The information contained within
this announcement is deemed by the Company to constitute inside
information as stipulated under the Market Abuse Regulation (EU)
No. 596/2014 as it forms part of UK domestic law by virtue of the
European Union (Withdrawal) Act 2018 ("MAR")
30/09/2024
Valereum
Plc
("Valereum", the "Company" or
the "Group")
Interim results for the six
months ended 30 June 2024
Significant progress in
developing products and services for launch in H2
2024
Valereum PLC (AQSE: VLRM), a
company focused on unlocking capital and creating value in
tokenised digital markets, is pleased to announce its unaudited
results for the six months ended 30 June 2024.
Financial highlights:
|
|
HY24
(£'000)
|
HY23
(£'000)
|
|
EBITDA
|
873
|
(70)
|
|
Profit/(loss) before tax
|
322
|
(243)
|
|
Total assets
|
5,198
|
1,759
|
|
Net
increase/(decrease) in cash
|
116
|
(87)
|
|
Net
cash/(debt)
|
47
|
(384)
|
● Significant
improvement in EBITDA to £873k in H1 24 compared to a loss of £70k
in H1 23).
● During H1 24, the
Company raised interim funding of £300k from the Chairman and
entered into an agreement with him to raise an additional
£2m.
● Post-period end,
Valereum concluded the £2m fund raise from the Chairman in July
2024 and repaid the remaining outstanding debt of £0.1m, clearing
all debt from the balance sheet during July 24.
Operational highlights:
●
During H1 24, the Company acquired the GSX Group,
securing significant technological intellectual property, a highly
respected management team with expertise in financial markets
including exchange management, and deep relationships across the
fintech sector.
●
After a comprehensive selection process, Valereum
began entering into contractual collaborations with technology
providers including Securities Trading Technology (Mauritius) Ltd
("STT"), Tokeny, and Fireblocks.
●
Post-period end:
- The Company announced it had been
awarded a DASP (digital asset service provider) licence from the
regulator in El Salvador to operate a Real World Asset (RWA)
ecosystem within a global market which is expected to grow rapidly
in the coming years subject to any applicable digital asset and/or
investment rules and requirements.
- Valereum has recently launched VLRM
Capital Management VSA Private Fund Limited ("VCM"), an Alternative
Investment Fund aiming to maximise returns on investors' capital
using technical trading strategies to significantly grow AUM. The
Valereum Chairman has invested £1,000,000 into the Fund.
Outlook
● Through the
acquisition of the technological intellectual property of the GSX
Group, the raising of funding for working capital, the elimination
of all debt, the forging of partnerships with technology providers,
the development of technology, the receipt of the DASP licence, and
the recent launch of VCM, Valereum has laid strong foundations to
support the generation of revenues from Q4 24 and their future
scaling in FY25 and beyond.
Nick Cowan, CEO added:
"I am pleased with the progress
made by Valereum in the first half of 2024, as we continued to
deliver against our strategy at pace, across all of our verticals,
in line with previous communications throughout the
year.
There is real momentum across the
business and I am excited about the future as Valereum remains
well-placed to pursue the opportunities that lie ahead. Our focus
is on scaling the launched products and services during H2 2024 and
into 2025."
Further updates to
follow.
Enquiries:
Valereum Plc
James Formolli,
Chairman
Tel: +44
7938767319
Stanford Capital
Partners
Tel: 023 3650 3650
Bob Pountney
Patrick Claridge
First Sentinel Corporate Finance
AQSE Corporate Adviser
Brian
Stockbridge
Tel: +44 20 3855
5551
The Directors of the Company
accept responsibility for the contents of this
announcement.
For more information, please visit
the Company's website at www.vlrm.com
Operational Review
In
January 2024, the Company acquired the entire share capital of the
GSX Group, through which it secured considerable intellectual
property including technology, partnerships with sector-leading
technology providers, prospective long-term users of its solutions
and a team which have decades of collective experience within
tier-one institutions, specialising in stock exchanges, capital
markets and associated technologies, becoming early adopters of the
power of blockchain technology in the application of securities
markets.
The
rich pool of resources acquired enabled Valereum to establish a
wider vision and accelerate the roll-out of a blockchain-powered
technology platform and marketplaces.
VLRM Technology
Development of Valereum's core
technology infrastructure, "The Bridge" Digital FMI (DFMI)
platform, has accelerated since entering into a strategic
partnership forged with STT during H1 24. The platform,
incorporating innovative blockchain technologies, is intended to
redefine the current legacy trading model, by providing a rapid and
efficient turn-key full-stack technology solution for digital
securities & digital assets, from primary issuance to secondary
trading, including clearing & settlement finality.
The blockchain technology
underpinning Valereum's solutions is increasingly being embraced by
governments and large financial institutions such as JPMorgan and
Mastercard and there is significant market potential in both RWA
(BCG predicts the RWA market size to be between $16 and $64
trillion by 2030), and traditional public markets, currently
capitalised at over $100 trillion*. VLRM plans to exploit these
opportunities through licensing its technology as a trusted DFMI to
exchanges and marketplaces. *https://www.world-exchanges.org/our-work/statistics
VLRM Markets
Following a comprehensive research
and selection process during H1 24, VLRM has partnered with the
technology providers Tokeny, Fireblocks and Antier to enable the
launch of the following services during Q4 24:
● The V-Wallet, a
non-custodial solution for mobile devices which will enable users
to access digital assets via links straight to VLRM marketplaces
and venues to buy, sell, hold and manage multiple digital
assets.
● The VLRM RWA
marketplace which will enable the primary issuance and bulletin
board-based secondary trading of a diverse range of tokenised real
world assets including securities, bonds and funds, real estate,
artwork and collectibles, commodities, intellectual property, image
rights and royalties.
These services are designed to
enable asset owners and investors to unlock and generate value by
providing efficiency, transparency, and diversification, and
creating wider financial inclusion. The global RWA market is
expected to grow rapidly in the coming years and is seen by
industry commentators as one of the largest market opportunities in
the blockchain sector.
Post period end, VLRM has been
awarded a DASP (digital asset service provider) licence from the
Comisión Nacional De Activos Digitales (CNAD) in El Salvador,
strategically selected due to its growing economy and innovative
approach to digital business and international trade. The licence
permits VLRM Markets to operate a regulated RWA ecosystem spanning
the creation, primary issuance and secondary trading of digital
assets; the buying, holding, selling and transfer of digital assets
including stablecoins, cryptocurrency and utility tokens; and for
professional clients, the trading, brokerage, OTC and custody of
real world assets, cryptocurrency, stablecoins and/or utility
tokens.
VLRM Capital
Valereum has recently launched VLRM
Capital Management VSA Private Fund Limited ("VCM"), an Alternative
Investment Fund aiming to maximise returns on investors' capital
using Volume Spread Analysis ("VSA") technical trading strategies
to significantly grow AUM. The Fund will trade highly liquid assets
only, from both the long side and short side, aiming to generate
returns regardless of market conditions.
Valereum Chairman, James Formolli,
has invested £1,000,000, into the Fund.
Financial review
●
Significant improvement in EBITDA to £873k in H1
24 compared to a loss of £70k in H1 23) due to:
- Gains of
£1.2m (H1 23: £0.5m) from the Company's investment in Vinanz Ltd,
listed on London's AQUIS stock exchange, valued at £3.5m based on
the listed price as at 30 June 2024)
- Negotiated
reductions in trade creditors of £266k in H1 24.
- Reduction
in underlying operating costs in H1 24 to £474k from £750k in H1
23.
●
Profit before tax of £322k
after reflecting a goodwill impairment of £405k
(H1 23: nil) which arose on the acquisition of the GSX
Group.
●
Total assets increased to £5,198k (2023: £1,759k), primarily due to the increase in value of the holding in
Vinanz Ltd.
●
Net cash inflows during H1 24 amounted to £116k
compared to an outflow of £87k in H1 23, as the Company raised
interim funding of £300k from the Chairman.
●
The remaining outstanding convertible loans of
£118k were extinguished during April 2024.
●
Post-period end, Valereum concluded the £2m fund
raise from the Chairman in July 2024 and repaid the remaining
outstanding debt of £0.1m clearing all debt from the balance sheet
during July 2024.
Summary and Outlook
We are pleased with the significant
progress achieved in H1 24.
Through the acquisition of the
technological intellectual property of the GSX Group, the raising
of funding for working capital, the elimination of all debt, the
forging of partnerships with technology providers, the development
of technology, the receipt of the DASP licence in El Salvador and
the recent launch of VCM, Valereum has laid strong foundations to
support the generation of revenues from Q4 24 and their future
scaling in FY25 and beyond.
Valereum Plc
Notes to the Consolidated Interim Financial
Statements
1. Basis of
preparation
Valereum Plc (herein "the Company"
or "the Group") presents its consolidated interim financial
statements for the period ended 30 June
2024.
These interim consolidated financial
statements have been prepared using the recognition and measurement
principles of International Financial Reporting Standards as
adopted for use in the United Kingdom using the accounting policies
that are expected to be applicable in the preparation of the Group
Annual Report for the year ended 31 December
2024.
The accounting policies applied are
consistent with those disclosed in the Group Annual Report for the
year ended 31 December 2023 and in accordance with the additional
accounting policies as stated
below.
"Goodwill represents the excess of
the cost of a business combination over the Group's interest in the
fair value of identifiable assets, liabilities and contingent
liabilities acquired.
Cost comprises the fair value of
assets given, liabilities assumed and equity instruments issued,
plus the amount of any non-controlling interests in the acquiree
plus, if the business combination is achieved in stages, the fair
value of the existing equity interest in the acquiree. Direct costs
of acquisition are recognised immediately as an expense.
Goodwill is capitalised as an
intangible asset with any impairment in carrying value being
charged to profit or loss.
"
Right of use assets are measured at
the amount of the lease liability plus incremental direct costs
incurred and lease payments made before the commencement of the
lease.
Lease liabilities in respect of
property leases are measure at the present value of future lease
payments discounted at the Company's incremental borrowing rate.
Interest is charged to profit or loss at an even rate on the
carrying amount of the lease
liability.
The interim consolidated financial
statements have not been subject to a review by the Company's
independent
auditor.
These interim consolidated financial
statements are not the statutory accounts of the Company. The
statutory accounts of the Company were approved and were authorised
for issue by the directors on 28 June 2024 and were filed with the
Registrar. The independent auditor's report on those financial
statements was unqualified but drew reference to a material
uncertainty in relation to the going concern status of the
Company.
2. Earnings
per share
|
|
Unaudited
Six Months ended 30 June
2024
|
|
Unaudited
Six Months ended 30 June
2023
|
|
Audited
Year ended 31 December
2023
|
|
|
£
|
|
£
|
|
£
|
|
Profit or loss for the year
attributable to the shareholders of the Parent Company
|
322,789
|
|
(243,776)
|
|
(353,295)
|
|
|
|
|
|
|
|
|
Weighted average number of ordinary
shares in issue at end of period/ year
|
110,916,412
|
|
86,484,387
|
|
91,510,253
|
|
|
|
|
|
|
|
|
Basic earnings(loss) per
share
|
0.0029
|
|
(0.0028)
|
|
(0.0039)
|
|
|
|
|
|
|
|
|
Diluted earnings(loss) per
share
|
0.0029
|
|
(0.0028)
|
|
(0.0039)
|
At 30
June 2024 the number of warrants outstanding over ordinary shares
of £0.001 each was 78,357,692. There was no dilutive effect of
those outstanding warrants.
3. Business
combinations
On 30 January 2024 the Company
acquired the entire share capital of the GSX Group Limited for a
consideration of 5,000,000 Ordinary Shares of £1 each. The
Company's share price at the date of acquisition was £0.055 per
share.
Below summarises the provisional
fair value assets and liabilities acquired. The directors expect to
have completed the fair value exercise within twelve months of the
date of acquisition.
|
|
|
|
|
|
Provisional
|
|
|
|
|
|
|
£
|
|
Unlisted investments
|
|
|
|
|
100,000
|
|
Development intangible
assets
|
|
|
|
|
500,000
|
|
Right of use assets
|
|
|
|
|
709,212
|
|
Cash at Bank
|
|
|
|
|
215,070
|
|
Other receivables and
prepayments
|
|
|
|
|
196,374
|
|
Other payables
|
|
|
|
|
(707,753)
|
|
Provisions
|
|
|
|
|
(40,000)
|
|
Lease liabilities
|
|
|
|
|
(1,102,986)
|
|
Net liabilities acquired
|
|
|
|
|
(130,083)
|
|
|
|
|
|
|
|
|
Consideration comprising 5,000,000
Ordinary shares of £0.001 each at a value of £0.055 per
share
|
|
|
|
|
275,000
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
|
|
405,083
|
Following the acquisition, it was deemed that the goodwill
arising was not recoverable and was fully impaired.
Immediately prior to acquisition, the Company issued warrants
over 10,000,000 Ordinary Shares of £0.001 each at an exercise price
of £0.01 each in lieu of amounts owed to certain directors and a
related party following the waiver of loans made by them to GSX
Group Limited prior to the acquisition.
4. Share
capital
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
30 June
2024
|
|
30 June
2023
|
|
31 December
2023
|
|
Authorised
|
£
|
|
£
|
|
£
|
|
6,000,000,000 Ordinary Shares of
£0.001 each
|
6,000,000
|
|
6,000,000
|
|
6,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued
|
|
|
|
|
|
|
Number of shares issued at beginning
of period/ year
|
101,644,718
|
|
79,224,628
|
|
79,224,628
|
|
|
|
|
|
|
|
|
Number of shares issued during
period/ year
|
12,517,857
|
|
22,420,090
|
|
22,420,090
|
|
|
|
|
|
|
|
|
Number of shares in issue at end of
period/ year
|
114,162,575
|
|
101,644,718
|
|
101,644,718
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares were issued during the period
as follows:
|
Number of
shares
|
|
|
|
|
|
|
Issued on the acquisition of GSX
Group Limited (see note 4)
|
5,000,000
|
|
|
Issue of shares on 4 January 2024 to
acquire non-controlling shares of Valereum Collections Limited at
0.049p per share
|
2,517,857
|
|
|
Issue of shares to James Formolli on
28 March 2024 at 6p per share
|
5,000,000
|
|
|
|
12,517,857
|
|
|
|
|
|
|
|
| |
5. Events
after the end of the reporting period
On 31 May 2024 the Company announced
the issue of 9,000,000 share options over ordinary shares of £0.001
each in the Company to the non-Board employees and the issue of
32,807,692 share options and otherwise warrants over ordinary
shares of £0.001 each in the Company to the Executive and
Non-Executive Directors.
Since the end of the period the
Company concluded the raising of £2 million from its Chairman,
James Formolli, through the issuance of 55,411,752 new ordinary
shares of £0.001 each at £0.036 per share and the issuance of
15,000,000 GATE Tokens, being VLRM's utility
token.
Since the end of the period options
and warrants have been exercised over a total of 6,757,692 ordinary
shares of £0.001 each for total proceeds of
£9,458.
The above shares were admitted to
trading on 10 July
2024.
6. Restatement
of interim results for the period ended 30 June
2023
|
The interim results for the period
ended 30 June 2023 were restated as follows:
|
|
|
|
£
|
|
Loss as previously stated
|
(624,628)
|
|
Share based payment expense
(previously not reported)
|
(111,000)
|
|
Revaluation of investments
(previously not reported)
|
491,852
|
|
Loss as restated
|
(243,776)
|
|
|
|
|
Total comprehensive loss as previously
stated
|
(462,858)
|
|
Share based payment expense
(previously not reported)
|
(111,000)
|
|
Revaluation of investments
(previously not reported)
|
491,852
|
|
Total comprehensive loss as restated
|
(82,006)
|
|
|
|
|
Net
liabilities as previously stated
|
(198,263)
|
|
Revaluation of investments
(previously not reported)
|
491,852
|
|
Net
assets and equity as restated
|
293,589
|