Company registration number 15022605 (England and Wales)
FORGE GENETICS LTD
ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 JULY 2024
FORGE GENETICS LTD
CONTENTS
Page
Accountants' report
1
Statement of financial position
2
Notes to the financial statements
3 - 8
FORGE GENETICS LTD
ACCOUNTANTS' REPORT TO THE BOARD OF DIRECTORS ON THE PREPARATION OF THE UNAUDITED STATUTORY FINANCIAL STATEMENTS OF FORGE GENETICS LTD FOR THE PERIOD ENDED 31 JULY 2024
- 1 -

In order to assist you to fulfil your duties under the Companies Act 2006, we have prepared for your approval the financial statements of Forge Genetics Ltd for the period ended 31 July 2024 which comprise, the statement of financial position and the related notes from the company’s accounting records and from information and explanations you have given us.

 

As a practising member firm of the Institute of Chartered Accountants in England and Wales (ICAEW), we are subject to its ethical and other professional requirements which are detailed at https://www.icaew.com/regulation.

This report is made solely to the board of directors of Forge Genetics Ltd, as a body, in accordance with the terms of our engagement letter dated 20 May 2024. Our work has been undertaken solely to prepare for your approval the financial statements of Forge Genetics Ltd and state those matters that we have agreed to state to the board of directors of Forge Genetics Ltd, as a body, in this report in accordance with ICAEW Technical Release 07/16 AAF. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than Forge Genetics Ltd and its board of directors as a body, for our work or for this report.

It is your duty to ensure that Forge Genetics Ltd has kept adequate accounting records and to prepare statutory financial statements that give a true and fair view of the assets, liabilities, financial position and profit of Forge Genetics Ltd. You consider that Forge Genetics Ltd is exempt from the statutory audit requirement for the period.

We have not been instructed to carry out an audit or a review of the financial statements of Forge Genetics Ltd. For this reason, we have not verified the accuracy or completeness of the accounting records or information and explanations you have given to us and we do not, therefore, express any opinion on the statutory financial statements.

Richardsons
13 January 2025
Chartered Accountants
30 Upper High Street
Thame
Oxfordshire
OX9 3EZ
FORGE GENETICS LTD
STATEMENT OF FINANCIAL POSITION
AS AT
31 JULY 2024
31 July 2024
- 2 -
2024
Notes
£
Current assets
Trade and other receivables
4
61,597
Cash and cash equivalents
271,730
333,327
Current liabilities
Trade and other payables
6
57,602
Net current assets
275,725
Non-current liabilities
Convertible loan notes
7
64,090
Net assets
211,635
Equity
Called up share capital
10
5
Retained earnings
211,630
Total equity
211,635

The directors of the company have elected not to include a copy of the income statement within the financial statements.

For the financial period ended 31 July 2024 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

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 members have not required the company to obtain an audit of its financial statements for the period in question in accordance with section 476.

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 13 January 2025 and are signed on its behalf by:
Dr L K Thomas
Director
Company registration number 15022605 (England and Wales)
FORGE GENETICS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 JULY 2024
- 3 -
1
Accounting policies
Company information

Forge Genetics Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Biodiscovery Institute, University Park, Nottingham, England, NG7 2RD. The company's principal activities and nature of its operations are disclosed in the directors' report.

1.1
Reporting period

The company has prepared accounts for a period longer than one year as these accounts are for the first period since incorporating.

1.2
Accounting convention

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the United Kingdom and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, except as otherwise stated.

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

The directors have at the time of approving the financial statements, a reasonable expectation that the truecompany has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.4
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 of a research and development project to he customer.

The major source of revenue recognised by the company is for conducting research and development.

The nature, timing of satisfaction of performance obligations and significant payment terms of the company's major sources of revenue are as follows:

Conducting research and development

Revenue is recognised when the plasmids, that are detailed in the contract, have been proven to work and delivered to the customer.

1.5
Cash and cash equivalents

Cash and cash equivalents 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.

1.6
Financial assets

Financial assets are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.

 

At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.

FORGE GENETICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 4 -
Financial assets at fair value through profit or loss

When any of the above-mentioned conditions for classification of financial assets is not met, a financial asset is classified as measured at fair value through profit or loss. Financial assets measured at fair value through profit or loss are recognized initially at fair value and any transaction costs are recognised in profit or loss when incurred. A gain or loss on a financial asset measured at fair value through profit or loss is recognised in profit or loss, and is included within finance income or finance costs in the statement of income for the reporting period in which it arises.

Financial assets held at amortised cost

Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (eg trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary.

Impairment of financial assets

Financial assets carried at amortised cost are assessed for indicators of impairment at each reporting end date.

 

The expected credit losses associated with these assets are estimated on a forward-looking basis. A broad range of information is considered when assessing credit risk and measuring expected credit losses, including past events, current conditions, and reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

1.7
Financial liabilities

The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.

Other financial liabilities

Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

Derecognition of financial liabilities

Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.

1.8
Equity instruments

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

1.9
Taxation

The tax expense represents the sum of the tax currently payable.

FORGE GENETICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 5 -
Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement 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.

1.10
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 inventories or non-current assets.

 

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.

1.11
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.12
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.

2
Critical accounting estimates and judgements

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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

 

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.

FORGE GENETICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 JULY 2024
2
Critical accounting estimates and judgements
(Continued)
- 6 -
Key sources of estimation uncertainty
Share Based Payments

The Company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. Estimating fair value for share-based payment transactions requires determining the most appropriate valuation model, which management has deemed to be Black Scholes. This estimate also requires determining the most appropriate inputs to the valuation model including the fair value of the underlying share, expected life of the share option, volatility and dividend yield, and making assumptions about them.

3
Employees

The average monthly number of persons (including directors) employed by the company during the period was:

2024
Number
Research and development
5
4
Trade and other receivables
2024
£
VAT recoverable
2,025
Prepayments and accrued income
59,572
61,597
5
Trade receivables - credit risk
Fair value of trade receivables

The directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value.

No significant receivable balances are impaired at the reporting end date.

6
Trade and other payables
2024
£
Trade payables
5,303
Accruals
2,876
Social security and other taxation
49,042
Other payables
381
57,602
FORGE GENETICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 JULY 2024
- 7 -
7
Convertible loan notes

The net proceeds received of £60,000 from the issue of the convertible loan notes have been recognised as a financial liability as the loan is convertible as fixed cash for equity of the same value, at the conversion date.

2024
£
Net proceeds of issue of convertible loan note
60,000
Liability component at date of issue
60,000

The effect rate of interest is 3% above the Bank of England base rate per annum accrued and compounding daily.

Movements and balance at the period end
Liability
£
Issue of convertible loan notes
60,000
Interest charged
4,090
Liability component at 31 July 2024
64,090
Liability component due after 12 months
64,090
8
Retirement benefit schemes
2024
Defined contribution schemes
£
Charge to profit or loss in respect of defined contribution schemes
4,037
9
Share-based payments

The options outstanding at 31 July 2024 had an exercise price of £13.90. These options vest between January 2024 and June 2025 and have a contractual life of 10 years.

Number of share options
Average exercise price
2024
2024
Number
£
Outstanding at 24 July 2023
-
0
-
0
Granted in the period
12,344
13.90
Outstanding at 31 July 2024
12,344
13.90
Exercisable at 31 July 2024
-
0
-
0
FORGE GENETICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 JULY 2024
9
Share-based payments
(Continued)
- 8 -
Options granted during the period

Options granted in the period are set out below. Fair value was measured using the Black-Scholes model.

2024
Grant date
Between 13 May 2024 and 12 June 2024
Weighted average fair value
9.028
Inputs for model:
- Weighted average share price
13.90
- Weighted average exercise price
13.90
- Expected volatility
50%
- Expected life
10 Years
- Risk free rate
3.793%
Options outstanding
Expenses
Related to equity settled share based payments
2,257
10
Share capital
2024
2024
Ordinary share capital
Number
£
Authorised
Ordinary of 0.01p each
50,000
5
Issued and fully paid
Ordinary of 0.01p each
50,000
5

The company has one class of ordinary shares which carry no right to fixed income.

 

During the year 20,000 shares were allotted in part exchange for an exclusive licence for a patent. As the patent has not yet been granted no charge has been recognised in the accounts for the licence.

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