CLON Clontarf Energy Plc

Notes:

1.    INFORMATION

The financial information for the six months ended 30 June 2024 and the comparative amounts for the six months ended 30 June 2023 are unaudited. The financial information above does not constitute full statutory accounts within the meaning of section 434 of the Companies Act 2006.

The Interim Financial Report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the U.K. The accounting policies and methods of computation used in the preparation of the Interim Financial Report are consistent with those used in the Group 2023 Annual Report, which is available at www.clontarfenergy.com

The interim financial statements have not been audited or reviewed by the auditors of the Group pursuant to the Auditing Practices board guidance on Review of Interim Financial Information.

2.    DIVIDEND

No dividend is proposed in respect of the period.

3.    GOING CONCERN

The Group incurred a loss for the period of £403,233 (2023: loss of £870,061) and had net current liabilities of £837,583 (2023: £1,277,374) at the balance sheet date. These conditions, as well as those noted below, represent a material uncertainty that may cast doubt on the Group's ability to continue as a going concern. Included in current liabilities is an amount of £910,082 (2023: £988,926) owed to directors in respect of directors' remuneration due at the balance sheet date.

The Group had a cash balance of £600,757 (2023: £182,516) at the balance sheet date. The directors have prepared cashflow projections for a period of at least 12 months from the date of approval of the financial statements which indicate that the group may require additional finance to fund working capital requirements and develop existing projects. As the Group is not revenue or cash generating it relies on raising capital from the public market.

As in previous years the Directors have given careful consideration to the appropriateness of the going concern basis in the preparation of the financial statements and believe the going concern basis is appropriate for these financial statements. The financial statements do not include the adjustments that would result if the Group and Company were unable to continue as a going concern

4.    LOSS PER SHARE

Basic loss per share is computed by dividing the loss after taxation for the year attributable to ordinary shareholders by the weighted average number of ordinary shares in issue and ranking for dividend during the year. Diluted earnings per share is computed by dividing the loss after taxation for the year by the weighted average number of ordinary shares in issue, adjusted for the effect of all dilutive potential ordinary shares that were outstanding during the year.

The following table sets out the computation for basic and diluted earnings per share ("EPS"):

Basic and diluted loss per share are the same as the effect of the outstanding share options is anti-dilutive and is therefore excluded.

5.    INTANGIBLE ASSETS

Exploration and evaluation assets relate to expenditure incurred in prospecting and exploration for lithium, oil and gas in Bolivia and Ghana. The directors are aware that by its nature there is an inherent uncertainty in exploration and evaluation assets and therefore inherent uncertainty in relation to the carrying value of capitalised exploration and evaluation assets.

During 2018 the Group resolved the outstanding issues with the Ghana National Petroleum Company (GNPC) regarding a contract for the development of the Tano 2A Block. The Group has signed a Petroleum Agreement in relation to the block and this agreement awaits ratification by the Ghanian government.

As ratification had not yet been achieved in the prior year the directors, as a matter of prudence, opted to write down 20% of the carrying value of the Tano 2A Block historic expenditure.  Accordingly, an impairment charge of £173,609 was recorded in the prior year.  In the current period the directors impaired a further £69,442 of the historical costs.

The directors believe that there were no facts or circumstances indicating that the carrying value of the remaining intangible assets may exceed their recoverable amount and thus no additional impairment review was deemed necessary by the directors. The realisation of these intangibles assets is dependent on the successful discovery and development of economic deposit resources and the ability of the Group to raise sufficient finance to develop the projects. It is subject to a number of potential significant risks, as set out below.

The Group's activities are subject to a number of significant potential risks including:

·        licence obligations;

·        exchange rate risks;

·        uncertainties over development and operational costs;

·        political and legal risks, including agreements with Governments for licences, profit sharing and taxation;

·        foreign investment risks including increases in taxes, royalties and renegotiation of contracts;

·        title to assets;

·        financial risk management;

·        going concern; and

·        ability to raise finance.

6.    INVESTMENT IN JOINT VENTURE

On 15 February 2023 the Group announced a heads of agreement around the potential formation of a 50:50 Joint Venture with US based, OTC Markets traded, technology company, NEXT-ChemX Corporation ("NCX") covering testing, marketing, and deploying of NCX's proprietary (patent pending) Direct Lithium Extraction ("DLE") technology in Bolivia. Formation of the JV was subject to final due diligence and the parties entering into formal documentation.

The terms of the JV are:

§  A 50:50 joint venture company to be formed on completion of due diligence covering the exclusive rights to the marketing, testing and deployment of the NCX DLE technology in Bolivia.

§  Clontarf Energy plc to contribute $500,000 in cash towards the pilot plant construction and testing as an exclusivity fee for the use of the NCX technology.

§  NCX will then issue shares equal to $500,000 at its next financing (CHMX:OTC) to Clontarf Energy plc. 

§  Clontarf Energy plc will issue shares as follows to NCX:

i.      385 million new Ordinary Shares on proceeding with the Pilot Plant;

ii.     250 million new Ordinary Shares after successful pilot processing of Bolivian brines through the NCX pilot plant; and

iii.    250 million new Ordinary Shares after entry into a construction and processing contract between the JV and the Bolivian authorities on processing of Bolivian brines utilising NCX processing technology.

             On 5 May 2023 the Company announced that all conditions precedent had been satisfied with respect to the JV with NCX coming into force. In this regard, Clontarf paid NCX US$500,000 and issued 385 million new Ordinary Shares in the capital of Clontarf of which half will be subject to a 12-month lock in requirement.

As at 30 June 2024 no trading activity had commenced in the JV and as such there are no results or expenses recorded. 

7.    SHARE CAPITAL

       Movements in issued share capital

On 18 March 2024 the Company raised £400,000 via a placing of 1,142,857,143 ordinary shares of 0.01p each at a price of 0.035p per share. Proceeds raised will be used to provide additional working capital and fund developments costs.

On 23 May 2024 the Company raised £300,000 via a placing of 857,142,857 ordinary shares of 0.01p each at a price of 0.035p per share. Proceeds raised will be used to provide additional working capital and fund developments costs.

8.    SHARE BASED PAYMENTS

SHARE OPTIONS

The Group issues equity-settled share-based payments to certain Directors and individuals who have performed services for the Group. Equity-settled share-based payments are measured at fair value at the date of grant.

Fair value is measured by the use of a Black-Scholes model.

The Group plan provides for a grant price equal to the average quoted market price of the ordinary shares on the date of grant.

On 9 April 2024 a total of 160,000,000 options were granted with a fair value of £56,981 to Directors and individuals who have performed services for the Group. On 16 June 2024 a total of 160,000,000 options were granted with a fair value of £59,321 to Directors and individuals who have performed services for the Group. These fair values were calculated using the Black-Scholes valuation model.

The inputs into the Black-Scholes valuation model were as follows:

Grant 9 April 2024

Weighted average share price at date of grant (in pence)                             0.0365p

Weighted average exercise price (in pence)                                                     0.0365p

Expected volatility                                                                                                 165.90%

Expected life                                                                                                           7 years

Interest free rate                                                                                                    4.25%

Expected dividends                                                                                                none

Grant 17 June 2024

Weighted average share price at date of grant (in pence)                             0.0385p

Weighted average exercise price (in pence)                                                     0.0385p

Expected volatility                                                                                                 153.03%

Expected life                                                                                                           7 years

Interest free rate                                                                                                    4.25%

Expected dividends                                                                                                none

Expected volatility was determined by management based on their cumulative experience of the movement in share prices. The terms of the options granted do not contain any market conditions within the meaning of IFRS 2.

The Group capitalised expenses of £Nil (2023: £Nil) and expensed costs of £116,303 (2023: £106,632) relating to equity-settled share-based payment transactions during the year.

Warrants

There were no warrants issued in the current period.

9.    POST BALANCE SHEET EVENTS

There are no significant post balance sheet events affecting the Company.

10. The Interim Report for the six months to 30 June 2024 was approved by the Directors on 13 September 2024.

11. The Interim Report will be available on the Company's website at www.clontarfenergy.com.