Phoenix Digital - Interim Results

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

27 September 2024

Phoenix Digital Assets PLC

("Phoenix" or the "Company")

Interim results

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

Comments from Jonathan Bixby, Executive Chairman of Phoenix:

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

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

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

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

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

Jonathan Bixby, Executive Chairman

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

About Phoenix

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

Consolidated Statement of Comprehensive Income

For the six months ended 30 June 2024

Consolidated Statement of Financial Position  

For the six months ended 30 June 2024

Company Statement of Financial Position          

For the six months ended 30 June 2024

Consolidated and Company Statement of Changes in Equity     

As at 30 June 2024

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

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

Consolidated Statement of Cash Flows

For the six months ended 30 June 2024

Company Statement of Cash Flows        

For the six months ended 30 June 2024

Notes to the Interim Financial Statements

1.   Basis of preparation

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

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

Basis of Consolidation

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

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

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

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

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

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

Profit/(loss) of Parent Company

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

2.   Critical accounting estimates and judgements

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

Investments

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

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

3.   Share based payments

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

•                       including any market performance conditions;

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

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

Assumptions about the number of options that are expected to vest include consideration of non-market vesting conditions. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the Statement of Comprehensive Income, with a corresponding adjustment to equity.

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

4.   Profit per ordinary share

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

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

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

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

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

5.   Intangible Assets

Group and Company

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

6.   Investments

Group

Company

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

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

7.   Events after the reporting period

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

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

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