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Registered number: 11427587










FACEGYM HOLDINGS LIMITED










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 29 FEBRUARY 2024

 
FACEGYM HOLDINGS LIMITED
 
 
COMPANY INFORMATION


Directors
Marcello Bottoli (resigned 18 September 2023) 
Simon Coble (resigned 31 May 2023)
Stephanie Horton 
Raffaella Redaelli De Zinis 
Inge Theron 
Andrea La Magra (appointed 20 June 2023)
Pete Wylie (resigned 1 September 2023) 
Laura Heely 
Etsko Loek De Boer 
Fiona Satchell 




Registered number
11427587



Registered office
6th Floor 1-4 Argyll Street,

London

W1F 7TA




Independent auditors
HaysMac LLP

10 Queen Street Place

London

EC4R 1AG





 
FACEGYM HOLDINGS LIMITED
 

CONTENTS



Page
Group Strategic Report
1 - 2
Directors' Report
3 - 4
Independent Auditors' Report
5 - 8
Consolidated Statement of Comprehensive Income
9
Consolidated Balance Sheet
10 - 11
Company Balance Sheet
12
Consolidated Statement of Changes in Equity
13
Company Statement of Changes in Equity
14
Consolidated Statement of Cash Flows
15
Notes to the Financial Statements
16 - 35


 
FACEGYM HOLDINGS LIMITED
 
 
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 29 FEBRUARY 2024

Introduction
 
The directors present their strategic report together with audited financial statements for the year ended 29 February 2024.

Business review
 
During the year the business undertook a significant strategic shift and implemented a number of actions to reduce its loss and cash burn, through headcount restructuring, cost cutting, streamlining operations and focussing on its profitable service business. This has led to a significant improvement in EBITDA with the Group generating an EBITDA loss before exceptionals of £3.6m (2023: £6.1m loss), a £2.5m improvement on the prior year. Overall sales were in line at £13.8m (2023: £13.6m), with a shift in focus from product sales online and through wholesale, to studio facial workout services, with the business opening one location in Santa Monica in the year. 
Exceptional charges relate to costs incurred in relation to a potential transaction and the raising of funding.
The directors have not recommended a dividend (2023 - £nil).
Going Concern 
The Directors' have made significant strides in increasing revenue and reducing expenses. This is shown since the year end where the Group's losses have reduced significantly and the business is close to being EBITDA breakeven and is now set on a path to profitability. The group also has an additional £924,113 to be raised if needed to support the business in the coming 12 months.

Principal risks and uncertainties
 
The group’s principal activity during the year was the provision of facial workouts and retail of beauty related products. This is through the group’s 14 studios across the UK and US in addition to a digital and wholesale product offering.
The principal risk that could materially affect the business, revenues, operating income, net income, net assets or liquidity is general economic risk. A positive economic and favourable legislative environment is key to the overall success of the beauty sector in the UK and US and as a consequence to FaceGym. These risks have been managed accordingly (see below).
Currency risk
The Group is exposed to transaction based foreign exchange risk. This risk is managed by regular review of foreign currency positions.
Liquidity risk
The Group seeks to manage liquidity risk by regularly forecasting future cashflows to ensure sufficient funds are available to meet the Group’s financial obligations for the foreseeable future.

Financial key performance indicators
 
The Group’s key performance indicators are revenue, gross profit margin and EBITDA.
The Group EBITDA (before exceptionals) decreased from a loss of £6.1m in 2023 to a loss of £3.6m in 2024 as a result of the actions taken by management in restructuring the underlying cost base. Revenue increased from £13.6m in 2023 to £13.8m in 2024. Gross profit margin increased from 71% in 2023 to 78% in 2024 as mix of higher margin workout sales versus 2023 when the Group sales were predominantly digital and product driven.

 
Page 1

 
FACEGYM HOLDINGS LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024


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


Etsko Loek De Boer
Director

Date: 28 November 2024

Page 2

 
FACEGYM HOLDINGS LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 29 FEBRUARY 2024

The directors present their report and the financial statements for the year ended 29 February 2024.

Directors' responsibilities statement

The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated financial statements in accordance with applicable law and regulations.
 
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Group's financial statements and then apply them consistently;

make judgments and accounting estimates that are reasonable and prudent;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Results and dividends

The loss for the year, after taxation, amounted to £5,827,880 (2023 - loss £6,681,088).

Directors

The directors who served during the year were:

Marcello Bottoli (resigned 18 September 2023) 
Simon Coble (resigned 31 May 2023)
Stephanie Horton 
Raffaella Redaelli De Zinis 
Inge Theron 
Andrea La Magra (appointed 20 June 2023)
Pete Wylie (resigned 1 September 2023) 
Laura Heely 
Etsko Loek De Boer 
Fiona Satchell 

Future developments

The Group’s plan is to focus on the profitable studio facial workout business; with a deprioritisation of the digital and wholesale channels. Performance in 2024 for workouts was strong as the Group leveraged its brand awareness and the uniqueness of its workout offering.

Page 3

 
FACEGYM HOLDINGS LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:

Post balance sheet events

The Group entered into a convertible loan note agreement on 23rd December 2022 permitting it to raise £10,000,000 to support the Group’s operating needs, working capital requirements and capital expenditure including in relation to the opening of studios and/or the development of skincare tools in each case in the furtherance of the Company’s business. In the year ended 28 February 2023, the Group raised £5,001,353 through the CLN agreement.
To the year ending 29th February 2024, the Group raised £3,474,534 through the CLN and in total to the date of signing these accounts, the Group has raised a further £600,000, leaving £924,113 of additional headroom to support the funding requirement for 12 months from the signing of these accounts and the going concern assumption.  

Auditors

On 18 November 2024 the Group’s auditor changed its name from Haysmacintyre LLP to HaysMac LLP.
The auditorsHaysMac LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

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





Etsko Loek De Boer
Director

Date: 28 November 2024

Page 4

 
FACEGYM HOLDINGS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FACEGYM HOLDINGS LIMITED
 

Unqualified opinion


We have audited the financial statements of FaceGym Holdings Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 29 February 2024, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion:


give a true and fair view of the state of the Group's and of the parent Company's affairs as at 29 February 2024 and of the Group's loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit
of the financial statements section of our report. We are independent of the Group in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the United Kingdom, including the
Financial Reporting Council's Ethical Standard, and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.


Conclusions relating to going concern


In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.


Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.


Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.


Page 5

 
FACEGYM HOLDINGS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FACEGYM HOLDINGS LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual ReportOur opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.





Opinion on other matters prescribed by the Companies Act 2006
 

In our opinion, based on the work undertaken in the course of the audit:


the information given in the Group Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.


We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:


adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent Company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 3, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.


In preparing the financial statements, the directors are responsible for assessing the Group's and the parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.

Page 6

 
FACEGYM HOLDINGS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FACEGYM HOLDINGS LIMITED (CONTINUED)



Auditors' responsibilities for the audit of the financial statements
 

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Group financial statements.


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Explanation as to what extent the audit was considered capable of detecting irregularities, including
fraud
Based on our understanding of the company and industry, we identified that the principal risks of noncompliance
with laws and regulations related to regulatory requirements for the company and trade regulations and UK tax laws and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006, income tax, payroll tax and sales tax.
We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls),and determined that the principal risks were related to posting inappropriate journal entries to revenue and management bias in accounting estimates. Audit procedures performed by the engagement team included:
•          Inspecting correspondence with regulators and tax authorities;
•          Discussions with management including consideration of known or suspected instances of non-
           compliance with laws and regulations and fraud;
•          Evaluating management’s controls designed to prevent and detect irregularities;
•          Identifying and testing accounting journal entries, in particular those journal entries which exhibited the
           characteristics we had identified as possible indicators of irregularities; and
•          Challenging assumptions and judgements made by management in their critical accounting estimates
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including
those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk
increases the more that compliance with a law or regulation is removed from the events and transactions
reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.
The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves
intentional concealment, forgery, collusion, omission or misrepresentation.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.


Page 7

 
FACEGYM HOLDINGS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FACEGYM HOLDINGS LIMITED (CONTINUED)


Use of our report
 

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.





Anastasia Frangos (Senior Statutory Auditor)
  
for and on behalf of
HaysMac LLP
 
Statutory Auditors
  
10 Queen Street Place
London
EC4R 1AG

28 November 2024
Page 8

 
FACEGYM HOLDINGS LIMITED
 
 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 29 FEBRUARY 2024

2024
2023
Note
£
£

  

Turnover
 4 
13,841,140
13,626,572

Cost of sales
  
(2,958,961)
(3,973,104)

Gross profit
  
10,882,179
9,653,468

Administrative expenses
  
(15,310,897)
(15,371,416)

Exceptional administrative expenses
  
(514,302)
(574,256)

Operating loss
 5 
(4,943,020)
(6,292,204)

Interest receivable and similar income
 8 
12,182
-

Interest payable and similar expenses
 9 
(893,379)
(385,245)

Loss before tax
  
(5,824,217)
(6,677,449)

Tax on loss
 10 
(3,663)
(3,639)

Loss for the financial year
  
(5,827,880)
(6,681,088)

Other comprehensive income for the year
  

Foreign Exchange Movements
  
27,563
(661,861)

Other comprehensive income for the year
  
27,563
(661,861)

Total comprehensive income for the year
  
(5,800,317)
(7,342,949)

The notes on pages 16 to 35 form part of these financial statements.

Page 9

 
FACEGYM HOLDINGS LIMITED
REGISTERED NUMBER: 11427587

CONSOLIDATED BALANCE SHEET
AS AT 29 FEBRUARY 2024

29 February
29 February
2024
2023
Note
£
£

Fixed assets
  

Intangible assets
 12 
415,868
546,253

Tangible assets
 13 
878,842
1,097,973

  
1,294,710
1,644,226

Current assets
  

Stocks
 15 
1,671,503
1,097,055

Debtors
 16 
1,190,092
1,134,343

Cash at bank and in hand
 17 
641,232
2,012,379

  
3,502,827
4,243,777

Creditors: amounts falling due within one year
 18 
(3,452,029)
(3,110,090)

Net current assets
  
 
 
50,798
 
 
1,133,687

Total assets less current liabilities
  
1,345,508
2,777,913

Creditors: amounts falling due after more than one year
 19 
(9,549,851)
(5,181,939)

Provisions for liabilities
  

Net liabilities
  
(8,204,343)
(2,404,026)


Capital and reserves
  

Called up share capital 
 20 
3,004
3,004

Share premium account
 21 
25,452,811
25,452,811

Foreign exchange reserve
 21 
(534,256)
(561,819)

Profit and loss account
 21 
(33,125,902)
(27,298,022)

Equity attributable to owners of the parent Company
  
(8,204,343)
(2,404,026)

  
(8,204,343)
(2,404,026)


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




Etsko Loek De Boer
Director

Date: 28 November 2024

Page 10

 
FACEGYM HOLDINGS LIMITED
REGISTERED NUMBER: 11427587
    
CONSOLIDATED BALANCE SHEET (CONTINUED)
AS AT 29 FEBRUARY 2024

The notes on pages 16 to 35 form part of these financial statements.

Page 11

 
FACEGYM HOLDINGS LIMITED
REGISTERED NUMBER: 11427587

COMPANY BALANCE SHEET
AS AT 29 FEBRUARY 2024

29 February
28 February 
2024
2023
Note
£
£

Fixed assets
  

Intangible assets
 12 
17,081
15,489

Investments
 14 
935
935

  
18,016
16,424

Current assets
  

Debtors
 16 
329
329

Cash at bank and in hand
 17 
38,897
1,520,607

  
39,226
1,520,936

Creditors: amounts falling due within one year
 18 
(345,770)
(86,755)

Net current (liabilities)/assets
  
 
 
(306,544)
 
 
1,434,181

Total assets less current liabilities
  
(288,528)
1,450,605

  

Creditors: amounts falling due after more than one year
 19 
(9,549,851)
(5,181,939)

  

Net liabilities
  
(9,838,379)
(3,731,334)


Capital and reserves
  

Called up share capital 
 20 
3,004
3,004

Share premium account
 21 
25,452,811
25,452,811

Profit and loss account brought forward
  
(29,187,149)
(22,790,178)

Loss for the year
  
(6,107,045)
(6,396,971)

Profit and loss account carried forward
  
(35,294,194)
(29,187,149)

  
(9,838,379)
(3,731,334)


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 


Etsko Loek De Boer
Director

Date: 28 November 2024

The notes on pages 16 to 35 form part of these financial statements.

Page 12

 

 
FACEGYM HOLDINGS LIMITED


 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 29 FEBRUARY 2024



Called up share capital
Share premium account
Foreign exchange reserve
Accumulated losses
Total equity


£
£
£
£
£



At 1 March 2022
1,648
10,756,665
100,042
(20,616,934)
(9,758,579)



Comprehensive income for the year


Loss for the year
-
-
-
(6,681,088)
(6,681,088)


Foreign Exchange Movements
-
-
(661,861)
-
(661,861)

Total comprehensive income for the year
-
-
(661,861)
(6,681,088)
(7,342,949)



Contributions by and distributions to owners


Shares issued during the year
1,356
14,696,146
-
-
14,697,502



Total transactions with owners
1,356
14,696,146
-
-
14,697,502





At 1 March 2023
3,004
25,452,811
(561,819)
(27,298,022)
(2,404,026)



Comprehensive income for the year


Loss for the year
-
-
-
(5,827,880)
(5,827,880)


Foreign Exchange Movement
-
-
27,563
-
27,563

Total comprehensive income for the year
-
-
27,563
(5,827,880)
(5,800,317)



Total transactions with owners
-
-
-
-
-



At 29 February 2024
3,004
25,452,811
(534,256)
(33,125,902)
(8,204,343)



Page 13

 

 
FACEGYM HOLDINGS LIMITED


 

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 29 FEBRUARY 2024



Called up share capital
Share premium account
Profit and loss account
Total equity


£
£
£
£



At 1 March 2022
1,648
10,756,665
(22,790,178)
(12,031,865)



Comprehensive income for the year


Loss for the year
-
-
(6,396,971)
(6,396,971)



Contributions by and distributions to owners


Shares issued during the year
1,356
14,696,146
-
14,697,502





At 1 March 2023
3,004
25,452,811
(29,187,149)
(3,731,334)



Comprehensive income for the year


Loss for the year
-
-
(6,107,045)
(6,107,045)



Total transactions with owners
-
-
-
-



At 29 February 2024
3,004
25,452,811
(35,294,194)
(9,838,379)



The notes on pages 16 to 35 form part of these financial statements.

Page 14

 
FACEGYM HOLDINGS LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 29 FEBRUARY 2024

29 February
28 February
2024
2023
£
£

Cash flows from operating activities

Loss for the financial year
(5,827,880)
(6,681,088)

Adjustments for:

Amortisation of intangible assets
289,246
320,479

Depreciation of tangible assets
504,961
836,222

Interest paid
893,378
-

Taxation charge
3,663
3,639

(Increase) in stocks
(574,447)
(159,219)

(Increase) in debtors
(55,747)
(214,122)

Increase in creditors
338,272
961,379

Foreign exchange
27,563
(688,904)

Net cash generated from operating activities

(4,400,991)
(5,621,614)


Cash flows from investing activities

Purchase of intangible fixed assets
(158,859)
(313,098)

Purchase of tangible fixed assets
(315,768)
(407,843)

Foreign exchange on retranslation of fixed assets
29,938
-

Net cash from investing activities

(444,689)
(720,941)

Cash flows from financing activities

Issue of ordinary shares
-
2,500,000

Issue of convertible loan notes
3,474,534
5,001,353

Net cash used in financing activities
3,474,534
7,501,353

Net (decrease)/increase in cash and cash equivalents
(1,371,146)
1,158,798

Cash and cash equivalents at beginning of year
2,012,378
853,581

Cash and cash equivalents at the end of year
641,232
2,012,379


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
641,232
2,012,379

641,232
2,012,379


The notes on pages 16 to 35 form part of these financial statements.

Page 15

 
FACEGYM HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 FEBRUARY 2024

1.


General information

Facegym Holdings Ltd is a private company, limited by shares, registered in England and Wales. The
Company's registered number is 11427587 and its registered office address is 6th Floor 1- 4 Argyll Street,
London, England, W1F 7TA
The principal activity of the company is to be the holding company for Facegym Ltd. 

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.

The following principal accounting policies have been applied:

 
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
In accordance with the transitional exemption available in FRS 102, the Group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102.

Page 16

 
FACEGYM HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 FEBRUARY 2024

2.Accounting policies (continued)

 
2.3

Going concern

As at the year end the Group had net liabilities of £8,234,073. The Group incurred a loss after tax for the financial year of £5,857,610. 
The Directors have prepared cash flow forecasts covering the 12-month period beyond the signing date of these financial statements. Included in the Directors' cash flows are the receipt of additional funds relating to the headroom on the Convertible Loan Note agreed in December 2022. This headroom allows for an additional £5,000,000 to be raised of which £4,074,534 has been raised to the date of signing these financial statements and allows for an additional £924,113 to be raised to support the business in the coming 12 months. A commitment letter has been received from the investors indicating their intention to support the Group up to this remaining balance. In addition, negotiations are well underway for additional financing beyond the term of the Convertible Loan Notes. 
 
Since the year end the Group's losses have reduced significantly and the business is close to being EBITDA breakeven and is now set on a  path to profitability. The Directors' have made significant strides in increasing revenue and reducing expenses. Unaudited management accounts for 2024 show that the Group's performance has exceeded management's forecasts, with turnover continuing to grow and losses continuing to fall.
 
Based on this support and the post year end trading performance, the directors are satisfied that the Group will have sufficient cash to meet liabilities as they fall due for at least another 12 months as the business moves to profitability. As such the Directors consider it appropriate to prepare the financial statements on a going concern basis. 

Page 17

 
FACEGYM HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 FEBRUARY 2024

2.Accounting policies (continued)

 
2.4

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

The Group's functional currency is both GBP and USD. This differs from the presentational currency which is GBP. The reason for the difference is that Facegym USA Inc provides services to the US. 
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 resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Consolidated Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.

Page 18

 
FACEGYM HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 FEBRUARY 2024

2.Accounting policies (continued)

 
2.5

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the Group has transferred the significant risks and rewards of ownership to the buyer;
the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the Group will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the Group will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

 
2.6

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.

 
2.7

Interest income

Interest income is recognised in profit or loss using the effective interest method.

Page 19

 
FACEGYM HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 FEBRUARY 2024

2.Accounting policies (continued)

 
2.8

Finance costs

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.

 
2.9

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

 
2.10

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group 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 Group in independently administered funds.

 
2.11

Share-based payments

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 Group 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.

 
2.12

Taxation

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 and the Group operate and generate income.

Page 20

 
FACEGYM HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 FEBRUARY 2024

2.Accounting policies (continued)

 
2.13

Exceptional items

Exceptional items are transactions that fall within the ordinary activities of the Group but are presented separately due to their size or incidence.

 
2.14

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 The estimated useful lives range as follows:

Website
-
2
years
Development expenditure
-
3
years
Trademarks
-
3
years
Computer Software
-
3
years

 
2.15

Tangible fixed assets

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, using the straight-line method.

Depreciation is provided on the following basis:

Long-term leasehold property
-
Over the term of the lease
Plant and machinery
-
Over 5 years
Fixtures and fittings
-
Over 3 years

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.

 
2.16

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

Page 21

 
FACEGYM HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 FEBRUARY 2024

2.Accounting policies (continued)

 
2.17

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a weighted average basis. Work in progress and finished goods include labour and attributable overheads.

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.18

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.19

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Consolidated Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.

 
2.20

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.21

Financial instruments

Financial instruments are recognised in the Group's Balance Sheet when the Group 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 trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.

Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Page 22

 
FACEGYM HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 FEBRUARY 2024

2.Accounting policies (continued)


2.21
Financial instruments (continued)

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.

Financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Group after the deduction of all its liabilities.

Basic financial liabilities, which include trade and other payables, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

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

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Other financial instruments



Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.

Derecognition of financial instruments

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Group transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Group will continue to recognise the value of the portion of the
Page 23

 
FACEGYM HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 FEBRUARY 2024

2.Accounting policies (continued)


2.21
Financial instruments (continued)

risks and rewards retained.

Derecognition of financial liabilities

Financial liabilities are derecognised when the Group's contractual obligations expire or are discharged or cancelled.


3.


Judgments in applying accounting policies and key sources of estimation uncertainty

In the process of applying its accounting policies, the directors are required to make certain estimates, judgements and assumptions that it believes are reasonable based on the information available. These judgements effect the carrying value of assets and liabilities at the date of financial statements and the revenues and expenses recognised in the period.
The following are the estimates and judgements that the directors consider to have the most significant impact on the annual results under FRS102.
Capitalisation of development costs
The Company recognises costs incurred on product range development as an intangible asset which
satisfies the requirement of FRS 102. The calculation of the costs incurred are based on invoices from
external suppliers. The decision whether to capitalise and how to determine the period of economic benefit of a product range requires an assessment of commericial viability.
Impairment of investments in subsidiaries
The annual impairment assessment in respect of investments requires estimates of the value in use (or
fair value less costs to sell) of each cash-generating unit. As a result, estimates of future cash flows are
required, together with an appropriate discount factor for the purpose of determining the present value of
those cash flows.
Recoverability of amounts owed by group companies
Management judges the recoverability of the amounts owed by group companies at the balance sheet
date and makes a provision for impairment where appropriate.
Stock valuation
Stock is carried at the lower of cost and net realisable value, on a weighted average basis. A provision is also made to write down any slow-moving or obsolete inventory to net realisable value. The Directors assess this provision based upon a line-by-line review of the stock items to determine whether, to their best knowledge, any stock is slow moving or obsolete. 
Impairment of Fixed Assets
The annual impairment assessment in respect of intangible and tangible fixed assets requires estimates
of the value in use (or fair value less costs to sell) of fixed assets assigned to each cash-generating unit.
As a result, estimates of future cash flows are required, together with an appropriate discount factor for
the purpose of determining the present value of those cash flows.

Page 24

 
FACEGYM HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 FEBRUARY 2024

4.


Turnover

An analysis of turnover by class of business is as follows:


2024
2023
£
£

Rendering of Services
8,837,480
7,486,603

Sale of Goods
5,003,660
6,139,969

13,841,140
13,626,572


Analysis of turnover by country of destination:

2024
2023
£
£

United Kingdom
7,488,733
6,863,250

Rest of the world
304,809
-

United States
6,047,598
6,763,322

13,841,140
13,626,572



5.


Operating loss

The operating loss is stated after charging:

2024
2023
£
£

Amortisation of intangibles
(289,246)
(320,480)

Depreciation of fixed assets
(504,961)
(652,370)

Other operating lease rentals
(1,056,006)
(1,007,985)


6.


Auditors' remuneration

During the year, the Group obtained the following services from the Company's auditors:


2024
2023
£
£

Fees payable to the Company's auditors for the audit of the consolidated and parent Company's financial statements
56,700
52,000

Page 25

 
FACEGYM HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 FEBRUARY 2024

7.


Employees

Staff costs, including directors' remuneration, were as follows:


Group
29 February
Group
28 February
Company
29 February
Company
28 February
2024
2023
2024
2023
£
£
£
£


Wages and salaries
5,984,106
7,160,904
-
(70,000)

Social security costs
722,400
734,614
-
-

Cost of defined contribution scheme
138,033
140,474
-
-

6,844,539
8,035,992
-
(70,000)


The average monthly number of employees of the Group, including the directors, during the year was as follows:


        2024
        2023
            No.
            No.







Sales Staff
186
152



Administrative Staff
36
40

222
192

The Company has no employees other than the directors, who did not receive any remuneration (2023 - £NIL)

8.


Interest receivable

2024
2023
£
£


Other interest receivable
12,182
-

12,182
-


9.


Interest payable and similar expenses

2024
2023
£
£


Interest payable in relation to the convertible loan note
893,379
385,245

893,379
385,245

Page 26

 
FACEGYM HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 FEBRUARY 2024

10.


Taxation



Factors affecting tax charge for the year

The tax assessed for the year is higher than (2023 - higher than) the standard rate of corporation tax in the UK of 25% (2023 - 19%). The differences are explained below:

2024
2023
£
£


Loss on ordinary activities before tax
(5,824,216)
(6,677,449)


Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 - 19%)
(1,456,054)
(1,267,701)

Effects of:


Fixed asset differences
26,258
36,260

Expenses not deductible for tax purposes
294,885
584,728

Remeasurement of deferred tax for changes in tax rates
(305,083)
(985,612)

Movement in deferred tax not recognised
1,443,657
1,635,964

Total tax charge for the year
3,663
3,639


Factors that may affect future tax charges

There were no factors that may affect future tax charges.




11.


Exceptional items

2024
2023
£
£


Restructuring costs
263,395
389,967

Funding and other costs
577,888
184,289

US employment related credit
(326,981)
-

514,302
574,256

Page 27

 
FACEGYM HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 FEBRUARY 2024

12.


Intangible assets

Group and Company







Website
Development expenditure
Trademarks
Computer software
Total

£
£
£
£
£



Cost


At 1 March 2023
623,171
514,273
50,443
80,173
1,268,060


Additions
52,493
93,984
12,382
-
158,859


Foreign exchange movement
(680)
-
-
-
(680)



At 29 February 2024

674,984
608,257
62,825
80,173
1,426,239



Amortisation


At 1 March 2023
520,435
192,365
9,007
-
721,807


Charge for the year on owned assets
81,946
192,563
14,737
-
289,246


Foreign exchange movement
(680)
-
-
-
(680)



At 29 February 2024

601,701
384,928
23,744
-
1,010,373



Net book value



At 29 February 2024
73,283
223,329
39,081
80,173
415,866



At 28 February 2023
102,736
321,908
41,436
80,173
546,253



Page 28

 
FACEGYM HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 FEBRUARY 2024

13.


Tangible fixed assets

Group








Long-term leasehold property
Plant and machinery
Fixtures and fittings
Total

£
£
£
£



Cost or valuation


At 1 March 2023
513,811
914,090
4,831,521
6,259,422


Additions
-
14,338
301,430
315,768


Exchange adjustments
-
(15,896)
(153,514)
(169,410)



At 29 February 2024

513,811
912,532
4,979,437
6,405,780



Depreciation


At 1 March 2023
242,454
696,737
4,222,258
5,161,449


Charge for the year on owned assets
50,393
113,112
341,456
504,961


Exchange adjustments
-
(11,667)
(127,805)
(139,472)



At 29 February 2024

292,847
798,182
4,435,909
5,526,938



Net book value



At 29 February 2024
220,964
114,350
543,528
878,842



At 28 February 2023
271,357
217,353
609,263
1,097,973

Page 29

 
FACEGYM HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 FEBRUARY 2024

14.


Fixed asset investments

Company








Investments in subsidiary companies

£



Cost or valuation


At 1 March 2023
935



At 29 February 2024
935






Net book value



At 29 February 2024
935



At 28 February 2023
935


Direct subsidiary undertakings


The following was an indirect subsidiary undertaking of the Company:

Name

Registered office

Holding

FaceGym Limited
6th Floor 1-4 Argyll Street, London, England, W1F 7TA
100%

The aggregate of the share capital and reserves as at 29 February 2024 and the profit or loss for the year ended on that date for the subsidiary undertaking was as follows:

Name
Profit/(Loss)

FaceGym Limited
(22,746,189)

Page 30

 
FACEGYM HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 FEBRUARY 2024

Indirect subsidiary undertaking


The following were an indirect subsidiary undertaking of the Company:


FaceGym USA Inc.
FaceGym NY, LLC
FG SFA LLC
FG Zero Bond LLC
FG 8490 Sunset LLC
FG UPPER EAST SIDE LLC
FG Santa Monica LLC
The registered address for all indirect subsidiary undertakings above is 874 Walker Road, Suite C, Dover, Delaware 19904 and all have a holding of 100%

The aggregate of the share capital and reserves as at 29 February 2024 and the profit or loss for the year ended on that date for the subsidiary undertakings were as follows:


          Aggregate of
           share capital
Name           and reserves        Profit/(Loss)
FaceGym USA Inc             (9,114,291)         (1,267,541)
The aggregate of share capital and reserves and profit/(loss) for the year for all remaining indirect subsidiary undertakings above is £nil. There are also no net assets in these other entities as they are all dormant.

Page 31

 
FACEGYM HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 FEBRUARY 2024

15.


Stocks

Group
29 February
Group
28 February
2024
2023
£
£

Finished goods and goods for resale
1,671,503
1,097,055


A stock provision of £246,982 (2023: £289,012) was recognised against stock at the year end due to slow moving and obsolete stock.


16.


Debtors

Group
29 February
Group
28 February 
Company

29 February
Company
28 February 
2024
2023
2024
2023
£
£
£
£

Due after more than one year

Rent Deposits
253,760
321,339
-
-

253,760
321,339
-
-

Due within one year

Trade debtors
344,539
249,981
-
-

Other debtors
318,036
234,099
329
329

Prepayments and accrued income
273,757
328,924
-
-

1,190,092
1,134,343
329
329



17.


Cash and cash equivalents

Group
29 February
Group
28 February
Company
29 February
Company
28 February
2024
2023
2024
2023
£
£
£
£

Cash at bank and in hand
641,232
2,012,379
38,897
1,520,607

641,232
2,012,379
38,897
1,520,607


Page 32

 
FACEGYM HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 FEBRUARY 2024

18.


Creditors: Amounts falling due within one year

Group
29 February
Group
28 February 
Company
29 February
Company
28 February 
2024
2023
2024
2023
£
£
£
£

Trade creditors
817,530
944,560
42,420
16,344

Other taxation and social security
302,604
270,948
-
-

Other Creditors
64,265
128,146
-
-

Accruals and deferred income
2,267,630
1,766,436
303,350
70,411

3,452,029
3,110,090
345,770
86,755



19.


Creditors: Amounts falling due after more than one year

Group
29 February
Group
28 February
Company
29 February
Company
28 February
2024
2023
2024
2023
£
£
£
£

Convertible loan notes
9,549,851
5,181,939
9,549,851
5,181,939


The balance outstanding at 28th February 2024 refers to convertible loan notes issued on 23 December 2022. These have a maturity period of 36 months with interest applied at 12%. There is an option for these to be repaid or converted to equity at a 20% discount rate. As at year end management consider it is likely for the convertible loan notes to convert before then. As a result these have not been accounted for at fair value and instead have been measured at amortised cost.

Page 33

 
FACEGYM HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 FEBRUARY 2024

20.


Share capital

29 February
28 February
2024
2023
£
£
Allotted, called up and fully paid



3,004,000 (2023 - 3,004,000) Ordinary Share Capital shares of £0.001 each
3,004
3,004



21.


Reserves

Share premium account

The share premium account includes any premiums received on issue of share capital. Any transaction
costs associated with the issuing of shares are deducted from share premium.

Foreign exchange reserve

The foreign exchange reserve includes exchange differences arising on translation of investments in
overseas subsidiaries.

Profit and loss account

The profit and loss account includes all current and prior period retained profits and losses.


22.


Share-based payments

The company operated one share option scheme during the year ended 28 February 2024 (2023: one).
No charge has been recognised in the profit and loss account for the year ended 28 February 2024 (2023: £nil) on the basis that the total share based payment reserve was trivial in total. 

29 February
29 February
28 February
28 February
Weighted average exercise price (pence)
2024
Number
2024
Weighted average exercise price
(pence)
2023
Number
2023

Outstanding at the beginning of the year

15.59

746,122

15.59
 
746,122
 
Outstanding at the end of the year

746,122

 
746,122
 



29 February
28 February

Page 34

 
FACEGYM HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 FEBRUARY 2024

23.


Commitments under operating leases

At 29 February 2024 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:


Group
29 February
Group
28 February
2024
2023
£
£

Not later than 1 year
878,393
1,018,142

Later than 1 year and not later than 5 years
2,682,567
2,773,457

Later than 5 years
486,417
894,498

4,047,377
4,686,097

24.


Related party transactions

The Group had loans outstanding due to Atypical Partner Ltd £279,046 (2023: £158,219), and Friday 17 SA £809,711 (2023: £723,558) companies connected in relation to the CLN arrangement.  
As well as a loan outstanding due to Three Hills Capital Partners Limited of £328,905 for services received in the year, in relation to Etsko Loek de Boer. 
The Group also has a loan outstanding due to Inge Theron Associates £312,179, a company connected to Inge Theron, a director; this includes the converted outstanding consultancy fees of £95,833 with and FG Finance SA a company connected to Andrea La Magra of £1,586,829 (2023: £435,634) also in relation to the CLN agreement. A total of £95,833 (2023: £66,667)  consultancy fees have been paid to Inge Theron in the year.
These balances have been included within the creditors falling due after one year balance of £9,549,851.
 



25.


Post balance sheet events

The Group entered into a CLN agreement on 23rd December 2022 permitting it to raise £10,000,000 to support the Group’s operating needs, working capital requirements and capital expenditure including in relation to the opening of studios and/or the development of skincare tools in each case in the furtherance of the Company’s business. To the 29th of February 2024, the Group raised £9,075,887.
Post the year end, and to the date of signing these accounts, the Group has raised a further £600,000, leaving £924,113 of additional headroom to support the funding requirement for 12 months from the signing of these accounts and the going concern assumption.  


26.


Controlling party

The ultimate controlling party of the Group is the Board of Directors for Facegym Holdings Ltd.

Page 35