1.       General Information

The Company was incorporated on 27 October 2023 in England and Wales with Registered Number 15241564 under the Companies Act 2006. The principal activity of the Company is the development of software harnessing AI capabilities.

The address of its registered office is 28 Austin Friars, London, England, EC2N 2QQ.

The Directors of the Company are responsible for the unaudited financial statements.

2          ACCOUNTING POLICIES

IAS 8 requires that management shall use its judgement in developing and applying accounting policies that result in information which is relevant to the economic decision-making needs of users, that are reliable, free from bias, prudent, complete and represent faithfully the financial position, financial performance and cash flows of the entity.

2.1        BASIS OF PREPARATION

The unaudited financial statements of Prior1ty AI ltd for the period ended 30 September 2024 has been prepared in accordance with UK-adopted International Accounting Standards ('IFRS'). Unaudited financial statements presents the results for the Group for the period from 27 October 2023 to 30 September 2024.

There was no comparative period.

The unaudited financial statements has been prepared under the historical cost convention.

The unaudited financial statements have been prepared using UK adopted International accounting standards. The unaudited financial statements has been prepared using the measurement bases specified by IFRS for each type of asset, liability, income and expense.

The unaudited financial statements is presented in £ unless otherwise stated, which is the Company's functional and presentational currency.

2.2        BASIS OF CONSOLIDATION

The consolidated unaudited financial information incorporates the financial information of the Company and entities controlled by the Company (its subsidiaries) made up to 30 September each year. Per IFRS 10, control is achieved when the Company:

·      has the power over the investee;

·      is exposed, or has rights, to variable returns from its involvement with the investee; and

·      has the ability to use its power to affects its returns.

The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.  When the Company has less than a majority of the voting rights of an investee, it considers that it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the Company's voting rights in an investee are sufficient to give it power, including:

·    the size of the Company's holding of voting rights relative to the size and dispersion of holdings of the other vote holders;

·     potential voting rights held by the Company, other vote holders or other parties;

·     rights arising from other contractual arrangements; and

·    any additional facts and circumstances that indicate that the Company has, or does not have,      the current ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders' meetings.

Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, the results of subsidiaries acquired or disposed of during the year are included in profit or loss from the date the Company gains control until the date when the Company ceases to control the subsidiary.  Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with the Group's accounting policies.

All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between the members of the Group are eliminated on consolidation.

The Group recognises any non-controlling interest in the acquired entity at the non-controlling interest's proportionate share of the acquired entity's net identifiable assets.  Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests' share of subsequent changes in equity.

Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of the subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

As at 30 September 2024, the Company owned interests in the following subsidiary undertakings, which are included in the consolidated financial statements:

2.3        NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS ADOPTED

The Company has adopted all of the new and amended standards and interpretations issued by the International

Accounting Standards Board that are relevant to its operations and effective for accounting periods commencing on or after 1^st January 2023.

2.4        NEW STANDARDS AND INTERPRETATIONS ADOPTED

The Group has adopted the below standards, amendments or interpretations for the first time for its unaudited financial statements commencing 27 October 2023 which do not have a material impact on the Group:

At the date of approval of these unaudited financial statements, the following standards and interpretations which have not been applied in these financial statements were in issue but not yet effective (and in some cases have not yet been adopted by the UK): 

The effect of these new and amended Standards and Interpretations which are in issue but not yet mandatorily effective is not expected to be material.

2.5        GOING CONCERN

The unaudited financial statements has been prepared on a going concern basis, which assumes that the consolidated group will have access to sufficient liquid resources to enable them to continue in operational existence for the foreseeable future and not less than twelve months from the date of signing this report.

Taking these matters into consideration, the Directors consider that the continued adoption of the going concern basis is appropriate having reviewed the forecasts for the coming 18 months and the unaudited financial statements does not reflect any adjustments that would be required if they were to be prepared other than on a going concern basis.

2.6        SEGMENT REPORTING

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision makers. The chief operating decision makers, who are responsible for allocating resources and assessing performance of the operating segments, has been identified as the executive Board of Directors.

All operations and information are reviewed together so that at present there is only one reportable operating segment.

2.7        FOREIGN CURRENCY TRANSLATION

Functional and presentation currency

      Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement, except when deferred in other comprehensive income as qualifying cash flow hedges and qualifying net investment hedges. Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the income statement within 'finance income or costs'. All other foreign exchange gains and losses are presented in the income statement within 'Other (losses)/gains - net'.

Translation differences on non-monetary financial assets and liabilities such as equities held at fair value through profit or loss are recognised in profit or loss as part of the fair value gain or loss. Translation differences on non-monetary financial assets measure at fair value, such as equities classified as available for sale, are included in other comprehensive income.

Transactions and balances

Transactions denominated in a foreign currency are translated into the presentational currency at the exchange rate at the date of the transaction. Assets and liabilities in foreign currencies are translated to the presentational currency at rates of exchange ruling at statement of financial position date. Gains or losses arising from settlement of transactions and from translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income for the period.

2.8        IMPAIRMENT OF NON-FINANCIAL ASSETS

Non-financial assets and intangible assets not subject to amortisation are tested annually for impairment at each reporting date and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

An impairment review is based on discounted future cash flows. If the expected discounted future cash flow from the use of the assets and their eventual disposal is less than the carrying amount of the assets, an impairment loss is recognised in profit or loss and not subsequently reversed.

For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are largely independent cash flows (cash generating units or 'CGUs').

2.9        CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise cash at bank and in hand, with banks and other financial institutions.

2.10      TRADE AND OTHER RECEIVABLES

Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 90 days. The Company has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue. Other receivables are recognised at amortised cost, less any allowance for expected credit losses.

2.11      TRADE AND OTHER PAYABLES

Trade and other payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accruals and accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.

Trade payables are recognised initially at fair value, and subsequently measured at amortised cost using the effective interest method.

2.12      FINANCIAL INSTRUMENTS

IFRS 9 requires an entity to address the classification, measurement and recognition of financial assets and liabilities.

a)  Classification

The Group classifies its financial assets in the following measurement categories:

·    those to be measured at amortised cost.

The classification depends on the Group's business model for managing the financial assets and the contractual terms of the cash flows.

The Group classifies financial assets as at amortised cost only if both of the following criteria are met:

·      the asset is held within a business model whose objective is to collect contractual cash flows; and

·      the contractual terms give rise to cash flows that are solely payment of principal and interest.

b)  Recognition

Purchases and sales of financial assets are recognised on trade date (that is, the date on which the Group commits to purchase or sell the asset). Financial assets are derecognised when the 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.

c)  Measurement

At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset.

Transaction costs of financial assets carried at FVPL are expensed in profit or loss.

Debt instruments

Amortised cost: Assets that are held for collection of contractual cash flows, where those cash flows represent solely payments of principal and interest, are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains/(losses) together with foreign exchange gains and losses. Impairment losses are presented as a separate line item in the statement of profit or loss.

d)  Impairment

The Group assesses, on a forward-looking basis, the expected credit losses associated with any debt instruments carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

2.13      EQUITY

Share capital is determined using the nominal value of shares that have been issued.

The share premium account includes any premiums received on the initial issuing of the share capital. Any transaction costs associated with the issuing of shares are deducted from the share premium account, net of any related income tax benefits.

Retained losses includes all current and prior period results as disclosed in the income statement.

2.14      EARNINGS PER SHARE

Basic earnings per share is calculated as profit or loss attributable to equity holders of the parent for the period, adjusted to exclude any costs of servicing equity (other than dividends), divided by the weighted average number of ordinary shares, adjusted for any bonus element.

2.15      TAXATION

The taxation expense for the year comprises current and deferred tax and is recognised in the statement of comprehensive income except to the extent that it relates to items recognised in other comprehensive income, or directly in equity, in which case the tax expense is also recognised in other comprehensive income or directly in equity.

Current tax is the amount of income tax payable in respect of the taxable profit for the current or past reporting periods. It is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the statement of financial position date.

Deferred tax represents the future tax consequences of transactions and events recognised in the consolidated financial statements of current and previous periods and arises from 'temporary differences'. Deferred tax is recognised in respect of all temporary differences, except that unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date that are expected to apply to the reversal of the temporary differences.

2.16      CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the process of applying the entity's accounting policies, management makes estimates and assumptions that have an effect on the amounts recognised in the financial information. Although these estimates are based on management's best knowledge of current events and actions, actual results may ultimately differ from those estimates. The following is the critical judgement the Directors have made in the process of applying the Group's accounting policies.

There are no critical accounting judgements or key sources of estimation uncertainty applicable to these unaudited financial statements. 

3.         EXPENSES BY NATURE

Operating loss from continued operations for the period ended 30 September 2024 can be broken down as follows:

4.         EMPLOYEES

The Group had 2 employees during the period. The average number of employees for the period was 2. All employees of the Group during the period were Directors who were engaged via service contracts. Please see below for further details. There were no other staff in the period.

5.         TAXATION

No liability to incomes taxes arise in the year.

Estimated tax losses of £542,833 are available for relief against future profits and a deferred tax asset of £135,708.

6.         EARNINGS PER SHARE

The calculation of the basic and diluted earnings per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period.

There is no difference between the diluted loss per share and the basic loss per share presented due to the fact that there are no other equity instruments in issue at the period end.

7.         INTANGIBLE ASSET

During this period, the Company acquired an intangible asset from Sports Media Ventures Ltd. Refer to note 21 for further details.

At 30 September 2024, the Group performed its annual impairment test on its acquired IP & Technology asset and identified no indicators of impairment in line with IAS 36 "Impairment of Assets." The asset is fully operational and continues to provide significant strategic value to the Group. At the test date, it was determined given the product is pre-revenue, there was insufficient evidence to estimate a value-in-use based on discounted future cash flows from the asset.

The Group has determined that the asset has an indefinite useful life for the followings reasons:

·      There are no legal, regulatory, or contractual factors that would limit the period during which the software can be used;

·      The software is regularly updated and maintained, ensuring its relevance and effectiveness over the long term;

·      The Group intends to continue using the software and it is forecasted to generate revenues for the Group indefinitely.

These factors support the assessment that the software has an indefinite useful life, which will be reviewed annually to ensure it remains appropriate."

Accordingly, the Group has concluded that the estimated recoverable amount of the asset exceeded the carrying amount, and therefore, no impairment was identified.

8.         CASH AND CASH EQUIVALENTS

9.         OTHER CURRENT ASSETS

10.        TRADE AND OTHER PAYABLES

11.        SHARE CAPITAL AND PREMIUM

^{1-         100,000,000 shares were issued at £0.001 nominal value at incorporation of the Company.  £40,000 of shares was issued to the Directors of Sports Media Ventures for the acquisition of the intellectual property.}

^{2-         40,000,000 shares at £0.01 were issued for the acquisition of the intellectual property held by Sports Media Ventures - Refer to note 7 for further information}

^{3-         6,000,000 shares at £.01p were issued to consultants in lieu of cash payment for services provided}

^{4-         35,000,000 shares were issued at £0.01 for total consideration of £350,000}

^{5-         33,160,241 shares were issued at £0.0166 for total consideration of £550,460}

The share premium represents the difference between the nominal value of the shares issued and the actual amount subscribed less; the cost of issue of the shares, the value of the bonus share issue, or any bonus warrant issue.

The par value of ordinary shares is £0.001 per share. All issued shares are fully paid.

12.        WARRANTS

The weighted average time to expiry of the warrants as at 30 September 2024 is 4.3 years.

13.        CAPITAL MANAGEMENT POLICY

The Directors' objectives when managing the Group's capital are to safeguard the Group's 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. The capital structure of the Group consists of equity attributable to equity holders of the Group, comprising issued share capital and reserves.

14.        FINANCIAL INSTRUMENTS

The Company's accounting policies and methods adopted, including the criteria for recognition, the basis on which income and expenses are recognised in respect of each class of financial asset and equity instrument are set out in Note 2.12 to the unaudited financial statements. The Company does not use financial instruments for speculative purposes.

15.        FINANCIAL RISK MANAGEMENT

The Directors use a limited number of financial instruments, comprising cash and other receivables, which arise directly from the Company's initial operations. The Group does not trade in financial instruments.

16.        FINANCIAL RISK FACTORS

The Group as a non-trading entity has had limited financial risks during the period. The Directors' overall risk management programme focuses on the maintenance of adequate cash to fulfil the working capital requirements of the Company.

Fair values

The Directors assessed that the fair values of the other payables approximate their carrying amounts.

17.        FINANCIAL ASSETS AND FINANCIAL LIABILITIES

18.        CAPITAL COMMITMENTS

There are no capital commitments at 30 September 2024.

19.        CONTINGENT LIABILITIES

There are no contingent liabilities as at 30 September  2024.

20.        COMMITMENTS UNDER OPERATING LEASES

There were no commitments under operating leases at 30 September 2024.

21.        RELATED PARTY TRANSACTIONS.

Purchase of intangible asset

During this period, the Company acquired an intangible asset from Sports Media Ventures Ltd., a company affiliated with James Sheehan and Daniel Gee, for a total consideration of £500,000. The payment was structured as follows: the Company issued 40,000,000 ordinary shares at £0.001 each, amounting to £400,000, to the seller, and paid an additional £50,000 in cash. The remaining £50,000 is contingent upon the successful listing on AIM. Furthermore, the Company assumed liabilities totalling £40,000, with £20,000 owed to The Equities Exchange, a company related to James Sheehan, and £20,000 owed to Daniel Gee. The £40,000 outstanding was settled via the issue of shares to both parties.

Share issue

During the year Directors James Sheehan was issued an additional 1,500,000 shares at 1p in lieu of services provided.

Warrant issue

As part of the initial seed round Directors Daniel Gee and James Sheehan (via The Equities Exchange Ltd) were issued 20,000,000 and 24,300,000 of founder warrants. On 20 December 2024 as part of the acquisition of the Company 80% of these warrants were surrendered with the remaining balance purchased via the issue of consideration warrants in Alteration Earth PLC. The warrants have a strike price of £.03p and expiry date of 30 December 2026.

22.        ULTIMATE CONTROLLING PARTY

In the opinion of the Directors as at the year end and the date of this unaudited financial statements there is no single ultimate controlling party.

23.        EVENTS AFTER THE REPORTING PERIOD

Reverse take-over

On 30 December 2024, Pri0r1ty AI ltd completed a Reverse Take Over (RTO) with its entire share capital acquired by Pri0r1ty Intelligence Group (Formerly Alteration Earth PLC ) (under the ticker "PR1") and the enlarged group listing onto AIM, a market operated by the London Stock Exchange. As part of the transaction the Company converted its corporate structure from a PLC to a Limited Company and shareholders of Pri0r1ty AI Ltd received 72,000,000 ordinary shares in PR1 for a total consideration of £0.135 per share.

Surrender of warrants

Upon the successful RTO existing warrant holders agreed to surrender 80% of the existing warrants held in the Company together with all and any rights in the Surrendered Warrants. A total of 80,000,000 warrants were surrendered to the Company.

No other subsequent events noted.