Company registration number 09952253 (England and Wales)
PAXOS TECHNOLOGY LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
PAGES FOR FILING WITH REGISTRAR
PAXOS TECHNOLOGY LIMITED
CONTENTS
Page
Balance sheet
1
Statement of changes in equity
2
Notes to the financial statements
3 - 7
PAXOS TECHNOLOGY LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2022
31 December 2022
- 1 -
2022
2021
Notes
$
$
$
$
Current assets
Debtors
3
373,100
105,397
Cash at bank and in hand
146,046
386,955
519,146
492,352
Creditors: amounts falling due within one year
4
(6,192,965)
(6,069,155)
Net current liabilities
(5,673,819)
(5,576,803)
Creditors: amounts falling due after more than one year
5
(4,588,922)
-
0
Net liabilities
(10,262,741)
(5,576,803)
Capital and reserves
Called up share capital
7
1
1
Capital contribution reserves
8
40,155,573
26,181,246
Profit and loss reserves
9
(50,418,315)
(31,758,050)
Total equity
(10,262,741)
(5,576,803)

The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true

These financial statements have been prepared and delivered 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 29 September 2023 and are signed on its behalf by:
Mr C G Cascarilla
Director
Company Registration No. 09952253
PAXOS TECHNOLOGY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
Share capital
Capital contribution reserves
Profit and loss reserves
Total
$
$
$
$
Balance at 1 January 2021
1
17,099,432
(21,876,268)
(4,776,835)
Year ended 31 December 2021:
Loss and total comprehensive income for the year
-
-
(9,881,782)
(9,881,782)
Capital contributions
-
9,081,814
-
0
9,081,814
Balance at 31 December 2021
1
26,181,246
(31,758,050)
(5,576,803)
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
-
(18,660,265)
(18,660,265)
Capital contributions
-
13,974,327
-
0
13,974,327
Balance at 31 December 2022
1
40,155,573
(50,418,315)
(10,262,741)
PAXOS TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 3 -
1
Accounting policies
Company information

Paxos Technology Limited is a private company limited by shares incorporated in England and Wales. The registered office is The Courtyard, High Street, Ascot, Berkshire, SL5 7HP.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

The functional currency of the Company is pound sterling. However, the directors have chosen to present the financial statements in US dollars in order to be consistent with the presentation currency of the parent company’s consolidated accounts. Monetary amounts in these financial statements are rounded to the nearest $.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The company’s ultimate parent company, Kabompo Holdings, Ltd, a company incorporated in the Cayman Islands, will provide financial support to the company for the foreseeable future. Kabompo Holdings, Ltd and its subsidiaries have adequate liquidity to be able to provide this support as a result of successful rounds of fundraising. Therefore, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.true

1.3
Turnover

Turnover relates to technology services provided and is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. Turnover is recognised in line with the performance of these services.

1.4
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.5
Financial instruments

Financial assets and financial liabilities are recognised when the company becomes a party to the contractual provisions of the financial instrument.

Basic financial assets

Debtors do not carry interest and are stated at their nominal value. Appropriate allowances for estimated irrecoverable amounts are recognised in the Profit and Loss account when there is objective evidence that the asset is impaired.

Basic financial liabilities

Creditors are not interest bearing and are included at their nominal value.

PAXOS TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 4 -
1.6
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.7
Taxation

The tax expense represents the tax currently payable.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Cash refunds from research and development tax credit claims are recognised upon receipt.

1.8
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.9
Share-based payments

For cash-settled share-based payments, a liability is recognised for the goods and services acquired, measured initially at the fair value of the liability. At the balance sheet date until the liability is settled, and at the date of settlement, the fair value of the liability is remeasured, with any changes in fair value recognised in profit or loss for the year.

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black Scholes model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.

When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.

 

Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.

1.10
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

1.11
Foreign exchange

Transactions in currencies other than pounds US Dollars are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

PAXOS TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 5 -
2
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2022
2021
Number
Number
Total
34
16

The average number of employees disclosed above relate to staff which the company employs itself. The company bears the employment costs of the staff it employs. The company also bears an allocation of the cost of staff employed by other companies in the group. The employment costs recharged from other companies in the group are allocated amongst the companies in the group based on the proportion of staff time spent on each company’s affairs.

3
Debtors
2022
2021
Amounts falling due within one year:
$
$
Trade debtors
89,249
64,254
Other debtors
283,851
41,143
373,100
105,397
4
Creditors: amounts falling due within one year
2022
2021
$
$
Trade creditors
181,361
126,866
Amounts owed to group undertakings
5,885,798
5,924,219
Other creditors
125,806
18,070
6,192,965
6,069,155
5
Creditors: amounts falling due after more than one year
2022
2021
$
$
Other creditors
4,588,922
-
0
PAXOS TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 6 -
6
Share-based payment transactions

The parent company operates an equity-settled share-based remuneration scheme for the group's employees. The following information relates to share options which have been granted to employees of Paxos Technology Limited.

 

The contractual life of an option is 10 years from grant. No Incentive Stock Options or Non-Qualified Stock Options are exercisable after 10 years from the date of grant, and most option awards will typically vest over a four-year period.

 

At the balance sheet date, 632,147 of the options (2021: 486,537) were exercisable. The following table illustrates the number and weighted average exercise prices of, and movements in, share options during the year:

Number of share options
Weighted average exercise price
2022
2021
2022
2021
Number
Number
$
$
Outstanding at 1 January 2022
915,713
1,216,114
4.83
2.22
Granted
123,820
219,889
13.98
12.53
Forfeited
(70,750)
(222,533)
8.91
2.18
Exercised
(7,338)
(297,757)
3.02
2.18
Outstanding at 31 December 2022
961,445
915,713
6.15
4.83
Exercisable at 31 December 2022
632,147
486,537
3.23
3.24

The option pricing model used was the Black Scholes model.

Inputs were as follows:
2022
2021
Weighted average share price
13.98
13.98
Weighted average exercise price
13.98
13.98
Expected volatility
110.00
110.00
Expected life
6.25
6.25
Risk free rate
3.92
1.44
Liabilities and expenses

During the year, the parent company offered to repurchase shares on exercise of vested options from certain shareholders. The share options have therefore been modified and consequently a portion of the share options have been reclassified from equity settled to cash settled during the year. Liabilities have been recognised for the employees of Paxos Technology Limited who are eligible to participate in the tender offers.

 

Liabilities arising in relation to cash settled share based payment transaction during the year was $(4,588,922) (2021 - $-).

During the year, the company recognised total share-based payment expenses of $1,833,090 (2021 - $1,828,802) which related to equity settled share based payment transactions.

PAXOS TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
6
Share-based payment transactions
(Continued)
- 7 -

During the year, the company recognised total expenses of $2,736,955 (2021 - $-) which related to cash settled share based payment transactions.

7
Called up share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
$
$
Issued and fully paid
Ordinary shares of $1.44 each
1
1
1
1
8
Other reserves

The capital contribution reserve relates to loans received from other companies in the group which have been capitalised as equity.

 

Other companies in the group are providing funds to the Company to finance the Company’s development of a platform for use in the UK. The loans provided to the Company are reviewed periodically for recoverability, and where loans are considered to be irrecoverable, they are converted to equity in the capital contribution reserve.

 

Also recognised in the capital contribution reserve are equity-settled share based payment costs as detailed further in Note 6. The parent company operates an equity-settled share-based payment scheme for the group's employees. Where share options have been granted to employees of Paxos Technology Limited, the equity-settled share-based payment costs are recognised in the capital contribution reserve.

9
Profit and loss reserves

The retained earnings reserve records retained earnings and accumulated losses.

10
Audit report information

As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:

The auditor's report was unqualified.

Senior Statutory Auditor:
David Forinton
Statutory Auditor:
Kirk Rice LLP
11
Parent company

The parent company of the smallest and largest group for which consolidated financial statements are drawn up of which the Company is a member is Kabompo Holdings, Ltd. The parent company's registered office is 130 5th Avenue, 3rd Floor, New York, NY 10011, USA.

2022-12-312022-01-01false29 September 2023CCH SoftwareCCH Accounts Production 2023.200No description of principal activityThis audit opinion is unqualifiedMr C G CascarillaMr E K WoodsA RaynerNorose Company Secretarial Services Limited099522532022-01-012022-12-31099522532022-12-31099522532021-12-3109952253core:CurrentFinancialInstrumentscore:WithinOneYear2022-12-3109952253core:CurrentFinancialInstrumentscore:WithinOneYear2021-12-3109952253core:Non-currentFinancialInstrumentscore:AfterOneYear2022-12-3109952253core:Non-currentFinancialInstrumentscore:AfterOneYear2021-12-3109952253core:CurrentFinancialInstruments2022-12-3109952253core:CurrentFinancialInstruments2021-12-3109952253core:ShareCapital2022-12-3109952253core:ShareCapital2021-12-3109952253core:OtherMiscellaneousReserve2022-12-3109952253core:OtherMiscellaneousReserve2021-12-3109952253core:RetainedEarningsAccumulatedLosses2022-12-3109952253core:RetainedEarningsAccumulatedLosses2021-12-3109952253core:ShareCapital2020-12-3109952253core:OtherMiscellaneousReserve2020-12-3109952253core:RetainedEarningsAccumulatedLosses2020-12-31099522532020-12-3109952253bus:Director12022-01-012022-12-3109952253core:RetainedEarningsAccumulatedLosses2021-01-012021-12-31099522532021-01-012021-12-3109952253core:RetainedEarningsAccumulatedLosses2022-01-012022-12-3109952253core:WithinOneYear2022-12-3109952253core:WithinOneYear2021-12-3109952253core:Non-currentFinancialInstruments2022-12-3109952253core:Non-currentFinancialInstruments2021-12-31099522532021-12-3109952253bus:PrivateLimitedCompanyLtd2022-01-012022-12-3109952253bus:SmallCompaniesRegimeForAccounts2022-01-012022-12-3109952253bus:FRS1022022-01-012022-12-3109952253bus:Audited2022-01-012022-12-3109952253bus:Director22022-01-012022-12-3109952253bus:Director32022-01-012022-12-3109952253bus:CompanySecretary12022-01-012022-12-3109952253bus:FullAccounts2022-01-012022-12-31xbrli:purexbrli:sharesiso4217:GBP