Fandango Holdings plc / Index: LSE / Epic: FHP / Sector: Investment

31 December 2021

Fandango Holdings plc ('Fandango' or 'the Company')

Year End Financial Accounts and Potential Reverse Take-Over Heads of Terms Signed

Fandango Holdings plc, the investment company, is pleased to provide its financial accounts for the year end 31 August 2021.

Earlier today, the Company announced that it has executed non-binding Heads of Terms ('HoT') to acquire Radair Limited ('the Acquisition').  Further details will be provided upon execution of a formal sales and purchase agreement.

The prospective RTO is with Radair Limited, a Bahamian based company. Radair is a Mesh Network Infrastructure provider, providing the largest Latin American long-range network to enable IoT solutions whilst mining crypto currency with a positive environmental impact. It has or will have six revenue streams:

1.   Crypto mining operations

2.   Staking interest and leverage

3.   Gateway and IoT Device sales

4.   Supernode Validator interest and fees

5.   Radair #RAD Utility Token

6.   IoT solutions, Data Backhaul revenue

The directors believe that that the acquisition of Radair should add significant shareholder value and look forward to completing the RTO transaction.

The Acquisition, if it proceeds, will constitute a Reverse Takeover under the Listing Rules since, inter alia, in substance it will result in a fundamental change in the business of the issuer The Acquisition is subject, inter alia, to the completion of due diligence, documentation and compliance with all regulatory requirements, including the Listing and Prospectus Rules and, as required, the Takeover Code.

As the Acquisition will constitute a Reverse Takeover under the Listing Rules, the Company's shares remain suspended pending the publication of a prospectus and the application for the enlarged Company to have its Ordinary Shares admitted to the Official List and to trading on the main market for listed securities of the London Stock Exchange.

The Company is working on the preparation of a prospectus in relation to the Acquisition and will, in due course, be making application for the enlarged Company to have its Ordinary Shares admitted to the Official List and to trading on the standard segment of the main market for listed securities of the London Stock Exchange.

Key performance indicators

There are no key performance indicators for this period as the Company has not completed its investment activity.

The Company operates in an uncertain environment and is subject to a number of risk factors. The Directors have carried out a robust assessment of the risks and consider the following risk factors are of particular relevant to the Company's activities, although it should be noted that this list is not exhaustive and that other risk factors not presently known or currently deemed immaterial may apply.

Principal risks and uncertainties

i.          Business strategy

The Company is a relatively new entity with no operating history and has not yet completed the acquisition of a suitable investment.

The Company may be unable to complete a suitable acquisition in a timely manner

ii.         Liquidity Risk

The Directors have reviewed the working capital requirements and believe that there is sufficient working capital to fund the business.

See stranger

Environmental Responsibility

The Company and its management believe that any matters related to environmental responsibility are not currently applicable as there are no trading activities. Nevertheless, the Company and its management acknowledge the importance of environmental responsibility and minimum compliance with local regulatory environmental requirements in the event where future trading and operational activities occur.

Social, community and human rights responsibility

The Company and its management recognise and acknowledge the responsibility under English law to promote success of the Company for the benefits of its stakeholders. The Company and its management also acknowledge and recognise the responsibility towards partners, suppliers, contractors, investors, lenders and local community in which future operational activities will take place. The Company has two employees, being the directors. At the end of the financial year there were two directors, both male.

Anti-corruption and anti-bribery policy

The Company is aware of the UK Bribery Act 2010 and any related guidelines and regulations. The Company and its management have conducted a review into its operational procedures to consider the impact of the Bribery Act 2010 and the Board has adopted anti-corruption and anti-bribery policy.

Going Concern

As stated in note 2 to the financial statements, the Directors and James Longley, a shareholder, have offered letters of support confirming that they will provide such additional working capital as necessary to enable the Company to meet all of its debts as and when they fall due for a period of at least 12 months from the date of approval of the financial statements. On this basis the Directors are satisfied that the Company has sufficient resources to continue in operation for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

Section 172 Statement

The Directors acknowledge their duty under s.172 of the Companies Act 2006 and consider that they have, both individually and together, acted in the way that, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole. In doing so, they have had regard (amongst other matters) to:

·      the likely consequences of any decision in the long term: The Company's long-term strategic objectives, including progress made during the year and principal risks to these objectives, are shown on above.

·      the interests of the Company's employees: Our employees are fundamental to us achieving our long-term strategic objectives.

·      the need to foster the Company's business relationships with suppliers, customer and others: A consideration of our relationship with wider stakeholders and their impact on our long-term strategic objectives is also disclosed above.

·      the impact of the Company's operations on the community and the environment: The Group operates honestly and transparently. We consider the impact on the environment on our day-to-day operations and how we can minimise this.

·      the desirability of the Company maintaining a reputation for high standards of business conduct: Our intention is to behave in a responsible manner, operating within the high standard of business conduct and good corporate governance.

·      the need to act fairly as between members of the Company: Our intention is to behave responsibly towards our shareholders and treat them fairly and equally, so that they too may benefit from the successful delivery of our strategic objectives.

The application of s172 requirements can be demonstrated in relation to some of the decisions made during 2021:

·      All directors agreed not to withdraw directors fee unless the company is in position to do so.

·      Any contracts of service have been undertaken with a clear cap on financial exposure.

DIRECTORS' REPORT

Results and dividends

The trading results for the period and the Company's financial position at the end of the period are shown in the attached financial statements.

The directors have not recommended a dividend.

Strategic Report

In accordance with section 414C (11) of the Companies Act 2006 the Company chooses to report the review of the business, the future outlook and the risks and uncertainties faced by the Company in the Strategic Report. 

Directors

The following directors have held office during the period:

Charles Tatnall                                                                          

Tim Cottier       

Share capital

Fandango Holdings Plc is incorporated as a public limited company and is registered in England and Wales with the registered number 10346576. Details of the Company's issued share capital, together with details of movements during the year, are shown in Note 13. The Company has one class of Ordinary shares, and all shares have equal voting rights and rank pari passu for the distribution of dividends and repayment of capital.

Directors' interests

At the date of this report the directors held the following beneficial interest in the ordinary share capital of the Company:

22,500,000 of Tim Cottier's holding is held by Bolly Investments Limited, a company incorporated in England and Wales (Company Number 10473027), in which he owns 100% of the issued share capital. The balance is held through Hargreaves Lansdown (Nominees) Limited.

Both Charles Tatnall and Tim Cottier held 12,500,000 warrants each in the Company.

There have been no changes in the directors' interests in the Company during the year, or to the date of this report.

Substantial Interests

The Company has been informed of the following shareholdings that represent 3% or more of the issued Ordinary Shares of the Company as at 4 January 2021:

Carbon emissions

The Company is currently non-trading with no operating premises or employees other than its directors, and therefore has minimal carbon emissions. Total emissions are expected to be lower than 40,000 Kwh. Accordingly, it is not considered necessary to obtain emissions, energy consumption or energy efficiency data and produce an Energy and Carbon Report under SI 2018/1155.

Financial risk and management of capital

The major balances and financial risks to which the Company is exposed to and the controls in place to minimise those risks are disclosed in Note 4.

The Board considers and reviews these risks on a strategic and day-to-day basis in order to minimise any potential exposure. 

Financial instruments

The Company has not entered into any financial instruments to hedge against interest rate or exchange rate risk.

Requirements of the Listing Rules

Listing Rule 9.8.4 requires the Company to include certain information in a single identifiable section of the Annual Report or a cross reference table indicating where the information is set out. The directors confirm that there are no disclosures required in relation to Listing Rule 9.8.4.

Auditors

Jeffreys Henry LLP were appointed auditors to the Company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

Statement of directors' responsibilities

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the European Union. 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 Company and of the profit or loss for that period. In preparing these financial statements, the directors are required to:          

-     select suitable accounting policies and then apply them consistently;

-     make judgements and accounting estimates that are reasonable and prudent;

-     state whether they have been prepared in accordance with IFRS as adopted by the European Union;

-     prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company. They are also responsible for safeguarding the assets of the 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.

Statement of disclosure to auditors

Each person who is a director at the date of approval of this Annual Report confirms that:

-     So far as the directors are aware, there is no relevant audit information of which the Company's auditors are unaware; and

-     Each director has taken all the steps that he ought to have taken as director in order to make himself aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

-     Each director is aware of and concurs with the information included in the Strategic Report.

Annual General Meeting

Notice of the forthcoming Annual General Meeting of the Company together with resolutions relating to the Company's ordinary business will be given the members separately.

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 AUGUST 2021

Since there is no other comprehensive income, the loss for the period is the same as the total comprehensive income for the period attributable to the owners of the Company.

STATEMENT OF FINANCIAL POSITION
AS AT 31 AUGUST 2021

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 AUGUST 2021

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2021

Share capital is the amount subscribed for shares at nominal value.

Share premium represents amounts subscribed for share capital in excess of nominal value.
Accumulated deficit represent the cumulative loss of the Company attributable to equity shareholders.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 AUGUST 2021

1     General information         

Fandango Holdings PLC ('the Company') is an investment company incorporated and domiciled in the United Kingdom. The address of the registered office is disclosed on the company information page at the front of the annual report.  The Company was incorporated and registered in England on 25 August 2016 as a private limited company and re-registered as a public limited company on 8 May 2017.

2     Accounting policies         

2.1.   Basis of Accounting

This financial information has been prepared in accordance with International Financial Reporting Standards (IFRS), including IFRIC interpretations issued by the International Accounting Standards Board (IASB) as adopted by the European Union and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below. 

        These policies have been consistently applied. 

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 3. The preparation of financial statements in conformity with IFRSs requires management to make judgments, estimates and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, income and expenses. Although these estimates are based on management's experience and knowledge of current events and actions, actual results may ultimately differ from these estimates.

The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

a)   Going concern

These financial statements have been prepared on the assumption that the Company is a going concern. When assessing the foreseeable future, the Directors have looked at a period of at least twelve months from the date of approval of this report and have looked at the adequacy of funds required as well as working capital requirements of the Company.

The Company continues to be loss-making and has very limited cash balances to pay it's debts as and when they fall due. The Directors and James Longley, a shareholder, have provided letters of support confirming that they will provide such additional working capital as necessary to enable the Company to meet all of its debts as and when they fall due for a period of at least twelve months from the date of approval of the financial statements. On this basis the Directors are satisfied that the Company has sufficient resources to continue in operation for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

b)    New and amended standards adopted by the Company

There are no IFRSs or IFRIC interpretations that are effective for the first time for the financial year beginning that would be expected to have a material impact on the Company.

Standards, interpretations and amendments to published standards that are not yet effective

Standards, amendments and interpretations to published standards

There are no IFRSs or IFRIC interpretations that are effective for the first time for the financial year beginning that would be expected to have a material impact on the Company. The new IFRSs adopted during the year are as follows:

·           IFRS 16 - Leases

·           IAS 1 Presentation of Financial Statements

·           IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors

The following new standards, amendments to standards and interpretations have been issued, but are not effective for the financial period beginning 1 September 2020 and have not been early adopted. The Directors anticipate that the adoption of these standard and the interpretations in future periods will have no material impact on the financial statements of the Company.

The new standards include:

IFRS 17                   Insurance Contracts

Effective for annual periods beginning on or after 1 January 2023

2.2   Financial instruments

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument.

       Other receivables

Other receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Subsequent to the initial recognition, other receivables are measured at amortised cost less impairment losses for bad and doubtful debts.

Expected credit losses are calculated as the difference between the carrying amount of financial asset and the estimated future cash flows, discounted where the effect of discounting is material.

       Cash and cash equivalents

       Cash and cash equivalents comprised of cash at bank and in hand.

       Fair values

The carrying amounts of the financial assets and liabilities such as cash and cash equivalents, receivables and payables of the Company at the statement of financial position date approximated their fair values, due to relatively short-term nature of these financial instruments.

       Other payables

Other payables are initially recognised at fair value and thereafter stated in amortised cost.

2.3   Share capital

Ordinary shares are classified as equity.

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

2.4   Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

Current Tax

The tax currently payable is based on taxable profit for the period. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other periods and it further excludes items that are never taxable or deductible. The company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

The Company is registered in England and Wales and is taxed at the company standard rate of 19%.

Deferred Tax

Deferred tax is the tax expected  to be payable  or recoverable  on differences  between  the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or the asset is realised. Deferred tax is charged or credited  in the income  statement,  except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority

2.5   Segmental reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the steering committee that makes strategic decisions. In the opinion of the director, the Company has one class of business, being that of an investment company. The Company's primary reporting format is determined by the geographical segment according to the location of its establishments. There is currently only one geographic reporting segment, which is the UK. All costs are derived from the single segment.

2.6 Government grants

Government grants in relation to tangible fixed assets are credited to profit and loss account over the useful lives of the related assets, whereas those in relation to expenditure are credited when the expenditure is charged to profit and loss.

2.7 Assets held for resale

       Non-current assets are classified as held for sale when

·      They are available for immediate sale

·      Management is committed to a plan to sell

·      The asset is being marketed at a reasonable price in relation to its fair value, and

·      A sale is expected to complete within 12 months from the date of classification.

·      Non-current assets are classified as held for sale are measured at the lower of: Their carrying amount immediately prior to being classified as held for sale in accordance with the group's accounting policy; and - Fair value less costs of disposal.

2.8 Borrowings

Borrowings are recognised initially as fair value net of transactions costs incurred.

Borrowings are subsequently carried at amortised cost, any difference between the proceeds   (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method.

Fees paid on the establishment of the loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

3     Critical accounting estimates and judgments

The Company makes certain judgements and estimates which affect the reported amount of assets and liabilities. Critical judgements and the assumptions used in calculating estimates 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.

In the process of applying the Company's accounting policies, which are described above, the Directors do not believe that they have had to make any assumptions or judgements that would have a material effect on the amounts recognised in the financial information.

4     Financial risk management

The Company's activities may expose it to some financial risks. The Company's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company's financial performance.

a)  Liquidity risk

Liquidity risk is the risk that Company will encounter difficulty in meeting obligations associated with financial liabilities. The responsibility for liquidity risks management rest with the Board of Directors, which has established appropriate liquidity risk management framework for the management of the Company's short term and long-term funding risks management requirements. During the period under review, the Company has not utilised any borrowing facilities. The Company manages liquidity risks by maintaining adequate reserves by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

b)  Capital risk

The Company takes great care to protect its capital investments. Significant due diligence is undertaken prior to making any investment. The investment is closely monitored.

c)  Credit risk

The Company has provided loans to companies. The Company assesses the creditworthiness, prior to providing the loans to limit the risk of default.

5     Operating loss, expenses by nature and personnel

6     Personnel

The average monthly number of employees during both the current and prior period was two directors.
 

There were no benefits, emoluments or remuneration payable during the period for key management personnel other than the £90,000 in fees disclosed in Note 5. The fees paid are also detailed in Note 16 as related party transactions.

7     Taxation

No liability to UK corporation tax arose on ordinary activities for the current period.

The Company has estimated excess management expenses of £818,917 (2019: £465,748) available for carry forward against future trading profits.

The tax losses have resulted in a potential deferred tax asset at a rate of 19% (2020: 19%) of approximately £182,694 (2020: £88,492) which has not been recognised in the financial statements due to the uncertainty of the recoverability of the amount.

8     Earnings per share

Due to the loss in the periods, the effect of the warrants was considered anti-dilutive and hence no diluted loss per share information has been provided

The number of shares on a diluted basis relates to the issue of 25,000,000 warrants to the Directors which confers the right but not the obligation to subscribe in cash for up to 25,000,000 £0.01p Ordinary Shares at the subscription price. These were deemed to have expired during the year.

9     Capital risk management

The Directors' objectives when managing capital are to safeguard the Company'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. At the date of this financial information, the Company had been financed by the introduction of capital. In the future the capital structure of the Company is expected to consist of borrowings and equity attributable to equity holders of the Company, comprising issued share capital and reserves

10    Trade and other receivables

Other receivables consist of unsecured loans to two related parties, the recoverability of which is based on the conversion of the loans to equity upon relisting of the two related parties. Further details are provided in note 16 to the financial statements.

11    Cash and cash equivalents

12    Trade and other payables due within 1 year

Included in other payable is a loan of £296,750 from Opus Capital Switzerland AG. The loan is unsecured, interest fee and has no fixed repayment date.

       Trade and other payables due after one year

A bank loan of £50,000 was received in May 2020. The loan is unsecured, repayable over 6 years                       and attracts an interest of 2.5% per annum. As at the year-end a deferment of repayment until December 2021 was agreed with the bank.

13    Share capital

During the period the Company had no share transactions.

The ordinary shares have attached to them full voting, dividend and capital distribution (including on winding up) right; they do not confer any rights of redemption.

14    Accumulated deficit

15   Contingent liabilities

The Company has no contingent liabilities in respect of legal claims arising from the ordinary course of business.