Consolidated statement of cash flows

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION

1.  General information and basis of preparation

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

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

The principal activity of the Company is that of a holding company for its subsidiaries, as well as performing all administrative, corporate finance, strategic and governance functions of the Group. The Company's investments comprise of subsidiaries operating in the natural gas sector.

The Company has the following subsidiary undertakings: 

More information on the individual group companies and timing of their acquisition is presented in the Company's audited consolidated financial information and notes thereto for the year ended 31 December 2023.

2.  Accounting policies

The Group Financial statements are presented in US Dollars.

Basis of preparation

The financial statements have been prepared in accordance with International Financial Reporting Standards and IFRIC interpretations as endorsed by the EU ("IFRS") and the requirements of the Companies Act applicable to companies reporting under IFRS.

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 Group's accounting policies. The Group's accounting policies as well as the areas involving a higher degree of judgment and complexity, or areas where assumptions and estimates are significant to the Group financial statements are disclosed in the audited annual report for the year ended 31 December 2023 and are available on the Group's website.

In the opinion of the management, the interim unaudited consolidated financial information includes all adjustments considered necessary for fair and consistent presentation of this financial information. The interim unaudited consolidated financial information should be read in conjunction with the Company's audited financial statements and notes for the year ended 31 December 2023.

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 Board has considered this in light of the Company's recent recapitalization and debt restructuring efforts, which took the form of a Company Voluntary Arrangement (CVA).  The terms of the CVA, approved at meetings of the creditors and shareholders on 5 September 2024, are that all amounts owed will be settled via a mix of cash and convertible loan notes.  A placing of £340,000 has been arranged by the Company's broker, Peterhouse Capital Limited, and following the CVA vote and general meeting, the funds have been released to satisfy the CVA and to the Company to fund its future operations.

The Directors note that, notwithstanding the debt reduction and capitalization enabled by the CVA  and placing referenced above, the Group will need additional funding to continue operations for the foreseeable future, however the cost basis of the Company post CVA and prior to any transaction is expected to remain low. The Directors are confident however that the Group will be able to raise, as required, sufficient cash to enable it to continue its operations, post passage of the CVA, 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.

However, as there can be no certainty that over access to future funding by the Company following the passage of the CVA, there exists a material uncertainty as to the Group's ability to continue as a going concern.

Basis of consolidation

The consolidated financial statements of the Group incorporate the financial statements of the Company and entities controlled by the Company, its subsidiaries. More information on the individual group companies, details and timing of their acquisition is presented in the Company's audited consolidated financial information and notes thereto for the year ended 31 December 2023.

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 is 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.

The Group consistently applies it to all similar transactions in the following way:

- the acquired assets and liabilities are recorded at their existing carrying values rather than at fair value;

- no goodwill is recorded;

- all intra-group transactions, balances and unrealised gains and losses on transactions are eliminated from the beginning of the first comparative period or inception, whichever is earlier;

- comparative periods are restated from the beginning of the earliest comparative period presented based on the assumption that the companies have always been together;

- all the pre-acquisition accumulated losses of the legal acquire are assumed by the Group as if the companies have always been together;

- all the share capital and membership capital contributions of all the companies included into the legal acquiree sub-group less the Company's cost of investment into these companies are included into the merger reserve; and

- the Company's called up share capital is restated at the preceding reporting date to reflect the value of the new shares that would have been issued to acquire the merged company had the merger taken place at the first day of the comparative period. Where new shares have been issued during the current period that increased net assets (other than as consideration for the merger), these are recorded from their actual date of issue and are not included in the comparative statement of financial position.

The results and cash flows of all the combining entities were brought into the financial statements of the combined entity from the beginning of the financial year in which the combination occurred, adjusted so as to achieve uniformity of accounting policies. The comparative information was restated by including the total comprehensive income for all the combining entities for the previous reporting period and their statement of financial position for the previous reporting date, adjusted as necessary to achieve uniformity of accounting policies. 

At 30 June 2024, 30 June 2023 and 31 December 2023, the group results include the results of Curzon Energy Plc, Coos Bay Energy, LLC, Westport Energy Acquisitions, Inc. and Westport Energy, LLC.

3.    Segmental analysis

In the opinion of the directors, the Group is primarily organised into a single operating segment. This is consistent with the Group's internal reporting to the chief operating decision maker.  Separate segmental disclosures have therefore not been included.

4.    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:

At 30 June 2024, 31 December 2023 and 30 June 2023 there were no potentially dilutive instruments in issue that could potentially dilute basic EPS in the future.

5.    Share capital

Issued equity share capital

*On 6 May 2020, the Company's shareholders approved the subdivision and re-designation of the 83,032,972 Existing Ordinary Shares ("Existing Ordinary Shares") of £0.01 each in the capital of the Company into (i) 83,032,972 New Ordinary Shares ("New Ordinary Shares") of £0.0001 each and (ii) 83,032,972 Deferred Shares ("Deferred Shares") of £0.0099 each in the capital of the Company, and to amend the Company's Articles of Association accordingly.

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

Warrants

There are no further warrants in issue as at 30 June 2024.

6.    Administrative expenses

Negative costs recognised in the period arise from the reversal of certain accrued expenses within the current period of report which had been recognised in prior years.

7.    Borrowings

The following loans from third parties were outstanding during the six months ended 30 June 2024. Details of the notes are disclosed in the table below:

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.

All borrowings as at the reporting date were fully settled via the passage of the Company Voluntary Arrangement which was passed by the creditors and shareholders on 5 September 2024.  See note 8 to these interim financial statements for further details.

8.    Events After the Reporting Period

On 5 September 2024 the Company completed a Company Voluntary Arrangement (CVA) following passage of the proposal by a vote of the Company creditors and shareholders.  Following passage of the CVA, the Company completed a capital raise of £340,000, the appointment of two new directors and the resumption of trading on the London stock exchange ahead of securing a suitable project for acquisition.

The passage of the above has resulted in the allotment of 1,133,333,900 new ordinary shares at a price of £0.0003 under the placing, and in respect of full and final settlement of creditors totaling £3.3m:

·      payment of £100,266 in cash and;

·      180,490,669 convertible loan notes, each convertible into one ordinary share at £0.0003, to be converted automatically on the publication of the next prospectus, in full and final settlement of creditors and borrowings.

The financial impact of the above process is:

·      A reduction in trade and other payables of £1,230,000;

·      A reduction in borrowings payable of £2,062,000;

·      An increase in convertible loan notes payable of £58,000 effective value (number of notes times conversion price);

·      An increase in cash and cash equivalents of £114,001 following cash settlement of creditors;

·      An increase in share capital and share premium of £113,333 and £226,667 respectively in respect of the placing;

·      An increase in share capital and share premium of £18,049 and £36,098 respectively in respect of the conversion of the issued CLN's to creditors, should such conversion take place in the future.