Marmalade Game Studio Limited Filleted accounts for Companies House (small and micro)

Marmalade Game Studio Limited Filleted accounts for Companies House (small and micro)

MARMALADE GAME STUDIO LIMITED - Company Information

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COMPANY REGISTRATION NUMBER: 03677408
Marmalade Game Studio Limited
Filleted Financial Statements
For the year ended
31 December 2019
Marmalade Game Studio Limited
Statement of Financial Position
31 December 2019
2019
2018
Note
£
£
£
Fixed assets
Intangible assets
6
1
56
Tangible assets
7
8,116
5,632
Investments
8
561,651
875,010
---------
---------
569,768
880,698
Current assets
Debtors
9
1,148,416
519,921
Cash at bank and in hand
265,580
116,825
------------
---------
1,413,996
636,746
Creditors: amounts falling due within one year
10
3,067,806
757,332
------------
---------
Net current liabilities
1,653,810
120,586
------------
---------
Total assets less current liabilities
( 1,084,042)
760,112
Creditors: amounts falling due after more than one year
11
2,000,000
3,500,000
------------
------------
Net liabilities
( 3,084,042)
( 2,739,888)
------------
------------
Marmalade Game Studio Limited
Statement of Financial Position (continued)
31 December 2019
2019
2018
Note
£
£
£
Capital and reserves
Called up share capital
569,681
509,735
Share premium account
25,275,050
24,444,382
Other reserves
613
613
Profit and loss account
( 28,929,386)
( 27,694,618)
-------------
-------------
Shareholders deficit
( 3,084,042)
( 2,739,888)
-------------
-------------
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies' regime and in accordance with Section 1A of FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.
In accordance with section 444 of the Companies Act 2006, the statement of comprehensive income has not been delivered.
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
These financial statements were approved by the board of directors and authorised for issue on 29 April 2020 , and are signed on behalf of the board by:
B Beckloff
Director
Company registration number: 03677408
Marmalade Game Studio Limited
Notes to the Financial Statements
Year ended 31 December 2019
1. General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is 33 Charlotte Street, London, W1T 1 RR, England.
2. Statement of compliance
These financial statements have been prepared in compliance with Section 1A of FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis .
Change of company name
On 2 January 2020, the company changed its name from Marmalade Technologies Limited.
Going concern
The directors have prepared projected cash flow information for the period ending 12 months from the date of their approval of these financial statements and will continue to seek to raise further equity and loan funding, as required, sufficient to meet the company requirements and the directors are satisfied that adequate cash and working capital resources will continue to be maintained and that it is appropriate to prepare the financial statements on a going concern basis. Subsequent to the year-end, the UK has experienced a pandemic of the coronavirus, however this has not had a negative impact on the business.
Consolidation
The company has taken advantage of the option not to prepare consolidated financial statements contained in Section 398 of the Companies Act 2006 on the basis that the company and its subsidiary undertakings comprise a small group.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The judgements (apart from those involving estimations) that management has made in the process of applying the entity's accounting policies and that have the most significant effect on the amounts recognised in the financial statements are detailed in revenue recognition policy note, investment, employee share option and creditors due after one year notes to the financial statements. Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows: 1) Deprecation and amortisation charges The annual depreciation and amortisation charge for each class of tangible and intangible asset is based on an estimate of the useful economic life of the respective assets. This is reviewed periodically by the directors to ensure that they reflect both the external and internal factors. 2) Valuation of EMI share options In accordance with the accounting standards, the directors have valued the EMI share options granted to various employees. The valuation has been carried out using an option pricing model.
Management recharges
Management recharges represent the proportion of expenses recharged at cost to its subsidiary company MGS 2019 Limited.
Revenue recognition
Turnover is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding Value Added Tax. Royalties are accounted for in the period in which they are earned. Product development income is recognised as contract activity progresses to reflect milestones achieved during the year. Amounts received in advance are carried forward until recognised as turnover. Licence sales are recognised over the course of the licensing agreement.
Foreign currencies
Foreign currency transactions are initially recorded in the functional currency, by applying the spot exchange rate as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate ruling at the reporting date, with any gains or losses being taken to the profit and loss account.
Operating leases
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.
Intangible assets
Intangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated amortisation and impairment losses.
Amortisation
Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows:
Development costs
-
33% straight line
If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Short leasehold property
-
20% Straight line
Plant and machinery
-
25 - 33% Straight line
Fixtures and fittings
-
50% Straight line
Financial instruments
The company holds basic financial instruments as defined in FRS102. The financial assets and financial liabilities of the company and their measurement basis are as follows: Financial assets - trade and other debtors are basic financial instruments and are debt instruments measured at amortised cost. Prepayments are not financial instruments. Cash at bank is classified as a basic financial instrument and is measured at amortised cost. Financial liabilities - trade creditors, accruals and other creditors are financial instruments, and are measured at amortised cost. Taxation and social security are not included in the financial instruments disclosure definition.
Share-based payments
Equity-settled share-based payment transactions are measured at fair value at the date of grant. The fair value is expensed on a straight-line basis over the vesting period, with a corresponding increase in equity. This is based upon the company's estimate of the shares or share options that will eventually vest which takes into account all vesting conditions and non-market performance conditions, with adjustments being made where new information indicates the number of shares or share options expected to vest differs from previous estimates. Fair value is determined using an appropriate pricing model. All market conditions and non-vesting conditions are taken into account when estimating the fair value of the shares or share options. As long as all other vesting conditions are satisfied, no adjustment is made irrespective of whether market or non-vesting conditions are met. Where the terms of an equity-settled transaction are modified, an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any increase in the fair value of the transaction, as measured at the date of modification. Where an equity-settled transaction is cancelled or settled, it is treated as if it had vested on the date of cancellation or settlement, and any expense not yet recognised in profit or loss is expensed immediately. Cash-settled share-based payment transactions are measured at the fair value of the liability. Until the liability is settled, the fair value of the liability is re-measured at each reporting date and at the date of settlement, with any changes in fair value recognised in profit or loss for the period.
4. Employee numbers
The average number of persons employed by the company during the year amounted to 4 (2018: 4 ).
5. Exceptional costs
As a means of motivating and retaining key staff, the company have established an enterprise incentive option scheme agreement where options to purchase shares have been granted to certain employees. In accordance with FRS102 the directors have valued these options and are recognising this cost when the services have been provided. The impact on these financial statements is an increase in costs of £133,894 for the current year. The directors consider it appropriate to disclose this cost separately on on the face of the income statement on the basis it is considered relevant to an understanding of the financial performance of the company.
As part of the business transfer from the subsidiary company, the loan balance of £138,006 owing from MGS 2019 Limited was waived.
The investment held in the subsidiary has been impaired to the value of its reserves at the year end, this has resulted in an impairment of £313,359.
6. Intangible assets
Development costs
£
Cost
At 1 January 2019 and 31 December 2019
106
----
Amortisation
At 1 January 2019
50
Charge for the year
55
----
At 31 December 2019
105
----
Carrying amount
At 31 December 2019
1
----
At 31 December 2018
56
----
7. Tangible assets
Land and buildings
Plant and machinery
Fixtures and fittings
Total
£
£
£
£
Cost
At 1 January 2019
42,091
7,511
7,795
57,397
Additions
–
8,440
–
8,440
Disposals
( 42,091)
–
–
( 42,091)
--------
--------
-------
--------
At 31 December 2019
–
15,951
7,795
23,746
--------
--------
-------
--------
Depreciation
At 1 January 2019
42,091
4,036
5,638
51,765
Charge for the year
–
3,799
2,157
5,956
Disposals
( 42,091)
–
–
( 42,091)
--------
--------
-------
--------
At 31 December 2019
–
7,835
7,795
15,630
--------
--------
-------
--------
Carrying amount
At 31 December 2019
–
8,116
–
8,116
--------
--------
-------
--------
At 31 December 2018
–
3,475
2,157
5,632
--------
--------
-------
--------
8. Investments
Shares in group undertakings
£
Cost
At 1 January 2019 and 31 December 2019
875,010
---------
Impairment
At 1 January 2019
–
Impairment losses
313,359
---------
At 31 December 2019
313,359
---------
Carrying amount
At 31 December 2019
561,651
---------
At 31 December 2018
875,010
---------
The company owns 100% of the issued share capital in MGS 2019 Limited. Its registered office is 33 Charlotte Street, London, England, W1T 1RR.
On 31 December 2019 the company purchased the trade, assets and liabilities of its subsidiary company.
9. Debtors
2019
2018
£
£
Amounts owed by group undertakings and undertakings in which the company has a participating interest
–
435,472
Other debtors
1,148,416
84,449
------------
---------
1,148,416
519,921
------------
---------
10. Creditors: amounts falling due within one year
2019
2018
£
£
Debenture loans
110,000
–
Bank loans and overdrafts
–
92,798
Trade creditors
109,640
173,127
Amounts owed to group undertakings
1,010
–
Accruals and deferred income
645,405
484,206
Social security and other taxes
69,798
235
Convertible loan notes
1,500,000
–
Interest on convertable loan notes
621,000
–
Other creditors
10,953
6,966
------------
---------
3,067,806
757,332
------------
---------
The debenture loans are secured by charges over the assets of the company. The convertible loan notes are unsecured.
11. Creditors: amounts falling due after more than one year
2019
2018
£
£
Debenture loans
2,000,000
2,000,000
Bank loans and overdrafts
–
1,500,000
------------
------------
2,000,000
3,500,000
------------
------------
The debenture loan was due for repayment in March 2020 but the terms of the loan have been renegotiated and it is now due for repayment March 2022. The directors consider it more appropriate to disclose this loan as repayable after one year to ensure the financial statements show a true and fair view of the position of the business and the long term nature of the loan. Since the year end the company has been in a position to overpay on this loan and has repaid £200,000 of the outstanding balance which is in addition to interest repayments of £240,000 on the convertible debt.
The debenture loans are secured by charges over the assets of the company.
The convertible loan notes are unsecured
 .
12. Operating leases
The total future minimum lease payments under non-cancellable operating leases are as follows:
2019
2018
£
£
Not later than 1 year
339,354
131,700
Later than 1 year and not later than 5 years
722,971
10,400
------------
---------
1,062,325
142,100
------------
---------
13. Summary audit opinion
The auditor's report for the year dated 3 May 2020 was unqualified.
The senior statutory auditor was Jonathan Day , for and on behalf of Streets Audit LLP .