Company registration number 06450324 (England and Wales)
SONICHEM TECHNOLOGIES LIMITED
FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
PAGES FOR FILING WITH REGISTRAR
SONICHEM TECHNOLOGIES LIMITED
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
3 - 10
SONICHEM TECHNOLOGIES LIMITED
BALANCE SHEET
AS AT
31 AUGUST 2024
31 August 2024
- 1 -
31 August 2024
31 December 2023
as restated
Notes
£
£
£
£
Fixed assets
Intangible assets
4
177,668
168,681
Investments
5
100
100
177,768
168,781
Current assets
Debtors
6
224,065
264,927
Cash at bank and in hand
317,165
165,372
541,230
430,299
Creditors: amounts falling due within one year
7
(94,161)
(180,691)
Net current assets
447,069
249,608
Net assets
624,837
418,389
Capital and reserves
Called up share capital
10
183,226
160,984
Share premium account
3,669,756
2,969,703
Profit and loss reserves
(3,228,145)
(2,712,298)
Total equity
624,837
418,389
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 29 October 2024 and are signed on its behalf by:
A J Black
Director
Company registration number 06450324 (England and Wales)
SONICHEM TECHNOLOGIES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 AUGUST 2024
- 2 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
As restated for the period ended 31 December 2023:
Balance at 1 January 2023
148,140
2,564,306
(1,477,866)
1,234,580
Effect of change in accounting policy
-
(424,683)
(424,683)
As restated
148,140
2,564,306
(1,902,549)
809,897
Year ended 31 December 2023:
Loss and total comprehensive income
-
-
(874,303)
(874,303)
Issue of share capital
10
12,844
405,397
-
418,241
Credit to equity for equity settled share-based payments
9
-
-
64,554
64,554
Balance at 31 December 2023
160,984
2,969,703
(2,712,298)
418,389
Period ended 31 August 2024:
Loss and total comprehensive income
-
-
(579,368)
(579,368)
Issue of share capital
10
22,242
700,053
-
722,295
Credit to equity for equity settled share-based payments
9
-
-
63,521
63,521
Balance at 31 August 2024
183,226
3,669,756
(3,228,145)
624,837
SONICHEM TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
- 3 -
1
Accounting policies
Company information
Sonichem Technologies Limited is a private company limited by shares incorporated in England and Wales. The registered office is 30 Upper High Street, Thame, Oxfordshire, OX9 3EZ.
1.1
Reporting period
The reporting period has been shortened from 31 December to 31 August in order to accelerate funding opportunities. Therefore, these accounts represent an 8 month period. The comparative amounts presented in the financial statements (including the related notes) are not entirely comparable.
1.2
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.3
Going concern
These financial statements are prepared on the going concern basis. The directors have a reasonable expectation that the company will continue in operational existence for the foreseeable future. Current cashflow forecasts project funds will run out by early February 2025 and the directors are aware that, as with previous years, further funding will be required in order to continue. The Company is in positive discussions with a number of potential equity funders and as a result of these discussions to date, the Directors consider that there is a reasonable likelihood of further funding being available.
1.4
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
1.5
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives.
1.6
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
SONICHEM TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 AUGUST 2024
1
Accounting policies
(Continued)
- 4 -
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.7
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of 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). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.8
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 current liabilities.
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally 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.
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.
SONICHEM TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 AUGUST 2024
1
Accounting policies
(Continued)
- 5 -
Classification of financial liabilities
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.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, 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.
1.10
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.
Changes in fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
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 liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date 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 is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
SONICHEM TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 AUGUST 2024
1
Accounting policies
(Continued)
- 6 -
1.12
Employee 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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Share-based payments
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. 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.
1.15
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.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
SONICHEM TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 AUGUST 2024
- 7 -
3
Employees
The average monthly number of persons (including directors) employed by the company during the period was:
2024
2023
Number
Number
Total
11
10
4
Intangible fixed assets
Patents & licences
Trademarks
Total
£
£
£
Cost
At 1 January 2024
160,204
8,477
168,681
Additions
5,108
3,879
8,987
At 31 August 2024
165,312
12,356
177,668
Amortisation and impairment
At 1 January 2024 and 31 August 2024
Carrying amount
At 31 August 2024
165,312
12,356
177,668
At 31 December 2023
160,204
8,477
168,681
5
Fixed asset investments
2024
2023
£
£
Shares in group undertakings and participating interests
100
100
6
Debtors
2024
2023
Amounts falling due within one year:
£
£
Other debtors
139,528
221,015
Prepayments and accrued income
70,435
34,190
209,963
255,205
SONICHEM TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 AUGUST 2024
6
Debtors
(Continued)
- 8 -
2024
2023
Amounts falling due after more than one year:
£
£
Corporation tax recoverable
14,102
9,722
Total debtors
224,065
264,927
7
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
27,107
87,607
Taxation and social security
21,032
20,116
Other creditors
46,022
72,968
94,161
180,691
8
Deferred taxation
As at 31 August 2024, there existed a potential net deferred tax asset of £704,453 (Dec 2023: £640,232), in respect of unrelieved trading losses less accelerated capital allowances.
This has not been reflected as an asset given the uncertainty of future revenue streams and the company is committed to significant continued investment in research and development.
9
Share-based payment transactions
Number of share options
Weighted average exercise price
2024
2023
2024
2023
Number
Number
£
£
Outstanding at 1 January
310,503
293,836
0.32
0.25
Granted
42,399
16,667
0.25
1.50
Outstanding at 31 August
352,902
310,503
0.31
0.32
Exercisable at 31 August
337,391
266,996
0.31
0.37
The options outstanding at 31 August 2024 had an exercise price range of £0.25 to £1.50.
Liabilities and expenses
During the period, the company recognised total share-based payment expenses of £63,521 (2023 - £64,554) which related to equity settled share based payment transactions.
SONICHEM TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 AUGUST 2024
- 9 -
10
Called up share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 5p each
3,664,512
3,219,683
183,226
160,984
During the period, a total of 444,829 ordinary shares with a nominal value of £0.05 each were issued. A total of £765,106 was received for these shares. Legal costs of £42,810 were incurred that related to the issue of the shares. These are shown as a reduction to share premium.
11
Audit report information
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was unqualified.
Material uncertainty related to going concern
We draw your attention to Note 1.3 in the financial statements, which indicates that the company currently has insufficient secured financial resources available to it. These conditions 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.
Senior Statutory Auditor:
Alison Richardson
Statutory Auditor:
Richardsons
Date of audit report:
29 October 2024
12
Operating lease commitments
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2024
2023
£
£
47,384
5,081
13
Prior period adjustment
A prior period adjustment was made to the financial statements to reclassify patent maintenance costs. These costs, which were previously treated as capital expenditure, have now been moved to the profit and loss account in accordance with FRS 102.
SONICHEM TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 AUGUST 2024
13
Prior period adjustment
(Continued)
- 10 -
Reconciliation of changes in equity
1 January
31 December
2023
2023
£
£
Adjustments to prior period
Move intangibles to P&L
-
(440,169)
Equity as previously reported
1,234,580
858,558
Equity as adjusted
1,234,580
418,389
Analysis of the effect upon equity
Profit and loss reserves
-
(440,169)
Reconciliation of changes in loss for the previous financial period
2023
£
Adjustments to prior period
Move intangibles to P&L
(15,486)
Loss as previously reported
(858,817)
Loss as adjusted
(874,303)
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