Tap Global Group Plc                  

Notes to Consolidated Financial Statements

For the year ended 30 June 2025

1.         General Information

Tap Global Group PLC (the "parent company") is a public company limited by shares and incorporated in England and Wales. The parent company is domiciled in the UK and its shares are admitted to trading on AIM, a market operated by The London Stock Exchange. These consolidated financial statements comprise the parent company and its subsidiaries (together referred to as the "group"). The group's consolidated financial statements for the year ended 30 June 2025 were authorised for issue by the Board of Directors on 31 December 2025.

2.         Summary of Significant Accounting Policies

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented unless otherwise stated.

Statement of Compliance

The Consolidated group's Financial Statements have been prepared in accordance with UK-adopted international accounting standards (the "IFRSs") in accordance with the requirements of the Companies Act 2006.

The group has adopted IFRSs that are relevant to its operations and effective for its accounting year beginning on 1 July 2023.  IFRSs comprise International Financial Reporting Standards ("IFRS"); International Accounting Standards ("IAS"); and Interpretations.

The parent company financial statements of Tap Global Group Plc have been prepared in compliance with United Kingdom Accounting Standards, including Financial Reporting Standard 102, "The Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland" ("FRS 102") and the Companies Act 2006.

Basis of Preparation 

The consolidated financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss.

The consolidated financial statements are prepared in sterling, which is the functional currency of the parent company. All amounts have been rounded to the nearest GBP.

Going concern

Details of the group's business activities, results, cash flows and resources, together with the risks it faces and other factors likely to affect its future development, performance and position are set out in the strategic report.

The group incurred an operating cash outflow of £183,836. These conditions indicate the existence of material uncertainty which may cast significant doubt on the Group's ability to continue as a going concern. Therefore, the Group may be unable to realise its assets and discharge its liabilities in the normal course of business.

The directors of the Company are of the opinion that the group will have sufficient working capital to meet its financial liabilities as and when they fall due given that (i) the group will be able to raise funds to meet a level sufficient to finance the working capital requirements of the group; and (ii) the group is actively implementing cost-control measures to improve operating cash flows and its financial position and the directors of the Company believe that the performance of the Group will be significantly improved in the forthcoming year.

Accordingly, the directors of the Company are of the opinion that it is appropriate to prepare the consolidated financial statements on the going concern basis. Should the group be unable to continue as a going concern, adjustments would have to be made to the consolidated financial statements, to write down the value of assets to their recoverable amounts, to provide for further liabilities which might arise and to reclassify non-current assets and non-current liabilities as current assets and current liabilities, respectively. The effect of these adjustments has not been reflected in the consolidated financial statements.

3.1        Basis of consolidation and significant accounting policies

The consolidated financial statements comprise the financial statements of all group subsidiaries as at 30 June each year using consistent accounting policies. Acquisition-related costs are expensed as incurred unless they result from the issuance of shares, in which case they are offset against the premium on those shares within equity.

Where considered appropriate, adjustments are made to the financial information of subsidiaries to bring the accounting policies used into line with those used by other members of the group. All intercompany transactions and balances between group enterprises are eliminated on consolidation.

Business combinations

The consolidated financial statements for business combinations using the acquisition method when control is transferred to the group. The consideration transferred in the acquisition is measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognised in profit or loss immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss.

Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent consideration that meets the definition of a financial instrument is classified as equity, then it is not re-measured, and settlement is accounted for within equity. Otherwise, other contingent consideration is re-measured at fair value at each reporting date and subsequent changes in the fair value of the contingent consideration are recognised in profit or loss.

Subsidiaries

Subsidiaries are entities controlled by the group. The group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. In assessing control, the group takes into consideration potential voting rights. The acquisition date is the date on which control is transferred to the acquirer. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. A non-controlling interest is recognised, representing the interests of minority shareholders in subsidiaries not wholly owned by the group.


Transactions eliminated on consolidation

Intra-group balances and transactions and any unrealised income and expenses arising from intra-group transactions are eliminated. On publishing the parent company financial statements here, together with the consolidated financial statements, the parent company is taking advantage of exemption in section 408 of the Companies Act 2006 not to present the individual income statement and related notes of the parent company which form part of these approved financial statements.

3.2        Foreign currency

In preparing these financial statements, transactions in currencies other than the parent company and group's presentational currency ("foreign currencies") are recorded at the rates of exchange prevailing on the dates of the transaction. At each statement of financial position date, monetary items in foreign currencies are translated into the presentational currency at the exchange rate prevailing at statement of financial position date. Exchange differences arising on the settlements of monetary items and on the retranslation of monetary items are included in the consolidated statement of comprehensive income for the year.                

3.3        Revenue Recognition

Revenue from contracts with customers

Revenue is measured based on the consideration specified in a contract with a customer with reference to the customary business practices and excludes amounts collected on behalf of third parties.  For a contract where the period between the payment by the customer and the transfer of the promised product or service exceeds one year, the consideration is adjusted for the effect of a significant financing component.

The group recognises revenue when it satisfies a performance obligation by transferring control over a product or service to a customer.  Depending on the terms of a contract and the laws that apply to that contract, a performance obligation can be satisfied over time or at a point in time.  A performance obligation is satisfied over time if:

-           the customer simultaneously receives and consumes the benefits provided by the group's performance;

-           the group's performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or

-           the group's performance does not create an asset with an alternative use to the group and the group has an enforceable right to payment for performance completed to date.

If a performance obligation is satisfied over time, revenue is recognised by reference to the progress towards complete satisfaction of that performance obligation.  Otherwise, revenue is recognised at a point in time when the customer obtains control of the product or service.

How the group recognises revenue for its significant revenue streams is described below:

Trading fees    

This service relates to the facility to buy and sell currency, including digital currency (crypto currency). A contract is identified when a payment is approved by the group and the customer. Performance obligations and transaction prices are set out in the contract. Revenue is recognised on the transaction date.

Account fees   

This service relates to the provision of account services. A contract is identified when a customer enters an agreement with the group for an account. Performance obligations and transaction prices are set out in the contract. Revenue related to monthly account fees are recognised during the month the account is provided.

Card fees         

A contract is identified when it is approved by relevant parties and when the card is issued to the customer. Performance obligations and transaction prices are set out in the contract. Revenue from provision of card services is recognised over period in which they are provided. ATM transaction and out-of-currency variable fees are constrained to the amount not expected to be reversed. Variable revenue is recognised at the point at which it is unlikely to be reversed, typically the transaction date.

3.4        Investments

(a)        Classification

Fair value through profit and loss equity investments are classified in this category if acquired principally for the purpose of trading or selling in the short term.  Investments in this category are classified as current assets if expected to be settled within 12 months; otherwise, they are classified as non-current. 

(b)        Recognition and Measurement

Regular purchases and sales of fair value through profit and loss equity investments are recognised on the trade date - the date on which the group commits to purchasing or selling the asset.  They carried at fair value through profit or loss is initially recognised at fair value, and transaction costs are expensed in the Income Statement. They are measured at fair value using the fair value hierarchy, as disclosed at note 23.

Fair value through profit and loss equity investments are derecognised when the rights to receive cash flows from the assets have expired or have been transferred, and the group has transferred substantially all of the risks and rewards of ownership.

Gains or losses arising from changes in the fair value of fair value through profit and loss equity investments at fair value through profit or loss are presented in the Income Statement.

3.5        Financial Assets

(a)       Classification

The group classifies its financial assets in the following categories: at amortised cost including trade receivables and other financial assets at amortised cost, at fair value through other comprehensive income and at fair value through profit or loss, loans and receivables, and available-for-sale.  The classification depends on the purpose for which the financial assets were acquired.  Management determines the classification of its financial assets at initial recognition.

(b)      Recognition and measurement

Amortised cost

Trade and other receivables are recognised initially at the amount of consideration that is unconditional, unless they contain significant financing components, in which case they are recognised at fair value. The group holds the trade and other receivables with the objective of collecting the contractual cash flows, and so it measures them subsequently at amortised cost using the effective interest method.

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

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

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

Fair value through profit or loss

The group classifies the following financial assets at fair value through profit or loss (FVPL):

•           debt instruments that do not qualify for measurement at either amortised cost (see above) or FVOCI;

•           equity investments that are held for trading; and

•           equity investments for which the entity has not elected to recognise fair value gains and losses through OCI.

For information about the methods and assumptions used in determining fair value refer to note 23. The group does not hold any financial assets that meet conditions for subsequent recognition at fair value through other comprehensive income ("FVTOCI").

(c)      Impairment of financial assets

The group recognises an allowance for expected credit losses ("ECL"s) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the group expects to receive, discounted at an approximation of the original Effective Interest Rate ("EIR"). The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).

For trade receivables and other receivables due in less than 12 months, the group applies the simplified approach in calculating ECLs, as permitted by IFRS 9. Therefore, the group does not track changes in credit risk, but instead, recognises a loss allowance based on the financial asset's lifetime ECL at each reporting date.

The group considers a financial asset to be in default when internal or external information indicates that the group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows and usually occurs when past due for more than one year and not subject to enforcement activity.

At each reporting date, the group assesses whether financial assets carried at amortised cost are credit impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

(d)      Derecognition

The group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.

On derecognition of a financial asset measured at amortised cost, the difference between the asset's carrying amount and the sum of the consideration received and receivable is recognised in profit or loss.

3.6        Financial Liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument under IFRSs.  An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.  The accounting policies adopted for specific financial liabilities and equity instruments are set out below.

All financial liabilities are recognised initially at fair value, net of directly attributable transaction costs. The group's financial liabilities include trade and other payables.

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Trade and other payables

Trade and other payables are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.

Trade and other payables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method unless the effect of discounting would be immaterial, in which case they are stated at cost.

Equity instruments

Equity instruments issued by the parent company are recorded at the proceeds received, net of direct issue costs.

Derecognition

A financial liability is derecognised when the associated obligation is discharged or cancelled or expires.

3.7        Expenditure

Expenses are recognised on the accrual basis.

3.8        Tangible assets

Tangible assets are stated at cost less accumulated depreciation and accumulated impairment losses. Such costs include costs directly attributable to making the asset capable of operating as intended. Depreciation is calculated at the following annual rates so as to write off the cost of fixed assets over their estimated useful lives using the reducing balance method:

Computer equipment 25%

Furniture and fittings 15%

On disposal, the difference between the net disposal proceeds and the carrying amount of the item sold is recognised in statement of comprehensive income and included in other operating income. The carrying values of the tangible assets are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. All subsequent repairs, renewals and maintenance costs are charged to the statement of comprehensive income when incurred.

3.9        Leases

At inception of a contract, the group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the group uses the definition of a lease in IFRS 16.

As a lessee

At commencement or on modification of a contract that contains a lease component, the group allocates the consideration in the contract to each lease component on the basis of its relative stand-alone prices. However, for the leases of property the group has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the group by the end of the lease term or the cost of the right-of-use asset reflects that the group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability. During the year, the right-of-use asset was depreciated over 6 years, which represented the unexpired portion of the lease.

The lease liability is initially measured at the present value of the expected future lease payments as at the commencement date of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the group's incremental borrowing rate. Generally, the group uses its incremental borrowing rate as the discount rate. The group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.

Lease payments included in the measurement of the lease liability comprise the following: - fixed payments, including in-substance fixed payments; - variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date; - amounts expected to be payable under a residual value guarantee; and - the exercise price under a purchase option that the group is reasonably certain to exercise, lease payments in an optional renewal period if the group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the group is reasonably certain not to terminate early.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero. The group presents right-of-use assets that do not meet the definition of investment property in 'property, plant and equipment, including right of use assets' and lease liabilities as disclosed on the face of the statement of financial position.

Short-term leases and leases of low-value assets

The group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-term leases. The group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

3.10      Intangible assets - Cryptoassets

Intangible assets include cryptoassets held by the company. The directors believes that the cryptoassets meet the definition of an intangible asset under IAS 38, 'Intangible Assets', as they meet the definition of an identifiable non-monetary asset without physical substance.

Under IAS 38 there is an accounting policy choice as to whether the cryptoassets should be recognised at fair value or cost less impairment. The director is of the opinion that there is an active market for the cryptoassets held by the company and therefore decided to measure the cryptoassets at fair value.

The directors intend to review this recognition policy on a regular basis and whenever new standards, or guidance are issued.

A single, generally accepted framework for the classification of different cryptoassets does not currently exist. There is consequently no general applied definition of a cryptoasset. This reflects the broad variety of features and bespoke nature of the transactions in practice. Cryptoassets are initially measured at cost if purchased in an ordinary transaction.

Under IAS 38 there is an accounting policy choice for the subsequent measurement of these assets. The choice is whether to recognise the assets at fair value or cost less impairment. The director deems there to be an active market for the crypto assets held by the company and has therefore made the decision to subsequently measure these assets at fair value less accumulated amortisation and impairment.

The intangible assets held by the company have an indefinite useful life as they have no expiration date, which means they can be used by the company for an unlimited period of time and could have the same use in the future as today.

3.11      Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and time, call and current balances with banks and similar institutions, which are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value.    

3.12      Provisions

Provisions are recognised for liabilities of uncertain timing or amount when the group has a present legal or constructive obligation arising as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made.  Where the time value of money is material, provisions are stated at the present value of the expenditures expected to settle the obligation.

Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow is remote.  Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events are also disclosed as contingent liabilities unless the probability of outflow is remote.

3.13      Intangible assets - computer software and website development

Computer software development expenditure is capitalised only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the group intends to and has sufficient resources to complete development and to use or sell the asset. Otherwise, it is recognised in the statement of comprehensive income as incurred. Subsequent to initial recognition, development expenditure is measured at cost less accumulated amortisation and any accumulated impairment losses.

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognised in statement of comprehensive income as incurred. Amortisation is calculated to write off the cost of computer software less their estimated residual values using the straight-line method over their estimated useful lives and is generally recognised in the statement of comprehensive income.

The estimated useful lives for current and comparative periods are as follows:

Computer software - 4 years

Website development - 4 years

Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

3.14      Impairment of assets

At the end of each reporting period, the group reviews the carrying amounts of its tangible and intangible assets except goodwill, investment properties (fair value model only), deferred tax assets, investments and receivables to determine whether there is any indication that those assets have suffered an impairment loss.  If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of any impairment loss.  Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs of disposal and value in use.  In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount.  An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised for the asset or cash-generating unit in prior years.  A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating units (CGUs) that are expected to benefit from that business combination. Where goodwill has been allocated to a cash-generating unit ("CGU") that CGU is tested for impairment annually to determine whether the carrying amount of the CGU may not be recoverable. An impairment loss in respect of goodwill is not reversed.

The group has recognised one CGU, called Crypto Asset Brokerage. This represents the lowest level at which goodwill is monitored for internal management purposes.

3.15      Share Capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

3.16      Income Tax

Tax is recognised in the profit and loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

Deferred income tax is recognised, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax is determined using tax rates (and laws) that have been enacted, or substantially enacted, by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised, or the deferred income tax liability is settled.

Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Deferred income tax assets are recognised on deductible temporary differences only to the extent that it is probable the temporary difference will reverse in the future and there is sufficient taxable profit available against which the temporary difference can be utilised.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities, and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

3.17      Share Based Payments

The group operates an equity-settled share-based scheme, under which the entity receives services from employees or third-party suppliers as consideration for equity instruments (shares, options and warrants) of the group.  The group may also issue warrants to share subscribers as part of a share placing. The fair value of the equity-settled share based payments is recognised as an expense in the income statement or charged to equity depending on the nature of the service provided or instrument issued.  The total amount to be expensed or charged in the case of options is determined by reference to the fair value of the options or warrants granted:

•           including any market performance conditions;

•           excluding the impact of any service and non-market performance vesting conditions (for example, profitability or sales growth targets, or remaining an employee of the entity over a specified time period); and

•           including the impact of any non-vesting conditions (for example, the requirement for employees to save).

In the case of shares and warrants the amount charged to the share premium account is determined by reference to the fair value of the services received if available. If the fair value of the services received is not determinable the shares are valued by reference to the market price and the warrants are valued by reference to the fair value of the warrants granted as described previously.

Non-market vesting conditions are included in assumptions about the number of options or warrants that are expected to vest. The total expense or charge is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied.  At the end of each reporting period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the income statement or equity as appropriate, with a corresponding adjustment to another reserve in equity.

When the warrants or options are exercised, the group issues new shares.  The proceeds received, net of any directly attributable transaction costs, are credited to share capital (nominal value) and share premium when the warrants or options are exercised.

3.18      Related parties

(A)       A person or a close member of that person's family is related to the group if that person:

(i)     has control or joint control over the group;

(ii)    has significant influence over the group; or

(iii)   is a member of the key management personnel of the group or of a parent of the group.

(B)       An entity is related to the group if any of the following conditions applies:

(i)   The entity and the group are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).

(ii)   One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).

(iii)  Both entities are joint ventures of the same third party.

(iv)  One entity is a joint venture of a third entity and the other entity is an associate of the third entity.

(v)  The entity is a post-employment benefit plan for the benefit of employees of either the group or an entity related to the group.  If the group is itself such a plan, the sponsoring employers are also related to the group.

(vi)  The entity is controlled or jointly controlled by a person identified in (A).

(vii) A person identified in (A)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).

The entity, or any member of a group of which it is a part, provides key management personnel services to the group or to a parent of the Company.

3.19      Employee benefits

(i)         Employee leave entitlements

Employee entitlements to annual leave and long service leave are recognised when they accrue to employees.  A provision is made for the estimated liability for annual leave and long service leave as a result of services rendered by employees up to the end of the reporting period.

Employee entitlements to sick leave and maternity leave are not recognised until the time of leave.

(ii)         Termination benefits

Termination benefits are recognised at the earlier of the dates when the group can no longer withdraw the offer of those benefits and when the group recognises restructuring costs and involves the payment of termination benefits.

3.20      Events after the reporting period

Events after the reporting period that provide additional information about the group's position at the end of the reporting period or those that indicate the going concern assumption is not appropriate are adjusting events and are reflected in the financial statements.  Events after the reporting period that are not adjusting events are disclosed in the note

s to the financial statements when material.

4.         Judgements And Key Sources of Estimation And Uncertainty

In the process of applying the accounting policies, the directors have made the following judgements that have the most significant effect on the amounts recognised in the consolidated financial statements.

4.1        Going concern basis

These consolidated financial statements have been prepared on a going concern basis, the validity of which depends upon the financial support of the controlling shareholder at a level sufficient to finance the working capital requirements of the group.  Details are explained in note 2 to consolidated financial statements.

The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the date of the financial statements.

If in the future such estimates and assumptions which are based on management's best judgement at the date of the financial statements, deviate from the actual circumstances, the original estimates and assumptions will be modified as appropriate in the year in which the circumstances change. Where necessary, the comparatives have been reclassified or extended from the previously reported results to take into account presentational changes.

4.2        Impairment of goodwill

Determining whether goodwill is impaired requires an estimation of the value in use of the CGU to which goodwill has been allocated.  The value in use calculation requires the group to estimate the future cash flows expected to arise from the CGU and a suitable discount rate in order to calculate the present value.  The carrying amount of goodwill at the end of the reporting period was £1,286,228 after an impairment loss of £4,702,649 was recognised during 2025. 

Management estimates discount rates using pre-tax rate that reflects the current market assessment of the time value of money and the specific risks associated with the asset for which the future cash flow estimates have not been adjusted. The rate used to discount the forecast cash flows are based upon the CGU's weighted average cost of capital (WACC). The WACC for the Crypto Asset Brokerage CGU was 16.0% (2024:14%), based on a WACC used by a listed business for a similar business model.

The group prepared cash flow forecasts derived from the most recent financial budgets approved by management for the next five years. For the purpose of the value in use calculation the management forecasts were extrapolated into perpetuity using a growth rate of 2.0%, representing the expected long-run rate of inflation in the UK. The forecasts assume growth rates in acquisitions which in turn drive the forecast collections and cost figures.

4.2        Share options

The Group issues equity-settled share-based payment awards to employees and directors. Determining the appropriate fair value of these awards at the grant date requires management to make critical judgements about the selection of valuation methodology, particularly when awards contain market-based performance conditions.

For awards with market-based vesting conditions, management determined that a Monte Carlo simulation model was the most appropriate valuation technique due to the need to model share price volatility and the probability of meeting market-based performance hurdles. For awards without market-based conditions, management applied the Black-Scholes option pricing model, which is considered to reflect the fair value of standard share option arrangements.

The identification of these models represents a critical judgement because alternative models could produce materially different valuations and therefore different expense recognition profiles.

The valuation of equity-settled share-based payments requires management to estimate several inputs that involve inherent uncertainty. The following key assumptions were applied in the current year:

·      Expected employee churn rate - 30%

Estimated based on historical employee turnover and expectations of the proportion of awards that will lapse before vesting.

·      Risk-free interest rate - 4%

Determined using yields on government bonds with maturities aligned to the expected life of the options.

·      Dividend yield - 0%

The Group does not currently pay dividends, therefore a dividend yield of 0% was assumed.

·      Expected volatility - derived from the Group's own share price trading history

Volatility was estimated using daily share price returns over a period consistent with the expected life of the awards. This assumption is particularly sensitive because volatility directly affects the calculated fair value under both the Monte Carlo and Black-Scholes models.

·      Expected life of options

Estimated using historic exercise patterns (if available), vesting profiles and expected employee behaviour.

These assumptions represent significant estimation uncertainty because they rely on forecasts of future employee behaviour and market conditions, and small changes in these inputs can materially affect the fair value of the options.

5.         Operating Profit

Operating profit or loss is stated after charging/crediting: