The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ('MAR'). Upon the publication of this announcement via Regulatory Information Service ('RIS'), this inside information is now considered to be in the public domain.

Curzon Energy Plc
("Curzon" or the "Company")

 

Results for the Year Ended 31 December 2022

 

28 April 2023

Curzon Energy Plc (LON:CZN), ("Curzon" or the "Company"), the London Stock Exchange listed company, announces its full year audited results for the year ended 31 December 2022.

 

A copy of the Company's annual report and financial statements for the year ended 31 December 2022, extracts of which are set out below, will be made available on the Company's website www.curzonenergy.com shortly.

 

Curzon further announces that a Notice of Annual General Meeting ("AGM") will be posted to shareholders, along with the Annual Report and Financial Statements for the year ended 31 December 2022, on or before 5 May 2023.

 

The Company will be holding its AGM at the Company's business address, which is located at Curzon Energy Plc, (WeWork), 71-91 Aldwych House, London WC2B 4HN, Room 2K, on Wednesday 31 May 2023 at 2.00 pm, the details of which are explained in the Notice of AGM, which will be also available on the Company's website www.curzonenergy.com shortly. 

 

Forms of proxy must be completed, signed and returned so as to be received by the Company's Registrars no later than 2.00 pm on 29 May 2023. 

 

For further information please contact:
Curzon Energy Plc	+44 (0) 20 7747 9980
Scott Kaintz
www.curzonenergy.com

 

 

Chairman's Statement

 

I am pleased to present the annual report for Curzon Energy Plc (the "Company"), covering its results for the year to 31 December 2022.

Period in Review

During the course of 2022, the Company focused its efforts on completing a potential reverse takeover transaction ("RTO") with Poseidon Plastics Ltd ("PPL" or "Poseidon"), developer of an integrated process, based on its patented technology platform, to convert currently unrecyclable PET waste, into high value, enhanced recycled PET resin (''erPET'').  Formal exclusivity with PET lapsed in September 2022.    

 

Activities at Coos Bay were relatively minimal during the course of the year, with the project remaining on care and maintenance.  The Company visited the site during the year and continued discussions regarding formal extensions of the project leases with the two main leaseholders, as well as a potential farm-out or sale of the project in light of higher natural gas demand and prices. 

Results

For the period ended 31 December 2022, the Group incurred a loss of US$467,793 (2021: loss of US$821,344).  The majority of this loss comprised expenditures on RTO due diligence, administrative expenses and required listing and regulatory overheads. Overall administrative expenses fell during the period at US$509,358 in 2022 (2021: US$569,865) and finance expenses rose slightly to US$191,735 (2021: US$165,598) reflecting the ongoing costs of funding the business during this due diligence phase.   

Outlook

While the delays associated with the proposed PET RTO were material and frustrating to all stakeholders, the Company has now formally exited this transaction. Subsequently, the Company executed a Letter of Intent on 19 April 2023 with Technology Metals Market Limited ("TM2"), an investment holding company developing a global network of supply, extending from mines (upstream) through the smelters, processors and convertors (midstream) and into the global distribution networks of global brands. Its portfolio of more than dozen verticals covers key battery metals such as lithium, graphite, manganese, zinc or nickel.

 

For the Company providing TM2 with an initial 17-day extendable period of exclusivity, the parties have agreed that they will work towards the execution and delivery of a definitive purchase agreement, with the goal to conclude an RTO transaction in the critical technology metals space. TM2 has provided a working capital facility of up to £750,000 to Curzon in the form of a one-year loan note (the "Note"), carrying an annual interest rate of 10% per annum, and convertible at the price of any subsequent share issue alongside the contemplated RTO transaction.  Under the terms of the Note, a total authorised amount of up to £750,000 is to be made available to the Company through mutually agreed drawdowns that began on 19 April 2023. Currently, the Company has begun due diligence on a TM2 nominated African lithium development company that seeks to achieve initial production in the medium term.  Curzon expects to release more information and details on the ultimate target of the RTO transaction in due course.

 

Elsewhere, the ongoing conflict in Ukraine has now continued on for more than a year, impacting markets and driving up commodity prices. While the global trend for lower emissions continues to push the world away from traditional oil and gas activities, this creates short term opportunities in the space.  Notwithstanding the Company's coal bed methane project at Coos Bay remains on care and maintenance and is earmarked for disposal, it may yet have residual value and may also benefit from the proposed RTO with TM2.  Going forward, the Company expects to remain active in its original natural resource extractives space, but with migration into the critical metals technology sector seeking to facilitate the world's low-carbon and electrification goals.  

We thank all investors and stakeholders for their patience and support during this period of transition and we look forward to both delivering this transaction and to working with TM2 to create a high-impact technology metals business with an initial focus on lithium.       

 

 

John McGoldrick

Non-Executive Chairman

27 April 2023

 

 

 

Strategic Report

 

Financial Results

The Group loss for the year to 31 December 2022 was US$467,793 (2021: US$821,344). There were no revenues and the majority of this loss related to administrative, listing and transaction costs. 

 

The loss per share was US$0.007 (2021: loss per share US$0.009). 

 

The Group currently has no source of revenue and is reliant on loans to continue to meet its overhead expenditure. The Group held cash balances of US$20,421 as at 31 December 2022. 

 

The Directors note that the Group will need additional funding to continue operations for the foreseeable future and, coupled with the fact that there is no guarantee that the TM2 transaction will be completed, this means there is a material uncertainty as to the Group's ability to continue as a going concern. The Directors are confident however that the Group will be able to raise, as required, sufficient cash or reduce its commitments to enable it to continue its operations and to continue to meet, as and when they fall due, its liabilities for at least the next twelve months from the date of approval of the Group financial statements. The Group financial statements have, therefore, been prepared on the going concern basis.

 

The Group has 3 members of staff (including Directors).

Principal Activities

The Company was incorporated in England and Wales on 29 January 2016 as an investment company to acquire oil and gas assets. Its first acquisition was of Coos Bay, which has now been wholly written off.

The Group's business is now operated through the United Kingdom and is focused on identifying and acquiring a new business in a promising sector.   

Review of the Business

On 18 April 2023, the Company announced that it had executed a letter of intent with Technology Metals Market Limited ("TM2") to acquire a 100% interest in a designated mining company via a potential reverse takeover.  TM2 and the Company have entered a period of exclusivity, where each party will conduct due diligence on the other and the designated target. 

The parties have further agreed that during this period they will work towards the execution and delivery of a sale and purchase agreement, with a goal to complete a reverse takeover transaction during the course of 2023.  

Key Performance Indicators (KPIs)

As the Company is currently pursuing a potential reverse takeover the Directors take the view that KPIs would not provide materially useful information to investors at this time.  As the business develops further, the addition of KPIs will be considered and added as appropriate. 

Principal Risks and Risk Management

As the Company is currently pursuing a reverse takeover, that would potentially materially change the nature of the business, the primary risk to the business during this period is going concern risk and a potential inability to fund the business through this transition.

The Company's Risk Mitigation Strategies Include the Following:

§ Utilising the Directors' experience in fundraising to maintain a balance of funding sources during the period of transition;

 

§ Managing the Company's existing debt positions, keeping all stakeholders up to date and informed as to progress of the transaction; and

 

§ Judicious use of capital and cost control during the transition.

Corporate Responsibility

The Company takes its responsibilities as a corporate citizen seriously. The Board's primary goal is to create shareholder value in a responsible way, which serves all stakeholders.

Section 172 Statement

Section 172 of the Companies Act 2006 requires Directors to take into consideration the interests of stakeholders in their decision making.  The Directors continue to have regard to the interests of the Company's employees and other stakeholders, including the impact of its activities on the community, the environment and the Company's reputation, when making decisions. Acting in good faith and fairly between members, the Directors consider what is most likely to promote the success of the Company for its members in the long term.

 

The Directors are fully aware of their responsibilities to promote the success of the Company in accordance with section 172 of the Companies Act 2006.  The Board regularly reviews our principal stakeholders and how we engage with them. The stakeholder voice is brought into the boardroom throughout the annual cycle through information provided by management and also by direct engagement with stakeholders themselves.  The relevance of each stakeholder group may increase or decrease depending on the matter or issue in question, so the Board seeks to consider the needs and priorities of each stakeholder group during its discussions and as part of its decision making.

 

The Board welcomes the opportunity to engage with our shareholders and with the capital markets more generally.  The Board achieves this through dialogue with shareholders, prospective shareholders and capital markets participants, including corporate brokers.  Feedback from any such meetings or calls would be shared with all Board members. 

 

Investors, prospective investors and analysts can contact the Executive Director as well as access information on our corporate website.  The Board believes that appropriate steps have been taken during the year so that all members of the Board, and in particular the non-executive Directors, have an understanding of the views of major shareholders.

 

Governance

The Board considers sound governance as a critical component of the Company's success and the highest priority.  The Company has an effective and engaged Board, with a strong non-executive presence drawn from diverse backgrounds and with well-functioning governance committees.

 

Analysis by Gender

 

Category	Male	Female
Directors	3	0
Senior Managers	0	0
Other Employees	0	0

 

 

Diversity and Inclusion

The Company does not discriminate on the grounds of age, gender, nationality, ethnic or racial origin, non-job-related-disability, sexual orientation or marital status. The Board does not support discrimination of any form, positive or negative, and all appointments are based solely on merit.

 

Health and Safety

The Company has a Health and Safety at Work policy, which is reviewed regularly by the Board and is committed to the health and safety of its employees and others, who may be affected by the Company's activities. The health and safety procedures used by the Company ensure compliance with all applicable legal, environmental and regulatory requirements as well as its own internal standards.

Outlook

In April 2023, the Company announced that it had executed a LOI with Technology Metals Market Limited ("TM2"), where TM2 agreed to extend up to a £750,000 facility in order to fund due diligence concluding in a reverse takeover of Curzon by a designated mining target, currently focused on lithium.

 

TM2 is building a global supply network, extending from the minesite through to smelters, processors, and converters and into the distribution networks of global brands.  TM2 has initially identified an African-based lithium development company, that is seeking to reach initial production in the medium term, and the Company and TM2 will work together over the coming weeks to further delineate these plans. 

 

Signed by order of the Board   

 

Scott Kaintz

Chief Executive Officer

27 April 2023

 

Directors' Report

 

The Directors present their report on the Company, together with the audited financial statements of the Company for the year ended 31 December 2022.

Cautionary Statement

The review of the business and its future development in the Strategic Report has been prepared solely to provide additional information to shareholders to assess the Company's strategies and the potential for these strategies to succeed. It should not be relied on by any other party for any other purpose. The review contains forward looking statements, which are made by the Directors in good faith based on information available to them up to the time of the approval of the reports and should be treated with caution due to the inherent uncertainties associated with such statements.

Results and Dividends

Given the nature of the business and its development strategy, it is unlikely that the Board will recommend a dividend in the next few years. The Directors believe the Company should seek to re-invest any profits to fund the Company's growth strategy over the short- and medium-term horizons.

Directors' Insurance and Indemnities

The Directors have the benefit of the indemnity provisions, contained in the Company's Articles of Association ('Articles'), and the Company has maintained throughout the year Directors' and officers' liability insurance for the benefit of the Company, the Directors and its officers. The Company has entered into qualifying third-party indemnity arrangements for the benefit of all its Directors in a form and scope, which comply with the requirements of the Companies Act 2006, and which were in force throughout the year and remain in force.

Business Review and Future Developments

Details of the business activities and developments made during the period can be found in the Strategic Report and in note 1 to the Financial Statements respectively.

Financial Instruments and Risk Management

Disclosures regarding financial instruments are provided within note 20 to the Financial Statements.

Capital Structure and Issue of Shares

Details of the Company's share capital, together with details of the movements during the period, are set out in note 17 to the Financial Statements. The Company has one class of Ordinary Shares, which carry no right to fixed income.

Post Balance Sheet Events

 

Transaction Termination and LOI with TM2

On 18 April 2023, the Company announced that it had notified Poseidon Enhanced Technologies of its intention to terminate discussions regarding a RTO of Curzon by PET, as originally announced on 3 February 2021.  The Company further announced that it has signed an LOI with Technology Metals Market Limited ("TM2"), to provide a working capital facility of £750,000 to fund Curzon to conduct due diligence and ultimately progress a RTO of Curzon by a designated target by TM2, currently expected to be in the lithium space.  TM2 would be able to fund ongoing exclusivity of Curzon by drawdowns on the offered facility. 

 

Directors

The Directors of the Company, who have served during the period and at the date of this report are:

 

Director	Role		Date of Appointment	Date of Resignation	Board Committee*
John McGoldrick	Chairman and Non-Executive Director	4/10/2017			N, R, A
Scott Kaintz	Executive Director	27/06/2018
Owen May	Non-Executive Director	27/09/2016			N, R, A

                                                                                    

*Board Committee abbreviations are as follows: N = Nomination Committee; A = Audit and Risk Committee; R = Remuneration Committee.

Board of Directors

Details of the current Directors and their backgrounds are as follows:

 

John McGoldrick (Chairman and Non-Executive Director)

John McGoldrick has over forty years of experience in the energy sector including a variety of senior management roles, notably at Enterprise Oil where he was responsible for its US operations up until Shell's takeover in 2002. Since then, Mr. McGoldrick has served as executive chairman of Caza Oil & Gas Inc. (formerly Falcon Bay Energy LLC), a US onshore exploration and production company, which went public in Toronto and London in 2007, becoming Non-Executive Chairman in 2010. From 2008 to 2013, Mr. McGoldrick was a Non-Executive Director of Vanguard Natural Resources LLC, a NYSE-listed Oil & Gas company focused on the US. In January 2012, Mr. McGoldrick joined Dart Energy International as CEO, subsequently becoming CEO of Dart Energy in March 2013. He held this post until Dart Energy's takeover by IGas at the end of 2014.  Mr. McGoldrick is also a Director of Poseidon Plastics Limited. Mr. McGoldrick holds a Bachelor of Engineering in Chemical Engineering with Management Economics from University of Bradford.

 

Scott Kaintz  (Executive Director and Chief Executive Officer)

Scott has extensive experience leading, funding and operating publicly traded natural resource exploration and development businesses on the London markets.  He started his career as a US Air Force Officer working across Europe, the Middle East and Central Asia.  He subsequently held managerial and technology roles in the defence sector in Europe, before transitioning to corporate finance and investment positions, focused primarily on capital raising and making debt and equity investments in small-cap listed companies.  Scott has significant experience in emerging markets, with a particular emphasis on the countries of the former Soviet Union.  Scott holds a BSLA in Russian language and Russian Area Studies from Georgetown University as well as MBA degrees from Columbia Business School and London Business School. He is also a Director of Corcel Plc and Red Rock Resources Plc.

 

Owen May (Non-Executive Director)

Mr. Owen May is an American banker with over 30 years of experience on Wall Street. He currently serves as a Managing Director of MD Global Partners, a full-service investment-banking firm, and is actively involved in a broad range of investment activities in Israel, China and Europe.  Mr. May started his career at Lehman Brothers as a Financial Advisor in the high-net-worth division in 1985. After leaving Lehman Brothers in 1989, Mr. May joined D.H. Blair & Co., a small boutique firm on Wall Street.  In 1993, Mr May went on to establish May Davis Group, a full-service investment banking firm on Wall Street that offered a full range of investment banking, research, sales, trading and retail brokerage services.  In 2007, Mr. May established MD Global Partners LLC, a firm that specialises in corporate finance, mergers & acquisitions, restructuring and business development.  Following his undergraduate degree in Biology at University of Miami, Mr. May earned an MBA in Finance from Duke University's Fuqua School of Business, where he currently sits on the Board of Visitors and offers career coaching and opportunities to programme participants. He also continues to hold a position on the President's Council for the University of Miami.

Directors' Interests in Shares

Directors' interests in the shares of the Company, at the date of this report, are disclosed below.

 

 

Director	Ordinary Shares Held	% Held
John McGoldrick	316,455	0.32
Scott Kaintz	949,367	0.95
Owen May	-	-

 

Substantial Interests

As at 1 April 2022, the Company has been advised of the following significant interests (greater than 3%) in its ordinary share capital:

 

Shareholder	Ordinary Shares Held	% Held
Jim Nominees Limited, Designation JARVIS	39,442,082	39.58%
Interactive Investor Services Nominees Limited, Designation SMKTNOMS	5,430,173	5.45%
Hargreaves Lansdown (Nominees) Limited, Designation 15942	5,239,899	5.26%
Hargreaves Lansdown (Nominees) Limited, Designation HLNOM	4,219,667	4.23%
Queensbury Inc	4,000,000	4.01%
Interactive Investor Services Nominees Limited, Designation SMKTISAS	3,627,140	3.64%

 

 

Corporate Governance

The Board is committed to maintaining high standards of corporate governance and, so far as appropriate given the Company's size and the constitution of the Board, complies with the Corporate Governance Guidelines for Small and Mid-Sized Companies (the "QCA Code").

 

The Board

The Board currently comprises one Executive Director and two Non-Executive Directors. The Board is ultimately responsible for the day-to-day management of the Company's business, its strategy and key policies. Members of the Board are appointed by the Shareholders. The Board also has power to appoint additional directors, subject to such appointments being approved by Shareholders. At least six board meetings are held per year.

 

Director	Number of Meetings Held During Tenure	Number of Meetings Attended
John McGoldrick	9	9
Scott Kaintz	9	9
Owen May	9	9

 

 

As prescribed by the QCA Code, the Board has established three committees: An Audit and Risk Committee, a Remuneration Committee and a Nomination Committee.

 

Each of the committees were formed on admission of the Company to the Standard Listing Segment on 4 October 2017. The Audit and Risk Committee and the Remuneration Committees have met once each during 2022.

Audit and Risk Committee

The Audit and Risk Committee, which comprises John McGoldrick and Owen May, is responsible, amongst other things, for monitoring the Group's financial reporting, external and internal audits and controls, including reviewing and monitoring the integrity of the Group's annual and half-yearly financial statements, reviewing and monitoring the extent of non-audit work undertaken by external auditors, advising on the appointment of external auditors, overseeing the Group's relationship with its external auditors, reviewing the effectiveness of the external audit process and reviewing the effectiveness of the Group's internal control review function. The ultimate responsibility for reviewing and approving the annual report and accounts and the half-yearly reports remains with the Board. The Audit and Risk Committee gives due consideration to laws and regulations, the provisions of the UK Corporate Governance Code (the Quoted Companies' Alliance code) and the requirements of the Listing Rules. The Audit and Risk Committee shall meet at least once a year at appropriate intervals in the financial reporting and audit cycle and otherwise as required.

 

Remuneration Committee

The Remuneration Committee, which comprises John McGoldrick and Owen May, is responsible, amongst other things, for assisting the Board in determining its responsibilities in relation to remuneration, including making recommendations to the Board on the Company's policy on executive remuneration, including setting the parameters and governance framework of the Group's remuneration policy and determining the individual remuneration and benefits package of each of the Company's Executive Directors and the Group. It is also responsible for approving the rules and basis for participation in any performance related pay-schemes, share incentive schemes and obtaining reliable and up-to-date information about remuneration in other companies. The Remuneration Committee shall meet at least once a year.

 

Nomination Committee

The Nomination Committee, which comprises John McGoldrick as Chairman and Owen May, will identify and nominate, for the approval of the Board, candidates to fill Board vacancies as and when they arise. The Nominations Committee will meet as required.

Share Dealing Policy

The Company has adopted a Share Dealing Policy, which sets out the requirements and procedures for dealings in any of its listed securities. The Share Dealing Policy applies widely to the Directors of the Company and its subsidiaries, the Company's employees and persons closely associated with them. The policy complies with the Market Abuse Regulations, which came into effect on 3 July 2016. 

 

Anti-Bribery and Anti-Corruption Policy

The Company has adopted an Anti-Bribery and Anti-Corruption Policy, which applies to the Directors and any future employees of the Company. The Directors believe that the Group, through its internal controls, has appropriate procedures in place to reduce the risk of bribery and that all employees, agents, consultants and associated persons are made fully aware of the Group's policies and procedures with respect to ethical behaviour, business conduct and transparency.

Health and Safety

The safety of the Group's employees and contractors is critical to its operations. Coos Bay requires its contractors working on site to comply with all applicable laws in connection with the performance of its work, including applicable requirements of the Occupational Health and Safety Act and the rules promulgated thereunder (OSHA). As Coos Bay currently maintains no employees and almost all work on site is performed by independent contractors, Coos Bay has not developed any formal safety procedures or training programs beyond those that may be required by OSHA or other applicable laws. The Board intends to review Coos Bay's health and safety practices from time-to-time to ensure that they remain consistent with current industry standards.

 

Relations with Shareholders

As detailed further below, the Directors seek to build on a mutual understanding of objectives between the Company and its shareholders by meeting to discuss long term issues and receive feedback, communicating regularly throughout the year and issuing trading updates as appropriate. The Board also seeks to use the Annual General Meeting to communicate with its shareholders.

 

Fair, Balanced and Understandable Assessment of Position and Prospects

The Board has shown its commitment to presenting fair, balanced and comprehensible assessments of the Company's position and prospects by providing comprehensive disclosures within the financial report in relation to its activities. The Board has applied the principles of good governance relating to Directors' remuneration as described below. The Board has determined that there are no specific issues, which need to be brought to the attention of shareholders.

 

Remuneration Strategy

The Company operates in a competitive market. If it is to compete successfully, it is essential that it attracts, develops and retains high quality staff. Remuneration policy has an important part to play in achieving this objective. The Company aims to offer its staff a remuneration package, which is both competitive in the relevant employment market and which reflects individual performance and contribution.

 

Share Options and Warrants

Nil.

 

Communication with Shareholders

The Board attaches great importance to communication with both institutional and private shareholders.

Regular communication is maintained with all shareholders through Company announcements, the half-year Statement and the Annual Report and Financial Statements.

 

The Directors seek to build on a mutual understanding of objectives between the Company and its shareholders. Institutional shareholders are in contact with the Directors through presentations and meetings to discuss issues and to give feedback regularly throughout the year. With private shareholders, this is not always practical.

The Board therefore intends to use the Company's Annual General Meeting as the opportunity to meet private shareholders, who are encouraged to attend, and at which the Board will give a presentation on the activities of the Company.

 

Following the presentation, there will be an opportunity to meet and ask questions of Directors and to discuss development of the business.

 

The Company operates a website at http://www.curzonenergy.com/investor-relations       

 

The website contains details of the Company and its activities, regulatory announcements, Company announcements, interim statements, preliminary statements and annual reports.

 

Greenhouse Gas Emissions

The Group has as yet minimal greenhouse gas emissions to report from the operations of the Company and its subsidiaries and does not have responsibility for any other emission producing sources under the Companies Act 2006 (Strategic Report and Directors Report) Regulations 2014.

 

Task Force on Climate Financial Disclosures

Given the current position of the group, the directors have not made any disclosures against the Task Force on Climate-related Financial Disclosures (TCFD) framework.  The directors will revisit the position in the event that a future transaction is completed. 

 

Annual General Meeting

The Company currently intends to hold its Annual General Meeting on 31 May 2023 at 2.00 pm, and it encourages all shareholders to vote via proxy regardless of their intention of attending the meeting in person.  

 

Financial Risk Management

The Group is exposed to a variety of financial risks, including currency risk, credit risk and liquidity risk. Some of the objectives and policies applied by management to mitigate these risks are outlined in note 20 to the Consolidated Financial Statements.

 

Share Capital

The Company's Ordinary Shares of £0.0001 per share and Deferred share of £0.0099 represent 100% of its total share capital. At a meeting of the Company every member present in person or by proxy shall have one vote for every Ordinary Share of which he is the holder. Holders of Ordinary Shares are entitled to receive dividends. Deferred shares do not carry any voting right or right to receive dividends.

 

On a winding-up or other return of capital, holders are entitled to share in any surplus assets pro rata to the amount paid up on their Ordinary Shares.  The shares are not redeemable at the option of either the Company or the holder.  There are no restrictions on the transfer of shares.

 

Independent Auditors

During the year, Crowe U.K. LLP was re-appointed as auditor to the Company.

 

Provision of Information to Auditors

Each of the persons, who are Directors at the time when this Directors' Report is approved, has confirmed that:

 

§ so far as that Director is aware, there is no information relevant to the audit of which the Company's auditors are unaware; and

 

§ each Director has taken all the steps that ought to have been taken as a director in order to be aware of any information needed by the Company's auditors in connection with preparing their report and to establish that the Company's auditors are aware of that information.

 

Signed by order of the Board

 

 

Scott Kaintz

Chief Executive Officer

27 April 2023

 

 

Directors' Remuneration Report

 

The Board of Directors has established a Remuneration Committee. The Remuneration Committee (the 'Committee') comprises our two Non-Executive Directors, John McGoldrick and Owen May.

 

The members of the Remuneration Committee have the necessary experience of executive compensation matters relevant to their responsibilities as members of such a committee by virtue of their respective professions, contacts within the minerals industry as well as experience in the broader business community. In addition, each member of the Remuneration Committee keeps abreast on a regular basis of trends and developments affecting executive compensation. Accordingly, it is considered that the Remuneration Committee has sufficient experience and knowledge to set appropriate levels of compensation. Neither the Company nor the Remuneration Committee engaged independent consultants to evaluate the levels of compensation during the year ended 31 December 2022.

 

Committee's Main Responsibility

The Remuneration Committee is responsible, amongst other things, for assisting the Board in determining its responsibilities in relation to remuneration, including making recommendations to the Board on the Company's policy on executive remuneration, including setting the parameters and governance framework of the Group's remuneration policy and determining the individual remuneration and benefits package for the Company's Executive Directors and the Group. It is also responsible for approving the rules and basis for participation in any performance related pay-schemes, share incentive schemes and obtaining reliable and up-to-date information about remuneration in other companies.  The Remuneration Committee shall meet at least once a year.

 

Statement of Policy on Directors' Remuneration

The Company's policy is to set remuneration to attract and retain the highest quality of directors and senior executives, and to:

 

▪    align their interests with shareholders';

▪    avoid incentivising excessive risk taking by executives;

▪    be proportionate to the contribution of the individuals concerned; and

▪    be sensitive to pay and employment conditions elsewhere in the group.

 

The Company is at an early stage of development. As a result, the use of traditional performance standards, such as corporate profitability, is not considered by the Remuneration Committee to be appropriate in the evaluation of corporate or Directors' performance. Discretionary bonuses may be paid to aid staff retention and reward performance.

 

The Company provides Executive Directors with base fees, which represent their minimum compensation for services rendered during the financial year. The base fees of Directors and senior executives depend on the scope of their experience, responsibilities and performance.

 

The Remuneration Committee has considered the risk implications of the Company's compensation policies and practices and has concluded that there is no appreciable risk associated with such policies and practices since such policies and practices do not have the potential of encouraging an executive officer or other applicable individual to take on any undue risk or to otherwise expose the Company to inappropriate or excessive risks. Furthermore, although the Company does not have in place any specific prohibitions, preventing executives from purchasing financial instruments, including prepaid variable forward contracts, equity swaps, collars or units of exchange funds that are designed to hedge or offset a decrease in market value of options or other equity securities of the Company granted in compensation or held directly or indirectly by the director, the Company is unaware of the purchase of any such financial instruments by any Director.

 

The Company does not anticipate making any significant changes to its compensation policies and practices during 2023.

 

Directors' Remuneration

The Directors, who held office on 31 December 2022 and who had beneficial interests in the ordinary shares of the Company, are summarised as follows:

 

Name of Director	Position
John McGoldrick	Chairman, Non-Executive Director
Scott Kaintz	Chief Executive Officer, Executive Director

 

Directors' Service Contracts

John McGoldrick was appointed by the Company with effect from Admission to act as Chairman and a Non-Executive Director of the Company under a letter of appointment, dated 4 October 2017. His appointment is terminable on three months' written notice on either side. He is entitled to a fee of £50,000 per annum.

 

Owen May was appointed as a Director on 27 September 2016. He has been appointed to act as a Non-Executive Director of the Company pursuant to a letter of appointment with the Company, dated 23 May 2017. His appointment is terminable on three months' written notice on either side. Owen is entitled to a fee of £25,000 per annum payable in cash or shares at the discretion of the Board. 

 

Scott Kaintz was appointed as a Director on 27 June 2018. He was appointed to act as an Executive Director and Chief Executive Officer as of 5 November 2018. His appointment continues until terminated by either party giving four months written notice. Scott is entitled to a fee of £120,000 per annum.

 

Summary Compensation Table (audited)

The following table sets forth the compensation awarded, paid to or earned by each Director during 2022:

 

2022	Directors' fees US$	Social security costs US$	Total cash-compensation  US$	Share-based Payments (options)   US$	Total compensation US$
John McGoldrick	62,473	-	62,473	-	62,473
Scott Kaintz	149,935	17,243	167,178	-	167,178
Owen May	31,236	-	31,236	-	31,236
Total Directors' compensation	243,644	17,243	260,887	-	260,887

 

 

John McGoldrick has, through agreement with the Company, agreed to defer payment of the majority of his Director's compensation from 2017 to 2022 until the completion of the RTO, which at 31 December 2022 totaled US$280,511 and has been recognized in other payables at the reporting date.

 

Owen May has, through agreement with the Company, agreed to defer payment of the majority of his Director's compensation from 2018 to 2022 until the completion of the RTO, which at 31 December 2022 totaled US$106,071 and has been recognized in other payables at the reporting date.

 

As at 31 December 2022 Scott Kaintz was owed US$144,780 in unpaid salary (31 December 2021: US$67,400).

 

Summary Compensation Table (audited)

 

2021	Directors' fees US$	Social security costs US$	Total cash-compensation  US$	Share-based Payments (options)   US$	Total compensation US$
John McGoldrick	68,876	-	68,876	-	68,876
Scott Kaintz	151,528	13,219	164,747	-	164,747
Owen May	34,438	-	34,438	-	34,438
Total Directors' compensation	254,842	13,219	268,061	-	268,061

Share-Based Awards (audited)

The Company has nil share options awarded to the Directors of the Company in accordance with its share option plan.  There were no awards of annual bonuses or incentive arrangements in the period. All remuneration was therefore fixed in nature and no illustrative table of the application of remuneration policy has been included in this report.

 

Directors' Interests in Shares (audited)

Directors' interests in the shares of the Company at the date of this report are disclosed below.

 

Director	Ordinary Shares Held	% Held
John McGoldrick	316,455	0.32
Scott Kaintz	949,367	1.14
Owen May	-	-

 

 

Other Matters Subject to Audit

The Company does not currently have any pension plans for any of the Directors and does not pay pension amounts in relation to their remuneration.

 

Other Matters

The Company does not currently have any annual or long-term incentive schemes in place for any of the Directors and as such there are no disclosures in this respect.

 

The performance of the Remuneration Committee is yet to be assessed given the short time frame that it has been operational.

 

No performance graph has been included here as the Company is in the early stages of its business development.

Signed

 

 

John McGoldrick

Chairman of the Remuneration Committee

27 April 2023

Statement of Directors' Responsibilities in Respect of the Strategic Report, the Directors' Report and the Financial Statements

 

The Directors are responsible for preparing the Strategic Report, the Directors' Report and the 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 they have elected to prepare the Financial Statements in accordance with UK adopted International Accounting Standards and applicable law. 

 

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 of the profit or loss of the Group for that period. In preparing these Financial Statements, the Directors are required to: 

 

§ select suitable accounting policies and then apply them consistently; 

§ make judgments and estimates that are reasonable and prudent; 

§ state whether they have been prepared in accordance with UK adopted International Accounting Standards; and 

§ prepare the Financial Statements on the going concern basis, unless it is inappropriate to presume that the Company will continue in business.

 

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the Financial Statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities. 

 

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the UK governing the preparation and dissemination of Financial Statements may differ from legislation in other jurisdictions.

 

We confirm that to the best of our knowledge:

 

§ the Financial Statements, prepared in accordance with UK adopted International Accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group;

 

§ the Directors report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that they face.

 

By Order of the Board

John McGoldrick

Director

27 April 2023

Consolidated Statement of Comprehensive Income

for the year ended 31 December 2022

 

	Notes		2022	2021
			US$	US$
Administrative expenses	6		(509,358)	(569,865)
Loss from operations			(509,358)	(569,865)
Finance expense, net	7		(191,735)	(165,598)
Provision for reclamation obligation	12		-	(125,000)
Loss before taxation	4		(701,093)	(860,463)
Income tax expense	8		-	-
Loss for the year attributable to
equity holders of the parent company			(701,093)	(860,463)
Other comprehensive income
Gain/(loss) on translation of parent net assets and results from functional currency into presentation currency			233,300	39,119
Total comprehensive loss for the year			(467,793)	(821,344)
Loss per share - Basic and diluted, US$	9		(0.007)	(0.009)

 

 

The notes form part of these Financial Statements

 

 

 

Consolidated Statement of Financial Position

as at 31 December 2022

	Notes		2022	2021
			US$	US$
Assets
Current assets
Prepayments and other receivables	13		29,828	44,058
Cash and cash equivalents	14		20,421	138,142
Total current assets			50,249	182,200
Total assets			50,249	182,200
Current liabilities
Trade and other payables	15		912,521	774,591
Borrowings	16		2,133,832	1,935,919
Total current liabilities			3,046,353	2,710,510
Total liabilities			3,046,353	2,710,510
Share capital	17		1,105,547	1,105,547
Share premium			3,619,332	3,619,332
Share-based payments reserve			474,792	474,792
Warrants reserve			375,198	375,198
Merger reserve			31,212,041	31,212,041
Foreign currency translation reserve			86,746	(146,554)
Accumulated losses			(39,869,759)	(39,168,666)
Total capital and reserves			(2,996,104)	(2,528,310)
Total equity and liabilities			50,249	182,200

 

 

The Financial Statements were approved and authorised for issue by the Board of Directors on 27 April 2023 and were signed on its behalf by:

 

 

John McGoldrick

Director

 

The notes form part of these Financial Statements.

 

 

 

Consolidated Statement of Changes in Equity

 

	Share capital	Share premium	Other reserves	Accumulated losses	Total
	US$	US$	US$	US$	US$
Equity at 1 January 2021	1,105,547	3,619,332	31,876,358	(38,308,203)	(1,706,966)
Loss for the year	-	-	-	(860,463)	(860,463)
Other comprehensive income for the year	-	-	39,119	-	39,119
Total comprehensive loss for the year	-	-	39,119	(860,463)	(821,344)
Equity at 31 December 2021	1,105,547	3,619,332	31,915,477	(39,168,666)	(2,528,310)
Loss for the year	-	-	-	(701,093)	(701,093)
Other comprehensive income for the year	-	-	233,300	-	233,300
Total comprehensive loss for the year	-	-	233,300	(701,093)	(467,793)
Equity at 31 December 2022	1,105,547	3,619,332	32,148,777	(39,869,759)	(2,996,104)

 

 

 

Other Reserves

 

	Merger reserve	Share-based payments reserve	Warrants reserve	Foreign currency translation reserve	Total Other reserves
	US$	US$	US$	US$	US$
Other reserves at 1 January 2021	31,212,041	474,792	375,198	(185,673)	31,876,358
Other comprehensive loss for the year	-	-	-	39,119	39,119
Total comprehensive loss for the year	-	-	-	39,119	39,119
Issue of warrants	-	-
Other reserves at 31 December 2021	31,212,041	474,792	375,198	(146,554)	31,915,477
Other comprehensive loss for the year	-	-	-	233,300	233,300
Total comprehensive loss for the year	-	-	-	233,300	233,300
Other reserves at 31 December 2022	31,212,041	474,792	375,198	86,746	32,148,777

 

 

 

Consolidated Statement of Cash Flows

	Notes	2022	2021
		US$	US$
Cash flow from operating activities
Loss before taxation		(701,093)	(860,463)
Adjustments for:
Finance expenses	7	191,970	159,087
Provision for reclamation obligations	12	-	125,000
Unrealised foreign exchange movements	7	(36,606)	6,511
Operating cashflows before working capital changes		(545,729)	(569,865)
Changes in working capital:
Increase in payables		235,141	46,220
(Increase)/decrease in receivables		10,587	(2,359)
Net cash used in operating activities		(300,002)	(526,004)
Financing activities
Issue of ordinary shares, net of share issue costs	17	-	-
Proceeds from new borrowings	16	184,693	619,886
Net cash flow from financing activities		184,693	619,886
Net increase /(decrease) in cash and cash equivalents in the period		(115,309)	93,882
Cash and cash equivalents at the beginning of the period		138,142	47,188
Restricted cash held on deposits	12	125,000	125,000
Total cash and cash equivalents at the beginning of the period, including restricted cash		263,142	172,188
Effect of the translation of cash balances into presentation currency		(2,412)	(2,927)
Cash and cash equivalents at the end of the period		20,421	138,142
Restricted cash held on deposits	12	125,000	125,000
Total cash and cash equivalents at the end of the period, including restricted cash		145,421	263,142

 

 

 

Notes to the Consolidated Financial Information

 

1.       General Information

 

The Company is incorporated and registered in England and Wales as a public limited company. The Company's registered number is 09976843 and its registered office is at Salisbury House, London Wall, London EC2M 5PS. On 4 October 2017, the Company's shares were admitted to the Official List (by way of Standard Listing) and to trading on the London Stock Exchange's Main Market.

 

With effect from admission, the Company has been subject to the Listing Rules and the Disclosure Guidance and Transparency Rules (and the resulting jurisdiction of the UK Listing Authority) to the extent such rules apply to companies with a Standard Listing pursuant to Chapter 14 of the Listing Rules. 

 

The principal activity of the Company is that of an investment company, currently focused on acquiring a new business with adequate scale and growth potential to be listed on the Standard Listing of the London Stock Exchange.

 

The individual financial statements of the Company ("Company financial statements") have been prepared in accordance with the Companies Act 2006 which permits a Company that publishes its Company and Group financial statements together, to take advantage of the exemption in Section 408 of the Companies Act 2006, from presenting to its members its Company Income Statement and related notes that form part of the approved Company financial statements.

2.    Accounting Policies

 

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements.

 

The Group Financial statements are presented in US Dollars as historically the entirety of the Company's operations have been located in the United States.

Basis of Preparation

The Financial Statements have been prepared in accordance with UK adopted International Accounting Standards ("IFRS") and the requirements of the Companies Act applicable to companies reporting under IFRS.

 

The Financial Statements are prepared on a going concern basis and under the historical cost convention.

a.   New standards, interpretations and amendments effective from 1 January 2022

There were no new standards or interpretations effective for the first time for periods beginning on or after 1 January 2022 that had a significant effect on the Curzon Group's Financial Statements.

 

b.   New standards, interpretations and amendments not yet effective

At the date of authorisation of these Financial Statements, a number of amendments to existing standards and interpretations, which have not been applied in these Financial Statements, were in issue but not yet effective for the year presented. The Directors do not expect that the adoption of these standards will have a material impact on the financial information of the Group in future periods.

 

Basis of Consolidation

The Company was incorporated on 29 of January 2016; On 4 of October 2017, it acquired Coos Bay Energy LLC. At the time of its acquisition by the Company, Coos Bay Energy LLC consisted of Coos Bay Energy LLC and its wholly owned US Group. It is the Directors' opinion that the Company at the date of acquisition of Coos Bay Energy LLC did not meet the definition of a business as defined by IFRS 3 and therefore the acquisition was outside on the IFRS 3 scope.

 

Where a party to an acquisition fails to satisfy the definition of a business, as defined by IFRS 3, management have decided to adopt a "merger accounting" method of consolidation as the most relevant method to be used.

 

Going Concern

The Group Financial Statements have been prepared on a going concern basis, which assumes that the Group will continue to be able to meet its liabilities as they fall due for the foreseeable future.  The operations of the Company are currently being financed by funds lent to the Company by Technology Metals Market Ltd. ("TM2").  On 19 April 2023, the Company announced that it had signed a letter of intent with TM2 to potentially acquire a 100% interest in a mining business of their choosing, with current plans focused on an African based lithium company.  In exchange for a period of exclusivity in relation to this potential reverse takeover transaction, TM2 has agreed to loan the Company a working capital facility of £750,000 in the form of a one-year loan note, carrying an annual interest rate of 10%.  At this stage, there can be no assurance that this transaction will be completed.

The Company further continues to rely on a US$1,000,000 credit facility provided from a company related to the largest shareholder that provides the Group up to US$500,000 minimum funding and an additional US$500,000 at the discretion of the lender. 

The Group believes that, based on the current low overhead expenditure, the proceeds from the loans being provided by TM2 and the undrawn amount of US$800,000 remaining on the US$1,000,000 credit facility will be sufficient for the Group to operate for a period of 12 months from the date of the approval of these Financial Statements. 

The Group currently has no source of revenue and is reliant on loans to continue to meet its overhead expenditures. The Group held cash balances of US$20,421 as at 31 December 2022 and has subsequently increased its borrowing capacity and current liquidity through the extension and expansion of the funding agreement with TM2.

 

The directors remain in discussions with the various creditors of the Company regarding the forbearance of amounts payable until the conclusion of the proposed RTO, with all creditors informally agreeing to defer payment of amounts due until the transaction has completed.

The Directors note that the Group will need additional funding to continue operations for the foreseeable future and, together with the above matters, this means there is a material uncertainty as to the Group's ability to continue as a going concern. The Directors are confident however that the Group will be able to raise, as required, sufficient cash or reduce its commitments to enable it to continue its operations, and to continue to meet, as and when they fall due, its liabilities for at least the next 12 months from the date of approval of the Group Financial Statements. The Group Financial Statements have, therefore, been prepared on the going concern basis.

 

Functional Currency

Functional and Presentation Currency

The individual financial information of each Group entity is measured in the currency of the primary economic environment in which the entity operates (its functional currency). The Company's functional currency is UK Pound Sterling (£). All other companies, belonging to the Curzon Group, have US Dollar as their functional currency. The Group Financial Statements are presented in US Dollars ($).

 

Transactions and Balances

Transactions in foreign currencies are converted into the respective functional currencies on initial recognition, using the exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities at the end of the reporting period are translated at the rates ruling as of that date.

 

Non-monetary assets and liabilities are translated using exchange rates that existed when the values were determined. All exchange differences are recognised in profit or loss.

 

On consolidation, the assets and liabilities of the Group's Pound Sterling operations are translated into the Group's presentational currency (US Dollar) at exchange rates prevailing at the reporting date. Income and expense items are translated at the average exchange rates for the period unless exchange rates have fluctuated significantly during the year, in which case the exchange rate at the date of the transaction is used. All exchange differences arising, if any, are recognised as other comprehensive income and are transferred to the Group's foreign currency translation reserve.

 

Rates applied in these Financial Statements:

		2022	2021
Closing USD/GBP rate at 31 December		1.2065	1.3489
Average USD/GBP rate for the year		1.2495	1.3775

 

 

Reclamation Costs

Where a material liability for the removal of production facilities and site restoration at the end of the field life exists, a provision for decommissioning is made. The amount recognised is the present value of estimated future expenditure determined in accordance with local conditions and requirements. An asset of an amount equivalent to the provision is also created and depreciated on a unit of production basis. Changes in estimates are recognised prospectively, with corresponding adjustments to the provision and the associated asset. At 31 December 2022 and 2021, a provision has been recognised and set off against restricted cash as permitted by IAS 32.  

 

Impairment

Impairment of Financial Assets

All financial assets are assessed at the end of each reporting period as to whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset. For an equity instrument, a significant or prolonged decline in the fair value below its cost is considered to be objective evidence of impairment.

 

An impairment loss in respect of financial assets carried at amortised cost is recognised in profit or loss and is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the financial asset's original effective interest rate.

 

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the financial asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

 

When there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in profit or loss immediately, unless the asset is carried at its revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

 

Financial Instruments

Financial instruments are recognised in the statements of financial position, when the Group has become a party to the contractual provisions of the instruments.

 

Financial Assets

The Group classifies its financial assets as financial assets carried at amortised cost, cash and cash equivalents and restricted cash. Financial assets are initially measured at fair value and subsequently carried at amortised cost.

 

Financial assets are derecognized, when the contractual rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership. On de-recognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss.

 

Amortised Cost

These assets incorporate such types of financial assets, where the objective is to hold these assets in order to collect contractual cash flows and the contractual cash flows are solely payments of principal and interest. They are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue and are subsequently carried at amortised cost, using the effective interest rate method, less provision for impairment. Impairment provisions receivables are recognised based on the simplified approach within IFRS 9, using a provision matrix in the determination of the lifetime expected credit losses. During this process, the probability of the non-payment of the receivables is assessed. This probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected credit loss for the receivables. On confirmation that the receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.

 

Impairment provisions for receivables from related parties and loans to related parties are recognised based on a forward-looking expected credit loss model. The methodology, used to determine the amount of the provision, is based on whether there has been a significant increase in credit risk since initial recognition of the financial asset. For those where the credit risk has not increased significantly since initial recognition of the financial asset, twelve month expected credit losses, along with gross interest income, are recognised. For those for which credit risk has increased significantly but not determined to be credit impaired, lifetime expected credit losses along with the gross interest income are recognised. For those that are determined to be credit impaired, lifetime expected credit losses along with interest income on a net basis are recognised.

 

The Group's financial assets, measured at amortised cost, comprise other receivables and cash and cash equivalents in the Consolidated Statement of Financial Position.

 

Cash and Cash Equivalents

Cash and cash equivalents comprise cash in hand, bank balances, bank overdrafts, deposits with financial institutions and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

 

Restricted Cash

Restricted cash are funds held as a collateral related to stand-by letters of credit related to the Group's oil and gas properties. Such deposits are classified as non-current assets and are not classified as part of cash and cash equivalents as these deposits are not accessible by the Company for unrestricted use and are not accessible for more than 3 months. More details on the Group's restricted cash are given in the note 12.

 

Financial Liabilities

Financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial instrument.

 

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends, gains and losses, relating to a financial instrument classified as a liability, are reported as an expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity.

 

All financial liabilities are recognised initially at fair value less financial costs and subsequently measured at amortised cost, using the effective interest method other than those categorised as fair value through the Statement of Comprehensive Income.

 

A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires. When an existing financial liability is replaced by another from the same party on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a de-recognition of the original liability and the recognition of a new liability and the difference in the respective carrying amounts is recognised in the Income Statement.

 

Financial liabilities include the following items:

 

§ Bank borrowings are initially recognised at fair value net of any transaction costs directly attributable to the issue of the instrument. Such interest-bearing liabilities are subsequently measured at amortised cost, using the effective interest rate method, which ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the consolidated statement of financial position. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption as well as any interest or coupon, payable while the liability is outstanding;

 

§ Liability components of convertible loan notes are measured as described further below;

 

§ Trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost, using the effective interest method.

 

Convertible Debt

The proceeds, received on issue of the Group's convertible debt, are allocated into their liability and equity components. The amount, initially attributed to the debt component, equals the discounted cash flows, using a market rate of interest that would be payable on a similar debt instrument that does not include an option to convert. Subsequently, the debt component is accounted for as a financial liability, measured at amortised cost until extinguished on conversion or maturity of the bond. The remainder of the proceeds is allocated to the conversion option and is recognised as a separate equity component within shareholders' equity, net of income tax effects.

 

Equity instruments

^{Ordinary Shares}

Ordinary shares are classified as equity. Incremental costs, directly attributable to the issue of new shares, are shown in Share Premium account as a deduction, net of tax, from proceeds. Dividends on ordinary shares are recognised as liabilities, when approved for distribution is allocated to the conversion option and is recognised as a separate equity component within shareholders' equity, net of income tax effects.

 

^Warrants

Warrants classified as equity are recorded at fair value as of the date of issuance on the Company's Consolidated Statement of Financial Position and no further adjustments to their valuation are made. Management estimates the fair value of these liabilities, using option pricing models and assumptions that are based on the individual characteristics of the warrants or instruments on the valuation date as well as assumptions for future financings, expected volatility, expected life, yield and risk-free interest rate.

 

Taxation

Income tax for each reporting period comprises current and deferred tax.

 

Current tax is the expected amount of income taxes, payable in respect of the taxable profit for the year and is measured, using the tax rates that have been enacted or substantively enacted at the end of the reporting period.

 

Deferred tax is provided in full, using the liability method, on temporary differences, arising between the tax bases of assets and liabilities and their carrying amounts in the Group Financial Statements.

 

Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. The carrying amounts of deferred tax assets are reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient future taxable profits will be available to allow all or part of the deferred tax assets to be utilised.

 

Deferred tax liabilities are recognised for all taxable temporary differences other than those that arise from goodwill or excess of the Group's interest in the net fair value of the acquired Company's identifiable assets, liabilities and contingent liabilities over the business combination costs or from the initial recognition of an asset or liability in a transaction, which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.

 

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period, when the asset is realised or the liability is settled, based on the tax rates that have been enacted or substantively enacted at the end of the reporting period.

 

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 the deferred income taxes relate to the same taxation authority.

 

Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow deferred tax assets to be recovered.

 

Deferred tax, relating to items recognised outside profit or loss, is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transactions either in other comprehensive income or directly in equity.

 

Deferred tax assets and liabilities are recognized, where the carrying amount of an asset or liability in the Consolidated Statement of Financial Position differs from its tax base, except for differences, arising on the initial recognition of goodwill, the initial recognition of an asset or liability in a transaction, which is not a business combination and at the time of the transaction affects neither accounting or taxable profit, and investments in subsidiaries and joint arrangements, where the Group is able to control the timing of the reversal of the difference and it is probable that the difference will not reverse in the foreseeable future.

 

Employee Benefits

Short-Term Benefits

Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits are accrued in the period in which the associated services are rendered by employees of the Group.

 

Post-Employment Benefits

The Group does not currently make provision for post-employment benefits by way of pension plans or similar arrangements.

 

Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognized, when the Group has a present or constructive obligation as a result of past events, when it is probable that an outflow of resources, embodying economic benefits, will be required to settle the obligation and when a reliable estimate of the amount can be made. Provisions are reviewed at the end of each financial reporting period and adjusted to reflect the current best estimate. Where the effect of the time value of money is material, the provision is the present value of the estimated expenditure required to settle the obligation.

 

A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by the occurrence of one or more uncertain future events not wholly within the control of the Group. It can also be a present obligation arising from past events that is not recognised because it is not probable that an outflow of economic resources will be required or the amount of obligation cannot be measured reliably.

 

A contingent liability is not recognised but is disclosed in the notes to the Financial Statements. When a change in the probability of an outflow occurs so that the outflow is probable, it will then be recognised as a provision.

 

A contingent asset is a probable asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain events not wholly within the control of the Group. The Group does not recognise contingent assets but discloses its existence, where inflows of economic benefits are probable, but not virtually certain.

 

Share-Based Payment Arrangements

Equity-settled share-based payments to employees and others, providing similar services, are measured at the fair value of the equity instruments at the grant date. Details regarding the determination of the fair value of equity-settled share-based transactions are set out in note 18 to the Group Financial Statements.

 

The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Directors' estimate of equity instruments that will eventually vest, with a corresponding increase in equity. Where the conditions are non-vesting, the expense and equity reserve, arising from share-based payment transactions is recognised in full immediately on grant.

 

At the end of each reporting period, the Directors revise their estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to other reserves.

 

Operating Segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses. The results of an operating segment are reviewed regularly by the chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

 

Summary of Critical Accounting Estimates and Judgments

The preparation of the Group Financial Statements, in conformity with IFRS, requires the use of certain critical accounting estimates. It also requires the Directors to exercise their judgment in the process of applying the accounting policies, which are detailed above. These judgments are continually evaluated by the Directors and management and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

 

The key estimates and underlying assumptions, concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

 

The prime areas, involving a higher degree of judgment or complexity, where assumptions and estimates are significant to the Financial Statements, are as follows:

 

Going Concern

The Group Financial Statements have been prepared on a going concern basis as the Directors have assessed the Group's ability to continue in operational existence for the foreseeable future. The operations are currently being financed by third party loans. See Going Concern section for more details.

 

The Group Financial Statements do not include the adjustments that would result if the Group were not to continue as a going concern.

 

3.    Segmental Analysis

 

IFRS 8 "Operating Segments" requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker (which takes the form of the Directors) as defined in IFRS 8 "Operating Segments", in order to allocate resources to the segment and to assess its performance.

The principal activity of the Company is that of an investment company, currently focused on acquiring a new business with adequate scale and growth potential to operate successfully on the Standard List of the London Stock Exchange.  At 31 December 2022 and 31 December 2021, the Directors consider there is one reportable operating segment. Accordingly, an analysis of segment profit or loss, segment assets, segment liabilities and other material items has not been presented.

 

The Group operates in one geographic area, being the USA. All intangible assets and operating assets and liabilities are located in the USA, excluding cash and cash equivalents, which are currently kept and managed from the UK head office. The management does not consider the UK to be a separate operating segment. The Group has not yet commenced production and therefore has no revenue.

 

 

4.    Loss for the Year Before Taxation

 

Loss before tax is stated after charging / (crediting):		2022	2021
		US$	US$
Auditor's remuneration:
-                fees payable to the Company's auditor for the audit of the consolidated and Company financial statements		46,230	34,438
Foreign currency translation (gain)		(235)	6,511

 

 

5.    Directors and Staff

 

There were no staff employed by the Group during the years ended 31 December 2022 and 31 December 2021, except for one Director, Mr Scott Kaintz, who was employed by the Company from 27 June 2018.

Remuneration of Key Management Personnel

The following table sets forth the compensation awarded, paid to or earned by each Director during 2020:

 

2022	Directors' fees US$	Social security costs US$	Total cash-compensation  US$	Share-based Payments (options)   US$	Total compensation US$
John McGoldrick	62,473	-	62,473	-	62,473
Scott Kaintz	149,935	17,243	167,178	-	167,178
Owen May	31,236	-	31,236	-	31,236
Total Directors' compensation	243,644	17,243	260,887	-	260,887

 

 

 

2021	Directors' fees US$	Social security costs US$	Total cash-compensation  US$	Share-based Payments (options)   US$	Total compensation US$
John McGoldrick	68,876	-	68,876	-	68,876
Scott Kaintz	151,528	13,219	164,747	-	164,747
Owen May	34,438	-	34,438	-	34,438
Total Directors' compensation	254,842	13,219	268,061	-	268,061

 

 

John McGoldrick has, through agreement with the Company, agreed to defer payment of the majority of his Director's compensation from 2017 to 2022 until the completion of the RTO, which at 31 December 2022 totaled US$280,511 and has been recognized in other payables at the reporting date.

Owen May has, through agreement with the Company, agreed to defer payment of the majority of his Director's compensation from 2018 to 2022 until the completion of the RTO, which at 31 December 2022 totaled US$106,071 and has been recognized in other payables at the reporting date.

 

As at 31 December 2022, Scott Kaintz was owed US$144,780 in unpaid salary (31 December 2021: US$67,400).

 

 

6.    Administrative Expenses

			2022			2021
			US$			US$
Staff costs
Directors' salaries			243,644			254,842
Employers NI			17,243			13,219
Consultants			26,239			22,729
Professional services
Accounting, audit & taxation			89,220			90,527
Legal			4,702			-
Marketing			14,816			14,447
Other			-			440
Regulatory compliance			2,349			63,298
Standard Listing Regulatory Costs			-			48,351
Travel			12,310			-
Business development			-			-
Office and Admin
General			32,865			11,716
IT costs			2,293			-
Temporary storage and office rent				27,406	7,199
Insurance			36,271			43,097
Total administrative costs			509,358			569,865

 

 

7.    Finance Expense (net)

		2022	2021
		US$	US$
Foreign exchange loss/(gain)		(235)	6,511
Interest expense on promissory notes and other short-term loans		191,970	159,087
Total finance expense		191,735	165,598

 

 

8.    Taxation

 

The Group has made no provision for taxation as it has not yet generated any taxable income. A reconciliation of income tax expense, applicable to the loss before taxation at the statutory tax rate to the income tax expense at the effective tax rate of the Group, is as follows:

		2022	2021
		US$	US$
Loss before tax		(701,093)	(860,463)
UK corporation tax credit at 19.00% (2021: 19.00%)		(133,208)	(163,488)
Effect of non-deductible expense		-	-
Differences in overseas tax rates		(961)	(2,916)
Effect of tax benefit of losses carried forward		134,169	166,404
Current tax (credit)		-	-

 

 

As at 31 December 2022, the tax effects of temporary timing differences, giving rise to deferred tax assets, was US$1,717,984 (2021: US$1,583,815 ).

 

A deferred tax asset in respect of these losses and temporary differences has not been established as the Group has not yet generated any revenues and the Directors have, therefore, assessed the likelihood of future profits being available to offset such deferred tax assets to be uncertain.

 

 

9.    Loss Per Share

 

The basic loss per share is derived by dividing the loss for the year attributable to ordinary shareholders of the Company by the weighted average number of shares in issue.

 

Diluted loss per share is derived by dividing the loss for the year attributable to ordinary shareholders of the Company by the weighted average number of shares in issue plus the weighted average number of ordinary shares that would be issued on conversion of all dilutive potential ordinary shares into ordinary shares.

 

The following reflects the loss and share data used in the basic and diluted loss per share computations:

 

		2022	2021
(Loss) after tax attributable to the shareholders of the parent (US$)		(701,093)	(860,463)
Weighted average number of ordinary shares of £0.01 in issue used calculation of in basic and diluted EPS		99,639,565	99,639,565
(Loss) per share - basic and fully diluted (US$)		(0.007)	(0.009)

 

 

At 31 December 2022 and 31 December 2021, the effect of all potential ordinary shares and contingently issuable shares, that are presented in the table below, was anti-dilutive as it would lead to a further reduction of loss per share, therefore, these instruments were not included in the diluted loss per share calculation.

		2022	2021
		Number	Number
Share options granted to employees - fully vested at the end of the respective period		-	280,854
Warrants given to shareholders as a part of placing equity instruments - fully vested at the end of the respective period		18,606,594	18,606,594
Total instruments fully vested		18,606,594	18,887,448
Total number of instruments and potentially issuable instruments (vested and not vested) not included into the fully diluted EPS calculation		18,606,594	18,887,448

 

 

10.   Intangible Assets

		2022	2021
Exploration and evaluation expenditure		US$	US$
Cost:
At the beginning of the year		24,716,316	24,716,316
Additions - exploration costs capitalised		-	-
At the end of the year		24,716,316	24,716,316
Impairment provision:
At the beginning of the year		(24,716,316)	(24,716,316)
Provision for the year		-	-
At end of the year		(24,716,316)	(24,716,316)
Net Book Value		-	-

 

 

Environmental Matters

 

The Group has established procedures for a continuing evaluation of its operations to identify potential environmental exposures and to assure compliance with regulatory policies and procedures. The Directors monitor these laws and regulations and periodically assesses the propriety of its operational and accounting policies related to environmental issues. The nature of the Group's business requires routine day-to-day compliance with environmental laws and regulations. The Group has incurred no material environmental investigation, compliance or remediation costs for each of the years ended 31 December 2022 and 31 December 2021. The Directors are unable to predict whether the Group's future operations will be materially affected by these laws and regulations. It is believed that legislation and regulations, relating to environmental protection will not materially affect the results of operations of the Group.

 

 

11.   Subsidiary Undertakings

 

The Group has the following subsidiary undertakings:

 

Name	Country of incorporation	Issued capital	Proportion held by Group	Activity
Coos Bay Energy LLC	USA	Membership interests	100%	Holding company
Westport Energy Acquisitions Inc.	USA	Shares	100%	Holding company
Westport Energy LLC	USA	Membership interests	100%	Oil and gas exploration

 

 

Coos Bay Energy LLC is a limited liability corporation incorporated in Nevada, USA whose registered office is 1370 Crowley Avenue SE, Portland, Oregon 97302, USA.

 

Westport Energy Acquisition Inc. was incorporated in May 2010 in Delaware, USA. Its registered office is located at 100 Overlook Center, 2nd Floor, Princeton Junction, NJ 08540, USA.

 

Westport Energy LLC was incorporated in December 2008 in Delaware, USA. Its registered office is located at 100 Overlook Center, 2nd Floor, Princeton Junction, NJ 08540, USA.

 

 

12.   Restricted Cash

 

Restricted cash of US$125,000 comprises funds held as collateral to support stand-by letters of credit related to the Group's oil and gas properties. The letters of credit secure the reclamation obligations under the leases and state law. The cash can be taken by Umpqua Bank in the event the letters of credit are drawn on by the State of Oregon, Department of Geology & Mineral Industries (DOGAMI). The cash is held in the form of a Certificate of Deposit.  In 2022 the Group recognised a provision for reclamation obligations equivalent to the entire restricted cash balance in recognition of the fact that recovery of these funds may only be possible following completion of reclamation work on these oil and gas properties.  This provision has been offset against the restricted cash balance as permitted by IAS 32.

 

 

13.   Prepayments and Other Receivables

		2022	2021
		US$	US$
VAT recoverable		1,744	8,404
Other debtors		28,084	35,654
Total prepayments and other receivables		29,828	44,058

 

 

The fair value of receivables and deposits approximates their carrying amount as the impact of discounting is not significant. The receivables are not impaired and are not past due.

 

 

14.   Cash and Cash Equivalents

 

For the purpose of the Statements of Financial Position, cash and cash equivalents comprise the following:

		2022	2021
		US$	US$
Cash in hand and at bank		20,421	138,142

 

 

15.   Trade and Other Payables

		2022	2021
		US$	US$
Trade and other payables		283,587	734,146
Accruals		628,934	33,724
Total financial liabilities, excluding loans and borrowings, classified as financial liabilities measured at amortised cost		912,521	767,870
Other payables - tax and social security payments		-	6,721
Total trade and other payables		912,521	774,591

 

 

16.   Borrowings

 

Details of the notes and borrowings originated by the Group are disclosed in the table below:

 

	Origination date	Contractual settlement date	Original note value in original currency	Annual interest rate	Security	Status at 31 December 2022
C4 Energy Ltd	22 Sept 2017	Conversion/Repayment at RTO date	$200,000	15%	unsecured	Outstanding
Bruce Edwards	1 Sep 2017	Conversion at RTO date	$100,000	15%	unsecured	Outstanding
HNW Investor Group	1 July 2019	Conversion/Repayment at RTO date	£263,265	13%	100% interest in Coos Bay LLC	Outstanding
Sun Seven Stars Investment Group ("SSSIG")	13 Mar 2020	Conversion/Repayment at RTO date	£260,000	10%	unsecured	Outstanding
Poseidon Plastics Limited ("PPL")	2 February 2021	Conversion/Repayment at RTO date	£590,000	10%	unsecured	Outstanding

 

 

No interim payments are required under the promissory notes, as the payment terms require the original principal amount of each note and all accrued interest thereon, to be paid in single lump payments at the time of the completion of a reverse takeover.

		2022	2021
		US$	US$
At 1 January		1,935,919	1,183,018
Received during the year		184,693	619,886
Interest accrued during the year		190,175	158,564
Exchange rate differences		(176,995)	(25,549)
Short-term loans and borrowings 31 December		2,133,832	1,935,919

 

 

Reconciliation of Liabilities Arising from Financing Activities

 

	31 Dec 2021	Cash flows Proceeds from new borrowings	Non-cash flow Forex movement	Non-cash flow Interest accrued	31 Dec 2022
HNW Investor Group	435,950	-	(47,504)	42,762	431,208
C4 Energy Ltd.	292,378	-	-	30,000	322,378
Bruce Edwards	162,350	-	-	15,000	177,349
Sun Seven Stars Investment Group ("SSSIG")	408,251	-	(44,226)	32,486	396,510
Poseidon Plastics Ltd ("PPL")	636,991	184,693	(85,225)	69,927	806,387
Total liabilities from financing activities	1,935,920	184,693	(176,955)	190,175	2,133,832

 

 

Reconciliation of Liabilities Arising from Financing Activities

 

	31 Dec 2020	Cash flows Proceeds from new borrowings	Non-cash flow Forex movement	Non-cash flow Interest accrued	31 Dec 2021
HNW Investor Group	395,060	-	(6,225)	47,145	435,950
C4 Energy Ltd.	262,378	-	-	30,000	292,378
Bruce Edwards	147,350	-	-	15,000	162,350
Sun Seven Stars Investment Group ("SSSIG")	378,230	-	(5,795)	35,816	408,251
Poseidon Plastics Ltd ("PPL")	-	619,886	(13,499)	30,604	636,991
Total liabilities from financing activities	1,183,018	619,886	(25,519)	158,565	1,935,920

 

 

17.   Share Capital

 

Authorised Share Capital

As permitted by the Companies Act 2006, the Company does not have an authorised share capital. The Company has one class of ordinary shares, which carry no right to fixed income. The ordinary shares carry the right to one vote per share at General Meetings of the Company and the rights to share in any distribution of profits or returns of capital and to share in any residual assets available for distribution in the event of a winding up.

 

Issued Equity Share Capital

 

	Ordinary shares, number	Deferred shares, number	Share capital, US$
At 1 January 2021	99,639,565	83,032,971	1,105,547
At 31 December 2021	99,639,565	83,032,971	1,105,547
At 31 December 2022	99,639,565	83,032,971	1,105,547

 

 

	Number Ordinary shares of £0.0001	Number Deferred shares of £0.0099	Share Capital, US$	Number Ordinary shares of £0.01 before subdivision	Share Capital, US$
Issued and fully paid
Existing Ordinary Shares of £0.01 each immediately before subdivision	-	-	-	83,032,972	1,103,457
After subdivision*:
New Ordinary shares of £0.0001 each	83,032,972	-	11,035	-	-
Deferred Shares of £0.0099 each	-	83,032,971	1,092,422	-	-
Post reorganization issue of shares	16,606,594	-	2,090	-	-
Total Share Capital	99,639,565	83,032,971	1,105,547	-	-

 

 

*On 6 May 2020, the Company's shareholders approved the subdivision and re-designation of the 83,032,971 Existing Ordinary Shares ("Existing Ordinary Shares") of £0.01 each in the capital of the Company into (i) 83,032,971 New Ordinary Shares ("New Ordinary Shares") of £0.0001 each and (ii) 83,032,971 Deferred Shares ("Deferred Shares") of £0.0099 each in the capital of the Company, and to amend the Company's Articles of Association accordingly.

 

Each New Ordinary Share carries the same rights in all respects under the amended Articles of Association as each Existing Ordinary Share did under the existing Articles of Association, including the rights in respect of voting and the entitlement to receive dividends. Each Deferred Share carries no rights and is deemed effectively valueless.

 

 

18.   Share Based Payments

 

Employee Share Options

At 31 December 2022, the Company had no outstanding options to subscribe for ordinary shares.

 

	2022		2021
	Number of options	Weighted average exercise price £	Number of options	Weighted average exercise price £
Outstanding at the beginning of the period	280,854	0.10	280,854	0.10
Expired in the period	(280,854)	0.10	-	-
Outstanding at the end of the period	-	-	280,854	0.10
Vested and exercisable at the end of the period	-	-	280,854	0.10

 

 

During the financial year, no options (2021: none) were granted. The weighted average fair value of each option granted during the year was £nil (2021: nil).

 

The exercise price of options outstanding on 31 December 2022 was £nil (31 December 2021: £0.1). Their weighted average remaining contractual life was nil years (2021: 0.75 years).

 

No options were exercised during the reporting year (2021: nil).

Warrants

On 31 December 2022, there were no warrants in issue.

 

	2022 Number of warrants	2021 Number of warrants
Outstanding at the beginning of the period	18,606,594	20,612,925
Granted during the period	-	-
Lapsed during the period	(18,606,594)	(2,006,331)
Exercised during the period	-	-
Outstanding at the end of the period	-	18,606,594
Vested and exercisable at the end of the period	-	18,606,594

The exercise price of warrants, outstanding on 31 December 2022 was £nil (2021: ranged between £0.011 and £0.015). Their weighted average remaining contractual life was nil years (2021: 0.45 years).

The weighted average share price (at the date of exercise) of warrants exercised during the year was nil (2021: nil) as no warrants were exercised.

 

Calculation of volatility involves significant judgement by the Directors due to the absence of the historical trading data for the Company at the date of the grant. Volatility number above was estimated based on the range of 5-year month end volatilities of 10 similar sized listed companies operating in the Oil and Gas sector.

19.   Reserves

 

Share Premium

The share premium account represents the excess of consideration received for shares issued above their nominal value net of transaction costs.

 

Foreign Currency Translation Reserve

The translation reserve represents the exchange gains and losses that have arisen from the retranslation of operations with a functional currency, which differs to the presentation currency.

 

Retained Earnings

Retained earnings represent the cumulative profit and loss net of distributions to owners.

 

Warrants Reserve

The warrants reserve represents the cumulative fair value of the warrants, granted to the investors together with placement shares.

 

Share-Based Payment Reserve

The share-based payment reserve represents the cumulative charge for options granted.

 

Merger Reserve

The merger reserve represents the cumulative share capital and membership capital contributions of all the companies included into the legal acquire sub-group less cost of investments into these legal acquirees.

 

20.   Financial Instruments - Risk Management

 

General Objectives, Policies and Processes

The overall objective of the Directors is to set policies that seek to reduce risk as far as possible without unduly affecting the Group's competitiveness and flexibility. Further details regarding these policies are set out below.

 

The Directors review the Group's monthly reports through which they assess the effectiveness of the processes put in place and the appropriateness of the objectives and policies it sets.

 

Categories of Financial Assets and Liabilities

The Group's activities are exposed to a variety of market risk (including currency risk) and liquidity risk. The Group's overall financial risk management policy focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on its financial performance.

 

The principal financial instruments used by the Group, from which financial instrument risk arises, are as follows:

 

▪    other receivables;

 

▪    cash and cash equivalents;

 

▪    trade and other payables; and

 

▪    borrowings.

 

The carrying value of financial assets and financial liabilities, maturing within the next 12 months, approximates their fair value due to the relatively short-term maturity of the financial instruments.

 

The Group had no financial assets or liabilities carried at fair values at the end of each reporting date.

A summary of the financial instruments held by category is provided below:

 

		2022	2021
		US$	US$
Financial assets
Cash and cash equivalents		20,421	138,142
Other receivables		-	-
Restricted cash*		125,000	125,000
Financial liabilities
Trade payables		283,587	292,592
Accruals		628,934	481,999
Short-term borrowings		2,133,832	1,935,919

 

 

*Note that the restricted cash balance has been impaired to nil in the current year, see note 12 for further details.

 

Credit Risk

The Group's exposure to credit risk, or the risk of counterparties defaulting, arises mainly from notes and other receivables. The Directors manage the Group's exposure to credit risk by the application of monitoring procedures on an ongoing basis. For other financial assets (including cash and bank balances), the Directors minimise credit risk by dealing exclusively with high credit rating counterparties.

Credit Risk Concentration Profile

The Group's receivables do not have significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The Directors define major credit risk as exposure to a concentration exceeding 10% of a total class of such asset.

 

The Company maintains its cash reserves in Barclays Bank UK PLC, which maintains the following credit ratings:

 

 

Credit Agency	Standard and Poor's	Moody's	Fitch	R&I
Long Term	A/Positive	A1/Negative	A+/Stable	A+/Stable
Short Term	A-1	P-1	F1	N/A
Unsupported Group Credit /Baseline Credit Assessment/Viability Rating	bbb+	baa3	a	N/A

 

Exposure to Credit Risk

The Group is exposed to the credit risk of the US Specialty Insurance Company, currently holding a US$125,000 bond on behalf of the Company's Coos Bay Energy LLC subsidiary.  Note that this balance has been impaired to nil in the current year, see note 12 for further details.

Market Risk - Interest Rate Risk

Borrowings issued at fixed rates expose the Group to fair value interest rate risk. The Directors' policy is to maintain a majority of the Group's borrowings in fixed rate instruments. The Directors have analysed the Group's interest rate exposure on a dynamic basis. This takes into consideration refinancing, renewal of existing positions and alternative financing. Based on these considerations, the Directors believe the Group's exposure to cash flow and fair value interest rate risk is not significant.

Market Risk - Currency Risk

Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates. Currency risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not the Company's (Pound Sterling, £) or its subsidiaries'  functional currency (US$). The Group is exposed to foreign exchange risk, arising from currency exposures primarily with respect to the UK Pound Sterling (£). The Directors monitor the exchange rate fluctuations on a continuous basis and act accordingly. The following sensitivity analysis shows the effects on loss before tax of 10% increase/decrease in the exchange rates of the US$ versus closing exchange rates of UK Pound Sterling as at 31 December 2022:

 

	+10%	-10%
	US$	US$
Loss before tax	Increase in loss by US$70,673	Decrease in loss by US$70,673

 

 

	2022	2022	2022	2021	2021	2021
Assets and liabilities by currency of denomination, al numbers are presented in US$	US$	£ In US$	Total US$	US$	£ In US$	Total US$
Financial assets
Cash and cash equivalents	53	20,356	20,410	8,931	129,211	138,142
Other receivables	-	-	-	-	-	-
Restricted cash*	-	-	-	125,000	-	125,000
Financial liabilities
Trade payables	73,917	209,671	283,587	48,918	243,674	292,592
Accruals	-	628,934	628,934	-	481,999	481,999
Short-term borrowings	499,727	1,634,105	2,133,832	454,726	1,481,193	1,935,919

 

*Note that the restricted cash balance has been impaired to nil in the current year, see note 12 for further details.

 

Liquidity Risk

The Group currently holds cash balances to provide funding for normal trading activity. Trade and other payables and short-term borrowings are monitored as part of normal management routine and all amounts outstanding fall due in one year or less.  Borrowings are conducted in both US$ and UK Pound Sterling and as such the Company monitors fluctuations that may impact both present and future liquidity levels. 

 

 

Capital Management

The Group defines capital as the total equity of the Group. The Directors' objectives, when managing capital, are to safeguard its ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

 

To meet these objectives, the Directors review the budgets and projections on a regular basis to ensure there is sufficient capital to meet the needs of the Group through to profitability and positive cash flow.

 

The capital structure of the Group consists of shareholders' equity as set out in the consolidated statement of changes in equity. All working capital requirements are financed from existing cash resources and borrowings.

 

Whilst the Group does not currently have distributable profits, it is part of the capital strategy to provide returns for shareholders and benefits for members in the future.

 

Capital for further development of the Group's activities will, where possible, be achieved by share issues or other finance as appropriate.

 

In order to maintain or adjust the capital structure, the Directors may return capital to shareholders, issue new shares or sell assets to reduce debt. It also ensures that distributions to shareholders do not exceed working capital requirements.

 

Fair Value Hierarchy

All the financial assets and financial liabilities, recognised in the Group Financial Statements, are shown at the carrying value, which also approximates the fair values of those financial instruments. Therefore, no separate disclosure for fair value hierarchy is required.

21.   Related Party Transactions

 

Balances and transactions between the Company and its subsidiaries, Coos Bay Energy LLC, Westport Energy Acquisition Inc. and Westport Energy LLC are eliminated on consolidation and are not disclosed in this note. Balances and transactions between the Group and other related parties are disclosed below.

The Group has a loan arrangement with Poseidon Plastics Limited, a company in which John McGoldrick is also a director.  See note 16 for further details.

 

During the year, the Group and Company was charged £15,000 (2021: £8,208) in rental recharges for utilized office space from Corcel plc, a company in which Scott Kaintz is also a director.  As at 31 December 2022 the Group and Company owed £28,114 to Corcel plc for such charges (2021: £13,354).

Remuneration of Directors

The remuneration of the senior Executive Management Committee members, who are the key management personnel of the Group, is set out in aggregate for each of the categories specified in IAS 24 "Related Party Disclosures" in note 5.

22.   Events After the Reporting Period

 

Transaction Termination and LOI with TM2

On 18 April 2023, the Company announced that it had notified Poseidon Enhanced Technologies of its intention to terminate discussions regarding a RTO of Curzon by PET, as originally announced on 3 February 2021.  The Company further announced that it has signed an LOI with Technology Metals Market Limited ("TM2"), to provide a working capital facility of £750,000 to fund Curzon to conduct due diligence and ultimately progress a RTO of Curzon by a designated target by TM2, currently expected to be in the lithium space.  TM2 would be able to fund ongoing exclusivity of Curzon by drawdowns on the offered facility. 

 

 

Company Statement of Financial Position

as at 31 December 2022

	Notes	2022	2021
		£	£
Assets
Current assets
Trade and other receivables	28	24,722	32,662
Cash and cash equivalents	29	16,926	102,408
Total current assets		41,648	135,070
Total assets		41,648	135,070
Liabilities
Current liabilities
Trade and other payables	30	695,072	537,959
Borrowings	31	1,768,614	1,435,141
Total liabilities		2,463,686	1,973,100
Capital and reserves attributable to shareholders
Share capital	32	831,990	831,990
Share premium	32	2,718,932	2,718,932
Share-based payments reserve		355,269	355,269
Warrants reserve		289,481	289,481
Merger relief reserve		2,800,000	2,800,000
Accumulated losses		(9,417,709)	(8,833,702)
Total capital and reserves		(2,422,037)	(1,838,030)
Total equity and liabilities		41,649	135,070

 

 

Company Statement of Comprehensive Income

As permitted by Section 408 Companies Act 2006, the Company has not presented its own income statement or statement of comprehensive income. The Company's loss for the financial year was £584,007 (2021: £538,176). The Company's total comprehensive loss for the financial year was £584,007 (2021: £538,176).

 

The Financial Statements were approved by the Board of Directors and authorised for issue on 27 April 2023 and are signed on its behalf by:

 

 

John McGoldrick

Director

 

The notes to the Company Statement of Financial Position form part of these Financial Statements.

 

 

 

Company Statement of Changes in Equity

 

	Share capital £	Share Premium £	Share-based payments reserve £	Warrants reserve £	Merger relief reserve £	Accumulated loss £	Total £
Equity at 1 January 2021	831,991	2,718,931	355,269	289,481	2,800,000	(8,295,526)	(1,299,854)
Loss for the year 2021	-	-	-	-	-	(538,176)	(538,176)
Total comprehensive loss for the year 2021	-	-	-	-	-	(538,176)	(538,176)
Equity at 31 December 2021	831,991	2,718,931	355,269	289,481	2,800,000	(8,833,702)	(1,838,030)

 

 

Loss for the year 2022	-	-	-	-	-	(584,007)	(584,007)
Total comprehensive loss for the year 2022	-	-	-	-	-	(584,007)	(584,007)
Equity at 31 December 2022	831,991	2,718,931	355,269	289,481	2,800,000	(9,417,709)	(2,422,037)

 

 

 

Company Statement of Cash Flows

for the Year Ended 31 December 2021

 

	Notes	2022	2021
		£	£
Cash flow from operating activities
Loss before taxation		(584,007)	(538,176)
Adjustments for:
Finance expense		153,643	115,488
Finance income		-	-
Impairment of loans and receivables		18,378	9,596
Unrealised foreign exchange movements		40,968	4,727
Operating cashflows before working capital changes		(371,018)	(408,365)
Changes in working capital:
Increase in payables		157,113	38,375
(Increase)/decrease in receivables		7,939	(2,162)
Net cash used in operating activities		(205,966)	(372,152)
Financing activities
Issue of ordinary shares, net of share issue costs		-	-
Proceeds from new borrowings		140,000	450,000
Interest paid		(1,138)	(358)
Advances granted to subsidiaries		(18,378)	(9,596)
Net cash flow from financing activities		120,484	440,046
Net increase/(decrease) in cash and cash equivalents in the period		(85,482)	67,894
Cash and cash equivalents at the beginning of the period		102,408	34,514
Cash and cash equivalents at the end of the period		16,926	102,408

 

 

Notes to the Company Financial Statements

 

23.   Significant Accounting Policies

 

The separate Financial Statements of the Company are presented as required by the Companies Act 2016 ("the Act"). As permitted by the Act, the separate Financial Statements have been prepared in accordance with UK adopted International Accounting Standards.

 

The Financial Statements have been prepared on the historical cost basis. The principal accounting policies adopted are the same as those set out in note 2 to the Consolidated Financial Statements except as noted below.

 

The presentational currency of the Company financial statements is UK Pounds Sterling, being the functional currency of the Company given its operations are entirely within the United Kingdom.

Investments in Subsidiaries

Investments in subsidiaries are carried at cost and are regularly reviewed for impairment if there are any indications that the carrying value may not be recoverable.

 

Receivables from Subsidiaries

Impairment provisions for receivables from related parties and loans to related parties are recognized, based on a forward-looking expected credit loss model. The methodology, used to determine the amount of the provision, is based on whether there has been a significant increase in credit risk since initial recognition of the financial asset. For those where the credit risk has not increased significantly since initial recognition of the financial asset, twelve month expected credit losses along with gross interest income are recognised. For those for which credit risk has increased significantly but not determined to be credit impaired, lifetime expected credit losses along with the gross interest income are recognised. For those that are determined to be credit impaired, lifetime expected credit losses along with interest income on a net basis are recognised.

Critical Accounting Judgments and Key Sources of Estimation Uncertainty

The Company's Financial Statements, and in particular its investments in and receivables from subsidiaries, are affected by the critical accounting judgments and key sources of estimation uncertainty in respect of going concern judgements which are more fully described in note 2 to the Consolidated Financial Statements.

 

24.   Auditor's Remuneration

 

The auditor's remuneration for audit and other services is disclosed in note 4 to the Consolidated Financial Statements.

25.   Directors and Staff

 

Scott Kaintz, Executive Director of the Company, has been the only employee of the Company in the reporting year after he was employed on 27 June 2018 and to date.

 

Key management remuneration is disclosed in note 5 to the Consolidated Financial Statements.

 

 

26.   Administrative Expenses

		2022	2021
		£	£
Staff costs		229,800	217,596
Standard Listing Regulatory Costs		1,880	45,951
Professional and consultancy fees		82,858	91,178
Other general administrative expenses		54,675	43,860
Total		369,212	398,585

 

27.   Receivables from Subsidiaries and Related Party Transactions

 

		2022	2021
		£	£
Loans to subsidiaries		-	-
Total loans to subsidiaries		-	-

 

 

During the year ended 31 December 2022, the Company recognised expected credit losses in relation to the intercompany loans in the amount of £18,378 (2021: £19,378).  This relates to the write-off of the Company's Coos Bay coal bed methane project in full, due primarily to the lack of capital currently available to advance the project.

During the year ended 31 December 2022, the maximum amount owed by the subsidiary to the Company was £18,378 (2021: £19,378).  The related party loans are unsecured and are repayable at the time of completion of a reverse takeover. In prior years interest was receivable at a rate of 9%.  No interest has been charged for the year ended 31 December 2022. At 31 December 2022, £39,368 (2021: £39,368) was accrued and included in the above balance.

 

The remuneration of the senior Executive Management Committee members, who are the key management personnel of the Group, is set out in aggregate for each of the categories specified in IAS 24 "Related Party Disclosures" in note 5.

 

 

28.   Prepayments and Other Receivables

		2022	2021
		£	£
VAT recoverable		1,446	6,230
Prepayments		23,276	26,432
Total prepayments and other receivables		24,722	32,662

 

 

The fair value of receivables and deposits approximates their carrying amount, as the impact of discounting is not significant. The receivables are not impaired and are not past due.

 

 

29.   Cash and Cash Equivalents

 

For the purpose of the statements of cash flows, cash and cash equivalents comprise the following:

		2022	2021
		£	£
Cash in hand and at bank		16,926	102,408

 

 

30.   Current Liabilities

 

Trade and Other Payables

		2022	2021
		£	£
Trade and other payables		173,784	180,642
Accruals		521,288	357,317
Total trade and other payables		695,072	537,959

 

 

31.   Short-Term Borrowings

 

At 31 December 2022, the Company had an outstanding promissory notes and loans of £1,768,614 (2021: £1,435,141), please refer to note 16.

	1 Jan 2022, £	Cash flows Proceeds from new borrowings, £	Non-cash flow Forex movement, £	Non-cash flow Interest accrued, £	31 Dec 2022, £
HNW Investor Group	323,180	-	-	34,224	357,404
C4 Energy Ltd	216,746	-	26,369	24,086	267,201
Bruce Edwards	120,353	-	14,599	12,043	146,995
Sun Seven Stars Investment Group ("SSSIG")	302,645	-	-	26,000	328,645
Poseidon Plastics Ltd ("PPL")	472,217	140,000	-	56,152	668,369
Total liabilities from financing activities	1,435,141	140,000	40,968	152,505	1,768,614

 

 

	1 Jan 2021, £	Cash flows Proceeds from new borrowings, £	Non-cash flow Forex movement, £	Non-cash flow Interest accrued, £	31 Dec 2021, £
HNW Investor Group	288,956	-	-	34,224	323,180
C4 Energy Ltd	191,909	-	3,059	21,778	216,746
Bruce Edwards	107,775	-	1,689	10,889	120,353
Sun Seven Stars Investment Group ("SSSIG")	276,645	-	-	26,000	302,645
Poseidon Plastics Ltd ("PPL")	-	450,000	-	22,217	472,217
Total liabilities from financing activities	865,285	450,000	4,748	115,108	1,435,141

 

 

32.   Share Capital

 

The movements in the share capital account are disclosed in note 17 to the Consolidated Financial Statements.

 

 

33.   Financial Instruments - Risk Management

 

The Company's strategy and financial risk management objectives are described in note 20.

 

Principal Financial Instruments

The principal financial instruments used by the Company from which risk arises are as follows:

 

		2022	2021
		£	£
Financial assets
Cash and cash equivalents		16,926	102.408
Other receivables		-	-
Loans due from subsidiaries		-	-
Financial liabilities
Trade payables		173,784	180,624
Accruals		521,288	357,317
Short-term borrowings		1,768,614	1,435,141

 

 

Credit Risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations, resulting in financial loss to the Company.

 

In addition to the risks described in note 20, which affect the Group, the Company is also subject to credit risk on the balances receivable from subsidiaries, see note 27. In the year ended 31 December 2022, credit losses were recognised in full in relation to all the balances receivable from subsidiaries.

 

Market Risk - Currency Risk

The Company is exposed to foreign exchange risk, arising from currency exposures primarily with respect to the US Dollar (US$). The Directors monitor the exchange rate fluctuations on a continuous basis and act accordingly.

Assets and liabilities by currency of denomination, al numbers are presented in £	2022 US$	2022 £	2022 Total £	2021 US$	2021 £	2021 Total £
Financial assets
Cash and cash equivalents	54	16,872	16,926	6,621	95,787	102,408
Other receivables	-	-	-	-	-	-
Financial liabilities
Trade payables	-	173,784	173,784	-	180,642	180,642
Accruals	-	521,288	521,288	-	357,317	357,317
Short-term borrowings	414,196	1,354,418	1,768,614	337,099	1,098,042	1,435,141

 

 

34.   Events After the Reporting Period

 

Events after the reporting period are more fully described in note 22.

 

35.   Controlling Party

 

At 31 December 2022, the Company did not have an ultimate controlling party.

 

36. These results are audited, however the information does not constitute statutory accounts as defined under section 434 of the Companies Act 2006.  The consolidated statement of financial position at 30 December 2022 and the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and the consolidated cash flow statement for the year then ended have been extracted from the Group's 2022 statutory financial statements.  Their report was unqualified and contained no statement under sections 498(2) or (3) of the Companies Act 2006. The financial statements for 2022 will be delivered to the Registrar of Companies by 30 June 2023.