Company registration number 05708056 (England and Wales)
CARBON8 SYSTEMS LIMITED
UNAUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
PAGES FOR FILING WITH REGISTRAR
CARBON8 SYSTEMS LIMITED
CONTENTS
Page
Balance sheet
1 - 2
Notes to the financial statements
3 - 11
CARBON8 SYSTEMS LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2024
31 December 2024
- 1 -
2024
2023
Notes
£
£
£
£
Fixed assets
Intangible assets
4
3,742,747
3,186,808
Tangible assets
5
45,716
238,472
Investments
6
1
1
3,788,464
3,425,281
Current assets
Stocks
195,622
333,688
Debtors
7
304,886
517,769
Cash at bank and in hand
145,458
893,340
645,966
1,744,797
Creditors: amounts falling due within one year
8
(5,536,890)
(4,544,475)
Net current liabilities
(4,890,924)
(2,799,678)
Total assets less current liabilities
(1,102,460)
625,603
Creditors: amounts falling due after more than one year
9
(14,078)
(24,391)
Net (liabilities)/assets
(1,116,538)
601,212
Capital and reserves
Called up share capital
12
4,364
4,364
Share premium account
9,461,711
9,461,711
Other reserves
14,404
-
0
Profit and loss reserves
(10,597,017)
(8,864,863)
Total equity
(1,116,538)
601,212
CARBON8 SYSTEMS LIMITED
BALANCE SHEET (CONTINUED)
AS AT
31 DECEMBER 2024
31 December 2024
- 2 -

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

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

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.

These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true

The financial statements were approved by the board of directors and authorised for issue on 4 February 2025 and are signed on its behalf by:
Dr P J Carey
J Pilkington
Director
Director
Company registration number 05708056 (England and Wales)
CARBON8 SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
- 3 -
1
Accounting policies
Company information

Carbon8 Systems Limited is a private company limited by shares incorporated in England and Wales . The registered office is Cumberland Court, 80 Mount Street, Nottingham, NG1 6HH and the company registered number is 05708056.

 

The principal activity of the company during the year was that of research and development in the treatment of waste.

1.1
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.

The company has taken advantage of the exemption under section 399 of the Companies Act 2006 not to prepare consolidated accounts, on the basis that the group of which this is the parent qualifies as a small group. The financial statements present information about the company as an individual entity and not about its group.

1.2
Going concern

Thetrue financial statements have been prepared on a going concern basis. The validity of this assumption depends upon the continued financial support of third parties who have indicated their willingness to support the company financially. On this basis the directors consider that the company is a going concern for the foreseeable future.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

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.

CARBON8 SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 4 -

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Software
33% straight line
Product development in progress
No amortisation charged, not yet in use
1.6
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Other fixed assets
20% straight line
Office equipment
33% straight line

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

1.7
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.

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.

1.8
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.

1.9
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.10
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.

CARBON8 SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 5 -
1.11
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.

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.

1.12
Compound instruments

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

1.13
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.

1.14
Taxation

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

CARBON8 SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 6 -
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.

1.15
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.

 

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.

1.16
Retirement benefits

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

1.17
Share-based payments

Where share options are awarded to employees and officers 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 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 Company 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 based on the period over which the services are rendered.

CARBON8 SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 7 -
1.18
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.

1.19

Interest income

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

2
Exceptional items
2024
2023
£
£
Income and Expenditure
Exceptional item - Admin costs
-
229,906
Exceptional items
(625,083)
-
(625,083)
229,906

During the year the company incurred some exceptional items relating to income in relation to contract termination fees (£677,083) and fees in employee settlements.

3
Employees

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

2024
2023
Number
Number
Total
28
34
CARBON8 SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 8 -
4
Intangible fixed assets
Software
Product development in progress
Total
£
£
£
Cost
At 1 January 2024
27,513
3,170,501
3,198,014
Additions
-
0
565,109
565,109
At 31 December 2024
27,513
3,735,610
3,763,123
Amortisation and impairment
At 1 January 2024
11,206
-
0
11,206
Amortisation charged for the year
9,170
-
0
9,170
At 31 December 2024
20,376
-
0
20,376
Carrying amount
At 31 December 2024
7,137
3,735,610
3,742,747
At 31 December 2023
16,307
3,170,501
3,186,808
5
Tangible fixed assets
Other fixed assets
Office equipment
Total
£
£
£
Cost
At 1 January 2024
764,212
77,879
842,091
Additions
26,478
3,891
30,369
Disposals
(607,464)
-
0
(607,464)
At 31 December 2024
183,226
81,770
264,996
Depreciation and impairment
At 1 January 2024
553,785
49,834
603,619
Depreciation charged in the year
77,935
19,678
97,613
Eliminated in respect of disposals
(481,952)
-
0
(481,952)
At 31 December 2024
149,768
69,512
219,280
Carrying amount
At 31 December 2024
33,458
12,258
45,716
At 31 December 2023
210,427
28,045
238,472
6
Fixed asset investments
2024
2023
£
£
Shares in group undertakings and participating interests
1
1
CARBON8 SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 9 -
7
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
3,500
3,657
Corporation tax recoverable
247,356
372,833
Other debtors and prepayments
54,030
129,981
Accrued income
-
0
11,298
304,886
517,769
8
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Convertible loans
10
4,873,333
-
0
Bank loans
10,338
10,059
Other borrowings
331,691
3,459,500
Trade creditors
92,038
142,806
Taxation and social security
49,454
58,650
Deferred income
-
0
750,000
Other creditors
84,170
83,191
Accruals
95,866
40,269
5,536,890
4,544,475
9
Creditors: amounts falling due after more than one year
2024
2023
£
£
Bank loans
14,078
24,391
10
Convertible loan notes
2024
2023
£
£
Liability component of convertible loan notes
4,873,333
-
0

The effective rate of interest to October 2024 was 6%. From November 2024 following a deed of variation the effective interest rate is now 10%.

The convertible loans are due to mature in 2025.

 

To calculate the equity element, we would need to discount to fair value. The difference between the fair value and the loan should be considered as the equity adjustment. However, given the early maturity date any adjustment to fair value would be minimal and therefore any equity adjustment would be immaterial.

CARBON8 SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 10 -
11
Share-based payment transactions

The Company operates both approved and unapproved incentive share option plans for certain officers and employees of the company. Options granted under the Plan vest over a 4 year period. Options granted under the plan expire and become exercisable upon an "exit" (sale) of the Company.

 

The Company has adopted FRS 102 Section 26 to record a share compensation expense. Under the provisions of FRS 102 Section 26, The share based payment expense is estimated at the grant date based on the awards fair value as calculated by the Black-Scholes option pricing model and is rateably recognised over the vesting period. The model is considered to be the most appropriate generally accepted valuation method of measuring fair value. The model requires judgmental assumptions including volatility, forfeiture rates and expected option life. If any of the assumptions used in the model change significantly the share based compensation expense may differ materially in the future from that recorded in the current period.

Number of share options
Weighted average exercise price
2024
2023
2024
2023
Number
Number
£
£
Outstanding at 1 January 2024
-
0
-
0
-
0
-
0
Granted
27,840
-
0
36.73
-
0
Outstanding at 31 December 2024
27,840
-
0
36.73
-
0
Exercisable at 31 December 2024
27,840
-
0
36.73
-
0

The weighted average fair value of stock options granted was calculated using the Black-Scholes option pricing model with assumptions listed below.

Inputs were as follows:
2024
2023
Weighted average share price
36.73
-
Weighted average exercise price
36.73
-
Expected volatility
45%
-
Risk free rate
3.52%
-
Liabilities and expenses

During the year, the company recognised total share-based payment expenses of £14,404 (2023 - £-) which related to equity settled share based payment transactions.

12
Called up share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of 1p each
309,674
309,674
3,097
3,097
Ordinary B shares of 1p each
1,420
1,420
14
14
Series A shares of 1p each
125,330
125,330
1,253
1,253
436,424
436,424
4,364
4,364
CARBON8 SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
12
Called up share capital
(Continued)
- 11 -

The rights to the shares can be found at Companies House.

13
Events after the reporting date

On 6 January 2025, convertible loan notes for the value of £600,000 were issued.

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