Company registration number 13406761 (England and Wales)
MESH AI LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
MESH AI LIMITED
CONTENTS
Page
Company information
1
Strategic report
2 - 4
Directors' report
5
Directors' responsibilities statement
6
Independent auditor's report
7 - 10
Statement of comprehensive income
11
Balance sheet
12
Statement of changes in equity
13
Statement of cash flows
14
Notes to the financial statements
15 - 26
MESH AI LIMITED
COMPANY INFORMATION
- 1 -
Directors
Mr M Farmer
Mr J Parsons
(Appointed 13 September 2024)
Secretary
Mr M Farmer
Company number
13406761
Registered office
37 Commercial Road
Poole
Dorset
BH14 0HU
Auditor
Azets Audit Services
37 Commercial Road
Poole
Dorset
BH14 0HU
MESH AI LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 2 -
The directors present the strategic report for the year ended 31 December 2024.
Principal activities
Mesh-AI Ltd (the "Company") is a wholly owned subsidiary of Mesh-AI Holdings Inc, a Delaware corporation ("Mesh-AI"), and the parent company of certain foreign subsidiaries. The principal activity of Mesh-AI is the development, implementation, and servicing of complex enterprise application software through artificial intelligence and data analytics technology.
We leverage cutting-edge AI and data solutions to solve complex business challenges, enabling organizations to enhance operational resilience, streamline underwriting, optimize investment strategies, and strengthen risk management. With deep expertise in banking, insurance, energy, and capital markets, we empower financial institutions and energy companies to navigate regulatory complexities, drive innovation, and deliver tangible value to stakeholders in a rapidly evolving landscape. We do not use off-the-shelf AI products; instead, we research, develop, and tailor AI and data solutions to meet customers' needs, solving some of the most complex problems in the market.
Business Strategy
In 2024, the Company's focus was to expand its footprint with key customers and establish itself as the premier partner for large enterprise companies in two primary sectors: Financial Services Institutions ("FSI") and Energy and Utilities ("EU").
To achieve this, the Company revisited its core values, ensuring a clear perspective on achieving its mission and embedding its culture into everything it does:
Own It – Take responsibility and make impactful decisions; ownership drives success.
Drive Excellence – Commit to being the best; excellence is the benchmark.
Act with Integrity – Uphold a culture of trust and respect, build strong relationships, and deliver on every promise.
Think Customer First – Put customers at the heart of every decision; their success defines ours.
Go Big & Innovate – Be ambitious, challenge norms, and innovate boldly to redefine possibilities for the Company and its customers.
The Company continues to operate using its unique delivery method, the Mesh Model, which radically accelerate delivery to our customers driving faster value through engineering excellence, account delivery, and cross-functional teams.
MESH AI LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 3 -
Review of the business
For the financial year ending 31 December 2024, the Company reported a loss of £6.6 million. This included a one-off, non-recurring restructuring cost of £919,000 in the first half of the year as the Company transitioned into a new phase of growth, focusing on a revised long-term go-to-market strategy and customer base.
The Company sought to expand its service offerings and innovation expertise in large enterprises facing complex challenges due to their scale and operational intricacies. To facilitate this transition, a new leadership team was appointed, bringing extensive experience in professional services and the markets where Mesh AI operates. Additionally, the Company re-evaluated its investment in lead generation. This resulted in a 26% revenue increase in the second half of the year and a backlog of £4.4 million as of 31 December 2024. The total revenue for the year reached £11,281,346, exceeding the initial £10 million forecast prior to the business restructure.
Since then, the Company has continued its growth trajectory, as reflected in its workforce expansion. Full-time equivalent (FTE) headcount increased from 83 in June 2024 to 105 in February 2025, a 27% increase. The Company has maintained an 80% utilization rate since January 2025.
Despite the short-term revenue impact due to restructuring, the leadership team believes that these strategic investments will position the Company for sustainable long-term growth. To support this vision, the Company retained its talent pool despite the temporary reduction in margins, which initially dropped to 29% but recovered to 35%. The Company projects margins to increase to 40% by the end of 2025.
Additionally, after the investment in the leadership team and lead generation, the Company has also revisited its fixed costs and is not expected to increase SG&A costs. The only anticipated cost increases will be in talent acquisition and training on critical skills, which should drive innovation and development.
Principal risks and uncertainties
Pandemic and Global Health Risks
The Company continuously monitors the potential impact of pandemics and other global health crises. In response to industry-wide shifts in working models post-COVID-19, the Company has adopted a hybrid work model (three days in-office, two days remote) to attract top talent while maintaining operational efficiency and competitiveness.
Financial Risks
The Group also faces exposure to three financial risk areas:
Liquidity Risk – The Company ensures operational continuity through effective management of assets and liabilities. It has access to investor funding from Columbia Capital if required and has secured a $30 million investment, of which $19 million has been utilized.
Credit Risk – The Company primarily operates on a non-credit basis and closely monitors trade debtors through regular reviews to ensure timely cash inflows. No provisions for doubtful debts have been required to date.
Foreign Currency Risk – The Company assesses and monitors foreign currency exposure related to inter-company transactions and cash flows. Regular reviews (monthly or quarterly) help mitigate any adverse financial impact.
MESH AI LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 4 -
Future Business Developments
In Q2 2024, the Company refined its long-term strategy with a focus on two key areas:
Leadership Transformation – New leadership was appointed in Sales, HR, and Finance, bringing extensive expertise in professional services and scaling operations. In September 2024, the Chief Revenue Officer (CRO) also assumed the role of Chief Executive Officer (CEO).
Go-to-Market Strategy Enhancement – The Company pivoted to targeting large enterprises with complex challenges in the Energy/Utilities and Financial Services sectors. This strategic alignment has strengthened its talent pool by integrating industry experts with its existing technical team, renowned for solving intricate industry-specific problems.
As a result, the Company has delivered significant value to customers, exceeding its 2025 revenue plan of £19 million and anticipating breakeven in the second half of the year, with sustained positive cash flow thereafter. Customers have expressed high satisfaction with deliverables, leading to partnerships expected to accelerate growth.
Mesh-AI is investing in growing its partnerships with AWS and Microsoft Azure to increase services in existing customers and win net new logos in target industries. Maturing partnerships with the world's top hyperscalers with a focus on industry outcomes powered by AI will bolster Mesh-AI's offerings through joint industry solutions and expand its reach across current and into new enterprise customers. This, in return, will strengthen its market position,as a key technology partner driving additional revenue through alliances with major tech firms.
To ensure business performance, the Company tracks key performance indicators (KPIs), including revenue, headcount, average billable rate (ABR), utilization, and profit margins. These KPIs are embedded into business operations and employee performance metrics.
Following the strategic change in 2023 and in order to support our global customers, 2025 will be the year for a customer service increase. The company will be making further investments, expanding its services, and increasing its footprint in other regions where our customers have a presence and require our services and innovative approach.
Mr J Parsons
Director
11 June 2025
MESH AI LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 5 -
The directors present their annual report and financial statements for the year ended 31 December 2024.
Results and dividends
The results for the year are set out on page 11.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr M Farmer
Mr S Bulpin
(Resigned 26 September 2024)
Mr M Chalmers
(Appointed 5 April 2024 and resigned 13 September 2024)
Mr J Parsons
(Appointed 13 September 2024)
Auditor
Azets Audit Services were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Directors' Confirmations
In the case of each director in office at the date the directors' report is approved:
Going Concern
After making appropriate enquiries and taking into account the matters set out in the Strategic Report on pages 2 to 4 and in the Basis of Preparation on page 11, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future.
The directors have received a letter of support from its Investors, Columbia Capital, confirming that financial support will be provided to assist the company in meeting its liabilities as and when they fall due, for a period of at least 12 months from the date of approval of the financial statements. Accordingly, they continue to adopt the going concern basis when preparing the financial statements.
On behalf of the board
Mr J Parsons
Director
11 June 2025
MESH AI LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 6 -
The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulation.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have prepared the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”, and applicable law).
Under company law, 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 company and of the profit or loss of the company for that period. In preparing the financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
state whether applicable United Kingdom Accounting Standards, comprising FRS 102 have been followed, subject to any material departures disclosed and explained in the financial statements;
make judgements and accounting estimates that are reasonable and prudent; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are also responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006.
MESH AI LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MESH AI LIMITED
- 7 -
Opinion
We have audited the financial statements of Mesh Ai Limited (the 'company') for the year ended 31 December 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the 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:
give a true and fair view of the state of the company's affairs as at 31 December 2024 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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 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 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.
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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
MESH AI LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MESH AI LIMITED
- 8 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its 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:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
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 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 company or to cease operations, or have no realistic alternative but to do so.
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.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
MESH AI LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MESH AI LIMITED
- 9 -
Extent to which 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 and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of information technology consultancy activities
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation and data protection, anti-bribery, employment, environmental and health and safety legislation;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgments and assumptions made in determining the accounting estimates set out in the accounting policies were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
Comparative periods
The comparative figure have not been audited.
MESH AI LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MESH AI LIMITED
- 10 -
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 so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone 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.
Mr Paul Francis
Senior Statutory Auditor
For and on behalf of Azets Audit Services
Chartered Accountants
Statutory Auditor
37 Commercial Road
Poole
Dorset
BH14 0HU
MESH AI LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
- 11 -
2024
2023
Notes
£
£
Turnover
3
11,281,346
16,214,320
Cost of sales
(8,713,064)
(9,042,868)
Gross profit
2,568,282
7,171,452
Administrative expenses
(10,715,827)
(9,973,823)
Operating loss
4
(8,147,545)
(2,802,371)
Interest receivable and similar income
27,980
Interest payable and similar expenses
7
(60,602)
(77,877)
Loss before taxation
(8,180,167)
(2,880,248)
Tax on loss
8
1,566,285
Loss for the financial year
(6,613,882)
(2,880,248)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
The notes on pages 15 to 26 form part of these financial statements.
MESH AI LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2024
31 December 2024
- 12 -
2024
2023
Notes
£
£
£
£
Fixed assets
Intangible assets
9
11,296
40,610
Tangible assets
10
100,915
139,582
112,211
180,192
Current assets
Debtors
12
5,143,768
3,251,501
Cash at bank and in hand
251,089
1,762,718
5,394,857
5,014,219
Creditors: amounts falling due within one year
13
(3,868,365)
(2,932,784)
Net current assets
1,526,492
2,081,435
Net assets
1,638,703
2,261,627
Capital and reserves
Called up share capital
15
1,000,100
100
Share premium account
1,000,000
Other reserves
14,981,840
8,990,882
Profit and loss reserves
(14,343,237)
(7,729,355)
Total equity
1,638,703
2,261,627
The financial statements were approved by the board of directors and authorised for issue on 11 June 2025 and are signed on its behalf by:
Mr J Parsons
Director
Company Registration No. 13406761
MESH AI LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
- 13 -
Share capital
Share premium account
Capital contribution
Profit and loss reserves
Total
£
£
£
£
£
Balance at 1 January 2023
100
1,000,000
4,969,321
(4,849,107)
1,120,314
Year ended 31 December 2023:
Loss and total comprehensive income for the year
-
-
-
(2,880,248)
(2,880,248)
Transfers
-
-
4,021,561
4,021,561
Balance at 31 December 2023
100
1,000,000
8,990,882
(7,729,355)
2,261,627
Year ended 31 December 2024:
Loss and total comprehensive income for the year
-
-
-
(6,613,882)
(6,613,882)
Transfers
-
-
5,990,958
5,990,958
Other movements
1,000,000
(1,000,000)
-
-
-
Balance at 31 December 2024
1,000,100
14,981,840
(14,343,237)
1,638,703
MESH AI LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
- 14 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
19
(7,413,185)
(2,797,170)
Interest paid
(60,602)
(77,877)
Net cash outflow from operating activities
(7,473,787)
(2,875,047)
Investing activities
Purchase of intangible assets
(10,938)
Purchase of tangible fixed assets
(61,639)
(99,572)
Proceeds from disposal of tangible fixed assets
4,859
Interest received
27,980
Net cash used in investing activities
(28,800)
(110,510)
Financing activities
Proceeds from Capital Contribution
5,990,958
4,021,561
Net cash generated from financing activities
5,990,958
4,021,561
Net (decrease)/increase in cash and cash equivalents
(1,511,629)
1,036,004
Cash and cash equivalents at beginning of year
1,762,718
726,714
Cash and cash equivalents at end of year
251,089
1,762,718
MESH AI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
- 15 -
1
Accounting policies
Company information
Mesh Ai Limited is a private company limited by shares incorporated in England and Wales. The registered office is 37 Commercial Road, Poole, Dorset, BH14 0HU.
The trading address is 100 Liverpool Street, London, EC2M 2AT.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention.The principal accounting policies adopted are set out below.
1.2
Going concern
The directors have received a letter of support from its Investors, Columbia Capital, confirming that financial support will be provided to assist the company in meeting its liabilities as and when they fall due, for a period of at least 12 months from the date of approval of the financial statements. trueThus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Software
3 years straight line
MESH AI LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 16 -
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold improvements
10 years straight line
Computers
3 years straight line
Office equipment
3 years straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
Impairment of fixed assets
At each reporting period end date, the company 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.
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.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
MESH AI LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 17 -
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
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 company 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 company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
MESH AI LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 18 -
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
MESH AI LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 19 -
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.14
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Provision for trade debtors
Where a debt is considered doubtful, a provision is made for the full outstanding invoice value.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Sale of services
11,281,346
16,214,320
MESH AI LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
3
Turnover and other revenue
(Continued)
- 20 -
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
10,721,026
15,536,683
Rest of Europe
560,320
677,637
11,281,346
16,214,320
2024
2023
£
£
Other revenue
Interest income
27,980
-
4
Operating loss
2024
2023
Operating loss for the year is stated after charging:
£
£
Exchange losses
5,143
2,512
Fees payable to the company's auditor for the audit of the company's financial statements
17,500
Depreciation of owned tangible fixed assets
85,781
73,037
Loss on disposal of tangible fixed assets
9,666
2,456
Amortisation of intangible assets
29,314
31,982
Operating lease charges
1,113,915
951,724
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Delivery
43
45
Operations
1
-
Management
1
3
Finance and admin
3
5
HR and recruitment
8
7
Sales
19
19
Marketing
6
5
Delivery contractors
4
8
Total
85
92
MESH AI LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
5
Employees
(Continued)
- 21 -
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
12,497,122
11,418,625
Social security costs
1,743,688
1,732,582
Pension costs
415,861
372,638
14,656,671
13,523,845
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
860,577
825,000
Company pension contributions to defined contribution schemes
4,459
12,915
865,036
837,915
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2023 - 2).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
400,577
478,750
Company pension contributions to defined contribution schemes
2,153
12,915
7
Interest payable and similar expenses
2024
2023
£
£
Interest on invoice finance arrangements
60,602
77,877
MESH AI LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 22 -
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
(664,445)
Adjustments in respect of prior periods
(901,840)
Total current tax
(1,566,285)
The actual (credit)/charge 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:
2024
2023
£
£
Loss before taxation
(8,180,167)
(2,880,248)
Expected tax credit based on the standard rate of corporation tax in the UK of 25.00% (2023: 23.50%)
(2,045,042)
(676,858)
Tax effect of expenses that are not deductible in determining taxable profit
6,785
9,210
Change in unrecognised deferred tax assets
2,053,573
676,858
Effect of change in corporation tax rate
(70,640)
Permanent capital allowances in excess of depreciation
9,667
2,213
Research and development tax credit
(1,566,285)
Other non-reversing timing differences
(24,983)
59,217
Taxation credit for the year
(1,566,285)
-
9
Intangible fixed assets
Software
Total
£
£
Cost
At 1 January 2024 and 31 December 2024
104,267
104,267
Amortisation and impairment
At 1 January 2024
63,657
63,657
Amortisation charged for the year
29,314
29,314
At 31 December 2024
92,971
92,971
Carrying amount
At 31 December 2024
11,296
11,296
At 31 December 2023
40,610
40,610
MESH AI LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 23 -
10
Tangible fixed assets
Leasehold improvements
Computers
Office equipment
Total
£
£
£
£
Cost
At 1 January 2024
26,000
202,527
40,600
269,127
Additions
1,522
51,706
8,411
61,639
Disposals
(26,000)
(57,871)
(83,871)
At 31 December 2024
1,522
196,362
49,011
246,895
Depreciation and impairment
At 1 January 2024
26,000
88,636
14,909
129,545
Depreciation charged in the year
254
69,898
15,629
85,781
Eliminated in respect of disposals
(26,000)
(43,346)
(69,346)
At 31 December 2024
254
115,188
30,538
145,980
Carrying amount
At 31 December 2024
1,268
81,174
18,473
100,915
At 31 December 2023
113,891
25,691
139,582
11
Financial instruments
2024
2023
£
£
Carrying amount of financial assets measured at amortised cost
Trade debtors
2,303,414
2,398,385
Amounts owed by group companies
220,467
160,646
Accrued income
469,046
189,090
Other debtors
218,899
217,234
3,211,826
2,965,355
Carrying amount of financial liabilities at amortised cost
Trade creditors
191,284
105,013
Other creditors
1,288,412
395,479
Accruals
366,294
351,978
1,845,990
852,470
MESH AI LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 24 -
12
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
2,303,414
2,398,385
Corporation tax recoverable
1,566,285
Amounts owed by group undertakings
220,467
160,646
Other debtors
218,899
217,234
Prepayments and accrued income
834,703
475,236
5,143,768
3,251,501
13
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
191,284
105,013
Taxation and social security
1,202,937
1,950,094
Deferred income
819,438
130,220
Other creditors
1,288,412
395,479
Accruals and deferred income
366,294
351,978
3,868,365
2,932,784
Included within other creditors is an amount of £1,277,258 (2023: £389,804) which is secured by way of fixed and floating charge over the assets of the company.
14
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
415,861
372,638
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund. Contributions totalling £nil (2023: £154,414) were payable to the fund at the reporting date and are included in creditors.
15
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of £1 each
500,050
50
500,050
50
Ordinary B shares of £1 each
500,050
50
500,050
50
1,000,100
100
1,000,100
100
The ordinary A and B shares rank pari passu.
MESH AI LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 25 -
16
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2024
2023
£
£
Within one year
1,129,727
1,113,915
Between two and five years
282,432
281,142
1,412,159
1,395,057
17
Related party transactions
During the year a total of £5,990,958 (2023: £4,021,561) was advanced from a connected company as a capital contribution. No interest was charged on this balance. No further advance made in the current period. At the balance sheet the amount included within other reserves was £14,981,840 (2023: £8,990,882).
During the year £155,570 (2023: £48,160) was advanced to and £105,106 (2023: £22,867) was credited by a connected company. The amount due from the related party at the balance sheet date was £211,110 (2023: £160,646).
During the year £9,357 was advanced to and £nil was credited by a connected company. The amount due from the related party at the balance sheet date was £9,357.
18
Ultimate controlling party
The company is controlled by Mesh AI Holdings Inc a company registered in the United States of America, by virtue of its 100% holding in the company's issued share capital.
The Directors do not consider there to be any one ultimate contolling party.
MESH AI LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 26 -
19
Cash absorbed by operations
2024
2023
£
£
Loss for the year after tax
(6,613,882)
(2,880,248)
Adjustments for:
Taxation credited
(1,566,285)
Finance costs
60,602
77,877
Investment income
(27,980)
Loss on disposal of tangible fixed assets
9,666
2,456
Amortisation and impairment of intangible assets
29,314
31,982
Depreciation and impairment of tangible fixed assets
85,781
73,037
Movements in working capital:
Increase in debtors
(325,982)
(886,466)
Increase in creditors
246,363
991,897
Increase/(decrease) in deferred income
689,218
(207,705)
Cash absorbed by operations
(7,413,185)
(2,797,170)
20
Analysis of changes in net funds
1 January 2024
Cash flows
31 December 2024
£
£
£
Cash at bank and in hand
1,762,718
(1,511,629)
251,089
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