Semper Fortis Esport - Annual Results for year to 31 January 2021
RNS Number : 9909G
Semper Fortis Esports PLC
30 July 2021
 

30 July 2021

 

SEMPER FORTIS ESPORTS PLC

("Semper Fortis Esports" or the "Company")

 

 

Annual Results for year to 31 January 2021

 

Chairman's Statement

 

I am pleased to present our maiden Annual Report and Financial Statements for the period from incorporation on 14th January 2020 to 31st January 2021, a period which pre-dates our listing on AQSE on 26th April 2021.

 

During the period we finalised the strategy for the business to become a multi-operational esports organisation focusing on gaming technology solutions, brand enhancement and high growth team infrastructures. We also managed to acquire the services of our first team called Top Blokes which competes in the game Rocket League.

 

As expected, no revenue was generated in the period and a loss before tax of £626,173 was incurred. A significant amount of these costs were Legal and Professional fees in relation to our listing.

 

The unprecedented disruption caused by COVID-19 had minimal effect on the Company during the period. However, it did accelerate the continued growth and popularity of esports and gaming as they provided entertainment and a format to allow young people to socialise. There was an estimated 27.9 billion total hours watched across Twitch, YouTube Gaming, and Facebook and Mixer in 2020, up 78.5% from 15.63 billion hours in 2019.

 

Post-period review

 

On 26th April 2021 we successfully listed on AQSE raising £2.55m by way of a Placing and Subscription in total of 255,500,000 new Ordinary Shares. The Placing and Subscription were oversubscribed.

 

Top Blokes

Post period following a successful 2020/21 season in the Rocket League European Championship Series, our Top Blokes team finished in 3rd position in its inaugural season with its current squad.

 

We have now, post period, rebranded the team as "SMPR" bringing the team brand closer to the Company.  We believe this new identity will appeal to our growing community and enhance the number of opportunities to bring in sponsors across the organisation.

 

We look forward to next season with increasing confidence.

 

Ambassadors

One of the strategies of Semper was to sign well-known personalities who will work with the Company to generate exposure for the Company's esports teams and who will help attract sponsorship opportunities for the Company and its team.

 

In May 2021 we were delighted to announce that Mr Dominic Calvert-Lewin of Everton Football Club and the national England team and Mr Harry Maguire captain of Manchester United Football Club and the England team had been appointed as brand ambassadors to the Company.

 

As part of Semper Fortis Esports, the brand ambassadors will interact with online audiences via digital platforms and bring their wealth of experience in traditional sports to an organisation in esports.

 

Expansion of Audience 

Semper have recently appointed an award-winning digital agency with the aim to accelerate growth in audience and engagement in order to help the company manage, build and monitise its digital presence.

 

 

Business to Business Consultancy

In September 2021 the Company is due to co-host its first esports and gaming conference. It is intended that the World Esports & Gaming Summit will be the first in a series of esports and gaming conferences that the Company will host or co-host to gain business to business exposure across a number of markets.

 

We anticipate that these conferences will enhance the Company's offering to potential sponsors and clients and create revenue through dedicated workshops and event sponsors.

 

Outlook

 

We are encouraged that since the period end we have already started to implement the initial stages of the business plan and we are excited by the planned expansion of Semper and the esports industry.

 

Finally, I would like to take this opportunity to thank all our shareholders, our Board, and advisers and last but not least our Top Blokes Team for their support which has positioned Semper for an exciting year ahead and strong growth in the future.

 

 

Keith Harris

Chairman

 

 

For more information, please contact:

 

Semper Fortis Esports plc

via Square1 Consulting

 

Kevin Soltani, Chief Executive Officer

Jassem Osseiran, Chief Operating Officer

Max Deeley, Finance Director

https://semperfortisesports.com

 

 

Hybridan LLP - AQSE Corporate Adviser and Broker

 https://hybridan.com/

 

Claire Noyce, Managing Partner, Corporate Finance

Niall Pearson, Head of Corporate Broking & Sales

+44 203 764 2341

+44 203 764 2343

 

 

Square1 Consulting

+44 207 929 5599

David Bick

 

+44 7831 381201

 

About Semper Fortis Esports plc

 

Semper Fortis Esports PLC is a multi-operational Esports organisation converging high growth team infrastructures, gaming technology solutions and corporate business advisory services. Semper Fortis leverages its position in competitive electronic sports to produce disruptive game-based solutions and interactive experiences fusing physical and digital.

 

Semper Fortis translates in Latin to "Always Strong", channelling its expertise in sports, media and entertainment to strengthen, innovate and add value to the Esports ecosystem in the United Kingdom.

 

 

 

 

Strategic Report

 

The Directors present their Strategic Report on Semper Fortis Esports plc for the period ended 31 January 2021.

 

Review of the business and developments during the period

Semper Fortis Esports Plc was incorporated on 14 January 2020 as a private limited company. The Company was re-registered as a public limited company on 4 November 2020. On 26th April 2021, the Company was listed on the Access segment of the AQSE Growth Market raising £2.55m.

 

During the period, the idea for a new esports organisation was conceived and an executive team with relevant and complimentary experience were bought together and a strategy for the business was finalised.

 

The initial focus of the Company is on:

(1) establishing esports teams and engaging with esports professionals;

(2) forming partnerships with well-known personalities (for online campaigns and content) and brands (for sponsorship) and strategic technology partners for research into and development of tech products; and

(3) business to business consultancy and advisory services.

 

During the period the Company acquired the services of its first team called Top Blokes which competes in the game Rocket League. Post period following a successful 2020/21 season in the Rocket League European Championship Series, our Top Blokes team finished in 3rd position in its inaugural season with its current squad. In July 2021 the Company rebranded its Top Blokes esports team as "SMPR" bringing the brand closer to the Company and creating an identity which reflects the culture of gaming.

 

One of the Company's early targets in the initial period following Admission was to enter into a joint venture agreement with a high profile talent who will work with the Company to generate exposure for its team and who will help attract sponsorship opportunities. In May 2021 we were delighted to announce that Mr Dominic Calvert-Lewin of Everton Football Club and the England team and Mr Harry Maguire captain of Manchester United Football Club and the England team had been appointed as brand ambassadors to the Company.

 

A key part of the esports industry is that esports players, teams and social media influencers can have a strong online presence through consistent streaming, video blogging and online competitions.  In June 2021, the Company appointed an award-winning digital agency with the aim to accelerate growth in audience and engagement in order to help the company manage, build and monetise its digital presence. Viewership and engagement figures will be generated through online broadcasting of team activity and social media. The Company then intends to use viewership power to attain sponsorship opportunities, preferably among a number of different brands.

 

On 23-24 September 2021 the Company is to co-host the World Esports & Gaming Summit. This will be a 2-day, Asia focused, virtual event and will commence with a start-up competition and competitive esports tournament.

 

The Company has also started to research possible esports technology applications, potential software partners and products for development that complement the esports industry.

 

 

 

 

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 most likely to 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 Company for the benefit of all its stakeholders, the directors need to ensure that the 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 Company has a number of key stakeholders that it is committed to maintaining a strong relationship with. Understanding the Company's stakeholders and how they and their interests will impact on the strategy and success of the Company over the long term is a key factor in the decisions that the Board make.

Shareholders The promotion of the success of the Company is ultimately for the benefit of the Company's shareholders who provide the Company's permanent capital. As a company listed on the Access segment of the AQSE Growth Market, 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 Company'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 ask questions on the Company and its performance.

Employees Our employees are key to the success of the Company and recruiting, retaining and developing our team is one of the Company's most important priorities. The Directors expect a high standard of integrity and accountability from the Company's employees. Directors encourage an open communication forum, aided by the Company's small size and relatively flat hierarchical structure.

Response to the Covid-19 outbreak The focus of the Directors since the Covid-19 outbreak has been on keeping the employees and their families safe. In accordance with the government lockdown restrictions, all employees have been working from home and have been provided with the technology and equipment to do so, where required.

Regulatory Bodies Although the Company is not itself directly regulated, it operates within a regulated environment (e.g. AQSE 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.

Suppliers and Advisors The Company's suppliers and advisors are integral to the day to day operation of the Company. Relationships with suppliers are carefully managed to ensure that the Company is always obtaining value for money. The Company seeks to ensure that good relationships are maintained with its suppliers and advisors through regular contact and the prompt payment of invoices. Post the period end, the Company has appointed Shakespeare Martineau's company secretarial services to ensure that high standards and timeliness are key to the Board's delivery of its objectives to shareholders.

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.

Events after the reporting date

On 24 March 2021, the Company raised £50,000 by the allotment of 5,000,000 Ordinary Shares of £0.0001 each at a price of £0.01 per Ordinary Share.

 

On 26 April 2021, the Company raised approximately £2.55m by way of a placing and subscription of 255,500,000 ordinary shares of 0.01 pence each.   On the same date, the Company's shares were admitted to trading on the Access Segment of the Aquis Stock Exchange Growth Market.

 

Principal Risks and Uncertainties

Reliance on key personnel

The Company is dependent on the Directors, its management and employees including recruiting talented esports players. The future success of the Company depends on the ability of the Company to attract and retain its management and employees. Given the Company's focus on establishing esports teams, talent selection is a key factor for the success of the Company. As team players (including the members of the Company's esports team, Top Blokes) and streamers become more successful in the industry, they may receive competitive offers from other esports businesses which could be more lucrative than what the Company is able to offer.

 

The unexpected departure or loss of members of the Board could have an adverse impact on the financial condition and results of operations of the Company, and there can be no assurance that the Company will be able to attract or retain suitable replacements for those members of the Board who depart.

 

Growth of esports industry

The performance of the Company depends on the continued growth of the esports industry in the UK. At the moment, the industry is in its infancy in the UK and is not well developed. While the Directors believe that the industry will continue to grow considerably, there can be no guarantee that it will. If the industry fails to develop, opportunities to grow the business may not materialise and the performance of the Company may be negatively affected.

 

Due to the industry being in its infancy and the informal online environment in which it operates, contractual arrangements in the esports industry can be informal. Commercial arrangements can be short term, ad hoc and in some cases can be terminated by either party with no notice. Competition for esports players and sponsorship is also increasing as more esports organisations enter the industry. Although the Company will enter into formally negotiated written agreements containing customary contractual protections, there can be no assurance that arrangements negotiated and entered into by the Company will not be terminated or will be renewed at the end of the contractual term agreed by the Company. The Top Blokes Contracts are for an initial short term and there is no guarantee that the players will seek to renew them. The loss of: (i) one or more of the Top Blokes Contracts, (ii) a key commercial arrangement, or (iii) the loss of several smaller commercial arrangements could have a material adverse effect on the Company's business, operations, revenues and financial results.

 

Competition

The esports industry is competitive and fast moving and it may become more competitive as the popularity of esports increases, particularly in light of the COVID-19 pandemic which has caused user engagement in esports to increase. Some of the Company's competitors are more established with greater financial, marketing and other resources than the Company. These competitors may undertake more extensive marketing and advertising campaigns, attract higher calibre players and host higher profile events than the Company.

 

Competitors may also be able to solicit players and teams away from the Company by offering them more favourable terms and larger amounts of money. This may have a negative impact on the revenue of the Company in the future. In addition, the Company would face an increase in competition if existing competitors expanded or if there were new entrants in the market.

 

 

Player performance

Though the company intends to sign the best esports players available, there is no guarantee that such recruitment will translate into tournament success. If the Company does not perform to a reasonably high level in tournaments, it will not generate the publicity to grow its brand and to attract sponsors and the Company's revenue from prize money and sponsors will be lower than expected, making future or further recruitment more difficult.

 

Reliance on third party services

The vast majority of esports fans watch leagues and tournaments via free, online live streaming of content on Twitch and YouTube. If Twitch or YouTube were to change their business models and charge for content, the attractiveness of esports to sponsors would be reduced and profile raising opportunities for the Company will be reduced. Furthermore, the esports sector is reliant on the technical infrastructure of Twitch and YouTube; a disruption in services offered by either may have a material adverse effect on the Company.

 

Key performance indicators ("KPI's")

 

The key performance indicators currently put in place for the company are set out below:

 

·      the Esports team's traditional social media followers (for example, the number of followers on Twitter and Instagram);

·      the Esports team's following on streaming channels (for example, the number of followers on Twitch, Youtube etc.);

·      revenue from subscribers, sponsors, advertising and merchandising.

 

Assessment of business risk

The Board regularly reviews operating and strategic risks. The Company'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; and

 

·      consideration of reports prepared by third parties.

 

 

Financial risk management

Details of the Company's financial instruments and its policies with regard to financial risk management are contained in note 12 to the financial statements.

 

Results for the period and dividends

The loss for the period after tax was £626,173. Since the Company does not have any distributable reserves, the Directors are unable to recommend the payment of a dividend.

 

 

 

 

Income Statement and Statement of Comprehensive Income

For the period ended 31 January 2021

 

 

 

Period

 

 

ended

 

Note

31 January 2021

 

 

 

 

 

£

Revenue

 

-

 

 

 

Operating and administrative expenses

4

(626,173)

Loss before income tax

 

(626,173)

 

 

 

Income tax

6

-

 

 

 

Loss for the period and total comprehensive loss

 

(626,173)

 

 

 

Earnings per share attributable to equity owners

 

 

Basic and diluted earnings per share

11

(0.01)

 

The income statement has been prepared on the basis that all operations are continuing operations. The accounting policies and notes form an integral part of these financial statements.

 

 

 

Statement of Financial Position

As at 31 January 2021

 

 

 

As at

31 January 2021

 

Note

£

Assets

 

 

Current assets

 

 

Other receivables

7

57,345

Cash and cash equivalents

8

73,158

Total assets

 

130,503

 

 

 

Equity and Liabilities

 

 

Equity attributable to owners

 

 

Share capital

12

50,500

Retained earnings

 

(356,674)

 

 

 

 

 

(306,174)

Current liabilities

 

 

Trade and other payables

9

436,677

 

 

 

Total equity and liabilities

 

130,503

 

 

 

The financial statements were approved by the board of directors and authorised for issue on 29 July 2021 and are signed on its behalf by:

 

Max Deeley

Finance Director

 

 

Statement of Changes in Equity

As at 31 January 2021

 

 

Share

capital

 

Share

premium

 

Retained

earnings

 

Total

 

 

£

 

£

 

£

 

£

 

 

 

 

 

 

 

 

 

At incorporation

 

1

 

-

 

-

 

1

Issue of ordinary shares

 

50,499

 

269,499

 

-

 

319,998

Reduction in share capital

 

 

 

(269,499)

 

269,499

 

-

Total comprehensive loss for the period

 

-

 

-

 

(626,173)

 

(626,173)

 

 

 

 

 

 

 

 

 

At 31 January 2021

 

50,500

 

-

 

(356,674)

 

(306,174)

 

 

 

 

 

Statement of Cash Flows

For the period ended 31 January 2021

 

 

 

Period

 

 

ended

 

 

31 January 2021

 

 

 

 

 

£

Cash flows from operating activities

 

 

Loss before income tax

 

(626,173)

 

 

 

Movement in working capital

 

 

Increase in receivables

7

(57,345)

Increase in payables

9

436,677

 

 

 

Net cash flow from operating activities

 

(246,841)

 

 

 

Cash flows from financing activities

 

 

Issue of ordinary shares

12

319,999

 

 

 

Net cash flows from financing activities

 

319,999

 

 

 

Net increase in cash and cash equivalents

 

73,158

 

 

 

Cash and cash equivalents at beginning of period

 

-

 

 

 

Cash and cash equivalents at end of period

 

73,158

 

 

NOTES TO THE FINANCIAL INFORMATION

For the period ended 31 January 2021

 

1.          General information

Semper Fortis Esports Plc (the "Company") was incorporated on 14 January 2020 in England and Wales, with registered number 12403380 under the Companies Act 2006. The registered office of the company is 1-3 Charter Square, Sheffield, United Kingdom, S1 4HS.

The principal activity of the Company is an esports business.

 

2.          Basis of preparation

The financial information and accompanying notes are based on the following policies which have been consistently applied:

The financial information of the Company has been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006.

The financial statements are presented in Sterling, which is the Company's functional and presentational currency and has been prepared under the historical cost convention.

The preparation of financial information in conformity with IFRS's requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company's Accounting Policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Financial Information are disclosed in Note 3.

Going Concern

The Company has raised £2.55m by way of a placing and subscription of shares on 26 April 2021. The raising of capital means that, following a review of the Company's cash flow forecast, including severe but plausible downside sensitivities, which take into account any impact of Covid-19, the Directors are of the opinion that the Company has adequate working capital to meet its obligations over the next 12 months. The Directors have therefore made an informed judgement, at the time of approving the financial statements, that there is reasonable expectation that the Company has adequate resources to continue its operational existence for the foreseeable future. As a result, the Directors have adopted the going concern basis of accounting in the preparation of the financial statements.

Adoption of new and revised standards

New standards, amendments and interpretations

The Company has adopted all of the new and amended standards and interpretations issued by the International Accounting Standards Board that are relevant to its operations and effective for accounting periods commencing on or after 14 January 2020.

New standards, amendments and Interpretations in issue but not yet effective or not yet endorsed at 14 January 2020 and not early adopted

Standard

Key requirements

Effective date for annual periods beginning on or after:

IAS 1

Amendments to IAS1, 'Presentation of Financial Statements' regarding the classification of liabilities

1 January 2023

IAS 12

Amendments to IAS12, 'Income Taxes' regarding deferred tax related to assets and liabilities arising from a single transaction

1 January 2023

IAS 1

Amendments to IAS1, 'Presentation of Financial Statements' regarding the amendments of disclosure of accounting policies

1 January 2023

IAS 8

Amendments to IAS 8 'Accounting Policies, Changes in Accounting Estimates and Errors' to distinguish between accounting policies and accounting estimates.

1 January 2023

IAS 16

Amendments to IAS 16 'Property, Plant and Equipment' regarding proceeds before intended use

1 January 2022

These standards are not considered to have a material impact on the financial statements.

3.          Accounting policies

The accounting policies set out below have, unless otherwise stated, been applied consistently.

There have been no judgements made by the Directors, in the application of these accounting policies that have significant effect on the financial information and estimates with a significant risk of material adjustment in the next year.

Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and short-term deposits with an original maturity of three months or less.

Equity

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs, or at fair value where no proceeds are received.

Financial instruments

Financial assets

Financial assets are recognised in the statement of financial position when the Company becomes party to the contractual provisions of the instrument.

Financial assets are classified into specified categories. The classification depends on the nature and purpose of the financial assets and is determined at the time of recognition.

Financial assets are subsequently measured at amortised cost, fair value through OCI, or FVPL.

The classification of financial assets at initial recognition that are debt instruments depends on the financial asset's contractual cash flow characteristics and the Company's business model for managing them. The Company initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs.

In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are 'solely payments of principal and interest ("SPPI")' on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level.

The Company's business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in four categories:

•   financial assets at amortised cost;

•   financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments);

•   financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments); and

•   financial assets at FVPL.

This category is the most relevant to the Company. The Company measures financial assets at amortised cost if both of the following conditions are met:

•   the financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows; and

•   the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets at amortised cost are subsequently measured using the effective interest rate ("EIR") method and are subject to impairment. Interest received is recognised as part of finance income in the statement of profit or loss and other comprehensive income. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired. IFRS 9.5.4 The Company's financial assets at amortised cost include other receivables and cash and cash equivalents.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognised when:

•   the rights to receive cash flows from the asset have expired; or

•   the Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a 'pass-through' arrangement; and either: (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of its continuing involvement. In that case, the Company also recognises an associated liability.

The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.

Impairment of financial assets

The Company recognises an allowance for expected credit losses ("ECLs") for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Company expects to receive, discounted at an approximation of the original EIR. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

The Company recognises an allowance for ECLs for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Company expects to receive, discounted at an approximation of the original EIR. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12 months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).

For other receivables due in less than 12 months, the Company applies the simplified approach in calculating ECLs, as permitted by IFRS 9. Therefore, the Company does not track changes in credit risk, but instead, recognises a loss allowance based on the financial asset's lifetime ECL at each reporting date.

The Company considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Company may also consider a financial asset to be in default when internal or external information indicates that the Company is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Company. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows and usually occurs when past due for more than one year and not subject to enforcement activity.

At each reporting date, the Company assesses whether financial assets carried at amortised cost are credit impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

Financial liabilities

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Company's financial liabilities include trade and other payables.

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

•   loans and borrowings and trade and other payables;

•   after initial recognition, interest-bearing loans and borrowings and trade and other payables are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in the statement of profit or loss and other comprehensive income when the liabilities are derecognised, as well as through the EIR amortisation process;

•   amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit or loss and other comprehensive income.

This category generally applies to trade and other payables.

Derecognition

A financial liability is derecognised when the associated obligation is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in profit or loss and other comprehensive income.

Financial risk management

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Financial Risk Factors

The Company's cash holdings are all held with major financial institutions whose financial status is regularly reviewed.

Credit Risk

Credit risk arises from outstanding receivables. Management does not expect any losses from non-performance of these receivables. The amount of exposure to any individual counter party is subject to a limit, which is assessed by the Board.

The Company considers the credit ratings of banks in which it holds funds in order to reduce exposure to credit risk, which is stated under the cash and cash equivalents accounting policy.

Liquidity risk

The Company's continued future operations depend on its ability to raise sufficient working capital through the issue of share capital and generate revenue.

Capital risk management

The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the return to stakeholders. The Company's capital structure primarily consists of equity attributable to the owners, comprising issued capital, reserves and retained losses.

Current and deferred tax

Current tax

The tax currently payable is based on taxable profit or loss for the period. Taxable profit or loss differs from the profit or loss for the financial period as reported in the statement of total comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting date.

Deferred tax

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 or loss.

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 future 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 the initial recognition of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised based on tax laws and rates that have been enacted or substantively enacted at the reporting date. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited in other comprehensive income, in which case the deferred tax is also dealt with in other comprehensive income.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the subsidiary intends to settle its current tax assets and liabilities on a net basis.

Deferred tax will be recognised on the losses incurred when the Company has sufficient visibility over the usage of these loses and is forecasting future profits in the short term.

Critical accounting estimates and judgements

The Company makes estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual results may differ from these estimates and assumptions. There are no 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 period.

 

 

 

4.          Operating expenses by nature

 

 

2021

 

 

£

 

 

 

Accrued costs

 

48,333

Professional fees

 

493,976

Esports team costs

 

67,047

Sundry expenses

 

16,817

 

 

 

 

 

626,173

 

Auditors' remuneration included in the above amounted to £14,800 for audit services and £2,500 for non-audit services.

5.          Staff costs

The average monthly number of employees during the period was one.

The directors received no remuneration in the period.

No pension contributions were paid.

6.          Taxation

 

 

2021

 

 

£

 

 

 

Current tax

 

-

Deferred tax

 

-

 

 

 

Tax charge/(credit) for the period

 

-

 

The Company has a potential deferred tax asset arising from unutilised 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 Company's accounting policy for deferred tax.

The Company's unutilised tax losses carried forward at 31 January 2021 amounted to £236,177.

 

 

6.       Taxation (continued)

The standard rate of tax for the current year, based on the UK effective rate of corporation tax is 19%. The actual tax for the current and previous year varies from the standard rate for the reasons set out in the following reconciliation:

 

 

2021

 

 

£

Loss for the period

 

(626,173)

 

 

 

Tax on ordinary activities at standard rate

 

(118,973)

Effects of:

 

 

Expenses not deductible for tax purposes

 

74,099

Tax losses available for carry forward against future profits

 

44,874

Tax for the period

 

-

 

7.          Trade and other receivables

 

 

2021

 

 

£

Other receivables

 

57,345

 

 

57,345

 

8.          Cash and cash equivalents

 

 

2021

 

 

£

Cash at bank

 

73,158

 

 

73,158

 

9.          Trade and other payables

Amounts falling due within one year:

 

 

 

2021

 

 

£

Trade payables

 

183,767

Other payables

 

252,910

 

 

436,677

 

 

 

 

 

10.            Earnings per share

The basic earnings per share is calculated by dividing the loss attributable to equity shareholders by the weighted average number of shares in issue.

The Company had in issue 154,999,800 ordinary shares at 31 January 2021. The loss attributable to equity holders and weighted average number of ordinary shares for the purposes of calculating diluted earnings per ordinary share are identical to those used for basic earnings per ordinary share.

 

 

2021

 

 

£

Loss for the period attributable to equity holders (£)

 

626,173

Weighted average number of shares in issue

 

60,463,747

 

 

 

Basic and diluted earnings per share (£)

 

(0.01)

 

11.         Share capital and premium

On 14 January 2020 (incorporation), the Company issued 1 ordinary share of £1 for consideration of £1.

On 4 September 2020, the existing one Ordinary Share of £1 was sub-divided into 10,000 ordinary shares of £0.0001 each.

On 4 September 2020, the Company issued 99,990,000 new ordinary shares of £0.0001 each at par. Amounts paid up of £10,000 in respect of the share capital issued was received into the Company's bank account.

On 4 September 2020, the Company issued 35,000 new redeemable deferred shares of £1 each at par. Amounts paid up of £8,750 in respect of the share capital issued was received into the Company's bank account.

On 4 September 2020, the Company issued 54,999,800 new ordinary shares of £0.0001 each at a price of £0.005 per ordinary share creating a share premium of £269,499. Amounts paid up of £274,999 in respect of the share capital issued was received into the Company's bank account.

On 19 October 2020, the Company reduced its share capital by £269,499 by cancelling all of its share premium in order to eliminate a deficit on profit and loss and create distributable reserves.

 

Number of

shares

Share

capital

Share

premium

Total

 

 

£

£

£

At incorporation

1

1

-

1.00

Issue of ordinary shares (04/02/2020)

99,990,000

9,999

-

9,999

Issue of ordinary shares (04/09/2020)

54,999,800

5,500

269,499

274,999

Issue of redeemable deferred shares (04/09/2020)

35,000

35,000

-

35,000

Reduction of share capital (19/10/2020)

-

-

(269,499)

(269,499)

 

 

50,500

-

50,500

 

The ordinary shares have full voting, dividend and capital distribution (including on winding up) rights.

The redeemable deferred shares hold no voting rights or rights to receive dividends.

 

12.         Financial instruments

The Company's financial instruments comprise cash, trade receivables and trade payables that arise from its operations. The main purpose of these financial instruments is to provide finance for the Company's future activities and day to day operational needs.

The main risks faced by the Company 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:

 

 

 

2021

At amortised cost

 

£

Other receivables

 

57,345

Cash and cash equivalents

 

73,158

 

 

 

 

 

130,503

 

Financial liabilities by category

The categories of financial liabilities included in the statement of financial position and the headings in which they are included are as follows:

 

 

 

 

2021

At amortised cost

 

£

Trade and other payables

 

436,677

 

The above trade and other payables are due within six months and represent the undiscounted contractual payments.

 

 

 

 

 

Interest rate risk

The Company manages the interest rate risk associated with the Company's cash assets by ensuring that interest rates are as favourable as possible, whilst managing the access the Company requires to the funds for working capital purposes.

 

The Company'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.

 

Capital risk management

The Company manages its capital to ensure that it will be able to continue as going concern while maximising the return to stakeholders through optimisation of the debt and equity balance. The capital structure of the Company currently consists cash and cash equivalents, and equity attributable to equity holders of the Company, comprising issued capital, reserves and retained earnings, all as disclosed in the Statement of Financial Position.

 

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 3 to the financial statements.

 

 

13.         Related party transactions

During the period the Company paid £13,355 to GIMA Group Inc related to travel and marketing services provided, in which Kevin Soltani was a Director.

 

14.         Controlling party

The Directors do not consider there to be an ultimate controlling party.

 

15.         Subsequent events

On 24 March 2021, the Company raised £50,000 by the allotment of 5,000,000 Ordinary Shares of £0.0001 each at a price of £0.01 per Ordinary Share.

On 26 April 2021, the Company raised approximately £2.55m by way of a placing and subscription of 255,500,000 ordinary shares of 0.01 pence each.   On the same date, the Company's shares were admitted to trading on the Access Segment of the Aquis Stock Exchange Growth Market.

 

 

 

 

 

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