XLON:CDL ESEF Annual Report
CLOUDBREAK DISCOVERY PLC (XLON:CDL)
ESEF Annual Report
2025-02-12
For: 2024-06-30
View Original
Added on
October 02, 2026
1
Registered number: 06275976
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2024
CLOUDBREAK DISCOVERY PLC
CONTENTS
Page
Company Information 2
Chairman’s Report 3
Strategic Report 5
Directors’ Report 9
Directors’ Remuneration Report 11
Statement of Directors’ Responsibilities 14
Corporate Governance Report 15
Independent Auditor’s Report 20
Statements of Financial Position 26
Consolidated Comprehensive Income Statement 27
Consolidated Statement of Changes in Equity 28
Company Statement of Changes in Equity 39
Statements of Cash Flows 30
Notes to the Financial Statements 31
CLOUDBREAK DISCOVERY PLC
COMPANY INFORMATION
2
Directors Andrew Male
Emma Priestley
Company Secretary Westend Corporate LLP
Registered Office 6 Heddon Street
London
United Kingdom
W1B 4BT
Company Number 6275976
Bankers HSBC Bank plc
69 Pall Mall
London
SW1Y 5EY
Financial Adviser Novum Securities Limited
2
nd
Floor
7-10 Chandos Street
London
W1G 9DG
Registrar Share Registrars Ltd
Suite E, First Floor
9 Lion and Lamb Yard
Farnham
Surrey
GU9 7LL
Independent Auditor PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
Canary Wharf
London
E14 4HD
Solicitors Bird & Bird LLP
12 New Fetter Lane
London
EC4A 1JP
CLOUDBREAK DISCOVERY PLC
CHAIRMAN’S REPORT
3
Dear Shareholder,
I am pleased to present the financial results of Cloudbreak Discovery Plc for the year ended 30 June 2024.
The Company remains focused on building a specialist early-stage natural resource investment project generator and
development business seeking to identify and secure potential acquisition opportunities within the mining and oil & gas
sectors. With a portfolio of mineral exploration projects and an investment in a company that has an operating oil and gas
field, that is undergoing a turnaround and ramp up on production, the Group made a pre-tax loss for the year of £855,966
(2023: £3,985,721). Cash at bank at the year-end was £195,157 (2023: £244,074).
The Company has undertaken a major restructuring since March 2023, resulting in the retirement of many of the corporate
debts, a reduction in the overheads and an ongoing review of its assets and projects under ownership and management. In
turn the balance sheet has seen improvement, and the Company is even more streamlined and focused with its efforts.
Stock markets generally continue to be unkind to small, developing companies for whom it can be quite difficult to raise funds.
On the one hand, this offers no shortage of good exploration and development propositions, often with seasoned and
professional management teams, that could provide excellent opportunities for Cloudbreak to consider as investments or
participation projects which can create and build long-term value for shareholders.
Alternately, the Company’s cash resources are limited such that any project with either critical mass or unlocked future
potential will require the injection of new funds to invest in future growth. This means that Cloudbreak will need to be seeking
to find sources of new capital to fund the acquisition and development of projects which themselves have run into difficulty
doing the same. The Directors of Cloudbreak believe that we have the skill set to identify, secure and fund such deserving
projects. However, in current markets this is taking longer to achieve than we would like.
Outlook
We continue to look for suitable late-stage mining exploration and oil and gas projects and companies, ideally with good
operational management and technical teams, particularly where existing resources are being upgraded to reporting code
standards for pre-feasibility and bankable feasibility studies and in special situations where short-term routes to cash flow can
be implemented without significant capital expenditure. We are particularly interested in projects exploring for or developing
resources in precious and base metals and will also consider energy mineral projects that meet certain criteria. Our expertise
lies particularly on the continents of North and South America and Africa.
Project Portfolio
Apple Bay – Industrial Minerals Quarry held by Linceo Media Group Ltd.
Rupert – Copper Porphyry target presently held by Buscando Resources Ltd. which are in default of property exploration
commitments.
Atlin West – Gold target currently held by Power Group Projects Corp. which are in default of property exploration
commitments while completing a restructuring of the company.
Yak – Gold target that was initially optioned by Moonbound Mining Corp., (now Cape Lithium Corp.), where exploration work
was completed and then Moonbound relinquished the project back to Cloudbreak due to a change of direction and effort.
Bobcat – Copper and Gold target currently beneficially owned by Longford Capital Corp. with 50% interest to Cloudbreak.
Elk Creek and Franklin – Appalachian Lithium Brine target with leases currently held until 2028.
The mining exploration projects held by Cloudbreak, while impaired technically, have an underlying value and are in line with
the Company’s business model. Securing early-stage exploration projects, completing sufficient exploration work on these
projects and then seeking financial and exploration partners is specifically how Cloudbreak realises its investment return.
Each of the projects noted above continue to be marketed to various mining exploration companies. Transactions vary
dependent on the project, location and stage or commodity. In each case Cloudbreak has little to no carrying costs and where
the carrying cost of these projects becomes cumbersome, Cloudbreak will make a commercial decision to hold or relinquish
the project. The opportunity to option or joint venture these projects outweigh the expenses in many ways.
Optioned Projects
Lonestar Lithium Ltd. – Texas Lithium Brine target currently under option to Lonestar
The Lonestar transaction is one whereby Cloudbreak developed a data set of information and exploration opportunities and
has optioned the project to Lonestar. In return Cloudbreak received a commitment of cash, shares and royalties, all based on
a timeline that requires Lonestar to meet in order to avoid penalties or default.
This is a typical transaction structure for Cloudbreak with its exploration portfolio.
CLOUDBREAK DISCOVERY PLC
CHAIRMAN’S REPORT
4
Operational Portfolio
G2 Energy Corp. – Operating oil and gas field.
Cloudbreak owns a USD $2.0m Convertible Debenture on G2 Energy which is a producing oil and gas company in Texas.
While production performance has fluctuated, the security position of this debt instrument is strong. Working closely with G2
and their team, Cloudbreak is looking forward that the return on the instrument and by extension the royalties will prove
profitable once the additional capital is invested in the field to initially stabilize and then enhance the production.
Financial Review
The Company currently only has interest income, and its cash reserves will be used in the short term to cover professional
service provider fees, initial due diligence and other costs incidental to the identification and development of acquisition
opportunities are being borne by the Directors and key stakeholders until such time as the Company can afford these fees.
The loss for the year was £855,966. Total expenditure during the year was £943,302 (2023: £3,855,925) which consisted
mainly of service providers to aid the restructuring and clean-up of the Company of £795,379 and director fees of £99,000,
with the balance comprising corporate, regulatory and administration expenses.
Financial Position
The Group’s Statement of Financial Position as at 30 June 2024 and comparatives at 30 June 2023 are summarised
below:
2024
£
2023
£
Current assets 1,962,510 2,071,143
Non-current assets 526,999 1,632,752
Total assets 2,489,509 3,703,895
Current liabilities 770,633 1,704,437
Total liabilities 770,633 1,704,437
Net assets 1,718,876 1,999,458
Cloudbreak will continue to require additional funds and/or funding facilities in order to fully develop its business plan.
The Directors believe that such funds are likely to come from the arrangement of appropriate debt arrangements, and further
equity issues. Ultimately the viability of Cloudbreak is dependent on future liquidity of its investments and in particular the
successful development of G2 Energy Corp. The Directors’ assessment of going concern is set out in note 2.4 to the financial
statements.
UK Listing Category
On 29 July 2024, the Listing Rules were replaced by the UK Listing Rules ("UKLR") under which the existing Standard Listing
category was replaced by the Equity Shares (transition) category under Chapter 22 of the UKLR. Consequently, with effect
from that date the Company is admitted to Equity Shares (transition) category of the Official List under Chapter 22 of the
UKLR and to trading on the London Stock Exchange's Main Market for listed securities.
I would like to thank all our professional staff, consultants and advisors, all of whom work tirelessly to accomplish our common
goal of the turnaround of the Company. And I would like to thank our Shareholders, and Directors for their considerable
support. I look forward to reporting further positive news during 2025.
Andrew Male
CEO
30 January 2025
CLOUDBREAK DISCOVERY PLC
STRATEGIC REPORT
5
The Directors of the Company present their Strategic Report on the Group for the year ended 30 June 2024.
Principal Activity
The principal activity of the Group is natural resource project and royalty generation as well as acquisition of projects and
royalties.
Review of operations
A review of the business of the Company during the year and an indication of likely future developments may be found in the
CEO’s Statement.
Financial performance review
The loss of the Group for the year ended 30 June 2024 amounts to £855,966 (30 June 2023: £3,997,899). The loss for the
year differs significantly to the year ended 30 June 2023 due to reduced overall activity and expenditure, and reduced
impairment charges in the current year.
The Board monitors the activities and performance of the Group on a regular basis. The Board uses financial indicators based
on budget versus actual to assess the performance of the Group. The board used the below KPIs to assess performance of
the group for the year ended 30 June 2024.
The main KPIs for the Group allow the Group to monitor costs and plan future exploration and development activities”. These
are detailed below:
KPI 2024 2023
Cash and cash equivalents £195,157 £244,074
Administrative expenses as a percentage of total assets 37.1% 108.2%
Exploration and evaluation cash expenditures - £648,310
Carrying value of investments £417,217 £891,255
Cash has been used to fund the Group’s operations and facilitate its investment activities (refer to the Statements of Cash
Flows).
Administrative expenses are the expenses related to the Group’s ability to run the corporate functions to ensure they can
perform their operational commitments.
Exploration costs include non-capitalised costs and costs capitalised during the period consist of exploration expenditure on
the Group’s exploration licences net of foreign exchange rate movements. There was no exploration activity or expenditure
carried out by the Group during the year ended 30 June 2024. Exploration assets were also disposed of and impaired during
the year ended 30 June 2024.
Principal risks and uncertainties
Risks are formally reviewed by the Board, and appropriate processes are put in place to monitor and mitigate them. If more
than one event occurs, it is possible that the overall effect of such events would compound the possible adverse effects on the
Group.
The management of the business and the execution of the Group’s strategy are subject to a number of risks. The key business
risks affecting the Group are set out below.
Exploration risks
The energy and resource business are controlled by a number of global factors, principally supply and demand which in turn
is a key driver of global prices; these factors are beyond the control of the Group. Exploration is a high-risk business and there
can be no guarantee that any mineralisation discovered will result in proven and probable reserves or go on to be an operating
mine. At every stage of the exploration process the projects are rigorously reviewed to determine if the results justify the next
CLOUDBREAK DISCOVERY PLC
STRATEGIC REPORT
6
stage of expenditure ensuring that funds are only applied to high priority targets. The energy sector is a cyclic business and
sensitive to several global and regional factors that the company is not able to predict or control.
Some of the principal assets of the Group are subject to certain financial and legal commitments. If these commitments are
not fulfilled the licences could be revoked. They are also subject to option agreements and legislation defined by the local
government; if this legislation is changed or option payments are not made on time, it could adversely affect the value of the
Group’s assets.
Whilst some aspects are beyond the control of the Group, management reduce exploration risks with their experience and
technical knowledge, also by carrying out thorough due diligence before making any decisions related to exploration.
Dependence on key personnel
The Group is dependent upon its executive management team and various technical consultants. Whilst it has entered into
contractual agreements with the aim of securing the services of these personnel, the retention of their services cannot be
guaranteed. The development and success of the Group depends on its ability to recruit and retain high quality and
experienced staff. The loss of the service of key personnel or the inability to attract additional qualified personnel as the Group
grows could have an adverse effect on future business and financial conditions.
To mitigate this risk, key management have significant equity, share options can be awarded and exciting business
opportunities are offered.
Uninsured risk
The Group, as a participant in exploration and development programmes, may become subject to liability for hazards that
cannot be insured against or third-party claims that exceed the insurance cover. The Group may also be disrupted by a variety
of risks and hazards that are beyond control, including geological, geotechnical and seismic factors, environmental hazards,
industrial accidents, occupational and health hazards and weather conditions or other acts of God.
Management takes these factors into consideration before deciding to work on specific exploration sites. Also, the Group’s
exploration programmes are in early stages with no development or operations in place as of yet.
Royalty acquisitions risk
The growth and viability of the Group is dependent on its ability to successfully identify and acquire royalties. The availability
of potential royalties which meet the Group’s investing policy will depend, inter alia, on the state of the world economy, general
business conditions, commodity prices, mining sector appetite, alternative sources of finance and financial markets generally.
Royalty agreements in place are reviewed by the Group and other parties involved on a timely basis to reduce this risk.
Funding risk
The only sources of funding currently available to the Group are through the issue of additional equity capital in the parent
company or through bringing in partners to fund exploration and development costs. The Group’s ability to raise further funds
will depend on the success of the Group’s exploration activities and its investment strategy. The Group may not be successful
in procuring funds on terms which are attractive and, if such funding is unavailable, the Group may be required to reduce the
scope of its exploration activities or relinquish some of the exploration licences held for which it may incur fines or penalties.
Financial risks
The Group’s operations expose it to a variety of financial risks that can include market risk (including foreign currency, price
and interest rate risk), credit risk, and liquidity risk. The Group has a risk management programme in place that seeks to limit
the adverse effects on the financial performance of the Group by monitoring levels of debt finance and the related finance
costs. The Group does not use derivative financial instruments to manage interest rate costs and, as such, no hedge
accounting is applied.
CLOUDBREAK DISCOVERY PLC
STRATEGIC REPORT
7
Investment risks
The Group holds investments in publicly listed and non-listed securities. These future valuations are determined by many
factors but include the operational and financial performance of the underlying investee companies, as well as market
perceptions of the future of the economy and its impact upon the economic environment in which these companies operate.
This risk represents the potential loss that the Group might suffer through holding its financial investment portfolio in the face
of market movements.
Investments are held in both listed and unlisted entities and the board monitor their investments on a regular basis. For
unlisted investments the board have regular communication with the management team of the investee.
Details of the Group’s financial risk management policies are set out in Note 3 to the Financial Statements.
Going Concern
These financial statements have been prepared on the going concern basis, as set out in Note 2.4.
Under the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with
neither the intention nor the necessity of liquidation, ceasing trading or seeking protection from creditors pursuant to laws or
regulations.
The Group receives property option income, debenture interest income and royalty income but even along with reducing
expenditure for financial year 2025, the forecasts indicate that the Group and Parent Company, in order to meet their
operational objectives, and expected liabilities as they fall due, will be required to raise additional funds within the next 12
months.
Whilst the Directors are confident that they will secure the necessary funding, the current conditions do indicate the existence
of a material uncertainty that may cast significant doubt regarding the applicability of the going concern assumption and the
auditors have made reference to this in their audit report. The Directors are confident in the Company’s ability to raise additional
funds as required, from existing and/or new investors, within the next 12 months. Thus, they continue to adopt the going
concern basis of accounting preparing these financial statements.
Internal Controls
The Board recognises the importance of both financial and non-financial controls and has reviewed the Group’s control
environment and any related shortfalls during the year. Since the Group was established, the Directors are satisfied that, given
the current size and activities of the Group, adequate internal controls have been implemented. The Directors are aware that
no system can provide absolute assurance against material misstatement or loss, however, in light of the current activity and
proposed future development of the Group, continuing reviews of internal controls will be undertaken to ensure that they are
adequate and effective.
Section 172(1) Statement - Promotion of the Company for the benefit of the members as a whole
The Directors believe they have acted in the way most likely to promote the success of the Company for the benefit of its
members as a whole, as required by s172 of the Companies Act 2006.
The requirements of s172 are for the Directors to:
• Consider the likely consequences of any decision in the long term,
• Act fairly between the members of the Company,
• Maintain a reputation for high standards of business conduct,
• Consider the interests of the Company’s employees,
• Foster the Company’s relationships with suppliers, customers and others, and
• Consider the impact of the Company’s operations on the community and the environment.
The Group operates as a project generation and royalty business for the natural resources sectors, which is inherently
speculative in nature and, without regular income, is dependent upon fund-raising for its continued operation. The nature of
the business is important to the understanding of the Group by its members, suppliers, and the Directors are as transparent
about the cash position and funding requirements as is allowed under FCA regulations.
The application of the s172
requirements is demonstrated throughout this report and the financial statements as a whole, with the following examples
representing some of the key decisions made in 2024 and up to the date of the approval of these financial statements:
CLOUDBREAK DISCOVERY PLC
STRATEGIC REPORT
8
• Remunerate the Directors with shares in lieu of cash: during the year, having decided on a plan to raise new funds
to finance operations, the Directors also decided that to maximise funds available for exploration the Directors would be
remunerated in part by the issue of shares instead of cash. This has the added benefit of more fully aligning the interests
of the Directors with those of the members.
• Ethical responsibility to the community and the environment: the Board takes seriously its ethical responsibilities
to the communities and environment in which it works. We abide by the local and relevant UK laws on anti-corruption
and bribery. Wherever possible, local communities are engaged in the geological operations and support functions
required for field operations, providing much needed employment and wider economic benefits to the local communities.
In addition, we follow international best practise on environmental aspects of our work. Our goal is to meet or exceed
standards, in order to ensure we obtain and maintain our social licence to operate from the communities with which we
interact.
Act fairly between members of the Company
After weighing up all relevant factors, the Directors consider which course of action best enables delivery of our strategy over
the long-term, taking into consideration the impact on stakeholders. The Directors believe they have acted in the way they
consider most likely to promote the success of the Company for the benefit of its members as a whole.
The Board is committed to maintaining good communication and having constructive dialogue with its shareholders. The
Company has close ongoing relationships with key private shareholders, analysts and brokers, providing the opportunity to
discuss issues and provide feedback at meetings with the Company. All shareholders are encouraged to attend the
Company's Annual General Meeting and any general meetings held by the Company.
Maintain a reputation for high standards of business conduct
The Board periodically reviews and approves clear frameworks, such as the Company’s Code of Business Ethics, to ensure
that its high standards are maintained both within the Group and the business relationships we maintain. This, complemented
by the various ways the Board is informed and monitors compliance with relevant governance standards, help ensure its
decisions are taken and that the Group acts in ways that promote high standards of business conduct.
Consider the interests of the Company’s employees
The are no employees in the Group currently, only Directors. Still, the Group is committed to considering the interests of all
directors of the Company when decisions or changes are to be made.
Foster the Company’s relationship with suppliers, customers and others
Delivering on our strategy requires strong mutually beneficial relationships with suppliers. The Group values all suppliers and
aims to build strong positive relationships through open communication and adherence option agreement terms. The Group
is committed to being a responsible entity and doing the right thing for its suppliers and business partners.
Consider the impact of the Company’s operations on the community and the environment
The Group is committed to the highest environmental, social and governance standards both internally within the Group and
externally with its partners. The Group is committed to being a responsible entity in terms of the community and the wider
environment.
Conclusion
The Directors believe that to the best of their wisdom and abilities, they have acted in the way they consider prudent to
promote the success of the Company for the benefit of its members as a whole, in the true spirit of the provisions of Section
172 (1) of the Companies Act 2006.
The Group Strategic Report was approved by the Board on 30 January 2025.
Andrew Male
Chief Executive Officer
CLOUDBREAK DISCOVERY PLC
DIRECTORS’ REPORT
9
The Directors are pleased to present their Report and the audited consolidated Financial Statements of the Company
and its subsidiaries for the year ended 30 June 2024.
Results and Dividends
Loss on ordinary activities of the Group after taxation amounted to £855,966 (2023: loss of £3,997,899). The
Directors do not recommend the payment of a dividend (2023: £Nil).
Directors & Directors’ interests
The Directors who held office at 30 June 2024 had the following beneficial interests in shares and options of the Group:
30 June 2024 30 June 2023
Ordinary
Shares
Options
Ordinary
Shares
Options
Emma Priestley 2,000,000 1,850,000 2,000,000 1,850,000
Andrew Male 12,145,742 1,350,000 2,000,000 1,350,000
Paul Gurney* 1,634,261 750,000 - 750,000
Total 15,780,003 3,950,000 4,000,000 3,950,000
*Paul Gurney resigned 18 October 2024.
On 25 July 2024, the Company published a prospectus enabling the issue of 403,864,936 new ordinary shares
of £0.001 each. Andrew Male, Emma Priestley and Paul Gurney all received shares from this issue.
Substantial shareholders
On 31 December 2024, the following parties had notified the Group of a beneficial interest that represents 3% or more of the
Group's issued share capital at those dates:
31 December 2024
Holding Percentage
Clarmond Wealth Limited 168,318,396 14.86%
Crestmont Invest Inc. 142,262,164 12.56%
Andrew Male 104,000,463 9.18%
Clariden Capital 75,931,688 6.70%
Paul Gurney 54,694,848 4.83%
Thomas Solomon 50,972,035 4.50%
Corporate responsibility
Greenhouse gas emissions
Given the nature of its activities which include aerial geophysics with a helicopter and the operation of drill rigs, the Group is
conscious of greenhouse gas emissions. The Directors are mindful of their responsibilities in this regard and strive to seek
opportunities where improvements may be made.
The Board recognises its responsibility to protect the environment and is fully committed to conserving natural resources and
striving for environmental sustainability, by ensuring that its facilities are operated to optimise energy usage; minimise waste
production; and protect nature and people.
The Company is currently deemed to be a low energy user meaning it has consumed less that 40MWh of energy during the
reporting period. This includes the combustion of gas, consumption of fuel for transport and the purchase of electricity for its
own use. As such, it is exempt from disclosing actual kWh of energy emitted during the period from its operations and activities.
As the Group’s operations scale up, it will continue to monitor its energy use and its status as a low energy user. The Group
will seek to collect, structure, and effectively disclose related performance data for the material, climate-related risks and
opportunities identified where relevant.
CLOUDBREAK DISCOVERY PLC
DIRECTORS’ REPORT
10
Internal controls
The Board recognises the importance of both financial and non-financial controls and has reviewed the Group’s control
environment and any related shortfalls during the period. Since the Group was established, the Directors are satisfied that,
given the current size and activities of the Group, adequate internal controls have been implemented. Whilst they are aware
that no system can provide absolute assurance against material misstatement or loss, in light of the current activity and
proposed future development of the Group, continuing reviews of internal controls will be undertaken to ensure that they are
adequate and effective.
Supplier payment policy
The Group's current policy concerning the payment of trade creditors is to follow the CBI's Prompt Payers Code (copies are
available from the CBI, Centre Point, 103 New Oxford Street, London WC1A 1DU).
The Group's current policy concerning the payment of trade creditors is to:
• settle the terms of payment with suppliers when agreeing the terms of each transaction;
• ensure that suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts; and
• pay in accordance with the Group's contractual and other legal obligations.
• If supplier terms aren’t met, this will be discussed with the suppliers and a suitable plan of action will be agreed by
both parties.
Directors’ and Officers’ indemnity insurance
The Group has made qualifying third-party indemnity provisions for the benefit of its Directors and Officers. These were made
during the period and remain in force at the date of this report.
Financial risk management objectives
The Group has disclosed the financial risk management objectives within Note 3 to these Financial Statements.
The task force on climate-related financial disclosures
The task force on climate-related financial disclosures (“TCFD”) aim to provide investors, lenders and other stakeholders with
information necessary to assess climate related risks and opportunities. The Group takes various actions throughout local
operations to mitigate the potential impacts of the Group’s activities. The directors note that for the year ended 30 June 2024,
the Group is not in compliance with TCFD as it has limited climate related risks due to the Group’s small scale and stage of
development they are at. The Group intends to actively monitor the situation and will devise strategies when the status of the
entity changes.
Events after the reporting period
Events after the reporting period are set out in Note 31 to the Financial Statements.
Future developments
Details of future developments for the Group are disclosed in the Chairman’s Report on page 3.
Provision of information to Auditor
So far as each of the Directors is aware at the time this report is approved:
• there is no relevant audit information of which the Company's auditor is unaware; and
• the Directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit
information and to establish that the auditor is aware of that information.
Auditor
PKF Littlejohn LLP has signified its willingness to continue in office as auditor.
This report was approved by the Board on 30 January 2025 and signed on its behalf.
Andrew Male
Chief Executive Officer
CLOUDBREAK DISCOVERY PLC
DIRECTORS’ REMUNERATION REPORT
11
The Company has an established Remuneration Committee. The purpose of the remuneration policy is to attract, retain and
motivate Executive Directors of a high calibre with a view to encouraging commitment to the development of the Company
and for long term enhancement of shareholder value.
The Company’s auditors, PKF Littlejohn LLP are required by law to audit certain disclosures and where disclosures have
been audited, they are indicated as such.
Service Contracts (unaudited)
The Executive Directors have entered into Service Agreements with the Company and continue to be employed until
terminated by the Company.
In the event of termination or loss of office the Director is entitled only to payment of their basic salary in respect of their notice
period. In the event of termination or loss of office in the case of a material breach of contract the Director is not entitled to
any further payment.
Executive Directors are allowed to accept external appointments with the consent of the Board, provided that these do not
lead to conflicts of interest. Executive Directors are allowed to retain fees paid.
The contracts are available for inspection at the Company's registered office.
Implementation Report
Particulars of Directors’ Remuneration (audited)
Particulars of directors’ remuneration, including directors’ options are provided in notes 16 and 19 and further referenced in
the Directors’ report.
Remuneration owing to the Directors’ during the year ended 30 June 2024 was:
Short-term
benefits
Share based
payments Total
£ £ £
Directors
Paul Gurney
33,000 - 33,000
Emma Priestley
33,000 - 33,000
Andrew Male 150,000 - 150,000
216,000 - 216,000
Remuneration hasn’t been paid in full to all directors, the amounts referenced above have either been accrued or partially
paid. Refer to note 27 for amounts still owed to the Directors.
On 25 July 2024, the Company published a prospectus enabling the issue of 403,864,936 new ordinary shares
of £0.001 each. Andrew Male, Emma Priestley and Paul Gurney all received shares from this issue.
Remuneration paid to the Directors’ during the year ended 30 June 2023 was:
Short-term
benefits
Share based
payments Total
£ £ £
Directors
Samuel “Kyle
r
” Hardy
120,000 6,329 126,329
Paul Gurney
30,000 3,798 33,798
Emma Priestley
45,000 3,798 48,798
Andrew Male 120,000 3,798 123,798
315,000 17,723 332,723
Incentive plans (audited)
CLOUDBREAK DISCOVERY PLC
DIRECTORS’ REMUNERATION REPORT
12
The Directors held the following options at the beginning and the end of the year:
As at 30
June 2023
Granted
during the
year
At 30 June
2024
Exercise
price
Expiry
date
Emma Priestley 1,850,000 - 1,850,000 £0.0225 09/08/2025
Andrew Male 1,350,000 - 1,350,000 £0.0225 09/08/2025
Paul Gurney 750,000 - 750,000 £0.0225 09/08/2025
Total 3,950,000 - 3,950,000 - -
Performance Graph (unaudited)
The Directors have considered the requirement of the UK 10-period performance graph comparing the company’s Total
Shareholder Return with that of a comparable indicator. The Directors do not currently consider that including the graph will
be meaningful as the Company is currently in a loss-making position and is not paying dividends. The Directors will review
the inclusion of this table for future reports.
Relative importance of spend on pay (unaudited)
The Directors have considered the requirement to present information on the relative importance of spend on pay compared
to shareholder dividends paid. Given that the Company does not currently pay dividends we have not considered it necessary
to include such information.
Other matters (audited)
The Company does not have any pension plans for any of the Directors and does not pay contributions in relation to their
remuneration. The Company has not paid out any excess retirement benefits to any Directors.
Directors’ interests in shares (audited)
The beneficial interest of the Directors in the Ordinary Share Capital of the Company as at 30 June 2024 was:
30 June 2024
Ordinary Shares
% of issued share
capital
Emma Priestley
2,000,000 0.27%
Andrew Male 12,145,742 1.67%
Paul Gurney 1,634,261 0.22%
Total 15,780,003 2.16%
The beneficial interest of the Directors in the Ordinary Share Capital of the Company at 30 June 2023 was:
CLOUDBREAK DISCOVERY PLC
DIRECTORS’ REMUNERATION REPORT
13
30 June 2023
Ordinary Shares
% of issued share
capital
Emma Priestley
2,000,000 0.33%
Andrew Male
2,000,000 0.33%
Paul Gurney
- -
Total
4,000,000 0.66%
The Directors’ remuneration report was approved by the Board on 30 January 2025.
Emma Priestley
Remuneration Committee Chairman
CLOUDBREAK DISCOVERY PLC
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
14
The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable
law and regulations, including the main market rules for Companies.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have
elected to prepare the Group and Company Financial Statements in accordance with UK-adopted International Accounting
Standards (UK-adopted IAS) in conformity with the requirements of the Companies Act 2006. Under company law the
Directors must not approve the Financial Statements unless they are satisfied that they give a true and fair view of the state
of affairs of the Group and Company, and of the profit or loss of the Group for that period. In preparing these Financial
Statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgments and accounting estimates that are reasonable and prudent;
• state whether applicable UK-adopted IAS in conformity with the requirements of the Companies Act 2006 have been
followed, subject to any material departures disclosed and explained in the financial statements; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will
continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s
and Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and
Company, and enable them to ensure that the Financial Statements comply with the Companies Act 2006. They are also
responsible for safeguarding the assets of the Group and Company, and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the
Company’s website, www.cloudbreakdiscovery.com. Legislation in the United Kingdom governing the preparation and
dissemination of the Financial Statements may differ from legislation in other jurisdictions.
The Directors confirm that they have complied with the above requirements in preparing the Financial Statements.
Directors Responsibility pursuant to Disclosure and Transparent Rules
Each of the Directors whose names and functions are listed on page 2 confirm that, to the best of their knowledge and belief:
• The Financial Statements prepared in accordance with UK-adopted international accounting standards, give a
true and fair view of the assets, liabilities, financial position and loss of the Group and Company; and
• the Annual Report and Financial Statements, including the Business review, includes a fair review of the
development and performance of the business and the position of the Group and Company, together with a
description of the principal risks and uncertainties that they face.
CLOUDBREK DISCOVERY PLC
CORPORATE GOVERNANCE REPORT
15
The Group is not required to comply with the provisions of the UK Corporate Governance Code. However, the Board is
committed to maintaining high standards of corporate governance and so far, as appropriate given the Group’s size and
the constitution of the Board, complies and intends to comply with The Corporate Governance Guidelines for Small and
Mid-Sized Companies.
In light of the Group’s size and recent history, the Group has deviated from the QCA Code in the following respects:
• The provisions relating to the composition of the Board and the division of responsibilities are not being complied
with as the Board feels these provisions to be inapplicable, given the size of the Group.
• The Board do not consider an internal audit function to be applicable due to the size of the Group.
• A diversity policy as applied to the Group’s administrative management and supervisory bodies has not yet been
developed.
The Directors are responsible for internal control in the Group and for reviewing effectiveness. Due to the size of the
Group, all key decisions are made by the Board. The Directors have reviewed the effectiveness of the Group’s systems
during the period under review and consider that there have been no material losses, contingencies or uncertainties due
to weaknesses in the controls.
The Group hold timely board meetings or informal meetings as issues arise which require the attention of the Board. The
Board is responsible for the management of the business of the Group, setting the strategic direction of the Group and
establishing the policies of the Group. It is the Directors’ responsibility to oversee the financial position of the Group and
monitor the business and affairs of the Group, on behalf of the Shareholders, to whom they are accountable. The primary
duty of the Directors is to act in the best interests of the Group at all times. The Board also addresses issues relating to
internal control and the Group’s approach to risk management and has formally adopted an anti-corruption and bribery
policy.
The Directors have established an audit committee, a nomination committee and a remuneration committee with formally
delegated duties and responsibilities. Emma Priestley and Paul Gurney (resigned 18 October 2024) are each considered
by the Board to be an independent Non-Executive Director. At the date of release, Andrew Male is considered to be an
Executive Director.
The QCA Code has ten principles of corporate governance that the Group has committed to apply within the foundations of
the business. These principles are:
1. Establish a strategy and business model which promote long-term value for shareholders;
2. Seek to understand and meet shareholder needs and expectations;
3. Take into account wider stakeholder and social responsibilities and their implications for long term success;
4. Embed effective risk management, considering both opportunities and threats, throughout the organisation;
5. Maintain the board as a well-functioning balanced team led by the Chair;
6. Ensure that between them the directors have the necessary up to date experience, skills and capabilities;
7. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement;
8. Promote a corporate culture that is based on ethical values and behaviours;
9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board;
and
10. Communicate how the Group is governed and is performing by maintaining a dialogue with shareholders and other
relevant stakeholders.
There follows a short explanation of how the Group will apply each of the principles:
Principle One
Business Model and Strategy
The Board has determined that the best medium and long term value can be delivered through the adoption of a single
strategy. The Group’s principal activity is natural resource project and royalty generation as well as acquisition of projects and
royalties. Cloudbreak maximizes its returns by seeking buyers to purchase its properties or by seeking partners to jointly
develop its properties through joint ventures or other partnering mechanisms.
Principle Two
Understanding Shareholder Needs and Expectations
The Board is committed to maintaining good communication and having constructive dialogue with its shareholders.
Shareholders are encouraged to attend the Group’s Annual General Meeting (“AGM”). Investors also have access to current
information on the Group though its website, www.cloudbreakdiscovery.com, and via Andrew Male, Chief Executive Officer,
who is responsible for shareholder liaison and is available to answer investor relations enquiries. Shareholders can email the
Group at [email protected] or via a submission on the Group website.
The Group’s Annual Report, Notice of AGM are sent to all shareholders and can be downloaded from our website. Copies of
the interim report and other investor presentations are also available on the Group’s website. Shareholders are kept up to
date via regulatory news flow (“RNS”) on matters of a material substance and regulatory nature.
CLOUDBREK DISCOVERY PLC
CORPORATE GOVERNANCE REPORT
16
Periodic updates are provided to the market and any deviations to these updates are announced via RNS. At the AGM,
separate resolutions are proposed on each substantial issue. For each proposed resolution, proxy forms are issued which
provide voting shareholders with an opportunity to vote in advance of the AGM if they are unable to vote in person. Our
registrars, count the proxy votes which are properly recorded, and the results of the AGM are announced through an RNS.
The Board is keen to ensure that the voting decisions of shareholders are reviewed and monitored and that approvals sought
at the Group’s AGM are as much as possible within the recommended guidelines of the QCA Code. Non-deal roadshows will
be arranged throughout the year to meet with existing shareholders and potential new stakeholders to maintain, as much as
possible, transparency and dialogue with the market. Additionally, investor presentations can be found on the Group’s website.
Principle Three
Considering Wider Stakeholder and Social Responsibilities
The Board recognises that the long-term success of the Group is reliant upon open communication with its internal and
external stakeholders: investee companies, shareholders, contractors, suppliers, regulators and other stakeholders. The
Group has close ongoing relationships with a broad range of its stakeholders and provides them via regular contact with the
opportunity to raise issues and provide feedback to the Group. The Board regularly reviews and assesses its key resources
and relationships and has established processes and systems to ensure that there is close oversight and contact with its
minority investee companies and key stakeholders.
Principle Four
Risk Management
The Board is responsible for ensuring that procedures are in place and being implemented effectively to identify, evaluate
and manage the significant risks faced by the Group, noting that the Group is primarily an operating company with some
remaining minority investments in portfolio companies. A risk assessment matrix has been established by the Group and is
updated at regular intervals. The following principal risks, and controls to mitigate them, have been identified:
Risk. Impact Probability Risk Level Mitigating
Actions &
Controls
Risk
Owner
Accept
Exploration
risks
High High Medium Experience of
the Board.
CEO Yes
Dependence on
key personnel
High Medium Low Key
management
have significant
equity.
Share options
awarded.
Exciting
business
opportunities.
CEO Yes
Uninsured risk Medium Low Low Group’s
exploration
programmes are
in the early
stages with no
mine
development or
operations in
place as of yet.
CEO Yes
Funding risk High Medium Medium Investments
held and
facilities in place
to fund the
Company for the
foreseeable
future.
CEO Yes
CLOUDBREK DISCOVERY PLC
CORPORATE GOVERNANCE REPORT
17
Financial risks High Medium Medium No debt held by
the Group as at
30 June 2024.
The Audit
Committee are
responsible for
overseeing and
managing this
risk accordingly.
CEO Yes
Investment risk High Medium Medium Investments are
held in both
listed and
unlisted entities
and the board
monitor their
investments in a
regular basis.
For unlisted
investments the
board have
regular
communication
with the
management
team of the
investee.
CEO Yes
Principle Five
A Well Functioning Board of Directors
During the year, the Board comprises the Chief Executive Officer, Andrew Male, and two Non-Executive Directors, Paul
Gurney (resigned 18 October 2024) and Emma Priestley. Biographical details of the current Directors are set out on the
Company’s website. Executive and Non-Executive Directors are subject to re-election in accordance with both the
requirements of the UK Companies Act 2006 and the Group’s articles of association (“Articles”). The Group’s Articles
state that Directors are subject to re-election at intervals of no more than three years. The letters of appointment for all
Directors stipulate the time commitment that each Director is expected to provide to the Group.
The Board meets at least once a month. It has established an Audit Committee, the members of which are Paul Gurney
(resigned 18 October 2024) and Emma Priestley. The Nominations Committee consists of Emma Priestley (Chair) and
Paul Gurney (resigned 18 October 2024). A Remuneration Committee has been established and is composed of Emma
Priestley (Chair) and Paul Gurney (resigned 18 October 2024).
During the year, Emma Priestley and Paul Gurney (resigned 18 October 2024) are considered to be independent
Directors and as such the Group is in compliance with the requirement to have a minimum of two independent Non-
Executive Directors on its Board. The Company is actively looking to expand the board with new directors.
The Nominations committee shall review further appointments and make recommendations to the Board.
To date, in the current financial year, the Directors have a 100% record of attendance at Board meetings. Directors meet
formally and informally both in person and by telephone.
Principle Six
Appropriate Skills and Experience of the Directors
The Board currently consists of two Directors, after the departure of Paul Gurney in October 2024. Westend Corporate
LLP acts as the Company Secretary. The Group believes that the current balance of skills in the Board as a whole,
reflects a very broad range of commercial and professional skills across geographies and industries and all of the
Directors have experience in the natural resources sector and public markets. Information about the directors can be
found on the website.
The Board is kept abreast with developments of governance and London Stock Exchange (“LSE”) regulations. The
Group’s lawyers provide updates on governance issues. The Directors have access to the Group’s company secretary,
lawyers and auditors as and when required and are able to obtain advice from other external bodies when necessary.
CLOUDBREK DISCOVERY PLC
CORPORATE GOVERNANCE REPORT
18
Principle Seven
Evaluation of Board Performance
Internal evaluation of the Board, the Committees and individual Directors is undertaken on an annual basis in the form
of peer appraisal and discussions to determine the effectiveness and performance against targets and objectives, as well
as the Directors’ continued independence. As a part of the appraisal the appropriateness and opportunity for continuing
professional development whether formal or informal is discussed and assessed. This evaluation hasn’t been recorded
formally of recent.
Principle Eight
Corporate Culture
The Board recognises that their decisions regarding strategy and risk will impact the corporate culture of the Group as a
whole, which in turn will impact the Group’s performance. The Directors are very aware that the tone and culture set by
the Board will greatly impact all aspects of the Group as a whole and the way that consultants or other representatives
behave. The corporate governance arrangements that the Board has adopted are designed to instil a firm ethical code
to be followed by Directors, consultants and representatives alike throughout the entire organisation. The Group strives
to achieve and maintain an open and respectful dialogue with representatives, regulators, suppliers and other
stakeholders. Therefore, the importance of sound ethical values and behaviours is crucial to the ability of the Group to
successfully achieve its corporate objectives. The Board places great importance on this aspect of corporate life and
seeks to ensure that this flows through all that the Group does. The Directors consider that at present the Group has an
open culture facilitating comprehensive dialogue and feedback and enabling positive and constructive challenge. The
Group has adopted, with effect from the date on which its shares were admitted to LSE, a code for Directors’ dealings in
securities which is appropriate for a company whose securities are traded on LSE and is in accordance with the
requirements of the Market Abuse Regulation which came into effect in 2016.
Issues of bribery and corruption are taken seriously, the Group has a zero-tolerance approach to bribery and corruption
and has an anti-bribery and corruption policy in place to protect the Group, its directors and those third parties to which
the business engages with. The policy is provided to management upon joining the business and training is provided to
ensure that all directors within the business are aware of the importance of preventing bribery and corruption. Each
director contract specifies that the director will comply with the policies. There are strong financial controls across the
business to ensure on going monitoring and early detection.
Principle Nine
Maintenance of Governance Structures and Processes
The Audit Committee was chaired by Paul Gurney throughout the year until his resignation on 18 October 2024, with
Emma Priestley being the other and sole remaining member subsequent to year end. The Board has adopted appropriate
delegations of authority which set out matters which are reserved for the Board. The Chairman is responsible for the
effectiveness of the Board as well as primary contact with shareholders, while, as an operating company, execution of
the Group’s strategy is delegated to the Chief Executive Officer.
The Audit Committee has primary responsibility for monitoring the quality of internal controls and ensuring that the
financial performance of the Group is properly measured and reported. It receives reports from Group advisors and
auditors relating to the interim and annual accounts and the accounting and internal control systems in use throughout
the Group. The Audit Committee meets not less than twice in each financial year, and it has unrestricted access to the
Group’s auditors.
In accordance with the Companies Act 2006, the Board complies with: a duty to act within their powers; a duty to promote
the success of the Group; a duty to exercise independent judgement; a duty to exercise reasonable care, skill and
diligence; a duty to avoid conflicts of interest; a duty not to accept benefits from third parties and a duty to declare any
interest in a proposed transaction or arrangement. The Board notes requirement for the Group to meet the LSE Rules
for Companies such that the Group is suitable at all times to remain admitted to trading on LSE. This includes the
requirement for a governance structure compatible with this requirement.
The Board retains full and effective control over the Group and holds regular meetings at which financial, operational and
other reports are considered and where appropriate voted upon. The Board is responsible for the Group’s strategy and
key financial and compliance issues.
There are certain matters that are reserved for the Board, they include:
•
approval of the Group’s strategic aims and objectives;
•
Review of Group performance and ensuring that any necessary corrective action is taken;
•
Extension of the Group’s activities into new business or geographical areas;
CLOUDBREK DISCOVERY PLC
CORPORATE GOVERNANCE REPORT
19
•
Any decision to cease to operate all or any part of the Group’s business;
•
Major changes to the Group’s corporate structure and management and control structure;
•
Any changes to the Group’s listing;
•
Changes to governance and key business policies;
•
Ensuring maintenance of a sound system of internal control and risk management;
•
Approval of half yearly and Annual Report and accounts and preliminary announcements of final year results;
•
Reviewing material contracts and contracts not in the ordinary course of business.
As the Group grows, the Directors will ensure that the governance framework remains in place to support the
development of the business.
Principle Ten
Shareholder Communication
The Board is committed to maintaining good communication and having constructive dialogue with its shareholders in
compliance with regulations applicable to companies quoted on the LSE market. All shareholders are encouraged to
attend the Group’s AGM where they will be given the opportunity to interact with the Directors.
Investors also have access to current information on the Group though its website, www.cloudbreakdiscovery.com, and
via Andrew Male, Chief Executive Officer, who is available to answer investor relations enquiries.
The Group shall include, when relevant, in its Annual Report, any matters of note arising from the Audit Committee (none
for the current year).
Copies of all Annual Reports, Notices of Meetings, Circulars sent to shareholders and Admission Documents (in respect
of the last five years) are included on the Group’s website.
If a significant proportion of votes was ever cast against a resolution by shareholders in General Meeting, the Group
would, on a timely basis, provide an explanation of what actions it intends to take to understand the reasons behind that
vote result, and, where appropriate, any different action it has taken, or will take, as a result of the vote.
Review
The Company has reviewed the new QCA code and assessed the potential impact on the Company for the next financial
year. After review from management, it was concluded that the impact won’t be significant for the year ended 30 June 2025.
Emma Priestley
Non-Executive Director
30 January 2025
CLOUDBREAK DISCOVERY PLC
INDEPENDENT AUDITOR’S REPORT
As at 30 June 2024
20
Opinion
We have audited the financial statements of Cloudbreak Discovery plc. (the ‘parent company’) and its subsidiaries (the ‘group’)
for the year ended 30 June 2024 which comprise the Group and Company Statements of Financial Position, the Consolidated
Statement of Comprehensive Income, the Consolidated and Company Statements of Changes in Equity, the Group and
Company Statements of Cash Flows and notes to the financial statements, including significant accounting policies. The
financial reporting framework that has been applied in their preparation is applicable law and UK-adopted international
accounting standards and as regards the parent company financial statements, as applied in accordance with the provisions
of the Companies Act 2006.
In our opinion:
• the financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs as
at 30 June 2024 and of the group’s loss for the year then ended;
• the group financial statements have been properly prepared in accordance with UK-adopted international accounting
standards;
• the parent company financial statements have been properly prepared in accordance with UK-adopted international
accounting standards and as applied in accordance with the provisions of the Companies Act 2006; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We are independent of the group and parent company in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as
applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Material uncertainty related to going concern
We draw attention to note 2.4 in the financial statements, which indicates that the group will need to raise additional funds either
through debt or equity during the going concern period in order to fund operations and to meet its liabilities as they fall due. As stated
in note 2.4, these events or conditions, indicate that a material uncertainty exists that may cast significant doubt on the group
and parent company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment of the group and parent
company’s ability to continue to adopt the going concern basis of accounting included obtaining management’s assessment of
going concern and associated cash flow forecasts for a period up to 31 December 2026. We reviewed the overall forecasts which
included checking the mathematical accuracy and agreeing the opening position to cash balances. We also made enquiries of
management to assess key inputs and assumptions made and drivers of the assessment which includes committed costs and
performed sensitivity analysis on the forecasts. Key assumptions were agreed to supporting evidence where appropriate and
considered the availability of funding or access to existing and additional working capital of the group.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections
of this report.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. At the
planning stage, materiality is used to determine the financial statement areas that are included within the scope of our audit and the
extent of audit procedures during the audit.
The group was audited to a level of materiality for the financial statements as a whole (‘overall materiality’) of £57,000 (2023:
£82,000), a benchmark calculated using 2% (2023: 2%) of gross assets of the group. We consider gross assets to be the most
significant determinant of the group’s financial position and performance used by shareholders and investors for the current year
and that the group’s future operations are being driven by investments and the performance of the subsidiaries.
The performance materiality applied at the group level was 75% (2023: 70%) of overall materiality of £42,750 (2023: £57,400). We
have reported to those charged with governance and management misstatements during our audit work above £2,850 (2023:
£4,100) for the group, as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds.
CLOUDBREAK DISCOVERY PLC
INDEPENDENT AUDITOR’S REPORT
As at 30 June 2024
21
The materiality applied to the parent company financial statements as a whole was £54,000 (2023: £58,000) being 2% of gross
assets (2023: 2% of total expenditure). The expenditure benchmark was used in the prior year owing to the costs incurred to deliver
on the parent company’s strategy. However, there was a change in its strategy this year with the parent company scaling back on
expenditure to reorganise its business operations and we did not deem it appropriate to use this benchmark to set the materiality
levels for the parent company this year.
Using gross assets as a benchmark is considered to be of most relevancy as the exploration activities of the company are
represented by gross assets. Performance materiality applied was £40,500 (2023: £40,600) being 75% (2023: 70%) of parent
company overall materiality.
Performance materiality for the group and parent company was set at 75% of overall materiality due to our accumulated knowledge
in respect of the group and the assessed level of risk associated with a listed company operating within the exploration sector.
For each component in the scope of our group audit, we allocated a materiality that is less than our group overall materiality. This
ranged between £9,000 and £54,000 (2023: between £41,300 and £59,000).
Our approach to the audit
In designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. We
looked at areas involving significant accounting estimates and judgement by the directors which includes the valuation of
investments, including those at fair value through profit of loss (FVPL) and the consideration of future events that are inherently
uncertain such as the recoverable value of the parent company’s investment in the subsidiaries. We also addressed the risk of
management override of controls, including an evaluation of whether there was evidence of bias by the directors that represented a
risk of material misstatement due to fraud.
Of the five components of the group, a full scope audit was performed on the complete financial information of two components
which composed of the parent company and Cloudbreak Exploration Inc. (a Canadian subsidiary). The remaining components were
subject to analytical review procedures only as they were not significant or material to the group.
Of the two components of the group which we performed full scope audit, one is in Canada and one in the UK, audited in London.
The audit of the group and parent company was conducted by the group audit team using a team with specific experience of auditing
mining exploration entities and publicly listed entities.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due
to fraud) we identified, including those which had the greatest effect on the overall audit strategy, the allocation of resources
in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of
the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters. In addition to the matter described in the Material uncertainty related to going concern section we have determined
the matters described below to be the key audit matters to be communicated in our report.
Key Audit Matter How our scope addressed this matter
Valuation and classification of investments in other entities (Note 6)
As disclosed in note 6 to the group financial
statements, the carrying value of financial
investments as at 30 June 2024 amounted to
£417,217.
Cloudbreak Exploration Inc. holds shares in
other listed and non-listed companies as
investments.
Under International Financial Reporting
Standard (IFRS) 9 Financial Instruments,
these investments should be valued at fair
value through profit or loss. Some
investments are held under level 3 of the fair
value hierarchy in accordance with IFRS 13
Fair Value Measurement which involves
Our audit work included the following:
Obtaining the agreements underpinning the investments and
understanding the key terms;
Obtaining proof of ownership;
Reviewing the accounting treatment to determine whether they are
appropriately classified and valued in accordance with IFRS 9;
Assessing whether any commitments are being met;
Reviewing management’s fair value assessment and providing
challenge to the assumptions made;
CLOUDBREAK DISCOVERY PLC
INDEPENDENT AUDITOR’S REPORT
As at 30 June 2024
22
management judgement and estimation due
to its lack of active market. There is a risk that
these investments are incorrectly valued as at
the year end. This is therefore considered to
be a key audit matter.
Reviewing accounting entries made in respect of fair value adjustments
to assess whether the basis of valuation is appropriate and fair value
adjustments have been recorded correctly; and
Ensuring disclosures made in the financial statements in relation to
critical accounting judgements are adequate.
Based on the procedures performed, we found management’s assessment
of the carrying value and classification of investment in other entities to be
supported by the underlying models and the judgements and estimates
applied reasonable.
Valuation of investments in subsidiary undertakings (Note 6) – parent company
Investments in subsidiary undertakings
amounted to £19,296 in the parent company’s
Statement of Financial Position. Given that
the subsidiaries are dependent on financing
from the parent company, there is a risk that
the investments in subsidiary undertakings
and associated loans provided by the parent
company may not be fully recoverable. The
estimated recoverable amount is subjective
due to the inherent uncertainty involved in the
assessment of early-stage exploration
projects in the subsidiary undertakings, we
considered the carrying value of the
investments to be a key audit matter.
Our work in this area included the following:
Obtaining confirmation of ownership of investments;
Considering the recoverability of investments with reference to the
underlying net asset values and cashflow forecasts;
Reviewing the impairment assessment prepared by management and
challenging the key inputs and estimates included therein; and
Ensuring disclosures made in the financial statements in relation to
critical accounting judgements are adequate.
Based on the procedures performed, we deemed the carrying value of
investment in subsidiaries, including any associated loans to be reasonable
after the impairment charge recognised by management.
Valuation of convertible debenture receivables (Note 8) – group and parent company
As at 30 June 2024, the convertible debenture
receivables amounted to £1,581,428 and it
was noted that there was an amendment of
the terms during the year.
There is a risk that the valuation, classification
and recoverability of these debentures have
not been accounted properly or considered
within the financial statements and that the
debenture is therefore materially misstated.
This is therefore considered to be a key audit
matter.
Our work in this area included the following:
Obtaining the amended debenture agreements and noting the key
terms and ensuring that the valuation and classification of the
debenture receivable is correct;
Holding discussions with management to understand the accounting
treatment applied in respect of the amendment of the terms, and
providing challenge where appropriate in order to conclude whether the
treatment is in accordance with IFRS and to conclude whether these
debentures are recoverable;
Obtaining management’s detailed recoverability assessment of
debenture receivables and reviewing the underlying assumptions
made by management including validating these to financial
information of the issuer and third party information as well as
challenging management on whether the assumptions made were
reasonable;
Reviewing the terms and conditions of the debenture agreement to
ensure the issuer is in compliance with financial or operational
covenants. If any covenants had been breached, assess whether such
breach impacts the recoverability of the debenture, such as
accelerated repayment demands or penalties; and
Ensuring that the transactions are properly presented and disclosed in
the financial statements.
Based on the work performed, we are satisfied that the carrying value of the
debenture receivable is not materially misstated.
CLOUDBREAK DISCOVERY PLC
INDEPENDENT AUDITOR’S REPORT
As at 30 June 2024
23
Other information
The other information comprises the information included in the annual report, other than the financial statements and our
auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion
on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the
financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the directors’ report for the financial year for which the financial
statements are prepared is consistent with the financial statements; and
• the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and parent company and their environment obtained in the
course of the audit, we have not identified material misstatements in the strategic report or the
directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report
to you if, in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not
been received from branches not visited by us; or
• the parent company financial statements and the part of the directors’ remuneration report to be audited are not in
agreement with the accounting records and returns or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the statement of directors’ responsibilities the directors are responsible for the preparation of the
group and parent company financial statements and for being satisfied that they give a true and fair view, and for such internal
control as the directors determine is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements, the directors are responsible for assessing the group’s and
the parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company
or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.
CLOUDBREAK DISCOVERY PLC
INDEPENDENT AUDITOR’S REPORT
As at 30 June 2024
24
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with
our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to
which our procedures are capable of detecting irregularities, including fraud is detailed below:
• We obtained an understanding of the group and parent company and the sector in which they operate to identify
laws and regulations that could reasonably be expected to have a direct effect on the financial statements. We
obtained our understanding in this regard through discussions with management, industry research, and application
of cumulative audit knowledge and experience of the sector.
• We determined the principal laws and regulations relevant to the group and company in this regard to be those
arising from:
o Listing Rules;
o UK Companies Act 2006;
o Market Abuse Directive;
o The Money Laundering and Terrorist Financing (Amendment) Regulations 2019;
o Disclosure Guidance and Transparency Rules for listed entities;
o Local industry regulations where the group operates;
o Local tax and employment law; and
o Canadian tax law.
• We designed our audit procedures to ensure the audit team considered whether there were any indications of non-
compliance by the group and parent with those laws and regulations. These procedures included, but were not
limited to:
o Making enquiries of management;
o Reviewing Regulatory News Service announcements (RNSs);
o Reviewing Board minutes; and
o Reviewing legal expense accounts.
• Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those
leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases
the more that compliance with a law or regulation is removed from the events and transactions reflected in the
financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also
greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
• We also identified the risks of material misstatement of the financial statements due to fraud. We considered, in
addition to the non-rebuttable presumption of a risk of fraud arising from management override of controls, that the
potential for management bias was identified in relation to the value and classification of investments in other entities
and value of investments in subsidiaries and we addressed this by challenging the assumptions and judgements
made by management when auditing these significant accounting estimates.
• As in all of our audits, we addressed the risk of fraud arising from management override of controls by performing
audit procedures which included, but were not limited to: the testing of journals; reviewing accounting estimates for
evidence of bias; and evaluating the business rationale of any significant transactions that are unusual or outside
the normal course of business and unusual transactions that do not appear to be in line with our understanding of
business operations. Aside from the non-rebuttable presumption of a risk of fraud arising from management override
of controls, we did not identify any significant fraud risks.
• We have made inquiries with management to understand whether there were any instances of non-compliance with
laws and regulations and whether there were any instances of fraud during the year. We have corroborated
management responses through review of board minutes, review of legal expenses incurred and accrued for during
the year and reviewed information available in pubic domain concerning the group and its subsidiary undertakings.
We did not identify any instances of non-compliances and related fraud.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading
to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that
compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we
CLOUDBREAK DISCOVERY PLC
INDEPENDENT AUDITOR’S REPORT
As at 30 June 2024
25
will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting
Council’s website at: www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor’s report.
Other matters which we are required to address
The parent company was listed on London stock exchange on 3 June 2021. We were re-appointed as auditor of the public listed
entity by the Audit Committee on 24 October 2023 to audit the financial statements for the year ending 30 June 2024. Our total
uninterrupted period of engagement is 15 years, covering the periods ended 30 June 2010 to 30 June 2024, including the audit
years prior to listing.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the group or the parent company and we
remain independent of the group and the parent company in conducting our audit.
Our audit opinion is consistent with the additional report to the audit committee.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are
required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone, other than the company and the company's members as a body, for our audit
work, for this report, or for the opinions we have formed.
Daniel Hutson (Senior Statutory Auditor) 15 Westferry Circus
For and on behalf of PKF Littlejohn LLP Canary Wharf
Statutory Auditor London E14 4HD
30 January 2025
CLOUDBREAK DISCOVERY PLC
STATEMENT OF FINANCIAL POSITION
As at 30 June 2024 Company number: 06275976
The Notes on pages 31 to 61 form part of these Financial Statements.
26
The Company has elected to take the exemption under Section 408 of the Companies Act 2006 from presenting the Parent
Company Income Statement and Statement of Comprehensive Income. The loss for the Company for the year ended 30 June
2024 was £2,011,221 (loss for year ended 30 June 2023: £8,781,189).
The Financial Statements were approved and authorised for issue by the Board of Directors on 30 January 2025 and were
signed on its behalf by:
Andrew Male
Chief Executive Officer
Group Company
Note
30 June
2024
£
30 June
2023
£
30 June
2024
£
30 June
2023
£
Non-Current Assets
Royalty asset 7 1 1 - -
Intangible assets 5 80,870 236,518 - -
Investments 6 417,217 891,255 256,560 43,046
Investment in subsidiaries 6 - - 19,296 1,997,048
Leased Asset 28,911 29,810 - -
Convertible debenture receivables 8 - 475,168 - 475,168
Current Assets
Trade and other receivables 10 185,925 243,177 87,797 77,254
Cash and cash equivalents 11 195,157 244,074 94,586 18,684
Convertible debenture receivables 8 1,581,428 1,583,892 1,581,428 1,583,892
Total Assets 2,489,509 3,703,895 2,039,667 4,195,092
Current Liabilities
Trade and other payables 13 727,385 1,704,437 657,767 1,454,431
Convertible loan notes 14 43,248 - 43,248 -
Total Liabilities 770,633 1,704,437 701,015 1,454,431
Net Assets 1,718,876 1,999,458 1,338,652 2,740,661
Equity attributable to owners of the Parent
Share capital 15 900,167 778,635 900,167 778,635
Share premium 15 17,239,349 16,753,221 17,239,349 16,753,221
Other reserves 17 162,365 519,045 17,864 340,716
Reverse asset acquisition reserve (4,134,019 ) (4,134,019 ) - -
Retained losses (12,448,986 ) (11,917,424 ) (16,818,728) (15,131,911)
Total Equity 1,718,876 1,999,458 1,338,652 2,740,661
CLOUDBREAK DISCOVERY PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2024
The Notes on pages 31 to 61 form part of these Financial Statements.
27
Continued operations Note
Year ended
30 June
2024
£
Year ended
30 June
2023
(restated)
£
Profit on disposal of exploration & evaluation asset sales
Administrative expenses 25 (943,302 ) (3,855,925 )
Foreign exchange (losses)/gains 50,529 (81,024 )
Operating loss (847,494 ) (3,571,981 )
Finance income 20 344,198 369,587
Finance costs (214,841 ) -
Other income 336,864 47,121
Impairment of loans 9 (172,221 ) (128,607 )
Impairment of debentures (474,428 ) -
Impairment of investments (117,260 ) -
Impairment of intangible assets
(107,684 ) (12,636 )
Other gains 21 633,113 17,913
Realised Loss on disposal investments 22 (71,071 ) (866,421 )
Unrealised fair value (loss)/gain on debentures (3,204 ) -
Unrealised fair value (loss)/gain on investments 6 (394,009 ) 309,896
Discontinued operations:
Gain/(loss) from discontinued operations 28 232,071 (150,593 )
Profit/(Loss) before income tax (855,966 ) (3,985,721 )
Income tax 23 - (12,178 )
Loss for the year attributable to owners of the Parent (855,966 ) (3,997,899 )
Basic and Diluted Earnings Per Share attributable to owners of the Parent
during the period (expressed in pence per share) 24
Continuing operations (0.1 )p (1 )p
Discontinuing operations - (0.0003 )p
Year ended
30 June
2024
£
Year ended
30 June
2023
£
Loss for the period (855,966 ) (3,997,899 )
Other Comprehensive Income:
Items that may be subsequently reclassified to profit or loss
Currency translation differences (33,828 ) (123,367 )
Other comprehensive income for the period, net of tax (889,794 ) (4,121,266 )
Total Comprehensive Income attributable to owners of the parent (889,794 ) (4,121,266 )
CLOUDBREAK DISCOVERY PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2024
The Notes on pages 31 to 61 form part of these Financial Statements.
28
Note
Share
capital
£
Share premium
£
Reverse asset
acquisition reserve
£
Other reserves
£
Retained losses
£
Total
£
Balance as at 1 July 2022 654,129 14,821,521 (4,134,019 ) 599,093 (7,919,525 ) 4,021,199
Loss for the year - - - - (3,997,899 ) (3,997,899 )
Other comprehensive income
for the year
Items that may be subsequently
reclassified to profit or loss
Currency translation differences - - - (123,367 ) - (123,367 )
Total comprehensive income for
the year - - - (123,367 )
(3,997,899 ) (4,121,266 )
Issue of shares
15
Issue costs 15 - (3,000 ) - - - (3,000 )
Options Granted 16 - - - 36,723 - 36,723
Warrants Granted 16 - - - 6,596 - 6,596
Total transactions with owners,
recognised directly in equity
Balance as at 30 June 2023 778,635 16,753,221 (4,134,019 ) 519,045 (11,917,424 ) 1,999,458
Balance as at 1 July 2023 778,635 16,753,221 (4,134,019 ) 519,045 (11,917,424 ) 1,999,458
Loss for the year - - - - (855,966 ) (855,966 )
Other comprehensive income
for the year - - - - - -
Items that may be subsequently
reclassified to profit or loss - - - - - -
Currency translation differences - - - (33,828 ) - (33,828 )
Total comprehensive income for
the year - - - (33,828 ) (855,966 ) (889,794 )
Issue of shares 15 121,532 486,128 - - - 607,660
Options lapsed 16 - - - (75,281 ) 75,281 -
Warrants lapsed 16 - - - (249,123 ) 249,123 -
Equity component of CLN 14 - - - 1,552 - 1,552
Total transactions with owners,
recognised directly in equity
Balance as at 30 June 2024 900,167 17,239,349 (4,134,019 ) 162,365 (12,448,986 ) 1,718,876
CLOUDBREAK DISCOVERY PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2024
The Notes on pages 31 to 61 form part of these Financial Statements.
29
Note
Share capital
£
Share
premium
£
Other reserves
£
Retained losses
£
Total equity
£
Balance as at 1 July 2022 654,129 14,821,521 297,397 (6,350,722) 9,422,325
Loss for the year - - - (8,781,189) (8,781,189)
Total comprehensive income
for the year
- - - (8,781,189) (8,781,189)
Issue of shares
15
124,506 1,934,700 - - 2,059,206
Issue Costs
15
- (3,000) - - (3,000)
Options granted 16 - -
36,723
- 36,723
Warrants Granted 16 - -
6,596
- 6,596
Total transactions with
owners, recognised directly in
equity
124,506 1,931,700 43,319 - 2,099,525
Balance as at 30 June 2023 778,635 16,753,221 340,716 (15,131,911) 2,740,661
Balance as at 1 July 2023 778,635 16,753,221 340,716 (15,131,911) 2,740,661
Loss for the year - - - (2,011,221) (2,011,221)
Total comprehensive income
for the year - - - (2,011,221) (2,011,221)
Issue of shares
15
121,532 486,128 - - 607,660
Options lapsed 16 - - (75,281) 75,281 -
Warrants lapsed 16 - - (249,123) 249,123 -
Equity component of CLN 14 - - 1,552 - 1,552
Total transactions with
owners, recognised directly in
equity 121,532 486,128 (322,852) 324,404 609,212
Balance as at 30 June 2024 900,167 17,239,349 17,864 (16,818,728) 1,338,652
CLOUDBREAK DISCOVERY PLC
STATEMENTS OF CASH FLOWS
For the year ended 30 June 2024
The Notes on pages 31 to 61 form part of these Financial Statements.
30
Group Company
Note
Year ended
30 June 2024
£
Year ended
30 June 2023
£
Year ended 30
June 2024
£
Year ended 30
June 2023
£
Cash flows from operating activities
Loss before income tax (855,966 ) (3,997,899 ) (2,011,221) (8,781,189)
Adjustments for:
Provision for bad debt 211,824 287,052 - 140,000
Realised loss on investments 71,071 866,421 - -
Change in fair value of investments 394,009 (309,896 ) 150,354 14,961
Change in fair value of convertible debentures 3,204 91,106 3,204 91,106
Impairment of loans and debentures 646,649 128,607 563,306 52,444
Impairment of intangible assets 107,684 12,636 - -
Impairment of investment 117,260 - 411,231 -
Impairment of intercompany investments - - 1,144,380 6,056,544
Interest income (262,885 ) (369,587 ) (199,299) (309,274)
Finance cost 177,000 - 177,000 -
Income on consideration shares 6 (316,343 ) - (316,343) -
Intercompany sales - - - (155,129)
Unrealised foreign exchange/(loss) (45,753 ) (100,977 ) 937 30,448
Share option expenses 25 - 43,306 - 43,306
Increase in trade and other receivables 10 (293,998 ) 773,143 (187,218) 1,614,494
(Decrease)/Increase in trade and other payables 13 (361,265 ) 282,930 (182,371) 108,424
Net cash used in operating activities
(407,509 ) (2,293,158 ) (446,040) (1,093,865)
Cash flows from investing activities
Funds received on sale of investment 6 255,612 677,400 - -
Funds spent on investment 6 - (58,649 ) - (58,007)
Funds spent on leased assets - (29,810 ) - -
Funds received on sale of exploration assets 5 41,919 47,206 - -
Loans (to)/from subsidiaries 6 - - 422,140 (732,651)
Interest received 99,802 226,382 99,802 226,382
Exploration and evaluation expenses - (222,667 ) - -
Convertible debenture receivable 8 - (503,499 ) - (503,499)
Net cash generated from (used in) investing
activities
Cash flows from financing activities
Proceeds from issue of share capital 15 - 2,059,206 - 2,059,206
Cost of shares issued 15 - (3,000 ) - (3,000)
Loans granted (38,741 ) 34,085 - -
Net cash generated from financing activities
(38,741 ) 2,090,291 - 2,056,206
Net (decrease)/increase in cash and cash
equivalents
(48,917 ) (66,504 ) 75,902 (105,434)
Cash and cash equivalents at beginning of year
11
Cash and cash equivalents at end of year 195,157 244,074 94,586 18,684
CLOUDBREAK DISCOVERY PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
31
1. General information
The Company is a public limited company incorporated and domiciled in England
listed on the London Stock Exchange. The registered office of the Company is 6 Heddon Street, London , W1B 4BT .
2. Summary of significant Accounting Policies
The principal Accounting Policies applied in the preparation of these Financial Statements are set out below. These Policies
have been consistently applied to all the periods presented, unless otherwise stated.
2.1. Basis of preparation of Financial Statements
The Financial Statements have been prepared in accordance with UK-adopted international accounting standards (UK IAS)
in accordance with the requirements of the Companies Act 2006. The Financial Statements have also been prepared under
the historical cost convention.
The Financial Statements are presented in Pounds Sterling rounded to the nearest pound.
The preparation of financial statements in conformity with UK IAS requires the use of certain critical accounting estimates. It
also requires management to exercise its judgement in the process of applying the Accounting Policies. The areas involving
a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Consolidated
Financial Statements are disclosed in Note 4.
2.2. New and amended standards
(a) New and amended standards mandatory for the first time for the financial periods beginning on or after 30 June
2024.
The International Accounting Standards Board (IASB) issued various amendments and revisions to International Financial
Reporting Standards and IFRIC interpretations. The amendments and revisions were applicable on or after the year ended
30 June 2024 but did not result in any material changes to the financial statements of the Group.
(b) New standards, amendments and interpretations in issue but not yet effective or not yet endorsed and not early
adopted.
Standards, amendments and interpretations that are not yet effective and have not been early adopted are as follows:
| Standard | ||
| Impact on initial application | Effective date | |
| IAS 21 (Amendments) | Lack of Exchangeability | 1 January 2025 |
| IAS 9 (Amendments) | Classification and measurement of Financial Instruments | 1 January 2026 |
The Group is evaluating the impact of the new and amended standards above which are not expected to have a material
impact on the Group’s results or shareholders’ funds.
2.3. Basis of Consolidation
The Consolidated Financial Statements consolidate the financial statements of the Company and its subsidiaries made up to
30 June. Subsidiaries are entities over which the Group has control. Control is achieved when the Group is exposed, or has
rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power
over the investee.
Generally, there is a presumption that a majority of voting rights result in control. To support this presumption and when the
Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an investee, including:
• The contractual arrangement with the other vote holders of the investee;
• Rights arising from other contractual arrangements; and
• The Group's voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to
one or more of the three elements of control. Subsidiaries are fully consolidated from the date on which control is transferred
to the Group. They are deconsolidated from the date that control ceases. Assets, liabilities, income and expenses of a
subsidiary acquired or disposed of during the period are included in the consolidated financial statements from the date the
Group gains control until the date the Group ceases to control the subsidiary.
CLOUDBREAK DISCOVERY PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
32
Investments in subsidiaries are accounted for at cost less impairment within the Parent Company financial statements. Where
necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with
those used by other members of the Group. All significant intercompany transactions and balances between Group enterprises
are eliminated on consolidation.
2.4. Going concern
The Group Financial Statements have been prepared on a going concern basis. The Directors are of the view that, the Group
has funds to meet its planned expenses over the next 12 months from the date of these financial statements.
As at 30 June 2024, the Group had cash and cash equivalents of £195,157. The Directors have prepared cash flow forecasts
to 31 December 2025, which take into account the cost and operational structure of the Group and Parent Company, property
option income, debenture interest and any existing licence and working capital requirements. These forecasts indicate that
the Group and Parent Company’s cash resources are not sufficient to cover the projected expenditure for a period of 12
months from the date of approval of these financial statements. These forecasts indicate that the Group and Parent Company,
in order to meet their operational objectives, and meets their expected liabilities as they fall due, will be required to raise
additional funds within the next 12 months.
In common with many entities in the resource sector, the Company will need to raise further funds within the next 12 months
in order to meet its expected liabilities as they fall due. Whilst the Directors are confident that they will be secure the necessary
funding, the current conditions do indicate the existence of a material uncertainty which may cast significant doubt about the
ability of the Group and parent company to continue as a going concern. No adjustments have been made in the financial
statements, should the Group not be able to continue as a going concern.
2.5. Foreign currencies
a) Functional and presentation currency
Items included in the Financial Information are measured using the currency of the primary economic environment in
which the entity operates (the ‘functional currency’). The functional currency of the parent company is Pounds Sterling as
is the functional currency of the UK subsidiary which is Imperial Minerals (UK) Limited. The functional currency of the
Canadian subsidiary, Cloudbreak Exploration Inc. is Canadian Dollars
. The functional currency of the US subsidiaries,
Cloudbreak Discovery (US) Ltd. and Cloudbreak Energy (US) Ltd. is US Dollars. The Financial Information in The Group’s
overseas subsidiaries are translated in accordance with IAS 21 – The Effect of Changes in Foreign Exchange Rates.
During the year ended 30 June 2024, the Company disposed of Kudu Resources and Kudu Resources Guinea as part of
a settlement agreement.
b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates
of the transactions or valuation where such items are re-measured. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the Income Statement in other comprehensive income. The financial
statements are presented in Pounds Sterling (£), the functional currency of Cloudbreak Discovery Plc is Pounds Sterling,
as is the functional currency of the UK subsidiary which is Imperial Minerals (UK) Limited.
2.6. Fair value measurement
IFRS 13 establishes a single source of guidance for all fair value measurements. IFRS 13 provides guidance on how to
measure fair value under IFRS when fair value is required or permitted. The resulting calculations under IFRS 13 affected the
principles that the Company uses to assess the fair value, but the assessment of fair value under IFRS 13 has not materially
changed the fair values recognised or disclosed. IFRS 13 mainly impacts the disclosures of the Company. It requires specific
disclosures about fair value measurements and disclosures of fair values, some of which replace existing disclosure
requirements in other standards.
2.7. Finance Income
Interest income is recognised using the effective interest method.
2.8. Other income
The other income of the Group comprises royalty income. It is measured at the fair value of the consideration received or
receivable after deducting discounts and other withholding tax. The royalty income becomes receivable on extraction and
sale of the relevant underlying commodity, and by determination of the relevant royalty agreement.
CLOUDBREAK DISCOVERY PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
33
2.9. Cash and cash equivalents
Cash and cash equivalents comprise cash at hand and current and deposit 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. This definition
is also used for the Statement of Cash Flows.
2.10. Trade and other receivables and prepaids
Trade receivables are amounts due from third parties in the ordinary course of business. If collection is expected in one year
or less, they are classified as current assets. If not, they are presented as non-current assets.
2.11. Royalty assets at fair value through profit and loss
Royalty financial assets are recognised or derecognised on completion date where a purchase or sale of the royalty is under
a contract, and are initially measured at fair value, including transaction costs. All of the Group’s royalty financial assets have
been designated as at fair value through profit and loss (“FVTPL”). The royalty financial assets at FVTPL are measured at
fair value at the end of each reporting period, with any fair value gains or losses recognised in the ‘revaluation of royalty
financial assets’ line item of the income statement.
2.12. Investments in subsidiaries
Investments in Group undertakings are stated at cost, which is the fair value of the consideration paid, less any impairment
provision.
2.13. Intangible assets
Exploration and evaluation assets
The Group recognises expenditure as exploration and evaluation assets when it determines that those assets hold potential
to be successful in finding specific resources. Expenditure included in the initial exploration and evaluation assets relate to
the acquisition of rights to explore, topographical, geological, geochemical and geophysical studies, exploratory drilling,
trenching, sampling and activities to evaluate the technical feasibility and commercial viability of extracting a resource.
Capitalisation of pre-production expenditure ceases when the prospective property is capable of commercial production.
Exploration and evaluation assets are recorded and held at cost
Exploration and evaluation assets are not subject to amortisation, as such at the year-end all intangibles held have an
indefinite life but are assessed annually for impairment. The assessment is carried out by allocating exploration and evaluation
assets to cash generating units (‘CGU’s’), which are based on specific projects or geographical areas. The CGU’s are then
assessed for impairment using the criteria specified in IFRS 6.
Whenever the exploration for and evaluation of resources in cash generating units does not lead to the discovery of
commercially viable quantities of resources and the Group has decided to discontinue such activities of that unit, the
associated expenditures are written off to the Income Statement.
Exploration and evaluation assets recorded at fair-value on business combination
Exploration assets which are acquired as part of a business combination are recognised at fair value in accordance with IFRS
3. When a business combination results in the acquisition of an entity whose only significant assets are its exploration asset
and/or rights to explore, the Directors consider that the fair value of the exploration assets is equal to the consideration. Any
excess of the consideration over the capitalised exploration asset is attributed to the fair value of the exploration asset.
2.14. Impairment of non-financial assets
Assets that have an indefinite useful life, for example, intangible assets not ready to use, are not subject to amortisation and
are tested annually for impairment. An impairment loss is recognised for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in
use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash flows (cash generating units). Non-financial assets that suffered impairment are reviewed for possible
reversal of the impairment at each reporting date.
CLOUDBREAK DISCOVERY PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
34
2.15. Financial assets
The Group classifies its financial assets into one of the categories discussed below, depending on the purpose for which the
asset was acquired. The Group's accounting policy for each category is as follows:
Fair Value through Profit or Loss (FVTPL)
Non-derivative financial assets comprising the Group's strategic financial investments in entities not qualifying as subsidiaries
or jointly controlled entities. These assets are classified as financial assets at fair value through profit or loss. They are carried
at fair value with changes in fair value recognised through the income statement. Where there is a significant or prolonged
decline in the fair value of a financial investment (which constitutes objective evidence of impairment), the full amount of the
impairment is recognised in the income statement.
Due to the nature of these assets being unlisted investments or held for the longer term, the investment period is likely to be
greater than 12 months and therefore these financial assets are shown as non-current assets in the Statement of financial
position.
Amortised Cost
These assets comprise the types of financial assets where the objective is to hold these assets in order to collect contractual
cash flows and the contractual cash flows are solely payments of principal and interest.
The Group's financial assets measured at amortised cost comprise trade and other receivables, convertible debenture
receivables and cash and cash equivalents in the consolidated statement of financial position. Cash and cash equivalents
include cash in hand, deposits held at call with banks, other short term highly liquid investments with original maturities of
three months or less, and – for the purpose of the statement of cash flows - bank overdrafts.
(a) Recognition and measurement
Amortised cost
Regular purchases and sales of financial assets are recognised on the trade date at cost – the date on which the Group
commits to purchasing or selling the asset. Financial assets are derecognized 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.
Fair value through the profit or loss
Financial assets that do not meet the criteria for being measured at amortised cost or FVTOCI are measured at FVTPL. The
Group holds equity instruments that are classified as FVTPL as these were acquired principally for the purpose of selling.
Financial assets at FTVPL are measured at fair value at the end of each reporting period, with any fair value gains or losses
recognised in profit or loss. Fair value is determined by using market observable inputs and data as far as possible. Inputs
used in determining fair value measurements are categorised into different levels based on how observable the inputs used
in the valuation technique utilised are (the ‘fair value hierarchy’):
- Level 1: Quoted prices in active markets for identical items (unadjusted)
- Level 2: Observable direct or indirect inputs other than Level 1 inputs
- Level 3: Unobservable inputs (i.e. not derived from market data).
The classification of an item into the above levels is based on the lowest level of the inputs used that has a significant effect
on the fair value measurement of the item. Transfers of items between levels are recognised in the period they occur.
The Group measures its investments in quoted shares using the quoted market price. For shares held in unlisted entities,
the share price is based on the current financial and operational performance, as well as taking the potential of future plans
into account. Unlisted investments whose fair value cannot be measured reliably, are measured at cost less impairment.
(b) Impairment of financial assets
The Group recognises an allowance for expected credit losses (ECLs) 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 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
CLOUDBREAK DISCOVERY PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
35
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 (not subject to provisional pricing) 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.
Impairment provisions for receivables from related parties and loans to related parties are recognised based on a forward-
looking expected credit loss model. The methodology used to determine the amount of the provision is based on whether
there has been a significant increase in credit risk since initial recognition of the financial asset, based on analysis of internal
or external information. For those where the credit risk has not increased significantly since initial recognition of the financial
asset, twelve month expected credit losses along with gross interest income are recognised. For those for which credit risk
has increased significantly, lifetime expected credit losses along with the gross interest income are recognised. For those that
are determined to be credit impaired, lifetime expected credit losses along with interest income on a net basis are recognised.
The Group considers a financial asset in default when contractual payments are 180 days past due. However, in certain
cases, the Group may also consider 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. This is the same treatment for a financial
asset measured at FVTPL.
2.16. Financial Investments
Non-derivative financial assets comprising the Group’s strategic financial investments in entities not qualifying as subsidiaries,
associates or jointly controlled entities. These assets are classified as financial assets at fair value through profit or loss. They
are carried at fair value with changes in fair value recognised through the income statement. Where there is a significant or
prolonged decline in the fair value of a financial investment (which constitutes objective evidence of impairment), the full
amount of the impairment is recognised in the income statement.
Listed investments are valued at closing bid price on 30 June 2024. Unlisted investments that are not publicly traded and
whose fair value cannot be measured reliably, are measured at cost less impairment.
2.17. Equity
Equity comprises the following:
• “Share capital” represents the nominal value of the Ordinary shares;
• “Share Premium” represents consideration less nominal value of issued shares and costs directly attributable to the
issue of new shares;
• “Reverse asset acquisition reserve” represents the retained losses of the Company before acquisition and the
Company equity at reverse acquisition.
• “Other reserves” represents the foreign currency translation reserve, warrant reserve and share option reserve where;
o “Foreign currency translation reserve” represents the translation differences arising from translating the
financial statement items from functional currency to presentational currency;
o “Warrant reserve” represents share warrants awarded by the Group;
o “Share option reserve" represents share options awarded by the Group;
• “Retained deficit or losses” represents retained losses.
2.18. Share based payments
The Group operates an equity-settled, share-based scheme under which the Group receives services from employees or
contractors as consideration for equity instruments (options and warrants) of the Group. The fair value of the third-party
suppliers’ services received in exchange for the grant of the options is recognised as an expense in the Income Statement or
CLOUDBREAK DISCOVERY PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
36
charged to equity depending on the nature of the service provided. The value of the employee services received is expensed
in the Income Statement and its value 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 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.
The fair value of the share options and warrants are determined using the Black Scholes valuation model.
Non-market vesting conditions are included in assumptions about the number of options 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 a separate reserve in equity.
When the 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 options are exercised.
2.19. Taxation
No current tax is payable for the year ended 30 June 2024 in view of the losses to date for all entities in the Group (2023:
£12,178).
Deferred tax is recognised for using the liability method in respect of temporary differences arising from differences between
the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in
the computation of taxable profit. However, deferred tax liabilities are not recognised if they arise from the initial recognition
of goodwill; deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other
than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.
In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets (including
those arising from investments in subsidiaries), are recognised to the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be utilised.
Deferred income tax assets are recognised on deductible temporary differences arising from investments in subsidiaries 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 used.
Deferred tax liabilities will be recognised for taxable temporary differences arising on investments in subsidiaries except where
the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
Deferred 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 tax assets and liabilities relate to income taxes levied by the same taxation authority on
either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
Deferred tax is calculated at the tax rates (and laws) that have been enacted or substantively enacted by the statement of
financial position date and are expected to apply to the period when the deferred tax asset is realised or the deferred tax
liability is settled.
Deferred tax assets and liabilities are not discounted.
3. Financial risk management
The Group’s activities expose it to a variety of financial risks: market risk (foreign currency risk, price risk and interest rate
risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial
markets and seeks to minimise potential adverse effects on the Group’s financial performance. None of these risks are
hedged.
Risk management is carried out by the Canadian based management team under policies approved by the Board of Directors.
CLOUDBREAK DISCOVERY PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
37
3.1. Treasury policy and financial instruments
During the years under review, the financial instruments were cash and cash equivalents, shares in listed and unlisted
companies and other receivables which were or will be required for the normal operations of the Group.
The Group operates informal treasury policies which include ongoing assessments of interest rate management and
borrowing policy. The Board approves all decisions on treasury policy.
The risks arising from the Group’s financial instruments are liquidity and interest rate risk. The Directors review and agree
policies for managing these risks and they are summarised below:
Unlisted investments
The Company is required to make judgments over the carrying value of investments in unquoted companies where fair values
cannot be readily established and evaluate the size of any impairment required. It is important to recognise that the carrying
value of such investments cannot always be substantiated by comparison with independent markets and, in many cases, may
not be capable of being realised immediately. Management’s significant judgement in this regard is that the value of their
investment represents their cost less previous impairment.
Market risk & foreign currency risk
The Group is exposed to market risk, primarily relating to interest rate and foreign exchange movements. The Group does not
hedge against market or foreign exchange risks as the exposure is not deemed sufficient to enter into forwards or similar
contracts.
Credit risk
Credit risk arises from cash and cash equivalents as well as outstanding receivables. The amount of exposure to any individual
counter party is subject to a limit, which is assessed by the Board.
The Group considers the credit ratings of banks in which it holds funds in order to reduce exposure to credit risk.
Liquidity risk and interest rate risk
The Group seeks to manage financial risk, to ensure sufficient liquidity is available to meet foreseeable needs and to invest
cash assets safely and profitably. This is achieved by the close control by the Directors of the Group in the day-to-day
management of liquid resources. Cash is invested in deposit accounts which provide a modest return on the Group’s resources
whilst ensuring there is limited risk of loss to the Group.
3.2. Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to
provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the
cost of capital.
4. Critical accounting estimates and judgements
The preparation of the Financial Information in conformity with UK adopted IASs requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the
date of the Financial Information and the reported amount of expenses during the year. Actual results may vary from the
estimates used to produce this Financial Information.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances.
Significant items subject to such estimates and assumptions include, but are not limited to:
Share based payment transactions
The Group has made awards of options and warrants over its unissued share capital to certain Directors and employees as
part of their remuneration package. Certain warrants have also been issued to shareholders as part of their subscription for
shares and to suppliers for various services received.
The valuation of these options and warrants involves making a number of critical estimates relating to price volatility, future
dividend yields, expected life of the options and forfeiture rates.
CLOUDBREAK DISCOVERY PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
38
Classification of royalty arrangements: initial recognition and subsequent measurement
The Directors must decide whether the Group’s royalty arrangements should be classified as:
• Intangible assets in accordance with IAS 38 Intangible Assets; or
• Financial assets in accordance with IFRS 9 Financial Instruments
The Directors use the following selection criteria to identify the characteristics which determine which accounting standard
to apply to each royalty arrangement:
Type 1 – Intangible assets: Royalties, are classified as intangible assets by the Group. The Group considers the substance
of a simple royalty to be economically similar to holding a direct interest in the underlying mineral asset. Existence risk (the
commodity physically existing in the quantity demonstrated), production risk (that the operator can achieve production and
operate a commercially viable project), timing risk (commencement and quantity produced, determined by the operator) and
price risk (returns vary depending on the future commodity price, driven by future supply and demand) are all risks which the
Group participates in on a similar basis to an owner of the underlying mineral licence. Furthermore, in a royalty intangible,
there is only a right to receive cash to the extent there is production and there are no interest payments, minimum payment
obligations or means to enforce production or guarantee repayment. These are accounted for as intangible assets under
IAS-38.
Type 2 – Financial royalty assets (royalties with additional financial protection): In certain circumstances where the risk is
considered too high, the Group will look to introduce additional protective measures. This has taken the form of minimum
payment terms. Once an operation is in production, these mechanisms generally fall away such that the royalty will display
identical characteristics and risk profile to the intangible royalties; however, it is the contractual right to enforce the receipt of
cash which results in these royalties being accounted for as financial assets under IFRS 9. There are currently no royalties
classified as financial royalty assets.
Estimated impairment of convertible loan notes receivable & Convertible debenture receivables
Anglo African Minerals Plc (‘AAM’)
The Group has assessed whether the AAM convertible loan notes receivable which has been previously fully impaired in the
prior year, should remain impaired in the current year or be reversed. They have reassessed this asset and determined that
there are no conditions to reverse the impairment.
G2 Energy Corp. (“G2”)
The Group also assessed whether the G2 convertible debenture receivable should be impaired and based on the current
production levels and the programme at the Masten Unit Energy Project, they have determined it should not be impaired as
G2, through the funding from the Company, now have the funds required to undertake the exploration activity and advance
the project. The terms of the debenture are still being met by both parties and G2 are expected to pay the necessary interest
payments. The directors assessed this debenture in accordance with IFRS standards and concluded it is a financial asset
accounted for as amortised cost as the financial asset is held within a business model with the objective to hold and collect
the contractual cash flows which is in the form of interest and principal payments. As part of the debenture agreement, the
Group received a 3.25% Overriding Royalty Interest in the project which has limited production and revenues. In accordance
with IFRS the directors have assessed the royalty interest and accounted for it as intangible assets in accordance with IAS
38 because
there is only a right to receive cash to the extent there is production and there are no interest payments, minimum
payment obligations or means to enforce production or guarantee repayment. These are accounted for as intangible assets
under IAS 38. The directors considered the fair value of the royalty assets which they receive in exchange as part of the
debenture agreement for which they did not pay any consideration. Fair value is determined based on discounted cash flow
models (and other valuation techniques) using assumptions considered to be reasonable and consistent with those that
would be applied by a market participant. The determination of assumptions used in assessing fair values is subjective and
the use of different valuation assumptions could have a significant impact on financial results. The current royalty covers a
very small production site. During the year ended 30 June 2024, £39,000 was received, with a total of £98,000 being received
to date from this royalty. Following their assessment, the directors concluded that the fair value of the royalty agreement was
not material and has not been recognised as intangible asset. The group is in regular communication with G2 and is
monitoring the results of its exploration activities that will be undertaken as the result of the funding by the Group to G2.
CLOUDBREAK DISCOVERY PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
39
Texas Legacy Exploration LLC (“Texas Legacy”)
The Group assessed whether the Texas Legacy convertible debenture receivable should be impaired. After review from
management, it was agreed that the debenture be impaired in full as it was no longer recognised as a debenture and was
converted to royalty. As a result of the impairment, the initial $600k payment was no longer considered payable. However,
royalty payments will be received should production commence in the future.
Unlisted investments
The Group is required to make judgments over the carrying value of investments in unquoted companies where fair values
cannot be readily established and evaluate the size of any fair value movement required. It is important to recognise that the
carrying value of such investments cannot always be substantiated by comparison with independent markets and, in many
cases, may not be capable of being realised immediately. Management’s significant judgement in this regard is that the value
of their investment represents the entities financial and operational performance, as well as their future potential. This
valuation method was considered the most appropriate by management due to the limited information available related to
the unlisted investments as at 30 June 2024. Management have assessed whether any fair value movement on the unlisted
investments is required at 30 June 2024 and have fully impaired one of their investments due to the lack of reported activity
and updates from the company.
Recovery of other receivables
Included in other receivables is an amount of £140,000 as at 30 June 2024 in respect of unpaid ordinary share capital issued
on 3 June 2021. The Directors plan to take action to recover the amount owed and believe that the amount will be recovered
in full in due time, but because this outcome is not certain and the balance has been owed for an extended period, a provision
for bad debt for the full amount has been implemented. This was recognised in the prior year ended 30 June 2023 and still
deemed appropriate to include in the year ended 30 June 2024.
Valuation of exploration and evaluation assets
Exploration and evaluation costs have a carrying value of 30 June 2024 of £80,870 (2023: £236,518). Such assets have an
indefinite useful life as the Group has the right to renew exploration licenses or options and the asset is only amortised once
extraction of the resource commences. The value of the Group’s exploration and evaluation expenditure will be dependent
upon the success of the Group in discovering economic and recoverable resources, especially in the countries of operation
where political, economic, legal, regulatory and social uncertainties are potential risk factors. The future revenue flows
relating to these assets is uncertain and will also be affected by competition, relative exchange rates and potential new
legislation and related environmental requirements. The Group’s ability to continue its exploration programs and develop its
projects is dependent on future fundraisings. The ability of the Group to continue operating within some of the jurisdictions
contemplated by management is dependent on a stable political environment which is uncertain based on the history of the
country. This may also impact the Group’s legal title to assets held which would affect the valuation of such assets. There
have been no changes made to any past assumptions.
The Directors have undertaken a review to assess whether circumstances exist which could indicate the existence of
impairment as follows:
• The Group no longer has title to mineral leases or the title will expire in the near future and is not expected to be renewed.
• A decision has been taken by the Board to discontinue exploration due to the absence of a commercial level of reserves.
• Sufficient data exists to indicate that the costs incurred will not be fully recovered from future development and
participation.
• No further exploration or evaluation is planned or budgeted.
Following their assessment, the Directors concluded that an impairment charge of £107,684 (2023: £12,636) was necessary
on the Northern Treasure property because the claims on the property had lapsed, and the Directors agreed that it shouldn’t
be renewed.
CLOUDBREAK DISCOVERY PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
40
5. Intangible assets
As at June 30, 2024, the Group’s exploration and evaluation assets are as follows:
| Group | ||
| Exploration & Evaluation Assets | ||
| 30 June 2024 | ||
| £ | ||
| 30 June 2023 | ||
| £ | ||
| South Timmins, British Columbia | 1 | 1 |
| Atlin West Property | 1 | 1 |
| Yak Property | 1 | 1 |
| Rizz Property | 1 | 1 |
| Icefall Property | 1 | 1 |
| Northern Treasure Property | - | 111,023 |
| Rupert Property, British Columbia | 1 | 1 |
| Apple Bay Property, British Columbia | 1 | 1 |
| Foggy Mountain, British Columbia | - | 43,220 |
| Bobcat Property, Idaho | 46,733 | 48,183 |
| Elk Creek, Pennsylvania | 34,130 | 34,085 |
| As at June 30 | 80,870 | 236,518 |
As at June 30, 2024, the Group’s reconciliation of exploration and evaluation assets are as follows:
| Group | ||
| Exploration & Evaluation Assets | ||
| 30 June 2024 | ||
| £ | ||
| 30 June 2023 | ||
| £ | ||
| Cost | ||
| As at 1 July | 236,518 | 78,694 |
| Additions | - | 222,667 |
| Disposals | (41,919) | (47,206) |
| Impairments | (107,684) | (12,636) |
| Forex movement | (6,045) | (5,001) |
| As at June 30 | 80,870 | 236,518 |
South Timmins Property, Canada
During the year ended June 30, 2021, the Group paid $27,540 CAD (£16,080) in asset staking costs to acquire twelve
mineral titles in Ontario, Canada known as the South Timmins property.
On 23 September 2021, the Group entered into an option agreement with 1315956 BC Ltd
, under which 1315956 BC Ltd
may acquire up to a 100% interest in the Group’s South Timmins property subject to a 1% net smelter return (“NSR”) to the
Group. In order for 1315956 BC Ltd to fully exercise the option on the South Timmins Property, they must pay the Group an
aggregate of $495,000 CAD, issue 2,250,000 common shares of 1315956 BC Ltd and incur exploration expenses of
$1,515,000 with a minimum of $265,000 CAD in the first year.
To date, the Group has received cash payments of $270,000 (£157,579) and 500,000 shares in relation to the option
payments due under the agreement.
At the year ended 30 June 2024, a total balance of $75,000 CAD (£43,367) was owed to the group in relation to the option
payments due under the agreement. 750,000 shares were also outstanding during the period as part of the agreement,
which are yet to be received.
After a review from management related to recoverability, the total balance owed was written off as bad debt.
CLOUDBREAK DISCOVERY PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
41
Atlin West, Canada
On August 9 2021, the Group entered into an option agreement with 1315843 BC Ltd to purchase 100% of the rights to the
Atlin West Project located in British Columbia, Canada. To earn a 100% interest, 1315843 BC Ltd would have to make
aggregate cash payments of $700,000 CAD, issue 8,000,000 shares in 1315843 BC Ltd and will make payments of $325,000
over a three-year period to Cloudbreak. Upon completion of the work Cloudbreak would transfer 100% interest. Cloudbreak
will retain a net 2% NSR. The Group has previously received cash payments of $100,000 CAD (£79,086) and 3,000,000
shares in relation to the option payments due under the agreement.
At the year ended 30 June 2024, a total balance of $75,000 CAD (£43,367) was owed to the group in relation to the option
payments due under the agreement. 2,500,000 shares were also due during the period as part of the agreement.
After a review from management related to recoverability, the total balance owed was written off as bad debt.
Yak, Canada
On October 13 2021, the Group entered into an option agreement with Moonbound Mining Ltd (‘Moonbound’). In respect of
the Yak Project located in British Columbia, Canada. Moonbound would issue Cloudbreak 2,700,000 common shares and
make aggregate cash payments of $145,000 CAD over a three-year period. Additionally, Moonbound will commit to spending
up to $700,000 CAD in exploration expenditure on the property and enter into a public transaction within six months of the
agreement. Upon completion of the obligations, Cloudbreak will transfer 100% interest and retain a net 2% NSR. The Group
has previously received cash payments of $35,000 CAD (£20,903) and 700,000 shares in relation to the option payments
due under the agreement.
At the year ended 30 June 2024, the total amount outstanding was $35,000 CAD (£20,521). After a review from management
related to recoverability, the total balance owed was written off as bad debt.
Rizz, Canada
On February 25 2022, the Group entered into an option agreement with 1311516 BC Ltd in respect of the Rizz Project in
British Colombia, Canada. 1311516 BC Ltd will issue 3,000,000 common shares to Cloudbreak and make an aggregate of
$120,000 CAD in cash payments to the Group. Additionally, 1311516 BC Ltd will commit to spending up to $750,000 CAD
in exploration expenditure on the property over three years. This will need to be done to earn an interest of 75% in the
project. Upon completion of the terms, Cloudbreak and 1311516 BC Ltd will enter a joint venture in which each party will be
responsible for its pro-rata share of expenditures on the project. Up to 30 June 2022, the Group received cash payments of
$25,000 CAD and 3,000,000 shares in relation to the option payments due under the agreement.
At 30 June 2023, $25,000 CAD (£14,931) was due as a cash payment and is still owed to the Group of in relation to the
option payments due under the agreement. After a review from management related to recoverability, the balance owed was
written off as bad debt.
At the year ended 30 June 2024, the total amount outstanding was $50,000 CAD (£29,316).
After a review from management related to recoverability, the balance owed was written off as bad debt.
Icefall, Canada
On March 3 2022, the Group entered into an option agreement with 1311516 BC Ltd in respect of the Icefall Project in British
Colombia, Canada. 1311516 BC Ltd will issue 2,000,000 common shares to Cloudbreak’s subsidiary Cloudbreak Exploration
Inc. and make an aggregate of $120,000 CAD in cash payments to the Group. Additionally, 1311516 will commit to spending
up to £700,000 CAD in exploration expenditure on the property over three years. This will need to be done to earn an interest
of 75% in the project. Upon completion of the terms Cloudbreak and 1311516 BC Ltd will enter a joint venture in which each
party will be responsible for its pro-rata share of expenditures on the project. Up to 30 June 2022, the Group has received
cash payments of $25,000 CAD and 2,000,000 shares in relation to the option payments due under the agreement.
During the year ended 30 June 2023 $25,000 CAD (£14,931) was due as a cash payment and is still owed to the Group in
relation to the option payments due under the agreement. After a review from management related to recoverability, the
balance owed was written off as bad debt.
At the year ended 30 June 2024, the total amount outstanding was $50,000 CAD (£29,316). After a review from management
related to recoverability, the balance owed was written off as bad debt.
Northern Treasure, Canada
During 2022, the Group staked the Northern Treasure property for $50,645 CAD which is located in Northern British
Columbia.
CLOUDBREAK DISCOVERY PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
42
On 28 October 2022, Cloudbreak announced that Precision GeoSurveys has completed a high-resolution helicopter-borne
magnetic survey over the Northern Treasure Project in British Columbia.
Following their assessment, the Directors impaired the Northern Treasure property in full after the claims on the property
lapsed, and the Directors agreed that it shouldn’t be renewed.
Rupert, Canada
On September 11, 2018, the Group entered into an asset purchase agreement with a company controlled by a director of
the Group and two unrelated persons to purchase the Rupert Property, located in British Columbia, Canada. As consideration
for the property, the Group issued 2,000,000 common shares valued at $100,000 CAD (£59,000) and granted a 2% NSR.
At any time, 1% of the NSR can be purchased by the Group for $1,500,000 CAD. Of the common shares issued to acquire
the property, 1,000,000 were issued to a company that was controlled by a director of the Group. The Group also agreed to
incur aggregate expenditures on the property of $800,000 ($100,000 CAD - £59,000 incurred).
On December 11, 2020, the Group sold the Rupert Property to Buscando Resources Corp. (“Buscando”), a company with a
director in common. Payments to be received by the Group are as follows:
•
$150,000 CAD in total cash payments with $25,000 CAD (£14,750) on closing (received), $50,000 CAD on or before
12 months after Buscando is listed on a public exchange (still owed at 30 June 2024), $75,000 CAD on or before 24
months after Buscando is listed on a public exchange;
•
3,750,000 shares in total issued to the Group with 1,000,000 shares issued on closing (received and valued at $50,000
CAD – £29,500 in the year ended 30 June 2023), 1,250,000 on or before 12 months after Buscando is listed on a public
exchange (received and valued at $125,000 CAD - £74,653 in the year ended 30 June 2023), 1,500,000 on or before
24 months after Buscando is listed on a public exchange; and
•
$200,000 expenditures incurred on the property with $100,000 CAD on or before 12 months after Buscando is listed
on a public exchange, $100,000 CAD on or before 24 months after Buscando is listed on a public exchange.
As a result of the sale to Buscando, the original vendors waived the exploration commitments required by the Group under
the September 11, 2018, agreement.
As at the 30 June 2024, this asset was fully impaired.
Stateline, United States
On February 9 2022, Cloudbreak and Alianza Minerals entered into an option agreement with Volt Lithium Corp (formerly
known as Allied Copper Corp) in respect of the Stateline Project in Colorado, United States. Volt Lithium will issue the alliance
(Cloudbreak and Alianza Minerals) 4,250,000 common shares over a three-year period and make aggregate cash payments
of $315,000 CAD ($40,000 CAD paid) with a further $50,000 CAD due on closing. Additionally, Volt Lithium will commit to
spending up to £3,750,000 CAD in exploration expenditure on the property over three years. The alliance will retain a net
2% NSR, not subject to a buy down provision.
On August 9 2022, Cloudbreak and Alianza Minerals agreed to amend the terms of the Stateline option agreement with Volt
Lithium entered into on 9 February 2022. Under the modified terms, Volt Lithium will be able to delay the issuance of shares
and warrants whilst keeping the agreement in good standing. Outstanding Volt Lithium shares will become payable to
Alianza and Cloudbreak as either party reduces its equity holding through sale or other type of divesture, or if additional
shares are issued in Volt Lithium which would dilute either party’s holdings. Up to 30 June 2022, the Group has received
cash payments of $65,000 CAD and 250,000 shares in relation to the option payments due under the agreement.
To date, the Group has received cash payments of $25,000 CAD (£14,931) and 250,000 shares in relation to the option
payments due under the agreement.
On 11 August 2023, the option agreement was terminated by Volt Lithium so no further payments will be received. No
amount was outstanding at 30 June 2024.
Foggy Mountain, Canada
In April 2022, the Group staked the Foggy Mountain property which is located in Central British Columbia.
On 19 October 2022, Cloudbreak announced that that it has completed a reconnaissance surface programme at the property.
During the year ended 30 June 2024, the Foggy Mountain Property was disposed as part of a settlement agreement.
CLOUDBREAK DISCOVERY PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
43
Bobcat, United States
On 6 December 2022, the Group entered a holding and cost share agreement with Longford Capital Corp pertaining to the
holding, exploration, operations and development of the Bob Cat property in Idaho. The Group acquired 50% interest in the
property for $60,000 USD (£47,517).
Elk Creek, United States
On 21 November 2022, the Group acquired an oil and gas lease for $43,157 USD (£34,178), for a property based in
Pennsylvania, USA. The lease gives the Group full permission to conduct any and all due diligence on the leased premises,
which includes inspections, tests, environmental assessments, soil studies, surveys and more.
6. Investments in subsidiary undertakings
| Company | ||
| 30 June 2024 | ||
| £ | ||
| 30 June 2023 | ||
| £ | ||
| Shares in Group Undertakings | ||
| At beginning of period | 1,997,048 | 7,252,886 |
| Shares transferred to CEI | - | (5,000) |
| Impairments | (1,555,612) | (6,056,544) |
| At end of period | ||
| 441,436 | 1,191,342 | |
| (Repayments)/Loans to group undertakings | ||
| (422,140) | 805,706 | |
| Total | ||
| 19,296 | 1,997,048 |
Investments held by Company
| Company | ||
| 30 June 2024 | ||
| £ | ||
| 30 June 2023 | ||
| £ | ||
| At beginning of the period | ||
| 43,046 | 68,056 | |
| Shares transferred to CEI | ||
| - | (68,056) | |
| G2 Energy Corp | ||
| 47,525 | 58,007 | |
| Lonestar Lithium Ltd | ||
| 316,343 | - | |
| Fair value movement | ||
| (150,354) | (14,961) | |
| Total | ||
| 256,560 | 43,046 |
CLOUDBREAK DISCOVERY PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
44
Subsidiaries
Details of the subsidiary undertakings at 30 June 2024 are as follows:
| Name of subsidiary | Registered office address | ||||
| Country of | |||||
| incorporation | |||||
| and place of | |||||
| business | |||||
| Proportion | |||||
| of ordinary | |||||
| shares held | |||||
| by parent | |||||
| (%) | |||||
| Proportion of | |||||
| ordinary | |||||
| shares held | |||||
| by the Group | |||||
| (%) | Nature of business | ||||
| Imperial Minerals | |||||
| (UK) Limited | |||||
| 6th Floor, 60 Gracechurch | |||||
| Street, London, EC3V | |||||
| 0HR | |||||
| United | |||||
| Kingdom | |||||
| 100% | 100% | Dormant | |||
| Cloudbreak | |||||
| Exploration Inc. | |||||
| Suite 520/999 West | |||||
| Hastings Street, | |||||
| Vancouver BC V6C2W2 | |||||
| Canada | 100% | 100% | |||
| A mineral property | |||||
| project generator | |||||
| Cloudbreak Discovery | |||||
| (US) Ltd. | |||||
| 1209 Orange Street, | |||||
| Wilmington, New Castle, | |||||
| Delaware, 19801 | |||||
| USA | 100% | 100% | |||
| Mineral | |||||
| exploration | |||||
| projects | |||||
| Cloudbreak Energy | |||||
| (US) Ltd. | |||||
| 1209 Orange Street, | |||||
| Wilmington, New Castle, | |||||
| Delaware, 19801 | |||||
| USA | 100% | 100% | |||
| Oil and Gas | |||||
| acquisitions |
During the year ended 30 June 2024, Kudu Resources Limited and Kudu Resources Guinea were disposed as part of a
settlement agreement with Cronin Services. The terms of the agreement also included the transfer of 950,000 Temas
Resources shares, 1,700,000 shares in Buscando Resources Corp., in addition to the Foggy Mountain property being
transferred.
During the year ended 30 June 2024, the loan and investment balances of the Company held in Cloudbreak Exploration Inc.
(‘CEI’) were impaired by a total of £1,555,611. This was agreed after reviewing the net asset value of the subsidiary and
adjusting the value of the investment and loan balance with CEI accordingly.
Investments held by Group
Financial assets at fair value through profit or loss are as follows:
| Level 1 | ||||
| £ | ||||
| Level 2 | ||||
| £ | ||||
| Level 3 | ||||
| £ | ||||
| Total | ||||
| £ | ||||
| 30 June 2023 | 771,725 | - | 119,530 | 891,255 |
| Additions | 363,868 | - | - | 363,868 |
| Disposals | (255,612) | - | - | (255,612) |
| Fair value changes | (394,009) | - | - | (394,009) |
| Realised loss on investments | (71,071) | - | - | (71,071) |
| Foreign exchange | 2,273 | - | (3,844) | (1,571) |
| Impairment | - | - | (115,643) | (115,643) |
| 30 June 2024 | 417,174 | - | 43 | 417,217 |
As at June 30, 2024, investments were classified as held for trading and recorded at their fair values based on quoted market
prices (if available). Investments that do not have quoted market prices are measured at cost due to the limited amount of
information available related to the fair value of the investments.
Calidus Resources Corp. and Canary Biofuels Inc. are Level 3 investments, all other investments listed below are Level 1.
Temas Resources Corp.
On September 23, 2020, the Group sold its La Blache property to Temas Resources Corp. (“Temas”) for a cash payment of
$30,000 CAD (£17,517) and 10,000,000 Temas shares which had a value at the time of $2,000,000 CAD (£1,167,815). The
CLOUDBREAK DISCOVERY PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
45
Group retained a 2% NSR on the La Blache property. The Temas shares are subject to pooling restrictions with 2,500,000
Temas shares released March 23, 2021, and 7,500,000 Temas released September 23, 2021. In 2022, the Group sold
29,000 shares for $2,020 CAD (£1,290).
During the year ended 30 June 2023 the Group sold 457,000 of their shares in Temas Resources for a total of $28,474 CAD
(£17,006) and had a share consolidation with a ratio of 9:1. At 30 June 2023, the fair value of the Temas Resources shares
was $147,996 CAD (£88,230).
During the year ended 30 June 2024, the Group sold all of their shares in Temas Resources for a total of $63,531 CAD
(£36,735).
Norseman Silver Inc.
On 23 August 2021, the Group received 380,000 shares in Norseman from the option agreement for the Silver Switchback
property for $129,200 CAD (£74,235).
On 31 May 2021, the Group received 1,000,000 shares in Norseman from the option agreement for the Caribou property for
$170,000 CAD (£108,575).
During the year ended 30 June 2022, the Group sold 1,766,500 shares in Norseman for a total of $352,002 CAD (£208,888).
During the year ended 30 June 2023, the Group received 1,200,000 warrants and sold their shares in Norseman for a total
of $528,200 CAD (£315,455). During the year ended 30 June 2024, the 1,200,000 warrants expired.
There was no additional activity during the year ended 30 June 2024 from the Group related to their investment in Norseman
Silver.
Buscando Resources Corp.
On December 31, 2020, the Group sold the Rupert property to Buscando, in exchange for 1,000,000 shares in Buscando at
a value of $50,000 CAD (£29,195).
During the year ended 30 June 2022, the Group purchased an additional 50,000 shares in Buscando for a total of $6,840
CAD (£4,305)
During the year ended 30 June 2023, the Group purchased 10,000 shares for a total of $1,080 CAD (£645) and received
1,250,000 shares for $0.10 CAD each from the Rupert Property option agreement.
At 30 June 2023, fair value of the Buscando shares was $246,000 CAD (£146,657).
During the year ended 30 June 2024, the Group received 150,000 shares from Buscando Resources, and sold 1,7000,000
for a total of $59,500 CAD (£34,405) as part of the settlement agreement outlined in note 6.
At 30 June 2024, fair value of the Buscando shares is $106,400 CAD (£61,524).
Linceo Resources Corp.
On August 17, 2019, the Group sold the Granny Smith and Fuji mineral claims to Linceo Media Group (“Linceo”), a company
with a director in common, for 4,000 shares in Linceo at a value of $47,600 CAD (£27,793) and retained a 2.5% NSR on
each property. During the year ended June 30, 2021, the Group impaired the shares in Linceo to $1. Management assessed
the value at year end and confirmed there is no further changes to the fair value of the Linceo shares.
AAM shares
On June 2, 2021, the Group acquired 12,500,000 AAM share purchase warrants that had a conversion price of $0.03 USD
and expiry date of July 1, 2021 and acquired 11,000,000 AAM ordinary shares. The Group issued 1,200,000 ordinary shares
to acquire the 12,500,000 AAM share purchase warrants (£36,000 value) and 3,520,000 ordinary shares (£105,600 value)
to acquire the 11,000,000 AAM ordinary shares. The warrants expired on July 1, 2021, with the £36,000 impaired to $1.
During the year ended June 30, 2021, the Group impaired the shares in AAM to $1. Management assessed the value at
year end and confirmed there is no further changes to the fair value of the AAM shares.
Calidus Resources Corp.
On September 1, 2021, the Group received 500,000 shares from Calidus Resources Corp. for the option agreement for the
South Timmins property for $500 CAD (£320).
This is a level 3 investment, with no public information available so management have kept the value at cost.
Volt Lithium Corp (formerly known as Allied Copper Corp.)
On 3 February 2022, the Group received 1,000,000 shares from Volt Lithium Corp. from the option agreement for the
Klondike project for $225,000 (£130,661).
CLOUDBREAK DISCOVERY PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
46
During the year ended 30 June 2023, the Group sold 959,500 shares in Volt Lithium Corp. for a total of $249,082 CAD
(£148,758).
At 30 June 2023, fair value of the Volt Lithium Corp. shares was $75,530 CAD (£45,029).
During the year ended 30 June 2024, the Group sold all of their shares in Volt Lithium Corp. for a total of $70,170 CAD
(£40,574).
Canary Biofuels Inc.
On 28 June 2022, the Group purchased 59,700 shares from Canary Biofuels Inc. for $200,095 (£127,753). This is a level 3
investment, with no public information available so management have kept the value at cost.
At 30 June 2023, the cost of the Canary Biofuels Inc. shares was $200,095 CAD (£119,230). This value remained the same
for the year ended 30 June 2024.
After review from management, the investment in Canary Biofuels Inc. was impaired in full in the year ended 30 June 2024
due to the lack of activity within the company.
Lithos Energy Inc. (formerly known as Alchemist Mining Inc.)
On 14 January 2022, the Group purchased 1,250,000 shares from Lithos Energy Inc. for $93,750 (£54,184).
During the year ended 30 June 2023, the Group sold 305,000 shares in Lithos Energy for a total of $106,022 (£63,319). At
30 June 2023, fair value of the Lithos Energy shares was $614,250 (£366,194).
During the year ended 30 June 2024, the Group sold 614,500 shares in Lithos Energy for a total of $248,860 (£155,463). At
30 June 2024, fair value of the Lithos Energy shares was $94,193 (£54,465).
1311516 B.C. Ltd
On 3 March 2022, the Group received 3,000,000 shares from 1311516 B.C. Ltd from the option agreement for the Rizz
property for $5,010 CAD (£2,963).
On 9 March 2022, the Group received 2,000,000 shares from 1311516 B.C. Ltd from the option agreement for the Icefall
property for $3,340 CAD (£1,978).
Management assessed the value at year end and confirmed there is no further changes to the fair value of the 1311516 B.C.
Ltd shares.
G2 Energy Corp.
During the year ended 30 June 2023, the Group received 6,017,000 shares from G2 Energy Corp. 5,110,000 of these shares
were received in place of the quarterly interest that was due to be paid to the Group as part of the debenture agreement
entered on 31 May 2022, and 907,000 of the shares were received for legal fees covered by the Group, for G2.
At 30 June 2023, fair value of the G2 Energy Corp. shares was $72,204 CAD (£43,046).
During the year ended 30 June 2024, G2 Energy Corp had a share consolidation with a ratio of 5:1. At 30 June 2024, fair
value of the G2 Energy Corp. shares is $33,381 CAD (£19,302).
Lonestar Lithium Ltd
During the year the Company acquired 2,000,000 shares in Lonestar Lithium Ltd at a valued price of $0.2 USD per share as
part of sale of the Group’s knowledge and lithium datasets in the USA (Pennsylvania and Texas).
7. Royalty Asset
Apple Bay Property, Canada
On April 5, 2017, the Group purchased a 1.50% production royalty on the Apple Bay property located in British Columbia,
Canada. The production royalty was purchased for 3,000,000 shares of the Group at a deemed value of $0.10 CAD (£0.058)
per share from a company controlled by the CEO of the Group. During the year ended June 30, 2021, the Group determined
that the royalty was impaired and reduced the balance to £1. As at June 30, 2024, included in Royalty Assets is £1 (June 30,
2023 – £1) attributed to the Apple Bay property.
CLOUDBREAK DISCOVERY PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
47
8. Debentures Receivable
| Group | ||
| 30 June 2024 | ||
| £ | ||
| 30 June 2023 | ||
| £ | ||
| Opening | ||
| 2,059,060 | 1,657,900 | |
| Additions | ||
| - | 503,499 | |
| Royalty payments related to previous year | ||
| - | (11,233) | |
| Fair Value Movement | ||
| (3,204) | (91,106) | |
| Impairment | ||
| (474,428) | - | |
| At end of period | ||
| 1,581,428 | 2,059,060 |
Masten Unit, United States
On 31 May 2022, the Group entered into an agreement with G2 Energy Corp. (‘G2’) on the Masten Unit Energy Project
located in Cochran County Texas, United States. Whereby the Company will provide G2 with a $2,000,000 USD debenture
on a two-year term in exchange for a 3.25% Overriding Royalty Interest in the Project. G2 will pay 12% per annum interest
to the Company, calculated and paid quarterly in cash or shares at the discretion of the Company. As part of the agreement,
the Group received 6,500,000 warrants for G2, however management have deemed that these warrants have no value at
this stage as the assets held by G2 are predominantly made up of the early-stage exploration assets on which they have
received from the Company. The group is in regular communication with G2 and is monitoring the results of its exploration
activities that will be undertaken as the result of the funding by the Group to G2. On 30 June 2024, the residual value of the
debenture in pound sterling was £1,581,428.
Butte Strawn, United States
On 16 August 2022, the Company entered into an agreement with Iron Forge Holdings (III) Ltd (IF3). Whereby the company
will provide IF3 with a $1,500,000 USD debenture for the Butte Strawn Energy Project located in Irion County, Texas.
$500,000 USD was paid on signing. IF3 will pay 12.5% per annum interest to the Company, calculated and paid quarterly in
cash or shares at the discretion of the Company. The Company received 6,000,000 warrants with a strike price of $0.35
CAD with a three-year term from financial close. On 16 June 2023, it was agreed that the principal value of the debenture
be reduced from $1,500,000 USD to $600,000 USD with no further obligations for the Group. All accrued interest not paid
as of the date of the agreement has been forgiven and both parties agreed to cancelling the warrants. The overriding royalty
was reduced from 6% to 2%.
After review from management during the year ended 30 June 2024, it was agreed that the debenture should be de-
recognised and impaired in full. This is because it was agreed that the principal amount of $600,000 USD (£474,428) was
no longer due as it would be recognised as royalty, rather than a debenture, and the Company will receive royalty payments
in future, when production commences.
CLOUDBREAK DISCOVERY PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
48
9. Convertible loans
| Group | |||
| 30 June 2024 | |||
| £ | |||
| 30 June 2023 | |||
| £ | |||
| Convertible loan note | $500,000 USD (£395,975) | 82,194 | 76,163 |
| Convertible loan note | $420,000 USD (£332,668) | 48,930 | 28,157 |
| Convertible loan note | $49,790 USD (£39,437) | 10,358 | 6,573 |
| Convertible loan note | $250,000 USD (£6,573) | 30,739 | 17,714 |
| Impairment provision | (172,221) | (128,607) | |
| - | - |
On March 20, 2019, the Group issued a $500,000 USD (£361,847) unsecured convertible loan note to Anglo-African Minerals
plc (“AAM”). The convertible loan note bears interest at 10% per annum and compounds monthly, is unsecured, and had an
original maturity date of September 20, 2019. The convertible loan note is convertible into common shares of AAM at $0.01
USD per share. The maturity date of the convertible loan note was subsequently extended to March 20, 2020, and the Group
was issued 21,029,978 AAM warrants per the terms of the extension. These warrants have a strike price of $0.025 USD per
share, with an expiry date of September 19, 2021. As at June 30, 2021, the Group impaired the balance down to $Nil as
collectability was considered doubtful. As at June 30, 2024, management have accrued interest amounting £82,194 (2023 -
£76,163) on the convertible loan and this same value has been impaired during the year.
On June 2, 2021, the Group acquired an unsecured convertible loan note that was issued to AAM from Cronin Services Ltd.,
a company controlled by the former Chairman and CEO of the Group, that had a principal value of $420,000 USD (£303,744)
and accrued interest of $61,261 (£44,304) for total value of $481,261 USD (£348,048). The Group issued 14,166,790 ordinary
shares and 7,083,395 share purchase warrants to acquire this note. Each share purchase warrant may be converted into one
ordinary share of the Group at £0.05 per ordinary share and expires June 2, 2025. The convertible loan note bears interest
at 10% per annum and compounds monthly, is unsecured, and had a maturity date of May 31, 2021. The convertible loan
note is convertible into common shares of AAM at $0.01 USD per share. As at June 30, 2021, the Group impaired the balance
down to $Nil as collectability was considered doubtful. As at June 30, 2024, management have accrued interest amounting
£48,930 (2023 - £28,157) on the convertible loan and this same value has been impaired during the year. The overall decrease
is from foreign exchange movement on interest and principal.
On June 2, 2021, the Group acquired an unsecured convertible loan note that was issued to AAM from Cronin Capital Corp.,
a company controlled by the former Chairman and CEO of the Group, that had a principal value of $49,790 USD (£35,949)
and accrued interest of $9,826 USD (£7,094) for total value of $59,617 USD (£43,043). The Group issued 1,630,832 ordinary
shares and 1,630,832 share purchase warrants to acquire this note. Each share purchase warrant may be converted into one
ordinary share of the Group at £0.05 per ordinary share and expires 2025 June 2. The convertible loan note bears interest at
15% per annum and compounds monthly, is unsecured, and had a maturity date of 30 September 2020. The convertible loan
note is convertible into common shares of AAM at $0.005 USD per share. As at June 30, 2021, the Group impaired the
balance down to $Nil as collectability was considered doubtful. As at June 30, 2024, management have accrued interest
amounting £10,358 (2023 - £6,573) on the convertible loan and this same value has been impaired during the year.
On June 2, 2021, the Group acquired an unsecured convertible loan note that was issued to AAM by Reykers Nominees
Limited that had a principal value of $250,000 USD (£180,500) and accrued interest of $52,776 (£38,104) for total value of
$302,776 USD (£218,604). The Group also acquired 12,500,000 AAM share purchase warrants that had a conversion price
of $0.03 USD and expiry date of July 1, 2021 and acquired 11,000,000 AAM ordinary shares. The Group issued 8,912,756
ordinary shares to acquire this convertible note, 1,200,000 ordinary shares to acquire the 12,500,000 AAM share purchase
warrants and 3,520,000 ordinary shares to acquire the 11,000,000 AAM ordinary shares. The convertible loan note bears
interest at 10% per annum and compounds monthly, is unsecured, and had a maturity date of 30 June 2020. The convertible
loan note is convertible into common shares of AAM at $0.01 USD per share. As at June 30, 2021, the Group impaired the
balance down to $Nil as collectability of the convertible loan was considered doubtful and the shares and warrants impaired.
As at June 30, 2024, management have accrued interest amounting £30,739 (2023 - £17,714) on the convertible loan and
this same value has been impaired during the year.
CLOUDBREAK DISCOVERY PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
49
10. Trade and other receivables
The following table sets out the fair values of financial assets within Trade and other receivables.
| Group | Company | |||
| 30 June | ||||
| 2024 | ||||
| £ | ||||
| 30 June | ||||
| 2023 | ||||
| £ | ||||
| 30 June | ||||
| 2024 | ||||
| £ | ||||
| 30 June | ||||
| 2023 | ||||
| £ | ||||
| Other Receivables | 89,139 | 69,879 | 324 | 47,523 |
| Tax Receivables | ||||
| 17,203 | ||||
| 18,372 | - | - | ||
| Sundry Receivables | ||||
| 225,874 | ||||
| 142,475 | 225,874 | 142,475 | ||
| Trade Receivables | ||||
| 350,987 | ||||
| 272,247 | ||||
| - | ||||
| - | ||||
| Prepayments | ||||
| 1,599 | ||||
| 27,256 | ||||
| 1,599 | ||||
| 27,256 | ||||
| Provision for bad debt | ||||
| (498,877) | ||||
| (287,052) | (140,000) | (140,000) | ||
| 185,925 | 243,177 | 87,797 | 77,254 |
The fair value of all current receivables is as stated above.
Included in sundry receivables is an amount of £140,000 (2023: £140,000) as at 30 June 2024 in respect of unpaid ordinary
share capital issued on 3 June 2021. A provision of £140,000 has been included for this after review from management.
The maximum exposure to credit risk at the year-end date is the carrying value of each class of receivable mentioned
above. The Group does not hold any collateral as security. Trade and other receivables are all denominated in £ sterling.
The carrying amounts of the Group and Company’s trade and other receivables are denominated in the following currencies:
| Group | Company | |||
| 30 June | ||||
| 2024 | ||||
| £ | ||||
| 30 June | ||||
| 2023 | ||||
| £ | ||||
| 30 June | ||||
| 2024 | ||||
| £ | ||||
| 30 June | ||||
| 2023 | ||||
| £ | ||||
| UK Pounds | 89,146 | 83,604 | 87,797 | 77,254 |
| Canadian Dollars | ||||
| 96,770 | 146,250 | |||
| - | - | |||
| US Dollars | ||||
| 9 | 8 | |||
| - | - | |||
| Guinea Franc | ||||
| - | 13,315 | |||
| - | - | |||
| 185,925 | 243,177 | 87.797 | 77,254 |
11. Cash and cash equivalents
| Group | Company | |||
| 30 June | ||||
| 2024 | ||||
| £ | ||||
| 30 June | ||||
| 2023 | ||||
| £ | ||||
| 30 June | ||||
| 2024 | ||||
| £ | ||||
| 30 June | ||||
| 2023 | ||||
| £ | ||||
| Cash at bank and in hand | 195,157 | 244,074 | 94,586 | 18,684 |
The majority of the entities cash at bank is held with institutions with at least a AA- credit rating. A bank account in the UK
which holds a small percentage of cash is held with institutions whose credit rating is unknown.
CLOUDBREAK DISCOVERY PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
50
The carrying amounts of the Group and Company’s cash and cash equivalents are denominated in the following currencies:
| Group | Company | |||
| 30 June | ||||
| 2024 | ||||
| £ | ||||
| 30 June | ||||
| 2023 | ||||
| £ | ||||
| 30 June | ||||
| 2024 | ||||
| £ | ||||
| 30 June | ||||
| 2023 | ||||
| £ | ||||
| UK Pounds | 84,389 | 6,523 | 84,389 | 1,593 |
| US Dollars | 10,197 | 17,091 | 10,197 | 17,091 |
| Canadian Dollars | ||||
| 100,571 | 220,460 | |||
| - | - | |||
| 195,157 | 244,074 | 94,586 | 18,684 |
12. Financial Instruments by Category
General objectives, policies and processes
The Board has overall responsibility for the determination of the Group’s risk management objectives and policies and, whilst
retaining ultimate responsibility for them, it has delegated authority for designing and operating processes that ensure the
effective implementation of the objectives and policies to the Group’s finance function. The Board receives monthly reports
through which it reviews the effectiveness of the processes put in place and the appropriateness of the objectives and
policies it sets.
The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the
Group’s competitiveness and flexibility.
The Group reports in Sterling. Internal and external funding requirements and financial risks are managed based on policies
and procedures adopted by the Board of Directors. The Group does not use derivative financial instruments such as forward
currency contracts, interest rate and currency swaps or similar instruments. The Group does not issue or use financial
instruments of a speculative nature.
Capital management
The Group’s objectives when maintaining capital are:
• to safeguard the entity’s ability to continue as a going concern, so that it can continue to provide returns for shareholders
and benefits for other stakeholders; and
• to provide an adequate return to shareholders.
The capital structure of the Group consists of total shareholders’ equity as set out in the ‘Statement of Changes in Equity’.
All working capital requirements are financed from existing cash resources. After discussions between management, the
Crescita drawdown facility was cancelled during the year ended 30 June 2024.
Capital is managed on a day-to-day basis to ensure that all entities in the Group are able to operate as a going concern.
Operating cash flow is primarily used to cover the overhead costs associated with operating as a main market-listed
company.
Liquidity risk
Liquidity risk arises from the Group’s management of working capital. It is the risk that the Group will encounter difficulty in
meeting its financial obligations as they fall due.
Whilst the Group’s payables exceed the cash at bank, the Directors are confident they can raise the funds required to meet
its obligations.
The Board receives forward looking cash flow projections at periodic intervals during the year as well as information regarding
cash balances. At the balance sheet date, the Group had cash balances of £195,157 and the financial forecasts indicated
that the Group is expected to raise funds to meet its obligations under all reasonably expected circumstances and will not
need to establish overdraft or other borrowing facilities.
CLOUDBREAK DISCOVERY PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
51
Interest rate risk
As the Group only has borrowings in the form of convertible loan notes, which aren’t impacted by varied interest rates, it only
has limited interest rate risk. The impact is on income and operating cash flow and arises from changes in market interest
rates. Cash resources are held in current, floating rate accounts.
Market risk
Market price risk arises from uncertainty about the future valuations of financial instruments held in accordance with the
Group’s investment objectives. These future valuations are determined by many factors but include the operational and
financial performance of the underlying investee companies, as well as market perceptions of the future of the economy and
its impact upon the economic environment in which these companies operate. This risk represents the potential loss that the
Group might suffer through holding its financial investment portfolio in the face of market movements, which was a maximum
of £417,217 (2023: £891,255).
The investments in equity of quoted companies that the Group holds are less frequently traded than shares in more widely
traded securities. Consequently, the valuations of these investments can be more volatile.
Market price risk sensitivity
The table below shows the impact on the return and net assets of the Group if there were to be a 20% movement in overall
share prices of the financial investments held at 30 June 2024.
| 2024 | 2023 | |
| Other comprehensive | ||
| income and | ||
| Net assets | ||
| Other | ||
| comprehensive | ||
| income and | ||
| Net assets | ||
| £ | £ | |
| Decrease if overall share price falls by 20%, with all other | ||
| variables held constant | ||
| (83,443) | (178,251) | |
| Decrease in other comprehensive earnings and net asset value | ||
| per Ordinary share (in pence) | ||
| (0.45) | (1.23) | |
| Increase if overall share price rises by 20%, with all other | ||
| variables held constant | ||
| 83,443 | 178,251 | |
| Increase in other comprehensive earnings and net asset value | ||
| per Ordinary share (in pence) | ||
| 0.45 | ||
| 1.23 |
The impact of a change of 20% has been selected as this is considered reasonable given the current level of volatility
observed and assumes a market value is attainable for the Group’s unlisted investments.
Currency risk
The Directors consider that there is minimal significant currency risk faced by the Group. The current foreign currency
transactions the Group enters are denominated in CAD$ and USD$ in relation to transactions associated with exploration
and evaluation option payments and property expenditures. The Group maintains minimal foreign currency holdings to
minimize this risk.
CLOUDBREAK DISCOVERY PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
52
Credit risk
Credit risk is the risk that a counterparty will fail to discharge an obligation or commitment that it has entered into with the
Group. The Group’s maximum exposure to credit risk is:
| 2024 | 2023 | |
| £ | £ | |
| Cash at bank | 195,157 | 244,074 |
| Other receivables | 185,925 | 243,177 |
| Convertible debenture receivable | 1,581,428 | 2,059,060 |
| 1,962,510 | 2,546,311 |
The Group’s cash balances are held in accounts with HSBC, BLK.FX, Bank of Montreal and with its Investment Broker
accounts.
Fair value of financial assets and liabilities
Financial assets and liabilities are carried in the Statement of Financial Position at either their fair value (financial
investments) or at a reasonable approximation of the fair value (trade and other receivables, trade and other payables and
cash at bank).
The fair values are included at the amount at which the instrument could be exchanged in a current transaction between
willing parties, other than in a forced or liquidation sale.
Trade and other receivables
The following table sets out the fair values of financial assets within Trade and other receivables.
| 2024 | 2023 | |
| Financial assets | £ | £ |
| Trade and other receivables - Non interest earning | 185,925 | 243,177 |
There are no financial assets which are past due and for which no provision for bad or doubtful debts has been made.
Trade and other payables
The following table sets out financial liabilities within Trade and other payables. These financial liabilities are predominantly
non-interest bearing, excluding the existing convertible loan notes. Other liabilities include tax and social security payables
and provisions which do not constitute contractual obligations to deliver cash or other financial assets.
| 2024 | 2023 | |
| Financial liabilities | £ | £ |
| Trade and other payables – Non interest earning | 727,385 | 1,704,437 |
CLOUDBREAK DISCOVERY PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
53
13. Trade and other payables
The following table sets out the fair values of financial liabilities within trade and other payables.
| Group | Company | |||
| 30 June | ||||
| 2024 | ||||
| £ | ||||
| 30 June | ||||
| 2023 | ||||
| £ | ||||
| 30 June | ||||
| 2024 | ||||
| £ | ||||
| 30 June | ||||
| 2023 | ||||
| £ | ||||
| Trade payables | 489,420 | 1,493,943 | 419,937 | 1,303,186 |
| Accruals | 90,115 | 151,396 | 90,115 | 139,687 |
| Other Creditors | 147,850 | 59,098 | 147,715 | 11,558 |
| Trade and other payables | 727,385 | 1,704,437 | 657,767 | 1,454,431 |
The carrying amounts of the Group and Company’s trade and other payables are denominated in the following currencies:
| Group | Company | |||
| 30 June | ||||
| 2024 | ||||
| £ | ||||
| 30 June | ||||
| 2023 | ||||
| £ | ||||
| 30 June | ||||
| 2024 | ||||
| £ | ||||
| 30 June | ||||
| 2023 | ||||
| £ | ||||
| UK Pounds | 657,767 | 1,497,746 | 657,767 | |
| 1,454,431 | ||||
| Canadian Dollars | 69,618 | |||
| 172,606 | ||||
| - | - | |||
| US Dollars | - | |||
| 34,085 | ||||
| - | - | |||
| 727,385 | ||||
| 1,704,437 | ||||
| 657,767 | ||||
| 1,454,431 |
14. Convertible loan notes
On 11 July 2023, the Company issued convertible loan notes (CLN) to Crestmont Invest, Logic Nominees, Thomas Solomon
and Paul Gurney. The gross proceeds totalled £340,000 and the loan notes have an annual interest rate of 12%.
| CLN 1 | CLN 2 | CLN 3 | CLN 4 | ||
| 30 June | |||||
| 2024 | |||||
| £ | £ | £ | £ | ||
| £ | |||||
| Convertible loan note | |||||
| 200,000 | 100,000 | 25,000 | 15,000 | 340,000 | |
| Interest | |||||
| Accrued interest | |||||
| 22,027 | 11,014 | 3,000 | 1,800 | 37,841 | |
| Conversion | |||||
| (222,027) | (111,014) | - | - | (333,041) | |
| Total | |||||
| - | - | 28,000 | 16,800 | 44,800 | |
| Equity | |||||
| Amount classified as equity | |||||
| - | - | 1,023 | 529 | 1,552 | |
| Total | |||||
| - | - | 1,023 | 529 | 1,552 |
CLOUDBREAK DISCOVERY PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
54
15. Share capital and premium
| Number of | ||||
| shares | ||||
| Share capital | ||||
| £ | ||||
| Share | ||||
| premium | ||||
| £ | ||||
| Total | ||||
| £ | ||||
| As at 30 June 2022 | 483,174,200 | 654,129 | 14,821,521 | 15,475,650 |
| Issue of new shares – 5 July 2022 | 16,800,000 | 16,800 | 361,200 | 378,000 |
| Issue of new shares – 19 July 2022 | 26,027,776 | 26,028 | 556,597 | 582,625 |
| Issue of new shares – 5 August 2022 | 10,000,000 | 10,000 | 169,000 | 179,000 |
| Issue of new shares – 1 September 2022 | 12,000,000 | 12,000 | 168,000 | 180,000 |
| Issue of new shares – 28 September 2022 | 14,000,000 | 14,000 | 166,180 | 180,180 |
| Issue of new shares – 25 October 2022 | 18,500,000 | 18,500 | 185,000 | 203,500 |
| Issue of new shares – 2 December 2022 | 15,000,000 | 15,000 | 161,850 | 176,850 |
| Issue of new shares – 27 January 2023 | 4,300,000 | 4,300 | 42,570 | 46,870 |
| Issue of new shares – 18 April 2023 | 7,876,829 | 7,878 | 121,303 | 129,181 |
| As at 30 June 2023 | ||||
| 607,678,805 | 778,635 | 16,753,221 | 17,531,856 | |
| Issue of new shares – 20 May 2024 | 121,531,891 | 121,532 | 486,128 | 607,660 |
| As at 30 June 2024 | ||||
| 729,210,696 | 900,167 | 17,239,349 | 18,139,516 |
On 20 May 2024, the Group issued and allotted 121,531,891 new ordinary shares at a price of 0.5 pence per share as part
of a shares for debt settlement. No cash was received from the issue of these shares. The debts settled mainly included
amounts owed to suppliers of the Group, the directors of the Company and individuals that provided convertible loans to the
Company.
16. Share based payments
The outstanding share options and warrants as at 30 June 2024 are shown below:
| Options | Warrants | ||
| Weighted average | |||
| exercise price | |||
| (£) | |||
| As at 30 June 2022 | |||
| 14,650,000 | 23,221,692 | 0.04 | |
| Options – Cancelled | (150,000) | - | 0.03 |
| Options – Issued | 7,250,000 | - | 0.02 |
| Warrants – Issued | - | 2,950,000 | 0.02 |
| Warrants - Expired | - | (7,926,968) | 0.05 |
| As at 30 June 2023 | 21,750,000 | 18,244,724 | 0.04 |
| Options – Lapsed | (13,100,000) | - | 0.03 |
| Warrants – Lapsed | - | (8,714,227) | 0.05 |
| Warrants - Expired | - | (9,530,497) | 0.04 |
| As at 30 June 2024 | 8,650,000 | - | 0.04 |
The Company and Group have no legal or constructive obligation to settle or repurchase the options or warrants in cash.
CLOUDBREAK DISCOVERY PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
55
The fair value of the share options and warrants was determined using the Black Scholes valuation model. The parameters
used are detailed below:
| 2021 Warrants | 2021 Warrants | 2022 Warrants | |||
| 2022 | |||||
| Warrants | |||||
| 2023 | |||||
| Warrants | |||||
| Granted on: | 2/06/2021 | 2/06/2021 | 13/8/2021 | 1/3/2022 | 9/8/2022 |
| Number of | |||||
| warrants | |||||
| 4,530,497 | 8,714,227 | 2,750,002 | 400,000 | 2,950,000 | |
| Life (years) | 2.71 years | 4 years | 2 years | 2 years | 1 year |
| Share price | |||||
| (pence per | |||||
| share) | |||||
| 0.10p | 0.05p | 0.025p | 0.10p | 0.025p | |
| Risk free rate | 0.55% | 0.81% | 0.58% | 0.80% | 2.07% |
| Expected | |||||
| volatility | |||||
| 100% | 100% | 20.28% | 140.94% | 51.43% | |
| Expected | |||||
| dividend yield | |||||
| - | - | - | - | - | |
| Total fair value | £46,092 | £157,695 | £2,750 | £27,314 | 6,596 |
| 2021 Options | 2022 Options | ||
| 2023 Options | |||
| Granted on: | 2/06/2020 | ||
| 25/8/2021 | 9/8/2022 | ||
| Number of options | 5,050,000 | ||
| 11,250,000 | 7,250,000 | ||
| Life (years) | 3.08 years | ||
| 4 years | 3 years | ||
| Share price (pence per share) | 0.025p | ||
| 0.03p | 0.025p | ||
| Risk free rate | 0.64% | ||
| 0.62% | 1.78% | ||
| Expected volatility | 100% | ||
| 20.55% | 51.43% | ||
| Expected dividend yield | - | ||
| - | - | ||
| Total fair value | £99,572 | ||
| £11,238 | £36,723 |
The expected volatility of the options is based on historical volatility for the six months prior to the date of granting. No options
or warrants were granted during the year ended 30 June 2024.
The risk-free rate of return is based on zero yield government bonds for a term consistent with the option life.
A reconciliation of options and warrants granted over the year to 30 June 2024 is shown below:
| 2024 | 2023 | |||||||
| Range of | ||||||||
| exercise | ||||||||
| prices (£) | ||||||||
| Weighted | ||||||||
| average | ||||||||
| exercise | ||||||||
| price (£) | ||||||||
| Number of | ||||||||
| shares | ||||||||
| Weighted | ||||||||
| average | ||||||||
| remaining | ||||||||
| life | ||||||||
| expected | ||||||||
| (years) | ||||||||
| Weighted | ||||||||
| average | ||||||||
| remaining | ||||||||
| life | ||||||||
| contracted | ||||||||
| (years) | ||||||||
| Weighted | ||||||||
| average | ||||||||
| exercise | ||||||||
| price (£) | ||||||||
| Number of | ||||||||
| shares | ||||||||
| Weighted | ||||||||
| average | ||||||||
| remaining | ||||||||
| life | ||||||||
| expected | ||||||||
| (years) | ||||||||
| Weighted | ||||||||
| average | ||||||||
| remaining | ||||||||
| life | ||||||||
| contracted | ||||||||
| (years) | ||||||||
| 0 – 0.029 | 0.02 | 5,550,000 | 3.510 | 3.510 | 0.02 | 14,750,000 | 3.047 | 3.047 |
| 0.03 – 0.049 | 0.03 | 3,100,000 | 1.150 | 1.150 | 0.03 | 11,600,000 | 1.431 | 1.431 |
| 0.05 – 0.099 | - | - | - | - | 0.05 | 8,714,227 | 1.971 | 1.971 |
| 0.10 – 0.15 | - | - | - | - | 0.10 | 4,930,497 | 0.650 | 0.650 |
CLOUDBREAK DISCOVERY PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
56
17. Other reserves
| Group – year ended 30 June 2023 | ||||
| Share option | ||||
| reserve | ||||
| £ | ||||
| Warrant option | ||||
| reserve | ||||
| £ | ||||
| Foreign | ||||
| currency | ||||
| translation | ||||
| reserve | ||||
| £ | ||||
| Total | ||||
| £ | ||||
| At 30 June 2022 | ||||
| 84,667 | 212,717 | 301,709 | 599,093 | |
| Currency translation differences | - | - | (123,367) | (123,367) |
| Issued Options | 36,723 | - | - | 36,723 |
| Issued Warrants | - | 6,596 | - | 6,596 |
| At 31 June 2023 | 121,390 | 219,313 | 178,342 | 519,045 |
| Group – year ended 30 June 2024 | |||||
| Share option reserve | |||||
| £ | |||||
| Warrant | |||||
| option | |||||
| reserve | |||||
| £ | |||||
| Foreign | |||||
| currency | |||||
| translation | |||||
| reserve | |||||
| £ | |||||
| Contingent | |||||
| share | |||||
| reserve | |||||
| £ | |||||
| Total | |||||
| £ | |||||
| At 30 June 2023 | 121,390 | 219,313 | 178,342 | - | 519,045 |
| Currency translation | |||||
| differences | |||||
| - | - | (33,828) | - | (33,828) | |
| Lapsed options | (75,281) | - | - | - | (75,281) |
| Lapsed warrants | - | (249,123) | - | - | (249,123) |
| Equity component of | |||||
| convertible loan note | |||||
| - | - | - | 1,552 | 1,552 | |
| At 30 June 2024 | 46,109 | (29,810) | 144,514 | 1,552 | 162,365 |
18. Employee benefit expense
The total number of Directors who served in the year was 3 (2023: 4). There are no employees of the Group.
The following amounts were paid during the year to Directors:
| Group | ||
| Staff costs | ||
| Year ended | ||
| 30 June 2024 | ||
| £ | ||
| Year ended | ||
| 30 June 2023 | ||
| £ | ||
| Directors Fees and Consulting Fees | 216,000 | 315,000 |
| Employee salaries and Tax | - | 33,515 |
| 216,000 | 348,515 |
Amounts included in Directors fees and salaries include £216,000 (2023: £315,000) in relation to director fees and consulting
fees. Details of fees paid to Companies and Partnerships of which the Directors detailed above are Directors and Partners
have been disclosed in Note 27.
CLOUDBREAK DISCOVERY PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
57
19. Directors' remuneration
| Year ended 30 June 2024 | ||
| Short-term | ||
| benefits | Total | |
| £ | £ | |
| Directors | ||
| Paul Gurney | ||
| 33,000 | 33,000 | |
| Emma Priestley | ||
| 33,000 | 33,000 | |
| Andrew Male* | 150,000 | 150,000 |
| 216,000 | 216,000 |
Remuneration hasn’t been paid in full to all directors, the amounts referenced above have either been accrued or partially
paid. Refer to note 27 for amounts still owning to the Directors.
*Andrew Male’s remuneration also includes his consulting fees related to his Company; Westridge Management
International Limited.
| Year ended 30 June 2023 | |||
| Short-term | |||
| benefits | |||
| Share based | |||
| payments | Total | ||
| £ | £ | £ | |
| Directors | |||
| Kyler Hardy | |||
| 120,000 | 6,329 | 126,329 | |
| Paul Gurney | |||
| 30,000 | 3,798 | 33,798 | |
| Emma Priestley | |||
| 45,000 | 3,798 | 48,798 | |
| Andrew Male | 120,000 | 3,798 | 123,798 |
| 315,000 | 17,723 | 332,723 |
20. Finance income
| Group | ||
| Year ended | ||
| 30 June 2024 | ||
| £ | ||
| Year ended | ||
| 30 June 2023 | ||
| £ | ||
| Interest income on convertible loan | ||
| 153,400 | 143,224 | |
| G2 Technology – debenture interest | ||
| 190,798 | 197,061 | |
| Texas Legacy Exploration – debenture interest | ||
| - | 29,302 | |
| Finance Income | 344,198 | 369,587 |
The interest income on the convertible loan is interest on the AAM convertible loans. This interest is subsequently impaired.
Refer to note 9 for further information.
CLOUDBREAK DISCOVERY PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
58
21. Other gains
| Group | ||
| Year ended | ||
| 30 June 2024 | ||
| £ | ||
| Year ended | ||
| 30 June 2023 | ||
| £ | ||
| Other gains | ||
| 633,113 | 17,913 | |
| Other gains | 633,113 | 17,913 |
The other gains balance is made up of the net gains that were realised after the transactions that took place as part of the
settlement agreement with Cronin Services. The settlement led to net gains on payables that were extinguished, in addition
to receivables and loan balances being written off.
22. Loss on disposal of investments
| Group | ||
| Year ended | ||
| 30 June 2024 | ||
| £ | ||
| Year ended | ||
| 30 June 2023 | ||
| £ | ||
| Realised loss on disposal of investments | ||
| 71,071 | 866,421 | |
| Loss on disposal of investments | 71,071 | 866,421 |
The realised loss on investment comes from the loss realised after the Group disposed of the shares they previously
owned during the year ended 30 June 2024.
23. Income tax expense
No charge to taxation arises due to the losses incurred.
The tax on the Group’s loss before tax differs from the theoretical amount that would arise using the weighted average tax
rate applicable to the losses of the consolidated entities as follows:
| Group | ||
| Year ended | ||
| 30 June 2024 | ||
| £ | ||
| Year ended | ||
| 30 June 2023 | ||
| £ | ||
| Loss before tax | ||
| (855,966) | (3,997,899) | |
| Tax at the applicable rate of 15.9% (2023: 18%) | (136,099) | (719,622) |
| Effects of: | ||
| Expenditure not deductible for tax purposes | ||
| - | 8,179 | |
| Net tax effect of losses carried forward | 136,099 | 723,621 |
| Tax (charge)/refund | ||
| - | (12,178) |
The weighted average applicable tax rate of 15.9% (2023: 18%) used is a combination of the 19% standard rate of
corporation tax in the UK, 15% Canadian corporation tax and 21% US corporation tax.
The Company has tax losses of approximately £2,989,637 (2023: £2,853,785) available to carry forward against future
taxable profits. No deferred tax asset has been recognised on accumulated tax losses because of uncertainty over the
timing of future taxable profits against which the losses may be offset.
CLOUDBREAK DISCOVERY PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
59
24. Earnings per share
Group
The calculation of the basic loss per share of 0.1 pence (2023: 1 pence) is based on the loss the loss attributable to equity
owners of the group of £855,966 (2023: loss of £3,997,899), and on the weighted average number of ordinary shares of
621,330,333 (2023: 578,496,992) in issue during the period.
In accordance with IAS 33, no diluted earnings per share is presented as the effect on the exercise of share options or
warrants would be to decrease the loss per share.
Details of share options and warrants that could potentially dilute earnings per share in future periods are set out in Note 16.
25. Expenses by nature
| Group | ||
| Year ended | ||
| 30 June | ||
| 2024 | ||
| £ | ||
| Year | ||
| ended 30 | ||
| June 2023 | ||
| (restated) | ||
| £ | ||
| Professional fees | 308,546 | 1,123,570 |
| Consulting fees | 154,654 | 1,500,735 |
| Employees and Contractors | 216,000 | 228,515 |
| Travel | 473 | 94,302 |
| Insurance | 33,651 | 37,312 |
| IT & Software services | 783 | 13,938 |
| Public Relations | 48,117 | 147,278 |
| Premises and Office costs | 9,481 | 10,447 |
| Property costs/exploration costs | - | 425,643 |
| Share option expense | - | 43,306 |
| Other expenses | 171,597 | 230,879 |
| Total administrative expenses | 943,302 | 3,855,925 |
26. Commitments
License commitments
The Group owns a number of exploration licences in Canada. These licences include commitments to pay minimum spend
requirements. The Group have entered into option agreements on all of their properties aside from newly staked properties,
Northern Treasure and Foggy Mountain – which was disposed of as part of the settlement agreement detailed in note 6. As
part of these option agreements, the minimum spend obligations have been passed onto the Optionees. Refer to note 5 for
further information.
As at 30 June 2024 these are as follows:
| Group | |
| Minimum spend | |
| requirement | |
| £ | |
| Not later than one year | |
| 493,041 | |
| Later than one year and no later than five years | 61,258 |
| Total | 554,299 |
27. Related party transactions
Details of the Directors’ remuneration can be found in Note 18. Key Management Personnel are considered to be the
Directors.
CLOUDBREAK DISCOVERY PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
60
During the year, the Group remitted amounts totalling £110,724 (2023: £59,000) to Westridge Management International
Ltd. A company controlled by Andrew Male, a Director of the group. £50,274 of the payments were paid via the issue of
10,144,850 shares at £0.005 per share. The amount outstanding owing to Westridge Management at the year-end was
£90,276 (2023: £65,000).
During the year, the Group remitted amounts totalling £24,171 (2023: nil) to Windy Apple Ventures Ltd. A company controlled
by Paul Gurney, who was a Director of the group during the year ended 30 June 2024 (resigned 18 October 2024). £8,171
of the payments were paid via the issue of 1,634,261 shares at £0.005 per share The amount accrued and outstanding
owing to Windy Apple Ventures Ltd. at the year-end was £48,240 (2023: £22,500).
On 3 July 2023, the Company issued a convertible loan note (CLN) to Paul Gurney. The gross proceeds totalled £15,000
and the loan had an annual interest rate of 12%.
During the year, the Group remitted amounts totalling £16,000 (2023: nil) to Emma Priestley. The amount accrued and
outstanding to Emma at the year-end was £47,000 (2023: £30,000).
28. Discontinued operation
During the year, the Company disposed of Kudu Resources Limited, a subsidiary of the Company for CAD 5,000 (£2,775).
Kudu Resources Limited had net liabilities of £222,190. The Group has recognised a gain from the subsidiary at the point
of disposal amounting to £232,071 and this was recognised in the statement of comprehensive income.
As the operations of Kudu Resources Limited were discontinued, the comparative profit and loss has been restated in
accordance with IFRS 5 to move the costs in 2023 that relate to the subsidiary to discontinued operations.
The profit and loss for Kudu Resources Limited is below:
| Year ended | ||
| 30 June | ||
| 2024 | ||
| £ | ||
| Year ended | ||
| 30 June | ||
| 2023 | ||
| £ | ||
| Revenue | - | - |
| Administration expenses | (228) | (150,593) |
| Gain from disposal of entity | 232,299 | - |
| Foreign exchange (losses)/gains | - | - |
| Operating profit/(loss) | 232,071 | (150,593) |
29. Ultimate controlling party
The Directors believe there is no ultimate controlling party.
30. Contingent liability
There is an ongoing dispute between Cloudbreak Discovery Exploration (subsidiary) and the Canada Revenue Agency
(“CRA”) related to an incorrect tax being charged to the subsidiary for their 2021 tax return. The CRA claimed that an
outstanding liability of $304,597 CAD is due in relation to the return, which the Group disagree with due to their loss-making
position over the previous years. An amended return has been sent by the subsidiary to the CRA to correct this amount and
management have been engaging with the CRA to resolve the matter.
31. Events after the reporting date
On 25 July 2024, the Company issued 403,864,936 new ordinary shares of £0.001 each as follows:
• 16,652,055 new ordinary shares issued at a price of £0.004 per Share, to correct the position created by the
conversion of convertible loan notes on 22 May 2024, where too few ordinary shares were issued as a result of the
miscalculation of the conversion price;
CLOUDBREAK DISCOVERY PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
61
• 305,832,210 new ordinary shares issued at a price of £0.002968 per Share, pursuant to the conversion of an
outstanding debt owed by the Company to the value of £907,710; and
• 81,380,671 new ordinary shares issued at a price of £0.002968 per Share to certain creditors of the Company to
capitalise amounts owed to them for the provision of their services to the Company
On 18 October 2024, Paul Gurney resigned from the Board.