Company Registration No. 03926192
Quantum Blockchain
Technologies PLC
Annual Report and Financial
Statements for the year ended
31 December 2023
Contents
Company Information
Chairman’s statement
Directors’ profiles
Strategic report
Directors’ report
Independent auditor’s report to the members of Quantum Blockchain Technologies Plc
Group statement of comprehensive income
Group and Company statements of financial position
Group statement of changes in equity
Company statement of changes in equity
Group and Company statements of cash flows
Notes to the financial statements
1
2
5
7
13
25
37
38
40
41
42
43
Francesco Gardin
Peter Fuhrman
Mark Michael Trafeli
James Gordon
03926192 (England and Wales)
First Floor
1 Chancery Lane
London
WC2A 1LF
A.C.T. Audit Limited
27 Hill Street
Mayfair
London
W1J 5LP
Ferrari Pedeferri Boni
Studio Legale Associato
Via Fatebenefratelli, 22
20121
Milan
Italy
Gordons Partnership LLP
First Floor
1 Chancery Lane
London
WC2A 1LF
SP Angel Corporate Finance LLP
Prince Frederick House
35-39 Maddox Street
London
W1S 2PP
Share Registrars Ltd
27-28 Eastcastle Street
London
W1W 8DH
COMPANY INFORMATION
Directors
Company Secretary
Company number
Registered office
Auditor
Italian Solicitors
UK Solicitors
Nominated Adviser & Broker
Registrar
1 | P a g e
CHAIRMAN’S STATEMENT
I am pleased to present the Group’s Final Results for the year ended 31 December 2023. The Group
consists of Quantum Blockchain Technologies PLC (the “Company” or “QBT”), which undertakes the
Group’s Research and Development (“R&D”) Programme and holds the Legacy Assets, and its wholly
owned subsidiary, Clear Leisure 2017 Ltd (“CL17”), which deals with the legal claims and related
litigation.
During 2023, the main focus of the Company has been the R&D Programme, launched in 2021, which
aims to develop a proprietary disruptive technology for mining Bitcoin through the development of
Artificial Intelligence (AI), Quantum Computing and a special architecture for ASIC chips design for
mining rigs. The capitalisation of the Bitcoin market as at the date of this report exceeds USD1.3 trillion,
therefore, a technology which could bring a competitive advantage to existing Bitcoin miners is
considered by the Company as potentially valuable.
The Company has several independent R&D teams working on each of the above technologies, based
in London (UK), Munich (Germany) and Milan (Italy).
The first goal of QBT’s R&D Programme is to create AI software to improve the mining power of existing
Bitcoin mining rigs. By applying AI and Machine Learning (ML) technologies, three different R&D teams
have independently achieved very promising results from internal laboratory tests for the Company’s
three proprietary methods, called “A”, “B” and “C”. While they are materially different, each method
has substantiated the Company’s initial assumption, i.e., that SHA-256, the core algorithm for mining
of Bitcoin, is to some extent predictable. Hence calculations can be limited only to those cases where
the chance of successfully mining Bitcoin is higher, resulting in better overall performance of the mining
process.
The Company is now working on adapting its three Bitcoin mining methods to existing mining rigs in
order to launch the first commercial QBT products, as Software as a Service (“SaaS”) for Bitcoin miners.
A second goal, which has a mid to long term timeframe, is the development of a proprietary mining
chip which includes all the internal R&D results, as per the two patent applications filed in 2021 and
2023.
Finally, the third objective will be the implementation of “Quantum Mining”, which is a proprietary
quantum version of SHA-256 algorithm for Bitcoin mining. A patent application for this implementation
is in the process of being drafted at the time of publication of this report.
In order to use QBT’s proprietary quantum algorithm for Bitcoin mining, a quantum computer with
more qubits than is currently commercially available is required. Therefore, the Company is planning
ahead to be in a position to use this opportunity when such quantum computer is available.
During 2023, the Company continued to deal with its Legacy Assets, with special focus on the litigation
against the former management and internal audit committee of Sipiem in Liquidazione Spa (“Sipiem”),
which is held via CL17. In late 2022, the Venice Court ruled in favour of CL17 and ordered Sipiem
defendants to pay CL17 €6,274,000 in damages (exclusive of interest and adjustments for inflation),
and legal fees (together the “Award Payment”).
The Company also continued to deal with its other Legacy Assets, such as the Sosushi Srl (“Sosushi”)
€1m litigation, and Company’s investments in PBV, Forcrowd and Geosim, although there are no
specific updates available at this time.
During the period under review, as announced on 1 June 2023, QBT raised a total of £1 million (before
expenses) pursuant to the issue of 71,428,571 new ordinary shares of 0.25 pence each in the Company
(“Ordinary Shares”) at a price of 1.4 pence per Ordinary Share. Further to that, as announced on 30
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CHAIRMAN’S STATEMENT (continued)
October, the Company raised a total of £2 million (before expenses) pursuant to the issue of
133,333,333 new Ordinary Shares at a price of 1.5 pence per Ordinary Share.
On 7 July 2023, the Company announced that it had received a conversion notice from MC Strategies
AG to convert €1 million of the Zero-Coupon Bond into new Ordinary Shares at a conversion price of 1
pence per Ordinary Share (EUR: GBP exchange rate of 0.89 – fixed per terms and conditions of the Zero-
Coupon Bond) (as originally disclosed by the Company on 9 November 2020). As a result, the Company
issued 89,000,000 new Ordinary Shares to MC Strategies AG on 14 July 2023.
As disclosed on 31 May 2023, QBT granted seven million new options over new Ordinary Shares to
certain consultants, members of the R&D team and in-house staff. As a result, at the time of this report,
the Company has outstanding options over 133,500,000 new Ordinary Shares exercisable at 5 pence
and outstanding options over 133,500,000 new Ordinary Shares exercisable at 10 pence, set to expire
between December 2024 and December 2026.
In conclusion, the Company believes that exciting times are ahead, as it expects that its products, once
available, could truly energise the cryptocurrency mining industry, while eventually being able to
monetise its Legacy Assets through legal settlements.
Financial Review
The Group reported a total comprehensive loss of €4,206,000 for the year ended 31 December 2023
(2022: €5,026,000) and a loss before tax of €4,348,000 (2022: €5,252,000). Operating losses for the
period were €4,025,000 (2022: €4,547,000). Included within administrative expenses are charges
relating to the recognition of share options totalling €416,000 (2022: €1,854,000) and within finance
costs are charges for the revaluation of derivatives representing a profit of €9,000 (2022: loss of
€324,000). The movement in these items is dependent on the volatility of the Company’s share price
used for the calculation according to the relevant accounting standards. The undiluted Net Asset Value
(“NAV”) of the Group decreased by €675,000 in 2023, compared to a decrease of €398,000 in 2022. The
Group had Net Current Liabilities of €3.1m as at 31 December 2023 (2022: Net Current Assets €4.4m).
Post-Balance Sheet Events
In January 2024, the Company announced it has agreed with MC Strategy S.A., the sole Bondholder of
the Company’s €3.5m Zero-Coupon Bond issued in 2020, to extend the maturity of the Bond from 15
December 2024 to 15 December 2026. QBT and MC Strategy S.A. have agreed to change the yield on
maturity from 1% to 3%.
With regards to the Company’s Zero-Coupon Bond originally issued in 2013, at the Bondholders
meeting held on 22 February 2024 (previously duly called on 18 January 2024) the bondholders agreed
to extend the maturity of the Zero-Coupon Bond from 15 December 2024 to 15 December 2026, and
to amend the conversion price from £0.05 to £0.03.
In March 2024, the Company announced a new development, called Method C, based on Machine
Learning and using predictive AI technology that is producing consistent results during testing. In testing
environments Method C had favourably demonstrated predictive ability in c. 30% of instances where it
was input to SHA-256 producing a winning hash, resulting in a potential saving of energy.
At the same time, QBT announced that it had commenced development of a proprietary ASIC chip. A
working prototype is about to undergo development to confirm performance levels, and the Company
entered into early-stage exploratory discussions with Bitcoin rig manufacturers and US Bitcoin mining
companies. Also in March, the Company noted that the porting of Method A and Method B into
commercial rigs had proven to be very challenging.
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CHAIRMAN’S STATEMENT (continued)
The R&D team engaged in testing different solutions for the final stage in order to deliver a fully reliable
product. Finally, per the same announcement, QBT disclosed that its first two patent applications (ASIC
UltraBoost and ASIC EnhancedBoost) were making positive headway and that a third patent application
was being drafted concerning the proprietary quantum version of SHA-256.
In May 2024, the Company announced that at the end of April 2024, it reached an agreement with
certain of the Sipiem litigation co-liable defendants who have settled their position for €700,000 (which,
net of certain costs, has been received by CL17) .
At the same time, CL17 also reached an agreement with the Sipiem’s receiver, acquiring its right to
receive 30% of any sums collected (net of legal and other costs) from the Sipiem litigation, as envisaged
in the 2019 claim purchase agreement (through which CL17 acquired the Sipiem litigation) for an
amount of €170,000, giving CL17 rights to all funds recovered, namely the €700,000 of the above
agreement and the balance amounting to €5.575 million plus interest and augmentation for inflation,
together (the “Settlement”)
As announced on 16 May 2024 the above agreements were subject to the Venice Court scheduling of
a hearing to approve the Settlement, before the issue of the appeal ruling.
In June, QBT confirmed that the payment of €700,000 had been completed, and that €170,000 has been
paid by CL17 to Sipiem’s Receiver with respect to the acquisition by CL17 of the Receiver’s right to
receive 30% of any further sums collected in connection with the claim (net of legal fees).
Subsequently, in June 2024, the Company announced that the Venice Court of Appeal confirmed the
ruling of the 2022 lower court Judgment in favour of CL17 (save for €105,412), amounting to €6,083,562
(plus interest and adjustments for inflation) in damages, plus €134,166 for legal expenses. As the appeal
ruling has been issued prior to the scheduling of the hearing regarding the Settlement, such settlement
is now deemed void. While the above matter is currently being assessed by the Company’s legal team,
the Company still hold the above Settlement funds, minus the €170,000 paid to the Receiver for the
30% rights. In the meantime, all the parties involved, namely the Receiver, the Sipiem’s statutory
auditor’s lawyers and the insurer’s lawyers are being contacted to discuss the contractual implications
of the voided Settlement.
Outlook
The Board remains committed to return value to its stakeholders by:
i.
ii.
iii.
iv.
continuing to focus on its R&D Programme, which is providing promising and consistent
results for the disruption of the Bitcoin market;
investing in the technology sector (both in a direct and an indirect manner);
managing the legacy portfolio assets, where positive outcomes are expected from the
Company’s legal claims; and
further reduction of the debt position (if and when the conditions are deemed
appropriate).
The Board remains positive as the technology investments are deemed sound and promising, while the
legal claims have strong merit and against defendants that are expected to remain solvent, thereby
enhancing the prospect of collection of the judgment debts.
Francesco Gardin
Chairman
25 June 2024
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DIRECTORS’ PROFILES
Francesco Gardin
Chief Executive Officer & Chairman
Francesco Gardin (aged 69), born in Rovigo, Italy, graduated in Theoretical Physics at Padova University
in 1979, before undertaking a UK Government research project at University of Exeter, UK from 1980
to 1982. In 1983, Francesco founded AISoftw@re SpA to develop and distribute AI systems within Italy,
which he took public on NASDAQ Europe in 1999 and the Milan Stock Exchange in 2000. He sold the
company in 2005 but agreed to remain Non-Executive Chairman until March 2008. When he left, the
company employed more than 1,400 people and had revenues in excess of £70m. In February 2002
Professor Gardin became Chairman of The Company until February 2011. He was re-appointed as
Chairman and CEO of the Company in July 2015. During the period between February 2011 and July
2015, Prof. Gardin had no association with the Company. In December 2008, he was appointed
Executive Director of London Asia Capital plc, a UK company investing in Asia, he resigned in July 2013.
In October 2013 he was appointed to the board of Pan European Terminals PLC, listed on AIM of the
London Stock Exchange. He resigned in July 2014 following the sale of the company. In December 2014,
he co-founded First IPO Capital Ltd, a UK company aiming at financing IPO costs to companies listing on
the London AIM market. During the last twenty years, he has been a director of almost fifty companies
in Italy, UK, USA, Israel, Hong Kong, China, Singapore, Mauritius and Jersey. From 1984 to 2014, he was
a Research Associate Professor at Udine, Milano and Siena University lecturing in Artificial Intelligence,
Theory and Application of Computation, and Virtual Reality. His academic papers include more than 50
individual and joint publications and three books on the subject of Artificial Intelligence as editor.
Peter Fuhrman
Non-Executive Director
Peter Fuhrman (aged 65) has extensive experience in High-Technology, Semiconductors, Finance and
Investment industries. He graduated summa cum laude from Tufts University in 1980 and also holds an
M.Phil degree in International Relations from Cambridge University. He did additional postgraduate
studies at Nanjing University, and as a Yale-in-China Fellow at the Chinese University of Hong Kong.
Peter is currently: - Chairman and CEO at China First Capital, which is one of China’s older specialist
international investment banks in the technology sector, with deep experience and expertise in China's
semiconductor industry, advanced manufacturing, robotics, precision automation, nano-positioning,
photonics and breakthrough energy technologies, and - Strategic Advisor on advanced technologies
and market expansion for CEOs of one of China's largest listed high-technology manufacturing
companies as well as one of Germany's and Europe's largest market-leading semiconductor technology
companies He previously was the CEO of Awareness Technologies, a Los Angeles based Cloud-based
enterprise security software company (which was successfully sold in 2008) and, in London, Peter was
Head of Europe at Forbes Inc., publisher of Forbes Magazine, one of the world’s largest and most
successful business publications. Peter is an “Industry Thought Leader” who has been published in The
Wall Street Journal, The New York Times, The Economist, The Financial Times, Bloomberg, CNBC, The
Washington Post, China Daily, The South China Morning Post. He speaks English, Mandarin Chinese and
Italian. Peter has also given guest lectures and has been a speaker on China- and technology-related
topics and innovation at the University of Chicago’s Business School, the University of Michigan Ross
School of Business and Harvard Business School’s global alumni.
Mark Michael Trafeli
Non-Executive Director
Mark Michael Trafeli (aged 57) is a lawyer qualified in England and Wales, California and New York.
Based in London, he has extensive expertise in regulation, compliance and corporate governance. He is
currently General Counsel for an enterprise in the online gaming sector with operations in multiple
countries and licences from the Gambling Commission of Great Britain. He also maintains a private law
practice that he established in 2008 advising on UK and USA-related financial services, stock exchange
regulation, commercial contracts, M&A, corporate governance, compliance, and litigation.
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DIRECTORS’ PROFILES (continued)
Previously, Mark served as General Counsel and Interim Head of Compliance at RJ O’Brien Europe
Limited, a London based FCA regulated clearing firm with multiple exchange memberships and General
Counsel to First World Trader (Pty) Limited, a leading South African global fintech company best known
for its Easy Equities platform. Mark holds a Bachelor of Arts degree in History and Political Science and
a Juris Doctor (JD) in law, both from the University of Michigan.
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STRATEGIC REPORT
The Directors present their Strategic Report on Quantum Blockchain Technologies plc and its subsidiary
undertakings (“the Group") for the year ended 31 December 2023.
Review of the business and developments during the year
During the year under review the Company provided regular updates to its stakeholders regarding the
business:
With regards to the R&D Programme and launch of BTC products:
-
-
-
-
-
-
In January, the Company retained Dr.Lov Kumar Grover as a special consultant for the
theoretical assessment of the Company’s proprietary quantum version of SHA-256.
Also in January, QBT announced that it decided to apply its SHA-256 based optimisations to
other cryptocurrencies within the Bitcoin “family”, enlarging the addressable market of its
future products, although maintaining the focus on Bitcoin.
In May, the Company appointed of Mr Vladimir Kusznirczuk as Marketing and Business
Development Manager with immediate effect, to address business opportunities with large
US and Canadian Bitcoin miners and mining rig manufacturers.
In July, the Company had filed a new patent application named ASIC EnhancedBoost,
developed by its cryptography expert and Cryptographic Optimisation team, which is currently
still under evaluation by the examiner of the UK patent office.
In September the Company commenced the process to establish a method to port Method A
and Method B onto commercial miners, focusing not only on Intel’s Blockscale based miners,
but also the most popular mining rigs produced in China.
In October, QBT stated that the proprietary Method A and Method B software would be
“available as a SaaS client-server cloud application by uploading an upgrade to the mining rigs'
firmware”, for a mutual partnership/testing phase.
Regarding the new Ordinary Shares and Options:
-
-
-
In May, the Company announced it had granted 7,000,000 options over new Ordinary Shares
(“Options”) to certain consultants, members of the R&D team and in-house staff. Furthermore,
the Company has extended the exercise period for 17,500,000 other Options previously
granted.
In June, QBT announced it raised £1 million (before expenses) through the placing of
71,428,571 new Ordinary Shares at a price of 1.4 pence per new Ordinary Share.
In October, the Company announced it raised £2 million (before expenses) through the placing
of 133,333,333 new Ordinary Shares at a price of 1.5 pence per new Ordinary Share.
Regarding the Legacy Assets:
-
In March, the Company announced that at the hearing for the Sipiem litigation at the Venice
Appeal Court, the judge ruled in favour of CL17, thereby allowing CL17 to seek enforcement
of the Award Payment against the main Sipiem defendant (a former director of Sipiem, who is
individually liable for the full amount of the Award Payment). The Appeal Court did, however,
grant the remaining Sipiem defendants’ request to enjoin enforcement of the judgment
against the members of the internal audit committee and the main defendant’s family
members.
Sale of investments
The Company did not dispose of any assets during 2023 (2022: nil).
7 | P a g e
STRATEGIC REPORT (continued)
Section 172(1) Statement – Promotion of the Company for the benefit of members as a whole:
The Directors believe they have acted in the way they considered in good faith, that would promote
the success of the Company for the benefit of its members as a whole, as required by s172 of the
Companies Act 2006, and in doing so have had regard to:
•
•
•
•
•
•
the likely consequences of any decision in the long term;
the need to act fairly between the members of the Company;
the desirability of maintaining the Company’s reputation for high standards of business
conduct;
consider the interests of the Company’s employees;
the need to foster the Company’s relationships with suppliers, customers and others; and
the impact of the Company’s operations on the community and the environment.
In order to fulfil their duties under section 172 and promote the success of the Group for the benefit of
all its stakeholders, the directors need to ensure that they not only act in accordance with the legal
duties but also engage with, and have regard for, all its stakeholders when taking decisions. The Group
has a number of key stakeholders that it is committed to maintaining a strong relationship with.
Understanding the Group’s stakeholders and how they and their interests will impact on the strategy
and success of the Group over the long term is a key factor in the decisions that the Board may make.
Shareholders The promotion of the success of the Group is ultimately for the benefit of the Company’s
shareholders who provide the Company’s permanent capital. As a company listed on the AIM Market
of the London Stock Exchange, the Company is responsible for ensuring that it is aware of shareholder
needs and expectations. The Directors attach great importance to maintaining good relationships with
all of its shareholders and interested parties and seeks to ensure that they have access to correct and
adequate information in a timely fashion. The Directors are aware that as stakeholders, its shareholders
play a vital role in the fabric of the Company and therefore regularly engages in dialogue with the
Company’s shareholders and is available for meetings with institutional and major shareholders
following the release of the Group’s Annual and Interim Results. The Directors welcome all shareholders
to make contact with the Company and provide any feedback or comments that they may have, and
contact details are available on the Company’s website. The Company’s Annual General Meeting is also
an important opportunity for shareholders to meet and engage with Directors and put questions to the
Company regarding its business, operations and performance.
Employees Our employees are key to the success of the Group and recruiting, retaining and developing
our team is one of the Group’s most important priorities. The Directors expect a high standard of
integrity and accountability from the Group’s employees. In return, they reward and incentivise the staff
on the basis of merit, ability and performance. Employee engagement is a key factor of this
performance, and the Directors encourage an open communication forum amongst all members of staff,
aided by the Group’s small size and relatively flat hierarchical structure. The Directors are committed to
promoting diversity and equal opportunities and consider the Group to be a supportive employer,
providing training and development where required.
Investee Companies Engagement with the Group’s portfolio of investee companies is critical to
delivering the Company’s long-term strategy of delivering shareholder return. Whilst the Group does
not involve itself in the day-to-day operations of its investee companies, it does retain formal oversight
by being part of the board of each investee.
Regulatory Bodies Although the Company is not itself directly regulated, it operates within a regulated
markets environment (e.g., AIM rules) and therefore actively engages with various regulatory bodies
and advisory firms to ensure that compliance standards are maintained and that the Company
continues to act with the high standards of business conduct that have established its reputation thus
far.
8 | P a g e
STRATEGIC REPORT (continued)
TCFD (Task Force on Climate-related Financial Disclosures) We recognize the importance of climate
change as a material financial risk and opportunity. As part of our commitment to transparency and
accountability, we have aligned our disclosure practices with the recommendations of the Task Force
on Climate-related Financial Disclosures (TCFD). Our disclosures aim to provide investors and
stakeholders with relevant information on our climate-related risks, opportunities, and performance.
By doing so, we seek to support the transition to a low-carbon and resilient economy while enhancing
long-term value for our shareholders.
Suppliers and Advisors The Company’s suppliers and advisors are integral to the day to day operation
of the Group. Relationships with suppliers are carefully managed to ensure that the Group is always
obtaining value for money. The Group seeks to ensure that good relationships are maintained with its
suppliers and advisors through regular contact and the prompt payment of invoices.
Other stakeholders and the wider community The Directors are committed to ensuring that none of
its activities have a detrimental impact on the wider community and the environment. The Group
actively encourages its employees to participate in charitable work and community projects.
Decision making and section 172 of the Companies Act 2006 The Group’s primary strategy is to deliver
shareholder value. The key driver of this growth is the investment of the Group’s resources into
businesses with experienced management teams that have excellent growth potential and where the
Group can offer its expertise and add value to. During the year, the Group continued to fund its existing
portfolio of investee companies as well as provide investment into a new investee company. Historically
the Group has used funds from past realisations and external fundraising to fund future opportunities
both within its current portfolio and to new investments.
Board changes
On 24 July 2023, Messrs Francesco Gardin, Peter Fuhrman and Mark Michael Trafeli were re-elected as
Directors of the Company.
Events after the reporting date
Regarding the Company's Bonds:
-
In January, the Company announced it agreed with MC Strategy S.A., the sole Bondholder of
the Company’s €3.5m Zero-Coupon Bond issued in 2020 to extend the maturity of the Bond
from 15 December 2024 to 15 December 2026. At the same time QBT and MC Strategy S.A.
agreed to change the yield to maturity from 1% to 3%.
- With regards to the Company’s Zero-Coupon Bond originally issued in 2013, on 22 February
2024, at the Bondholders meeting (previously duly called on 18 January 2024), bondholders
agreed to extend the maturity of the Zero-Coupon Bond from 15 December 2024 to 15
December 2026, and to amend the conversion price from £0.05 to £0.03.
9 | P a g e
STRATEGIC REPORT (continued)
With regard to the R&D Programme:
-
-
-
-
In March, the Company announced a new development, called Method C, based on ML and
using AI technology is producing consistent results during testing. Method C in testing
environments had favourably demonstrated predictive ability in c. 30% of the cases, if an input
to SHA-256 will produce a winning hash, resulting in a potential saving of energy.
At the same time, the QBT announced it commenced development of a proprietary ASIC chip.
A working prototype was about to undergo development which will confirm performance
levels, and it entered into early-stage exploratory discussions with Bitcoin rig manufacturers
and US Bitcoin mining companies.
Also in March, the Company noted that the porting of Method A and Method B onto
commercial rigs had proven to be very challenging. The R&D team engaged in testing different
solutions for the final stage in order to deliver a fully reliable product.
Finally, per the same announcement, QBT disclosed that its first two patent applications (ASIC
UltraBoost and ASIC EnhancedBoost) were making positive headway and that a third patent
application was being drafted with respect to the proprietary quantum version of SHA-256.
About the Sipiem litigation:
-
-
In May, the Company announced that at the end of April 2024, it reached an agreement with
some of the Sipiem litigation co-liable defendants who have settled their position for €700,000
(which, net of certain costs, has been received by CL17).
At the same time, CL17 also reached an agreement with the Sipiem’s receiver, acquiring its
right to receive 30% of any sums collected (net of legal and other costs) from the Sipiem
litigation, as envisaged in the 2019 claim purchase agreement (through which CL17 acquired
the Sipiem litigation) for an amount of €170,000, giving CL17 rights to all funds recovered.
- On 18 June 2024, the Company announced that the Venice Court of Appeal confirmed the
ruling of the 2022 lower court Judgment in favour of CL17 (save for €105,412), amounting to
€6,083,562 (plus interest and adjustments for inflation) in damages, plus €134,166 for legal
expenses. As the appeal ruling has been issued prior to the scheduling of the hearing regarding
the €700,000 settlement, such settlement is now deemed void. So is the €170,00 agreement
with the Receiver, as strictly connected to the above settlement. Through its ruling, the Venice
Court of Appeal removed any opposition to the enforceability, by CL17, of the above amounts
against all defendants.
- While the above matter is currently being assessed by the Company’s legal team, the Company
still hold the above Settlement funds, minus the €170,000 paid to the Receiver for the 30%
rights. In the meantime, all the parties involved, namely the Receiver, the Sipiem’s statutory
auditor’s lawyers and the insurer’s lawyers are being contacted to discuss the contractual
implications of the voided Settlement.
Principal Risks and Uncertainties
The Group's investments as at 31 December 2023 were all in unlisted entities. As a result, there is no
readily available market for sale in order to arrive at a fair value. The valuation of each investment is
appraised on a regular basis and requires a significant amount of judgment together with reviewing the
cash flows and budgets of the investee company in order to arrive at a fair value.
The Company received a liquidity injection during the year under analysis and during the first 6 months
of 2024, but the Directors consider that the amount may be sufficient to meet operating expenditure
over the next 12 months. This is covered further in the Going concern section of this report and Note 2
to the financial statements.
10 | P a g e
STRATEGIC REPORT (continued)
As the Company focuses more on improving existing practices to accelerate bitcoin mining, risks arise
in relation to the development of new solutions and products. These risks arise in regard to
developing products to a marketable stage and eventually bringing to market. The risks are mitigated
through the Board’s strong knowledge of the market and the finished product being a new, innovative
addition to the industry.
Key performance indicators (“KPIs”)
The key performance indicators are set out below
Net asset value
Closing share price
31 December
2023
31 December
2022
Change %
(€2,547,000)
(€3,222,000)
(20.95)
1.575p
1.125p
40.00
85.34
Market capitalisation
€23,461,528
€12,658,933
Assessment of business risk
The Board regularly reviews operating and strategic risks. The Group's operating procedures include a
system for reporting financial and non-financial information to the Board including:
•
•
•
•
•
reports from management with a review of the business at each Board meeting, focusing on
any new decisions/risks arising;
reports on the performance of investments;
reports on selection criteria of new investments;
discussion with senior personnel; and
consideration of reports prepared by third parties.
Financial risk management
Details of the Group's financial instruments and its policies with regard to financial risk management
are contained in Note 21 to the financial statements.
Results for the year and dividends
The loss for the year was €4,206,000 (2022: loss of €5,026,000). Since the Group does not have any
distributable reserves, the Directors are not recommending the payment of a dividend.
Going Concern
In 2023 the Group incurred a loss of €4,206,000 (2022: €5,026,000) and had net current liabilities as at
31 December 2023 €3,121,000 of (2022: net current assets of €4,414,000). Our forecasts for the period
to 30 June 2025 has been prepared on the prudent assumptions that the Group will still be nonrevenue-
generating, will not receive any portion of its litigation claims, and will not receive any debtor cash
settlement specifically from Mediapolis Liquidation proceedings. Nonetheless, on the basis of the
equity funding raised last 1 June 2023 and 30 October 2023 which raised a total of EUR 2.74 million,
and the extension on our two convertible bond repayments from December 2024 to December 2026,
we believe that the Group, at the date of this report, may hold sufficient liquidity to sustain its
operational existence for the following twelve months without the specific necessity to raise further
funding either through an equity placing on AIM, or through other external sources, unless for
additional specific investment opportunities or ventures.
11 | P a g e
STRATEGIC REPORT (continued)
After making due enquiries, the Directors have formed a judgement that there is a reasonable
expectation that, in the next twelve months, there should be no need to secure further resources, but
in case of new investment opportunities the Group can secure further funds to sustain such expenses
and that adequate arrangements will be in place to enable the settlement of their financial
commitments, as and when they fall due.
On this note, the Directors continue to adopt the going concern basis in preparing the financial
statements.
Notwithstanding the above the Directors believe that due to the little headroom existing within our
budget at 30 June 2025 and the inherent commercial uncertainties in relation to future events, a
material uncertainty over the outcome of the matters described exists and Group might be required to
raised further finance and note the uncertainty in relation to the group being able to realise its assets
and discharge its liabilities in the normal course of business.
By order of the Board.
Francesco Gardin
Director
25 June 2024
12 | P a g e
DIRECTORS’ REPORT
The Directors present their report together with the audited financial statements for the year ended
31 December 2023.
Principal Activity
The principal activities of the Group are the R&D Programme and operating as investing company with
a portfolio of assets in technology sectors. The main focus of management is to successfully run the
R&D Programme and release new products to the market. The management is also pursuing the
monetisation of all of the Company’s Legacy Assets, through selected realisations, court-led recoveries
of misappropriated assets and substantial debt recovery processes.
Activities in the field of research and development
During the year, the Company continued an intense in-house Research and Development Programme
in respect of advanced proprietary techniques for bitcoin mining, with the primary goal to encounter
and exploit new important efficiencies of the mining process.
Directors
The present members of the Board of Directors together with brief biographies are shown on page 5.
The Board comprised the following directors who served throughout the year and up to the date of this
report save where disclosed otherwise beside their name:
Francesco Gardin
Peter Fuhrman
Mark Michael Trafeli
Qualifying third party indemnity provisions
The Company has made qualifying third-party indemnity provisions for the benefit of its directors
during the year. These provisions remain in force at the reporting date.
Directors’ interests
During the period, some Directors had a material interest in certain contracts of significance to the
Company or any of its subsidiaries. No Director of the Company have any beneficial interests in the
shares of its subsidiary companies. The interests of the directors who served at the end of the year in
the share capital of the Company at 31 December 2023 and 31 December 2022 were as follows:
Directors
Francesco Gardin
31 December 2023
(0.25p ordinary shares)
Holding
%
31 December 2022
(0.25p ordinary shares)
29,284,149
2.94%
29,284,149
The above 29,284,149 Ordinary Shares do not include the 5,000,000 Ordinary Shares that are the
subject of the Sale and Repurchase Agreement between Francesco Gardin and MC Strategies AG, as
originally announced on 15 December 2021.
The closing market price of the Quantum Blockchain Technologies Ordinary Shares at 31 December
2023 was 1.575p and the highest and lowest closing prices during the year were 3.00p and 0.78p
respectively.
13 | P a g e
DIRECTORS’ REPORT (continued)
Remuneration
Remuneration receivable by each Director during the year was as follows:
2023
2023
2023
Board fees
Remuneration Total
2022
Total
€’000
€’000
€’000
€’000
-
38
35
69
142
-
-
-
-
-
-
38
35
69
32
57
10
17
142
116
Directors
Reginald Eccles
Francesco Gardin
Peter Fuhrman
Mark Michael Trafeli
Total
None of the Directors had any pension entitlement.
Please note that further payments for the provision of R&D services were made to Infusion (2009) Ltd,
which is an entity Francesco Gardin is a director and a shareholder. For further details, please see Note
27.
Directors’ interests in share options and warrants
Details of directors’ share options are as follows:
At 1 January
2023
Granted
Exercised
At 31 December
2023
Exercise
date
Exercise Price
Directors
Francesco Gardin
Francesco Gardin
Peter Fuhrman
Peter Fuhrman
100,000,000
100,000,000
2,500,000
2,500,000
Mark Michael Trafeli
2,500,000
Total
207,500,000
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
100,000,000
100,000,000
2,500,000
2,500,000
2,500,000
207,500,000
N/A
N/A
N/A
N/A
N/A
5p
10p
5p
10p
5p
Expiry date
Date from
which
exercisable
06/05/2022
06/05/2026
06/05/2023
06/05/2026
12/09/2022
15/12/2024
12/09/2022
15/12/2024
01/09/2022
15/12/2024
14 | P a g e
DIRECTORS’ REPORT (continued)
Significant shareholders
As at 20 June 2024, the parties who are directly or indirectly interested in 3 percent or more of the
nominal value of the Company’s share capital are as follows:
SHAREHOLDER
Number of Ordinary Shares
HARGREAVES LANSDOWN (NOMINEES) LIMITED
INTERACTIVE INVESTOR SERVICES NOMINEES LIMITED
MC STRATEGIES AG
HSDL NOMINEES LIMITED
LAWSHARE NOMINEES LIMITED
BARCLAYS DIRECT INVESTING NOMINEES LIMITED
VIDACOS NOMINEES LIMITED
398,073,917
201,619,104
155,000,000
145,765,575
69,601,228
59,723,618
39,665,009
%
30.80
15.60
12.00
11.30
5.40
4.60
3.10
Corporate Governance The Board of Directors is accountable to the Company’s Shareholders for
ensuring good corporate governance and the Directors have agreed (on 27 September 2017) to report
under the UK Quoted Companies Alliance ("QCA") Governance Code:
QCA Code Recommendation
Principle 1
Application by the Company
Quantum Blockchain Technologies plc is an AIM
listed
investing company which has recently
realigned its strategic focus to technology related
investments, with special regard to Quantum
computing, Blockchain, Cryptocurrencies and AI
sectors. The Company has commenced an
aggressive R&D and investment programme in the
dynamic world of Blockchain Technology, which
includes cryptocurrency mining and other advanced
blockchain applications.
A more detailed explanation of the Company’s
strategy is set out in the preface of the Company’s
Annual Reports and business updates released to
the market which are available on the Company’s
website in the Regulatory News Section.
Establish a strategy and business model
which promote
for
shareholders
long-term
value
•
•
•
The board must be able to express a
shared view of the company’s purpose,
business model and strategy.
It should go beyond the simple
description of products and corporate
structures and set out how the company
intends to deliver shareholder value in
the medium to long-term.
It should demonstrate that the delivery
of long-term growth is underpinned by a
clear set of values aimed at protecting
the company from unnecessary risk and
securing its long-term future.
15 | P a g e
DIRECTORS’ REPORT (continued)
Principle 2
Seek to understand and meet shareholder
needs and expectations
• Directors must develop a good
understanding of the needs and
expectations of all elements of the
company’s shareholder base.
The board must manage shareholders’
expectations and should seek to
understand the motivations behind
shareholder voting decisions.
•
The Company endeavours to maintain a dialogue
institutional
keep both private and
and
shareholders
public
its
through
informed
announcements and its corporate website.
Shareholders are sent Annual Reports and all
shareholders receive a Notice of the Meeting and
are encouraged to attend the Annual General
Meeting.
Members of the Board are in attendance at the
Annual General Meeting and are available to meet
shareholders formally after the meeting to discuss
information that is available in the public domain.
The Company will advise shareholders attending
the AGM of the number of proxy votes lodged for
and against each resolution after each resolution
has been dealt with by a show of hands.
In addition, shareholder communication may also
be answered, where possible or appropriate, by the
Company’s Financial PR advisor, Christian T.
Wilkinson or the Company’s Nominated Advisor and
Broker, SP Angel Corporate Finance LLP.
Christian T. Wilkinson is responsible for the public
relations of the Company, which includes assistance
in the preparation of public announcements and
liaison with the press.
The Board is responsible for the Company’s public
announcements
the market and where
appropriate takes advice from the Company’s
advisors in respect of their preparation and the
Company’s regulatory requirements.
to
The Board is responsible for the Company’s public
announcements
the market and where
appropriate takes advice from the Company’s
advisors in respect of their preparation and the
Company’s regulatory requirements.
to
16 | P a g e
The Directors are aware of the impact the business
activities have on the communities in which the
Group's businesses operate and are very cognisant
of the importance of stakeholders, including but not
limited to shareholders, employees, advisors,
business partners, regulators and the wider society.
The Company holds formal and informal meetings,
to identify both internal and external stakeholders’
needs, interests, and expectations.
The Board, on a case-by-case basis, will take the
decision to act on feedback from stakeholders.
The Company does not have a policy on charity
giving, given the current size of the Company, but
the Board may from time to time decide to make
charitable donations.
The Company works closely with its advisors to
ensure it meets its listing obligations as well as the
social, legal, religious, and cultural requirements of
the countries in which it operates.
its
The Company is exposed to a variety of risks that
investing activities. A detailed
result from
explanation of the Board’s management of each
risk is outlined in the Annual Reports. Internal
controls are designed to manage rather than
eliminate risk and therefore even the most effective
system cannot provide assurance that each and
every risk, present and future, has been addressed.
The Board is responsible for the identification,
assessment and management of such risks. In
assessing the risks, the Board is assisted by the
Company’s advisors.
DIRECTORS’ REPORT (continued)
Principle 3
Take into account wider stakeholder and
social responsibilities and their implications
for long-term success
•
Long-term success relies upon good
relations with a range of different
stakeholder groups both internal
(workforce) and external (suppliers,
customers, regulators and others). The
board needs to identify the company’s
stakeholders and understand their
needs, interests and expectations.
• Where matters that relate to the
company’s impact on society, the
communities within which it operates or
the environment have the potential to
affect the company’s ability to deliver
shareholder value over the medium to
long-term, then those matters must be
integrated into the company’s strategy
and business model.
Feedback is an essential part of all
control mechanisms. Systems need to be
in place to solicit, consider and act on
feedback from all stakeholder groups.
•
Principle 4
effective
Embed
risk management,
considering both opportunities and threats,
throughout the organisation
•
•
The board needs to ensure that the
company’s risk management framework
identifies and addresses all relevant risks
in order to execute and deliver strategy;
companies need to consider their
extended business, including the
company’s supply chain, from key
suppliers to end-customer.
Setting strategy includes determining the
extent of exposure to the identified risks
that the company is able to bear and
willing to take (risk tolerance and risk
appetite).
17 | P a g e
DIRECTORS’ REPORT (continued)
Principle 5
Maintain the board as a well-functioning,
balanced team led by the chair
•
•
•
•
The board members have a collective
responsibility and legal obligation to
promote the interests of the company,
and are collectively responsible for
defining corporate governance
arrangements. Ultimate responsibility for
the quality of, and approach to,
corporate governance lies with the chair
of the board.
The board (and any committees) should
be provided with high quality
information in a timely manner to
facilitate proper assessment of the
matters requiring a decision or insight.
The board should have an appropriate
balance between executive and non-
executive directors and should have at
least two independent non-executive
directors. Independence is a board
judgement.
The board should be supported by
committees (e.g. audit, remuneration,
nomination) that have the necessary
skills and knowledge to discharge their
duties and responsibilities effectively.
• Directors must commit the time
necessary to fulfil their roles.
Quantum Blockchain Technologies plc’s Board of
Directors is comprised of Prof Francesco Gardin as
Chairman and Chief Executive Officer (“CEO”). Mr Peter
Fuhrman and Mr Mark Michael Trafeli are the
independent Non-executive Directors of the Company,
while Mr James Douglas Gordon acts as Company
Secretary.
Directors allocate sufficient time to the Company to
discharge their duties.
Ultimate responsibility for the quality of, and approach
to, corporate governance lies with the Chair of the Board.
The Board is aware that the QCA Corporate Governance
Code advises that, save in exceptional circumstances, the
Chairman should not also fulfil the role of Executive
Director. Given the current size and stage of the
Company, alongside Prof Gardin’s knowledge of past and
present complex
impacting on the
legal matters
Company, the Board believes that this combined role is
currently appropriate. This, however, will be kept under
review as the Company develops.
The shareholders are aware of these circumstances and
have not opposed the re-election of the Board at the
Annual General Meetings.
In addition, there is a regular dialogue between the
Directors and the Company Secretary to ensure every
decision is correctly assessed and properly balanced.
The Board is also supported by a number of committees
including the Audit Committee and the Remuneration
Committee.
The Audit Committee is composed of Mr Paul Howarth
(external independent Chairman of the Committee) and
Mr Peter Fuhrman (independent non-executive director).
The Remuneration Committee is composed of Mr Paul
Howarth
the
Committee) and Mr Peter Fuhrman (independent non-
executive director).
independent Chairman of
(external
Additionally, as a holding company, Quantum Blockchain
Technologies
the Boards and
supported by
independent Directors of individual operating companies
is
18 | P a g e
DIRECTORS’ REPORT (continued)
Principle 6
Ensure that between them the directors have
the necessary up-to-date experience, skills
and capabilities
Biographies and expertise of the Directors are
available on the Company’s website (in the Board of
Directors section) and within the Annual Report.
•
•
The board must have an appropriate
balance of sector, financial and public
markets skills and experience, as well as
an appropriate balance of personal
qualities and capabilities. The board
should understand and challenge its own
diversity, including gender balance, as
part of its composition.
The board should not be dominated by
one person or a group of people. Strong
personal bonds can be important but can
also divide a board.
• As companies evolve, the mix of skills
and experience required on the board
will change, and board composition will
need to evolve to reflect this change.
For matters relating to the Company Law, the
Company depends upon the legal expertise of its
legal advisers.
Where there are issues that exceed the expertise of
the Directors, the Company utilises external
advisors.
The Company has engaged several law firms, in
Italy and in the UK, to advise in respect of the legal
matters related to the claims the Company has
pursued since the appointment of the current
Chairman in July 2015.
The Directors’ background and experience
guarantee they can maintain their skillset up-to-
date. Prof Francesco Gardin has maintained close
connections with his former colleagues at Udine,
Milan and Siena Universities, where he lectured for
30 years, regularly attends global technology and
technology-related conferences and is part of a
network of advisors, CEOs and CFOs, of quoted and
unquoted companies around the world, he meets
regularly. Prior to his passing in August 2022, Mr
Reginald Eccles was a long-standing member of the
Institute of Directors, through which he maintained
access to outstanding advice and information. He
was also a Freeman of a City Livery Company and a
Freeman of the City of London, in which roles he
continuously met with
entrepreneurs and
businessmen. Mr Fuhrman has over twenty years of
experience and expertise working as an investor
and strategic partner in the global semiconductor
industry, in Europe, the USA and for the last +10
years in China. He has a large and diverse set of
the high-technology
in
senior-level contacts
industry.
Mr Trafeli remains a practising solicitor and not
only draws upon his decades of experience working
in highly regulated markets, but also his work as a
litigator. He maintains worldwide global network of
current and former colleagues.
19 | P a g e
The Board considers the evaluation process is best carried
out internally given the Company’s current size, However,
the Board will keep this under review and may consider
independent external evaluation reviews in due course as
the Company grows.
for assessing and
The Independent Non-Executive Director Mr Fuhrman is a
member of the Remuneration Committee, which
is
for evaluating the
responsible
effectiveness of
(including
determination of any annual bonus) by reference to the
performance of the Company. This review takes place
every six months.
the Executive Director
The Company does not consider it necessary at the current
time to have a Nominations Committee and the Board as
a whole is responsible for Board and senior management
nominations. The merits of constituting a separate
Nominations Committee will be kept under review. The
Board continues to monitor and evolves the Company’s
corporate governance structures and processes, and
maintains that these will evolve over time, in line with the
Company’s growth and development.
The Board meets periodically and is regularly updated by
the Executive Director.
The Board approved a succession plan, with the
appointment of new key figures in the Company.
The Board recognises that a corporate culture based on
sound ethical values and behaviours is an asset and
provides competitive advantages. The Company operates
in different sectors and markets and is mindful that
respect of individual cultures is critical to corporate
success.
The Company endeavours to conduct its business in an
ethical, professional and responsible manner, treating its
employees, business partners and wider stakeholders
with equal courtesy and respect at all times.
DIRECTORS’ REPORT (continued)
Principle 7
Evaluate board performance based on clear
and relevant objectives, seeking continuous
improvement
•
•
The board should regularly review the
effectiveness of its performance as a
unit, as well as that of its committees
and the individual directors.
The board performance review may be
carried out internally or, ideally,
externally facilitated from time to time.
The review should identify development
or mentoring needs of individual
directors or the wider senior
management team.
It is healthy for membership of the board
to be periodically refreshed. Succession
planning is a vital task for boards. No
member of the board should become
indispensable.
Principle 8
Promote a corporate culture that is based on
ethical values and behaviours
•
•
The board should embody and promote
a corporate culture that is based on
sound ethical values and behaviours and
use it as an asset and a source of
competitive advantage.
The policy set by the board should be
visible in the actions and decisions of the
chief executive and the rest of the
management team. Corporate values
should guide the objectives and strategy
of the company.
20 | P a g e
DIRECTORS’ REPORT (continued)
Principle 8 (continued)
•
•
The culture should be visible in every
aspect of the business, including
recruitment, nominations, training and
engagement. The performance and reward
system should endorse the desired ethical
behaviours across all levels of the company.
The corporate culture should be
recognisable throughout the disclosures in
the annual report, website and any other
statements issued by the company.
21 | P a g e
is responsible for maintaining the
The Board
corporate governance structure that is appropriate
to its corporate culture and business growth. In
maintaining the governance structure, the Board
works closely with its Nominated Advisor.
The Executive Director is responsible for running the
business and
implementing the decisions and
policies of the Board. The Board is also responsible
for ensuring the Company’s communication with
shareholders is timely, informative and accurate
with due regard to regulatory requirements.
to provide
The Non-Executive Directors were appointed not
only
independent oversight and
constructive challenge to the Executive Director but
also chosen to provide strategic advice and
guidance that draws upon their diverse professional
backgrounds.
The Board is supported by the Audit Committee,
and the Remuneration Committee.
Fuhrman.
The Audit Committee meets twice a year and is
responsible for dealing with accounting matters,
ensuring the independence of the external auditors,
financial reporting and
internal controls. The
committee comprises Mr Paul Howarth (external
independent Chairman of the Committee) and the
Non-executive Director Mr
The
Remuneration Committee, chaired by Mr Paul
Howarth and comprising
the Non-executive
is responsible for the
Director Mr Furhman,
approval of the remuneration for the executive
Director. The Committee meets twice a year. In
determining the total remuneration (including
bonuses, if any) of the Committee’s chairman and,
Mr Fuhrman may consult advisors. The Executive
Director also consults the Non-Executive Directors
with respect to overall staff remuneration.
DIRECTORS’ REPORT (continued)
Principle 9
governance
and
Maintain
processes that are fit for purpose and
support good decision-making by the board
structures
•
The company should maintain
governance structures and processes in
line with its corporate culture and
appropriate to its:
o
o
size and complexity; and
capacity, appetite and tolerance
for risk.
The governance structures should evolve over
time in parallel with its objectives, strategy
and business model
the
to
development of the company.
reflect
22 | P a g e
The Chairman is responsible for maintaining a
dialogue with shareholders and the financial
markets, including the financial press. The Company
communicates with shareholders through the
accounts,
Annual
announcements to the stock market, and at its
Annual General Meeting.
half-year
Report
and
The AIM Rule 26 section of the Company’s website
provides all required regulatory information as well
as additional information shareholders may find
helpful.
Historical Company announcements, annual
reports and circulars of Annual General Meeting are
available on the Company’s website in the Annual
Report and Circulars and Regulatory News section.
Results of shareholder meetings will be publicly
announced through the regulatory notifications
system and displayed on the Company’s website
with
suitable explanations of any actions
undertaken as a result of any significant votes
against resolutions.
Information on the work of the various Board
Committees and other relevant information are
included in the Company’s Annual Report.
DIRECTORS’ REPORT (continued)
Principle 10
Communicate how the company is governed
and is performing by maintaining a dialogue
with shareholders and other
relevant
stakeholders
• A healthy dialogue should exist between
the board and all of its stakeholders,
including shareholders, to enable all
interested parties to come to informed
decisions about the company.
In particular, appropriate communication
and reporting structures should exist
between the board and all constituent
parts of its shareholder base. This will
assist:
o
•
o
the communication of
shareholders’ views to the
board; and
the shareholders’
understanding of the unique
circumstances and constraints
faced by the company.
should be
It
these
communication practices are described
(annual report or website).
clear where
23 | P a g e
DIRECTORS’ REPORT (continued)
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual Report and Financial Statements in accordance
with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that
law, the Directors have elected to prepare the Group and Parent Company’s financial statements in
accordance with International Accounting Standards as adopted in the United Kingdom ("UK adopted
IFRS"). Under Company law the directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of
the profit or loss of the Group for that period. The Directors are also required to prepare financial
statements in accordance with the AIM rules of the London Stock Exchange.
In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
•
• make judgments and accounting estimates that are reasonable and prudent;
•
state whether applicable UK adopted IFRS has been followed, subject to any material
departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to
presume that the Group will continue in business.
•
The Directors are responsible for keeping adequate accounting records that are sufficient to show and
explain the Group’s transactions and disclose with reasonable accuracy at any time the financial
position of the Group and Company and enable them to ensure that the financial statements comply
with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and
Company and hence for taking reasonable steps for the prevention and detection of fraud and other
irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial
information included on the Group's website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
The Group is compliant with AIM Rule 26 regarding the Group’s website.
Disclosure of information to auditor
Disclosure of information to auditor
In the case of each person who was a director at the time this report was approved:
•
•
so far as that director is aware there is no relevant audit information of which the Group’s
auditor is unaware; and
that director has taken all steps that the director ought to have taken as a director to make
himself aware of any relevant audit information and to establish that the Group’s auditor is
aware of that information.
Independent auditor ACT, having expressed their willingness to continue in office, will be deemed
reappointed for the next financial year in accordance with section 487(2) of the Companies Act 2006
unless the Company receives notice under section 488(1) of the Companies Act 2006.
By order of the Board
Francesco Gardin
Chairman
25 June 2024
24 | P a g e
QUANTUM BLOCKCHAIN TECHNOLOGIES PLC
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF QUANTUM BLOCKCHAIN TECHNOLOGIES PLC
The Group financial statements, as defined below, consolidate the accounts of Quantum Blockchain
Technologies plc and its subsidiaries (the “Group”). The “Parent Company” is defined as Quantum
Blockchain Technologies plc, as an individual entity. The relevant legislation governing the Company is
the United Kingdom Companies Act 2006 ("Companies Act 2006”).
Qualified opinion
We have audited the financial statements of Quantum Blockchain Technologies plc (the 'Parent
Company') for the year ended 31 December 2023.
The financial statements that we have audited comprise:
•
•
•
•
•
•
•
The Group income statement and statement of comprehensive income;
The Group statement of financial position;
The Parent Company statement of financial position;
The Group statement of changes in equity;
The Parent Company statement of changes in equity;
The Group and Parent Company statement of cash flows; and
The related Group and Parent Company Notes 1 to 28
The financial reporting framework that has been applied in the preparation of the Group and Company
financial statements is applicable law and UK adopted international accounting standards.
In our opinion, except for the possible effects of the matter described in the Basis for qualified opinion
section of our report, the financial statements:
•
•
•
give a true and fair view of the state of the Group’s and of the Parent Company's affairs as at
31 December 2023 and of the Group’s loss for the year then ended;
have been properly prepared in accordance with United Kingdom adopted international
accounting standards; and
have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for qualified opinion
Investment in GeoSim Systems Ltd
The investment disclosed in Note 16 in relation to GeoSim Systems Ltd, an Israeli company, for an
amount of €302,000 has been accounted for at fair value by the Directors. The Directors have reduced
the measurement of the fair value of the investment by 50% during the year as they recognize the
uncertainties and lack of updated information regarding GeoSim Systems Ltd, also considering the
ongoing situation in the area that the investment was based, Israel. However, this is not supported by
an accepted valuation technique. In our opinion the valuation technique used by the Directors does not
provide a reliable measurement of the fair value of the investment in GeoSim Systems Ltd at the
reporting date. As the investee is a company that is still in the course of establishing itself, an income
approach, in isolation or combined with a cost approach, could have been used to estimate the fair
value of the investment in accordance with IFRS 13 Fair Value Measurement. We were unable, via our
audit procedures, to obtain sufficient and appropriate audit evidence about the carrying amount of the
investment in GeoSim Systems Ltd and, consequently we were unable to determine whether any
adjustment to that amount was necessary.
25 | P a g e
QUANTUM BLOCKCHAIN TECHNOLOGIES PLC
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF QUANTUM BLOCKCHAIN TECHNOLOGIES PLC
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and
applicable law. Our responsibilities under those standards are further described in the Auditor's
responsibilities for the audit of the financial statements section of our report. We are independent of
the Group in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide basis for our qualified opinion.
Material uncertainty related to going concern
We draw attention to Note 2 in the financial statements, which indicates that the Group and Parent
Company incurred a substantial loss during the year ended December 31, 2023, and that the Group and
Parent Company’s operational existence is still dependent on the ability to raise further funding either
through an equity placing, or through other external sources of finance. The impact of this, together
with other matters stated in the note, indicate that a material uncertainty exists that may cast significant
doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of
this matter. In auditing the financial statements, we have concluded that the Directors’ use of the going
concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation
of the Directors’ assessment of the Group and the Parent Company’s ability to continue to adopt the
going concern basis of accounting included:
•
The consideration of inherent risks to the Group and the Parent Company’s operations and
specifically its business model.
The evaluation of how those risks might impact on the Group’s available financial resources.
•
• Where additional resources may be required the reasonableness and practicality of the
•
•
•
assumptions made by the Directors when assessing the probability and likelihood of those
resources becoming available.
Liquidity considerations including examination of cash flow projections.
Solvency considerations including examination of budgets and forecasts and their basis of
preparation, including review and assessment of the model’s mechanical accuracy and the
reasonableness of assumptions used.
Consideration of availability of funds required in funding facilities during the going concern
review period. Assessing the reasonableness and practicality of the mitigation measures
identified by management in their conservative case scenario and considered by them in
arriving at their conclusions about the existence of any uncertainty in respect of going
concern.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described
in the relevant sections of this report.
26 | P a g e
QUANTUM BLOCKCHAIN TECHNOLOGIES PLC
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF QUANTUM BLOCKCHAIN TECHNOLOGIES PLC
Overview of our audit approach
Scope
Our audit was scoped by obtaining an understanding of the Group, including
the Parent Company, and its environment, including the Group’s system of
internal control, and assessing the risks of material misstatement in the
financial statements. We also addressed the risk of management override of
internal controls, including assessing whether there was evidence of bias by
the Directors that may have represented a risk of material misstatement.
Materiality
Group
2023
€86,000
2022
€96,000
Parent Company
€77,400
€86,400
1% of Total Liabilities
(2022: 1.04% of Total
Liabilities)
1% of Total Liabilities,
but capped at 90% of
Group materiality
(2022: 1% of Total
Liabilities, but capped
at 90% of Group
materiality
Key audit matters
Recurring
Key Audit Matters
Classification and valuation of bonds
Existence and recoverability of litigation claims
•
•
• Accuracy of accounting for Group entities
•
Employment tax liabilities
In addition to the matters described in the Basis for qualified opinion section, we have determined
matters described below to be Key Audit Matters to be communicated in our report. Key Audit Matters
are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements of the current year and include the most significant assessed risks of material
misstatements, whether or not due to fraud, that we identified. These matters included those matters
which had the greatest effect on the overall audit strategy; the allocation of resources in the audit; and
directing the efforts of the engagement team. These matters were addressed in the context of our audit
of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
27 | P a g e
QUANTUM BLOCKCHAIN TECHNOLOGIES PLC
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF QUANTUM BLOCKCHAIN TECHNOLOGIES PLC
Classification and valuation of bonds
Key audit matter description
How the scope of our audit
responded to the key audit
matter
The Group has historic external financing arrangements,
including bonds and loans, that have share conversion options.
These arrangements are
regarded as hybrid financial
instruments, that comprise a financial liability host contract and
conversion option that is an embedded derivative.
The accounting classification and valuation of these external
financing arrangements is a significant judgment area which also
includes whether the conversion option should have been
separated from the financial liability host instrument and
accounted for at fair value through profit or loss.
Our work over the classification and valuation of bonds included,
but was not limited to:
• We obtained a detailed understanding and background
regarding the bonds and loans in place at the start of
the year; during the year; and held as at the year-end
via the review of the contracts that underpin the
instruments. Subsequently, we verified the
appropriateness of the respective accounting
treatment adopted.
• We tested and formed an opinion on the
appropriateness of management inputs into the
valuation calculations.
• We reviewed the inputs of the Black-Scholes model in
relation to the valuation of the embedded derivative
financial instrument of the bonds.
• We reviewed the presentation of the bonds in the
financial statements under IAS 1 Presentation of
Financial Statements, in relation to the maturity
extension of the bonds.
Key observations communicated
to the Group’s Audit Committee
Based on our procedures performed detailed above, we
confirm that we have nothing material to report, and or draw
attention to in respect of these matters.
28 | P a g e
QUANTUM BLOCKCHAIN TECHNOLOGIES PLC
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF QUANTUM BLOCKCHAIN TECHNOLOGIES PLC
Contingencies and existence of litigations and claims
Key audit matter description
The Group is actively engaged in ongoing litigations and claims to
recover receivables in contingent damages for breach of contract,
where the Group expects significant future economic benefits.
How the scope of our audit
responded to the key audit
matter
The Group is required to assess the initial and subsequent
measurement of the recoverability of receivables and the other
proceeds of its claims in view of the requirements of IFRS 9
Financial Instruments and IAS 37 Provisions, Contingent Liabilities
and Contingent Assets.
Some of the claims are yet to be concluded in the courts and
require significant judgment from management as to the total
amount receivable.
The risk exists that the outcome of these claims are not assessed
appropriately and that rights and obligations do not exist to the
extent that the corresponding assets are recognised.
Our work over contingencies and existence of litigation and claims
included, but was not limited to:
• We reviewed the significant judgements adopted by
management in respect of assets subject to litigation
and claims and assessed its consistency with the
requirements of IFRS 9 and IAS 37.
• We reviewed and discussed each claim with
management and understood their basis for the
treatment of each claim.
• We tested managements calculations as to the value of
any claim amount and tested the key inputs to
confirmations from external legal advisers and versus
similar historical claims where the Group has been
successful.
• We have reviewed relevant announcements made in
the company’s website to confirm and update our
understanding in the progress of any claims.
• We considered the presentation and measurement of
the assets under litigation.
• We assessed whether the appropriate disclosures
regarding the nature of the claims have been
adequately disclosed in the financial statements.
Key observations communicated to
the Group’s Audit Committee
We concluded that the assets arising from litigation claims were
only recognised when their recovery was virtually certain and
the assets could be reliably measured.
29 | P a g e
QUANTUM BLOCKCHAIN TECHNOLOGIES PLC
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF QUANTUM BLOCKCHAIN TECHNOLOGIES PLC
Accuracy of accounting for Group entities
Key audit matter description
The Parent Company is required to prepare consolidated financial
statements that include the entities that it controls in accordance
with the requirements of
IFRS 10 Consolidated Financial
Statements.
There is a risk that entities have been omitted from the Groups
consolidated accounts and therefore have been accounted for
incorrectly.
If ‘control’ exists over an entity, in accordance with the definition
in IFRS 10, and this has not been consolidated, the Group
accounts may be materially misstated.
The Group has shareholdings in several dormant, inactive,
liquidated, and in-liquidation entities that might need to be
statements.
consolidated
financial
Group
into
In particular, the Group has not consolidated the subsidiary
Mediapolis Investment S.A. and Clear Holiday Srl as the directors
consider their inclusion to be immaterial to the consolidated
financial statements.
How the scope of our audit
responded to the key audit
matter
Our work over the accuracy of accounting for Group entities
included, but was not limited to:
• Assessment of each investment held by the Group in
other entities against the definition of control set out in
IFRS 10.
• We sought to establish whether the investment resulted
in control of the entity by reviewing relevant
documentation about the various entities and by
inquiries of the Group’s management and advisers.
• We also obtained the latest available financial
information for all the investments and assessed the
conclusions of the Directors about the inclusion of the
various entities set out in Note 16.
• We obtained from management their updated
assessment of the non-consolidation of Mediapolis
Investment S.A and Clear Holiday Srl.
• We challenged management as to any further
information obtained during 2023 or post year end that
supported their conclusions.
Key observations communicated
to the Group’s Audit Committee
Based on our procedures performed detailed above, we
concluded that the entities meeting the definition of control by
the Group were consolidated in accordance with IFRS 10.
30 | P a g e
QUANTUM BLOCKCHAIN TECHNOLOGIES PLC
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF QUANTUM BLOCKCHAIN TECHNOLOGIES PLC
Employment tax liabilities
Key audit matter description
The business assesses and categorizes all tax risks between
remote, possible, and probable, with possible risks being
disclosed as contingent liabilities and probable risks being
provided for in the financial statements.
During the period under review, the most material tax risk relates
to employment taxes not being deducted between 2015 and
2022 on consultancy payments to Directors.
We noted that the Group has made a provision for the potential
underpayment of employer’s pay as you earn (PAYE) and national
insurance which totals €210,000 in 2022 which has since been
reduced to €97,583 in 2023.
How the scope of our audit
responded to the key audit
matter
Our work over employment tax liabilities included, but was not
limited to:
• We requested management to engage an employment
tax specialist to review their internal calculations and
analysis to ensure that these had taken into
consideration all available and relevant information.
• We ensured that the calculations prepared by
management were materially accurate mathematically.
• We obtained a confirmation from the director's tax
adviser to confirm key assumptions used in
management's calculation.
Key observations communicated
to the Group’s Audit Committee
We are comfortable that the provision included in the Group
financial statements is materially accurate based on the
information available to management.
31 | P a g e
QUANTUM BLOCKCHAIN TECHNOLOGIES PLC
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF QUANTUM BLOCKCHAIN TECHNOLOGIES PLC
Our application of materiality
Our definition of materiality considers the value of error or omission on the financial statements that,
individually or in aggregate, would change or influence the economic decision of a reasonably
knowledgeable user of those financial statements. Misstatements below these levels will not
necessarily be evaluated as immaterial as we also take account of the nature of the identified
misstatements, and the particular circumstances of their occurrence, when evaluation their effect on
the financial statements as a while. Materiality is used in planning the scope of our work, executing that
work and evaluation the results.
Overall materiality
How we determined it
Group Financial Statements
€86,000 (2022: €96,000)
1% of Total Liabilities
(2022: 1.04% of Tota Liabilities)
Rationale
benchmark applied
for
the
We consider total liabilities to be
the most appropriate benchmark
for materiality for the Group
given that it is largely associated
with
for
investment
operating
and
purposes which then creates a
corresponding liability, both in
terms of bonds and loans raised.
finance
raising
Parent Company Financial Statements
€77,400 (2022: €86,400)
1% of Total Liabilities, but capped at
90% of Group materiality
(2022: 1% of Total Liabilities, capped at
90% of Group materiality
The Parent Company constitutes the
majority of the Group’s operations and
holds the external debt. Therefore, in
line with Group materiality, the most
appropriate benchmark is the total
liabilities as this is the most important
area to the users of the financial
statements.
Performance materiality is the application of materiality at the individual account or balance level, set
at an amount to reduce, to an appropriately low level, the probability that the aggregate of uncorrected
and undetected misstatements exceeds materiality for the financial statements as a whole.
Performance materiality for the Group was set at €51,600 (2022: €57,600) and at €46,400
(2022: €51,800) for the Parent Company which represents 60% (2022: 60%) of the above materiality
levels.
The determination of performance materiality reflects our assessment of the risk of undetected errors
existing, the nature of the systems and controls and the level of misstatements arising in previous audits.
We agreed to report any corrected or uncorrected adjustments exceeding €4,300 (2022: €4,800) and
€3,900 (2022: €4,320) in respect of the Group and Parent Company, respectively to the Audit Committee
as well as differences below this threshold that in our view warranted reporting on qualitative grounds.
32 | P a g e
QUANTUM BLOCKCHAIN TECHNOLOGIES PLC
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF QUANTUM BLOCKCHAIN TECHNOLOGIES PLC
Overview of the scope of the Group and Parent Company audits
Our assessment of audit risk, evaluation of materiality and our determination of performance
materiality sets our audit scope for each company within the Group. Taken together, this enables us to
form an opinion on the consolidated financial statements. This assessment takes into account the size,
risk profile, organisation / distribution and effectiveness of group-wide controls, changes in the business
environment and other factors such as recent internal audit results when assessing the level of work to
be performed at each component.
In assessing the risk of material misstatement to the consolidated financial statements, and to ensure
we had adequate quantitative and qualitative coverage of significant accounts in the consolidated
financial statements we identified all 4 UK and Italian components as representing the principal business
units within the Group.
Full scope audits - Of the 4 components selected, audits of the complete financial information of
Quantum Blockchain Technologies Plc, Clear Leisure 2017 Limited and Brainspark Associates Limited
were undertaken. These entities were selected based upon their size or risk characteristics.
Specified procedures - The final reporting component, QBT R&D Srl, was not considered to be a
significant component of the Group and thus specified procedures on all balances in excess of
component materiality was undertaken.
The control environment
We evaluated the design and implementation of those internal controls of the Group, including the
Parent Company, which are relevant to our audit, such as those relating to the financial reporting cycle.
We also tested operating effectiveness, but did not place reliance on this work.
Other information
The other information comprises the information included in the annual report other than the financial
statements and our auditor's report thereon. The directors are responsible for the other information
contained within the annual report. Our opinion on the financial statements does not cover the other
information and, except to the extent otherwise explicitly stated in our report, we do not express any
form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial statements or
our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If
we identify such material inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial statements themselves. If,
based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact.
As described in the Basis for qualified opinion section of our report, our audit opinion is qualified for
insufficient audit evidence in respect of the fair value of the investment in GeoSim Systems Ltd.
33 | P a g e
QUANTUM BLOCKCHAIN TECHNOLOGIES PLC
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF QUANTUM BLOCKCHAIN TECHNOLOGIES PLC
Strategic report and directors report
Expect for the matter described in the Bais for qualified opinion section of our report, in our opinion,
based on the work undertaken in the course of our audit:
•
•
the information given in the directors' report for the financial year for which the financial
statements are prepared is consistent with the financial statements; and
the directors' report has been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the Parent Company and their
environment obtained in the course of the audit, we have not identified material misstatements in the
strategic report or the directors’ report.
Matters on which we are required to report by exception
Expect for the matter described in the Basis for qualified opinion section of our report, we have nothing
to report in respect of the following matters in relation to which the Companies Act 2006 requires us to
report to you if, in our opinion:
•
adequate accounting records have not been kept, or returns adequate for our audit have not
been received from branches not visited by us; or
•
the financial statements are not in agreement with the accounting records and returns; or
•
certain disclosures of directors' remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit,
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view, and
for such internal control as the directors determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and the
Parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the directors either intend to
liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but
to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor's report
that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it
exists
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
34 | P a g e
QUANTUM BLOCKCHAIN TECHNOLOGIES PLC
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF QUANTUM BLOCKCHAIN TECHNOLOGIES PLC
A further description of our responsibilities for the financial statements is located on the FRC's website
at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect
of irregularities, including fraud.
These audit procedures were designed to provide reasonable assurance that the financial statements
were free from fraud or error. The risk of not detecting a material misstatement due to fraud is higher
than the risk of not detecting one resulting from error and detecting irregularities that result from fraud
is inherently more difficult than detecting those that result from error, as fraud may involve collusion,
deliberate concealment, forgery or intentional misrepresentations. Also, the further removed non-
compliance with laws and regulations is from events and transactions reflected in the financial
statements, the less likely we would become aware of it.
Identifying and assessing potential risks arising from irregularities, including fraud
The extent of the procedures undertaken to identify and assess the risks of material misstatement in
respect of irregularities, including fraud, included the following:
• We considered the nature of the industry and sector the control environment, business
performance including remuneration policies and the Group's, including the Parent
Company's, own risk assessment that irregularities might occur as a result of fraud or error.
From our sector experience and through discussion with the directors, we obtained an
understanding of the legal and regulatory frameworks applicable to the Group focusing on
laws and regulations that could reasonably be expected to have a direct material effect on
the financial statements, such as provisions of the Companies Act 2006, listing rules and tax
legislation.
• We enquired of the directors and management concerning the Group's and the Parent
Company's policies and procedures relating to:
o
identifying, evaluating and complying with the laws and regulations and whether
they were aware of any instances of non-compliance;
o detecting and responding to the risks of fraud and whether they had any knowledge
o
of actual or suspected fraud; and
the internal controls established to mitigate risks related to fraud or non-compliance
with laws and regulations.
• We assessed the susceptibility of the financial statements to material misstatement,
including how fraud might occur by evaluating management's incentives and opportunities
for manipulation of the financial statements. This included utilising the spectrum of inherent
risk and an evaluation of the risk of management override of controls. We determined that
the principal risks were related to posting inappropriate journal entries to increase revenue
or reduce costs, creating fictitious transactions to improve financial performance, and
management bias in accounting estimates particularly in determining the valuation of
investments in unquoted companies.
35 | P a g e
QUANTUM BLOCKCHAIN TECHNOLOGIES PLC
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF QUANTUM BLOCKCHAIN TECHNOLOGIES PLC
Audit response to risks identified
In respect of the above procedures:
• we corroborated the results of our enquiries through our review of the minutes of the
•
Group's and the Parent Company's audit committee meetings;
audit procedures performed by the engagement team in connection with the risks identified
included:
o
reviewing financial statement disclosures and testing to supporting documentation
to assess compliance with applicable laws and regulations expected to have a direct
impact on the financial statements.
testing journal entries, including those processed late for financial statements
preparation, those posted by infrequent or unexpected users, those posted to
unusual account combinations;
o
o evaluating the business rationale of significant transactions outside the normal
course of business, and reviewing accounting estimates for bias;
o enquiry of management around actual and potential litigation and claims.
o
challenging the assumptions and judgements made by management in its significant
accounting estimates, in particular those relating to the valuation of investments in
unquoted companies as reported in the key audit matter section of our report; and
o obtaining confirmations from third parties to confirm existence of a sample of
transactions and balances.
•
the Senior Statutory Auditor considered the experience and expertise of the engagement
team to ensure that the team had the appropriate competence and capabilities; and
• we communicated relevant laws and regulations and potential fraud risks to all engagement
team members, including experts, and remained alert to any indications of fraud or non-
compliance with laws and regulations throughout the audit.
Use of our report
This report is made solely to the Parent Company's members, as a body, in accordance with Chapter 3
of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to
the company's members those matters we are required to state to them in an auditor's report and for
no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company's members as a body, for our audit work, for this
report, or for the opinions we have formed.
Pierpaolo Spadoni (Senior Statutory Auditor)
For and on behalf of ACT Audit Limited
27 Hill Street
Mayfair
London
W1J 5LP
United Kingdom
36 | P a g e
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
Revenue
Administrative expenses
Other income
Operating loss
Other gains and losses
Share of loss from equity-accounted associates
Finance costs
Loss before tax
Tax
Loss for the year
Note
7
8
9
12
2023
€’000
2022
€’000
-
-
-
-
(4,025)
-
(4,547)
-
(4,025)
(4,547)
32
(59)
(296)
-
(69)
(636)
(4,348)
(5,252)
142
226
(4,206)
(5,026)
TOTAL COMPREHENSIVE LOSS FOR THE YEAR
(4,206)
(5,026)
Earnings per share:
Basic loss per share (cents)
Diluted loss per share (cents)
13
13
€0.382
€0.508
€0.256
€0.312
There was no other comprehensive income during the year.
The accounting policies and notes form an integral part of these financial statements.
37 | P a g e
GROUP AND COMPANY STATEMENTS OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
Notes
Group
2023
Group
2022
Company
2023
Company
2022
Non-current assets
Intangible assets
Property, plant and equipment
Financial assets at fair value through profit
and loss
Investments held at cost
Investments in equity-accounted associates
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Current liabilities
Trade and other payables
Borrowings
Derivative financial instruments
Provisions
Total current liabilities
15
14
16
16
8
17
18
19
20
21
22
€’000
€’000
€’000
€’000
2
169
396
-
7
574
-
226
677
-
60
963
-
-
76
11
7
94
-
-
115
10
-
125
3,243
2,057
5,300
4,626
463
5,089
946
2,041
2,987
1,056
449
1,505
5,874
6,052
3,081
1,630
(413)
(7,451)
(459)
(98)
(8,421)
(465)
-
-
(210)
(675)
(390)
(7,451)
(459)
(98)
(8,398)
(577)
-
-
(210)
(787)
718
843
Net current (liabilities)/assets
(3,121)
4,414
(5,411)
Total assets less current liabilities
(2,547)
5,377
(5,317)
Non-current liabilities
Borrowings
Derivative financial instruments
Total non-current liabilities
Total liabilities
Net liabilities
Equity
Share capital
Share premium account
Other reserves
Retained losses
Total equity
38 | P a g e
20
21
23
23
25
-
-
-
(8,131)
(468)
(8,599)
-
-
-
(8,131)
(468)
(8,599)
(8,421)
(9,274)
(8,398)
(9,386)
(2,547)
(3,222)
(5,317)
(7,756)
9,219
54,165
14,228
(80,159)
8,378
50,541
13,812
(75,953)
9,219
54,165
5,903
(74,604)
8,378
50,541
5,487
(72,162)
(2,547)
(3,222)
(5,317)
(7,756)
GROUP AND COMPANY STATEMENTS OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023 (CONTINUED)
An income statement for the parent company is not presented in accordance with the exemption
allowed by S408 of the Companies Act 2006. The parent company’s comprehensive loss for the financial
year amounted to €2,442,000 (2022: loss of €4,550,000).
The financial statements were approved by the board of directors and authorised for issue on 25 June
2024, on its behalf by:
Francesco Gardin
Director
Company Number 03926192
The notes on pages 43 to 79 form an integral part of these financial statements.
39 | P a g e
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Group
At 1 January 2022
Total present loss and
comprehensive loss for the year
Exercise of warrants
Grant of share options
Modification of bond
At 31 December 2022
Total comprehensive loss
for the year
Issue of shares
Grant of share options
At 31 December 2023
Share
capital
€’000
8,221
-
157
-
-
8,378
-
841
-
9,219
Share
premium
account
€’000
Other
reserves
Retained
losses
Total
equity
€’000
€’000
€’000
49,442
11,409
(71,896)
(2,824)
-
1,099
-
-
-
-
1,854
549
(5,026)
(5,026)
969
-
-
2,225
1,854
549
50,541
13,812
(75,953)
(3,222)
-
3,624
-
-
-
416
(4,206)
(4,206)
-
-
4,465
416
54,165
14,228
(80,159)
(2,547)
The following describes the nature and purpose of each reserve:
cumulative net gains and losses less distributions made and items
represents the nominal value of equity shares.
amount subscribed for share capital in excess of the nominal value.
Share capital
Share premium
Retained losses
of other comprehensive income not accumulated in another
separate reserve. Included within retained losses are movements
relating to the grant, exercise, and fair value movement of the
warrants issued during the year.
consist of three reserves, as detailed in Note 25, see below:
relates to the difference in consideration and nominal value of
Other reserves
Merger reserve
shares issued during a merger and the fair value of assets
transferred in an acquisition of 90% or more of the share capital of
another entity.
Loan note equity reserve
Share option reserve
option scheme as accrued at the reporting date.
fair value of the employee and key personnel equity settled share
relates to the equity portion of the convertible loan notes.
The accounting policies and notes form part of these financial statements.
40 | P a g e
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Company
At 1 January 2022
Total present loss and
comprehensive loss for the year
Exercise of warrants
Grant of share options
Modification of bond
At 31 December 2022
Total comprehensive loss
for the year
Share
capital
€’000
8,221
Share
premium
account
€’000
49,442
-
-
157
1,099
-
-
-
-
8,378
50,541
-
-
Issue of shares
841
3,624
Other
reserves
Retained
losses
Total
€’000
3,084
€’000
(68,581)
€’000
(7,834)
-
-
1,854
549
5,487
-
-
(4,550)
(4,550)
969
-
-
2,225
1,854
549
(72,162)
(7,756)
(2,442)
(2,442)
-
-
4,465
416
Grant of share options
-
-
416
At 31 December 2023
9,219
54,165
5,903
(74,604)
(5,317)
The following describes the nature and purpose of each reserve:
cumulative net gains and losses less distributions made and items
represents the nominal value of equity shares.
amount subscribed for share capital in excess of the nominal value.
Share capital
Share premium
Retained losses
of other comprehensive income not accumulated in another
separate reserve. Included within retained losses are movements
relating to the grant, exercise, and fair value movement of the
warrants issued during the year.
consist of three reserves, as detailed in Note 25, see below:
relates to the difference in consideration and nominal value of
Other reserves
Merger reserve
shares issued during a merger and the fair value of assets
transferred in an acquisition of 90% or more of the share capital of
another entity.
Loan note equity reserve
Share option reserve
option scheme as accrued at the reporting date.
fair value of the employee and key personnel equity settled share
relates to the equity portion of the convertible loan notes.
The accounting policies and notes form part of these financial statements.
41 | P a g e
GROUP AND COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
Note
Group
2023
€’000
Group
2022
€’000
Company
2023
€’000
Company
2022
€’000
Cash used in operations
Loss before tax
Impairment of investments
Share of post-tax losses of equity accounted
associates
Non cash foreign exchange movements
Finance charges
Depreciation expense
Decrease /(increase) in receivables
(Decrease) /increase in payables
Impairment of intercompany receivables
Share based payments
R&D tax credit received
Net cash outflow from operating activities
Cash flows from investing activities
Purchase of investments
Purchase of other investments
Purchase of property, plant and equipment
Purchase of intangible assets
16
8
16
9
14
17
19
16
14
15
(4,348)
303
(5,252)
154
(2,585)
-
(4,753)
154
59
-
296
55
1,383
(164)
-
416
154
69
(35)
637
49
474
346
33
1,854
-
59
-
295
-
110
(298)
-
416
154
69
-
635
-
(196)
433
12
1,854
-
(1,846)
(1,671)
(1,849)
(1,792)
(22)
(5)
-
(2)
(50)
-
(111)
-
(22)
(6)
-
-
(50)
-
-
-
Net cash outflow from investing activities
(29)
(161)
(28)
(50)
Cash flows from financing activities
Proceeds from capital issue
3,465
-
3,465
Proceeds from exercise of warrants
Net interest paid
Net cash (outflow)/inflow from financing
activities
-
(9)
1,256
-
-
(9)
-
1,256
-
3,456
1,256
3,456
1,256
Net (decrease) /increase in cash for the
year
Cash and cash equivalents at beginning of
year
Exchange differences
Cash and cash equivalents at end of year
18
1,581
(576)
1,579
(586)
463
1,039
449
1,035
13
2,057
-
463
13
2,041
-
449
42 | P a g e
The accounting policies and notes form part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1. General Information
Quantum Blockchain Technologies plc is a company incorporated in the United Kingdom under the
Companies Act 2006. The Company’s ordinary shares are traded on AIM of the London Stock Exchange.
The address of the registered office is given on the Company Information page. The nature of the
Group’s operations and its principal activities are set out in the Directors’ report on page 13.
2. Accounting policies
The principal accounting policies are summarised below. They have all been applied consistently
throughout the period covered by these consolidated financial statements.
Basis of preparation
The consolidated Financial Statements of Quantum Blockchain Technologies plc have been prepared in
accordance with United Kingdom adopted International Financial Reporting Standards ("UK adopted
IFRS") and the parts of Companies Act 2006 applicable to companies reporting under IFRS.
The financial statements have been prepared under the historical cost convention as modified by the
revaluation of assets and liabilities held at fair value.
The preparation of Financial Statements in conformity with IFRS requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in the process of applying
the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the consolidated Financial Statements are
disclosed in Note 3.
The Consolidated Financial Statements are presented in Euros (€), the functional and presentation of
the entity rounded to the nearest €’000.
The Group has adopted the amendments to IAS 16 Property, Plant and Equipment (issued in May 2020)
in the current year. This has not had a material impact on the Group financial statements.
The Group has adopted the amendments to IAS 16 IAS 37 Provisions, Contingent Liabilities and
Contingent Assets (issued in May 2020) in the current year. This has not had a material impact on the
Group financial statements.
Going Concern
In 2023 the Group incurred a loss of €4,206,000 (2022: €5,026,000) and had net current liabilities as at
31 December 2023 of €3,121,000 (2022: net current assets of €4,414,000). Our forecasts for the period
to 30 June 2025 has been prepared on the prudent assumptions that the Group will still be nonrevenue-
generating, will not receive any portion of its litigation claims, and will not receive any debtor cash
settlement specifically from Mediapolis Liquidation proceedings. Nonetheless, on the basis of the
equity funding raised last 1 June 2023 and 30 October 2023 which raised a total of EUR 2.74 million,
and the extension on our two convertible bond repayments from December 2024 to December 2026,
we believe that the Group, at the date of this report, may hold sufficient liquidity to sustain its
operational existence for the following twelve months without the specific necessity to raise further
funding either through an equity placing on AIM, or through other external sources, unless for
additional specific investment opportunities or ventures.
After making due enquiries, the Directors have formed a judgement that there is a reasonable
expectation that, in the next twelve months, there should be no need to secure further resources, but
in case of new investment opportunities the Group can secure further funds to sustain such expenses
and that adequate arrangements will be in place to enable the settlement of their financial
commitments, as and when they fall due.
43 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
2. Accounting policies (continued)
On this note, the Directors continue to adopt the going concern basis in preparing the financial
statements.
Notwithstanding the above, the Directors believe that due to the little headroom existing within our
budget at 30 June 2025 and the inherent commercial uncertainties in relation to future events, a
material uncertainty over the outcome of the matters described exists and Group might be required to
raise further finance and note the uncertainty in relation to the group being able to realise its assets
and discharge its liabilities in the normal course of business.
New standards, interpretations and amendments not yet adopted
The Group decided not to early adopt the following amendments to standards which are not yet
mandatory.
Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or
Non-current (issued January 2020)
The amendments clarify that the classification of a liability as current or non-current is based only on
rights existing at the end of the reporting period and the classification is not affected by expectations
about whether rights to settle or defer a liability will be exercised. Further, the amendments clarify that
the settlement of a liability refers to the transfer of cash, equity instruments, other assets, or services
to the counterparty. This amendment only affects presentation.
The amendment is effective for financial years beginning on or after 1 January 2024 and is not yet
adopted in the United Kingdom.
The Group does not expect a material impact on its consolidated financial statements from these
amendments.
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform – Phase 2
(issued in August 2020)
The amendments are aimed at helping companies to provide investors with useful information about
the effects of the reform of interest rate benchmarks on those companies’ financial statements.
The amendments complement those issued in 2019 and focus on the effects on financial statements
when a company replaces the old interest rate benchmark with an alternative benchmark rate as a
result of the reform. The Phase 2 amendments relate to:
•
changes to contractual cash flows—a company will not have to derecognise or adjust the
carrying amount of financial instruments for changes required by the reform, but will instead
update the effective interest rate to reflect the change to the alternative benchmark rate;
• hedge accounting—a company will not have to discontinue its hedge accounting solely
because it makes changes required by the reform, if the hedge meets other hedge
accounting criteria; and
• disclosures—a company is required to disclose information about new risks arising from the
reform and how it manages the transition to alternative benchmark rates.
The Group does not expect a material impact on its consolidated financial statements from these
amendments.
Amendments to IAS 1 and IFRS Practice Statement 2 Disclosure of Accounting Policies (issued in
February 2021)
44 | P a g e
The amendments enhance the disclosure requirements relating to an entity’s accounting policies and
clarify that the notes to a complete set of financial statements are required to include material
accounting policy information. Material accounting policy information, when considered with other
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
2. Accounting policies (continued)
information included in the financial statements, can reasonably be expected to influence decisions
that the primary users of financial statements make on the basis of the financial statements. The
amendments help preparers determine what constitutes material accounting policy information and
notes that accounting policy information which focuses on how IFRS has been applied to its own
circumstances is more useful for users of financial statements than standardised information or
information duplicating the requirements of IFRS.
The amendment also states that immaterial accounting policy information need not be disclosed but
when it is disclosed it shall not obscure material accounting policy information. Further, if accounting
policy information is not deemed material this does not affect the materiality of related disclosure
requirements of IFRS.
The disclosure of judgements made in applying accounting policies should reflect those that have had
the most significant effect on items recognised in the financial statements.
The amendment is effective for financial years beginning on or after 1 January 2023 and is not yet
adopted in the United Kingdom.
Amendments to IAS 8 Definition of Accounting Estimates (issued in February 2021)
The amendments define accounting estimates as monetary amounts in financial statements that are
subject to measurement uncertainty. An accounting policy may require an item in financial statements
to be measured at a monetary amount that cannot be observed directly so that in order to achieve the
objective of an accounting policy, an estimation is required.
The amendments state that the development of an accounting estimate requires the use of judgement
or assumptions based on the latest available reliable information and involve the use of measurement
techniques and inputs. Accounting estimates might then need to change as a result of new information,
new developments or more experience.
A change in input or measurement technique is a change in accounting estimate which is applied
prospectively unless the change results from the correction of prior period errors.
The amendment is effective for financial years beginning on or after 1 January 2023 and is not yet
adopted in the United Kingdom.
Amendments to IAS 12 Deferred Tax related to Assets and Liabilities arising from a Single Transaction
(issued in May 2021)
The amendments specify how companies should account for deferred tax on transactions such as
leases and decommissioning obligations.
In specified circumstances, companies are exempt from recognising deferred tax when they recognise
assets or liabilities for the first time. Previously, there had been some uncertainty about whether the
exemption applied to transactions such as leases and decommissioning obligations—transactions for
which companies recognise both an asset and a liability.
The amendments clarify that the exemption does not apply and that companies are required to
recognise deferred tax on such transactions. The aim of the amendments is to reduce diversity in the
reporting of deferred tax on leases and decommissioning obligations.
The amendments are effective for annual reporting periods beginning on or after 1 January 2023, with
early application permitted and is not yet adopted in the United Kingdom.
45 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
2. Accounting policies (continued)
Basis of consolidation
Where the company has control over an investee, it is classified as a subsidiary. The company controls
an investee if all three of the following elements are present: power over the investee, exposure to
variable returns from the investee, and the ability of the investor to use its power to affect those
variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a
change in any of these elements of control.
The consolidated financial statements present the results of the company and its subsidiaries as if they
formed a single entity. Intercompany transactions and balances between group companies are
therefore eliminated in full. All subsidiaries have a reporting date of December.
The consolidated financial statements incorporate the results of business combinations using the
acquisition method. In the statement of financial position, the acquiree's identifiable assets, liabilities
and contingent liabilities are initially recognised at their fair values at the acquisition date. The results
of acquired operations are included in the consolidated statement of comprehensive income from the
date on which control is obtained. They are deconsolidated from the date on which control ceases.
There is alignment of accounting polices across all Group entities by using uniform accounting policies
for like transactions and other events in similar circumstances.
The Group attributes total comprehensive income or loss of subsidiaries between the owners of the
parent and the non-controlling interests based on their respective ownership interests.
On consolidation, the results of overseas operations are translated into euros at rates approximating
to those ruling when the transactions took place. All assets and liabilities of overseas operations,
including goodwill arising on the acquisition of those operations, are translated at the rate ruling at the
reporting date. Exchange differences arising on translating the opening net assets at opening rate and
the results of overseas operations at actual rate are recognised in other comprehensive income and
accumulated in the foreign exchange reserve.
On disposal of a foreign operation, the cumulative exchange differences recognised in the foreign
exchange reserve relating to that operation up to the date of disposal are transferred to the
consolidated statement of comprehensive income as part of the profit or loss on disposal.
Investments in subsidiaries
Investments in subsidiaries are stated at cost less any impairment loss.
Investments in associates
Investments in associates are accounted for using the equity method less any impairment loss.
The carrying amount of the investment in associates is increased or decreased to recognise the Group’s
share of the profit or loss and other comprehensive income of the associate, adjusted where necessary
to ensure consistency with the accounting policies of the Group.
46 | P a g e
Unrealised gains and losses on transactions between the Group and its associates are eliminated to the
extent of the Group’s interest in those entities. Where unrealised losses are eliminated, the underlying
asset is also tested for impairment.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
2. Accounting policies (continued)
Foreign currency
The functional currency is Euro. Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the transactions or valuation where items
are re-measured. This is applicable to non-monetary items. Exchange gains and losses resulting from
the settlement of such transactions and from the translation at year-end exchange rates of monetary
assets and liabilities denominated in foreign currencies are recognised in profit or loss. Exchange gains
and losses that relate to borrowings and cash and cash equivalents are presented in the income
statement within ‘finance income or costs’. All other exchange gains and losses are presented in the
income statement within ‘other (losses)/gains – net’.
Changes in the fair value of monetary securities denominated in foreign currency are analysed between
translation differences resulting from changes in the amortised cost of the security and other changes
in the carrying amount of the security. Translation differences related to changes in amortised cost are
recognised in profit or loss, and other changes in carrying amount are recognised in other
comprehensive income.
Taxation
The tax expense represents the sum of the tax currently payable and any deferred tax.
Current taxes are based on the results of the Group companies and are calculated according to local
tax rules, using the tax rates and laws that have been enacted or substantially enacted by the reporting
date.
Deferred tax is provided in full using the financial position liability method for all taxable temporary
differences arising between the tax bases of assets and liabilities and their carrying values for financial
reporting purposes. Deferred tax is measured using currently enacted or substantially enacted tax rates
and laws. Deferred tax is the tax expected to be payable or recoverable on differences between the
carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases
used in the computation of taxable profit and is accounted for using the statement of financial position
liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be utilised. Such assets and liabilities are
not recognised if the temporary difference arises from goodwill or from the initial recognition (other
than in a business combination) of other assets and liabilities in a transaction that affects neither the
taxable profit nor the accounting profit.
Deferred tax assets are recognised to the extent the temporary difference will reverse in the
foreseeable future and that it is probable that future taxable profit will be available against which the
asset can be utilised. Deferred tax is recognised for all deductible temporary differences arising from
investments in subsidiaries and associates, to the extent that it is probable that the temporary
difference will reverse in the foreseeable future and taxable profit will be available against which the
temporary difference can be utilised.
47 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
2. Accounting policies (continued)
Revenue
The Group provides consultancy services.
To determine whether to recognise revenue, the Group follows a 5-step process:
Identifying the contract with a customer
Identifying the performance obligations
1.
2.
3. Determining the transaction price
4. Allocating the transaction price to the performance obligations, and then
5. Recognising revenue when/as performance obligation(s) are satisfied.
Revenue is recognised at the point of the provision of the service. Revenue is recognised as earned at
a point in time on the unconditional supply of these services, which are received and consumed
simultaneously by the customer. The Group measures revenues at the fair value of the consideration
received or receivable for the provision of consultancy services net of Value Added Tax.
Interest income
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective
interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through
the expected life of the financial asset to that asset’s net carrying amount on initial recognition.
Property, plant and equipment
Property, plant and equipment are initially measured at cost and subsequently measured at cost or
valuation, net of depreciation and any impairment losses.
Depreciation is recognised on a straight-line basis to write down the cost less estimated residual value.
The following useful lives are applied:
Computers
5 years
The gain or loss arising on the disposal of an asset is determined as the difference between the sale
proceeds and the carrying value of the asset and is recognised in the profit or loss.
Impairment of property, plant and equipment
At each reporting end date, the company reviews the carrying amounts of its property, plant and
equipment to determine whether there is any indication that those assets have suffered an impairment
loss. If any such indication exists, the recoverable amount of the asset is estimated in order to
determine the extent of the impairment loss (if any). Where it is not possible to estimate the
recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-
generating unit to which the asset belongs.
Intangible assets
Intangible assets acquired separately from a business are recognised at cost and are subsequently
measured at cost less accumulated amortisation and accumulated impairment losses.
48 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
2. Accounting policies (continued)
Financial instruments
Classification and measurement
The Group classifies its financial assets into the following categories: those to be measured
subsequently at fair value through profit or loss (FVPL) and those to be held at amortised cost.
Classification depends on the business model for managing the financial assets and the contractual
terms of the cash flows.
Management determines the classification of financial assets at initial recognition. The Group’s policy
with regard to financial risk management is set out in Note 21. Generally, the Group does not acquire
financial assets for the purpose of selling in the short term.
The Group’s business model is primarily that of “hold to collect” (where assets are held in order to
collect contractual cash flows). When the Group enters into derivative contracts, these transactions are
designed to reduce exposures relating to assets and liabilities, firm commitments or anticipated
transactions.
Financial Assets held at amortised cost
The classification applies to debt instruments which are held under a hold to collect business model,
and which have cash flows that meet the “solely payments of principal and interest” (SPPI) criteria.
At initial recognition, trade receivables that do not have a significant financing component, are
recognised at their transaction price. Other financial assets are initially recognised at fair value plus
related transaction costs, they are subsequently measured at amortised costs using the effective
interest method. Any gain or loss on derecognition or modification of a financial asset held at amortised
cost is recognised in the income statement.
Financial Assets held at fair value through profit or loss (FVPL)
The classification applies to the following financial assets. In all cases, transaction costs are immediately
expensed to the income statement.
• Debt instruments that do not meet the criteria of amortised costs or fair value through other
comprehensive income. These receivables are generally held to collect but do not meet the
SPPI criteria and as a result must be held at FVPL. Subsequent fair value gains or losses are
taken to the income statement.
•
Equity investments which are held for trading or where the FVOCI election has not been
applied. All fair value gains or losses and related dividend income are recognised in the income
statement.
• Derivatives which are not designated as a hedging instrument. All subsequent fair value gains
or losses are recognised in the income statement.
Trade and other receivables
Trade and other receivables are measured at initial recognition at fair value and are subsequently
measured at amortised cost using the effective interest rate method. For trade receivables, where there
is no significant financing component, fair value is normally the transaction price.
49 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
2. Accounting policies (continued)
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits and other short-term highly
liquid investments that are readily convertible to a known amount of cash and are subject to an
insignificant risk of changes in value with maturities of three months or less from inception.
Impairment of financial assets
A forward-looking expected credit loss (ECL) review is required for: debt instruments measured at
amortised costs are held at fair value through other comprehensive income; loan commitments and
financial guarantees not measured at fair value through profit or loss; lease receivables and trade
receivables that give rise to an unconditional right to consideration.
As permitted by IFRS9, the Company applies the “simplified approach” to trade receivable balances and
the “general approach” to all other financial assets. The general approach incorporates a review for
any significant increase in counter party credit risk since inception. The ECL reviews including
assumptions about the risk of default and expected loss rates. For trade receivables, the assessment
takes into account the use of credit enhancements, for example, letters of credit. Impairments for
undrawn loan commitments are reflected as a provision.
Financial liabilities
Borrowings and other financial liabilities (including trade payables but excluding derivative liabilities)
are recognised initially at fair value, net of transaction costs incurred, and are subsequently measured
at amortised costs.
Convertible bonds
Convertible bonds are regarded as compound instruments, consisting of a liability component and an
equity component. At the date of issue, the fair value of the liability component is estimated using the
prevailing market interest rate for similar non-convertible debt. The difference between the proceeds
of issue of the convertible loan notes and the fair value assigned to the liability component,
representing the embedded option to convert the liability into equity of the Group, is included in equity.
Issue costs are apportioned between the liability and equity components of the convertible loan notes
based on their relative carrying amounts at the date of issue. The portion relating to the equity
component is charged directly against equity.
The interest expense on the liability component is calculated by applying the prevailing market interest
rate for similar non-convertible debt to the liability component of the instrument. The difference
between this amount and the interest paid is added to the carrying amount of the convertible loan
note.
Borrowings costs
Interest-bearing borrowings are initially recorded at fair value net of attributable transaction costs.
Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost with any
difference between proceeds and redemption value being recognised in the profit or loss over the
period of the borrowings on an effective interest basis.
Trade payables
50 | P a g e
Trade payables are initially measured at fair value, and are subsequently measured at amortised cost,
using the effective interest rate method.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
2. Accounting policies (continued)
Provisions, contingent assets and contingent liabilities
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of
a past event, it is probable that the Group will be required to settle that obligation and a reliable
estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the
present obligation at the year-end date, taking into account the risks and uncertainties surrounding the
obligation.
No liability is recognised if an outflow of economic resources as a result of present obligations is not
probable. Such situations are disclosed as contingent liabilities unless the outflow of resources is
remote.
Contingent assets are possible assets whose existence will be confirmed by the occurrence or non-
occurrence of uncertain future events that are not wholly within the control of the Group. Contingent
assets are not recognised, but they are disclosed when it is more likely than not that an inflow of
benefits will occur. When the inflow of benefits is virtually certain an asset is recognised.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Group after
deducting all of its liabilities. Equity instruments issued by the Group are recorded at the proceeds
received net of direct issue costs.
Share capital account represents the nominal value of the shares issued.
The share premium account represents premiums received on the initial issuing of the share capital.
Any transaction costs associated with the issuing of shares are deducted from share premium, net of
any related income tax benefits.
Retained losses include all current and prior period results as disclosed in the statement of
comprehensive income.
Other reserves consist of the merger reserve, share option reserve and loan equity reserve.
•
•
•
the merger reserve represents the premium on the shares issued less the nominal value of the
shares, being the difference between the fair value of the consideration and the nominal value
of the shares.
the share option reserve represents the cumulative amounts charged to the profit or loss in
respect of employee share option arrangements where the scheme has not yet been settled
by means of an award of shares to an individual.
the loan equity reserve represents the value of the equity component of the nominal value of
the loan notes issued.
Government Grants
Grants from the government are recognised at their fair value where there is reasonable assurance that
the grant will be received, and the group will comply with all attached conditions. Government grants
which are revenue in nature are recognised in profit or loss over the period in which the group
recognises as expenses the related costs for which the grants are intended to compensate.
51 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
2. Accounting policies (continued)
Research and development costs
Development costs are recognised as an asset only when all of the following criteria are met:
(a)
the technical feasibility of completing the intangible asset so that it will be available for use or sale.
(b)
its intention to complete the intangible asset and use or sell it.
(c)
its ability to use or sell the intangible asset.
(d) how the intangible asset will generate probable future economic benefits. Among other things, the entity
can demonstrate the existence of a market for the output of the intangible asset or the intangible asset
itself or, if it is to be used internally, the usefulness of the intangible asset.
(e)
the availability of adequate technical, financial and other resources to complete the development and to
use or sell the intangible asset.
(f)
its ability to measure reliably the expenditure attributable to the intangible asset during its development.
The research and development expenditure that does not meet the recognition criteria are not
capitalised and are recognised as an expense as incurred, as shown in Note 7.
3. Critical accounting judgements and key sources of estimation uncertainty
The preparation of Financial Statements in conformity with IFRSs requires management to make
judgements, estimates and assumptions that affect the application of policies and reported amounts
of assets and liabilities, income and expenses. Estimates and judgements are continually evaluated and
are based on historical experience and other factors including expectations of future events that are
believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting
estimates will, by definition, seldom equal the related actual results. The estimates and assumptions
that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are discussed below and in other relevant notes in the financial
statements.
Fair value measurement
Management uses valuation techniques to determine the fair value of financial instruments (where
active market quotes are not available) and non-financial assets. This involves developing estimates
and assumptions consistent with how market participants would price the instrument. Management
bases its assumptions on observable data as far as possible, but this is not always available. In that case
management uses the best information available. Estimated fair values may vary from the actual prices
that would be achieved in an arm’s length transaction at the reporting date.
In order to arrive at the fair value of investments a significant amount of judgement and estimation has
been adopted by the Directors as detailed in the investments accounting policy. Where these
52 | P a g e
investments are un-listed and there is no readily available market for sale the carrying value is based
upon future cash flows and current earnings multiples for which similar entities have been sold. The
nature of these assumptions and the estimation uncertainty as a result is outlined in Note 16, along
with sensitivities in Note 21.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
4. Segment information
In identifying its operating segments, management generally follows the Group's service lines, which
represent the main products and services provided by the Group. The measurement policies the Group
uses for segment reporting under IFRS 8 are the same as those used in its financial statements. The
disclosure is based on the information that is presented to the chief operating decision maker, which is
considered to be the board of Quantum Blockchain Technologies plc.
The Directors are of the opinion that under IFRS 8 - "Operating Segments" there are no identifiable
business segments that are subject to risks and returns different to the core business of developing
cheaper and faster bitcoin mining. The information reported to the Directors, for the purposes of
resource allocation and assessment of performance is based wholly on the overall activities of the
Group. Therefore, the Directors have determined that there is only one reportable segment under IFRS
8.
The Group has not generated a material level of income and has no major customers.
5. Staff costs
Staff costs during the period
comprise:
including directors
Wages and salaries
Social security costs and pension contributions
Share options expense
Group
2023
€’000
2022
€’000
Company
2023
€’000
2022
€’000
217
(90)
416
543
188
228
1,854
2,270
217
(90)
416
543
188
228
1,854
2,270
In 2022 the social security costs and pension contributions included a provision relating to the
directors national insurance of €210,000. Of this provision, €113,000 was subsequently reversed in
2023 contributing to the credit balance for the year.
6. Directors’ emoluments
Aggregate emoluments
Share options expense
2023
€’000
142
416
558
2022
€’000
116
1,728
1,844
Remuneration of the highest paid Director was €69,000 (2022: €57,000).
There are no retirement benefits accruing to the Directors. Details of directors’ remuneration are
included in the Directors’ Report.
53 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
7. Expenses by nature
Directors’ emoluments
Employee emoluments
Professional and legal fees
Audit fees
Administrative expenditure
Impairment of assets (excluding investment)
Fundraising fees
Research and development costs
2023
€’000
462
99
722
56
201
1,527
-
781
2022
€’000
1,844
378
509
86
216
618
75
821
3,848
4,547
8.
Investments in associates
The Group has a 41.17% equity interest in ForCrowd Srl.
Summarised financial information of the Group’s share in this associate is as follows:
Loss from continuing operations
Impairment
Total comprehensive loss
Aggregate carrying amount of the Group’s interests in this associate
9. Finance (costs)/income
(Loss)/gain on derivatives
Interest on convertible bonds
Bank revaluations
Interest credit on modification of convertible bonds
Other gains or losses
Interest received
Bank fees
54 | P a g e
2023
2022
€’000
(59)
-
(59)
7
2023
€’000
9
(320)
5
-
-
12
(2)
€’000
(69)
(82)
(151)
60
2022
€’000
(324)
(325)
-
9
-
6
(2)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
10. Auditor’s remuneration
Group Auditor’s remuneration:
Fees payable to the Group’s auditor for the audit of the Company and
consolidated financial statements:
Non audit services:
Other services (tax)
Subsidiary Auditor’s remuneration
Other services pursuant to legislation
11. Employee numbers
(296)
(636)
2023
€’000
2022
€’000
56
-
-
56
56
-
-
56
Group
Company
2023
Number
2022
Number
2023
Number
2022
Number
The average number of Company’s employees,
including directors during the period was as follows:
Management and administration
3
4
3
4
12. Taxation
Corporation tax - current period
Corporation tax - prior period under provision
Foreign tax
Deferred taxation
Tax charge for the year
2023
€’000
(100)
(41)
(1)
-
2022
€’000
(117)
(86)
(23)
-
(142)
(226)
The Group has a potential deferred tax asset arising from unutilised trading losses and management
expenses available for carry forward and relief against future taxable profits. The deferred tax asset has
not been recognised in the financial statements in accordance with the Group's accounting policy for
deferred tax.
55 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
12. Taxation (continued)
The Group's unutilised losses are as follows:
Trading losses
Management expenses
Non trade loan relationship deficits
Capital losses
2023
€’million
2022
€’million
4
19
2
9
2
19
2
8
The standard rate of tax for the current year, based on the UK effective rate of corporation tax is 23.5%
(2022: 19%). The standard rate of Research and Development Tax credit is 10%/14.5% of the enhanced
R&D expenditure. The actual rate for the current and previous year varies from the standard rate for
reasons set out in the following reconciliation:
Continuing operations
Loss for the year before tax
Tax on ordinary activities at standard rate
Effects of:
Expenses not deductible for tax purposes
R&D enhancement
R&D losses surrendered
R&D Foreign Tax losses surrendered
Losses brought forward claimed
Tax losses available for carry forward against future profits
Total tax payable
2023
€’000
2022
€’000
(4,348)
(5,252)
(1,022)
(998)
497
(168)
344
11
-
338
-
595
(153)
270
11
-
275
-
Enhanced R&D expenditure
1,273
804
Total tax repayable – current year
100
117
Corporation tax - prior period under provision
Foreign tax
41
1
86
23
56 | P a g e
Total tax repayable
142
226
The UK government has announced that the corporation tax rate will increase from 19% to 25% with
effect from 1 April 2023.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
13. Earnings per share
The basic earnings per share is calculated by dividing the loss attributable to equity shareholders by the
weighted average number of ordinary shares in issue during the period. Diluted earnings per share is
computed using the weighted average number of shares during the period adjusted for the dilutive
effect of share options, warrants and convertible loans outstanding during the period.
The loss and weighted average number of shares used in the calculation are set out below:
2023
Weighted
average
no.
of shares
000’s
Per share
amount
Euro
Cent
Profit/
(Loss)
€’000
2022
Weighted
average
no.
of shares
000’s
Per share
amount
Euro
Cent
Profit/
(Loss)
€’000
Basic earnings per share
Continuing
operations
Total operations
(4,206)
1,102,309
(0.382)
(5,026)
989,497
(0.508)
(4,206)
1,102,309
(0.382)
(5,026)
989,497
(0.508)
Fully diluted earnings per share
Continuing
operations
Total operations
(4,424)
(4,424)
1,727,130
(0.256)
(5,091)
1,632,694
(0.312)
1,727,130
(0.256)
(5,091)
1,632,694
(0.312)
57 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
14. Property, plant and equipment
Group
Cost
At 1 January 2023
Additions
At 31 December 2023
Depreciation and impairment
At 1 January 2023
Depreciation charged in the year
At 31 December 2023
Carrying amount
At 31 December 2023
At 31 December 2022
Computers
€’000
Total
€’000
275
-
275
49
57
106
169
226
275
-
275
49
57
106
169
226
The tangible fixed assets relate in full to the Group’s IT infrastructure dedicated to the R&D
Programme.
The Parent Company held no tangible fixed assets during the years ended 31 December 2022 and
2023.
58 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
15. Intangible assets
Group
Cost
At 1 January 2023
Additions
At 31 December 2023
Amortisation
At 1 January 2023
Amortisation charged in the year
At 31 December 2023
Carrying amount
At 31 December 2023
At 31 December 2022
Formation
Expenses
€’000
Total
€’000
-
2
2
-
-
-
2
-
-
2
2
-
-
-
2
-
The intangible assets relate in full to formation expenses.
16. Investments
The significant entities for which the Group owns shares, held at 31 December 2023, were as follows:
Group Companies
Ownership Country
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
Brainspark Associates Ltd
Clear Leisure 2017 Ltd
QBT R&D Srl
Milan Digital Twin Ltd
London Digital Twin Ltd
Miner One Ltd
Clear Holiday Srl
Mediapolis Investment S.A 71.72%
99.30%
Sosushi Company Srl
84.04%
Fallimento Mediapolis Srl
50.17%
Sipiem in Liquidazione Srl
41.17%
ForCrowd Srl
ClassFinance in
Liquidazione Srl
20.00%
59 | P a g e
Company
Status
Trading
Trading
Trading
Dormant
Dormant
Dormant
Dormant
Inactive
In liquidation
Liquidated
In liquidation
Investment
Net Assets/
(Liabilities)
€,000
(36,169)
(537)
(69)
Nil
Nil
Nil
10
(6,648)
654
1,204
645
(8)
Date of
latest
accounts
2022
2022
2022
2022
2022
2022
2014
2010
2013
2016
2014
2022
Treatment
Consolidated
Consolidated
Consolidated
Consolidated
Consolidated
Consolidated
Not Consolidated
Not Consolidated
Not Consolidated
Not Consolidated
Not Consolidated
Equity-accounting
UK
UK
Italy
UK
UK
UK
Italy
Luxembourg
Italy
Italy
Italy
Italy
Italy
Investment
(104)
2018
Held at fair value
PBV Monitor
Geosim Systems
Beni Immobili Srl
TLT S.P.A
10.00%
4.53%
15.05%
0.25%
Italy
Israel
Italy
Italy
Investment
Investment
Investment
Investment
471
(330)
14
(2,476)
2022
2018
2014
2016
Held at fair value
Held at fair value
Held at fair value
Held at fair value
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
16. Investments (continued)
The registered office of all UK companies is: First Floor, 1 Chancery Lane, London, England, WC2A 1LF.
The registered office for QBT R&D Srl is Via Mazzini 38, Rovigo (RO), 45100.
The registered office for Clear Holiday Srl is Viale Francesco Restelli 1/3, Milano (MI), 20124.
The registered office for Mediapolis Investment S.A is Rue Val des Bons Malades 231, 2121,
Luxembourg-Kirchberg.
The registered office for Sosushi Company Srl is Via Parravicini 40, Monza (MB), 20900.
The registered office for Fallimento Mediapolis Srl is Via Friuli 10, Burtolo (TO), 10010.
The registered office for Sipiem in Liquidazione Srl is Via Mazzini 38, Rovigo (RO), 45100.
The registered office for Forcrowd Srl is Via Vincenzo Monti 52, Milano (MI), 20123.
The registered office for Class Finance Srl is Via Conservaorio 30, 20122, Milan.
The registered office for PBV Monitor Srl is Via Matteotti 13, Brebbia (VA), 21020.
The registered office for Geosim Systems Limited is Granit St. Petach-Tikva 4951446, Israel.
The registered office for Beni Immobili Srl is Via Torino 58, Biella (BI), 13900.
The registered office for TLT SPA is Via Trento 5, Biella (BI), 13900.
The directors have assessed the group’s interests in other entities on an individual basis and come to
the overall conclusions as detailed in the table above. Please see the note narrative for additional
information on an entity by entity basis.
Quantum Blockchain Technologies PLC
This entity is the UK based group parent.
Brainspark Associates Limited
This entity is a 100% owned UK incorporated subsidiary of Quantum Blockchain Technologies PLC and
has been included in the consolidation.
Clear Leisure 2017 Limited
This entity is a 100% owned UK incorporated subsidiary of Quantum Blockchain Technologies PLC and
has been included in the consolidation.
QBT R&D Srl
This entity is a 100% owned subsidiary of the group incorporated in Italy and has been included in the
consolidation.
60 | P a g e
Milan Digital Twin Limited
This entity is a 100% owned UK incorporated subsidiary of Quantum Blockchain Technologies PLC. This
entity only includes unpaid share capital and has not begun operating. It has been included in the
consolidation with an overall impact of nil.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
16. Investments (continued)
London Digital Twin Limited
This entity is a 100% owned UK incorporated subsidiary of Quantum Blockchain Technologies PLC. This
entity only includes unpaid share capital and has not begun operating. It has been included in the
consolidation with an overall impact of nil.
Clear Holiday Srl
Clear Holiday Srl is a 100% owned subsidiary of the group incorporated in Italy. Although QBT hold all
of the shares, they do not have control of the company. Therefore, this entity has not been consolidated
on the basis that QBT do not have control. The balances held within the company are not with external
third parties and therefore the overall impact on the accounts would be trivial.
Miner One Limited
Miner One Limited is a 100% owned UK based entity. The entity itself was initially set up with the hope
of transferring certain assets, notably a data centre located in Serbia into its possession. However, due
to disputes with the previous joint venture partner this did not materialise. In 2021 this entity remained
dormant and did not trade during the year. This entity only includes unpaid share capital and has not
begun operating, it has been included in the consolidation with an overall impact of nil.
Mediapolis Investment S.A.
Mediapolis Investment S.A. is a 71.72% owned subsidiary incorporated in Luxembourg. The company
itself is inactive and is not trading. Previous management failed to pay accountants and local directors
for the previous six years and no financial statements have been filed for over seven years. Although
this entity is inactive and 71.72% of the shares are held by the group, there is no active management
in Luxembourg, and this has led to a difficulty in finalizing a liquidation.
The most recent accounts available were produced in 2010 and the main asset held by the entity is the
investment of 13% of the capital in another former group company, Fallimento Mediapolis Srl, which
has been liquidated. This investment is carried at approximately EUR6.6m and has been impaired to nil
in previous years. Therefore, the non-consolidation of this entity is deemed to be immaterial to the
group.
On 6 May 2021 Mediapolis Investment S.A. had entered a liquidation process and the Group does not
expect any further assets or liabilities to arise from these proceedings.
Sosushi Company Srl
Sosushi Company Srl was a 99.3% owned entity incorporated in Italy. On 24 June 2021, the Company
received notification that Sosushi had been declared bankrupt. Sosushi has not been consolidated as
the fair value has been determined as nil and all receivables from the company have been fully
impaired. The litigation is held via Clear Leisure 2017.
Fallimento Mediapolis Srl
Fallimento Mediapolis Srl was an 84.04% equivalent owned entity incorporated in Italy. Quantum
Blockchain Technologies Plc held directly 74.67% of the capital of the company whilst a 13% stake was
held via Mediapolis Investment S.A as noted above. The company was liquidated in 2017 and therefore
this is the date from which control is deemed to have been lost. There is ongoing bankruptcy litigation
61 | P a g e
however, the investment has been fully impaired. Therefore, the financial information for Fallimento
Mediapolis Srl has not been consolidated into the group financial statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
16. Investments (continued)
Sipiem In Liquidazione Srl
Sipiem in Liquidazione Srl, previously Sipiem S.P.A., (“Sipiem”) was a 50.17% owned entity incorporated
in Italy. The entity had not been trading for a number of years and was maintained due to ongoing legal
matters with the former directors. The company entered into liquidation in 2015. Therefore, this is the
date from which control is deemed to have been lost. Therefore, the financial information for Sipiem
has not been consolidated into the group financial statements. The investment in Sipiem is accounted
at fair value through profit or loss. Furthermore, in August 2022 the company was declared bankrupt
by the Court of Rovigo, following a petition filed by Sipiem’s liquidator with the support of its main
shareholder (Quantum Blockchain Technologies). Sipiem’s bankruptcy does not impact the Company’s
balance sheet, as the litigation is held via Clear Leisure 2017.
In November 2022, the Venice Court issued its final judgement in respect of the Company’s legal claim
against the previous management, which is held via CL17 in which it ruled in favour of CL17 and ordered
the defendants to pay an aggregate amount of €6,188,974 (plus interest and adjustments for inflation
to accrue from different dates until the date of payment) in damages, plus €85,499 in legal expenses
(together the “Award Payment”). The Award Payment is subject to tax duties in Italy. It is worth noting
that the exact amount of the Award Payment that will be collected by the Company and the timing of
receipt of any such funds have not yet been finalised.
In March 2023, the Company announced that at the hearing for the Sipiem litigation at the Venice
Appeal Court, the judge ruled in favour of CL17, thereby allowing CL17 to seek enforcement of the
Award Payment against the main Sipiem defendant (a former director of Sipiem, who is individually
liable for the full amount of the Award Payment). The Appeal Court did, however, grant the remaining
Sipiem defendants’ request to enjoin enforcement of the judgment against the members of the internal
audit committee and the main defendant’s family members.
In May 2024 , the Company announced that at the end of April 2024, it reached an agreement with
some of the Sipiem litigation co-liable defendants who have settled their position for €700,000 (which,
net of certain costs, has been received by CL17).At the same time, CL17 also reached an agreement
with the Sipiem’s receiver, acquiring its right to receive 30% of any sums collected (net of legal and
other costs) from the Sipiem litigation, as envisaged in the 2019 claim purchase agreement (through
which CL17 acquired the Sipiem litigation) for an amount of €170,000, giving CL17 rights to all funds
recovered.
On 18 June 2024, the Company announced that the Venice Court of Appeal confirmed the ruling of the
2022 lower court Judgment in favour of CL17 (save for €105,412), amounting to €6,083,562 (plus
interest and adjustments for inflation) in damages, plus €134,166 for legal expenses. As the appeal
ruling has been issued prior to the scheduling of the hearing regarding the €700,000 settlement, such
settlement is now deemed void. So is the €170,00 agreement with the Receiver, as strictly connected
to the above settlement. Through its ruling, the Venice Court of Appeal removed any opposition to the
enforceability, by CL17, of the above amounts against all defendants.
While the above matter is currently being assessed by the Company’s legal team, the Company still
hold the above Settlement funds, minus the €170,000 paid to the Receiver for the 30% rights. In the
meantime, all the parties involved, namely the Receiver, the Sipiem’s statutory auditor’s lawyers and
62 | P a g e
the insurer’s lawyers are being contacted to discuss the contractual implications of the voided
Settlement.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
16. Investments (continued)
The post money valuation at which the Company invested in 2018 was €340,000, which also
represented the Company’s valuation of PBV in Pre Covid-19 conditions. The difference between this
original value and the current Fair Value is not attributable to a change of fundamentals to the business.
Similarly, the progress made since 2020 has not highlighted any significant divergence from the original
business plan.
The difference in the valuation is therefore attributable to lower value attributed to the company during
the 2022 equity round. The key assumptions underpinning the equity round at the start of 2022 remain
applicable.
The Fair Value assessment of PBV Monitor, is directly related to the company’s valuation in future
rounds.
Geosim Systems Limited
Geosim Systems Limited is a 4.53% owned investment in an entity incorporated in Israel. The
investment has been recognised in the accounts through its fair value and is held via Brainspark
Associates Limited.
63 | P a g e
ForCrowd Srl ForCrowd Srl is a 41.17% owned investment of the group incorporated in Italy. The group has determined that it holds significant influence over this associate given the voting rights arising from its shareholding. Consequently, this investment has been categorised in the accounts within "Investments in equity-accounted associates" and is carried in the accounts at the Group's share of the associate's net assets, with the Group’s share of the profit or loss and other comprehensive income of the associate being brought into the Group's results for the year. Previously, this investment was categorised in the financial statements within "Investments" and hence was re-categorised in the year ended 31 December 2021. ClassFinance in Liquidazione Srl ClassFinance in Liquidazione Srl is a 20% owned investment of the group incorporated in Italy. The company was placed into liquidation in 2015. The investment in ClassFinance in Liquidazione Srl is accounted at fair value through profit or loss. The fair value is assessed to be nil and fair value loss has been fully recognised. PBV Monitor Srl PBV Monitor Srl is a 10% owned investment in an entity incorporated in Italy. The investment has been recognised in the accounts at fair value through profit or loss. The Fair Value of PBV Monitor (€76,000, 2022: €55,000) has increased during the year due to the reassessment to fair value. There were additional rounds of equity funding in January and February 2022, in which the entire post money valuation of the company was €1,429,000, with Quantum Blockchain Technologies directly holding 10% of such amount.
The Fair Value of Geosim (€320,000, 2022: €622,000) has been assessed in relation to the last equity
round of the company in 2018, in which Quantum Blockchain Technologies’ 533,990 Geosim shares
have been valued at $1.25 each. The difference in the valuation between 2023 and 2022, attributable
to an impairment during the year.
The Fair Value assessment of Geosim is directly related to the company’s valuation in future rounds
and to the EUR/USD exchange rate.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
16. Investments (continued)
Beni Immobili Srl
Beni Immobili Srl is a 15.05% equivalent owned investment in an entity incorporated in Italy. The shares
in this company are held via Sipiem No fair value is recognised for this investment as the entity has
minimal net assets and the valuation would be trivial to the consolidated financial statements.
Moreover, as the investment is held via Sipiem, which is in liquidation, the investment has not been
recognised as an asset.
TLT S.P.A
TLT S.P.A is a 0.25% owned investment based in Italy. No fair value is recognised for this investment as
the entity has a large net liability position and due to the small shareholding, any potential valuation
would be trivial to the consolidated financial statements. Moreover, as the investment is held via
Sipiem, there has been a complete fair value loss and the investment amount has been derecognised.
Carrying value of investments
At as 1 January
Additions
Fair value decrease
Foreign exchange
Carrying value at 31 December
Group
Company
2023
2022
2023
2022
€’000
677
22
(303)
-
396
€’000
664
50
(72)
35
677
€’000
65
22
-
-
87
€’000
298
50
(283)
-
65
An amount of €320,000 (2022: €622,000) included within Group investments held for trading is a level
3 investment and represents the fair value of 533,990 shares in GeoSim Systems Ltd. GeoSim Systems
Ltd is an Israeli company seeking to establish itself as the world leader in building complete and
photorealistic 3D virtual cities and in delivering them through the Internet for use in local searches,
real estate and city planning, homeland security, tourism and entertainment. Quantum Blockchain
Technologies owns 4.53% of GeoSim Systems Ltd.
An amount of €76,000 (2022: €55,000) included within Company investments held for trading is a level
3 investment and represents the fair value of a 10% interest in PBV Monitor Srl (“PBV”). PBV is an
Italian company specialising in the acquisition and dissemination of data for the legal services industry,
utilising proprietary market intelligence tools and dedicated search software. Quantum Blockchain
Technologies acquired 10% of PBV in December 2018 and has purchased more shares in January and
February 2022 to maintain their 10% shareholding. As part of the initial investment agreement,
Quantum Blockchain Technologies was granted a seat on the board of PBV and was appointed as
exclusive advisor to PBV regarding the possible sale of PBV from 1 January 2020 for a period of four
years and will be entitled to a 4% commission fee on the proceeds of any sale.
64 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
16. Investments (continued)
Investments held at cost
At as 1 January
Additions
Fair value decrease
Foreign exchange
Carrying value at 31 December
Group
Company
2023
2022
2023
2022
€’000
-
€’000
-
€’000
10
€’000
10
-
-
-
-
-
-
-
-
1
-
-
11
-
-
-
10
The value of the investment at cost represents €10,000 for QBT R&D and €1,000 for BAL which was not
previously recognised.
17. Trade and other receivables
Trade receivables
Other receivables
Amounts owed by related parties
Group
Company
2023
€’000
14
3,154
75
2022
€’000
14
4,537
75
3,243
4,626
2023
€’000
-
189
757
946
2022
€’000
-
280
776
1,056
Group other receivables includes an amount of €132,000 (2022: €132,000) due in relation to the
Fallimento Mediapolis Srl bankruptcy procedure; and an amount of €2,818,000 (2022: €4,037,000)
due in relation to the ongoing Sipiem legal claim, which is unsecured, interest free and does not have
fixed terms of repayment. The balance also includes an amount of -€112,000 (2022: €0) in CL17 to
record the guarantee made against fellow group entity debtors. An intercompany balance of
€4,445,000 was fully impaired in the year.
The Directors consider that the carrying value of trade and other receivables approximates to their
fair value.
18. Cash and cash equivalents
Bank current accounts
65 | P a g e
Group
2023
€’000
2,057
2022
€’000
463
Company
2023
€’000
2,041
2022
€’000
449
The Directors consider the carrying amounts of cash and cash equivalents approximates to their fair
value.
2,057
463
2,041
449
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
19. Trade and other payables
Trade payables
Other payables
Accruals
Trade and other payables
Group
2023
€’000
85
138
190
413
2022
€’000
147
183
135
465
Company
2023
€’000
64
138
2022
€’000
122
320
188 135
390
577
The Directors consider that the carrying value of trade and other payables approximates to their fair
value.
Included within other payables are intercompany balances that are not eliminated on consolidation,
PAYE, national insurance and pension liabilities outstanding as at the year end, and unpaid salary
balances.
Accruals relate to R&D, consulting and accountancy costs incurred by the Group that had not been
invoiced by the year end.
20. Borrowings
Zero rate convertible bond 2015
Zero rate convertible bond 2020
Disclosed as:
Current borrowings
Non-current borrowings
Group
2023
€’000
5,202
2,249
7,451
7,451
-
7,451
2022
€’000
5,148
2,983
8,131
Company
2023
€’000
5,202
2,249
7,451
-
7,451
8,131
8,131
-
7,451
2022
€’000
5,148
2,983
8,131
-
8,131
8,131
Interest on the bonds are accrued on a monthly basis. Presented in the bonds line item above is the
principal amount plus all interest accrued as at 31 December 2023.
On 25 March 2013 the Company issued €3,000,000 nominal value of zero rate convertible bonds at a
discount of 22%. The bonds are convertible at 15p per share and have a redemption date of 15
December 2015.
During 2014 the Company issued €1,885,400 zero bonds in settlement of £1,563,000 7% bonds (see
above). Also €600,000 zero bonds were issued in settlement of a debt of €518,000 and €450,000 bonds
were issued for cash realising €412,000 before expenses.
66 | P a g e
On 15 December 2015 the bondholders meeting approved the amendments on the Zero Rate
Convertible Bond 2015, originally due on 15 December 2015; Under new terms the final maturity date
of the Bond is 15 December 2017 and the interest has been reduced from 9.5% to 7%.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
20. Borrowings (continued)
On 15 December 2016 the bondholders meeting approved the amendments on the Zero Rate
Convertible Bond 2015, originally due on 15 December 2017; Under new terms the final maturity date
of the Bond is 15 December 2018 and the interest has been reduced from 7% to 1%.
On 19 June 2018, the holders of its €9.9m Bonds agreed to extend the final maturity date of the Bonds
from 15 December 2018 to 15 December 2022. The Company is now able to convert the Bonds into
new ordinary shares of 0.25p each.
On 28 December 2018, bonds with a face value of €2,100,000 plus cumulative interest were converted
into 50,992,826 new ordinary shares of 0.25 pence at a price of 3.76 pence per share.
On 5 October 2020, Eufingest SA agreed to extend the repayment date of all loans advanced to the
company amounting to €3,375,000 and £30,000 to 31 October 2020.
On 9 November 2020 Eufingest SA agreed to convert all outstanding loans and accrued interest
amounting to €3,423,707 into Zero rate convertible bond 2020. The Zero Coupon Bonds 2020 accrue
interest at a rate of 2% per annum. Bondholders can convert at any time up to 15 December 2022 at a
conversion price of £0.01 per share.
In April 2022, QBT agreed with the sole bondholder of the €3.5m 2020 Zero Coupon Bond to extend the
maturity date from December 2022 to December 2024.
Also, with regard to the 2015 Zero Coupon Bond, via a Bondholders’ meeting held on 21 April 2022, the
Company extended the maturity date from 15 December 2022 to 15 December 2024 and amended the
conversion price into Company’s new ordinary shares from 15p to 5p.
On 7 July 2023, the Company received a conversion notice from MC Strategies AG to convert €1m of
the 2020 Zero Coupon Bond into new ordinary shares of 0.025p each in the Company. The conversion
price was 1p per share an as a result, the Company issued and allotted 89,000,000 New Shares.
Following the conversion, face value of the remaining Bond has decreased to €2,493,575.
21. Financial instruments
Key Assumptions
The derivative element of the Zero Coupon Bonds 2015 were valued at each year end using the Black
Scholes option pricing model. The following assumptions were used at each period end.
Zero Coupon Bonds 2015
Share price
Expected life
Volatility
Dividend yield
Risk free interest rate
67 | P a g e
2023
1.575p
1 year
146.2%
0%
3.46%
2022
1.125p
2 years
136%
0%
3.58%
Fair value
0.45p
0.5p
The Group’s financial instruments comprise cash, investments at fair value through profit or loss,
investments in equity-accounted associates, trade receivables, trade payables that arise from its
operations and borrowings. The main purpose of these financial instruments is to provide finance for
the Group’s future investments and day to day operational needs.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
21. Financial instruments (continued)
The Group does not enter into any derivative transactions such as interest rate swaps or forward foreign
exchange contracts, as the Group’s exposure to movements in foreign exchange rates is not considered
significant (see foreign currency risk management). The main risks faced by the Group are limited to
interest rate risk on surplus cash deposits and liquidity risk associated with raising sufficient funding to
meet the operational needs of the business.
The Board reviews and agrees policies for managing these risks and they are summarised below.
FINANCIAL ASSETS BY CATEGORY
The categories of financial assets included in the statement of financial position and the headings in
which they are included are as follows:
Financial assets:
Financial assets held at fair value through profit and loss
Investments in equity-accounted associates
Trade and other receivables
Cash and cash equivalents
FINANCIAL LIABILITIES BY CATEGORY
2023
€’000
396
7
3,243
2,057
5,703
The categories of financial liabilities included in the statement of financial position and the headings
in which they are included are as follows:
Financial liabilities at amortised cost:
Trade and other payables
Provisions
Borrowings
Derivative
2023
€'000
413
98
7,451
459
8,421
2022
€'000
677
60
4,284
463
5,484
2022
€'000
465
210
8,131
468
9,274
68 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
21. Financial instruments (continued)
Financial instruments measured at fair value:
As at 31 December 2023
Investments at fair value through profit or loss
As at 31 December 2022
Investments at fair value through profit or loss
Level 1
€’000
Level 2
€’000
Level 3
€’000
-
-
-
-
-
-
-
-
396
396
677
677
The valuation techniques and significant unobservable inputs used in determining the fair value
measurement of level 2 and level 3 financial instruments, as well as the inter-relationship between key
unobservable inputs and fair value, are set out in the table below.
Financial Instruments
Investments
inputs
Significant
unobservable
(Level 3 only)
of
Assessment
recoverability of loan.
Inter – relationship
key
between
unobservable
inputs
and fair value (level 3
only)
If loan was considered
not to be recoverable
this would result in the
reduction in the fair
the
of
value
investment.
in
technique
Valuation
used
issue of
Based on
shares
the
investments held by
the
and
Group
directors assessment
on the recoverability
of loans.
The Group has adopted fair value measurements using the IFRS 7 fair value hierarchy.
Categorisation within the hierarchy has been determined on the basis of the lowest level of input that
is significant to the fair value measurement of the relevant asset as follows:
Level 1:
Level 2:
Level 3:
valued using quoted prices in active markets for identical assets;
valued by reference to valuation techniques using observable inputs other than quoted
prices included in Level 1;
valued by reference to valuation techniques using inputs that are not based on
observable markets criteria.
The Level 3 investment refers to an investment in GeoSim Systems Ltd and PBV Monitor Srl.
Capital risk management
69 | P a g e
The Group manages its capital to ensure that entities in the Group will be able to continue as going
concerns while maximising the return to stakeholders through optimisation of the debt and equity
balance. The capital structure of the Group consists of debt attributable to convertible bondholders,
borrowings, cash and cash equivalents, and equity attributable to equity holders of the Group,
comprising issued capital, reserves and retained earnings, all as disclosed in the Statement of Financial
Position.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
21. Financial instruments (continued)
Significant accounting policies
Details of the significant accounting policies and methods adopted, including the criteria for
recognition, the basis of measurement and the basis on which income and expenses are recognised,
in respect of each class of financial asset, financial liability and equity instrument disclosed in Note 2
to the financial statements.
Financial risk management objectives
The Company is exposed to a variety of financial risks which result from both its operating and
investing activities. The Group’s risk management is coordinated by the board of directors and focuses
on actively securing the Company’s short and medium-term cash flows by raising liquid capital to meet
current liability obligations.
Market price risk
The Company’s exposure to market price risk mainly arises from movements in the fair value of its
investments held for trading. The Group manages the investment price risk within its long-term
investment strategy to manage a diversified exposure to the market. If the investments were to
experience a rise or fall of 15% in their fair value, this would result in the Group’s net asset value and
statement of comprehensive income increasing or decreasing by €60,000 (2022: €102,000).
Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which
monitors the Group’s short, medium and long-term funding and liquidity management requirements
on an appropriate basis. The Group has adequate cash balances at the reporting date (refer to Note 2
– Basis of preparation and going concern) to sustain the operational existence over the next twelve
months. The Group expects to continue securing resources from disposals and realisation of the
“Legacy Assets”. Furthermore, the Company expect to be able to start it commercial activity in the
coming months, although prudentially, no significant revenues have been included in the short-term
financial projections. This is an on-going ongoing process and the directors are confident with their
cash flow models.
70 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
21. Financial instruments (continued)
The following are the undiscounted contractual maturities of financial liabilities:
As at 31 December 2023
Trade and other payables
Provisions
Borrowings
Derivative financial instruments
As at 31 December 2022
Trade and other payables
Provisions
Borrowings
Derivative financial instruments
Carrying
Amount
€’000
Less than 1
year
€’000
Between
1 and 5 years
€’000
413
98
7,451
459
8,421
465
210
8,131
468
9,274
413
98
7,451
459
8,421
465
210
-
-
675
-
-
-
-
-
-
-
8,131
468
8,599
Total
€’000
413
98
7,451
459
8,421
465
210
8,131
468
9,274
Management believes that based on the information provided in Note 2 – in the ‘Basis of preparation’
and ‘Going concern’, that future cash flows from operations will be adequate to support these financial
liabilities.
Interest rate risk
The Group and Company manage the interest rate risk associated with the Group cash assets by
ensuring that interest rates are as favourable as possible, whilst managing the access the Group requires
to the funds for working capital purposes.
The Group’s cash and cash equivalents are subject to interest rate exposure due to changes in interest
rates. Short-term receivables and payables are not exposed to interest rate risk. The borrowings are at
fixed interest rates.
Group
2023
3,472
7,830
2022
€’000
5,021
8,528
Company
2023
194
7,808
2022
€’000
222
8,503
Fixed rate instruments
Financial assets
Financial liabilities
71 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
21. Financial instruments (continued)
Change in interest rates will affect the Group’s income statement as follows:
Group
Euribor +0.5% / -0.5%
Gain / (loss)
2023
€’000
2022
€’000
+10 / -10
+2 / -2
The analysis was applied to cash and cash equivalents based on the assumption that the amount of asset
as at the reporting date was available for the whole year.
Foreign currency risk management
The Group undertakes certain transactions denominated in currencies other than Euro, hence
exposures to exchange rate fluctuations arise. Amounts due to fulfil contractual obligations of £387,000
(2022: £435,000) are denominated in sterling. An adverse movement in the exchange rate will impact
the ultimate amount payable, a 10% increase or decrease in the rate would result in a profit or loss of
£39,000 (2022: £44,000). The Group’s functional and presentational currency is the Euro as it is the
currency of its main trading environment, and most of the Group’s assets and liabilities are denominated
in Euro. The parent company is located in the sterling area.
Credit risk management
The Group’s financial instruments, which are subject to credit risk, are considered to be trade and other
receivables. There is a risk that the amount to be received becomes impaired. The Group’s maximum
exposure to credit risk is €3,243,000 (2022: €4,626,000) comprising receivables during the period. About
87% (2022: 87%) of total receivables are due from a single company. The ageing profile of trade
receivables was:
2023
2022
Total book
value
€’000
3,243
3,243
Allowance
for
impairment
€’000
-
-
Total book
value
€’000
4,626
4,626
Allowance
for
impairment
€’000
-
-
946
946
-
1,056
- 1,056
-
-
Group
Current
Company
Current
72 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
22. Provisions
Provision for potential payroll tax liability
Provisions
Group
2023
€’000
98
98
2022
€’000
210
210
Company
2023
€’000
98
98
2022
€’000
210
210
The above provision relates to a potential tax liability owed on the directors’ remuneration from
previous years.
23. Share capital and share premium
ISSUED AND FULLY
PAID:
Number of
ordinary shares
Number of
deferred
shares
At 1 January 2022
945,051,851
199,409,377
Issue of shares
52,500,000
-
At 31 December 2022
997,551,851
199,409,377
Issue of shares
293,761,904
-
At 31 December 2023
1,291,313,755
199,409,377
Ordinary
share
capital
€’000
2,754
Deferred
share
capital
€’000
5,467
157
2,911
841
3,752
-
5,467
-
5,467
Share
premium
€’000
49,442
1,099
50,541
3,624
54,165
Total
€’000
57,663
1,256
58,919
4,465
63,384
All ordinary shares carry equal rights.
The deferred shares have restricted rights such that they have no economic value.
24. Share based payments
On 26 May 2023, an employee was granted options to subscribe for 1,000,000 new ordinary shares in
the Company at an exercise price of 5 pence per share and 1,000,000 new ordinary shares in the
Company at an exercise price of 10 pence per share. The options are exercisable for the period between
1 November 2023 and 25 May 2025.
On 31 May 2023, two employees were granted options to subscribe for 5,000,000 new ordinary shares
in the Company at an exercise price of 10 pence per share. The options are exercisable at any time
before 25 May 2025.
On 31 May 2023, the Company has extended the exercise period for certain other options previously
granted, as follows:
Number of Options
Exercise Price Previous End of Exercise
2,500,000
5p
Period
06/05/2024
New End of Exercise
Period
25/05/2025
73 | P a g e
2,500,000
7,500,000
5,000,000
5p
5p
10p
28/02/2023
31/03/2023
30/06/2023
25/05/2025
25/05/2025
25/05/2025
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
24. Share based payments (continued)
The total share-based payment expense recognised in the income statement for the year ended 31
December 2023 in respect of the share options granted was €416,000 (2022: €1,854,000).
The significant inputs to the model in respect of the options granted during the year were as follows:
Share price
Expected life
Volatility
Dividend yield
Risk free interest rate
Fair value
5p
1.125p - 3.100p
2 months - 3 years
130% - 137%
0%
0.76% – 4.27%
0.0p – 2.1p
10p
1.175p - 3.050p
6 months - 3 years
130% - 137%
0%
0.76% - 4.27%
0.0p – 1.7p
The table below discloses the movements in share options during the year.
Number of
options at
1 Jan 2023
105,000,000
105,000,000
5,000,000
5,000,000
2,500,000
5,000,000
2,500,000
2,500,000
2,500,000
2,500,000
2,500,000
5,000,000
5,000,000
5,000,000
5,000,000
5,000,000
−
−
−
Granted
in the year
−
−
−
−
−
−
−
−
−
−
−
−
−
−
−
−
1,000,000
1,000,000
5,000,000
Exercised
in the year
−
−
−
−
−
−
−
−
−
−
−
−
−
−
−
−
−
−
−
Lapsed
in the year
−
−
−
−
−
−
−
−
−
−
−
−
−
−
−
5,000,000
−
−
−
Number of
options at
31 Dec 2023
105,000,000
105,000,000
5,000,000
5,000,000
2,500,000
5,000,000
2,500,000
2,500,000
2,500,000
2,500,000
2,500,000
5,000,000
5,000,000
5,000,000
5,000,000
−
1,000,000
1,000,000
5,000,000
Exercise
Price, pence
5.00
10.00
5.00
10.00
5.00
10.00
5.00
10.00
5.00
5.00
5.00
5.00
10.00
5.00
10.00
5.00
5.00
10.00
10
Expiry
date
06.05.2026
06.05.2026
06.05.2025
06.05.2025
25.05.2025
01.12.2026
15.12.2024
15.12.2024
15.12.2024
25.05.2025
25.05.2025
25.05.2025
25.05.2025
22.05.2025
22.05.2025
31.10.2023
25.05.2025
25.05.2025
25.05.2025
265,000,000
7,000,000
−
5,000,000
267,000,000
74 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
24. Share based payments (continued)
On 20 December 2022, Peter Fuhrman, a director, was granted options to subscribe for 2,500,000 new
ordinary shares in the Company at an exercise price of 5 pence per share. The options are exercisable
for the period between 12 September 2022 and 15 December 2024. Peter Fuhrman was also granted
options to subscribe for 2,500,000 new ordinary shares in the Company at an exercise price of 10 pence
per share. The options are exercisable for the period between 12 September 2022 and 15 December
2024.
On 20 December 2022, Mark Michael Trafeli, a director, was granted options to subscribe for 2,500,000
new ordinary shares in the Company at an exercise price of 5 pence per share. The options are
exercisable for the period between 1 September 2022 and 15 December 2024.
On 20 December 2022, a consultant was granted options to subscribe for 2,500,000 new ordinary
shares in the Company at an exercise price of 5 pence per share. The options are exercisable for the
period between 20 December 2022 and 31 March 2023. Another consultant was granted options to
subscribe for 2,500,000 new ordinary shares in the Company at an exercise price of 5 pence per share.
The options are exercisable for the period between 20 December 2022 and 31 March 2023. A third
consultant was granted options to subscribe for 5,000,000 new ordinary shares in the Company at an
exercise price of 5 pence per share. The options are exercisable for the period between 20 December
2022 and 31 March 2023. The third consultant was also granted options to subscribe for 5,000,000 new
ordinary shares in the Company at an exercise price of 10 pence per share. The options are exercisable
for the period between 1 January 2023 and 30 June 2023. A fourth consultant was granted options to
subscribe for 5,000,000 new ordinary shares in the Company at an exercise price of 5 pence per share.
The options are exercisable for the period between 20 December 2022 and 22 May 2025. The fourth
consultant was also granted options to subscribe for 5,000,000 new ordinary shares in the Company at
an exercise price of 10 pence per share. The options are exercisable for the period between 23 May
2023 and 22 May 2025. On 20 December 2022, a fifth consultant was granted options to subscribe for
5,000,000 new ordinary shares in the Company at an exercise price of 5 pence per share. The options
are exercisable for the period between 20 December 2022 and 31 October 2023.
The total share-based payment expense recognised in the income statement for the year ended 31
December 2023 in respect of the share options granted was €416,000 (2022: €1,854,000).
The significant inputs to the model in respect of the options granted during the prior year were as
follows:
Share price
Expected life
Volatility
Dividend yield
Risk free interest rate
Fair value
5p
1.175p - 3.100p
2 months - 3 years
130% - 136%
0%
0.76% – 3.58%
0.0p – 2.1p
10p
1.175p - 3.050p
6 months - 3 years
130% - 136%
0%
0.76% - 3.58%
0.0p – 1.7p
75 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
24. Share based payments (continued)
The table below discloses the movements in share options during 2022.
Number of
options at
1 Jan 2022
105,000,000
105,000,000
10,000,000
5,000,000
5,000,000
2,500,000
5,000,000
−
−
−
−
−
−
−
−
−
−
Granted
in the year
−
−
−
−
−
−
−
2,500,000
2,500,000
2,500,000
2,500,000
2,500,000
5,000,000
5,000,000
5,000,000
5,000,000
5,000,000
Exercised
in the year
−
−
−
−
−
−
−
−
−
−
−
−
−
−
−
−
−
Lapsed
in the year
−
−
10,000,000
−
−
−
−
−
−
−
−
−
−
−
−
−
−
Number of
options at
31 Dec 2022
105,000,000
105,000,000
−
5,000,000
5,000,000
2,500,000
5,000,000
2,500,000
2,500,000
2,500,000
2,500,000
2,500,000
5,000,000
5,000,000
5,000,000
5,000,000
5,000,000
Exercise
Price, pence
5.00
10.00
5.00
5.00
10.00
5.00
10.00
5.00
10.00
5.00
5.00
5.00
5.00
10.00
5.00
10.00
5.00
Expiry
date
06.05.2026
06.05.2026
15.08.2022
06.05.2025
06.05.2025
06.05.2024
01.12.2026
15.12.2024
15.12.2024
15.12.2024
31.03.2023
31.03.2023
31.03.2023
30.06.2023
22.05.2025
22.05.2025
31.10.2023
237,500,000
37,500,000
−
10,000,000
265,000,000
25. Other reserves
The Group considers its capital to comprise ordinary share capital, share premium, retained losses and
its convertible bonds. In managing its capital, the Group’s primary objective is to maintain a sufficient
funding base to enable the Group to meet its working capital and strategic investment needs. In
making decisions to adjust its capital structure to achieve these aims, through new share issues, the
Group considers not only their short-term position but also their long-term operational and strategic
objectives.
Group
Merger
reserve
Loan note
equity reserve
Share option
reserve
At 1 January 2022
Grant of share options
Modification of bond
€’000
8,325
-
-
€’000
462
-
-
€’000
2,622
1,854
-
Capital
redemption
reserve
€’000
-
-
549
Total other
reserves
€’000
11,409
1,854
549
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At 31 December 2022
8,325
Grant of share options
Modification of bond
-
-
At 31 December 2023
8,325
462
-
-
462
4,476
416
-
4,892
549
13,812
-
-
416
-
549
14,228
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
25. Other reserves (continued)
Company
At 1 January 2022
Grant of share options
Modification of bond
At 31 December 2022
Grant of share options
Modification of bond
At 31 December 2023
Loan note
equity reserve
Share option
reserve
€’000
462
-
-
462
-
-
462
€’000
2,622
1,854
-
4,476
416
-
4,892
Capital
redemption
reserve
€’000
-
-
549
549
-
-
Total other
reserves
€’000
3,084
1,854
549
5,487
416
-
549
5,903
26. Ultimate controlling party
The Group considers that there is no ultimate controlling party.
27. Related party transactions
Transactions between the company and its subsidiaries, which are related parties have been
eliminated on consolidation, but are disclosed where they relate to the parent company. These
transactions along with transactions between the company and its investment holdings are disclosed
in the table below, with all amounts being presented in Euros and being owed to the Group:
Related party
Clear Leisure 2017 Limited
QBT R&D Srl
Geosim Systems Limited
ForCrowd Srl
2023
Group
-
-
49,874
55,000
104,874
2022
Group
-
-
49,605
25,000
74,605
2023
Company
2022
Company
265,631
410,881
55,386
55,000
786,898
255,575
448,655
49,605
22,500
776,335
During the year, Quantum Blockchain Technologies Limited made sales totalling €10,000 (2022:
€10,000) to QBT R&D Srl, for consulting services.
During the year, QBT R&D Srl made sales totalling €109,000 (2022: €109,000) to Quantum Blockchain
Technologies Plc, for consulting and R&D services.
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During the year, Infusion 2009 Limited, a company in which F Gardin is a Director, charged Quantum
Blockchain Technologies Plc €288,000 (2022: €200,000) for consulting company fees for R&D
coordination. The amount owed to Infusion 2009 Limited at year end is €nil (2022: €34,000).
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
27. Related party transactions (continued)
Remuneration of key management personnel
The remuneration of the directors, who are the key personnel of the group, is included in the Directors
Report and within note 6. Under “IAS 24: Related party disclosures”, all their remuneration is in
relation to short-term employee benefits.
28. Events after the reporting date
During the first months of 2024, the Company has been involved in the following:
In January the Company reported an extension of the maturity of the €3.5m 2020 Zero Coupon Bond
from 15 December 2024 to December 2026 with the sole Bondholder of the Company, MC Strategy
S.A.
In February a meeting was held on 22 February 2024 with regard to the 2013 Zero Coupon Bond. The
Company extended the maturity date from 15 December 2024 to 15 December 2026 and modified
the conversion price from 5p to 3p.
In March 2024, the Company announced a new development, called Method C, based on Machine
Learning and using predictive AI technology that is producing consistent results during testing. In testing
environments Method C had favourably demonstrated predictive ability in c. 30% of instances where it
was input to SHA-256 producing a winning hash, resulting in a potential saving of energy. At the same
time, QBT announced that it had commenced development of a proprietary ASIC chip. A working
prototype is about to undergo development to confirm performance levels, and the Company entered
into early-stage exploratory discussions with Bitcoin rig manufacturers and US Bitcoin mining
companies. Also in March, the Company noted that the porting of Method A and Method B into
commercial rigs had proven to be very challenging. The R&D team engaged in testing different solutions
for the final stage in order to deliver a fully reliable product. Finally, per the same announcement, QBT
disclosed that its first two patent applications (ASIC UltraBoost and ASIC EnhancedBoost) were making
positive headway and that a third patent application was being drafted concerning the proprietary
quantum version of SHA-256.
In May 2024, the Company announced that at the end of April 2024, it reached an agreement with
certain of the Sipiem litigation co-liable defendants who have settled their position for €700,000 (which,
net of certain costs, has been received by CL17). Following this agreement, the remaining value of the
Award Payment is approximately €5.575 million (plus interest and inflation adjustment) which amount
CL17 continues to pursue.
At the same time, CL17 also reached an agreement with the Sipiem’s receiver, acquiring its right to
receive 30% of any sums collected (net of legal and other costs) from the Sipiem litigation, as envisaged
in the 2019 claim purchase agreement (through which CL17 acquired the Sipiem litigation) for an
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amount of €170,000, giving CL17 rights to all funds recovered, namely the €700,000 of the above
agreement and the balance amounting to €5.575 million plus interest and augmentation for inflation.
In June, QBT confirmed that the payment of €700,000 had been completed, and that €170,000 has been
paid by CL17 to Sipiem’s Receiver with respect to the acquisition by CL17 of the Receiver’s right to
receive 30% of any further sums collected in connection with the claim (net of legal fees).
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONTINUED)
28. Events after the reporting date (continued)
Subsequently, in June 2024, the Company announced that the Venice Court of Appeal confirmed the
ruling of the 2022 lower court Judgment in favour of CL17 (save for €105,412), amounting to €6,083,562
(plus interest and adjustments for inflation) in damages, plus €134,166 for legal expenses. As the appeal
ruling has been issued prior to the scheduling of the hearing regarding the Settlement, such settlement
is now deemed void. While the above matter is currently being assessed by the Company’s legal team,
the Company still hold the above Settlement funds, minus the €170,000 paid to the Receiver for the
30% rights. In the meantime, all the parties involved, namely the Receiver, the Sipiem’s statutory
auditor’s lawyers and the insurer’s lawyers are being contacted to discuss the contractual implications
of the voided Settlement.
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