TIDMCZN
RNS Number : 7834J
Curzon Energy PLC
29 April 2022
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 2021
29 April 2022
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 2021.
A copy of the Company's annual report and financial statements
for the year ended 31 December 2021, 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
2021, on or before 6 May 2022.
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 on Tuesday 31 May 2022 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 27
May 2022.
For further information please
contact:
Curzon Energy Plc +44 (0) 20 7747 9980
Scott Kaintz
www.curzonenergy.com
SP Angel Corporate Finance LLP +44 (0) 20 3470 0470
Broker
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
2021.
Period in Review
During the course of 2021, the Company focused its efforts on
progressing 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, including colored and
opaque materials, into high value enhanced recycled PET resin
("erPET") and recycled BHET ("rBHET").
Poseidon plans to build on the success of its pilot plant
operations in Hull and a number of intensive verification programs
that have been undertaken with international PET manufacturers and
end product users in the UK and Germany. Through these programs PPL
is working to further optimize the design of the integrated process
and to develop a much larger continuous integrated processing plant
at a commercial scale. Plans for the construction of multiple
commercial processing facilities across Europe are being developed
to provide recycled materials for major global consumer packaged
goods ("CPG") brands.
At the Company's coal bed methane project at Coos Bay,
activities were minimal during the course of the year, with the
project remaining on care and maintenance. The Company has been
advancing formal extensions of the project leases, as well as a
potential farm-out or sale of the project in light of increasing
natural gas demand and prices.
Results
For the period ended 31 December 2021, the Group incurred a loss
of US$821,344 (2020: loss of US$699,871). The majority of this loss
comprised the recognition of a provision for reclamation
obligations associated with the Coos Bay project as well as
administrative expenses and required listing and regulatory
overheads. Overall administrative expenses were broadly consistent
during the period at US$569,865 in 2021 (2020: US$528,799) and
finance expenses rose slightly to US$165,598 (2020: US$88,775)
reflecting the ongoing costs of funding the business during this
phase of due diligence.
Outlook
While the timeline to complete mutual due diligence on the PPL
RTO transaction has been extended, recent world developments
including the immediate need to reduce CO2 emissions and reduce
plastic waste, as well as the war in Ukraine and associated
resources shortages, have only served to strengthen the appeal of,
and requirement for, a business such as PPL with its innovative
plastics recycling technology. These developments have
simultaneously increased the perceived value of the Company's
historic natural gas assets in Coos Bay, Oregon.
Initially targeting global CPG brands that require ever
increasing volumes of recycled packaging materials, the Poseidon
technology platform is also being developed for the polyester fiber
and specialty chemicals industries. Poseidon's addressable global
markets represent revenue of > $100BN annually, growing at 3 -
4% p.a. The use of PPL's proprietary erPET and rBHET products
reduces the amount of single use plastics destined for landfill or
incineration and reduces critical emissions of greenhouse
gasses.
PPL's plastics recycling offering falls squarely in the critical
Environmental, Social and Governance ("ESG") space, where PPL's
technology can address imminent requirements for recycled content
being imposed on the world's major CPG brands; before either
substantial fines and/or charges for the continued use of virgin
plastics takes effect - both in Europe and across North
America.
Substantial organizational progress was made on the proposed
RTO, as well as operationally and organizationally at PPL.
Reflecting this progress, and after the year-end, the Company
extended PPL's exclusivity rights to allow it additional time to
complete key business development discussions with international
PET manufacturers and certain global CPG brands, prior to
undertaking the proposed RTO; currently targeted for the latter
half of 2022.
PPL is looking to meet strong demand growth for recycled
material from global CPG brands faced with a limited supply of
recycled PET alternatives. Such brands are subject to increasing
customer, regulatory and public opinion pressure to reduce both
their general environmental impact as well as their shipments of
single-use plastics. With an active conflict in Europe for the
first time in many decades, much of the world is now also actively
looking to both reduce hydrocarbon demand and to move away from
Russian supplies, and PPL, with its innovative plastics recycling
technology, is expected to assist in reducing such reliance by
providing a recycled PET product practically identical to a virgin
one.
In relation to the Company's coal bed methane project at Coos
Bay, the conflict in Ukraine has led directly to both short and
long term increases in natural gas prices, with European countries
in particular, looking to develop alternate sources of energy
including imported LNG from North America and the Middle East. The
war is also driving increased construction of new modular nuclear
reactors and increasing reliance on renewables globally.
Notwithstanding that Coos Bay is currently earmarked for disposal,
such global factors make it a potentially more valuable asset in
this environment, and one that may well deliver this value through
a transaction timed with the completion of the proposed PPL
RTO.
During 2022 the Company looks forward to being able to the
conclude our efforts to reposition the business away from
traditional oil and gas development and into a new sector that we
believe is set to assist the world in moving on from its
unsustainable relationship with virgin plastics. We thank all
investors and partners for their patience and support during this
period of transition and we look forward to both delivering the PPL
RTO and to creating a high-impact, high-growth international
plastics recycling business to the benefit of all stakeholders.
John McGoldrick
Non-Executive Chairman
28 April 20 22
Strategic Report
Financial Results
The Group loss for the year to 31 December 2021 was US$860,463
(2020: US$617,574). There were no revenues and the majority of this
loss related to the administrative and listing costs.
The loss per share was US$0.009 (2020: loss per share
US$0.008).
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$138,142 as at 31 December 2021 and has after
the year end increased its borrowing capacity and current liquidity
through the extension and expansion of the financing agreement with
Poseidon Plastics Ltd.
The Directors note that the Group will need additional funding
to continue operations for the foreseeable future and this means
there is a material uncertainty as to the Group's ability to
continue as a going concern, however, the Directors are confident
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 3 February 2021 the Company terminated discussions with Seven
Sun Stars Investment Group ("SSSIG") to acquire a 100% interest in
the London Critical Metals Market ("LCMM").
On 3 February 2021, the Company announced that it had executed a
letter of intent with Poseidon Plastics Limited ("PPL"), where
Curzon Chairman John McGoldrick is the Executive Chairman, to
acquire a 100% interest via a potential reverse takeover. PPL and
the Company had entered a period of exclusivity, where each party
will conduct due diligence on the other.
The parties have further agreed that during this period they
will work towards the execution and delivery of a sale and purchase
agreement. This period of exclusivity has been extended multiple
times throughout the course of the year as due diligence remains
ongoing, with the current expiry of this period now having been
extended to 30 September 2022.
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 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;
-- 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. Through the Company's compensation policies and
variable components of employee remuneration, the Remuneration
Committee of the Board seeks to ensure that the Company's values
are reinforced in employee behavior and that effective risk
management is promoted.
Analysis by Gender
Category Male Female
Directors 3 0
----- -------
Senior Managers 0 0
----- -------
Other Employees 0 0
----- -------
Employees and Their Development
The Company is dependent upon the qualities and skills of its
employees and their commitment plays a major role in the Company's
business success. Employees' performance is aligned to the
Company's goals through an annual performance review process and
via incentive programs. The Company provides employees with
information about its activities through regular briefings and
other media. The Company operates a Share Option Scheme operated at
the discretion of the Remuneration Committee.
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 Company gives due
consideration to all applications and provides training and the
opportunity for career development wherever possible. 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 endeavors to ensure that the working environment is
safe and healthy and conducive to the wellbeing of employees, who
are able to balance work and family commitments. 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 Company provides the information, instruction,
training and supervision necessary to ensure that employees are
able to discharge their duties effectively. 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.
Prospects
In February 2021 the Board announced that it had entered a
period of exclusivity with PPL, where Curzon Chairman John
McGoldrick is the Executive Chairman, in order to pursue the
execution and delivery of a definitive purchase agreement,
contemplating a RTO of Curzon by PPL. A RTO would be conditional
upon receipt of the required regulatory approvals from the FCA and
its primary market functions, among other matters. Throughout the
course of 2021 PPL extended its rights under the exclusivity
arrangement by providing ongoing funding to the Company.
PPL continues to work to prepare its business for a potential
transaction with Curzon, and meaningful progress has been made in
this arena over the course of the year. After the year end the
Company extended PPL's exclusivity rights to 1 June 2022, with PPL
holding the right to continue to extend through to 30 September
2022, which is expected to provide enough time to complete both due
diligence and preparations ahead of the proposed RTO
transaction.
Signed by order of the Board
Scott Kaintz
Chief Executive Officer
28 April 2022
Independent auditor's report to the members of Curzon Energy
Plc
Opinion
We have audited the financial statements of Curzon Energy Plc
(the "company") and its subsidiaries (the "group") for the year
ended 31 December 2021 which comprise the consolidated statement of
comprehensive income, the consolidated and company statements of
financial position, the consolidated and company statements of cash
flows, the consolidated and company statements of changes in equity
and notes to the financial statements, including significant
accounting policies. The financial reporting framework that has
been applied in preparation of the group and parent company
financial statements is applicable law and UK-adopted international
accounting standards.
In our opinion:
-- the financial statements give a true and fair view of the
state of the group and company's affairs as at 31 December 2021 and
of the group's loss for the year then ended;
-- the group and company financial statements have been properly
prepared in accordance with UK-adopted international accounting
standards; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the group
and the company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK,
including the FRC's Ethical Standard, and we have fulfilled our
other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
opinion.
Material uncertainty related to going concern
We draw attention to note 2 to the financial statements, which
details the factors the directors considered when assessing the
going concern position. As detailed in note 2, the group currently
has no source of revenue and is reliant on loans to continue to
meet its obligations. The group will need additional funding to
continue operations for the foreseeable future, which indicates the
existence of a material uncertainty that may cast significant doubt
on the group's ability to continue as a going concern. Our opinion
is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the
directors' use of the going concern basis of accounting in
preparation of the financial statements is appropriate. Our
evaluation of the directors' assessment of the entity's ability to
continue to adopt the going concern basis of accounting
included:
-- discussions with management;
-- reviewing the letter of intent regarding possible acquisition
of a 100% interest in Poseidon Plastics Ltd by means of a reverse
takeover ('RTO');
-- discussing the RTO progress directly with the target, Poseidon Plastics Ltd;
-- reviewing the directors' going concern assessment including
the worst-case scenario cash flow forecast that covers at least 12
months from the date we expect to sign the audit report;
-- assessing of the key assumptions, judgements and estimates used in the cash flow forecast;
-- reviewing funding and availability of finance;
-- making enquiries of management as to its knowledge of events
or conditions beyond the period of their assessment that may cast
significant doubt on the entity's ability to continue as a going
concern, and evaluating the reliability of the data underpinning
the forecast cash flows.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
Overview of our audit approach
Materiality
In planning and performing our audit we applied the concept of
materiality. An item is considered material if it could reasonably
be expected to change the economic decisions of a user of the
financial statements. We used the concept of materiality to both
focus our testing and to evaluate the impact of misstatements
identified.
Based on our professional judgement, we determined overall
materiality for the group financial statements as a whole to be
$41,000 (2020: $35,000), based on a percentage the net liabilities
(2020: based on 5% of adjusted result for the year). The change in
the basis for the materiality is due to the change in nature of the
group's operations.
Materiality for the parent company financial statements as a
whole was set at GBP34,000 (2020: GBP30,000) based on a percentage
of net liabilities (2020: based on 5% of adjusted result for the
year). The change in the basis for the materiality is due to the
change in nature of the company's operations.
We use a different level of materiality ('performance
materiality') to determine the extent of our testing for the audit
of the financial statements. Performance materiality is set based
on the audit materiality as adjusted for the judgements made as to
the entity risk and our evaluation of the specific risk of each
audit area having regard to the internal control environment.
Performance materiality was set at 70% of materiality for the
financial statements as a whole, which equates to $28,700 for the
group and GBP23,800 for the parent.
Where considered appropriate performance materiality may be
reduced to a lower level, such as, for related party transactions
and directors' remuneration.
We agreed with the Audit Committee to report to it all
identified errors in excess of $2,000 (2020: $1,750). Errors below
that threshold would also be reported to it if, in our opinion as
auditor, disclosure was required on qualitative grounds.
Overview of the scope of our audit
There are two components of the group, Curzon Energy Plc as the
parent entity and the US sub-group headed by Coos Bay Energy LLC.
All audit work has been conducted by the group audit team.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Apart from going concern, where our work is described in the
'Material Uncertainty Related to Going Concern' section, we have
determined that there are no other key audit matters.
Other information
The other information comprises the information included in the
annual report other than the financial statements and our auditor's
report thereon. The directors are responsible for the other
information contained within the annual report.
Our opinion on the financial statements does not cover the other
information and, except to the extent otherwise explicitly stated
in our report, we do not express any form of assurance conclusion
thereon. Our responsibility is to read the other information and,
in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to be
materially misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required to determine
whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we
conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion the part of the directors' remuneration report to
be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of
our audit:
-- the information given in the strategic and the directors'
reports for the financial year for which the financial statements
are prepared is consistent with the financial statements; and
-- the strategic and the directors' reports have been prepared
in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In light of the knowledge and understanding of the group and the
parent company and their environment obtained in the course of the
audit, we have not identified material misstatements in the
strategic report or the directors' report.
We have nothing to report in respect of the following matters
where the Companies Act 2006 requires us to report to you if, in
our opinion:
-- adequate accounting records have not been kept by the
company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the group and company financial statements and the part of
the directors' remuneration report to be audited are not in
agreement with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Responsibilities of the directors for the financial
statements
As explained more fully in the directors' responsibilities
statement, the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true
and fair view, and for such internal control as the directors
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the Company's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Company or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below, however the primary responsibility for the
prevention and detection of fraud lies with management and those
charged with the governance of the partner company and group. We
obtained an understanding of the legal and regulatory frameworks
that are applicable to the Group and the procedures in place for
ensuring compliance. The most significant areas identified were the
Companies Act 2006 and specific regulations relevant to the group's
past activities.
-- As part of our audit planning process we assessed the
different areas of the financial statements, including disclosures,
for the risk of material misstatement. This included considering
the risk of fraud where direct enquiries were made of management
and those charged with governance concerning both whether they had
any knowledge of actual or suspected fraud and their assessment of
the susceptibility of fraud.
-- We have read board and committee minutes of meetings, as well
as regulatory announcements, as part of our risk assessment process
to identify events or conditions that could indicate an incentive
or pressure to commit fraud or provide an opportunity to commit
fraud. As part of this process, we have considered whether
remuneration incentive schemes or performance targets exist for the
Directors.
-- In addition to the risk of management override of controls,
we have considered the fraud risk related to any unusual
transactions or unexpected relationships, including assessing the
risk of undisclosed related party transactions. Our procedures to
address this risk included testing a risk-based selection of
journal transactions, both at the year end and throughout the
year.
Owing to the inherent limitations of an audit, there is an
unavoidable risk that some material misstatements of the financial
statements may not be detected, even though the audit is properly
planned and performed in accordance with the ISAs (UK). The
potential effects of inherent limitations are particularly
significant in the case of misstatement resulting from fraud
because fraud may involve sophisticated and carefully organized
schemes designed to conceal it, including deliberate failure to
record transactions, collusion or intentional misrepresentations
being made to us.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities .
This description forms part of our auditor's report.
Other matters which we are required to address
We were appointed by the Board on 18 April 2016 to audit the
financial statements for the year ended 31 December 2016. Our total
uninterrupted period of engagement is six years, covering the
period ended 31 December 2016 to 31 December 2021.
The non-audit services prohibited by the FRC's Ethical Standard
were not provided to the company and we remain independent of the
group and the parent company in conducting our audit.
Our audit opinion is consistent with the additional report to
the audit committee.
Use of our report
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Steve Gale
Senior Statutory Auditor
For and on behalf of
Crowe U.K. LLP
Statutory Auditor
London
28 April 2022
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2021
Note 2021 2020
US$ US$
-------------------------------------- ----- ---------- -----------
Administrative expenses 6 (569,865) (528,799)
-------------------------------------- ----- ---------- -----------
Loss from operations (569,865) (528,799)
Finance expense, net 7 (165,598) (88,775)
Provision for reclamation obligation 12 (125,000) -
Loss before taxation 4 (860,463) (617,574)
Income tax expense 8 - -
-------------------------------------- ----- ---------- -----------
Loss for the year attributable
to
equity holders of the parent
company (860,463) (617,574)
-------------------------------------- ----- ---------- -----------
Other comprehensive loss
Gain/(loss) on translation of
parent net assets and results
from functional currency into
presentation currency 39,119 (82,297)
-------------------------------------- ----- ---------- -----------
Total comprehensive loss for
the year (821,344) (699,871)
-------------------------------------- ----- ---------- -----------
Loss per share - Basic and diluted,
US$ 9 (0.009) (0.008)
-------------------------------------- ----- ---------- -----------
The notes form part of these Financial Statements
Consolidated Statements of Financial Position
as at 31 December 2021
Note 2021 2020
US$ US$
------------------------------ ----- ------------- -------------
Assets
Non-current assets
Intangible assets 10 - -
Restricted cash 12 - 125,000
------------------------------ ----- ------------- -------------
Total non-current assets - 125,000
------------------------------ ----- ------------- -------------
Current assets
Prepayments and other
receivables 13 44,058 41,699
Cash and cash equivalents 14 138,142 47,188
------------------------------ ----- ------------- -------------
Total current assets 182,200 88,887
------------------------------ ----- ------------- -------------
Total assets 182,200 213,887
------------------------------ ----- ------------- -------------
Current liabilities
Trade and other payables 15 774,591 737,835
Borrowings 16 1,935,919 1,183,018
------------------------------ ----- ------------- -------------
Total current liabilities 2,710,510 1,920,853
------------------------------ ----- ------------- -------------
Total liabilities 2,710,510 1,920,853
------------------------------ ----- ------------- -------------
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 (146,554) (185,673)
Accumulated losses* (39,168,666) (38,308,203)
Total capital and reserves (2,528,310) (1,706,966)
------------------------------ ----- ------------- -------------
Total equity and liabilities 182,200 213,887
------------------------------ ----- ------------- -------------
The Financial Statements were approved and authorised for issue
by the Board of Directors on 28 April 2022 and were signed on its
behalf by:
John McGoldrick
Director
The notes form part of these Financial Statements.
Consolidated Statements of Changes in Equity
Other Accumulated
Share capital Share premium reserves losses Total
US$ US$ US$ US$ US$
--------------------- -------------- -------------- ----------- ------------- ------------
Equity at
1 January
2020, 1,103,457 3,586,947 31,796,707 (37,690,629) (1,203,518)
--------------------- -------------- -------------- ----------- ------------- ------------
Loss for the
year - - - (617,574) (617,574)
Other comprehensive
loss for the
year - - (82,297) - (82,297)
--------------------- -------------- -------------- ----------- ------------- ------------
Total comprehensive
loss for the
year - - (82,297) (617,574) (699,871)
Issue of shares 2,090 206,871 - - 208,961
Share issue
costs - (12,538) - - (12,538)
Issue of warrants - (161,948) 161,948 - -
Total transactions
with shareholders 2,090 32,385 161,948 - 196,423
--------------------- -------------- -------------- ----------- ------------- ------------
Equity at
31 December
2020 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
loss for the
year - - 39,199 - 39,199
--------------------- -------------- -------------- ----------- ------------- ------------
Total comprehensive
loss for the
year - - 39,199 (860,463) (821,344)
Issue of shares - - - - -
Share issue
costs - - - - -
Issue of warrants - - - - -
--------------------- -------------- -------------- ----------- ------------- ------------
Total transactions
with shareholders - - - - -
--------------------- -------------- -------------- ----------- ------------- ------------
Equity at
31 December
2021 1,105,547 3,619,332 31,915,557 (39,168,666) (2,528,310)
--------------------- -------------- -------------- ----------- ------------- ------------
Other Reserves
Foreign
Share-based currency
Merger payments Warrants translation Total Other
reserve reserve reserve reserve reserves
US$ US$ US$ US$ US$
--------------------- ----------- ------------ --------- ------------- ------------
Other reserves
at 1 January
2020 31,212,041 474,792 213,250 (103,376) 31,796,707
--------------------- ----------- ------------ --------- ------------- ------------
Other comprehensive
loss for the
year - - - (82,297) (82,297)
--------------------- ----------- ------------ --------- ------------- ------------
Total comprehensive
loss for the
year - - - (82,297) (82,297)
Issue of warrants - - 161,948 - 161,948
Other reserves
at 31 December
2020 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
--------------------- ----------- ------------ --------- ------------- ------------
Consolidated Statement of Cash Flows
Notes 2021 2020
US$ US$
------------------------------------------------ ------ ---------- ----------
Cash flow from operating activities
Loss before taxation (860,463) (617,574)
Adjustments for:
Finance expenses 7 159,087 111,881
Provision for reclamation obligations 12 125,000 -
Unrealised foreign exchange movements 7 6,511 (23,106)
------------------------------------------------ ------ ---------- ----------
Operating cashflows before working capital
changes (569,865) (528,799)
------------------------------------------------ ------ ---------- ----------
Changes in working capital:
Increase in payables 46,220 26,464
(Increase)/decrease in receivables (2,359) (10,496)
------------------------------------------------ ------ ---------- ----------
Net cash used in operating activities (526,004) (512,831)
------------------------------------------------ ------ ---------- ----------
Financing activities
Issue of ordinary shares, net of share
issue costs 17 - 196,423
Proceeds from new borrowings 16 619,886 331,760
------------------------------------------------ ------ ---------- ----------
Net cash flow from financing activities 619,886 528,183
------------------------------------------------ ------ ---------- ----------
Net increase /(decrease) in cash and cash
equivalents in the period 93,882 15,352
Cash and cash equivalents at the beginning
of the period 47,188 28,709
Restricted cash held on deposits 12 125,000 125,000
------------------------------------------------ ------ ---------- ----------
Total cash and cash equivalents at the
beginning of the period, including restricted
cash 172,188 153,709
------------------------------------------------ ------ ---------- ----------
Effect of the translation of cash balances
into presentation currency (2,927) 3,127
Cash and cash equivalents at the end of
the period 138,142 47,188
Restricted cash held on deposits 12 125,000 125,000
------------------------------------------------ ------ ---------- ----------
Total cash and cash equivalents at the
end of the period, including restricted
cash 263,142 172,188
------------------------------------------------ ------ ---------- ----------
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 Kemp House, 152 City Road,
London EC1V 2NX. 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 in the
environmental, social and corporate governance space (ESG).
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 2021
There were no new standards or interpretations effective for the
first time for periods beginning on or after 1 January 2021 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 the 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 Poseidon Plastics Ltd. ("PPL"). On
03 February 2021, the Company announced that it had signed a letter
of intent with PPL to potentially acquire a 100% interest in their
business, a developer of a proprietary chemical recycling process
for PPL plastics. In exchange for a period of exclusivity in
relation to this potential reverse takeover transaction, PPL has
agreed to loan the Company an initial amount of GBP500,000 in the
form of a one-year loan note, extended following the reporting date
to 14 February 2023 carrying an annual interest rate of 10%. PPL
has agreed to lend up to a total of GBP745,000 in order to support
the Company during the ongoing due diligence and potential reverse
takeover process. 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 PPL 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$138,142 as at 31 December 2021 and has
subsequently increased its borrowing capacity and current liquidity
through the extension and expansion of the funding agreement with
PPL.
The directors remain in discussions with the various creditors
of the Company regarding the forbearance of amounts payable until
the conclusion of the proposed RTO, with all creditors informally
agreeing to defer payment of amounts due until the transaction has
completed.
The Directors note that the Group will need additional funding
to continue operations for the foreseeable future and this means
there is a material uncertainty as to the Group's ability to
continue as a going concern, however the Directors are confident
that the Group will be able to raise, as required, sufficient cash
or reduce its commitments to enable it to continue its operations,
and to continue to meet, as and when they fall due, its liabilities
for at least the next 12 months from the date of approval of the
Group Financial Statements. The Group Financial Statements have,
therefore, been prepared on the going concern basis.
Functional Currency
Functional and Presentation Currency
The individual financial information of each Group entity is
measured in the currency of the primary economic environment in
which the entity operates (its functional currency). The Company's
functional currency is UK Pound Sterling (GBP). All other
companies, belonging to the Curzon Group, have US Dollar as their
functional currency. The Group Financial Statements are presented
in US Dollars ($).
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:
2021 2020
------------------------------------- ------- -------
Closing USD/GBP rate at 31 December 1.3489 1.3672
Average USD/GBP rate for the year 1.3775 1.2760
-------------------------------------- ------- -------
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 2021, a
provision has been recognized and set off against restricted cash
as permitted by IAS 32. At 31 December 2020, no provision were
deemed necessary.
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.
(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.
Leases
The Group previously held leases to approximately 45,370 acres
of prospective coalbed methane lands in the Coos Bay Basin during
the period. These leases are outside of IFRS16 scope as they fall
within the scope of IFRS 6. The annual rental payments, under these
operating leases, were recognised in prior years as an expense on a
straight-line basis over the lease term.
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 in the
environmental, social and corporate governance space (ESG). At 31
December 2021 and 31 December 2020, 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): 2021 2020
US$ US$
---------------------------------------------------- ------- ---------
Auditor's remuneration:
- fees payable to the Company's auditor
for the audit of the consolidated and
Company financial statements 34,438 31,900
Foreign currency translation (gain) 6,511 (23,106)
----------------------------------------------------- ------- ---------
5. Directors and Staff
There were no staff employed by the Group during the years ended
31 December 2021 and 31 December 2020, 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:
Social Share-based
Directors' security Payments Total
fees costs Total cash-compensation (options) compensation
2021 US$ US$ US$ US$ 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
------------------ ----------- ---------- ------------------------ ------------ --------------
Social Share-based
Directors' security Payments Total
fees costs Total cash-compensation (options) compensation
2020 US$ US$ US$ US$ US$
------------------ ----------- ---------- ------------------------ ------------ --------------
John McGoldrick 63,800 - 63,800 - 63,800
Scott Kaintz 148,335 20,995 169,330 - 169,330
Owen May 29,242 - 29,242 - 29,242
------------------ ----------- ---------- ------------------------ ------------ --------------
Total Directors'
compensation 241,377 20,995 262,372 - 262,372
------------------ ----------- ---------- ------------------------ ------------ --------------
John McGoldrick has, through agreement with the Company, agreed
to defer payment of his 2017, 2018, 2019, 2020 and 2021 Director's
compensation until the completion of the RTO, which at 31 December
2021 totaled $273,160 and has been recognized in other payables at
the reporting date.
Owen May has, through agreement with the Company, agreed to
defer payment of his 2018, 2019, 2020 and 2021 Director's
compensation until the completion of the RTO, which at 31 December
2021 totaled $98,360 and has been recognized in other payables at
the reporting date.
As at 31 December 2021 Scott Kaintz was owed $67,400 in unpaid
salary (31 December 2020: $68,400).
6. Administrative Expenses
2021 2020
US$ US$
--------------------------------------- ---- -------- ---------
Staff costs
Directors' salaries 254,842 241,376
Employers NI 13,219 15,891
Consultants 22,729 42,445
Professional services
Accounting, audit & taxation 90,527 74,752
Legal - -
Marketing 14,447 12,235
Other 440 -
Regulatory compliance 63,298 93,484
Standard Listing Regulatory Costs 48,351 -
Travel - 492
Business development - -
Office and Admin
General 11,716 -
IT costs - 1,622
Mineral rights lease (outside of IFRS
16 scope) - 11,349
Temporary storage and office rent 7,199 19,140
Insurance 43,097 16,013
--------------------------------------------- -------- ---------
Total administrative costs 569,865 528,799
--------------------------------------------- -------- ---------
7. Finance Expense (net)
2021 2020
US$ US$
-------------------------------------- -------- ---------
Foreign exchange loss/(gain) 6,511 (23,106)
Interest expense on promissory notes
and other short-term loans 159,087 111,881
--------------------------------------- -------- ---------
Total finance expense 165,598 88,775
--------------------------------------- -------- ---------
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:
2021 2020
US$ US$
-------------------------------------------- ---------- ----------
Loss before tax (860,463) (617,574)
--------------------------------------------- ---------- ----------
UK corporation tax credit at 19.00% (2019:
19.00%) (163,488) (117,339)
Effect of non-deductible expense - 10,559
Differences in overseas tax rates (2,916) (1,287)
Effect of tax benefit of losses carried
forward 166,404 108,067
--------------------------------------------- ---------- ----------
Current tax (credit) - -
--------------------------------------------- ---------- ----------
As at 31 December 2021, the tax effects of temporary timing
differences, giving rise to deferred tax assets, was US$1,583,815
(2020: US$1,417,411).
A deferred tax asset in respect of these losses and temporary
differences has not been established as the Group has not yet
generated any revenues and the Directors have, therefore, assessed
the likelihood of future profits being available to offset such
deferred tax assets to be uncertain.
9. Loss Per Share
The basic loss per share is derived by dividing the loss for the
year attributable to ordinary shareholders of the Company by the
weighted average number of shares in issue.
Diluted loss per share is derived by dividing the loss for the
year attributable to ordinary shareholders of the Company by the
weighted average number of shares in issue plus the weighted
average number of ordinary shares that would be issued on
conversion of all dilutive potential ordinary shares into ordinary
shares.
The following reflects the loss and share data used in the basic
and diluted loss per share computations:
2021 2020
-------------------------------------------- ----------- -----------
(Loss) after tax attributable to the
shareholders of the parent (US$) (860,463) (617,574)
Weighted average number of ordinary shares
of GBP0.01 in issue used calculation
of in basic and diluted EPS 99,639,565 92,632,948
(Loss) per share - basic and fully diluted
(US$) (0.009) (0.008)
--------------------------------------------- ----------- -----------
At 31 December 2021 and 31 December 2020, the effect of all
potential ordinary shares and contingently issuable shares, that
are presented in the table below, was anti-dilutive as it would
lead to a further reduction of loss per share, therefore, these
instruments were not included in the diluted loss per share
calculation.
2021 2020
Number Number
---------------------------------------------- ----------- -----------
Share options granted to employees -
fully vested at the end of the respective
period 280,854 280,854
Warrants given to shareholders as a part
of placing equity instruments - fully
vested at the end of the respective period 18,606,594 20,612,925
----------------------------------------------- ----------- -----------
Total instruments fully vested 18,887,448 20,893,779
----------------------------------------------- ----------- -----------
Total number of instruments and potentially
issuable instruments (vested and not
vested) not included into the fully diluted
EPS calculation 18,887,448 20,893,779
----------------------------------------------- ----------- -----------
10. Intangible Assets
2021 2020
Exploration and evaluation expenditure US$ 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 2021 and 31 December 2020. 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:
Country Proportion
Name of incorporation Issued capital held by Group Activity
---------------- ------------------ --------------- --------------- ------------------------
Coos Bay Energy Membership
LLC USA interests 100% Holding company
Westport Energy
Acquisitions
Inc. USA Shares 100% Holding company
Westport Energy Membership
LLC USA interests 100% Oil and gas exploration
Curzon Energy
Inc.* USA Shares 100% Holding company
Rigel Energy Membership
LLC** USA interests 100% Holding company
---------------- ------------------ --------------- --------------- ------------------------
* Incorporated on 1 May 2019 and dissolved on 26 February 2020
as related transaction did not complete.
** Incorporated on 1 May 2019 and dissolved on 27 February 2020
as related transaction did not complete.
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 $125,000 comprises funds held as a collateral
to support stand-by letters of credit related to the Group's oil
and gas properties. The letters of credit secure the reclamation
obligations under the leases and state law. The cash can be taken
by Umpqua Bank in the event the letters of credit are drawn on by
the State of Oregon, Department of Geology & Mineral Industries
(DOGAMI). The cash is held in the form of a Certificate of Deposit.
At the year end the Group has recognized a provision for
reclamation obligations equivalent to the entire restricted cash
balance in recognition of the fact that recovery of these funds may
only be possible following completion of reclamation work on these
oil and gas properties. This provision has been offset against the
restricted cash balance as permitted by IAS 32.
13. Prepayments and Other Receivables
2021 2020
US$ US$
----------------------------------------- ------- -------
VAT recoverable 8,404 3,106
Other debtors 35,654 38,593
------------------------------------------ ------- -------
Total prepayments and other receivables 44,058 41,699
------------------------------------------ ------- -------
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:
2021 2020
US$ US$
-------------------------- -------- -------
Cash in hand and at bank 138,142 47,188
--------------------------- -------- -------
15. Trade and Other Payables
2021 2020
US$ US$
------------------------------------------------ -------- --------
Trade and other payables 734,146 674,527
Accruals 33,724 46,350
------------------------------------------------- -------- --------
Total financial liabilities, excluding
loans and borrowings, classified as financial
liabilities measured at amortised cost 767,870 720,877
------------------------------------------------- -------- --------
Other payables - tax and social security
payments 6,721 16,958
------------------------------------------------- -------- --------
Total trade and other payables 774,591 737,835
------------------------------------------------- -------- --------
16. Borrowings
Details of the notes and borrowings originated by the Group are
disclosed in the table below:
Origination Contractual Original Annual Status at
date settlement note value interest 31 December
date in original rate 2021
currency Security
------------------- ------------- ---------------------- ------------- ---------- -------------- -------------
C4 Energy 22 Sept Conversion/Repayment
Ltd 2017 at RTO date $200,000 15% unsecured Outstanding
Conversion
Bruce Edwards 1 Sep 2017 at RTO date $100,000 15% unsecured Outstanding
100% interest
HNW Investor 1 July Conversion/Repayment in Coos
Group 2019 at RTO date GBP263,265 13% Bay LLC Outstanding
Sun Seven
Stars Investment 13 Mar Conversion/Repayment
Group ("SSSIG") 2020 at RTO date GBP260,000 10% unsecured Outstanding
Poseidon
Plastics
Limited 2 February 14 February
("PPL") 2021 2023* GBP450,000 10% unsecured Outstanding
------------------- ------------- ---------------------- ------------- ---------- -------------- -------------
*Please refer to note 22 Post Balance Sheet Events for more
information
No interim payments are required under the promissory notes, as
the payment terms require the original principal amount of each
note and all accrued interest thereon, to be paid in single lump
payments on the respective contractual settlement dates.
2021 2020
US$ US$
--------------------------------------------- ---------- ----------
At 1 January 1,183,018 698,798
Received during the year 619,886 331,760
Interest accrued during the year 158,564 109,943
Exchange rate differences (25,549) 42,517
Short-term loans and borrowings 31 December 1,935,919 1,183,018
---------------------------------------------- ---------- ----------
Reconciliation of Liabilities Arising from Financing
Activities
Cash flows
Proceeds Non-cash Non-cash
from new flow Forex flow Interest 31 Dec
31 Dec 2020 borrowings movement accrued 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
------------------- ------------ ------------ ------------ --------------- ----------
Cash flows
Proceeds Non-cash Non-cash
from new flow Forex flow Interest 31 Dec
31 Dec 2019 borrowings movement accrued 2020
------------------- ------------ ------------ ------------ --------------- ----------
HNW Investor
Group 334,070 - 17,286 43,704 395,060
C4 Energy Ltd. 232,378 - - 30,000 262,378
Bruce Edwards 132,350 - - 15,000 147,350
Sun Seven Stars
Investment Group
("SSSIG") - 331,760 25,231 21,239 378,230
Total liabilities
from financing
activities 698,798 331,760 42,517 109,943 1,183,018
------------------- ------------ ------------ ------------ --------------- ----------
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, Deferred shares, Share capital,
number number US$
-------------------------------- ----------------- ----------------- ---------------
At 1 January 2020 83,032,971 - 1,103,457
-------------------------------- ----------------- ----------------- ---------------
Share subdivision on 6 May
2020 - details of subdivision
are presented in the table
below 83,032,971 83,032,971 1,103,457
-------------------------------- ----------------- ----------------- ---------------
Issue of shares at GBP0.01
per share via placement
on 3 June 2020 for cash 16,606,594 - 2,090
-------------------------------- ----------------- ----------------- ---------------
At 31 December 2020 99,639,565 83,032,971 1,105,547
-------------------------------- ----------------- ----------------- ---------------
At 31 December 2021 99,639,565 83,032,971 1,105,547
-------------------------------- ----------------- ----------------- ---------------
Number
Ordinary
Number Number shares
Ordinary Deferred Share of GBP0.01 Share
shares of shares Capital, before Capital,
GBP0.0001 of GBP0.0099 US$ subdivision US$
--------------------- ----------- -------------- ---------- ------------- ----------
Issued and fully
paid
Existing Ordinary
Shares of GBP0.01
each immediately
before subdivision - - - 83,032,972 1,103,457
After subdivision*:
New Ordinary shares
of GBP0.0001 each 83,032,972 - 11,035 - -
Deferred Shares
of GBP0.0099 each - 83,032,972 1,092,422 - -
--------------------- ----------- -------------- ---------- ------------- ----------
Total Share Capital 1,103,457 1,103,457
--------------------- ----------- -------------- ---------- ------------- ----------
*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 GBP0.01 each in the capital
of the Company into (i) 83,032,971 New Ordinary Shares ("New
Ordinary Shares") of GBP0.0001 each and (ii) 83,032,971 Deferred
Shares ("Deferred Shares") of GBP0.0099 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 20 21 , the Company had outstanding options to
subscribe for ordinary shares as follows:
Option exercise Number of Vesting date Expiry date Fair value
price options of individual
granted option
GBP0.10 280,854 4 Oct 2018 4 Oct 2022 GBP0.074
Total options
outstanding at
31 December 20
21 280,854
----------------- ---------- ------------- ------------ ---------------
2021 2020
---------------------- ---------------------
Weighted Weighted
average average
exercise Number exercise
Number of price of price
options GBP options GBP
------------------------------ ---------- ---------- --------- ----------
Outstanding at the beginning
of the period 280,854 0.10 280,854 0.10
Outstanding at the end of
the period 280,854 0.10 280,854 0.10
------------------------------ ---------- ---------- --------- ----------
Vested and exercisable at
the end of the period 280,854 0.10 280,854 0.10
------------------------------ ---------- ---------- --------- ----------
During the financial year, no options (2020: none ) were
granted. The weighted average fair value of each option granted
during the year was GBPnil (2020: nil).
The exercise price of options outstanding on 31 December 2021
and 31 December 2020 is GBP0.1 Their weighted average remaining
contractual life was 0.75 years (2020: 1.45 years).
No options were exercised during the reporting year (2020:
nil).
Warrants
On 31 December 2021, the following warrants were in issue:
Warrant exercise Number of warrants Expiry date Fair value of
price granted individual warrant
----------------------- ------------------- ------------ --------------------
GBP0.011 1,000,000 1 Oct 2022 GBP0.0056
GBP0.015 17,606,594 9 June 2022 GBP0.00731
----------------------- ------------------- ------------ --------------------
Total warrants in
issue at 31 December
2021 18,606,594
----------------------- ------------------- ------------ --------------------
2021 2020
Number of Number of
warrants warrants
Outstanding at the beginning of the
period 20,612,925 5,636,531
Granted during the period - 17,606,594
Lapsed during the period (2,006,331) (2,630,200)
Exercised during the period - -
Outstanding at the end of the period 18,606,594 20,612,925
-------------------------------------- ------------ ------------
Vested and exercisable at the end of
the period 18,606,594 20,612,925
-------------------------------------- ------------ ------------
The exercise price of warrants, outstanding on 31 December 20 21
, ranged between GBP0.011 and GBP0.015 (2020: ranged between GBP0.
0 1 58 and GBP0.1). Their weighted average remaining contractual
life was 0.45 years (2020: 1.24 years).
The weighted average share price (at the date of exercise) of
warrants exercised during the year was nil (2020: nil) as no
warrants were exercised.
The following information is relevant in the determination of
the fair value of the warrants granted during the year ended 31
December 2020:
Granted on 3 June 2020
------------------------------------------ -----------------------
Warrant pricing model used Black-Scholes
Weighted average share price at grant
date, GBP 0.013
Warrant exercise price, GBP 0.015
Weighted average contractual life, years 2
Expected volatility, % 117
Expected dividend growth rate, % 0
Risk-free interest rate (2-year bond),
% 0.006
FV of 1 warrant, GBP 0.00731
------------------------------------------ -----------------------
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.
The aggregate fair value, related to the share warrants granted
to shareholders acting in the capacity of shareholders during the
year ended 31 December 2020, has been allocated to share premium as
directly attributable share issue cost in the amount of
US$161,948.
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:
2021 2020
US$ US$
--------------------------- ---------- ----------
Financial assets
Cash and cash equivalents 138,142 47,188
Other receivables - -
Restricted cash* 125,000 125,000
---------------------------- ---------- ----------
Financial liabilities
Trade payables 292,592 349,117
Accruals 481,999 388,718
Short-term borrowings 1,935,919 1,183,018
---------------------------- ---------- ----------
*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 Moody's Fitch R&I
Poor's
Long Term A/Stable A1/Stable A+/Negative A+/Stable
------------- ---------- ------------ ----------
Short Term A-1 P-1 F1 N/A
------------- ---------- ------------ ----------
Unsupported Group Credit bbb+ baa3 a N/A
/Baseline Credit Assessment/Viability
Rating
------------- ---------- ------------ ----------
Exposure to Credit Risk
The Group is exposed to the credit risk of the US Specialty
Insurance Company, currently holding a US$125,000 bond on behalf of
the Company's Coos Bay Energy LLC subsidiary. Note that this
balance has been impaired to nil in the current year, see note 12
for further details.
Market Risk - Interest Rate Risk
Borrowings issued at fixed rates expose the Group to fair value
interest rate risk. The Directors' policy is to maintain a majority
of the Group's borrowings in fixed rate instruments. The Directors
have analysed the Group's interest rate exposure on a dynamic
basis. This takes into consideration refinancing, renewal of
existing positions and alternative financing. Based on these
considerations, the Directors believe the Group's exposure to cash
flow and fair value interest rate risk is not significant.
Market Risk - Currency Risk
Currency risk is the risk that the value of financial
instruments will fluctuate due to changes in foreign exchange
rates. Currency risk arises when future commercial transactions and
recognised assets and liabilities are denominated in a currency
that is not the Company's (Pound Sterling, GBP) or its
subsidiaries' functional currency (US$). The Group is exposed to
foreign exchange risk, arising from currency exposures primarily
with respect to the UK Pound Sterling (GBP). 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 2021:
+10% -10%
US$ US$
----------------- ----------------- -----------------
Loss before tax Increase in loss Decrease in loss
by US$71,466 by US$71,466
----------------- ----------------- -----------------
2021 2021 2021 2020 2020 2020
Assets and liabilities
by currency of denomination,
al numbers are presented GBP Total GBP Total
in US$ US$ In US$ US$ US$ In US$ US$
------------------------------- -------- ---------- ---------- -------- --------- ----------
Financial assets
Cash and cash equivalents 8,931 129,211 138,142 299 46,889 47,188
Other receivables - - - - - -
Restricted cash* 125,000 - 125,000 125,000 - 125,000
------------------------------- -------- ---------- ---------- -------- --------- ----------
Financial liabilities
Trade payables 48,918 243,674 292,592 54,805 294,312 349,117
Accruals - 481,999 481,999 - 388,718 388,718
Short-term borrowings 454,726 1,481,193 1,935,919 409,728 773,290 1,183,018
------------------------------- -------- ---------- ---------- -------- --------- ----------
*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.
Promissory Notes
On 13 February 2020, the Company announced that it had been
informed by YA Global Investments LP of the sale of its outstanding
debt due to YA Global to C4 Energy Ltd, a UK incorporated private
Company. The balance of the loan agreement at that time was
US$200,000, with approximately US$32,000 of accrued interest.
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
Drawdown of Loan Facility
Following the reporting date, the Company drew down on a further
$189,000 (GBP140,000) on its loan facility with Poseidon Enhanced
Technologies Limited, bringing the total value of the principal of
this loan facility drawn down to $796,000 (GBP590,000).
Exclusivity Extensions
On 4 January 2022, 31 January 2022, 23 February 2022, 2 Match
2022, 31 March 2022 and 28 April 2022 the Company announced a
series of extensions to the exclusivity period entered into with
Poseidon Enhanced Technologies Limited under the terms of the LOI
entered into between the parties, initially announced on 3 February
2021, with such period now expiring on 1 June 2022 and extendable
up to 30 September 2022.
Loan Extension and Facility Increase
On 23 February 2022, the Company announced that it had extended
its outstanding loan with Poseidon Enhanced Technologies Limited to
14 February 2023 along with an expansion of the total principal
available for drawdown from $674,000 (GBP500,000) to $1,005,000
(GBP745,000).
Company Statement of Financial Position
as at 31 December 2021
Note 2021 2020
GBP GBP
-------------------------------------- ----- ------------ ------------
Assets
Current assets
Trade and other receivables 28 3 2,662 3 0 ,500
Cash and cash equivalents 29 102,408 34,514
-------------------------------------- ----- ------------ ------------
Total current assets 135,070 65,014
-------------------------------------- ----- ------------ ------------
Total assets 135,070 65,014
-------------------------------------- ----- ------------ ------------
Liabilities
Current liabilities
Trade and other payables 30 537,959 499,583
Borrowings 31 1,435,141 865,285
-------------------------------------- ----- ------------ ------------
Total liabilities 1,973,100 1,364,868
-------------------------------------- ----- ------------ ------------
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 (8,833,702) (8,295,526)
Total capital and reserves (1,838,030) (1,299,854)
-------------------------------------- ----- ------------ ------------
Total equity and liabilities 135,070 65,014
-------------------------------------- ----- ------------ ------------
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
GBP538,176 (2020: GBP515,324). The Company's total comprehensive
loss for the financial year was GBP538,176 (2020: GBP515,324).
The Financial Statements were approved by the Board of Directors
and authorised for issue on 28 April 2022 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-based Merger
Share Share payments Warrants relief Accumulated
capital Premium reserve reserve reserve loss Total
GBP GBP GBP GBP GBP GBP GBP
--------------------- --------- ---------- ------------ --------- ---------- ------------ ------------
Equity at 1 January
2020 830,330 2,693,194 355,269 160,777 2,800,000 (7,780,202) (940,632)
Loss for the
year 2020 - - - - - (515,324) (515,324)
Total comprehensive
loss for the
year 2020 - - - - - (515,324) (515,324)
Issue of shares 1,661 164,405 - - - - 166,066
Issue of warrants - (9,964) - - - - (9,964)
Issue of share
options - (128,704) - 128,704 - - -
--------------------- --------- ---------- ------------ --------- ---------- ------------ ------------
Total transactions
with shareholders 1,661 25,737 - 128,704 - - 156,102
--------------------- --------- ---------- ------------ --------- ---------- ------------ ------------
Equity at 31
December 2020 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)
Other comprehensive
loss for the
year - - - - - - -
--------------------- -------- ---------- -------- -------- ---------- ------------ ------------
Total comprehensive
loss for the
year 2020 - - - - - (538,176) (538,176)
Total transactions
with shareholders - - - - - - -
--------------------- -------- ---------- -------- -------- ---------- ------------ ------------
Equity at 31
December 2021 831,991 2,718,931 355,269 289,481 2,800,000 (8,833,702) (1,838,030)
--------------------- -------- ---------- -------- -------- ---------- ------------ ------------
Company Statement of Cash Flows
for the Year Ended 31 December 2021
Notes 2021 2020
GBP GBP
-------------------------------------------- ------- ---------- ----------
Cash flow from operating activities
Loss before taxation (538,176) (515,324)
Adjustments for:
Finance expense 115,488 87,681
Finance income - (39,368)
Impairment of loans and receivables 9,596 94,627
Income from forgiven creditors - (15,816)
Unrealised foreign exchange movements 4,727 (18,110)
----------------------------------------------------- ---------- ----------
Operating cashflows before working capital
changes (408,365) (406,310)
----------------------------------------------------- ---------- ----------
Changes in working capital:
Increase in payables 38,375 64,802
(Increase)/decrease in receivables (2,162) (6,709)
----------------------------------------------------- ---------- ----------
Net cash used in operating activities (372,152) (348,217)
----------------------------------------------------- ---------- ----------
Financing activities
Issue of ordinary shares, net of share
issue costs - 156,102
Proceeds from new borrowings 450,000 260,000
Interest paid (358) -
Advances granted to subsidiaries (9,596) (55,259)
----------------------------------------------------- ---------- ----------
Net cash flow from financing activities 440,046 360,843
----------------------------------------------------- ---------- ----------
Net increase/(decrease) in cash and cash
equivalents in the period 67,894 12,626
----------------------------------------------------- ---------- ----------
Cash and cash equivalents at the beginning
of the period 34,514 21,888
----------------------------------------------------- ---------- ----------
Cash and cash equivalents at the end
of the period 102,408 34,514
----------------------------------------------------- ---------- ----------
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
2021 2020
GBP GBP
--------------------------------------- -------- --------
Staff costs 217,596 218,954
Standard Listing Regulatory Costs 45,951 73,263
Professional and consultancy fees 91,178 75,672
Other general administrative expenses 43,860 38,421
---------------------------------------- -------- --------
Total 398,585 406,310
---------------------------------------- -------- --------
27. Receivables from Subsidiaries and Related Party Transactions
2021 2020
GBP GBP
---------------------------- ----- -----
Loans to subsidiaries - -
---------------------------- ----- -----
Total loans to subsidiaries - -
---------------------------- ----- -----
During the year ended 31 December 2021, the Company recognised
expected credit losses in relation to the intercompany loans in the
amount of GBP19,378 (2020: GBP94,627). 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 available to advance the
project in declining US oil and gas markets.
During the year ended 31 December 2021, the maximum amount owed
by the subsidiary to the Company was GBP19,378 (2020: GBP94,627).
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 2021 At 31 December 2021, GBP39,368 (2020:
GBP39,368) 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
2021 2020
GBP GBP
----------------------------------------- ------- -------
VAT recoverable 6,230 2,272
Prepayments 26,432 28,227
Total prepayments and other receivables 32,662 30,499
------------------------------------------ ------- -------
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:
2021 2020
GBP GBP
-------------------------- -------- -------
Cash in hand and at bank 102,408 34,514
--------------------------- -------- -------
30. Current Liabilities
Trade and Other Payables
2021 2020
GBP GBP
-------------------------------- -------- --------
Trade and other payables 180,642 215,266
Accruals 357,317 284,317
--------------------------------- -------- --------
Total trade and other payables 537,959 499,583
--------------------------------- -------- --------
31. Short-Term Borrowings
At 31 December 2021, the Company had an outstanding promissory
notes and loans of GBP1,435,141 (2020: GBP865,285), please refer to
note 16 .
Cash flows
Proceeds Non-cash Non-cash
from new flow Forex flow Interest 31 Dec
1 Jan 2021, borrowings, movement, accrued, 2021,
GBP GBP GBP GBP GBP
------------------- ------------ ------------- ------------ --------------- ----------
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
------------------- ------------ ------------- ------------ --------------- ----------
Cash flows
Proceeds Non-cash Non-cash
from new flow Forex flow Interest 31 Dec
1 Jan 2020, borrowings, movement, accrued, 2020,
GBP GBP GBP GBP GBP
------------------- ------------ ------------- ------------ --------------- --------
HNW Investor
Group 254,705 - - 34,251 288,956
C4 Energy Ltd 177,171 - (8,773) 23,511 191,909
Bruce Edwards 100,907 - (4,888) 11,756 107,775
------------------- ------------ ------------- ------------ --------------- --------
Sun Seven Stars
Investment Group
("SSSIG") - 260,000 - 16,645 276,645
------------------- ------------ ------------- ------------ --------------- --------
Total liabilities
from financing
activities 532,783 260,000 (13,661) 86,163 865,285
------------------- ------------ ------------- ------------ --------------- --------
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:
2021 2020
GBP GBP
----------------------------- ---------- --------
Financial assets
Cash and cash equivalents 102.408 34,514
Other receivables - -
Loans due from subsidiaries - -
----------------------------- ---------- --------
Financial liabilities
Trade payables 180,624 215,266
Accruals 357,317 284,317
Short-term borrowings 1,435,141 865,285
------------------------------ ---------- --------
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 2021, 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, 2021 2020
al numbers are presented 2021 2021 Total 2020 2020 Total
in GBP US$ GBP GBP US$ GBP GBP
------------------------------- -------- ---------- ---------- -------- -------- --------
Financial assets
Cash and cash equivalents 6,621 95,787 102,408 219 34,295 34,514
Other receivables - - - - - -
Financial liabilities
Trade payables - 180,642 180,642 - 215,266 215,266
Accruals - 357,317 357,317 - 284,317 284,317
Short-term borrowings 337,099 1,098,042 1,435,141 299,684 565,601 865,285
------------------------------- -------- ---------- ---------- -------- -------- --------
34. Events After the Reporting Period
Events after the reporting period are more fully described in
note 22 .
35. Controlling Party
At 31 December 2021, 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 31 December 2021 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 2021 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 2021 will
be delivered to the Registrar of Companies by 30 June 2022.
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FR IPMLTMTBTBAT
(END) Dow Jones Newswires
April 29, 2022 02:01 ET (06:01 GMT)
Curzon Energy (LSE:CZN)
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Curzon Energy (LSE:CZN)
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