The company’s SAFE (Simple Agreement for Future Equity) notes are classified as equity instruments as they represent a contractual right to future equity rather than a financial liability. In accordance with FRS 102, these financial instruments are initially recognised at historic cost, which corresponds to the cash received from investors.
Subsequent measurement is at historic cost, with no revaluation or fair value adjustment applied unless there is evidence of impairment or a triggering event requiring reclassification. No interest or dividend expense is recognised in relation to these instruments prior to conversion.
This policy reflects the company's current interpretation based on the terms and conditions of the outstanding SAFEs and will be reviewed in the event of a conversion, revaluation trigger, or change in the relevant contractual provisions.