Registered number: 05797254
TECHSOFT 3D LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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TECHSOFT 3D LIMITED
CONTENTS
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Notes to the financial statements
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TECHSOFT 3D LIMITED
COMPANY INFORMATION
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Blick Rothenberg Audit LLP
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Chartered Accountants & Statutory Auditor
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REGISTERED NUMBER:05797254
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TECHSOFT 3D LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2023
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Provisions for liabilities
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REGISTERED NUMBER:05797254
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TECHSOFT 3D LIMITED
BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2023
The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The company has opted not to file the profit and loss account in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved, authorised for issue and signed by the sole director.
The notes on pages 4 to 13 form part of these financial statements.
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TECHSOFT 3D LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Techsoft 3D Limited is a private company limited by shares incorporated in England and Wales. The address of its registered office is 16 Great Queen Street, Covent Garden, London WC2B 5AH.
The financial statements are presented in Sterling (£).
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The following principal accounting policies have been applied:
The sole customer of the company is its parent company, Tech Soft 3D, Inc.. The company is therefore dependent on financial support from its parent company and without such support would not be a going concern.
The company's director has received written assurances regarding the continuation of financial support from the company's parent undertaking for the foreseeable future, being a period of at least twelve months from the date the financial statements were approved.
The parent company incurred consolidated net losses of approximately $7.2m for the year ended 31 December 2023 and expects to incur future additional losses. The parent company does not have liquidity or reliable ongoing sources of revenues sufficient to repay its debt which matures in February 2025. The ability of the parent company to continue as a going concern, and provide the required support to Techsoft 3D Limited, is dependent on the parent company obtaining adequate capital to fund the required debt service at maturity in February 2025. Management anticipates that the parent company will be able to refinance with its existing lender or with a new lender prior to the credit agreement maturity. The parent company however, is not currently producing sufficient cash flow from operations to fund operations and repay their debt and will require additional capital resources if they are not able to refinance.
Although no assurances can be given, the director, having also consulted with the directors of the parent company, remains confident that the parent company will continue to have access to sufficient liquid funds to finance the operating costs of the company as needed.
The director is of the opinion that the matters described above are material uncertainties relating to events or conditions that may cast significant doubt upon the company's ability to continue as a going concern. However, the director has a reasonable expectation that the parent company will be able to provide sufficient financial support for the company to continue operating for a period of at least 12 months from the date of the approval of the financial statements. Accordingly, the director continues to adopt the going concern basis in preparing the financial statements.
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Exemption from preparing consolidated financial statements
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The company, and the group headed by it, qualify as small as set out in section 383 of the Companies Act 2006 and the parent and group are considered eligible for the exemption to prepare consolidated accounts.
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TECHSOFT 3D LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Revenue from contracts to provide sales and marketing services to the parent company is recognised in the period in which the services are provided. Revenue is recognised to the extent that it is probable that the company will receive the consideration due under the contract and the amount of revenue can be measured reliably. Revenue is measured as the fair value of the consideration received or receivable, excluding value added tax.
The company has elected to apply Sections 11 and 12 of FRS 102 in respect of financial instruments.
Financial assets and financial liabilities are recognised when the company becomes party to the contractual provisions of the instrument.
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.
The company’s policies for its major classes of financial assets and financial liabilities are set out below.
Financial assets
Basic financial assets, including trade and other debtors, cash and bank balances, intercompany working capital balances, and intercompany financing are initially 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 for a similar debt instrument. Financing transactions are those in which payment is deferred beyond normal business terms or is financed at a rate of interest that is not a market rate.
Such assets are subsequently carried at amortised cost using the effective interest method, less any impairment.
Financial liabilities
Basic financial liabilities, including trade and other creditors and loans from fellow group companies, 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 for a similar debt instrument. Financing transactions are those in which payment is deferred beyond normal business terms or is financed at a rate of interest that is not a market rate.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
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TECHSOFT 3D LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Financial instruments (continued)
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Impairment of financial assets
Financial assets 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 the profit and loss account.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between the asset's carrying amount and the best estimate of the amount the company would receive for the asset if it were to be sold at the reporting date.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between the asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If the financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets and financial liabilities
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.
Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.
Offsetting of financial assets and financial liabilities
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.
Ordinary shares are classified as equity.
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TECHSOFT 3D LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Foreign currency translation
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Functional and presentation currency
The company's functional and presentational currency is Sterling (£).
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the profit and loss account within 'interest receivable and similar income' or 'interest payable and similar expenses'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.
Defined contribution pension plan
The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the company in independently administered funds.
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Operating leases: the company as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
Interest income is recognised in profit or loss using the effective interest method.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
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TECHSOFT 3D LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Where share options are awarded to employees, the fair value of the options at the date of grant is charged to profit or loss over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the company keeping the scheme open or the employee maintaining any contributions required by the scheme).
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period.
Where equity instruments are granted to persons other than employees, profit or loss is charged with fair value of goods and services received.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on a reducing balance basis.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Investments in subsidiaries are measured at cost less accumulated impairment.
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TECHSOFT 3D LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours.
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Judgments in applying accounting policies and key sources of estimation uncertainty
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In the application of the company's accounting policies which are detailed in note 2, the only key judgment made by the directors is:
Share based payments
As part of their ongoing service to the company, employees are granted options to purchase shares in the parent undertaking. The company determines the fair values of these options at grant date, then recognises the cost over the vesting period of 4 years. The Black Scholes Option Pricing Model is used to value these stock options, with key assumptions being stock volatility which is based on historic volatility of listed peer companies and the risk free rate which is based on the relevant market data at grant date.
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The average monthly number of employees, including directors, during the year was 5 (2022 - 5).
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TECHSOFT 3D LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Charge for the year on owned assets
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Investments in subsidiary companies
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At 1 January 2023 and 31 December 2023
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TECHSOFT 3D LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Amounts owed by group undertakings
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Prepayments and accrued income
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Amounts owed by group undertakings are interest free and repayable on demand.
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Accruals and deferred income
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Amounts owed to group undertakings are interest free and repayable on demand.
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Charged to profit or loss
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TECHSOFT 3D LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
9.Deferred taxation (continued)
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The deferred taxation balance is made up as follows:
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Accelerated capital allowances
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Share based payment - relief deferred
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Allotted, called up and fully paid
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100 (2022 - 100) Ordinary Shares shares of £1.00 each
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Other reserves
The reserve comprises the share option expense for share options granted not yet exercised.
Profit and loss account
The profit and loss account includes all current and prior period retained profits and losses.
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Related party transactions
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The company has taken advantage of the exemption contained in FRS 102 section 33 "Related Party Disclosures" from disclosing transactions with entities which are a wholly owned part of the group.
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Post balance sheet events
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Effective February 29, 2024, the Company entered into a share sale and purchase agreement to acquire Theorem Solutions Holdings Limited, a United Kingdom based 3D design software solutions company, for approximately 18 million pounds sterling. The closing of the acquisition was completed on June 3, 2024 upon all conditions being met. The purchase price allocation was not available at the time these financial statements were issued.
On April 22, 2024 the parent, Tech Soft 3D, Inc, entered into an asset purchase agreement to acquire Actify, Inc., a U.S. based 3D design software solutions company with subsidiaries in the United Kingdom and Germany, for approximately $14.3 million dollars. As part of the agreement,Techsoft 3D Limited will purchase $600,000 of assets from Actify Europe Limited. The closing of the acquisition was completed on May 1, 2024. The purchase price allocation was not available at the time these financial statements were issued.
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TECHSOFT 3D LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The smallest group for which consolidated financial statements are drawn up is headed by Tech Soft 3D, Inc., a company incorporated under the laws of the State of Delaware, the United States of America.
Tech Soft 3D, Inc.'s registered office is 1567 SW Chandler Ave. Suite 100, Bend, Oregon, United States, OR 97702.
The auditor's report on the company's full financial statements which was unqualified, included a material uncertainty related to going concern paragraph as described below.
Material uncertainty related to going concern
We draw attention to note 2.2 in the financial statements, which indicates that the company's ability to continue as a going concern is reliant on the parent company's continuing ability to provide financial support to the company. This is in turn dependent on the parent company being able to refinance its debt facility which expires in February 2025, or obtaining additional capital resources. As stated in note 2.2, these events or conditions, along with the other matters as set forth in note 2.2, indicate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
The audit report was signed on 9 October 2024 by Mark Cunningham (Senior statutory auditor) on behalf of Blick Rothenberg Audit LLP.
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