Push Technology Limited - Period Ending 2020-12-31

DIFFUSIONDATA LIMITED - Company Information

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Registration number: 06034919

Push Technology Limited

Annual Report and Financial Statements

for the Year Ended 31 December 2020

Push Technology Limited

Contents

Company Information	1
Statement of Directors' Responsibilities	2
Balance Sheet	3
Statement of Changes in Equity	4
Notes to the Financial Statements	5 to 13

Push Technology Limited

Company Information

Directors

S Bowen

A Stafford-Deitsch

M C Fairbairn

J Pocock

A C Abrahams

J A Sharp

Registered office

6th Floor
Fountain House
Queens Walk
Reading
RG1 7QF

Accountants

Ballards LLP
Chartered Accountants
Oakmoore Court
11c Kingswood Road
Hampton Lovett
Droitwich
Worcestershire
WR9 0QH

Auditors

BDO LLP
55 Baker Street
London
W1U 7EU

Push Technology Limited

Statement of Directors' Responsibilities

The directors acknowledge their responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable laws and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 'the Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 these financial statements, the directors are required to:

•	select suitable accounting policies and apply them consistently;

•	make judgements and accounting estimates that are reasonable and prudent;

•	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

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 also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Push Technology Limited

(Registration number: 06034919)
Balance Sheet as at 31 December 2020

	Note	2020 £	2019 £
Fixed assets
Tangible assets	8	35,182	17,492
Investments	9	63	63
		35,245	17,555
Current assets
Debtors	10	1,361,572	818,511
Cash at bank and in hand		2,417,579	87,347
		3,779,151	905,858
Creditors: Amounts falling due within one year	11	(1,863,321)	(7,006,621)
Net current assets/(liabilities)		1,915,830	(6,100,763)
Total assets less current liabilities		1,951,075	(6,083,208)
Creditors: Amounts falling due after more than one year	11	(305,000)	(43,535)
Provisions for liabilities		(6,130)	(2,647)
Net assets/(liabilities)		1,639,945	(6,129,390)
Capital and reserves
Called up share capital		1,679	644
Share premium reserve		21,607,905	11,570,491
Warrant reserve		1,779,310	1,779,310
Profit and loss account		(21,748,949)	(19,479,835)
Total equity		1,639,945	(6,129,390)

These financial statements have been prepared in accordance with provisions applicable to the companies act subject to the small companies regime and in accordance with the provisions of FRS102 Section 1A - small entities.

These financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime and the option not to file the Profit and Loss Account has been taken.

Approved and authorised by the Board on 30 September 2021 and signed on its behalf by:

.........................................
S Bowen
Director

Push Technology Limited

Statement of Changes in Equity for the Year Ended 31 December 2020

	Share capital £	Share premium £	Warrant reserve £	Profit and loss account £	Total £
At 1 January 2020	644	11,570,491	1,779,310	(19,479,835)	(6,129,390)
Total comprehensive income	-	-	-	(2,269,114)	(2,269,114)
New share capital subscribed	1,035	10,357,100	-	-	10,358,135
Share issue costs	-	(319,686)	-	-	(319,686)
At 31 December 2020	1,679	21,607,905	1,779,310	(21,748,949)	1,639,945

5,705,100 ordinary C shares of £0.0001 each and 4,652,000 ordinary B shares of £0.0001 each were allotted as fully paid at a premium of £1.00 per share during the year on 1 April 2020. 650 ordinary A shares of £0.0001 shares each were also allotted as fully paid at par during the year on 1 April 2020.

The rights of the shares are included within the Company’s Articles of Association.

	Share capital £	Share premium £	Warrant reserve £	Profit and loss account £	Total £
At 1 January 2019	643	11,554,328	1,779,310	(18,727,985)	(5,393,704)
Total comprehensive income	-	-	-	(751,850)	(751,850)
New share capital subscribed	1	16,163	-	-	16,164
At 31 December 2019	644	11,570,491	1,779,310	(19,479,835)	(6,129,390)

3,311 ordinary shares of £0.0001 each were allotted as fully paid at a premium of £1.51 per share during the year on 28 February 2019 for a total consideration of £5,000.

On 11 July 2019 the Company received equity investment of £11,164 into ordinary shares of £0.001 in advance of the 2020 fundraising.

Push Technology Limited

Notes to the Financial Statements for the Year Ended 31 December 2020

1	General information

The company is a private company limited by shares and incorporated in United Kingdom.

The address of its registered office is:
6th Floor
Fountain House
Queens Walk
Reading
RG1 7QF

2	Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

The financial statements have been prepared under the historical cost convention and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and Republic of Ireland and the Companies Act 2006.

The company is part of a small group. The company has taken advantage of the exemption provided by Section 398 (2A) of the companies Act 2006 and has not prepared group accounts.

The preparation of financial statements in compliance with FRS102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the company's accounting policies.

Going concern

The directors note that even after modelling cash flow forecasts prepared using stress test methodology of restricting revenue to only amounts already committed and excluding new uncommitted project revenue that the business would maintain a positive cash position for at least twelve months from signing the financial statements. Nonetheless, the directors are closely monitoring the business activity and mitigating liquidity risk by pursuing and winning new clients, expanding revenues from existing clients and bolstering working capital reserves through decreased discretionary spend.

During April 2020 the Company successfully completed on a fundraise of £4.6m of equity investment and secured the conversion of its long term debt of £5.9m to equity, resulting in a total of £10m of new equity.

Following the assessment above, the directors have reasonable expectations that the company has adequate resources to continue in operational existence in the foreseeable future. Accordingly the directors continue to adopt the going concern basis in preparing these financial statements.

Audit report

The Independent Auditor's Report was unqualified. The name of the Senior Statutory Auditor who signed the audit report on 30 September 2021 was Mark Ayres, who signed for and on behalf of BDO LLP.

Push Technology Limited

Notes to the Financial Statements for the Year Ended 31 December 2020

Key sources of estimation uncertainty

Fair value of share options: Management uses valuation techniques (specifically Black Scholes Method) in measuring the fair value of share options where active market quotes are not available.

Details of assumptions are the following; Annualised volatility rate of 11%, Annual Dividend rate of 0%, and a Risk Free rate of 1%, which are applied to the perceived current market value of the shares at date of issue.

In applying the valuation techniques, management makes maximum use of market inputs, and uses estimates and assumptions that are, as far as possible, consistent with observable data that market participants would use in pricing the instrument.

Where applicable data is not observable, management uses it best estimates about the assumptions that market participants would make.

Revenue recognition

Turnover represents amounts chargeable, net of value added tax, in respect of the sale of goods and services to customers. Technology contracts are recognised as income in the period in which they are performed based on an assessment of the work done. In order to achieve this, the company adopts the following policies in terms of revenue recognition:

Licences:
Sales of licences are recognised over the period to which they relate. Sales of perpetual licences are recognised in the period in which they are issued.

Maintenance:
Revenues arising from maintenance sales are recognised over the period of the maintenance contract on a straight line basis.

Consultancy:
Revenues arising from consultancy services are recognised in the period in which the service is delivered.

Government grants

Grants received in the year relate to employment incentive grants, which are accounted for on an accrual basis and recognised in other income.

Foreign currency transactions and balances

Transactions in foreign currencies are recorded at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the closing rates at the balance sheet date. All exchange differences are included in the profit and loss account.

The functional and presentation currency is £ sterling rounded to the nearest pound.

Push Technology Limited

Notes to the Financial Statements for the Year Ended 31 December 2020

Tax

The tax expense for the period comprises current tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.

Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements and on unused tax losses or tax credits in the company. Unrelieved tax losses and other deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or future taxable profits.

The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.

Tangible assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets over their estimated useful lives as follows:

Asset class	Depreciation method and rate
Plant and machinery	33.3% on cost
Fixtures and fittings	33.3% on cost
Equipment	33.3% on cost

Investments

Investments in subsidiaries are stated at cost and impairment reviews are carried out as required. At 31 December 2020, the directors consider that the value has not been impaired.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash (being those with original maturities of 3 months or less) and are subject to an insignificant risk of change in value.

Debtors

Trade debtors are amounts due from customers for services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors 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.

Push Technology Limited

Notes to the Financial Statements for the Year Ended 31 December 2020

Creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Loans and Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the Profit and Loss Account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Leases

Rentals payable under operating leases are charged in the profit and loss account on a straight line
basis over the lease term.

Defined contribution pension obligation

The company operates a defined contribution pension scheme. Contributions are recognised in the profit and loss account over the period of service in accordance with the rules of the scheme.

Financial instruments

Recognition and measurement
A financial asset or a financial liability is recognised only when the entity becomes a party to the contractual provisions of the instrument.

Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately.

Impairment
Financial assets that are individually significant, are assessed individually for impairment. Other financial assets can be either assessed individually or grouped on the basis of similar credit risk characteristics.

Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised.

Push Technology Limited

Notes to the Financial Statements for the Year Ended 31 December 2020

Employee Share Schemes

The Company engages in equity settled share based payment transactions in respect of services received from certain employees. The estimated fair value was calculated by applying a Black-Scholes option pricing model. The calculated fair value of the share options has not been charged to the profit and loss account as it is not material to the accounts

Warrants

The fair value for the issuance of warrants, net of issue costs, are credited to the warrant reserve. Warrant reserve is non-distributable and the balance of the warrant reserve in relation to unexercised warrants at expiry of warrant period in 2026 will be transferred into the profit and loss account.

3	Staff numbers

The average number of persons employed by the company (including directors) during the year, was 30 (2019 - 23).

4	Director Remuneration

The Directors aggregate remuneration in respect of qualifying services was:

	2020	2019
	£	£

Remuneration	307,884	221,000
Company contributions to defined contribution pension plans	3,750	14,375

The number of directors who accrued benefits under company pension plans was as follows:

	2020	2019
	£	£

Defined contribution plans	1	1

The Directors of the company are considered to be only the key management personnel.

5	Interest payable and similar charges

	2020 £	2019 £
Interest expense on fair value of loans	105,151	525,795
	105,151	525,795

Push Technology Limited

Notes to the Financial Statements for the Year Ended 31 December 2020

6	Loss before tax

Arrived at after charging/(crediting)

	2020 £	2019 £
Depreciation expense	20,025	12,410
Foreign currency gains	(1,221)	(34,180)
Auditors' remuneration	28,000	23,000
Operating lease rentals	183,669	232,684
Intercompany provision charge / (reversal)	904,984	(502,561)

Taxation

Analysis of the tax credit
The tax credit on the loss on ordinary activities for the year was as follows:

	2020	2019
	£	£
Current tax:
R&D tax credit	(462,261)	(388,514)
Deferred tax	3,483	(1,848)
Tax on loss on ordinary activities	(458,778)	(390,362)

8	Tangible assets

	Fixtures and fittings £	Office equipment £	Plant and machinery £	Total £
Cost or valuation
At 1 January 2020	15,065	205,459	17,199	237,723
Additions	-	37,714	-	37,714
Disposals	(13,545)	(179,974)	(17,199)	(210,718)
At 31 December 2020	1,520	63,199	-	64,719
Depreciation
At 1 January 2020	14,581	188,451	17,199	220,231
Charge for the year	484	19,541	-	20,025
Eliminated on disposal	(13,545)	(179,975)	(17,199)	(210,719)
At 31 December 2020	1,520	28,017	-	29,537
Carrying amount
At 31 December 2020	-	35,182	-	35,182
At 31 December 2019	484	17,008	-	17,492

Push Technology Limited

Notes to the Financial Statements for the Year Ended 31 December 2020

9	Investments

	2020 £	2019 £
Investments in subsidiaries	63	63

Subsidiaries	£
Cost or valuation
At 31 December 2019 and 2020	63
Carrying amount
At 31 December 2019 and 2020	63

Details of undertakings

Details of the investments in which the company holds 20% or more of the nominal value of any class of share capital are as follows:

Undertaking	Registered office	Holding	Proportion of voting rights and shares held
			2020	2019
Subsidiary undertakings
Push Technology Inc.	United States of America	Ordinary	100%	100%

The principal activity of Push Technology Inc. software engineering.

The loss for the financial period of Push Technology Inc. was $375,336 and the aggregate amount of capital and reserves at the end of the period was $(7,270,068). Push Technology Inc is unaudited.

Debtors

	2020 £	2019 £
Trade debtors	641,713	361,620
Other debtors	719,859	456,891
	1,361,572	818,511

Push Technology Limited

Notes to the Financial Statements for the Year Ended 31 December 2020

Creditors

	2020 £	2019 £
Due within one year
Trade creditors	19,553	199,640
Taxation and social security	373,051	99,689
Accruals	235,353	189,108
Deferred income	1,235,364	627,566
Other creditors	-	5,890,618
	1,863,321	7,006,621
Due after one year
Deferred income	305,000	43,535

12	Operating leases

The total future minimum lease payments under non-cancellable operating leases are as follows:

	2020	2019
	£	£
Not later than 1 year	-	90,469
	-	90,469

13	Share-based payments

Share Options

The Company has granted share options to a number of employees. Under FRS102 Section 1A, only share options issued post transition to FRS 102 are accounted for and disclosed in the financial statements under exemptions available in paragraph 35.10(b).

At the start of the year there were 894,185 options in existence, of which 714,334 had vested. During the year 100,970 options lapsed and 80,000 new options were issued to employees with an exercise price £1.00 per share.

The charge in respect of these options is immaterial and therefore has not been provided.

Warrants

At the start of the year there were 2,108,000 warrants with a 10 year exercise period and an exercise price of £1.51 to the holders of loan notes. There has been no movement in the warrant reserve in the year.

Push Technology Limited

Notes to the Financial Statements for the Year Ended 31 December 2020

15	Related party transactions

Summary of transactions with other related parties

During the year, Push Technology Inc recharged costs to its parent, Push Technology Limited, of £947,552 (2019 - £350,855).

A Stafford - Deitsch, a director of Push Technology Limited was owed £nil (2019: £408,296) at the balance sheet date. The loan principle and interest of £407,244 has been converted into ordinary 'C' shares.

A former director of Push Technology Limited Geoff Hudson Seale is director of International Business and Executive Management Limited. During the year International Business and Executive Management Limited charged the company £49,263 (2019: £24,000) for directorship services.

During the year, M Fairbain, a director of Push Technology Limited, made an additional equity investment of £440,000 on arms length commercial terms as part of the April 2020 fundraise.

M Fairbairn is a director of Crunchwell Services Limited and of Push Technology Limited. During the year, Crunchwell Services Limited charged the company £21,000 (2019: £36,000) for directorship and consultancy services and received £60,000 (2019: £nil) of short term loan repayments. At the balance sheet date, Crunchwell Services Limited was owed £nil (2019: £67,200).

During the year, Martin Hand, a former director of Push Technology Limited, received short term loan repayments of £20,000 (2019: £nil). At the balance sheet date £nil (2019: £75,961) was owed to Martin Hand in relation to sales commission, unpaid salary and short-term loans.

16	Ultimate controlling party

There is no single controlling party.