Caseware UK (AP4) 2022.0.179 2022.0.179 2022-12-312022-12-31true2022-01-01falseNo description of principal activity4426true 09851330 2022-01-01 2022-12-31 09851330 2021-01-01 2021-12-31 09851330 2022-12-31 09851330 2021-12-31 09851330 2021-01-01 09851330 c:RestatedAmount 2021-01-01 09851330 2 2022-01-01 2022-12-31 09851330 2 2021-01-01 2021-12-31 09851330 e:CompanySecretary1 2022-01-01 2022-12-31 09851330 e:Director1 2022-01-01 2022-12-31 09851330 e:Director2 2022-01-01 2022-12-31 09851330 e:Director3 2022-01-01 2022-12-31 09851330 e:RegisteredOffice 2022-01-01 2022-12-31 09851330 c:OfficeEquipment 2022-01-01 2022-12-31 09851330 c:OfficeEquipment 2022-12-31 09851330 c:OfficeEquipment 2021-12-31 09851330 c:OfficeEquipment c:OwnedOrFreeholdAssets 2022-01-01 2022-12-31 09851330 c:ComputerEquipment 2022-01-01 2022-12-31 09851330 c:ComputerEquipment 2022-12-31 09851330 c:ComputerEquipment 2021-12-31 09851330 c:ComputerEquipment c:OwnedOrFreeholdAssets 2022-01-01 2022-12-31 09851330 c:OwnedOrFreeholdAssets 2022-01-01 2022-12-31 09851330 c:CurrentFinancialInstruments 2022-12-31 09851330 c:CurrentFinancialInstruments 2021-12-31 09851330 c:Non-currentFinancialInstruments 2022-12-31 09851330 c:Non-currentFinancialInstruments 2021-12-31 09851330 c:CurrentFinancialInstruments c:WithinOneYear 2022-12-31 09851330 c:CurrentFinancialInstruments c:WithinOneYear 2021-12-31 09851330 c:ShareCapital 2022-01-01 2022-12-31 09851330 c:ShareCapital 2022-12-31 09851330 c:ShareCapital 2021-01-01 2021-12-31 09851330 c:ShareCapital 2021-12-31 09851330 c:ShareCapital 2021-01-01 09851330 c:SharePremium 2022-01-01 2022-12-31 09851330 c:SharePremium 2022-12-31 09851330 c:SharePremium 2 2022-01-01 2022-12-31 09851330 c:SharePremium 2021-01-01 2021-12-31 09851330 c:SharePremium 2021-12-31 09851330 c:SharePremium 2021-01-01 09851330 c:SharePremium c:RestatedAmount 2021-01-01 09851330 c:SharePremium 2 2021-01-01 2021-12-31 09851330 c:OtherMiscellaneousReserve 2022-01-01 2022-12-31 09851330 c:OtherMiscellaneousReserve 2022-12-31 09851330 c:OtherMiscellaneousReserve 2 2022-01-01 2022-12-31 09851330 c:OtherMiscellaneousReserve 2021-01-01 2021-12-31 09851330 c:OtherMiscellaneousReserve 2021-12-31 09851330 c:OtherMiscellaneousReserve 2021-01-01 09851330 c:OtherMiscellaneousReserve c:RestatedAmount 2021-01-01 09851330 c:OtherMiscellaneousReserve 2 2021-01-01 2021-12-31 09851330 c:RetainedEarningsAccumulatedLosses 2022-01-01 2022-12-31 09851330 c:RetainedEarningsAccumulatedLosses 2022-12-31 09851330 c:RetainedEarningsAccumulatedLosses 2 2022-01-01 2022-12-31 09851330 c:RetainedEarningsAccumulatedLosses 2021-01-01 2021-12-31 09851330 c:RetainedEarningsAccumulatedLosses 2021-12-31 09851330 c:RetainedEarningsAccumulatedLosses 2021-01-01 09851330 c:RetainedEarningsAccumulatedLosses c:RestatedAmount 2021-01-01 09851330 c:RetainedEarningsAccumulatedLosses 2 2021-01-01 2021-12-31 09851330 e:OrdinaryShareClass1 2022-01-01 2022-12-31 09851330 e:OrdinaryShareClass1 2022-12-31 09851330 e:OrdinaryShareClass1 2021-12-31 09851330 e:FRS102 2022-01-01 2022-12-31 09851330 e:Audited 2022-01-01 2022-12-31 09851330 e:FullAccounts 2022-01-01 2022-12-31 09851330 e:PrivateLimitedCompanyLtd 2022-01-01 2022-12-31 09851330 c:WithinOneYear 2022-12-31 09851330 c:WithinOneYear 2021-12-31 09851330 c:BetweenOneFiveYears 2022-12-31 09851330 c:BetweenOneFiveYears 2021-12-31 09851330 e:SmallCompaniesRegimeForAccounts 2022-01-01 2022-12-31 09851330 c:SharePremium c:PriorPeriodErrorIncreaseDecrease 2021-01-01 2021-12-31 09851330 c:OtherMiscellaneousReserve c:PriorPeriodErrorIncreaseDecrease 2021-01-01 2021-12-31 09851330 c:RetainedEarningsAccumulatedLosses c:PriorPeriodErrorIncreaseDecrease 2021-01-01 2021-12-31 09851330 c:PriorPeriodErrorIncreaseDecrease 2021-01-01 2021-12-31 xbrli:shares iso4217:GBP xbrli:pure

Registered number: 09851330









DIGITAL THERAPEUTICS LTD









FINANCIAL STATEMENTS

INFORMATION FOR FILING WITH THE REGISTRAR

FOR THE YEAR ENDED 31 DECEMBER 2022

 
DIGITAL THERAPEUTICS LTD
 
 
COMPANY INFORMATION


Directors
Maroof Ahmed 
Yusuf Sherwani 
Sarim Siddiqui 




Company secretary
Yusuf Sherwani



Registered number
09851330



Registered office
Ps.03. Third Floor, Peer House
8-14 Verulam Street

Holborn

London

England




Independent auditors
Donald Reid Limited
Chartered Accountants & Statutory Auditors

Prince Albert House

18a/20 King Street

Maidenhead

Berkshire

SL6 1EF





 
DIGITAL THERAPEUTICS LTD
 

CONTENTS



Page
Balance sheet
1 - 2
Statement of changes in equity
3 - 4
Notes to the financial statements
5 - 15


 
DIGITAL THERAPEUTICS LTD
REGISTERED NUMBER: 09851330

BALANCE SHEET
AS AT 31 DECEMBER 2022

As restated
2022
2021 
Note
£
£

Fixed assets
  

Tangible assets
 4 
106,245
66,080

  
106,245
66,080

Current assets
  

Stocks
  
2,577
3,095

Debtors: amounts falling due after more than one year
 5 
70,392
25,783

Debtors: amounts falling due within one year
 5 
590,464
861,273

Cash at bank and in hand
 6 
740,030
1,949,291

  
1,403,463
2,839,442

Creditors: amounts falling due within one year
 7 
(11,889,877)
(7,000,269)

Net current liabilities
  
 
 
(10,486,414)
 
 
(4,160,827)

Total assets less current liabilities
  
(10,380,169)
(4,094,747)

  

Net liabilities
  
(10,380,169)
(4,094,747)


Capital and reserves
  

Called up share capital 
 8 
124,634
124,634

Share premium account
 9 
501,105
501,105

Other reserves
 9 
978,147
369,525

Profit and loss account
 9 
(11,984,055)
(5,090,011)

  
(10,380,169)
(4,094,747)


Page 1

 
DIGITAL THERAPEUTICS LTD
REGISTERED NUMBER: 09851330
    
BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2022

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.

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

The Company has opted not to file the statement of income and retained earnings in accordance with provisions applicable to companies subject to the small companies' regime.

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 27 November 2023.




Sarim Siddiqui
Director

The notes on pages 5 to 15 form part of these financial statements.

Page 2

 
DIGITAL THERAPEUTICS LTD
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022


Called up share capital
Share premium account
Other reserves
Profit and loss account
Total equity

£
£
£
£
£

At 1 January 2022
124,634
501,105
369,525
(5,090,011)
(4,094,747)


Comprehensive income for the year

Loss for the year

-
-
-
(6,894,044)
(6,894,044)


Other comprehensive income for the year
-
-
-
-
-


Total comprehensive income for the year
-
-
-
(6,894,044)
(6,894,044)


Contributions by and distributions to owners

Share based payments charge
-
-
608,622
-
608,622


Total transactions with owners
-
-
608,622
-
608,622


At 31 December 2022
124,634
501,105
978,147
(11,984,055)
(10,380,169)


The notes on pages 5 to 15 form part of these financial statements.

Page 3

 
DIGITAL THERAPEUTICS LTD
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021


Called up share capital
Share premium account
Other reserves
Profit and loss account
Total equity

£
£
£
£
£

At 1 January 2021 (as previously stated)
124,634
501,105
211,372
(2,426,146)
(1,589,035)

Prior year adjustment - correction of error
-
-
-
(102,023)
(102,023)

At 1 January 2021 (as restated)
124,634
501,105
211,372
(2,528,169)
(1,691,058)


Comprehensive income for the year

Loss for the year (as restated)

-
-
-
(2,561,842)
(2,561,842)


Other comprehensive income for the year
-
-
-
-
-


Total comprehensive income for the year
-
-
-
(2,561,842)
(2,561,842)


Contributions by and distributions to owners

Share based payments charge
-
-
158,153
-
158,153


Total transactions with owners
-
-
158,153
-
158,153


At 31 December 2021 (as restated)
124,634
501,105
369,525
(5,090,011)
(4,094,747)


The notes on pages 5 to 15 form part of these financial statements.

Page 4

 
DIGITAL THERAPEUTICS LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

1.


General information

Digital Therapeutics Ltd is a private company limited by shares. The company was incorporated in the United Kingdom and is registered in England and Wales. The registration number is 09851330. The registered office address of the company is Ps 03, Third Floor, Peer House, 8-14 Verulam Steet, Holborn, London, England. 

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The following principal accounting policies have been applied:

 
2.2

Going concern

The company made a loss in the period. As the company is supported by its parent company, the directors consider that it is appropriate to prepare the financial statements on the going concern basis.

 
2.3

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of income and retained earnings within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

Page 5

 
DIGITAL THERAPEUTICS LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.4

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the Company has transferred the significant risks and rewards of ownership to the buyer;
the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

 
2.5

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

  
2.6

Research and development

All expenditure on research and development is recognised as an expense when it is incurred.

 
2.7

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.

Page 6

 
DIGITAL THERAPEUTICS LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.8

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Company in independently administered funds.

 
2.9

Share-based payments

Where share options are awarded to employees, the fair value of the options at the date of grant is charged to profit or loss over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the Company keeping the scheme open or the employee maintaining any contributions required by the scheme).
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period.
Where equity instruments are granted to persons other than employees, profit or loss is charged with fair value of goods and services received.

 
2.10

Taxation

Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

 
2.11

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Page 7

 
DIGITAL THERAPEUTICS LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)


2.11
Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Office equipment
-
20%
Computer equipment
-
20%

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.12

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a weighted average basis.

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.13

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.14

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are 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 insignificant risk of change in value.

 
2.15

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.16

Financial instruments

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

The Company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.
Page 8

 
DIGITAL THERAPEUTICS LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)


2.16
Financial instruments (continued)


Financial instruments are recognised in the Company's Balance sheet when the Company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.

Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Other financial assets

Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.

Financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.

Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing
Page 9

 
DIGITAL THERAPEUTICS LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)


2.16
Financial instruments (continued)

transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Derecognition of financial instruments

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.


3.


Employees

The average monthly number of employees, including directors, during the year was 44 (2021 - 26).

Page 10

 
DIGITAL THERAPEUTICS LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

4.


Tangible fixed assets





Office equipment
Computer equipment
Total

£
£
£



Cost or valuation


At 1 January 2022
37,507
60,480
97,987


Additions
17,227
54,252
71,479


Disposals
-
(6,651)
(6,651)



At 31 December 2022

54,734
108,081
162,815



Depreciation


At 1 January 2022
14,254
17,653
31,907


Charge for the year on owned assets
8,338
19,418
27,756


Disposals
-
(3,093)
(3,093)



At 31 December 2022

22,592
33,978
56,570



Net book value



At 31 December 2022
32,142
74,103
106,245



At 31 December 2021
23,253
42,827
66,080

Page 11

 
DIGITAL THERAPEUTICS LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

5.


Debtors

2022
2021
£
£

Due after more than one year

Other debtors
70,392
25,783

70,392
25,783


As restated
2022
2021 
£
£

Due within one year

Trade debtors
65,398
6,273

Other debtors
237,391
681,098

Called up share capital not paid
94,910
94,910

Prepayments and accrued income
192,765
78,992

590,464
861,273



6.


Cash and cash equivalents

2022
2021
£
£

Cash at bank and in hand
740,030
1,949,291

740,030
1,949,291



7.


Creditors: Amounts falling due within one year

As restated
2022
2021 
£
£

Trade creditors
122,026
113,672

Amounts owed to group undertakings
11,495,090
6,714,945

Other taxation and social security
149,742
104,988

Other creditors
24,472
22,063

Accruals and deferred income
98,547
44,601

11,889,877
7,000,269


Page 12

 
DIGITAL THERAPEUTICS LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

8.


Share capital

2022
2021
£
£
Allotted, called up and fully paid



6,231,715 (2021 - 6,231,715) Ordinary shares of £0.02 each
124,634
124,634



9.


Reserves

Share premium account

The share premium account records the amount above nominal value received for shares sold, less transaction costs.

Other reserves

Charges relating to share based payments are included within other reserves.

Profit and loss account

The profit and loss account records the cumulative profits or losses of the company since incorporation, less any dividends.

Page 13

 
DIGITAL THERAPEUTICS LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

10.


Share-based payments

Digital Therapeutics Ltd's parent company, Digital Therapeutics, Inc. has an equity-settled Enterprise Management Incentive Scheme ("EMI") which is available to employees who work for the Company or a group company and satisfy the qualifying conditions and the EMI working time requirements. In addition to the EMI scheme, the parent company also operates an unapproved option scheme.
The options vest over a period of four years. The option pricing model (OPM) valuation method was used to determine the fair-value of the options vested during the year.
A charge of £608,622 (
2021 - £158,153) relevant to the Company's employees has been recognised within the profit and loss in relation to the share based payment transactions.


11.


Prior year adjustment

During the year it was identified that the PAYE payroll amounts paid over to the payroll provider for the December payroll, which is due to HMRC, are only paid to HMRC by the payroll provider in January. As a result the 2021 Balance Sheet has been restated to account for the unpaid HMRC taxes as at 31 December 2021 with an increase in both Other debtors and Other taxation and social security of £104,988. This has a nil impact on the Balance Sheet.
Therefore, the Balance Sheet as well as Note 5 Debtors and Note 7 Creditors have been restated. There is no impact on tax.
During the year it was also identified that the amounts owing to the parent company are denominated in USD. As such the 2020 and 2021 year end loan balances had to be revalued using the appropriate USD to GBP rate at the respective year ends. This has lead to a opening balance adjustment in 2021 of £139,349 being a decrease of the carried forward losses in retained earnings and a decrease in the amount owed to the parent. Further this has lead to an adjustment of the 2021 unrealised foreign currency losses increasing by £76,784 as well as an increase in the amount owed to the parent. 
This therefore impacts the Statement of income and retained earnings, Statement of changes in equity, Balance Sheet and Note 7 Creditors being restated. There is no impact on tax.


12.


Contingent liabilities

R&D claim
During the fiscal period 2023, HMRC opened an enquiry into the R&D claim submitted for 2021 and on 18 October 2023 concluded that the 2021 claim did not satisfy the required criteria and as such was rejected. The amount of the claim being £516,91 as such has been derecognised as an asset in the 2022 period. 
As a result of the above, there is a contingent liability in place with respect to periods prior to 2021 for R&D claims submitted being £338,521 for 2020 and £199,809 for 2019. There is currently insufficient evidence to suggest that these claims will in fact be rejected and required to be repaid hence no liability or provision has raised on the Balance Sheet.
Registration of charge
On 15 November 2022, a registration of charge was entered into between Digital Therapeutics Ltd and Kreos Capital VII (UK) Limited. This is as a result of a loan entered into between Kreos Capital VII (UK) Limited and Digital Therapeutics Inc. where Digital Therapeutics Inc. would be advanced monies. Kreos Capital VII (UK) Limited as a result perfected first security over all the assets of Digital Therapeutics Ltd. As of 31 December 2022 no money had been advanced to Digital Therapeutics Inc. 

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DIGITAL THERAPEUTICS LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

13.


Pension commitments

The company operates a defined contributions pension scheme. The assets of the scheme are held seperately from those of the company in an independently administered fund. The pension cost charge represents contributions payable to the fund and amounted to £77,090 (2021 - £91,853). Contributions totalling £12,002 (2021 - £19,437) were payable to the fund at the balance sheet date and are included in other creditors.


14.


Commitments under operating leases

At 31 December 2022 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2022
2021
£
£


Not later than 1 year
118,183
8,658

Later than 1 year and not later than 5 years
40,030
-

158,213
8,658


15.


Related party transactions

At the year end included in creditors is £11,495,090 (2021 as restated- £6,714,945) owed to the parent company. During the year, management fees of £1,221,622 (2021 - £235,096) have been charged to the parent company.


16.


Controlling party

The ultimate controlling party is Digital Therapeutics, Inc. a company incorporated in the United States of America. The registered address of Digital Therapeutics, Inc. is 251 Little Falls Drive, Wilmington, New Castle 19808, United States.


17.


Auditors' information

The auditors' report on the financial statements for the year ended 31 December 2022 was unqualified.

In the previous accounting period, the directors have taken advantage of the small companies exemptions provided by 477 of the Companies Act 2006. As such, the previous period financial statements were not subject to audit.


The audit report was signed on 27 November 2023 by Jacqui Williams (FCA) (Senior statutory auditor) on behalf of Donald Reid Limited.

 
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