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Company No: SC567055 (Scotland)

RAVEN CONTROLS LIMITED

UNAUDITED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 MAY 2024
PAGES FOR FILING WITH THE REGISTRAR

RAVEN CONTROLS LIMITED

UNAUDITED FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 MAY 2024

Contents

RAVEN CONTROLS LIMITED

BALANCE SHEET

AS AT 31 MAY 2024
RAVEN CONTROLS LIMITED

BALANCE SHEET (continued)

AS AT 31 MAY 2024
Note 2024 2023
£ £
Fixed assets
Intangible assets 4 456,749 409,022
Tangible assets 5 4,143 6,114
460,892 415,136
Current assets
Debtors 6 98,502 144,152
Cash at bank and in hand 50 4,968
98,552 149,120
Creditors: amounts falling due within one year 7 ( 1,064,389) ( 859,452)
Net current liabilities (965,837) (710,332)
Total assets less current liabilities (504,945) (295,196)
Creditors: amounts falling due after more than one year 8 ( 70,337) ( 90,804)
Net liabilities ( 575,282) ( 386,000)
Capital and reserves
Called-up share capital 9 2 1
Share premium account 470,067 470,066
Profit and loss account ( 1,045,351 ) ( 856,067 )
Total shareholders' deficit ( 575,282) ( 386,000)

For the financial year ending 31 May 2024 the Company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

Directors' responsibilities:

The financial statements of Raven Controls Limited (registered number: SC567055) were approved and authorised for issue by the Board of Directors on 17 October 2024. They were signed on its behalf by:

Mr I Kerr
Director
RAVEN CONTROLS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 MAY 2024
RAVEN CONTROLS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 MAY 2024
1. Accounting policies

The principal accounting policies are summarised below. They have all been applied consistently throughout the financial year and to the preceding financial year, unless otherwise stated.

General information and basis of accounting

Raven Controls Limited (the Company) is a private company, limited by shares, incorporated in the United Kingdom under the Companies Act 2006 and is registered in Scotland. The address of the Company's registered office is C/O Johnston Carmichael Llp 1st Floor, 227 West George Street, Glasgow, G2 2ND, United Kingdom.

The financial statements have been prepared under the historical cost convention and in accordance with Section 1A of Financial Reporting Standard 102 (FRS 102) ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ issued by the Financial Reporting Council and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime.

The financial statements are presented in pounds sterling which is the functional currency of the Company and rounded to the nearest £.

Going concern

The company has incurred a loss for the year in accordance with its business plan as it conducts research and development activities. At the balance sheet date there are net current liabilities of £965,837, however, included within creditors due within one year is deferred income of £263,699 that relates to future sales income and deferred grant income that will be recognised in the following year. There is a further £360,808 which is owed to related parties who will not seek repayment until the company has sufficient resources to do so. To continue its development plans the company is seeking to raise additional finance to support the board of directors execute an agreed development and commercial plan. It is probable that as part of that fund raise the convertible loan notes totalling £176,000 included in creditors due within one year will be converted into equity. Additionally, the company has recently secured contracts with some of the largest customers in their target market which will lead to a significant increase in revenue in future periods. Considering all of these elements the directors conclude that the company has sufficient funding for the period of 12 months from the date of approval of the financial statements and on this basis the directors feel it is appropriate to prepare the accounts on a going concern basis.

Foreign currency

Transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction. Exchange differences are recognised in the Profit and Loss Account in the period in which they arise.

Turnover

Turnover is recognised at the fair value of the consideration receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes.

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from contracts for the provision of services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably.

Employee benefits

Short term benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Defined contribution schemes
The Company operates a defined contribution scheme. The amount charged to the Profit and Loss Account in respect of pension costs and other post-retirement benefits is the contributions payable in the financial year. Differences between contributions payable in the financial year and contributions actually paid are included as either accruals or prepayments in the Balance Sheet.

Share-based payment

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black-Scholes model. If material the fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.

When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.

Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.

Taxation

Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax
Deferred tax arises as a result of including items of income and expenditure in taxation computations in periods different from those in which they are included in the Company's financial statements. Deferred tax is provided in full on timing differences which result in an obligation to pay more or less tax at a future date, at the average tax rates that are expected to apply when the timing differences reverse, based on current tax rates and laws. Deferred tax assets and liabilities are not discounted.

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.

Research and development expenditure

Expenditure on research activities is recognised as an expense in the period in which it is incurred.

In the event that an internally generated intangible asset arises from the company's development activities
then it will be recognised only if all of the following conditions are met:
• an asset is created that can be identified;
• the project from which the asset arises meets the company's criteria for assessing technical feasibility;
• it is probable that the asset created will generate future economic benefits; and
• the development cost of the asset can be measured reliably.

Intangible assets

In the event that an internally generated intangible asset arises from the company's development activities
then it will be recognised only if all of the following conditions are met:
• an asset is created that can be identified;
• the project from which the asset arises meets the company's criteria for assessing technical feasibility;
• it is probable that the asset created will generate future economic benefits; and
• the development cost of the asset can be measured reliably.

Internally generated intangible assets are amortised on a straight-line basis over their useful lives. Where
no internally generated intangible asset can be recognised, development expenditure is recognised as an
expense in the period in which it is incurred.

Other intangible assets 3 years straight line
Tangible fixed assets

Tangible fixed assets are stated at cost or valuation, net of depreciation and any provision for impairment. Depreciation is provided on all tangible fixed assets, other than investment property and freehold land, at rates calculated to write off the cost or valuation, less estimated residual value, of each asset on a straight-line or reducing balance basis over its expected useful life, as follows:

Office equipment 25 % reducing balance
Computer equipment 3 years straight line

Residual value represents the estimated amount which would currently be obtained from disposal of an asset, after deducting estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life.

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Leases

The Company as lessee
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

Impairment of assets

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 the Profit and Loss Account as described below.

Non-financial assets
At each balance sheet date, the company reviews its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss.

If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use.

Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in creditors: amounts falling due within one year.

Financial instruments

Financial assets and financial liabilities are recognised when the Company becomes a 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.

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 asset and settle the liability simultaneously.

Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, 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. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

Compound instruments

The component parts of compound instruments issued by the company are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangement. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar non-convertible instrument. This amount is recorded as a liability on an amortised cost basis using the effective interest method until extinguished upon conversion or at the instrument's maturity date. The equity component is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognised and included in equity net of income tax effects and is not subsequently remeasured.

2. Employees

2024 2023
Number Number
Monthly average number of persons employed by the Company during the year, including directors 9 8

3. Share-based payments

Equity-settled share-based payment schemes

The Company has an HMRC approved share option scheme for employees.

Options are exercisable at a price equal to the estimated fair value of the Company’s shares on the date of grant. The vesting period for the approved scheme is spread evenly over two years from grant of the option and are exercisable on exit. Options are forfeited if the employee leaves the Company before the options vest.

Details of the share options outstanding during the financial year are as follows:

2024 2023
Weighted Average Weighted Average
Number of share options Average exercise price (£) Number of share options Average exercise price (£)
Outstanding at beginning of period 1,774 32.93 1,774 32.93
Exercised during the period ( 1,614) 32.93 0 0
Outstanding at the end of the period 160 32.93 1,774 32.93
Exercisable at the end of the period 0 0 0 0

The fair value of the share options at the grant date was calculated using the Black-Scholes model, which is considered to be the most appropriate generally accepted valuation method of measuring fair value.

The Black-Scholes model is considered to apply the most appropriate valuation method due to the relatively short contractual lives of the options and the requirement to exercise within a short period after the employee becomes entitled to the shares (the “vesting date”).

The expected life used in the model has been adjusted, based on management’s best estimate, for the effect of non-transferability, exercise restrictions, and behavioural considerations.

The share options are of equity-settled EMI options and have a maximum term of 10 years.

The company did not recognise any share-based payment expenses which relate to the EMI scheme through the profit and loss account as they were deemed to be immaterial.

4. Intangible assets

Other intangible assets Total
£ £
Cost
At 01 June 2023 1,371,066 1,371,066
Additions 462,539 462,539
At 31 May 2024 1,833,605 1,833,605
Accumulated amortisation
At 01 June 2023 962,044 962,044
Charge for the financial year 414,812 414,812
At 31 May 2024 1,376,856 1,376,856
Net book value
At 31 May 2024 456,749 456,749
At 31 May 2023 409,022 409,022

5. Tangible assets

Office equipment Computer equipment Total
£ £ £
Cost
At 01 June 2023 3,742 22,010 25,752
Additions 1,145 0 1,145
At 31 May 2024 4,887 22,010 26,897
Accumulated depreciation
At 01 June 2023 2,636 17,002 19,638
Charge for the financial year 396 2,720 3,116
At 31 May 2024 3,032 19,722 22,754
Net book value
At 31 May 2024 1,855 2,288 4,143
At 31 May 2023 1,106 5,008 6,114

6. Debtors

2024 2023
£ £
Trade debtors 78,678 45,183
Corporation tax 0 84,683
Other debtors 19,824 14,286
98,502 144,152

7. Creditors: amounts falling due within one year

2024 2023
£ £
Bank overdrafts 18,245 0
Trade creditors 107,692 41,469
Convertible loan notes 176,000 176,000
Taxation and social security ( 15,699) 48,981
Other creditors 778,151 593,002
1,064,389 859,452

During the year ended 31 May 2021 a convertible loan note was issued for £176,000. The convertible loan is repayable in 36 months from the date of issue or converts to equity if there is a relevant fundraise and has interest applied of 8% per annum. There is deemed to be no equity element of the convertible loan note and subsequently the entire £176,000 has been recorded as a liability.

8. Creditors: amounts falling due after more than one year

2024 2023
£ £
Other creditors 70,337 90,804

There are no amounts included above in respect of which any security has been given by the small entity.

9. Called-up share capital

2024 2023
£ £
Allotted, called-up and fully-paid
15,535 Ordinary shares of £ 0.0001 each (2023: 13,921 shares of £ 0.0001 each) 2 1

10. Related party transactions

Transactions with the entity's directors

2024 2023
£ £
Amounts owed by directors 5,000 0
Amounts owed to directors 62,000 50,000

Other related party transactions

2024 2023
£ £
Amounts owed to other related parties 298,808 297,675