Multiply AI Limited |
Notes to the Accounts |
for the year ended 31 December 2023 |
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1 |
Accounting policies |
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Basis of preparation |
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The accounts have been prepared under the historical cost convention and in accordance with FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland (as applied to small entities by section 1A of the standard). |
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Turnover |
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Turnover is measured at the fair value of the consideration received or receivable, net of discounts and value added taxes. Turnover includes revenue earned from the sale of goods and from the rendering of services. Turnover from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer. Turnover from the rendering of services is recognised by reference to the stage of completion of the contract. The stage of completion of a contract is measured by comparing the costs incurred for work performed to date to the total estimated contract costs. |
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Tangible fixed assets |
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Tangible fixed assets are measured at cost less accumulative depreciation and any accumulative impairment losses. Depreciation is provided on all tangible fixed assets, other than freehold land, at rates calculated to write off the cost, less estimated residual value, of each asset evenly over its expected useful life, as follows: |
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Office equipment |
over 3 years |
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Debtors |
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Short term debtors are measured at transaction price (which is usually the invoice price), less any impairment losses for bad and doubtful debts. Loans and other financial assets are initially recognised at transaction price including any transaction costs and subsequently measured at amortised cost determined using the effective interest method, less any impairment losses for bad and doubtful debts. |
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Creditors |
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Short term creditors are measured at transaction price (which is usually the invoice price). Loans and other financial liabilities are initially recognised at transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method. |
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Taxation |
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A current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. A current tax asset is recognised in respect of a tax loss that can be carried back to recover tax paid in a previous period. Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used. Current and deferred tax assets and liabilities are not discounted. |
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Provisions |
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Provisions (ie liabilities of uncertain timing or amount) are recognised when there is an obligation at the reporting date as a result of a past event, it is probable that economic benefit will be transferred to settle the obligation and the amount of the obligation can be estimated reliably. |
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Foreign currency translation |
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Transactions in foreign currencies are initially recognised at the rate of exchange ruling at the date of the transaction. At the end of each reporting period foreign currency monetary items are translated at the closing rate of exchange. Non-monetary items that are measured at historical cost are translated at the rate ruling at the date of the transaction. All differences are charged to profit or loss. |
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Pensions |
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Contributions to defined contribution plans are expensed in the period to which they relate. |
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2 |
Employees |
2023 |
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2022 |
Number |
Number |
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Average number of persons employed by the company |
14 |
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12 |
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3 |
Tangible fixed assets |
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Office equipment |
£ |
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Cost |
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At 1 January 2023 |
40,739 |
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Additions |
2,566 |
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Disposals |
(10,638) |
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At 31 December 2023 |
32,667 |
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Depreciation |
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At 1 January 2023 |
22,669 |
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Charge for the year |
7,706 |
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On disposals |
(10,638) |
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At 31 December 2023 |
19,737 |
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Net book value |
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At 31 December 2023 |
12,930 |
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At 31 December 2022 |
18,070 |
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4 |
Debtors |
2023 |
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2022 |
£ |
£ |
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Trade debtors |
40,650 |
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848 |
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Other debtors |
17,582 |
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68,687 |
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58,232 |
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69,535 |
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5 |
Creditors: amounts falling due within one year |
2023 |
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2022 |
£ |
£ |
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Trade creditors |
70,312 |
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56,811 |
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Taxation and social security costs |
49,482 |
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43,205 |
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Other creditors |
94,865 |
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32,717 |
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214,659 |
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132,733 |
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6 |
Going concern |
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The balance sheet at the end of 2023 recorded negative shareholder funds, however the Board were working on such a scenario and initiatives to resolve this are in train. Our Board initiated a successful equity funding round in the fourth quarter of 2023. The round has garnered significant interest, with capital inflows beginning in the second quarter of 2024. We are confidant in closing the round by the end of the year. The company successfully secured a steady stream of new clients from the fourth quarter of 2023 through 2024. We are optimistic about our continued growth and expect to welcome additional clients in the near future. The successful implementation of these initiatives has significantly improved our financial position. This strengthened financial foundation will enable us to effectively pursue our business objectives for 2024 and fulfil our obligations to our clients. |
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7 |
Share based payments |
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1. For the financial year ending 31 December 2023, the Company is recognising for the first time the accumulated staff expense for the granting of options to employees of £928,015. The Directors judged in earlier years that the expense associated with the granting of options was not significant to recognize, If recognized during the financial year ended 2022 the comparable expense would have been £49,734 using the same mechanics as used for the 2023 valuation. The full Profit and Loss and Shareholder Funds impact of all options granted has been processed through the 2023 accounts. |
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The comparative financial information for 2022 has been prepared on a consistent basis unless otherwise noted. |
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2. Description of the Share Option Plan: The Company operates an equity-settled, share-based compensation plan, under which it previously granted options to key employees as part of their remuneration package. There were no new share options granted during the current financial year. The plan includes options that vest over a period contingent upon continuing employment and meeting specified performance criteria. |
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3. Summary of Existing Option Pool: As of 31 December 2023, the Company has an existing pool of 47,554,042 options granted in prior years, some of which are still in the process of vesting. The options are exercisable at a price of £0.00001 per option and have the following vesting schedule and conditions: |
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Vesting period: 1, 2 and 4 years from the grant date. |
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Vesting conditions: Subject to the achievement of specific operational targets and continued employment. |
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4. Status of Vesting: As of 31 December 2023, 90% of the previously granted options have vested, with the remainder expected to vest over the next 3 years, assuming continuing employment and achievement of performance targets. |
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5. Expense Recognised: The total expense recognised for the year arising from the entity's share-based payment transactions amounted to 756,519. This represents the ongoing amortisation of the fair value of the options that were estimated at the grant date and is recognised on a graded vesting basis. |
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6. Reconciliation of Outstanding Options: A reconciliation of option movements during the year is as follows: |
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Description |
Number of Options |
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Weighted Average Exercise Price |
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Outstanding at the beginning of the year |
47,163,459 |
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0.03056 |
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Granted during the year |
390,583 |
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0.03141 |
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Forfeited during the year |
- |
- |
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Exercised during the year |
- |
- |
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Expired during the year |
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- |
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Outstanding at the end of the year |
47,554,042 |
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0.03056 |
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Exercisable at the end of the year |
42,996,437 |
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0.03072 |
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8 |
Share based payments - Perfomance based options |
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1. Description of the Performance-based Share Option Plan: The Company has implemented a performance-based share option program targeted at senior management and key personnel. Under this program, options are granted that vest based on the achievement of specific performance targets linked to the Company's valuation performance over a specified period. |
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2. Summary of Grant Activity and Conditions: During the year ended 31 December 2023, the Company did not grant any performance-based options to senior executives. Previous options have been granted subject to vesting conditions based on the achievement of a pre-determined valuation of the Company. |
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3. Valuation of Options: The fair value of performance-based options granted was estimated at the grant date using a Monte Carlo simulation model, reflecting the likelihood of meeting the high market conditions specified. Key inputs to the model included: |
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Risk-free rate: 1.25% |
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Expected volatility: 35% |
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Expected dividends: Nil |
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Share price target: £0.0489 |
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The fair value determined at the grant date was £0.01417 per option. |
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4. Expense Recognition: The total estimated expense of £51,656 is recognised over the vesting period adjusted for the company's revision of the probability that these performance conditions will be met. Changes in performance expectations or market conditions may lead to significant adjustments to the initially recognised amounts. |
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5. Reconciliation of Outstanding Options: A reconciliation of option movements during the year is as follows: |
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Description |
Number of Options |
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Weighted Average Exercise Price |
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Outstanding at the beginning of the year |
10,415,568 |
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0.01417 |
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Granted during the year |
- |
- |
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Forfeited during the year |
- |
- |
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Exercised during the year |
- |
- |
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Expired during the year |
- |
- |
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Outstanding at the end of the year |
10,415,568 |
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0.01417 |
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Exercisable at the end of the year |
- |
- |
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6. Significant Adjustments: As at the year end the assessment of the probability of the performance based share options meeting their performance requirement was 50%. However, post year end the probability of meeting the requirement has risen to 85%. |
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9 |
Other information |
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Multiply AI Limited is a private company limited by shares and incorporated in England. Its registered office is: |
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24 Arlington Square |
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London |
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N1 7DP |
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The registered office moved from Rise London, 41 Luke Street, London, EC2A 4DP on 17 August 2023. |