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Registered number: 03955861










OBS MEDICAL LIMITED








UNAUDITED

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2024



 
OBS MEDICAL LIMITED
 

 
COMPANY INFORMATION

Directors
S Didcote 
A Cockell 
A Simon 




Registered number
03955861



Registered office
Unit 14
Tetbury Road

Cirencester Office Park

Cirencester

GL7 6JJ




Independent accountant
James Cowper Kreston
Chartered Accountants

2 Chawley Park

Cumnor Hill

Oxford

Oxfordshire

OX2 9GG





 
OBS MEDICAL LIMITED
 

 
CONTENTS

Page
Directors' Report
 
 
1
Statement of Profit or Loss and Other Comprehensive Income

 
2
Statement of Financial Position
 
 
3 - 4
Statement of Changes in Equity
 
 
5
Statement of Cash Flows
 
 
6
Notes to the Financial Statements
 
 
7 - 26

 
OBS MEDICAL LIMITED
 

 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024

The Directors present their report and the financial statements for the year ended 31 March 2024.

Results and dividends

The loss for the year, after taxation, amounted to £478,254 (2023 - loss £279,893).

Principal activity

The principal activity of the business in the year under review was that of researching, developing and selling products for patient monitoring and cardiac safety.

Directors

The Directors who served during the year were:

S Didcote 
A Cockell 
A Simon 

Business review

The Company continued its research and development activities during the year, with focus on improvements to its patented algorithms and platform with a focus on market expansion. 
OBS Medical Limited (“OBS”) now has licensing agreements with 2 major middleware companies who are in the process of embedding Visensia within their own products, with 1 of these products due for launch in 2024; distribution contracts in Canada, Europe and Asia; a fully engaged teaching hospital reference site in the Netherlands; an established partnership with a leading Canadian company in the field of predictive analytics and an established partnership with a US thought leader in the space of ICU analytics..
Sales from these channels have started and are forecast to pick up pace in the EU and Canada during late 2024.

Revenues increased in the year to £198,687 (2023: £157,437) and gross profit increased to £160,150 (2023: £139,716). This is largely due to early adopters and innovators adopting OBS’s products.
Administrative expenses increased during the year to £695,962 (2023: £653,815). Staff costs increased to £495,274 (2023: £451,547).
The Company was successful in raising additional funding during the year of £485,000 (2023: £330,000) due to the issue of share capital. Net liabilities at 31 March 2024 were £9,846,476 (2023: £9,853,247). The Company managed its cash reserves carefully to ensure that research and administrative activities were adequately funded. 

Small companies' exemption note

In preparing this report, the Directors have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006.

This report was approved by the board and signed on its behalf.
 


................................................
S Didcote
Director

Date: 24 October 2024
Page 1

 
OBS MEDICAL LIMITED
 

 
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024

2024
2023
Note
£
£

  

Revenue
 3 
198,687
157,437

Cost of sales
  
(38,537)
(17,721)

Gross profit
  
160,150
139,716

  

Other operating income
 4 
16,587
3,262

Administrative expenses
  
(695,962)
(653,815)

Loss from operations
  
(519,225)
(510,837)

  

Finance expense
 7 
(2,343)
(2,321)

Loss before tax
  
(521,568)
(513,158)

  

Tax Credit
  
43,314
233,265

Loss for the year
  
(478,254)
(279,893)

The notes on pages 7 to 26 form part of these financial statements.

Page 2

 
OBS MEDICAL LIMITED
REGISTERED NUMBER: 03955861

 
STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2024

2024
2023
Note
£
£

Assets

Non-current assets
  

Property, plant and equipment
 9 
4,967
2,099

Other non-current investments
 10 
57
57

  
5,024
2,156

Current assets
  

Trade and other receivables
 11 
148,784
192,403

Cash and cash equivalents
 20 
71,881
35,669

  
220,665
228,072

  

Total assets

  

225,689
230,228

Liabilities

Non-current liabilities
  

Loans and borrowings
 13 
17,792
26,310

  
17,792
26,310

Current liabilities
  

Trade and other liabilities
 12 
86,312
89,104

Loans and borrowings
 13 
5,791,170
5,791,170

Derivative financial liabilities
  
4,176,891
4,176,891

  
10,054,373
10,057,165

Total liabilities
  
10,072,165
10,083,475

Net liabilities
  
(9,846,476)
(9,853,247)


Issued capital and reserves
  

Share capital
 14 
3,814,072
3,329,072

Share premium reserve
  
26,931,070
26,931,070

Convertible debt option reserve
  
116,412
116,412

Retained earnings
  
(40,708,030)
(40,229,801)

TOTAL EQUITY
  
(9,846,476)
(9,853,247)

Page 3

 
OBS MEDICAL LIMITED
REGISTERED NUMBER: 03955861

 
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 MARCH 2024

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

The members have not required the Company to obtain an audit for the year in question in accordance with section 476 of the Companies Act 2006.
The Directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.

The Company's financial statements have been prepared in accordance with the provisions applicable to the companies subject to the small companies regime.

The financial statements on pages 1 - 26 were approved and authorised for issue by the board of Directors and were signed on its behalf by:




................................................
S Didcote
Director

Date: 24 October 2024

The notes on pages 7 - 26 form part of these financial statements.

Page 4

 
OBS MEDICAL LIMITED


 
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024


Share capital
Share premium
Share-based payment reserve
Retained earnings
Total equity


£
£
£
£
£

At 1 April 2023
3,329,072
26,931,070
116,412
(40,229,776)
(9,853,222)

Comprehensive income for the year




Loss for the year
-
-
-
(478,254)
-

Total comprehensive income for the year
-
-
-
(478,254)
(478,254)

Contributions by and distributions to owners






Issue of share capital
485,000
-
-
-
485,000

Total contributions by and distributions to owners
485,000
-
-
-
485,000

At 31 March 2024
3,814,072
26,931,070
116,412
(40,708,030)
(9,846,476)



Share capital
Share premium
Share-based payment reserve
Retained earnings
Total equity


£
£
£
£
£

At 1 April 2022
2,999,072
26,931,070
123,818
(39,957,314)
(9,903,354)

Comprehensive income for the year




Loss for the year
-
-
-
(279,893)
-

Total comprehensive income for the year
-
-
-
(279,893)
(279,893)

Contributions by and distributions to owners






Issue of share capital
330,000
-
-
-
330,000

Expiry of share options
-
-
(7,406)
-
(7,406)

Share options movement
-
-
-
7,406
7,406

Total contributions by and distributions to owners
330,000
-
(7,406)
7,406
330,000

At 31 March 2023
3,329,072
26,931,070
116,412
(40,229,801)
(9,853,247)

The notes on pages 7 to 26 form part of these financial statements.

Page 5

 
OBS MEDICAL LIMITED


 
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024

2024
2023
Note
£
£

Cash flows from operating activities
  

Loss for the year
  
(417,144)
(279,893)

Adjustment for
  

Depreciation of property, plant and equipment
 9 
427
1,502

Finance expense
 7 
2,343
2,321

R&D tax credit
 8 
(43,314)
(233,265)

  
(457,688)
(509,335)

Movements in working capital:
  

(Increase)/decrease in trade and other receivables
  
(17,490)
(13,790)

(Decrease)/increase in trade and other payables
  
(2,792)
39,912

Cash generated from operations
  
(477,970)
(483,213)

  

Income tax credits received
  
43,441
112,255

Net cash used in operating activities

  
(434,529)
(370,958)

Cash flows from investing activities
  

Purchases of property, plant and equipment
 9 
(3,398)
(189)

Interest paid
  
(2,343)
(2,320)

Net cash used in investing activities

  
(5,741)
(2,509)

Cash flows from financing activities
  

Issue of ordinary shares
  
485,000
330,000

Repayment of loan
  
(8,518)
(8,716)

Net cash from financing activities
  
476,482
321,284

Net increase/(decrease) in cash and cash equivalents
  
36,212
(52,183)

  

Cash and cash equivalents at the beginning of year
  
35,669
87,852

Cash and cash equivalents at the end of the year
 20 
71,881
35,669

The notes on pages 7 to 26 form part of these financial statements.

Page 6

 
OBS MEDICAL LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

1.Accounting policies


1.1

Basis of preparation

The Company has chosen to prepare its financial statements in accordance with International Financial Reporting Standards (IFRS) and IFRS Interpretations Committee (IFRS IC) 2006 issued and effective at the time of preparing these annual financial statements, in conformity with the requirements of the Companies Act.  
The financial statements have been prepared on the going concern basis, under the historical cost convention. These financial statements are presented in pounds sterling because that is the currency of the primary economic environment in which the Company operates.


1.2

Going concern

The Company in the year under review made a total loss of £478,254 (2023: £279,893) and has total net liabilities of £9,846,476 (2023: £9,853,247). Despite the position, the Directors believe the Company is a going concern. 
The Directors have prepared budgets and forecasts assessing the required resources to continue in operational existence for the foreseeable future.
Based on this review the Directors believe that the financial statements have been prepared appropriately on a going concern basis.

 
1.3

Revenue

Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. The Company recognises revenue when it transfers control over a product or service to a customer.

The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.


1.4

Employee benefits

A provision is made in the financial statements for all employee benefits. Liabilities for wages and salaries, including non-monetary benefit and annual leave obliged to be settled within 12 months of the balance sheet date, are recognised in accruals.
The contributions to defined contribution pension plans are charged to the Income Statement in the period to which the contributions relate.

Page 7

 
OBS MEDICAL LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

1.Accounting policies (continued)

 
1.5

Taxation


(i) Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from ‘profit before tax’ as reported in the Profit and Loss Account because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company's current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.


(ii) Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.


(iii) Current and deferred tax for the year

Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

R&D tax credits are recognised on a cash basis.

Page 8

 
OBS MEDICAL LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

1.Accounting policies (continued)

 
1.6

Property, plant and equipment

Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

Depreciation is provided on all other items of property, plant and equipment so as to write off their carrying value over their expected useful economic lives. It is provided at the following range:

Office equipment
25-50%
Fixtures and fittings
25%

 
1.7

Financial instruments

Financial assets and financial liabilities are recognised when an entity becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

  
1.8

Derivative financial instruments

The Company enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign exchange rate risks, including foreign exchange forward contracts, interest rate swaps and cross currency swaps. Further details of derivative financial instruments are disclosed in note 17.

Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

Page 9

 
OBS MEDICAL LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

1.Accounting policies (continued)


1.9

Adoption of new or amended accounting policies

There have been no new international reporting standards, amendments and interpretations that have had a material impact on the Company for the year ended 31 March 2024.
Standards and interpretations not yet effective


Presentation of Financial Statements (Amendments to IAS 1) - Classification of liabilities as current or non-current; non-current liabilities with covenants 

The amendments clarify that the classification of liabilities as current or non-current should be based on rights that exist at the end of the reporting period. Where an entity is required to comply with a covenant attached to the liability on or before the end of the reporting period, the covenant will affect whether the right to defer settlement of the liability exists at the reporting date and therefore impacts the classification of the liability. Covenants to be complied with after the reporting date do not affect the classification but entities are required to disclose information about the covenants in the notes to the financial statements.

The amendment is effective for annual reporting periods beginning on or after 1 January 2024.

The Directors do not consider that this standard will have a material impact on the Company.

Lease Liability in a sale and leaseback (Amendment to IFRS16) 

The amendments require a seller-lessee to subsequently measure lease liabilities arising from a leaseback so as not to recognise any amount of the gain or loss that relates to the right of use retained, however they may recognise any gain or loss relating to partial or full termination of a lease in profit or loss.

The amendment is effective for annual reporting periods beginning on or after 1 January 2024.

The Directors do not consider that this standard will have a material impact on the Company.

Supplier Finance Arrangements (Amendment to IAS 7 and IFRS 7)

The amendments introduce two new disclosure objectives for a company to provide information about its supplier finance arrangements that would enable users (investors) to assess the effects of these arrangements on the company's liabilities and cash flows, and the company's exposure to liquidity risk. Under the amendments, companies also need to disclose the type and effect of non-cash changes in the carrying amounts of the financial liabilities that are a part of a supplier finance arrangement.

The amendment is effective for annual reporting periods beginning on or after 1 January 2024.

The Directors do not consider that this standard will have a material impact on the Company.

International Tax Reform—Pillar Two Model Rules (IAS 12)

International Tax Reform—Pillar Two Model Rules amends IAS 12 Income Taxes. The amendments introduce a temporary exception to the requirements to recognise and disclose information about deferred tax assets and liabilities related to Pillar Two income taxes. The amendments also introduce targeted disclosure requirements for affected entities.

The amendment is effective for annual reporting periods beginning on or after 1 January 2024.

The Directors do not consider that this standard will have a material impact on the Company.


Page 10

 
OBS MEDICAL LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

1.Accounting policies (continued)


Lack of Exchangeability (Amendment to IAS 21)

Under the amendments, companies will need to provide new disclosures to help users assess the imapct of using an estimated exchange rate on the financial statements. These disclosures might include:

- the nature and financial impacts of the currency not being exchangable;
- the spot exchange rate used;
- the estimation process; and
- risks to the company because the currency is not exchangeable. 

The amendment is effective for annual reporting periods beginning on or after 1 January 2025.

The Directors do not consider that this standard will have a material impact on the Company.

2.


Judgements in applying accounting policies and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amount 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. The following judgements (apart from those involving estimates) have had the most significant effects on amounts recognised in the financial statements.
Share based payments 
Estimating the fair value for share based payment transactions requires determination of the most appropriate valuation model, which depends on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option and volatility. For the measurement of the fair value of equity settled transactions with employees at the grant date, the Company used the Black-Scholes model.


3.


Revenue


The following is an analysis of the Company's revenue for the year from continuing operations:


2024
2023
£
£


Other sales
198,687
157,437

198,687
157,437


Analysis of revenue by country of destination:

2024
2023
£
£


United Kingdom
-
10,246

Rest of Europe
198,687
147,191

198,687
157,437

Page 11

 
OBS MEDICAL LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

4.


Other operating income

2024
2023
£
£


Sundry income
16,587
3,262


5.


Employee benefit expenses

2024
2023
£
£

Employee benefit expenses (including Directors) comprise:

Wages and salaries
394,510
358,731

National insurance
45,551
42,847

Defined contribution pension cost
55,213
49,969

495,274
451,547

Key management personnel compensation

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company, including the Directors of the Company listed on page 1.


2024
2023
£
£


Salary
136,174
122,837

Defined contribution scheme costs
10,202
9,102

146,376
131,939

The number of Directors accruing benefits under money purchase pension schemes was 1 (2023: 1).

The monthly average number of persons, including the Directors, employed by the Company during the year was as follows:


2024
2023
No.
No.

Average employee numbers
7
7

Page 12

 
OBS MEDICAL LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

6.


Directors' remuneration

2024
2023
£
£


Directors' emoluments
136,174
122,837

Company contributions to pension schemes
10,202
9,102

146,376
131,939



7.


Finance income and expense

Recognised in profit or loss


2024
2023
£
£



Finance expense

Bank charges
2,343
2,321

Net finance expense recognised in profit or loss
(2,343)
(2,321)




Page 13

 
OBS MEDICAL LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

8.


Tax expense

8.1 Income tax recognised in profit or loss



2024
2023
£
£

Current tax

Current tax on loss for the year

(43,314)
(233,265)




Total tax expense

Tax credit
(43,314)
(233,265)

The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to losses for the year are as follows:


2024
2023
£
£


Loss for the year
(478,254)
(279,893)

Income tax (credit)/expense (including income tax on associate, joint venture and discontinued operations)
(43,314)
(233,265)

Loss before income taxes
(521,568)
(513,158)


Tax using the Company's domestic tax rate of 25% (2023:19%)
(130,392)
(97,500)

Expenses not deductible for tax purposes
27
-

R&D expenditure credits
4,147
-

Fixed asset differences
-
(44)

Additional deduction for R&D expenditure
(54,860)
(87,208)

Surrender of tax losses for R&D tax credit refund
71,191
36,543

Adjustments to tax charge in respect of prior periods
(1)
(114,752)

Remeasurement of deferred tax for changes in tax rates
-
(9,574)

Movement in deferred tax not recognised
66,574
39,889

Other movements
-
(619)

Total tax expense
(43,314)
(233,265)

Changes in tax rates and factors affecting the future tax charges

There were no factors that may affect future tax charges.


Page 14

 
OBS MEDICAL LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

9.


Property, plant and equipment





Fixtures and fittings
Office equipment
Right of use assets
Total

£
£
£
£



Cost or valuation






At 1 April 2022
14,321
11,389
167,608
193,318


Additions
-
189
-
189



At 31 March 2023
14,321
11,578
167,608
193,507


Additions
-
3,398
-
3,398


Disposals
(13,905)
(2,916)
-
(16,821)



At 31 March 2024
416
12,060
167,608
180,084


Fixtures and fittings
Office equipment
Right of use assets
Total

£
£
£
£



Accumulated depreciation and impairment






At 1 April 2022
12,995
9,303
167,608
189,906


Charge owned for the year
1,135
367
-
1,502



At 31 March 2023
14,130
9,670
167,608
191,408


Charge owned for the year
-
427
-
427


Disposals
(13,905)
(2,813)
-
(16,718)



At 31 March 2024
225
7,284
167,608
175,117



Net book value


At 1 April 2022
1,326
2,086
-
3,412


At 31 March 2023
191
1,908
-
2,099


At 31 March 2024
191
4,776
-
4,967

Page 15

 
OBS MEDICAL LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

10.

Other non-current investments

2024
2023
£
£

Investments in subsidiary companies
57
57



11.


Trade and other receivables


2024
2023
£
£


Trade receivables
14,080
-

Receivables from related parties
42,170
40,592

Prepayments and accrued income
30,527
27,710

Tax recoverable
59,901
121,010

Other receivables
2,106
3,091

Total trade and other receivables

148,784
192,403

Amounts owed by group undertakings are non-interest bearing and repayable on demand. 
The carrying value of trade and other receivables classified as loans and receivables approximates fair value. 
No trade receivables at the year end are past due that have not been provided for (2023: £nil).
The ageing of amounts due but not impaired are nil (2023: nil)

Page 16

 
OBS MEDICAL LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024



12.


Trade and other payables


2024
2023
£
£


Current

Trade payables
10,992
11,488

Other payables
4,722
4,590

Accruals
11,715
10,800

27,429
26,878

Other payables - tax and social security payments
13,800
13,465

Deferred income
45,083
48,761

Total current trade and other payables
86,312
89,104


13.


Loans and borrowings

2024
2023
£
£

Non-current

Secured loans
17,792
26,310

Current

Secured loans
5,791,170
5,791,170

Page 17

 
OBS MEDICAL LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

13.Loans and borrowings (continued)


Summary of borrowing arrangements:

The Company has historically held a number of loan relationships with Comvest Limited, a shareholder. The loans remaining outstanding are as follows: 
(i) Loans (£1,145,180 in principal amount) which date from November 2010 (some of which were originally USD denominated and were converted into sterling on 13 April 2011).  These have an option to convert into equity shares at a capped valuation per share. The repayment date of these loans has been extended by agreement with Comvest Limited; as at 31 March 2024 the most recent formal extension was to 31 December 2024. 
 
(ii) In April 2012, an extension was agreed to the then outstanding Comvest Limited loans providing a revolving £250,000 facility, which was convertible into equity shares. This date was subsequently extended by agreement with Comvest Limited; as at 31 March 2024 the most recent formal extension was to 31 December 2024.  
 
(iii) In August 2017, the Company entered into a further convertible loan agreement with Comvest Limited with a total face value of £1.25 million and a repayment date of 31 December 2017. The repayment date was extended to 30 June 2018 and the maximum amount of the loan has been extended. These loans include an option to convert to equity shares at a discount to the market price at the date of conversion.  During the year to 31 March 2024 £nil principal amount of this loan was issued (2023: £nil). No conversion occurred during the year. 
 
The short-term nature of the loan instrument of August 2017 and the fact that interest rates will have little impact on the value of the early redemption option means that the main driver is considered to be the possibility of the loan notes converting to shares. These loan notes are not considered to have an embedded derivative.  
 
The loan agreements referred to in (i) and (ii) carry a fixed interest rate of 17.5% per annum.  The loan agreement of August 2017 referred to in (iii) carries an interest rate of 10% per annum.  Interest entitlements have been rolled up rather than any interest being paid.  From 30 June 2018 Comvest Limited formally agreed with the Company to regard no further interest in respect of any of the above agreements as being paid, payable or accruing until further notice.
 
Comvest Limited has debentures dated 19 April 2012 and 16 August 2017, providing fixed and floating charges over the Company's assets in relation to loans and associated interest existing on and about the date of those debentures.

Derivative financial liabilities
The fair value of the derivative financial liabilities has been undertaken on behalf of the Board by an independent professional valuation firm in 2017, who used a Monte Carlo simulation approach to the valuation. As above, the Directors have assessed that there are no material movements in this fair value since this valuation and, therefore, no further valuation has taken place during the period.
These derivatives are not traded in active markets. See note 19.
 
Included in the above is an unrealised loss of  £4,176,891 (2023: £4,176,891). There is no realised gain/(loss) included in the financial statements. 
Page 18

 
OBS MEDICAL LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
14.


Share capital

Authorised

2024
2024
2023
2023
Number
£
Number
£

Shares treated as equity
Ordinary shares of £0.01 each

378,697,197

3,786,972

330,197,197
 
3,301,972
 
A Ordinary shares of £0.01 each

2,710,044

27,100

2,710,044
 
27,100
 
381,407,241

3,814,072

332,907,241
 
3,329,072
 

Issued and fully paid

2024
2024
2023
2023
Number
£
Number
£

Ordinary shares of £0.01 each

At 1 April

330,197,197

3,301,972

297,197,197
 
2,971,972
 
Shares issued

48,500,000

485,000

33,000,000
 
330,000
 
At 31 March
378,697,197

3,786,972

330,197,197
 
3,301,972
 

2024
2024
2023
2023
Number
£
Number
£

A Ordinary shares of £0.01 each

At 1 April and 31 March
2,710,044

27,100

2,710,044
 
27,100
 

Page 19

 
OBS MEDICAL LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

14.Share capital (continued)

A Ordinary Shares have certain preference rights over those attributable to Ordinary Shares, which include:
Liquidation Preference: Holders of A Ordinary Shares receive any net return of assets on liquidation, capital reduction or otherwise (other than a conversion, redemption or purchase of shares), which is net of any payment of the company's liabilities, in preference to Ordinary Shareholders, to an amount equivalent to the Subscription Price per A Ordinary shares, which was £0.69641 per share.
Exit Provision: On a share sale, proceeds are to be distributed with holders of A Ordinary Shares taking precedence ahead of holders of Ordinary shares, to the extent of the equivalent of the Subscription Price per A Ordinary Shares, which was £0.69641 per share, should the proceeds of sale not be settled in their entirety on completion. 
Similarly on an Asset Sale, the surplus of assets of the Company remaining after payment of its liabilities are to be distributed, with holders of A Ordinary Shares taking preference ahead of holders of Ordinary shares, to the extent of the equivalent of the Subscription Price per A Ordinary Share, which was £0.69641 per share. 
On an IPO of the Company, each holder of A Ordinary Shares is to be allotted, by way of automatic capitalisation of reserves, a number of Ordinary Shares (disregarding any fraction of a share), to the amount of an aggregate Realisation Price equal to the Subscription Price of the A Ordinary Shares held, where the Realisation Price is the value of each Ordinary share in use immediately prior to an IPO, determined by reference to the price per share at which Ordinary Shares are to be offered for sale, placed or otherwise marketed pursuant to such IPO.
An IPO is defined as the admission of all or any of the Company's shares to be admitted to or traded or quoted on NASDAQ or the Official List of the United Kingdom Listing Authority or the AIM Market operated by the London Stock Exchange Plc or any other recognised investment exchange (as defined in section 285 of the Financial Services and Markets Act 2000).
Between the 17 May 2023 and 28 March 2024, the Company issued 48,500,000 £0.01 Ordinary Shares for a total consideration of £485,000.


Page 20

 
OBS MEDICAL LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

15.


Reserves


Share premium

The Share premium represents the total amount received for shares issued in excess of their nominal value.

Share-based payment reserve

The Share-based payment reserve represents the reserve for the share option scheme.

Retained earnings

The profit and loss account represents profit and losses after cumulative dividends have been paid.


16.


Defined Contribution Scheme

The Company operates a defined contribution pension scheme for its employees. The pension cost charge represents contributions paid by the Company and amounts to £55,213 (2023: £49,969). At the year end an amount of £4,722 (2023: £4,590) remained payable.

Page 21

 
OBS MEDICAL LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

17.


Financial instruments - fair values and risk management

17.1 Accounting classifications and fair values

The following table shows the carrying amounts and fair values of financial assets and financial liabilities. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.


Carrying amount
31 March 2024
Note
Fair value - hedging instruments
Other financial liabilities
Total


        £
        £
        £

Financial assets measured at fair value


  

 





  


-
-
-
Financial assets not measured at fair value


  





Trade and other receivables

 11 

-

88,883

88,883

Cash and cash equivalents

 20 

-

71,881

71,881



  


-
160,764
160,764
Financial liabilities measured at fair value


  





Embedded derivatives

 12 

4,176,891

-

4,176,891



  


4,176,891
-
4,176,891
Financial liabilities not measured at fair value


  





Secured loans

 13 

-

5,808,962

5,808,962

Accruals

 13 

-

11,715

11,715

Trade payables

 12 

-

10,992

10,992


  


-
5,831,669
5,831,669

Page 22

 
OBS MEDICAL LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

17.Financial instruments - fair values and risk management (continued)


17.1 Accounting classifications and fair values (continued)


Carrying amount
31 March 2023
Note
Fair value - hedging instruments
Other financial liabilities
Total


        £
        £
        £

Financial assets measured at fair value


  

 





  


-
-
-
Financial assets not measured at fair value


  





Trade and other receivables

 11 

-

71,394

71,394

Cash and cash equivalents

 20 

-

35,669

35,669



  


-
107,063
107,063
Financial liabilities measured at fair value


  





Embedded derivatives

 12 

4,176,891

-

4,176,891



  


4,176,891
-
4,176,891
Financial liabilities not measured at fair value


  





Secured loans

 13 

-

5,817,480

5,817,480

Accruals

 13 

-

10,800

10,800

Trade payables

 12 

-

11,488

11,488


  


-
5,839,768
5,839,768

Page 23

 
OBS MEDICAL LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

17.Financial instruments - fair values and risk management (continued)


17.2 Foreign currency risk management

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilising forward foreign exchange contracts.

The carrying amounts of the Company's foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:


Assets
2024
2023
£
£

USD
9
10,395

Euro
356
7,220

365
17,615


17.3 Interest rate risk management

The Company is exposed to interest rate risk because the Company borrows funds at both fixed and floating interest rates. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings, and by the use of interest rate swap contracts and forward interest rate contracts. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite, ensuring the most cost-effective hedging strategies are applied.


17.4 Credit risk management

The Company's credit risk is primarily attributable to its cash balances and trade receivables. TheCompany does not have a significant concentration of risk, with exposure spread over a number of thirdparties. The credit risk on liquid funds is limited because the third parties are parties are large internationalbanks with a credit rating of at least A. The Company's total credit risk amounts to the total of the sum of the receivables and cash equivalents. At the year end this amounted to £281,775 (2023: £228,072). There are no receivables past their due date.

Page 24

 
OBS MEDICAL LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

18.


Liquidity risk management

Prudent liquidity risk management includes maintaining sufficient cash balances to ensure the Company can meet liabilities as they fall due. 
In managing liquidity risk, the main objective of the Company is, therefore, to ensure that it has the ability to pay all of its liabilities as they fall due. The Company monitors its levels of working capital to ensure that it can meet its debt repayments as they fall due. the table below shows the undiscounted cash flows on the Company's financial liabilities as at 31 March 2024 and 2023, on the basis of their earliest possible contractual maturity. 

Carrying amount
Total
1-6 months
1-2 years
        £
        £
        £
        £
Secured Loans

5,808,962

5,808,962

5,791,170
 
17,792
 
Accruals

11,715

11,715

11,715
 
-
 
Trade payables

10,992

10,992

10,992
 
-
 

-

-

-
 
-
 

5,850,568

5,850,568

5,813,458
 
26,310
 

Carrying amount
Total
1-6 months
1-2 years
        £
        £
        £
        £
31 March 2023

Secured loans

5,828,280

5,828,280

5,791,170
 
26,310
 
Accruals

10,800

10,800

10,800
 
-
 
Trade payables

11,488

11,488

11,488
 
-
 

5,850,568

5,850,568

5,813,458
 
26,310
 

Page 25

 
OBS MEDICAL LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

19.


Share based payments


19.1. Employee share option plan of the Company


Movements in share options during the year

The following reconciles the share options outstanding at the beginning and end of the year:


2024
2023
Number of options
Weighted average exercise price
Number of options
Weighted average exercise price

£

£


Balance at the beginning of the year
21,259,000
0.01
22,005,000
0.01

Expired during the year
-
-
(746,000)
-

21,259,000
-
-

2024
2023
£
£



Weighted average share price (pence)
1
1

Exercise price (pence)
1
1

Weighted average life (years)
10
10

Expected volatility (%)
31
31

Risk-free interest rate (% pa)
1
1


20.

Notes supporting statement of cash flows

2024
2023
£
£


Cash at bank available on demand
71,881
35,669

Cash and cash equivalents in the statement of financial position

71,881
35,669


Cash and cash equivalents in the statement of cash flows
71,881
35,669

Page 26