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REGISTERED NUMBER: 11023994 (England and Wales)









AUDITED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 AUGUST 2023

FOR

WATERBEAR EDUCATION LTD

WATERBEAR EDUCATION LTD (REGISTERED NUMBER: 11023994)

CONTENTS OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023










Page

Company Information 1

Balance Sheet 2

Notes to the Financial Statements 3


WATERBEAR EDUCATION LTD

COMPANY INFORMATION
FOR THE YEAR ENDED 31 AUGUST 2023







DIRECTORS: B J Dickinson
A P J Bushell
T Sweeney
S Patel
V J Collis
R M Holmes



REGISTERED OFFICE: Pavilion View
19 New Road
Brighton
East Sussex
BN1 1EY



BUSINESS ADDRESS: Hanover House
118 Queens Road
Brighton
BN1 3XG



REGISTERED NUMBER: 11023994 (England and Wales)



SENIOR STATUTORY AUDITOR: Daniel Chapman



AUDITORS: Hartley Fowler LLP
Statutory Auditors
Chartered Accountants
Pavilion View
19 New Road
Brighton
East Sussex
BN1 1EY

WATERBEAR EDUCATION LTD (REGISTERED NUMBER: 11023994)

BALANCE SHEET
31 AUGUST 2023

2023 2022
Notes £    £    £    £   
FIXED ASSETS
Intangible assets 4 94,183 104,521
Tangible assets 5 288,377 169,004
382,560 273,525

CURRENT ASSETS
Debtors 6 283,962 286,516
Cash at bank 353,142 505,379
637,104 791,895
CREDITORS
Amounts falling due within one year 7 854,091 691,148
NET CURRENT (LIABILITIES)/ASSETS (216,987 ) 100,747
TOTAL ASSETS LESS CURRENT
LIABILITIES

165,573

374,272

CREDITORS
Amounts falling due after more than one
year

8

674,933

283,367
NET (LIABILITIES)/ASSETS (509,360 ) 90,905

CAPITAL AND RESERVES
Called up share capital 11 396,953 396,953
Share premium 1,961,149 1,961,149
Share option reserves 9,842 -
Retained earnings (2,877,304 ) (2,267,197 )
SHAREHOLDERS' FUNDS (509,360 ) 90,905

The financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

In accordance with Section 444 of the Companies Act 2006, the Statement of Comprehensive Income has not been delivered.

The financial statements were approved by the Board of Directors and authorised for issue on 27 February 2024 and were signed on its behalf by:





A P J Bushell - Director


WATERBEAR EDUCATION LTD (REGISTERED NUMBER: 11023994)

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023


1. STATUTORY INFORMATION

Waterbear Education Ltd is a private company, limited by shares, incorporated in England and Wales. The company's registered number and registered office address can be found on the Company Information Page.

The presentation currency of the financial statements is the Pound Sterling (£).

Monetary amounts in these financial statements are rounded to the nearest whole £1. The financial statements are presented in sterling which is also the functional currency of the Company.

2. ACCOUNTING POLICIES

Basis of preparing the financial statements
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" including the provisions of Section 1A "Small Entities" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

The financial statements have been prepared on the going concern basis which assumes that the company will continue in operational existence for the foreseeable future. At the year end the company had net liabilities of £509,360 (2022: net assets of £90,905), including cash at bank of £353,142 (2022: 505,379).The directors are confident that through detailed modelling and the company's strong cash reserves, as well as the new college at Sheffield, trading should continue as forecast for the foreseeable future. With the investment and loan commitments from Falmouth University, in addition to them being a positive partner with a significant interest in the company, the directors foresee no reason to increase the going concern risk. On that basis the directors are satisfied that the going concern basis of preparing the financial statements is appropriate.

Significant judgements and estimates
In the application of the company's accounting policies, which are described below, management is required to make judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based in historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both the current and future periods.

The key sources of estimation uncertainty that have a significant effect on the amounts recognised in the financial statements are described below.

(i) Accrued income provision
The directors estimate the required accrued income provision by reviewing accrued income and taking in to account both amounts received post year-end and the perceived likelihood of the accrued income being recovered.

The key area of judgement is in the treatment of the transaction costs attributable to the Investment Agreements. The Investment Agreements incorporated the issue of all five types of shares capital and the issue of the loan note instruments. The directors consider that to divide the transaction costs six ways between all five types of share issue and the loan notes to be the most appropriate treatment of the transaction costs.

Transaction costs attributed to Ordinary A and Ordinary B shares were allocated to Retained Earnings. Transaction costs attributed to Ordinary C shares were allocated to the Share Premium account and the Loan Notes liability. Transaction costs attributed to Ordinary D and Ordinary E shares were allocated to the Share Premium account.

WATERBEAR EDUCATION LTD (REGISTERED NUMBER: 11023994)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 AUGUST 2023


2. ACCOUNTING POLICIES - continued

Turnover
Turnover represents amounts receivable for course fees in the academic year. Turnover is recognised in line with the delivery of content of each course.

Intangible assets
Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Trademarks are being amortised evenly over their estimated useful life of five years.

Delivery platform is being amortised evenly over its estimated useful life of five years.

Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.
Short leasehold - over the lease term
Improvements to property - 10% on cost
Plant and machinery - 33% on cost
Fixtures and fittings - 33% on cost
Computer equipment - 33% on cost

Tangible fixed assets are stated at cost less accumulated depreciation less accumulated impairment losses. Cost includes costs directly attributable to making the asset capable of operating as intended by management.

At each balance sheet date, the company reviews the carrying amount of its tangible fixed assets to determine whether there is any indication that items have suffered an impairment loss. If any such indication exists, the recoverable amount of an asset is estimated in order to determine the extent of the impairment loss, if any.

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. Impairment loss is recognised as an expense immediately.

Taxation
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

WATERBEAR EDUCATION LTD (REGISTERED NUMBER: 11023994)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 AUGUST 2023


2. ACCOUNTING POLICIES - continued

Hire purchase and leasing commitments
Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability.

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

Debtors and creditors receivable / payable within one year
Debtors and creditors with no stated interest rate and receivables or payables within one year are recorded at transaction price. Any losses arising from impairment are recognised in the profit and loss account in other administrative expenses.

Impairments
Assets not measured at fair value are reviewed for any indication that the asset may be impaired at each balance sheet date. If such indication exists, the recoverable amount of the asset, or the asset's cash generating unit, is estimated and compared to the carrying amount. Where the carrying amount exceeds its recoverable amount, an impairment loss is recognised in profit or loss unless the asset is carried at a revalued amount where the impairment loss is a revaluation decrease.

3. EMPLOYEES AND DIRECTORS

The average number of employees during the year was 32 (2022 - 25 ) .

4. INTANGIBLE FIXED ASSETS
Delivery
Trademarks platform Totals
£    £    £   
COST
At 1 September 2022 5,475 177,157 182,632
Additions - 29,182 29,182
At 31 August 2023 5,475 206,339 211,814
AMORTISATION
At 1 September 2022 2,802 75,309 78,111
Amortisation for year 1,095 38,425 39,520
At 31 August 2023 3,897 113,734 117,631
NET BOOK VALUE
At 31 August 2023 1,578 92,605 94,183
At 31 August 2022 2,673 101,848 104,521

The Trademarks amortisation policy was changed from 10 years straight line to 5 years straight line. Resulting in an increase to the charge for the year of £548.

WATERBEAR EDUCATION LTD (REGISTERED NUMBER: 11023994)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 AUGUST 2023


5. TANGIBLE FIXED ASSETS
Improvements
Short to Plant and
leasehold property machinery
£    £    £   
COST
At 1 September 2022 22,349 138,176 170,695
Additions 3,873 51,294 23,139
At 31 August 2023 26,222 189,470 193,834
DEPRECIATION
At 1 September 2022 6,359 50,284 128,116
Charge for year 2,680 15,106 26,894
At 31 August 2023 9,039 65,390 155,010
NET BOOK VALUE
At 31 August 2023 17,183 124,080 38,824
At 31 August 2022 15,990 87,892 42,579

Fixtures
and Computer
fittings equipment Totals
£    £    £   
COST
At 1 September 2022 37,736 39,268 408,224
Additions 48,332 64,010 190,648
At 31 August 2023 86,068 103,278 598,872
DEPRECIATION
At 1 September 2022 32,449 22,012 239,220
Charge for year 8,292 18,303 71,275
At 31 August 2023 40,741 40,315 310,495
NET BOOK VALUE
At 31 August 2023 45,327 62,963 288,377
At 31 August 2022 5,287 17,256 169,004

6. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
£    £   
Trade debtors 11,154 44,570
Other debtors 42,799 22,067
Directors' current accounts 599 113
Accrued income 101,224 127,881
Prepayments 128,186 91,885
283,962 286,516

WATERBEAR EDUCATION LTD (REGISTERED NUMBER: 11023994)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 AUGUST 2023


7. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
£    £   
Bank loans and overdrafts 10,000 9,690
Other loans 502,917 -
Loan notes - 400,163
Trade creditors 184,307 92,014
Social security and other taxes 67,045 31,188
Other creditors 35,591 22,376
Directors' current accounts - 186
Deferred income 14,434 50,114
Accrued expenses 39,797 85,417
854,091 691,148

8. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
2023 2022
£    £   
Bank loans - 1-2 years 10,000 10,000
Bank loans - 2-5 years 17,500 27,500
Loan notes 647,433 245,867
674,933 283,367

9. LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:
2023 2022
£    £   
Within one year 221,936 113,123
Between one and five years 416,383 262,257
In more than five years 265,000 14,583
903,319 389,963

The comparative minimum lease payments under non-cancellable operating leases has been increased by £242,633 from £147,330 to £389,963. The prior year adjustment has been made to reflect the true position at the 31 August 2022 balance sheet date.

10. SECURED DEBTS

The £330,000 10% Loan Notes issued on 6 February 2018 are secured by the lender via fixed and floating charges across all of the company's property and contains a negative pledge. The charge was registered on 6 February 2018.

WATERBEAR EDUCATION LTD (REGISTERED NUMBER: 11023994)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 AUGUST 2023


11. CALLED UP SHARE CAPITAL

Allotted and fully paid:
Number: Class: Nominal value: 2023 2022
£ £
15,812,778 Ordinary A shares £0.01 158,128 158,128
15,400,000 Ordinary B shares £0.01 154,000 154,000
1,170,000 Ordinary C shares £0.000001 1 1
8,074,444 Ordinary D shares £0.01 80,744 80,744
408,000 Ordinary E shares £0.01 4,080 4,080

396,953 396,953

Per the company's Articles of Association, C Ordinary shares will be converted upon the Listing of the company with the C Ordinary shares being consideration for the purchase of the new shares issued. The number of new shares that will be purchased will depend on the 'value' of the C Ordinary shares at the time of Listing as determined by the Investment Agreement. This will be treated as an issue of bonus shares upon conversion.

12. DISCLOSURE UNDER SECTION 444(5B) OF THE COMPANIES ACT 2006

The Report of the Auditors was unqualified.

Daniel Chapman (Senior Statutory Auditor)
for and on behalf of Hartley Fowler LLP

13. DIRECTORS' ADVANCES, CREDITS AND GUARANTEES

The following advances and credits to directors subsisted during the years ended 31 August 2023 and 31 August 2022:

2023 2022
£    £   
A P J Bushell
Balance outstanding at start of year 113 (103 )
Amounts advanced - 216
Amounts repaid (113 ) -
Amounts written off - -
Amounts waived - -
Balance outstanding at end of year - 113

B J Dickinson
Balance outstanding at start of year (186 ) (186 )
Amounts advanced 785 -
Amounts repaid - -
Amounts written off - -
Amounts waived - -
Balance outstanding at end of year 599 (186 )

The loan is interest free and repayable on demand.

WATERBEAR EDUCATION LTD (REGISTERED NUMBER: 11023994)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 AUGUST 2023


14. POST BALANCE SHEET EVENTS

Following the year end, the company issuedthe following: (i) fixed rate unsecured 10% loan notes with a principal amount of £1,000,000, and (ii) warrants entitling the warrant holder to subscribe for 5% of the company's entire fully diluted issued share capital on certain exercise events.

In addition, the company entered in to aterm loan facility agreement which replacedan existing loan agreement in effect at the year end, extending the term of the £500,000 7%"Other loan" (detailed in the note titled "Creditors: Amounts falling due within one year") with £100,000 repayable by 31 May 2024 and £400,000 repayable by 30 November 2025 or, otherwise, by 31 May 2026.