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== Appendix == === Relative valuation approach === As noted earlier in this report, research suggests that in terms of estimating the expected return of an investment over a period of 12-months or more, the approach that is more accurate is the discounted cash flow approach, so that's the approach that Stockhub suggests using to determine the estimated value of the company (the valuation based on the discounted cash flow approach can be found in the valuation section of this report); nevertheless, for completeness purposes, separately, the valuation of the company is also estimated using the relative valuation approach. ==== What's the expected return of an investment in Arctic Shores using the relative valuation approach? ==== Stockhub estimates that the expected return of an investment in Arctic Shores over the next five years is 38x, which equates to an annual return of 108%. In other words, an £100,000 investment in the company is expected to return £3,933,322 in five years time. The assumptions used to estimate the return figure can be found in the table below. ==== What are the assumptions used to estimate the return figure? ==== {| class="wikitable" |+Key inputs !Description !Value !Commentary |- |Which type of multiple do you want to use? |Growth-adjusted EV/sales |For the numerator, the Stockhub users believe that to account for the different financial leverage levels of its peers, it's best to use enterprise value (EV), rather than price. For the denominator, the Stockhub users believe that because it expects Arctic Shores to reinvest almost all of its revenue back into the business over the five year forecast period and therefore its earnings are expected to be abnormally low over the period, it's best to use sales. Accordingly, the Stockhub users suggest valuing its company using the EV/sales ratio. However, the Stockhub users think that to take into account the different business lifecycle stages of its peers, the most suitable valuation multiple to use is the growth-adjusted EV/sales multiple, rather than the EV/sales multiple. |- |In regards to the growth-adjusted EV/sales multiple, for the sales figure, which year to you want to use? |Year 5 |Stockhub suggests that to account for general market cyclicity, it's best to estimate the expected return of the company between now and five years time. |- |In regards to the growth-adjusted EV/sales multiple, for the sales growth figure, which year(s) do you want to use? |Year 6, from now |Stockhub suggests that for the sales growth figure, it's best to use Year 6. |- |In regards to the growth-adjusted EV/sales multiple, what multiple figure do you want to use? |0.18x |In Stockhub's view, Arctic Shores closest peer(s) is Sova Assessment Limited. |- |Which financial forecasts to use? |Stockhub users |The only available forecasts are the ones that are supplied by the Stockhub users (the forecasts can be found in the financials section of this report), so Stockhub suggests using those. |- |What's the current value of the company? |£21.98 million |The Stockhub users calculate the valuation as of £21.98 million (for the calculation, see the 'Arctic Shores Series B valuation calculation' table in this report). However, according to Dealroom.co estimates, the firm valuation is between $30m and $46m ($38 million mean) as of January 2023.<ref name=":2" /> The Dealroom valuation is based on either of: the publicly disclosed value, or an estimate that is based on the last funding round amount, using similar rounds as benchmarks. |- |Which time period do you want to use to estimate the expected return? |Between now and five years time |Stockhub suggests that to account for general market cyclicity, it's best to estimate the expected return of the company between now and five years time. |- |Which valuation recommendation method do you want to use? |Relative |There's two main types of valuation recommendation methods, relative and absolute. The relative method determines the investment recommendation relative to other investments (e.g. the investment is "suitable" if it's within say the top 10% of the investment universe in terms of investment returns), whereas the absolute method determines the recommendation based on a fixed return amount (e.g. the investment is "suitable" if it returns 50% or more). Assuming sufficient data, the Stockhub users suggest using the relative method. |- |Which top proportion of the investment universe constitutes a "suitable" rating? |10% |The proportion depends on the user's preference. That said, typically, the higher the proportion, the higher the risk associated with the investment. |- |Which universe of investments do you want to use? |All investments |If the main objective of the user is to maximise investment returns, then the Stockhub users suggest using 'all investments' as the investment universe. |} ==== Sensitivity analysis ==== The main inputs that result in the greatest change in the expected return of the Arctic Shores investment are, in order of importance (from highest to lowest): #The growth-adjusted EV/sales multiple (the default multiple 0.18); #Arctic Shores Year 5 sales figure (the default figure is £48.74 million); and #Arctic Shores Year 6 sales growth rate (the default rate is 98.5%). The impact of a 50% change in those main inputs to the expected return of the Arctic Shores investment is shown in the table below. {| class="wikitable sortable" |+Arctic Shores investment expected return sensitivity analysis !Main input !50% worse !Unchanged !50% better |- |The growth-adjusted EV/sales multiple |ccc% |ccc% |ccc% |- |Arctic Shores Year 5 sales figure |ccc% |ccc% |ccc% |- |Arctic Shores Year 6 sales growth rate |ccc% |ccc% |ccc% |} ===Economic links to cash flow patterns === {| class="wikitable" |+Economic links to cash flow patterns |- !Cash flow type!!Introduction!!Growth!!Shake out!!Mature!!Decline |- |Operating|| style="background: red; color: white;" |-|| style="background: green; color: white;" |+ | style="background: orange; color: white;" | +/-|| style="background: green; color: white;" |+|| style="background: red; color: white;" |- |- |Investing|| style="background: red; color: white;" |-|| style="background: red; color: white;" |-|| style="background: orange; color: white;" |+/-|| style="background: red; color: white;" |- | style="background: green; color: white;" | + |- |Financing|| style="background: green; color: white;" |+|| style="background: green; color: white;" |+|| style="background: orange; color: white;" |+/-|| style="background: red; color: white;" |-|| style="background: orange; color: white;" |+/- |} === Beta risk profile === {| class="wikitable" |+ !Beta value !Risk rating |- |style="background: green; color: white;" |0 to 0.50 |style="background: green; color: white;" | Low |- |style="background: orange; color: white;" | 0.50 to 1.50 |style="background: orange; color: white;" | Medium |- |style="background: red; color: white;" | 1.50 to 3.00 |style="background: red; color: white;" | High |- |style="background: purple; color: white;" | 3.00 and above |style="background: purple; color: white;" | Extremely high |} === Arctic Shores adjusted beta calculation === {| class="wikitable" |+ !Date !iShares MSCI World ETF unit price (USD) !Arctic Shores share price (GBP) !iShares MSCI World ETF unit price change (%) !Arctic Shores share price change (%) |- |01/11/2018 |86.21 |N/A | | |- |01/12/2018 |78.87 |N/A | -8.51% |N/A |- |01/01/2019 |84.96 |N/A |7.72% |N/A |- |01/02/2019 |87.49 |N/A |2.98% |N/A |- |01/03/2019 |88.79 |N/A | 1.49% |N/A |- |01/04/2019 |92.09 |N/A |3.72% |N/A |- |01/05/2019 |86.76 |N/A | -5.79% |N/A |- |01/06/2019 |91.02 |N/A |4.91% |N/A |- |01/07/2019 |91.86 |N/A |0.92% |N/A |- |01/08/2019 |89.84 |N/A | -2.20% | N/A |- |01/09/2019 |91.78 |4.69 |2.16% |N/A |- |01/10/2019 |94.12 |N/A |2.55% |N/A |- |01/11/2019 |96.76 |N/A |2.80% |N/A |- |01/12/2019 |98.78 |N/A |2.09% |N/A |- |01/01/2020 |97.73 |N/A | -1.06% |N/A |- |01/02/2020 |89.67 |N/A | -8.25% |N/A |- |01/03/2020 |77.93 |N/A | -13.09% |N/A |- |01/04/2020 |86.36 |N/A |10.82% |N/A |- |01/05/2020 |90.7 |N/A |5.03% |N/A |- |01/06/2020 |92.14 |N/A |1.59% |N/A |- |01/07/2020 |96.65 |N/A |4.89% |N/A |- |01/08/2020 |102.96 |N/A |6.53% |N/A |- |01/09/2020 |99.52 |N/A | -3.34% |N/A |- |01/10/2020 |96.53 |N/A | -3.00% |N/A |- |01/11/2020 |108.94 |N/A |12.86% |N/A |- |01/12/2020 |112.41 |N/A |3.19% |N/A |- |01/01/2021 |111.49 |N/A | -0.82% |N/A |- |01/02/2021 |114.27 |N/A |2.49% |N/A |- |01/03/2021 |118.49 |N/A |3.69% |N/A |- |01/04/2021 |123.61 |N/A |4.32% |N/A |- |01/05/2021 |125.6 |N/A |1.61% |N/A |- |01/06/2021 |126.57 |N/A |0.77% |N/A |- |01/07/2021 |128.83 |N/A |1.79% |N/A |- |01/08/2021 |132.02 |N/A |2.48% |N/A |- |01/09/2021 |126.46 |N/A | -4.21% |N/A |- |01/10/2021 |133.84 |N/A |5.84% |N/A |- |01/11/2021 |131.1 |N/A | -2.05% |N/A |- |01/12/2021 |135.32 |N/A |3.22% |N/A |- |01/01/2022 |128.32 |N/A | -5.17% |N/A |- |01/02/2022 |124.58 |N/A | -2.91% |N/A |- |01/03/2022 |128.16 |N/A |2.87% |N/A |- |01/04/2022 |117.42 |N/A | -8.38% |N/A |- |01/05/2022 |117.94 |N/A |0.44% |N/A |- |01/06/2022 |106.88 |N/A | -9.38% |N/A |- |01/07/2022 |115.57 |N/A |8.13% |N/A |- |01/08/2022 |110.28 |N/A | -4.58% |N/A |- |01/09/2022 |99.95 |N/A | -9.37% |N/A |- |01/10/2022 |107.42 |N/A |7.47% |N/A |- |01/11/2022 |115.44 |N/A |7.47% |N/A |- |01/12/2022 |109.25 |N/A | -5.36% |N/A |- |01/01/2023 |117.01 |3.03 |7.10% |N/A |- |01/02/2023 |113.98 |N/A | -2.59% |N/A |- |01/03/2023 |117.67 |N/A |3.24% |N/A |- |01/04/2023 |119.79 |N/A |1.80% |N/A |- |01/05/2023 |118.6 |N/A | -0.99% |N/A |- |01/06/2023 |124.52 |N/A |4.99% |N/A |- |01/07/2023 |128.54 |N/A |3.23% |N/A |- |01/08/2023 |125.7 |N/A | -2.21% |N/A |- |01/09/2023 |120.17 |N/A | -4.40% |N/A |- |01/10/2023 |118.3 |N/A | -1.56% |N/A |- |24/10/2023 |118.3 |N/A |0.00% |N/A |} {| class="wikitable" |+ !Date !iShares MSCI World ETF unit price (USD) !Arctic Shores share price (GBP) !iShares MSCI World ETF unit price change (%) !Arctic Shores share price change (%) |- |01/09/2019 |91.78 |4.69 |N/A |N/A |- |01/01/2023 |117.01 |3.03 |27.49% |(35.39)% |} {| class="wikitable" |+Arctic Shores beta and adjusted beta value ! !Beta !Adjusted beta !Comment(s) |- |Consistent (monthly) intervals between data points |N/A |N/A |Here, when there is no valuation event, we have assumed that the share price is the same as the previous month, and, therefore, there has been no change in the share price. For example, there was no Arctic Shores valuation event in January 2022, so we have assumed that the valuation of Arctic Shores is the same in January 2022 as the previous month of December 2020, and, therefore, the share price change in January is 0%. |- |Inconsistent intervals between data points |N/A |N/A |Because there's only two Arctic Shores valuation events, and, therefore, two, available data points, calculating beta based on inconsistent intervals between data points seems to be the best approach. |- |Assessment scheme approach |9.90 |6.93 | |} ===Funding history=== {| class="wikitable" |+Arctic Shores Funding<ref name=":2" /> !Date !Investors !Raised amount (local currency) !FX rate !Raised amount (GBP) !Post-money valuation (GBP) !Round |- | - |Home |N/A | | |N/A | - (not yet verified) |- |12/2017 |N/A |N/A | | |N/A |Seed (not yet verified) |- |02/09/2019<ref name=":24">https://www.privateequitywire.co.uk/beringea-leads-usd55m-investment-arctic-shores/</ref> |Beringea, Candy Ventures |$5.5m |1.2466 |£4.41m |N/A |Series A |- |02/2020 |Tech Nation |N/A | | |N/A |Support Program |- |13/01/2022 |Standard Treasury |£1.5m |1 |£1.5m |N/A |Debt (not yet verified) |- |05/01/2023<ref name=":22">https://www.arcticshores.com/news/arctic-shores-closes-5.75m-series-b-to-spearhead-the-soft-skills-assessment-market-and-accelerate-growth</ref> |Beringea, Calculus Capital, Praetura Ventures<ref name=":22" /> |£5.75m<ref name=":22" /> |1 |£5.75m |£21.98m |Series B<ref name=":22" /> |- | colspan="2" |'''Total Funding''' | | |'''£11.66m''' | | |} {| class="wikitable" |+Arctic Shores valuation calculation !Input !Series A !Series B |- |Total number of shares pre-fundraise: |3,986,061 |5,129,909<ref>https://find-and-update.company-information.service.gov.uk/company/08589048/filing-history/MzMzNjczODM0NWFkaXF6a2N4/document?format=pdf&download=0</ref> |- |Total number of shares post-fundraise: |4,860,106<ref name=":25">https://find-and-update.company-information.service.gov.uk/company/08589048/filing-history/MzI0MjgxNDQ4OGFkaXF6a2N4/document?format=pdf&download=0</ref> |7,247,963<ref name=":23">https://find-and-update.company-information.service.gov.uk/company/08589048/filing-history/MzM2NDc1NjM5NGFkaXF6a2N4/document?format=pdf&download=0</ref> |- |Total new shares: |874,045<ref name=":25" /> |2,118,054 |- |Non-cash consideration new shares: |0<ref name=":25" /> |222,223<ref name=":23" /> |- |Cash consideration new shares |874,045<ref name=":25" /> |1,895,831 |- |Cash consideration new shares as a proportion of the total number of shares (%): |17.98% |26.16% |- |The total amount of money raised: |£4,410,000<ref name=":24" /> |£5,750,000<ref name=":22" /> |- |Post-money valuation: |£22,797,950 |£21,980,122 |- |Pre-money valuation: |£18,697,950 |£16,230,122 |- |Price per share (£) |£4.69 per share |£3.03 per share |} {| class="wikitable" |+Sova Assessment Limited Series A valuation calculation !Input !Value |- |Total number of shares pre-fundraise:<ref>https://find-and-update.company-information.service.gov.uk/company/09593533/filing-history/MzMxMjI5MTc1NmFkaXF6a2N4/document?format=pdf&download=0</ref> |58,514 |- |Total number of shares post-fundraise:<ref>https://find-and-update.company-information.service.gov.uk/company/09593533/filing-history/MzMyODM1NTY3N2FkaXF6a2N4/document?format=pdf&download=0</ref> |70,799 |- |New shares: |12,285 |- |New shares as a proportion of the total number of shares (%): |17.35% |- |The total amount of money raised:<ref>https://www.crunchbase.com/organization/sova-assessment/company_financials</ref> |£6.7m |- |Post-money valuation: |£38.61m |- |Pre-money valuation: |£31.91m |} {| class="wikitable sortable" |+ !Date !Total number of issues shared !New shares !Class of shares !Comments |- |28/06/2013<ref>https://find-and-update.company-information.service.gov.uk/company/08589048/filing-history/MzA4MDYyNjc5N2FkaXF6a2N4/document?format=pdf&download=0</ref> |2 |2 |Ordinary | |- |28/01/2014<ref>https://find-and-update.company-information.service.gov.uk/company/08589048/filing-history/MzA5NTA0NTQ5NGFkaXF6a2N4/document?format=pdf&download=0</ref> |2,000,000 |1,999,998 |Ordinary |Sub-division of shares. |- |10/12/2014<ref>https://find-and-update.company-information.service.gov.uk/company/08589048/filing-history/MzExMzIyNTEwM2FkaXF6a2N4/document?format=pdf&download=0</ref> |2,169,521 |169,521 |Ordinary | |- |23/06/2016<ref name=":3">https://find-and-update.company-information.service.gov.uk/company/08589048/filing-history/MzE1NjI1NzAyM2FkaXF6a2N4/document?format=pdf&download=0</ref> |2,386,883 |217,362 |Ordinary | |- |23/06/2016<ref name=":3" /> |2,864,189 |477,306 |Ordinary | |- |08/02/2017<ref>https://find-and-update.company-information.service.gov.uk/company/08589048/filing-history/MzE2ODUyNjQ5MmFkaXF6a2N4/document?format=pdf&download=0</ref> |2,976,372 |112,183 |Ordinary | |- |20/06/2017<ref>https://find-and-update.company-information.service.gov.uk/company/08589048/filing-history/MzE3ODQ0ODk0NmFkaXF6a2N4/document?format=pdf&download=0</ref> |3,095,715 |119,343 |Ordinary | |- |04/08/2017<ref>https://find-and-update.company-information.service.gov.uk/company/08589048/filing-history/MzE4MjI2NDg0NWFkaXF6a2N4/document?format=pdf&download=0</ref> |3,286,660 |190,945 |Ordinary | |- |10/10/2017<ref>https://find-and-update.company-information.service.gov.uk/company/08589048/filing-history/MzE4NzI4NjEzN2FkaXF6a2N4/document?format=pdf&download=0</ref> |3,389,295 |102,635 |Ordinary | |- |09/07/2018<ref>https://find-and-update.company-information.service.gov.uk/company/08589048/filing-history/MzIwOTMzOTQzOWFkaXF6a2N4/document?format=pdf&download=0</ref> |3,593,670 |204,375 |Ordinary | |- |'''18/10/2018<ref>https://find-and-update.company-information.service.gov.uk/company/08589048/filing-history/MzIxNzI5Mjg0MmFkaXF6a2N4/document?format=pdf&download=0</ref>''' |'''3,969,722''' |'''376,052''' |'''Ordinary''' |There's a discrepancy between the total number of shares in this table and in the company's filing (3,969,722 vs. 3,978,195), a difference of 8,473 shares. The 8,473 shares seem to relate to the company Needham Consultancy Ltd <ref name=":12" /> and/or to the person James Williams. <ref>https://find-and-update.company-information.service.gov.uk/company/08589048/filing-history/MzIwOTYwOTkxOGFkaXF6a2N4/document?format=pdf&download=0</ref> |- |22/08/2019<ref>https://find-and-update.company-information.service.gov.uk/company/08589048/filing-history/MzI0MjM4MzA2M2FkaXF6a2N4/document?format=pdf&download=0</ref> |4,025,502 |55,780 |Ordinary | |- |28/08/2019<ref>https://find-and-update.company-information.service.gov.uk/company/08589048/filing-history/MzI0MjgxNDQ4OGFkaXF6a2N4/document?format=pdf&download=0</ref> |4,899,547 |874,045 |A Ordinary | |- |20/04/2022<ref>https://find-and-update.company-information.service.gov.uk/company/08589048/filing-history/MzMzNjczNjk5MGFkaXF6a2N4/document?format=pdf&download=0</ref> |5,102,287 |202,740 |Ordinary | |- |20/04/2022<ref name=":4">https://find-and-update.company-information.service.gov.uk/company/08589048/filing-history/MzMzNjczODA5OWFkaXF6a2N4/document?format=pdf&download=0</ref> |5,104,674 |2,387 |Ordinary | |- |20/04/2022<ref name=":4" /> |5,112,534 |7,860 |Ordinary | |- |20/04/2022<ref name=":4" /> |5,192,534 |80,000 |Ordinary | |- |20/04/2022<ref name=":4" /> |5,193,158 |624 |Ordinary | |- |20/04/2022<ref name=":4" /> |5,195,206 |2,048 |Ordinary | |- |21/04/2022<ref name=":5" /> |5,195,455 |249 |Ordinary | |- |21/04/2022<ref name=":5">https://find-and-update.company-information.service.gov.uk/company/08589048/filing-history/MzMzNjczODM0NWFkaXF6a2N4/document?format=pdf&download=0</ref> |5,195,704 |249 |Ordinary | |- |05/01/2023<ref name=":6">https://find-and-update.company-information.service.gov.uk/company/08589048/filing-history/MzM2NDc1NjM5NGFkaXF6a2N4/document?format=pdf&download=0</ref> |5,211,261 |15,557 |Ordinary | |- |05/01/2023<ref name=":6" /> |5,397,253 |185,992 |A Ordinary | |- |05/01/2023<ref name=":6" /> |5,619,476 |222,223 |A Ordinary | |- |05/01/2023<ref name=":6" /> |6,119,476 |500,000 |B Ordinary | |- |05/01/2023<ref name=":6" /> |6,254,930 |135,454 |A1 Ordinary | |- |05/01/2023<ref name=":6" /> |6,390,384 |135,454 |A2 Ordinary | |- |05/01/2023<ref name=":6" /> |6,810,486 |420,102 |B1 Ordinary | |- |05/01/2023<ref name=":6" /> |7,230,588 |420,102 |B2 Ordinary | |- |24/02/2023<ref name=":7" /> |7,391,699 |161,111 |A Ordinary | |- |24/02/2023<ref name=":7">https://find-and-update.company-information.service.gov.uk/company/08589048/filing-history/MzM3MDQ1ODAwMGFkaXF6a2N4/document?format=pdf&download=0</ref> |7,416,587 |24,888 |A Ordinary | |- |11/04/2023<ref name=":8" /> |7,417,835 |1,248 |Ordinary | |- |11/04/2023<ref name=":8">https://find-and-update.company-information.service.gov.uk/company/08589048/filing-history/MzM3NTczMDY3MGFkaXF6a2N4/document?format=pdf&download=0</ref> |7,418,035 |200 |Ordinary | |- |25/05/2023<ref name=":9">https://www.telegraph.co.uk/business/2023/06/13/freetrade-stock-trading-start-up-valuation-plunge/</ref> |7,418,460 |425 |Ordinary | |- |25/05/2023<ref name=":9">https://find-and-update.company-information.service.gov.uk/company/08589048/filing-history/MzM4MDgwNDE2NWFkaXF6a2N4/document?format=pdf&download=0</ref> |7,418,560 |100 |Ordinary | |- |29/08/2023<ref name=":10" /> |7,429,868 |11,308 |Ordinary | |- |29/08/2023<ref name=":10">https://find-and-update.company-information.service.gov.uk/company/08589048/filing-history/MzM5MTExNzM0OWFkaXF6a2N4/document?format=pdf&download=0</ref> |7,430,868 |1,000 |Ordinary | |- |27/09/2023<ref name=":11" /> |7,442,549 |11,681 |Ordinary | |- |27/09/2023<ref name=":11">https://find-and-update.company-information.service.gov.uk/company/08589048/filing-history/MzM5NDYzNTYyMmFkaXF6a2N4/document?format=pdf&download=0</ref> |7,443,199 |650 |Ordinary | |- |'''Total''' | |'''7,268,501''' | | |} {| class="wikitable sortable" |+ !Class of shares !Number of shares !Share class proportion of total shares (%) |- |A Ordinary |1,282,260 |17.64% |- |B Ordinary |500,000 |6.88% |- |Ordinary |4,375,129 |60.19% |- |A1 Ordinary |135,454 |1.86% |- |A2 Ordinary |135,454 |1.86% |- |B1 Ordinary |420,102 |5.78% |- |B2 Ordinary |420,102 |5.78% |- |'''Total''' |'''7,268,501''' |'''100.00%''' |} {| class="wikitable sortable" |+Shareholding as of 28th June 2023<ref name=":12">https://find-and-update.company-information.service.gov.uk/company/08589048/filing-history/MzM4NjIxOTA2MWFkaXF6a2N4/document?format=pdf&download=0</ref> !# !Number of shares !Share class !Name |- |1 |1,000,000 |Ordinary |Robert Newry |- |2 |1,000,000 |Ordinary |Safe Hammad |- |3 |38,543 |Ordinary |Andrew Needham |- |4 |54,333 |Ordinary |Royston Jeans |- |5 |64,500 |Ordinary |Sherief Hammad |- |6 |6,522 |Ordinary |Caroline Elliman |- |7 |96,097 |Ordinary |Oliver Schrader |- |8 |36,077 |Ordinary |Patricia Armstrong |- |9 |170,406 |Ordinary |Malcolm Jackson |- |10 |36,069 |Ordinary |Geoffrey Bailhache |- |11 |985,937 |Ordinary |Candy Ventures Sarl |- |12 |153,234 |Ordinary |NT Asset (Cayman) Limited |- |13 |0 |Ordinary |R Needham Consultancy Ltd. 74,756 shares have been transferred, on 7th September 2018. To where have the shares been transferred? |- |14 |26,731 |Ordinary |Penjuru Capital Pte Ltd. |- |15 |8,473 |Ordinary |James Williams |- |16 |38,183 |Ordinary |M R Howe |- |17 |26,731 |Ordinary |Half Brother Capital Ltd. |- |18 |10,308 |Ordinary |J Arkwright |- |19 |12,415 |Ordinary |R Graham |- |20 |20,691 |Ordinary |R Ronaldshay (Earl of) |- |21 |10,168 |Ordinary |R A Sangster |- |22 |50,839 |Ordinary |Giles Slinger |- |23 |50,839 |Ordinary |Lucy Slinger |- |24 |27,291 |Ordinary |Nick Wentworth-Stanley |- |25 |16,946 |Ordinary |Martin Elphron and Eugenia Ephson |- |26 |16,946 |Ordinary |A Wentworth-Stanley |- |27 |20,691 |Ordinary |Maria Nirusha Balaratham Trust |- |28 |21,391 |Ordinary |Richard Wingfield |- |29 |16,946 |Ordinary |Tower Pension Trustees Ltd. |- |30 |20,691 |Ordinary |Jonathan Davie |- |31 |20,691 |Ordinary |James Corcoran |- |32 |10,168 |Ordinary |Kate Amin |- |33 |12,415 |Ordinary |Guy Roxburghe |- |34 |10,168 |Ordinary |Guy Sangster |- |35 |10,308 |Ordinary |James Dean |- |36 |10,308 |Ordinary |Harry Henderson |- |37 |0 |Ordinary |Needham Consultancy Ltd. 8,473 shares have been transferred on 6th May 2018. To where have the shares been transferred? |- |38 |9,721 |Ordinary |Christopher Milln |- |39 |8,473 |Ordinary |Richard Benyon |- |40 |7,866 |Ordinary |Atomico Angel Program I, LLC. |- |41 |3,745 |Ordinary |Eugenia Ephson |- |42 |24,972 |Ordinary |Philip Green<ref>It seems the correct spelling of the first name is 'Philip', not 'Phillip', based on the following Linked-In page: https://www.linkedin.com/in/philip-green-35b38210/</ref> |- |43 |713,809 |A Ordinary |Proven Growth and Income VCT Plc. |- |44 |382,459 |A Ordinary |Proven VCT Plc. |- |45 |7,860 |Ordinary |Alastair Frater |- |46 |2,387 |Ordinary |Joe Wilson |- |47 |249 |Ordinary |Calum Murphy |- |48 |2,048 |Ordinary |David Cuthbertson |- |49 |80,624 |Ordinary |Lara Montefiori |- |50 |249 |Ordinary |Nisha Wasim |- |51 |100 |Ordinary |Nathan Braithwaite |- |52 |425 |Ordinary |Tom Satterthwaite |- |53 |624 |Ordinary |Joel Yusupoff |- |54 |624 |Ordinary |Mark Williamson |- |55 |824 |Ordinary |Tara Franks |- |56 |3,206 |A Ordinary |Robert Newry |- |57 |3,206 |A Ordinary |Safe Hammad |- |58 |420,102 |B1 Ordinary |Calculus Nominees Ltd. |- |59 |420,102 |B2 Ordinary |Calculus Nominees Ltd. |- |60 |350,000 |B Ordinary |MNL Nominees Ltd. |- |61 |135,454 |A1 Ordinary |Calculus VCT Plc. |- |62 |135,454 |A2 Ordinary |Calculus VCT Plc. |- |63 |9,620 |A Ordinary |Malcolm Jackson |- |64 |8.017 |A Ordinary |NT Asset (Cayman) Limited |- |65 |150,000 |B Ordinary |MNL (BBI) Nominees Limited |- |66 |11,224 |A Ordinary |Adam Hale |- |67 |92,999 |A Ordinary |UK FF Nominees Ltd. |- |68 |4,008 |A Ordinary |Sherief<ref>First name seems to be spelt incorrectly in the company's filing.</ref> Hammad |- |69 |10,422 |A Ordinary |Giles Slinger |- |70 |10,422 |A Ordinary |Lucy Slinger |- |71 |9,620 |A Ordinary |Philip<ref>Company filing shows 'Phil' Green, which seems to relate to the company's existing shareholder 'Phillip' Green.</ref> Green |- |72 |6,413 |A Ordinary |David Mills |- |73 |4,810 |A Ordinary |John Woyton |- |74 |4,008 |A Ordinary |Etedal Hammad |- |75 |94,341 |Ordinary |Needham Ventures Limited |- |76 |8,017 |A Ordinary |Needham Ventures Limited |} {| class="wikitable sortable" |+Aggregated shareholding as of 28th June 2023<ref name=":12" /> !# !Shareholder !Number of shares !Proportion of total shares (%) !Comment(s) |- |1 |Robert Newry |1,003,206 |13.85% |Robert is one of the co-founders of Arctic Shores. He is also the CEO of the company. Further information about Robert can be found in the 'team' section of the report. |- |2 |Safe Hammad |1,003,206 |13.85% |Safe is one of the co-founders of Arctic Shores. He is also an advisor of the company. Further information about Safe can be found in the 'team' section of the report. |- |3 |Candy Ventures Sarl |985,937 |13.61% | |- |4 |Calculus Nominees Ltd. |840,204 |11.60% | |- |5 |Proven Growth and Income VCT Plc. |713,809 |9.86% | |- |6 |Proven VCT Plc. |382,459 |5.28% | |- |7 |MNL Nominees Ltd. |350,000 |4.83% | |- |8 |Calculus VCT Plc. |270,908 |3.74% | |- |9 |Malcolm Jackson |180,026 |2.49% | |- |10 |NT Asset (Cayman) Limited |153,242 |2.12% | |- |11 |MNL (BBI) Nominees Limited |150,000 |2.07% | |- |12 |Needham Ventures Limited |102,358 |1.41% | |- |13 |Oliver Schrader |96,097 |1.33% | |- |14 |UK FF Nominees Ltd. |92,999 |1.28% | |- |15 |Lara Montefiori |80,624 |1.11% | |- |16 |Sherief Hammad |68,508 |0.95% | |- |17 |Giles Slinger |61,261 |0.85% | |- |18 |Lucy Slinger |61,261 |0.85% | |- |19 |Royston Jeans |54,333 |0.75% | |- |20 |Andrew Needham |38,543 |0.53% | |- |21 |M R Howe |38,183 |0.53% | |- |22 |Patricia Armstrong |36,077 |0.50% | |- |23 |Geoffrey Bailhache |36,069 |0.50% | |- |24 |Philip Green |34,592 |0.48% |Further information about Philip can be found by clicking here: https://www.linkedin.com/in/philip-green-35b38210/details/experience/ |- |25 |Nick Wentworth-Stanley |27,291 |0.38% | |- |26 |Half Brother Capital Ltd. |26,731 |0.37% | |- |27 |Penjuru Capital Pte Ltd. |26,731 |0.37% | |- |28 |Richard Wingfield |21,391 |0.30% | |- |29 |James Corcoran |20,691 |0.29% | |- |30 |Jonathan Davie |20,691 |0.29% | |- |31 |Maria Nirusha Balaratham Trust |20,691 |0.29% | |- |32 |R Ronaldshay (Earl of) |20,691 |0.29% |The title "Earl of Ronaldshay" is a courtesy title for the eldest son and heir of the Marquess of Zetland. The title has been held by different individuals across generations within the Dundas family, with notable holders serving in significant political roles, particularly in relation to British colonial administration in India during the early 20th century.<ref>https://en.wikipedia.org/wiki/Marquess_of_Zetland</ref> |- |33 |A Wentworth-Stanley |16,946 |0.23% | |- |34 |Martin Elphron and Eugenia Ephson |16,946 |0.23% | |- |35 |Tower Pension Trustees Ltd. |16,946 |0.23% | |- |36 |Guy Roxburghe |12,415 |0.17% | |- |37 |R Graham |12,415 |0.17% | |- |38 |Adam Hale |11,224 |0.15% | |- |39 |Harry Henderson |10,308 |0.14% | |- |40 |J Arkwright |10,308 |0.14% | |- |41 |James Dean |10,308 |0.14% | |- |42 |Guy Sangster |10,168 |0.14% | |- |43 |Kate Amin |10,168 |0.14% | |- |44 |R A Sangster |10,168 |0.14% | |- |45 |Christopher Milln |9,721 |0.13% | |- |46 |James Williams |8,473 |0.12% | |- |47 |Richard Benyon |8,473 |0.12% | |- |48 |Atomico Angel Program I, LLC. |7,866 |0.11% | |- |49 |Alastair Frater |7,860 |0.11% | |- |50 |Caroline Elliman |6,522 |0.09% | |- |51 |David Mills |6,413 |0.09% | |- |52 |John Woyton |4,810 |0.07% | |- |53 |Etedal Hammad |4,008 |0.06% | |- |54 |Eugenia Ephson |3,745 |0.05% | |- |55 |Joe Wilson |2,387 |0.03% | |- |56 |David Cuthbertson |2,048 |0.03% | |- |57 |Tara Franks |824 |0.01% | |- |58 |Joel Yusupoff |624 |0.01% | |- |59 |Mark Williamson |624 |0.01% | |- |60 |Tom Satterthwaite |425 |0.01% | |- |61 |Calum Murphy |249 |0.00% | |- |62 |Nisha Wasim |249 |0.00% | |- |63 |Nathan Braithwaite |100 |0.00% | |- | |'''Total''' |'''7,242,551''' |'''100.00%''' | |} === Additional information === The company misspelled its name as "Artic Shores Limited" on the official incorporation filing documents, but realised and corrected the error to "Arctic Shores Limited" within four days.<ref name=":15" /> === Arctic Shores peer(s) === {| class="wikitable" |+ ! !Arctic Shores Limited !Sova Assessment Limited !Workday, Inc. ! ! ! ! !Average (median) |- ! colspan="9" |Relative valuation data |- |Local currency |GBP |GBP |USD | | | | |N/A |- |Current market capitalisation (local currency) |19,676,452 |38,612,397 |56,870,000,000 | | | | |N/A |- |Year ago sales |N/A |2,497,334 |5,138,798,000 | | | | |N/A |- |Current sales |N/A |3,891,612 |6,215,818,000 | | | | |N/A |- |Sales growth rate (%) |N/A |55.83% |20.96% | | | | | |- |Current cash |5,480,754 |3,352,065 |1,886,311,000 | | | | |N/A |- |Current debt |1,215,278 |4,012,780 |2,975,934,000 | | | | |N/A |- ! colspan="9" |Relative valuation metrics |- |Enterprise value/sales (x) |N/A |10.09 |9.32 | | | | |9.705 |- |Growth-adjusted enterprise value/sales ratio |N/A |0.18 |0.44 | | | | |0.31 |- ! colspan="9" |Absolute valuation data |- |Lifecycle growth stage |Stage 1 (of 4) |Stage 1 (of 4) |Stage 2 (of 4) | | | | |N/A |- |Cost of goods sold as a proportion of revenue (%) |N/A |22.08% |27.59% | | | | | |- |Operating expenses as a proportion of revenue (%) |N/A |(78.39)% |75.98% | | | | | |- |Tax rate (%) |N/A |(0.27)% |41.08% | | | | | |- |Depreciation and amortisation rate (%) | |6.82% | | | | | | |- |Fixed Capital Investment (FCInv) as a proportion of revenue (%) |N/A |36.30% | | | | | | |- |Working Capital Investment (WCInv) as a proportion of revenue (%) |N/A |22.31% | | | | | | |- |Net borrowing as a proportion of revenue (%) |N/A |7.54% | | | | | | |- |Interest expense as a proportion of revenue (%) |N/A |(7.54)% | | | | | | |} {| class="wikitable" |+Key metrics for different stages of the business lifecycle ! !Stage 1 !Stage 2 !Stage 3 !Stage 4 |- |Cost of goods sold as a proportion of revenue (%) |22.08% |27.59% | |36.13% |- |Operating expenses as a proportion of revenue (%) |(78.39)% |75.98% | |174.39% |- |Tax rate (%) |(0.27)% |41.08% | |(1.94)% |- |Depreciation and amortisation rate (%) |6.82% |5.86% | |47.29% |- |Fixed Capital Investment (FCInv) as a proportion of revenue (%) |36.30% |5.78% | |6.25% |- |Working Capital Investment (WCInv) as a proportion of revenue (%) |22.31% |55.99% | |2.13% |- |Net borrowing as a proportion of revenue (%) |7.54% |18.25% | |0% |- |Interest expense as a proportion of revenue (%) |(7.54)% |1.65% | |0% |} {| class="wikitable" |+Stage 1 ! !Arctic Shores Limited !Sova Assessment Limited ! !Median |- |Cost of goods sold as a proportion of revenue (%) |N/A |22.08% | |22.08% |- |Operating expenses as a proportion of revenue (%) |N/A |(78.39)% | |(78.39)% |- |Tax rate (%) |N/A |(0.27)% | |(0.27)% |- |Depreciation and amortisation rate (%) | |6.82% | |6.82% |- |Fixed Capital Investment (FCInv) as a proportion of revenue (%) |N/A |36.30% | |36.30% |- |Working Capital Investment (WCInv) as a proportion of revenue (%) |N/A |22.31% | |22.31% |- |Net borrowing as a proportion of revenue (%) |N/A |7.54% | |7.54% |- |Interest expense as a proportion of revenue (%) |N/A |(7.54)% | |(7.54)% |} {| class="wikitable" |+Stage 2 ! !Workday, Inc. ! ! !Median |- |Cost of goods sold as a proportion of revenue (%) |27.59% | | |27.59% |- |Operating expenses as a proportion of revenue (%) |75.98% | | |75.98% |- |Tax rate (%) |41.08% | | |41.08% |- |Depreciation and amortisation rate (%) |5.86% | | |5.86% |- |Fixed Capital Investment (FCInv) as a proportion of revenue (%) |5.78% | | |5.78% |- |Working Capital Investment (WCInv) as a proportion of revenue (%) |55.99% | | |55.99% |- |Net borrowing as a proportion of revenue (%) |18.25% | | |18.25% |- |Interest expense as a proportion of revenue (%) |1.65% | | |1.65% |} {| class="wikitable" |+Stage 3 ! ! ! ! !Median |- |Cost of goods sold as a proportion of revenue (%) | | | | |- |Operating expenses as a proportion of revenue (%) | | | | |- |Tax rate (%) | | | | |- |Depreciation and amortisation rate (%) | | | | |- |Fixed Capital Investment (FCInv) as a proportion of revenue (%) | | | | |- |Working Capital Investment (WCInv) as a proportion of revenue (%) | | | | |- |Net borrowing as a proportion of revenue (%) | | | | |- |Interest expense as a proportion of revenue (%) | | | | |} {| class="wikitable" |+Stage 4 ! !Blackberry ! ! !Median |- |Cost of goods sold as a proportion of revenue (%) |36.13% | | |36.13% |- |Operating expenses as a proportion of revenue (%) |174.39% | | |174.39% |- |Tax rate (%) |(1.94)% | | |(1.94)% |- |Depreciation and amortisation rate (%) |47.29% | | |47.29% |- |Fixed Capital Investment (FCInv) as a proportion of revenue (%) |6.25% | | |6.25% |- |Working Capital Investment (WCInv) as a proportion of revenue (%) |2.13% | | |2.13% |- |Net borrowing as a proportion of revenue (%) |0% | | |0% |- |Interest expense as a proportion of revenue (%) |0% | | |0% |} {| class="wikitable" |+Sova Assessment Limited !Year !1 !2 !3 !4 !5 !6 !7 |- !Period end date !31/03/2016 !31/03/2017 !31/03/2018<ref>https://find-and-update.company-information.service.gov.uk/company/09593533/filing-history/MzI0MjA3OTAwNmFkaXF6a2N4/document?format=pdf&download=0</ref> !31/03/2019<ref>https://find-and-update.company-information.service.gov.uk/company/09593533/filing-history/MzI2NDE3MDEyOGFkaXF6a2N4/document?format=pdf&download=0</ref> !31/03/2020<ref>https://find-and-update.company-information.service.gov.uk/company/09593533/filing-history/MzMyMDMyOTgxOWFkaXF6a2N4/document?format=pdf&download=0</ref> !31/03/2021<ref name=":19">https://find-and-update.company-information.service.gov.uk/company/09593533/filing-history/MzM2MTM2ODQzN2FkaXF6a2N4/document?format=pdf&download=0</ref> !31/03/2022<ref name=":19" /> |- !Period duration (days) !366 !365 !365 !365 !366 !365 !365 |- ! !Historic !Historic !Historic !Historic !Historic !Historic !Historic |- ! colspan="8" |Profit and loss |- |Turnover | | | | | |2,497,334 |3,891,612 |- |Cost of sales | | | | | | | |- |Gross profit | | | | | |1,791,902 |3,032,458 |- |Administrative expenses | | | | | |(3,659,529) |(5,951,033) |- |Exceptional administrative expenses | | | | | |(314,526) |(131,526) |- |Other operating income | | | | | |284,924 |0 |- |Operating profit/(loss) | | | | | |(1,897,229) |(3,050,532) |- |Interest receivable and similar income | | | | | |7 |0 |- |Interest payable and similar expenses | | | | | |(231,580) |(293,605) |- |Profit Before Tax | | | | | |(2,128,802) |(3,344,137) |- |Tax on loss | | | | | |350,000 |10,402 |- |Profit for the period | | | | | |(1,778,802) |(3,333,735) |- |Other comprehensive income for the year | | | | | | | |- |Foreign exchange reserve movement | | | | | |(5,111) |(12,388) |- |Other comprehensive income for the year | | | | | |(5,111) |(12,388) |- |Total comprehensive income for the year | | | | | |(1,783,913) |(3,346,123) |- |Profit for the year attributable to: | | | | | | | |- |Owners of the parent company | | | | | |(1,778,802) |(3,333,735) |- |Total comprehensive income attributable to: | | | | | |(1,778,802) |(3,333,735) |- ! colspan="8" |Balance sheet |- | colspan="8" |'''Assets''' |- | colspan="8" |'''Non-current assets''' |- |Intngible assets | | | | | |0 |553,632 |- |Tangible assets | | | | | |32,460 |58,619 |- | | | | | | |32,460 |612,251 |- | colspan="8" |'''Current assets''' |- |Debtors: amounts falling due within one year | | | | | |1,079,279 |1,430,349 |- |Cash at bank and in hand | | | | | |1,595,233 |3,352,065 |- | | | | | | |2,674,512 |4,782,414 |- | colspan="8" |'''Current liabilities''' |- |Creditors: amounts falling due within one year | | | | | |(1,795,980) |(3,035,591) |- |'''Net current assets''' | | | | | |878,532 |1,746,823 |- |'''Total assets less current liabilities''' | | | | | |910,992 |2,359,074 |- | colspan="8" |'''Non-current liabilities''' |- |Creditors: amounts falling due after more than one year | | | | | |(3,719,275) |(4,012,780) |- |Provisions for liabilities | | | | | | | |- |'''Net liabilities''' | | | | | |'''(2,808,283)''' |'''(1,653,706)''' |- |'''Capital and reserves''' | | | | | | | |- |Called up share capital | | | | | |214 |221 |- |Share premium account | | | | | |2,795,046 |7,295,739 |- |Foreign exchange reserve | | | | | |4,041 |(8,347) |- |Profit and loss account | | | | | |(5,607,584) |(8,941,319) |- |Equity attributable to owners of the parent company | | | | | |(2,808,283) |(1,653,706) |- | | | | | | |'''(2,808,283)''' |'''(1,653,706)''' |- ! colspan="8" |Cash flow statement |- |'''Net cash from/(used in) operating activities''' | | | | | |N/A |N/A |- | colspan="8" |'''Investing activities''' |- |Decrease in term deposits | | | | | |N/A |N/A |- |Purchase of property, plant and equipment | | | | | |N/A |N/A |- |Purchase of intangible assets | | | | | |N/A |N/A |- |Proceeds on disposal of subsidiary | | | | | |N/A |N/A |- |Proceeds/(purchase) on disposal of investments | | | | | |N/A |N/A |- |'''Net cash from/(used in) investing activities''' | | | | | |N/A |N/A |- | colspan="8" |'''Financing activities''' |- |Purchase of own shares in EBT | | | | | |N/A |N/A |- |Proceeds on sale of own shares in EB | | | | | |N/A |N/A |- |Payment of principal in relation to lease liabilities | | | | | |N/A |N/A |- |Dividends paid to owners of the parent | | | | | |N/A |N/A |- |'''Net cash from/(used in) financing activities''' | | | | | |N/A |N/A |- ! colspan="8" |Other information |- |Exchange differences | | | | | |36,874 |192,039 |- |Depreciation | | | | | | |23,008 |- |Amortisation | | | | | | |19,445 |- |Total depreciation and amortisation | | | | | |14,844 |42,453 |- |Net interest | | | | | |(231,573) |(293,605) |- |Intangible assets cost | | | | | | |573,077 |- |Tangible fixed assets cost | | | | | | |49,167 |- |Total intangible and tangible costs | | | | | | |622,244 |- |Fixed asset investment cost | | | | | | |741,219 |- |Fixed Capital Investment (FCInv) | | | | | | |1,412,630 |- |Working Capital Investment (WCInv) | | | | | | |868,291 |- |Bank loans at period end | | | | | |3,719,275 |4,012,780 |- |Net borrowing | | | | | | |293,505 |- ! colspan="8" |Metrics |- |Cost of goods sold as a proportion of revenue (%) | | | | | |28.25% |22.08% |- |Operating expenses as a proportion of revenue (%) | | | | | |(75.97)% |(78.39)% |- |Tax rate (%) | | | | | |(14.01)% |(0.27)% |- |Depreciation and amortisation rate (%) | | | | | | |6.82% |- |Fixed Capital Investment (FCInv) as a proportion of revenue (%) | | | | | | |36.30% |- |Working Capital Investment (WCInv) as a proportion of revenue (%) | | | | | | |22.31% |- |Net borrowing as a proportion of revenue (%) | | | | | | |7.54% |- |Interest expense as a proportion of revenue (%) | | | | | |(9.27)% |(7.54)% |} {| class="wikitable" |+Workday, Inc. (in thousands, except per share data) ! !31/01/2018 !31/01/2019 !31/01/2020 !31/01/2021<ref name=":26">https://app.quotemedia.com/data/downloadFiling?webmasterId=101533&ref=117287473&type=HTML&symbol=WDAY&companyName=Workday+Inc.&formType=10-K&dateFiled=2023-02-27&CK=1327811#i627048a875d54f79b7e232c1ccadb81d_295</ref> !31/01/2022<ref name=":26" /> !31/01/2023<ref name=":26" /> !31/01/2024 |- ! !Historic !Historic !Historic !Historic !Historic !Historic !Forecast |- ! colspan="8" |Profit and loss |- |Revenues: | | | | | | | |- |Subscription services | | | |3,788,452 |4,546,313 |5,567,206 | |- |Professional services | | | |529,544 |592,485 |648,612 | |- |Total revenues | | | |4,317,996 |5,138,798 |6,215,818 | |- |Costs and expenses (1): | | | | | | | |- |Costs of subscription services | | | |611,912 |795,854 |1,011,447 | |- |Costs of professional services | | | |586,220 |632,241 |703,731 | |- |Product development | | | |1,721,222 |1,879,220 |2,270,660 | |- |Sales and marketing | | | |1,233,173 |1,461,921 |1,848,093 | |- |General and administrative | | | |414,068 |486,012 |604,087 | |- |Total costs and expenses | | | |4,566,595 |5,255,248 |6,438,018 | |- |Operating income (loss) | | | |(248,599) |(116,450) |(222,200) | |- |Other income (expense), net | | | |(26,535) |132,632 |(37,750) | |- |Income (loss) before provision for (benefit from) income taxes | | | |(275,134) |16,182 |(259,950) | |- |Provision for (benefit from) income taxes | | | |7,297 |(13,191) |106,799 | |- |Net income (loss) | | | |(282,431) |29,373 |(366,749) | |- |Net income (loss) per share, basic | | | |(1.19) |0.12 |(1.44) | |- |Net income (loss) per share, diluted | | | |(1.19) |0.12 |(1.44) | |- |Weighted-average shares used to compute net income (loss) per share, basic | | | |237,019 |247,249 |254,819 | |- |Weighted-average shares used to compute net income (loss) per share, diluted | | | |237,019 |254,032 |254,819 | |- ! colspan="8" |Balance sheet |- |Assets | | | | | | | |- |Current assets: | | | | | | | |- |Cash and cash equivalents | | | | |1,534,273 |1,886,311 | |- |Marketable securities | | | | |2,109,888 |4,235,083 | |- |Trade and other receivables, net of allowance for credit losses of $8,509 and $10,790, respectively | | | | |1,242,545 |1,570,086 | |- |Deferred costs | | | | |152,957 |191,054 | |- |Prepaid expenses and other current assets | | | | |174,402 |225,690 | |- |Total current assets | | | | |5,214,065 |8,108,224 | |- |Property and equipment, net | | | | |1,123,075 |1,201,254 | |- |Operating lease right-of-use assets | | | | |247,808 |249,278 | |- |Deferred costs, noncurrent | | | | |341,259 |420,988 | |- |Acquisition-related intangible assets, net | | | | |391,002 |305,465 | |- |Goodwill | | | | |2,840,044 |2,840,044 | |- |Other assets | | | | |341,252 |360,985 | |- |Total assets | | | | |10,498,505 |13,486,238 | |- |Liabilities and stockholders’ equity | | | | | | | |- |Current liabilities: | | | | | | | |- |Accounts payable | | | | |55,487 |153,751 | |- |Accrued expenses and other current liabilities | | | | |195,590 |260,131 | |- |Accrued compensation | | | | |402,885 |563,548 | |- |Unearned revenue | | | | |3,110,947 |3,559,393 | |- |Operating lease liabilities | | | | |80,503 |91,343 | |- |Debt, current | | | | |1,222,443 |— | |- |Total current liabilities | | | | |5,067,855 |4,628,166 | |- |Debt, noncurrent | | | | |617,354 |2,975,934 | |- |Unearned revenue, noncurrent | | | | |71,533 |74,540 | |- |Operating lease liabilities, noncurrent | | | | |182,456 |181,799 | |- |Other liabilities | | | | |24,225 |40,231 | |- |Total liabilities | | | | |5,963,423 |7,900,670 | |- |Commitments and contingencies (Note 13) | | | | | | | |- |Stockholders’ equity: | | | | | | | |- |Preferred stock, $0.001 par value; 10 million shares authorised; no shares issued or outstanding as of January 31, 2023, and 2022 | | | | |— |— | |- |Class A common stock, $0.001 par value; 750 million shares authorised; 204 million and 196 million shares issued and outstanding as of January 31, 2023, and 2022, respectively | | | | |196 |204 | |- |Class B common stock, $0.001 par value; 240 million shares authorised; 55 million and 55 million shares issued and outstanding as of January 31, 2023, and 2022, respectively | | | | |55 |55 | |- |Additional paid-in capital | | | | |7,284,174 |8,828,639 | |- |Treasury stock, at cost; 1 million and 0.1 million shares as of January 31, 2023, and 2022, respectively | | | | |(12,467) |(185,047) | |- |Accumulated other comprehensive income (loss) | | | | |7,709 |53,051 | |- |Accumulated deficit | | | | |(2,744,585) |(3,111,334) | |- |Total stockholders’ equity | | | | |4,535,082 |5,585,568 | |- |Total liabilities and stockholders’ equity | | | | |10,498,505 |13,486,238 | |- ! colspan="8" |Cash flow statement |- |Cash flows from operating activities: | | | | | | | |- |Net income (loss) | | | |(282,431) |29,373 |(366,749) | |- |Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | | | | | | | |- |Depreciation and amortisation | | | |293,657 |343,723 |364,357 | |- |Share-based compensation expenses | | | |1,004,854 |1,100,584 |1,294,622 | |- |Amortisation of deferred costs | | | |112,647 |138,797 |174,611 | |- |Amortisation and writeoff of debt discount and issuance costs | | | |53,693 |3,988 |6,955 | |- |Non-cash lease expense | | | |84,376 |86,235 |91,750 | |- |(Gains) losses on investments | | | |(16,558) |(145,845) |30,780 | |- |Other | | | |4,247 |(14,213) |12,645 | |- |Changes in operating assets and liabilities, net of business combinations: | | | | | | | |- |Trade and other receivables, net | | | |(159,240) |(207,933) |(318,600) | |- |Deferred costs | | | |(184,353) |(238,453) |(292,437) | |- |Prepaid expenses and other assets | | | |52,117 |(35,153) |(14,070) | |- |Accounts payable | | | |(3,476) |9,414 |85,773 | |- |Accrued expenses and other liabilities | | | |(18,472) |50,671 |135,965 | |- |Unearned revenue | | | |327,380 |529,516 |451,593 | |- |'''Net cash provided by (used in) operating activities''' | | | |'''1,268,441''' |'''1,650,704''' |'''1,657,195''' | |- |Cash flows from investing activities: | | | | | | | |- |Purchases of marketable securities | | | |(2,731,885) |(2,858,729) |(7,182,961) | |- |Maturities of marketable securities | | | |1,802,334 |2,804,103 |4,948,833 | |- |Sales of marketable securities | | | |10,627 |199,016 |104,324 | |- |Owned real estate projects | | | |(6,116) |(171,501) |(4,236) | |- |Capital expenditures, excluding owned real estate projects | | | |(253,380) |(264,267) |(359,552) | |- |Business combinations, net of cash acquired | | | |— |(1,190,199) |— | |- |Purchase of other intangible assets | | | |(2,950) |(8,007) |(700) | |- |Purchases of non-marketable equity and other investments | | | |(67,482) |(123,011) |(23,173) | |- |Sales and maturities of non-marketable equity and other investments | | | |7,228 |5,169 |11,539 | |- | | | | | | | | |- |'''Net cash provided by (used in) investing activities''' | | | |'''(1,241,624)''' |'''(1,607,426)''' |'''(2,505,926)''' | |- |Cash flows from financing activities: | | | | | | | |- |Proceeds from issuance of debt, net of debt discount | | | |747,795 |— |2,978,077 | |- |Repayments and extinguishment of debt | | | |(268,762) |(37,614) |(1,843,605) | |- |Payments for debt issuance costs | | | |— |— |(7,220) | |- |Repurchases of common stock | | | |— |— |(74,666) | |- |Proceeds from issuance of common stock from employee equity plans, net of taxes paid for shares withheld | | | |148,673 |148,328 |151,974 | |- |Other | | | |(2,657) |(463) |(739) | |- |'''Net cash provided by (used in) financing activities''' | | | |'''625,049''' |'''110,251''' |'''1,203,821''' | |- |Effect of exchange rate changes | | | |1,334 |(705) |(595) | |- |Net increase (decrease) in cash, cash equivalents, and restricted cash | | | |653,200 |152,824 |354,495 | |- |Cash, cash equivalents, and restricted cash at the beginning of period | | | |734,721 |1,387,921 |1,540,745 | |- |Cash, cash equivalents, and restricted cash at the end of period | | | |1,387,921 |1,540,745 |1,895,240 | |- ! ! ! ! ! ! ! ! |- |Interest expense | | | |(68,806) |(16,602) |(102,353) | |- ! colspan="8" |Metrics |- |Cost of goods sold as a proportion of revenue (%) | | | |27.75% |27.79% |27.59% | |- |Operating expenses as a proportion of revenue (%) | | | |78.01% |74.48% |75.98% | |- |Tax rate (%) | | | |2.65% |81.52% |41.08% | |- |Depreciation and amortisation rate (%) | | | |6.80% |6.69% |5.86% | |- |Fixed Capital Investment (FCInv) as a proportion of revenue (%) | | | |5.87% |5.14% |5.78% | |- |Working Capital Investment (WCInv) as a proportion of revenue (%) | | | | |2.85% |55.99% | |- |Net borrowing as a proportion of revenue (%) | | | |11.09% | -0.73% |18.25% | |- |Interest expense as a proportion of revenue (%) | | | |1.59% |0.32% |1.65% | |} {| class="wikitable" |+ !Year !1 !2 !3 !4 !5 !6 !7 |- !Year end date !31/12/2015 !31/12/2016 !31/12/2017 !31/12/2018 !31/12/2019 !31/12/2020 !31/12/2021 |- ! !Historic !Historic !Historic !Historic !Historic !Historic !Historic |- ! colspan="8" |Profit and loss |- |Revenue (£'000) | | | | | | | |- |Gross profit (£'000) | | | | | | | |- |Other operating income | | | | | | | |- |Administrative expenses | | | | | | | |- |Profit from operations | | | | | | | |- |Finance income | | | | | | | |- |Finance expense | | | | | | | |- |Profit before tax | | | | | | | |- |Tax expense | | | | | | | |- |Profit for the year | | | | | | | |- |Exchange (losses)/gains arising on translation on foreign operations | | | | | | | |- |Total comprehensive income | | | | | | | |- ! colspan="8" |Balance sheet |- | colspan="8" |'''Assets''' |- | colspan="8" |'''Non-current assets''' |- |Property, plant and equipment | | | | | | | |- |Intangible assets | | | | | | | |- |Investment in associates | | | | | | | |- |Trade and other receivables | | | | | | | |- |Deferred tax assets | | | | | | | |- | | | | | | | | |- | colspan="8" |'''Current assets''' |- |Trade and other receivables | | | | | | | |- |Cash and cash equivalents | | | | | | | |- |Current asset investments | | | | | | | |- | | | | | | | | |- |Total assets | | | | | | | |- | colspan="8" |Liabilities |- | colspan="8" |'''Non-current liabilities''' |- |Loans and borrowings | | | | | | | |- | | | | | | | | |- | colspan="8" |'''Current liabilities''' |- |Trade and other payables | | | | | | | |- |Loans and borrowings | | | | | | | |- | | | | | | | | |- |Total liabilities | | | | | | | |- |Net assets | | | | | | | |- | colspan="8" |'''Issued capital and reserves attributable to owners of the parent''' |- |Share capital | | | | | | | |- |Foreign exchange reserves | | | | | | | |- |Other reserves | | | | | | | |- |Retained earnings | | | | | | | |- | | | | | | | | |- |Total equity | | | | | | | |- ! colspan="8" |Cash flow statement |- | colspan="8" |'''Cash flows from operating activities''' |- |Profit for the year | | | | | | | |- | colspan="8" |'''Adjustments for:''' |- |Depreciation of property, plant and equipment | | | | | | | |- |Amortisation of intangible fixed assets | | | | | | | |- |Interest and other finance income | | | | | | | |- |Interest and other finance expenses | | | | | | | |- |Loss/(gain) on sale of property, plant and equipment | | | | | | | |- |Foreign exchange gain/(loss) of revaluation of assets | | | | | | | |- |Foreign exchange (loss)/gain on consolidation | | | | | | | |- |Interest paid | | | | | | | |- |Interest received | | | | | | | |- |Income tax expense | | | | | | | |- | | | | | | | | |- | colspan="8" |'''Movements in working capital:''' |- |Decrease/(increase) in trade and other receivables | | | | | | | |- |Increase in current asset investments | | | | | | | |- |Increase in trade and other payables | | | | | | | |- |Cash generated from operations | | | | | | | |- |Income tax paid | | | | | | | |- |Net cash from/(used in) operating activities | | | | | | | |- | colspan="8" |'''Cash flows from investing activities''' |- |Purchases of property, plant and equipment | | | | | | | |- |Purchases of intangible assets | | | | | | | |- |Proceeds from disposal of property, plant and equipment | | | | | | | |- |Net cash from/(used in) investing activities | | | | | | | |- | colspan="8" |'''Cash flows from financing activities''' |- |Finance lease payments | | | | | | | |- |New finance leases | | | | | | | |- |Loan repayments | | | | | | | |- |Loans received | | | | | | | |- |Net cash from/(used in) financing activities | | | | | | | |- ! colspan="8" |Metrics |- |Cost of goods sold as a proportion of revenue (%) | | | | | | | |- |Operating expenses as a proportion of revenue (%) | | | | | | | |- |Tax rate (%) | | | | | | | |- |Depreciation and amortisation rate (%) | | | | | | | |- |Fixed Capital Investment (FCInv) as a proportion of revenue (%) | | | | | | | |- |Working Capital Investment (WCInv) as a proportion of revenue (%) | | | | | | | |- |Net borrowing as a proportion of revenue (%) | | | | | | | |- |Interest expense as a proportion of revenue (%) | | | | | | | |} {| class="wikitable" |+ ! !31/12/2018 !31/12/2019 !31/12/2020 !31/12/2021 !31/12/2022 |- ! !Historic !Historic !Historic !Historic !Historic |- ! colspan="6" |Profit and loss |- | colspan="6" |'''Revenues:''' |- |Transaction-based revenues | | | | | |- |Net interest revenues | | | | | |- |Other revenues | | | | | |- |Total net revenues | | | | | |- | | | | | | |- | colspan="6" |'''Operating expenses:''' |- |Brokerage and transaction | | | | | |- |Technology and development | | | | | |- |Operations | | | | | |- |Marketing | | | | | |- |General and administrative | | | | | |- |Total operating expenses | | | | | |- | | | | | | |- |Change in fair value of convertible notes and warrant liability | | | | | |- |Other (income) expense, net | | | | | |- |Income (loss) before income taxes | | | | | |- |Provision for (benefit from) income taxes | | | | | |- |Net income (loss) | | | | | |- | colspan="6" |'''Net income (loss) attributable to common stockholders:''' |- |Basic | | | | | |- |Diluted | | | | | |- | colspan="6" |'''Net income (loss) per share attributable to common stockholders:''' |- |Basic | | | | | |- |Diluted | | | | | |- | colspan="6" |'''Weighted-average shares used to compute net income (loss) per share attributable to common stockholders:''' |- |Basic | | | | | |- |Diluted | | | | | |- ! colspan="6" |Balance sheet |- | colspan="6" |'''Assets''' |- | colspan="6" |'''Current assets:''' |- |Cash and cash equivalents | | | | | |- |Cash segregated under federal and other regulations | | | | | |- |Receivables from brokers, dealers, and clearing organisations | | | | | |- |Receivables from users, net | | | | | |- |Securities borrowed | | | | | |- |Deposits with clearing organisations | | | | | |- |Asset related to user cryptocurrencies safeguarding obligation | | | | | |- |User-held fractional shares | | | | | |- |Prepaid expenses | | | | | |- |Other current assets | | | | | |- |Total current assets | | | | | |- |Property, software, and equipment, net | | | | | |- |Goodwill | | | | | |- |Intangible assets, net | | | | | |- |Non-current prepaid expenses | | | | | |- |Other non-current assets | | | | | |- |Total assets | | | | | |- | colspan="6" |'''Liabilities and stockholders’ equity''' |- | colspan="6" |'''Current liabilities:''' |- |Accounts payable and accrued expenses | | | | | |- |Payables to users | | | | | |- |Securities loaned | | | | | |- |User cryptocurrencies safeguarding obligation | | | | | |- |Fractional shares repurchase obligation | | | | | |- |Other current liabilities | | | | | |- |Total current liabilities | | | | | |- |Other non-current liabilities | | | | | |- |Total liabilities | | | | | |- | colspan="6" |'''Commitments and contingencies''' |- | colspan="6" |'''Stockholders’ equity:''' |- |Additional paid-in capital | | | | | |- |Accumulated other comprehensive income (loss) | | | | | |- |Accumulated deficit | | | | | |- |Total stockholders’ equity | | | | | |- |Total liabilities and stockholders’ equity | | | | | |- ! colspan="6" |Cash flow statement |- | colspan="6" |'''Operating activities:''' |- |Net income (loss) | | | | | |- | colspan="6" |Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |- |Depreciation and amortisation | | | | | |- |Net cash from/(used in) operating activities | | | | | |- | colspan="6" |'''Investing activities:''' |- |Purchase of property, software, and equipment | | | | | |- |Capitalisation of internally developed software | | | | | |- |Acquisitions of a business, net of cash acquired | | | | | |- |Purchase of investments | | | | | |- |Sales of investments | | | | | |- |Other | | | | | |- |Net cash from/(used in) investing activities | | | | | |- | colspan="6" |'''Financing activities:''' |- |Proceeds from issuance of common stock in connection with initial public offering, net of offering costs | | | | | |- |Proceeds from issuance of common stock under the Employee Stock Purchase Plan | | | | | |- |Taxes paid related to net share settlement of equity awards | | | | | |- |Proceeds from issuance of convertible notes and warrants | | | | | |- |Draws on credit facilities | | | | | |- |Repayments on credit facilities | | | | | |- |Payments of debt issuance costs | | | | | |- |Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs | | | | | |- |Proceeds from exercise of stock options, net of repurchases | | | | | |- |Net cash from/(used in) financing activities | | | | | |- ! colspan="6" |Metrics |- |Cost of goods sold as a proportion of revenue (%) | | | | | |- |Operating expenses as a proportion of revenue (%) | | | | | |- |Tax rate (%) | | | | | |- |Depreciation and amortisation rate (%) | | | | | |- |Fixed Capital Investment (FCInv) as a proportion of revenue (%) | | | | | |- |Working Capital Investment (WCInv) as a proportion of revenue (%) | | | | | |- |Net borrowing as a proportion of revenue (%) | | | | | |- |Interest expense as a proportion of revenue (%) | | | | | |} {| class="wikitable" |+Blackberry ! !28/02/2019 !28/02/2020 !28/02/2021 !28/02/2022 !28/02/2023 |- ! !Historic !Historic !Historic !Historic !Historic |- ! colspan="6" |Profit and loss |- |Revenue | | |893 |718 |656 |- |Cost of sales | | |250 |251 |237 |- | | | | | | |- |Gross margin | | |643 |467 |419 |- | | | | | | |- |Operating expenses | | | | | |- |Research and development | | |215 |219 |207 |- |Selling, marketing and administration | | |344 |297 |340 |- |Amortisation | | |182 |165 |96 |- |Impairment of goodwill | | |594 |0 |245 |- |Impairment of long-lived assets | | |43 |0 |235 |- |Gain on sale of property, plant and equipment, net | | |0 |0 |(6) |- |Debentures fair value adjustment | | |372 |(212) |(138) |- |Litigation settlement | | |0 |0 |165 |- | | | |1,750 |469 |1,144 |- |Operating loss | | |(1,107) |(2) |(725) |- |Investment income (loss), net | | |(6) |21 |5 |- | | | | | | |- |Income (loss) before income taxes | | |(1,113) |19 |(720) |- |Provision for (recovery of) income taxes | | |(9) |7 |14 |- | | | | | | |- |Net income (loss) | | |(1,104) |12 |(734) |- |Earnings (loss) per share | | | | | |- |Basic | | |(1.97) |0.02 |(1.27) |- |Diluted | | |(1.97) |(0.31) |(1.35) |- ! colspan="6" |Balance sheet |- | colspan="6" |'''Assets''' |- | colspan="6" |'''Current''' |- |Cash and cash equivalents | | | |378 |295 |- |Short-term investments | | | |334 |131 |- |Accounts receivable, net of allowance of $1 and $4, respectively | | | |138 |120 |- |Other receivables | | | |25 |12 |- | | | | | | |- |Income taxes receivable | | | |9 |3 |- |Other current assets | | | |159 |182 |- | | | | | | |- | | | | |1,043 |743 |- |Restricted cash and cash equivalents | | | |28 |27 |- |Long-term investments | | | |30 |34 |- |Other long-term assets | | | |9 |8 |- | | | | | | |- |Operating lease right-of-use assets, net | | | |50 |44 |- |Property, plant and equipment, net | | | |41 |25 |- |Goodwill | | | |844 |595 |- |Intangible assets, net | | | |522 |203 |- | | | | | | |- | | | | |2,567 |1,679 |- | colspan="6" |'''Liabilities''' |- | colspan="6" |'''Current''' |- |Accounts payable | | | |22 |24 |- |Accrued liabilities | | | |157 |143 |- |Income taxes payable | | | |11 |20 |- |Debentures | | | |0 |367 |- |Deferred revenue, current | | | |207 |175 |- | | | | |397 |729 |- |Deferred revenue, non-current | | | |37 |40 |- |Operating lease liabilities | | | |66 |52 |- |Other long-term liabilities | | | |4 |1 |- |Long-term debentures | | | |507 |0 |- | | | | | | |- | | | | |1,011 |822 |- |Commitments and contingencies | | | | | |- |Shareholders' equity | | | | | |- |Capital stock and additional paid-in capital | | | | | |- |Preferred shares: authorised unlimited number of non-voting, cumulative, redeemable and retractable | | | |0 |0 |- |Common shares: authorised unlimited number of non-voting, redeemable, retractable Class A common shares and unlimited number of voting common shares | | | | | |- |Issued and outstanding - 582,157,203 voting common shares (February 28, 2022 - 576,227,898) | | | |2,869 |2,909 |- |Deficit | | | |(1,294) |(2,028) |- |Accumulated other comprehensive loss | | | |(19) |(24) |- | | | | |1,556 |857 |- | | | | |2,567 |1,679 |- ! colspan="6" |Cash flow statement |- | colspan="6" |'''Cash flows from operating activities''' |- | | | | | | |- |Net income (loss) | | |(1,104) |12 |(734) |- |Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | | | | | |- |Amortisation | | |198 |176 |105 |- | | | | | | |- |Stock-based compensation | | |44 |36 |34 |- |Gain on sale of investment | | |0 |(22) |0 |- |Impairment of goodwill | | |594 |0 |245 |- |Impairment of long-lived assets | | |43 |0 |235 |- | | | | | | |- |Gain on sale of property, plant and equipment, net | | |0 |0 |(6) |- |Debentures fair value adjustment | | |372 |(212) |(138) |- | | | | | | |- |Operating leases | | |(4) |(16) |(16) |- |Other | | |(5) |(3) |(5) |- |Net changes in working capital items | | | | | |- |Accounts receivable, net of allowance | | |29 |44 |18 |- |Other receivables | | |(11) |0 |13 |- | | | | | | |- |Income taxes receivable | | |(4) |1 |6 |- |Other assets | | |55 |15 |(1) |- |Accounts payable | | |(11) |2 |2 |- |Accrued liabilities | | |(20) |(16) |(11) |- |Income taxes payable | | |(15) |5 |9 |- |Deferred revenue | | |(79) |(50) |(29) |- |Net cash provided by (used in) operating activities | | |82 |(28) |(263) |- | colspan="6" |'''Cash flows from investing activities''' |- |Acquisition of long-term investments | | |(5) |(1) |(3) |- |Proceeds on sale, maturity or distribution from long-term investments | | |0 |35 |0 |- |Acquisition of property, plant and equipment | | |(8) |(8) |(7) |- |Proceeds on sale of property, plant and equipment | | |0 |0 |17 |- |Acquisition of intangible assets | | |(36) |(31) |(34) |- | | | | | | |- |Acquisition of short-term investments | | |(1,039) |(916) |(514) |- |Acquisition of restricted short-term investments | | |(24) |0 |0 |- |Proceeds on sale or maturity of restricted short-term investments | | |0 |24 |0 |- |Proceeds on sale or maturity of short-term investments | | |1,047 |1,104 |717 |- | | | | | | |- |Net cash provided by (used in) investing activities | | |(65) |207 |176 |- | colspan="6" |'''Cash flows from financing activities''' |- |Issuance of common shares | | |19 |10 |6 |- | | | | | | |- |Payment of finance lease liability | | |(1) |0 |0 |- |Repurchase of 3.75% Debentures | | |(610) |0 |0 |- |Issuance of 1.75% Debentures | | |365 |0 |0 |- | | | | | | |- |Net cash provided by (used in) financing activities | | |(227) |10 |6 |- |Effect of foreign exchange gain (loss) on cash, cash equivalents, restricted cash, and restricted cash equivalents | | |2 |(1) |(3) |- |Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents during the period | | |(208) |188 |(84) |- |Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of period | | |426 |218 |406 |- |Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period | | |218 |406 |322 |- ! colspan="6" |Metrics |- |Cost of goods sold as a proportion of revenue (%) | | |28.00% |34.96% |36.13% |- |Operating expenses as a proportion of revenue (%) | | |195.97% |65.32% |174.39% |- |Tax rate (%) | | |0.81% |36.84% | -1.94% |- |Depreciation and amortisation rate (%) | | | |31.61% |47.29% |- |Fixed Capital Investment (FCInv) as a proportion of revenue (%) | | |4.93% |5.43% |6.25% |- |Working Capital Investment (WCInv) as a proportion of revenue (%) | | | |89.97% |2.13% |- |Net borrowing as a proportion of revenue (%) | | | |0% |0% |- |Interest expense as a proportion of revenue (%) | | | |0% |0% |} === Cost of equity === {| class="wikitable" |+Cost of equity (%) !Input !Input value !Additional information |- |Risk-free rate (%) |5.061% |Here, the risk free rate is the US 30 year treasury bond, and is calculated as at 26th October 2023.<ref>https://www.marketwatch.com/investing/bond/tmubmusd30y?countrycode=bx</ref> Research suggests that for the risk-free rate, it's best to use one that has the same or similar maturity to the estimated remaining lifespan of the company. Here, we have assumed that the estimated lifespan of the company is 50 years, so we have used the longest maturity, which is 30 years. |- |Beta |6.93 |Here, to estimate the adjusted beta, we used the iShares MSCI World ETF to represent the market portfolio; and in terms of the time period and frequency of observations, we used five years of monthly data (i.e. 60 observations in total), which is supported by a study and is the most common choice. The beta value in a future period has been found to be on average closer to the mean value of 1.0, and because valuation is forward-looking, it is logical to adjust the raw beta so it more accurately predicts a future beta. |- |Equity risk premium (%) |7.13% |Here, the equity risk premium is in relation to the global region, and is calculated as at 1st July 2023.<ref>https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/ctryprem.html</ref> Research suggests that for the region of equity risk premium, it's best to use one that is the same or similar to the region of the beta market portfolio. Here, the region of the beta market portfolio is the world/global, so we have used the world/global region for the equity risk premium. |- |Cost of equity (%) |54.496% |Cost of equity = Risk-free rate + Beta x Equity risk premium. |} ===Assessment scheme to adjust the basic beta coefficient of Arctic Shores=== Research suggests that the average beta coefficient for start-ups high-tech start-ups is 6.4. The general basic beta coefficient has to be adjusted for each individual start-up based on the risk profile. A standardised assessment scheme has been developed for the adjustment of the beta coefficient. The assessment scheme is used for the standardised determination of a premium or a discount to the beta coefficient depending on the risk profile, associated with the startup, based on information from the business plan and additional discussions with the founders or the management team. {| class="wikitable" |+Assessment scheme to adjust the basic beta coefficient of Arctic Shores<ref>https://ijb.cyut.edu.tw/var/file/10/1010/img/859/V183-3.pdf</ref> ! rowspan="2" |Category ! rowspan="2" |Subcategory ! colspan="5" |'''Adjustment of the beta coefficient''' ! rowspan="2" |'''Result''' |- !'''+1''' !'''+0.5''' !'''0''' !'''-0.5''' !'''-1''' |- ! rowspan="4" | Technology !Maturity of technology |Technology still in initial experimental phase |Technology successful on a laboratory scale |Technology successful in pilot plant |Technology successful in demo plant |Technology successful in technical application | '''-1.0''' |- !Advantages compared to competitive technologies |No advantages identified |Advantages not clearly identifiable |Costs or quality advantages identifiable |Costs and quality advantages identifiable |Significant costs and quality advantages identifiable | '''+1.0''' |- !Reputation of scientist |No reputation |Poor reputation |Moderate reputation |Good reputation |Very good reputation |'''+0.5''' |- !Patent protection |No patent application |First patent application filed |Basic patent close to being granted |Basic patent granted |Extensive portfolio of granted patents | '''+1.0''' |- ! rowspan="4" | Products !Product benefits |Product benefits not identifiable |Product benefits not clearly identifiable |Product benefits clearly identifiable |Product benefits confirmed by first clients |Product benefits confirmed by numerous clients | '''+1.0''' |- !Unique selling proposition |Unique selling proposition not identifiable |Unique selling proposition not clearly identifiable |Unique selling proposition clearly identifiable |Unique selling proposition confirmed by first clients |Unique selling proposition confirmed by numerous clients | '''+1.0''' |- !Scalability |Very low scalability |Low scalability |Moderate scalability |High scalability |Very high scalability |'''-1.0''' |- !Competition |Currently strong competition |Potentially strong competition |Moderate competition | Low competition |Long-term low competition | '''+1.0''' |- ! rowspan="4" | Implementation !Business plan |Business plan unjustifiable |Business plan with open questions |Business plan plausible |Business plan occasionally proven |Business plan frequently proven | '''0.0''' |- !Technical development plan |Technical development plan unjustifiable |Technical development plan difficult to justify |Technical development plan justifiable |Technical development plan likely to be feasible |Technical development plan very likely to be feasible | '''0.0''' |- !Marketing plan |Marketing plan unjustifiable |Marketing plan difficult to justify |Marketing plan justifiable |Marketing plan likely to be feasible |Marketing plan very likely to be feasible | '''0.0''' |- !Business development plan |Business development plan unjustifiable |Business development plan difficult to justify |Business development plan justifiable |Business development plan likely to be feasible |Business development plan very likely to be feasible | '''0.0''' |- ! rowspan="4" | Organisation' !Competences of the management team |Management team with major flaws |Management team with some flaws |Management team is complete |Management team is complete and competent | rowspan="2" |Management team is complete and very competent Headquarters location has many advantages | '''0.0''' |- !Headquarters location |Headquarters location problematic |Headquarters location can be improved |Headquarters location is fine |Headquarters location has advantages | '''-0.5''' |- !Competences of advisory board |Very low level of competences of advisory board/ consultants |Low level of competences of advisory board/ consultants |Moderate level of competences of advisory board/consultants |High level of competences of advisory board/ consultants |Very high level of competences of advisory board/consultants | '''-0.5''' |- !Process efficiency |Process inefficient |Process not very efficient |Process efficient |Process very efficient |Process exceptionally efficient | '''0.0''' |- ! rowspan="4" | Finances !Sales plan |Sales plan unjustifiable |Sales plan difficult to justify |Sales plan justifiable |Sales plan conservative |Sales plan very conservative | '''0.0''' |- !Costs plan |Costs plan unjustifiable |Costs plan difficult to justify |Costs plan justifiable |Costs plan conservative |Costs plan very conservative | '''0.0''' |- !Profitability |Fundamentally low profitability |Risk of low profitability |Average profitability |Currently high profitability |Fundamentally high profitability | '''1.0''' |- !Liquidity plan |Financial resources for next year are not secured |Financial resources for next year are secured |Financial resources for next 2 years are secured |Financial resources for next 3 years are secured |Financial resources for next 4 years are secured | '''0.0''' |- | colspan="7" |'''Total''' |'''3.5''' |}
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