Company registration number 07533570 (England and Wales)
IMSPEX DIAGNOSTICS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
IMSPEX DIAGNOSTICS LIMITED
COMPANY INFORMATION
Directors
Mr S Dominguez Vivero
Mr Z Wang
Mr J McKinley
Company number
07533570
Registered office
Ty Menter
Venture House
Navigation Park
Abercynon
Mid Glamorgan
United Kingdom
CF45 4SN
Auditor
Azets Audit Services
Ty Derw, Lime Tree Court
Cardiff Gate Business Park
Cardiff
United Kingdom
CF23 8AB
IMSPEX DIAGNOSTICS LIMITED
CONTENTS
Page
Directors' report
1 - 2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Profit and loss account
7
Balance sheet
8
Notes to the financial statements
9 - 19
IMSPEX DIAGNOSTICS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company continued to be that of the provision of a range of customer analytical chemistry services.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr S Dominguez Vivero
Mr Z Wang
Mr J McKinley
Auditor
In accordance with the company's articles, a resolution proposing that Azets Audit Services be reappointed as auditor of the company will be put at a General Meeting.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
IMSPEX DIAGNOSTICS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Going Concern
These financial statements are prepared on the going concern basis. The directors have a reasonable expectation that the company will continue in operational existence for the foreseeable future. However, the directors are aware of certain material uncertainties which may cause doubt on the company's ability to continue as a going concern.
The company has generated a loss of £727,395 (2022: £544,806) and had net assets of £822,196 (2022: £1,675,527) at the year end. Current liabilities include convertible loans due within one year of £904,075 (2022:
£829,075);
At the date of approval of the financial statements, the company was in advanced discussions on a number of transactions, including the sale of its investment in its subsidiary, the sale of certain intangible Assets and a share buyback.
The expected proceeds from these transactions are expected to enable the company to settle a significant proportion of its liabilities, including the convertible loan notes. These loan notes which were due for repayment on 31 December 2022 have been extended such that repayment will not be required until after the transactions referred to above have occurred. The directors have identified that in order to continue trading, additional funding over and above the proceeds from the transactions will be required. This additional funding is initially expected to be in the form of new loan notes issued for a period of 6 months, which at their maturity will need to be replaced by further funding to enable the company to continue its operations.
At the date of approval of the financial statements, the additional funding had not been legally committed to. The directors recognise that in the event that the company was not able to successfully complete the fundraising referred to above significant uncertainty would exist as to whether the company would be able to continue to operate. This indicates that a material uncertainty exists that may cast doubt on the company’s ability to continue as a going concern.
The financial statements do not include the adjustments that would result if the company were unable to continue as a going concern. In the event the company ceased to be a going concern, the adjustments would include writing down the carrying value of assets, to their recoverable amount and providing for any further liabilities that might arise. The recoverable amount is unlikely to the same value as the net book value, this is particularly relevant in the case of the net book value of the company’s intangible asset.
Notwithstanding the material uncertainties described above, on the basis that further support can be agreed in the relevant timescale and values, the directors have a reasonable expectation that the company can continue to meet its liabilities as they fall due, for a period of at least 12 months from the date of approval of this report. As such the financial statements have been prepared on a going concern basis.
Small companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.
On behalf of the board
Mr S Dominguez Vivero
Mr J McKinley
Director
Director
2 April 2024
2 April 2024
IMSPEX DIAGNOSTICS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
IMSPEX DIAGNOSTICS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF IMSPEX DIAGNOSTICS LIMITED
- 4 -
Opinion
We have audited the financial statements of Imspex Diagnostics Limited (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, the balance sheet and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty relating to going concern
We draw attention to note 1.2 in the financial statements, which indicates that whilst the directors are exploring plans for funding arrangements sufficient for the company, there remains uncertainty over whether this funding will be received within the necessary timescales or at all.
In forming our opinion, which is not modified, we have considered the adequacy of the disclosures made in note 1.2 of the financial statements concerning the company's ability to continue as a going concern. Should the forecasts prepared by the board not be realised or should the expected further sources of funding not be acheived the company will be unable to continue meeting liabilities as they fall due. These conditions indicate the existence of a material uncertainty which may cast significant doubt about the company's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the company was unable to continue as a going concern, these would include but not limited to recognising intangible assets at a break up value as opposed to their current net book value.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the directors' report has been prepared in accordance with applicable legal requirements.
IMSPEX DIAGNOSTICS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF IMSPEX DIAGNOSTICS LIMITED
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit; or
the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption in preparing the directors' report and from the requirement to prepare a strategic report.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
IMSPEX DIAGNOSTICS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF IMSPEX DIAGNOSTICS LIMITED
- 6 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Craig Yearsley FCCA (Senior Statutory Auditor)
For and on behalf of Azets Audit Services
2 April 2024
Chartered Accountants
Statutory Auditor
Charter Court
Phoenix Way Enterprise Park
Swansea
United Kingdom
SA7 9FS
IMSPEX DIAGNOSTICS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
£
£
Turnover
41,409
75,667
Cost of sales
(70,142)
(10,458)
Gross (loss)/profit
(28,733)
65,209
Administrative expenses
(883,605)
(1,036,448)
Other operating income
73,364
247,321
Operating loss
(838,974)
(723,918)
Interest payable and similar expenses
(75,663)
(47,266)
Loss before taxation
(914,637)
(771,184)
Tax on loss
62,026
226,378
Loss for the financial year
(852,611)
(544,806)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
IMSPEX DIAGNOSTICS LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
4
3,839,589
3,945,685
Tangible assets
5
5,976
4,348
Investments
6
8,560
8,560
3,854,125
3,958,593
Current assets
Stocks
11,428
47,660
Debtors
8
106,171
199,915
Cash at bank and in hand
3,763
27,675
121,362
275,250
Creditors: amounts falling due within one year
9
(2,642,316)
(1,405,909)
Net current liabilities
(2,520,954)
(1,130,659)
Total assets less current liabilities
1,333,171
2,827,934
Creditors: amounts falling due after more than one year
10
(19,354)
(661,506)
Provisions for liabilities
(490,901)
(490,901)
Net assets
822,916
1,675,527
Capital and reserves
Called up share capital
12
310,811
310,811
Share premium account
1,807,507
1,807,507
Profit and loss reserves
(1,295,402)
(442,791)
Total equity
822,916
1,675,527
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies' regime and Financial Reporting Standard 102 section 1A for small companies.
The financial statements were approved by the board of directors and authorised for issue on 2 April 2024 and are signed on its behalf by:
Mr S Dominguez Vivero
Director
Company Registration No. 07533570
IMSPEX DIAGNOSTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
1
Accounting policies
Company information
Imspex Diagnostics Limited is a private company limited by shares incorporated in England and Wales. The registered office is Ty Menter, Venture House, Navigation Park, Abercynon, Mid Glamorgan, United Kingdom, CF45 4SN.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
IMSPEX DIAGNOSTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 10 -
1.2
Going concern
These financial statements are prepared on the going concern basis. The directors have a reasonable expectation that the company will continue in operational existence for the foreseeable future. However, the directors are aware of certain material uncertainties which may cause doubt on the company's ability to continue as a going concern.
The company has generated a loss of £852,611 (2022: £544,806) and had net assets of £822,196 (2022: £1,675,527) at the year end. Current liabilities include convertible loans due within one year of £822,916 (2022: £829,075);
At the date of approval of the financial statements, the company was in advanced discussions on a number of transactions, including the sale of its investment in its subsidiary, the sale of certain intangible Assets and a share buyback.
The expected proceeds from these transactions are expected to enable the company to settle a significant proportion of its liabilities, including the convertible loan notes. These loan notes which were due for repayment on 31 December 2022 have been extended such that repayment will not be required until after the transactions referred to above have occurred. The directors have identified that in order to continue trading, additional funding over and above the proceeds from the transactions will be required. This additional funding is initially expected to be in the form of new loan notes issued for a period of 6 months, which at their maturity will need to be replaced by further funding to enable the company to continue its operations.
At the date of approval of the financial statements, the additional funding had not been legally committed to. The directors recognise that in the event that the company was not able to successfully complete the fundraising referred to above significant uncertainty would exist as to whether the company would be able to continue to operate. This indicates that a material uncertainty exists that may cast doubt on the company’s ability to continue as a going concern.
The financial statements do not include the adjustments that would result if the company were unable to continue as a going concern. In the event the company ceased to be a going concern, the adjustments would include writing down the carrying value of assets, to their recoverable amount and providing for any further liabilities that might arise. The recoverable amount is unlikely to the same value as the net book value, this is particularly relevant in the case of the net book value of the company’s intangible asset.
Notwithstanding the material uncertainties described above, on the basis that further support can be agreed in the relevant timescale and values, the directors have a reasonable expectation that the company can continue to meet its liabilities as they fall due, for a period of at least 12 months from the date of approval of this report. As such the financial statements have been prepared on a going concern basis.
1.3
Turnover
The turnover shown in the profit and loss account represents amounts invoiced during the period, exclusive of Value Added Tax.
1.4
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
IMSPEX DIAGNOSTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 11 -
1.5
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Patents
straight line over 20 years
Development Costs
straight line over 10 years
1.6
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and machinery
10% to 20% on a straight line basis
Fixtures, fittings & equipment
33% on a straight line basis
Computer equipment
33% on a straight line basis
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.
1.7
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of 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). 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.
Recoverable amount is the higher of fair value less costs to sell and 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.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. 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.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
IMSPEX DIAGNOSTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
1.8
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.9
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.10
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
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.
Classification of financial liabilities
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.
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.
IMSPEX DIAGNOSTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.11
Compound instruments
The component parts of compound instruments issued by the company are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangement. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar non-convertible instrument. This amount is recorded as a liability on an amortised cost basis using the effective interest method until extinguished upon conversion or at the instrument's maturity date. The equity component is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognised and included in equity net of income tax effects and is not subsequently remeasured.
1.12
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.13
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.14
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.15
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
IMSPEX DIAGNOSTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.16
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.17
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
1.18
Operating lease agreements
Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged against profits on a straight line basis over the period of the lease.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on 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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Depreciation
Management reviews the useful lives of depreciable assets at each reporting date based on the expected utilitisation of the assets of the company. The carrying amounts are analysed in notes 4 and 5. Actual results, however, may vary due to technical obsolescence.
Intangible Assets Impairment assessment
Management reviews the carrying value of the intangible assets at each reporting date based on the expected future benefit to the company. There is considerable judgement in terms of future sales of the products as well as the expected margins and cost base related to these sales.
IMSPEX DIAGNOSTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 15 -
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Value of Intangible Assets
Intangible assets include research and development costs for innovative products. These are amortised over a 10 year period, however there is estimation uncertainty over the future benefit that will be derived from the assets, particularly given the going concern issues raised in note 1 to the financial statements. While the company has products which it is able to sell, until sales commence at any volume there is significant estimation as to if the period of 10 years is sufficent. If this was shortened by a period of 1 year this was have the affect of increasing the amortisation by £58,816.
No amortisation is charged in the year of capitalisation.
3
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
4
5
4
Intangible fixed assets
Patents
Development Costs
Total
£
£
£
Cost
At 1 January 2023
204,516
5,836,505
6,041,021
Additions - internally developed
433,474
433,474
At 31 December 2023
204,516
6,269,979
6,474,495
Amortisation and impairment
At 1 January 2023
71,571
2,023,765
2,095,336
Amortisation charged for the year
10,226
529,344
539,570
At 31 December 2023
81,797
2,553,109
2,634,906
Carrying amount
At 31 December 2023
122,719
3,716,870
3,839,589
At 31 December 2022
132,945
3,812,740
3,945,685
IMSPEX DIAGNOSTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
5
Tangible fixed assets
Plant and machinery etc
£
Cost
At 1 January 2023
151,045
Disposals
(32,017)
At 31 December 2023
119,028
Depreciation and impairment
At 1 January 2023
146,697
Depreciation charged in the year
6,224
Eliminated in respect of disposals
(32,017)
Other adjustments
(7,852)
At 31 December 2023
113,052
Carrying amount
At 31 December 2023
5,976
At 31 December 2022
4,348
6
Fixed asset investments
2023
2022
£
£
Other investments other than loans
8,560
8,560
7
Subsidiaries
Details of the company's subsidiaries at 31 December 2023 are as follows:
Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Gesellschaft fur analytische Seneorsysteme mbH
Germany
Analytical Chemistry
Ordinary
62.99
8
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,508
Corporation tax recoverable
69,841
171,282
Other debtors
36,330
26,125
106,171
199,915
IMSPEX DIAGNOSTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
8
Debtors
(Continued)
- 17 -
The corporation tax recoverable relates to R & D tax credits for the period.
9
Creditors: amounts falling due within one year
2023
2022
£
£
Bank loans
11,333
11,037
Convertible loans
904,075
829,075
Trade creditors
269,795
89,524
Amounts owed to group undertakings
1,133,324
202,492
Taxation and social security
5,894
4,495
Other creditors
317,895
269,286
2,642,316
1,405,909
Included within other creditors is interest due to convertabile loan note holders amounting to £93,734 (2022: £47,780).
Also included in other creditors is a directors loan amounting to £22,888 (2022: £22,888).
Included in amounts owed to group compaines are loans of £570,581 (2022: £202,492) interest on these loans has been added to the loan balances and are due for repayment. The loans accrue interest at a rate of between 5% & 8%.
10
Creditors: amounts falling due after more than one year
2023
2022
£
£
Bank loans and overdrafts
19,354
28,828
Convertible loans
75,000
Other creditors
557,678
19,354
661,506
IMSPEX DIAGNOSTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
11
Convertible loan notes
2023
2022
£
£
Liability component of convertible loan notes
904,075
904,075
The net proceeds received from the issue of the convertible loan notes have not been split between the financial liability element and an equity component due to an indeterminate share price at the date of conversion. There is not deemed to be an equity component of the convertible loans notes and no amount has been credited to the equity reserve.
The liability component is measured at amortised cost, and the difference between the carrying amount of the liability at the date of issue and the amount reported in the Balance Sheet represents the effective interest rate less interest paid to that date.
The effective rate of interest is 5%.
12
Called up share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and not fully paid
Ordinary shares of 1p each
31,081,080
31,081,080
310,811
310,811
The company issued 1,785,903 new £0.01 shares during the previous financial year for an aggregate nominal value of £17,859. The consideration received by the company for the allotment was £239,306.
13
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2023
2022
£
£
12,590
17,687
IMSPEX DIAGNOSTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
14
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Sales
Purchases
2023
2022
2023
2022
£
£
£
£
Entities over which the entity has control, joint control or significant influence
5,500
8,801
32,334
77,242
Other related parties
6,300
42,537
440,646
-
Loan interest Paid
2023
2022
£
£
Entities over which the entity has control, joint control or significant influence
35,955
9,101
2023
2022
Amounts due to related parties
£
£
Entities with control, joint control or significant influence over the company
89,742
-
Entities over which the entity has control, joint control or significant influence
1,043,582
759,129
Other related parties
230,499
-
15
Parent company
The controlling parent is Hanon Group Inc Limited, incorporated in China.
The ultimate holding company is Hanon Advanced Technology Group Co Ltd (by virtue of the shareholdings).
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