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REGISTERED NUMBER: 13610686 (England and Wales)















REPORT OF THE DIRECTORS AND

AUDITED FINANCIAL STATEMENTS

FOR THE PERIOD 8 SEPTEMBER 2021 TO 28 FEBRUARY 2023

FOR

CSDG HOLDINGS LIMITED

PREVIOUSLY KNOWN AS
CHANGE AGRONOMY LIMITED

CSDG HOLDINGS LIMITED (REGISTERED NUMBER: 13610686)
PREVIOUSLY KNOWN AS CHANGE AGRONOMY LIMITED

CONTENTS OF THE FINANCIAL STATEMENTS
FOR THE PERIOD 8 SEPTEMBER 2021 TO 28 FEBRUARY 2023










Page

Company Information 1

Report of the Directors 2

Statement of Directors' Responsibilities 4

Report of the Independent Auditors 5

Income Statement 9

Balance Sheet 10

Statement of Changes in Equity 11

Notes to the Financial Statements 12


CSDG HOLDINGS LIMITED
PREVIOUSLY KNOWN AS CHANGE AGRONOMY LIMITED

COMPANY INFORMATION
FOR THE PERIOD 8 SEPTEMBER 2021 TO 28 FEBRUARY 2023







DIRECTORS: S P Allesch-Taylor
R Haldankar
A F Legge
Ms K J Shelton Innes





REGISTERED OFFICE: 5th Floor One New Change
London
EC4M 9AF





REGISTERED NUMBER: 13610686 (England and Wales)





AUDITORS: Cox Costello & Horne Partners LLP
Chartered Accountants and Statutory Auditors
Batchworth Lock House
99 Church Street
Rickmansworth
WD3 1JJ

CSDG HOLDINGS LIMITED (REGISTERED NUMBER: 13610686)
PREVIOUSLY KNOWN AS CHANGE AGRONOMY LIMITED

REPORT OF THE DIRECTORS
FOR THE PERIOD 8 SEPTEMBER 2021 TO 28 FEBRUARY 2023


The directors present their report with the financial statements of the Company for the period 8 September 2021 to 28 February 2023.

INCORPORATION
The Company was incorporated on 8 September 2021 and passed a special resolution on 11 May 2023 changing its name from Change Agronomy Limited to CSDG Holdings Limited (the "Company").

REVIEW OF BUSINESS
After a successful fund raise at the end of 2021, contemporaneous with the acquisition of Change Agronomy (Canada) Limited ("CACL"), previously known as Trichome Agronomy Corporation, and with further funds being secured during April and May 2022, the Company's Canadian operations faced twin challenges of inclement weather and equipment failure.

CACL's management identified an adapted cotton gin as the preferred alternative process for decorticating the hemp. However, further funding was required. The Company secured a subscription agreement for £8.0m from MBU Capital Group Limited ("MBU") in August 2022, which was due to flow from November 2022. With this in place, the Company then secured £1.0m of bridge financing in September 2022, ahead of a larger convertible loan note raise, for which the MBU subscription was the cornerstone.

When the subscription monies due from MBU did not arrive the Company had to resort to litigation. Litigation funding sufficient to carry the case through to the High Court, with a trial date set for February 2025 was secured in November 2023 alongside an agreement to extend the standstill agreement on the £1.0m bridge loan through to June 2025.

However, the financial difficulties caused by the non-receipt at the end of 2022 of monies from MBU meant that the Board's first step at the end of 2022 was to ensure the Company could continue to trade.

In February 2023, the Company had agreed a loan facility with security over both 100% of the Company's shares in CACL and the loan due from CACL. Without the funds from MBU, the Company was unable to meet the repayment instaments on the bridge loan and CACL was unable to meet payments due in Canada. In either case, this could have resulted in the security being enforced and the Company losing all of its holding in CACL. To avoid this, in January 2023, the Company reached an agreement with secured lender to move the £2.6m of secured debt from the Company's balance sheet to that of CACL and reducing the loan due from CACL to the Company from £9.1m to £6.6m, whilst, at the same time, selling 70% of CACL to the secured lender. The loan due from CACL to the Company was formalised with a condition that it would become repayable once the £2.6m loan had been repaid in full and an exit value of CAD$80M had been achieved for CACL.Shawn Babcock and Greg Baron also both stepped down from the UK board to focus on the Canadian business.

This restructuring had a significant impact on the financial statements. The value of the £6.6m loan due from CACL has been derecognised, not withstanding that the Board understand that it remains recoverable in full if the conditions for repayment (disclosed in Note 8) are met. Meanwhile, the value of the investment into CACL reflects the sale of 70% of the Company's interest to the secured lender.

The global picture for hemp remains positive, with increasing awareness of the benefits and uses of the plant at consumer, governmental and supra-governmental levels. With litigation funding having been secured in November 2023, the board is now looking to use 2024 to return to the task of building the business. As well as looking to sell its carbon credits for compliance purposes, the Company is also looking at potential consultancy and project management roles with clients seeking to create their own re-gen agricultural carbon credits alongside continuing to support CACL.

SUBSEQUENT EVENT
Information relating to events since the end of the period is given in the notes to the financial statements.

DIRECTORS
The directors who have held office during the period from 8 September 2021 to the date of this report are as follows:

S P Allesch-Taylor - appointed 13 October 2021
R Haldankar - appointed 20 December 2022
A F Legge - appointed 30 May 2022
Ms K J Shelton Innes - appointed 8 September 2021
S Babcock - appointed 16 September 2021 - resigned 14 January 2023
T Baretti - appointed 13 October 2021 - resigned 23 March 2022
G C A Baron - appointed 13 October 2021 - resigned 14 January 2023

All the directors who are eligible offer themselves for election at the forthcoming first Annual General Meeting.

CSDG HOLDINGS LIMITED (REGISTERED NUMBER: 13610686)
PREVIOUSLY KNOWN AS CHANGE AGRONOMY LIMITED

REPORT OF THE DIRECTORS
FOR THE PERIOD 8 SEPTEMBER 2021 TO 28 FEBRUARY 2023


STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS
The auditors, Cox Costello & Horne Partners LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies.

ON BEHALF OF THE BOARD:





S P Allesch-Taylor - Director


9 February 2024

CSDG HOLDINGS LIMITED (REGISTERED NUMBER: 13610686)
PREVIOUSLY KNOWN AS CHANGE AGRONOMY LIMITED

STATEMENT OF DIRECTORS' RESPONSIBILITIES
FOR THE PERIOD 8 SEPTEMBER 2021 TO 28 FEBRUARY 2023


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

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-select suitable accounting policies and then apply them consistently;
-make judgements and accounting estimates that are reasonable and prudent;
-prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
CSDG HOLDINGS LIMITED


Opinion
We have audited the financial statements of CSDG Holdings Limited (the 'company') for the period ended 28 February 2023 which comprise the Income Statement, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:
-give a true and fair view of the state of the company's affairs as at 28 February 2023 and of its loss for the period then ended;
-have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material uncertainty relating to going concern
In auditing the financial statements, we have reviewed the cash flow forecasts of the directors and the ability of these cash flows to be flexed. We have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

We draw attention to Note 2 in the financial statements, which indicates that the company incurred a loss after tax £13,552,685 during the period ended 28 February, as of that date, the financial statements showed net current liability of £311,770 and shareholders' funds of £413,992.

Our opinion is not modified in respect of this matter.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information
The directors are responsible for the other information. The other information comprises the information in the Report of the Directors and the Statement of Directors' Responsibilities, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Report of the Directors has been prepared in accordance with applicable legal requirements.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
CSDG HOLDINGS LIMITED


Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
- the financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of directors' remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit; or
- the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption from the requirement to prepare a Strategic Report or in preparing the Report of the Directors.

Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities set out on page four, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
CSDG HOLDINGS LIMITED


Auditors' responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We designed procedures in line with our responsibilities outlined above, to detect material misstatements in respect of irregularities, including fraud.

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our: general commercial and sector experience; through verbal and written communications with those charged with governance and other management; and via inspection of the company's regulatory and legal correspondence.

We discussed with those charged with governance and other management the policies and procedures regarding compliance with laws and regulations.

We communicated identified laws and regulations to our team and remained alert to any indicators of non-compliance throughout the audit, we also specifically considered where and how fraud may occur within the company.

The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the company is subject to laws and regulations that directly affect the financial statements, including: the company's constitution, relevant financial reporting standards; company law; tax legislation and distributable profits legislation and we assess the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

Secondly the company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on the amounts or disclosures in the financial statements, for instance through the imposition of fines and penalties, or through losses arising from litigations. We identified the following areas as those most likely to have such an effect: laws and regulations relevant to employment legislation; health and safety legislation; data protection legislation; anti-bribery and corruption legislation.

International Auditing Standards (UK) limit the required procedures to identify non-compliance with these laws and regulations, and no procedures over and above those already noted are required. These limited procedures did not identify any actual or suspected non-compliance with laws and regulations that could have a material impact on the financial statements.

In relation to fraud, we performed the following specific procedures in addition to those already noted:

- Challenging assumptions made by management in its significant accounting estimates;
- Identifying and testing journal entries, in particular any entries posted with unusual nominal ledger account combinations, journal entries crediting cash or any revenue account, and journal entries posted by senior management;
- Performing analytical procedures to identify unexpected movements in account balances which may be indicative of fraud; and
- Ensuring that testing undertaken on both the performance statement and the Balance Sheet includes a number of items selected on a random basis.

These procedures did not identify any actual or suspected fraudulent irregularity that could have a material impact on the financial statements.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with International Auditing Standards (UK). For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the procedures that we are required to undertake would identify it. In addition, as with any audit, there remains a high risk of non-detection of irregularities, as these might involve collusion, forgery, intentional omissions, misrepresentation, or the override of internal controls. We are not responsible for preventing non-compliance with laws and regulations or fraud, and cannot be expected to detect non-compliance with all laws and regulations or every incidence of fraud.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
CSDG HOLDINGS LIMITED


Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.




Michael F Cox (Senior Statutory Auditor)
for and on behalf of Cox Costello & Horne Partners LLP
Chartered Accountants and Statutory Auditors
Batchworth Lock House
99 Church Street
Rickmansworth
WD3 1JJ

9 February 2024

CSDG HOLDINGS LIMITED (REGISTERED NUMBER: 13610686)
PREVIOUSLY KNOWN AS CHANGE AGRONOMY LIMITED

INCOME STATEMENT
FOR THE PERIOD 8 SEPTEMBER 2021 TO 28 FEBRUARY 2023

Notes £

TURNOVER -

Cost of sales 26,683
GROSS LOSS (26,683 )

Administrative expenses 1,778,184
OPERATING LOSS (1,804,867 )

Derecognition of loan 4 (6,580,623 )
Loss on sale of investment 4 (4,843,763 )
(13,229,253 )


Interest payable and similar expenses 5 323,432
LOSS BEFORE TAXATION (13,552,685 )

Tax on loss 6 -
LOSS FOR THE FINANCIAL PERIOD (13,552,685 )

CSDG HOLDINGS LIMITED (REGISTERED NUMBER: 13610686)
PREVIOUSLY KNOWN AS CHANGE AGRONOMY LIMITED

BALANCE SHEET
28 FEBRUARY 2023

Notes £ £
FIXED ASSETS
Investments 7 2,859,039

CURRENT ASSETS
Debtors 8 326,266
Cash at bank 400,726
726,992
CREDITORS
Amounts falling due within one year 9 1,038,762
NET CURRENT LIABILITIES (311,770 )
TOTAL ASSETS LESS CURRENT
LIABILITIES

2,547,269

CREDITORS
Amounts falling due after more than one
year

10

2,133,277
NET ASSETS 413,992

CAPITAL AND RESERVES
Called up share capital 13 362,018
Other reserves 13,604,659
Retained earnings (13,552,685 )
SHAREHOLDERS' FUNDS 413,992

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the Board of Directors and authorised for issue on 9 February 2024 and were signed on its behalf by:





A F Legge - Director


CSDG HOLDINGS LIMITED (REGISTERED NUMBER: 13610686)
PREVIOUSLY KNOWN AS CHANGE AGRONOMY LIMITED

STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD 8 SEPTEMBER 2021 TO 28 FEBRUARY 2023

Called up
share Retained Other Total
capital earnings reserves equity
£ £ £ £

Changes in equity
Issue of share capital 362,018 - - 362,018
Total comprehensive income - (13,552,685 ) 13,604,659 51,974
Balance at 28 February 2023 362,018 (13,552,685 ) 13,604,659 413,992

CSDG HOLDINGS LIMITED (REGISTERED NUMBER: 13610686)
PREVIOUSLY KNOWN AS CHANGE AGRONOMY LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD 8 SEPTEMBER 2021 TO 28 FEBRUARY 2023


1. STATUTORY INFORMATION

CSDG Holdings Limited is a private limited company incorporated in England and Wales. The Company's registered address is 5th Floor, One New Change, London England EC4M 9AF.

2. ACCOUNTING POLICIES

Basis of preparing the financial statements
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" including the provisions of Section 1A "Small Entities" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Going Concern
The financial statements showed a loss after tax of £13,552,685 in the period and net current liabilities of £311,770 and share holders' fund £413,992 at the balance sheet date. A substantial amount of this loss related to the exceptional non recurring expenditure.

In the short term the Company can meet its daily working capital requirements through its bank, delay in paying creditors and short-term private loans facilities which it will be able to do for the foreseeable future.

The long term going concern status of the Company is ultimately dependent on the outcome of the legal case for which by its nature there must be some uncertainty.

Irrespective of the outcome of the case, the directors plan to grow the business, control costs and effectively manage working capital.

Changes in interests resulting in a loss of control
Prior to the year end, the Company lost its controlling interest in its sole subsidiary undertaking, thus these financial statements present the result and financial position of the Company as a standalone entity.

Critical accounting judgements and key sources of estimation uncertainty
In the application of the Company's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

- Critical judgements
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities outlined below:

- Impairment on investment
Management assesses the impairment of fixed assets investment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors considered important that may trigger an impairment review include the following: changes in the manner of the use of the acquired assets or the strategy of the overall business, significant negative industry or economic trends, taking into account market knowledge, professional judgement and historical transactional comparable.

CSDG HOLDINGS LIMITED (REGISTERED NUMBER: 13610686)
PREVIOUSLY KNOWN AS CHANGE AGRONOMY LIMITED

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE PERIOD 8 SEPTEMBER 2021 TO 28 FEBRUARY 2023


2. ACCOUNTING POLICIES - continued

Financial instruments
a) Debtors
Basic financial assets, including trade and other debtors, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Such assets are subsequently carried at amortised cost using the effective interest method, less any impairment.

b) Creditors
Basic financial liabilities, including trade and other creditors, loans from third parties and loans from related parties, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Such instruments are subsequently carried at amortised cost using the effective interest method, less any impairment.

c) Cash at bank and in hand
Cash and cash equivalents are represented by cash in hand, deposits held at call with financial institutions, and other short term highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with significant risk of change in value.

d) Interest income
Interest income is recognised in profit or loss using the effective interest method.

e) Finance costs
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

Taxation
Taxation for the period comprises current and deferred tax. Tax is recognised in the profit or loss except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

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

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the period end and that are expected to apply to the reversal of the timing difference.

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.

Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Valuation of investment
Investments in subsidiaries are recognised at cost, being the fair value consideration payable, less impairment. Where control is lost of a subsidiary but the investment meets the definition of an associate, then the deemed cost of the associate, is its fair value and the date when control is lost.

3. EMPLOYEES AND DIRECTORS

The average number of employees during the period was 4 .

CSDG HOLDINGS LIMITED (REGISTERED NUMBER: 13610686)
PREVIOUSLY KNOWN AS CHANGE AGRONOMY LIMITED

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE PERIOD 8 SEPTEMBER 2021 TO 28 FEBRUARY 2023


4. EXCEPTIONAL ITEMS
£
Derecognition of loan (6,580,623 )
Loss on sale of investment (4,843,763 )
(11,424,386 )

£6,580,623 was the derecognition of the loan owed by CACL (Note 8).

Loss on sale of investment £4,843,763 related to 70% of the share disposal in CACL (Note 7).

5. INTEREST PAYABLE AND SIMILAR EXPENSES
£
Loan Interest 323,432

6. TAXATION

Analysis of the tax charge
No liability to UK corporation tax arose for the period.

At the reporting date, the company has tax losses of approximately £2,116,299 which subject to agreement with HMRC, are available to carry forward and offset against future profits of the same trade.

No deferred tax is recognised in relation to the tax losses as the directors do not consider it prudent to recognise a deferred tax asset on the balance sheet at the current time in light of the accounting losses incurred to date. No deferred tax has been recognised in relation to capital allowances in excess of depreciation as there are sufficient tax losses to utlise against future reversals.

7. FIXED ASSET INVESTMENTS
Unlisted
investments
£
COST
Additions 7,702,802
Disposals (4,843,763 )
At 28 February 2023 2,859,039
NET BOOK VALUE
At 28 February 2023 2,859,039

On 28th October 2021, the Company acquired 100% of all issued and outstanding shares of Trichome Agronomy Corp (now known as Change Agronomy Canada Limited) by a share for share exchange agreement.

On 14th January 2023, following the non-receipt of funds from MBU, the directors agreed with the lender to novate the entire loan of £2.6m to CACL and reduce the amount owed by CACL to the Company to £6,580,623 from the total loan facility of £9,180,623. At the same time sold 70% of the share capital of CACL to the lender as part of the deal.

The value in the financial statements represents the fair value at the date the investment was acquired less 70% for the disposal as noted above. Whilst progress in developing CACL has been slower than anticipated due to the non-receipt of the funds from MBU Capital to arrive there has been derecognition of loan owed by CACL as noted in Note 4 and Note 8 which is likely to enhance the financial position of CACL.

8. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
£
Other debtors 326,266

CSDG HOLDINGS LIMITED (REGISTERED NUMBER: 13610686)
PREVIOUSLY KNOWN AS CHANGE AGRONOMY LIMITED

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE PERIOD 8 SEPTEMBER 2021 TO 28 FEBRUARY 2023


8. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR - continued

During the period, there was an accumulated loan of £6,580,623 owed by CACL to the Company. The loan is unsecured, non interest bearing and repayable based upon the following conditions:

(1) repayment in full of the amount due under the secured loan facility (Note12);

(2) a transaction occurring (sale of shares, initial public offering or a conversion of debt to equity of CACL) which values the issued share capital of CACL at not less than CAD$80m.

Subsequent to the balance sheet date, CACL has indicated in their financial statements that their directors believe it is unlikely that the conditions for repayment of the loan due to the Company will be met. The loan had been written off in CACL's unaudited financial statements for the year ended 31 December 2022.

Whilst not necessarily accepting the premise for CACL's action, given the uncertainty in connection with this matter the directors have agreed to derecognised the amount in full at the year end.

9. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
£
Trade creditors 810,292
Directors' current accounts 125,059
Accruals and deferred income 103,411
1,038,762

10. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
£
Debentures (see note 11) 1,133,277
Other loans (see note 11) 1,000,000
2,133,277

11. LOANS

An analysis of the maturity of loans is given below:

£
Amounts falling due between one and two years:
Other loans - 1-2 years 1,000,000

Amounts falling due between two and five years:
Debentures - 2-5 years 1,133,277

12. SECURED DEBTS

On 3rd February 2022, the Company entered a term loan facility agreement for an aggregated amount of £2,600,000. The loan was secured by a registered charge by way of fixed charge over the intercompany loan due from CACL and present and future property of the Company.

As outlined in Note 7, the charge was satisfied in June 2023 by the disposal of 70% of the shares in the investment, the novation of the secured loan to CACL and the reduction in the amount owed by CACL to the Company to £6,580,623.

CSDG HOLDINGS LIMITED (REGISTERED NUMBER: 13610686)
PREVIOUSLY KNOWN AS CHANGE AGRONOMY LIMITED

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE PERIOD 8 SEPTEMBER 2021 TO 28 FEBRUARY 2023


13. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal
value: £
36,201,705 Ordinary 0.01 362,018

36,201,705 Ordinary shares of 0.01 each were allotted and fully paid for cash at par during the period.

Share capital is recognised at the fair value of consideration receivable.

Where a share for share exchange occurs and the provision of Section 612 of Companies Act 2006 are applied, the transaction is still recognised at fair value, with the any premium received been recognised as other reserves.

14. CONTINGENT LIABILITIES

On 28 September 2022, the Company entered a bridging loan facility for £1m (Note 10). The bridge loan was due to be repaid from December 2022 in four equal monthly instalments with an exit fee of £250,000 on the final payment.

Following the non-receipt of funds from MBU, the Company was not able to make any of the repayments, which constituted events of default for the bridge loan and hence for the secured loan.

On 12 January 2023, and as a condition of the agreement with the secured lender (Note 7 and Note 12) the Company entered into a standstill agreement with the bridge lender through to 30 June 2024.

In November 2023, the Company and the bridge lender entered into a further extension of the standstill through to the earlier of:

1. The end of the litigation against MBU;
2. The termination of the standstill agreement; or
3. 30 June 2025.

The exit fee due to be repaid to the bridge lender by 30 June 2025 increased to £0.65m such that the total amount due is now £1.65m.

15. RELATED PARTY DISCLOSURES

During the period, the following related party transactions were incurred:

The sale of the shares in CACL to the secured lender, Perpetual Lending Limited, which is a 0.8% shareholder in the Company; and the formalisation of the £6.6m loan to CACL. The terms of these deals, which are set out in Note 7, Note 8 and Note 12, were undertaken at arm's length.

16. SUBSEQUENT EVENTS

The Company has commenced legal proceedings against MBU for damages caused by the non receipt of funds from MBU. The outcome of the case can not be guaranteed, and the recoverable amount can not be reliably measured. Therefore this has been treated as a non adjusting event.

In November 2023, the Company entered a litigation funding agreement to meet the costs of the legal proceedings against MBU.