Redcloud Technologies Limited
Unaudited Financial Statements
For the year ended 31 December 2023
Pages for Filing with Registrar
Company Registration No. 08872820 (England and Wales)
RedCloud Technologies Limited
Redcloud Technologies Limited
Company Information
Directors
H Kunz
J Floyd
N Senn
S Hamzaoui
Secretary
J Fletcher
Company number
08872820
Registered office
50 Liverpool Street
London
United Kingdom
EC2M 7PY
RedCloud Technologies Limited
Redcloud Technologies Limited
Contents
Page
Balance sheet
1 - 2
Statement of changes in equity
Notes to the financial statements
3 - 12
Redcloud Technologies Limited
Balance Sheet
As at 31 December 2023
Page 1
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
3
3,632,505
2,971,044
Tangible assets
4
99,881
63,497
Investments
5
901
12,871,969
3,733,287
15,906,510
Current assets
Debtors
7
5,701,658
5,767,921
Cash at bank and in hand
287,479
1,463,390
5,989,137
7,231,311
Creditors: amounts falling due within one year
8
(4,917,823)
(4,339,753)
Net current assets
1,071,314
2,891,558
Total assets less current liabilities
4,804,601
18,798,068
Creditors: amounts falling due after more than one year
9
(19,856,539)
(13,183,714)
Net (liabilities)/assets
(15,051,938)
5,614,354
Capital and reserves
Called up share capital
11
43,475
34,450
Share premium account
53,324,361
36,598,414
Revaluation reserve
-
0
12,001,834
Equity reserve
3,324,665
-
0
Profit and loss reserves
(71,744,439)
(43,020,344)
Total equity
(15,051,938)
5,614,354
Redcloud Technologies Limited
Balance Sheet (Continued)
As at 31 December 2023
Page 2

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

For the financial year ended 31 December 2023 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.

The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.

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 24 January 2025 and are signed on its behalf by:
J Floyd
Director
Company Registration No. 08872820
Redcloud Technologies Limited
Notes to the Financial Statements
For the year ended 31 December 2023
Page 3
1
Accounting policies
Company information

RedCloud Technologies Limited is a private company limited by shares incorporated in England and Wales. The registered office is 50 Liverpool Street, London, EC2M 7PY.

1.1
Accounting convention

The financial statements are prepared under the historical cost convention, with the exception of the company's fixed asset investment which are held at fair value. This is permitted under the Alternative Accounting Rules of the Companies Act 2006 (SI 2008/410 Sch 1 para 32 (3)) and in accordance with FRS 102 section 1A "The Financial Reporting Standard applicable in the UK and Republic of Ireland" ("FRS 102").

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 principal accounting policies adopted are set out below.

1.2
Going concern

At 31 trueDecember 2023 the company had accumulated losses of £71,744,439 (2022: £43,020,344). During the year ended 31 December 2023, losses of £28,892,499 (9 month period ending Dec 2022: £5,831,184) were incurred in the continuing development of the platform, fully owned by the company and its subsidiary, and to support the growth of the company.

The directors have a reasonable expectation that the company will have sufficient resources available to it to enable it to continue its operations and meet its liabilities as they fall due during the 12 month period ending 31 December 2025 and for a period thereafter and accordingly continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Research and development expenditure

Research expenditure is written off to the profit and loss account in the year in which it is incurred. Development expenditure is written off in the same way unless the directors are satisfied as to the technical, commercial and financial viability of individual projects. In this situation, the expenditure is capitalised within intangible assets and amortised over the period during which the company is expected to benefit, which is considered to be five years. A full year's amortisation charge is recognised in the year the cost was incurred.

1.4
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost less accumulated depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Fixtures, fittings & equipment
3 years straight line
Computer equipment
3 years straight line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

Redcloud Technologies Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 4
1.5
Fixed asset investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at transaction price excluding transaction costs, and are subsequently measured at fair value at each reporting date. Transaction costs are expensed to profit or loss as incurred. Changes in fair value are recognised in other comprehensive income except to the extent that a gain reverses a loss previously recognised in profit or loss, or a loss exceeds the accumulated gains recognised in equity; such gains and loss are recognised in profit or loss.

 

The value of fixed asset investments in the financial statements is the estimated fair value of the company's investments. The valuation of investments have been prepared by the directors.

 

The unrealised surplus or deficit on revaluation is credited or debited to the statement of recognised gains and losses.

 

For details of the valuation of the company's subsidiary undertaking see the fixed asset investments note.

1.6
Impairment of fixed assets

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.7
Cash and cash equivalents

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

1.8
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. The company only has financial instruments measured at amortised cost, with no financial instruments classified as other or basic instruments measured at fair value except for the investments in subsidiary undertakings.

 

Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.

1.9
Compound instruments

The component parts of compound instruments issued by the company are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangement. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar non-convertible instrument. This amount is recorded as a liability on an amortised cost basis using the effective interest method until extinguished upon conversion or at the instrument's maturity date. The equity component is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognised and included in equity net of income tax effects and is not subsequently remeasured.

Redcloud Technologies Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 5
1.10
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.

1.11
Derivatives

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

 

A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.

1.12
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 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.

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 profit and loss account, 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.

1.13
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.

Redcloud Technologies Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 6
1.14
Retirement benefits

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

1.15
Share-based payments

The company has taken advantage of the exemption in FRS102 section 1A to not retrospectively account for the share based payment charges in respect of share options that vested prior to the commencement of its first FRS102 accounting period.

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.

1.16
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.

1.17
Foreign exchange

Transactions in currencies other than pounds sterling 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 are included in the profit and loss account for the period.

2
Employees

The average monthly number of persons (excluding directors) employed by the company during the year was: 41 (2022: 31)

Redcloud Technologies Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 7
3
Intangible fixed assets
Other
£
Cost
At 1 January 2023
9,678,033
Disposals
(4,144,131)
At 31 December 2023
5,533,902
Amortisation and impairment
At 1 January 2023
6,706,989
Amortisation charged for the year
964,477
Disposals
(5,770,069)
At 31 December 2023
1,901,397
Carrying amount
At 31 December 2023
3,632,505
At 31 December 2022
2,971,044
4
Tangible fixed assets
Plant and machinery etc
£
Cost
At 1 January 2023
186,579
Additions
78,375
At 31 December 2023
264,954
Depreciation and impairment
At 1 January 2023
123,082
Depreciation charged in the year
41,991
At 31 December 2023
165,073
Carrying amount
At 31 December 2023
99,881
At 31 December 2022
63,497
Redcloud Technologies Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 8
5
Fixed asset investments
2023
2022
£
£
Shares in group undertakings and participating interests
901
12,871,969
Movements in fixed asset investments
Shares in subsidiaries
£
Cost or valuation
At 1 January 2023
12,871,969
Valuation changes
(12,001,834)
Reclassifcation of intercompany loans
(869,234)
At 31 December 2023
901
Carrying amount
At 31 December 2023
901
At 31 December 2022
12,871,969
Redcloud Technologies Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 9
6
Subsidiaries

The company directly holds 100% shareholding in RedCloud IP Limited, a company registered in the United Kingdom with the purpose of being the holding company of the developed intellectual property.

 

The company also directly holds 100% shareholding in RedCloud Technologies Argentina S.A., RedCloud Trust S.A. (both registered in Argentina), Marketplace Technologies Nigeria Limited (Nigeria), RedCloud Technologies Inc. (Delaware, USA), RedCloud Peru S.A.C (Peru), RedCloud Technologies (Pty) Ltd (South Africa), RedCloud Technologies Brasil Servicios Digitais Ltda (Brazil) and RedCloud Technologies (Portugal) Unipessoal Ltd (Portugal) . All of these companies are incorporated in order to further trading opportunities in their relevant countries.

7
Debtors
2023
2022
Amounts falling due within one year:
£
£
Amounts owed by group undertakings
3,318,624
3,552,473
Other debtors
50,224
200,059
Prepayments and accrued income
84,327
91,862
3,453,175
3,844,394
2023
2022
Amounts falling due after more than one year:
£
£
Other debtors
2,248,483
1,923,527
Total debtors
5,701,658
5,767,921

The amounts owed by group undertakings includes loans granted to an immediate subsidiary company amounting to £2,248,483 as at 31 December 2023 (2022: £1,796,159). The amounts owed by group undertakings accrue interest on an annual basis at 6%. Total interest of £66,638  (2022: £32,324) was receivable during the period ended 31 December 2023. The total available facility is £4,000,000 and the loan is repayable on 1st January 2028.

8
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
538,437
300,645
Amounts owed to group undertakings
3,414,137
3,112,406
Corporation tax
24,517
60,180
Other taxation and social security
149,747
66,709
Other creditors
428,219
491,748
Accruals and deferred income
362,766
308,065
4,917,823
4,339,753
Redcloud Technologies Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 10
9
Creditors: amounts falling due after more than one year
2023
2022
£
£
Convertible loans
19,856,539
13,083,714
Other creditors
-
100,000
19,856,539
13,183,714
10
Convertible loan notes
2023
2022
£
£
Liability component of convertible loan notes and shareholders loans
19,856,539
13,083,714

Convertible loan notes:

From July 2020 to August 2021, the Company entered into loan agreements with certain shareholders. Convertible loan finance will be converted into equity automatically on a qualified financing or exit, at the election of the Lender Majority on non-qualified financing, or automatically on the maturity date unless notice for repayment has been given by the lenders in accordance with the agreement. Interest on the convertible loan notes accrued at 8% to 10% per annum. In July 2023, these loan holders converted the entire loan balance into common shares of the Company.

Between September and November 2023, the Company entered into loan agreements with certain shareholders at a 15% annual interest rate, with no cash payment due on the loans until their maturity date in March 2026. The loans are convertible into the most senior class of shares issued if the conversion is due to a Company financing event, at a 35% discount to the financing event price. The loans are convertible into the most senior class of shares in issue due to an exit event, such as a Company initial public offering or sale of the Company, at a 35% discount to the exit event share price.

 

Shareholder Loans:

In June 2023, the Company entered into an agreement with the shareholders to extend the maturity date of all shareholder loans to December 2023. In December 2023, the Company similarly entered into another agreement to further extend the maturity date of the loans to align with the completion of an initial public offering of its common shares, which the Company expects in the second half of 2024.

The net proceeds received from the issue of the convertible loan notes have not been split between the financial liability element and an equity component, as the equity element of the loan is considered immaterial to the financial statements.

Convertible loan notes are held at fair value from their respective inception dates for the life of the loans.

Redcloud Technologies Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 11
11
Called up share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
ordinary shares of 0.1p each
43,475,000
34,450,000
43,475
34,450

 

12
Share-based payment transactions

The company has a share option plan for eligible employees. Details of the options in existence are set out below.

Number of share options
Weighted average exercise price
2023
2022
2023
2022
Number
Number
£
£
Outstanding at 1 January 2023
1,625,688
1,354,334
0.20
0.13
Granted
911,812
307,187
0.80
0.61
Forfeited
(365,000)
(35,833)
0.80
0.49
Outstanding at 31 December 2023
2,172,500
1,625,688
0.79
0.20
Exercisable at 31 December 2023
2,172,500
1,625,688
0.79
0.20
Liabilities and expenses

During the year, the company recognised total share-based payment expenses of £55,342 (2022 - £-) which related to equity settled share based payment transactions.

The company has taken advantage of the transitional exemption in FRS102 section 1A to not retrospectively account for the share based payment charges in respect of share options that vested prior to the commencement of its first FRS102 section 1A accounting period.

13
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
2022
£
£
-
0
128,267
Redcloud Technologies Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 12
14
Related party transactions

The company has taken advantage of the exemption available in accordance with FRS 102 section 33 'Related Party Disclosures' not to disclose transactions entered into between two or more members of the group, as the company is a wholly owned subsidiary undertaking of the group with which it is party to the transactions.

15
Directors' transactions

Included within other debtors is an amount of £nil (2022: £49,537) due from J.Floyd.

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