Expressionedits Ltd |
Notes to the Accounts |
for the year ended 31 December 2023 |
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1 |
Accounting policies |
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Basis of preparation |
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The accounts have been prepared under the historical cost convention and in accordance with FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland (as applied to small entities by section 1A of the standard). |
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Turnover |
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Turnover is measured at the fair value of the consideration received or receivable, net of discounts and value added taxes. Turnover includes revenue earned from the sale of goods and from the rendering of services. Turnover from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer. Turnover from the rendering of services is recognised by reference to the stage of completion of the contract. The stage of completion of a contract is measured by comparing the costs incurred for work performed to date to the total estimated contract costs. |
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Intangible fixed assets |
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Intangible fixed assets are measured at cost less accumulative amortisation and any accumulative impairment losses. |
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Tangible fixed assets |
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Tangible fixed assets are measured at cost less accumulative depreciation and any accumulative impairment losses. Depreciation is provided on all tangible fixed assets, other than freehold land, at rates calculated to write off the cost, less estimated residual value, of each asset evenly over its expected useful life, as follows: |
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Fixtures, fittings, tools and equipment |
over 4 years |
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Share Based Payment |
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The company has a share option plan under which it makes equity-settled share-based payments. The plan does not feature any options for cash settlement. Equity-settled share-based payments are measured at the date of grant by reference to the fair value of the equity instruments granted using the Black-Scholes option pricing model. Options vest in monthly tranches, with some subject to an initial cliff. The fair value determined at the grant date is recognised for each tranche from the grant date, such that a larger proportion of the charge is recognised earlier in the life of the option based on the Company's profit & loss, together with a corresponding credit to equity. |
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Debtors |
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Short term debtors are measured at transaction price (which is usually the invoice price), less any impairment losses for bad and doubtful debts. Loans and other financial assets are initially recognised at transaction price including any transaction costs and subsequently measured at amortised cost determined using the effective interest method, less any impairment losses for bad and doubtful debts. |
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Creditors |
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Short term creditors are measured at transaction price (which is usually the invoice price). Loans and other financial liabilities are initially recognised at transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method. |
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Taxation |
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A current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. A current tax asset is recognised in respect of a tax loss that can be carried back to recover tax paid in a previous period. Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used. Current and deferred tax assets and liabilities are not discounted. |
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Provisions |
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Provisions (ie liabilities of uncertain timing or amount) are recognised when there is an obligation at the reporting date as a result of a past event, it is probable that economic benefit will be transferred to settle the obligation and the amount of the obligation can be estimated reliably. |
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Foreign currency translation |
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Transactions in foreign currencies are initially recognised at the rate of exchange ruling at the date of the transaction. At the end of each reporting period foreign currency monetary items are translated at the closing rate of exchange. Non-monetary items that are measured at historical cost are translated at the rate ruling at the date of the transaction. All differences are charged to profit or loss. |
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Pensions |
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Contributions to defined contribution plans are expensed in the period to which they relate. |
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3 |
Employees |
2023 |
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2022 |
Number |
Number |
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Average number of persons employed by the company |
10 |
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9 |
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4 |
Intangible fixed assets |
£ |
£ |
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Cost |
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At 1 January 2023 |
6,671 |
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At 31 December 2023 |
6,671 |
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Amortisation |
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At 31 December 2023 |
- |
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Net book value |
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At 31 December 2023 |
6,671 |
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At 31 December 2022 |
6,671 |
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5 |
Tangible fixed assets |
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Office equipment |
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Computer equipment |
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Laboratory equipment |
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Total |
Total |
£ |
£ |
£ |
£ |
£ |
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Cost |
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At 1 January 2023 |
18,127 |
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14,198 |
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62,079 |
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94,404 |
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Additions |
920 |
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3,714 |
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19,783 |
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24,417 |
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Prior year adjustment |
(12,790) |
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- |
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4,443 |
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(8,347) |
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At 31 December 2023 |
6,257 |
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17,912 |
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86,305 |
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110,474 |
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Depreciation |
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At 1 January 2023 |
1,621 |
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1,315 |
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4,547 |
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7,483 |
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Charge for the year |
1,446 |
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3,940 |
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17,830 |
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23,216 |
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Prior year adjustment |
(1,066) |
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- |
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699 |
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(367) |
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At 31 December 2023 |
2,001 |
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5,255 |
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23,076 |
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30,332 |
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Net book value |
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At 31 December 2023 |
4,256 |
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12,657 |
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63,229 |
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80,142 |
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At 31 December 2022 |
16,506 |
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12,883 |
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57,532 |
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86,921 |
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6 |
Debtors |
2023 |
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2022 |
£ |
£ |
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Other debtors |
31,382 |
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19,157 |
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7 |
Creditors: amounts falling due within one year |
2023 |
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2022 |
£ |
£ |
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Trade creditors |
20,887 |
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- |
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Other creditors |
16,517 |
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31,025 |
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37,404 |
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31,025 |
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8 |
Prior Year Adjustments |
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During the year, an internal audit was carried out of the fixed asset register and some items had been allocated incorrectly to the register. The company has now rectified this and all amendments are shown as prior year adjustments in the profit & loss account and the fixed assets in note 5. |
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During a review, there was a correction made to the Called Up Share capital - please refer to note 9. |
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9 |
Called Up Share Capital |
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2023 |
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2022 |
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2023 |
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2022 |
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Number |
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Number |
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£ |
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£ |
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Ordinary share capital |
11,272,258 |
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11,272,258 |
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11.272258 |
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11.272258 |
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Issued and fully paid |
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Ordinary shares 0.000001p |
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Seed preferred share capital |
4,696,726 |
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4,696,726 |
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4.696726 |
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4.696726 |
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Issued and fully paid |
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Seed preferred shares of 0.000001p |
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B ordinary share capital |
16,750 |
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16,750 |
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0.01675 |
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0.01675 |
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Issued and fully paid |
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B ordinary shares of 0.000001p |
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Total equity share capital |
15.985734 |
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15.985734 |
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10 |
Share Based Payment Transactions |
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2023 |
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2022 |
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£ |
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£ |
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Options brought forward |
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753,223 |
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Options granted |
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51,340 |
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753,223 |
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Options expired/cancelled |
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- |
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- |
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Options exercised |
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- |
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- |
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Options carried forward |
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804,563 |
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753,223 |
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Excerisable on 31 December |
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- |
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- |
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The company adopted an equity-settled share-based renumeration plan for its employees during 2022, under which between 19-26 October 2022 share options over a total of 723,343 ordinary shares were granted as qualifying EMI options. |
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Non-EMI options were granted to service providers in 2023: On 31 March 2023 non-EMI options of 29,880 ordinary shares were granted, on 05 July 2023 non-EMI options of 21,460 ordinary shares were granted and on 14 December 2023 non-EMI options of 29,880 ordinary shares were granted. |
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The rights to the shares transfer to the holder over the vesting period. The EMI options vest in monthly tranches over the vesting period of four years subject to an initial cliff. Non-EMI options granted in March and December 2023 vest over a 3-year period. Those granted in July 2023, vest over a 12-month period. Options expire ten years after grant. None of the shares under option lapsed, were exercised or cancelled during the year. |
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All goods and services received in exchange for the grant of any share-based payments are measured at their fair values. Where employees are rewarded using share-based payments, the fair value of the employees’ services is determined indirectly by reference to the fair value of the equity instruments granted. This fair value is appraised at the grant date and excludes the impact of non-market vesting conditions. |
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All share based renumeration is ultimately recognised as an expense in profit or loss with a corresponding credit to retained earnings. (Note the charges for 2022 and 2023 are not shown in the accounts due to the low value.) If vesting periods or other vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of shared options expect to vest. Upon exercise of share options, the proceeds received, net of any directly attributable transaction costs, are allocated to share capital up to the nominal (or par) value of the shares issued with any excess being recorded as share premium. |
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The weighted average fair value of options granted in 2022 and 2023 was determined using the Black Scholes option pricing model. The Black-Scholes model is considered to apply to the most appropriate method due to the relatively short contractual lives of the options. |
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Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. Estimates are subsequently revised if there is any indication that the number of share options expected to vest differs from previous estimates. Any adjustment to the cumulative share-based compensation resulting from a revision is recognised in the current period. The number of vested options ultimately exercised by holders does not impact the expense recorded in any period. |
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Inputs are as follows: |
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2023 |
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2022 |
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Share price, £ |
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0.000001 |
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0.000001 |
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Exercise price, £ |
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0.000001 |
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0.000001 |
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Expected volatility |
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59.30% |
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59.00% |
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Expected option life, years |
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10 |
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10 |
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Expected dividend yield |
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0 |
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0 |
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Risk free interest rate |
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1.42%-3.73% |
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3.69%-4.83% |
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Charge for the period |
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0.30 |
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0.06 |
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11 |
Events after reporting date |
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On 3 April 2024, a SEED-2 funding round was closed with the associated allotment of 12,499,998 SEED-2 Preferred shares. |
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12 |
Related party transactions |
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Dr Allan Bradley, director, provided advisory services to the company. |
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13 |
Controlling party |
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The ultimate controlling party is Dr Kärt Tomberg by virtue of her majority shareholding in the company. |
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14 |
Other information |
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Expressionedits Ltd is a private company limited by shares and incorporated in England. Its registered office is: |
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3rd Floor |
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1 Ashley Road |
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Altrincham |
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Cheshire |
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WA14 2DT |