Company Registration No. 12467225 (England and Wales)
4AUTH LIMITED
FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2020
PAGES FOR FILING WITH REGISTRAR
4AUTH LIMITED
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 9
4AUTH LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2020
31 December 2020
- 1 -
2020
Notes
£
£
Fixed assets
Tangible assets
6
6,488
Current assets
Debtors
7
13,861
Cash at bank and in hand
2,196,545
2,210,406
Creditors: amounts falling due within one year
8
(64,471)
Net current assets
2,145,935
Net assets
2,152,423
Capital and reserves
Called up share capital
10
12
Share premium account
2,985,496
Profit and loss reserves
(833,085)
Total equity
2,152,423
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.
true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 8 November 2021 and are signed on its behalf by:
Mr P McGuire
Director
Company Registration No. 12467225
4AUTH LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2020
- 2 -
1
Accounting policies
Company information
4Auth Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
9th Floor 107 Cheapside, London, United Kingdom, EC2V 6DN
.
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”) as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
After making enquiries, the directors have reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. This will depend on the continuing support of the shareholders and the directors. Accordingly, they continue to adopt the going concern basis in preparing the financial statements. The financial statements do not include any adjustments that would result if this support were to be withdrawn.
1.3
Reporting period
These are the first set of financial statements prepared since incorporation on 17 February 2020 to 31 December 2020.
1.4
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated
.
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:
Computers
Straight line over 4 years
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
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.
4AUTH LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 3 -
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.
Basic financial assets
Basic financial assets, which include
debtors
and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
4AUTH LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 4 -
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
paymen
ts 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. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities.
Trade creditors
are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
1.9
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
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.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
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 options pricing
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.
4AUTH LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 5 -
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.
For equity-settled share-based payment transactions the company, in accordance with IFRS 2 'Share-Based Payments' measures their value and the corresponding increase in equity, indirectly, by reference to the fair value of the equity instrument granted. The fair value of those equity instruments is measured at the grant date using the black-scholes method. The expense is apportioned over the vesting period of the financial instrument and is based on the number which is expected to vest and the fair value of the those financial instruments at the date of grant. If the equity instruments granted vest immediately, the expense is recognised in full.
1.13
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.
Share based payments
The company recognises share based payments during the period and these estimates require certain judgements and estimates to be made. The Directors' believe that they have made judgements that are further explained in the notes and which are in accordance with the UK Generally Accepted Accounting Practice.
4AUTH LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2020
- 6 -
3
Employees
The average monthly number of persons (including directors) employed by the company during the period was:
2020
Number
Total
5
4
Directors' remuneration
2020
£
Remuneration paid to directors
119,949
5
Taxation
No tax has been provided as the company made losses during the period. No tax credits have been recognised due to uncertainty and they will be recognised once they are agreed with HMRC.
6
Tangible fixed assets
Plant and machinery etc
£
Cost
At 17 February 2020
Additions
7,289
At 31 December 2020
7,289
Depreciation and impairment
At 17 February 2020
Depreciation charged in the period
801
At 31 December 2020
801
Carrying amount
At 31 December 2020
6,488
7
Debtors
2020
Amounts falling due within one year:
£
Other debtors
13,861
4AUTH LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2020
- 7 -
8
Creditors: amounts falling due within one year
2020
£
Trade creditors
16,265
Taxation and social security
28,085
Other creditors
20,121
64,471
9
Share-based payment transactions
On 07 July 2020, 12,999,999 options were issued to the group’s directors and staff. These options have a vesting period of four years from the date of grant with a 12 month cliff and an exercise price of £0.0000001 each.
On 27 August 2020, a further 833,333 options were issued. These options have a vesting period of four years from the date of grant with a 12 month cliff and an exercise price of £0.0000001 each.
Number of share options
Weighted average exercise price
2020
2020
Number
£
Outstanding at 17 February 2020
Granted
13,833,332
0.0000001
Outstanding at 31 December 2020
13,833,332
0.0000001
Exercisable at 31 December 2020
The options outstanding at 31 December 2020 had an exercise price of £0.0000001 per option, and a remaining contractual life of between 9 and 10 years. The vesting period of the options in issue are over a period of 4 years from the date of grant.
4AUTH LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2020
9
Share-based payment transactions
(Continued)
- 8 -
During the year £0 has been charged in the profit and loss account in relation to share option issues. These options have been accounted for at the fair value of the options issued and using the black-scholes options pricing model.
Inputs were as follows:
2020
Weighted average share price (£)
0.0000001
Weighted average exercise price (£)
0.0000001
Expected volatility (%)
35.00
Expected life (yrs)
10.00
Risk free rate (%)
0.25
Liabilities and expenses
During the year, the company recognised total share-based payment expenses of £0 which related to equity settled share based payment transactions.
10
Called up share capital
2020
2020
Ordinary share capital
Number
£
Issued and fully paid
Ordinary shares of 0.00001p each
80,308,333
8
Seed shares of 0.00001p each
36,691,667
4
117,000,000
12
The company was incorporated on 17 February 2020 with an issued share capital of 8,000,000 ordinary shares of £0.000001 each.
On 7 April 2020 the company sub-divided its existing 8,000,000 ordinary shares of £0.000001 each into 80,000,000 ordinary shares of £0.0000001 each.
On 14 April 2020 the company issued 31,080,000 seed shares of £0.0000001 each and raised capital of £2,520,000.
On 17 April 2020 the company issued 1,850,000 seed shares of £0.0000001 each and raised capital of £150,000.
On 5
June 2020 the company issued 1,430,667 seed shares of £0.0000001 each and raised capital of £116,000.03.
On 12 July 2020 the company issued 308,333 ordinary shares of £0.0000001 each and raised capital of £25,000.
On 14 July 2020 the company issued 481,000 seed shares of £0.0000001 each and raised capital of £39,000.
On 16 July 2020 the company issued 1,850,000 seed shares of £0.0000001 each and raised capital of £150,000.
4AUTH LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2020
- 9 -
11
Audit report information
As the income statement has been omitted from the filing copy of the financial statements
,
the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006
:
The auditor's report was unqualified.
The senior statutory auditor was Sachin Ramaiya.
The auditor was Jeffreys Henry LLP.
12
Events after the reporting date
In
May 2021, the company issued US$
5
M of 0%
unsecured
convertible loan notes
2024
.