Paddle.Com Market Limited
Annual Report and Financial Statements
For the year ended 31 December 2023
Company Registration No. 08172165 (England and Wales)
Paddle.Com Market Limited
Company Information
Directors
S C Chandler
L C Bowden
K A Griswold
P Devine
J Fitzgerald
S H Galit
(Appointed 11 August 2023)
Company number
08172165
Registered office
Judd House
18-29 Mora Street
London
United Kingdom
EC1V 8BT
Auditor
Moore Kingston Smith LLP
6th Floor
9 Appold Street
London
EC2A 2AP
Paddle.Com Market Limited
Contents
Page
Strategic report
1 - 4
Directors' report
5 - 7
Directors' responsibilities statement
8
Independent auditor's report
9 - 12
Group statement of comprehensive income
13
Group statement of financial position
14
Company statement of financial position
15
Group statement of changes in equity
16
Company statement of changes in equity
17
Group statement of cash flows
18
Notes to the financial statements
19 - 45
Paddle.Com Market Limited
Strategic Report
For the year ended 31 December 2023
Page 1

The Directors present the strategic report for Paddle.com Market Ltd ("Paddle" or "the Company") for the year ended 31 December 2023.

 

The Directors consider, both individually and together, that they have acted in the way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole (having regard to the stakeholders and matters set out in s172(1)(a-f) of the Companies Act 2006 in the decisions taken during the year ended 31 December 2023.

 

Section 172 requires a director to have regard, amongst other matters to the:

 

In discharging its section 172 duties, the Directors have had regard to the factors set out above; the relative importance of each factor will vary depending on the decision being taken. In addition, the Directors recognise that certain decisions will require them to consider additional factors, as appropriate. The Company's key stakeholders are its ultimate parent undertaking, employees, suppliers, customers, regulators and community as a whole; the interests of these stakeholders are considered as part of the Directors decision making, as appropriate.

 

The Directors consider and discuss information from across the organisation to help it understand the impact of the Company's operations, and the interests and views of its key stakeholders. It also reviews strategy, financial and operational performance as well as information covering areas such as key risks, and legal and regulatory compliance. This information is provided to the Directors through reports sent in advance of each meeting and through in-person presentations. As a result, the Directors have an overview of engagement with stakeholders and other relevant factors, which enables the Directors to comply with their legal duty under Section 172(1).

 

The following items are material developments, activities or transactions for the Company during the financial year:

Paddle.Com Market Limited
Strategic Report (Continued)
For the year ended 31 December 2023
Page 2
Review of Business, Operations, Financial Results and Key Performance Indicators

The Company’s mission is to become the leading platform for software businesses to run and grow their businesses.

 

The Company’s operating model is as a Merchant of Record’ (“MoR”) whereby the Company is an authorised reseller of its suppliers’ software and digital products. In this model, a buyer purchases the product directly from the Company or one of its subsidiaries and the supplier remains the licensor. The Company, as the legal MoR, is responsible for collecting payment, the calculation of, and remittance of any applicable sales tax. To support these endeavors, it manages an e-commerce platform that includes a user-friendly payment stack with built in logic for recurring payments and an inhouse team handling queries and concerns from buyers.

 

The Company also offers customers a proprietary Software-as-a-Service (“SaaS”) application, Retain, to help them retain their existing subscription customers through pre-built automated dunning workflows. Retain customers range from small independent developers to large enterprises.

 

Finally, the Company also provides pricing consultancy services under the brand of Price Intelligently. Price Intelligently customers range from small independent developers to large enterprises.

 

Paddle’s go to market strategy in 2023 was primarily driven by inbound demand generation coupled with outbound sales activities that focused on helping our target MoR suppliers, Retain customers, or Price Intelligently customers succeed in building and growing their businesses. Product development in 2023 was focused on improving the Company’s offerings for SaaS businesses while continuing to evolve its checkout and invoicing solutions. Improvements in the Company’s billing and subscription management functionality were made to align with the expectations of its target MoR suppliers. Work on the Company’s checkout functionality included adding multiple new payment currencies, localisation of payment options and increased diversification of the Company's payments stack.

 

The Company’s strategy continues to be focused on increasing the complexity and depth of its offering, whilst providing the security and compliance expected by its suppliers globally. Future product development will grow the Company’s invoicing capabilities and subscription management features through the integration of the Retain platform directly into the MoR e-commerce platform.

 

Key Performance Indicators

Revenue from operations increased by 17% to £57.3m in 2023 as compared to the prior year. Management also evaluates performance using an EBITDA metric, which is reconciled to Net loss below.

 

2023
2022 restated
£
£
Net Loss
(45,102,683)
(36,161,292)
Finance Costs
103,381
(629,038)
Interest Income
(1,394,492)
(180,139)
Tax on Loss
218,593
(416,843)
Depreciation
328,011
335,490
Amortisation
13,893,397
9,082,140
EBITDA
(31,953,793)
(27,969,682)
Paddle.Com Market Limited
Strategic Report (Continued)
For the year ended 31 December 2023
Page 3
Principle risks and uncertainties

The directors assess the risks and uncertainties facing the business on a regular basis, with the principal risks identified as follows:

 

Competitive Landscape

 

Whilst the Company’s operating model is that of a MoR and reseller, it nonetheless operates within the same competitive space as payment processors, who offer their more limited service at a lower price. As such, the Company’s ‘all in one’ offering and platform is at odds with much of the market, which currently takes a modular approach to e-commerce. Future growth will depend on persuading more suppliers of the value and overall benefits of using a reseller in the sale of their products. During 2023, the Company narrowed our focus to suppliers that are more in line with our ideal customer profile, continued to build brand awareness, and improved our self-serve onboarding process.

 

Security and Privacy

 

The Company’s security and privacy posture is in line with its status as reseller and merchant (within the meaning of applicable payment scheme rules). The Company builds and operates an internet-facing platform hosted in the AWS cloud, making it potentially vulnerable to cyber-attacks. The Company also handles buyer data, including Personal Information (PI) and payment card data, consistent with the Company’s status as a merchant. A security or data breach has the potential to cause significant damage to Paddle’s prospects. The Company continues to mitigate the likelihood of occurrence by investing in appropriate technical and business controls, i.e. SOC 2 Type 2, PCI DSS v4.0 and GDPR compliant and has Cyber Insurance coverage.

 

Reliance on Third Parties

 

The Company relies on banks, card schemes, and multiple payment processors to execute certain components of the MoR business. To receive payments as a MoR, we pay these third parties interchange, processing, and gateway fees. As a result, if we are unable to maintain relationships with these third parties, or if they experience service disruptions or cease operations, our business could be adversely impacted.

Paddle.Com Market Limited
Strategic Report (Continued)
For the year ended 31 December 2023
Page 4

Financial Crime and Fraud

 

Financial crime risk primarily manifests within the Company in two distinct ways. Firstly, there is the risk that the suppliers that use the Company operate fraudulent business models and look to use a reseller to mask their practices and escape detection. This risk is mitigated through deep technical reviews of their website/ domain and stringent supplier verification checks (KYC/KYB) to ensure that the Company only works with businesses in a manner consistent with AML and sanctions requirements. Secondly, there is a risk of payment fraud perpetrated by buyers who attempt to exploit controls to defraud the Company and commit credit card fraud. The Company acts to control this risk through real time and post-event transaction monitoring.

 

Supplier Risk

 

The Company builds relationships with suppliers, and if our suppliers act nefariously, the Company’s reputation with card schemes, payment processers, or government agencies could be damaged. Reputational damage to the Company’s brand could result in lost revenue due to supplier churn, the inability to acquire new suppliers, or fines and/or penalties assessed against the Company.

 

Regulatory and Tax

 

The global sales tax environment moves quickly, with an increasing number of jurisdictions opting to tax the sale of non-domestic digital products. The Company continues to update and remain abreast of new registrations globally and has a dedicated team who monitor new and upcoming requirements. Provision is made where the Company is exposed to sales tax liabilities. This exposes the Company to increased global sales tax compliance risk, and in the event of an audit, could result in fines and penalties being assessed against the Company or could pose reputational risk. Payments and consumer transactions continue to be a focus for regulators and whilst the MoR model does not require licence or specific regulatory oversight, developments in the space may see this change in the future.

 

Talent

 

The Company operates in a very competitive talent market, primarily in the UK, the United States, the Netherlands, and Portugal, with technology specific roles in high demand. The lifeblood of the Company is its people and significant employee attrition would be damaging to the business and its ability to innovate. The Company has sought to expand its talent pool by moving to a ‘digital-first’ working environment, whilst maintaining a head office in London and building communities of employees in designated hubs to support those that seek an in person work experience.

 

Cash

 

The Company is a high growth loss-making business and may need to raise capital periodically to fuel its continued growth until reaching cash flow breakeven. The Company closed a Series D financing round as discussed in the financial statements, which facilitated the acquisition of 200OK LLC on April 29, 2022.

On behalf of the board

J Fitzgerald
Director
7 March 2025
Paddle.Com Market Limited
Directors' Report
For the year ended 31 December 2023
Page 5

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the company and group continued to be that of operating an e-commerce platform.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

C B Owens
(Resigned 18 April 2024)
S C Chandler
C Thoma
(Resigned 12 June 2024)
L C Bowden
K A Griswold
P Campbell
(Resigned 25 May 2023)
P Devine
J Fitzgerald
S H Galit
(Appointed 11 August 2023)
Results and dividends

No ordinary dividends were paid for the years ended 31 December 2023 and 2022. The directors do not recommend payment of future dividends.

Disabled persons

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the group continues and that the appropriate training is arranged. It is the policy of the group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

Employee involvement

The group's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.

Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.

Future developments

Currently trade is operating as normal and no significant changes are anticipated.

The Group was loss making for the years ended 31 December 2023 and 31 December 2022 and was in a net asset position of £84.2m and £118.5m, respectively. The Directors have reviewed the Group’s forecasts for a period of at least 12 months from the date that these financial statements were approved. These forecasts, including stress tests, reflect ongoing losses and a reliance upon cash resources to fund working capital requirements. The Company has sufficient cash flow funding to continue to be able to settle its liabilities as they fall due, alongside providing support to subsidiaries as required. As such, the directors are satisfied it is appropriate to adopt the going concern basis of accounting in preparing these financial statements.

Auditor

In accordance with the company's articles, a resolution proposing that Moore Kingston Smith LLP be reappointed as auditor of the group will be put at a General Meeting.

Paddle.Com Market Limited
Directors' Report (Continued)
For the year ended 31 December 2023
Page 6
Energy and carbon report

As the group has consumed more than 40,000 kWh of energy in this reporting period, it does not qualify as a low energy user under these regulations and is therefore required to report on its emissions, energy consumption or energy efficiency activities.

 

2023
2022
Energy consumption
kWh
kWh
Aggregate of energy consumption in the year
129,120
154,933
2023
2022
Emissions of CO2 equivalent
metric tonnes
metric tonnes
Scope 1 - direct emissions
- Gas combustion
-
-
- Fuel consumed for owned transport
-
-
-
-
Scope 2 - indirect emissions
- Cloud computing usage
0.19
0.13
Total gross emissions
0.19
0.13
Quantification and reporting methodology

The group has followed the 2019 HM Government Environmental Reporting Guidelines. The group has also used the GHG Reporting Protocol – Corporate Standard and have used the 2020 UK Government’s Conversion Factors for Company Reporting

Intensity measurement

The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per employee, the recommended ratio for the sector.

Measures taken to improve energy efficiency

Paddle.com Market Limited and its subsidiary companies are committed to implementing environmental best practice into its day-to-day activities and have already taken the following energy efficiency actions:

(1) Water leak detections throughout the office to ensure water can be automatically stopped if leak is detected - no waste

(2) LED lights throughout the office with motion detectors to ensure the lights are turned on only when needed

(3) Equipment is set to work on Mon-Fri schedule to save on energy, with an option to manually override when needed.

(4) Adjusting BMS system on regular basis in accordance with weather conditions changes and office attendance

(5) Roof level solar panels

(6) Paddle is fully remote company with reduced domestic and international travel

(7) Through working with Verte Ltd and through implementation of an Asset Improvement Plan, we were able to achieve a 10% energy saving without capital expenditure. This resulted in a reduction in energy consumption, operational costs, and carbon emissions.

Paddle.Com Market Limited
Directors' Report (Continued)
For the year ended 31 December 2023
Page 7
Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

On behalf of the board
J Fitzgerald
Director
7 March 2025
Paddle.Com Market Limited
Directors' Responsibilities Statement
For the year ended 31 December 2023
Page 8

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Paddle.Com Market Limited
Independent Auditor's Report
To the Members of Paddle.Com Market Limited
Page 9
Opinion

We have audited the financial statements of Paddle.com Market Limited (the 'Parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2023 which comprise the Group Statement of Comprehensive Income, the Group Statement Of Financial Position, the Company Statement Of Financial Position, the Group Statement of Changes in Equity, the Company Statement of Changes in Equity, the Group Statement of Cash Flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

 

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Paddle.Com Market Limited
Independent Auditor's Report (Continued)
To the Members of Paddle.Com Market Limited
Page 10

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

 

Responsibilities of directors

As explained more fully in the Directors' Responsibilities Statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

 

In preparing the financial statements, the directors are responsible for assessing the group's and parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or parent company or to cease operations, or have no realistic alternative but to do so.

Paddle.Com Market Limited
Independent Auditor's Report (Continued)
To the Members of Paddle.Com Market Limited
Page 11
Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

 

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

 

Paddle.Com Market Limited
Independent Auditor's Report (Continued)
To the Members of Paddle.Com Market Limited
Page 12

Explanation as to what extent the audit was considered capable of detecting irregularities, including

fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,

including fraud is detailed below.

 

The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.

 

Other matters which we are required to address

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken for no purpose other than to draw to the attention of the company’s members those matters we are required to include in an auditor's report addressed to them. To the fullest extent permitted by law, we do not accept or assume responsibility to any party other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Rebecca Shields (Senior Statutory Auditor)
for and on behalf of Moore Kingston Smith LLP
7 March 2025
Chartered Accountants
Statutory Auditor
6th Floor
9 Appold Street
London
EC2A 2AP
Paddle.Com Market Limited
Group Statement of Comprehensive Income
For the year ended 31 December 2023
Page 13
2023
2022
as restated
Notes
£
£
Revenue
3
57,299,864
49,018,457
Cost of sales
(23,561,251)
(22,358,505)
Gross profit
33,738,613
26,659,952
Administrative expenses
(80,122,886)
(64,623,456)
Other operating income
209,072
576,192
Operating loss
4
(46,175,201)
(37,387,312)
Interest receivable and similar income
8
1,394,492
180,139
Interest payable and similar expenses
9
(103,381)
629,038
Loss before taxation
(44,884,090)
(36,578,135)
Tax on loss
10
(218,593)
416,843
Loss for the financial year
(45,102,683)
(36,161,292)
Other comprehensive income
Currency translation differences
698,655
(585,318)
Total comprehensive income for the year
(44,404,028)
(36,746,610)
Loss for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the year is all attributable to the owners of the parent company.
Paddle.Com Market Limited
Group Statement Of Financial Position
As at 31 December 2023
Page 14
2023
2022
as restated
Notes
£
£
£
£
Non-current assets
Goodwill
11
59,808,729
72,656,873
Other intangible assets
11
8,093,029
14,880,023
Total intangible assets
67,901,758
87,536,896
Property, plant and equipment
12
721,087
1,009,529
68,622,845
88,546,425
Current assets
Trade and other receivables falling due after more than one year
16
549,652
549,652
Trade and other receivables falling due within one year
16
11,738,814
12,509,939
Cash and cash equivalents
68,753,089
83,351,479
81,041,555
96,411,070
Current liabilities
17
(67,177,768)
(66,420,169)
Net current assets
13,863,787
29,990,901
Total assets less current liabilities
82,486,632
118,537,326
Non-current liabilities
18
(3,706,560)
-
Net assets
78,780,072
118,537,326
Equity
Called up share capital
20
6,582
6,569
Share premium account
22
189,620,054
189,609,120
Other reserves
262,743
(642,580)
Retained earnings
(111,109,307)
(70,435,783)
Total equity
78,780,072
118,537,326
The financial statements were approved by the board of directors and authorised for issue on 7 March 2025 and are signed on its behalf by:
07 March 2025
J Fitzgerald
Director
Paddle.Com Market Limited
Company Statement Of Financial Position
As at 31 December 2023
31 December 2023
Page 15
2023
2022
as restated
Notes
£
£
£
£
Non-current assets
Property, plant and equipment
12
678,580
958,105
Investments
13
305,977
305,977
984,557
1,264,082
Current assets
Trade and other receivables falling due after more than one year
16
549,652
549,652
Trade and other receivables falling due within one year
16
84,531,411
108,536,140
Cash and cash equivalents
67,750,672
69,969,703
152,831,735
179,055,495
Current liabilities
17
(46,981,494)
(50,198,461)
Net current assets
105,850,241
128,857,034
Total assets less current liabilities
106,834,798
130,121,116
Non-current liabilities
18
(3,706,560)
-
Net assets
103,128,238
130,121,116
Equity
Called up share capital
20
6,582
6,569
Share premium account
22
189,620,054
189,609,120
Other reserves
206,668
-
0
Retained earnings
(86,705,066)
(59,494,573)
Total equity
103,128,238
130,121,116

As permitted by s408 Companies Act 2006, the company has not presented its own income statement and related notes. The company’s loss for the year was £31,639,652 (2022 - £30,096,492 loss).

The financial statements were approved by the board of directors and authorised for issue on 7 March 2025 and are signed on its behalf by:
07 March 2025
J Fitzgerald
Director
Company Registration No. 08172165 (England and Wales)
Paddle.Com Market Limited
Group Statement of Changes in Equity
For the year ended 31 December 2023
Page 16
Share capital
Share premium account
Other reserves
Retained earnings
Total
Notes
£
£
£
£
£
As restated for the period ended 31 December 2022:
Balance at 1 January 2022
5,397
48,525,539
(57,262)
(40,051,236)
8,422,438
Year ended 31 December 2022:
Loss for the year
-
-
-
(36,161,292)
(36,161,292)
Other comprehensive income:
Currency translation differences
-
-
(585,318)
-
(585,318)
Total comprehensive income for the year
-
-
(585,318)
(36,161,292)
(36,746,610)
Issue of share capital
20
1,172
141,083,581
-
-
141,084,753
Credit to equity for equity settled share-based payments
21
-
-
-
5,776,745
5,776,745
Balance at 31 December 2022
6,569
189,609,120
(642,580)
(70,435,783)
118,537,326
Year ended 31 December 2023:
Loss for the year
-
-
-
(45,102,683)
(45,102,683)
Other comprehensive income:
Currency translation differences
-
-
698,655
-
698,655
Total comprehensive income for the year
-
-
698,655
(45,102,683)
(44,404,028)
Issue of share capital
20
13
10,934
-
-
10,947
Credit to equity for equity settled share-based payments
21
-
-
-
4,396,563
4,396,563
Other movements
-
-
239,264
-
239,264
Transfers
-
-
(32,596)
32,596
-
Balance at 31 December 2023
6,582
189,620,054
262,743
(111,109,307)
78,780,072
Paddle.Com Market Limited
Company Statement of Changes in Equity
For the year ended 31 December 2023
Page 17
Share capital
Share premium account
Other reserves
Retained earnings
Total
Notes
£
£
£
£
£
As restated for the period ended 31 December 2022:
Balance at 1 January 2022
5,397
48,525,539
-
(35,174,826)
13,356,110
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
-
-
(30,096,492)
(30,096,492)
Issue of share capital
20
1,172
141,083,581
-
-
141,084,753
Credit to equity for equity settled share-based payments
21
-
-
-
5,776,745
5,776,745
Balance at 31 December 2022
6,569
189,609,120
-
(59,494,573)
130,121,116
Year ended 31 December 2023:
Loss and total comprehensive income for the year
-
-
-
(31,639,652)
(31,639,652)
Issue of share capital
20
13
10,934
-
-
10,947
Credit to equity for equity settled share-based payments
21
-
-
-
4,396,563
4,396,563
Other movements
-
-
239,264
-
239,264
Transfers
-
-
(32,596)
32,596
-
Balance at 31 December 2023
6,582
189,620,054
206,668
(86,705,066)
103,128,238
Paddle.Com Market Limited
Group Statement of Cash Flows
For the year ended 31 December 2023
Page 18
2023
2022
as restated
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
31
(12,927,487)
(5,427,268)
Interest received
1,194,673
180,139
Interest paid
(125,817)
(192,087)
Income taxes refunded
167,328
350,189
Net cash outflow from operating activities
(11,691,303)
(5,089,027)
Investing activities
Purchase of property, plant and equipment
(75,460)
(273,818)
Proceeds from disposal of property, plant and equipment
34,021
25,842
Purchase of 200K LLC, net of cash acquired
-
(84,716,920)
Interest received
-
180,139
Net cash used in investing activities
(41,439)
(84,784,757)
Financing activities
Proceeds from issue of shares
10,947
127,820,515
Repayment of borrowings
-
821,125
Purchase of derivatives
-
(910,660)
Net cash generated from financing activities
10,947
127,730,980
Net (decrease)/increase in cash and cash equivalents
(11,721,795)
37,857,196
Cash and cash equivalents at beginning of year
83,351,479
46,079,601
Effect of foreign exchange rates
(2,876,595)
(585,318)
Cash and cash equivalents at end of year
68,753,089
83,351,479
Paddle.com Market Limited
Paddle.Com Market Limited
Notes to the Financial Statements
For the year ended 31 December 2023
Page 19
1
Accounting policies
Company information

Paddle.com Market Limited (“the company”) is a private company limited by shares domiciled and incorporated in England and Wales. The registered office is Judd House, 18-29 Mora Street, London, EC1V 8BT.

 

The group consists of Paddle.com Market Limited and all of its subsidiaries.

1.1
Accounting convention

The group and company financial statements of the parent company 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.

 

The group financial statements are prepared in pound sterling and rounded to the nearest pound. The company’s functional and presentation currency is the pound sterling.

 

The group and company financial statements are prepared on a going concern basis, under the historical cost convention, as modified by the recognition of certain financial assets and liabilities measured at fair value. The principal accounting policies applied in the preparation of these group and company financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

 

FRS 102 allows a qualifying entity certain disclosure exemptions, subject to conditions. The company has taken advantage of the following exemptions in its individual financial statements:

 

 

The consolidated group financial statements include the financial statements of the Parent Company, and all of its subsidiary undertakings together with the group’s share of its interests in joint ventures and associates made up to 31 December 2023.

 

Where a subsidiary has different accounting policies to the group, adjustments are made to those subsidiary financial statements to apply the group’s accounting policies when preparing the group financial statements.

 

All intra-group transactions, balances, income and expenses are eliminated on consolidation. Adjustments are made to eliminate the profit or loss arising on transactions with associates to the extent of the group’s interest in the entity.

Paddle.com Market Limited
Paddle.Com Market Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 20

Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.

1.2
Going concern

The group is growing rapidly and as forecasted revenue has continued to grow, it made a loss in the year to 31 December 2023. The group was able to maintain cash reserves of £68.8m (2022: £83.4m).

 

Based on the above, at the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Revenue

Revenue is recognised to the extent that the group obtains the right to consideration in exchange for its performance. Revenue is measured at the fair value of the consideration received, excluding discounts, rebates, VAT and other sales taxes or duties.

 

The Company’s operating model is as a ‘Merchant of Record’ (“MoR”) whereby the Company is an authorised reseller of its suppliers’ software and digital products. In this model, a buyer purchases the product directly from the Company or one of its subsidiaries and the supplier remains the licensor. The Company, as the legal MoR, is responsible for collecting payment, the calculation and remittance of any applicable sales tax. To support these endeavours, it manages an e- commerce platform that includes a user-friendly payment stack with built-in logic for recurring payments and an inhouse team handling queries and concerns from buyers.

 

Although the Group operates as the MoR for the transactions described above, the Group does not participate in the significant risks and rewards associated with the provision of the products and therefore the Company is an ‘agent’ under FRS 102. As a result, the difference between the amount the software or other digital goods are purchased from suppliers and then resold to buyers is recorded as revenue.

 

The Group also operates a subscription retention SaaS product. Revenue from SaaS contracts are recognised in the statement of comprehensive income over the period during which the services are performed. The group recognises SaaS revenue on a per-day basis over the contract term.

Finally, the Group also operates a pricing consultancy business. Revenue from consulting services provided is recognised in the statement of comprehensive income over the period during which the services are performed. The group recognises consulting service revenue based on the stage of completion of the service contract at the end of the reporting period. The revenue is measured at the fair value of the consideration received or receivable, taking into account the agreed- upon milestones and rates as stipulated in the contract.

 

Revenue from Software as a Service (SaaS) contracts is recognized in the statement of comprehensive income over the period during which the services are performed. The group recognises SaaS revenue on a per-day basis over the contract term.

 

Provisions are made for credit notes based on the expected level of returns which is based on the historical experience of returns.

 

Interest earned from cash and cash equivalents is recognized using the effective interest rate method and is recorded in the ‘Interest receivable and similar income’ line of the Group Statement of Comprehensive Income.

Paddle.com Market Limited
Paddle.Com Market Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 21
1.4
Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred.

1.5
Business Combinations and goodwill

Business combinations are accounted for by applying the purchase method. The cost of a business combination is the fair value of the consideration given, liabilities incurred or assumed and of equity instruments issued plus the costs directly attributable to the business combination.

 

Contingent consideration is initially recognized at an estimated amount where the consideration is probable and can be measured reliably. Where (i) the contingent consideration is not considered probable or cannot be reliably measured but subsequently becomes probable and measurable or (ii) contingent consideration previously measured is adjusted, the amounts are recognized as an adjustment to the cost of the business combination.

 

On acquisition of a business, fair values are attributed to the identifiable assets, liabilities and contingent liabilities unless the fair value cannot be measured reliably, in which case the value is incorporated in goodwill. Intangible assets are only recognised separately from goodwill where they are separable and arise from contractual or other legal rights. Where the fair value of contingent liabilities cannot be reliably measured they are disclosed on the same basis as other contingent liabilities.

 

Goodwill recognised represents the excess of the fair value and directly attributable costs of the purchase consideration over the fair values to the group’s interest in the identifiable net assets, liabilities and contingent liabilities acquired. On acquisition, goodwill is allocated to cash-generating units (‘CGU’s’) that are expected to benefit from the combination. Goodwill is amortised over its expected useful life which is estimated to be ten years.

 

Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. No reversals of impairment are recognised.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

1.6
Other intangible assets

Intangible assets are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Amortisation is included in ‘Administrative expenses’ in the profit and loss account.

Amortisation is recognised to write off the cost or valuation of assets less their residual values over their useful lives on a straight-line basis:

Goodwill
10 years
Intellectual property
3 - 5 years
Customer relationships
5 years
Developed technologies
3 years
Paddle.com Market Limited
Paddle.Com Market Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 22

Where factors, such as technological advancement or changes in market price, indicate that residual value or useful life have changed, the residual value, useful life or amortisation rate are amended prospectively to reflect the new circumstances. The assets are reviewed for impairment if the above factors indicate that the carrying amount may be impaired.

1.7
Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Cost includes the original purchase price, costs directly attributable to bringing the asset to its working condition for its intended use, dismantling and restoration costs.

Depreciation is calculated, using the straight-line method, to allocate the depreciable amount to their residual values over their estimated useful lives, as follows:

Leasehold improvements
Depreciated over the life of the lease
Fixtures and fittings
3 years straight line
Computer equipment
3 years straight line

The assets’ residual values and useful lives are reviewed, and adjusted, if appropriate, at the end of each reporting period. The effect of any change is accounted for prospectively.

 

Repairs and maintenance costs are expensed as incurred.

 

Property, plant and equipment are derecognised on disposal or when no future economic benefits are expected. On disposal, the difference between the net disposal proceeds and the carrying amount is recognized in profit or loss and included in Administrative Expenses.

1.8
Non-current investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

 

Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.

Paddle.com Market Limited
Paddle.Com Market Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 23

Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.

 

In the parent company financial statements, investments in associates are accounted for at cost less impairment.

Entities in which the group has a long-term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.9
Impairment of non-current assets

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

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.

1.10
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, when applicable, are shown within borrowings in current liabilities.

Paddle.com Market Limited
Paddle.Com Market Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 24
1.11
Financial instruments

The group 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 group's statement of financial position when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and 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 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.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

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 group after deducting all of its liabilities.

Paddle.com Market Limited
Paddle.Com Market Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 25
Basic financial liabilities

Basic financial liabilities, including trade and other payables, 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 payables 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 payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Compound financial instruments

Compound financial instruments issued by the group comprise of a debt instrument with an attached warrant, which can be converted to share capital at the option of the holder, and the number of shares to be issued does not vary with changes in their fair value. The liability component of a compound financial instrument is initially recognised at the fair value of a similar liability that does not have an equity conversion option. The equity component is initially recognised as the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts. Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortised cost using the effective interest method. The equity component of a compound financial instrument is not re-measured subsequent to initial recognition except on conversion or expiry.

Derecognition of financial liabilities

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

1.12
Equity instruments

Equity instruments issued by the group 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 group.

Paddle.com Market Limited
Paddle.Com Market Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 26
1.13
Taxation

Taxation expense for the period comprises of current and deferred tax recognized in the reporting period. Tax is recognised in the profit and loss account, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is also recognized in other comprehensive income or directly in equity respectively.

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 group’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 measured using tax rates and laws that have been enacted or substantively enacted by the period end and that are expected to apply to the reversal of the timing difference. Deferred tax assets and liabilities are offset if, and only if, there is 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.

1.14
Employee benefits

The group provides a range of benefits to employees, including performance bonus arrangements, paid holiday arrangements, private health insurance and defined contribution pension plans.

 

Short-term benefits, including holiday pay and other similar non-monetary benefits, are recognised as an expense in the period in which the service is 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.

1.15
Retirement benefits

The group operates a number of country-specific defined contribution plans for its employees. A defined contribution plan is a pension plan under which the group pays fixed contributions into a separate entity. Once the contributions have been paid, the group has no further payment obligations. The contributions are recognised as an expense when they are due. Amounts not paid are shown in accruals in the balance sheet. The assets of the plan are held separately from the group in independently administered funds.

Paddle.com Market Limited
Paddle.Com Market Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 27
1.16
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.

 

The expense in relation to options over the parent company’s shares granted to employees of a subsidiary is recognised by the company as a capital contribution and presented as an increase in the company’s investment in that subsidiary.

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.

 

The group has no cash-settled arrangements.

1.17
Leases

At inception the group assesses agreements that transfer the right to use assets. The assessment considers whether the arrangement is, or contains, a lease based on the substance of the arrangement.

 

Leases of assets that transfer substantially all the risks and rewards incidental to ownership are classified as finance leases. Finance leases are capitalised at commencement of the lease as assets at the fair value of the leased asset or, if lower, the present value of the minimum lease payments calculated using the interest rate implicit in the lease. Where the implicit rate cannot be determined, the group’s incremental borrowing rate is used. Incremental direct costs, incurred in negotiating and arranging the lease, are included in the cost of the asset. Assets are depreciated over the shorter of the lease term and the estimated useful life of the asset. Assets are assessed for impairment at each reporting date.

 

The capital element of lease obligations is recorded as a liability on inception of the arrangement. Lease payments are apportioned between capital repayment and finance charge, using the effective interest rate method, to produce a constant rate of charge on the balance of the capital repayments outstanding.

 

Leases that do not transfer all the risks and rewards of ownership are classified as operating leases. Payments under operating leases are charged to the profit and loss account on a straight-line basis over the period of the lease.

 

Leases that do not transfer all the risks and rewards of ownership are classified as operating leases. Payments, including any lease incentives received, under operating leases are charged to the profit and loss account on a straight-line basis over the period of the lease, except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

Paddle.com Market Limited
Paddle.Com Market Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 28

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.

1.18
Foreign currency

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 the profit and loss account except where deferred in other comprehensive income as qualifying cash flow hedges.

 

Foreign exchange gains and losses are presented in the profit and loss account within ‘Administrative expenses’.

 

The trading results of group undertakings are translated into sterling at the average exchange rates for the year. The assets and liabilities of overseas undertaking, including goodwill and fair value adjustments arising on acquisition, are translated at the exchange rates ruling at the year-end. Exchange adjustments arising from the retranslation of opening net investments and from the translation of the losses at average rates are recognized in ‘Currency translation differences’ in the Group Statement of Comprehensive Income.

1.19

Finance costs

Finance costs are charged to the Statement of Comprehensive Income over the term of the debt using the effective interest method. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

1.20

Provisions and contingencies

Provisions are recognised when the group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and the amount of the obligation can be estimated reliably.

 

Contingent liabilities are not recognised, except those acquired in a business combination. Contingent liabilities arise as a result of past events when (i) it is not probable that there will be an outflow of resources or that the amount cannot be reliably measured at the reporting date or (ii) when the existence will be confirmed by the occurrence or non-occurrence of uncertain future events not wholly within the group’s control. Contingent liabilities are disclosed in the financial statements unless the probability of an outflow of resources is remote.

 

1.21
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.
Paddle.com Market Limited
Paddle.Com Market Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 29
2
Judgements and key sources of estimation uncertainty

In the application of the group’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.

 

The following estimates and judgements have had the most significant effect on amounts recognised in the financial statements:

 

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Sales tax provisions

Judgement and estimation are required in determining whether global activities undertaken by the group give rise to sales tax liabilities in territories. These decisions depend on an assessment of the relevant taxation legislation and where an obligation has arisen, this has been recognised on the balance sheet.

Share-based payment transactions

Judgement and estimation are required in determining the fair value of shares at the date of award. The fair value is estimated using valuation techniques which take into account the awards’ term, the risk-free interest rate and the expected volatility of the market price of the Company’s shares. Details of share-based payments and the assumptions applied are disclosed in note 20.

 

 

3
Revenue
2023
2022
£
£
Revenue analysed by class of business
Sale of services
57,299,864
49,018,457
Paddle.com Market Limited
Paddle.Com Market Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
3
Revenue
(Continued)
Page 30
2023
2022
£
£
Revenue analysed by geographical market
Europe, Middle East, & Africa
29,033,100
25,203,020
North America
23,043,645
17,784,614
Asia-Pacific
4,780,252
5,530,385
Latin America
442,867
500,438
57,299,864
49,018,457
2023
2022
£
£
Other revenue
Interest income
1,394,492
180,139

The revenue is derived from provision of services and reselling of the digital content to buyers on behalf of suppliers globally.

4
Operating loss
2023
2022
£
£
Operating loss for the year is stated after charging/(crediting):
Exchange losses/(gains)
9,301,193
(2,518,886)
Research and development costs
378,720
401,040
Depreciation of owned property, plant and equipment
328,011
335,490
Loss/(profit) on disposal of property, plant and equipment
976
(11,077)
Amortisation of intangible assets
13,893,397
9,082,140
Impairment of intangible assets
3,150,993
-
0
Operating lease charges
943,250
882,950
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
107,127
101,218
Audit of the financial statements of the company's subsidiaries
130,933
123,710
238,060
224,928
Paddle.com Market Limited
Paddle.Com Market Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
5
Auditor's remuneration
(Continued)
Page 31
For other services
Taxation compliance services
30,000
30,000
All other non-audit services
8,500
-
38,500
30,000
6
Employees

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

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Directors
2
3
2
2
Employees
295
284
205
214
Total
297
287
207
216

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
22,719,699
24,362,691
15,950,723
16,655,026
Other staff costs
3,390,794
688,271
382,882
653,943
Share based payments
4,396,563
5,776,748
2,597,524
2,959,128
Social security costs
3,676,969
3,193,979
2,453,204
2,081,191
Pension costs
386,677
345,592
382,750
344,186
34,570,702
34,367,281
21,767,083
22,693,474
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
732,235
761,460
Company pension contributions to defined contribution schemes
-
6,573
732,235
768,033
Paddle.com Market Limited
Paddle.Com Market Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
7
Directors' remuneration
(Continued)
Page 32
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
324,222
259,187
Company pension contributions to defined contribution schemes
-
6,573

There were no directors in the Group's defined contribution pension scheme (2022: 2). No directors exercised share options during the year (2022: 2).

 

 

8
Investment income
2023
2022
£
£
Interest income
Interest on bank deposits or short-term investments
1,394,492
180,139
9
Finance costs
2023
2022
£
£
Finance costs for financial instruments measured at fair value through profit or loss
-
0
(821,125)
Other interest
103,381
192,087
Total finance costs
103,381
(629,038)
10
Taxation
2023
2022
£
£
Current tax
Adjustments in respect of prior periods
343,724
-
0
Other tax reliefs
(226,177)
(691,577)
Total UK current tax
117,547
(691,577)
Foreign current tax on profits for the current period
101,046
274,734
Total current tax
218,593
(416,843)
Paddle.com Market Limited
Paddle.Com Market Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
10
Taxation
(Continued)
Page 33

The actual charge/(credit) for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Loss before taxation
(44,884,090)
(36,578,135)
Expected tax credit based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
(10,556,738)
(6,949,846)
Tax effect of expenses that are not deductible in determining taxable profit
427,418
1,263,320
Permanent capital allowances in excess of depreciation
2,579,936
(25,846)
Share based payment charge
1,034,072
(869,633)
Cash subsidy for R&D expenditure
(226,177)
(297,575)
Deferred tax not recognised
6,520,135
8,316,051
Impact of change in future tax rate on tax balances
(3,356)
(1,853,314)
Capitalised R&D expenditure
99,579
-
Adjustment for previous R&D submissions
343,724
-
Taxation charge/(credit)
218,593
(416,843)

The amount of losses carried forward and not used is £90.5m (2022 - £64.4m) for Paddle.com Market Limited and losses of £3.0 (2022 - £2.7m) for Paddle Inc.

11
Intangible fixed assets
Group
Goodwill
Intellectual property
Developed technologies
Customer relationships
Total
£
£
£
£
£
Cost
At 1 January 2023
77,701,633
1,669,869
16,820,334
689,426
96,881,262
Disposals
-
0
(50,164)
-
0
-
0
(50,164)
Revaluation
2,082,167
-
0
-
0
-
0
2,082,167
Exchange adjustments
(4,156,608)
(76,458)
(916,144)
(37,551)
(5,186,761)
Impairment of goodwill
(3,226,518)
-
0
-
0
-
0
(3,226,518)
At 31 December 2023
72,400,674
1,543,247
15,904,190
651,875
90,499,986
Amortisation and impairment
At 1 January 2023
5,044,760
569,896
3,640,188
89,522
9,344,366
Amortisation charged for the year
7,878,391
583,234
5,301,397
130,375
13,893,397
Disposals
-
0
(50,164)
-
0
-
0
(50,164)
Exchange adjustments
(331,206)
(149,637)
(105,923)
(2,605)
(589,371)
At 31 December 2023
12,591,945
953,329
8,835,662
217,292
22,598,228
Paddle.com Market Limited
Paddle.Com Market Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
11
Intangible fixed assets
(Continued)
Page 34
Carrying amount
At 31 December 2023
59,808,729
589,918
7,068,528
434,583
67,901,758
At 31 December 2022
72,656,873
1,099,973
13,180,146
599,904
87,536,896
Company
Intellectual property
£
Cost
At 1 January 2023
266,098
Disposals
(50,164)
At 31 December 2023
215,934
Amortisation and impairment
At 1 January 2023
266,098
Disposals
(50,164)
At 31 December 2023
215,934
Carrying amount
At 31 December 2023
-
0
At 31 December 2022
-
0

One of the group’s brands, Price Intelligently, grew materially more slowly than expected. As a result, goodwill was impaired by £3.2 million. The remaining goodwill in the Price Intelligently cash-generating unit is £5.4 million.

Paddle.com Market Limited
Paddle.Com Market Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 35
12
Property, plant and equipment
Group
Leasehold improvements
Fixtures and fittings
Computer equipment
Total
£
£
£
£
Cost
At 1 January 2023
702,241
310,299
752,869
1,765,409
Additions
-
0
10,681
64,779
75,460
Disposals
(82,197)
(35,433)
(257,885)
(375,515)
Exchange adjustments
-
0
33
(2,677)
(2,644)
At 31 December 2023
620,044
285,580
557,086
1,462,710
Depreciation and impairment
At 1 January 2023
80,018
225,651
450,211
755,880
Depreciation charged in the year
142,118
51,973
133,920
328,011
Eliminated in respect of disposals
(82,197)
(35,433)
(223,864)
(341,494)
Exchange adjustments
-
0
6
(780)
(774)
At 31 December 2023
139,939
242,197
359,487
741,623
Carrying amount
At 31 December 2023
480,105
43,383
197,599
721,087
At 31 December 2022
622,223
84,648
302,658
1,009,529
Company
Leasehold improvements
Fixtures and fittings
Computer equipment
Total
£
£
£
£
Cost
At 1 January 2023
702,241
308,407
689,392
1,700,040
Additions
-
0
10,681
49,281
59,962
Disposals
(82,197)
(35,433)
(257,885)
(375,515)
At 31 December 2023
620,044
283,655
480,788
1,384,487
Depreciation and impairment
At 1 January 2023
80,018
224,423
437,494
741,935
Depreciation charged in the year
142,118
51,680
111,668
305,466
Eliminated in respect of disposals
(82,197)
(35,433)
(223,864)
(341,494)
At 31 December 2023
139,939
240,670
325,298
705,907
Carrying amount
At 31 December 2023
480,105
42,985
155,490
678,580
At 31 December 2022
622,223
83,984
251,898
958,105
Paddle.com Market Limited
Paddle.Com Market Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 36
13
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
14
-
0
-
0
305,977
305,977
Movements in non-current investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2023 and 31 December 2023
305,977
Carrying amount
At 31 December 2023
305,977
At 31 December 2022
305,977

The prior year restatement to the carrying value of investments is an alignment to the capital contribution made to Paddle Payments in 2019. The capital contribution was made to convert the intercompany debt of EUR 342,652.97 to equity.

14
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Registered office
Nature of business
Class of shares held
% Held
Direct
Indirect
Paddle Payments Limited
Ireland
Services and reselling of the digital content
Ordinary
100
-
Paddle.com Inc
USA
Services and reselling of the digital content
Ordinary
100
-
200OK LLC
USA
Services and reselling of the digital content
Ordinary
-
100
15
Financial instruments
Group
Company
2023
2022
2023
2022
£
£
£
£
Carrying amount of financial liabilities
Measured at fair value through profit or loss
Foreign exchange forward contracts
-
113,106
-
113,106
Paddle.com Market Limited
Paddle.Com Market Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 37
16
Trade and other receivables
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade receivables
1,619,709
1,364,889
360
3,940
Corporation tax recoverable
572,728
1,144,434
572,728
1,144,434
Amounts owed by group undertakings
-
-
77,764,355
102,213,642
Other receivables
7,787,950
7,481,695
4,688,818
3,142,022
Prepayments and accrued income
1,758,427
2,518,921
1,505,150
2,032,102
11,738,814
12,509,939
84,531,411
108,536,140
Amounts falling due after more than one year:
Other receivables
549,652
549,652
549,652
549,652
Total debtors
12,288,466
13,059,591
85,081,063
109,085,792
17
Current liabilities
Group
Company
2023
2022
2023
2022
£
£
£
£
Trade payables
584,288
1,193,009
326,498
855,592
Payables to merchant of record suppliers
43,713,360
37,449,189
28,545,930
23,002,637
Other payables
3,232,574
3,064,508
1,775,631
1,679,040
Amounts owed to group undertakings
-
0
-
0
1,615,469
5,687,974
Corporation tax payable
26,577
241,941
115,044
60,000
Other taxation and social security
13,242,141
13,510,036
11,429,236
11,948,215
Derivative financial instruments
-
0
113,106
-
0
113,106
Accruals and deferred income
6,378,828
10,848,380
3,173,686
6,851,897
67,177,768
66,420,169
46,981,494
50,198,461
18
Non-current liabilities
Group
Company
2023
2022
2023
2022
£
£
£
£
Other taxation and social security
3,706,560
-
3,706,560
-
0
Paddle.com Market Limited
Paddle.Com Market Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 38
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
386,677
345,592

The company operates a defined contribution scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. Contributions totalling £102,181 (2022: £95,756) were payable to the fund at the reporting date and are included in creditors.

20
Share capital and other reserves
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 0.01p each
18,685,663
18,566,212
1,869
1,856
Ordinary A shares of 0.01p each
4,073,300
4,073,300
407
407
Ordinary A2 shares of 0.01p each
3,214,200
3,214,200
321
321
Ordinary A3 shares of 0.01p each
15,471,900
15,471,900
1,547
1,547
Ordinary A4 shares of 0.01p each
15,460,500
15,460,500
1,547
1,547
Ordinary A5 shares of 0.01p each
8,909,621
8,909,621
891
891
65,815,184
65,695,733
6,582
6,569

During the year 92,251 Ordinary shares were issued as a result of an exercise of share options and a share premium of £10,933 was recognised.

 

All share classes are entitled to one vote in any circumstances and dividend payments or any other distribution. Each share is entitled to participate in a distribution arising from winding up of the company. In any liquidation event the A5 Ordinary shares shall be paid first in any asset distribution, followed by A4 Ordinary then A3 Ordinary shares, A2 Ordinary shares and A Ordinary shares and then Ordinary shares. The shares are not to be redeemed nor are they liable to be redeemed at the option of the company or the shareholders.

21
Share-based payment transactions

The group operates an Enterprise management incentives (EMI) qualifying share option scheme and an unapproved share option scheme for its employees based in the UK and an Incentive stock options (ISOs) and a Non-qualified stock options (NSOs) scheme for its US-based employees. The options are granted with a fixed exercise price, and generally vest monthly over a four-year period, with a one-year cliff, and expire ten years after the date of grant. On exercise of the options by the employees, the company issues new shares.

 

Details of the number and weighted average exercise prices (WAEP) of share options during the period are as follows:

Paddle.com Market Limited
Paddle.Com Market Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
21
Share-based payment transactions
(Continued)
Page 39
Group
Number of share options
Weighted average exercise price
2023
2022
2023
2022
Number
Number
£
£
Restated
Restated
Outstanding at 1 January 2023
8,797,792
4,910,992
2.99
0.04
Granted
1,078,727
5,211,470
1.20
3.85
Forfeited
(2,745,061)
(399,430)
4.72
0.21
Exercised
(119,451)
(844,066)
0.09
0.01
Expired
(14,021)
(81,174)
2.97
-
Outstanding at 31 December 2023
6,997,986
8,797,792
1.20
2.29
Group
Company
2023
2022
2023
2022
£
£
£
£
Expenses recognised in the year
Arising from equity settled share based payment transactions
4,396,563
5,776,745
2,597,524
1,255,835
22
Share premium account
Group
Company
2023
2022
2023
2022
£
£
£
£
At the beginning of the year
189,609,120
48,525,539
189,609,120
48,525,539
Issue of new shares
10,934
141,083,581
10,934
141,083,581
At the end of the year
189,620,054
189,609,120
189,620,054
189,609,120

The share premium account includes the premium on issue of equity shares, net of any issue costs.

23
Other reserves
2023
2022
Group
£
£
At the beginning of the year
(642,580)
(57,262)
Currency translation movement
698,655
(585,318)
Additions
239,264
-
Transfers
(32,596)
-
At the end of the year
262,743
(642,580)
Paddle.com Market Limited
Paddle.Com Market Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
23
Other reserves
(Continued)
Page 40
2023
2022
Company
£
£
At the beginning of the year
-
-
Additions
239,264
-
Transfers
(32,596)
-
At the end of the year
206,668
-

The brought forward balance in other reserves relates to the cumulative portion of currency translation differences.

 

The other reserve addition represents the equity component of the loan at initial issue less transfers to retained earnings in respect of this component on a straight-line basis in lieu of the effective interest method as this loan is a revolver.

24
Acquisition of a business

On 29 April 2022 Paddle.com Inc acquired 100% of 200OK LLC

 

 

 

Fair Value
Net assets acquired
£
Actual net working capital
(1,380,701)
Customer relationships
658,464
Developed technology
16,064,941
Trade names
1,340,728
Cash and cash equivalents
922,285
Total identifiable net assets
17,605,717
Goodwill
76,315,301
Total consideration
93,921,018
The consideration was satisfied by:
£
Cash
80,086,154
Directly attributable costs
1,166,317
Stock consideration
12,668,547
93,921,018
Paddle.com Market Limited
Paddle.Com Market Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
24
Acquisition of a business
(Continued)
Page 41
Contribution by the acquired business for the reporting period ending 31 December 2022  included in the group statement of comprehensive income since acquisition:
£
Revenue
9,422,858
Profit after tax
5,983,890

The goodwill arising on the acquisition of the business is attributable to Paddle.com Inc.

25
Operating lease commitments
Lessee

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
720,729
415,371
720,729
415,371
Between two and five years
1,419,234
2,540,396
1,419,234
2,540,396
2,139,963
2,955,767
2,139,963
2,955,767
26
Financial commitments, guarantees and contingent liabilities

On August 21, 2024, the Company received a draft civil complaint and proposed settlement offer from a government agency alleging violations of consumer protection laws in connection with the Company’s oversight of two third-party software suppliers from September 2017 to July 2023. The revenue earned from the suppliers during this period is £1.1 million, which is less than 1% of the Company’s revenue during that time period. The Company is in active discussions with the government agency in an attempt to resolve the claims and believes it has strong defences to the claims and will defend the claims if a resolution is not achieved. We do not have sufficient information to express a judgment about the likelihood of an unfavourable outcome in this matter; nor can we predict the potential amount of loss or range of loss in this matter.

Paddle.com Market Limited
Paddle.Com Market Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 42
27
Related party transactions

The group discloses transactions with related parties which are not wholly owned within the same group. Where appropriate, transactions of a similar nature are aggregated unless, in the opinion of the directors, separate disclosure is necessary to understand the effect of the transactions on the group financial statements.

 

The company has taken advantage of the exemption available under paragraph 33.1A of the Financial Reporting Standard 102 not to disclose transactions with other wholly owned members of the group.

 

Key management personnel include all directors across the group who together have authority and responsibility for planning, directing and controlling the activities of the group. The total compensation paid to key management personnel for services provided to the group is disclosed in note 7.

28
Events after the reporting date

On 26 March 2024, the company purchased additional shares in Paddle.com Inc. for £72.8 million. The purpose of this transaction was to settle the inter-company balances between the entities.

 

On 8 November 2024, the company sold all assets and liabilities related to Price Intelligently to Sales Benchmark Index LLC for a purchase price of $5.35 million USD. The carrying value of the net assets and liabilities included in the sale as of 31 December 2023 was $7.15 million USD.

29
Controlling party

The Directors do not consider there to be an ultimate controlling party by virtue of the various shareholdings in the parent company.

30
Loans and other borrowings

The group entered into a new revolving credit facility with HSBC Innovation Bank Limited on August 9, 2023 that matures on June 30, 2026. The revolving credit facility has a commitment of up to $25,000,000 United States Dollars (USD) and can be funded in sterling or USD. Interest for sterling advances is the Bank of England’s base rate plus 3.0%, and USD advances is Prime Rate plus 0.5%. A commitment fee of 0.5% is charged on the undrawn amount.

Paddle.com Market Limited
Paddle.Com Market Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 43
31
Cash absorbed by group operations
2023
2022
£
£
As restated
Loss for the year after tax
(45,102,683)
(36,161,292)
Adjustments for:
Taxation charged/(credited)
218,593
(416,843)
Finance costs
103,381
(629,038)
Investment income
(1,394,492)
(180,139)
Loss/(gain) on disposal of property, plant and equipment
1,298
(11,077)
(Gain)/Loss on foreign currency exchange rates
9,303,929
(1,885,104)
Amortisation and impairment of intangible assets
13,893,397
9,082,140
Depreciation and impairment of property, plant and equipment
328,011
335,490
Impairment on goodwill
3,226,518
-
Equity settled share based payment expense
4,396,563
5,776,745
Movements in working capital:
Increase in trade and other receivables
(1,218,009)
(4,458,297)
Increase in trade and other payables
3,316,007
23,120,147
Cash absorbed by operations
(12,927,487)
(5,427,268)
32
Analysis of changes in net funds - group
1 January 2023
Cash flows
Exchange rate movements
31 December 2023
£
£
£
£
Cash at bank and in hand
83,351,479
(11,721,795)
(2,876,595)
68,753,089
33
Prior period adjustment
Changes to the statement of financial position - group
The prior period adjustments do not give rise to any effect upon the statement of financial position.
Changes to the income statement - group
As previously reported
Adjustment
As restated
Period ended 31 December 2022
£
£
£
Administrative expenses
(61,687,154)
(2,936,302)
(64,623,456)
Paddle.com Market Limited
Paddle.Com Market Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
33
Prior period adjustment
(Continued)
Page 44
Reconciliation of changes in equity - group
The prior period adjustments do not give rise to any effect upon equity.
Reconciliation of changes in loss for the previous financial period
2022
£
Adjustments to prior year
Paddle.com Market Limited 2022 share based payment charge
(246,304)
Paddle.com Inc 2022 share based payment charge
(2,689,998)
Total adjustments
(2,936,302)
Loss as previously reported
(33,224,990)
Loss as adjusted
(36,161,292)
Changes to the statement of financial position - company
As previously reported
Adjustment at 1 Jan 2022
Adjustment at 31 Dec 2022
As restated at 31 Dec 2022
£
£
£
£
Fixed assets
Investments
97
305,880
-
305,977
Current assets
Debtors due within one year
106,442,716
(596,574)
2,689,998
108,536,140
Net assets
127,721,812
(290,694)
2,689,998
130,121,116
Capital and reserves
Retained earnings
(61,893,877)
(290,694)
2,689,998
(59,494,573)
Changes to the income statement - company
As previously reported
Adjustment
As restated
Period ended 31 December 2022
£
£
£
Administrative expenses
(42,966,267)
(246,304)
(43,212,571)
Paddle.com Market Limited
Paddle.Com Market Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
33
Prior period adjustment
(Continued)
Page 45
Reconciliation of changes in equity - company
1 January
31 December
2022
2022
£
£
Adjustments to prior year
Intercompany impact - Paddle.com Inc 2022 share based payment charge
-
2,689,998
Capital contribution in Paddle Payments
305,880
305,880
Intercompany impact - Paddle.com Inc 2021 share based payment charge
(596,574)
(596,574)
Total adjustments
(290,694)
2,399,304
Equity as previously reported
13,646,804
127,721,812
Equity as adjusted
13,356,110
130,121,116
Analysis of the effect upon equity
Retained earnings
(290,694)
2,995,878
Reconciliation of changes in loss for the previous financial period
2022
£
Adjustments to prior year
Prior year adjustment to share based payment charge
(246,304)
Loss as previously reported
(29,850,188)
Loss as adjusted
(30,096,492)
Notes to reconciliation

The Company has restated the share option pool roll forward disclosure table and the prior period share based payment expenses, and the related disclosures as a result of identifying errors in the calculation of the fair value of the stock option grants, and the period over which they were previously recognised.

 

The impact of the identified errors on the share based payment expense charge resulted in a prior year restatement in Paddle.com Market Limited of £246,304 (2021: Credit £3,210,925).

 

The impact of the identified errors on the share based payment expense charge resulted in a prior year restatement in Paddle.com Inc of £2,689,998 (2021: £596,574).

The prior year restatement to the carrying value of investments is an alignment to the capital contribution made to Paddle Payments in 2019. The capital contribution was made to convert the intercompany debt of EUR 342,652.97 to equity. This resulted in a prior year adjustment in Paddle.com Market Limited of £305,880.

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