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Registered number: 11172221
Magic Carpet AI Limited
Financial statements
Information for filing with the registrar
For the Period Ended 31 December 2021
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Magic Carpet AI Limited
Registered number: 11172221
Balance Sheet
As at 31 December 2021
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Page 1
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Magic Carpet AI Limited
Registered number: 11172221
Balance Sheet (continued)
As at 31 December 2021
The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The Company has opted not to file the statement of comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 4 January 2023.
The notes on pages 3 to 11 form part of these financial statements.
Page 2
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Magic Carpet AI Limited
Notes to the Financial Statements
For the Period Ended 31 December 2021
Magic Carpet AI Limited (the "Company") is a private company limited by share capital incorporated in England and Wales under the Companies Act 2006.
As at 31 December 2021, the Company was a wholly owned subsidiary of Blockchain (GB) Limited (the "Parent Company"). The entire share capital of the Company was purchased by Blockchain (GB) Limited on 5 November 2021.
The address of the registered office of the Company is given on the Company Information page.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The following principal accounting policies have been applied:
Revenue 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. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
∙the amount of revenue can be measured reliably;
∙it is probable that the Company will receive the consideration due under the contract;
∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and
∙the costs incurred and the costs to complete the contract can be measured reliably.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
Page 3
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Magic Carpet AI Limited
Notes to the Financial Statements
For the Period Ended 31 December 2021
2.Accounting policies (continued)
In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
All borrowing costs are recognised in profit or loss in the period in which they are incurred.
Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Page 4
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Magic Carpet AI Limited
Notes to the Financial Statements
For the Period Ended 31 December 2021
2.Accounting policies (continued)
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Tangible fixed assets (continued)
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Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
Investments in non-derivative instruments that are equity to the issuer are measured:
∙at fair value with changes recognised in the Statement of Comprehensive Income if the shares are publicly traded or their fair value can otherwise be measured reliably;
∙at cost less impairment for all other investments.
Financial assets that are measured at cost and amortised cost are assessed at the end of each
Page 5
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Magic Carpet AI Limited
Notes to the Financial Statements
For the Period Ended 31 December 2021
2.Accounting policies (continued)
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Financial instruments (continued)
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reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Comprehensive Income.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the balance sheet date.
Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or income as appropriate. The company does not currently apply hedge accounting for interest rate and foreign exchange derivatives.
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The average monthly number of employees, including directors, during the period was 6 (2021 - 6).
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Page 6
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Magic Carpet AI Limited
Notes to the Financial Statements
For the Period Ended 31 December 2021
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Crypto currency and other digital assets
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Page 7
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Magic Carpet AI Limited
Notes to the Financial Statements
For the Period Ended 31 December 2021
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Charge for the period on owned assets
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Cash and cash equivalents
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Page 8
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Magic Carpet AI Limited
Notes to the Financial Statements
For the Period Ended 31 December 2021
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Creditors: Amounts falling due within one year
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Other taxation and social security
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Accruals and deferred income
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Creditors: Amounts falling due after more than one year
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Amounts owed to group undertakings
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Analysis of the maturity of loans is given below:
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Amounts falling due 1-2 years
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Page 9
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Magic Carpet AI Limited
Notes to the Financial Statements
For the Period Ended 31 December 2021
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Allotted, called up and fully paid
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529,911 (2021 - 464,919) Ordinary shares of £0.00001 each
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53,686 (2021 - NIL ) B Ordinary shares of £0.00001 each
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64,992 Ordinary shares and 53,686 Ordinary B shares were issued on redemption of the convertible loan iin the year. Ordinary shares were issued at £10.05 per share and Ordinary B shares were issued at the nominal value.
IIn the prior year, Interest payable and Convertable loan was understated. This is due to errouneously emmiting the interest payable in the prior year. This has been corrected in the financial statements with the impact set out as follows:
The immediate parent company is Blockchain (GB) Limited, a company registered in the United Kingdom. The address of the registered office of the Company is Minshull House, 67 Wellington Road North, Stockport, Cheshire, SK4 2LP.
The ultimate parent company is Blockchain.com Group Holdings, Inc., a company registered in the Cayman Islands. The address of the registered office of the Company is 190 Elgin Avenue, George Town, Grand Cayman, KY1,9008, Cayman Islands.
Page 10
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Magic Carpet AI Limited
Notes to the Financial Statements
For the Period Ended 31 December 2021
The auditors' report on the financial statements for the period ended 31 December 2021 was unqualified.
The audit report was signed on 4 January 2023 by Nicholas Newman (Senior Statutory Auditor) on behalf of Harris & Trotter LLP.
Page 11
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