TIDMTAP
28 December 2023
Tap Global Group plc
Final Results for the Year Ended 30 June 2023
Significant growth in user numbers and revenue following a transformative period
Tap Global Group Plc (https://investor.tap.global/) (AQSE:
TAP (https://www.aquis.eu/companies/TAP)), the cryptocurrency app bridging the
gap between traditional finance and blockchain technology, is pleased to present
its results for the year ended 30 June 2023 ("FY23"). References herein to "Tap
Group", the "Group" or the "Company" refer to Tap Global Group Plc (formerly
Quetzal Capital Plc), whereas references to "Tap" refer to Tap Global Limited
and/or Tap Technologies Limited which were acquired by the Group during FY23 on
9 January 2023 (see "Important note" below for further details).
Group Financial Highlights
2023 2022
£ £
Trading Payment Volume* 181,568,624 -
Trading Revenue 1,678,602 -
Other Revenue 337,484 50,000
Total Revenue 2,016,086 50,000
Trading Margin 0.92% -
Adjusted EBITDA** (363,363) (313,169)
EBITDA (782,838) (321,793)
Loss After Tax (1,074,640) (306,163)
· Group trading payment volume was £181.6m (2022: £0)
· Group total revenue was £2.0m (2022: £0.05m), reflecting six months of
trading from Tap since January 2023
· Tap's full year (1 July 2022 to 30 June 2023) revenue was £2.5m (FY22:
£0.9m), an increase of 176%
· Group adjusted EBITDA loss was £0.4m (2022: £0.3m)
· An overall loss after tax of £1.1m for the year (2022: £0.3m), with Tap
contributing a profit after tax whilst part of the Group, of £0.4m
· Cash position increased to £2.3 million (FY22: £1.1 million)
Operational Highlights
· Tap Group relisted on Aquis Stock Exchange via a Reverse Takeover ("RTO") of
Tap in January 2023 and raised £3.1 million in gross proceeds as part of the
RTO, primarily from strategic investors already active in cryptocurrency
projects and businesses
· Tap registered users increased by 82% to 162,000 (FY22: 89,000)
· Tap coins listed on the platform increased by 133%, taking the total to 42
cryptocurrencies (FY22: 18)
· Tap trading volume for the full year significantly increased by 335% to
£207m (2022: £47m)
· Tap maintained its geographic footprint of 44 countries throughout the
period
· Tap secured a deal with Bitfinex, one of the world's leading crypto
exchanges, in January 2023 for the provision of Cards as a Service to users of
Bitfinex who can opt in for a Mastercard managed by Tap
· David Hunter was appointed as Group Chairman and Kriya Patel as Tap CEO in
May 2023
Post Year-End Trading Update to 30 November 2023 & Outlook
· Revenue for the five-month period was £1.0m - lower than the recent run-rate
reflecting a temporary pause in UK trading while Tap successfully adapted to the
regulatory environment
· Cash at 30 November 2023 remained in line with year-end cash at £2.3m
· Registered users exceeded 250,000 at 30 November 2023
· Tap Group announced an agreement to launch in the US (expected to occur in
Q1 2024) through a partnership with Zero Hash LLC, a Chicago-based B2B2C crypto
infrastructure platform, ensuring the requisite regulatory coverage for the new
US business
David Hunter, Chairman of Tap Group, commented:
"Since joining the Board, I have been highly impressed with a great deal of what
I have seen in Tap Group. It enjoys an immensely dynamic and imaginative
executive team that is constantly seeking to explore new initiatives and growth
opportunities tempered with an acute awareness that the Company must avoid the
pitfalls that have befallen an increasing number of other operators in the
industry.
The Group's financial status is in robust health with revenues for the year of
£2.0 million, a cost base that is under control, and a healthy cash balance at
year-end of £2.3 million. The Group's adjusted EBITDA for the year was a loss of
£0.4m, which was expected as the Group executes its growth strategy.
When comparing the full year trading of Tap (1 July 2022 to 30 June 2023), the
revenue for the year was £2.5m, representing an increase of 176% on the prior
year.
There is more to do to ensure Tap Group emerges as a force out of the current
industry-wide maelstrom; but the foundations for huge scaling have been firmly
laid and Tap Group is poised to become a truly global player in the fintech
arena."
The Directors of the Company accept responsibility for the contents of this
announcement.
Notes
*Trading Payment Volume - the value of funds traded by customers when selling
one currency for another
**Adjusted EBITDA - earnings before interest, tax, depreciation, amortisation
and adjustments for realised or unrealised gains and losses on non-GBP
transactions or holdings, fair value on investments and sales of assets
Important note
References throughout this report to "Tap Group" or the "Company" refer to Tap
Global Group Plc (AQSE: TAP) (formerly Quetzal Capital Plc).
References throughout this report to "Tap" refer to Tap Global Limited and/or
Tap Technologies Limited which are wholly owned subsidiaries of Tap Global Group
Plc. Tap Global Limited is licensed and regulated by the Gibraltar Financial
Services Commission under the Distributed Ledger Technology (DLT) with licence
No. 25532.
Enquiries:
Tap Global Group Plc Via Vigo Consulting
David Carr, Chief Executive
Officer
Peterhouse Capital Limited (AQSE +44 (0)20 220 9795
Growth Market Corporate Advisor)
Guy Miller / Narisha
Ragoonanthun
Tennyson Securities (Broker) +44 (0)20 7186 9030
Alan Howard
Vigo Consulting (Investor +44 (0)20 7390 0230
Relations)
tapglobal@vigoconsulting.com
Ben Simons / Kendall Hill /
Peter Jacob
About Tap Global Group Plc
The Tap group of companies provide an innovative and fully integrated fiat
payments and crypto settlement service. A single regulatory registration, via
the wholly owned operating business Tap Global Limited, provides Tap customers
with access to several major crypto exchanges through the Tap App allowing them
to purchase over 40 cryptocurrencies and store them directly in the customer's
wallet. The wallet can also store fiat currency denominated in Sterling, Euros
and/or USD.
Through the single app, Tap's over 250,000 users can access several major
cryptocurrency exchanges and, utilising Tap's proprietary Artificial
Intelligence middleware, customers benefit from best-execution and pricing in
real time. Through the Tap card (UK and Europe only), users can also convert
their cryptocurrencies to fiat to spend at more than 37 million merchant
locations worldwide.
Tap is one of only a handful of unified solutions operators fully regulated to
provide Distributed Ledger Technology (DLT) services and was the first
cryptocurrency FinTech company approved by Mastercard in Europe.
About Tap Global Limited
Tap Global Limited is registered in Gibraltar with the registration number
118724 and the registered office of Madison Building, Line Wall Road, Gibraltar,
GX11 1AA. Tap Global Limited is licensed and regulated by the Gibraltar
Financial Services Commission under the DLT with license No. 25532.
Learn more: www.withtap.com
Tap Global Group Plc
Chairman's Statement
For the year ended 30 June 2023
It is my great pleasure to address you in our annual report; my first as
Chairman of Tap Global Group Plc (the "Group").
Tap Global Limited and its 100% owned subsidiaries ("Tap") were acquired by
Aquis-listed shell Quetzal Capital Plc in a Reverse Takeover transaction on 9
January 2023 ("RTO"). The Group readmitted to the market the following day as
Tap Global Group Plc. As such, while this report covers the reporting period
from 1 July 2022 to 30 June 2023, this includes only a little under six months'
contribution from Tap, post-acquisition. Those months since the Reverse Takeover
have seen a seminal transformation, both in Tap and in the wider market and
regulatory environment for cryptocurrencies and fintech. There have been as many
threats as there have been opportunities, but Tap has shown itself to be
extraordinarily well positioned to succeed in what remain stormy waters. This is
key to the value creation opportunity inherent in the business.
The Group raised £3.1m of new expansion capital concurrent with the RTO just
after the collapse of FTX and in the lead up to other notable failures in the
cryptocurrency industry such as the demise of Silicon Valley Bank. I would like
to pay tribute to those who delivered the successful listing of the Group amidst
the most challenging of backdrops.
The `regulation first' mantra that Tap has always adopted has ensured that Tap
has not only managed to survive in the increasingly hostile regulatory
environment that these high-profile failures have created, but to thrive, and
grow, and continue to expand.
There are many reasons why we believe the Group outperforms its competitors -
including best execution across a number of exchanges powered by our own AI
algorithms, insured cold storage, and access to a pre-paid Mastercard - but
primary among them is the regulated status of our operating company, Tap Global
Limited, under a Distributed Ledger Technology (DLT) licence issued by the
Gibraltar Financial Services Commission.
We welcome regulation in the cryptocurrency and fintech sectors; indeed, Tap
established itself in Gibraltar from the outset exactly because it provided the
most robust regulatory environment. We continue to act under our `regulation
first' approach and believe that the continued growth in our user numbers - now
standing at over a quarter of a million - is in large part a result of a flight
to safety of customers from other platforms perceived as carrying higher risk.
There have been many positive changes to the Group since it listed in January
2023. Chief among these has been the recruitment of Kriya Patel as the CEO of
our operating company, Tap, in Gibraltar.
Kriya is instilling tremendous rigour in all Tap's processes and ensuring that
decisions are based on a thorough interrogation of the myriad data that we
process. His operational experience across payments, e-money, and financial
technology businesses has immediately been applied to Tap's business and Tap is
on a very strong footing to expand in the future.
Kriya is laser focused on growing the business in a manner that both protects
our users and shareholders from as much risk as possible and in a sustainable
way that does not inject the kinds of overheads that have become so destructive
to other operators, particularly in the United Kingdom.
As a result, the Group's financial status is in robust health with revenues for
the year of £2.0 million, a cost base that is under control, and a healthy cash
balance at year-end of £2.3 million. The Group's adjusted EBITDA for the year
was a loss of £0.4m, which was expected as the Group executes its growth
strategy.
When comparing the full year trading of Tap (1 July 2022 to 30 June 2023), the
revenue for the year was £2.5m, representing an increase of 176% on the prior
year.
Geographic expansion has been a long-held ambition of Tap Group and plans to
launch in the US have continued apace, despite the collapse and then subsequent
withdrawal of several actors in that jurisdiction.
I would like to pay tribute to David Carr, the Group CEO, and Arsen Torosian,
our Chief Strategy Officer, for the manner in which the partnership with Zero
Hash, our launching partner in the US, has been secured amidst a constantly
changing backdrop in what must be the most active regulatory jurisdiction in the
world. It has been a significant challenge, but we believe we have the optimal
launchpad to begin servicing the largest cryptocurrency market in the world from
Q1 2024.
There are a number of other growth vectors that the Board is pursuing
vigorously, including the further rolling out of the Cards as a Service product
for other exchanges, following the signing of Bitfinex in January 2023 as the
first client for this new service. This service enables companies to offer their
customers a prepaid Mastercard to enhance their existing financial offering.
Since joining the Board, I have been highly impressed with a great deal of what
I have seen in the Group. It enjoys an immensely dynamic and imaginative
executive team that is constantly seeking to explore new initiatives and growth
opportunities tempered with an acute awareness that the Company must avoid the
pitfalls that have befallen an increasing number of other operators in the
industry.
There is more to do to ensure the Group emerges as a force out of the current
industry-wide maelstrom; but the foundations for huge scaling have been firmly
laid and the Group is poised to become a truly global player in the fintech
arena.
David Hunter
Non-Executive Chairman
Tap Group
Tap Global Group Plc
CEO's Statement
For the year ended 30 June 2023
I am delighted to present the Group's results for the year ended 30 June 2023, a
period of significant financial and operational growth for the business and our
first as a UK listed company.
The cryptocurrency market, unlike traditional stocks and shares, never sleeps,
and, as the assets are global and can be bought by investors around the world,
the fluctuation in prices is constant. Tap's business is driven by activity and
although the price of assets is not the key driver for Tap, movement in their
prices is. The price of Bitcoin, which is the longest running cryptocurrency,
drives activity across most of the other cryptocurrencies.
When I am asked how cryptocurrency prices affect Tap, I am always quick to point
out that it is not pricing but market movement - up or down - that drives Tap
revenues. Stagnant markets, when users are holding, are the worst kind for Tap.
I am pleased to say that we have been seeing a sustained return of
cryptocurrency trading volumes since the RTO in January 2023 and this has helped
drive our revenues to £2.0m in the six months of trading that Tap was within the
Group. On a full year basis (1 July 2022 to 30 June 2023), Tap's revenue was
£2.5m, an increase of 176% when compared to the previous financial year, which
is a tremendous achievement and shows the investment funds being deployed
effectively.
At our previous year end in June 2022, Tap, our regulated operating business,
was providing access to 18 different crypto assets. At the end of June 2023, the
different crypto assets available on the Tap App had more than doubled to 42
across a geographic footprint of 44 countries, with a US market entry in
progress.
During the financial year, Tap grew at a steady rate with both onboarding and
revenues progressing in line with expenditure on marketing campaigns. Since the
end of the financial year, Tap has added even more cryptocurrencies, and the
total available assets today stands at 46.
The Tap platform user numbers grew from 89,000 at the beginning of the financial
year in July 2022 to 162,000 at the end of June 2023. The growth has continued
post-year end and, in November 2023, the total registered users on the platform
surpassed a quarter of a million.
The user base acquisition growth was one of the key reasons for the listing on
Aquis. The additional raised capital was budgeted for use in driving the
customer acquisition growth strategy and was initiated almost immediately. The
user base began to increase simultaneously with these efforts and as such the
user acquisition strategy has proven to be highly successful.
This customer growth was a catalyst for Tap to add operational staff in line
with the additional user numbers and accordingly some strategic key additional
hires were identified. Two of these people were Kriya Patel as a new CEO and
Nigel Crome as the new Money Laundering Reporting Officer, both for Tap's
licensed operating entity in Gibraltar, Tap Global Limited.
These two individuals bring a wealth of fintech and compliance experience with
them. Both individuals were vetted and approved by the Gibraltar Financial
Services Commission as regulated individuals; this is a key process within the
regulatory framework that Tap operates under.
Further headcount increases are planned over the coming months as Tap continues
to build out key operational teams in support of the accelerated growth
witnessed to date and expected product and market expansion planned.
In summary, the last financial year and remainder of 2023 has been focussed on
delivery of strong financial performance, continued delivery of a better
solution for customers and ensuring the Tap is operationally ready to continue
growth in an ever-changing regulatory environment.
Operational Review
The revenue generating elements of the Tap service offering are primarily driven
by a share of trading fees Tap charges to users. This accounted for circa 90% of
the revenues during the period. A continued evaluation of our pricing strategy
is undertaken to ensure we remain competitively priced whilst optimising on
revenue generation opportunities from the services delivered.
The first client for Tap's Cards as a Service product line (offering a white
-labelled prepaid Mastercard underpinned by Tap's infrastructure and regulated
status) during the period was Bitfinex. This will be ready for a public launch
in early 2024. It is anticipated that this launch will add a significant
alternative revenue stream to Tap as this will not be based on the trading of
assets directly within Tap. This launch, once fully completed, will demonstrate
to the cryptocurrency and wider fintech market that Tap can provide a proven,
operating tech and service stack that can accelerate the rollout of new services
for commercial partners, powered by Tap.
Another element that has been in development is the provision of Crypto as a
Service which, unlike the card service, is directly linked to trading activity.
The ultimate concept of this product is to allow a commercial partner to
leverage Tap's crypto services as a product for their user base without having
to develop the environment, and deliver on the regulatory standards required,
themselves. This could again drive additional users to the Tap platform along
with additional revenue as every transactional movement would incur a fee, for
both Tap and the commercial partner without the acquisition costs associated
with user growth via a direct to market approach.
Some operational developments have been necessarily curtailed both during the
last financial year and after the reporting period end due to the increased
efforts required to address new regulatory requirements and changes in wider
fintech market critical supply chain. Change considerations and replanning
priorities have also materialised following reaction from the industry and
regulators to the collapse of some large well-known companies, which in some
high-profile cases were not regulated at all. Tap continues to operate under
the `regulation first' principle that has ensured we have emerged from the
recent market upheaval with a tremendously solid foundation still in place.
Nonetheless, Tap has delivered on over 55 key milestones in 2023, including
revenue and customer growth, compliance with regulatory changes, optimising
group company structure, application redesign, performance and service
improvements, improved fraud protection and security measures, the development
of greater redundancy, further automation of key processes and the introduction
of greater business risk management and control toolkits. This has allowed Tap
to plan better and deliver on change initiatives, such as the UK Financial
Promotions Regime, and future proof our business for continued growth through a
proactive, rather than reactive, resilience to change approach that inevitably
impacts the cryptocurrency sector.
Outlook
Global cryptocurrency sector events have rightly raised alarm bells with
regulators around the world and as a consequence some Tap expansion plans had
been paused due to changes in the risk appetite of critical partners or market
uncertainties. An example would be where Tap requires third party suppliers that
need to be regulated locally in the countries in which we operate or plan to
operate. Changes in local regulatory environments, specifically within key
markets such as the UK, required Tap to pivot quickly following review of key
partner relationships and the evaluation of new suppliers. Change decisions
needed to be expedited, partners identified, and implementations thoroughly
tested and integrated into existing operations - an exercise the business is
well placed to deal with both now and in the future. Through this period of
flux, the Group generated revenues of £1m for the five-month period to November
2023 and is well positioned to build on this in its current and new markets.
In October 2023, we announced the intention to launch the Group's crypto asset
offering into the United States. We are doing so via a wholly owned subsidiary,
Tap Americas, through a partnership with Zero Hash LLC, a Chicago-based B2B2C
crypto infrastructure platform. The US is the world's largest cryptocurrency
market. Through this partnership with Zero Hash, a well-established and
regulated US entity, we identified a pathway to launch in the US whilst ensuring
the requisite regulatory coverage for the new US business.
In Zero Hash, we have found a partner that shares our regulation-first approach
and will be able to provide us with a platform for establishing a significant
presence in the US. Tap Americas has already built a significant waiting list in
the US, which has 45 million active cryptocurrency users. Tap Americas will
offer its new users a secure, regulated and innovative alternative to the
platforms currently falling under regulatory scrutiny for their imprudent
approach to the safety of consumers and their digital assets. We are very
excited to launch in the US in the new year.
The Group set up an operations hub in Greece in late 2023. This operation will
be focussed on the areas of customer onboarding and compliance oversight as well
operational support elements for the European operations. This team will be used
to help facilitate the expansion into new regions by providing the required
support in these areas as these come online. We are also evaluating whether our
Greek centre of operations should also become the operational hub for the
forthcoming MICA Regulations which come into force in 2024 and have been a key
strategic area evaluated by Tap in 2023.
The Group's public listing journey, although less than 12 months old, has been
incredibly positive in terms of positioning Tap with the tools necessary to
continue to grow in a regulation-first way which is one of the cornerstones of
the Group. Tap continues to increase market presence and customers in existing
markets and the expansion into other markets remains in process. 2024 is looking
very positive, with continued user acquisition, expansion into other regions,
and team growth planned.
As Tap expands into new markets, we also leverage on new partnerships with best
-in-class service providers. This delivers opportunities for the Group to
further mitigate key supplier dependency risks and could also facilitate further
commercial diversification opportunities with additional white-labelling and
managed utility as a service provisioning for new commercial partners.
Ensuring adoption of a regulated approach to each new market, I believe, will
prove to be a sound decision as we see ever more regulation being considered and
introduced in the digital asset industry. Using well established processes
developed in meeting regulatory requirements since the inception of Tap
positions the Company well in meeting these requirements both now and in the
future.
Tap will be making a number of product enhancements in the coming year which
will include the introduction of additional assets, further security
enhancements and delivery of new user facing services and functionality. These
will be led by the Chief Strategy Officer and co-founder of Tap, Arsen Torosian.
His vision on the crypto environment has helped Tap to continue to grow even
during what some called a "Crypto Winter".
During 2023, the crypto market has fluctuated significantly both up and down,
the price of Bitcoin at the time of the RTO was circa $17,700. By this month,
the price of one Bitcoin had reached as high as $44,373. Similarly, the price of
one Ethereum at the time of the RTO was circa $1,266 and again in December 2023
the price of this asset had been as high as $2,366. This price increase has
driven additional trading activity from Tap account holders.
Our overall outlook is very positive, and I believe that the assembled team will
help to achieve great things in the coming year.
David Carr
Chief Executive Officer
Tap Group
Tap Global Group Plc
CFO's Statement
For the year ended 30 June 2023
I present my review and financial report for the year ended 30 June 2023 where I
review in detail the consolidated statement of comprehensive income and the
consolidated statement of financial position.
Review of Consolidated Comprehensive Income Statement
Overall, the Group made an adjusted EBITDA Loss of £363k (2022: £313k), with
revenue increasing to £2.0m (2022: £50k) and adjusted operating costs increasing
by £1.5m from £0.4m in 2022 to £1.9m in 2023. Cost of sales in 2023 was £494k
(2022: 0).
The traded payment volume (value of funds traded by a customer) was £181.6m in
the six months of trading, and with average trading margin of 0.92%, resulting
in trading revenue of £1.7m and a further £0.3m of other revenue.
The increase in costs were due to the Group inheriting the costs of the Tap
operating entities and a further investment in people, product and marketing to
drive the growth strategy. Table 1 details the revenue and increase in costs
explained above.
Table 1 - Income and Expense Account
+---------------------------------+-----------------+---------+
|Year ended |Jun-23 |Jun-22 |
+---------------------------------+-----------------+---------+
| |£ |£ |
+---------------------------------+-----------------+---------+
|Payment Volumes Traded |181,568,624 |- |
+---------------------------------+-----------------+---------+
|Trading Revenue |1,678,602 |- |
+---------------------------------+-----------------+---------+
|Other Revenue |337,484 |50,000 |
+---------------------------------+-----------------+---------+
|Revenue -Total |2,016,086 |50,000 |
+---------------------------------+-----------------+---------+
|Cost of sales |494,488 |- |
+---------------------------------+-----------------+---------+
|Gross Profit |1,521,598 |50,000 |
+---------------------------------+-----------------+---------+
|Staff Costs | 455,792|97,459 |
+---------------------------------+-----------------+---------+
|Share Option and Warrant Expenses|378,631 |4,979 |
+---------------------------------+-----------------+---------+
|Marketing |240,892 |1,500 |
+---------------------------------+-----------------+---------+
|Legal & Professional Fees |257,829 |216,515 |
+---------------------------------+-----------------+---------+
|Other Expenses |551,817 |42,716 |
+---------------------------------+-----------------+---------+
|Total Operating Costs |1,884,961 |363,169 |
+---------------------------------+-----------------+---------+
|Adjusted EBITDA |(363,363) |(313,169)|
+---------------------------------+-----------------+---------+
|RTO and Acquisition related costs|(419,917) |(88,840) |
+---------------------------------+-----------------+---------+
|Fair Revaluation on Investments |(300,795) |(82,552) |
+---------------------------------+-----------------+---------+
|Sales of Assets |- |162,769 |
+---------------------------------+-----------------+---------+
|Gain on Sales of Crypto Assets |323,178 |- |
+---------------------------------+-----------------+---------+
|Exchange Rate Variance |(21,941) |- |
+---------------------------------+-----------------+---------+
|EBITDA |(782,838) |(321,793)|
+---------------------------------+-----------------+---------+
|Depreciation & Amortisation |(290,168) |- |
+---------------------------------+-----------------+---------+
|Interest Income/Expense |(1,634) |- |
+---------------------------------+-----------------+---------+
|Tax |- |15,629 |
+---------------------------------+-----------------+---------+
|Net Loss |(1,074,640) |(306,164)|
+---------------------------------+-----------------+---------+
Certain costs have been adjusted out of EBITDA due to the nature of the expense
or on the basis that they are non-recurring. The acquisition related costs are
specific to the acquisition of Tap and the re-listing of the Group and are
therefore considered non-recurring. The decrease in the fair value on
investments is due to the write down of historical investments held by the Group
prior to the acquisition of Tap. The sale of assets in the year to June 2022 was
due to shares sold in those investments. The gain on sales of crypto assets is
based on the market value of the liquidity held by the Group in crypto assets
during the year and at the year end. There was a gain on the sale of crypto
assets of £323k in the six-month period but as Tap is holding this liquidity to
facilitate customer trading and not for the purposes of propriety trading, this
line item is considered to not be part of the business operating model and is
adjusted out of the EBITDA.
As shown in Table 2 below, the Tap operating entities were profitable for the
six months of trading that they were within the Group.
Table 2 Net Profit / (Loss) by Entity
+-----------------------------------------------------+-----------+
|Entity Type |June-23 |
+-----------------------------------------------------+-----------+
|Operating Entities: Tap Global & Tap Technologies Ltd|419,502 |
+-----------------------------------------------------+-----------+
|Holding Company: Tap Global Group PLC |(1,494,142)|
+-----------------------------------------------------+-----------+
|Consolidated Net Loss |(1,074,640)|
+-----------------------------------------------------+-----------+
In Table 3 is a breakdown of the revenue for Tap Global Limited for the years
ended 30 June 2022 and 2023 respectively and for the six months of trading with
the Group. As the table shows, £2.0m of the £2.5m revenue that was generated
was in the first six months of 2023, following the acquisition and investment in
marketing.
The Trade Revenue is the commission earned on the difference between the cost of
currency sold and bought. The asset transfer revenue is a fee applied when a
customer moves assets to or from the Tap platform. The Other Revenue relates to
other usage fees applied such as card usage fees associated with the Tap prepaid
card.
Table 3 - Tap Global Limited Historical Revenue
+--------+-----------------------+--------------------+--------------------+
|Revenue |FY June 22 |FY June 23 |6 Months to June-23 |
|Type | | | |
+--------+-----------------------+--------------------+--------------------+
|Trade | 544,964| 2,025,691 | 1,678,602 |
|Revenue | | | |
+--------+-----------------------+--------------------+--------------------+
|Asset | 233,244| 412,082| 323,510|
|Transfer| | | |
|Fees | | | |
+--------+-----------------------+--------------------+--------------------+
|Other | 123,680|53,251 | 13,974|
|Revenue | | | |
+--------+-----------------------+--------------------+--------------------+
|Total | 901,888| 2,491,024 | 2,016,086 |
|Revenue | | | |
+--------+-----------------------+--------------------+--------------------+
Cost of Sales
These costs are directly related to customer activity around the three revenue
streams described above and include fees incurred at currency liquidity
providers, bank charges, costs for maintaining the prepaid card and customer
onboarding costs.
Operating Costs
The significant costs are staff costs, marketing, legal and professional costs
and share option and warrant expenses
Staff costs of £456k (2022: £97k) reflect the cost of the staff from the Tap
operating entities plus the increase in headcount to drive the growth strategy.
Marketing costs of £241k (2022: £2k) are primarily customer acquisition costs
from the Tap operating entities. Legal and professional fees of £258k (2022:
£216k) include audit and accountancy costs, regulatory costs and legal fees. The
share option and warrant expense primarily relates to warrants issued at the
time of the RTO in in January 2023.
Review of Consolidated Financial Position Statement
Please refer to the consolidated Statement of Financial Position for the Group.
Overall, the net current assets for the Group, excluding goodwill, is £3.8m.
Below I separately review each asset class.
Non-Current Assets
The tangible assets include a right of use asset of £104k which is the leased
offices in Gibraltar, with the balance of tangible assets comprising computer
equipment and office fixture and fittings.
The intangible assets include crypto assets held for investment and value of the
software platform developed to operate the Tap operating model which is
capitalised and amortised over the useful life of the software. The goodwill is
the difference between the consideration paid of £20.25m and the book value of
the Tap operating companies acquired which was a net liability of £1.6m. This
net liability included the convertible loan note of £1.5m that the Group
advanced to Tap in December 2021 and which was subsequently capitalised
following the completion of the acquisition.
Current Assets
Cash at bank at is £2.3m (2022: £1.1m) with a further £1.2m in liquidity
represented by crypto assets held for investment but reported in non-current
assets. The increase in cash reflects the £3.1m equity raised in January 2023,
less one-off payments relating to the RTO and the costs to fund the growth
strategy which include funding crypto asset liquidity balances, investment in
software development and customer acquisition costs.
Current Liabilities
Trade payables of £237k (2022: £42k) and Accruals of £197k (2022: £98k) reflect
the increased activity within the Group following the RTO. The Directors'
current account of £679k is monies owed to the founder (Arsen Torosian) and is
repayable on demand any time on or after 30 June 2025. The loan does not accrue
interest.
Equity
The increase in the called-up share capital and the share premium account of
£23.5m is detailed in Table 4 below. The increase primarily relates to the share
issue and acquisition of Tap Global.
Table 4 - Changes in Ordinary Share Capital and Share Premium
+-----------------------------------+---------------------+
| |£ |
+-----------------------------------+---------------------+
|Share Issue | 3,250,000 |
+-----------------------------------+---------------------+
|Consideration for Tap Global | 20,250,000 |
+-----------------------------------+---------------------+
|Issue of Share Options and Warrants| 20,000|
+-----------------------------------+---------------------+
|Total Change in Year | 23,520,000 |
+-----------------------------------+---------------------+
The increase in the option and warrant reserve was primarily due to placement
warrants issued against 40.4m shares at the time of the RTO which attracted an
increase in the reserve of £314k and a charge to the income statement. The
balance of the increase was due to share options issued in the year.
The loss after tax for the year of £1.1m increased the Profit and Loss Account
deficit to £4.6m.
Outlook - Trading and Cash to November 2023
Revenue for the five-month period to November 2023 is £1.0m and Cash at Bank as
at November 2023 is £2.3m. Revenue in Q3 2023 was down on the recent historical
average due to the uncertainly in the UK market during the introduction of the
new Financial Promotion rules on crypto assets. Following Tap's successful
registration to trade crypto assets in the UK, revenue returned to recent
historical levels during the month of November 2023.
Tap Global Group Plc
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2023
Notes 2023 2022
£ £
REVENUE
Revenue 2,016,086 50,000
Cost of sales (494,488) -
GROSS PROFIT 1,521,598 50,000
Operating expenses (2,596,680) (371,792)
Exchange difference (21,941) -
Fair value adjustments 5 (300,795) -
Gain on sale of cryptoassets 5 323,178 -
Loss before income tax (1,074,640) (321,792)
Tax on loss 9 - 15,629
Total comprehensive loss for the year (1,074,640) (306,163)
Loss per shares
Basic and diluted (Pence) 20 (0.248) (0.018)
Group operations are classed as continuing.
The exemption under section 408 of the Companies Act 2006 from presenting the
Parent Company's income statement has been taken. The Company's loss for the
year was £1,344,142 (2022: £306,163).
The notes form part of these consolidated financial statements.
Tap Global Group Plc
Company number 05840813
Consolidated Statement of Financial Position
For the year ended 30 June 2023
Notes 2023 2022
ASSETS £ £
Non-current assets
Tangible assets, including 10 103,873 -
right-of-use assets
Investments 12 16,512 1,987
Intangible assets - 13 1,221,451 -
cryptoassets held for
investment
Intangible assets - 14 1,234,389 -
website domains
Goodwill 14 21,850,947 -
Deferred tax asset 9 12,517 12,517
24,439,689 14,504
Current assets
Cash and cash equivalents 16 2,335,375 1,066,912
Financial assets - 1,815,320
Trade and other 15 115,523 102,078
receivables
2,450,898 2,984,310
Total assets 26,890,587 2,998,814
LIABILITIES AND EQUITY
Non-current liabilities
Lease liability 11 61,925 -
61,925 -
Current liabilities
Trade payables 17 237,343 41,739
Accruals 197,250 98,225
Director's current account 18 679,451 -
Lease liability 11 31,776 -
1,145,820 139,964
Equity
Capital and reserves
Called up share capital 23 2,223,466 1,701,243
Share premium 27,685,458 4,687,681
Option & warrant reserve 374,898 14,099
Profit and loss account (4,600,980) (3,544,173)
Equity shareholders' funds 25,682,842 2,858,850
Total liabilities and 26,890,587 2,998,814
equity
The consolidated financial statements were approved and authorised for issue by
the Board and were signed on its behalf by:
Anthony Quirke
Director
Date: 27 December 2023
The notes form part of these consolidated financial statements.
Tap Global Group Plc
Consolidated Statement of Changes in Equity
For the year ended 30 June 2023
Called up Share Option & Profit and Total
Share Premium Warrant Loss
Capital Reserve Account
£ £ £ £ £
As at 1 July 2022 1,701,243 4,687,681 14,099 (3,544,173) 2,858,850
Total (1,074,640) (1,074,640)
comprehensive loss
for the year
Issue of shares 72,223 3,197,777 - - 3,270,000
Acquisition of 450,000 19,800,000 - - 20,250,000
subsidiaries
Forfeiture of - - (17,833) 17,833 -
share options
Option & warrant - - 378,632 - 378,632
reserve
As at 30 June 2023 2,223,466 27,685,458 374,898 (4,600,980) 25,682,842
Called up Share Option & Profit and Total
share premium warrant loss
capital reserve account
£ £ £ £ £
As at 1 July 2021 1,701,243 4,687,681 9,120 (3,238,010) 3,160,034
Total (306,163) (306,163)
comprehensive loss
for the year
Option & warrant 4,979 4,979
reserve
As at 30 June 2022 1,701,243 4,687,681 14,099 (3,544,173) 2,858,850
The notes form part of these consolidated financial statements.
Tap Global Group Plc
Consolidated Statement of Cash Flows
For the year ended 30 June 2023
2023 2022
£ £
Cash flow from operating
activities
Loss after taxation for the (1,074,640) (306,163)
year
Adjustment for:
Depreciation 18,876 -15,629
Amortisation 270,836 -
Financing costs 1,892 -
Share option charge 378,632 4,979
Fair value change of 300,795 82,552
investment
Gain on sale of (323,178) (162,769)
cryptoassets
Change in:
Trade and other receivables 94,115 (27,338)
Trade and other payables (1,283,699) 119,594
Cash generated from (1,616,371) (304,774)
operations
Tax paid - (3,112)
Net cash used in operating (1,616,371) (307,886)
activities
Cash flow from investing
activities
Acquisition of subsidiaries 323,840 -
Proceeds from cryptoassets 4,318,385 -
Additions of cryptoassets (4,660,607) -
Purchase of intangible (338,558) -
assets
Purchase of tangible assets (11,726) -
Purchase of convertible - (1,500,000)
loan note
Purchase of investment - (612,875)
Sale of investments - 645,994
Net cash used in investing (368,666) (1,466,881)
activities
Cash flow from financing
activities
Repayment of lease (16,500) -
liabilities
Issued capital 3,270,000 -
Net cash used in financing 3,253,500 -
activities
Increase/(decrease) in cash 1,268,463 (1,774,767)
and cash equivalents
Cash and cash equivalents 1,066,912 2,841,679
at the beginning of the
year
Cash and cash equivalents 2,335,375 1,066,912
at the end of the year
The notes form part of these consolidated financial statements.
1. General Information
Tap Global Group PLC (formerly Quetzal Capital Plc) (the "parent company") is a
public company limited by shares and incorporated in England and Wales. The
parent company y is domiciled in the UK and its shares are admitted to trading
on AQSE, a market operated by The London Stock Exchange. These consolidated
financial statements comprise the parent company and its subsidiaries (together
referred to as the "group"). The group's consolidated financial statements for
the year ended 30 June 2023 were authorised for issue by the Board of Directors
on 27 December 2023.
2. Summary of Significant Accounting Policies
The principal accounting policies applied in the preparation of these
consolidated financial statements are set out below. These policies have been
consistently applied to all the years presented unless otherwise stated.
Statement of Compliance
The Consolidated group's Financial Statements have been prepared in accordance
with UK-adopted international accounting standards in accordance with the
requirements of the Companies Act 2006.
The parent company financial statements of Tap Global Group Plc (formerly
Quetzal Capital Plc) have been prepared in compliance with United Kingdom
Accounting Standards, including Financial Reporting Standard 102, "The Financial
Reporting Standard applicable in the United Kingdom and the Republic of Ireland"
("FRS 102") and the Companies Act 2006.
Basis of Preparation
The consolidated financial statements have been prepared on the historical cost
basis, as modified by the revaluation of certain financial assets and
liabilities and investment properties measured at fair value through profit or
loss.
The consolidated financial statements are prepared in sterling, which is the
functional currency of the parent company. All amounts have been rounded to the
nearest GBP.
Going concern
Details of the group's business activities, results, cash flows and resources,
together with the risks it faces and other factors likely to affect its future
development, performance and position are set out in the strategic report.
Consideration has been given to whether there is sufficient liquidity and
financing to support the business, the post balance sheet trading of the group,
the regulatory environment and the effectiveness of risk management policies.
The Board, therefore, has a reasonable expectation that the group has adequate
resources to continue in operational existence for the foreseeable future and
therefore the financial statements are prepared on a going concern basis.
3.1 Basis of consolidation and significant accounting policies
The consolidated financial statements comprise the financial statements of all
group subsidiaries as at 30 June each year using consistent accounting policies.
Acquisition-related costs are expensed as incurred unless they result from the
issuance of shares, in which case they are offset against the premium on those
shares within equity.
Where considered appropriate, adjustments are made to the financial information
of subsidiaries to bring the accounting policies used into line with those used
by other members of the group. All intercompany transactions and balances
between group enterprises are eliminated on consolidation.
Business combinations
The consolidated financial statements for business combinations using the
acquisition method when control is transferred to the group. The consideration
transferred in the acquisition is measured at fair value, as are the
identifiable net assets acquired. Any goodwill that arises is tested annually
for impairment. Any gain on a bargain purchase is recognised in profit or loss
immediately. Transaction costs are expensed as incurred, except if related to
the issue of debt or equity securities. The consideration transferred does not
include amounts related to the settlement of pre-existing relationships. Such
amounts are generally recognised in profit or loss.
Any contingent consideration is measured at fair value at the date of
acquisition. If an obligation to pay contingent consideration that meets the
definition of a financial instrument is classified as equity, then it is not re
-measured, and settlement is accounted for within equity. Otherwise, other
contingent consideration is re-measured at fair value at each reporting date and
subsequent changes in the fair value of the contingent consideration are
recognised in profit or loss.
Subsidiaries
Subsidiaries are entities controlled by the group. The group controls an entity
when it is exposed to, or has rights to, variable returns from its involvement
with the entity and has the ability to affect those returns through its power
over the entity. In assessing control, the group takes into consideration
potential voting rights. The acquisition date is the date on which control is
transferred to the acquirer. The financial statements of subsidiaries are
included in the consolidated financial statements from the date that control
commences until the date that control ceases. A non-controlling interest is
recognised, representing the interests of minority shareholders in subsidiaries
not wholly owned by the group.
Transactions eliminated on consolidation
Intra-group balances and transactions and any unrealised income and expenses
arising from intra-group transactions are eliminated. On publishing the parent
company financial statements here, together with the consolidated financial
statements, the parent company is taking advantage of exemption in section 408
of the Companies Act 2006 not to present the individual income statement and
related notes of the parent company which form part of these approved financial
statements.
3.2 Foreign currency
In preparing these financial statements, transactions in currencies other than
the parent company and group's presentational currency ("foreign currencies")
are recorded at the rates of exchange prevailing on the dates of the
transaction. At each statement of financial position date, monetary items in
foreign currencies are translated into the presentational currency at the
exchange rate prevailing at statement of financial position date. Exchange
differences arising on the settlements of monetary items and on the
retranslation of monetary items are included in the consolidated statement of
comprehensive income for the year.
3.3 Revenue Recognition
The group applies IFRS 15 Revenue from Contracts with Customers for the
recognition of revenue. IFRS 15 established a comprehensive framework for
determining whether, how much and when revenue is recognised. It affects the
timing and recognition of revenue items, but not generally the overall amount
recognised the performance obligations of all revenue streams are satisfied on
the transaction date or by the provision of the service for the period described
in the contract. Revenue is not recognised where there is evidence to suggest
that customers do not have the ability or intention to pay. The group does not
have any contracts with customers where the performance obligations have not
been fully satisfied. How the group recognises revenue for its significant
revenue streams is described below:
Trading fees
This service relates to the facility to buy and sell currency, including digital
currency (crypto currency). A contract is identified when a payment is approved
by the group and the customer. Performance obligations and transaction prices
are set out in the contract. Revenue is recognised on the transaction date.
Account fees
This service relates to the provision of account services. A contract is
identified when a customer enters an agreement with the group for an account.
Performance obligations and transaction prices are set out in the contract.
Revenue related to monthly account fees are recognised during the month the
account is provided.
Card fees
A contract is identified when it is approved by relevant parties and when the
card is issued to the customer. Performance obligations and transaction prices
are set out in the contract. Revenue from provision of card services is
recognised over period in which they are provided. ATM transaction and out-of
-currency variable fees are constrained to the amount not expected to be
reversed. Variable revenue is recognised at the point at which it is unlikely to
be reversed, typically the transaction date.
3.4 Investments
(a) Classification
Fair value through profit and loss equity investments are classified in this
category if acquired principally for the purpose of trading or selling in the
short term. Investments in this category are classified as current assets if
expected to be settled within 12 months; otherwise, they are classified as non
-current.
(b) Recognition and Measurement
Regular purchases and sales of fair value through profit and loss equity
investments are recognised on the trade date - the date on which the group
commits to purchasing or selling the asset. They carried at fair value through
profit or loss is initially recognised at fair value, and transaction costs are
expensed in the Income Statement. They are measured at fair value using the fair
value hierarchy, as disclosed at note 24.
Fair value through profit and loss equity investments are derecognised when the
rights to receive cash flows from the assets have expired or have been
transferred, and the group has transferred substantially all of the risks and
rewards of ownership.
Gains or losses arising from changes in the fair value of fair value through
profit and loss equity investments at fair value through profit or loss are
presented in the Income Statement.
3.5 Impairment of assets
A review for indicators of impairment is carried out at each reporting date,
with the recoverable amount being estimated where such indicators exist. Where
the carrying value exceeds the recoverable amount, the asset is impaired
accordingly. Prior impairments are also reviewed for possible reversal at
reporting date. For the purposes of impairment testing, when it is not possible
to estimate the recoverable amount of an individual asset, an estimate is made
of the recoverable amount of the cash-generating unit to which the asset
belongs. The cash-generating unit is the smallest identifiable group of assets
that includes the asset and generates cash inflows that are largely independent
of the cash inflows from other assets or groups of assets. For impairment
testing of goodwill, the goodwill acquired in a business combination is, from
the acquisition date, allocated to each of the cash-generating units that are
expected to benefit from the synergies of the combination, irrespective of
whether other assets or liabilities of the group are assigned to those units.
3.6 Financial Assets
(a) Classification
The group classifies its financial assets in the following categories: at
amortised cost including trade receivables and other financial assets at
amortised cost, at fair value through other comprehensive income and at fair
value through profit or loss, loans and receivables, and available-for-sale.
The classification depends on the purpose for which the financial assets were
acquired. Management determines the classification of its financial assets at
initial recognition.
(b) Recognition and measurement
Amortised cost
Trade and other receivables are recognised initially at the amount of
consideration that is unconditional, unless they contain significant financing
components, in which case they are recognised at fair value. The group holds the
trade and other receivables with the objective of collecting the contractual
cash flows, and so it measures them subsequently at amortised cost using the
effective interest method.
The group classifies its financial assets as at amortised cost only if both of
the following criteria are met:
·the asset is held within a business model whose objective is to collect the
contractual cash flows; and
·the contractual terms give rise to cash flows that are solely payments of
principal and interest.
Fair value through profit or loss
The group classifies the following financial assets at fair value through profit
or loss (FVPL):
·debt instruments that do not qualify for measurement at either amortised cost
(see above) or FVOCI;
·equity investments that are held for trading; and
·equity investments for which the entity has not elected to recognise fair value
gains and losses through OCI.
Information about the methods and assumptions used in determining fair value is
provided in note 24. For information about the methods and assumptions used in
determining fair value refer to note 24. The group does not hold any financial
assets that meet conditions for subsequent recognition at fair value through
other comprehensive income ("FVTOCI").
(c) Impairment of financial assets
The group recognises an allowance for expected credit losses ("ECL"s) for all
debt instruments not held at fair value through profit or loss. ECLs are based
on the difference between the contractual cash flows due in accordance with the
contract and all the cash flows that the group expects to receive, discounted at
an approximation of the original Effective Interest Rate ("EIR"). The expected
cash flows will include cash flows from the sale of collateral held or other
credit enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has not
been a significant increase in credit risk since initial recognition, ECLs are
provided for credit losses that result from default events that are possible
within the next 12-months (a 12-month ECL). For those credit exposures for which
there has been a significant increase in credit risk since initial recognition,
a loss allowance is required for credit losses expected over the remaining life
of the exposure, irrespective of the timing of the default (a lifetime ECL).
For trade receivables and other receivables due in less than 12 months, the
group applies the simplified approach in calculating ECLs, as permitted by IFRS
9. Therefore, the group does not track changes in credit risk, but instead,
recognises a loss allowance based on the financial asset's lifetime ECL at each
reporting date.
The group considers a financial asset to be in default when internal or external
information indicates that the group is unlikely to receive the outstanding
contractual amounts in full before taking into account any credit enhancements
held by the group. A financial asset is written off when there is no reasonable
expectation of recovering the contractual cash flows and usually occurs when
past due for more than one year and not subject to enforcement activity.
At each reporting date, the group assesses whether financial assets carried at
amortised cost are credit impaired. A financial asset is credit-impaired when
one or more events that have a detrimental impact on the estimated future cash
flows of the financial asset have occurred.
(d) Derecognition
The group derecognises a financial asset only when the contractual rights to the
cash flows from the asset expire, or when it transfers the financial asset and
substantially all the risks and rewards of ownership of the asset to another
entity.
On derecognition of a financial asset measured at amortised cost, the difference
between the asset's carrying amount and the sum of the consideration received
and receivable is recognised in profit or loss.
3.7 Financial Liabilities
All financial liabilities are recognised initially at fair value, net of
directly attributable transaction costs. The group's financial liabilities
include trade and other payables.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as
described below:
Trade and other payables
Trade and other payables are classified as current liabilities if payment is due
within one year or less. If not, they are presented as non-current liabilities.
Trade and other payables are recognised initially at fair value, and
subsequently measured at amortised cost using the effective interest method.
Derecognition
A financial liability is derecognised when the associated obligation is
discharged or cancelled or expires.
3.8 Expenditure
Expenses are recognised on the accrual basis.
3.9 Tangible assets
Tangible assets are stated at cost less accumulated depreciation and accumulated
impairment losses. Such costs include costs directly attributable to making the
asset capable of operating as intended. Depreciation is calculated at the
following annual rates so as to write off the cost of fixed assets over their
estimated useful lives using the reducing balance method:
Computer equipment 25%
Furniture and fittings 15%
On disposal, the difference between the net disposal proceeds and the carrying
amount of the item sold is recognised in statement of comprehensive income and
included in other operating income. The carrying values of the tangible assets
are reviewed for impairment when events or changes in circumstances indicate the
carrying value may not be recoverable. All subsequent repairs, renewals and
maintenance costs are charged to the statement of comprehensive income when
incurred.
3.10 Leases
At inception of a contract, the group assesses whether a contract is, or
contains, a lease. A contract is, or contains, a lease if the contract conveys
the right to control the use of an identified asset for a period of time in
exchange for consideration. To assess whether a contract conveys the right to
control the use of an identified asset, the group uses the definition of a lease
in IFRS 16.
As a lessee
At commencement or on modification of a contract that contains a lease
component, the group allocates the consideration in the contract to each lease
component on the basis of its relative stand-alone prices. However, for the
leases of property the group has elected not to separate non-lease components
and account for the lease and non-lease components as a single lease component.
The right-of-use asset is subsequently depreciated using the straight-line
method from the commencement date to the end of the lease term, unless the lease
transfers ownership of the underlying asset to the group by the end of the lease
term or the cost of the right-of-use asset reflects that the group will exercise
a purchase option. In that case the right-of-use asset will be depreciated over
the useful life of the underlying asset, which is determined on the same basis
as those of property and equipment. In addition, the right-of-use asset is
periodically reduced by impairment losses, if any, and adjusted for certain
remeasurements of the lease liability. During the year, the right-of-use asset
was depreciated over 6 years, which represented the unexpired portion of the
lease.
The lease liability is initially measured at the present value of the expected
future lease payments as at the commencement date of the lease, discounted using
the interest rate implicit in the lease or, if that rate cannot be readily
determined, the group's incremental borrowing rate. Generally, the group uses
its incremental borrowing rate as the discount rate. The group determines its
incremental borrowing rate by obtaining interest rates from various external
financing sources and makes certain adjustments to reflect the terms of the
lease and type of the asset leased.
Lease payments included in the measurement of the lease liability comprise the
following: - fixed payments, including in-substance fixed payments; - variable
lease payments that depend on an index or a rate, initially measured using the
index or rate as at the commencement date; - amounts expected to be payable
under a residual value guarantee; and - the exercise price under a purchase
option that the group is reasonably certain to exercise, lease payments in an
optional renewal period if the group is reasonably certain to exercise an
extension option, and penalties for early termination of a lease unless the
group is reasonably certain not to terminate early.
When the lease liability is remeasured in this way, a corresponding adjustment
is made to the carrying amount of the right-of-use asset or is recorded in
profit or loss if the carrying amount of the right-of-use asset has been reduced
to zero. The group presents right-of-use assets that do not meet the definition
of investment property in 'property, plant and equipment, including right of use
assets' and lease liabilities as disclosed on the face of the statement of
financial position.
Short-term leases and leases of low-value assets
The group has elected not to recognise right-of-use assets and lease liabilities
for leases of low-value assets and short-term leases. The group recognises the
lease payments associated with these leases as an expense on a straight-line
basis over the lease term.
3.11 Cryptoassets
Cryptoassets are held principally for the purpose of trading in the near term or
used in operations (hereafter called "Cryptoassets held for trading") or held
for investment purposes. The group accounts for cryptoassets at their initial
cost and subsequently re-measures the carrying amounts it owns at the end of the
reporting period based on the quoted price published on the cryptocurrency
exchanges.
Cryptoassets owned by the group are derecognized when the group has transferred
all the risks and rewards of ownership by selling to verified third parties or
through exchanges to obtain fiat currency delivered to its banking accounts,
utilized by paying its vendors and personnel who accept this form of payment, or
otherwise, losing control and therefore, access to the economic benefits
associated with ownership of cryptoassets.
The IFRS Interpretations Committee ("IFRIC") published a tentative agenda
decision: Holding of Cryptocurrencies - Agenda Paper 12, in 2019, which
clarifies how to apply the holdings of cryptocurrencies' classification,
recognition and measurement within issued IFRS Standards.
"The IFRIC observed that a holding of cryptocurrency meets the definition of an
(1) intangible asset in IAS 38 on the grounds that (a) it is capable of being
separated from the holder and sold or transferred individually; and (b) it does
not give the holder a right to receive a fixed or determinable number of units
of currency; or (2) in certain circumstances, inventory in accordance with IAS
2. Based on this conclusion, the classification, recognition and measurement,
and disclosure requirements of IAS 38 or IAS 2 should be applied in regards to
Bitcoin. Management has assessed the impact of the IFRIC's agenda decision and
determined that the group's policies are consistent with the IFRIC decision.
The group's cryptoassets held for trading are accounted under IAS 2 Inventories
under the guidance for broker-traders since the group holds cryptocurrencies for
sale in the ordinary course of business. The cyrptoassets held for trading is
initially measured at fair value less cost to sell and subsequently being
remeasured using fair value less cost to sell with the changes in profit or
loss. The group has determined that costs to sell are negligible and immaterial
to the financial statements.
Cyrptoassets is considered Level 1 in accordance with the fair value hierarchy
as it is based on a quoted (unadjusted) market price in an active market for
identical assets. "
3.12 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and time, call and current
balances with banks and similar institutions, which are readily convertible to
known amounts of cash and which are subject to insignificant risk of changes in
value.
3.13 Provisions
Provisions are recognised for liabilities of uncertain timing or amount when the
group has a present legal or constructive obligation arising as a result of a
past event, it is probable that an outflow of economic benefits will be required
to settle the obligation and a reliable estimate can be made. Where the time
value of money is material, provisions are stated at the present value of the
expenditures expected to settle the obligation.
Where it is not probable that an outflow of economic benefits will be required,
or the amount cannot be estimated reliably, the obligation is disclosed as a
contingent liability, unless the probability of outflow is remote. Possible
obligations, whose existence will only be confirmed by the occurrence or non
-occurrence of one or more future events are also disclosed as contingent
liabilities unless the probability of outflow is remote.
3.14 Intangible assets - computer software and website development
Computer software development expenditure is capitalised only if the expenditure
can be measured reliably, the product or process is technically and commercially
feasible, future economic benefits are probable, and the group intends to and
has sufficient resources to complete development and to use or sell the asset.
Otherwise, it is recognised in the statement of comprehensive income as
incurred. Subsequent to initial recognition, development expenditure is measured
at cost less accumulated amortisation and any accumulated impairment losses.
Subsequent expenditure is capitalised only when it increases the future economic
benefits embodied in the specific asset to which it relates. All other
expenditure is recognised in statement of comprehensive income as incurred.
Amortisation is calculated to write off the cost of computer software less their
estimated residual values using the straight-line method over their estimated
useful lives and is generally recognised in the statement of comprehensive
income.
The estimated useful lives for current and comparative periods are as follows:
Computer software - 4 years
Website development - 4 years
Amortisation methods, useful lives and residual values are reviewed at each
reporting date and adjusted if appropriate.
Impairment of intangible assets - computer software and website development
At each reporting date, the group reviews the carrying amounts of its non
-financial assets (other than inventories and deferred tax assets) to determine
whether there is any indication of impairment.
If any such indication exists, then the asset's recoverable amount is estimated.
An impairment loss is recognised if the carrying amount of an asset exceeds its
recoverable amount. Impairment losses are recognised in profit or loss. For
other assets, an impairment loss is reversed only to the extent that the asset's
carrying amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment loss had been
recognised.
3.15 Intangible assets - Goodwill
Goodwill acquired in a business combination is allocated, at acquisition, to the
cash generating units (CGUs) that are expected to benefit from that business
combination. Where goodwill has been allocated to a cash-generating unit ("CGU")
that CGU is tested for impairment annually to determine whether the carrying
amount of the CGU may not be recoverable. An impairment loss in respect of
goodwill is not reversed.
The group has recognised one CGU, called Crypto Asset Brokerage. This represents
the lowest level at which goodwill is monitored for internal management
purposes.
Management estimates discount rates using pre-tax rate that reflects the current
market assessment of the time value of money and the specific risks associated
with the asset for which the future cash flow estimates have not been adjusted.
The rate used to discount the forecast cash flows are based upon the CGU's
weighted average cost of capital (WACC). The WACC for the Crypto Asset Brokerage
CGU was 14.0%, based on a WACC used by a listed business for a similar business
model - see Appendix B for details.
The group prepared cash flow forecasts derived from the most recent financial
budgets approved by management for the next five years. For the purpose of the
value in use calculation the management forecasts were extrapolated into
perpetuity using a growth rate of 2.0%, representing the expected long-run rate
of inflation in the UK. The forecasts assume growth rates in acquisitions which
in turn drive the forecast collections and cost figures.
The value in use of the crypto asset brokerage CGU was £24.2m which is in excess
of the goodwill of £21.8m by £2.4m, more than 10%. Based on this analysis, the
group has determined that the value in use of Crypto Asset Brokerage is in
excess of the goodwill on the balance sheet and therefore no impairment of the
goodwill is required.
3.16 Share Capital
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
3.17 Income Tax
Tax is recognised in the profit and loss, except to the extent that it relates
to items recognised in other comprehensive income or directly in equity. In this
case, the tax is also recognised in other comprehensive income or directly in
equity, respectively.
Deferred income tax is recognised, using the liability method, on temporary
differences arising between the tax bases of assets and liabilities and their
carrying amounts in the financial statements. Deferred income tax is determined
using tax rates (and laws) that have been enacted, or substantially enacted, by
the end of the reporting period and are expected to apply when the related
deferred income tax asset is realised, or the deferred income tax liability is
settled.
Deferred income tax assets are recognised only to the extent that it is probable
that future taxable profit will be available against which the temporary
differences can be utilised.
Deferred income tax assets are recognised on deductible temporary differences
only to the extent that it is probable the temporary difference will reverse in
the future and there is sufficient taxable profit available against which the
temporary difference can be utilised.
Deferred income tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets against current tax liabilities,
and when the deferred income tax assets and liabilities relate to income taxes
levied by the same taxation authority on either the taxable entity or different
taxable entities where there is an intention to settle the balances on a net
basis.
3.18 Share Based Payments
The group operates an equity-settled share-based scheme, under which the entity
receives services from employees or third-party suppliers as consideration for
equity instruments (shares, options and warrants) of the group. The group may
also issue warrants to share subscribers as part of a share placing. The fair
value of the equity-settled share based payments is recognised as an expense in
the income statement or charged to equity depending on the nature of the service
provided or instrument issued. The total amount to be expensed or charged in
the case of options is determined by reference to the fair value of the options
or warrants granted:
·including any market performance conditions;
·excluding the impact of any service and non-market performance vesting
conditions (for example, profitability or sales growth targets, or remaining an
employee of the entity over a specified time period); and
·including the impact of any non-vesting conditions (for example, the
requirement for employees to save).
In the case of shares and warrants the amount charged to the share premium
account is determined by reference to the fair value of the services received if
available. If the fair value of the services received is not determinable the
shares are valued by reference to the market price and the warrants are valued
by reference to the fair value of the warrants granted as described previously.
Non-market vesting conditions are included in assumptions about the number of
options or warrants that are expected to vest. The total expense or charge is
recognised over the vesting period, which is the period over which all of the
specified vesting conditions are to be satisfied. At the end of each reporting
period, the entity revises its estimates of the number of options that are
expected to vest based on the non-market vesting conditions. It recognises the
impact of the revision to original estimates, if any, in the income statement or
equity as appropriate, with a corresponding adjustment to another reserve in
equity.
When the warrants or options are exercised, the group issues new shares. The
proceeds received, net of any directly attributable transaction costs, are
credited to share capital (nominal value) and share premium when the warrants or
options are exercised.
3.19 Related parties
(A) A person or a close member of that person's family is related to the group
if that person:
(i) has control or joint control over the group;
(ii) has significant influence over the group; or
(iii) is a member of the key management personnel of the group or of a
parent of the group.
(B) An entity is related to the group if any of the following conditions
applies:
(i) The entity and the group are members of the same group (which means
that each parent, subsidiary and fellow subsidiary is related to the others).
(ii) One entity is an associate or joint venture of the other entity (or an
associate or joint venture of a member of a group of which the other entity is a
member).
(iii) Both entities are joint ventures of the same third party.
(iv) One entity is a joint venture of a third entity and the other entity is
an associate of the third entity.
(v) The entity is a post-employment benefit plan for the benefit of employees
of either the group or an entity related to the group. If the group is itself
such a plan, the sponsoring employers are also related to the group.
(vi) The entity is controlled or jointly controlled by a person identified in
(A).
(vii) A person identified in (A)(i) has significant influence over the entity or
is a member of the key management personnel of the entity (or of a parent of the
entity).
The entity, or any member of a group of which it is a part, provides key
management personnel services to the group or to a parent of the Company.
3.20 Employee benefits
(i) Employee leave entitlements
Employee entitlements to annual leave and long service leave are recognised when
they accrue to employees. A provision is made for the estimated liability for
annual leave and long service leave as a result of services rendered by
employees up to the end of the reporting period.
Employee entitlements to sick leave and maternity leave are not recognised until
the time of leave.
(ii) Pension obligations
The group contributes to defined contribution retirement schemes which are
available to all employees. Contributions to the schemes by the group and
employees are calculated as a percentage of employees' basic salaries. The
retirement benefit scheme cost charged to profit or loss represents
contributions payable by the group to the funds.
(iii) Termination benefits
Termination benefits are recognised at the earlier of the dates when the group
can no longer withdraw the offer of those benefits and when the group recognises
restructuring costs and involves the payment of termination benefits.
3.21 Events after the reporting period
Events after the reporting period that provide additional information about the
group's position at the end of the reporting period or those that indicate the
going concern assumption is not appropriate are adjusting events and are
reflected in the financial statements. Events after the reporting period that
are not adjusting events are disclosed in the notes to the financial statements
when material.
4. Judgements And Key Sources Of Estimation And Uncertainty
The preparation of the financial statements requires management to make
estimates and assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities, and the disclosure of contingent liabilities
at the date of the financial statements.
If in the future such estimates and assumptions which are based on management's
best judgement at the date of the financial statements, deviate from the actual
circumstances, the original estimates and assumptions will be modified as
appropriate in the year in which the circumstances change. Where necessary, the
comparatives have been reclassified or extended from the previously reported
results to take into account presentational changes.
5. Operating Profit
Operating profit or loss is stated after charging/crediting:
Group
2023 2022
£ £
Fair value adjustment of listed shares (300,795) -
Gains on cryptocurrency assets 323,178 -
Total 22,383 -
6. Auditors Remuneration
Group
2023 2022
£ £
Fees payable for the audit of the financial statements 78,590 -
78,590 -
7. Interest Payable And Similar Expenses
Group
2023 2022
£ £
Interest on lease liability 1,892 -
1,892 -
8. Employees And Directors
The average
monthly number of
persons employed
by the group
during the year
was as follows:
Group
2023 2022
Directors 8 0
Employees 4 0
The aggregate
payroll costs
incurred during Group
the year,
relating
to the above, 2023 2022
were:
£ £
Directors 665,821 -
Employees 168,602 -
9. Taxation
The group's taxation charge or credit is the composite of:
1. Corporation tax credit arising on losses in the financial year; and
2. Deferred taxation arising on temporary and permanent timing differences and
losses carried forward, to the extent that the group believes these to be
recoverable from future taxable profits.
At 30 June 2023, the group had tax losses available to be offset against future
taxable profits of [(£1,074,640)]
Major components of tax expense Group
2023 2022
Current tax £ £
UK current tax expense - -
Deferred tax
Revaluation of listed investment 12,517 12,517
10. Tangible Assets - Right-Of-Use Assets
Right-of-use Computer Fixtures & Total
asset equipment Fittings
Cost £ £ £ £
Upon 190,650 12,882 3,735 207,267
acquisition
Additions - 9,972 1,754 11,726
Balance as at 190,650 22,854 5,489 218,993
30 June 2023
Depreciation
Upon 87,381 7,462 1,401 96,244
acquisition
Charge for 15,888 2,643 346 18,876
the period
At 30 June 103,269 10,105 1,747 115,120
2023
Net book
value
At 30 June 87,381 12,749 3,743 103,873
2023
At 30 June - - - -
2022
11. Lease 2023 2022
liability
£ £
Upon 108,309 -
acquisition
Interest 1,892 -
expense
Payments (16,500) -
At the end of 93,701 -
the year
Current 31,776 -
Non-current 61,925 -
12. Tangible Assets - Investments
Group
2023 2022
£ £
As at 1 July 2022 1,987 1,987
Transfer from financial assets 315,320 -
Revaluations (300,795) -
At the end of the year 16,512 1,987
13. Intangible Assets - Cryptoassets Held for Investment
Group
2023 2022
£ £
Cryptoassets
Upon acquisition 556,049 -
Additions 4,660,607 -
Disposals (4,318,383) -
Gain on sale of cryptoassets 323,178 -
At the end of the year 1,221,451 -
14. Intangibles - Other Intangibles
Group
2023 2022
Website & software development £ £
Upon acquisition 1,166,667 -
Additions 338,558 -
Amortisation (270,836) -
At the end of the year 1,234,389 -
Intangible assets - goodwill
Group
2023 2022
Goodwill £ £
Upon acquisition 21,850,947 -
Impairment - -
Net book value 21,850,947 -
15. Trade And Other Receivables
Group
2023 2022
£ £
Prepayments 112,481 -
Other debtors 3,042 -
At the end of the year 115,523 -
16. Cash And Cash Equivalents
Group
2023 2022
£ £
Cash at bank 2,335,375 1,066,912
17. Trade Payables
Group
2023 2022
Trade payables £ £
Trade creditors 237,343 41,739
At the end of the year 237,343 -
18. Related Party Transactions
Directors current account
Group
2023 2022
£ £
Balance upon acquisition 1,994,975 -
Transactions during the year (1,315,524) -
At the end of the year 679,451 -
19. Acquisitions
On 10 January 2023, the Group acquired Tap Global Limited and its subsidiaries.
The total consideration was £20.25m, satisfied by the issue of shares. Tap
Global Limited was providing an App and trading platform that allow customers to
hold and trade crypto currencies and conduct fiat FX.
The fair value of the identifiable assets and liabilities of the above company
as at its date of acquisition is as follows:
£
Cash and cash equivalents 323,840
Trade and other receivables 107,561
Tangible Assets 111,023
Intangible Assets 1,166,667
Crypto Currency Assets 556,049
Trade Payables (195,782)
Accruals (67,021)
Lease liability (108,309)
Investment Quetzal Liability (1,500,000)
Director's current account (1,994,975)
(1,600,947)
Share consideration 20,250,000
Goodwill - 21,850,947
20. Loss Per Share
The calculation of basic loss per share has been based on the loss attributable
to ordinary shareholders. The loss after tax attributable to ordinary
shareholders of the group is, £1,074,640 (2022: £306,163).
Loss per share is calculated by dividing the loss for the year attributable to
ordinary shareholders of the parent by the number of ordinary and deferred
shares outstanding during the year.
The effect of all potential ordinary shares are anti-dilutive for the year ended
30 June 2023 and 2022.
21. Subsidiary Undertakings
The parent
company
holds the
share
capital
(both
directly and
indirectly)
of the
following
companies
Subsidiary Country of Class Shares Held %
registration
/ incorporatio
n
Tap Global Gibraltar Ordinary 100
Ltd
Tap Gibraltar Ordinary 100
Technologies
Limited*
Tap Global Australia Ordinary 100
Pty Ltd*
Tap Americas United States Ordinary 100
LLC* of America
*denotes
held
indirectly
22. Share Options And Share Warrants
The group grants share options to employees as part of the remuneration of key
management personnel and directors to enable them to purchase ordinary shares in
the group. Under the plan, 1,125,000 options were granted for no cash
consideration for a period of 2 years expiring on an extended date of 31December
2023. The share options outstanding at 30 June 2023 had a weighted average
remaining contractual life of 0.5 years (2022: 0.75). Maximum term of new
options granted was 2 years from the grant date. The weighted average exercise
price of share options as at the date of exercise is £0.00427 (2022: £0.0064).
John Taylor holds the following options:
Number Exercise Price Expiry Date Vesting Conditions
150,000 £0.06 31 December 2023 Fully Vested
150,000 £0.08 31 December 2023 Fully Vested
150,000 £0.10 31 December 2023 Fully Vested
Fungai Ndoro retains the following share options granted to her:
Number Exercise Price Expiry Date Vesting Conditions
112,500 £0.06 31 December 2023 Fully Vested
112,500 £0.08 31 December 2023 Fully Vested
112,500 £0.10 31 December 2023 Fully Vested
Simon Grant-Rennick retained the following share options granted to him on 10
March 2021. 75% of the original grant lapsed on Simon's resignation:
Number Exercise Price Expiry Date Vesting Conditions
37,500 £0.06 31 December 2023 Fully Vested
37,500 £0.08 31 December 2023 Fully Vested
37,500 £0.10 31 December 2023 Fully Vested
Anthony Quirke holds the following options:
Number Exercise Price Expiry Date Vesting Conditions
75,500 £0.06 31 December 2023 Fully Vested
75,500 £0.08 31 December 2023 Fully Vested
75,500 £0.10 31 December 2023 Fully Vested
Share Warrants
The group has 37,500,000 share warrants with each warrant giving the holder the
right to subscribe for one ordinary share in the group at a price of £0.08 per
share and will expire on 31 December 2023.
Additionally, the group has a further 39,444,445 share warrants with each
warrant giving the holder the right to subscribe for one ordinary share in the
group at a price of £0.08 per share and will expire on 10 January 2026.
Furthermore, the group as an additional 1,000,000 share warrants with each
warrant giving the holder the right to subscribe for one ordinary share in the
group at a price of £0.045 per share and will expire on 10 January 2028.
The fair value of these share options expensed during the year was £378,632,
being the value of the options and warrants attributable to the vesting periods
to 30 June 2023 (2022: £4,979). The volatility is set by reference to the
historic volatility of the share price of the Company.
23. Called Up Share Capital
2023 2022
COMPANY AND GROUP No. £ No. £
Ordinary shares of £0.001 each 693,409,624 693,410 171,187,399 171,187
Deferred shares of £0.099 each 15,455,115 1,530,056 15,455,115 1,530,056
708,864,739 2,223,466 186,642,514 1,701,243
24. Fair value measurements
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date. The following disclosures of fair value measurements use
a fair value hierarchy that categorises into three levels the inputs to
valuation techniques used to measure fair value:
Level 1 inputs: quoted prices (unadjusted) in active markets for identical
assets or liabilities that the Group can access at the measurement date.
Level 2 inputs: inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly or indirectly.
Level 3 inputs: unobservable inputs for the asset or liability.
The group's policy is to recognise transfers into and transfers out of any of
the three levels as of the date of the event or change in circumstances that
caused the transfer.
Disclosures of level in fair value hierarchy:
Fair value measurements using: Total
Description Level 1 Level 2 Level 3 2023
HK$ HK$ HK$ HK$
Recurring fair value
measurements:
Investments at fair
value through profit or
loss
Listed securities 16,512 - - 16,512
Fair value measurements using: Total
Description Level 1 Level 2 Level 3 2022
HK$ HK$ HK$ HK$
Recurring fair value
measurements:
Investments at fair
value through profit or
loss
Listed securities 317,307 - - 317,307
25. Events After The End Of The Reporting Period
No other matters or circumstances have arisen since the end of the financial
year which significantly affected or may significantly affect the operations of
the group, the results of those operations or the state of affairs of the group
in future financial years.
Tap Global Group Plc
Company number 05840813
Parent Company Statement of Financial Position
Year Ended 30 June 2023
2023 2022
Note £ £
Fixed assets
Investments 6 16,512 1,987
Investments in subsidiaries 6 20,250,000 -
20,266,512 1,987
Current assets
Debtors 7 12,997 102,078
Financial assets 8 - 1,815,320
Cash and cash equivalents 567,414 1,066,912
580,411 2,984,310
Creditors: amounts falling due within one year 9 96,100 139,964
Net current assets 484,311 2,844,346
Total assets less current liabilities 20,750,823 2,846,333
Provisions 10 12,517 12,517
Net assets 20,763,340 2,858,850
Capital and reserves
Called up share capital 12 2,223,466 1,701,243
Share premium 27,685,458 4,687,681
Option & warrant reserve 374,898 14,099
Capital reserves (4,500,000) -
Profit & loss accounts (5,020,482) (3,544,173)
Shareholders' funds 20,763,340 2,858,850
The Parent Company financial statements were approved and authorised for issue
by the Board and were signed on its behalf by:
Anthony Quirke
Director
Date: 27 December 2023
The notes form part of these Parent Company financial statements.
Tap Global Group Plc
Parent Company Statement of Changes in Equity
Year Ended 30 June 2023
Called up Share Option & Capital Profit & Total
Share Premium Warrant Reserves Loss
Capital Reserves Account
£ £ £ £ £ £
As at 1 July 1,701,243 4,687,681 14,099 - (3,544,173)
2,858,850
2022
Total - - - - (1,494,142)
(1,344,142)
comprehensive
loss
for the year
Issue of 522,223 3,177,777 - - -
3,700,000
shares
Acquisition - 19,820,000 - -
19,820,000
of
subsidiaries
Deemed - - - (4,500,000) -
(4,500,000)
contribution
Forfeiture of - - (17,833) - 17,833 -
share option
Option & - - 378,632 - -
378,632
warrant
reserve
Balance at 30 2,223,466 27,685,458 374,898 (4,500,000) (5,020,482)
20,763,340
June
2023
Called up Share Option & Profit & Total
Share Premium Warrant Loss
Capital Reserves Account
£ £ £ £ £
As at 1 July 2021 1,701,243 4,687,681 9,120 (3,238,010) 3,160,034
Total - - - (306,163) (360,163)
comprehensive loss
for the year
Option & warrant - - 4,979 - 4,979
reserve
Balance at 30 June 1,701,243 4,687,681 14,099 (3,544,173) 2,858,850
2022
The following describes the nature and purpose of each reserve within owners'
equity:
Reserve Description and purpose
Called Up This represents the nominal value of
Share shares issued.
Capital
Share Amount subscribed for share capital in
Premium excess of nominal value.
Profit & Cumulative net gains and losses recognised
Loss in the statement of comprehensive income.
Account
Other Cumulative fair value of options granted
Reserve
The notes form part of these Parent Company financial statements.
Tap Global Group Plc
Parent Company Statement of Cash Flows
Year Ended 30 June 2023
2023 2022
£ £
Cash flows from operating
activities
Loss after taxation for (1, 494,142) (306,163)
the financial year
Adjustments for:
Tax on loss - (15,629)
Share option charge 378,632 4,979
Fair value adjustment of - 82,552
listed shares
Loss / (profit) on 300,795 (162,769)
disposal of investments
Changes in:
Trade and other debtors (2,910,919) (27,338)
Trade and other creditors (43,864) 119,594
Net cash used in (3,769,498) (304,774)
operating activities
Cash flows from investing
activities
Purchase of Convertible - (1,500,000)
Loan Note
Purchase of investments - (612,875)
Sales of investments - 645,994
Net cash used in - (1,466,881)
investing activities
Cash flows from financing
activities
Tax paid - (3,112)
Share issue 3,700,000 -
Share issue expenses paid (430,000) -
Net cash used in 3,270,000 (3,112)
financing activities
Decrease in cash and cash (499,498) (1,774,767)
equivalents
Cash and cash equivalents 1,066,912 2,841,679
at beginning of the year
Cash and cash equivalents 567,414 1,066,912
at the end of the year
The notes form part of these Parent Company financial statements.
Tap Global Group Plc
Notes to the Parent Company Financial Statements
Year Ended 30 June 2023
1. General information
The Parent Company is a public company limited by shares, registered in England
and Wales. The address of the registered office is 6th Floor, 60 Gracechurch
Street, London, EC3V 0HR, United Kingdom.
2. Statement of compliance
The Parent Company financial statements of Tap Global Group Plc (formerly
Quetzal Capital Plc) have been prepared in compliance with United Kingdom
Accounting Standards, including Financial Reporting Standard 102, "The Financial
Reporting Standard applicable in the United Kingdom and the Republic of Ireland"
("FRS 102") and the Companies Act 2006.
3. Summary of significant accounting policies
The significant accounting policies applied in the preparation of these Parent
Company financial statements are set out below. These policies have been
consistently applied to all years presented unless otherwise stated.
Basis of preparation
The Parent Company financial statements have been prepared on the historical
cost basis, as modified by the revaluation of certain financial assets and
liabilities and investment properties measured at fair value through profit or
loss.
The Parent Company financial statements are prepared in sterling, which is the
functional currency of the entity.
Going Concern
The Parent Company made a loss for the year of £1,494,142 (2022: £306,163) and
has net asset position of £20,763,340 (2022: £2,858,850). The directors continue
to adopt the going concern basis of accounting in preparing the Parent Company
financial statements.
The directors believe it is appropriate to prepare the Parent Company financial
statements on a going concern basis as the Parent Company will have sufficient
funds to finance its operations for the next 15 months from the approval of
these Parent Company financial statements.
Judgements and key sources of estimation uncertainty
The preparation of the Parent Company financial statements requires management
to make judgements, estimates and assumptions that affect the amounts reported.
These estimates and judgements are continually reviewed and are based on
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.
Significant judgements
The are no judgements (apart from those involving estimations) that management
has made in the process of applying the entity's accounting policies and that
have a significant effect on the amounts recognised in the Parent Company
financial statements.
Key sources of estimation uncertainty
Accounting estimates and assumptions are made concerning the future and, by
their nature, will rarely equal the related actual outcome. There are no key
assumptions and other sources of estimation uncertainty that have a significant
risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year.
Investments
Fixed asset investments are initially recorded at cost, and subsequently stated
at cost less any accumulated impairment losses.
Listed investments are measured at fair value with changes in fair value being
recognised in profit or loss.
Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date,
with the recoverable amount being estimated where such indicators exist. Where
the carrying value exceeds the recoverable amount, the asset is impaired
accordingly. Prior impairments are also reviewed for possible reversal at each
reporting date.
For the purposes of impairment testing, when it is not possible to estimate the
recoverable amount of an individual asset, an estimate is made of the
recoverable amount of the cash-generating unit to which the asset belongs. The
cash-generating unit is the smallest identifiable group of assets that includes
the asset and generates cash inflows that largely independent of the cash
inflows from other assets or groups of assets.
For impairment testing of goodwill, the goodwill acquired in a business
combination is, from the acquisition date, allocated to each of the cash
-generating units that are expected to benefit from the synergies of the
combination, irrespective of whether other assets or liabilities of the Parent
Company are assigned to those units.
Financial instruments
A financial asset or a financial liability is recognised only when the Parent
Company becomes a party to the contractual provisions of the instrument.
Basic financial instruments are initially recognised at the transaction price,
unless the arrangement constitutes a financing transaction, where it is
recognised at the present value of the future payments discounted at a market
rate of interest for a similar debt instrument.
Debt instruments are subsequently measured at amortised cost.
Where investments in non-convertible preference shares and non-puttable ordinary
shares or preference shares are publicly traded or their fair value can
otherwise be measured reliably, the investment is subsequently measured at fair
value with changes in fair value recognised in profit or loss. All other such
investments are subsequently measured at cost less impairment.
Other financial instruments, including derivatives, are initially recognised at
fair value, unless payment for an asset is deferred beyond normal business terms
or financed at a rate of interest that is not a market rate, in which case the
asset is measured at the present value of the future payments discounted at a
market rate of interest for a similar debt instrument.
Other financial instruments are subsequently measured at fair value, with any
changes recognised in profit or loss, with the exception of hedging instruments
in a designated hedging relationship.
Financial assets that are measured at cost or amortised cost are reviewed for
objective evidence of impairment at the end of each reporting date. If there is
objective evidence of impairment, an impairment loss is recognised in profit or
loss immediately.
For all equity instruments regardless of significance, and other financial
assets that are individually significant, these are assessed individually for
impairment. Other financial assets are either assessed individually or grouped
on the basis of similar credit risk characteristics.
Any reversals of impairment are recognised in profit or loss immediately, to the
extent that the reversal does not result in a carrying amount of the financial
asset that exceeds what the carrying amount would have been had the impairment
not previously been recognised.
4. Auditors remuneration
2023 2022
£ £
Fees payable for the audit of the 25,000 7,100
Parent Company financial
statements
5. Employees and directors
The average monthly number of persons employed by the Parent Company during the
year was as follows:
2023 2022
Directors 5 3
Employees 1 -
The aggregate payroll costs incurred during the year, relating to the above,
were:
2023 2022
£ £
Directors 269,007 99,115
Employees 33,333 -
As in previous years this disclosure did not include social security costs,
however, in 2023 this amounted to an additional £19,595. Currently all
employees and directors are opted-out of a workplace pension and no pension
contributions are made by the Parent Company on their behalf.
6. Investments
Shares in Other investments Total
group other than loans
undertakings
£ £ £
As at 1 July - 1,987 1,987
2022
Additions 20,250,000 - 20,250,000
Transfer from - 315,320 315,320
financial
assets
Revaluations - (300,795) (300,795)
Balance at 30 20,250,000 16,512 20,266,512
June 2023
Shares in Other Total
group investments
undertakings other than
loans
Carrying £ £ £
amount
As at 30 - 1,987 1,987
June 2022
As at 30 20,250,000 16,512 20,266,512
June 2023
The Parent
Company
holds the
share
capital
(both
directly and
indirectly)
of the
following
companies
Subsidiary Country of Class Shares Held
registration %
/ incorporatio
n
Tap Global Gibraltar Ordinary 100
Ltd
Tap Gibraltar Ordinary 100
Technologies
Limited*
Tap Global Australia Ordinary 100
Pty Ltd*
Tap Americas United States Ordinary 100
LLC* of America
*denotes
held
indirectly
7. Debtors
2023 2022
£ £
Prepayments and accrued income 12,997 23,092
VAT liability - 21,057
Other debtors - 57,929
12,997 102,078
£296 (2022: £24,817) of other debtors represent funds held as a cash balance in
a brokerage account.
8. Financial assets
2023 2022
£ £
At fair value
Available for sale listed and unlisted investments - 1,815,320
- 1,815,320
9. Creditors falling due within one year
2023 2022
£ £
Trade creditors 7,450 41,739
Accruals 88,650 98,225
96,100 139,964
10. Provisions
Deferred tax
Carrying amount £
As at 1 July 2022 (12,517)
Movement -
Balance at 30 June 2023 (12,517)
11. Deferred tax
The deferred tax included in the statement of financial position is as follows:
2023 2022
£ £
Included in provision (note 10) (12,517) (12,517)
(12,517) (12,517)
The deferred tax account consists of the tax effect of timing differences in
respect of:
2023 2022
£ £
Revaluation of listed investments / financial assets (12,517) (12,517)
(12,517) (12,517)
12. Called up share capital
2023 2022
COMPANY AND GROUP No. £ No. £
Ordinary shares of £0.001 each 693,409,624 693,410 171,187,399 171,187
Deferred shares of £0.099 each 15,455,115 1,530,056 15,455,115 1,530,056
708,864,739 2,223,466 186,642,514 1,701,243
13. Share options and share warrants
The Parent Company grants share options to employees as part of the remuneration
of key management personnel and directors to enable them to purchase ordinary
shares in the Parent Company. Under the plan, 1,125,000 options were granted for
no cash consideration for a period of 2 years expiring on an extended date of
31December2023. The share options outstanding at 30 June 2023 had a weighted
average remaining contractual life of 0.5 years (2022: 0.75). Maximum term of
new options granted was 2 years from the grant date. The weighted average
exercise price of share options as at the date of exercise is £0.00402
(2022:£0.0064).
John Taylor hold the following options:
Number Exercise Price Expiry Date Vesting Conditions
150,000 £0.06 31 December 2023 Fully Vested
150,000 £0.08 31 December 2023 Fully Vested
150,000 £0.10 31 December 2023 Fully Vested
Fungai Ndoro retains the following share options granted to her:
Number Exercise Price Expiry Date Vesting Conditions
112,500 £0.06 31 December 2023 Fully Vested
112,500 £0.08 31 December 2023 Fully Vested
112,500 £0.10 31 December 2023 Fully Vested
Simon Grant-Rennick retained the following share options granted to him on 10
March 2021. 75% of the original grant lapsed on Simon's resignation:
Number Exercise Price Expiry Date Vesting Conditions
37,500 £0.06 31 December 2023 Fully Vested
37,500 £0.08 31 December 2023 Fully Vested
37,500 £0.10 31 December 2023 Fully Vested
Anthony Quirke hold the following options:
Number Exercise Price Expiry Date Vesting Conditions
75,500 £0.06 31 December 2023 Fully Vested
75,500 £0.08 31 December 2023 Fully Vested
75,500 £0.10 31 December 2023 Fully Vested
Share Warrants
The Parent Company has 37,500,000 share warrants with each warrant giving the
holder the right to subscribe for one ordinary share in the Parent Company at a
price of £0.08 per share and will expire on 31 December 2023.
Additionally the Parent Company has a further 39,444,445 share warrants with
each warrant giving the holder the right to subscribe for one ordinary share in
the Parent Company at a price of £0.08 per share and will expire on 10 January
2026.
Furthermore, the Parent Company as an additional 1,000,000 share warrants with
each warrant giving the holder the right to subscribe for one ordinary share in
the Parent Company at a price of £0.045 per share and will expire on 10 January
2028.
The fair value of these share options and warrants expensed during the year was
£378,632, being the value of the options and warrants attributable to the
vesting periods to 30 June 2023 (2022: £4,979).
The volatility is set by reference to the historic volatility of the share price
of the Parent Company.
14. Events after the end of the reporting period
No other matters or circumstances have arisen since the end of the financial
year which significantly affected or may significantly affect the operations of
the group, the results of those operations or the state of affairs of the group
in future financial years.
15. Related party transactions
All transactions with Directors are included within Notes 5 and 13.
16. Controlling party
The directors consider that there is no ultimate controlling party.
This information was brought to you by Cision http://news.cision.com
END
(END) Dow Jones Newswires
December 28, 2023 02:01 ET (07:01 GMT)
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