Company No: 11011754 (England and Wales)

Contents

• Company Information
• Balance Sheet
• Notes to the Financial Statements

DIRECTORS	R J Cruise
	P M Davies
	J Hughes (Resigned 25 January 2024)
	C Searle (Resigned 07 June 2023)
	H Thomas (Resigned 25 January 2024)

REGISTERED OFFICE	C/O Gateley Legal
	Ship Canal House
	98 King Street
	Manchester
	M2 4WU
	United Kingdom

COMPANY NUMBER

11011754 (England and Wales)

ACCOUNTANT	Gravita Business Services Limited
	Aldgate Tower
	2 Leman Street
	London
	E1 8FA
	United Kingdom

	Note	2023		2022
		£		£
Fixed assets
Intangible assets	3	200,058		180,857
Tangible assets	4	49,224		70,231
		249,282		251,088
Current assets
Debtors	5	411,992		971,401
Cash at bank and in hand		344,026		798,947
		756,018		1,770,348
Creditors: amounts falling due within one year	6	( 365,927)		( 374,217)
Net current assets		390,091		1,396,131
Total assets less current liabilities		639,373		1,647,219
Net assets		639,373		1,647,219
Capital and reserves
Called-up share capital		144		142
Share premium account		5,735,504		5,180,005
Other reserves		1,372,237		1,113,092
Profit and loss account		( 6,468,512 )		( 4,646,020 )
Total shareholders' funds		639,373		1,647,219

For the financial year ending 31 December 2023 the Company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

Directors' responsibilities:

• The members have not required the Company to obtain an audit of its financial statements for the financial year in accordance with section 476;
• 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; and
• These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime and a copy of the Profit and Loss Account has not been delivered.

The financial statements of Magway Limited (registered number: 11011754) were approved and authorised for issue by the Board of Directors on 18 April 2024. They were signed on its behalf by:

P M Davies Director

1. Accounting policies

The principal accounting policies are summarised below. They have all been applied consistently throughout the financial year and to the preceding financial year, unless otherwise stated.

General information and basis of accounting

Magway Limited (the Company) is a private company, limited by shares, incorporated in the United Kingdom under the Companies Act 2006 and is registered in England and Wales. The address of the Company's registered office is C/O Gateley Legal, Ship Canal House, 98 King Street, Manchester, M2 4WU, United Kingdom.

The financial statements have been prepared under the historical cost convention, modified to include certain items at fair value, and in accordance with Section 1A of Financial Reporting Standard 102 (FRS 102) ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ issued by the Financial Reporting Council and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime.

The financial statements are presented in pounds sterling which is the functional currency of the Company and rounded to the nearest £.

Going concern

The directors have assessed the Balance Sheet and likely future cash flows at the date of approving these financial statements. During and post year end, the Company received further investments and is actively seeking more investments. The Company has engaged KPMG Acceleris to assist with the fundraising. It is supplementing this effort including, the company has started to access the US market via a separate platform for pre-authorised investors in early 2024 alongside a further separate application supported by Grantify to access UK Government grant funding. The directors note the significant reduction in sales which was largely caused by factors outside of the Company’s control in relation to an internal reorganisation being carried out by its major client. The client continues to be engaged whilst this is being completed and post year end the Company will generate sales and develop commercial opportunities. However, due to the commercial opportunities nature the timing of these is irregular and the directors note that the Company is partially reliant on the future capital investments noted above. Although no assurances can be given, management are confident that it will be successful in these efforts given its track record of raising capital historically.

The directors are of the opinion that the matters described above are material uncertainties related to events or conditions, which includes partial reliant on the future capital investments, that may cast significant doubt upon the Company’s ability to continue as a going concern. However, the directors have a reasonable expectation that the Company will be successful in its fundraising efforts. Therefore, the directors have a reasonable expectation that the Company will continue in operational existence for a period of at least 12 months from the date of approval of these financial statements. Accordingly, the directors continue to adopt the going concern basis in preparing the financial statements.

Foreign currency

Transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the Balance Sheet date are reported at the rates of exchange prevailing at that date.

Exchange differences are recognised in the Profit and Loss Account in the period in which they arise except for exchange differences arising on gains or losses on non-monetary items which are recognised in the Statement of Comprehensive Income.

Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Turnover is recognised when the significant risks and rewards are considered to have been transferred to the customer.

Turnover from service contracts is recognised in the month to which it relates in which the work is completed using the stage of completion method.

Interest income

Interest income is recognised when it is probable that the economic benefits will flow to the Company and the amount of revenue can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial recognition.

Employee benefits

Defined contribution schemes
The Company operates a defined contribution scheme. The amount charged to the Profit and Loss Account in respect of pension costs and other post-retirement benefits is the contributions payable in the financial year. Differences between contributions payable in the financial year and contributions actually paid are included as either accruals or prepayments in the Balance Sheet.

Share-based payment

Equity-settled share-based payment transactions are measured at fair value at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Company’s estimate of shares that will eventually vest and adjusted for the effect of non-market-based vesting conditions.

Fair value is measured by use of an appropriate pricing model which is considered by management to be the most appropriate method of valuation. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.

Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.

Finance costs

Finance costs are charged to the Profit and Loss Account over the term of the debt using the effective interest method so 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.

Taxation

Current tax
Current tax is provided at amounts expected to be paid (or recoverable) using the tax rates and laws that have been enacted or substantively enacted at the Balance Sheet date.

Deferred tax
Deferred tax arises as a result of including items of income and expenditure in taxation computations in periods different from those in which they are included in the Company's financial statements. Deferred tax is provided in full on timing differences which result in an obligation to pay more or less tax at a future date, at the average tax rates that are expected to apply when the timing differences reverse, based on current tax rates and laws. Deferred tax assets and liabilities are not discounted.

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.

Intangible assets

Intangible assets are not currently being amortised due to the assets being in development and not being ready for use at this stage, which is in line with the directors' expectations based on current forecasts. Intangible assets consist of computer software, trademarks, patents and licenses and intellectual property rights.

Computer software consist of an engineering software developed by the Company, and is recognised at cost. After recognition, the intangible assets are measured at cost less any accumulated amortisation and accumulated impairment losses.

Trademark, patents and licenses, where separately acquired, are included at cost and amortised in equal annual instalments over the estimated useful economic life. Provision is made for any impairment.

Other intangible assets consist of intellectual property rights, which are initially recognised at cost. After recognition, these are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Computer software	not amortised
Trademarks, patents and licences	not amortised

Research and development

Research expenditure is written off as incurred. Development expenditure is also written off, except where the directors are satisfied as to the technical, commercial and financial viability of individual projects. In such cases, the identifiable expenditure is capitalised as an intangible asset and amortised over the period during which the Company is expected to benefit.

Tangible fixed assets

Tangible fixed assets are stated at cost or valuation, net of depreciation and any provision for impairment. Depreciation is provided on all tangible fixed assets, other than investment properties and freehold land, at rates calculated to write off the cost or valuation, less estimated residual value, of each asset on a straight-line or reducing balance basis over its expected useful life, as follows:

Land and buildings	10 % reducing balance
Plant and machinery etc.	25 % reducing balance

Land and buildings relates to leasehold improvements and is deprecated over the lower of 10% reducing balance as described above and the length of the lease term.

Residual value represents the estimated amount which would currently be obtained from disposal of an asset, after deducting estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life.

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

Leases

The Company as lessee
Rentals under operating leases are charged on a straight-line basis over the lease term, even if the payments are not made on such a basis. Benefits received and receivable as an incentive to sign an operating lease are similarly spread on a straight-line basis over the lease term.

Impairment of assets

Assets, other than those measured at fair value, are assessed for indicators of impairment at each Balance Sheet date. If there is objective evidence of impairment, an impairment loss is recognised in the Profit and Loss Account as described below.

Non-financial assets
At each balance sheet date, the company reviews its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss.

If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Financial assets
An asset is impaired where there is objective evidence that, as a result of one or more events that occurred after initial recognition, the estimated recoverable value of the asset has been reduced. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use.

Where indicators exist for a decrease in impairment loss, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.

For financial assets carried at amortised cost, the amount of impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

For financial assets carried at cost less impairment, the impairment loss is the difference between the asset’s carrying amount and the best estimate of the amount that would be received for the asset if it were to be sold at the reporting date.

Where indicators exist for a decrease in impairment loss, and the decrease can be related objectively to an event occurring after the impairment was recognised, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired financial asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.

Financial instruments

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.

Financial assets and liabilities are only offset in the Balance Sheet when, and only when there exists a legally enforceable right to set off the recognised amounts and the Company intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Financial assets are derecognised when and only when the contractual rights to the cash flows from the financial asset expire or are settled, or the Company transfers to another party substantially all of the risks and rewards of ownership of the financial asset, or the Company, despite having retained some, but not all, significant risks and rewards of ownership, has transferred control of the asset to another party.

Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

Government grants

Government grants are recognised based on the accrual model and are measured at the fair value of the asset received or receivable. Grants are classified as relating either to revenue or to assets. Grants relating to revenue are recognised in income over the period in which the related costs are recognised. Grants relating to assets are recognised over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income.

2. Employees

	2023		2022
	Number		Number
Monthly average number of persons employed by the Company during the year, including directors	18		20

3. Intangible assets

	Computer software		Trademarks, patents and licences		Total
	£		£		£
Cost
At 01 January 2023	36,601		144,256		180,857
Additions	0		19,201		19,201
At 31 December 2023	36,601		163,457		200,058
Accumulated amortisation
At 01 January 2023	0		0		0
At 31 December 2023	0		0		0
Net book value
At 31 December 2023	36,601		163,457		200,058
At 31 December 2022	36,601		144,256		180,857

The intangible assets are not currently put into use, hence the non amortisation to date. The Company expects the intangible assets to be generating revenues from the year 2026-2027 which coincides with the first full scale commercial deployments.

4. Tangible assets

	Land and buildings		Plant and machinery etc.		Total
	£		£		£
Cost
At 01 January 2023	46,138		71,388		117,526
Additions	0		241		241
At 31 December 2023	46,138		71,629		117,767
Accumulated depreciation
At 01 January 2023	8,127		39,168		47,295
Charge for the financial year	3,801		17,447		21,248
At 31 December 2023	11,928		56,615		68,543
Net book value
At 31 December 2023	34,210		15,014		49,224
At 31 December 2022	38,011		32,220		70,231

5. Debtors

	2023		2022
	£		£
Trade debtors	0		562,320
Corporation tax	330,260		363,491
Other taxation and social security	26,246		0
Other debtors	55,486		45,590
	411,992		971,401

6. Creditors: amounts falling due within one year

	2023		2022
	£		£
Trade creditors	116,465		35,729
Other taxation and social security	37,355		120,214
Other creditors	212,107		218,274
	365,927		374,217

7. Financial commitments

Commitments

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

	2023		2022
	£		£
within one year	92,100		29,170
between one and five years	130,475		0
	222,575		29,170

Pensions

The Company operates a defined contribution pension scheme for the directors and employees. The assets of the scheme are held separately from those of the Company in an independently administered fund.

	2023		2022
	£		£
Unpaid contributions due to the fund (inc. in other creditors)	5,047		0

8. Related party transactions

Directors' remuneration during the year was £418,509 (2022: £477,300). The directors are the only key management personnel of the Company.

Included within other creditors is an amount due to the directors of £161,782 (2022: £160,575). The amount is interest free and repayable on demand.

9. Events after the Balance Sheet date

Post year end, the Company has raised £525,000 of off-platform advance share subscriptions and a further £165,870 in advance share subscriptions.

10. Ultimate controlling party

There is no individual ultimate controlling party.