Notes to the financial statements

 

1.         Description of business, basis of preparation and going concern

 

GENERAL INFORMATION

 

Silver Bullet Data Services Group PLC ("SBDS") was incorporated on 13 May 2013. SBDS is a public limited company incorporated in England and Wales and domiciled in the UK.  The address of the registered office is The Harley Building, 77 New Cavendish Street, London, England, W1W 6XB.

 

SBDS is the ultimate parent company to the subsidiaries listed at Note 15, together referred to as "the Group". The principal activity of the SBDS Group is marketing services through the application of big data technologies to reduce friction.

 

Silver Bullet Data Services Group PLC is registered with Companies House (Company Number: 08525481).

 

BASIS OF PREPARATION

 

These financial statements have been prepared in accordance with UK-adopted International Accounting Standards, interpretations issued by the International Financial Reporting Standards Interpretations Committee ("IFRIC"), and the Companies Act 2006.  The accounting policies have been applied consistently throughout the period.

 

The Company has taken advantage of the exemption under S408 of the Companies Act 2006 not to include a separate Statement of Comprehensive Income as group statements have been prepared.

 

The consolidated financial statements have been prepared under the historical cost convention. Historical cost is generally based on the fair value of the consideration given in exchange for assets.

 

The presentational currency of the Group is GBP with functional currencies of the subsidiaries disclosed at Note 15 being GBP, EUR, AUD, and USD.

 

GOING CONCERN

 

The directors have prepared detailed budgets and forecasts covering the period to 31 December 2025 which are based on the strategic business plan. These take into account all reasonably foreseeable circumstances and include consideration of trading results, cash flows and the level of facilities the group requires on a month-by-month basis.

 

Whilst the directors have plans in place to manage any reasonably foreseeable circumstances, there may be the need for additional funding in the short-term. The directors are confident that the Group will be able to raise any required funds to meet their strategic objectives however there remains uncertainty over how much funding may be raised when required.

 

Based on their enquiries and the information available to them and taking into account the other risks and uncertainties set out herein, the directors have a reasonable expectation that the company and the group has adequate resources to continue operating for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing this financial information.

 

2.         Significant accounting policies

 

REVENUE RECOGNITION

 

IFRS 15 - Revenue from Contracts with Customers has been applied for all periods presented within the financial statements. The timing of all revenue recognised by the Group during the reporting period was satisfied over time in accordance with IFRS 15 recognition criteria. None of the Group's activities result in the transfer of control of a product at a point in time for revenue recognition purposes.

During the period under review the Group recognised revenue from the following activities:

 

Customer Experience Services

Revenue relating to service contracts is invoiced according to milestones defined within each contract, the terms of which vary on a case-by-case basis. In all cases the revenue is recognised in line with the provision of the services or, where the quantum and timing of the services cannot be reliably predicted, rateable over the period of the agreement.

 

Invoices against services contracts are raised on a monthly basis with adjustments for accrued or deferred income where the agreed invoicing timescale does not match the valuation of provision of services.

 

4D contextual targeting and insights platform

Amounts received or receivable for campaigns, typically invoiced on a monthly basis, recognise revenue in proportion to the quantum of advertising units delivered according to the contracted service. Units and metrics deliverable under each contracted services will vary on a case-by-case basis.

 

Contract liabilities

Contract liabilities are recognised when payment from a customer is received in advance of performance obligations being satisfied. Contract liabilities are recognised in trade and other payables.

 

BUSINESS COMBINATIONS

                                                                      

Silver Bullet Data Services Group PLC applies the acquisition method of accounting to account for business combinations in accordance with IFRS 3, 'Business Combinations'.

 

The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred, and the equity interests issued by Silver Bullet Data Services Group PLC. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The excess of the consideration transferred over the fair value of Silver Bullet Data Services Group PLC's share of the identifiable net assets acquired is recorded as goodwill. All transaction-related costs are expensed in the period they are incurred as exceptional operating expenses.

 

TAXES

 

Corporation tax, where payable, is provided on taxable profits at the current rate.

 

Deferred tax is provided on all temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

 

Deferred tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax assets and unused tax losses can be utilised. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.

 

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities, and when the deferred tax assets and liabilities relate to taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

 

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

 

FOREIGN CURRENCY TRANSLATION

 

Transactions in currencies other than the functional currency (foreign currencies) are initially recorded at the exchange rate prevailing on the date of the transaction.

 

Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary assets and liabilities denominated in foreign currencies are translated at the rate ruling at the date of the transaction, or, if the asset or liability is measured at fair value, the rate when that fair value was determined.

 

All translation differences are taken to profit or loss, except to the extent that they relate to gains or losses on non-monetary items recognised in other comprehensive income, when the related translation gain or loss is also recognised in other comprehensive income.

 

Subsidiaries using a functional currency other than the presentation currency of the group are retranslated at each period end. Any translation differences are held within the group foreign exchange reserve.

 

INTANGIBLE ASSETS AND GOODWILL

 

Goodwill

 

Goodwill is initially measured as the excess of the aggregate of the consideration transferred over the fair value of the net assets acquired, and any previous interest held over the net identifiable assets acquired and liabilities assumed.  After initial recognition, goodwill is measured at cost less any accumulated impairment losses. The goodwill is tested annually for impairment irrespective of whether there is an indication of impairment.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. 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.

 

Intangible 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 if the fair value can be measured reliably.

 

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:

 

Development costs	-	Straight line basis over 5 years
Customer lists	-	Straight line basis over 4 years

 

PROPERTY PLANT AND EQUIPMENT

 

Property, plant and equipment are stated at cost net of accumulated depreciation and accumulated impairment losses. Cost comprises purchase cost together with any incidental costs of acquisition.

 

Depreciation is provided to write down the cost less the estimated residual value of all tangible fixed assets by equal instalments over their estimated useful economic lives on a straight-line basis. The following rates are applied:

 

Computer equipment	-	Straight line over 3 years
Fixtures, fittings and equipment	-	Reducing balance over 4 years

 

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.

 

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 is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in the statement of comprehensive income.

 

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.

 

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.

 

Development costs relate to the 4D Platform developed internally by the group which are expected to generate future revenue streams.

 

FINANCIAL INSTRUMENTS

 

Silver Bullet Data Services Group PLC classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement. Financial instruments are recognised on the date when the Group becomes a party to the contractual provisions of the instrument. Financial instruments are recognised initially at fair value plus, in the case of a financial instrument not a fair value through profit and loss, transaction costs that are directly attributable to the acquisition or issue of the financial instrument. Financial instruments are derecognised on the settlement date when the Group is no longer a party to the contractual provisions of the instrument.

 

             Non-derivative financial instruments comprise trade and other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables.

 

Trade and other receivables and trade and other payables

Trade and other receivables are recognised initially at transaction price less attributable transaction costs. Trade and other payables are recognised initially at transaction price plus attributable transaction costs. Subsequent to initial recognition they are measured at amortised cost using the effective interest method, less any expected credit losses in the case of trade receivables. Impairments of the trade receivable balances are based on a review of individual receivable balances, their ageing and management's assessment of realisation.

 

If the arrangement constitutes a financing transaction, for example if payment is deferred beyond normal business terms, then it is measured at the present value of future payments discounted at a market rate of interest for a similar debt instrument.

 

Contract assets

Contract assets are recognised when revenue is recognised but payment is conditional on a basis other than the passage of time. Contract assets are included in trade and other receivables.

 

Interest-bearing borrowings

Interest-bearing borrowings are recognised initially at the present value of future payments discounted at a market rate of interest. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised costs using the effective interest method.

 

Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand form an integral part of the Group's cash management and are included as a component of cash and cash equivalents for the purpose only on the cash flow statement.

 

PROVISIONS

 

A provision is recognised in the statement of financial position when the Group has a present legal or constructive obligation as a result of a past event, that can be reliably measured, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects risks specific to the liability.  Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

 

EMPLOYEE BENEFITS

 

During the period the Group operated a defined contribution money purchase pension scheme under which it pays contributions based upon a percentage of the members' basic salary. The Group also paid other employee benefits including medical insurance.

 

All employee benefits are charged to the Statement of Comprehensive Income and differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments.

 

LEASES

 

The Group leases a number of properties in various locations in Europe, Australia, USA, and the UK from which it operates.

 

All leases are accounted for by recognising a right-of-use asset and a lease liability except for:

- Leases of assets below £1,000; and

- Leases with a duration of twelve months or less.

 

All leases signed by the Group during the reporting period were for a period of less than twelve months, so no right-of-use assets have been recognised.

 

GRANT INCOME

 

Grant income is recognised where there is reasonable assurance that the grant will be received, and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it is recognised as income in equal amounts over the expected useful life of the related asset.

 

SHARE-BASED PAYMENTS

 

The Group operates a share option programme which allows employees of the subsidiary companies to be granted options to purchase shares in this company. The fair value of options granted is recognised as an employment expense with a corresponding increase in equity.

 

The fair value of the options is measured at the grant date and spread over the vesting period. The fair value is measured based on an option pricing model taking into account the terms and conditions upon which the instruments were granted.

 

Vesting periods in each share option agreement vary from vesting immediately on grant date to vesting over a period of four years.

 

EXCEPTIONAL ITEMS

 

Where items of income and expense included in the statement of comprehensive income are considered to be material and exceptional in nature, separate disclosure of their nature and amount is provided in the financial statements. These items are classified as exceptional items. The Group considers the size and nature of an item both individually and when aggregated with similar items when considering whether it is material, for example impairment of intangible assets or restructuring costs.

 

FINANCE INCOME AND EXPENSES

 

Finance expenses comprise interest payable and leases liabilities recognised in the statement of comprehensive income using the effective interest method and unwinding of the discount on provisions.

 

Interest income and interest payable are recognised in the statement of comprehensive income as they accrue, using the effective interest method.

 

ADOPTION OF NEW AND REVISED STANDARDS

 

The following standards and interpretations relevant to the Group are in issue but are not yet effective and have not been applied in the financial statements. In some cases, these standards and guidance have not been endorsed for use in the United Kingdom.

 

 

·      IAS 1 Presentation of liabilities as current or non-current

·      IAS 1 Disclosure of accounting policies

·      IAS 8 definition of accounting estimates

 

The above standards are not expected to materially impact the Group.

 

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

 

The preparation of these financial statements requires the Directors to make estimates and judgements that affect the reported amounts of assets, liabilities, costs and revenue in the financial statements. Actual results could differ from these estimates. The judgements, estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant.

 

Key sources of estimation uncertainty that could cause an adjustment to be required to the carrying amount of assets or liabilities within the next accounting period are:

 

Critical accounting estimates:

 

Amortisation

The assessment of the useful economic lives, residual values and the method of depreciating or amortising intangible (excluding goodwill) fixed assets requires judgement. Amortisation is charged to profit, or loss based on the useful economic life selected, which requires an estimation of the period and profile over which the group expects to consume the future economic benefits embodied in the assets. Useful economic lives and residual values are re-assessed, and amended as necessary, when changes in their circumstances are identified.

 

Capitalised development costs

Development costs incurred in building the Group's key platform for future expansion have been capitalised in accordance with the requirements of IAS38. The majority of these costs consist of salary expenses to which an estimated proportion of development time has been applied.

 

Impairment of intangible fixed assets

Impairment tests have been undertaken in respect of goodwill and intangible fixed assets using an assessment of the value in use of the respective cash generating units (CGUs). This assessment requires a number of assumptions and estimates to be made including the allocation of assets of CGUs, the expected future cash flows from each CGU and also the selection of a suitable discount rate in order to calculate the present value of those cash flows. Impairments of intangible assets are explained in more detail at note 12.

 

Impairment of trade receivables

The Group's policy on recognising an impairment of the trade receivables balance is based on a review of individual receivable balances, their ageing and management's assessment of realisation. This review and assessment is conducted on a continuing basis and any material change in management's assessment of trade receivable impairment is reflected in the carrying value of the asset.

 

Critical accounting judgements:

 

Going concern

As discussed more fully in the Directors' Report these financial statements have been prepared on the going concern basis. This treatment is based on management's judgement that cashflow requirements for the continued development can be achieved through operating activities and through additional fundraising if required.

 

3.         Operating segments

 

IFRS 8 requires that operating segments be identified on the basis of internal reporting and decision-making. The Board of Directors is the chief operating decision maker for the Group.

 

The Group has two key business segments outlined below. The business analyses these streams by revenue and gross margin.  Overheads, assets and liabilities are not separately allocated across the business streams.

 

The business monitors operating segment profitability using their Earnings (or Profit) Before Interest, Tax, Depreciation and Amortisation (EBITDA). This is used as a metric to represent operating cashflow generated by the business.

 

	2022			2021
	Revenue	Gross profit		Revenue	Gross profit
	£	£		£	£
Customer Experience Services	4,302,431	4,011,972		3,602,505	2,895,650
4D Platform	1,515,824	207,310		206,750	(110,616)
Total	5,818,255	4,219,282		3,809,255	2,785,034
EBITDA from continuing operations
Operating (loss)		(7,348,222)			(8,548,904)
Depreciation and amortisation		790,274			512,064
Total		(6,557,948)			(8,036,840)

 

4.         Geographical analysis

 

Revenue analysed by geographical market:

	2022		2021
	£		£
United Kingdom	1,066,801		1,078,128
Rest of Europe	1,553,243		1,901,162
Rest of the world	3,198,211		829,965
	5,818,255		3,809,255

 

The timing of all revenue recognised by the Group during the reporting period was satisfied over time in accordance with IFRS 15 recognition criteria. None of the Group's activities result in the transfer of control of a product at a point in time for revenue recognition purposes.

 

Two major customers are included within revenue totalling £1,512,875, each representing 13% of total group revenue (2021: one major customer totalling £497,717, being 13%).

 

Non-current assets analysed by geographical market:

	2022		2021
	£		£
United Kingdom	6,934,199		6,586,473
Rest of Europe	4,506		4,104
Rest of the world	14,504		7,942
	6,953,209		6,598,519

 

5.         Other operating income

 

	Group
	2022	2021
	£	£
Grant income	-	38,328
	-	38,328

 

 

6.         Exceptional items

	Group
	2022	2021
	£	£
Professional fees on initial public offering	-	520,180
Losses incurred / (recovered) as a result of fraud	(42,154)	340,905
	(42,154)	861,085

 

             Reported loss before tax for the group is reconciled to the headline loss before tax as follows:

 

	Group
	2022	2021
	£	£
Reported (loss) before tax	(7,536,773)	(8,567,832)
Share option charges	1,476,183	1,602,025
Professional fees on initial public offering	-	520,180
Losses incurred / (recovered) as a result of fraud	(42,154)	340,905
Headline (loss) before tax	(6,102,744)	(6,104,722)

 

 

7.         Operating (loss)

 

             The operating loss is arrived at after charging/(crediting):

 

	Group
	2022	2021
	£	£
Depreciation of property plant and equipment	29,209	36,255
Amortisation of intangible assets	761,065	475,809
Short-term leases	237,388	214,972
Foreign exchange losses	24,334	80,005
Auditor's remuneration in respect of:
- audit of the consolidated financial statements	72,000	60,000
- other audit related assurance services	5,000	193,750

 

8.         Staff costs

 

	Group
	2022	2021
	£	£
Wages and salaries	5,859,808	4,523,434
Share-based payments	1,211,252	1,602,025
Social security costs	786,795	715,282
Pension costs - defined contribution	215,546	129,079
Termination payments	19,598	56,272
	8,092,999	7,026,092

                            

Average number of staff

	Group			Company
	2022	2021		2022	2021
Customer Experience Services	36	34		-	-
4D Platform	32	23		-	-
Central	12	12		-	-
	80	69		-	-

 

9.         Directors' remuneration

 

             Key management personnel are considered to be the directors and their remuneration, employer's national insurance, and pension contributions are disclosed below:

 

	Group
	2022	2021
	£	£
Directors' remuneration	763,237	957,855
Share-based payments	446,077	376,994
Social security costs	79,133	97,494
Pension costs - defined contribution	20,526	19,589
Invoiced services	17,920	71,650
	1,326,893	1,523,582

 

The directors are remunerated, in respect of their services to the Group, through subsidiary companies. During the year three directors (2021: four) were accruing benefits under the company defined contribution pension scheme.

 

Remuneration disclosed above includes the following amounts paid to the highest paid director:

 

	Group
	2022	2021
	£	£
Directors' remuneration	225,000	273,375
Share-based payments	148,894	104,901
Social security costs	29,744	36,507
Pension costs - defined contribution	6,750	5,438
Invoiced services	-	30,000

 

10.       Finance expenses

	Group
	2022	2021
	£	£
On convertible loan notes	166,651	-
On bank overdrafts and loans	21,900	16,926
On other credit arrangements	-	2,002
	188,551	18,928

 

11.       Income tax provision

            

             A deferred tax asset in respect of the Group's losses to date has not been recognised due to the uncertainty of the timing of future loss relief.

 

	Group
	2022	2021
Current tax	£	£
UK corporation tax credits for R&D from prior years	(41,009)	(21,121)
UK corporation tax credits for R&D for current year	(360,000)	(360,000)
Foreign taxation	1,971	-
Total current tax	(399,038)	(381,121)
Deferred tax	84,298	323,971
Total tax credit	(314,740)	(57,150)

 

Reconciliation of tax expense

 

The tax assessed on the loss on ordinary activities for the year is lower than the standard rate of corporation tax in the UK of 19% (2021: 19%).

 

	Group
	2022	2021
	£	£
Loss on ordinary activities before taxation	(7,512,440)	(8,567,832)
Loss on ordinary activities by rate of tax	(1,427,364)	(1,627,888)
Non-allowable expenses	150,152	139,632
Enhanced R&D expenditure	(360,000)	(360,000)
Change in deferred tax rate applied	-	131,494
Deferred tax movement on intangible assets	84,298	323,971
Movement in deferred tax not recognised	1,277,212	1,356,762
Adjustments in respect of prior periods	(41,009)	(21,121)
Foreign taxation	1,971	-
Tax on loss	(314,740)	(57,150)

 

 

Deferred tax assets have not been recognised on cumulative losses for the group totalling £40,012,779 (2021: 34,655,101).

 

12.       Goodwill and intangible assets

 

	Customer lists	Development Costs	Goodwill	Total
	£	£	£	£
COST
At 1 January 2021	595,708	1,058,170	4,330,222	5,984,100
Additions	-	1,439,834	19,440	1,459,274
At 31 December 2021	595,708	2,498,004	4,349,662	7,443,374
At 1 January 2022	595,708	2,498,004	4,349,662	7,443,374
Additions	-	1,099,062	-	1,099,062
At 31 December 2022	595,708	3,597,066	4,349,662	8,542,436
AMORTISATION
At 1 January 2021	213,863	197,298	-	411,161
Amortisation charge	148,927	326,882	-	475,809
Write off	-	-	-	-
At 31 December 2021	362,790	524,180	-	886,970
At 1 January 2022	362,790	524,180	-	886,970
Amortisation charge	148,927	612,138	-	761,065
At 31 December 2022	511,717	1,136,318	-	1,648,035
NET BOOK VALUE
At 31 December 2021	232,918	1,973,824	4,349,662	6,556,404
At 31 December 2022	83,991	2,460,748	4,349,662	6,894,401

 

 

             Amortisation is charged within administrative expenses in the Statement of Comprehensive Income.

 

 

13.       Investments

 

             All investments held by the group relate to investments in trading companies as detailed in Note 15.

 

COST	Group		Company
At 1 January 2021	-		5,270,836
Additions	-		1,602,075
At 31 December 2021	-		6,872,911
At 1 January 2022	-		6,872,911
Additions	4,999		1,481,183
At 31 December 2022	4,999		8,354,094

 

 

14.      Tangible assets

 

	Fixtures, fittings and equipment	Computer equipment	Total
	£	£	£
COST
At 1 January 2021	13,672	103,065	116,737
Additions	1,770	39,660	41,430
Disposals	(7,145)	-	(7,145)
At 31 December 2021	8,297	142,725	151,022
At 1 January 2022	8,297	142,725	151,022
Additions	11,814	29,089	40,903
Disposals	-	-	-
At 31 December 2022	20,111	171,814	191,925
DEPRECIATION
At 1 January 2021	10,684	69,113	79,797
Charge for the period	1,434	34,821	36,255
Disposals	(7,145)	-	(7,145)
At 31 December 2021	4,973	103,934	108,907
At 1 January 2022	4,973	103,934	108,907
Charge for the period	4,237	24,972	29,209
Disposals	-	-	-
At 31 December 2022	9,210	128,906	138,116
NET BOOK VALUE
At 31 December 2021	3,324	38,791	42,115
At 31 December 2022	10,901	42,908	53,809

 

Depreciation is charged to administrative expenses within the Statement of Comprehensive Income.

 

15.      Investments in subsidiaries

 

As at 31 December 2022 Silver Bullet Data Services Group PLC owned an interest in the ordinary share capital of the companies below.

 

All companies are 100% owned with the exceptions of joint ventures Local Planet Data Services Ltd (51% owned) and Silver Bullet Data Science Limited (49.99% owned).

 

Silver Bullet Data Science Limited has not been consolidated into these financial statements as the Group does not exercise control over the company's activities.

 

Subsidiary undertaking	Country of incorporation	Registered office	Principal activity
Silver Bullet Media Services Limited	England and Wales	The Harley Building, 77 New Cavendish Street, London, W1W 6XB	Marketing services and data technologies
IOTEC Native Limited	England and Wales	The Harley Building, 77 New Cavendish Street, London, W1W 6XB	Dormant
Silver Bullet Data Services Limited	England and Wales	The Harley Building, 77 New Cavendish Street, London, W1W 6XB	Marketing services and data technologies
Silver Bullet Data Services GmbH	Germany	Herzogspitalstraße 24, 80331, Munich	Marketing services and data technologies
Silver Bullet Data Services Pty Ltd	Australia	452 Flinders St, Melbourne, 3000, Victoria	Marketing services and data technologies
Silver Bullet Data Services S.r.l	Italy	20161, Via Gian Rinaldo, Carli n. 47, Milan	Marketing services and data technologies
Technobeet S.r.l.	Italy	20161, Via Gian Rinaldo, Carli n. 47, Milan	Dormant
Silver Bullet USA Inc.	United States of America	1250 Broadway, 36th Floor, New York, New York, 10001	Marketing services and data technologies
Local Planet Data Services Ltd	England and Wales	The Harley Building, 77 New Cavendish Street, London, W1W 6XB	Marketing services and data technologies

 

16.       Trade and other receivables

	Group			Company
	2022	2021		2022	2021
	£	£		£	£
Trade receivables	1,307,790	1,333,272		-	-
Other receivables	448,798	202,623		227,439	75,965
Prepayments	225,537	151,749		58,135	2,557
Contract assets	170,855	217,328		-	-
Corporation tax receivable	334,864	360,000		-	-
	2,487,844	2,264,972		285,574	78,522

 

In determining the recoverability of accounts receivable, the Group considers any changes in the credit quality of the accounts receivable from the date credit was initially granted up to the reporting date.

 

Those receivable balances that are passed due have been assessed by management on an individual basis and provisions for bad debts has been made as necessary.

 

Contract assets represent agreements with customers against which revenue has been recognised but not yet invoiced in accordance with the contract terms. All accrued revenue at each period end has been invoiced within a maximum of three months of the reporting period.

 

17.       Cash and cash equivalents

	Group			Company
	2022	2021		2022	2021
	£	£		£	£
Cash at bank	1,352,221	3,687,809		8,572	60
	1,352,221	3,687,809		8,572	60

 

Cash at bank earns interest at floating rates based on daily bank deposit rates.

 

18.       Trade and other payables

	Group			Company
	2022	2021		2022	2021
	£	£		£	£
Trade payables	530,257	525,267		34,448	35,129
Tax and social security	497,631	558,799		20,613	20,613
Other payables	345,496	317,018		5,050	50
Accruals	647,382	1,007,845		4,609	10,467
Contract liabilities	290,988	200,099		-	-
Amounts owed to group undertakings	-	-		3,762,367	1,983,003
	2,311,754	2,609,028		3,827,087	2,049,262

 

The fair value of trade and other payables approximates to book value at each year-end. Trade payables are non-interest bearing and are normally settled monthly.

 

Contract liabilities represent agreements with customers against which revenue has not yet been recognised for invoices raised during the report period. All such deferred revenue at each period end has been released to the Statement of Comprehensive Income within a maximum of three months of the reporting period.

 

 

19.          Loans and borrowings

	Group			Company
	2022	2021		2022	2021
	£	£		£	£
Current liabilities
Bank loans	41,227	16,061		-	-
	41,227	16,061		-	-
	2022	2021		2022	2021
	£	£		£	£
Non-current liabilities
Convertible loan notes	1,687,697	-		1,687,697	-
Bank loans	110,295	143,644		-	-
	1,797,992	143,644		1,687,697	-

 

As at 31 December 2022 the Group had bank loans of £151,522 (2021: £177,104) accruing interest at 1.95% repayable over six years to 2026, with repayments due from 31^st August 2022.

 

Convertible loan notes were issued during the reporting period which are convertible into new ordinary shares at the price of £1.10 per new ordinary share at any point during the three-year term of the loan.

 

The loan notes attract interest at a rate of 12% per annum, which is payable commencing on the date of issue either:

i)              at the Company's option of 8% per annum paid monthly plus 4% payable via the issue of additional Convertible Loan Notes as payment in kind.

ii)             12% payable via the issue of additional Convertible Loan Notes as payment in kind.

 

The loan notes may be redeemed in cash at the option of company at any point at a premium equal to 15% of the principal amount of the Notes.

 

The equity element of the convertible loan note is recognised within other reserves (see Note 24). A market interest rate of 21% has been applied to calculate the residual equity value of the financial instrument.

 

20.       Deferred tax liability

	Group			Company
	2022	2021		2022	2021
	£	£		£	£
Movements in the year:
Liability brought forward	547,892	223,921		-	-
Charge to profit or loss	84,298	323,971		-	-
Liability carried forward	632,190	547,892		-	-

 

All deferred tax liabilities are recognised in respect of intangible and tangible asset timing differences. No deferred tax assets have been recognised by the Group.

 

21.       FINANCIAL INSTRUMENTS

 

Financial instruments and risk management

 

The Group's financial instruments may be analysed as follows:

 

	Group			Company
	2022	2021		2022	2021
	£	£		£	£
Financial assets measured at amortised cost
Cash and cash equivalents	1,352,221	3,687,809		8,571	60
Trade receivables	1,307,790	1,333,272		-	-
Other receivables	448,798	202,623		227,439	75,965
	3,108,809	5,223,704		236,010	76,025
Financial liabilities measured at amortised cost
Trade payables	530,257	525,267		34,448	35,129
Accruals	647,382	1,007,845		4,610	10,468
Other payables	345,496	875,812		3,767,417	2,014,133
Loans	1,839,219	159,705		1,687,697	-
	3,362,354	2,568,629		5,494,172	2,059,729

 

Financial assets measured at amortised cost comprise cash, trade receivables and other receivables.

 

Financial liabilities measured at amortised cost comprise bank loans and overdrafts, other loans, trade payables, convertible loan notes and other payables.

 

The debt instruments were initially recognised at fair value, and subsequently they were measured at amortised cost using the effective interest rate method, whereby the fair value of the debt approximates their carrying value.

 

The Group is exposed to a variety of financial risks through its use of financial instruments which result from its operating activities. All of the Group's financial instruments are classified as loans and receivables.

 

The Group does not actively engage in the trading of financial assets for speculative purposes. The most significant financial risks to which the Group is exposed are described below:

 

Credit risk

         

Generally, the Group's maximum exposure to credit risk is limited to the carrying amount of the financial assets recognised at the reporting date, as summarised above.

 

Credit default risk is the financial risk to the Group if a counter party to a financial instrument fails to meet its contractual obligation. The nature of the Group's receivable balances, the time taken for payment by entities and the associated credit risk are dependent on the type of engagement.

 

Credit risk is minimised substantially by ensuring the credit worthiness of the entities with which it carries on business. Credit terms are provided on a case-by-case basis. The Group's trade and other receivables are actively monitored. The Group has not experienced any significant instances of non-payment from its customers.

 

Unbilled revenue is recognised by the Group only when all conditions for revenue recognition have been met in line with IFRS 15.

 

Liquidity risk

 

Liquidity risk represents the contingency that the Group is unable to gather the funds required with respect to its financial obligations at the appropriate time and under reasonable conditions in order to meet their current obligations. The Group attempts to manage this risk so as to ensure that it has sufficient liquidity at all times to be able to honour its current and future financial obligations under normal conditions and in exceptional circumstances. Financing strategies to ensure the management of this risk include the issuance of equity or debt securities as deemed necessary.

 

All of the Group's financial liabilities mature within twelve months of both reporting periods, with the exception of non-current liabilities disclosed at note 19. In each of these cases, the financial liabilities matured within five years of the reporting date.

 

Foreign currency risk

         

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily Australian Dollars, United States Dollars and Euros. The Group monitors exchange rate movements closely and ensures adequate funds are maintained in appropriate currencies to meet known liabilities.

 

The Group's exposure to foreign currency risk at the end of the respective reporting periods were as follows:

	2022				2021
	AUD	USD	EUR		AUD	USD	EUR
Assets and liabilities	299,236	244,995	(515,938)		121,403	128,932	302,200

 

Assets and liabilities include the monetary assets and liabilities of subsidiaries denominated in foreign currency.

 

The Group is exposed to foreign currency risk on the relationship between its functional currencies and other currencies in which the Group's material assets and liabilities are denominated. The table below summaries the effect on reserves had the functional currencies of the Group weakened or strengthened against these other currencies, with all other variables held constant.

 

	Group			Company
	2022	2021		2022	2021
	£	£		£	£
10% weakening of functional currency	(7,876)	34,124		-	-
10% strengthening of functional currency	16,539	(71,661)		-	-

 

The impact of a change of 10% has been selected as this has been considered reasonable given the current level of exchange rates and the volatility observed both on a historical basis and market expectations for future movements.

 

22.       Share capital and premium

            

Ordinary share capital
Issued and fully paid	No.	£
As at 1 Jan 2022	13,422,687	134,227
Shares issued	2,514,000	25,140
As at 31 Dec 2022	15,936,687	159,367

In June 2022 investment funding was raised for 2,494,000 new shares issued at £1.00. At the reporting date deferred share subscriptions were outstanding of £142,720 (2021: £nil) and are held within other receivables. 20,000 share options were also exercised during the financial year at nominal value of £0.01.

23.       Share Option Reserve

 

The Group operates a programme for employees of its subsidiaries to acquire shares in the company under an EMI scheme. All options are settled by the physical delivery of shares once the options have vested and are exercised.

 

The number and weighted average exercise price of share options during the year were as follows:

	2022		2021
	Weighted average exercise price	Share options	Weighted average exercise price	Share options
	£	No.	£	No.
Outstanding at start of period	1.56	1,679,607	3.05	250,153
Forfeited/expired during period	1.50	(198,987)	(1.27)	(244,767)
Granted during period	0.27	109,000	1.27	1,705,682
Exercised during period	0.01	(20,000)	(0.30)	(31,461)
Outstanding at end of period	1.49	1,569,620	1.56	1,679,607

 

Share options have been valued at grant date based on the Black Scholes valuation model using an estimated volatility of 40%. Options vest over varying terms according to individual option agreements from vesting in full on grant date to a period of three years.

 

All options expire after seven years and an expected take-up rate of 100% has been applied. A dividend yield of 0% has been applied to option valuation models as the Group focuses on capital growth through this period. Risk-free rates have been applied ranging from 0.26% to 3.62% based on UK 10-year gilt rates since 2014.

 

Other key inputs applied to Black Scholes valuation models are as follows:

 

Tranche date	Options outstanding	Share price	Average exercise price
	No.	£	£
01 October 2014	1,325	22.21	0.001
12 January 2015	94	22.21	0.001
15 July 2015	281	24.63	0.001
18 July 2016	2,703	24.63	9.837
12 October 2016	10,000	24.63	24.633
26 January 2018	9,099	8.55	15.462
21 May 2020	21,750	3.64	0.810
09 July 2020	625	3.64	0.810
17 July 2020	2,125	1.96	0.810
24 July 2020	5,000	1.96	0.810
01 October 2020	625	1.96	0.810
21 May 2020	751	1.96	0.810
21 May 2020	998	1.96	0.810
06 July 2020	4,360	1.96	0.810
02 June 2021	716,021	2.57	0.415
25 June 2021	689,863	2.57	2.286
11 August 2022	104,000	0.90	0.277
	1,569,620

 

The movement in option valuation during the year ended 31 December 2022 resulted in a staffing cost being recognised by the Group of £1,476,183 (2021: £1,602,025), with a corresponding increase in the Group's equity.

 

The valuation of options exercised, lapsed, and forfeited during the year totalled £355,150 (2021: £1,519,315) which has been transferred to Retained Earnings.

 

The contractual life for outstanding options runs for a number of periods, the latest of which being to 11^th August 2029.

 

The total number of exercisable options at the period end was 1,569,620 (2021: 1,679,607), with an average exercise price of £1.49 (2021: £1.56).

 

24.       Other reserves

 

		2022		2021
		£		£
Convertible loan notes		398,954		-
		398,954		-

 

Loan notes were issued during the reporting period which are convertible into new ordinary shares at the price of £1.10 per new ordinary share at any point during the three year term of the loan.

 

The equity element of the convertible loan note is recognised within other reserves. A market interest rate of 21% has been applied to calculate the residual equity value of the financial instrument.

 

25.       Related party transactions

 

Key management personnel and directors' remuneration is detailed at note 9.

 

Local Planet International Limited: is a related party to the group by virtue of having Directors in common.  Ian James, Martyn Rattle and Nigel Sharrocks are directors of both companies.

 

Recharges for shared services totalling £146,293 (2021: £107,131) are included in revenue for the year ended 31 December 2022. Amounts outstanding at the year-end included in trade receivables totals £29,611 (2021: £37,758).

 

Recharges for direct costs incurred were processed during the year ended 31 December 2022 totalling £114,009 (2021: £56,000). Amounts outstanding at 31 December 2022 totalled £32,400 (2021: £5,574).

 

Fluency Media Limited: is a related party to the group by virtue of having Directors in common. Ian James is a director of both companies. Consultancy services were provided during the year ended 31 December 2022 totalling £nil (2021: £90,000). All of these services were provided prior to listing in June 2021 and were settled by the reporting date.

 

Marmalade Consultants Limited: is a related party to the group by virtue of having Directors in common. Martyn Rattle is a director of both companies Consultancy services were provided during the year ended 31 December 2022 totalling £17,920 (2021: £56,673). Amounts outstanding at 31 December 2022 totalled £nil (2021: £nil).

 

Educated Solutions Limited: is a related party to the group by virtue of having Directors in common. Ian James and Martyn Rattle are directors of both companies. Revenue was recognised for services provided to the company during the year ended 31 December 2022 totalling £nil (2021: £13,800). Costs of £3,462 (2021: £nil) were also recognised in respect of a profit share agreement. Revenue outstanding at 31 December 2022 totalled £nil (2021: £16,560) and are included within trade receivables.

 

Umberto Torrielli: A director of the Group company relocated to the USA in order to establish a new presence in this territory in 2020. For this purpose, a loan was issued of £150,000 which is held within other debtors at the end of the reporting period (2021: £150,000).

 

Transactions with group companies

 

As holding company for the subsidiaries listed at Note 15, all funds raised are distributed to subsidiary companies as required. A summary of balances outstanding at the period end are provided below. All balances are repayable on demand and are lent without security or accruing any interest.

 

A provision for bad debts has been included in the Company financial statements for all amounts receivable from subsidiaries in both the current and previous year.

 

Amounts owed to subsidiary companies	2022	2021
	£	£
Silver Bullet Media Services Limited	2,960,236	1,180,872
Iotec Native Limited	802,131	802,131
	3,762,367	1,983,003

 

26.       Earnings per share

 

Earnings per share (EPS) is calculated on the basis of profit attributable to equity shareholders divided by the weighted average number of shares in issue for the year. The diluted EPS is calculated on the treasury stock method and the assumption that the weighted average EMI share options outstanding during the period are exercised.

 

	2022	2021
	£	£
Loss after taxation	(7,222,033)	(8,510,682)
Number of shares
Weighted average number of ordinary shares in issue	14,889,187	11,684,142
Dilutive effect of in-the-money share options	589,590	792,028
Diluted weighted average number of shares	15,478,777	12,476,170
Earnings per share
Basic earnings per share	(0.49)	(0.73)
Diluted earnings per share	(0.49)	(0.73)

 

As there is a loss for the year the options are antidilutive and therefore the basic and the diluted EPS are the same.

 

27.       Other financial commitments

 

             The Company has provided a guarantee in respect of the outstanding liabilities of the subsidiary companies listed below in accordance with Sections 479A - 479C of the Companies Act 2006, as these subsidiary companies of the Group are exempt from the requirements of the Companies Act 2006 relating to the audit of the accounts by virtue of Section 479A of this Act.

 

Silver Bullet Media Services Limited (06216702)

IOTEC Native Limited (08286180)

Silver Bullet Data Services Limited (10081847)

Local Planet Data Services Ltd (13123941)

Silver Bullet Data Science Limited (14086726)

            

28.       Ultimate controlling party

 

Management considers there is no ultimate controlling part of the Group.

 

 

 

 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 ("MAR") as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018, as amended by virtue of the Market Abuse (Amendment) (EU Exit) Regulations 2019.