21 March
2024
Blue Star Capital
plc
("Blue Star" or the
"Company")
Final Results for the year
ended 30 September 2023
Blue Star Capital plc (AIM: BLU),
the investing company with a focus on esports, technology and its
applications within media and gaming, announces its final results
for the year ended 30 September 2023.
Operating and financial summary
- The Company
incurred a pretax loss for the period of £6,329,473 compared to a
loss for the previous period of £1,301,008.
- The main factors
behind this year's significant loss were the write down in value of
the Company's investments in Dynasty Media & Gaming and Sthaler
and losses incurred on the realisation of the Company's quoted
investments.
- The operating
expenses of the Company have been significantly reduced from
£517,003 to £201,118
- The cash
position of the Company at 30 September 2023 was £63,158 compared
with £86,575 in the previous period.
- The formal sales
process for SatoshiPay is ongoing and the Company will update
shareholders as appropriate. The Company has a 27.9% interest in
SatoshiPay which is valued on the basis of the last external fund
raise in 2019 at approximately £4.65 million.
- The Company's
Net Asset value per share is 0.11p
- Post year end a
decision was taken by the management of Dynasty to merge with
Googly. To help support Dynasty through this transitioning phase,
Blue Star invested US$75,000 in a US$3 million fundraise undertaken
by Dynasty in November 2023. The Convertible Loan Note has a
two-year expiry period, is non-interest bearing and convertible at
a discount of 50 per cent to Dynasty's next funding
round.
The Annual Report and notice of
Annual General Meeting ("AGM") will be posted to shareholders
shortly and will be available to view on the Company's
website http://www.bluestarcapital.co.uk
The AGM will be held at the
offices of Cairn Financial Advisers LLP, 80 Cheapside, 3rd Floor,
EC2V 6EE on 17 April 2024 at 10.30 a.m. Shareholders wishing to
vote on any matters of business at the AGM are encouraged to do so
through completion of a proxy form which can be completed and
submitted to the Company. Proxies should be completed and returned
in accordance with the instructions on the form of proxy by no
later than 10.30 a.m. on 15 April 2024.
Tony Fabrizi Executive Chairman of
Blue Star Capital plc, commented:
"The last year was one of considerable
disappointment for all those connected with Blue Star. The material
and unexpected write down in value in our investment in Dynasty has
had a significantly detrimental impact on the Company's net asset
value and this has obviously impacted sentiment towards the
Company. Our focus is on securing an attractive offer for our
shareholding in SatoshiPay later this year at which point the Board
will consult with shareholders over the Company's
future."
This announcement contains inside information for the
purposes of Article 7 of EU Regulation 596/2014.
For further information, please
contact:
Blue Star Capital plc
|
+44 (0) 777 178 2434
|
Tony Fabrizi
|
|
|
|
Cairn Financial Advisers
LLP
|
+44 (0) 20 7213 0880
|
(Nominated Adviser &
Broker)
|
|
Jo Turner / Liam Murray
|
|
|
|
Chairman's Statement
Blue Star Capital plc ("the
Company" or "Blue Star") provides investors with exposure to a
portfolio of geographically diverse companies in high-growth,
disruptive technology sectors.
During the period, the Company's
Net Asset Value ("NAV") decreased by 53% to £5,329,347 (2022:
£11,414,507) with the Company incurring a pre-tax loss of
£6,328,408 (2022: loss £1,301,008). The significant decline in NAV
and loss for the year principally reflect the write down of our
investments in Dynasty Media & Gaming and Sthaler plus the
losses incurred on the realisation of the Company's quoted
investments. The Company ended the year with cash of £63,158 (2022:
£86,575).
In September 2022, the Board set
out its strategy for the next two years. The key components were to
refrain from making any new investments while it sought offers for
its shareholdings in SatoshiPay and Dynasty. The Board also advised
that, if possible, it would endeavour to manage the business
without any further equity raises.
We provide the following portfolio
company overviews for the year ended 30 September 2023.
Blockchain and decentralised
finance
SatoshiPay's mission is to connect
the world through instant payments. To achieve this ambition,
SatoshiPay is initially focusing on building the Pendulum Network
Project ("Pendulum").
Pendulum, a smart-blockchain
infrastructure technology company, aims to decentralize forex and
traditional finance, by providing the missing link between fiat
currency and De-Fi ecosystems through a sophisticated smart
contract network. Pendulum is committed to advancing foreign
exchange ("Forex") trading into the blockchain space to integrate a
tranche of the US$6.6 trillion traded daily in Forex
markets.
In the period under review,
Pendulum has achieved a number of key operational milestones, most
notably:
•
In December 2022 Pendulum completed its crowdloan as a precursor to
it becoming a Polkadot Parachain. Pendulum's crowdloan was the
fastest parachain crowdloan in the history of the Polkadot
ecosystem.
•
Pendulum parachain went live on Polkadot mainnet in February 2023
and the corresponding utility token called PEN was listed on MEXC
in March 2023.
•
In March 2023 Pendulum announced the development of "Spacewalk",
its blockchain bridge connecting the Stellar and Polkadot networks.
This innovative bridge is intended to facilitate the transfers of
multiple stablecoins, advancing interoperability in the blockchain
space. Pendulum described Spacewalk as a trust-minimized bridge
that supports the smooth and seamless transfer of stable assets
between the two ecosystems, allows closer collaboration in the
De-Fi sector and drives synergies between traditional fintech
services and the De-Fi sector.
•
In December 2023, an HRMP channel was opened with Moonbeam Network
helping to demonstrate Pendulum's partnerships strategy. This
launch helped enable additional functionalities for the PEN token
and stablecoin activities within the Moonbeam ecosystem and
assisted with the listing of PEN on Moonbeam's DEX Stellaswap in
early January 2024.
SatoshiPay currently owns around
5% of the PEN tokens and has a service contract with Pendulum to
provide software development.
SatoshiPay also successfully
incubated the 0xAmber AMM Project (now called Nabla.fi) for which it
secured 5 per cent of the future tokens. Nabla is a novel AMM
design for low-risk, single-sided liquidity provision, significantly
lower slippage and fees compared to other AMM designs. The nabla.fi
team are about to launch their novel-design decentralized exchange
with oracle-guided pricing and single-sided liquidity provision for
maximum capital efficiency and attractive FX rates on
chain.
During the period, the SatoshiPay
team took the decision to mothball Dtransfer, given the need to
focus resources on Pendulum and Nabla. However, the successful
incubation of Pendulum followed by Nabla provides the board of
SatoshiPay with confidence that they are well positioned to incubate
other DeFi applications with a stablecoin, FOREX or business
focus.
In its most recent results to 31
December 2022, SatoshiPay achieved turnover of €2.93 million and
profits after tax of €587,000.
Blue Star currently has a 27.9%
interest in SatoshiPay's share capital, which is valued on the
basis of the last external fund raise in 2019 at approximately
£4.65 million. As previously announced, Benchmark International
have been appointed to undertake a formal sales process for
SatoshiPay which may lead to the sale of all or part of Blue Star's
shareholding in SatoshiPay. There is no guarantee that this
exercise will result in a whole or partial sale, but the Board
believes it's important to undertake such a process so as to obtain
a better understanding of SatoshiPay's current and potential
value.
Esports
To date we have invested
approximately £2.5 million in our Esports portfolio which
originally consisted of eight companies, with the main investments
being £712,665 in Guild and £969,268 in Dynasty. In last year's
accounts we wrote off four of those investments and started the
year with investments in Dynasty, Googly, Paidia and Guild. These
investments were carried at either cost or last private fundraising
for our private investments or market value for our quoted
investments.
Details of the four Esports
investments are provided below.
Dynasty Media & Gaming
Dynasty's original business plan
was to provide its gaming platform to large telecoms companies, for
which it initially had much success, generating fixed monthly
license fee income. However, operational complexities, including
the need to support several different and highly customised
platforms, led to a pivot to focus on launching B2C platforms with
more strategically aligned and complementary partners and in the
process, maintaining control of its products and contact with the
end users. As a result of extensive technology development,
Dynasty's platform has now moved to a single code base, meaning
time to launch in new markets has been reduced from at least nine
months to one month.
As previously reported, Dynasty
believes it has built the leading and most comprehensive
gaming/esports platform globally, which combines the following key
features, licenses, and accreditations in one single
platform:
•
Enterprise grade international esports tournament engine accredited
and endorsed by major international games publishers including
Riot, Activision and Supercell to run professional leagues and mass
market grassroots esports feeder leagues.
•
The only enterprise grade esports platform and gaming shop
that:
o supports international
standard professional esports tournaments for both PC and Mobile
games, the world's fastest growing gaming sector;
o is optimised for key
hyper-growth 'mobile first' markets. Dynasty optimised its mobile
experience to 30MB, perfect for mobile first markets such as India,
Africa, SEA and LATAM;
o incorporates a payment
wallet, subscription engine, digital voucher and top up shop, with
full security accreditation;
o can deliver and launch a
fully branded, fully functional partner platform within 4 weeks.
This has been enabled by a single code cloud-based code
structure.
· Full
customer relationship management campaign engine to increase
monetisation and engagement.
· Unique User Generated Tournament engine that allows users to
create entry fee and prize pool tournaments, sharing in platform
monetisation.
· The
only enterprise grade esports and gaming shop with an AI Academy,
allowing players to improve in game performance.
Dynasty now has live B2C platforms
in several key gaming markets including Googly in India, Lets Play
Live in Australia and New Zealand and Lightning Dragon in
Philippines. Further details on these platforms are summarised
below:
Googly: Dynasty advises that India
is the world's fastest growing gaming market, with over 750 million
gamers forecast in the country by the end of 2026, spending more
than US$6.7 billion. By most metrics, the rate of growth in gaming
in India is more than double the average of the rest of the world -
this includes more mature, slower growth markets like North America
and Europe, but also accelerating regions such as Latin America and
Southeast Asia. The future growth of gaming in India will continue
to be almost entirely driven by mobile, fuelled by a young
population of digital natives, increasing wealth, and mass
smartphone adoption. Googly's platform offering provides India's
gamers a diverse, immersive experience, catering to all levels of
casual and competitive gaming, including - leaderboards, live
broadcasts, engaging content, unique user-generated prizepool
tournaments, and a market leading games shop.
Lets Play Live: The platform was
launched in June 2023 with the Company's 50/50 JV partner Lets Play
Live, the region's leading tournament organiser and gaming content
creator. Within the first six months of operation, the platform has
already become Oceania's largest and most successful gaming
platform with over 420,000 users. Major official publisher-led
national and regional tournaments secured with an extensive
calendar scheduled throughout 2024 for leading games titles
including Valorant, Fortnite, and Clash Royale.
Lightning Dragon: The platform was
recently launched with large media conglomerate Vera Media Group.
Lightning Dragon has already secured significant partnerships
including PayMaya, one of the region's leading payment providers
with over 40 million users in the Philippines, and Razer, one of
the world's largest gaming brands. Lightning Dragon expects to
announce several more strategic marketing partnerships in the
coming weeks across sectors including TV, radio, telcos, retail,
esports tournament organisers and gaming content
creators.
Dynasty's management believe their
new business model will allow them to become cash-flow positive
later this year. Within their business model, India is the largest
contributor and given the importance of the Indian market and the
financial support provided by Googly and its shareholders to Dynasty
over the last 9 months, a decision was taken late last year to
merge Dynasty and Googly. To help support Dynasty through this
transitioning phase, Blue Star invested US$75,000 in a US$3 million
fundraise undertaken by Dynasty in November 2023. The Convertible
Loan Note had a two-year expiry period, was non-interest bearing
and converted at a discount of 50 per cent to Dynasty's next
funding round.
Details of the merger were
announced on 13 March 2024, in which Dynasty has entered into an
agreement to acquire the entire assets and business of Googly for a
purchase consideration of approximately US$7.6 million in an
all-share acquisition that values the combined entity at US$15m. In
addition, the Company has also been informed that a number of
Convertible Loan Note holders in Dynasty also intend to convert
post the Acquisition and the Company has decided that it will also
convert its US$75,000 Convertible Loan at that point.
Blue Star has been an investor in
Dynasty since 2019 and pre the merger with Googly and the
conversion of all outstanding Convertible Loan Notes, had a
shareholding of approximately 13%. Additionally, the Company had a
shareholding of 0.6% of Googly. Post the merger and pre conversion
of the Convertible Loan Notes, the Company holds approximately 6.3%
of the fully diluted share capital of Dynasty. Assuming all
Convertible Loan Notes convert, this holding is expected to fall to
around 2.4%.
Guild Esports PLC
Guild Esports PLC is a global
teams organisation and lifestyle brand, which was the first esports
organisation to list on the London Stock Exchange.
At the year end the Company held
8,951,500 shares in Guild with a valuation of £51,471.
Subsequently, the Company sold its remaining shareholding in
Guild.
Paidia
Paidia is an all-women's esports
business which has achieved significant growth. The market
positioning of Paidia is attracting significant attention both from
the media as well as large global brands. The Company invested
approximately
£59,000 into Paidia in 2021 and is
carrying the investment based on the last external valuation in
August 2023 at £105,910.
Other
investments
Sthaler Limited
Sthaler is a Digital Identity
business which enables an individual to identify themselves using
the unique vein patterns within a finger. Its FinGo ID platform uses
a biometric called VeinID which instantly recognises an individual
through the unique pattern of veins inside each finger. FinGo Pay is
approved to authenticate multiple payment types including payment
cards and real-time payments (bank-to-bank).
At the beginning of 2023,
Sthaler's management calculated that the Company needed to raise
around £4 million to fund it through to a point where it was
self-sustaining. It began a process of reaching out to existing
shareholders and some new investors to seek their support for such
a raise. Although there was general support for the business,
market conditions and the lack of secured projects meant that
investors were unwilling to support at previous valuations. After
considerable efforts, Sthaler's management decided to significantly
reduce the valuation in order to recapitalise the business and
raise the needed funding. At the end of 2023, Sthaler reduced the
valuation to £2 million pre money and secured support from a number
of shareholders. This raise is still ongoing but is expected to
close shortly at between £3.5 million - £4 million.
Although the Company continues to
believe Sthaler retains significant potential, our focus is on our
two main investments which combined with our limited cash
resources, meant that we did not participate in the
round.
At the year end, Blue Star's
shareholding in Sthaler was approximately 0.68% but will fall to
around 0.24% post the current fund raise completing. On this basis,
Blue Star's holding will be valued at approximately £13,600,
compared with a cost of £50,000.
East Sides Games and NFT
Investments PLC To provide working capital the Company
disposed of its shareholdings in NFT Investments during the year
and East Side Games post year-end.
Outlook
Last year was clearly extremely
disappointing for everyone connected with Blue Star with significant
write-downs in a number of our investments. We supported all our
investee businesses to the extent possible and continue to believe
they have potential to become successful businesses in the future.
Our main investment is in SatoshiPay which is currently engaged in
a sales process which may or may not lead to an offer. While this
process is ongoing the Board has agreed to take its remuneration in
shares and has taken actions to eliminate all non-essential
spending. Once the SatoshiPay sales process is complete, the Board
intends to carry out a process of consultation with shareholders to
determine the future direction of the Company.
Anthony Fabrizi
Executive Chairman
21 March 2024
Strategic
Report
The Directors present their
strategic report on the Company for the year ended 30 September
2023.
Review of Business and Analysis Using Key Performance
Indicators
The full year's loss was
£6,328,408 compared to a loss of £1,301,008 for the year ended 30
September 2022.
Net assets have decreased to
£5,329,347 at 30 September 2023, changing from £11,414,507 at 30
September 2022. The cash position at the end of the year decreased
to £63,158 from £86,575 as at 30 September 2022.
During the year, there was a fair
value decrease in the company's investment assets of £5,762,911
(2022: £445,223 loss). A full review of the company's portfolio
investments is provided in the Chairman's statements.
Key Performance Indicators
The Board monitors the activities
and performance of the Company on a regular basis. The indicators
set out below have been used by the Board to assess performance
over the year to 30 September 2023. The main KPIs for the Company
are listed as follows:
|
2023
|
2022
|
Valuation of investments
|
£5,291,806
|
£11,390,278
|
Cash and cash equivalents
|
£63,158
|
£86,575
|
Net current assets
|
£37,541
|
£24,229
|
Loss before tax
|
£6,328,408
|
£1,301,008
|
Net asset value per share
|
0.11p
|
0.23p
|
Investing Policy
|
|
|
Assets or companies in which
the Company can invest
|
|
The Company can invest in assets
or companies in, inter alia, the following sectors:
|
•
Technology;
|
•
Gaming and esports; and
|
•
Media
|
The Company's geographical range
is mainly UK companies but considers opportunities globally and
will actively co- invest in larger deals.
The Company can take positions in
investee companies by way of equity, debt or convertible or hybrid
securities.
Whether investments will be active
or passive investments.
The Company's investments are
passive in nature but may be actively managed. The Company may be
represented on, or observe, the boards of its investee
companies.
Holding period for investments
The Company's investments are
likely to be illiquid and consequently are to be held for the
medium to long term.
Spread of investments and maximum
exposure limits, policy in relation to cross-holdings and investing
restrictions The Company does not have any maximum exposure limits,
limits on cross-holdings or other investing restrictions. Under
normal circumstances, it is the Directors' intention not to invest
more than 10% of the Company's gross assets in any individual
company (calculated at the time of investment). The Company has
accumulated a 27.9% stake in SatoshiPay, which the Board believes
represents a strong opportunity to generate significant shareholder
value.
Policy in relation to gearing
The Directors may exercise the
powers of the Company to borrow money and to give security over its
assets. The Company may also be indirectly exposed to the effects
of gearing to the extent that investee companies have outstanding
borrowings.
Returns and distribution policy
It is anticipated that returns
from the Company's investment portfolio will arise upon realisation
or sale of its investee companies, rather than from dividends
received. Whilst it is not possible to determine the timing of
exits, the Board will seek to return capital to shareholders when
appropriate.
Life of the Company
The Company has an indefinite
life.
Future developments
The Company is working with its
largest investee business, SatoshiPay, to establish an independent
valuation and potential offer for the business. If an offer is
accepted the Board will then consult with shareholders on whether
to reinvest this cash realised from the SatoshiPay share sale or
make some form of cash distribution to shareholders.
Promotion of the Company for the benefit of the members as a
whole
The Director's believe they have
acted in the way most likely to promote the success of the Company
for the benefit of its members as a whole, as required by s172 of
the Companies Act 2006.
The requirements of s172 are for
the Directors to:
•
Consider the likely consequences of any decision
in the long term,
•
Act fairly between the members of the
Company,
•
Maintain a reputation for high standards of
business conduct,
•
Consider the interests of the Company's
employees,
•
Foster the Company's relationships with
suppliers, customers and others, and
•
Consider the impact of the Company's operations
on the community and the environment.
The following paragraphs summarise
how the Directors fulfil their duties:
The Company is quoted on AIM and
its members will be fully aware, through detailed announcements,
shareholder meetings and financial communications, of the Board's
broad and specific intentions and the rationale for its decisions.
The Board recognises its responsibility for setting and maintaining
a high standard of behaviour and business conduct. There is no
special treatment for any group of shareholders and all material
information is disseminated through appropriate channels and
available to all through the Company's news releases and
website.
When selecting investments, issues
such as the impact on the community and the environment have
actively been taken into consideration. The Company's approach is
to use its position to promote positive change for the people with
whom it interacts.
The Company is committed to being
a responsible business. The Company pays its employees and
creditors promptly and keeps its costs to a minimum to protect
shareholders funds. There were no employees in the Company other
than the three Directors in the current and prior-year and
therefore effectiveness of employee policies is not relevant for
the Group.
Principal risks and uncertainties
The Company seeks investments in
late-stage venture capital and early-stage private equity
opportunities, which by their very nature allow a diverse portfolio
of investments within different sectors and geographic
locations.
The Company's primary risk is loss
or impairment of investments. This is mitigated by careful
management of the investment and in particular, only continuing to
support those investments which demonstrate potential to achieve a
positive exit and decisively determining those which do not.
Portfolio and capital management techniques are fully applied
according to industry standard practice.
It may be necessary to raise
additional funds in the future by a further issue of new Ordinary
shares or by other means. However, the ability to fund future
investments and overheads in Blue Star Capital Plc as well as the
ability of investments to return suitable profit cannot be
guaranteed, particularly in the current economic
climate.
The value of companies similar to
those in Blue Star Capital's portfolio and in particular those at
an early stage of development, can be highly volatile. The price at
which investments are made, and the price which the Company may
realise for its investment, will be influenced by a large number of
factors, some specific to the Company and its operations and some
which may affect the sector.
By Order of the Board
Anthony Fabrizi
Executive Chairman
21 March 2024
Directors'
Report
The Directors present their report
together with the audited financial statements for the year ended 30
September 2023.
Results and dividends
The trading results for the year
ended 30 September 2023 and the Company's financial position at that
date are shown in the enclosed financial statements.
The Directors do not recommend the
payment of a dividend for the year (2022: £nil).
Principal activities and review of the
business
The principal activity of the
Company is to invest in the technology, esports and gaming sectors.
A review of the business is included within the Chairman's
Statement and Strategic Report.
Directors serving during the year
Anthony Fabrizi
|
|
Brian Rowbotham
|
Resigned on 9 October
2023
|
Sean King
|
|
On 9 October 2023, Brian Rowbotham
resigned and Anthony Fabrizi was appointed as Company
Secretary.
Directors' interests
The Directors at the date of these
financial statements who served, and their interest in the ordinary
shares of the Company, are as follows:
|
30
September 2023
|
|
30
September 2022
|
|
Number
of ordinary Shares
|
Warrants
|
|
Number
of ordinary Shares
|
Warrants
|
Anthony Fabrizi
|
-
|
170,000,000
|
|
-
|
-
|
Sean King
|
18,250,000
|
30,000,000
|
|
18,250,000
|
-
|
Brian Rowbotham
|
-
|
50,000,000
|
|
-
|
-
|
Significant
Shareholders
As at 13 March 2024, so far as the
Directors are aware, the parties (other than the interests held by
Directors) who are directly or indirectly interested in 3% or more
of the nominal value of the Company's share capital is as
follows:
|
Number
of Ordinary Shares
|
Percentage of issued share
capital
|
Nicolas Slater
|
582,730,468
|
11.44%
|
Pioneer Media Holdings
Inc
|
322,916,333
|
6.34%
|
Derek Lew
|
211,527,778
|
4.15%
|
Paniolo Ventures Limited
|
208,333,333
|
4.09%
|
Related party transactions
Related party transactions and
relationships are disclosed in note
18.
Going concern
The Company has reported a loss
for the year excluding fair value loss on the valuation of
investments of £565,497 (2022: £855,785).
The Company had cash reserves at
the year-end of £63,158 (2022: £86,575).
Post year-end, the Company raised
£75,487 from the sale of its remaining listed investments. In
addition, the Company raised £100,000, pre expenses, pursuant to a
placing of 100,000,000 new ordinary shares at a price of 0.1p per
new ordinary share (refer to note 21).
The Directors have prepared
detailed financial forecasts and cash flows looking beyond 12 months
from the date of the approval of these financial statements. In
developing these forecasts, the Directors have made assumptions
based upon their view of the current and economic conditions that
are expected to prevail over the forecast period. The Directors
estimate that the cash held by the Company, together with known
receivables, will be sufficient to support the current level of
activities to the end of the third quarter of 2024. The Directors
have concluded that the ability of the Company to raise further
funds in the future represents a material uncertainty which may
cast significant doubt on the Company's ability to continue as a
going concern.
The Directors are continuing to
explore sources of finance available to the Company, including the
sale of further investments and they have a reasonable expectation
that they will be able to secure sufficient cash inflows for the
Company to continue its activities for not less than 12 months from
the date of approval of these financial statements. On this basis,
the Directors continue to adopt the going concern basis in
preparing these accounts.
Streamlined Energy and Carbon Reporting
(SECR)
The Company is a low energy user
and as such is exempt from reporting under these
regulations.
Events after the reporting date
Events after the reporting date
are disclosed in note 21.
Political Donations
There were no political donations
during the current or prior year.
Provision of information to Auditor
In so far as each of the Directors
are aware at the time of approval of the report:
•
there is no relevant audit information of which
the Company's auditor is unaware; and
•
the Directors have taken all steps that they
ought to have taken to make themselves aware of any relevant audit
information and to establish that the auditor is aware of that
information.
Auditor
Adler Shine LLP have expressed
their willingness to continue as auditor and a resolution to
re-appoint Adler Shine LLP will be proposed at the Annual General
Meeting.
On behalf of the board of
Directors
Anthony Fabrizi
Executive Chairman
21 March 2024
Statement of Comprehensive Income
|
|
For the year ended 30 September
2023
|
|
Note
|
2023
£
|
2022
£
|
Revenue
|
|
-
|
-
|
Loss on disposal of
investments
|
|
(122,196)
|
(338,836)
|
Fair valuation movements in
financial instruments designated
|
|
|
|
at fair value through profit or
loss
|
11
|
(5,762,911)
|
(445,223)
|
|
|
(5,885,107)
|
(784,059)
|
Share based payments
|
6
|
(243,248)
|
-
|
Administrative expenses
|
3
|
(201,118)
|
(517,003)
|
Operating (loss)/profit
|
4
|
(6,329,473)
|
(1,301,062)
|
Finance income
|
5
|
1,065
|
54
|
(Loss)/Profit before and after taxation and total
comprehensive
|
|
|
|
income for the year
|
|
(6,328,408)
|
(1,301,008)
|
(Loss)/Profit per ordinary share:
|
|
|
|
Basic earnings per share on
(loss)/profit for the year
|
10
|
(0.13p)
|
(0.03p)
|
Diluted earnings per share on
(loss)/profit for the year
|
10
|
(0.13p)
|
(0.03p)
|
The notes form part of these
financial statements.
|
Statement of Financial Position
|
|
|
|
For the year ended 30 September
2023
|
|
|
|
|
Note
|
2023
£
|
2022
£
|
Non-current assets
|
|
|
|
Financial assets at fair value
through profit or loss
|
11
|
5,291,806
|
11,390,278
|
Convertible loan note
|
11
|
-
|
-
|
Total non-current assets
|
|
5,291,806
|
11,390,278
|
Current assets
|
|
|
|
Trade and other
receivables
|
12
|
6,459
|
8,072
|
Cash and cash
equivalents
|
13
|
63,158
|
86,575
|
Total current assets
|
|
69,617
|
94,647
|
Total assets
|
|
5,361,423
|
11,484,925
|
Current liabilities
|
|
|
|
Trade and other
payables
|
14
|
32,076
|
70,418
|
Total liabilities
|
|
32,076
|
70,418
|
Net assets
|
|
5,329,347
|
11,414,507
|
Shareholders' equity
|
|
|
|
Share capital
|
15
|
4,892,774
|
4,892,774
|
Share premium account
|
|
9,575,072
|
9,575,072
|
Other reserves
|
|
243,248
|
-
|
Retained earnings
|
|
(9,381,747)
|
(3,053,339)
|
Total shareholders' equity
|
|
5,329,347
|
11,414,507
|
The financial statements were
approved by the Board, authorised for issue on 20 March 2024 and
were signed on its behalf by:
Anthony Fabrizi
Director
Registered number:
05174441
The notes form part of these
financial statements.
|
Statement of Changes in
Equity
For the year ended 30 September
2023
|
Share
capital
£
|
Share
premium
£
|
Other
reserves
£
|
Retained
earnings
£
|
Total
£
|
Year ended 30 September 2022
|
|
|
|
|
|
At 1 October 2021
|
4,892,774
|
9,575,072
|
-
|
(1,752,331)
|
12,715,515
|
Loss for the year and total
|
|
|
|
|
|
comprehensive income
|
-
|
-
|
-
|
(1,301,008)
|
(1,301,008)
|
At 30 September 2022
|
4,892,774
|
9,575,072
|
-
|
(3,053,339)
|
11,414,507
|
Year ended 30 September 2023
|
|
|
|
|
|
At 1 October 2022
|
4,892,774
|
9,575,072
|
-
|
(3,053,339)
|
11,414,507
|
Loss for the year and total
|
|
|
|
|
|
comprehensive income
|
-
|
-
|
-
|
(6,328,408)
|
(6,328,408)
|
Share based payments
|
-
|
-
|
243,248
|
-
|
243,248
|
At 30 September 2023
|
4,892,774
|
9,575,072
|
243,248
|
(9,381,747)
|
5,329,347
|
Share capital
Share capital represents the
nominal value on the issue of the Company's equity share capital,
comprising £0.001 ordinary shares.
Share premium
Share premium represents the
amount subscribed for the Company's equity share capital in excess
of nominal value.
Other reserves
Other reserves represent the
cumulative cost of share-based payments.
Retained earnings
Retained earnings represent the
cumulative net income and losses of the Company recognised through
the statement of comprehensive income.
The notes form part of these
financial statements.
Cash Flow Statement
|
|
For the year ended 30 September
2023
|
|
Note
|
2023
£
|
2022
£
|
Operating activities
|
|
|
|
Loss for the year
|
|
(6,328,408)
|
(1,301,008)
|
Adjustments:
|
|
|
|
Finance income
|
5
|
(1,065)
|
(54)
|
Fair value losses
|
|
5,762,911
|
445,278
|
Impairment of convertible
note
|
|
-
|
150,846
|
Loss on disposal of investments
|
|
122,196
|
338,836
|
Share based payment
|
|
243,248
|
-
|
Working capital adjustments
|
|
|
|
Decrease in trade and other
receivables
|
|
1,613
|
127,429
|
Decrease in trade and other
payables
|
|
(38,342)
|
(163,725)
|
Net cash used in operating activities
|
|
(237,847)
|
(402,398)
|
Investing activities
|
|
|
|
Proceeds from sale of investments
|
|
213,365
|
192,867
|
Interest received
|
|
1,065
|
-
|
Net cash from investing activities
|
|
214,430
|
192,867
|
Net cash generated from financing activities
|
|
-
|
-
|
Net decrease in cash and cash equivalents
|
|
(23,417)
|
(209,531)
|
Cash and cash equivalents at start
of the year
|
13
|
86,575
|
296
106
|
Cash and cash equivalents at end
of the year
|
13
|
63,158
|
86,575
|
The notes form part of these
financial statements.
Notes to the Financial
Statements
For the year ended 30 September
2023
1. Accounting policies
General information
Blue Star Capital Plc (the
Company) invests principally in the media, technology and gaming
sectors.
The Company is a public limited
company incorporated and domiciled in England and Wales with
registered number: 05174441 The address of its registered office is
Griffin House, 135 High Street, Crawley RH10 1DQ.
The Company is listed on the
Alternative Investment Market (AIM) market of the London Stock
Exchange plc. The financial statements are presented in Pound
Sterling (£) and rounded to the nearest £1.
Summary of significant accounting policies
The principal accounting policies
adopted in the preparation of these financial statements are set out
below.
These policies have been
consistently applied to all the years presented, unless otherwise
stated.
Basis of preparation
These financial statements have
been prepared in accordance with International Financial Reporting
Standards, International Accounting Standards and Interpretations
(collectively IFRS) issued by the International Accounting
Standards Board (IASB) as adopted by the United Kingdom ("UK
adopted IFRS") and with those parts of the Companies Act 2006
applicable to companies reporting under IFRS.
These financial statements have
been prepared under the historical cost convention, as modified by
the revaluation of assets and liabilities held at fair
value.
The preparation of financial
statements in conformity with IFRS requires the use of certain
critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Company's
accounting policies. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and estimates
are significant in the financial statements, are disclosed in note
2.
Going concern
The Company has reported a loss
for the year excluding fair value gain on the valuation of
investments of £565,497.
The Company had cash reserves at
the year-end of £63,158 and a portfolio of investment companies
which include quoted investments which can be easily liquidated
should further funds be required.
Post year-end, the Company raised
£75,487 from the sale of its remaining quoted investments. In
addition, the Company raised £100,000 pursuant to a placing of
100,000,000 new ordinary shares at a price of 0.1p per new ordinary
share (refer to note 21).
The Directors have prepared
detailed financial forecasts and cash flows looking beyond 12 months
from the date of the approval of these financial statements. In
developing these forecasts, the Directors have made assumptions
based upon their view of the current and economic conditions that
are expected to prevail over the forecast period. The Directors
estimate that the cash held by the Company, together with known
receivables, will be sufficient to support the current level of
activities to the end of the third quarter of 2024. The Directors
have concluded that the ability of the Company to raise further
funds in the future represents a material uncertainty which may
cast significant doubt on the Company's ability to continue as a
going concern.
The Directors are continuing to
explore sources of finance available to the Company, including the
sale of further investments and they have a reasonable expectation
that they will be able to secure sufficient cash inflows for the
Company to continue its activities for not less than 12 months from
the date of approval of these financial statements. On this basis,
the Directors continue to adopt the going concern basis in
preparing these accounts.
Accordingly, these accounts do not
contain any adjustments to the carrying amount or classification of
assets and liabilities that would result if the Company were unable
to continue as a going concern.
New standards, amendments and interpretations adopted by the
Company
The following IFRS or IFRIC
interpretations were effective for the first time for the financial
year beginning 1 October 2022. Their adoption has not had any
material impact on the disclosures or on the amounts reported in
these financial statements
Standards/interpretations
|
Application
|
IFRS 9
|
Financial Instruments
|
|
Amendments resulting from Annual
Improvements to IFRS Standards 2018-2020 (fees in the '10 per cent'
test for derecognition of financial liabilities)
|
IFRS 16
|
Property, Plant and Equipment
|
|
Amendments prohibiting a company
from deducting from the cost of property, plant and equipment
amounts received from selling items produced while the company is
preparing the asset for its intended use
|
IFRS 37
|
Provisions, Contingent Liabilities and Contingent
Assets
|
|
Amendments regarding the costs to
include when assessing whether a contract is onerous
|
New standards, amendments and
interpretations not yet adopted
Interpretations
|
Application
|
Effective date
|
IFRS 4
|
Insurance Contracts
Amendments regarding the expiry
date of the deferral approach
|
01/01/2023
|
IFRS 7
|
Financial Instruments: Disclosure
Amendments regarding supplier
finance arrangements
|
01/01/2024
|
IFRS 16
|
Leases
Amendments to clarify how a
seller-lessee subsequently measures sale and leaseback
transactions.
|
01/01/2024
|
IAS 1
|
Presentation of Financial Statements
Amendments regarding the
disclosure of accounting policies Amendments regarding the
classification of liabilities
|
01/01/2023
|
|
Classification of Liabilities as
Current or Non-current and Non-current Liabilities with
Covenants
|
01/01/2024
|
IAS 7
|
Statement of Cash Flows
Amendments to specify the
disclosure requirements regarding supplier finance
arrangements
|
01/01/2024
|
IAS 8
|
Accounting policies, Changes in Accounting Estimates and
Errors
Amendments regarding the definition
of accounting estimates
|
01/01/2024
|
IAS 21
|
Income Taxes
Amendments regarding deferred tax
on leases and decommissioning obligations
|
01/01/2023
|
|
Amendments to provide a temporary
exception to the requirements regarding deferred tax assets and
liabilities related to pillar two income taxes
|
|
There are no IFRS's or IFRIC
interpretations that are not yet effective that would be expected
to have a material impact on the Company.
Financial assets
The Company classifies its financial
assets into one of the categories discussed below, depending on the
purpose for which the asset was acquired. The Company has not
classified any of its financial assets as held to maturity or
available for sale.
The Company's accounting policy
for each category is as follows:
Fair value through profit or loss
Financial assets at fair value
through profit or loss are financial assets designated upon initial
recognition as at fair value through profit or loss.
Financial assets designated at
fair value through the profit or loss are those that have been
designated by management upon initial recognition. Management
designated the financial assets, comprising equity shares and
warrants, at fair value through profit or loss upon initial
recognition due to these assets being part of the Company's
financial assets, which are managed and their performance evaluated
on a fair value basis.
Financial assets at fair value
through the profit or loss are recorded in the statement of financial
position at fair value. Changes in fair value are recorded in "Fair
valuation movements in financial assets designated at fair value
through profit or loss".
Financial assets, comprising
equity shares and warrants, are valued in accordance with the
International Private Equity and Venture Capital ("IPEVC")
guidelines.
(a)
Early-stage investments: these are investments in immature
companies, including seed, start-up and early-stage investments.
Such investments are valued at cost less any provision considered
necessary, until no longer viewed as an early stage
(b)
or unless significant transactions involving an independent
third-party arm's length, values the investment at a materially
different value:
(c)
Development stage investments: such investments are in mature
companies having a maintainable trend of sustainable revenue and
from which an exit, by way of floatation or trade sale, can be
reasonably foreseen. An investment of this stage is periodically
re-valued by reference to open market value. Valuation will usually
be by one of five methods as indicated below:
I.
At cost for at least one period unless such basis is
unsustainable;
II.
On a third-party basis based on the price at which a subsequent
significant investment is made involving a new investor;
III.
On an earnings basis, but not until at least a period since the
investment was made, by applying a discounted price/earnings ratio
to the profit after tax, either before or after interest;
or
IV.
On a net asset basis, again applying a discount to reflect the
illiquidity of the investment.
V.
In a comparable valuation by reference to similar businesses that
have objective data representing their equity value.
(d)
Quoted investments: such investments are valued using the quoted
market price, discounted if the shares are subject to any
particular restrictions or are significant in relation to the issued
share capital of a small quoted company.
At each balance sheet date, a
review of impairment in value is undertaken by reference to
funding, investment or offers in progress after the balance sheet
date and provisions is made accordingly where the impairment in
value is recognised.
Financial assets
The Company uses the following
hierarchy for determining and disclosing the fair value of financial
instruments by valuation technique:
Level 1: quoted (unadjusted)
prices in active markets for identical assets or
liabilities.
Level 2: other techniques for
which all inputs which have a significant effect on the recorded
fair value are observable, either directly or
indirectly.
Level 3: techniques which use
inputs which have a significant effect on the recorded fair value
that are not based on observable market data.
Cash and cash equivalents
Cash and cash equivalents include
cash in hand, deposits held at call with banks, other short term
highly liquid investments with original maturities of three months
or less.
For the purpose of the cash flow
statement, cash and cash equivalents consist of cash and cash
equivalents as defined above, net of outstanding bank
overdrafts.
Financial liabilities
The Company classifies its financial
liabilities in the category of financial liabilities measured at
amortised cost. The Company does not have any financial liabilities
at fair value through profit or loss.
Financial liabilities measured at amortised
cost
Financial liabilities measured at
amortised cost include:
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 rate method.
Finance income
Finance income relates to interest
income arising on cash and cash equivalents held on deposit and
interest accrued on loans receivable. Finance income is accrued on
a time basis, by reference to the principal outstanding and at the
effective interest rate applicable.
Operating loss
Operating loss is stated after
crediting all items of operating income and charging all items of
operating expense.
Deferred taxation
Deferred tax assets and
liabilities are recognised where the carrying amount of an asset or
liability in the balance sheet differs from its tax
base.
Recognition of deferred tax assets
is restricted to those instances where it is probable that taxable
profit will be available against which the difference can be
utilised.
The amount of the asset or
liability is determined using tax rates that have been enacted or
substantively enacted by the balance sheet date and are expected to
apply when the deferred tax liabilities/(assets) are
settled/(recovered).
Provisions
Provisions are recognised when the
Company has a present obligation (legal or constructive) as a
result of a past event, it is probable that the Company will be
required to settle the obligation, and a reliable estimate can be
made of the amount of the obligation.
The amount recognised as a
provision is the best estimate of the consideration required to
settle the present obligation at the end of the reporting period,
taking into account the risks and uncertainties surrounding the
obligation. When a provision is measured using the cash flows
estimated to settle the present obligation, it's carrying amount is
the present value of the cash flows (when the effect of the time
value of money is material).
When some or all of the economic
benefits required to settle a provision are expected to be recovered
from a third party, a receivable is recognised as an asset if it is
virtually certain that reimbursement will be received and the
amount of the receivable can be measured reliably.
Present obligations under onerous
leases are recognised and measured as provisions. An onerous
contract is considered to exist where the Company has a contract
under which the unavoidable costs of meeting the obligations under
the contract exceed the economic benefits expected to be received
from the contract.
Share-based payments
All services received in exchange
for the grant of any share-based remuneration are measured at their
fair values. These are indirectly determined by reference to the
fair value of the share options/warrants awarded. Their value is
appraised at the grant date and excludes the impact of any
non-market vesting conditions (for example, profitability and sales
growth targets).
Share based payments are
ultimately recognised as an expense in the Statement of
Comprehensive Income with a corresponding credit to other reserves
in equity, net of deferred tax where applicable. If vesting periods
or other vesting conditions apply, the expense is allocated over
the vesting period, based on the best available estimate of the
number of share options/warrants expected to vest. Non-market
vesting conditions are included in assumptions about the number of
options/warrants that are expected to become exercisable. Estimates
are subsequently revised, if there is any indication that the
number of share options/warrants expected to vest differs from
previous estimates. No adjustment is made to the expense or share
issue cost recognised in prior periods if fewer share options
ultimately are exercised than originally estimated.
Upon exercise of share options,
the proceeds received net of any directly attributable transaction
costs up to the nominal value of the shares issued are allocated to
share capital with any excess being recorded as share
premium.
Where share options are cancelled,
this is treated as an acceleration of the vesting period of the
options. The amount that otherwise would have been recognised for
services received over the remainder of the vesting period is
recognised immediately within the Statement of Comprehensive
Income.
2. Critical accounting estimates and
judgements
The Company makes certain
estimates and assumptions regarding the future. Estimates and
judgements are continually evaluated based on historical experience
and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. In the future,
actual experience may differ from these estimates and assumptions.
The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are those in relation
to:
Fair value of financial instruments
The Company holds investments that
have been designated at fair value through profit or loss on initial
recognition. The Company determines the fair value of these
financial instruments that are not quoted, using valuation
techniques, contained in the IPEVC guidelines. These techniques are
significantly affected by certain key assumptions. Other valuation
methodologies such as discounted cash flow analysis assess estimates
of future cash flows and it is important to recognise that in that
regard, the derived fair value estimates cannot always be
substantiated by comparison with independent markets and, in many
cases, may not be capable of being realised immediately.
In certain circumstances, where
fair value cannot be readily established, the Company is required
to make judgements over carrying value impairment, and evaluate the
size of any impairment required.
The methods and assumptions
applied, and the valuation techniques used, are disclosed in note
11.
Share based payment
The estimate of share based
payments costs requires management to select an appropriate
valuation model and make decisions about various inputs into the
model including the volatility of its own share price, the probable
life of the options, the vesting date of options where non-market
performance conditions have been set and the risk free interest
rate.
3. Nature of expenses
|
|
|
2023
£
|
2022
£
|
Directors remuneration
|
100,067
|
156,750
|
Legal and professional
fees
|
41,361
|
164,330
|
Impairment of convertible
note
|
-
|
150,846
|
Other expenses
|
59,690
|
45,077
|
|
201,118
|
517,003
|
4. Operating loss
|
|
|
|
2023
£
|
2022
£
|
This is stated after charging:
|
|
|
Auditor's remuneration - statutory
audit fees
|
19,000
|
14,275
|
5. Finance income
|
|
|
|
2023
£
|
2022
£
|
Interest received on short term
deposits
|
1,065
|
54
|
|
1,065
|
54
|
6. Share based
payments
Share warrants
|
|
|
|
|
|
2023
Weighted average
exercise
price (p)
|
2023
Number
|
2022
Weighted average exercise
price (p)
|
2022
Number
|
Outstanding at the beginning of
the year
|
-
|
-
|
0.25
|
591,666,667
|
Lapsed during year
|
-
|
-
|
0.25
|
(591,666,667)
|
Granted during the year
|
0.37
|
250,000,000
|
-
|
-
|
Exercised during the
year
|
-
|
-
|
-
|
-
|
Outstanding at the end of the
year
|
0.37
|
250,000,000
|
-
|
-
|
The contracted average remaining
life of warrants at 30 September 2023 was 2.3 years (2022: 0.1
years).
At 30 September 2023, the Company
had the following warrants in issue:
|
|
Date of grant
|
27
January 2023
|
27
January 2023
|
Number outstanding
|
200,000,000
|
50,000,000
|
Contractual life
|
3
years
|
3
years
|
Exercise price (pence)
|
0.35p
|
0.45p
|
|
|
| |
The fair value of warrants is
determined using the Black-Scholes valuation model. The charge to
the profit and loss for the year ended 30 September 2023 was
£243,248 (2022: NIL).
The assumptions used in the
calculation of fair value of the warrants was as follows:
|
|
Date of grant
|
27
January 2023
|
27
January 2023
|
Share price at date of
grant
|
0.235p
|
0.235p
|
Exercise price
|
0.35p
|
0.45p
|
Expected life (years)
|
2.18
|
2.93
|
Volatility
|
94.98%
|
94.98%
|
Risk free interest rate
|
3.34%
|
3.29%
|
7. Staff costs, including
Directors
|
|
|
|
2023
£
|
2022
£
|
Wages and salaries
|
66,000
|
107,750
|
Social security costs
|
4,067
|
-
|
Share based payment
|
243,248
|
-
|
|
313,315
|
107,750
|
During the year the Company had an
average of 3 employees who were management (2022: 3). The employees
are Directors and key management personnel of the
Company.
8. Directors'
and key management personnel
Directors' remuneration for the
year ended 30 September 2023 is as follows:
|
Salary
|
Fees
|
Share based
payments
|
Compensation for loss of
office
|
Total
2023
|
A Fabrizi
|
36,000
|
12,000
|
165,145
|
-
|
213,145
|
B Rowbotham
|
30,000
|
-
|
48,649
|
-
|
78,649
|
S King
|
-
|
18,000
|
29,454
|
-
|
47,454
|
|
66,000
|
30,000
|
243,248
|
-
|
339,248
|
Directors' remuneration for the
year ended 30 September 2022 is as follows:
|
Salary
|
Fees
|
Share based
payments
|
Compensation for loss of
office
|
Total
2022
|
D Lew
|
68,750
|
-
|
-
|
25,000
|
93,750
|
B Rowbotham
|
39,000
|
-
|
-
|
-
|
39,000
|
S King
|
-
|
24,000
|
-
|
-
|
24,000
|
|
107,750
|
24,000
|
-
|
25,000
|
156,750
|
Emoluments above are paid in full
at the end of both financial years.
9.
Taxation
The tax assessed on loss before
tax for the year differs to the applicable rate of corporation tax
in the UK for small companies of 25% (2022: 19%). The differences
are explained below:
|
2023
£
|
2022
£
|
Loss before tax
|
(6,328,408)
|
(1,301,008)
|
Loss before tax multiplied by
effective rate of corporation tax of 25% (2022:
19%)
|
(1,582,102)
|
(247,191)
|
Effect of:
Loss on disposal of investments
|
30,549
|
64,379
|
Fair value movements on
investments
|
1,440,728
|
84,721
|
Capital losses
|
(30,549)
|
(18,862)
|
Share based payments
|
60,802
|
-
|
Capital allowances
|
-
|
(168)
|
Losses carried forward
|
80,572
|
117,121
|
Tax charge in the income statement
|
-
|
-
|
The Company has incurred tax
losses for the year and a corporation tax expense is not
anticipated. The amount of the unutilised tax losses has not been
recognised in the financial statements as the recovery of this
benefit is dependent on future profitability, the timing of which
cannot be reasonably foreseen. The unrecognised and revised
deferred tax asset at 30 September 2023 is £1,341,055 (2022:
£81,058).
From 1 April 2023 the standard
rate of corporation tax increased from 19% to 25%.
10. Earnings per
ordinary share
The earnings and number of shares
used in the calculation of loss/earnings per ordinary share are set
out below:
|
2023
|
2022
|
Basic:
|
|
|
Loss for the financial period
|
(6,328,408)
|
(1,301,008)
|
Weighted average number of
shares
|
4,992,772,996
|
4,992,772,996
|
Loss per share (pence)
|
(0.13)
|
(0.03)
|
Fully Diluted:
|
|
|
Loss for the financial period
|
(6,328,408)
|
(1,301,008)
|
Weighted average number of
shares
|
4,992,772,996
|
4,992,772,996
|
Loss per share (pence)
|
(0.13)
|
(0.03)
|
There is no difference between the
diluted loss per share and the basic loss per share presented due
to the loss position of the Company. Share options and warrants
could potentially dilute basic earnings per share in the future,
but were not included in the calculation of diluted earnings per
share as they are anti-dilutive for the year presented.
11. Investments
|
|
|
2023
£
|
2022
£
|
At start of year
|
11,390,278
|
12,367,204
|
Additions
|
-
|
-
|
Disposals
|
(335,561)
|
(531,703)
|
Net fair value loss for the
year
|
(5,762,911)
|
(445,223)
|
At end of year
|
5,291,806
|
11,390,278
|
During the year the Company
reduced it's shareholding in Guild Esports plc and NFT Investment's
plc in order to raise working capital. This reduction resulted in a
loss on disposal of £122,196 (2022: £338,836).
Following year end, the Company's
remaining shareholding in Guild Esports plc was disposed together
with the shareholding in East Side Group (refer to Note
21).
Investments
|
|
|
2023
£
|
2022
£
|
Quoted investments
|
69,196
|
599,482
|
Unquoted investments
|
5,222,610
|
10,790,796
|
|
5,291,806
|
11,390,278
|
The country of incorporation for
all investments held at 30 September 2023 are listed
below:
|
£
|
Country of Incorporation
|
Investment class
|
Dynasty Media & Gaming
|
412,622
|
Singapore
|
Unquoted
|
Guild Esports PLC
|
51,471
|
United
Kingdom
|
Quoted
|
East Side Group (Formerly Leaf
Mobile Inc)
|
17,725
|
Canada
|
Quoted
|
SatoshiPay Limited
|
4,653,099
|
United
Kingdom
|
Unquoted
|
Sthaler Limited
|
13,600
|
United
Kingdom
|
Unquoted
|
Paidia Esports Inc
|
105,910
|
Canada
|
Unquoted
|
Googly Media Holdings PTE.
Limited
|
37,379
|
Singapore
|
Unquoted
|
|
5,291,806
|
|
|
Post year-end, a decision was
taken by the management of Dynasty to merge with Googly. To help
support Dynasty through this transitioning phase, Blue Star
invested US$75,000 in a US$3 million fundraise undertaken by
Dynasty in November 2023. The Convertible Loan Note has a two-year
expiry period, is non-interest bearing and convertible at a
discount of 50 per cent to Dynasty's next funding round.
Blue Star currently has a 27.9%
interest in SatoshiPay's share capital, which is valued on the
basis of the last external fund raise in 2019 at approximately
£4.65million. An M&A expert has been appointed to undertake a
formal sales process for SatoshiPay which may lead to the sale of
all or part of Blue Star's shareholding in SatoshiPay.
The methods used to value the
unquoted investments are described below.
Fair value
The fair value of unquoted
investments is established using valuation techniques. These
include the use of quoted market prices, recent arm's length
transactions, the Black-Scholes option pricing model and discounted
cash flow analysis.
Where a fair value cannot be
estimated reliably the investment is reported at the carrying value
at the previous reporting date in accordance with International
Private Equity and Venture Capital ("IPEVC") guidelines.
The Company assesses at each
balance sheet date whether there is any objective evidence that the
unquoted investments are impaired. The unquoted investments are
deemed to be impaired, if and only if, there is objective evidence
of impairment as a result of one or more events that have occurred
after the initial recognition of the asset (an incurred 'loss
event') and that loss event (or events) has an impact on the
estimated future fair value of the investments that can be reliably
measured.
Convertible Loan Note
On 11 October 2019, the Company
invested US$185,000 in convertible loan notes issued by The Dibs
Esports Corp. The loan notes carried interest of 5% per annum and
had a 36-month life span. In the prior year, after a review
conducted by the Directors, the Directors considered that there was
doubt as to the recoverability of this asset and fully provided
against the amount owed.
12. Trade and other
receivables
|
2023
£
|
|
2022
£
|
Prepayments
|
3,044
|
|
3,175
|
Other receivables
|
3,415
|
|
4,897
|
|
6,459
|
|
8,072
|
The Directors consider that the
carrying value of trade and other receivables approximates to the
fair value.
13. Cash and cash
equivalents
|
2023
£
|
|
2022
£
|
Cash at bank and in
hand
|
63,158
|
|
86,575
|
|
63,158
|
|
86,575
|
Cash and cash equivalents comprise
cash at bank and other short-term highly liquid investments with an
original maturity of three months or less. The Directors consider
that the carrying value of cash and cash equivalents approximates
to their fair value.
14. Trade and other payables
|
|
|
2023
£
|
2022
£
|
Trade payables
|
3,750
|
31,793
|
Accruals
|
28,326
|
33,162
|
Other payables
|
-
|
5,463
|
|
32,076
|
70,418
|
All trade and other payables fall
due for payment within one year. The Directors consider that the
carrying value of trade and other payables approximates to their
fair value.
15. Share capital
|
Issued and fully
paid
|
|
2023
Number
|
2023
£
|
2022
Number
|
2022
£
|
At 1 October
|
4,992,772,996
|
4,892,774
|
4,992,772,996
|
4,892,774
|
Shares issued in the year
|
-
|
-
|
-
|
-
|
At 30 September
|
4,992,772,996
|
4,892,774
|
4,992,772,996
|
4,892,774
|
During the year ended 30 September
2023 there were no shares issued (2022:NIL).
16. Financial risk management
Interest rate risk
The Company's exposure to changes
in interest rates relate primarily to cash and cash equivalents.
Cash and cash equivalents are held either on current or on short
term deposits at floating rates of interest determined by the
relevant bank's prevailing base rate. The Company seeks to obtain a
favourable interest rate on its cash balances through the use of
bank treasury deposits. Any reasonable change in interest rate
would not have a material impact on finance income that the Company could receive in the course of a year, based on the current level of cash and cash equivalents either
held in current accounts or short-term
deposits.
Market risk
The Company's market risk is
attributable to the financial instruments that are held at fair
value through profit and loss. The potential that future changes in
market conditions may make an instrument less valuable, due to
fluctuations in security prices, as well as interest and foreign
exchange rates. Market risk is directly impacted by the volatility
and liquidity in the markets in which the related underlying assets
are traded.
Sensitivity analysis
The following table looks at the
impact on net profit or loss based on a given movement in the fair
value of all the investments.
|
2023
£
|
2022
£
|
10% increase in fair value
|
529,181
|
1,139,028
|
20% decrease in fair value
|
1,058,361
|
2,278,056
|
30% decrease in fair value
|
1,587,542
|
3,417,083
|
Borrowing facilities
The operations to date have been financed through the placing of shares and investor loans. It is the Board's policy to keep borrowing to a minimum, where
possible.
Liquidity risks
The Company seeks to manage
liquidity risk by ensuring sufficient liquid assets are available
to meet foreseeable needs and to invest liquid funds safely and
profitably. All cash balances are immediately accessible and the
Company holds no trades payable that mature in greater than 3
months, hence a contractual maturity analysis of financial
liabilities has not been presented. Since these financial
liabilities all mature within 3 months, the Directors believe that
their carrying value reasonably equates to fair value.
Foreign currency risk management
The Company undertakes certain
transactions denominated in currencies other than pound sterling,
hence exposures to exchange rate fluctuations arise. The fair
values of the Company's investments that have foreign currency
exposure at 30 September 2023 are shown below.
|
EUR
£
|
SGD
£
|
CAD
£
|
Fair value of investments
|
4,653,099
|
450,001
|
123,635
|
|
|
2022
|
|
|
EUR
£
|
SGD
£
|
CAD
£
|
Fair value of investments
|
4,715,219
|
5,615,289
|
136,799
|
The Company accounts for movements
in fair value of financial assets in the comprehensive income. The
following table illustrates the sensitivity of the equity in regard
to the company's financial assets and the exchange rates for
£/Euro, £/Singapore Dollar and £/Canadian Dollar.
It assumes the following changes
in exchanges rates:
-
£/EUR +/- 20% (2021: +/- 20%)
-
£/SGD +/- 20% (2021: +/- 20%)
-
£/CAD +/- 20% (2021: +/- 20%)
The sensitivity analysis is based
on the Company's foreign currency financial instruments held at each
balance sheet date. If £ Sterling had weakened against the
currencies shown, this would have had the following
effect:
|
|
2023
|
|
|
EUR
£
|
SGD
£
|
CAD
£
|
Increase in fair value of
investments
|
930,620
|
90,000
|
24,727
|
|
|
2022
|
|
|
EUR
£
|
SGD
£
|
CAD
£
|
Increase in fair value of
investments
|
943,044
|
1,123,166
|
27,360
|
If £ Sterling had strengthened
against the currencies shows, this would have had the following
effect:
|
|
2023
|
|
|
EUR
£
|
SGD
£
|
CAD
£
|
Reduction in fair value of
investments
|
(775,517)
|
(75,000)
|
(20,606)
|
|
|
2022
|
|
|
EUR
£
|
SGD
£
|
CAD
£
|
Reduction in fair value of
investments
|
(785,870)
|
(935,971)
|
(22,800)
|
The Company's functional and
presentational currency is the pound sterling as it is the currency
of its main trading environment.
Credit risk
The Company's credit risk is
attributable to cash and cash equivalents and trade and other
receivables.
Cash is deposited with reputable
financial institutions with a high credit rating. The maximum credit
risk relating to cash and cash equivalents and trade and other
receivables is equal to their carrying value of £66,573 (2022:
£91,472)
Capital Disclosure
As in previous years, the Company
defines capital as issued capital, reserves and retained earnings as
disclosed in the statement of changes in equity. The Company
manages its capital to ensure that the Company will be able to
continue to pursue strategic investments and continue as a going
concern. The Company does not have any externally imposed financial
requirements.
17. Financial Instruments
Set out below is an overview of
financial instruments held by the company:
|
Note
|
2023
£
|
2022
£
|
Financial assets at fair value
through profit and loss
|
|
|
|
Investments
|
11
|
5,291,806
|
11,390,278
|
Cash and cash equivalents
|
13
|
63,158
|
86,575
|
Total
|
|
5,354,964
|
11,476,853
|
Financial assets at amortised
cost
|
|
|
|
Trade and other receivables
|
12
|
-
|
26
|
Total
|
|
-
|
26
|
Financial liabilities at amortised
cost
|
|
|
|
Trade and other payables
|
14
|
32,076
|
70,418
|
Total
|
|
32,076
|
70,418
|
The fair value measurement of
financial assets carried at fair value through profit and loss is set
out in the table below:
|
Note
|
Level 1
£
|
Level 2
£
|
Level 3
£
|
At 30 September 2023
Investments
|
11
|
69,196
|
-
|
5,222,610
|
Total financial assets
|
|
69,196
|
-
|
5,222,610
|
At 30 September 2022
Investments
|
11
|
599,482
|
-
|
10,790,796
|
Total financial assets
|
|
599,482
|
-
|
10,790,796
|
18. Related party
transactions
Sean King was paid his director's
fee of £18,000 (2022: £24,000) through Three S Ventures Limited. At
the year-end an amount of £3,000 (2022: £2,000) was included within
Trade payables.
19. Operating lease
commitments
At the balance sheet date, the
Company had no outstanding commitments under operating
leases.
20. Ultimate Controlling
Party
The Company considers that there is
no ultimate controlling party.
21. Post Balance Sheet
Events
In October 2023, the Company's
remaining shareholding in Guild Esports plc was disposed together
with the shareholding in East Side Group (Formerly Leaf Mobile).
The Company realised £75,486 proceeds from this sale.
In November 2023, the Company
invested US$75,000 in Dynasty through the purchase of a convertible
loan note. The Convertible loan note has a two-year expiry period,
is non-interest bearing and convertible at a discount of 50 per
cent to Dynasty's next funding round.
On 17 January 2024, the Company
raised £100,000, before expenses, pursuant to a placing of
100,000,000 new ordinary shares at a price
of 0.1p per new ordinary share.