Half Year Report

28 March 2024

Tap Global Group Plc

Half Year Report

Tap Global Group Plc (AQSE: TAP), the cryptocurrency app bridging the gap between traditional finance and blockchain technology, is pleased to present its results for the six months ended 31 December 2023.

References herein to “Tap Group”, the “Group” or the “Company” refer to Tap Global Group Plc (formerly Quetzal Capital Plc). References to “Tap” or “Tap Global” refer to Tap Global Limited and/or Tap Technologies Limited which are wholly owned subsidiaries of Tap Global Group Plc. Tap Global Limited is licensed and regulated by the Gibraltar Financial Services Commission under the Distributed Ledger Technology (DLT) with licence No. 25532.

Financial Highlights

	Tap Group	Tap Group	Tap Group	Tap Global
	6 months to 31 Dec 23 (“H1 24”)	12 months to 30 Jun 23 (“FY 23”)	6 months to 31 Dec 22 (“H1 23”)	6 months To 31 Dec 22 (“H1 23”)
	£	£	£	£
Trading Payment Volume*	71,922,117	181,568,624	-	25,908,019
Trading Revenue	913,051	1,678,624	-	354,678
Other Revenue	378,005	337,484	40,000	120,134
Total Revenue	1,291,056	2,016,086	40,000	474,812
Trading Margin	1.27%	0.92%	-	1.37%
Adjusted EBITDA**	(742,559)	(363,363)	(264,622)	(429,749)
EBITDA	(708,966)	(782,838)	(298,992)	(241,001)
Loss After Tax	(995,475)	(1,074,640)	(298,992)	(527,394)

• Tap Group trading payment volume in H1 24 was £71.9m (Tap Global H1 23: £25.9m), an increase of 178% on H1 23
• Tap Group revenue in H1 24 was £1.3m (Tap Global H1 23: £0.5m), an increase of 172% on H1 23
• Tap Group trading margin in H1 24 was 1.27% (Tap Group FY 23: 0.92%), an improvement of 37% on FY 23 reflecting the focus on revenue margin improvement  
• Tap Group adjusted EBITDA in H1 24 was a loss of £0.7m (Tap Global H1 23: £0.4m loss), the increased loss due to the take on of the PLC costs and investment in sales and marketing
• Tap Group overall loss after tax in H1 24 was £1.0m (Tap Global H1 23: £0.5m) as the Company scaled up operations, invested in product and marketing and incorporated PLC costs
• Tap Group cash at 31 December 2023 was £1.9m (30 June 2023: £2.3m), a decrease of £0.4m from the prior financial year end

Notes

*Trading Payment Volume – the value of funds traded by customers when selling one currency for another

**Adjusted EBITDA - earnings before interest, tax, depreciation, amortisation, and adjustments for realised or unrealised gains and losses on non-GBP transactions or holdings, fair value on investments and sales of assets

Operational Highlights

• Prepared for launch in the US through a partnership with Zero Hash LLC (“Zero Hash”), a Chicago-based B2B2C cryptocurrency infrastructure platform, ensuring the requisite regulatory coverage for the new US business
• Ensured compliance with the FCA’s Crypto Financial Promotions Regime to enable continuation of service to UK customers
• Exceeded 250,000 user milestone during H1 24, with total registered users now at over 330,000
• Added three new tokens, bringing the total cryptocurrency offering to 48
• Developed new technical solutions to further improve customer security
• Opened office in Greece to establish a cost effective operational hub for servicing EU and EEA customers under the MiCA regime
• Rose to Number 1 in the Greek App Store ranking for financial apps in December 2023

Post-Period End Highlights

• Tap Group trading volume in January and February 2024 was £18.4m and revenue was £0.4m, including trading revenue of £0.3m
• Tap Group trading revenue margin in January and February 2024 improved again to 1.64%
• Continued development of customer upgrade solutions, including rewards, cashback, discounted fees, and alignment of XTP and Tap interests
• Added Bitfinex as a new exchange services partner

David Hunter, Chairman of Tap Group, commented:

“From service offering enhancements to continued rapid user base expansion, I am proud of our recent operational progress which has continued into 2024.

We again demonstrated our ability to adapt to regulatory changes prevalent in the cryptocurrency sector, and this versatility and resilience has ensured we continue to attract high-quality partners that help us grow the Company and capitalise on new business opportunities.

Tap Group has made a strong start to 2024 and management are confident that we will deliver on our growth ambitions, including our near-term priorities of increasing both revenue and user numbers, while completing our important US launch.”

The directors of the Company accept responsibility for the contents of this announcement.

Enquiries: 

Tap Global Group Plc  David Hunter, Executive Chairman	Via Vigo Consulting
Peterhouse Capital Limited (Aquis Growth Market Corporate Advisor) Guy Miller Narisha Ragoonanthun	[phone]
Tennyson Securities (Broker) Alan Howard	[phone]
Vigo Consulting (Investor Relations) Ben Simons Kendall Hill Peter Jacob	[phone] [e-mail]

About Tap Global Group Plc

The Tap group of companies provide an innovative and fully integrated fiat payments and crypto settlement service. A single regulatory registration, via the wholly owned operating business Tap Global Limited, provides Tap customers with access to several major cryptocurrency exchanges through the Tap App allowing them to purchase over 48 cryptocurrencies and store them directly in the customer’s wallet. The wallet can also store fiat currency denominated in Sterling, Euros and/or USD.

Through the single app, Tap’s over 330,000 users can access several major cryptocurrency exchanges and, utilising Tap’s proprietary Artificial Intelligence middleware, customers benefit from best-execution and pricing in real time. Through the Tap card (UK and Europe only), users can also convert their cryptocurrencies to fiat to spend at more than 37 million merchant locations worldwide.

Tap is one of only a handful of unified solutions operators fully regulated to provide Distributed Ledger Technology (DLT) services and was the first cryptocurrency FinTech company approved by Mastercard in Europe. 

About Tap Global Limited

Tap Global Limited is registered in Gibraltar with the registration number 118724 and the registered office of Madison Building, Line Wall Road, Gibraltar, GX11 1AA. Tap Global Limited is licensed and regulated by the Gibraltar Financial Services Commission under the DLT with license No. 25532.

Learn more: www.withtap.com

Follow us on social media:

LinkedIn: https://www.linkedin.com/company/tapglobal/

X (formerly Twitter): https://twitter.com/TapGlobalPlc

Tap Global Group Plc

Chairman’s Statement

For the six month period ended 31 December 2023 (“H1 24”)

Introduction

H1 24 was a productive period for the business. We delivered solid operational progress via service offering enhancements and continued rapid user base expansion while identifying the ideal partner for our US launch.

Tap Group’s H1 24 show significant improvement over the corresponding interim period for Tap Global in the previous financial year (before it was part of the Group), despite revenues being impacted by the interruption of some customer services as a result of well publicised changes to the wider fintech regulatory landscape. As we committed resources to navigating these regulatory changes, Tap was principally focused on customer retention and profit margins in the period, rather than new customer acquisition. Tap has acted swiftly and prudently to ensure services comply with these new regulations, and, as a result, revenue growth post-period end has been positive.

Growth and Optimisation

Expanding the selection of cryptocurrencies on the platform is a pillar of our growth strategy, and during the period we added Loopring (LRC), Basic Attention Token (BAT), and NAGA Coin (NAGA) to our asset portfolio, taking the total number to 48. Tap provides users with access to a diverse range of cryptocurrencies, including both nascent and well-established coins, and we will continue to explore opportunities to broaden the selection of cryptoassets available to customers as the year progresses.

Tap grew its user base by over 130,000 in the period to over 294,000. This took us through a quarter of a million which was a key milestone for the Company and a strong indicator of our well-paced development. Tap’s rapid user growth continued post-period end, with over 333,000 individuals globally now registered to use our services. This is a testament to the quality of our service offering and demonstrates Tap’s growing credibility in the unique fintech space in which we operate.

Since inception, we have aspired to expand our footprint to North America and in October 2023 we announced our intention to launch in the US through our wholly owned subsidiary, Tap Americas, and via a strategic partnership with B2B2C cryptocurrency infrastructure platform, Zero Hash LLC. A well-established US entity, Zero Hash shares our regulation-first approach and will provide the platform for us to establish a significant foothold in what is the world’s largest cryptocurrency market. The launch process continues apace, and we expect to provide shareholders with further updates in the near future. 

As anticipated, the trading fees that Tap charges to users accounted for the majority of revenues generated in the period. We continually evaluate our pricing strategy to ensure we remain appropriately priced compared to market competitors while optimising revenue generation opportunities from the services delivered. We are developing plans to implement user fee changes in 2024 to bolster revenue streams and ensure we continue to provide a good value, competitively priced service.

Tap’s Cards-as-a-Service product is nearing formal launch, with Bitfinex confirmed as the first client for this product line. The white-labelled prepaid Mastercard will be made available to all Bitfinex’s European users and will be underpinned by Tap’s existing infrastructure and regulatory approvals. We have also been making good progress on the development of a Crypto-as-a-Service solution which, unlike the card service, is directly linked to trading activity. Once launched, this product will provide potential commercial partners with a number of benefits, enabling them to leverage Tap’s cryptocurrency services as a product for their user base without having to develop the environment or deliver on the regulatory standards required themselves.

During the period, we implemented additional technical solutions to strengthen our cybersecurity and fraud protection capabilities, which has further reduced fraud and scam risks for Tap customers. This includes the launch of a new anti-scam account takeover prevention functionality that is directly in line with Tap’s focus in this area. The appointment of a Deputy Money Laundering Reporting Officer in December 2023 has also bolstered our compliance function to further improve the overall safety of our service whilst increasing our threat monitoring capacity, helping ensure Tap remains a go-to for individuals seeking a secure and fully regulated one-stop solution for traditional finance and blockchain technology.

The regulatory environment in the cryptocurrency sector continues to evolve, and we have worked hard to ensure that we are well positioned to proactively respond to new regulatory requirements in a timely manner so as to not disrupt our operations. Accordingly, in October 2023 we implemented changes to ensure we adhered to new regulation on how cryptoasset firms promote their services to UK consumers in accordance with the FCA’s Cryptoassets Financial Promotion Regime.

We established an operations centre in Greece in November 2023, with the country likely to become the operational hub for servicing EU and EEA customers under the recently established MiCA regulation. We are well prepared for the introduction of this new regulatory framework, which covers cryptoassets, cryptoasset issuers, and cryptoasset providers, and we are finalising our VASP application to ensure we comply with the relevant jurisdictional regulations. There is strong Greek interest in Tap’s services, as demonstrated by our top ranking in Greece’s App Store for financial apps, and we look forward to leveraging this new base to grow our presence in the country as well as wider Europe.

Financial Performance

As the results show, Tap Group has come through a period of change in the cryptocurrency space and delivered a solid set of results for H1 24, comparing favourably to the corresponding period for Tap Global in the prior year. During this period of change, the Group focused on revenue margin improvement with the results starting to take effect when comparing the trade revenue margin for FY 23 at 0.92% with H1 24 of 1.27% - a 37% increase. This will increase further when the full effect flows through from January 2024 onwards.

Cash at 31 December 2023 was £1.9m, down from £2.3m at 30 June 2023, as the Group continued to invest in product and marketing and maintaining regulatory status in its core territories.

Post-Period End

Tap’s partnerships in the cryptocurrency industry continue to underpin new business momentum and are instrumental in helping us enhance user experience. Post-period end, we added Bitfinex as a new exchange services partner. This strategic partnership not only broadens our trading routes but also deepens liquidity, facilitating faster, larger trades at more competitive rates for an improved trading experience.

Post-period end, we also announced changes to the Board as we focused on streamlining the corporate structure of the Company. Arsen Torosian, previously Tap Group’s Chief Strategy Officer, was appointed as Chief Executive Officer following the resignation of David Carr as Chief Executive Officer and as a Director of the Company. In the same month, Tony Quirke resigned as CFO and Director of the Company, with his replacement Steven Borg due to take over responsibilities in April 2024 following a transition period. Steven has many years of financial leadership experience in the digital assets and payments industries, and I have no doubt that his expertise will be invaluable to Tap Group as we continue to grow. Des Hellicar-Bowman, Non-Executive Director of Tap Group, also announced that he would be retiring as a Director. On behalf of the Board, I would like to thank David, Tony, and Des for their valuable contributions towards our listing and growth to date and wish them the best of luck in their future endeavours.

Outlook

The full effect of the focus on revenue margins is illustrated in the post-period end results, where the trade revenue margin has further improved to 1.64% from 1.27% for H1 24 and 0.92% for FY 23. The current revenue margin is now expected to be maintained at least in the near term.

Facilitated by prudent investment in sales and marketing initiatives, we are actively looking at opportunities to expand into new geographies and plan on making a number of enhancements to our already sophisticated and multifaceted product suite in the coming year, including the introduction of additional assets, rewards to users for usage on the app, and delivery of new user facing services and functionality.

Tap has made a strong start to 2024 and management are confident that we will deliver on our growth ambitions, including our near-term priorities of increasing both revenue and user numbers, and completing our US launch. We have repeatedly proven our ability to adapt to regulatory changes prevalent in the cryptocurrency sector, and this versatility and resilience has ensured we continue to attract high-quality partners that help us grow and capitalise on new business opportunities. I am proud of the operational progress delivered during the period and look forward to providing shareholders with an update on ongoing projects in due course.

David Hunter

Non-Executive Chairman

Tap Group

27 March 2024

Tap Global Group Plc

Interim Consolidated Statement of Comprehensive Income

For the six-month period ended 31 December 2023

		Dec-23	Jun-23	Dec-22
		6 months	12 months	6 months
		unaudited	audited	unaudited
	Notes	£	£	£
Revenue
Revenue		1,291,056	2,016,086	40,000
Cost of sales	1	(404,418)	(494,488)	-
Gross profit		886,638	1,521,598	40,000
Operating expenses	2	(1,915,706)	(2,596,680)	(304,622)
Exchange difference		(1,318)	(21,941)	-
Fair value adjustments		6,650	(300,795)	(34,370)
Gain/(loss) on sale of cryptoassets		28,261	323,178	-
Loss before income tax		(995,475)	(1,074,640)	(298,992)
Tax on loss		-	-	-
Total comprehensive loss for the period		(995,475)	(1,074,640)	(298,992)

Group operations are classed as continuing.

The exemption under section 408 of the Companies Act 2006 from presenting the Parent Company’s income statement has been taken. The Company’s loss for the period was £383,737 (2023: £1,494,142).

The notes form part of these interim consolidated financial statements.

Tap Global Group Plc

Interim Consolidated Statement of Financial Position

As at 31 December 2023

		Dec-23	Jun-23	Dec-22
		unaudited	audited	unaudited
	Note	£	£	£
ASSETS
Non-current assets
Tangible assets, including right-of-use assets	4, 6	109,303	120,385	-
Investments		-	-	1,782,937
Intangible assets - cryptoassets	8	586,598	1,221,451	-
Intangible assets – software and website domains		1,331,570	1,234,389	-
Goodwill		21,850,947	21,850,947	-
Deferred tax asset		12,517	12,517	12,517
Total non-current assets		23,890,935	24,439,689	1,795,454
Current assets
Cash and cash equivalents		1,892,267	2,335,375	970,055
Trade and other receivables	7	234,033	115,523	51,486
Total current assets		2,126,299	2,450,898	1,021,541
Total assets		26,017,234	26,890,587	2,816,995
LIABILITIES AND EQUITY
Non-current liabilities
Lease liability	5	42,512	61,925	-
Total non-current liabilities		42,512	61,925	-
Current liabilities
Trade payables		296,194	237,343	24,254
Accruals		287,115	197,250	132,883
Unissued share capital		-	-	100,000
Director's current account		669,451	679,451	-
Lease liability	5	34,595	31,776	-
Total current liabilities		1,287,358	1,145,820	257,137
Equity
Capital and reserves
Called up share capital		2,223,466	2,223,466	1,701,243
Share premium		27,685,458	27,685,458	4,687,681
Option & warrant reserve		374,898	374,898	14,099
Profit and loss account		(5,596,455)	(4,600,980)	(3,843,165)
Equity shareholders' funds		24,687,367	25,682,842	2,559,858
Total liabilities and equity		26,017,234	26,890,587	2,816,995

The notes form part of these interim consolidated financial statements.

Tap Global Group Plc

Interim Consolidated Statement of Changes in Equity

For the six-month period ended 31 December 2023

	Called up share capital	Share premium	Option & warrant reserve	Profit and loss account	Total
	£	£	£	£	£
As at 1 July 2022	1,701,243	4,687,681	14,099	(3,544,173)	2,858,850
Total comprehensive loss for the year	-	-	-	(1,074,640)	(1,074,640)
Share subscription	72,223	3,197,777	-	-	3,270,000
Acquisition of the subsidiaries	450,000	19,800,000	-	-	20,250,000
Forfeiture of share options	-	-	(17,833)	17,833	-
Option & warrant reserve	-	-	378,632	-	378,632
As at 30 June 2023	2,223,466	27,685,458	374,898	(4,600,980)	25,682,842
As at 1 July 2023	2,223,466	27,685,458	374,898	(4,600,980)	25,682,842
Total comprehensive loss for the period	-	-	-	(995,475)	(995,475)
Share subscription	-	-	-	-	-
Acquisition of the subsidiaries	-	-	-	-	-
Forfeiture of share options	-	-	-	-	-
Option & warrant reserve	-	-	-	-	-
As at 31 December 2023	2,223,466	27,685,458	374,898	(5,596,455)	24,687,367

The notes form part of these interim consolidated financial statements.

Tap Global Group Plc

Interim Consolidated Statement of Cash Flows

For the six-month period ended 31 December 2023

	Dec-23	Jun-23	Dec-22
	unaudited	audited	unaudited
	£	£	£
Cash flow from operating activities
Loss after taxation for the period	(995,475)	(1,074,640)	(298,992)
Adjustment for:
Depreciation	19,045	18,876	-
Amortisation	266,060	270,836	-
Finance costs	1,406	1,892	-
Share option charge	-	378,632	-
Fair value change of investment	(6,650)	300,795	34,370
Gain on sale of cryptoassets	(28,261)	(323,178)	-
Change in:
Trade and other receivables	(118,510)	94,115	50,592
Trade and other payables	138,719	(1,283,699)	117,173
Cash generated from operations	(723,666)	(1,616,371)	(96,857)
Interest paid	-	-	-
Tax paid	-	-	-
Net cash used in operating activities	(723,666)	(1,616,371)	(96,857)
Cash flow from investing activities
Acquisition of subsidiaries	-	323,840	-
Proceeds from cryptoassets	1,320,383	4,318,385	-
Additions to cryptoassets	(657,271)	(4,660,607)	-
Purchase of intangible assets	(363,241)	(338,558)	-
Purchase of tangible assets	(1,313)	(11,726)	-
Purchase of investment	-	-	-
Sale of investments	-	-	-
Net cash used in investing activities	298,558	(368,666)	-
Cash flow from financing activities
Repayment of lease liabilities	(18,000)	(16,500)	-
Issued capital	-	3,270,000	-
Net cash used in financing activities	(18,000)	3,253,500	-
Increase/(decrease) in cash and cash equivalents	(443,108)	1,268,463	(96,857)
Cash and cash equivalents at beginning of period	2,335,375	1,066,912	1,066,912
Cash and cash equivalents at end of period	1,892,267	2,335,375	970,055

The notes form part of these interim consolidated financial statements.

Tap Global Group Plc

Notes to the Interim Financial Statements

For the six-month period ended 31 December 2023

Financial Information

The financial information set out in these interim financial statements does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The Group’s consolidated statutory financial statements for the year ended 30 June 2023 have been filed with the Companies House.  The auditor’s report on those financial statements was unqualified and did not contain a statement under Section 498(2) of the Companies Act 2006.

These interim results have not been audited nor have they been reviewed by the Company’s auditors under ISRE 2410 of the Auditing Practices Board.

These interim financial statements are for the six month period ended 31 December 2023. They have been prepared following the recognition and measurement principles of FRS 102. They do not include all of the information required for full annual financial statements and should be read in conjunction with the financial statements for the period ended 30 June 2023.

Going concern

The directors, having made appropriate enquiries, consider that adequate resources exist and continued support of the directors is forthcoming for the Company to continue in operational existence for the foreseeable future, therefore, it is appropriate to adopt the going concern basis in preparing these interim financial statements for the period ended 31 December 2023.

1. Cost of sales

	Dec-23	Jun-23	Dec-22
	£	£	£
Transaction fees	376,384	463,260	-
Bank charges	28,034	31,228	-
Total	404,418	494,488	-

2. Operating expenses

	Dec-23	Jun-23	Dec-22
	£	£	£
Salaries	498,698	834,423	83,875
Professional and legal fees	485,292	455,846	39,252
Marketing and communications	347,439	390,892	-
IT Costs	161,659	185,163	-
Depreciation and amortisation	265,598	290,573	-
Other operating expenses	157,021	439,782	181,495
Total	1,915,706	2,596,680	304,622

3. Earnings per share

The calculation of earnings per share is based on the loss attributable to shareholders divided by the weighted average number of ordinary shares in issue, being 708,864,739 during the period. This results in a loss per share of £0.0014 (2023: £0.00248).

4. Tangible assets – right-of-use assets

	Right-of-use	Computer	Fixtures &	Total
	asset	equipment	Fittings
Cost	£	£	£	£
Balance as at 30 June 2023	190,650	22,854	5,490	218,994
Additions	-	1,313	-	1,313
Balance as at 31 December 2023	190,650	37,157	5,490	220,307
Depreciation
Balance as at 30 June 2023	103,269	10,105	1,747	115,120
Charge for the period	15,888	2,746	412	17,293
Balance as at 31 December 2023	117,404	12,851	2,159	132,413
Net book value
At 31 December 2023	73,246	11,316	3,331	87,894
At 30 June 2023	87,381	12,749	3,743	103,873

5. Lease liability

	Dec-23	Jun-23	Dec-22
	£	£	£
Opening Balance	93,701	-	-
Acquisition of subsidiaries	-	108,309	-
Interest expense	1,406	1,892	-
Payments	(18,000)	(16,500)	-
At the end of the year	77,107	93,701	-
Current	34,595	31,776	-
Non-current	42,512	61,925	-

6. Tangible assets – investments

	Dec-23	Jun-23	Dec-22
	£	£	£
Opening balance	16,512	1,987	1,987
Transfer from financial assets	-	315,320	34,370
Revaluations	6,650	(300,795)	(34,370)
Total	23,162	16,512	1,987

7. Debtors

	Dec-23	Jun-23	Dec-22
	£	£	£
Trade debtors	13,700	-	-
Prepayments	145,955	112,481	11,239
Other debtors	88,079	3,042	40,247
Total	234,034	115,523	51,486

8. Intangible assets – crypotassets held for investment

	Dec-23	Jun-23	Dec-22
	£	£	£
Opening balance	1,221,451	-	-
Upon acquisition	-	556,049	-
Additions	657,271	4,660,607	-
Disposals	(1,320,383)	(4,318,383)	-
Gain on sale of cryptoassets	28,261	323,178	-
Total	586,598	1,221,451	-

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