Compliance functions report to the Board on a
regular basis. Training and monitoring are continually developed
and open communication between the Board and stakeholders is
encouraged.
Community and environment
Mobile Streams is aware of the different environments in which
it operates.
The Strategic Report was approved by the Board and signed on its
behalf by:
Bob Moore
Chairman
22 December 2023
DIRECTORS' REPORT
Items dealt with in the Strategic Report
-- Business review
-- Principal risks and uncertainties
-- Future developments
The principal activities of the Group are the sale of content
for distribution on mobile devices and provision of data insight
and intelligence platforms and services. The Company is registered
in England and Wales under company number 03696108.
Results and dividends
The trading results and the Group's financial position for the
year ended 30 June 2023 are shown in the attached Financial
Statements, and are discussed further in the Strategic Report.
The Directors have not proposed a dividend for this year (2022:
GBPNil).
Shareholder interests
The table below shows all significant shareholders who have
disclosed holdings above 3.0% of the issued share capital, and the
current holdings of Directors and PDMR at the date of this
report.
Ordinary Percentage
shares of holding
0.01 pence each
Mark Barry 323,653,487 7.16%
John Barker 220,000,000 4.87%
David Maclean 176,000,000 3.89%
Nigel Burton (including family
holdings) 169,375,241 3.75%
Annabel Hembry 110,115,964 2.44%
Mark Epstein 109,185,995 2.41%
Tom Gutteridge 109,185,995 2.41%
Charles Goodfellow 45,853,143 1.01%
Directors and their interests
The Directors of the Company (the "Board" or the "Directors"),
who served during the year, together with their beneficial
interests in the ordinary shares of the Group, as at 30 June 2023,
are set out below. All Directors served on the Board throughout the
year.
Ordinary Ordinary
shares of shares of
0.01 pence each 0.01 pence each
30 June 2023 30 June 2022
DIRECTORs
Mark Epstein 109,185,995 103,036,017
Charles Goodfellow 45,853,143 40,301,360
Bob Moore (appointed 23 July 2021) - -
Sri Ramakrishna Uthayanan (appointed - -
23 July 2021)
PDMRs
Nigel Burton 169,375,241 161,413,736 169,375,241 161,413,736
Tom Gutteridge 109,185,995 103,036,017
Annabel Hembry 110,115,964 104,564,181
The remuneration of each of the Directors and Senior Management
for the period ended 30 June 2023 is set out below:
Year Year
to 30 to 30
June June 2022
2023
Salary Fees Benefits Post-employment Other Termination Total Total
benefits Long Term Benefits
benefits
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
M Epstein 82.5 - - - 3.5 - 86.0 70
T
Gutteridge
(#) 82.5 - - - 3.5 - 86.0 70
C
Goodfellow 30 - - - - - 30 30
N Burton
* 60 - - - 3.5 - 63.5 70
R Moore - 30 - - - - 30 15
R Uthayanan 30 48 - - - - 78 77
A Hembry 15 - - - - - 15 30
Total 300 78 - - 10.5 - 388.5 362
=============== ================ ========= ======================= ===================== ===================== =================== ===================
(#) Senior management (non-Board role)
Other Long Term benefits comprise the fair value of share
options granted during the year.
The three Directors appointed in November 2019, namely Nigel
Burton, Charles Goodfellow and Mark Epstein and two senior
employees Annabel Hembry and Tom Gutteridge, all agreed to annual
remuneration of GBP30,000 each, and also agreed to accept payment
for their services in Ordinary Shares, subject to deduction and
payment of all necessary taxes, until such time as the Directors
are satisfied that the Company is able to make these payments out
of operating cashflow. With effect from 1 July 2021, the above
named Directors and senior employees reverted to their original
contractual arrangements, which state that until such time as the
Board determines otherwise, fees will be paid quarterly or half
yearly in Ordinary Shares, priced at the Volume Weighted Average
Price ("VWAP") of the Ordinary Shares for the period to which the
payment relates, after deduction and payment of all necessary
taxes. As announced on 4 January 2022, based on the budget and cash
projections, the Board now considers that the Company is in a
position to pay salaries in cash, although one Director (Charles
Goodfellow) and two senior managers (Annabel Hembry and Nigel
Burton) have elected to continue to be paid in shares.
Going Concern
In common with the Going Concern disclosures in the Group
Financial Statements, the Company Financial Statements have been
prepared on a going concern basis, which assumes that the Group and
the Company will continue in operational existence for the
foreseeable future, being 12 months from the date of sign-off of
these accounts.
The Group and Company use annual budgeting, forecasting and
regular performance reviews to assess the longer-term profitability
of the Group and make strategic and commercial changes as required
to ensure that cash resources are maintained. Although the Group
remained loss-making in the year ending 30 June 2023, the Group
actively manages its use of cash, particularly marketing and other
expenditure.
Management have prepared projections for the Group's ongoing
business covering the 12 month period following the date of
approval of the financial statements. These forecasts make certain
assumptions in respect of predicted revenue to be received from
development of the new Mexican sports betting business and expected
synergies for the existing NFTs revenue stream. The directors note
that these revenue streams are uncontracted and have no historical
data at present upon which to base the revenue forecasts. As such,
the directors note that there is an element of uncertainty
surrounding these forecasts. However, the directors believe the
revenue forecast targets to be achievable and reasonable due to
management's expertise and experience in the industry.
In July 2022 the Company launched its business as the exclusive
global producer and provider of Non Fungible Tokens ("NFTs") for
several prominent football teams and sports professionals, which
developed initial revenues during the year-ending 30th June 2023.
The company seeks to expand this business and sees this as a major
driver of revenue across the coming 18 months with further
potential contracts under negotiation. Whilst uncertain, the growth
in revenue from the NFT business is predicted to more than offset
the decline in the revenues from the International Gaming Systems
partnership.
The market for NFTs has proven to be less successful than
initially anticipated. The Group is however, hoping that the
development of the new Mexican business segment, being publishing,
online sports betting, online casino operations and media
ownership, will lead to operational synergies which will enable the
group to reach a larger target market for NFT sales. At present the
success of the NFT revenue stream is thus also uncertain.
For the group to achieve the target forecast and maintain
sufficient cash balances to fund working capital, the group's
revenue forecasts will need to be achieved. Should the revenue
targets not be achieved, the group will require additional funding
to enable the group to meet its working capital requirements for
the going concern period.
The Directors have modelled significant downside scenarios,
including where predicted revenues are reduced by more than 40%.
Discretionary spending, including investment in growth, will be
carefully controlled and will be reduced to the extent that gross
and net revenues do not match budget expectations. The various
scenarios indicate how sensitive the forecasts are to adverse
changes in revenue forecasts.
These conditions and events indicate the existence of a material
uncertainty that may cast significant doubt upon the Group's
ability to continue as a going concern and the Group companies may
therefore be unable to realise their assets and discharge their
liabilities in the ordinary course of business. The auditors make
reference to going concern in their audit report by way of a
material uncertainty. These financial statements do not include the
adjustments that would result if the Group were unable to continue
as a going concern.
Directors' responsibilities statement
The Directors are responsible for preparing the Strategic
Report, the Director's Report and the Financial Statements in
accordance with applicable laws and regulations.
Company law requires the Directors to prepare Financial
Statements for each nancial year. Company law requires the
Directors to prepare Group and Company Financial Statements for
each financial year. The Directors are required by the AIM Rules of
the London Stock Exchange to prepare Group Financial Statements in
accordance with International Accounting Standards ("IAS") as
adopted by the United Kingdom ("UK") and have elected under company
law to prepare the Company Financial Statements in accordance with
UK GAAP.
Under company law the Directors must not approve the Financial
Statements unless they are satisfied that they give a true and fair
view of the state of affairs and profit or loss of the Company and
Group for that period. In preparing these Financial Statements, the
Directors are required to:
-- select suitable accounting policies and then apply them consistently,
-- make judgements and estimates that are reasonable and prudent,
-- state whether applicable UK-adopted Internal Accounting
Standards and UK GAAP regulations have been followed, subject to
any material departures disclosed and explained in the Financial
Statements, and
-- prepare the Financial Statements on the going concern basis
unless it is inappropriate to presume that the Group and the
Company will continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group's and the
Company's transactions and disclose with reasonable accuracy at any
time the financial position of the Group and the Company and enable
them to ensure that the Financial Statements, and the Directors'
Remuneration Report comply with the Companies Act 2006 and Article
4 of the IAS Regulation. They are also responsible for safeguarding
the assets of the Group and Company and hence for taking reasonable
steps for the prevention and detection of fraud and other
irregularities.
The Directors con rm that:
-- so far as each Director is aware, there is no relevant audit
information of which the Group's auditor is unaware, and
-- the Directors have taken all steps that they ought to have
taken as Directors to make themselves aware of any relevant audit
information and to establish that the auditor is aware of that
information.
This confirmation is given pursuant to section 418 of the
Companies Act 2006 and should be interpreted in accordance with and
subject to those provisions.
The Directors are responsible for the maintenance and integrity
of the corporate and nancial information included on the Group's
website. Legislation in the United Kingdom governing the
preparation and dissemination of Financial Statements may differ
from legislation in other jurisdictions.
Auditor
PKF Littlejohn UK LLP have indicated their willingness to
continue in office.
Corporate Governance Statement
The Board is committed to maintaining high standards of
corporate governance.
The Company's Corporate Governance Statement, which includes
full details of the recognised corporate governance code which the
Company complies with and an explanation of any departure from the
code, is maintained on its website, as required by AIM rules. The
information is reviewed at least once per annum and the website
includes the date on which the information was last reviewed. The
most recent review has been undertaken during the process of
preparing the Annual Report and Financial Statements.
As a company whose shares are traded on AIM, the Board seeks to
comply with the Quoted Companies Alliance's Corporate Governance
Code ("the QCA Code"). In addition, the Directors have adopted a
code of conduct for dealings in the shares of the Company by
Directors and employees and are committed to maintaining the
highest standards of corporate governance. Bob Moore, in his
capacity as Non-Executive Director, has assumed responsibility for
ensuring that the Company has appropriate corporate governance
standards in place and that these requirements are followed and
applied within the Company as a whole. The corporate governance
arrangements that the Board has adopted are designed to ensure that
the Company delivers long term value to its shareholders and that
shareholders have the opportunity to express their views and
expectations for the Company in a manner that encourages open
dialogue with the Board. The Board recognises that its decisions
regarding strategy and risk will impact the corporate culture of
the Company as a whole and that this will impact the performance of
the Company. The Board is very aware that the tone and culture set
by the Board will greatly impact all aspects of the Company as a
whole and the way that employees behave. A large part of the
Company's activities is centred upon what needs to be an open and
respectful dialogue with employees, clients and other stakeholders.
Therefore, the importance of sound ethical values and behaviours is
crucial to the ability of the Company to successfully achieve its
corporate objectives. The Board places great importance on this
aspect of corporate life and seeks to ensure that this flows
through all that the Company does.
No material governance related matters occurred during the
financial year ended 30 June 2023.
The Company's Corporate Governance report, which can also be
found on the website, follows.
Corporate Governance Report
The QCA Code sets out 10 principles that should be applied.
These are listed below together with a short explanation of how the
Company applies each of the principles:
Principle One
Business Model and Strategy
The Board has concluded that the highest medium and long term
value can be delivered to its shareholders by the adoption of a
single strategy for the Company. The Company will seek to grow its
business by entering into new business segments where the Board
believe will benefit the growth of the Company (as disclosed in the
Strategic Report), and will seek out further complementary
partnerships and acquisitions that create enhanced value.
Principle Two
Understanding Shareholder Needs and Expectations
The Board is committed to maintaining good communication and
having constructive dialogue with its shareholders. The Company has
close ongoing relationships with its private shareholders.
Institutional shareholders and analysts have the opportunity to
discuss issues and provide feedback at meetings with the Company.
In addition, all shareholders are encouraged to attend the
Company's Annual General Meeting. Investors also have access to
current information on the Company through its website,
www.mobilestreams.com, and via Mark Epstein, CEO who is available
to answer investor relations enquiries.
Principle Three
Considering wider stakeholder and social responsibilities
The Board recognises that the long-term success of the Company
is reliant upon the efforts of the employees of the Company and its
contractors, suppliers, regulators and other stakeholders. The
Board has put in place a range of processes and systems to ensure
that there is close oversight and contact with its key resources
and relationships. For example, all employees of the Company
participate in a structured Company-wide annual assessment process
which is designed to ensure that there is an open and confidential
dialogue with each person in the Company to help ensure successful
two way communication with agreement on goals, targets and
aspirations of the employee and the Company. These feedback
processes help to ensure that the Company can respond to new issues
and opportunities that arise to further the success of employees
and the Company. The Company has close ongoing relationships with a
broad range of its stakeholders and provides them with the
opportunity to raise issues and provide feedback to the
Company.
Principle Four
Risk Management
In addition to its other roles and responsibilities, the Audit
and Compliance Committee is responsible to the Board for ensuring
that procedures are in place and are being implemented effectively
to identify, evaluate and manage the significant risks faced by the
Company. The risk assessment matrix below sets out those risks, and
identifies their ownership and the controls that are in place. This
matrix is updated as changes arise in the nature of risks or the
controls that are implemented to mitigate them. The Audit and
Compliance Committee reviews the risk matrix and the effectiveness
of scenario testing on a regular basis. The following principal
risks and controls to mitigate them, have been identified:
Activity Risk Impact Control(s)
========================= =========================
Management Recruitment and Reduction in operating Stimulating and
retention of key capability safe working environment
staff Balancing salary
with longer term
incentive plans
=========== ========================= ========================= ==========================
Regulatory Breach of rules Censure or withdrawal Strong compliance
adherence of authorisation regime instilled
at all levels of
the Company
=========== ========================= ========================= ==========================
Strategic Damage to reputation Inability to secure Effective communications
new capital or with shareholders
clients coupled with consistent
Inadequate disaster messaging to our
recovery procedures customers
Loss of key operational Robust compliance
and financial Secure off-site
data storage of data
=========== ========================= ========================= ==========================
Financial Liquidity, market Inability to continue Robust capital
and credit risk as going concern management policies
Reduction in asset and procedures
Inappropriate values Appropriate authority
controls and accounting Incorrect reporting and investment
policies of assets levels as set by
Treasury and Investment
Policies
Audit and Compliance
Committee
=========== ========================= ========================= ==========================
The Directors have established procedures, as represented by
this statement, for the purpose of providing a system of internal
control. An internal audit function is not considered necessary or
practical due to the size of the Company and the close day to day
control exercised by the Executive Directors. However, the Board
will continue to monitor the need for an internal audit function.
The Board works closely with and has regular ongoing dialogue with
the Company financial controller and has established appropriate
reporting and control mechanisms to ensure the effectiveness of its
control systems.
Principle Five
A Well-Functioning Board of Directors
As at the date hereof the Board comprised, the CEO Mark Epstein,
Finance Director Sri Ramakrishna Uthayanan and two Non-Executive
Directors, Bob Moore (Chairman) and Charles Goodfellow.
Biographical details of the current Directors are set out within
Principle Six below. Executive and Non-Executive Directors are
subject to re-election at intervals of no more than three years.
The letters of appointment of all Directors are available for
inspection at the Company's registered office during normal
business hours.
The Board meets at least eight times per annum. It has
established an Audit and Compliance Committee a Remuneration
Committee, and a Nominations Committee, particulars of which appear
hereafter. The Non-Executive Directors are considered to be part
time but are expected to provide as much time to the Company as is
required. The Board notes that the QCA recommends a balance between
Executive and Non-Executive Directors and recommends that there be
two independent non-Executives. Bob Moore and Charles Goodfellow
are considered to be Independent Directors. Further commentary in
relation to the Board's assessment of independence is set out
within Principle Six below.
As the Company grows and develops the Board will periodically
review its corporate governance framework to ensure it remains
appropriate for the size, complexity and risk profile of the
Company.
Attendance at Board and Committee Meetings
The Company shall report annually on the number of Board and
committee meetings held during the year and the attendance record
of individual Directors. To date in the current financial year the
Directors have a 100% record of attendance at such meetings. In
order to be efficient, the Directors meet formally and informally
both in person and by telephone. During the year there were 8 Board
meetings, with all Directors being present at all meetings. The
volume and frequency of such meetings is expected to continue at a
similar rate. The Audit and Compliance Committee met three times
and the Remuneration Committee, met twice, in each case with all
members present.
Principle Six
Appropriate Skills and Experience of the Directors
The Board currently consists of five Directors led by Chairman
Bob Moore and, in addition, the Company has contracted the
outsourced services of Pennsec Limited to act as the Company
Secretary. The Company believes that the current balance of skills
in the Board as a whole, reflects a very broad range of commercial
and professional skills across geographies and industries and each
of the Directors has experience in public markets. As demonstrated
below in the descriptions of each Director, the Board has the
necessary commercial, financial and legal skills required for the
effective leadership of the Group.
The Board recognises that it currently has a limited diversity
and this will form a part of any future recruitment consideration
if the Board concludes that replacement or additional Directors are
required.
Each Director undertakes a mixture of formal and informal
continuing professional development as necessary to ensure that
their skills remain current and relevant to the needs of the
Group.
Mr Bob Dennis Moore, Non-Executive Chairman
Bob is a UK qualified lawyer (Barrister, called to the bar at
Middle Temple 1981) with over 35 years' business, commercial and
legal experience, including as Head of International Legal Affairs
at Enterprise Oil plc (a UK FTSE 100 company until its acquisition
by Shell in 2002) and as Co-founder and Commercial Director of
Granby Oil & Gas plc, which was listed on AIM from 2005 until
its sale in 2008. Bob has subsequently co-founded, and is Managing
Director of, several private engineering and energy businesses
based in the UK and Luxembourg.
Mr Charles Edouard Goodfellow, Non-Executive Director
Charles Goodfellow has over 30 years' experience in the London
capital markets, having worked initially in equity sales and then
in corporate finance for various London investment banks and
corporate finance specialists. He specialises in assisting smaller
companies across a range of sectors in raising growth capital, as
well as targeting industry partners capable of taking strategic
stakes and control.
Mr Mark Alexander Epstein, Chief Executive Officer
Mark is an experienced CEO, Director, entrepreneur, expert in
marketing, communications, technology and mobile. Mark is the
co-founder of Krunch.ai a next generation insight and intelligence
platform, IgniteAMT a digital transformation company and IgniteCAP
an incubation and investment business. Mark also co-founded and was
CEO on its AIM listing of The People's Operator PLC, a cause-based
mobile phone network that had operations in the UK and USA. Prior
to that Mark co-founded Mass1 which he grew into one of the UK's
most successful campaign agencies. He has also held numerous senior
management positions in his career.
Sri Ramakrishna Uthayanan, Finance Director
Rama is a UK qualified accountant with over 35 years' audit and
accounting experience, including as Finance Director of AIM listed
The People's Operator plc from 2016 until 2019. He has been Finance
Director at KrunchData Limited, the Company's subsidiary since
December 2018.
Mr Moore and Mr Goodfellow are considered to be independent
Directors of the Company. In coming to this conclusion, the Board
has taken a number of matters into consideration including:
-- the absence of previous employment or material business
relationships with the Company and its Shareholders;
-- that none are party to any performance related share schemes;
and service length with the Company.
Principle Seven
Evaluation of Board Performance
The Board has undertaken an internal review of the Board, the
Committees and individual Directors, in the form of peer appraisal
and discussions, to determine their effectiveness and performance
as well as the Directors' continued independence.
The evaluation concluded that the Board demonstrates the
appropriate level of skills, knowledge and performance for the size
and nature of the Group. The Directors will continue to review the
need to strengthen the Board as the Group develops.
Principle Eight
Corporate Culture
The Board recognises that its decisions regarding strategy and
risk will impact the corporate culture of the Company as a whole
and that this will impact the performance of the Company. The
corporate governance arrangements that the Board has adopted are
designed to ensure that the Company delivers long term value to its
shareholders and that shareholders have the opportunity to express
their views and expectations for the Company in a manner that
encourages open dialogue with the Board. The Board recognises that
their decisions regarding strategy and risk will impact the
corporate culture of the Company as a whole and that this will
impact the performance of the Company. The Board is very aware that
the tone and culture set by the Board will greatly impact all
aspects of the Company as a whole and the way that employees
behave. A large part of the Company's activities is centred upon
what needs to be an open and respectful dialogue with employees,
clients and other stakeholders. Therefore, the importance of sound
ethical
values and behaviours is crucial to the ability of the Company
to successfully achieve its corporate objectives.
The Board places great import on this aspect of corporate life
and seeks to ensure that this flows through all that the Company
does. The Directors consider that at present the Company has an
open culture facilitating comprehensive dialogue and feedback and
enabling positive and constructive challenge. There is frequent
dialogue between the Directors and senior management of the
principal operating subsidiaries. The Board monitors the corporate
culture through a mix of formal and informal feedback, based on
which the Board is confident that a healthy culture consistent with
the principles adopted exists.
The Company has adopted, with effect from the date on which its
shares were admitted to AIM, a code for Directors' and employees'
dealings in securities which is appropriate for a company whose
securities are traded on AIM and is in accordance with the
requirements of the Market Abuse Regulation which came into effect
in 2016.
Principle Nine
Maintenance of Governance Structures and Processes
Ultimate authority for all aspects of the Company's activities
rests with the Board, the respective responsibilities of the
Chairman and Chief Operating Officer arising as a consequence of
delegation by the Board. The Board has adopted appropriate
delegations of authority which set out matters which are reserved
to the Board. The Chairman is responsible for the effectiveness of
the Board, while management of the Company's business and primary
contact with shareholders has been delegated by the Board to the
Chief Executive Officer.
Audit and Compliance Committee
The Audit and Compliance Committee comprises Bob Moore, who
chairs this committee, and Charles Goodfellow. The Audit and
Compliance Committee has primary responsibility for monitoring the
quality of internal controls and ensuring that the financial
performance of the Company is properly measured and reported. It
receives reports from the Executive management and auditors
relating to the interim and annual accounts and the accounting and
internal control systems in use throughout the Company. The Audit
and Compliance Committee shall meet not less than twice in each
financial year and it has unrestricted access to the Company's
auditors.
Remuneration Committee
The Remuneration Committee comprises Bob Moore, who chairs this
committee, and Charles Goodfellow. The Remuneration Committee
reviews the performance of the Executive Directors and employees
and makes recommendations to the Board on matters relating to their
remuneration and terms of employment. The Remuneration Committee
also considers and approves the granting of share options pursuant
to the share option plan and the award of shares in lieu of bonuses
pursuant to the Company's Remuneration Policy.
Nominations Committee
The Nominations Committee comprises Bob Moore, who chairs this
committee, and Charles Goodfellow.
Non-Executive Directors
The Board has adopted guidelines for the appointment of
Non-Executive Directors which have been in place and which have
been observed throughout the year. These provide for the orderly
and constructive succession and rotation of the Chairman and
Non-Executive Directors insofar as both the Chairman and
Non-Executive Directors will be appointed for an initial term of
three years and may, at the Board's discretion believing it to be
in the best interests of the Company, be appointed for subsequent
terms. The Chairman may serve as a Non-Executive Director before
commencing a first term as Chairman.
In accordance with the Companies Act 2006, the Board complies
with: a duty to act within their powers; a duty to promote the
success of the Company; a duty to exercise independent judgement; a
duty to exercise reasonable care, skill and diligence; a duty to
avoid conflicts of interest; a duty not to accept benefits from
third parties and a duty to declare any interest in a proposed
transaction or arrangement.
Principle Ten
Shareholder Communication
The Board is committed to maintaining good communication and
having constructive dialogue with its shareholders. The Company
responds to all shareholders who contact the Directors, and as a
result has positive ongoing relationships with a wide range of
shareholders. All shareholders and analysts have the opportunity to
discuss issues and provide feedback at meetings with the Company.
The Company also provides shareholder updates whenever appropriate
using both regulatory and other channels. In addition, all
shareholders are encouraged to attend the Company's Annual General
Meeting.
Investors also have access to current information on the Company
through its website, www.mobilestreams.com, and via Mark Epstein,
CEO, who is available to answer investor relations enquiries.
The Company includes, when relevant, in its annual report, any
matters of note arising from the audit or remuneration
committees.
On behalf of the Board
Bob Moore
Chairman
22 December 2023
REPORT OF THE INDEPENT AUDITOR TO THE MEMBERS OF MOBILE STREAMS
PLC
Opinion
We have audited the group financial statements of Mobile Streams
Plc (the 'group') for the year ended 30 June 2023 which comprise
the Consolidated Statement of Comprehensive Income, the
Consolidated Statement of Financial Position, the Consolidated
Statement of Changes in Equity and the Consolidated Statement of
Cash Flows and notes to the financial statements, including a
summary of significant accounting policies. The financial reporting
framework that has been applied in their preparation is applicable
law and UK-adopted international accounting standards.
In our opinion, the group financial statements:
-- give a true and fair view of the state of the group's affairs
as at 30 June 2023 and of its loss for the year then ended;
-- have been properly prepared in accordance with UK-adopted
international accounting standards; and
-- have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and 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 group
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 related to going concern
We draw attention to the accounting policies in the group
financial statements, which indicates that the group needs to
achieve its operating targets, and may require further financing to
meet its commitments as they fall due. As stated in the accounting
policies, the group's forecasts are dependent on revenue streams
which are uncontracted and have no historical data at present upon
which to base the revenue forecasts. As such there is currently
uncertainty regarding the group achieving such operating targets as
the forecasts are dependent on factors beyond the control of the
group. As stated in the accounting policies, these events or
conditions indicate that a material uncertainty exists that may
cast significant doubt on the group's ability to continue as a
going concern.
Our opinion is not modified in respect of this matter.
In auditing the group financial statements, we have concluded
that the director's use of the going concern basis of accounting in
the preparation of the group financial statements is appropriate.
Our evaluation of the directors' assessment of the group's ability
to continue to adopt the going concern basis of accounting
included:
-- consideration of the group's objectives, policies and
processes in managing its working capital as well as exposure to
financial, credit and liquidity risks;
-- reviewing the cash flow forecasts for the ensuing twelve
months from the date of approval of these group financial
statements and assessment thereof;
-- performing sensitivity analysis on the cash flow forecast
prepared by management, and challenging the assumptions included
thereto;
-- reviewing the management's going concern memorandum
assessment and discussing with management regarding the future and
availability of funding; and
-- reviewing the adequacy and completeness of disclosures in the group financial statements.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
Our application of materiality
The group materiality for the financial statements as a whole
was set at GBP223,000 (2022: GBP112,280) based on 7% of loss before
tax (2022: 7% of loss before tax). We have used this benchmark to
determine our materiality, which we believe is the key metric of
the group used by shareholders, as the group seeks to reduce their
cost base and refocus their business strategy. The Group
performance materiality was set at 70% (2022: 70%) of materiality
for the financial statements as a whole equating to GBP156,000
(2022: GBP78,590). In determining performance materiality of the
group, we considered the risk profile of the listed entity
including the increased losses in the financial period.
We have agreed with those charged with governance that we would
report any individual audit difference in excess of GBP11,150
(2022: GBP5,690) as well as differences below this threshold that,
in our view, warranted reporting on qualitative grounds.
Materiality for the significant components of the group ranged
from GBP34,000 (2022: GBP1,763) to GBP200,000 (2022: GBP63,133)
based on 7% of loss before tax for each component.
Our approach to the audit
In designing our audit, we determined materiality and assessed
the risk of material misstatement in the group financial
statements. In particular, we looked at areas involving significant
accounting estimates and judgements by the directors including the
valuation of share options. These areas were however not considered
to constitute key audit matters. We also addressed the risk of
management override of internal controls, including evaluating
whether there was evidence of bias by the directors that
represented a risk of material misstatements due to fraud. Of the
seven reporting components of the group, a full scope audit was
performed on the complete financial information of four components
(Mobile Streams Plc, Streams Data Limited, Krunch Data Limited and
Mobile Streams Mexico) and, for the other components, a limited
scope review was performed.
The group's key accounting function is based in Argentina and
our audit was performed remotely from our London office with
regular contact with relevant personnel throughout. No component
auditors were used in the audit.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters. In addition to
the matter described in the Material uncertainty related to going
concern section we have determined the matters described below to
be the key audit matters to be communicated in our report.
Key Audit Matter How our scope addressed this
matter
Accounting Treatment of Non
Fungible Tokens (" NFTs") -
see Group Accounting Policies
==================================================================
During the year, the group Our work in this area included:
entered into a number of licence * Obtaining and reviewing the NFT agreements
agreements with sporting teams
to have the right to sell various
intellectual properties of the * Applying the guidance included within IAS 38 -
teams (e.g. logos) in the form Intangible Assets, to ascertain if the transactions
of NFTs. These agreements all are within scope of the standard and require
comprise royalty rates with capitalising
upfront guaranteed minimum royalties
("GMR's") defined for year 1
and, for most agreements, further * Reviewing management's application of accounting
minimum royalties defined for treatment and critically assess for appropriateness
years 2-5.
The accounting treatment must
be considered, to establish * Recalculating and reperforming any calculations
whether these upfront payments derived from the agreements
should be capitalised and amortised
over the period of the agreement,
whether it should be accounted * Assessing management's forecasts of future NFT
for as a prepaid expense or revenues to quantify potential liabilities in respect
whether it should be expensed of royalty payments
during the year.
* Ensuring that the appropriate disclosures are made
within the financial statements.
We have concluded that the accounting
treatment of these payments
are materially correct and have
been presented truly and fairly.
==================================================================
Other information
The other information comprises the information included in the
annual report, other than the financial statements and our
auditor's report thereon. The directors are responsible for the
other information contained within the annual report. Our opinion
on the group financial statements does not cover the other
information and, except to the extent otherwise explicitly stated
in our report, we do not express any form of assurance conclusion
thereon. Our responsibility is to read the other information and,
in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the course of the audit or otherwise appears to be
materially misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required to determine
whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we
conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion, based on the work undertaken in the course of
the audit:
-- the information given in the strategic report and the
directors' report for the financial year for which the group
financial statements are prepared is consistent with the group
financial statements; and
-- the strategic report and the directors' report have been
prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and
its environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the
directors' report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
-- adequate accounting records have not been kept, or returns
adequate for our audit have not been received from branches not
visited by us; or
-- the financial statements are not in agreement with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities
statement, the directors are responsible for the preparation of the
group financial statements and for being satisfied that they give a
true and fair view, and for such internal control as the directors
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to
fraud or error.
In preparing the group financial statements, the directors are
responsible for assessing the group's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below:
-- We obtained an understanding of the group and the sector in
which it operates to identify laws and regulations that could
reasonably be expected to have a direct effect on the financial
statements. We obtained our understanding in this regard through
discussions with management and application of cumulative audit
knowledge and experience of the sector.
-- We determined the principal laws and regulations relevant to
the group in this regard to be those arising from AIM rules,
Companies Act 2006 and local employment law.
-- We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-compliance by
the group with those laws and regulations. These procedures
included, but were not limited to:
o enquiries of management and review of minutes.
-- We also identified the risks of material misstatement of the
financial statements due to fraud. We considered, in addition to
the non-rebuttable presumption of a risk of fraud arising from
management override of controls, that the potential for management
bias was identified in relation to:
o the impairment of goodwill and intangible assets and we
addressed this by challenging the assumptions and judgements made
by management when auditing these significant accounting estimates;
and
-- As in all of our audits, we addressed the risk of fraud
arising from management override of controls by performing audit
procedures which included, but were not limited to: the testing of
journals; reviewing accounting estimates for evidence of bias; and
evaluating the business rationale of any significant transactions
that are unusual or outside the normal course of business.
Because of the inherent limitations of an audit, there is a risk
that we will not detect all irregularities, including those leading
to a material misstatement in the financial statements or
non-compliance with regulation. This risk increases the more that
compliance with a law or regulation is removed from the events and
transactions reflected in the financial statements, as we will be
less likely to become aware of instances of non-compliance. The
risk is also greater regarding irregularities occurring due to
fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor's report
Other matter
We have reported separately on the parent company financial
statements of Mobile Streams Plc for the year ended 30 June
2023.
Use of our report
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone, other than the company and the company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Timothy Harris (Senior Statutory Auditor) 15 Westferry
Circus
For and on behalf of PKF Littlejohn LLP Canary Wharf
Statutory Auditor London E14 4HD
22 December 2023
Consolidated STATEMENT OF comprehensive income
Year ended Year ended
30 June 30 June 2022
2023
(restated)
Note GBP000's GBP000's
Revenue 3 1,824 1,022
Cost of sales 3 (1,812) (572)
----------------------------------------------- ----- ------------------- -----------------------------
Gross profit 12 450
Selling and marketing costs 3 (876) (264)
Administrative expenses 3 (2,220) (1,979)
Impairment of Goodwill 4 (360) -
Quanta convertible loan impairment 4 - (414)
Quanta revenue bad debt provision 4 - (201)
Impairment of intangibles 4 (348) (104)
Operating Loss (3,792) (2,513)
Finance income 3 3 4
Loss before tax (3,789) (2,509)
Tax expense 5 - -
----------------------------------------------- ----- ------------------- -----------------------------
Loss for the year (3,789) (2,509)
-
----------------------------------------------- ----- ------------------- -----------------------------
Comprehensive Loss for the year (3,789) (2,509)
=============================================== ===== =================== =============================
Attributable to:
Equity shareholders of Mobile Streams
plc (3,789) (2,509)
=============================================== ===== =================== =============================
(3,789) (2,509)
Other comprehensive income
Other comprehensive income - -
Total comprehensive loss for the year attributable
to equity (3,789) (2,509)
shareholders of Mobile Streams plc
----------------------------------------------- ----- ------------------- -----------------------------
Earnings per share
Pence per Pence per share
share
Basic earnings per share 6 (0.093) (0.092)
Diluted earnings per share 6 (0.093) (0.092)
Consolidated STATEMENT OF FINANCIAL POSITION
Year ended Year ended
30 June 30 June 2022
2023
(restated)
Note GBP000's GBP000's
Assets
Non- Current
Intangible assets 9 - 326
Goodwill 9 - 360
Other Assets 10 - 170
------------------------------------------ ------- ----------------------- -----------------------
- 856
Current
Trade and other receivables 11 148 162
Cash and cash equivalents 12 913 1,675
------------------------------------------ ------- ----------------------- -----------------------
1,061 1,837
Total assets 1,061 2,693
========================================== ======= ======================= =======================
Equity
Equity attributable to equity holders of Mobile Streams
plc
Called up share capital 13 768 659
Share premium 21,331 19,334
Translation reserve (3,050) (3,050)
Share Based Payment reserve 25 13
Retained earnings (18,541) (14,752)
------------------------------------------ ------- ----------------------- -----------------------
Equity attributable to equity holders of Mobile
Streams plc 533 2,204
Non-controlling interest - -
Total equity 533 2,204
========================================== ======= ======================= =======================
Liabilities
Non-Current
Bank debt - 40
------------------------------------------ ------- ----------------------- -----------------------
- 40
Current
Trade and other payables 14 487 442
Bank debt 41 7
------------------------------------------ ------- ----------------------- -----------------------
528 449
Total liabilities 528 449
========================================== ======= ======================= =======================
Total equity and liabilities 1,061 2,693
========================================== ======= ======================= =======================
Company Registration Number: 03696108
The Financial Statements were approved by the Board of Directors
on 22 December 2023 and are signed on its behalf by:
Bob Moore
Chairman
Consolidated STATEMENT OF CHANGES IN EQUITY
Equity attributable to equity holders of Mobile Streams plc
Called Share Translation Share-based Retained Non- Total
up share premium reserve payment earnings Controlling Equity
capital reserve Interest
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
Balance at 1 July
2021 567 16,765 (3,050) 13 (11,480) 1 2,816
----------------------- -------------- --------- -------------- ---------------- ------------------- --------------- ------------------
Loss for the year - - - (2,764) - (2,764)
Comprehensive Loss
for the year - - - (2,764) - (2,764)
----------------------- -------------- --------- -------------- ---------------- ------------------- --------------- ------------------
Warrants charge - - - 255 - - 255
Issue of shares 92 2,569 - - - 2,661
Acquisition of 51%
of KrunchData Limited - - - - (763) (1) (764)
Transactions with
shareholders 92 2,569 - 255 (763) (1) 2,204
----------------------- -------------- --------- -------------- ---------------- ------------------- --------------- ------------------
Balance at 30 June
2022 659 19,334 (3,050) 268 (15,007) - 2,204
----------------------- -------------- --------- -------------- ---------------- ------------------- --------------- ------------------
At 1(st) July 2022
as previously
reported 659 19,334 (3,050) 268 (15,007) - 2,204
Prior Year Adjustment
(Note 23) - - - (255) 255 - -
----------------------- -------------- --------- -------------- ---------------- ------------------- --------------- ------------------
Balance at 1 July
2022 (restated) 659 19,334 (3,050) 13 (14,752) - 2,204
Loss for the year - - - - (3,789) - (3,789)
Comprehensive loss
for the year - - - - (3,789) - (3,789)
----------------------- -------------- --------- -------------- ---------------- ------------------- --------------- ------------------
Share option charge - - - 12 - - 12
Issue of shares 109 1,997 - - - - 2,106
Transactions with
Shareholders 109 1,997 - 12 - - 2,118
----------------------- -------------- --------- -------------- ---------------- ------------------- --------------- ------------------
Balance at 30 June
2023 768 21,331 (3,050) 25 (18,541) - 533
----------------------- -------------- --------- -------------- ---------------- ------------------- --------------- ------------------
consolidated CASH FLOW statement
Year ended Year ended
30 June 30 June
2023 2022
(restated)
Note GBP000's GBP000's
Operating activities
Loss before taxation (3,789) (2,509)
Adjustments:
Amortization of intangible assets 9 296 262
Impairment of intangible assets 9 708 106
Impairment losses of financial
assets 10 - 80
Impairment of receivables 11 (15) 283
Impairment of convertible loan 4 - 414
Profit on disposals of investments 10 (22) -
Share Based Payments expense 16 12 -
Remuneration paid to Directors 67 -
and Senior Managers in shares
Consultant fees paid in shares 719 -
Finance income (3) (4)
Changes in trade and other receivables 11 28 (120)
Changes in trade and other payables 14 45 89
Total cash generated in operating
activities (1,954) (1,399)
------------------------------------------------------------------ -------------------------- --- -----------------------------
Investing activities
Additions intangible assets 9 (318) -
Acquisitions - consideration
(cash) - (265)
Acquisitions - other investments - (414)
Proceeds from sale of Gfinity
shares 10 192 -
Finance income 3 4
Net Cash used in investing activities (123) (675)
------------------------------------------------------------------ -------------------------- --- -----------------------------
Financing activities
Equity fund-raise (net of expenses
paid) 1,320 2,015
(Repayment) of Bank loans 15 (6) (3)
Net Cash generated from financing
activities 1,314 2,012
------------------------------------------------------------------ -------------------------- --- -----------------------------
Net change in cash and cash
equivalents (763) (62)
Exchange (losses) on cash and
cash equivalents 1 22
Cash and cash equivalents at beginning
of year 1,675 1,715
Cash and cash equivalents,
end of year 12 913 1,675
-------------------------------------------------- -------------- -------------------------- --- -----------------------------
Reconciliation of net debt is shown in Note 15.
Significant non-cash transactions that occurred during the
period relate to payments made to individuals in relation to the
NFT contracts as well as to directors as directors fees and some
fees to senior managers.
Mobile Streams plc (the 'Company') and its subsidiaries
(together 'the Group') delivers gaming content to a global
audience, through its websites and platforms, where long-standing
carrier relationships are in countries including India, Argentina
and Mexico. The Streams data insight, intelligence and
visualisation services and marketing optimisation tools support the
content business, as well as serving enterprise level bespoke
clients and the Streams SaaS ("Software as a Service") self-service
platform. The Group's strategy is to deliver next-generation
content including gaming, Esports and related NFTs to a global
audience. The Group has recently announced it will be expanding its
operations in Mexico into publishing, betting and media ownership,
which complements its existing content portfolio of products and
services, through the acquisition of a 10% interest in Capital
Media Sports S.A ("Capital Media Sports"), a newly created
company.
The Company is a public limited company incorporated and
domiciled in the United Kingdom. The address of its registered
office is 125 Wood Street, London, EC2V 7AW.
The Company is listed on the London Stock Exchange's Alternative
Investment Market.
These consolidated Financial Statements were approved for issue
by the Board of Directors on 22 December 2023.
Summary of significant accounting policies
Basis of preparation
The Group Financial Statements consolidate those of the parent
company and all of its subsidiary undertakings drawn up to 30 June
2023. They have been prepared in accordance with applicable
International Accounting Standards as adopted by the UK and with
the Companies Act 2006. The Financial Statements have been prepared
under the historical cost convention, with investments being valued
under fair value through profit or loss.
Business combinations
The Group applies the acquisition method to account for business
combinations. The consideration transferred for the acquisition of
a subsidiary is the fair values of the assets transferred, the
liabilities incurred to the former owners of the acquiree and the
equity interests issued by the Group. The consideration transferred
includes the fair value of any asset or liability resulting from a
contingent consideration arrangement. Identifiable assets acquired
and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the
acquisition date. The Group recognises any non--controlling
interest in the acquire on an acquisition -by -acquisition basis,
either at fair value or at the non--controlling interest's
proportionate share of the recognised amounts of acquiree's
identifiable net assets. Acquisition- related costs are expensed as
incurred.
Consolidation
Control is achieved where the Company 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. Subsidiaries are fully consolidated from the date on
which control is transferred to the Group. They are de-consolidated
from the date on which control is lost.
Intercompany transactions, balances and unrealised gains on
transactions between group companies are eliminated in full.
Unrealised losses are also eliminated unless the transaction
provides evidence of an impairment of the asset transferred.
Subsidiaries' accounting policies have been changed where necessary
to ensure consistency with the policies adopted by the Group.
Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are, with limited
exceptions, measured initially at their fair values at the
acquisition date. The Group recognises any non-controlling interest
in the acquired entity on an acquisition-by-acquisition basis
either at fair value or at the non-controlling interest's
proportionate share of the acquired entity's net identifiable
assets.
The separate Financial Statements and related notes of the
Company follow the Financial Statements and related notes of the
Group, and are prepared in accordance with FRS 101.
Foreign currency translation
(a) Presentational currency
The consolidated and parent company Financial Statements are
presented in British pounds. The functional currency of the parent
entity is also British pounds. The subsidiaries of the parent
company and their respective functional currencies are as follows:
Mobile Streams de Argentina SRL (Argentine Peso), Mobile Streams
Columbia Limitada (Columbian Peso), Mobile Streams of Mexico de CV
(Mexican Peso), Mobile Streams India Private Limited (Rupee),
Streams Data Limited (British Pounds), KrunchData Limited (British
Pounds).
(b) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the date the
transaction occurs. Any exchange gains or losses resulting from
these transactions and the translation of monetary assets and
liabilities at the consolidated statement of financial position
date are recognised in the consolidated income statement, except to
the extent that a monetary asset or liability represents a net
investment in a subsidiary when exchange differences arising on
translation are recognised in equity within the translation
reserve. Amount due from or to subsidiaries are treated as part of
net investment in the subsidiary when settlement is neither planned
nor likely to occur in the foreseeable future. Upon settlement,
amounts that have arisen are taken directly to profit or loss.
Foreign currency balances are translated at the year-end using
exchange rate prevailing at the year-end.
(c) Group companies
The financial results and position of all group entities that
have a functional currency different from the presentation currency
of the Group are translated into the presentation currency as
follows:
i assets and liabilities for each consolidated statement of
financial position are translated at the closing exchange rate at
the date of the consolidated statement of financial position.
ii income and expenses for each consolidated income statement
are translated at average exchange rates (unless it is not a
reasonable approximation to the exchange rate at the date of
transaction).
iii all resulting exchange differences are recognised as a
separate component of equity (cumulative translation reserve).
Hyper-inflationary currencies
The Argentinian economy is designated as a hyper-inflationary.
The Financial Statements of the Argentinian subsidiary are stated
in terms of the purchasing power at the end of the reporting period
through the selection of a general price index before translation
into the Group's presentation currency being GBP.
Goodwill
Goodwill arising on the acquisition of a subsidiary undertaking
is determined as the difference between the fair value of the
assets, including any intangible assets arising on acquisition, and
liabilities acquired, and the fair value of consideration paid.
Goodwill, which is classified as an intangible asset with an
indefinite life, is subject to an annual impairment review. Further
detail of the goodwill arising on the acquisition of KrunchData
Limited can be found in note 9: Goodwill and Intangible Assets.
Intangible assets
An intangible asset arising from the Company's product
development is recognised if, and only if, the Company can
demonstrate all of the following:
-- the technical feasibility of completing the intangible asset
so that it will be available for use or sale
-- its intention to complete the intangible asset and use or sell it
-- its ability to use or sell the intangible asset
-- how the intangible asset will generate probable future economic benefits
-- the availability of adequate technical, financial and other
resources to complete the development and to use or sell the
intangible asset
-- its ability to measure reliably the expenditure attributable
to the intangible asset during its development
Intangible assets are amortised on a straight line basis over
their useful lives of up to five years. Amortisation is charged to
the income statement from when the asset becomes available to use.
Where no internally generated intangible asset can be recognised,
development expenditure is recognised as an expense in the period
in which it is incurred.
Going Concern
The Financial Statements have been prepared on a going concern
basis, which assumes that the Group and the Company will continue
in operational existence for the foreseeable future, being 12
months from the date of sign-off of these accounts.
The Group and Company use annual budgeting, forecasting,
scenario planning and regular performance reviews to assess the
longer-term profitability of the Group and make strategic and
commercial changes as required to ensure that cash resources are
maintained.
Management have prepared forecasts for the Group's ongoing
business covering the 12 month period following the date of
approval of the financial statements. These forecasts make certain
assumptions in respect of predicted revenue to be received from
development of the new Mexican Sports betting segment and expected
synergies for the existing NFTs revenue stream. The directors note
that these revenue streams are uncontracted and have no historical
data at present upon which to base the revenue forecasts. As such,
the directors note that there is an element of uncertainty
surrounding these forecasts. However, the directors believe the
revenue forecast targets to be achievable and reasonable due to
management's expertise and experience in the industry.
In July 2022 the Company launched its business as the exclusive
global producer and provider of Non Fungible Tokens ("NFTs") for
several prominent football teams and sports professionals, which
developed initial revenues during the year-ending 30th June 2023.
The company seeks to expand this business and sees this as a major
driver of revenue across the coming 18 months with further
potential contracts under negotiation. Whilst uncertain, the growth
in revenue from the NFT business is predicted to more than offset
the decline in the revenues from the International Gaming Systems
partnership.
The market for NFTs has proven to be less successful than
initially anticipated. The Group is however, hoping that the
development of the new Mexican sports betting segment will lead to
operational synergies which will enable the group to reach a larger
target market for NFT sales. At present the success of the NFT
revenue stream is thus also uncertain.
For the group to achieve the target forecast and maintain
sufficient cash balances to fund working capital, the group's
revenue forecasts will need to be achieved. Should the revenue
targets not be achieved, the group will require additional funding
to enable the group to meet its working capital requirements for
the going concern period.
The Directors have modelled significant downside scenarios,
including where predicted revenues are reduced by more than 40%.
Discretionary spending, including investment in growth, will be
carefully controlled and will be reduced to the extent that gross
and net revenues do not match budget expectations. The various
scenarios indicate how sensitive the forecasts are to adverse
changes in revenue forecasts.
These conditions and events indicate the existence of a material
uncertainty that may cast significant doubt upon the Group's
ability to continue as a going concern and the Group companies may
therefore be unable to realise their assets and discharge their
liabilities in the ordinary course of business. The auditors make
reference to going concern in their audit report by way of a
material uncertainty. These financial statements do not include the
adjustments that would result if the Group were unable to continue
as a going concern.
After consideration of the above, the Directors consider that
the continued adoption of the going concern basis is
appropriate.
New standards and interpretations not yet adopted
At the date of approval of these Financial Statements, the
following standards and interpretations which have not been applied
in these Financial Statements were in issue but not yet effective
(and in some cases have not yet been adopted by the UK):
-- Onerous Contracts: Cost of Fulfilling a Contract (Amendments to IAS 37).
-- COVID-19: Related Rent Concessions (Amendment to IFRS 16).
-- Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16).
-- Reference to Conceptual Framework (Amendments to IFRS 3).
-- Classification of Liabilities as Current or Non-current (Amendments to IAS 1).
-- Insurance Contracts and amendments to Insurance Contracts (Amendment to IFRS 17).
-- Disclosure of Accounting policies (Amendment to IAS 1 and IFRS Practice Statement 2).
-- Deferred Tax related to Assets and Liabilities arising from a
Single Transaction (Amendments to IAS 12)
The new and amended Standards and Interpretations which are in
issue but not yet mandatorily effective are not expected to be
material.
Taxation
Current tax is the tax currently payable based on taxable profit
for the year.
Deferred income tax is provided, using the liability method, on
temporary differences arising between the tax base of assets and
liabilities and their carrying amounts in the consolidated
Financial Statements. However, deferred tax is not provided on the
initial recognition of goodwill, nor on the initial recognition of
an asset or liability unless the related transaction is a business
combination or affects tax or accounting profit. Deferred tax on
temporary differences associated with shares in subsidiaries is not
provided if reversal of these temporary differences can be
controlled by the Group and it is probable that reversal will not
occur in the foreseeable future.
Deferred income tax is determined using tax rates known by the
consolidated statement of financial position date and that are
expected to apply when the 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 tax liabilities are
provided in full. There is no discounting of assets or
liabilities.
Changes in deferred tax assets or liabilities are recognised as
a component of the tax expense in the consolidated income
statement, except where they relate to items that are charged or
credited directly to equity or other comprehensive income, in which
case the related deferred tax is also charged or credited directly
to equity or other comprehensive income.
Provisions
Provisions, including those for legal claims, are recognised
when the Group has a present legal or constructive obligation as a
result of past events, it is probable that an outflow of economic
benefits will be required to settle the obligation and the amount
can be reliably estimated.
Provisions are measured at the present value of management's
best estimate of the expenditure required to settle the present
obligation at the consolidated statement of financial position
date. The discount rate used to determine the present value
reflects current market assessments of the time value of money and
the risks specific to the liability.
Financial Assets
Classification
A number of the Company's accounting policies and disclosures
require the determination of fair value, for both financial and
non-financial liabilities. Fair values have been determined for
measurement and/or disclosure purposes based on the following
methods. When applicable, further information about the assumptions
made in determining fair values is disclosed in the notes specific
to that asset or liability.
Classification of fair value financial instruments
The Company classified the fair value of its financial
instruments measured at fair value according to the following
hierarchy based on the amount of observable inputs used to value
the instrument.
Level 1: Quoted prices in active markets for identical assets
and liabilities.
Level 2: Inputs other than the quoted prices included in level 1
that are observable for the asset or liability either directly or
indirectly.
Level 3: Inputs for the asset or liability that are not based on
observable market data.
The company's investments in public companies are considered
Level 1.
a) Financial assets and financial liabilities are recognised in
the consolidated statement of financial position when the Company
becomes party to the contractual provisions of the instrument.
Financial assets are de-recognised when the contracted rights to
the cash flows from the financial asset expire or when the
contracted rights to those assets are transferred. Financial
liabilities are de-recognised when the obligation specified in the
contract is discharged, cancelled or expired. Financial assets and
financial liabilities are initially measured at their fair value.
Transaction costs attributable to the acquisition of a financial
asset or financial liability are added or deducted from the fair
value of the financial asset or financial liability. At each
reporting date, financial assets are reviewed to assess whether
there is objective evidence of impairment. If any such evidence
exists, impairment loss is determined and recognised based on the
classification of the financial asset.
b) Loans and receivables (including trade receivables,
prepayments, deposits, loans and other receivables, cash and bank
balances) are non-derivative financial assets with fixed or
determinable payments that are not quoted on an active market. At
each reporting date subsequent to initial recognition, loans and
receivables are carried at amortised cost using the effective
interest method, unless when there is objective evidence that the
asset is impaired. Impairment is measured as the difference between
the asset's carrying amount and the present value of estimated
future cash flows discounted at the original effective interest
rate. Impairment losses are reversed in subsequent periods when an
increase in the asset's recoverable amount can be related
objectively to an event occurring after the impairment is
recognised, subject to a restriction that the carrying amount of
the asset at the date the impairment is reversed does not exceed
what the amortised cost would have been had the impairment not been
recognised.
c) Trade and other receivables are recognised at their fair
value. Appropriate provisions for estimated irrecoverable amounts
are recognised in the statement of comprehensive income when there
is objective evidence that the assets are impaired.
d) Cash and cash equivalents comprise cash on hand and demand
deposits held on call with banks. Cash and cash equivalents are
shown in note 12.
Receivables
Receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. They
are included in current assets, except for maturities greater than
12 months after the Statement of Financial Position date. These are
classified as non-current assets. The Group's receivables comprise
trade and other receivables and cash and cash equivalents in the
Statement of Financial Position.
Recognition and Measurement
Financial assets are initially measured at fair value plus
transactions costs. Receivables are subsequently carried at
amortised cost using the effective interest method, except for
short term receivables.
Impairment of Financial Assets
The Group assesses at the end of each reporting period whether
there is objective evidence that a financial asset, or a group of
financial assets, is impaired. A financial asset, or a group of
financial assets, is impaired, and impairment losses are incurred,
only if there is objective evidence of impairment as a result of
one or more events that occurred after the initial recognition of
the asset (a "loss event"), and that loss event (or events) has an
impact on the estimated future cash flows of the financial asset,
or group of financial assets, that can be reliably estimated.
The criteria that the Group uses to determine that there is
objective evidence of an impairment loss include:
-- significant financial difficulty of the issuer or obligor;
-- a breach of contract, such as a default or delinquency in
interest or principal repayments;
-- the disappearance of an active market for that financial asset because of financial difficulties;
-- observable data indicating that there is a measurable
decrease in the estimated future cash flows from a portfolio of
financial assets since the initial recognition of those assets,
although the decrease cannot yet be identified with the individual
financial assets in the portfolio; or
-- for assets classified as available-for-sale, a significant or
prolonged decline in the fair value of the security below its
cost.
Assets carried at amortised cost
The amount of impairment is measured as the difference between
the asset's carrying amount and the present value of estimated
future cash flows (excluding future credit losses that have not
been incurred), discounted at the financial asset's original
effective interest rate. The asset's carrying amount is reduced,
and the loss is recognised in the Statement of Comprehensive
Income. As a practical expedient, the Group may measure impairment
on the basis of an instrument's fair value using an observable
market price.
If, in a subsequent period, the amount of the impairment loss
decreases and the decrease can be related objectively to an event
occurring after the impairment was recognised (such as an
improvement in the debtor's credit rating), the reversal of the
previously recognised impairment loss is recognised in the
Statement of Comprehensive Income.
Financial Liabilities
Financial liabilities are obligations to pay cash or other
financial assets and are recognised when the Group becomes a party
to the contractual provisions of the instruments. Financial
liabilities are initially measured at fair value, net of
transactions costs. They are subsequently measured at amortised
cost using the effective interest method.
Financial liabilities are derecognised when the Group or
Company's contractual obligations expire, are cancelled or are
discharged. The Group's financial liabilities consist of trade and
other payables.
Cash and Cash Equivalents
For the purpose of the cash flow statements, cash and bank
overdrafts comprise cash at bank and in hand.
Revenue recognition
Under IFRS 15, Revenue from Contracts with Customers, five key
points to recognise revenue have been assessed:
Step 1: Identify the contract(s) with a customer;
Step 2: Identify the performance obligations in the
contracts;
Step 3: Determine the transaction price;
Step 4: Allocate the transaction price to the performance
obligations in the contract; and
Step 5: Recognise revenue when (or as) the entity satisfies a
performance obligation.
The Group recognises revenue when the amount of revenue can be
reliably measured, it is probable that future economic benefits
will flow to the entity, and specific criteria have been met for
each of the Group's activities, as described below.
The Group bases its estimates on historical results, taking into
consideration the type of customer, the type of transaction and the
specifics of each arrangement. Where the Group makes sales relating
to a future financial period, these are deferred and recognised
under 'deferred revenue' on the Statement of Financial
Position.
The Group has two material streams of revenue, being the
subscription (legacy) business and Streams Data revenues. Revenue
from the legacy business is recognised in accordance with IFRS15:
content subscriptions are purchased by the customer through the
carrier phone contract, creating the obligation to provide content
access to the customer. The transaction price is determined and
communicated to the customer during the subscription process. When
the customer has obtained access and the ability to use it, the
revenue is recognised on a monthly basis.
The Streams Data business comprises several principal revenue
streams.
a) ("Software as a Service") platform
Customers are charged via credit card for a digital marketing
and communications content package. Payments are processed by
Stripe, a secure online payment processing platform. Customers pay
online via credit or debit card and Stripe collects all payments
and generates monthly reporting sheets on the transactions, revenue
and fee components. Monthly reconciliations are provided to Streams
Data which are reviewed and nominal ledger entries to record the
net revenue and sales tax are posted and contra posted to Stripe
trade debtor account. Payments are made from Stripe to the Streams
Data bank account 30 days in arrears covering the previous 30 days
of transaction funds collected less Stripe fee for using the
payment platform.
b) the Streams bespoke data insight, intelligence, and visualisation service
Enterprise customers who Streams provide data insight,
intelligence and visualisation services to be invoiced directly
from Streams Data and charged on a mixture of fixed monthly fees
and on an hourly rate basis for technical platform support.
Enterprise customers revenue is collected on a 30 day payment term
basis.
c) the IGS (International Gaming Systems) revenue share and strategic agreement
IGS provides MOS with content for the use on its various
platforms. Revenue generated from the content IGS supplies is
subject to a revenue share agreement between MOS and IGS. MOS
deducts any costs incurred in the setup, delivery and marketing of
the content or services that IGS supplies. MOS invoices IGS for the
gross monthly revenue, and IGS invoices MOS for its portion of the
total revenue, both on a monthly basis.
d) the sporting NFT revenue stream
Streams provides the technology platform upon which the trading
of NFTs take place. Revenue generated from the sale of NFTs is
subject to a revenue share agreement between MOS and the artwork
owners. MOS receives the proceeds from the sale of NFTs to
consumers (via a 3(rd) party consumer facing partner) and pays the
contracted share of these proceeds (as a royalty) to the artwork
owner. In the year ended 30 June 2023, the Group incurred costs in
respect of upfront royalties of first year target revenues. Where
the Directors deemed that these royalties could not be allocated
over the life of the contract, due to revenue projections as at the
balance sheet date, the upfront costs were expensed to the profit
and loss account. MOS revenues arise daily and settlement of the
revenue share is conducted monthly on a manual basis.
Loans and borrowings
After initial recognition, interest bearing loans and borrowings
are subsequently measured at amortised cost using the effective
interest rate method. Gains and losses are recognised in the income
statement when the liabilities are derecognised as well as through
the effective interest rate method (EIR) amortisation process.
Amortised cost is calculated by taking into account any discount or
premium on acquisition and fees or costs that are an integral part
of the EIR. The EIR amortisation is included in finance costs in
the income statement.
Share based payments
Employees (including Directors) of the Group receive
remuneration in the form of share-based payment transactions,
whereby employees render services in exchange for shares or rights
over shares ('equity-settled transactions'). Service providers also
may receive settlement for their services in the form of
share-based payments.
The Group has applied the requirements of IFRS 2 Share-Based
Payments to all grants of equity instruments.
The cost of equity settled transactions with employees is
measured by reference to the fair value at the grant date of the
equity instruments granted. The fair value is determined by using
the Black-Scholes model. The cost of services provided to the
Company settled by share-based payments are either fair valued in
same manner as those for employees or, if available, by reference
to the cash equivalent of those services.
The cost of equity-settled transactions is recognised in the
consolidated income statement, together with a corresponding
increase in retained earnings, over the periods in which the
performance conditions are fulfilled, ending on the date on which
the relevant employees become fully entitled to the award ('vesting
date'). At each consolidated statement of financial position date
before vesting the cumulative expense is calculated, representing
the extent to which the vesting period has expired and management's
best estimate of the achievement or otherwise of non-market
conditions and of the number of equity instruments that will
ultimately vest. Market conditions are taken into account in
determining the fair value of the options granted, at grant date,
and are subsequently not adjusted for. The movement in cumulative
expense since the previous consolidated statement of financial
position date is recognised in the consolidated income statement,
with a corresponding entry in equity.
No expense or increase in equity is recognised for awards that
do not ultimately vest. Awards where vesting is conditional upon a
market condition are treated as vesting irrespective of whether or
not the market condition is satisfied, provided that all other
performance conditions are satisfied.
Share capital
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares or options are
charged to the share premium account.
Operating leases are leases in which the risks and rewards of
ownership are not transferred to the lessee.
Equity balances
a) Called up share capital
Called up share capital represents the aggregate nominal value
of ordinary shares in issue.
b) Share premium
The share premium account represents the incremental paid up
capital above the nominal value of ordinary shares issued.
c) Translation Reserve
The translation reserve represents the cumulative translation
adjustments on translation of foreign operations.
d) Share based payments reserve in accordance with International
Financial reporting Standard 2 (IFRS2).
Determination of fair values
A number of the Company's accounting policies and disclosures
require the determination of fair value, for both financial and
non-financial liabilities. Fair values have been determined for
measurement and/or disclosure purposes based on the following
methods. When applicable, further information about the assumptions
made in determining fair values is disclosed in the notes specific
to that asset or liability.
Classification of fair value financial instruments
The Company classified the fair value of its financial
instruments measured at fair value according to the following
hierarchy based on the amount of observable inputs used to value
the instrument.
Level 1: Quoted prices in active markets for identical assets
and liabilities.
Level 2: Inputs other than the quoted prices included in level 1
that are observable for the asset or liability either directly or
indirectly.
Level 3: Inputs for the asset or liability that are not based on
observable market data.
The company's investments in public companies are considered
Level 1.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Critical accounting estimates, judgements AND ASSUMPTIONS
When applying the Group's accounting policies, it is necessary
that management makes a number of accounting estimates, judgements
and assumptions about the future. Estimates and judgements are
evaluated on a regular basis and are based on historical experience
and other factors, such as expectations of future events that are
believed to be reasonable under the circumstances.
The critical judgements that have been made in arriving at the
amounts recognised in the consolidated Financial Statements are
discussed below. The Directors of the Group have determined that
there are no critical accounting estimates, judgements and
assumptions associated with the Group's activities, other than as
outlined below
Valuation and asset lives of separately identifiable intangible
assets
Based on the information available, the management have made the
appropriate judgements in respect of the estimated useful economic
lives of the intangible assets, which are typically judged to be 5
years from the point at which the assets become available for use.
These judgements are compared with available comparative
information of similar businesses. See Note 9: Goodwill and
Intangible assets.
The assets' residual values and useful economic lives are
reviewed and valuations are adjusted, if appropriate, at each
balance sheet date.
Valuation of acquired assets at fair value
Intangible assets acquired through a business combination are
initially measured at fair value at the acquisition date and then
amortised over their useful economic lives. Subsequent expenditure
is capitalised only when it increases the future economic benefits
embodied in the specific asset to which it relates.
Impairment of goodwill and other intangible assets
Management make judgements as to whether or not goodwill or
other intangible assets are impaired. The calculation of the value
requires the Directors to estimate the future cash flows expected
to arise from the cash-generating unit. According to the NPV model
used, the management needs to use a suitable discount rate in order
to calculate present value.
The carrying amount of intangibles was GBPnil following the
impairment, given the global NFT market. This by no means reflects
the Board's considered view of the long-term valuation of these
assets but a combination of the constraints of the accounting
valuation methodology and a prudent assessment of the global NFT
and crypto market as of June 2023. The Board will now explore how
best to value the group's assets. We note that other NFT businesses
have significant platform valuations even at the pre-revenue stage
and want to ensure we value our assets appropriately in line with
these comparables, making sure their value is clear to investors.
The model used was a sensitivity analysis of a discounted cash
flow, using a discount rate of 15% per year and an average revenue
growth rate of 6% per year.
The Directors have reviewed the value of Goodwill acquired
through the Krunch transaction. Taking a conservative view, the
Directors have elected to impair the intangible assets to GBPnil
carrying value.
See Note 9: Goodwill and Intangible Assets.
Capitalisation of development costs
Included within Intangible Assets, Note 9, are costs capitalised
in connection with KrunchData platform. These costs are based on
management's view of the development team's time spent on the
projects and considering the requirements of IAS 38 "Intangible
Assets". Development costs are amortised over the life of the
project once it has been released to the commercial environment.
The carrying value is tested for impairment when there is an
indication that the value of the assets might be impaired.
The key estimates involved include the time spent by personnel
on development of the projects, and the judgement of management
that the costs will be recovered in future based on the success of
these developments.
2. Services provided by the group's auditor
The Group (including its overseas subsidiaries) obtained the
following services from the Group's auditor and network firms:
Year ended Year ended
2023 2022
GBP000's GBP000's
Fees payable to the Company's auditor and its
associates for the audit of the parent company
and consolidated accounts 96 75
Non-Audit services:
Fees payable to the Company's auditor and its associates
for other services:
Interim statement review - -
Tax compliance - -
96 75
==================== ====================
3. Segmental reporting
As at 30 June 2023, the Group was organised into 4 geographical
segments: Europe, North America, Latin American, and Asia Pacific.
The operating segments are organised, managed and reported to the
Board of Directors. Revenues are from external customers only and
generated from two principal business activities: the sale of
mobile content through Multi-National Organisation's (Mobile
Operator Services), and the provision of data insight and
intelligence platforms and services (Other Service Fees).
All operations are continuing, and all inter-segment
transactions are priced and carried out at arm's length.
The segmental results for the year ended 30 June 2023 were as
follows:
GBP000's Europe Asia North Latin Consol Group
Pacific America America entries
Mobile Operator
Services - 10 - 95 - 105
Mobile Internet - - - - -
Services
Other Service
fees 1,944 - - - (225) 1,719
---------------- ----------------- ---------------- ------------------ ------------ ------------------ -------------
Total Revenue 1,944 10 - 95 (225) 1,824
Cost of sales (1,772) - - (39) - (1,812)
---------------- ----------------- ---------------- ------------------ ------------ ------------------ -------------
Gross profit 172 10 - 56 (225) 12
Selling,
marketing and
administration
expenses (2,399) - - (404) - (2,803)
Trading EBITDA* (2,227) 10 - (348) (225) (2,790)
---------------- ----------------- ---------------- ------------------ ------------ ------------------ -------------
Depreciation,
amortisation
and impairment (841) - - - (148) (989)
Share based
compensation (12) - - - - (12)
Profit (loss) - - - - - -
for
derecognition
of subsidiaries
Finance income - - - 3 - 3
Finance expense - - - - - -
---------------- ----------------- ---------------- ------------------ ------------ ------------------ -------------
Loss before tax (3,080) 10 - (345) (373) (3,789)
Minority - -
Interest
Taxation - - - - - -
Loss after tax (3,080) 10 - (345) (373) (3,789)
================ ================= ================ ================== ============ ================== =============
The segmental results for the year ended 30 June 2022 (restated)
were as follows:
GBP000's Europe Asia North Latin Consol Group
Pacific America America entries
Mobile Operator
Services - 6 - 217 - 223
Mobile Internet - - - - -
Services
Other Service
fees 1,275 - - - (476) 799
---------------- --------------- --------------- ------------------ ----------- ------------------ -------------
Total Revenue 1,275 6 - 217 (476) 1,022
Cost of sales (417) - - (155) - (572)
---------------- --------------- --------------- ------------------ ----------- ------------------ -------------
Gross profit 858 6 - 62 (476) 450
Selling,
marketing and
administration
expenses (1,734) (12) - (72) - (1,818)
Trading EBITDA* (876) (6) - (10) (476) (1,368)
---------------- --------------- --------------- ------------------ ----------- ------------------ -------------
Depreciation,
amortisation
and impairment (997) - - - (148) (1,145)
Share based - - - - - -
compensation
Profit (loss) - - - - -
for
derecognition
of subsidiaries
Finance income - - - 4 4
Finance expense - - - - - -
---------------- --------------- --------------- ------------------ ----------- ------------------ -------------
Loss before tax (1,873) (6) - (6) (624) (2,509)
Minority - -
Interest
Taxation - - - - - -
Loss after tax (1,873) (6) - (6) (624) (2,509)
================ =============== =============== ================== =========== ================== =============
* Earnings before interest, tax, depreciation, amortisation,
impairments of assets and share compensation
4. Operating loss
Operating loss is stated after charging the Year ended Year ended
following items:
2023 2022
(restated)
Notes GBP000's GBP000's
Amortisation 9 296 262
Loss on foreign currency (6) (50)
Loss in fair value of investments held - 80
Impairment of intangibles 9 348 125
Impairment of goodwill 9 360 -
Quanta loan bad debt provision - 414
Quanta receivables bad debt provision - 201
Other bad debt provisions (15) 82
Share-based payments expense 12 -
995 1,114
================= ===================
Current year administrative expenses were GBP2.9m and prior year
expenses were GBP2.7m. There were a number of one-off expenses in
the prior year listed above that were no longer incurred in the
current year. Comparatively, the current year expenses of GBP2.9m
were GBP0.3m higher than prior year expenses net of the
non-recurring items listed above.
5. income tax
The tax (credit)/charge is based on the profit before tax for
the year and represents:
2023 2022
GBP'000 GBP'000
Foreign tax on profits of the period - -
-------------------- --------------------
Total current tax - -
Deferred tax:
Origination & reversal of timing differences: - -
(Deferred tax charge/(credit))
Total Deferred tax - -
-------------------- --------------------
Total Tax benefit - -
-------------------- --------------------
2023 2022
Factors affecting the tax charge for the period GBP'000 GBP'000
--------------------
Loss on ordinary activities before tax (3,789) (2,509)
-------------------- --------------------
Loss multiplied by weighted average tax rate
applicable
of corporation tax in the United Kingdom of 19% (720) (477)
Adjustment in respect of prior years - foreign - -
tax
Prior year tax adjustments - deferred tax - -
Deferred tax not recognized 720 477
--------------------
Tax credit - -
-------------------- --------------------
Tax loss carried forward 7,500 4,728
No deferred tax asset has been recognised due to uncertainty as
to when future profits will be generated against which to relieve
said assets.
6. EARNINGS PER SHARE ('EPS')
Basic earnings per share is calculated by dividing the loss or
profit attributable to equity holders of the company by the
weighted average number of ordinary shares in issue during the
period. For the years ended 30 June 2023 and 30 June 2022, options
over ordinary shares have been excluded from the calculations of
earnings per share; the options were non-dilutive in both years as
the company was loss-making.
Reconciliations of the earnings and weighted average number of
shares used in the calculations are set out below.
The adjusted EPS figures have been calculated to reflect the
underlying performance of the business by excluding non-cash
charges for depreciation, amortisation, impairments and share
compensation charges.
Year ended Year ended
2023 2022
(restated)
Pence per Pence per
share share
Basic loss per share (0.093) (0.092)
Diluted loss per share (0.093) (0.092)
Reconciliations of the earnings and weighted average number of
shares used in the calculations are set out below.
2023 2022
(restated)
GBP000's GBP000's
Loss for the year (3,789) (2,509)
===================== ==========================
For adjusted earnings per share GBP000's GBP000's
Loss for the year (3,789) (2,509)
Add back: share compensation expense 12 -
Add back: depreciation and amortisation 296 262
Adjusted loss for the year (3,481) (2,247)
===================== ==========================
Weighted average number of shares
Number Number
of shares of shares
For basic earnings per share 4,079,974,110 2,717,045,225
Exercisable share options - -
For diluted earnings per share 4,079,984,110 2,717,045,225
--------------------- --------------------------
Pence per Pence per
share share
Adjusted Loss per share (0.085) (0.083)
Adjusted diluted Loss per share (0.085) (0.083)
7. Directors' and Officers' remuneration
The Directors are regarded as the key management personnel of
Mobile Streams plc. Charges in relation to remuneration received by
key management personnel for services in all capacities during the
year ended 30 June 2023 are detailed in the Directors Report.
8. Directors and employees
Staff costs including Directors during the year were as
follows:
2023 2022
(restated)
GBP000's GBP000's
Wages and salaries 461 503
Social security costs 15 59
Share Based Payments 12 -
488 562
=================================== ===================
Share options costs in respect of staff costs were GBP12,000
during the period (2022: Nil).
The average number of employees during the year was as
follows:
Year ended Year
2023 ended
2022
Number Number
Management 6 6
6 6
==================================== ==================
9. GOODWILL AND INTANGIBLE ASSETS
The goodwill reflects the retention of the economic value
accruing to the Company from its acquisition of KrunchData
Limited.
Intangibles Intangibles Subtotal Goodwill Total
acquired added internally
Platform Streams
development
and software
GBP000's GBP000's GBP000's GBP000's GBP000's
-------------------------- ----------------------- ---------------------- -------------------------- ----------------------
Cost
At 1 July 2022 485 308 793 360 1,153
Additions - 318 318 - 318
At 30 June 2023 485 626 1,111 360 1,471
-------------------------- ----------------------- ---------------------- -------------------------- ----------------------
Accumulated amortisation and
impairment
At 1 July 2022 (274) (193) (467) - (467)
Amortisation (167) (129) (296) - (296)
Impairment (44) (304) (348) (360) (708)
At 30 June 2023 (485) (626) (1,111) (360) (1,111)
-------------------------- ----------------------- ---------------------- -------------------------- ----------------------
Net book value at - - - - -
30 June 2023
-------------------------- ----------------------- ---------------------- -------------------------- ----------------------
Intangibles and goodwill up to 30 June 2022:
Intangibles Intangibles Subtotal Goodwill Total
acquired added internally
Platform Streams
development
and software
GBP000's GBP000's GBP000's GBP000's GBP000's
-------------------------- ----------------- --------- ------------------------ ---------
Cost
At 1 July 2021 360 308 668 360 1,028
Additions -LiveScore 125 - 125 - 125
------------------------ ---------
At 30 June 2022 485 308 793 360 1,153
-------------------------- ----------------- --------- ------------------------ ---------
Accumulated amortisation
and impairment
At 1 July 2021 - (99) (99) - (99)
LiveScores Impairment (106) - (106) - (106)
Amortisation (168) (94) (262) - (262)
--------------------------
At 30 June 2022 (274) (194) (467) - (467)
-------------------------- ----------------- --------- ------------------------ ---------
Net book value at
30 June 2022 211 115 326 360 686
========================== ================= ========= ======================== =========
The Company's internally developed software relates to the
Streams Data platform. The Group tests intangibles and goodwill
annually for impairment, or more frequently if there are
indications that the asset might be impaired. The recoverable
amount is determined from value in use calculations. The key
assumptions, which are the long-term growth rates, the discount
rates and the cash flow forecasts were derived from the most recent
financial budgets approved by management covering a three-year
period.
A sensitivity analysis was performed using a range of lower
growth and higher discount rate assumptions. The central case rates
applied were:
-- Long term (three year) average growth rate 6% per year
-- Discount rate / cost of capital 15%
The discount rates used are based on comparative businesses
weighted average cost of capital. As a result of this exercise, as
an accounting formality, the Directors concluded at 30(th) June
2023 that the carrying values of all intangible assets was impaired
given the current global NFT market. The Group is also in a state
of transition from legacy products to new products. Whilst
expectations remain positive in relation to the future growth of
the sale of NFTs and the prospects of the new Mexican business
segment (being publishing, online sports betting, online casino
operations and media ownership), the Directors have taken the
prudent decision to impair the intangible assets and acquisition
goodwill to GBPnil value and an impairment charge of GBP708,000 has
been recognised in the Statement of Comprehensive Income for the
year ending 30(th) June 2023. This by no means reflects the Board's
considered view of the long-term valuation of these assets but a
combination of the constraints of the accounting valuation
methodology and a prudent assessment of the global NFT and crypto
market as of June 2023. The Board will now explore how best to
value the group's assets. We note that other NFT businesses have
significant platform valuations even at the pre-revenue stage and
want to ensure we value our assets appropriately in line with these
comparables, making sure their value is clear to investors.
10. OTHER ASSETS
Shares in UK public companies 30 June 30 June
2023 2022
GBP000's GBP000's
Fair Value of Share b/f 170 -
Shares of UK public companies acquired
in year - 250
Shares of UK public companies disposed (170) -
in year
Year-end fair value adjustment - (80)
Fair Value of Shares c/f - 170
========================= =========
The Group purchased 20m shares of Gfinity plc on 14 March 2022
at 1.25 pence per share. The value at June 30 2022 was GBP170,000.
A loss of GBP80,000 was written off to Profit and Loss in the prior
year. The shares were sold in August 2022 for GBP191,701 and
resulted in a small gain in the current year of GBP21,701 versus
their carrying value.
Convertible Loan Note issued to 30 June 30 June
Quanta ("QCLN") 2023 2022
GBP000's GBP000's
QCLN b/f - 250
QCLN issued in year - 164
QCLN impaired in year - (414)
QCLN at year-end - -
------------------------- ---------
During 2021 and 2022 the Group issued convertible loan notes to
Quanta in the cumulative amount of GBP414,000. During 2022 the
Directors elected to provide in full against the recoverability of
these loan notes. This GBP414,000 impairment was expensed within
the statement of Comprehensive Income,
The Group classified the fair value of its financial instruments
measured at fair value according to the following hierarchy based
on the amount of observable inputs used to value the
instrument:
Level 1: quoted prices in active markets for identical assets
and liabilities;
Level 2: inputs, other than the quoted prices included in Level
1, that are observable for the asset or liability, either directly
or indirectly;
Level 3: inputs for the asset or liability that are not based on
observable market data. The company's investments in public
companies are considered Level 1 in the hierarchy.
11. Trade and other receivables
2023 2022
GBP000's GBP000's
Trade receivables 50 96
Other debtors 6 5
Other receivables 91 61
147 162
================= =================
The carrying value of receivables is considered a reasonable
approximation of fair value.
In addition, some of the unimpaired trade receivables are
overdue as at the reporting date. The age profile of trade
receivables is as follows:
2023 2022
Within terms GBP000's GBP000's
Not more than 30 days 5 6
Overdue
Not more than 3 months 5 108
More than 3 months but not more than 6
months 42 77
More than 6 months but not more than 1
year 40 84
More than 1 year 98 37
Provision for doubtful debts (140) (216)
50 96
================== ===================
2023 2022
GBP000's GBP000's
Opening provision for doubtful debts 216 29
Change in provision during the year -
utilisation (61) (96)
Change in provision during the year -
charge /(release) into statement of comprehensive
income (15) 283
Closing provision for doubtful debts 140 216
================== ===================
Trade and other receivables that are not impaired are considered
to be collectible within the Group's payment terms, negotiated with
each customer.
12. Cash and cash equivalents
Cash and cash equivalents include the following components:
2023 2022
GBP000's GBP000's
Argentina's cash at bank and in hand 8 11
Other companies 905 1,664
Cash at bank and in hand 913 1,675
============= ===============
The balances are: GBP882,000 in British pounds, GBP3,000 in
Indian Rupees, GBP8,000 in Argentine pesos and GBP20,000 in Mexican
pesos.
The majority of cash ( GBP0.8m) is held with NatWest Group plc,
the long term credit rating of which is P-2 (Moody's) and A-2
(S&P).
13. SHARE CAPITAL and RESERVES
2023 2022
(restated)
GBP000's GBP000's
Ordinary Share capital 768 659
Share premium 21,331 19,334
Translation Reserve (3,050) (3,050)
Share Based Payment
reserve 25 13
Retained earnings (18,541) (14,752)
533 2,204
=============================== =====================
The total number of Ordinary Shares in issue as at 30 June 2023
was 4,369,655,903 with a par value of 0.01 pence per share (30 June
2022: 3,285,590,326 with a par value of 0.01 pence per share). All
issued shares are fully paid. In addition, there are 140,753,533
Deferred Shares of 0.19 pence nominal value each in issue. The
Deferred Shares, as their name suggests, have very limited rights
which are deferred to the Ordinary Shares and effectively carry no
value as a result. Accordingly, the holders of the Deferred Shares
are not entitled to receive notice of, attend or vote at general
meetings of the Company, nor are they entitled to receive any
dividends or any payment on a return of capital until at least
GBP10,000,000 has been paid on each Ordinary Share. The Deferred
Shares will not be admitted to trading on AIM or any other
market.
The Group's main source of capital is the parent company's
equity shares. The Group's policy is to retain sufficient
authorised share capital so as to be able to issue further shares
to fund acquisitions, settle share-based transactions and raise new
funds. Share based payments relate to employee share options
schemes. The schemes have restrictions on headroom so as not to
dilute the value of issued shares of the Company. The Group has not
raised debt financing in the past and does not expect to do so in
the future.
Allotted, called up and fully paid Year ended Year ended
2023 2022
In issue at 1 July 3,285,590,326 2,354,549,845
Issued during year 1,084,065,577 931,040,481
In issue at 30 June 4,369,655,903 3,285,590,326
The balance in the share premium account represents the proceeds
received above the nominal value on the issue of the Company's
equity share capital.
In July 2022 the Group issued 5,434,581 shares at 0.37 pence per
share and 172,413,792 shares at 0.29 pence per share.
In October 2022 the Group issued 666,666,666 shares at 0.18
pence per share via a share placing, and 111,111,111 shares at 0.18
pence per share via a Broker offer.
In October 2022 the Group issued 25,930,446 shares at 0.18 pence
per share.
In February 2023 the Group issued 30,483,696 shares at 0.2711
pence per share and 72,025,285 shares at 0.1899 pence per
share.
In October 2022 the Group issued 666,666,666 Warrants with a
strike price of 0.30 pence per share and exercisable up to 18(th)
April 2024.
In April 2023 the Group issued 340,000,000 Options over Ordinary
Shares to senior management with a strike price of 0.11 pence and
exercisable up to April 2033.
14. Trade and other payables
2023 2022
GBP000's GBP000's
Trade payables 246 112
Other payables 104 277
Accruals and deferred income 137 53
487 442
================== =================
All amounts are current. The carrying values are considered to
be a reasonable approximation of fair value.
15. LOANS AND BORROWINGS
The Directors believe the book value of loans and borrowings
approximates fair values. Book values are:
2023 2022
Current GBP GBP
Bounce Back Loan 40,809 6,571
Non-Current - 40,351
Total Loans and borrowings 40,809 46,922
======= ======================================
Prior to its acquisition by the Group, KrunchData Limited
obtained a Bounce Back Loan from Metro Bank PLC. The purpose of the
Loan is to finance working capital and investment in the business
and to support trading or commercial activity in the United
Kingdom. The duration of this fixed sum loan agreement is 72 months
from the loan drawdown date. The interest rate which applies to the
loan agreement is 2.5% (fixed) per annum. No repayments of capital
or interest are required during the first 12 months after the date
draw down, as the loan is under the terms of the Bounce Back Loan
scheme offered by the UK Government, which covers the interest
payments on behalf of the Company for that period.
16. Share-based payments
The Group operates three share option incentive plans - an
Enterprise Management Incentive Scheme, a Global Share Option Plan
and an ISO Sub Plan - in order to attract and retain key staff. The
remuneration committee can grant options over shares in the Company
to employees of the Group. Options are granted with a fixed
exercise price equal to the market price of the shares under option
at the date of grant and are equity settled, the contractual life
of an option is 10 years. Exercise of an option is subject to good
and bad leaver provisions. Options are valued at the date of grant
using the Black-Scholes option pricing model. Directors did not
exercise any options during the period.
On 28 April 2023 the group issued 340,000,000 share options to
senior staff as part of their remuneration. These options have an
exercise price of 0.11p per share but are only exercisable if the
volume weighted share price reaches 0.3p measured over any 10
consecutive business days. They are exercisable up to 27 April
2033. It is the opinion of the Directors that the market condition
would be reached in 4 years.
The inputs into the Black-Scholes model for issuance of stock
options were as follows for 2023:
2023 2022
Weighted average share price / pence 0.11 n/a
---------------------- --------------------
Weighted average exercise price / pence 0.11 n/a
---------------------- --------------------
Weighted average expected volatility 124% n/a
/ %
---------------------- --------------------
Weighted average expected life / years 4 n/a
---------------------- --------------------
Weighted average risk-free rate / % 3.684% n/a
---------------------- --------------------
a) The risk-free rate is based on the UK gilt rate as at the
grant date with a period to maturity commensurate with the expected
term of the relevant option tranche.
b) The fair value charge is spread evenly over the period
between the grant of the option and the earliest exercise date.
c) The expected volatility is based on the historical volatility
of share prices over the previous period of equivalent length as
the option's expected life. The expected life used in the model has
been adjusted, based on management's best estimate, for the effects
of non-transferability, exercise restrictions and behavioural
considerations. The range of comparable companies has been reviewed
for grants in the current year resulting in the decrease in
expected volatility.
The table below illustrates the number and weighted average
exercise price of share options
OPTIONS 2023 Weighted Remaining 2022 Weighted Remaining
Number of Average Life in Number of average Life in
share options Exercise years share options exercise years
Price Price
(p) (p)
At start
of year 4,501,000 0.5593 1.37 4,501,000 0.5593 2.37
Issued in
year 340,000,000 0.1100 9.83 - - -
Exercised - - - - - -
Forfeited - - - - - -
At end of
year 344,501,000 0.1159 9.71 4,501,000 0.5593 1.37
=========== ===================== ========= ========== =========================== ========= ==========
The total charge for the year relating to employee share-based
payment plans was GBP12,000 (2022: GBPNil) and is included in
administrative expenditure in the Statement of Comprehensive
Income.
17. Capital commitments
The Group had no capital commitments as at 30 June 2023 (30 June
2022: GBPnil ). As detailed in Note 24 Events After the Reporting
Date, the Group is currently committed to investing approximately
GBP228,000 into its new Mexican business segment.
18. RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group is exposed to currency and liquidity risk, which
result from both its operating and investing activities. The
Group's risk management is coordinated in close co-operation with
the Board and focuses on actively securing the Group's short to
medium term cash flows by minimising the exposure to financial
markets. The most significant financial risks to which the Group is
exposed are described below. Also refer to the accounting
policies.
Foreign currency risk
The Group is exposed to transaction foreign exchange risk. The
currencies where the Group is most exposed to volatility are
Argentine Peso, Mexican Peso and Indian Rupee.
Currently no hedging instruments are used. The Company will
continue to review its currency risk position as the overall
business profile changes.
Foreign currency denominated financial assets and liabilities,
which are all short-term in nature and translated into local
currency at the closing rate, are as follows.
2023 2022
000's 000's
USD ARS Other USD ARS Other
Nominal amounts GBP GBP GBP GBP GBP GBP
Financial assets - 30 99 - 82 17
Financial
liabilities (5) (25) (483) (5) (50) (85)
Short-term exposure (5) 14 (384) (5) 32 (68)
--------------- ------------------ ------------ ------------------ ----------- ------------
Percentage movements for the period in the exchange rates for
the British Pound to US Dollar and Argentine Peso are below. These
percentages have been determined based on the average exchange
rates during the period.
2023 2022
US Dollar -9.5% -13.9%
Argentine Peso +35.8% +12.8%
During the period the USD continued to strengthen against the
pound and the Argentine peso continued to weaken.
Liquidity risk
The Group seeks to manage financial risk by ensuring sufficient
liquidity is available to meet foreseeable needs. Management
prepares cash flow forecasts which are reviewed at Board meetings
to ensure liquidity. The Group has no borrowing arrangements.
As at 30 June 2023, the Group's financial liabilities were all
current and have contractual maturities as follows:
30 June 2023 Within 6 6 to 12
months months
GBP000's GBP000's
Trade and other 247 -
payables
The maturity of the Group's financial liabilities, which were
all current at the previous year end, was as follows:
30 June 2022 Within 6 6 to 12
months months
GBP000's GBP000's
Trade and other 112 -
payables
Capital Management Disclosures
Management assesses the Group's capital requirements in order to
maintain an efficient overall financing structure while avoiding
excessive leverage. The Group manages the capital structure and
makes adjustments to it in the light of changes in economic
conditions and the risk characteristics of the underlying assets.
In order to maintain or adjust the capital structure, the Group
could issue new shares.
19. FINANCIAL INSTRUMENTS
A number of the Company's accounting policies and disclosures
require the determination of fair value, for both financial and
non-financial assets and liabilities. Fair values have been
determined for measurement and/or disclosure purposes based on the
following methods. When applicable, further information about the
assumptions made in determining fair values is disclosed in the
notes specific to that asset or liability.
Classification of fair value of financial instruments
The Company classified the fair value of its financial
instruments measured at fair value according to the following
hierarchy based on the amount of observable inputs used to value
the instrument:
Level 1: quoted prices in active markets for identical assets
and liabilities;
Level 2: inputs, other than the quoted prices included in Level
1, that are observable for the asset or liability, either directly
or indirectly;
Level 3: inputs for the asset or liability that are not based on
observable market data;
The company's investments in public companies (note 10) are
considered Level 1 in the hierarchy.
The Company's financial instruments comprise primarily cash and
various items such as trade debtors and trade payables which arise
directly from operations. The main purpose of these financial
instruments is to provide working capital for the Company's
operations. The Company does not utilise complex financial
instruments or hedging mechanisms.
Financial assets and financial liabilities (except the
investment in public companies, see note 10) are initially measured
at amortised cost. Transaction costs attributable to the
acquisition of a financial asset or financial liability are added
or deducted from the value of the financial asset or financial
liability.
The tables below set out the Group's accounting classification
of each class of its financial assets and liabilities.
2023 2022
GBP000's GBP000's
Financial Assets
Accrued Receivables 4 5
Trade receivables 50 96
Cash and Cash equivalents 913 1,675
967 1,776
---------------------- --------------------
Financial Liabilities
Trade Creditors (247) (112)
Accrued content costs (25) (48)
Other Accrued liabilities (113) (5)
(385) (165)
---------------------- --------------------
All receivables are expected to be received in full, and all
payables are expected to be paid in full. Cash and cash equivalents
comprise cash on hand and demand deposits held on call with banks.
Therefore, in the view of management, all of the above financial
assets' carrying values are stated at their amortised cost, as at
30 June 2023 and 2022.
20. Related party transactions
Key Management
Key management personnel consist of the Directors and senior
management and their remuneration is disclosed in the Remuneration
Committee Report. The shareholdings of key management are shown
within the Director's Report. During the year key management were
issued with 300,000,000 options over ordinary shares as per Note
16.
Related Parties
IgniteAMT Limited is a company where Mark Epstein is a Board
Member and has a beneficial interest and Sri Ramakrishna Uthayanan
is the Finance Director without beneficial interest and Tom
Gutteridge is a Person of Significant Control. During the year
Company made payments of GBP172,200 excluding VAT to IgniteAMT
Limited. At June 30 2023, the company owed IgniteAMT Limited
GBP25,280.
Rama Uthayanan received GBP48,000 for fees from KrunchData,
which is disclosed in the Remuneration Committee report.
21. EXCHANGE DIFFERENCES ON TRANSLATING FOREIGN OPERATIONS
During FY 2020, 5 subsidiaries were closed (Singapore,
Australia, Chile, Appitalism (USA) and The Nickels Group (USA)).
These entities had Foreign Exchange equity reserves recorded due to
Intercompany transactions, according to IAS 21. The effect of the
derecognition was disclosed in the FY 2020 Financial Statements
comprehensive income.
During FY 2021, FY 2022 and FY 2023 the FX reserve transactions
are Nil, as no subsidiaries were closed during these years, all the
remaining subsidiaries remain operational.
22. ULTIMATE CONTROLLING PARTY
The Directors do not consider there to be an ultimate
controlling party due to the composition of the share register.
23. PRIOR YEAR ADJUSTMENT
The year-ending 30 June 2022 Statement of Comprehensive Income,
Statement of Financial Position, Statement of Changes in Equity and
Cashflow Statement have been restated in respect of broker options
which were issued as part of the fundraising during March 2022. The
linked expense in respect of this was originally estimated at
GBP255,000 on the understanding that the instruments had been
issued to the broker in exchange for services rendered. Upon review
it was determined that these instruments had been issued to the
broker for redistribution to investors for participation in the
funding round and therefore were not in exchange for any goods or
services and thus, are not within the scope of IFRS 2: Share Based
Payments. As such a prior year restatement has been recognised at
30th June 2022 to reverse the prior year's GBP255,000 share-based
payment charge and movement on the share-based payment reserve.
Signed Accounts Adjustment Restated as
as of 30(th) of 30(th) June
June 2022 2022
Statement of Comprehensive
income
Loss per signed accounts GBP(2,764,000) GBP255,000 GBP(2,509,000)
at 30(th) June 2022
Earnings Per Share
Basic Earnings per Share (0.102)p +0.01p (0.092)p
Group Statement of Financial
Position
Share-Based Payment reserve GBP268,000 GBP(255,000) GBP13,000
Retained Earnings GBP(15,007,000) GBP255,000 GBP(14,752,000)
Company Statement of Financial
Position
Share Based Payment Reserve GBP268,000 GBP(255,000) GBP13,000
Retained Earnings GBP(16,302,000) GBP255,000 GBP(16,047,000)
24. EVENTS AFTER THE REPORTING DATE
Following the year-end, a further GBP675,000 (before expenses)
was raised during December 2023 by issue of new Ordinary Shares.
These funds will be used to boost working capital and expand the
revenues derived from the Group's technology platform into a new
business segment engaged in sports betting, publishing and media
ownership in Mexico. The Group has for several months been engaged
in corporate development discussions with key companies engaged in
this high growth business segment and this fundraising enables the
opportunity for the group to enter contracts to broaden the
revenues derived from its Streams technology platform. The Group
will acquire a 10% interest in Capital Media Sports S.A ("Capital
Media Sports"), a newly created company. The intention is to create
one of the largest Sports Media groups in Mexico, by partnering
with one of the largest media publishers in Mexico, namely Capital
Media Group, together with the co-owner of Necaxa football club,
the co-owner of Atlante football club, the co-owners of Capital
Media Group and the Neme business family which owns Alive Sports
Entertainment, one of Mexico's biggest sports event businesses.
The Group's existing wholly owned Mexican subsidiary, Mobile
Streams of Mexico, S.de R.I, intends to pay MXN 5m (approximately
GBP228k) to obtain a 10% shareholding in Capital Media Sports,
which has a strategy seeking to acquire a number of sporting
publications under which it has signed heads to terms to acquire
Estadio, a major existing heritage sports media publication in
Mexico formerly owned by Capital News S.A ("Capital News" and part
of the Capital Media Group), as the first of these. Capital Media
Sports will, according to the HOT (Heads of Terms), acquire all
associated IP for the print and digital operations of the
publication.
Initially Capital Media Sports will acquire the assets and IP of
Estadio. Following the acquisition of the interest in Capital Media
Sports, MOS and its partners will, subject to regulatory approvals,
then fund the launch of two associated companies, Estadio Bet
("Bet") and Estadio Talk ("Talk"), in which MOS will have a 25%
interest (together the "Investment"). Bet will be a betting company
using the sports publication brand to deliver online gambling and
betting services to Mexican consumers and Talk will be a 'Talk
Sport' style podcast service, also utilising the brand.
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF MOBILE STREAMS
PLC
Opinion
We have audited the financial statements of Mobile Streams Plc
(the 'parent company') for the year ended 30 June 2023 which
comprise the parent company Statement of Financial Position, the
parent company Statement of Changes in Equity and notes to the
financial statements, including a summary of significant accounting
policies. The financial reporting framework that has been applied
in their preparation is applicable law and UK-adopted international
accounting standards, including Financial Reporting Standard 101
Reduced Disclosure Framework (United Kingdom Generally Accepted
Accounting Practice).
In our opinion, the parent company financial statements:
-- give a true and fair view of the state of the parent
company's affairs as at 30 June 2023 and of its loss for the year
then ended;
-- have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and
-- have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and 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 parent
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 related to going concern
We draw attention to the accounting policies in the group
financial statements, which indicates that the group needs to
achieve its operating targets, and may require further financing to
meet its commitments as they fall due. As stated in the accounting
policies, the group's forecasts are dependent on revenue streams
which are uncontracted and have no historical data at present upon
which to base the revenue forecasts. As such there is currently
uncertainty regarding the group achieving such operating targets as
the forecasts are dependent on factors beyond the control of the
group. As stated in the accounting policies, these events or
conditions indicate that a material uncertainty exists that may
cast significant doubt on the group's ability to continue as a
going concern.
In auditing the company financial statements, we have concluded
that the director's use of the going concern basis of accounting in
the preparation of the company financial statements is appropriate.
Our evaluation of the directors' assessment of the company's
ability to continue to adopt the going concern basis of accounting
included:
-- consideration of the group's objectives, policies and
processes in managing its working capital as well as exposure to
financial, credit and liquidity risks;
-- reviewing the cash flow forecasts for the ensuing twelve
months from the date of approval of these group financial
statements and assessment thereof;
-- performing sensitivity analysis on the cash flow forecast
prepared by management, and challenging the assumptions included
thereto;
-- reviewing the management's going concern memorandum
assessment and discussing with management regarding the future and
availability of funding; and
-- reviewing the adequacy and completeness of disclosures in the group financial statements.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
Our application of materiality
The parent company materiality for the financial statements as a
whole was set at GBP200,000 (2022: GBP63,133) based on 7% of loss
before tax (2022: 7% of loss before tax). We have used this
benchmark to determine our materiality, which we believe is the key
metric of the company used by shareholders, as the company seeks to
reduce their cost base and refocus their business strategy.
Performance materiality was calculated at 70% (2022: 70%) of
materiality for the financial statements as a whole equating to
GBP140,000 (2022: GBP44,193). In determining performance
materiality of the group, we considered the risk profile of the
listed entity including the increased losses in the financial
period.
We have agreed with those charged with governance that we would
report any individual audit difference in excess of GBP10,000
(2022: GBP5,614) as well as differences below this threshold that,
in our view, warranted reporting on qualitative grounds.
Our approach to the audit
In designing our audit, we determined materiality and assessed
the risk of material misstatement in the parent company financial
statements. In particular, we looked at areas involving significant
accounting estimates and judgements by the directors including the
valuation of share options. These areas were however not considered
to constitute key audit matters. We also addressed the risk of
management override of internal controls, including evaluating
whether there was evidence of bias by the directors that
represented a risk of material misstatements due to fraud.
The parent company's key accounting function is based in London
and our audit was performed remotely from our London office with
regular contact with relevant personnel throughout.
Key audit matters
Except for the matter described in the 'Material uncertainty
related to going concern' section, we have determined that there
are no other key audit matters to communicate in our report.
Other information
The other information comprises the information included in the
annual report, other than the financial statements and our
auditor's report thereon. The directors are responsible for the
other information contained within the annual report. Our opinion
on the parent company financial statements does not cover the other
information and, except to the extent otherwise explicitly stated
in our report, we do not express any form of assurance conclusion
thereon. Our responsibility is to read the other information and,
in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the course of the audit or otherwise appears to be
materially misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required to determine
whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we
conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion, based on the work undertaken in the course of
the audit:
-- the information given in the strategic report and the
directors' report for the financial year for which the parent
company financial statements are prepared is consistent with the
parent company financial statements; and
-- the strategic report and the directors' report have been
prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the parent
company and its environment obtained in the course of the audit, we
have not identified material misstatements in the strategic report
or the directors' report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
-- adequate accounting records have not been kept, or returns
adequate for our audit have not been received from branches not
visited by us; or
-- the financial statements are not in agreement with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities
statement, the directors are responsible for the preparation of the
parent company financial statements and for being satisfied that
they give a true and fair view, and for such internal control as
the directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the parent company financial statements, the
directors are responsible for assessing the parent company's
ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the
parent company or to cease operations, or have no realistic
alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud.
The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
-- We obtained an understanding of the parent company and the
sector in which it operates to identify laws and regulations that
could reasonably be expected to have a direct effect on the
financial statements. We obtained our understanding in this regard
through discussions with management and application of cumulative
audit knowledge and experience of the sector.
-- We determined the principal laws and regulations relevant to
the parent company in this regard to be those arising from AIM
rules, Companies Act 2006 and local employment law.
-- We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-compliance by
the parent company with those laws and regulations. These
procedures included, but were not limited to:
o enquiries of management;
o reviews of board minutes; and
o Review of legal accounts.
-- We also identified the risks of material misstatement of the
financial statements due to fraud. We considered, in addition to
the non-rebuttable presumption of a risk of fraud arising from
management override of controls, that the potential for management
bias was identified in relation to:
o Revenue recognition;
o the impairment of goodwill and intangible assets and we
addressed this by challenging the assumptions and judgements made
by management when auditing these significant accounting estimates;
and
-- As in all of our audits, we addressed the risk of fraud
arising from management override of controls by performing audit
procedures which included, but were not limited to: the testing of
journals; reviewing accounting estimates for evidence of bias; and
evaluating the business rationale of any significant transactions
that are unusual or outside the normal course of business.
Because of the inherent limitations of an audit, there is a risk
that we will not detect all irregularities, including those leading
to a material misstatement in the financial statements or
non-compliance with regulation. This risk increases the more that
compliance with a law or regulation is removed from the events and
transactions reflected in the financial statements, as we will be
less likely to become aware of instances of non-compliance. The
risk is also greater regarding irregularities occurring due to
fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor's report
Other matter
We have reported separately on the Group financial statements of
Mobile Streams plc for the year ended 30 June 2023. That report
includes details of the Group Key Audit Matters; how we applied the
concept of materiality in planning and performing our audit; and an
overview of the scope of our audit.
Use of our report
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone, other than the company and the company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Tim Harris (Senior Statutory Auditor) 15 Westferry Circus
For and on behalf of PKF Littlejohn LLP Canary Wharf
Statutory Auditor London E14 4HD
22 December 2023
COMPANY STATEMENT OF FINANCIAL POSITION
30 June 30 June 2022
2023
(restated)
GBP000's GBP000's
Fixed assets Note
Intangible assets 1 - -
Other assets 2 - 170
Investments in subsidiaries 3 - 1,500
---------------------------------- ----------- -------------------- --------------------- ---------------------
Total fixed
assets - 1,670
Current assets
Debtors 4 4 964
Cash and cash equivalents 865 1,616
---------------------------------- ----------- -------------------- --------------------- ---------------------
Total current
assets 869 2,580
Creditors
Creditors: amounts falling due within
one year 5 (233) (290)
----------------------------------------------- -------------------- --------------------- ---------------------
Current Liabilities (233) (290)
Net assets 635 3,960
================================== =========== ==================== ===================== =====================
Capital and reserves
Called up share capital 6 768 659
Share premium 7 21,331 19,333
Share Based Payment
reserve 25 13
Profit and loss
account (21,489) (16,047)
Shareholders deficit / Shareholders
funds 635 3,960
----------------------------------------------- -------------------- --------------------- ---------------------
The parent Company has taken advantage of Section 408 of the
Companies Act 2006 and has not included its own Statement of
Comprehensive Income account in these Financial Statements. The
parent Company's recognised loss for the year ended 30 June 2023
was GBP5.44m.
The company registration number is 03696108
The notes on pages 61 to 64 form part of these Financial
Statements.
The Financial Statements were approved by the Board of Directors
on 22 December 2023.
Bob Moore
Chairman
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2023
Share Share Share Based Profit
capital premium Payment and loss
account account Reserve Account Total
GBP000 GBP000 GBP000 GBP000 GBP000
At 1 July 2021 567 16,765 13 (14,318) 3,027
New equity issue 92 2,568 - - 2,661
Loss for the year - - - (1,985) (1,985)
Warrant charge - - 255 - 255
At 30 June 2022 659 19,333 268 (16,302) 3,960
=================== =================== ============ ==================== ====================
At 1 July 2022 as
previously
stated 659 19,333 268 (16,302) 3,960
Prior Year
Adjustment
(Group Note 23) - - (255) 255 -
------------------ ------------------- ------------------- ------------ -------------------- --------------------
At 1 July 2022
(restated) 659 19,333 13 (16,047) 3,960
New equity issue 108 1,997 - - 2,105
Loss for the year - - - (5,442) (5,442)
Share based
payments
- options - - 12 - 12
At 30 June 2023 768 21,331 25 (21,489) 635
=================== =================== ============ ==================== ====================
summary of significant accounting policies
Statement of compliance
These Financial Statements have been prepared in accordance with
applicable accounting standards and in accordance with Financial
Reporting Standard 101 - "Reduced Disclosure Framework" (FRS 101)
The principal accounting policies adopted in the preparation of
these Financial Statements are set out below. These policies have
all been applied consistently throughout the year unless otherwise
stated.
The Financial Statements have been prepared on a historical cost
basis. The Financial Statements are presented in Sterling (GBP) and
have been presented in round thousands (GBP'000).
In preparing these Financial Statements the Company has taken
advantage of all disclosure exemptions conferred by FRS 101.
Therefore, these Financial Statements do not include:
1. A statement of cash flows and related notes
2. The requirements of IAS 24 related party disclosures to
disclose related party transactions entered in to between two or
more members of the group as they are wholly owned within the
group.
3. The effect of future accounting standards not adopted.
4. Certain share based payment disclosures.
5. Disclosures in relation to impairment of assets.
6. Disclosures in respect of financial instruments (other than
disclosures required as a result of recording financial instruments
at fair value).
Additionally, the consolidated Group prepares accounts under
IFRS which should be read in conjunction with these statements
specifically in respect of the judgements and estimates used in
considering the impairment of investments which is considered
alongside that of impairment of intangible assets.
Basis of preparation
The Financial Statements have been prepared on the historical
cost basis with investments being valued under fair value through
profit or loss. The principal accounting policies are set out
below. The Company has applied the exemption under section 408 of
the Companies Act 2006 and has not included the individual profit
and loss account statement in the Financial Statements.
Going concern
The Financial Statements have been prepared on a going concern
basis, which assumes that the Group and the Company will continue
in operational existence for the foreseeable future, being 12
months from the date of sign-off of these accounts. The Directors
are aware of a material uncertainty in the magnitude of future
revenues and this is discussed further in the Going Concern section
of Note 1 of the Group Financial Statements on page 31.
Investments IN SUBSIDIARIES
Investments in subsidiaries are stated in the Company's
statement of financial position at cost less provisions for
impairment. The recoverability of investments is considered to be a
key judgement and estimate and these are considered alongside those
considered at a Group level in respect of the recoverability of
Intangible assets (See 1.1). Intercompany receivables and stated in
the Company's statement of financial position at the estimated
recoverable amount less provisions for impairment.
COMpany profit and loss account
The parent Company has taken advantage of Section 408 of the
Companies Act 2006 and has not included its own profit and loss
account in these Financial Statements. The parent Company's
recognised loss for the year ended 30 June 2023 was GBP5,442k (2022
(restated): GBP1,730k).
1. INTANGIBLES
Investment in LiveScores 30 June 30 June 2022
2023
GBP000's GBP000's
Cost - -
Additions - 125
Amortisation in year - (21)
Impairment in year - (106)
--------------------------- ----------------------
Net Book Value at 30(th) June - -
--------------------------- ----------------------
The addition comprised the investment in LiveScores. This was
subsequently amortised and impaired to GBPnil book value during the
prior year.
2. Other ASSETS
Shares in UK public companies 30 June 30 June
2023 2022
GBP000's GBP000's
Fair Value of Share b/f 170 -
Shares of UK public companies acquired
in year - 250
Shares of UK public companies disposed (170) -
in year
Year-end fair value adjustment - (80)
Fair Value of Shares c/f - 170
========================= =========
The company purchased 20m shares of Gfinity plc on 14 March 2022
at 1.25 pence per share. The value at June 30 2022 was GBP170,000.
A loss of GBP80,000 was written off to Profit and Loss in the prior
year. The shares were sold in August 2022 for GBP191,701 and
resulted in gain of GBP21,701 in the current year versus their
carrying value.
Convertible Loan Note issued to 30 June 30 June
Quanta ("QCLN") 2023 2022
GBP000's GBP000's
QCLN b/f - 250
QCLN issued in year - 164
QCLN impaired in year - (414)
QCLN at year-end - -
------------------------- ---------
During 2021 and 2022 the company issued convertible loan notes
to Quanta in the cumulative amount of GBP414,000. During 2022 the
Directors elected to provide in full against the recoverability of
these loan notes. This GBP414,000 impairment was expensed within
the statement of Comprehensive Income in the prior year.
3. Investment in subsidiary companies
Investments in subsidiaries are reviewed for impairment when
events indicate the carrying amount may not be recoverable and are
accounted for in the Company's Financial Statements at cost less
accumulated impairment losses.
During the year the Directors impaired the carrying value of the
investment in Krunch Data Limited by GBP1,500,000. This was a
result of the impairment exercise conducted across all group
intangibles as per Note 9 of the Group Financial Statements which
took into account the current level of business. In the prior year
Mobile Streams Plc completed its 100% acquisition of KrunchData Ltd
and recorded the investment at cost being GBP1.5 million.
Management assessed the recoverability of investments at year ended
30 June 2023 and an impairment indicator was identified as a result
of the loss of the significant contract with customer, IGS, and due
to the global NFT and crypto markets NFT revenues did not perform
as expected. Although the directors are of the opinion that the
investment in KrunchData Ltd is equivocal to its original cost, as
it underpins the Group's business model, since the future revenue
streams are uncontracted and since there is no historical data to
support the forecasts, the directors deem it prudent to impair the
investment in KrunchData in full.
Investments in Subsidiary undertakings comprise:
Proportion held
Subsidiary Directly by By other Total held Country Status
Mobile Streams Group companies by Group of incorporation
plc
Mobile Streams Inc. 100% - 100% USA Dormant
Mobile Streams de
Argentina SRL 50% 50% 100% Argentina Active
Mobile Streams Columbia
Limitada. 50% 50% 100% Colombia Dormant
Mobile Streams of
Mexico de CV 50% 50% 100% Mexico Active
Mobile Streams India
Private Limited 99.99% - 99.99% India Active
Streams Data Limited 100% - 100% UK Active
KrunchData Limited 100% - 100% UK Active
All the subsidiaries' issued shares were ordinary shares and
their principal activities were the distribution of licensed mobile
phone content and/or the provision of data insight and intelligence
platforms and services.
The registered offices addresses are:
Mobile Streams plc
125 Wood Street
London
EC2V 7AW
Mobile Streams, Inc.
PO Box 471191
Celebration
FL 34747-4679
KrunchData Limited
125 Wood Lane
London
EC2V 7AW
Mobile Streams Argentina SRL
Viamonte 1815 3rd Floor appt G
Ciudad Autonoma de Buenos Aires
Republica Argentina
Mobile Streams India:
2106, Wing A, Bldg/2, Raheja Willows, CHS L,
Birchwood, Akruli Rd, Kandivali East, Maharashtra,
India
Mobile Streams Colombia
AV. CRA 13 No. 69-74 OF. 701
Municipio Bogota D.C..
Colombia
Mobile Streams Mexico
Calle Florencia No. 57, 3deg Piso,
Colonia Juarez, Delegacion Cuauhtemoc, Ciudad de Mexico,
C.P. 06600.
Mexico
Streams Data Limited
125 Wood Street
London
EC2V 7AW
4. DEBTORS 2023 2022
GBP000's GBP000's
Trade debtors 1 79
Other debtors 3 5
Intercompany debtors 2,598 880
Provision for Intercompany (2,598) -
debtors
4 964
========== =============
Management assessed the recoverability of intercompany debtors
at year ended 30 June 2023. Due to a reduction in the revenue
derived from the legacy business and as future revenue growth is
based on uncertain and uncontracted revenue from the new business
segment, the directors have raised a provision against intercompany
debtors in full. In respect of this the charge to the profit and
loss account amounts to GBP2,598k.
5. CREDITORS
Creditors: amounts falling due within one year
2023 2022
GBP000's GBP000's
Trade creditors 86 8
Accruals and deferred income 147 282
233 290
========= =========
6. SHARE CAPITAL
For details of share capital refer to note 13 to the Group
Financial Statements.
7. share premium account
For details of share capital refer to note 13 to the Group
Financial Statements.
8. Capital commitments
The Company has no capital commitments at 30 June 2023 (2022:
Nil). As detailed in Note 24 to the Group Financial Statements -
Events After the Reporting Date, the Group is currently committed
to investing approximately GBP228,000 into its new Mexican business
segment.
9. Contingent liabilities
As at 30 June 2023 there were no contingent liabilities (2022:
Nil).
10. Related party transactions
During the year the Company remunerated the Directors and
Officers as disclosed in the Remuneration Report.
Related Parties
IgniteAMT Limited is a company where Mark Epstein is a Board
Member and has a beneficial interest and Sri Ramakrishna Uthayanan
is the Finance Director without beneficial interest and Tom
Gutteridge is a Person of Significant Control. During the year
Company made payments of GBP172,200 excluding VAT to IgniteAMT
Limited. At June 30 2023, the company owed IgniteAMT Limited
GBP25,280.
Rama Uthayanan received GBP48,000 for fees from KrunchData,
which is disclosed in the Remuneration Committee report.
The Company is taking advantage of the exemption per IAS 24
which does not require disclosure of transactions entered into
between members of a group when one of the transacting parties is a
wholly owned subsidiary.
11. Directors and employees
The average number of employees during the year to 30 June 2023
was as follows:
Year-ended Year
2023 ended
2022
Number Number
Management 5 5
5 5
==================================== ==================
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END
FR FLFERFTLDFIV
(END) Dow Jones Newswires
December 27, 2023 12:03 ET (17:03 GMT)
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