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Registration number: 05023238

Prepared for the registrar

Cortex Limited

Annual Report and Unaudited Financial Statements

for the Year Ended 31 December 2023

 

Cortex Limited

Contents

Company Information

1

Balance Sheet

2

Notes to the Financial Statements

3 to 10

 

Cortex Limited

Company Information

Directors

M Taylor

A Edwards

Registered office

Kings Park House
22 Kings Park Road
Southampton
SO15 2AT

Accountants

Hazlewoods LLP
Windsor House
Bayshill Road
Cheltenham
GL50 3AT

 

Cortex Limited

(Registration number: 05023238)
Balance Sheet as at 31 December 2023

Note

31 December 2023
 £

(As restated)
31 December 2022
 £

Fixed assets

 

Intangible assets

4

1,425,892

1,524,664

Tangible assets

5

34,137

38,072

Investments

6

-

1

 

1,460,029

1,562,737

Current assets

 

Debtors

7

803,373

879,052

Cash at bank and in hand

 

484,630

961,124

 

1,288,003

1,840,176

Creditors: Amounts falling due within one year

8

(1,289,746)

(1,786,011)

Net current (liabilities)/assets

 

(1,743)

54,165

Total assets less current liabilities

 

1,458,286

1,616,902

Provisions

10

(60,000)

(60,000)

Deferred tax liabilities

11

(288,753)

(380,575)

Net assets

 

1,109,533

1,176,327

Capital and reserves

 

Called up share capital

13

10,306

9,299

Share premium reserve

1,205,244

198,641

Profit and loss account

(106,017)

968,387

Total equity

 

1,109,533

1,176,327

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

Directors' responsibilities:

The members have not required the Company to obtain an audit of its accounts for the year in question in accordance with section 476; and

The directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts.

These financial statements have been prepared in accordance with the special provisions relating to companies subject to the small companies regime within Part 15 of the Companies Act 2006.

Approved and authorised by the Board on 27 August 2024 and signed on its behalf by:
 


A Edwards
Director

 

Cortex Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

 

1

General information

The Company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is:
Kings Park House
22 Kings Park Road
Southampton
SO15 2AT

 

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' Section 1A Small Entities.

Basis of preparation

These financial statements have been prepared using the historical cost convention.

The presentational currency of the financial statements is Pounds Sterling, being the functional currency of the primary economic environment in which the Company operates. Monetary amounts in these financial statements are rounded to the nearest Pound.

Going concern

The Directors plan to continue to invest in development of products to generate new revenue streams and have produced forecasts for the 12 month period from the date of approving the financial statements including this further investment and expected growth, and they have a reasonable expectation that the Company will have access to adequate resources to continue in operation for the foreseeable future.

The Directors therefore continue to adopt the going concern basis in preparing the financial statements.

Group accounts not prepared

The Company is part of a small group. The Company has taken advantage of the exemption provided by Section 398 of the Companies Act 2006 and has not prepared group accounts.

Changes in accounting policy

The company have revised their accounting policy so that Development Costs are now capitalised in the financial statements. The directors' are in agreement that the revised policy provides more reliable and more relevant information to the users and the new policy has been applied retrospectively in the financial statements. A reconciliation of the impact can be seen in note 14.

Revenue recognition

Revenue represents the fair value of services provided during the period. Revenue is recognised as contract activity progresses and the right to consideration earned. Fair value reflects the amounts expected to be recoverable from customers and is based on time spent and costs incurred to date as a percentage of total anticipated costs. Revenue from support and maintenance agreements is recognised as earned over the period of the agreement. Payments in advance under such agreements are treated as deferred income.

The Company recognises revenue when: the amount of revenue can be reliably measured; it is probable that future economic benefits will flow to the entity; and specific criteria have been met for each of the Company's activities.

 

Cortex Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

 

2

Accounting policies (continued)

Foreign currency transactions and balances

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the initial transaction dates.

Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in the profit and loss account, except that a charge attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates taxable income.

Deferred tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements and on unused tax losses or tax credits in the Company. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

The carrying amounts of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.

Development costs

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

Amortisation

Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:

Asset class

Amortisation method and rate

Development costs

50% of cost

Tangible assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is provided on tangible fixed assets so as to write off the cost, less any estimated residual value, over their expected useful economic life as follows:

Asset class

Depreciation method and rate

Leasehold Improvements

Over term of lease

Furniture & Fittings

20-25% of cost

Computer Equipment

33% of cost

Trade debtors

Trade debtors are amounts due from customers for services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. All trade debtors are repayable within one year and hence are included at the undiscounted cost of cash expected to be received. A provision for the impairment of trade debtors is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the debtors.

 

Cortex Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

 

2

Accounting policies (continued)

Financial instruments


Classification
Financial instruments are classified and accounted for according to the substance of the contractual arrangement, as financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. Where shares are issued, any component that creates a financial liability of the Company is presented as a liability on the balance sheet. The corresponding dividends relating to the liability component are charged as interest expenses in the profit and loss account.

 Recognition and measurement
All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

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


 Impairment
Assets, other than those measured at fair value, are assessed for indicators of impairment at each balance sheet date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss as described below.

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

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

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

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

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

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the Company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and all are repayable within one year and hence are included at the undiscounted amount of cash expected to be paid.

 

Cortex Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

 

2

Accounting policies (continued)

Provisions

Provisions are recognised when the Company has an obligation at the reporting date as a result of a past event, it is probable that the Company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the Company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

Critical accounting 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 amounts 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.

Key sources of estimation uncertainty

No key sources of estimation uncertainty have been identified by management in preparing these financial statements other than those detailed in these accounting policies.

Judgements

No significant judgements have been made by management in preparing these financial statements.

 

Cortex Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

 

3

Staff numbers

The average number of persons employed by the Company (including directors) during the year, was as follows:

Year ended 31 December 2023
 No.

1 October 2021 to 31 December 2022
 No.

Average number of employees

48

50

 

4

Intangible assets

(As restated)
Development costs
 £

Cost

At 1 January 2023

3,542,597

Additions

1,057,652

At 31 December 2023

4,600,249

Amortisation

At 1 January 2023

2,017,933

Amortisation charge

1,156,424

At 31 December 2023

3,174,357

Carrying amount

At 31 December 2023

1,425,892

At 31 December 2022

1,524,664

 

5

Tangible assets

Leasehold Improvements
£

Furniture & Fittings
£

Computer Equipment
 £

Total
£

Cost

At 1 January 2023

84,350

44,299

44,937

173,586

Additions

-

1,291

6,750

8,041

At 31 December 2023

84,350

45,590

51,687

181,627

Depreciation

At 1 January 2023

48,374

44,299

42,841

135,514

Charge for the period

8,648

206

3,122

11,976

At 31 December 2023

57,022

44,505

45,963

147,490

Carrying amount

At 31 December 2023

27,328

1,085

5,724

34,137

At 31 December 2022

35,976

-

2,096

38,072

 

Cortex Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

 

6

Investments

31 December
2023
£

30 September
2022
£

Investments in subsidiaries

-

1

Cortex Limited held 100% of the Ordinary shares in Innovise IES Limited, a dormant company registered in England & Wales. On 28 February 2023, Innovise IES Limited was dissolved.

 

7

Debtors

31 December 2023
 £

31 December 2022
 £

Trade debtors

 

225,988

140,261

Amounts owed by group undertakings

-

7,320

Other debtors

 

216,102

212,711

Prepayments

 

39,743

3,882

Accrued income

 

91,246

27,767

Corporation tax asset

230,294

487,111

   

803,373

879,052

Details of non-current trade and other receivables

£40,800 (2022 - £40,800) of other debtors is classified as non-current.

 

8

Creditors

Note

31 December 2023
 £

31 December 2022
 £

Due within one year

 

Loans and borrowings

9

469,000

-

Trade creditors

 

37,175

22,747

Amounts owed to group undertakings

2,446

-

Social security and other taxes

 

76,812

66,309

Other creditors

 

16,695

14,729

Accrued expenses and deferred income

 

687,618

1,682,226

 

1,289,746

1,786,011

 

9

Loans and borrowings

2023
£

2022
£

Current loans and borrowings

Other borrowings

469,000

-


Other borrowings
Other borrowings are secured by a debenture over all assets held by the company.

 

Cortex Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

 

10

Provisions

Dilapidations
£

Total
£

At 1 January 2023

60,000

60,000

At 31 December 2023

60,000

60,000

Provisions for dilapidations relate to estimated costs of rectification works required under tenant repairing leases.

 

11

Deferred tax

Deferred tax assets and liabilities

2023

Liability
£

Fixed asset timing differences

360,818

Short term timing differences

(1,704)

Losses and other deductions

(70,361)

288,753

2022

Liability
£

Fixed asset timing differences

385,299

Short term timing differences

(1,460)

Losses and other deductions

(3,264)

380,575

 

12

Obligations under leases

Operating leases

As at 31 December 2023 the company had total commitments under non-cancellable operating leases of £221,000 (2022 - £289,000). Of this amount, £68,000 (2022 - £68,000) is due in under 1 year and £153,000 (2022 - £221,000) is due in more than 1 year.

 

13

Share capital

Allotted, called up and fully paid shares

 

31 December 2023

31 December 2022

 

No.

£

No.

£

Ordinary A shares of £0.01 each

130,640

1,306

29,879

299

Ordinary B shares of £1,000 each

9

9,000

9

9,000

 

130,649

10,306

29,888

9,299

 

Cortex Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

 

13

Share capital (continued)


Issue of shares
During the year, 100,761 Ordinary A shares of £0.01 each were issued for total consideration of £1,007,610.

Share rights
Shares rights are the same in all respects except that profits distributable to Ordinary B shareholders are at the prior sanction of Ordinary A shareholders and there are restrictive rights on the Ordinary B shares in the event of a sale of the Company.

 

14

Reconciliation of prior period restatement following a change of policy in capitalised development costs

The tables below reconcile profit for the financial period ending 31 December 2022 and equity as at 31 December 2022 from those reported in the prior period financial statements.

Reconciliation of loss for the financial period ended 31 December 2022:

£

Loss for the financial period as previously reported in 31 December 2022 financial statements

(520,460)

Adjustments on transition to revised accounting policy:

Capitalisation of development expenditure previously expensed

1,501,339

Amortisation of development costs

(1,289,243)

Deferred tax charge

(53,909)

Loss for the financial period ended 31 December 2022 as restated

(362,273)



Reconciliation of equity as at 31 December 2022:
 

1 October 2021

31 December 2022

£

£

Equity reported under previous accounting policy

552,698

32,238

Adjustments to equity on application of revised accounting policy

Capitalised development expenditure

2,041,258

3,542,597

Amortisation on development expenditure

(728,690)

(2,017,933)

Deferred tax on timing differences as a result of capitalised development expenditure

(326,666)

(380,575)

Total adjustments to equity on application of revised accounting policy

985,902

1,144,089

Equity reported after application of revised accounting policy

1,538,600

1,176,327

On 1 January 2022 the company changed its accounting policy in respect of development expenditure whereby qualifying expenditure is capitalised as detailed in note one of these financial statements. Prior to this date all such expenditure was charged to the profit and loss account as it was incurred. In accordance with the requirements of FRS 102 the policy has been applied retrospectively and the balance sheets as at 1 October 2021 & 31 December 2022 as well as the profit and loss account for the year ended 31 December 2022 have been restated as detailed above.