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Argo Blockchain PLC Final Results

17/04/2019 2:39pm

UK Regulatory (RNS & others)


Argo Blockchain (LSE:ARB)
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RNS Number : 5277W

Argo Blockchain PLC

17 April 2019

PRESS RELEASE

17 April 2019

Argo Blockchain Plc

("Argo" or "the Group")

2018 Preliminary Results

Argo Blockchain Plc, a UK-based provider of cryptocurrency mining services (LSE: ARB), announces its preliminary maiden audited results for the period from incorporation on 7 December 2017 to 31 December 2018.

Summary

   --    Revenue amounted to GBP0.76m, reflecting start-up of mining services from mid-2018 
   --    Pre-tax loss of GBP4.1m 
   --    Cash as at year end amounted to GBP16m. 

-- Achieved London Stock Exchange listing in August 2018, the first crypto-mining business to float on one of the world's leading exchanges

-- Successfully launched and rolled out a consumer-facing mining as a service platform (MaaS) with two operational centres in Canada

-- Despite challenging market conditions sold more than 10,000 monthly packages by the year end, exceeding internal growth targets

Post period items

-- On 15 February 2019 announced a strategic refocus involving a temporary closure of the MaaS business in light of continuing tough industry conditions and a shift to mining for the Group's own account, which is expected to be EBITDA break-even from the second half of 2019.

   --    Cash of GBP15m as of 31(st) March 2019 

Commenting on the results, Jonathan Bixby, executive chairman of Argo, said: "The results reflect our first year's performance from start-up and were better than our expectations. In response to challenging market conditions the Group has taken prudent steps to transition its mining business to ride out the current downturn and position Argo for new opportunities being presented by the downturn. As a result the Group expects to turn EBITDA break-even in the second half of this year, which is earlier that its original expectations at the time of flotation, while also stepping-up investments in both its existing infrastructure and new mining capabilities to create long term value for shareholders."

For further information please visit www.argoblockchain.com or contact:

 
 Argo Blockchain 
 Timothy Le Druillenec            Via Tancredi +44 203 
  Chief Financial Officer          434 2334 
  Neil Thapar 
  Financial Communications 
  Advisor 
 
 
                                   +44 (0) 7876 455323 
                                 --------------------- 
 Tancredi Intelligent             Media relations 
  Communication 
                                 --------------------- 
                                  +44 7812 211 403 
 Georgia Hanias 
  Georgia@tancrediGroup.com 
  Salamander Davoudi               +44 7957 549 906 
  salamander@tancrediGroup.com 
  Emma Valgimigli 
  emma@tancredigroup.com           +44 203 434 2322 
                                 --------------------- 
 

About Argo:

Argo Blockchain plc is a global data centre management business that provides a flexible platform for the mining of leading cryptocurrencies. Argo is headquartered in London, UK and operates state-of-the art data centres in Quebec, Canada. The Company's shares are listed on the main market of London Stock Exchange under the ticker: ARB.

ARGO BLOCKCHAIN PLC

CHAIRMAN'S STATEMENT

The Group incurred a pre-tax loss of GBP4,117,285 in the period from incorporation until 31st December 2018. These losses reflect the costs of the start-up of the business; the professional costs and related costs of achieving the Group's listing on the Official List of the UK Listing Authority by way of a standard listing; the roll out of the infrastructure to support the MaaS subscribers; maintaining the Group's listing; and include directors' and employees fees and salaries; general administration costs and professional fees.

Despite tumultuous industry conditions in 2018, Argo completed its maiden period of operations in a strong financial position. Following its inception in December 2017, the Group became the first cryptocurrency miner to achieve an LSE listing in August 2018. Within four months of our flotation we rapidly established and rolled out a successful MaaS platform aimed at the consumer market worldwide from outsourced operational centres in Canada. As a result, Argo exceeded its internal growth targets with the sale of more than 10,000 monthly mining packages.

Our early success was achieved in the face of deteriorating market conditions throughout the year, which saw cryptocurrency prices slump by as much as 80% with Bitcoin down from $13,791 USD to $3,768 between January 1(st) 2018 to January 1(st) 2019.

Notwithstanding the excellent progress made in our first year, and in the light of a prolonged and unexpectedly severe industry downturn, in February 2019 the Board took the difficult but necessary decision to temporarily cease Argo's subscription-based consumer mining service and transition to mining for its own account.

The move is aimed at de-risking the business in an uncertain industry environment, shorten our path to profitability by reducing support and marketing costs, and reposition Argo to take full advantage of opportunities as industry dynamics change and competition dissipates.

I am particularly pleased with the prudent management of cash throughout the year, enabling Argo to close the year with cash of GBP16m. Our strong balance sheet is a major competitive advantage and provides the business with agility to adapt to changing industry conditions. As of 31st March 2019, cash amounted to GBP15m.

2019/20 Vision and Strategy Refocus

We continue to believe strongly that the cryptocurrency market has considerable long-term potential to become a major asset class and a store of enduring value. As institutions adopt the blockchain technology underlying cryptocurrencies, they will create and maintain infrastructure that will help propel the next evolution of the market. This will allow for wide adoption and acceptance of custody and trading solutions that will, in turn, drive the adoption of crypto-mining (both Proof of Work and Proof of Stake) on a global scale.

The technology underlying crypto-mining is also moving between Proof of Work and Proof of Stake. We intend to continue to be a market leader in Proof of Work mining while at the same time exploring Proof of Stake mining technology with the goal of ultimately providing a leading product offering and trusted brand in both areas. This is entirely in line with our existing investment in hardware and our team's expertise.

Further to the announcement of 15th February 2019, Argo moved quickly to implement its strategy refocus, streamline the business and cut costs. The MaaS operation has ceased and existing infrastructure and capital have been redeployed for mining on Argo's own account, effective from 1(st) April 2019. As part of the transition, staff numbers have been cut by 40% and the marketing and customer support functions were significantly reduced and reassigned. The Group has also renegotiated its major input costs, contributing to an overall saving in ongoing mining operational costs by 35%.

This repositioning is expected to turn the Group EBITDA break-even in the second half of this year - ahead of the Group's original plans at the time of its flotation - even if industry conditions continue to remain challenging. In the event of a sustained recovery in market conditions, the revised strategy stands to deliver significant incremental gains long term.

The restructuring and strategy refocus is already making a positive impact and is expected to deliver the following benefits:

   --      35% reduction in Group's annual operating cost base 
   --      Generate mining profits by utilising Argo's existing hardware and hashing capacity, 
   --      Deliver Group EBITDA break-even on a monthly basis from the second half of 2019 at current cryptocurrency market prices. 

In addition, due to collapse in cryptocurrency prices, the Group now has the opportunity to step-up long term investment in new mining capacity as marginal players exit the industry and some hardware prices tumble by as much as 70 per cent.

The combination of lower procurement and operating costs together with easing competition significantly improve Argo's potential for mining profitably. Investment in new hardware has the potential to enhance returns further. Based on our internal analysis, the Group believes new hardware has the capability to generate operating margins of between 30% and 40% at current cryptocurrency prices.

Accordingly, the Group plans to commence a phased expansion of its mining infrastructure in the current year. These investments will be made as new generation hardware becomes available and the Return on Investment for this hardware makes sense. The Company feels confident that it can rapidly scale operations with the combination of in-house staff and its relationships with its current outsourcing partners.

In addition to prudent investments in Proof of Work mining, the Group plans to commence a significant investment in Proof of Stake (POS) mining. Proof of Stake mining at scale is coming and the Group believes that it has significant potential as it addresses some of the major limitations of Proof of Work (POF) mining including the amount of electricity needed to power the mining network and the lengthy confirmation process involved. The Group believes that utilizing its existing investments in hardware and the expertise of its existing team it can become a recognized leader in this space in 2019.

The Board strongly believes that Argo's refreshed strategy, strong balance sheet, business agility and technology experience provides a strong foundation to ride out the current challenging market conditions and deliver long term shareholder value.

On behalf of the Board, I would also like to take this opportunity to thank all our shareholders for their unstinting support as well as commend our employees for their hard work and dedication in this landmark period for the Group.

Jonathan Bixby

Executive Chairman

ARGO BLOCKCHAIN PLC

GROUP STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIODED 31 DECEMBER 2018

 
                                                  Period 
                                                   ended 
                                             31 December 
                                                    2018 
                           Notes                     GBP 
 
Revenue                         4                  764,562 
 
Cost of sales                5                (1,175.964) 
 
Gross Profit                                     (411,402) 
 
Administrative expenses      5                 (3,731.913) 
 
Operating loss                                 (4,143,315) 
 
 
Interest expense                                            (9,934) 
 
Finance income                                               35,964 
 
 
 
Loss before taxation                                    (4,117,285) 
 
Tax on loss                                        9              - 
 
 
 
Total comprehensive loss attributable to the 
 equity holders of the company                          (4,117,285) 
 
 
 
Earnings per share attributable to equity owners 
 (pence 
 
Basic and diluted loss per share                   10        (2.2p) 
 
 
 
 

The income statement has been prepared on the basis that all operations are continuing operations

ARGO BLOCKCHAIN PLC

GROUP BALANCE SHEET

AS AT 31 DECEMBER 2018

 
                                               2018 
                               Notes            GBP 
ASSETS 
Non-current assets 
Intangible fixed assets         12          619,500 
Tangible fixed assets           13        2,457,240 
 
 
 
 
Total non-current assets                  3,076,740 
 
Current assets 
Trade and other receivables     15        2,179,057 
Other current assets            16            2,082 
Cash and cash equivalents                16,389,443 
 
 
 
Total current assets                     18,570,582 
 
 
Total assets                             21,647,322 
 
EQUITY AND LIABILITIES 
Equity 
Share capital                   19          293,750 
Share premium account           20       25,252,288 
Retained loss                           (4,117,285) 
 
 
Total equity                             21,428,753 
                                        ----------- 
 
 
Current liabilities 
Trade and other payables        22          218,569 
 
 
Total liabilities                           218,569 
 
 
 
 
 
 
Total equity and liabilities             21,647,322 
 
 
 
 

ARGO BLOCKCHAIN PLC

COMPANY BALANCE SHEET

AS AT 31 DECEMBER 2018

 
                                               2018 
                               Notes            GBP 
ASSETS 
Non-current assets 
Investment in subsidiary        11                1 
 
 
 
 
Total non-current assets                          1 
 
Current assets 
Trade and other receivables     15           16,764 
Loan to Subsidiary                       10,695,589 
Cash and cash equivalents                13,117,072 
 
 
 
Total current assets                     23,829,425 
 
 
Total assets                             23,829,426 
 
EQUITY AND LIABILITIES 
Equity 
Share capital                   19          293,750 
Share premium account           20       25,252,288 
Retained losses                         (1,779,612) 
 
 
Total equity                             23,766,426 
                                        ----------- 
 
 
Current liabilities 
Trade and other payables        22           63,000 
 
 
Total liabilities                            63,000 
 
 
 
 
 
 
Total equity and liabilities             23,829,426 
 
 
 
 

ARGO BLOCKCHAIN PLC

GROUP STATEMENT OF CHANGES IN EQUITY

FOR THE PERIODED 31 DECEMBER 2018

 
                         Share   Share premium      Share         Retained              Total 
                       capital         account      based           losses 
                                                  payment 
                                                  reserve 
                        GBP           GBP          GBP            GBP               GBP 
 
 Balance at 5                -               -          -                -                  - 
 December 2017: 
 
 Period ended 31 
 December 
 2018: 
 Total 
  comprehensive 
  loss 
  for the period          -              -           -          (4,117,285)       (4,117,285) 
 
 Transactions with 
 equity 
 owners 
 Issue of share 
  capital 
  net of issue 
  costs                293,750      25,252,288       -                -            25,546,038 
                     ---------  --------------  ---------  ----------------  ---------------- 
 Total transactions 
  with 
  owners               293,750      25,252,288       -                -            25,546,038 
 
 
 Balance at 31 
  December 
  2018                 293,750      25,252,288       -          (4,117,285)           21,428,753 
 
 
 

ARGO BLOCKCHAIN PLC

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE PERIODED 31 DECEMBER 2018

 
                                     Share       Share     Share     Retained        Total 
                                   capital     premium     based       losses 
                                               account   payment 
                                                         reserve 
                                       GBP         GBP       GBP          GBP          GBP 
Balance at 5 December 2017:              -           -         -            -            - 
 
Period ended 31 December 2018: 
Total comprehensive loss 
 for the period                          -           -         -  (1,779,612)  (1,779,612) 
 
Transactions with equity 
 owners 
Issue of share capital net 
 of issue costs                    293,750  25,252,288         -            -   25,546,038 
 
Total transactions with 
 owners                            293,750  25,252,288         -            -   25,546,038 
 
 
Balance at 31 December 2018        293,750  25,252,288         -  (1,779,612)   23,766,426 
 
 

ARGO BLOCKCHAIN PLC

GROUP STATEMENT OF CASH FLOWS

FOR THE PERIODED 31 DECEMBER 2018

 
                                                                  Period ended 
                                                                   31 December 
                                                                          2018 
                                              Notes          GBP           GBP 
 
Cash flows from operating activities 
 
Operating loss                                 23                    (4,153,249) 
Depreciation/Amortisation                                                487,697 
Equity settled share based payments                                       60,000 
Crypto asset purchases for resale              16                        329,088 
Decrease/(increase) in trade and other 
 receivables                                                         (2,181,139) 
(Decrease)/increase in trade and other 
 payables                                                                218,569 
 
 
Net cash flow used in operating activities                           (5,239,034) 
 
 
Investing activities 
Purchase of intangible assets                          (671,921) 
Purchase of tangible fixed assets                    (2,892,516) 
Crypto asset purchases for resale 16                   (329,088) 
Interest received                                         35,964 
 
 
 
 
 
 
Net cash used in investing activities                                (3,857,561) 
 
Financing activities 
Proceeds from issue of shares net of issue costs      25,486,038 
 
 
 
 
Net cash generated from/(used in) financing 
 activities                                                         25,486,038 
 
 
 
Net increase in cash and cash equivalents                           16,389,443 
 
Cash and cash equivalents at beginning of period                             - 
 
 
 
Cash and cash equivalents at end of period                          16,389,443 
 
 
 
 
 

ARGO BLOCKCHAIN PLC

COMPANY STATEMENT OF CASH FLOWS

FOR THE PERIODED 31 DECEMBER 2018

 
                                                                          Period ended 
                                                                           31 December 
                                                                                  2018 
                                                     Notes           GBP           GBP 
 
Cash flows from operating activities 
 
Operating loss                                        23                   (1,815,576) 
Equity settled share based payments                                             60,000 
Decrease/(increase) in trade and other receivables                            (16,764) 
(Decrease)/increase in trade and other payables                                 63,000 
 
 
Net cash flow used in operating activities                                 (1,709,340) 
 
 
Investing activities 
Investment in subsidiary                                             (1) 
Decrease/(increase) in loan to subsidiary                   (10,695,589) 
Purchase of tangible fixed assets                                      - 
Interest received                                                 35,964 
 
 
 
 
Net cash used in investing activities                                     (10,659,626) 
 
Financing activities 
Proceeds from issue of shares net of costs                    25,486,038 
 
 
 
 
Net cash generated from/(used in) financing 
 activities                                                                 25,486,038 
 
 
 
Net increase in cash and cash equivalents                                   13,117,072 
 
Cash and cash equivalents at beginning of period                                     - 
 
 
 
Cash and cash equivalents at end of period                                  13,117,072 
 
 
 
 

ARGO BLOCKCHAIN PLC

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIODED 31 DECEMBER 2018

 
1    Accounting policies 
 
     Company information 
     Argo Blockchain plc ("the company") is a public limited company 
      incorporated in England and Wales. The registered office is Room 
      4, 1st Floor 50 Jermyn Street, London, United Kingdom, SW1Y 6LX. 
      The company was incorporated on 5 December 2017 as GoSun Blockchain 
      Limited and changed its name to Argo Blockchain Limited on 21 
      December 2017. Also on 21 December 2017, the company re-registered 
      as a public company, Argo Blockchain plc. Argo Blockchain plc 
      acquired a 100% subsidiary, Argo Blockchain Canada Holdings Inc. 
      (together "the Group"), incorporated in Canada, on 12 January 
      2018. 
 
      On 3 August 2018 the company placed 156,250,000 ordinary shares 
      at a price of 16 pence per ordinary share and gained admission 
      to the official list (by way of Standard Listing under chapter 
      14 of the Listing Rules) and to trading on the London Stock Exchange's 
      main market for listed securities. 
 
      The principal activity of the group is that of the provision 
      of crypto mining services. 
     Reporting period 
     The financial statements cover the period from incorporation 
      5 December 2017 to 31 December 2018. 
     Significant accounting policies 
     The principal accounting policies applied in the preparation 
      of these consolidated financial statements are set out below. 
 
1.1  Basis of preparation 
 
       The financial statements have been prepared in accordance with 
       International Financial Reporting Standards (IFRS) and IFRS Interpretations 
       Committee (IFRS IC) interpretations 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 financial statements are prepared in sterling, which is the 
      functional currency of the company and Group. Monetary amounts 
      in these financial statements are rounded to the nearest GBP. 
      Entities within the Group which have a functional currency that 
      is different to that of the parent, are presented in the Group's 
      presentational currency of Sterling. Where group entities' functional 
      currencies are different from the parent, the assets and liabilities 
      presented are translated at the closing rate as at the Balance 
      Sheet date. Income and expenses are translated at average exchange 
      rates (unless this average is not a reasonable approximation 
      of the cumulative effect of the rates prevailing on the transaction 
      dates, in which case income and expenses are translated at the 
      rate on the dates of the transactions). 
 
     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 group accounting policies. The areas involving 
      a higher degree of judgement or complexity, or areas where assumptions 
      and estimates are significant to the financial statements are 
      disclosed in note 3. 
 
1.2  Going concern 
 
       The preparation of consolidated financial statements requires 
       an assessment on the validity of the going concern assumption. 
       The Directors have reviewed projections for a period of at least 
       12 months from the date of approval of the Financial Statements. 
       The Group currently has a low level of revenues but significant 
       cash resources were raised, following its listing, to finance 
       its activities. In making their assessment of going concern, 
       the Directors acknowledge that the Group has considerable cash 
       reserves and can therefore confirm that they hold sufficient 
       funds to ensure the Group continues to meet its obligations as 
       they fall due for a period of at least one year from date of 
       approval of these Financial Statements. Accordingly, the Board 
       believes it is appropriate to adopt the going concern basis in 
       the preparation of the Financial Statements. 
 
 
 
1.3  Revenue recognition 
 
       Subscription revenue 
 
       The Group recognised revenue during the period based on subscription 
       revenues received monthly in advance of the MaaS facilities offered. 
       Each contract was renewable on a monthly basis and the Group 
       did not offer any longer term agreements to subscribers. The 
       Group enters into contracts with the subscriber. Revenue arising 
       from subscription sales under these subscription contracts is 
       recognised when the price is determinable, the product has been 
       delivered in accordance with the terms of the contract, the significant 
       risks and rewards of ownership have been transferred to the customer 
       and collection of the sales price is reasonable assured. These 
       criteria are assessed to have occurred once the crypto mining 
       service has been delivered to the customer. 
 
       Mined income 
 
       The Group recognised revenue during the period in relation to 
       mined crypto. The Group enters into contracts with the blockchain. 
       The performance obligation is identified to be the delivery of 
       crypto into the Group's wallet once an algorithm has been solved. 
       The transaction price is the fair value of crypto mined, being 
       the fair value per yahoo finance on the transaction date, and 
       this is allocated to the number of crypto mined. These criteria 
       are assessed to have occurred once the crypto has been received 
       in the Group's wallet. 
 
1.4  Basis of consolidation 
 
       Subsidiaries are all entities (including structured entities) 
       over which the Group has control. The Group controls an entity 
       when the Group is exposed to, or has rights to, variable returns 
       from its involvement with the entity and has the ability to affect 
       those returns through its power over the entity. Subsidiaries 
       are fully consolidated from the date on which control is transferred 
       to the Group. They are deconsolidated from the date that control 
       ceases. 
 
       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. Consolidation of 
       a subsidiary begins when the Group obtains control over the subsidiary 
       and ceases when the Group loses control of the subsidiary. Assets, 
       liabilities, income and expenses of a subsidiary acquired or 
       disposed of during the year are included in the consolidated 
       financial statements from the date the Group gains control until 
       the date the Group ceases to control the subsidiary. 
 
       The group consists of Argo Blockchain plc and its wholly owned 
       subsidiaries Argo Innovation Labs Inc and Argo Innovation Labs 
       Limited, the latter remaining dormant. 
 
       In the parent company financial statements, investments in subsidiaries, 
       joint ventures and associates are accounted for at cost less 
       impairment. 
 
     The consolidated financial statements incorporate those of Argo 
      Blockchain plc and all of its subsidiaries (i.e. entities that 
      the group controls through its power to govern the financial 
      and operating policies so as to obtain economic benefits). Subsidiaries 
      acquired during the year are consolidated using the purchase 
      method. Their results are incorporated from the date that control 
      passes. 
 
      All financial statements are made up to 31 December 2018. Where 
      necessary, adjustments are made to the financial statements of 
      subsidiaries to bring the accounting policies used into line 
      with those used by other members of the group. 
 
      All intra-group transactions, balances and unrealised gains on 
      transactions between group companies are eliminated on consolidation. 
 
     Argo Innovation Labs Inc. has been included in the group financial 
      statements using the purchase method of accounting. Accordingly, 
      the group profit and loss account and statement of cash flows 
      include the results and cash flows of Argo Innovation Labs Inc. 
      for the period from its incorporation and acquisition on 12 January 
      2018. 
 
 
 
1.5  Segmented reporting 
 
       The directors consider that the Group has only one reporting 
       segment. Accordingly, no segmental analysis is considered necessary. 
 
 
 
1.6  Intangible assets 
     Intangible fixed assets comprising of the Group's website and 
      supporting software platform relates to the user interface for 
      customers, and as such is revenue generating. 
 
      Intangible assets are recognised at cost and are subsequently 
      measured at cost less accumulated amortisation and accumulated 
      impairment losses. 
 
      Costs relating to the development of website and software are 
      capitalised once all the development phase recognition criteria 
      of IAS 38 "Intangible Assets" are met. When the software is available 
      for its intended use, amortisation is charged on a straight-line 
      basis over the estimated useful life of 5 years. 
 
      The useful life represents management's view of the expected 
      period over which the Group will receive benefits from the Website, 
      as well as anticipation of future events which may impact their 
      useful life, such as changes in technology. 
 
1.7  Tangible fixed assets 
 
       Tangible fixed assets comprise of computer equipment and data 
       centre improvements. 
 
       Tangible fixed assets are initially measured at cost and subsequently 
       measured at cost or valuation, net of depreciation and any impairment 
       losses. Cost includes the original purchase price of the asset 
       and any costs attributable to bringing the asset to its working 
       condition for its intended use. An item of property, plant and 
       equipment is recognised as an asset if it is probable that future 
       economic benefits associated with the asset will flow to the 
       entity, and the cost of the asset can be measured reliably. 
 
     Depreciation is recognised so as to write off the cost or valuation 
      of assets less their residual values over their estimated useful 
      lives of 3 years in the case of computer equipment and 5 years 
      in the case of the data centre improvements. 
 
     Management assesses the useful lives based on historical experience 
      with similar assets as well as anticipation of future events 
      which may impact their useful life, such as changes in technology. 
 
 
1.8  Fixed asset investments 
 
       In the parent company financial statements, investments in subsidiaries 
       are initially measured at cost and subsequently measured at cost 
       less any accumulated impairment losses. 
 
 
1.9  Impairment of fixed assets 
 
       At each reporting period end date, the group reviews the carrying 
       amounts of its tangible and intangible assets to determine whether 
       there is any indication that those assets have suffered an impairment 
       loss. If any such indication exists, the recoverable amount of 
       the asset is estimated in order to determine the extent of the 
       impairment loss (if any). Where it is not possible to estimate 
       the recoverable amount of an individual asset, the company estimates 
       the recoverable amount of the cash-generating unit to which the 
       asset belongs. 
 
 
1.10  Cash and cash equivalents 
 
        Cash and cash equivalents comprise cash at bank and in hand and 
        demand deposits with banks and other financial institutions, 
        that are readily convertible into known amounts of cash and which 
        are subject to an insignificant risk of changes in value. 
 
1.11  Financial instruments - initial recognition and subsequent measurement 
 
              (1) Financial assets 
 
              Financial assets are recognised in the Balance Sheet when the 
              group becomes party to the contractual provisions of the instrument. 
 
              Financial assets are classified into specified categories. The 
              classification depends on the nature and purpose of the financial 
              assets and is determined at the time of recognition. 
 
              Financial assets are subsequently measured at amortised cost, 
              fair value through OCI, or fair value through profit and loss. 
 
              The classification of financial assets at initial recognition 
              that are debt instruments depends on the financial asset's contractual 
              cash flow characteristics and the Group's business model for 
              managing them. The Group initially measures a financial asset 
              at its fair value plus, in the case of a financial asset not 
              at fair value through profit or loss, transaction costs. 
 
              In order for a financial asset to be classified and measured 
              at amortised cost or fair value through OCI, it needs to give 
              rise to cash flows that are 'solely payments of principal and 
              interest (SPPI)' on the principal amount outstanding. This assessment 
              is referred to as the SPPI test and is performed at an instrument 
              level. 
 
              The Group's business model for managing financial assets refers 
              to how it manages its financial assets in order to generate cash 
              flows. The business model determines whether cash flows will 
              result from collecting contractual cash flows, selling the financial 
              assets, or both. 
 
        Subsequent measurement 
 
         For purposes of subsequent measurement, financial assets are 
         classified in four categories: 
 
          *    Financial assets at amortised cost 
 
 
          *    Financial assets at fair value through OCI with 
               recycling of cumulative gains and losses (debt 
               instruments) 
 
 
          *    Financial assets designated at fair value through OCI 
               with no recycling of cumulative gains and losses upon 
               derecognition (equity instruments) 
 
 
          *    Financial assets at fair value through profit or loss 
 
 
 
         Financial assets at amortised cost (debt instruments) 
 
         This category is the most relevant to the Group. The Group measures 
         financial assets at amortised cost if both of the following conditions 
         are met: 
 
          *    The financial asset is held within a business model 
               with the objective to hold financial assets in order 
               to collect contractual cash flows; and 
 
 
          *    The contractual terms of the financial asset give 
               rise on specified dates to cash flows that are solely 
               payments of principal and interest on the principal 
               amount outstanding. 
 
 
 
         Financial assets at amortised cost are subsequently measured 
         using the effective interest rate (EIR) method and are subject 
         to impairment. Interest received is recognised as part of finance 
         income in the statement of profit or loss and other comprehensive 
         income. Gains and losses are recognised in profit or loss when 
         the asset is derecognised, modified or impaired. IFRS 9.5.4 The 
         Group's financial assets at amortised cost include other receivables 
         and cash and cash equivalents. 
 
 
         Derecognition 
 
         A financial asset (or, where applicable, a part of a financial 
         asset or part of a group of similar financial assets) is primarily 
         derecognised (i.e., removed from the Group's consolidated Balance 
         sheet) when: 
 
          *    The rights to receive cash flows from the asset have 
               expired; or 
 
 
          *    The Group has transferred its rights to receive cash 
               flows from the asset or has assumed an obligation to 
               pay the received cash flows in full without material 
               delay to a third party under a 'pass-through' 
               arrangement; and either (a) the Group has 
               transferred substantially all the risks and rewards 
               of the asset, or (b) the Group has neither 
               transferred nor retained substantially all the risks 
               and rewards of the asset, but has transferred control 
               of the asset. 
 
 
 
         When the Group has transferred its rights to receive cash flows 
         from an asset or has entered into a pass-through arrangement, 
         it evaluates if, and to what extent, it has retained the risks 
         and rewards of ownership. When it has neither transferred nor 
         retained substantially all of the risks and rewards of the asset, 
         nor transferred control of the asset, the Group continues to 
         recognise the transferred asset to the extent of its continuing 
         involvement. In that case, the Group also recognises an associated 
         liability. The transferred asset and the associated liability 
         are measured on a basis that reflects the rights and obligations 
         that the Group has retained. 
 
 
         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. 
 
         The Group recognises an allowance for 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. 
         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 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 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. 
 
         The Group considers a financial asset in default when contractual 
         payments are 90 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. 
 
         (2) Financial liabilities 
 
         Financial liabilities are classified, at initial recognition, 
         as financial liabilities at fair value through profit or loss, 
         loans and borrowings, payables, or as derivatives designated 
         as hedging instruments in an effective hedge, as appropriate. 
         All financial liabilities are recognised initially at fair value 
         and, in the case of loans and borrowings and payables, net of 
         directly attributable transaction costs. The Group's financial 
         liabilities include trade and other payables and loans. 
 
 
         Subsequent measurement 
 
         The measurement of financial liabilities depends on their classification, 
         as described below: 
 
         Loans and borrowings and trade and other payables 
 
         After initial recognition, interest-bearing loans and borrowings 
         and trade and other payables are subsequently measured at amortised 
         cost using the EIR method. Gains and losses are recognised in 
         the statement of profit or loss and other comprehensive income 
         when the liabilities are derecognised, as well as through the 
         EIR amortisation process. 
 
         Amortised cost is calculated by taking into account any discount 
         or premium on acquisition and fees or costs that are an integral 
         part of the EIR. The EIR amortisation is included as finance 
         costs in the statement of profit or loss and other comprehensive 
         income. 
 
         This category generally applies to trade and other payables. 
 
 
         Derecognition 
 
         A financial liability is derecognised when the associated obligation 
         is discharged or cancelled or expires. 
 
         When an existing financial liability is replaced by another from 
         the same lender on substantially different terms, or the terms 
         of an existing liability are substantially modified, such an 
         exchange or modification is treated as the derecognition of the 
         original liability and the recognition of a new liability. The 
         difference in the respective carrying amounts is recognised in 
         profit or loss and other comprehensive income. 
 
1.12  Equity instruments 
 
        Equity instruments issued by the group are recorded at the proceeds 
        received, net of transaction costs. Dividends payable on equity 
        instruments are recognised as liabilities once they are no longer 
        at the discretion of the group. Incremental costs directly attributable 
        to the issue of new shares or options are shown in equity as 
        a deduction, net of tax, from the proceeds. 
1.13  Financial risk management 
           Equity instruments issued by the group are recorded at the proceeds 
            received, net of transaction costs. Dividends payable on equity 
            instruments are recognised as liabilities once they are no longer 
            at the discretion of the group. Incremental costs directly attributable 
            to the issue of new shares or options are shown in equity as 
            a deduction, net of tax, from the proceeds. 
 
            Financial Risk Factors 
 
            The Group's activities expose it to a variety of financial risks: 
            market risk (price risk), credit risk and liquidity risk. The 
            Group's overall risk management programme seeks to minimise potential 
            adverse effects on the Group's financial performance. 
 
            The Group has no borrowings, but is exposed to market risk in 
            terms of foreign exchange risk. 
 
            Risk management is undertaken by the Board of Directors. 
 
            Market Risk - price risk 
 
            The Group is exposed to price risk primarily for the costs of 
            power and hosting at its data centres as well as the costs of 
            computer equipment acquired to facilitate mining cryptocurrencies. 
 
            The Group is also exposed to commodity price risk by way of the 
            values of cryptocurrencies. The Directors review all these costs 
            on a regular basis and aim to achieve the best possible terms 
            for the Group at the time of acquisition. 
 
            Credit risk 
 
            Credit risk arises from cash and cash equivalents as well as 
            any outstanding receivables. Management does not expect any losses 
            from non-performance of these 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, which is stated 
            under the cash and cash equivalents accounting policy. 
 
 
          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. 
           Controls over expenditure are carefully managed, in order to 
           maintain its cash reserves. 
 
           Financial liabilities are all due within one year. 
 
           Capital risk management 
 
           The Group's objectives when managing capital is 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. The Group has no 
           borrowings. 
 
           In order to maintain or adjust the capital structure, the Group 
           may adjust the amount of dividends paid to shareholders, return 
           capital to shareholders or issue new shares. 
 
           The Group monitors capital on the basis of the total equity held 
           by the Group, being GBP21,428,753. 
 
1.14      Taxation 
 
            The tax expense represents the sum of tax currently payable and 
            deferred tax. 
 
          Current tax 
 
            The tax currently payable is based on taxable profit for the 
            year. 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 years and it further 
            excludes items that are never taxable or deductible. The group's 
            liability for current tax is calculated using tax rates that 
            have been enacted or substantively enacted by the reporting end 
            date. 
          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. 
          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 to 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. 
 
1.15      Employee benefits 
 
            The costs of short-term employee benefits are recognised as a 
            liability and an expense, unless those costs are required to 
            be recognised as part of non-current assets. 
          The cost of any unused holiday entitlement is recognised in the 
           period in which the employee's services are received. 
 
          Termination benefits are recognised immediately as an expense 
           when the company is demonstrably committed to terminate the employment 
           of an employee or to provide termination benefits. 
 
1.16      Retirement benefits 
 
            The group does not have any pension schemes. 
 
1.17      Share-based payments 
 
            Equity-settled share based payments are measured at fair value 
            at the date of grant by reference to the fair value of the equity 
            instruments granted using the Black-Scholes model. The fair value 
            determined at the grant date is expensed on a straight-line basis 
            over the vesting period, based on the estimate of shares that 
            will eventually vest. A corresponding adjustment is made to equity. 
 
          When the terms and condition of equity settled share-based payments 
           at the time they were granted are subsequently modified, the 
           fair value of the share-based payment under the original terms 
           and conditions and under the modified terms and conditions are 
           both determined at the date of the modification. Any excess of 
           the modified fair value over the original fair value is recognised 
           over the remaining vesting period in addition to the grant date 
           fair value of the original share-based payment. The share-based 
           payment expense is not adjusted if the modified fair value is 
           less than the original fair value. 
 
          Cancellations or settlements are treated as an acceleration of 
           vesting and the amount that would have been recognised over the 
           remaining vesting period is recognised immediately. 
1.18      Leases 
 
            Leases are classified as finance leases whenever the terms of 
            the lease transfer substantially all the risks and rewards of 
            ownership to the lessees. All other leases are classified as 
            operating leases. 
 
          Rentals payable under operating leases, less any lease incentives 
           received are charged to income on a straight line basis over 
           the term of the relevant lease except where another more systematic 
           basis is more representative of the time pattern in which the 
           benefits from the lease asset are consumed. 
 
1.19      Foreign exchange 
          Transactions in currencies other than pounds sterling are recorded 
           at the rates of exchange prevailing at the dates of the transactions. 
           At each reporting end date, monetary assets and liabilities that 
           are determined in foreign currencies are retranslated at the 
           rates prevailing on the reporting end date. Gains and losses 
           arising on translation are included in the income statement for 
           the period. 
 
2         Adoption of new and revised standards 
 
          These are the first financial statements of the company. The 
           company has therefore adopted all recognition, measurement and 
           disclosure requirements of IFRS, including any new and revised 
           standards and Interpretations of IFRS, in effect for annual periods 
           commencing on or after 1 January 2018. 
 
          Standards which are in issue but not yet effective 
          At the date of authorisation of these financial statements, the 
           following Standards and Interpretation, which have not yet been 
           applied in these financial statements, were in issue but not 
           yet effective. 
          Standard                 Description                       Effective date for 
           or Interpretation                                         annual accounting period 
                                                                     beginning on or after 
 
          IFRS 3                   Amendments to IFRS 3' 'Business   1 January 2020 
                                   Combinations' 
                                   to clarify the definition of a 
                                   business 
          IFRS 16                  Leases - new standard             1 January 2019 
          IAS 1                    Amendments to IAS 1,              1 January 2020 
                                   'Presentation 
                                   of Financial Statements' 
                                   regarding 
                                   the definition of 'material' 
          IAS 8                    Amendments to IAS 8, 'Accounting  I January 2020 
                                   Policies, Changes in Accounting 
                                   Estimates 
                                   and Errors' regarding the 
                                   definition 
                                   of 'material' 
 
          IAS 12                   Amendments to IAS 12, 'Income     1 January 2019 
                                   Taxes' 
                                   resulting from Annual 
                                   Improvements 
                                   2015-2017 Cycle (income tax 
                                   consequences 
                                   of dividends) 
          IFRIC 23                 Uncertainty over Income Tax       1 January 2019 
                                   Treatments 
 
          The company have not early adopted any of the above standards 
           and the directors are assessing the impact on future financial 
           statements. 
 
3         Judgements and key sources of estimation uncertainty 
 
          In the application of the Group's accounting policies, the directors 
           are required to make judgements, estimates and assumptions about 
           the carrying amount of assets and liabilities that are not readily 
           apparent from other sources. The estimates and associated assumptions 
           are based on historical experience and other factors that are 
           considered to be relevant. Actual results may differ from these 
           estimates. 
 
           The estimates and underlying assumptions are reviewed on an ongoing 
           basis. Revisions to accounting estimates are recognised in the 
           period in which the estimate is revised where the revision affects 
           only that period, or in the period of the revision and future 
           periods where the revision affects both current and future periods. 
 
           The estimates and assumptions which have a significant risk of 
           causing a material adjustment to the carrying amount of assets 
           and liabilities are outlined below. 
          Share-based payments 
 
           During the course of the period certain share based payments 
           were made based on the fees due to certain individual for services 
           to be performed by them in the future. In calculating these payments, 
           where possible the Directors consulted with professional advisers 
           to establish the market rate for these services. 
 
           Valuation of intangible fixed assets 
 
           The directors considered at length whether any further impairments 
           were required on the value of the computer equipment and website. 
           In doing so they made use of forecasts of revenues and expenditure 
           prepared by the Group and came to the conclusion that further 
           impairment of those assets were unnecessary based on current 
           forecasts. 
 
           Valuation of cryptocurrencies 
 
           The Board monitors regularly the values of the cryptocurrencies 
           and any market forecasts. During the period, the Group entered 
           into crypto currency transactions, which were assessed for fair 
           value in line with the requirements of IAS38. Revaluations were 
           made with such regularity that as at the end of the reporting 
           period the carrying amount of the asset does not differ materially 
           from its fair value. All revaluations were made with reference 
           to level 1 information, being crypto currencies actively traded 
           on the open market. As at 31(st) December 2018 the Group did 
           not hold any significant amounts of crypto currency. 
4        Revenue 
                                                                            2018 
                                                                             GBP 
 UK (corporate reseller)                                                 227,561 
 Canada (corporate reseller)                                             370,993 
 Website - worldwide                                                      77,044 
 Crypto currency mining                                                   88,964 
 
                                                                         764,562 
                                                                      ---------- 
 
5        Expenses by nature 
                                                                            2018 
                                                                             GBP 
 
        Administration expenses 
 Salary and other employee costs                                         202,839 
 Depreciation and amortisation                                            67,842 
 Mirabaud Securities Limited provision (see below)                       834,000 
 Legal, professional and regulatory fees                                 520,610 
 Foreign Exchange losses                                                 152,748 
 Consulting fees                                                         925,411 
 Advertising fees                                                        350,564 
 Travel and subsistence                                                  208,894 
 Crypto asset fair value movement (see note 16)                          235,196 
 Other administration expenses                                           233,809 
 
 
 Total administration expenses                                         3,731,913 
 
                                                                            2018 
                                                                             GBP 
 
        Cost of sales 
 Crypto asset disposal (see note 16)                                     414,970 
 Depreciation of computer hardware                                       419,856 
 Hosting and other costs                                                 341,139 
 
 
 Total cost of sales                                                   1,175,965 
 
 
 
 
          Mirabaud provision 
          The Group has still not received GBP834,000 of the Placing monies 
          due from Mirabaud Securities Limited as part of the Listing process 
          on 3(rd) August 2018. It is in constant dialogue with its advisers 
          and Mirabaud with the aim of recovering those monies under the 
          contractual 
          agreement between the two parties. In the meantime, the Board has 
          taken the prudent step of providing against this amount during the 
          period notwithstanding the fact that efforts are being made to recover 
          the monies. 
6        Auditor's remuneration 
                                                                            2018 
         Fees payable to the company's auditor and associates                GBP 
 
         For audit services 
 In relation to listing                                                   40,000 
 Audit of the financial statements of the group for 
  the period ended 31 December 2018                                       45,000 
 
 
 
7        Employees 
 
         The average monthly number of persons (including directors) employed 
          by the group during the period was: 
                                                                            2018 
                                                                          Number 
 
 Management                                                                    9 
 
                                                                            2018 
          Their aggregate remuneration comprised:                            GBP 
 
          Wages and salaries                                             177,531 
          Social security costs                                            4,854 
          Pension costs                                                    2,353 
          Share based payments                                            35.000 
 
 
                                                                         219,738 
 
 
8         Directors' and key management personnel remuneration 
                                                                            2018 
                                                                             GBP 
          Director's remuneration for qualifying services                596,742 
          Other key management personnel remuneration for qualifying 
           services                                                      305,271 
 
 
                                                                         902,012 
 
 
 
 

The amounts above are remunerated through both salaries (of which, some are included in Note 7) and through service companies (as disclosed in Note 29). Details of Directors remuneration are available in the Remuneration report.

 
9   Taxation 
 
    The actual charge for the period can be reconciled to the expected 
     charge based on the profit or loss and the standard rate of tax 
     as follows: 
 
                                                                                     2018 
                                                                                      GBP 
 
 Loss before taxation                                                             4,117,285 
 
 
 
 Expected tax credit based on a weighted average of 24% 
  (UK and Canada)                                                               (996,941) 
 Effect of expenses not deductible in determining taxable 
  profit                                                                           44,068 
 Capital allowances in excess of depreciation                                   (161,140) 
 Other tax adjustments                                                             63,503 
 Unutilised tax losses carried forward                                          1,050,510 
 
 
                                                                                        - 
 
 
 Taxation charge in the financial statements                                            - 
 
 
 
 The group has tax losses available to be carried forward and 
  used against trading profits arising in future periods of GBP4,248,640. 
 
 A deferred tax asset of GBP1,026,354 calculated at a weighted 
  average rate of 24% has not been recognised in respect of the 
  tax losses carried forward on the basis that there is insufficient 
  certainty over future profits to utilise against this amount. 
 
 
 
 
10   Earnings per share 
 
     The basic loss per share is calculated by dividing the loss attributable 
      to equity shareholders by the weighted average number of shares 
      in issue. 
 
     The Group and Company has in issue 48,230,103 warrants and options 
      at 31 December 2018. The loss attributable to equity holders 
      and weighted average number of ordinary shares for the purposes 
      of calculating diluted earnings per ordinary share are identical 
      to those used for basic earnings per ordinary share. This is 
      because the exercise of warrants and options would have the effect 
      of reducing the loss per ordinary share and is therefore anti-dilutive 
                                                                                       2018 
                                                                                        GBP 
 
 Net loss for the period attributable to ordinary equity 
  holders for continuing operations                                             (4,117,285) 
 
 Weighted average number of ordinary shares in issue                            186,019,809 
 
 Basic and diluted loss per share for continuing operations                          (2.2)p 
 
 
 
 
11   Investments in subsidiaries 
 
     Company                                                                        Shares in 
                                                                                 subsidiaries 
                                                                                          GBP 
     Cost and carrying value 
     At 5 December 2017                                                                     - 
 Additions                                                                                  1 
 
 
 At 31 December 2018                                                                        1 
 
 
     Details of the company's subsidiaries at 31 December 
      2018 are as follows: 
 
     Name of undertaking        Country               Ownership   Voting power      Nature of 
                                 of incorporation      interest       held (%)       business 
                                                            (%) 
 
 Argo Blockchain Canada 
  Holdings Inc.             Canada                         100%           100%             ** 
 
 ** The provision of cryptocurrency mining services. 
 The company's interest in Argo Blockchain Canada Holdings Inc. 
  was acquired on incorporation of Argo Blockchain Canada Holdings 
  Inc. on 12 January 2018. 
 The registered office of Argo Blockchain Canada Holdings Inc. 
  is 700-401 West Georgia Street, Vancouver BC V6B 5A1 Canada. 
 
 
12              Intangible assets 
 
                Group                                                                       Website 
                                                                                                GBP 
                Cost 
                At 5 December 2017                                                                - 
 Additions                                                                                  671,921 
                                                         ------------------------------------------ 
 
 
 
 At 31 December 2018                                                                        671,921 
                                                         ------------------------------------------ 
 
 
 
                Amortisation and impairment 
                At 5 December 2017                                                                - 
 Amortisation charged in the period                                                          52,421 
                                                         ------------------------------------------ 
 
 
 
 At 31 December 2018                                                                         52,421 
                                                         ------------------------------------------ 
 
 
 
                Carrying amount 
 At 31 December 2018                                                                        619,500 
                                                         ------------------------------------------ 
 
 
      All intangible assets are held by the subsidiary. 
 
 
 
 
13     Tangible fixed assets 
 
       Group                                      Computer               Improvements              Total 
                                                 equipment              to Datacentre 
                                                                                                     GBP 
       Cost 
       At 5 December 2017                                                                              - 
 Additions                                       2,807,589                     84,927          2,892,516 
                                      --------------------  -------------------------  ----------------- 
 
 At 31 December 2018                             2,807,589                     84,927          2,892,516 
                                      --------------------  -------------------------  ----------------- 
 
       Depreciation and impairment 
       At 5 December 2017                                -                                             - 
 Depreciation charged in the 
  period                                           421,711                     13,565            435,276 
                                      --------------------  -------------------------  ----------------- 
 
 At 31 December 2018                               421,711                     13,565            435,276 
                                      --------------------  -------------------------  ----------------- 
 
       Carrying amount 
 At 31 December 2018                             2,385,878                     71,362          2,457,240 
                                      --------------------  -------------------------  ----------------- 
 
       All property, plant and equipment is owned by the subsidiary. 
 
 
 
14    Financial instruments 
                                                            Group                         Company 
                                                             2018                            2018 
                                                              GBP                             GBP 
      Carrying amount of financial assets 
      Debt instruments measured at amortised cost       1,630,600                      10,699,089 
 
                                                        1,630,600                      10,699,089 
 
 
 
      Carrying amount of financial liabilities 
      Measured at amortised cost                          218,589                          63,000 
 
 
 
      The directors consider the carrying amounts of financial instruments 
       carried at amortised cost in the financial statements approximate 
       to their fair values. 
 
 
15    Trade and other receivables 
                                                            Group                         Company 
                                                             2018                            2018 
      Amounts falling due within one year:                    GBP                             GBP 
 
      Amounts due from group companies                          -                      10,695,589 
      Other receivables                                 1,643,424                          16,764 
      Other taxation & social security                    535,633                               - 
 
 
 
                                                        2,179,057                      10,712,353 
 
 
 
      Amounts due from group companies consist of an intercompany loan 
       made to the 100% subsidiary, Argo Blockchain Canada Holdings 
       Inc. and is eliminated on consolidation. 
 
      The directors consider that the carrying amount of trade and 
       other receivables is approximately equal to their fair value. 
 
      During the period, the directors made a provision against a receivable 
       due to the company for GBP834,000, as described in Note 5. No 
       other significant receivable balances are impaired at the reporting 
       date. 
 
 
 
16   Other current assets 
 
     Group                                                             Crypto 
                                                                       assets 
                                                                          GBP 
     At 5 December 2017                                                     - 
 
     Additions 
 Crypto assets purchased for resale                                   329,088 
 Crypto assets purchased for contractual 
 obligation                                                           234,196 
 Crypto assets mined                                                   88,964 
 
 
 
     Fair value movements 
 Fair value movements on Crypto assets 
  held                                                              (235,196) 
 
 
 
     Disposals 
 Disposal of Crypto assets                                          (414,970) 
 
 
     Carrying amount 
 At 31 December 2018                                                    2,082 
 
 
 
 
 During the period, the Group entered into transactions involving 
  the purchase, mining and disposal of Crypto assets. 
 
  Throughout the period, the Group used spare hardware capacity 
  to accumulate Crypto currencies and held the assets with the 
  intention of short-term capital growth. Crypto assets amounting 
  to the value of GBP88,964 were mined. 
 
  Between 11 October 2018 and 14 November 2018, the Group identified 
  an opportunity to make short term gains from a low prevailing 
  price on the Crypto currency market, purchasing Bitcoin and 
  Ethereum to the value of GBP329,088. However, due to the continued 
  poor performance of the Crypto currency market, only losses 
  were realised. 
 
  During the months of October, November and December 2018, the 
  Group entered into contracts for the provision of mining as 
  a service. The Directors concluded that given the poor performance 
  of the Crypto currency market in the period approaching the 
  year end, it would not be financially advantageous to purchase 
  the additional hardware required to satisfy the contracts. Instead, 
  the Directors reached an agreement with the customers to supply 
  an equivalent amount of Bitcoin equal to the amount of Crypto 
  currency expected to be mined in accordance with the contracts. 
  In order to fulfil the new obligation, the Group purchased additional 
  Bitcoin to the value of GBP234,196. The amounts purchased for 
  resale and the amounts mined, were also converted into Bitcoin 
  and also transferred in the transaction above. 
 
  During the period, the fair value of Crypto assets held fell 
  by GBP235,196. The fair value of the Crypto assets disposed 
  of in order to satisfy the contracts described above was GBP414,970. 
  At the period end, the Group held Crypto assets representing 
  less than 1 Bitcoin, being a fair value of GBP2,082. 
 
 
17                Share options and warrants 
 
                  The following options and warrants over Ordinary Shares have 
                   been granted by the company and are outstanding: 
 
                  Options                   Grant date                  Expiry date                     Exercise             Number of options              Number of options 
                   / warrants                                                                              price                  and warrants                   and warrants 
                                                                                                                                   outstanding                    exercisable 
                                                                                                                                at 31 December                 at 31 December 
                                                                                                                                          2018                           2018 
 
 Warrants                              2 February 2018              2 February 2023                      GBP0.08                     2,250,000                      2,250,000 
                                        23-26 February               23-26 February 
 Warrants                                         2018                         2021                      GBP0.08                     6,580,000                      3,290,000 
                                           23 February 
 Warrants                                         2018             23 February 2021                      GBP0.08                     1,400,000                              - 
                                          14 - 17 June 
 Warrants                                         2018              14-17 June 2021                      GBP0.16                       650,000                        325,000 
 Warrants                                 15 June 2018                 15 June 2021                      GBP0.16                       210,453                              - 
 Warrants                                3 August 2018                3 August 2023                      GBP0.16                    11,781,600                     11,781,600 
 Options                                  25 July 2018                 25 July 2024                      GBP0.16                    25,358,050                      7,532,050 
 
                                                                                                                                    48,230,103                     25,178,650 
 
 
 
                  Movements in the number of options and warrants outstanding and 
                   their related weighted average exercise prices are as follows: 
 
                                                                                                                             Number of options               Weighted average 
                                                                                                                                  and warrants                 exercise price 
                                                                                                                                                                          GBP 
                                                                                                                                          2018                           2018 
                  At beginning of period                                                                                                     -                              - 
 Granted                                                                                                                            48,230,103                           0.14 
                  Exercised                                                                                                                  -                              - 
                  Lapsed                                                                                                                     -                              - 
 
 Outstanding at 31 December 2018                                                                                                    48,230,103                           0.14 
 
 
 Exercisable at 31 December 2018                                                                                                    25,178,650                           0.14 
 
 
                  The weighted average remaining contractual life of options and 
                   warrants as at 31 December 2018 is 4 years. 
                  If the exercisable shares had been exercised on 31(st) December 
                   2018 this would have represented 8% of the enlarged 
                  share capital. 
 
                  At the grant date, the fair value of the warrants issued have 
                   been determined using the Black-Scholes option pricing model. 
                   Volatility was calculated based on data from comparable listed 
                   technology start-up companies, with an appropriate discount applied 
                   due to being an unlisted entity at the grant date. Risk free 
                   interest has been based on UK Government Gilt rates for an equivalent 
                   term. As the exercise price was equal or above the market value 
                   of the shares during the period to 31 December 2018, and share 
                   prices fell during the period, the marketability of shares was 
                   low and as such a discount rate of between 75% and 90% was placed 
                   on the fair value of the shares depending on amounts and timing. 
                   The Directors note that the expense for the fair value of options 
                   and warrants are not material during the period and therefore 
                   not included in the accounts. 
18                Share options and warrants (continued) 
 
                                                                         2 February               23-26 February                    14-17 June                       3 August                         25 July 
                  Grant date share price                                    GBP0.08                      GBP0.08                       GBP0.08                        GBP0.16                         GBP0.08 
                  Exercise price                                            GBP0.08                      GBP0.08                       GBP0.16                        GBP0.16                         GBP0.16 
 Expected volatility                                                            40%                          40%                           40%                            40%                             40% 
                  Option life                                             5/3 years                      3 years                       3 years                        5 years                         6 years 
 Risk-free interest 
  rate                                                                           1%                           1%                            1%                             1%                              1% 
 Marketability discount                                                         75%                          75%                           75%                            90%                             75% 
 
 
19                Share capital 
                                                                                                                                                                                                    Group and 
                                                                                                                                                                                                      company 
                                                                                                                                                                                                         2018 
                  Ordinary share capital                                                                                                                                                                  GBP 
                  Issued and fully paid 
 293,750,000 Ordinary Shares of GBP0.001 each                                                                                                                                                         293,750 
 
 
 
                  Reconciliation of movements during the year: 
                                                                                                                                           2018                                                          2018 
                                                                                                                                         Number                                                        Number 
                                                                                                                                       Ordinary                                                      Ordinary 
                                                                                                                                      Shares of                                                     Shares of 
                                                                                                                                       GBP0.001                                                     GBP1 each 
                                                                                                                                           each 
 
 1 Ordinary Share of GBP1 issued at GBP1 on incorporation                                                                                     -                                                             1 
 Subdivision of ordinary shares on 20 December 
  2017                                                                                                                                    1,000                                                           (1) 
 89,999,000 Ordinary Shares issued at GBP0.001 
  each on 20 December 2017 for cash                                                                                                  89,999,000                                                             - 
 10,000,000 Ordinary Shares issued at GBP0.01 
  each on 2 January 2018 for cash                                                                                                    10,000,000                                                             - 
 31,250,000 Ordinary Shares issued at GBP0.08 
  each on 2 February 2018 for cash                                                                                                   31,250,000                                                             - 
 750,000 Ordinary Shares issued at GBP0.08 each 
  on 2 February 2018 for services                                                                                                       750,000                                                             - 
 5,500,000 Ordinary Shares issued at GBP0.001 
  each on 15 June 2018 on exercise of warrants                                                                                        5,500,000                                                             - 
 156,250,000 Ordinary Shares issued at GBP0.16 
  each on 3 August 2018 on placing                                                                                                  156,250,000                                                             - 
                                                                                                                  -----------------------------  ------------------------------------------------------------ 
 
                                                                                                                                    293,750,000                                                             - 
                                                                                                                  =============================  ============================================================ 
 
                  On incorporation, the Company issued 1 ordinary share for consideration 
                   of GBP1. The Company later passed a written resolution to subdivide 
                   the 1 Ordinary Share into 1,000 ordinary shares, with a nominal 
                   value of GBP0.001 each. 
 
20                Share premium account 
                                                                                                                                                                                                    Group and 
                                                                                                                                                                                                      company 
                                                                                                                                                                                                         2018 
                                                                                                                                                                                                          GBP 
 
                  At beginning of period                                                                                                                                                                    - 
 Issue of new shares                                                                                                                                                                               27,461,750 
 Share issue expenses                                                                                                                                                                             (2,209,462) 
 
                                                                                                                                                                                                   25,252,288 
 
 
 
21                Reserves 
 
                  The following describes the nature and purpose of each reserve: 
 
                  Reserve                               Description 
                  Share capital                         Represents the nominal value of equity shares 
                  Share premium                         Amount subscribed for share capital in excess 
                                                         of nominal value 
                  Retained earnings                     Cumulative net gains and losses and other 
                                                         transactions with equity holders not recognised 
                                                         elsewhere. 
 
22                Trade and other payables 
 
 
                                                                                                                                                      Group Company 
                                                                                                                                                        2018 2018 
GBP GBP 
 
 Other creditors                                                                                                                         15,801                                                         5,000 
 Accruals                                                                                                                               202,768                                                        58,000 
 
 
 
                                                                                                                                        218,569                                                        63,000 
 
 
 
         Within other creditors is an amount of GBP5,000 owed to related parties 
          in relation to securing trade agreements and facilitating the business 
          and expenditure accrued during the early stages of the business. 
          See Note 29 for additional disclosure. 
 
         The directors consider that the carrying value of trade and other 
          payables is approximately equal to their fair value. 
 
 
 
23   Cash generated from group operations 
                                                      2018 
                                                       GBP 
 
 Loss for the period after tax                     4,117,285 
 
     Adjustments for: 
 Finance income                                       35,964 
 
 
 
 Operating Loss per Cash Flow                      4,153,249 
 
 
 
     Cash generated from operations - company 
                                                      2018 
                                                       GBP 
 
 Loss for the period after tax                     1,779,612 
 
     Adjustments for: 
 Finance income                                       35,964 
 
 
 
 Operating loss per Cash Flow                      1,815,576 
 
 
 
 
 
 
 24    Capital management policy 
 
       There are currently no capital commitments contracted for 
        by the Group. 
 
 
 25    Financial risk management 
 
       The group's activities expose it to a variety of financial 
        risks: credit risk, liquidity risk and market risk (including 
        foreign currency risk and interest rate risk). The group's 
        risk management policies in respect of these financial risks 
        are set out below. 
 
       Credit risk 
       Credit risk arises principally from cash and cash equivalents, 
        as well as credit exposures from outstanding receivables. 
       The group and company's cash balances are held with reputable 
        financial institutions being NatWest Bank in England and 
        CIBC in Canada. The Group initially banked with Metrobank 
        in England but late in 2018 was given notice that Metrobank 
        had decided that a business dealing with cryptocurrencies, 
        albeit through MaaS, was incompatible with their business 
        model and therefore would cease providing banking facilities. 
        The carrying amount of financial assets recorded in the 
        financial statements represent the company's maximum exposure 
        to credit risk. The company does not hold any collateral 
        or other credit enhancements to cover this credit risk. 
 
       Liquidity risk 
       Liquidity risk is the risk that the group and company will 
        not be able to meet financial obligations as and when they 
        fall due. 
       The policy is to settle all liabilities within the terms 
        of invoices which is normally within 30 days. 
 
 
 26    Financial risk management (continued) 
 
       The carrying amounts of the group's foreign currency denominated 
        monetary assets and liabilities at the reporting date are 
        as follows: 
 
                                                                                       Assets        Liabilities 
                                                                                         2018               2018 
                                                                                          GBP                GBP 
 
       Cash and cash equivalents                                                    3,272,371                  - 
       Trade and other receivables                                                  2,162,293                  - 
  Trade and other payables                                                                  -            155,569 
 
 
                                                                                    5,434,664            155,569 
 
 
  Market risk 
  The Group is very dependent on the state of the cryptocurrency 
   market and general sentiment of crypto currencies as a whole. 
   The Group is set up to deal with these issues by switching 
   to self mining at relatively short notice and cutting costs 
   when and where necessary. 
 
 
 27    Retirement benefit schemes 
 
  There are no material company pension schemes in operation. 
 
 
 28    Operating lease commitments 
 
    At 31 December 2018 the Group had future minimum lease payments 
    under non-cancellable operating leases as follows: 
                                                                                                            2018 
                                                                                                             GBP 
  <1 year                                                                                           GBP3,956,250 
  1 - 2 years                                                                                       GBP3,731,250 
  2 - 5 years                                                                                       GBP2,100,000 
                                                                                                    GBP9,787,500 
 
 
    The above disclosure relates to the minimum power commitment 
    in line with the GPU agreement entered into on 8 August 
    2018. The commitments fell with the subsidiary and now such 
    commitments exist for the company. 
 29    Related party transactions 
 
             Founder agreement 
              The Company entered into an agreement with the Founder Shareholders, 
              to pay them GBP95,000 pro rata to their percentage shareholdings 
              in the Company. This was in consideration of their efforts 
              to enable the Company to enter into certain memoranda of 
              understanding and a media buying contract. 
 
              The outstanding balance as at the date of these financial 
              statements is GBP5,000. 
 
 
              Share based payment 
 
              During the period, the Company issued shares to the value 
              of GBP35,000 to Timothy Le Druillenec, a Director of the 
              Company. This was in lieu of payment for professional services 
              undertaken in excess of the services required by his directorship. 
 
              Rental agreement 
 
              The Company rents office space from Dukemount Capital plc, 
              for which Timothy Le Druillenec was a Director during the 
              period. During the period, payments of GBP4,620 were made 
              with a balance of GBPNil outstanding as at 31 December 2018. 
 
              The Group also rents office space from Vernon blockchain 
              Inc, for which Peter Wall (considered to be key management 
              personal) was a Director during the period. During the period, 
              payments of GBP30,471 were made with a balance of GBPNil 
              outstanding as at 31 December 2018. 
 
              For each agreement, there is no long term commitment, and 
              these transactions were made on an arm's length basis. 
 
              Fixed assets 
 
              During the period, the Group acquired GBP93,323 fixed assets 
              from Vernon Blockchain Inc, for which Peter Wall was a Director 
              during the period, with a balance of GBPNil outstanding 
              as at 31 December 2018. 
 
              Advertising services 
 
              During the period ended 31 December 2018, the Company paid 
              GBP83,780 to Stanley Park Ventures, for which Jonathan Bixby 
              was a Director, with a balance of GBPNil outstanding as 
              at 31 December 2018. 
 
              Key management compensation 
 
              Key management includes Directors (executive and non-executive) 
              and senior. The compensation paid to related parties in 
              respect of key management for employee services during the 
              period was made only from Argo Innovation Labs Inc, amounting 
              to: GBP208,612 paid to Possibilities Training Group Ltd 
              in respect of the fees of Jonathan Bixby; GBP208,982 paid 
              to MSE Management Inc. in respect of the fees of Mike Edwards; 
              GBP134,706 paid to Blockchain Consulting in respect of fees 
              of Inderpreet Hothi; GBP105,175 paid to Vernon Blockchain 
              Inc in respect fees of Peter Wall. Other key management 
              received GBP65,390. These are not inclusive of the related 
              party transactions disclosed above. 
 
 30    Controlling party 
 
  There is no controlling party of the Group. 
 
 
 31    Post balance sheet events 
 
  On 8(th) January 2019 the 100% owned subsidiary, Argo Blockchain 
   Canada Holdings Inc. changed its name to Argo Innovation 
   Labs Inc. 
 
   On 1(st) September 2018 the Company acquired 100% of Argo 
   Mining Limited (a company incorporated in the UK) for GBP1. 
   On 14(th) January 2019 that company changed its name to 
   Argo Innovation Labs Limited. 
   On 15(th) February 2019 the Group announced a refocus of 
   its business strategy in light of the continuing difficult 
   trading conditions in the cryptocurrency market as digital 
   currencies continued to face severe price pressure and volatility. 
   As a result of the challenging conditions, the Company ceased 
   accepting new mining subscriptions and decided to terminate 
   all existing mining-as-a-service (MaaS) contracts by 1st 
   April 2019. This shift in strategy followed more than six 
   months of better-than-expected growth achieved by Argo's 
   consumer business since its launch in the summer of 2018. 
   Despite continuing demand for the services, the Company 
   temporarily moved away from MaaS to mining directly for 
   its own account. 
 
 
 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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April 17, 2019 09:39 ET (13:39 GMT)

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