21 March 2024

Blue Star Capital plc

("Blue Star" or the "Company")

Final Results for the year ended 30 September 2023

Blue Star Capital plc (AIM: BLU), the investing company with a focus on esports, technology and its applications within media and gaming, announces its final results for the year ended 30 September 2023.

Operating and financial summary

-    The Company incurred a pretax loss for the period of £6,329,473 compared to a loss for the previous period of £1,301,008.

-    The main factors behind this year's significant loss were the write down in value of the Company's investments in Dynasty Media & Gaming and Sthaler and losses incurred on the realisation of the Company's quoted investments.

-    The operating expenses of the Company have been significantly reduced from £517,003 to £201,118

-    The cash position of the Company at 30 September 2023 was £63,158 compared with £86,575 in the previous period.

-    The formal sales process for SatoshiPay is ongoing and the Company will update shareholders as appropriate. The Company has a 27.9% interest in SatoshiPay which is valued on the basis of the last external fund raise in 2019 at approximately £4.65 million.

-    The Company's Net Asset value per share is 0.11p

-    Post year end a decision was taken by the management of Dynasty to merge with Googly. To help support Dynasty through this transitioning phase, Blue Star invested US$75,000 in a US$3 million fundraise undertaken by Dynasty in November 2023. The Convertible Loan Note has a two-year expiry period, is non-interest bearing and convertible at a discount of 50 per cent to Dynasty's next funding round.

The Annual Report and notice of Annual General Meeting ("AGM") will be posted to shareholders shortly and will be available to view on the Company's website http://www.bluestarcapital.co.uk

The AGM will be held at the offices of Cairn Financial Advisers LLP, 80 Cheapside, 3rd Floor, EC2V 6EE on 17 April 2024 at 10.30 a.m. Shareholders wishing to vote on any matters of business at the AGM are encouraged to do so through completion of a proxy form which can be completed and submitted to the Company. Proxies should be completed and returned in accordance with the instructions on the form of proxy by no later than 10.30 a.m. on 15 April 2024.

Tony Fabrizi Executive Chairman of Blue Star Capital plc, commented:

"The last year was one of considerable disappointment for all those connected with Blue Star. The material and unexpected write down in value in our investment in Dynasty has had a significantly detrimental impact on the Company's net asset value and this has obviously impacted sentiment towards the Company. Our focus is on securing an attractive offer for our shareholding in SatoshiPay later this year at which point the Board will consult with shareholders over the Company's future."

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

For further information, please contact:

Chairman's Statement

Blue Star Capital plc ("the Company" or "Blue Star") provides investors with exposure to a portfolio of geographically diverse companies in high-growth, disruptive technology sectors.

During the period, the Company's Net Asset Value ("NAV") decreased by 53% to £5,329,347 (2022: £11,414,507) with the Company incurring a pre-tax loss of £6,328,408 (2022: loss £1,301,008). The significant decline in NAV and loss for the year principally reflect the write down of our investments in Dynasty Media & Gaming and Sthaler plus the losses incurred on the realisation of the Company's quoted investments. The Company ended the year with cash of £63,158 (2022: £86,575).

In September 2022, the Board set out its strategy for the next two years. The key components were to refrain from making any new investments while it sought offers for its shareholdings in SatoshiPay and Dynasty. The Board also advised that, if possible, it would endeavour to manage the business without any further equity raises.

We provide the following portfolio company overviews for the year ended 30 September 2023.

Blockchain and decentralised finance

SatoshiPay's mission is to connect the world through instant payments. To achieve this ambition, SatoshiPay is initially focusing on building the Pendulum Network Project ("Pendulum").

Pendulum, a smart-blockchain infrastructure technology company, aims to decentralize forex and traditional finance, by providing the missing link between fiat currency and De-Fi ecosystems through a sophisticated smart contract network. Pendulum is committed to advancing foreign exchange ("Forex") trading into the blockchain space to integrate a tranche of the US$6.6 trillion traded daily in Forex markets.

In the period under review, Pendulum has achieved a number of key operational milestones, most notably:

•              In December 2022 Pendulum completed its crowdloan as a precursor to it becoming a Polkadot Parachain. Pendulum's crowdloan was the fastest parachain crowdloan in the history of the Polkadot ecosystem.

•              Pendulum parachain went live on Polkadot mainnet in February 2023 and the corresponding utility token called PEN was listed on MEXC in March 2023.

•              In March 2023 Pendulum announced the development of "Spacewalk", its blockchain bridge connecting the Stellar and Polkadot networks. This innovative bridge is intended to facilitate the transfers of multiple stablecoins, advancing interoperability in the blockchain space. Pendulum described Spacewalk as a trust-minimized bridge that supports the smooth and seamless transfer of stable assets between the two ecosystems, allows closer collaboration in the De-Fi sector and drives synergies between traditional fintech services and the De-Fi sector.

•              In December 2023, an HRMP channel was opened with Moonbeam Network helping to demonstrate Pendulum's partnerships strategy. This launch helped enable additional functionalities for the PEN token and stablecoin activities within the Moonbeam ecosystem and assisted with the listing of PEN on Moonbeam's DEX Stellaswap in early January 2024.

SatoshiPay currently owns around 5% of the PEN tokens and has a service contract with Pendulum to provide software development.

SatoshiPay also successfully incubated the 0xAmber AMM Project (now called Nabla.fi) for which it secured 5 per cent of the future tokens. Nabla is a novel AMM design for low-risk, single-sided liquidity provision, significantly lower slippage and fees compared to other AMM designs. The nabla.fi team are about to launch their novel-design decentralized exchange with oracle-guided pricing and single-sided liquidity provision for maximum capital efficiency and attractive FX rates on chain.

During the period, the SatoshiPay team took the decision to mothball Dtransfer, given the need to focus resources on Pendulum and Nabla. However, the successful incubation of Pendulum followed by Nabla provides the board of SatoshiPay with confidence that they are well positioned to incubate other DeFi applications with a stablecoin, FOREX or business focus.

In its most recent results to 31 December 2022, SatoshiPay achieved turnover of €2.93 million and profits after tax of €587,000.

Blue Star currently has a 27.9% interest in SatoshiPay's share capital, which is valued on the basis of the last external fund raise in 2019 at approximately £4.65 million. As previously announced, Benchmark International have been appointed to undertake a formal sales process for SatoshiPay which may lead to the sale of all or part of Blue Star's shareholding in SatoshiPay. There is no guarantee that this exercise will result in a whole or partial sale, but the Board believes it's important to undertake such a process so as to obtain a better understanding of SatoshiPay's current and potential value.

Esports

To date we have invested approximately £2.5 million in our Esports portfolio which originally consisted of eight companies, with the main investments being £712,665 in Guild and £969,268 in Dynasty. In last year's accounts we wrote off four of those investments and started the year with investments in Dynasty, Googly, Paidia and Guild. These investments were carried at either cost or last private fundraising for our private investments or market value for our quoted investments.

Details of the four Esports investments are provided below.

Dynasty Media & Gaming

Dynasty's original business plan was to provide its gaming platform to large telecoms companies, for which it initially had much success, generating fixed monthly license fee income. However, operational complexities, including the need to support several different and highly customised platforms, led to a pivot to focus on launching B2C platforms with more strategically aligned and complementary partners and in the process, maintaining control of its products and contact with the end users. As a result of extensive technology development, Dynasty's platform has now moved to a single code base, meaning time to launch in new markets has been reduced from at least nine months to one month.

As previously reported, Dynasty believes it has built the leading and most comprehensive gaming/esports platform globally, which combines the following key features, licenses, and accreditations in one single platform:

•              Enterprise grade international esports tournament engine accredited and endorsed by major international games publishers including Riot, Activision and Supercell to run professional leagues and mass market grassroots esports feeder leagues.

•              The only enterprise grade esports platform and gaming shop that:

o  supports international standard professional esports tournaments for both PC and Mobile games, the world's fastest growing gaming sector;

o  is optimised for key hyper-growth 'mobile first' markets. Dynasty optimised its mobile experience to 30MB, perfect for mobile first markets such as India, Africa, SEA and LATAM;

o  incorporates a payment wallet, subscription engine, digital voucher and top up shop, with full security accreditation;

o  can deliver and launch a fully branded, fully functional partner platform within 4 weeks. This has been enabled by a single code cloud-based code structure.

·      Full customer relationship management campaign engine to increase monetisation and engagement.

·      Unique User Generated Tournament engine that allows users to create entry fee and prize pool tournaments, sharing in platform monetisation.

·      The only enterprise grade esports and gaming shop with an AI Academy, allowing players to improve in game performance.

Dynasty now has live B2C platforms in several key gaming markets including Googly in India, Lets Play Live in Australia and New Zealand and Lightning Dragon in Philippines. Further details on these platforms are summarised below:

Googly: Dynasty advises that India is the world's fastest growing gaming market, with over 750 million gamers forecast in the country by the end of 2026, spending more than US$6.7 billion. By most metrics, the rate of growth in gaming in India is more than double the average of the rest of the world - this includes more mature, slower growth markets like North America and Europe, but also accelerating regions such as Latin America and Southeast Asia. The future growth of gaming in India will continue to be almost entirely driven by mobile, fuelled by a young population of digital natives, increasing wealth, and mass smartphone adoption. Googly's platform offering provides India's gamers a diverse, immersive experience, catering to all levels of casual and competitive gaming, including - leaderboards, live broadcasts, engaging content, unique user-generated prizepool tournaments, and a market leading games shop.

Lets Play Live: The platform was launched in June 2023 with the Company's 50/50 JV partner Lets Play Live, the region's leading tournament organiser and gaming content creator. Within the first six months of operation, the platform has already become Oceania's largest and most successful gaming platform with over 420,000 users. Major official publisher-led national and regional tournaments secured with an extensive calendar scheduled throughout 2024 for leading games titles including Valorant, Fortnite, and Clash Royale.

Lightning Dragon: The platform was recently launched with large media conglomerate Vera Media Group. Lightning Dragon has already secured significant partnerships including PayMaya, one of the region's leading payment providers with over 40 million users in the Philippines, and Razer, one of the world's largest gaming brands. Lightning Dragon expects to announce several more strategic marketing partnerships in the coming weeks across sectors including TV, radio, telcos, retail, esports tournament organisers and gaming content creators.

Dynasty's management believe their new business model will allow them to become cash-flow positive later this year. Within their business model, India is the largest contributor and given the importance of the Indian market and the financial support provided by Googly and its shareholders to Dynasty over the last 9 months, a decision was taken late last year to merge Dynasty and Googly. To help support Dynasty through this transitioning phase, Blue Star invested US$75,000 in a US$3 million fundraise undertaken by Dynasty in November 2023. The Convertible Loan Note had a two-year expiry period, was non-interest bearing and converted at a discount of 50 per cent to Dynasty's next funding round.

Details of the merger were announced on 13 March 2024, in which Dynasty has entered into an agreement to acquire the entire assets and business of Googly for a purchase consideration of approximately US$7.6 million in an all-share acquisition that values the combined entity at US$15m. In addition, the Company has also been informed that a number of Convertible Loan Note holders in Dynasty also intend to convert post the Acquisition and the Company has decided that it will also convert its US$75,000 Convertible Loan at that point.

Blue Star has been an investor in Dynasty since 2019 and pre the merger with Googly and the conversion of all outstanding Convertible Loan Notes, had a shareholding of approximately 13%. Additionally, the Company had a shareholding of 0.6% of Googly. Post the merger and pre conversion of the Convertible Loan Notes, the Company holds approximately 6.3% of the fully diluted share capital of Dynasty. Assuming all Convertible Loan Notes convert, this holding is expected to fall to around 2.4%.

Guild Esports PLC

Guild Esports PLC is a global teams organisation and lifestyle brand, which was the first esports organisation to list on the London Stock Exchange.

At the year end the Company held 8,951,500 shares in Guild with a valuation of £51,471. Subsequently, the Company sold its remaining shareholding in Guild.

Paidia

Paidia is an all-women's esports business which has achieved significant growth. The market positioning of Paidia is attracting significant attention both from the media as well as large global brands. The Company invested approximately

£59,000 into Paidia in 2021 and is carrying the investment based on the last external valuation in August 2023 at £105,910.

Other investments

Sthaler Limited

Sthaler is a Digital Identity business which enables an individual to identify themselves using the unique vein patterns within a finger. Its FinGo ID platform uses a biometric called VeinID which instantly recognises an individual through the unique pattern of veins inside each finger. FinGo Pay is approved to authenticate multiple payment types including payment cards and real-time payments (bank-to-bank).

At the beginning of 2023, Sthaler's management calculated that the Company needed to raise around £4 million to fund it through to a point where it was self-sustaining. It began a process of reaching out to existing shareholders and some new investors to seek their support for such a raise. Although there was general support for the business, market conditions and the lack of secured projects meant that investors were unwilling to support at previous valuations. After considerable efforts, Sthaler's management decided to significantly reduce the valuation in order to recapitalise the business and raise the needed funding. At the end of 2023, Sthaler reduced the valuation to £2 million pre money and secured support from a number of shareholders. This raise is still ongoing but is expected to close shortly at between £3.5 million - £4 million.

Although the Company continues to believe Sthaler retains significant potential, our focus is on our two main investments which combined with our limited cash resources, meant that we did not participate in the round.

At the year end, Blue Star's shareholding in Sthaler was approximately 0.68% but will fall to around 0.24% post the current fund raise completing. On this basis, Blue Star's holding will be valued at approximately £13,600, compared with a cost of £50,000.

East Sides Games and NFT Investments PLC  To provide working capital the Company disposed of its shareholdings in NFT Investments during the year and East Side Games post year-end.

Outlook

Last year was clearly extremely disappointing for everyone connected with Blue Star with significant write-downs in a number of our investments. We supported all our investee businesses to the extent possible and continue to believe they have potential to become successful businesses in the future. Our main investment is in SatoshiPay which is currently engaged in a sales process which may or may not lead to an offer. While this process is ongoing the Board has agreed to take its remuneration in shares and has taken actions to eliminate all non-essential spending. Once the SatoshiPay sales process is complete, the Board intends to carry out a process of consultation with shareholders to determine the future direction of the Company.

Anthony Fabrizi

Executive Chairman

21 March 2024

Strategic Report

The Directors present their strategic report on the Company for the year ended 30 September 2023.

Review of Business and Analysis Using Key Performance Indicators

The full year's loss was £6,328,408 compared to a loss of £1,301,008 for the year ended 30 September 2022.

Net assets have decreased to £5,329,347 at 30 September 2023, changing from £11,414,507 at 30 September 2022. The cash position at the end of the year decreased to £63,158 from £86,575 as at 30 September 2022.

During the year, there was a fair value decrease in the company's investment assets of £5,762,911 (2022: £445,223 loss). A full review of the company's portfolio investments is provided in the Chairman's statements.

Key Performance Indicators

The Board monitors the activities and performance of the Company on a regular basis. The indicators set out below have been used by the Board to assess performance over the year to 30 September 2023. The main KPIs for the Company are listed as follows:

The Company's geographical range is mainly UK companies but considers opportunities globally and will actively co- invest in larger deals.

The Company can take positions in investee companies by way of equity, debt or convertible or hybrid securities.

Whether investments will be active or passive investments.

The Company's investments are passive in nature but may be actively managed. The Company may be represented on, or observe, the boards of its investee companies.

Holding period for investments

The Company's investments are likely to be illiquid and consequently are to be held for the medium to long term.

Spread of investments and maximum exposure limits, policy in relation to cross-holdings and investing restrictions The Company does not have any maximum exposure limits, limits on cross-holdings or other investing restrictions. Under normal circumstances, it is the Directors' intention not to invest more than 10% of the Company's gross assets in any individual company (calculated at the time of investment). The Company has accumulated a 27.9% stake in SatoshiPay, which the Board believes represents a strong opportunity to generate significant shareholder value.

Policy in relation to gearing

The Directors may exercise the powers of the Company to borrow money and to give security over its assets. The Company may also be indirectly exposed to the effects of gearing to the extent that investee companies have outstanding borrowings.

Returns and distribution policy

It is anticipated that returns from the Company's investment portfolio will arise upon realisation or sale of its investee companies, rather than from dividends received. Whilst it is not possible to determine the timing of exits, the Board will seek to return capital to shareholders when appropriate.

Life of the Company

The Company has an indefinite life.

Future developments

The Company is working with its largest investee business, SatoshiPay, to establish an independent valuation and potential offer for the business. If an offer is accepted the Board will then consult with shareholders on whether to reinvest this cash realised from the SatoshiPay share sale or make some form of cash distribution to shareholders.

Promotion of the Company for the benefit of the members as a whole

The Director's believe they have acted in the way most likely to promote the success of the Company for the benefit of its members as a whole, as required by s172 of the Companies Act 2006.

The requirements of s172 are for the Directors to:

•     Consider the likely consequences of any decision in the long term,

•     Act fairly between the members of the Company,

•     Maintain a reputation for high standards of business conduct,

•     Consider the interests of the Company's employees,

•     Foster the Company's relationships with suppliers, customers and others, and

•     Consider the impact of the Company's operations on the community and the environment.

The following paragraphs summarise how the Directors fulfil their duties:

The Company is quoted on AIM and its members will be fully aware, through detailed announcements, shareholder meetings and financial communications, of the Board's broad and specific intentions and the rationale for its decisions. The Board recognises its responsibility for setting and maintaining a high standard of behaviour and business conduct. There is no special treatment for any group of shareholders and all material information is disseminated through appropriate channels and available to all through the Company's news releases and website.

When selecting investments, issues such as the impact on the community and the environment have actively been taken into consideration. The Company's approach is to use its position to promote positive change for the people with whom it interacts.

The Company is committed to being a responsible business. The Company pays its employees and creditors promptly and keeps its costs to a minimum to protect shareholders funds. There were no employees in the Company other than the three Directors in the current and prior-year and therefore effectiveness of employee policies is not relevant for the Group.

Principal risks and uncertainties

The Company seeks investments in late-stage venture capital and early-stage private equity opportunities, which by their very nature allow a diverse portfolio of investments within different sectors and geographic locations.

The Company's primary risk is loss or impairment of investments. This is mitigated by careful management of the investment and in particular, only continuing to support those investments which demonstrate potential to achieve a positive exit and decisively determining those which do not. Portfolio and capital management techniques are fully applied according to industry standard practice.

It may be necessary to raise additional funds in the future by a further issue of new Ordinary shares or by other means. However, the ability to fund future investments and overheads in Blue Star Capital Plc as well as the ability of investments to return suitable profit cannot be guaranteed, particularly in the current economic climate.

The value of companies similar to those in Blue Star Capital's portfolio and in particular those at an early stage of development, can be highly volatile. The price at which investments are made, and the price which the Company may realise for its investment, will be influenced by a large number of factors, some specific to the Company and its operations and some which may affect the sector.

By Order of the Board

Anthony Fabrizi

Executive Chairman

21 March 2024

Directors' Report

The Directors present their report together with the audited financial statements for the year ended 30 September 2023.

Results and dividends

The trading results for the year ended 30 September 2023 and the Company's financial position at that date are shown in the enclosed financial statements.

The Directors do not recommend the payment of a dividend for the year (2022: £nil).

Principal activities and review of the business

The principal activity of the Company is to invest in the technology, esports and gaming sectors. A review of the business is included within the Chairman's Statement and Strategic Report.

Directors serving during the year

On 9 October 2023, Brian Rowbotham resigned and Anthony Fabrizi was appointed as Company Secretary.

Directors' interests

The Directors at the date of these financial statements who served, and their interest in the ordinary shares of the Company, are as follows:

Significant Shareholders                                    

As at 13 March 2024, so far as the Directors are aware, the parties (other than the interests held by Directors) who are directly or indirectly interested in 3% or more of the nominal value of the Company's share capital is as follows:

Related party transactions

Related party transactions and relationships are disclosed in note 18.                    

Going concern

The Company has reported a loss for the year excluding fair value loss on the valuation of investments of £565,497 (2022: £855,785).

The Company had cash reserves at the year-end of £63,158 (2022: £86,575).

Post year-end, the Company raised £75,487 from the sale of its remaining listed investments. In addition, the Company raised £100,000, pre expenses, pursuant to a placing of 100,000,000 new ordinary shares at a price of 0.1p per new ordinary share (refer to note 21).

The Directors have prepared detailed financial forecasts and cash flows looking beyond 12 months from the date of the approval of these financial statements. In developing these forecasts, the Directors have made assumptions based upon their view of the current and economic conditions that are expected to prevail over the forecast period. The Directors estimate that the cash held by the Company, together with known receivables, will be sufficient to support the current level of activities to the end of the third quarter of 2024. The Directors have concluded that the ability of the Company to raise further funds in the future represents a material uncertainty which may cast significant doubt on the Company's ability to continue as a going concern.

The Directors are continuing to explore sources of finance available to the Company, including the sale of further investments and they have a reasonable expectation that they will be able to secure sufficient cash inflows for the Company to continue its activities for not less than 12 months from the date of approval of these financial statements. On this basis, the Directors continue to adopt the going concern basis in preparing these accounts.

Streamlined Energy and Carbon Reporting (SECR)

The Company is a low energy user and as such is exempt from reporting under these regulations.

Events after the reporting date

Events after the reporting date are disclosed in note 21.

Political Donations

There were no political donations during the current or prior year.

Provision of information to Auditor

In so far as each of the Directors are aware at the time of approval of the report:

•     there is no relevant audit information of which the Company's auditor is unaware; and

•     the Directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.

Auditor

Adler Shine LLP have expressed their willingness to continue as auditor and a resolution to re-appoint Adler Shine LLP will be proposed at the Annual General Meeting.

On behalf of the board of Directors

Anthony Fabrizi

Executive Chairman

21 March 2024

Statement of Changes in Equity

For the year ended 30 September 2023

Share capital

Share capital represents the nominal value on the issue of the Company's equity share capital, comprising £0.001 ordinary shares.

Share premium

Share premium represents the amount subscribed for the Company's equity share capital in excess of nominal value.

Other reserves

Other reserves represent the cumulative cost of share-based payments.

Retained earnings

Retained earnings represent the cumulative net income and losses of the Company recognised through the statement of comprehensive income.

The notes form part of these financial statements.

The notes form part of these financial statements.

Notes to the Financial Statements

For the year ended 30 September 2023

1.  Accounting policies

General information

Blue Star Capital Plc (the Company) invests principally in the media, technology and gaming sectors.

The Company is a public limited company incorporated and domiciled in England and Wales with registered number: 05174441 The address of its registered office is Griffin House, 135 High Street, Crawley RH10 1DQ.

The Company is listed on the Alternative Investment Market (AIM) market of the London Stock Exchange plc. The financial statements are presented in Pound Sterling (£) and rounded to the nearest £1.

Summary of significant accounting policies

The principal accounting policies adopted in the preparation of these financial statements are set out below.

These policies have been consistently applied to all the years presented, unless otherwise stated.

Basis of preparation

These financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively IFRS) issued by the International Accounting Standards Board (IASB) as adopted by the United Kingdom ("UK adopted IFRS") and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

These financial statements have been prepared under the historical cost convention, as modified by the revaluation of assets and liabilities held at fair value.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant in the financial statements, are disclosed in note 2.

Going concern

The Company has reported a loss for the year excluding fair value gain on the valuation of investments of £565,497.

The Company had cash reserves at the year-end of £63,158 and a portfolio of investment companies which include quoted investments which can be easily liquidated should further funds be required.

Post year-end, the Company raised £75,487 from the sale of its remaining quoted investments. In addition, the Company raised £100,000 pursuant to a placing of 100,000,000 new ordinary shares at a price of 0.1p per new ordinary share (refer to note 21).

The Directors have prepared detailed financial forecasts and cash flows looking beyond 12 months from the date of the approval of these financial statements. In developing these forecasts, the Directors have made assumptions based upon their view of the current and economic conditions that are expected to prevail over the forecast period. The Directors estimate that the cash held by the Company, together with known receivables, will be sufficient to support the current level of activities to the end of the third quarter of 2024. The Directors have concluded that the ability of the Company to raise further funds in the future represents a material uncertainty which may cast significant doubt on the Company's ability to continue as a going concern.

The Directors are continuing to explore sources of finance available to the Company, including the sale of further investments and they have a reasonable expectation that they will be able to secure sufficient cash inflows for the Company to continue its activities for not less than 12 months from the date of approval of these financial statements. On this basis, the Directors continue to adopt the going concern basis in preparing these accounts.

Accordingly, these accounts do not contain any adjustments to the carrying amount or classification of assets and liabilities that would result if the Company were unable to continue as a going concern.

New standards, amendments and interpretations adopted by the Company

The following IFRS or IFRIC interpretations were effective for the first time for the financial year beginning 1 October 2022. Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements

New standards, amendments and interpretations not yet adopted

There are no IFRS's or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Company.

Financial assets

The Company classifies its financial assets into one of the categories discussed below, depending on the purpose for which the asset was acquired. The Company has not classified any of its financial assets as held to maturity or available for sale.

The Company's accounting policy for each category is as follows:

Fair value through profit or loss

Financial assets at fair value through profit or loss are financial assets designated upon initial recognition as at fair value through profit or loss.

Financial assets designated at fair value through the profit or loss are those that have been designated by management upon initial recognition. Management designated the financial assets, comprising equity shares and warrants, at fair value through profit or loss upon initial recognition due to these assets being part of the Company's financial assets, which are managed and their performance evaluated on a fair value basis.

Financial assets at fair value through the profit or loss are recorded in the statement of financial position at fair value. Changes in fair value are recorded in "Fair valuation movements in financial assets designated at fair value through profit or loss".

Financial assets, comprising equity shares and warrants, are valued in accordance with the International Private Equity and Venture Capital ("IPEVC") guidelines.

(a)           Early-stage investments: these are investments in immature companies, including seed, start-up and early-stage investments. Such investments are valued at cost less any provision considered necessary, until no longer viewed as an early stage

(b)           or unless significant transactions involving an independent third-party arm's length, values the investment at a materially different value:

(c)           Development stage investments: such investments are in mature companies having a maintainable trend of sustainable revenue and from which an exit, by way of floatation or trade sale, can be reasonably foreseen. An investment of this stage is periodically re-valued by reference to open market value. Valuation will usually be by one of five methods as indicated below:

I.              At cost for at least one period unless such basis is unsustainable;

II.             On a third-party basis based on the price at which a subsequent significant investment is made involving a new investor;

III.            On an earnings basis, but not until at least a period since the investment was made, by applying a discounted price/earnings ratio to the profit after tax, either before or after interest; or

IV.            On a net asset basis, again applying a discount to reflect the illiquidity of the investment.

V.             In a comparable valuation by reference to similar businesses that have objective data representing their equity value.

(d)           Quoted investments: such investments are valued using the quoted market price, discounted if the shares are subject to any particular restrictions or are significant in relation to the issued share capital of a small quoted company.

At each balance sheet date, a review of impairment in value is undertaken by reference to funding, investment or offers in progress after the balance sheet date and provisions is made accordingly where the impairment in value is recognised.

Financial assets

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1:  quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.

Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short term highly liquid investments with original maturities of three months or less.

For the purpose of the cash flow statement, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

Financial liabilities

The Company classifies its financial liabilities in the category of financial liabilities measured at amortised cost. The Company does not have any financial liabilities at fair value through profit or loss.

Financial liabilities measured at amortised cost

Financial liabilities measured at amortised cost include:

Trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost using the effective interest rate method.

Finance income

Finance income relates to interest income arising on cash and cash equivalents held on deposit and interest accrued on loans receivable. Finance income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable.

Operating loss

Operating loss is stated after crediting all items of operating income and charging all items of operating expense.

Deferred taxation

Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the balance sheet differs from its tax base.

Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the difference can be utilised.

The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the deferred tax liabilities/(assets) are settled/(recovered).

Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, it's carrying amount is the present value of the cash flows (when the effect of the time value of money is material).

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

Present obligations under onerous leases are recognised and measured as provisions. An onerous contract is considered to exist where the Company has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received from the contract.

Share-based payments

All services received in exchange for the grant of any share-based remuneration are measured at their fair values. These are indirectly determined by reference to the fair value of the share options/warrants awarded. Their value is appraised at the grant date and excludes the impact of any non-market vesting conditions (for example, profitability and sales growth targets).

Share based payments are ultimately recognised as an expense in the Statement of Comprehensive Income with a corresponding credit to other reserves in equity, net of deferred tax where applicable. If vesting periods or other vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of share options/warrants expected to vest. Non-market vesting conditions are included in assumptions about the number of options/warrants that are expected to become exercisable. Estimates are subsequently revised, if there is any indication that the number of share options/warrants expected to vest differs from previous estimates. No adjustment is made to the expense or share issue cost recognised in prior periods if fewer share options ultimately are exercised than originally estimated.

Upon exercise of share options, the proceeds received net of any directly attributable transaction costs up to the nominal value of the shares issued are allocated to share capital with any excess being recorded as share premium.

Where share options are cancelled, this is treated as an acceleration of the vesting period of the options. The amount that otherwise would have been recognised for services received over the remainder of the vesting period is recognised immediately within the Statement of Comprehensive Income.

2. Critical accounting estimates and judgements

The Company makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are those in relation to:

Fair value of financial instruments 

The Company holds investments that have been designated at fair value through profit or loss on initial recognition. The Company determines the fair value of these financial instruments that are not quoted, using valuation techniques, contained in the IPEVC guidelines. These techniques are significantly affected by certain key assumptions. Other valuation methodologies such as discounted cash flow analysis assess estimates of future cash flows and it is important to recognise that in that regard, the derived fair value estimates cannot always be substantiated by comparison with independent markets and, in many cases, may not be capable of being realised immediately.

In certain circumstances, where fair value cannot be readily established, the Company is required to make judgements over carrying value impairment, and evaluate the size of any impairment required.

The methods and assumptions applied, and the valuation techniques used, are disclosed in note 11.

Share based payment

The estimate of share based payments costs requires management to select an appropriate valuation model and make decisions about various inputs into the model including the volatility of its own share price, the probable life of the options, the vesting date of options where non-market performance conditions have been set and the risk free interest rate.

The contracted average remaining life of warrants at 30 September 2023 was 2.3 years (2022: 0.1 years).

The fair value of warrants is determined using the Black-Scholes valuation model. The charge to the profit and loss for the year ended 30 September 2023 was £243,248 (2022: NIL).

7.    Staff costs, including Directors

During the year the Company had an average of 3 employees who were management (2022: 3). The employees are Directors and key management personnel of the Company.

8.    Directors' and key management personnel

Directors' remuneration for the year ended 30 September 2023 is as follows:

Directors' remuneration for the year ended 30 September 2022 is as follows:

Emoluments above are paid in full at the end of both financial years.

9.            Taxation

The tax assessed on loss before tax for the year differs to the applicable rate of corporation tax in the UK for small companies of 25% (2022: 19%). The differences are explained below:

The Company has incurred tax losses for the year and a corporation tax expense is not anticipated. The amount of the unutilised tax losses has not been recognised in the financial statements as the recovery of this benefit is dependent on future profitability, the timing of which cannot be reasonably foreseen. The unrecognised and revised deferred tax asset at 30 September 2023 is £1,341,055 (2022: £81,058).

From 1 April 2023 the standard rate of corporation tax increased from 19% to 25%.

10.  Earnings per ordinary share

The earnings and number of shares used in the calculation of loss/earnings per ordinary share are set out below:

There is no difference between the diluted loss per share and the basic loss per share presented due to the loss position of the Company. Share options and warrants could potentially dilute basic earnings per share in the future, but were not included in the calculation of diluted earnings per share as they are anti-dilutive for the year presented.

11.    Investments

During the year the Company reduced it's shareholding in Guild Esports plc and NFT Investment's plc in order to raise working capital. This reduction resulted in a loss on disposal of £122,196 (2022: £338,836).

Following year end, the Company's remaining shareholding in Guild Esports plc was disposed together with the shareholding in East Side Group (refer to Note 21).

The country of incorporation for all investments held at 30 September 2023 are listed below:

Post year-end, a decision was taken by the management of Dynasty to merge with Googly. To help support Dynasty through this transitioning phase, Blue Star invested US$75,000 in a US$3 million fundraise undertaken by Dynasty in November 2023. The Convertible Loan Note has a two-year expiry period, is non-interest bearing and convertible at a discount of 50 per cent to Dynasty's next funding round.

Blue Star currently has a 27.9% interest in SatoshiPay's share capital, which is valued on the basis of the last external fund raise in 2019 at approximately £4.65million. An M&A expert has been appointed to undertake a formal sales process for SatoshiPay which may lead to the sale of all or part of Blue Star's shareholding in SatoshiPay.

The methods used to value the unquoted investments are described below.

Fair value

The fair value of unquoted investments is established using valuation techniques. These include the use of quoted market prices, recent arm's length transactions, the Black-Scholes option pricing model and discounted cash flow analysis.

Where a fair value cannot be estimated reliably the investment is reported at the carrying value at the previous reporting date in accordance with International Private Equity and Venture Capital ("IPEVC") guidelines.

The Company assesses at each balance sheet date whether there is any objective evidence that the unquoted investments are impaired. The unquoted investments are deemed to be impaired, if and only if, there is objective evidence of impairment as a result of one or more events that have occurred after the initial recognition of the asset (an incurred 'loss event') and that loss event (or events) has an impact on the estimated future fair value of the investments that can be reliably measured.

Convertible Loan Note

On 11 October 2019, the Company invested US$185,000 in convertible loan notes issued by The Dibs Esports Corp. The loan notes carried interest of 5% per annum and had a 36-month life span. In the prior year, after a review conducted by the Directors, the Directors considered that there was doubt as to the recoverability of this asset and fully provided against the amount owed.

12.  Trade and other receivables

The Directors consider that the carrying value of trade and other receivables approximates to the fair value.

13.  Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and other short-term highly liquid investments with an original maturity of three months or less. The Directors consider that the carrying value of cash and cash equivalents approximates to their fair value.

14.  Trade and other payables

All trade and other payables fall due for payment within one year. The Directors consider that the carrying value of trade and other payables approximates to their fair value.

15.  Share capital

During the year ended 30 September 2023 there were no shares issued (2022:NIL).

16.  Financial risk management

Interest rate risk

The Company's exposure to changes in interest rates relate primarily to cash and cash equivalents. Cash and cash equivalents are held either on current or on short term deposits at floating rates of interest determined by the relevant bank's prevailing base rate. The Company seeks to obtain a favourable interest rate on its cash balances through the use of bank treasury deposits. Any reasonable change in interest rate would not have a material impact on finance income that the Company could receive in the course of a year, based on the current level of cash and cash equivalents either held in current accounts or short-term deposits.

Market risk

The Company's market risk is attributable to the financial instruments that are held at fair value through profit and loss. The potential that future changes in market conditions may make an instrument less valuable, due to fluctuations in security prices, as well as interest and foreign exchange rates. Market risk is directly impacted by the volatility and liquidity in the markets in which the related underlying assets are traded.

Sensitivity analysis

The following table looks at the impact on net profit or loss based on a given movement in the fair value of all the investments.

Borrowing facilities

The operations to date have been financed through the placing of shares and investor loans. It is the Board's policy to keep borrowing to a minimum, where possible.

Liquidity risks

The Company seeks to manage liquidity risk by ensuring sufficient liquid assets are available to meet foreseeable needs and to invest liquid funds safely and profitably. All cash balances are immediately accessible and the Company holds no trades payable that mature in greater than 3 months, hence a contractual maturity analysis of financial liabilities has not been presented. Since these financial liabilities all mature within 3 months, the Directors believe that their carrying value reasonably equates to fair value.

Foreign currency risk management

The Company undertakes certain transactions denominated in currencies other than pound sterling, hence exposures to exchange rate fluctuations arise. The fair values of the Company's investments that have foreign currency exposure at 30 September 2023 are shown below.

The Company accounts for movements in fair value of financial assets in the comprehensive income. The following table illustrates the sensitivity of the equity in regard to the company's financial assets and the exchange rates for £/Euro,  £/Singapore Dollar and £/Canadian Dollar.

It assumes the following changes in exchanges rates:

-              £/EUR +/- 20% (2021: +/- 20%)

-              £/SGD +/- 20% (2021: +/- 20%)

-              £/CAD +/- 20% (2021: +/- 20%)

The sensitivity analysis is based on the Company's foreign currency financial instruments held at each balance sheet date. If £ Sterling had weakened against the currencies shown, this would have had the following effect:

If £ Sterling had strengthened against the currencies shows, this would have had the following effect:

The Company's functional and presentational currency is the pound sterling as it is the currency of its main trading environment.

Credit risk

The Company's credit risk is attributable to cash and cash equivalents and trade and other receivables.

Cash is deposited with reputable financial institutions with a high credit rating. The maximum credit risk relating to cash and cash equivalents and trade and other receivables is equal to their carrying value of £66,573 (2022: £91,472)

Capital Disclosure

As in previous years, the Company defines capital as issued capital, reserves and retained earnings as disclosed in the statement of changes in equity. The Company manages its capital to ensure that the Company will be able to continue to pursue strategic investments and continue as a going concern. The Company does not have any externally imposed financial requirements.

17.  Financial Instruments

Set out below is an overview of financial instruments held by the company:

The fair value measurement of financial assets carried at fair value through profit and loss is set out in the table below:

18.  Related party transactions

Sean King was paid his director's fee of £18,000 (2022: £24,000) through Three S Ventures Limited. At the year-end an amount of £3,000 (2022: £2,000) was included within Trade payables.

19.  Operating lease commitments

At the balance sheet date, the Company had no outstanding commitments under operating leases.

20.  Ultimate Controlling Party

The Company considers that there is no ultimate controlling party.

21.  Post Balance Sheet Events

In October 2023, the Company's remaining shareholding in Guild Esports plc was disposed together with the shareholding in East Side Group (Formerly Leaf Mobile). The Company realised £75,486 proceeds from this sale.

In November 2023, the Company invested US$75,000 in Dynasty through the purchase of a convertible loan note. The Convertible loan note has a two-year expiry period, is non-interest bearing and convertible at a discount of 50 per cent to Dynasty's next funding round.

On 17 January 2024, the Company raised £100,000, before expenses, pursuant to a placing of 100,000,000 new ordinary shares at a price of 0.1p per new ordinary share.