Results for the year ended 31 December 2024

World Chess Plc

("World Chess" or the "Company" or the "Group")

Financial Results for the year ended 31 December 2024

World Chess plc (LSE:CHSS), the London-listed chess organisation and operator of FIDE Online Arena (chessarena.com), today publishes its financial results for the year ended 31 December 2024.

Copies of the Company's full Annual Report and Financial Statements for the period ended 31 December 2024 will be made available on the Company's website at https://worldchess.com. and uploaded to the National Storage Mechanism at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

Highlights:

· Results for the year: Revenue for the year was €2,434,173 (2023: €2,345,492). Net loss for the year before tax was €3,843,031 (2023: €4,671,470).

· Launch of the World Chess Tour: On 23 October 2024, the Company announced plans to introduce the World Chess Tour, a global series of tournaments modelled after the ATP tennis tour. This initiative aims to provide a structured and competitive platform for the world's top chess players, enhancing the sport's global appeal.

· Strategic Investment: In September 2024, World Chess secured a significant investment from a new strategic investor. This infusion of capital is set to bolster the Company's financial position and support ongoing growth initiatives within the chess and technology sectors.

· Extension of Algorand Partnership: The Company extended its partnership with Algorand in September 2024, continuing the collaboration to integrate blockchain technology into the chess ecosystem. This partnership underscores World Chess's commitment to innovation and enhancing user experience.

· High-Profile Rematch Event: In July 2024, the Company hosted "Clash of Blames" in London, a highly anticipated rematch between Grandmasters Vladimir Kramnik and José Alcántar. The event garnered significant attention, showcasing World Chess's capability to organise premier chess events. The rematch was held on Chessarena.com, following technical issues in the original match on Chess.com, and highlighted the platform's superior stability and performance.

· Launch of New FIDE Online Arena Interface: In May 2024, World Chess unveiled a new interface for the FIDE Online Arena, enhancing the digital playing experience for users worldwide. This development aligns with the Company's strategy to leverage technology in promoting chess accessibility and engagement.

· Financial Milestone: In December 2024, the Company secured a €6 million loan facility. The initial tranche will refinance existing short-term debt under improved terms, with the remaining funds allocated to support near-term growth and operational initiatives. Additional financing will be required to meet the Company's longer-term funding need.

For more information, visit: www.worldchess.com or contact:

Notes to Editors

About World Chess Plc

World Chess (LSE: CHSS) is a London-based chess gaming and entertainment company and Fédération Internationale des Échecs ('FIDE') official commercial partner. World Chess organised the FIDE Championship Matches in the USA, and the UK, and revolutionised the sport by signing the biggest media partnerships in history. World Chess develops Armageddon, the chess league for prime-time television. World Chess also runs FIDE Online Arena, the exclusive official chess gaming platform. More at worldchess.com.

Statement from the Chair

I am pleased to report that over the past year, World Chess PLC has made substantial progress in strengthening our financial foundation while expanding our global chess community.

Financial Performance

While our year-on-year revenue growth of 4% was modest, I am particularly encouraged by our significant improvement in gross profit, which increased from €179K in 2023 to €889K in 2024. This nearly fivefold improvement stems primarily from our strategic shift toward higher-margin digital offerings and operational efficiencies. This enhanced profitability provides a strong foundation for our continued growth and long-term financial stability.

Strategic Developments and Challenges

The past year has not been without challenges. Our Berlin Chess Club, opened in 2023 as an experimental concept space, did not meet its financial targets despite attracting significant community engagement. After careful evaluation, we made the difficult decision to close this location in April 2025.

This closure, however, aligns with our refined venue strategy. We are now developing a more sustainable model for physical chess spaces that integrate seamlessly with our digital infrastructure.

Board Changes

On February 14, 2025, our Non-Executive Chair, Graham Woolfman, stepped down from his position. Graham's strategic guidance has been invaluable throughout his tenure, particularly in navigating our public listing and early growth phase. On behalf of the Board and the entire World Chess senior team, I extend our sincere appreciation for his contributions.

I have assumed the role of Interim Chair while our Board conducts a comprehensive search for a new Non-Executive Director and Chair. We expect to announce an appointment shortly, bringing fresh expertise to help us capitalise on emerging opportunities in the chess ecosystem.

Looking Ahead

Despite global economic uncertainties, the chess market continues to demonstrate resilience, with online participation growing significantly. The Board remains focused on building long-term shareholder value through targeted investments that strengthen our position as a chess-focused technology company while broadening our community reach.

We are grateful for the continued support of our shareholders, players, and chess enthusiasts worldwide as we work to elevate the profile and accessibility of chess globally.

Neil Rafferty

Interim Chairman

28 April 2025

Statement from the Chief Executive

At World Chess, we spent the past twelve months laying the foundations to change the way the 600-million-strong chess world is organized, played, and experienced. We didn't set out to make a small improvement. We set out to rethink chess as a global ecosystem, and to build it in a way that respects the game, the players, and the scale of the opportunity. A rare chance for a small company to have an impact on an entire sport and the way people enjoy it.

Here's what we accomplished in 2024:

· We announced the World Chess Tour - a global tournament series modelled on ATP, offering a structured and visible platform for elite chess competition.

· We secured a new strategic investment in September - strengthening our ability to scale and build.

· We released a full redesign of the FIDE Online Arena - a faster, better online platform for official chess.

· We deepened our partnership with Algorand - integrating blockchain to improve trust, ratings, and verification in digital chess.

· We hosted the 'Clash of Blames' match in London - delivering a high-profile event that captured international attention.

· We organised global events around International Chess Day - because chess is built on community, not just competition.

· We secured a €6 million loan facility - improving our balance sheet and fuelling the next phase of growth.

· We expanded our chess commerce business - developing merchandise and chess sets designed to turn free players into engaged customers.

· We aligned our products into a connected ecosystem - where digital play, professional tournaments, merchandise, and community engagement work together.

Focus and Priorities

The year ahead is about execution. Our priorities are:

· Expand the World Chess Tour - more events, bigger audiences, global reach, including media partnerships.

· Grow our digital platforms - acquiring new users, deepening engagement, and strengthening the online rating and player identity system.

· Monetise smartly across the ecosystem - offering products, memberships, and experiences to every segment of our audience, from free subscribers to PRO members.

· Strengthen the World Chess brand - clear, modern, trusted, and aligned with the future of the game.

· Deliver shareholder value - through scale, through ecosystem growth, and through a strategy built to last.

· As part of our focus on scalable, digital-first growth we made the decision to close the current World Chess Club Berlin venue in April 2025.

Ilya Merenzon

Chief Executive Officer

28 April 2025 

Financial Review

The group continued to focus on the development of chessarena.com and the World Chess Club Berlin ('WCCB') investing a further €697,258 (2023: €817,533) in the development of chessarena.com.

Revenue and Gross Profit

Revenue for the year increased 4% to €2,434,173 from €2,345,492 in 2023, however this included growth in revenues from chessarena.com (99% growth), WCCB (256% growth) and merchandise (29% growth) and a decline in tournament revenues (68% decline) due to not hosting an Armageddon series in 2024.

The change in mix of revenue streams also led to an increase in gross profit to €889,623 (2023: €179,102), this reflects the relatively higher gross profit from operating chessarena.com and WCCB compared with hosting tournaments.

Loss per share

The loss per share was €0.006 (2023: €0.007), resulting from a reduction in operating losses and an increase in the weighted average number of shares in issue, from 650,232,851 in 2023 to 689,110,129 in 2024. At 31 December 2024, there were a total of 691,724,039 shares in issue.

Cash flows

The Group absorbed €1,641,412 from operations (2023: €3,338,149) and invested a further €1,009,385 (2023: €1,451,19) in fixed assets, this was financed by net cash generated from financing activities of €3,433,366 (2023: €4,867,827).

Statement of Financial Position

The Consolidated Statement of Financial Position as at 31 December 2024 shows net assets of €950,770 (2023: €2,516,461 as restated), included within equity - pending issuance is €2,016,703 (2023: €1,508,737) received by the Company in relation to binding subscription agreements for the issue of new ordinary shares which had not yet been issued at 31 December 2024. On 25 February 2025 (as detailed in note 30 to the consolidated financial statements) the Company announced the issue of 22,666,672 shares representing of €1,200,000 of this amount with a further 11,667,187 new ordinary shares remaining to be issued representing the remaining €816,703.

Capital expenditure

The development of chessarena.com remained a priority during the year with additional investment of €697,258 (2023: €817,533), bringing the total invested to €4,622,229 with a carrying value at 31 December 2024 of €2,942,925.

Investments and impairment

As detailed in notes 10 and 12 to the consolidated financial statements the Directors considered the carrying value of intangible assets and investments at 31 December 2024 based on detailed budgets and forecasts, these budgets and forecasts generally cover a five-year period. Based on this the Directors concluded that no impairment was necessary at 31 December 2024. However, as detailed in note 30 the current World Chess Club venue in Berlin is due to close at the end of April 2025 and as a result, an impairment of the Groups investment is expected to be recognised in the next financial year.

Cash and debt position

At the year end the Group has total cash balances of €267,396 (2023: €186,881) and total borrowings of €2,705,817 (including lease commitments of €1,304,274) (2023: €1,453,470 and €1,420,481) giving a net debt figure of €2,438,421 (€1,134,147 excluding lease commitment) (2023: €1,266,589 and €153,892).

Going concern

Based on the Group's Statement of Financial Position and a review of its forecast future operating budgets and forecasts, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for at least twelve months from the date of signing of these consolidated financial statements. This review included certain reasonable downside scenarios and confirmed that, even in the case of such downside scenarios, the Group could continue to operate and meet its obligations as they fall due. Accordingly, the Directors have adopted the going concern basis in preparing the Annual Report and consolidated financial statements.

However, as detailed on in note 2 on page 58, this assessment includes a material uncertainty related to the refinancing of existing borrowing due in 2026. While the Directors are confident that refinancing will be secured in the ordinary course of business, the absence of committed funding at the date of signing these financial statements gives rise to a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern beyond the assessment period.

In making this assessment, the Directors have considered the resilience of the Group in severe but plausible scenarios, taking into account the principal risks and uncertainties facing the Group as detailed on page 11, and the effectiveness of any mitigating actions. The Directors' assessment considered the potential impacts of these scenarios, both individually and in combination, on the Group's business model, future performance, solvency and liquidity over the period. Sensitivity analysis was also used to stress test the Group's strategic plan and to confirm that sufficient headroom would remain under the Group's available sources of finance. The Directors consider that under each of these scenarios, the mitigating actions would be effective and sufficient to support the ongoing viability of the Group, notwithstanding the material uncertainty described above.

Richard Collett

Chief Financial Officer

28 April 2025

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2024

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2024

The financial statements were approved by the Board of Directors and authorised for issue on 28 April 2025 and were signed on its behalf by:

Ilya MerenzonChief Executive Officer

COMPANY STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2024

As permitted by Section 408 of the Companies Act 2006, the statement of Profit and loss and comprehensive income of the parent company is not presented as part of these financial statements. The parent company's loss for the financial year was €3,550,193 (2023: €1,542,691).

The financial statements were approved by the Board of Directors and authorised for issue on 28 April 2025 and were signed on its behalf by:

Ilya MerenzonChief Executive Officer

CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 31 DECEMBER 2024

COMPANY STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 31 DECEMBER 2024

As detailed in note 31 the Group identified a classification error in the year ended 31 December 2023. An amount of €1,508,737 received under a binding share subscription agreement was incorrectly classified within Trade and other payables. This has been reclassified as share capital to be issued in the Consolidated and Company Statements of Changes in Equity.

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2024

COMPANY STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2024

NOTES TO THE STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2024

An impairment charge of €2,631,441 relating to the write-down of the carrying value of an intercompany loan, being a significant non-cash transaction, has been added back to loss before tax in the Company cash flow statement.

Amounts owed to Directors includes balances due to Directors disclosed in note 27 to the financial statements. Although classified under 'trade and other payables' in the Statement of Financial Position, these amounts represent short-term financing from Directors and are included in net debt.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

World Chess PLC is a public company, limited by shares, registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

Basis of preparation

These financial statements have been prepared in accordance with UK - adopted International Accounting Standards and IFRIC interpretations 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, except for certain financial assets and liabilities, including crypto assets which are measured at fair value.

The Group had no discontinued operations during the year. All results presented relate to continuing operations.

The financial statements are presented in Euro which is the functional currency of the Group and rounded to the nearest €.

Going concern

In assessing the Group's ability to continue as a going concern, the Directors have considered the Group's Statement of Financial Position, forecast future operating budgets and cash flow projections for a period of at least twelve months from the date of approval of these consolidated financial statements. This assessment has included the evaluation of certain reasonable downside scenarios and associated mitigating actions.

The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the consolidated financial statements have been prepared on a going concern basis.

However, the Group has an existing borrowing facility which is due for repayment in 2026. While the Directors expect that refinancing or replacement funding will be secured in the ordinary course of business, this funding is not yet committed as at the date of signing these financial statements. As such, the need to secure this future funding represents a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern.

Notwithstanding this material uncertainty, and based on current forecasts and available resources, the Directors believe the Group will be able to continue in operation and meet its obligations as they fall due for a period of at least twelve months from the date of approval of these consolidated financial statements.

These financial statements do not include the adjustments that would be required if the Group were unable to continue as a going concern.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to 31 December each year. Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities.

Intra-group balances and transactions are eliminated on consolidation.

Critical accounting judgements and key sources of estimation uncertainty

The preparation of the financial statements in conformity with UK - adopted International Accounting Standards requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amounts, events or actions, actual results ultimately 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. The material areas in which estimates and judgements are applied as follows:

Impairment of other intangible assets

The Group is required to test, on an annual basis, whether other intangible assets have suffered any impairment. Determining whether there has been any impairment requires an estimation of the fair value in use of the cash-generating units. The value in use calculation requires the Directors to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate to calculate the present value, the discount rate applied is 12.81% (2023: 16.15%). The carrying value of intangible assets is set out in the table below (see also note 10):

Sensitivity Analysis

The impairment review is sensitive to changes in key assumptions, particularly the discount rate and the forecast revenues and costs. The Directors have considered possible changes in these assumptions and their potential impact on the headroom available in the impairment model.

· A 1% increase in the discount rate (from 12.81% to 13.81%) would reduce the value in use of the cash-generating unit by approximately €2,150,000 but would not result in impairment of any of the assets tested.

· A 1% decrease in forecast revenues would reduce the value in use of the cash-generating unit by approximately €850,000 but would not result in impairment of any of the assets tested.

· A 1% increase in forecast costs would reduce the value in use of the cash-generating unit by approximately €700,000 but would not result in impairment of any of the assets tested.

Investments and amounts owed by group undertakings for impairment (Company Only)

At each reporting date, the Company assesses whether amounts owed by group undertakings have suffered any impairment. Determining whether there has been any impairment requires an estimation of the recoverable amount of the receivables, based on the financial position and expected future cash flows of the relevant group undertakings.

This assessment involves estimating future cash flows expected to arise from the group undertaking and applying a suitable discount rate to calculate the present value. The discount rate applied is 12.81% (2023: 16.15%) and the carrying value of amounts owed by group undertakings is set out in the table below:

As of the reporting date, an impairment charge of €2,631,441 (2023: €512,854) has been recognised in the Company's income statement to reflect a reduction in the recoverable amount of the balance. The Directors will continue to monitor the financial performance of the group undertakings and reassess the recoverability of the amount owed on an ongoing basis.

The Directors will continue to monitor the financial performance of the subsidiary and reassess the recoverability of the loan on an ongoing basis.

Legal proceedings and other provisions

Provisions for legal proceedings are recognised as other expenses when the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount can be measured reliably. At the Statement of Financial Position date there is an ongoing claim with one supplier, if the claim is successful then an invoice, amounting to €1,140,000, will become payable. The invoice is not provided for in the financial statements as the Directors consider it to be null and void and raised by the supplier in breach of contract (see note 26).

The Group has also recognised a dilapidations provision of €157,887 at 31 December 2024 (2023: €157,887), representing the estimated cost of reinstating a leased property to its original condition at the end of the lease term. The estimate is based on the Group's current understanding of the lease requirements and will be reviewed regularly throughout the lease term, which ends on 31 December 2031.

Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue from sale of goods is recognised when control of the goods has transferred to the customer. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Any revenue received in advance gives rise to contract liabilities which is deferred and included in accruals and deferred income. The carrying amount of the deferred income included in payables being €401,898 (2023: €650,098).

No obligation for returns, refunds or other similar obligation is recognised, the Directors following careful consideration, having concluded that any potential obligation is trivial.

The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all the following conditions are satisfied:

· The Company has transferred the significant risks and rewards of ownership to the buyer;

· The Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

· The amount of revenue can be measured reliably;

· It is probable that the Company will receive the consideration due under the transaction; and

· The costs incurred or to be incurred in respect of the transaction can be measured reliably.

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:

· The amount of turnover can be measured reliably;

· It is probable the Company will receive the consideration due under the contract;

· The stage of completion of the contract at the end of the reporting period can be measured reliably; and

· The costs incurred and the costs to complete the contract can be measured reliably.

The policies specific to the Group's revenue types within its activities are outlined below:

Events

Revenue is recognised in the period in which the event takes place; revenue is typically linked to multiyear agreements where payment is received in advance of the event to which it relates.

Online income

Revenue is recognised over the period of the subscription; online subscriptions are paid annually in advance.

Merchandising and Clubs

Revenue is recognised when control of the goods has transferred to the customer; typically, control is transferred upon payment by the customer.

Segment reporting

IFRS 8 Operating Segments requires operating segments to be identified and reported in a manner consistent with the internal reporting provided to chief operating decision maker ('CODM'), who is responsible for allocating resources and assessing performance of the operating segments as identified by the Directors.

The Directors have reviewed the Group's activities and consider the Group to comprise a single line of business being a mass market promoter of chess. Within the single line of business, the Group undertakes integrated revenue generating activities across tournaments, an online platform, chessarena.com, and merchandise and clubs. These revenue generating activities are closely aligned within a business model which seeks to promote a chess community across tournaments, online and physical environments.

The individual revenue generating activities are managed in an integrated way by the CODM and executive management team who review financial information on the same integrated way. The Group has geographically separate operations and a geographic split of revenue as well as the split between the revenue types within its activities is included in note 3.

Cash and cash equivalents

Cash represents cash in hand and deposits held on demand with financial institutions. Cash equivalents are short-term, highly-liquid investments with original maturities of three months or less (as at their date of acquisition). Cash equivalents are readily convertible to known amounts of cash and subject to an insignificant risk of change in that cash value.

In the presentation of the Statement of Cash Flows, cash and cash equivalents also include bank overdrafts. Any such overdrafts are shown within borrowings under 'current liabilities' on the Statement of Financial Position.

Crypto-assets

Included within intangible assets are crypto-assets held in the Group's name in the Binance crypto exchange, the Group has not traded in crypto-assets to date and such activities do not form part of its strategy. The crypto-assets are not held as long-term investments, nor do they form part of the Group's inventory. The Group's strategy is to convert crypto-assets to fiat currencies at the earliest opportunity, usually upon receipt or in accordance with an agreed schedule of conversion. 

Any crypto-assets received are recognised at the exchange rate prevailing at the date that the risk and reward associated with the crypto-asset passes to the Group. Where the exchange rate of the crypto-assets has a guaranteed minimum floor price, a receivable is recognised for any short-fall.

Crypto-assets are not amortised but are reviewed for impairment if the prevailing exchange rate indicates their value has fallen below their carrying value. Any impairment or realised exchange gains on the conversion of crypto-assets to fiat currency are recognised within exceptional items on the Consolidated Statement of Profit or Loss and Other Comprehensive Income.

Other intangible assets

Amortisation is charged to the income statement on a straight-line basis over the estimated useful lives of intangible assets.

Intangible assets are amortised from the date they are available for use. The estimated useful lives are as follows:

· Exclusive rights to organise and host top-level chess events in association with FIDE amortised using the straight-line method over the ten-year term of the original contract. Following the 2022 FIDE Grand Prix, the rights were varied such that the company now holds the exclusive right to operate the official gaming platform of FIDE, chessarena.com. This was treated as a disposal of the old rights and an acquisition of the new rights at the same carrying value, with the new rights being amortised over the remaining life of the original contract.

· Capitalised costs associated with developing the online platform used for the FIDE Online Arena, ten years using the straight-line method.

· Licences to operate certain software incorporated into the platform, the life of the contract, being five years using the straight-line method.

The basis for choosing these useful lives is with reference to the years over which they can continue to generate value for the Group.

The Group reviews the amortisation period and method whenever events or circumstances indicate that the useful lives of intangible assets may have changed since the last reporting date. The amortisation charge for the year is recognised within Administrative Expenses in the Consolidated Statement of Profit or Loss and Other Comprehensive Income.

The Group assesses at each reporting date whether there is any indication that intangible assets may be impaired. If any such indication exists, the recoverable amount of the asset is estimated. An impairment loss is recognised in the income statement if the carrying amount of an intangible asset exceeds its recoverable amount. The recoverable amount is determined as the higher of fair value less costs of disposal and value in use, based on estimated future cash flows discounted to their present value.

Property, plant and equipment

Depreciation is provided in order to write off each asset over its estimated useful life or, if held as a right-of-use asset, over the lease term, whichever is the shorter, which are typically.

· Fixtures and fittings - Straight line between 1 and 10 years depending on the type of asset

· Computer equipment - Straight line over 3 years

The Group assesses at each reporting date whether there is any indication that property, plant and equipment may be impaired. If such an indication exists, the recoverable amount of the asset is estimated. An impairment loss is recognised if the carrying amount exceeds the recoverable amount, which is determined as the higher of fair value less costs of disposal and value in use. Any impairment losses are recognised in profit or loss. Impairment losses are reviewed at each reporting date for possible reversal.

Financial instruments

The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other receivables and payables, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade receivables and payables, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of trade debt deferred beyond normal business terms or financed at a rate of interest that is not market rate or in the case of an out-right short-term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Consolidated Statement of Profit or Loss and Other Comprehensive Income.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the company would receive for the asset if it were to be sold at the date of the Statement of Financial Position.

Financial assets and liabilities are offset, and the net amount reported in the Statement of Financial Position when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Inventories

Inventories of traded goods are valued at the lower of cost or net realisable value (the estimated selling price less the estimated costs to sell), after making due allowance for obsolete and slow-moving items.

Taxation

Current taxes are based on the results shown in the financial statements and are calculated according to local tax rules in the UK, USA and Germany where the Group operates, using tax rates enacted or substantively enacted by the date of the Statement of Financial Position.

Current tax represents the amount of tax payable or receivable in respect of the taxable profit (or loss) for the current or past reporting periods. It is measured at the amount expected to be paid or recovered using the tax rates and laws that have been enacted or substantively enacted by the date of the Statement of Financial Position.

Commercial legislation within the Russian Federation in which the Group operated prior to April 2022, including tax legislation, is subject to varying interpretations and frequent changes. The Group's management is confident that all necessary tax accruals have been made and, accordingly, no additional provision is required in the Consolidated Financial Statements.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date.

Deferred tax represents the future tax consequences of transactions and events recognised in the financial statements of current and previous periods. It is recognised in respect of all timing differences, with certain exceptions. Timing differences are differences between taxable profits and total comprehensive income as stated in the financial statements that arise from the inclusion of income and expense in tax assessments in periods different from those in which they are recognised in the financial statements. Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date that are expected to apply to the reversal of timing differences.

Research and development

Research and development expenditure is capitalised if it can be demonstrated that:

· it is technically and commercially feasible to develop the asset for future economic benefit;

· adequate resources are available to maintain and complete the development;

· there is the intention to complete and develop the asset for future economic benefit;

· the Group is able to use the asset;

· use of the asset will generate future economic benefit; and

· expenditure on the development of the asset can be measured reliably.

Other development expenditure is recognised in the Consolidated Statement of Profit and Loss as an expense as incurred.

Capitalised development expenditure is stated at cost less accumulated amortisation and less accumulated impairment losses.

Foreign currencies

Assets and liabilities in foreign currencies are translated into euro at the rates of exchange ruling at the statement of financial position date. Transactions in foreign currencies are translated into euro at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

The results and financial position of subsidiaries whose functional currency is not the euro are translated into euro as follows:

· Monetary assets and liabilities are translated at the closing exchange rate at the statement of financial position date.

· Non-monetary items (such as equity investments and property, plant and equipment) are translated at historical exchange rates.

· Income and expenses are translated at the average exchange rate for the period, unless exchange rates fluctuate significantly, in which case the exchange rates at the dates of the transactions are used.

Exchange differences arising from the translation of the financial statements of foreign subsidiaries are recognised in other comprehensive income and accumulated in a separate component of equity, called the foreign currency translation reserve. On disposal of a foreign subsidiary, the cumulative translation differences are reclassified to profit or loss as part of the gain or loss on disposal.

IFRS 16 'Leases'

Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. 

Where ownership of the right-of-use asset transfers to the lessee at the end of the lease term, the right-of-use asset is depreciated over the asset's remaining useful life. If ownership of the right-of-use asset does not transfer to the lessee at the end of the lease term, depreciation is charged over the shorter of the useful life of the right-of-use asset and the lease term.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:

· Fixed payments (including in-substance fixed payments), less any lease incentives receivable;

· Amounts expected to be payable by the lessee under residual value guarantees; and

· Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.

The lease payments are discounted using the interest rate implicit in the lease, if that rate can be determined, or the Group's incremental borrowing rate. Right-of-use assets are measured at cost comprising the following:

· The amount of the initial measurement of lease liability;

· Any lease payments made at or before the commencement date less any lease incentives received; and

· Any initial direct costs.

Adoption of new and revised standards

There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are effective from 1 January 2024, none of which have a material impact on these financial statements.

Standards issued but not yet effective

At the date of approval of these financial statements, the following new or amended standards and interpretations had been issued by the International Accounting Standards Board (IASB) and endorsed for use in the UK, but were not yet effective for the year ended 31 December 2024. The Group has not early adopted any of these standards:

· IAS 1 (Amendments) - Classification of Liabilities as Current or Non-current (effective date 1 January 2027)

· IAS 7 and IFRS 7 (Amendments) - Supplier Finance Arrangements (effective date 1 January 2027)

· IFRS 10 and IAS 28 (Amendments) - Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (effective date deferred indefinitely)

· IFRS 18 - Presentation and Disclosure in Financial Statements (effective date 1 January 2027)

· IFRS 19 - Subsidiaries without Public Accountability: Disclosures (effective date 1 January 2027)

It is not expected that the amendments listed above, except for IFRS 18, once adopted, will have a material impact on the financial statements.

Financial liabilities

The Group does not have financial liabilities that would be classified as fair value through the profit or loss. Therefore, all financial liabilities are classified as other financial liabilities.

The Group use the amortised cost method for financial liabilities include borrowings, trade and other payables and are recognised at their original amount.

Revenue is reported by geographical area based on the location where the revenue is recognised in the Group's financial records, rather than the location of the customer.

Revenue recognised over time relates primarily to subscription income from the Online Arena and Sponsorship income, which are recognised evenly over the duration of the performance obligation.

Revenue recognised at a point in time includes, merchandise sales, and club-related income, which are recognised when control of the goods or services transfers to the customer.

Major customer

Included in Tournaments revenue are revenues of €353,004 attributable to a major customer (2023: €991,008 attributable to two major customers), being customers who represent more than 10% of revenue; revenue attributable to major customers are Customer 1: €353,004 (2023: €606,008) and Customer 2: €nil (2023: €385,000).

Included in Online Arena revenue are revenues of €303,408 attributable to a major customer (2023: €nil), being a customer who represents more than 10% of revenue; revenue attributable to the customer are: €303,408 (2023: €nil).

The aggregate payroll costs (including Directors not under employment contracts)

In the opinion of the Board, only the Directors of the Company, as detailed in the Corporate Governance Report, are regarded as key management personnel. The remuneration of key management personnel during 2024 was, in aggregate, €553,317 (2023: €491,490).

Contributions to a defined contribution pension scheme on behalf of directors of €2,334 (2023: €1,544) were made during the year.

Further details of Directors', including Non-Executive Directors', remuneration and fees during the year are set out in the Directors Remuneration Report on page 34 of these consolidated financial statements.

The highest paid director was Ilya Merenzon whose total remuneration was €212,400 (2023: €210,000).

The average number of employees (including Directors) during the year was as follows

The Group had no UK employees in 2024 and 2023 except the Directors.

Listing Costs

One-off costs associated with the Company's listing on the Main Market of the London Stock Exchange in April 2023.

Exchange loss on Crypto-assets

Most of the crypto-assets received by the Group are in stablecoin which tracks the US Dollar and are converted into USD on receipt, however where crypto-assets values fluctuate a (gain)/loss is recognised.