Interim Results

Phoenix Digital Assets PLC

27 September 2024

 

This announcement contains information which, prior to its disclosure, was inside information as stipulated under Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310 (as amended). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

27 September 2024

Phoenix Digital Assets PLC

("Phoenix" or the "Company")

Interim results

Phoenix Digital Assets PLC (AQSE: PNIX) announces its unaudited results for the six months ended 30 June 2024.

Comments from Jonathan Bixby, Executive Chairman of Phoenix:

I am delighted to report the Company's interim results for the six months ended 30 June 2024.

The Company had a net asset value of £23.360 million (5.07p per share) as at 30 June 2024.

I am extremely proud of the fact that we returned £33.688 million (5.39p per share) through a share tender offer as a result of our prudent investment thesis through the crypto winter of 2022/23.

The market has gone through a large consolidation phase and we remain very bullish on the crypto market well into 2025. We have re-aligned our portfolio of liquid assets to best take advantage of what we believe is the coming crypto bull market.

I would like to take this opportunity to thank all our shareholders for their ongoing support.

Jonathan Bixby, Executive Chairman

The Directors of Phoenix accept responsibility for this announcement.  For further information please contact:

Phoenix Digital Assets PLC
Jonathan Bixby Executive Chairman	[phone]
First Sentinel Corporate Finance Limited
Corporate Adviser Brian Stockbridge	[phone]

About Phoenix

Phoenix Digital Assets PLC invests in a diversified portfolio of cryptocurrency, and/or in companies or funds which have exposure to NFT or blockchain technology. The Company's leadership team have an extensive track record in the cryptocurrency sector and previously founded Argo Blockchain PLC, a global crypto miner. Phoenix is headquartered in London, UK, and its shares are listed on the Aquis Stock Exchange Growth Market under the ticker symbol PNIX.  https://www.getphoenix.co.uk

Consolidated Statement of Comprehensive Income

For the six months ended 30 June 2024

		Unaudited			Audited
		Six months ended 30 June			Year ended 31 December
	Note	2024	2023		2023
		£	£		£
Revenue		-	-		-
Profit/(loss) on disposal of digital assets and tokens		20,557,482	(25,554)		(8,260)
Fair value movements (including impairment and exchange differences) in investments		2,134	(318,593)		(2,381,246)
Fair value movements in digital assets and tokens		(797,649)	10,082,738		25,271,943
		19,761,967	9,738,591		22,882,437
Share based payment	3	-	(262,600)		(153,184)
Administrative expenses		(1,096,243)	(805,286)		(2,530,188)
Impairment of intangible asset		-	-		(62,500)
Operating Profit		18,665,724	8,670,705		20,136,565
Finance income		16,599	-		-
Profit before taxation		18,682,323	8,670,705		20,136,565
Taxation		(5,219,718)	-		(2,570,736)
Profit after taxation and total comprehensive profit for the period		13,462,605	8,670,705		17,565,829
Earnings per ordinary share:
Basic earnings per share	4	1.40	0.86		1.75
Diluted earnings per share	4	1.35	0.86		1.66

Consolidated Statement of Financial Position  

For the six months ended 30 June 2024

		Unaudited			Audited
		Six months ended 30 June			Year ended 31 December
	Note	2024	2023		2023
		£	£		£
Non-Current Assets
Intangible assets	5	29,284,717	27,786,002		43,873,668
Investments	6	1,537,074	3,372,592		1,534,940
Deferred tax asset		216,818	-		-
Total non-current assets		31,038,609	31,158,594		45,408,608
Current Assets
Trade and other receivables		11,480	128,265		1,284
Cash and cash equivalents		408,963	2,782,870		695,760
Total current assets		420,443	2,911,135		697,044
Total assets		31,459,052	34,069,729		46,105,652
Shareholders' equity
Share capital		460,875	1,007,000		1,009,000
Share premium		709,875	33,359,133		18,000
Share based payments reserve		826,520	3,188,508		3,049,183
Distributable reserve		296,633	-		33,359,133
Retained earnings		21,066,549	(3,570,952)		5,381,281
Total shareholders' equity		23,360,452	33,983,689		42,816,597
Non-Current Liabilities
Deferred tax liabilities		-	-		2,543,536
Total non-current liabilities		-	-		2,543,536
Current Liabilities
Trade and other payables		118,528	86,040		745,519
Income tax payable		7,980,072	-		-
Total current liabilities		8,098,600	86,040		745,519
Total liabilities		8,098,600	86,040		3,289,055
Total equity and liabilities		31,459,052	34,069,729		46,105,652

Company Statement of Financial Position          

For the six months ended 30 June 2024

		Unaudited			Audited
		Six months ended 30 June			Year ended 31 December
	Note	2024	2023		2023
		£	£		£
Non-Current Assets
Intangible assets	5	29,284,717	27,786,002		43,873,668
Investments	6	1,537,075	3,372,593		1,534,941
Deferred tax asset		216,818	-		-
Total non-current assets		31,038,610	31,158,595		45,408,609
Current Assets
Trade and other receivables		51,023	1,910,337		388,356
Cash and cash equivalents		369,419	1,000,797		308,687
Total current assets		420,442	2,911,134		697,043
Total assets		31,459,052	34,069,729		46,105,652
Shareholders' equity
Share capital		460,875	1,007,000		1,009,000
Share premium		709,875	33,359,133		18,000
Share based payments reserve		826,520	3,188,508		3,049,183
Distributable reserve		296,633	-		33,359,133
Retained earnings		21,066,549	(3,570,952)		5,381,281
Total shareholders' equity		23,360,452	33,983,689		42,816,597
Non-Current Liabilities
Deferred tax liabilities		-	-		2,543,536
Total non-current liabilities		-	-		2,543,536
Current Liabilities
Trade and other payables		118,528	86,040		745,519
Income tax payable		7,980,072	-		-
Total current liabilities		8,098,600	86,040		745,519
Total liabilities		8,098,600	86,040		3,289,055
Total equity and liabilities		31,459,052	34,069,729		46,105,652

Consolidated and Company Statement of Changes in Equity     

As at 30 June 2024

	Share capital	Share Premium	Retained earnings	Share-based payments reserve	Distributable reserve	Total
	£	£	£	£	£	£
Unaudited
Six months ended 30 June 2024
At 1 January 2024	1,009,000	18,000	5,381,281	3,049,183	33,359,133	42,816,597
Profit for the period and total comprehensive profit	-	-	13,462,605	-	-	13,462,605
Shares issued during the period	76,875	691,875	-	-	-	768,750
Repurchase of shares2	(625,000)	-	-	-	(33,062,500)	(33,687,500)
Warrants exercised in the period	-	-	1,716,417	(1,716,417)	-	-
Lapse of warrants	-	-	506,246	(506,246)	-	-
At 30 June 2024	460,875	709,875	21,066,549	826,520	296,633	23,360,452
Unaudited
Six months ended 30 June 2023
At 1 January 2023	1,003,000	33,323,133	(12,241,657)	2,925,908	-	25,010,384
Profit for the period and total comprehensive profit	-	-	8,670,705	-	-	8,670,705
Shares issued during the period	4,000	36,000	-	-	-	40,000
Share based payments	-	-	-	262,600	-	262,000
At 30 June 2023	1,007,000	33,359,133	(3,570,952)	3,188,508	-	33,983,689
Audited
Year ended 31 December 2023
At 1 January 2023	1,003,000	33,323,133	(12,241,657)	2,925,908	-	25,010,384
Profit for the year and total comprehensive profit	-	-	17,565,829	-	-	17,565,829
Shares issued in the year	6,000	54,000	-	-	-	60,000
Share based payments	-	-	-	153,184	-	153,184
Deferred tax on share based payments	-	-	-	27,200	-	27,200
Warrants exercised in the year	-	-	57,109	(57,109)	-	-
Cancellation of share premium account	-	(33,359,133)	-		33,359,133	-
At 31 December 2023	1,009,000	18,000	5,381,281	3,049,183	33,359,133	42,816,597

¹ There were no transactions in the Subsidiary and thus no impact on the Statement of Changes in Equity

² During the period the Company repurchased 625,000 shares which were subsequently cancelled

Consolidated Statement of Cash Flows

For the six months ended 30 June 2024

		Unaudited			Audited
		Six months ended 30 June			Year ended 31 December
		2024	2023		2023
		£	£		£
Operating activities
Profit for the period		13,462,605	8,670,705		17,565,829
Adjustments:
(Profit)/loss on disposal of digital assets and tokens		(20,557,482)	25,554		8,260
(Profit)/loss on revaluation of digital assets and tokens		797,649	(11,235,686)		(26,150,407)
Loss on valuation of investments		-	2,258,239		711,109
Impairment of investments		-	-		1,491,767
Impairment of intangible assets		-	-		62,500
Amortisation of software development costs		-	28,750		-
Share based payments		-	262,600		153,184
Foreign exchange		(2,134)	(1,051,158)		1,056,834
Finance Income		(16,599)	-		-
Income tax expense		5,219,718	-		2,570,736
Working capital adjustments:
(Increase)/decrease in trade and other receivables		(10,197)	(2,500)		124,481
(Decrease)/increase in trade and other payables		(626,991)	(16,183)		643,296
Net cash used in operating activities		(1,733,431)	(1,059,679)		(1,762,411)
Investing activities
Purchase of digital assets and tokens		(26,311,483)	(3,174,552)		(4,697,212)
Sale of digital assets and tokens		60,660,268	1,129,827		1,248,109
Interest received		16,599	-		-
Net cash from/(used in) investing activities		34,365,384	(2,044,725)		(3,449,103)
Financing activities
Share issue		768,750	40,000		60,000
Repurchase of shares		(33,687,500)	-		-
Net cash (used in)/from financing activities		(32,918,750)	40,000		60,000
Net decrease in cash and cash equivalents		(286,797)	(3,064,404)		(5,151,514)
Cash and cash equivalents at start of year		695,760	5,847,274		5,847,274
Cash and cash equivalents at end of year		408,963	2,782,870		695,760

Company Statement of Cash Flows        

For the six months ended 30 June 2024

		Unaudited			Audited
		Six months ended 30 June			Year ended 31 December
		2024	2023		2023
		£	£		£
Operating activities
Profit for the period		13,462,605	8,670,705		17,565,829
Adjustments:
(Profit)/loss on disposal of digital assets and tokens		-	25,554		8,260
(Profit)/loss on revaluation of digital assets and tokens		(20,557,482)	(11,235,686)		(26,150,407)
Loss on valuation of investments		797,649	2,258,239		711,109
Impairment of investments		-	-		1,491,767
Impairment of intangible assets		-	-		62,500
Amortisation of software development costs		-	28,750		-
Share based payments		-	262,600		153,184
Foreign exchange		(2,134)	(1,051,158)		1,056,834
Finance Income		(16,599)	-		-
Income tax expense		5,219,718	-		2,570,736
Working capital adjustments:
(Increase)/decrease in trade and other receivables		337,332	(1,752,500)		(230,519)
(Decrease)/increase in trade and other payables		(626,991)	(16,183)		643,296
Net cash used in operating activities		(1,385,902)	(2,809,679)		(2,117,411)
Investing activities
Purchase of digital assets and tokens		(26,311,483)	(3,174,552)		(4,697,212)
Sale of digital assets and tokens		60,660,268	1,129,827		1,248,109
Interest received		(16,599)	-		-
Net cash from/(used in) investing activities		34,365,384	(2,044,725)		(3,449,103)
Financing activities
Share issue		768,750	40,000		60,000
Repurchase of shares		(33,687,500)	-		-
Net cash (used in)/from financing activities		(32,918,750)	40,000		60,000
Net decrease in cash and cash equivalents		60,732	(4,814,404)		(5,506,514)
Cash and cash equivalents at start of year		308,687	5,815,201		5,815,201
Cash and cash equivalents at end of year		369,419	1,000,797		308,687

Notes to the Interim Financial Statements

1.   Basis of preparation

The interim results of Phoenix Digital Assets PLC are prepared in accordance with the requirements of IAS 34 Interim Financial Reporting and are prepared in accordance with the accounting policies set out in the last financial statements for the year ended 31 December 2023. Phoenix Digital Assets PLC expects to apply the same policies in its financial statements for the year ending 31 December 2024.

The financial information for the six months ended 30 June 2024 and for the six months ended 30 June 2023 have neither been audited nor reviewed by the Company's auditors. The comparative financial information for the year ended 31 December 2023 has been derived from the audited financial statements for that period.

Basis of Consolidation

Where the Company has control over an investee, it is classified as a subsidiary. The Company controls an investee if all three of the following elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control.

The consolidated financial statements present the results of the Company and its subsidiaries as if they formed a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full. All subsidiaries have a reporting date of December.

The consolidated financial statements incorporate the results of business combinations using the acquisition method. In the statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date on which control ceases.

On consolidation, the results of overseas operations are translated into pounds sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations, including goodwill arising on the acquisition of those operations, are translated at the rate ruling at the reporting date.

Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income and accumulated in the foreign exchange reserve. Exchange differences recognised in profit or loss in Group entities' separate financial statements on the translation of long-term monetary items forming part of the Group's net investment in the overseas operation concerned are reclassified to other comprehensive income and accumulated in the foreign exchange reserve on consolidation.

On disposal of a foreign operation, the cumulative exchange differences recognised in the foreign exchange reserve relating to that operation up to the date of disposal are transferred to the consolidated statement of comprehensive income as part of the profit or loss on disposal.

Profit/(loss) of Parent Company

As permitted by Section 408 of the Companies Act 2006, the statement of comprehensive income of the Parent Company is not presented as part of these financial statements. The Parent Company's profit for the financial period was £13,462,605 (period ending 30 June 2023: £8,670,705 and year ended 31 December 2023: £17,565,829.

2.   Critical accounting estimates and judgements

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, 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 discussed below.

Investments

On acquisition, investments are valued at cost as this is deemed to be the fair value. Subsequent to this, management uses valuation techniques and other relevant information to determine the fair value of financial instruments (where active market quotes are not available) and non-financial assets. This involves developing estimates and assumptions consistent with how market participants would price the instrument. Management bases its assumptions on observable data as far as possible but this is not always available. In that case management uses the best information available. Estimated fair values may vary from the actual prices that would be achieved in an arm's length transaction at the reporting date.

At each balance sheet date, a review of impairment in value is undertaken and the Company follows the guidance of IFRS 9 to determine when a financial asset is impaired. This determination requires significant judgement. In making this judgement, management evaluates, among other factors, the duration and extent to which the fair value of an investment is less than its cost, and the financial health of, and short-term business outlook for, the investee, including factors such as industry and sector performance, changes in technology and operational, financing cash flow and proposed fundraising.

3.   Share based payments

The Company operates a number of equity-settled, share-based compensation plans, under which the entity receives services from employees as consideration for equity instruments (options) of the Company. The fair value of the employee services received in exchange for the grant of options is recognised as an expense. The total amount to be expensed is determined by reference to the fair value of the options granted:

•                       including any market performance conditions;

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

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

Assumptions about the number of options that are expected to vest include consideration of non-market vesting conditions. The total expense 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 Statement of Comprehensive Income, with a corresponding adjustment to equity.

When the options are exercised, the Company 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 options are exercised.

4.   Profit per ordinary share

The calculation of a basic profit per share is based on the profit for the period attributable to equity holders of the Company and on the weighted average number of shares in issue during the period.

Diluted profit per share is calculated adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares.

For the six months ended 30 June 2024, there were 42,125,000 share warrants in issue which had a dilutive effect on the weighted average number of shares.

For the six months ended 30 June 2024, there was no difference between the basic earnings per share and the diluted earnings per share.

For the year-ended 31 December 2023, there were 136,250,000 share warrants in issue which had a dilutive effect on the weighted average number of shares

5.   Intangible Assets

Group and Company

		Digital assets and tokens £		Software development costs £	Total £
Cost
Balance at 1 January 2024		43,873,668		-	43,873,668
Additions		26,311,483		-	26,311,483
Disposals		(60,660,268)		-	(60,660,268)
Net gain for the period		19,759,834		-	19,759,834
As at 30 June 2024		29,284,717		-	29,284,717
Net book value as at 30 June 2024		29,284,717		-	29,284,717

		Digital assets and tokens £		External software development costs £	Total £
Cost
Balance at 1 January 2023		15,160,882		287,500	15 448 382
Additions		3,174 ,552		-	3,174 ,552
Disposals		(1,129,827)		-	(1,129,827)
Accumulated amortisation		-		(28,750)	(28,750)
Net gain for the period		10,321,645			10,321,645
As at 30 June 2023		27,527,252		258,750	27,786,002
Net book value as at 30 June 2023		27,527,252		258,750	27 786 002
Cost
Balance at 1 January 2023		15,160,882		287,500	15 448 382
Additions		4,697,212		-	4,697,212
Disposals		(1,248,109)		-	(1,248,109)
Impairment		-		(62,500)	(62,500)
Transfer to investments		-		(225,000)	(225,000)
Net gain for the year		25,263,683		-	25,263,683
As at 31 December 2023		43,873,668		-	43,873,668
Net book value as at 31 December 2023		43,873,668		-	43,873,668

The breakdown for all digital assets and tokens held at 30 June 2024 are listed below:

Token name		Number of tokens			£
Bitcoin BTC		250			12,023,692
DigitalBits XDB		751,600			-
Ethereum ETH		2,546			6,546,530
Solana SOL		96,530			10,681,827
IRON		60,938			32,668
					29,284,717

6.   Investments

Group

	Six months ended 30 June			Year ended 31 December
	2024 £	2023 £		2023 £
At start of the period	1,534,940	3,691,186		3,691,186
Additions	-	-
Transfer from intangible assets	-	-		225.000
Impairments	-	-		(1,491,767)
Revaluations	-	(148,593)		(711,109)
Exchange difference	2,134	(170,001)		(178,370)
At end of the period	1,537,074	3,372,592		1,534,940

Company

	Six months ended 30 June			Year ended 31 December
	2024 £	2023 £		2023 £
At start of the period	1 534 941	3,691,187		3,691,187
Additions	-	-
Transfer from intangible assets				225.000
Impairments	-	-		(1,491,767)
Revaluations	-	(148,593)		(711,109)
Exchange difference	2,134	(170,001)		(178,370)
At end of the period	1,537,075	3,372,593		1,534,941

The country of incorporation and investment class for investments held by the Group at 30 June 2024 are listed below:

	£	Country of Incorporation	Investment class
Pioneer Media Holdings Inc	69,261	Canada	Listed
Ordre Group International Limited (formerly Aeon International Limited) (formerly Aeon International Limited)	254,973	Hong Kong	Unlisted
IO+ Pte Ltd	225,000	Singapore	Unlisted
Afterparty Inc	53,189	USA	Safe note
Big Whale Labs Inc	144,294	Canada	Safe note
Oliver Labs Inc	790,357	USA	Safe note
	1,537,074

The Company has the following investment directly in subsidiaries at 30 June 2024:

Name and registered address of company	Share- holding	Value of share-holding £	Country of incorporation	Nature of business
1319644 B.C. Ltd 700-401 West Georgia Street, Vancouver BC V6B 5A1 Canada	100%	1	Canada	Company has not traded during the period

7.   Events after the reporting period

At the Annual General Meeting, held on 25 July 2024, the Company was granted authority to purchase its own shares up to a total consideration of £7,500,000.

As at 26 September 2024, the company has purchased 8,196,172 shares for a total consideration of £350,094.

These shares are held in Treasury and thus the Company's issued share capital net of treasury shares is 452,678,808.

 

END