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Registration number: 07164254

Essentia Analytics Ltd.

Annual Report and Financial Statements

for the Year Ended 31 December 2023

Pages for Filing with Registrar

 

Essentia Analytics Ltd.

(Registration number: 07164254)
Balance Sheet as at 31 December 2023

Note

2023
£

2022
£

Fixed assets

 

Tangible assets

7

39,112

55,620

Investments

8

7

7

 

39,119

55,627

Current assets

 

Debtors

9

704,182

664,082

Cash at bank and in hand

 

1,263,711

1,196,148

 

1,967,893

1,860,230

Creditors: Amounts falling due within one year

10

(2,193,384)

(2,000,922)

Net current liabilities

 

(225,491)

(140,692)

Total assets less current liabilities

 

(186,372)

(85,065)

Creditors: Amounts falling due after more than one year

10

(2,416,990)

-

Net liabilities

 

(2,603,362)

(85,065)

Capital and reserves

 

Called up share capital

11

618

601

Share premium reserve

11,616,819

11,541,467

Other reserves

86,348

122,489

Profit and loss account

(14,307,147)

(11,749,622)

Shareholders' deficit

 

(2,603,362)

(85,065)

 

Essentia Analytics Ltd.

(Registration number: 07164254)
Balance Sheet as at 31 December 2023

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.

These financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime. As permitted by section 444 (5A) of the Companies Act 2006, the directors have not delivered to the registrar a copy of the Profit and Loss Account.

Approved and authorised by the Board on 5 August 2024 and signed on its behalf by:
 

.........................................

Clare Flynn Levy
Director

 

Essentia Analytics Ltd.

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:
1 Mark Square
London
EC2A 4EG

Principal activity

The principal activity of the company is a provision of behavioural analytics services to professional investors.

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 have been prepared in accordance with Financial Reporting Standard 102 Section 1A - 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006.

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

Turnover recognition

Turnover comprises the fair value of the consideration received or receivable for the provision of services in the ordinary course of the Company’s activities. The company recognises revenue as total contract value divided by estimated onboarding time (months) plus duration of the current contract (months). The contract value has been split equally across these periods and the revenue recognition starts in the month that the contract is executed (if executed on or before the 15th), or the month after the contract is executed (if executed after 15th). Turnover is shown net of sales/value added tax, returns, rebates and discounts.

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.

 

Essentia Analytics Ltd.

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

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 rate on the date when the fair value is re-measured.

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 tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current income 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 income 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 income tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

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

Tangible assets

Tangible assets are stated in the statement of financial position 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 charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Plant & machinery

15 - 25% straight line

 

Essentia Analytics Ltd.

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

Investments

Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.

Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.

Financial instruments

The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from other third parties, loans to related parties and investments in non-puttable ordinary shares.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in profit or loss.

Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an 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.

Debtors

Basic financial assets, including trade and other debtors, are intially recognised at transaction price, 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. Such assets are subsequently carried at amortised cost using the effective interest method, less any impairment.

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

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

 

Essentia Analytics Ltd.

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

Creditors

Basic financial liabilities, including trade and other creditors, loans from third parties and loans from related parties, 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. Such instruments are subsequently carried at amortised cost using the effective interest method, less any impairment.

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.

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.

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.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.

Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation.

Lease payments are apportioned between finance costs in the profit and loss account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

 

Essentia Analytics Ltd.

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

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.

Research and development

Expenditure on research and development is charged to the profit and loss account in the year in which it is incurred.

Share based payments

Employees (including Directors) of the company receive remuneration in the form of share-based payments, whereby employees render services in exchange for rights over shares ("equity-settled transactions"). The cost of equity-settled transactions with employees is measured with reference to the fair value at the date on which they are granted. Fair value is measured using the Black-Scholes Option Pricing Model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. In valuing equity-settled transactions, no account is taken of any performance conditions.

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the years in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award ("vesting date").

At each reporting date, the cumulative expense recognised for equity-settled transactions reflects the extent to which the vesting period has expired and the number of awards, that in the opinion of the Directors, will ultimately vest. Directors' estimates are based on the best available information at that date.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vesting irrespective of whether or not the market condition is satisfied, provided that all other performance conditions are satisfied.

 

Essentia Analytics Ltd.

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

3 Going concern

The directors have considered the going concern position of the company taking into account the net loss for the year of £2,557,525, net liabilities of £2,603,362 and net current liabilities of £225,491 as at 31 December 2023.

The company’s financial statements have been prepared on a going concern basis on the grounds that the company is forecast to have a cash runway that will allow it to meet its liabilities as they fall due until at least August 2025. This forecast is based on growth assumptions that are lower than what has already been achieved so far in 2024.

The company is now engaging with potential strategic partners with the aim to reach a corporate transaction. This will convert the convertible loan notes and pay off the debt on the balance sheet. The company has started making monthly repayments but has recently been granted a repayment holiday to preserve the company's cash. The company is dependent on the continuing support of it's lenders.

In the circumstances the directors believe it is appropriate to prepare the financial statements on a going concern basis. However, there is a material uncertainty related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern and, therefore, that it may be unable to realise all its assets and discharge its liabilities in the normal course of business. Should the company be unable to continue as a going concern, adjustments would be required to reclassify long term assets and liabilities to short term, to write current assets down to their realisable values and provide for any further liabilities that may arise.

4

Significant judgements and estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. In the Director's opinion there are no significant judgements or key sources of estimation uncertainty.

5

Audit report

The Independent Auditor's Report was unqualified, but the auditor drew attention to the disclosures in relation to going concern and loans and borrowings by way of emphasis. The name of the Senior Statutory Auditor who signed the audit report on 5 August 2024 was David Matkins, who signed for and on behalf of Bourner Bullock.

6

Staff numbers

The average number of persons employed by the Company (including directors) during the year, was 29 (2022 - 40).

 

Essentia Analytics Ltd.

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

7

Tangible assets

Plant and machinery
 £

Total
£

Cost or valuation

At 1 January 2023

123,539

123,539

Additions

5,498

5,498

Disposals

(27,979)

(27,979)

At 31 December 2023

101,058

101,058

Depreciation

At 1 January 2023

68,920

68,920

Charge for the year

20,106

20,106

Eliminated on disposal

(27,080)

(27,080)

At 31 December 2023

61,946

61,946

Carrying amount

At 31 December 2023

39,112

39,112

At 31 December 2022

55,620

55,620

 

Essentia Analytics Ltd.

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

8

Investments

2023
£

2022
£

Investments in subsidiaries

7

7

Subsidiaries

£

Cost or valuation

At 1 January 2023

7

Carrying amount

At 31 December 2023

7

At 31 December 2022

7

9

Debtors

2023
£

2022
£

Trade debtors

402,336

45,600

Prepayments

147,052

146,635

Other debtors

154,794

471,847

704,182

664,082

 

Essentia Analytics Ltd.

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

10

Creditors

Creditors: amounts falling due within one year

Note

2023
£

2022
£

Due within one year

 

Bank loans and overdrafts

12

540,540

636,163

Trade creditors

 

111,487

69,314

Amounts owed to group undertakings

872,804

303,396

Taxation and social security

 

67,464

115,874

Other creditors

 

601,089

876,175

 

2,193,384

2,000,922

Due after one year

 

Loans and borrowings

12

2,416,990

-

11

Share capital

Allotted, called up and fully paid shares

 

2023

2022

 

No.

£

No.

£

Ordinary shares of £0.0001 each

3,246,390

324.64

3,081,604

308.16

Ordinary A shares of £0.0001 each

434,520

43.45

434,520

43.45

Ordinary B shares of £0.0001 each

1,939,646

193.96

1,939,646

193.96

Ordinary B1 shares of £0.0001 each

280,658

28.07

280,658

28.07

Ordinary B2 shares of £0.0001 each

276,313

27.63

276,313

27.63

 

6,177,527

618

6,012,741

601

 

Essentia Analytics Ltd.

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

12

Loans and borrowings

2023
£

2022
£

Non-current loans and borrowings

Secured debentures

1,459,460

-

Other borrowings

957,530

-

2,416,990

-

2023
£

2022
£

Current loans and borrowings

Secured debentures

540,540

-

Other borrowings

-

636,163

540,540

636,163

Bank loans

Salica Investments (formerly Hambro Perks) Term Loan is denominated in GBP, and the final instalment is due on 28 March 2027. The carrying amount at year end is £2,000,000 (2022 - £Nil).

Security has been given in respect of the £2,000,000 Salica Investments (formerly Hambro Perks) Term Loan facility, the outstanding amount of which within creditors is £2,000,000. Security on this amount takes the form of a fixed and floating charge over the company's assets. The company have started making monthly repayments, but has recently been granted a repayment holiday to preserve the company's cash. Covenants have been breached after the year end, and the Directors are in communication with the bank regarding these.

Other borrowings

Convertible loan note is denominated in GBP with a nominal interest rate of 10%. The carrying amount at year end is £957,530 (2022 - £Nil).

No security has been given in respect of the £957,530 convertible loan note, of which £915,665 relates to the original subscription, and £41,865 relates to accrued interest. The company is now engaging with potential strategic partners with the aim to reach a corporate transaction that will convert the convertible loan notes.

 

Essentia Analytics Ltd.

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

13

Dividends

There were no dividends paid or proposed in either the current year or the previous year.

14

Operating leases

The total of future minimum lease payments is as follows:

2023
 £

2022
 £

Not later than one year

68,800

30,587

15

Share-based payments

Share-based arrangement

Scheme details and movements

Management have issued share options to key management personnel and senior employees under approved and unapproved share options schemes.

The share options contracts may only be exercised in connection with a change in control, an asset sale or an admission to the stock market to the extent that the share options have become vested shares. In addition, an employee may exercise their options on cessation of employment, as good leaver, at the absolute discretion of the board of directors.

The fair value of the employee share options has been measured using the Black-Scholes formula. A discount has also been applied to the valuation obtained to take into account future employee turnover rate. The model is widely recognised as being appropriate to value employee share schemes.

The fair value of the ordinary shares as of the Valuation dates were provided by management. The expected term/life of the option is calculated based on the time to maturity.

The risk-free rates were based on the average return of the U.K. Government Debt maturing at approximately the same time as the options.
Expected volatility is based on analysis of guideline companies as of the grant date.

Management has represented that there have been no material events between the Valuation dates of the Employee Share Options and the date of the valuation report that would indicate a significant change in fair value.

 

Essentia Analytics Ltd.

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

The movements in the share options during the year were as follows:

31 December 2023

31 December 2022

Number of options

Weighted average exercise price

Number of options

Weighted average exercise price

£

£

Balance at 1 January

883,462

0.43

926,183

0.39

Granted

157,500

0.50

91,500

0.55

Exercised

(164,786)

Nil

(74,204)

Nil

Lapsed

-

-

-

-

Forfeited

(217,256)

0.41

(60,017)

0.37

Outstanding at 31 December

658,920

0.43

883,462

0.43