Company registration number 14208249 (England and Wales)
COWBELL CYBER LTD
FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
PAGES FOR FILING WITH REGISTRAR
COWBELL CYBER LTD
CONTENTS
Page
Statement of financial position
1
Notes to the financial statements
2 - 7
COWBELL CYBER LTD
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 1 -
2023
Notes
£
£
Current assets
Debtors
4
72,285
Cash at bank and in hand
63,287
135,572
Creditors: amounts falling due within one year
5
(2,342,139)
Net current liabilities
(2,206,567)
Capital and reserves
Called up share capital
7
1
Other reserves
329,919
Profit and loss reserves
(2,536,487)
Total equity
(2,206,567)
The directors of the company have elected not to include a copy of the income statement 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 27 November 2024 and are signed on its behalf by:
J Y Kudale
Director
Company Registration No. 14208249
COWBELL CYBER LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 2 -
1
Accounting policies
Company information
Cowbell Cyber Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Dukes Place, 30 Dukes Place, London, United Kingdom, EC3A 7LP.
1.1
Reporting period
The financial period has been lengthened to 18 months, this is to be inline with fellow group companies after incorporation in July 2022. As this is the first reporting period of the entity, no comparative amounts are presented in the financial statements.
1.2
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 financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.3
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. Thus the directors continue to adopt the going concern basis of accouting in preparing the financial statements.
Despite the company incurring a loss of £2,536,487 during the period ended 31 December 2023 and as of that date current liabilities exceeding net assets of £2,206,567, the directors have received assurances that the support already given by the ultimate parent, Cowbell Cyber Inc, will remain in place for at least twelve months from the date of approval of these financial statements.
As a consequence of these factors and other evidence available to the directors in respect of the company's trading prospects, the director is satisfied that the company has sufficient resources to meet its liabilities as they fall due for a period of at least twelve months from the date of signing of these financial statements.
Accordingly, the financial statements are prepared on a going concern basis and do not include any adjustments which would be necessary if this basis of preparation was inappropriate.
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.
COWBELL CYBER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 3 -
1.5
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position 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 debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method 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. Financial assets classified as receivable within one year are not amortised.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, 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. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
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 sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement 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.
COWBELL CYBER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 4 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.8
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.9
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.10
Share-based payments
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.
1.11
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.
COWBELL CYBER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 5 -
2
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.
3
Employees
The average monthly number of persons (including directors) employed by the company during the period was:
2023
Number
Total
8
4
Debtors
2023
Amounts falling due within one year:
£
Amounts owed by group undertakings
52,440
2023
Amounts falling due after more than one year:
£
Other debtors
19,845
Total debtors
72,285
5
Creditors: amounts falling due within one year
2023
£
Trade creditors
43,861
Amounts owed to group undertakings
2,217,601
Other creditors
80,677
2,342,139
COWBELL CYBER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 6 -
6
Share-based payment transactions
Number of share options
Weighted average exercise price
2023
2023
Number
$
Outstanding at 1 July 2022
Granted
2,890,000
0.48
Exercised
(33,854)
0.49
Expired
(25,000)
0.49
Outstanding at 31 December 2023
2,831,146
0.48
Exercisable at 31 December 2023
The options outstanding at 31 December 2023 had an exercise price ranging from $0.460 to $0.494, and a remaining contractual life of 10 years.
Options were granted on 1 November 2022, 26 January 2023, 9 March 2023, 2 May 2023 and 26 July 2023.
The fair value has been derived by use of a Black-Scholes model.
Inputs were as follows:
2023
Weighted average share price ($)
0.66
Weighted average exercise price ($)
0.48
Expected volatility (%)
35.79
Expected life (years)
4.00
Risk free rate (%)
4.52
Liabilities and expenses
During the period, the company recognised total share-based payment expenses of £329,919 which related to equity settled share based payment transactions. A corresponding credit has been recorded within the capital contribution reserve to recognise the investment made in the parent to the employees of the company.
Further share options have been granted post year end.
7
Called up share capital
2023
2023
Ordinary share capital
Number
£
Issued and fully paid
Ordinary Shares of 1p each
100
1
COWBELL CYBER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 7 -
8
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:
Material uncertainty related to going concern
We draw attention to Note 1.3 in the financial statements, which indicates that the company incurred a net loss of £2,536,487 during the period ended 31 December 2023 and, as of that date, the company’s current liabilities exceeded its total assets by £2,206,567. As stated in Note 1.3, these events or conditions, along with other matters as set forth in Note 1.3, indicate that if group support was not obtained, a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern.
The auditor's report was unqualified.
Senior Statutory Auditor:
Daniel Graves BA(Hons) FCA
Statutory Auditor:
Azets
9
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2023
£
Within one year
36,406
36,406
10
Related party transactions
The company has taken advantage of the exemption contained in FRS 102 section 33 and has therefore not disclosed transactions or balances with wholly owned subsidiaries of Cowbell Cyber Inc.
11
Parent company
The company is a wholly owned subisdary undertaking of Cowbell Cyber Inc, a company incorporated in the United States of America.
The group in which the results of the Company are consolidated is that headed by Cowbell Cyber Inc,. No other group financial statements include the results of the Company. The consolidated financial statements of the group can be obtained from 6800 Koll Centre Pkwy, Suite 250, Pleasanton, CA 94566.