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Registered number: 08953245
AXONIX LTD
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
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AXONIX LTD
COMPANY INFORMATION
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F Hager (appointed 31 October 2019)
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Chartered Accountants and Registered Auditors
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AXONIX LTD
CONTENTS
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Independent Auditors' Report
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Statement of Profit or Loss and Other Comprehensive Income
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Statement of Financial Position
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Statement of Changes in Equity
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Notes to the Financial Statements
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AXONIX LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2018
The directors present the strategic report and financial statements for the year ended 31 December 2018.
On 3 August 2018, the entire share capital of the company was acquired by mGage Holdings, LLC and Mobile Ad Exchange Holdings, LLC, both are Delaware limited liability company. Both mGage Holdings, LLC and Mobile Ad Exchange Holdings, LLC are ultimately controlled by The Blackstone Group Inc, Delaware, USA.
Before the acquisition of full control by mGage Holdings, LLC and Mobile Ad Exchange Holdings, LLC, the company was a subsidiary within the Telefonica Group with Telefonica Digital Limited, a company incorporated in England and Wales as immediate parent company and Telefonica SA, a company incorporated in Spain as ultimate parent company.
Details of share capital movements are disclosed in note16 to the financial statements.
The company is responsible for selling advertising inventory, directly and through an advertising exchange which is a technology platform facilitating real time auctions of advertising impressions on mobile apps or mobile websites. The largest market for the company is the USA with Western Europe also being significant.
Now in its fourth year of trading, the company has continued to invest in improving technology platform to run the real time advertising exchange. Technology improvements have enabled easier integration of publishers, and this coupled with a focus on acquiring new demand partners as well as new publishers has resulted in revenue increasing/decreasing as the year progressed.
2018 was a year of transition for the company. The transaction simplified the ownership structure and disposed of its investment in Statiq Limited for $3.137 million. This has allowed Axonix to achieve their strategic objectives.
The new GDPR regulation forced a change in strategy away from first party data to new innovative data models to improve targeting and efficiencies in programmatic advertising.
This change in strategy set up Axonix well for the future and we continue to support and invest in the business going forward.
Principal Risk Management Objectives, Policies and Exposure
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The company's principal financial instruments comprise bank balances, trade payables, trade receivable and balances with related parties. The main purpose of the instruments is to raise funds to finance the company's operations. Due to the nature of the financial instruments used by the company there is no exposure to price risk.
The company's operation, including risk and uncertainties, are reviewed regularly. The principal risks and uncertainties facing the company are:
- The company is relatively new to the market and significant acquisition of publishers and demand partners may prove challenging.
- The company may not be able to, or it may take longer than expected, to develop and launch new and innovative products or services and these products and services may not deliver appropriate customer engagement or usage when deployed. The products and services may not deliver commercial values.
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AXONIX LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
- Regulatory risks could reduce the company's ability to sell certain products and services. This includes developments in privacy and data protection and advertising law, regulators interpretation of these or media and general consumer concerns.
- Competitors may develop different products and services more quickly than the company which are sold to customers.
These risks are mitigated by utilising a number of different approaches to selling inventory with first party relationships via RTB (Real Time Bidding) exchange at the core but also incorporating direct sales and third-party supply relationships. This mitigate both risks on developing technology and acquisition of relationships.
Regulatory risks are mitigated by complying with all rules and regulations and offering opt-out solutions. In-house legal presence ensures continued awareness and compliance.
Analysis of Development and Performance
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The company earns revenue through the provision of advertising inventory to brands through its exchange and directly. The company's performance is measured principally through revenue generated from these sales of inventory via the exchange and directly to advertisers.
Analysis based in Key Performance Indicators
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The company uses revenue and profit or loss as its main Key Performance Indicators. The revenue for the year decreased from $11.5 million in 2017 to $7.0 million in 2018 and whilst we made a loss of $2.7 million in 2018 this was an extraordinary year and we believe that advertising spend and programmatic advertising will continue to grow. Axonix is well set up to benefit from this growth.
This report was approved by the board on 18 March 2021 and signed on its behalf.
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AXONIX LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2018
The directors present their report and the financial statements for the year ended 31 December 2018.
The directors who served during the year were:
J M P Romero (resigned 3 August 2018)
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J New (appointed 3 August 2018, resigned 31 October 2019)
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M E G Lizasoain (resigned 3 August 2018)
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The loss for the year, after taxation, amounted to $2,699,211 (2017 - loss $3,575,041).
The directors believe that there will be no material change in the operation of the business in 2021.
Details of the company's approach to financial risk managment are set out in note 4 to the financial statements.
The company's policy is to consult and discuss with employees matters likely to affect their interests.
Information of matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.
Directors' responsibilities statement
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The directors are responsible for preparing the Strategic Report, Directors' Report and the financial statements, in accordance with applicable law.
Company law requires the directors to prepare financial statements for each financial year. Under that law they have elected to prepare the financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU.
Under company law the 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;
∙make judgments and estimates that are reasonable and prudent;
∙state whether they have been prepared in accordance with IFRS as adopted by the EU, subject to any material departures disclosed and explained in the financial statements;
∙assess the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
∙use the going concern basis of accounting unless they either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
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AXONIX LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
The directors are 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. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the company and to prevent and detect fraud and other irregularities.
Disclosure of information to auditors
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Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the company's auditors are unaware, and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the company's auditors are aware of that information.
The auditors, Nyman Libson Paul LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on 18 March 2021 and signed on its behalf.
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AXONIX LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AXONIX LTD
We have audited the financial statements of Axonix Ltd for the year ended 31 December 2018 which comprise the Statement of Profit or Loss and Other Comprehensive Income, the Statement of Financial Position, the Statement of Cash Flows, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policies set out on pages 15 - 18. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
In our opinion the financial statements:
∙give a true and fair view of the state of the company's affairs as at 31 December 2018 and of its loss for the year then ended;
∙have been properly prepared in accordance with IFRSs as adopted by the European Union; 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 auditors' 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 United Kingdom, including the Financial Reporting Council'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
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We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
∙the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
∙the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
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AXONIX LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AXONIX LTD (CONTINUED)
The directors are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our auditors' report thereon. 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.
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.
Opinion on other matters prescribed by the Companies Act 2006
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In our opinion, based on the work undertaken in the course of the 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.
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 on page 5, 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.
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AXONIX LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AXONIX LTD (CONTINUED)
Auditors' 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 auditors' 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 for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors' report.
The financial statements of the company for the year ended 31 December 2017 were not audited and accordingly the corresponding figures and the comparative financial statements are unaudited.
Richard Paul (Senior Statutory Auditor)
for and on behalf of
Nyman Libson Paul LLP
Chartered Accountants and Registered Auditors
124 Finchley Road
London
NW3 5JS
22 March 2021
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AXONIX LTD
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2018
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(Loss) on disposals of assets
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The statement of comprehensive loss has been prepared on the basis that all operations are continuing operations.
There are no recognised gains and lossed other than those passing through the statement of comprehensive income.
The notes on 14 - 27 form part of these financial statements.
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AXONIX LTD
REGISTERED NUMBER: 08953245
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2018
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Property, plant and equipment
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Trade and other receivables
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Cash and cash equivalents
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Trade and other liabilities
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Total current liabilities
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Issued capital and reserves
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The financial statements on pages 10 to 27 were approved and authorised for issue by the board of directors on 18 March 2021 and were signed on its behalf by:
The notes on pages 14 to 27 form part of these financial statements.
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AXONIX LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2018
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Comprehensive income for the year
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Total comprehensive income for the year
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Comprehensive income for the year
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Total comprehensive income for the year
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Total contributions by owners
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The notes on pages 14 to 18 form part of these financial statements.
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AXONIX LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2018
Cash flows from operating activities
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Depreciation of property, plant and equipment
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Loss on disposal of investments
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Movements in working capital:
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Decrease/(Increase) in trade and other receivables
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(Increase) in prepayments and deferred charges
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(Decrease)/increase in trade and other payables
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Cash generated from operations
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Net cash used in operating activities
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Cash flows from investing activities
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Purchases of property, plant and equipment
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Payments to acquire investments
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Proceeds from disposal of investments
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Net cash from/(used in) investing activities
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Cash flows from financing activities
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Net cash from financing activities
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Net cash (decrease)/increase in cash and cash equivalents
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Cash and cash equivalents at the beginning of year
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Cash and cash equivalents at the end of the year
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AXONIX LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Axonix Limited (the 'company') is a limited company incorporated in England and Wales. The company's registered office is 40 Berkeley Square, London, W1J 5AL.
The principal activity of the company is the sale of advertising inventory, directly and through an advertising exchange which is a technology platform facilitating real time auctions of advertising impressions on mobile apps or mobile websites.
The financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS") and International Financial Reporting Committee ("IFRIC") interpretations and with those parts of the Companies Act 2006 as they apply to the financial statements of the company for the year ended 31 December 2018.
Details of the company's accounting policies, including changes during the year, are included in note 4.
In preparing these financial statements, management has made judgments, estimates and assumptions that affect the application of the company accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.
The areas where judgments and estimates have been made in preparing the financial statements and their effects are disclosed in note 5.
The financial statements have been prepared on the historical cost basis unless otherwise specified within accounting policies.
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2.2 Changes in accounting policies
New standards, interpretations and amendments effective from 1 January 2018
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IFRS 9
There are no material adjustments required to be made to the company's financial statements as a result of the application of IFRS 9 from 1 January 2018.
New standards, interpretations and amendments not yet effective
The following new standards, interpretations and amendments, which are not yet effective and have not been adopted early in these financial statements, will or may have an effect on the company's future financial statements:
IFRS 16, Leases - mandatory effective date period beginning 1 January 2019
The directors anticipate that the adoption of other Standards and interpretations that are not yet effective in future periods will only have an impact on the presentation in the financial statements of the company.
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AXONIX LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
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Functional and presentation currency
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These financial statements are presented in US dollars, which is the company's functional currency. All amounts have been rounded to the nearest US dollar, unless otherwise indicated.
4.Accounting policies
Like many companies, we have been impacted by Covid19. Advertising spend, across the world, was significantly reduced in Q2 and Q3 of 2020. However, we have seen advertising spend increase dramatically in Q4 2020. We continue to see improvements into 2021 where Q1 revenues are higher than the same period last year.
The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future, and thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
The company is in discussions to sell some of its assets. These discussions are expected to conclude in Q2 of 2021.
Additionally, the company has received a letter of parental support from shareholders of GSO MMBU Cayman Holdings LP a parent undertaking of Axonix Ltd, which confirms that they will continue to provide financial support to the company for a period of twelve months from the date of approval of the financial statements.
Transactions denominated in foreign currencies are translated into US dollars at the applicable rate at the time of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the foreign currency exchange rate ruling at the reporting date.
Foreign exchange differences arising on transition are recognised in the statement of comprehensive income. Non-monetary assets and liabilities denominated in foreign currencies are translated at the foreign currency exchange rate ruling at the date the non-monetary assets and liabilities are recognised.
Turnover represents amounts receivable for services net of VAT and trade discounts.
Revenue relates to services provided to customers in relation to the principal activities of the company. These services are the sale of advertising inventory, directly through an advertising exchange facility, and real time auctions of advertising impressions on mobile apps or mobile websites.
Customers are billed based on the number of adverts they have displayed to users on publisher websites or apps (''impression'') through buying advertising space from Axonix. Each impression is bought at a price determined by the auction process, with revenue being recognised for impression bought in that same period.
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AXONIX LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
4.Accounting policies (continued)
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Property, plant and equipment
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Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the company.
Depreciation is provided on all other items of property, plant and equipment so as to write off their carrying value over their expected useful economic lives. It is provided at the following rates:
Investments in subsidiaries are measured at cost less accumulated impairment.
The company assesses whether it has significant influence not only on the basis of its ownership percentage but also on the existence of qualitative factors such as representation on the board of directors of the investee, its participation in decision making processes, interchange of managerial personnel and access to technical information.
The investments are assessed at each reporting date to determine whether it is necessary to recognise any impairment loss with respect to the company's investment. When necessary, the entire carrying amount of the investment is tested for impairment as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs of disposal) with its carrying amount. Any impairment loss recognised forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognised to the extent that the recoverable amount of the investment subsequently increases.
The charge for current tax is based on the results for the period as adjusted for items which are non-assessable or disallowed. Income tax relating to items recognised directly in equity is recognised in equity.
Deferred income tax is provided in full, using the statement of financial position liability method, on temporary differences arising between the tax base of assets and liabilities and their carrying amounts in the financial statements. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable future taxable profits will be available against which deductible temporary differences can be utilised.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except, where the timing of the reversal of the temporary difference is controlled by the company and it is probable that the temporary differences will not reverse in the foreseeable future.
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AXONIX LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
4.Accounting policies (continued)
Deferred income tax and current tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the statement of financial positions date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Financial assets and financial liabilities are recognised when an entity becomes a party to the contractual provisions of the instruments.
All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.
All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
Cash and cash equivalents are carried in the statement of financial position at cost. Cash and cash equivalent includes cash in hand, deposits held at banks, and other short-term highly liquid investments with original maturities of three months or less.
Trade debtors and other receivables are carried at original invoice amount less provision for doubtful debts. A provision for doubtful debt is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables. The amount of the provision is the difference between the carrying amount and the present value of estimated future cash flows. Changes in provision against receivables are recognised in the statement of comprehensive income.
Provisions are recognised when the company has a present or constructive obligation as a result of past events. It is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. If the effect of the time value of money is material, provision are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance expense.
Rentals payable under operating leases are charged against income on a straight line basis over the lease term.
The company operates a defined contribution scheme for the benefit of its employees. Contribution payable are charged to the profit and loss in the year they are payable.
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AXONIX LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
4.Accounting policies (continued)
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Financial risk factors and management
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The company's operation exposes it to a variety of financial risk including currency risk, credit risk and liquidity risk. The principal risks of the company and how the company manages these risks are discussed below.
Liquidity risk
The company manages its cash and borrowings requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the businesses.
Foreign currency risk
The company does not have any hedging activities as majority of the trading transactions are carried out in the company's functional currency, US dollars. However, some transactions including payroll are carried out in other currencies notably GB£.
The company is exposed to transactional foreign exchange risks arising from a small number of currency movements, primarily with respect to the GB£ that can affect its results and financial position.
Credit risk
The company manages its credit risk by credit checking customers, timely invoicing and follow up on late payments.
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Accounting estimates and judgments
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Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The areas involving a higher degree of judgement or complexity and areas where assumptions and estimates are significant to the company's financial statements are discussed below:
Income taxes
The company evaluates the recoverability of deferred tax assets based on estimates of future earnings. The ability to recover these taxes depends ultimately on the company's ability to generate taxable earnings over the course of the period for which the deferred tax assets remain deductible. This analysis is based on the estimated reversal of deferred taxes as well as estimates of taxable earnings, which are sourced from internal projections and are updated to reflect the latest trends.
The appropriate classification of tax assets and liabilities depends on a number of factors, including estimates as to the timing and materialisation of deferred tax assets and the forecast tax payment schedule. Actual income tax receipts and payments could differ from the estimates made by the company as a result of changes in tax legislation or unforeseen transactions that could affect tax balances.
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AXONIX LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
5.Accounting estimates and judgments (continued)
Plant, property and equipment
Accounting for property, plant and equipment involves the use of estimates and judgements for determining the useful lives over which these are to be depreciated.
Property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives and taking into account their expected residual values. When the company estimates useful lives, various factors are considered including expected technological obsolescence and the expected usage of the asset.
The directors regularly review these asset lives and change them as necessary to reflect the estimated current remaining lives in light of future economic utilisation and physical condition of the assets concerned. A significant change in asset lives can have a significant change on depreciation charges for the period.
Provisions
Provisions are recognised when the company has a present legal or constructive obligation as a result of past events. It is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. This obligation may be legal or constructive deriving from regulations, contracts, normal practices or public commitments that lead third parties to reasonably expect that the company will assume certain responsibilities. The amount of the provision is determined based on the best estimate of the outflow of resources required to settle the obligation, taking into account all available information.
No provision is recognised if the amount of liability cannot be estimated reliably. In this case, the relevant information is disclosed in the notes to the financial statements.
Given the uncertainties inherent in the estimates used to determine the amount of provision, actual outflows of resources may differ from the amounts recognised originally on the basis of the estimates.
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The following is an analysis of the company's revenue for the year from continuing operations:
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AXONIX LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
6.Revenue (continued)
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Analysis of revenue by country of destination:
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Depreciation of property, plant and equipment
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Amortisation of intangible assets
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Fees payable to company's auditor for the audit of the company's annual accounts
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AXONIX LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
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Employee benefit expenses
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Employee benefit expenses (including directors) comprise:
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Defined contribution pension cost
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Key management personnel compensation
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the company, including the directors of the company listed on page 1, the CEO and the Financial Controller of the company.
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The monthly average number of persons, including the directors, employed by the company during the year was as follows:
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AXONIX LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
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The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to losses for the year are as follows:
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Income tax expense (including income tax on associate, joint venture and discontinued operations)
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Tax using the company's domestic tax rate of 19% (2017:19.25%)
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Expenses not deductible for tax purposes, other than goodwill, amortisation and impairment
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Capital allowances for the year in excess of depreciation
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Profit/(Loss) on disposal of investments
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Unrelieved tax losses carried forward
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AXONIX LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
The company has estimated losses of $17,145,768 (2017 unaudited: $26,736,493) available for carry forward against future trading profits.
The recognition of deferred tax assets is based upon whether it is more likely than not that sufficient and suitable taxable profits will be available in future against which the reversal of temporary differences can be deducted. Recognition therefore involves judgement regarding the future financial performance of the company.
Deferred tax assets and liabilities are only offset where there is a legally enforceable right of offset and there is an intention to settle the balances left.
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Property, plant and equipment
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Accumulated depreciation and impairment
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Charge owned for the year
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Charge owned for the year
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AXONIX LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
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Investments in subsidiary companies
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The company sold its investment in Statiq Limited during the period.
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Trade and other receivables
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Amounts owed by parent and fellow subsidiary undertakings
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Prepayments and accrued income
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Total trade and other receivables
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Included within amounts owed by group undertaking is a receivable balance of $3,035,742 due from mGage Holdings, LLC and Mobile Ad Exchange Holdings, LLC, together a direct and indirect subsidiary of GSO MMBU Cayman Holdings LP.
This amount is unsecured, interest free and repayable on demand.
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Amounts owed to parent and fellow subsidiary undertakings
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Other taxes and social security costs
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Total trade and other payables
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AXONIX LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
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A Ordinary Shares shares of $0.01 each
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B Ordinary Shares shares of $0.01 each
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Ordinary Shares shares of $0.01 each
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A Ordinary Shares shares of $0.01 each
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B Ordinary Shares shares of $0.01 each
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AXONIX LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
16.Share capital (continued)
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Ordinary Shares shares of $0.01 each
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The A Ordinary Shares as a class shall be entitled to such number of votes in respect of any resolution passed at general meeting or by written resolution equal to greater of: (a) 50% of the total number of votes capable of being cast + 1; and (b) the proportion which the A Ordinary Shares represent of the total Shares.
The B Ordinary Shares as a class shall be entitled to such number of votes in respect of any resolution passed at general meeting or by written resolution equal to 100% less the percentage of votes allocated to the A Ordinary Shares.
On 16 August 2018, company's 215,072 A Ordinary shares and 60,657 B Ordinary Shares were re-designated as 275,729 Ordinary Shares in the capital of the company.
The Ordinary Shares have full voting, dividend and capital distribution (including on winding up) rights, they do not confer any rights of redemption.
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On 3 August 2018, the entire share capital of the company was acquired by mGage Holdings, LLC and Mobile Ad Exchange Holdings, LLC, both are Delaware limited liability company. Both mGage Holdings, LLC and Mobile Ad Exchange Holdings, LLC are ultimately controlled by The Blackstone Group Inc, Delaware, USA.
Before 3 August 2018, the company was under the Telefonica Group with Telefonica Digital Ltd, a company incorporated in England and Wales as immediate parent company and Telefonica SA, a company incorporated in Spain as ultimate parent company.
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AXONIX LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
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Events after the reporting date
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Since March 2020, the spread of COVID-19 pandemic has severely impacted many local economies around the globe. In many countries, businesses are being forced to cease or limit operations for long or indefinite periods of time. Measures taken to contain the spread of the virus, including travel bans, quarantines, social distancing, and closures of non-essential services have triggered significant disruptions to businesses worldwide, resulting in an economic slowdown.
Like many companies, we have been impacted by Covid19. Advertising spend, across the world, was significantly reduced in Q2 and Q3 of 2020. However, we have seen advertising spend increase dramatically in Q4 2020. We continue to see improvements into 2021 where Q1 revenues are higher than the same period last year
The company has considered the impact of COVID-19 pandemic and determined that these events are non-adjusting events. Accordingly the financial position and results of operation as of and for the year ended 31 December 2018 have not been adjusted to reflect their impact.
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Notes supporting statement of cash flows
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Cash at bank available on demand
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Cash and cash equivalents in the statement of financial position
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Cash and cash equivalents in the statement of cash flows
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