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Registered number: 08273616
Congenica Ltd
Directors' Report and
Unaudited Financial Statements
For The Year Ended 31 December 2024
Archangel Accounting Limited
Contents
Page
Company Information 1
Directors' Report 2—3
Profit and Loss Account 4
Balance Sheet 5—6
Statement of Changes in Equity 7
Notes to the Financial Statements 8—20
Page 1
Company Information
Directors A Richards
R M Denison
M Hurles
M L Anstey
Parkwalk Advisors Ltd
S Wenzhao
D A Lundholm
Company Number 08273616
Registered Office Bic Wellcome Genome Campus
Hinxton
Cambridge
CB10 1DR
Accountants Archangel Accounting Limited
Burnham House
Splash Lane
Huntingdon
Cambridgeshire
PE28 2AF
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Directors' Report
The directors present their report and the financial statements for the year ended 31 December 2024.
Directors
The directors who held office during the year were as follows:
A Richards
R M Denison
H Dreismann Resigned 25/11/2024
M Hurles
M L Anstey
Parkwalk Advisors Ltd
R Gupta Resigned 28/05/2024
S Wenzhao
D A Lundholm Appointed 28/05/2024


Statement of Directors' Responsibilities

The directors are responsible for preparing the Directors' Report and the 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law, including FRS 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 of the profit or loss of the company for that period. In preparing the financial statements the directors are required to: 
  • select suitable accounting policies and then apply them consistently;
  • make judgments and accounting estimates that are reasonable and prudent;
  • state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
  • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company 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 enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Going concern

The directors have identified material uncertainties related to events or conditions that may cast doubt about the company's ability to continue as a going concern, however, they believe that the going concern basis remains appropriate, as the company expects to receive continued support from investors as well as through the successful implementation of ongoing cost controls and revenue driving initiatives. Evidenced during the year ended 31 December 2024, the company incurred a loss after tax of £2,492,304 (2023 restated: £11,535,821) a significant reduction year-over-year (78%).
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Small Company Rules
The company was subject to statutory audit in the prior financial year. However, for the current financial year, the directors have assessed the company’s eligibility under section 477 of the Companies Act 2006 and determined that the company qualifies as a small company and is therefore exempt from the requirement to have its financial statements audited.
As a result, these financial statements have been prepared in accordance with the special provisions relating to companies subject to the small companies regime within Part 15 of the Companies Act 2006.
The company is also a parent entity and has subsidiary undertakings. However, as the group qualifies as a small group under section 399 of the Companies Act 2006, the company has also taken exemption from preparing consolidated financial statements. Consequently, these financial statements present information about the company as an individual entity.

On behalf of the board
A Richards
Director
28/04/2025
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Profit and Loss Account
2024 2023
as restated
Notes £ £
TURNOVER 4,672,007 4,843,835
Cost of sales (2,284,787 ) (2,936,990 )
GROSS PROFIT 2,387,220 1,906,845
Administrative expenses (5,276,081 ) (14,705,119 )
Other operating income 38,333 602,355
OPERATING LOSS 3 (2,850,528 ) (12,195,919 )
Fair value losses (99,412 ) (202,932 )
Other interest receivable and similar income 36,445 142,206
Interest payable and similar charges 5 (340,578 ) (57,115 )
LOSS BEFORE TAXATION (3,254,073 ) (12,313,760 )
Tax on Loss 6 761,769 777,939
LOSS AFTER TAXATION BEING LOSS FOR THE FINANCIAL YEAR (2,492,304 ) (11,535,821 )
The notes on pages 8 to 19 form part of these financial statements.
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Balance Sheet
2024 2023
as restated
Notes £ £ £ £
FIXED ASSETS
Intangible Assets 7 107,384 158,954
Tangible Assets 8 38,282 84,811
Investments 9 - 22,120
145,666 265,885
CURRENT ASSETS
Debtors 10 1,786,311 2,361,688
Cash at bank and in hand 1,205,973 3,750,134
2,992,284 6,111,822
Creditors: Amounts Falling Due Within One Year 11 (1,773,500 ) (3,264,528 )
NET CURRENT ASSETS (LIABILITIES) 1,218,784 2,847,294
TOTAL ASSETS LESS CURRENT LIABILITIES 1,364,450 3,113,179
Creditors: Amounts Falling Due After More Than One Year 12 (4,001,223 ) (3,502,932 )
NET LIABILITIES (2,636,773 ) (389,753 )
CAPITAL AND RESERVES
Called up share capital 13 59,591 59,544
Share premium account 66,835,937 66,835,513
Profit and Loss Account (69,532,301 ) (67,284,810 )
SHAREHOLDERS' FUNDS (2,636,773) (389,753)
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For the year ending 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 in accordance with section 476 of the Companies Act 2006.
The directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts.
These accounts have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors on 28 April 2025 and were signed on its behalf by:
A Richards
Director
28/04/2025
The notes on pages 8 to 19 form part of these financial statements.
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Statement of Changes in Equity
Share Capital Share Premium Profit and Loss Account Total
£ £ £ £
As at 1 January 2023 59,429 66,833,501 (56,298,534 ) 10,594,396
Loss for year - - (11,535,821) (11,535,821 )
Charge to equity for share based payments - - 549,545 549,545
Other comprehensive income for the year - - 549,545 549,545
Total comprehensive income for the year - - (10,986,276 ) (10,986,276)
Arising on shares issued during the period 115 2,012 - 2,127
As at 31 December 2023 and 1 January 2024 as restated 59,544 66,835,513 (67,284,810 ) (389,753)
Loss for year - - (2,492,304) (2,492,304 )
Charge to equity for share based payments - - 244,813 244,813
Other comprehensive income for the year - - 244,813 244,813
Total comprehensive income for the year - - (2,247,491 ) (2,247,491)
Arising on shares issued during the period 47 424 - 471
As at 31 December 2024 59,591 66,835,937 (69,532,301 ) (2,636,773)

The balance as at 1 January 2023 has been restated due to the transition from IFRS to FRS 102. For further details and a reconciliation between the previously reported and the restated figure, please refer to Note 16.
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Notes to the Financial Statements
1. General Information
Congenica Ltd is a private company, limited by shares, incorporated in England & Wales, registered number 08273616 . The registered office is Bic Wellcome Genome Campus, Hinxton, Cambridge, CB10 1DR.

The principal activity of the company during the year was to develop and commercialise a clinical genomic analytics platform for processing genome wide data sets of human clinical phenotype and genotype information.
2. Accounting Policies
2.1. Basis of Preparation of Financial Statements
The financial statements have been prepared under the historical cost convention and in accordance with Financial Reporting Standard 102 section 1A Small Entities "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006.
2.2. Going Concern Disclosure
The directors have identified material uncertainties related to events or conditions that may cast doubt about the company's ability to continue as a going concern, however, they believe that the going concern basis remains appropriate, as the company expects to receive continued support from investors as well as through the successful implementation of ongoing cost controls and revenue driving initiatives. Evidenced during the year ended 31 December 2024, the company incurred a loss after tax of £2,492,304 (2023 restated: £11,535,821) a significant reduction year-over-year (78%). 
2.3. Significant judgements and estimations
The key accounting policy judgements and estimates that have a significant effect on the carrying amounts of assets and liabilities recognised in the financial statements, are discussed below.

Fair value of convertible loan notes 

The company reviewed the carrying value of the 2024 convertible loan notes at the balance sheet date and as a result a fair value adjustment of £99,412 was charged to the P&L (2023: £194,921).

Each of the six potential outcomes, being three redemption and three conversion scenarios, were weighted based upon the information in hand at the balance sheet date. Each scenario was also given an expected likelihood of occurring and an estimated timing for that event. Where an exit involved a sale, expected proceeds and deal execution costs were also estimated. The key assumptions impacting the value are the likelihood of each scenario, with the greatest sensitivity being the estimated proceeds in the case of a sale and the timing of each event.

Turnover recognition 

Turnover includes amounts from licence agreements, clinical review services, data storage, and professional services. The nature of the contracts requires management judgement to determine the most appropriate accounting treatment and whether revenue should be recognised at a point in time or over time. Turnover recognised over time for professional services is based on management estimates for stage of completion using a cost input method.

Determination of fair value of share-based payments

Where employees are rewarded using share-based payments, the fair value of employees' services is determined by reference to the fair value of the equity instruments granted. The key assumptions in estimating fair value are:
...CONTINUED
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2.3. Significant judgements and estimations - continued
  • (a) the grant date FV of an equity share; and  
  • (b) the expected exit date where this is beyond the explicit vesting period prescribed in the option agreement. The date included within management’s calculations is Sept 2024.
Capitalisation of development costs
The point at which development costs meet the criteria for capitalisation is critically dependant on management's judgment of the probability and measurability of future economic benefits. There are no capitalised development costs as at 31 December 2024 reflecting the early stage of commercialisation of the group's technology. 

Recognition of deferred income tax assets 
At the reporting date, management assesses whether the tax losses as well as other income tax credits are recoverable as deferred income tax assets. As at 31 December 2024, no deferred tax asset has been recognised as management believes that there will be no sufficient future taxable profits against which the group's unused tax losses can be used. 
2.4. Turnover
Turnover is measured at the fair value of the consideration received or receivable, net of discounts and value added taxes.

Turnover comprises (i) license fees for access to the Congenica software and bioinformatics analysis pipeline, (ii) service income from clinical interpretation services, (iii) sample data storage, and (iv) professional services for software development and support.
License fee turnover arises from providing access to its software, hosted on Congenica's server, which allows a customer to analyse samples. The license terms can include set-up, training and support, and data storage. The training and support and data storage performance obligations are considered distinct. All of the performance obligations are recognised over time. Where licenses include a fixed number of sample analysis with additional amounts charged when further samples are uploaded, the incremental turnover is recognised at that point in time.
Clinical interpretation service turnover arises from providing customers individual sample analysis. The associated performance obligation is the provision of the final report with the analysis and at that point in time revenue is recognised. 
Where customer sample data is stored the associated turnover is recognised over time. 
Software development and support services provide customers with a bespoke software solution. Turnover is recognised as work is performed using a cost input based method. 
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2.5. Intangible Fixed Assets and Amortisation - Other Intangible
Payments made to acquire software are capitalised at cost and amortised on a straight-line basis over their estimated useful lives (one - five years).

Expenditure on development activities including internally generated intangible assets is recognised as an asset if and only if it meets the recognition criteria. Development costs are capitalised when it is probable that the project will be a success considering its commercial and technical feasibility; the company is able to use or sell the asset; the company has sufficient resources and intent to complete the development; and its costs can be measured reliably. Research costs are expensed in the period in which they are incurred.

Impairment of tangible and intangible assets 

At each balance sheet date, the group 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 such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset is estimated to be less than it's carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately.
2.6. Tangible Fixed Assets and Depreciation
Tangible fixed assets are stated at cost, net of accumulated depreciation and any recognised impairment loss. Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use.

Depreciation is charged to write off the cost of the assets over their useful lives, using the straight-line method, on the following basis:
Plant & Machinery 5 years
Fixtures & Fittings 3 - 5 years
Computer Equipment 3 years
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in income. Residual values of assets and their useful lives are reviewed and adjusted if appropriate at each balance sheet date.
2.7. Foreign Currencies
Monetary assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the statement of financial position date. Transactions in foreign currencies are translated into sterling at the rate ruling on the date of the transaction. Exchange differences are taken into account in arriving at the operating profit.
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2.8. Taxation
Income tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted at the balance sheet date.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the statement of comprehensive income because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax is recognised on timing differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable timing differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible timing differences can be utilised. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Deferred tax liabilities are presented within provisions for liabilities and deferred tax assets within debtors. The measurement of deferred tax liabilities and assets reflect the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Current and deferred tax are recognised in profit or loss for the year, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case current and deferred tax are recognised in other comprehensive income or directly in equity respectively.

2.9. Pensions
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due. The group has no further obligations once the contributions have been paid.

2.10. Share based payments
Incentives in the form of shares are provided to certain employees under the company share option scheme. Equity-settled share-based payments are measured at fair value (excluding the effect of non-market based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is measured by the use of the Black-Scholes method and is expensed on a straight-line basis over the vesting period, based on the group's estimate of the number of shares that will eventually vest. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. Changes made to the consolidated income statement in respect of share-based payments are credited to equity. 

At the end of each reporting year, the company revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the consolidated income statement, with a corresponding adjustment to equity. When the options are exercised the company issues new shares. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium.
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3. Operating Loss
The operating loss is stated after charging:
Depreciation on tangible fixed assets have been restated as part of the transition from IFRS to FRS 102. For further details on the impact of this transition, see FS Note 16.
2024 2023
as restated
£ £
Bad debts 851 41,332
Research and Development Costs 3,603,402 5,780,908
Depreciation of tangible fixed assets 35,601 53,344
Amortisation of intangible fixed assets 51,569 98,207
4. Average Number of Employees
Average number of employees, including directors, during the year was:  43 (2023: 89)
43 89
5. Interest Payable and Similar Charges
2024 2023
as restated
£ £
Convertible loan interest 273,879 10,651
Foreign exchange charges 66,699 46,464
340,578 57,115
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6. Tax on Profit
Tax Rate 2024 2023
as restated
2024 2023 £ £
Current tax
UK Corporation Tax 25.0% 23.5% (781,240 ) (900,058 )
Prior period adjustment 19,471 118,391
Foreign tax - 3,728
(761,769 ) (777,939 )
Total tax charge for the period (761,769 ) (777,939 )
2024 2023
£ £
Profit before tax (3,254,073) (12,313,760)
Breakdown of tax charge is:
Tax on profit at 25% (UK standard rate) (813,518 ) (2,896,196 )
Expenses not deductible for tax purposes 146,718 1,254,034
Research and Development tax credit (819,573 ) (954,371 )
Prior period adjustment 19,471 118,391
Tax losses unutilised carried forward 705,133 1,697,518
Overseas tax suffered/expensed - 2,685
Total tax charge for the period (761,769) (777,939)
7. Intangible Assets
Software
£
Cost
As at 1 January 2024 259,274
As at 31 December 2024 259,274
Amortisation
As at 1 January 2024 100,320
Provided during the period 51,570
As at 31 December 2024 151,890
Net Book Value
As at 31 December 2024 107,384
As at 1 January 2024 158,954
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8. Tangible Assets
Fixtures & Fittings Computer Equipment Total
£ £ £
Cost
As at 1 January 2024 27,511 444,968 472,479
Disposals - (15,729 ) (15,729 )
As at 31 December 2024 27,511 429,239 456,750
Depreciation
As at 1 January 2024 26,029 361,639 387,668
Provided during the period 849 34,752 35,601
Disposals - (4,801 ) (4,801 )
As at 31 December 2024 26,878 391,590 418,468
Net Book Value
As at 31 December 2024 633 37,649 38,282
As at 1 January 2024 1,482 83,329 84,811
During the transition from IFRS to FRS 102, the brought forward cost and accumulated depreciation of tangible fixed assets have been restated to reflect the de-recognition of right-of-use assets previously recognised under IFRS 16. Under IFRS, the company accounted for operating leases as right-of-use assets with corresponding lease liabilities, depreciating the asset over the lease term. While under FRS 102, operating lease payments are recognised as an expense in the profit and loss account as incurred.
As a result, the cost of tangible fixed assets has been reduced by £133,134, with a corresponding reduction in accumulated depreciation of £95,556, resulting in a net reduction of £37,578 in tangible fixed assets. The impact of this change is further detailed in Note 13 (Transition to FRS 102), which includes a Reconciliation of Equity and Reconciliation of Profit or Loss outlining the overall financial effect of the transition.
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9. Investments
Subsidiaries
£
Cost
As at 1 January 2024 22,120
As at 31 December 2024 22,120
Provision
As at 1 January 2024 -
Impairment losses 22,120
As at 31 December 2024 22,120
Net Book Value
As at 31 December 2024 -
As at 1 January 2024 22,120
During the year, the company recognised an impairment loss of £22,120 in respect of its investments in Congenica Inc. and Congenica (Hong Kong) Limited. The full carrying amounts of these investments were written down due to the absence of foreseeable future economic benefits. As a result, the investments have been fully impaired at the reporting date.

Subsidiaries, associates and other investments
Subsidiary undertakings
Country of incorporation
Class of share
%
Congenica Inc. 
United States
Ordinary
100%
Congenica (Hong Kong) Limited
Hong Kong
Ordinary
100%
The principal office for both subsidiaries is Biodata Innovation Centre, Wellcome Genome Campus, Hinxton, Cambridgeshire, CB10 1DR, United Kingdom. 

10. Debtors
2024 2023
as restated
£ £
Due within one year
Trade debtors 788,090 492,034
Amounts owed by group undertakings 888 324,206
Other debtors 997,333 1,545,448
1,786,311 2,361,688
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11. Creditors: Amounts Falling Due Within One Year
2024 2023
as restated
£ £
Trade creditors 1,341,771 677,756
Amounts owed to group undertakings - 780,659
Other creditors 340,574 1,529,990
Taxation and social security 91,155 276,123
1,773,500 3,264,528
12. Creditors: Amounts Falling Due After More Than One Year
2024 2023
as restated
£ £
Convertible loan notes 4,001,223 3,502,932
On 14th December 2023, the company issued a convertible loan note (CLN) offered to all existing shareholders. The key features are an 8% fixed interest rate (calculated daily and compounded annually), a redemption premium and a share of proceeds upon a sale, and an ability to convert to shares at a 20% discount in the event of a financing round completing. The loan notes mature three years from the date of issue.

Two additional subscriptions were received in 2024: £100,000 on 31 January and £25,000 on 9 February, completing the CLN offering when it closed later that month.

At 31 December 2024, £3,425,000 had been subscribed for, with all funds received. Total interest of £281,890 earned to the balance sheet date has been accrued, with £273,879 charged to the profit and loss account in the year.

The company also reviewed the carrying value of the loan notes at the reporting date and as a result a fair value adjustment of £99,412 was charged to the profit and loss account.
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13. Share Capital
2024 2023
as restated
Allotted, called up and fully paid £ £
7,848,456 Ordinary Shares of £ 0.001 each 7,849 7,802
16,338,318 Ordinary A shares of £ 0.001 each 16,338 16,338
10,316,000 Ordinary B shares of £ 0.001 each 10,316 10,316
25,087,820 Ordinary C shares of £ 0.001 each 25,088 25,088
59,591 59,544
Shares issued during the period: £
47,000 Ordinary Shares of £ 0.001 each 47
Called up share capital

The called-up share capital represents the nominal value of shares that have been issued. All shares are non-redeemable. Each holder of Ordinary, A Ordinary and B Ordinary shares has the right to vote on the basis of one vote per share held; the right to participate in a dividend in proportion to the number of shares held; and the right to participate in a distribution of assets on a liquidation or a return of capital, with the C Ordinary shares taking priority over any other classes of share and the A Ordinary shares taking priority over the B Ordinary shares and the Ordinary shares.

14. Related Party Transactions
The company's related parties during the year comprised of Genome Research Limited (GRL), an investor from whom it leases office space.

Unless otherwise stated, none of the transactions incorporate special terms and conditions and no guarantees were given or received. Outstanding balances are usually settled in cash.

Transactions with Genome Research Limited
During the year purchases of £108,024 (2023: £187,788) from GRL, of which £Nil was outstanding at the year end (2023: £17,063). 
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15. Share-based payments
The company operates a share option scheme for certain employees. Share options are exercisable at prices determined at the date of grant. The vesting period is four years. If the options remain unexercised after a period of ten years from the date of grant the options expire. Options are forfeited if the employee leaves the company before the options vest (unless deemed a good leaver as defined by the rules of the scheme), although the directors have discretion to allow acceleration of vesting and exercise before an exit.

Current vested options can only be exercised on an exit, although the directors have discretion to allow acceleration of vesting and exercise before an exit. The cost of the options is being spread evenly by month over the period to a likely exit event. The following share-based payment arrangements were in existence during the current period and prior year.

For all options, 25% of the options vest on the first date of vesting as shown in the below table and 1/48th of the options vest on the last day of each month thereafter over the following three years.
Year
Options
Lapsed/Forfeit
Exercised
Total
2024
50,000
(35,417)
(14,583)
-
2023
332,500
(5,406)
(2,094)
325,000
2022
1,570,000
(7,760)
(8,740)
1,553,000
2021
846,000
(4,604)
(9,396)
832,000
2020
19,500
-
-
19,500
2019
542,550
-
(12,300)
530,250
2018
75,000
-
-
75,000
2017
172,500
-
-
172,500
2016
600,000
image
-
image
-
image
600,000
image
Total
4,208,050
image
(53,187)
image
(47,113)
image
4,107,750
image


Options were priced using the Black-Scholes option pricing model. Expected volatility used was 60.9% (2023: 60.9%) determined based on the historic volatility of comparable companies. The expected life of 4 years (2023: 9 months) is the expected period from grant to exercise based on management's best estimate. The risk-free return of 4.5% (2023: 3.31%) is the rate offered for UK gilt deposits at the time of the grant. The weighted average share price for options granted during year was £0.01 (2023: £0.01) and expected dividends was £nil (2023: £nil).

The 2023 charge included an accelerated charge for good leavers during the year, which caused expected life of the option to signficantly drop from 5 years previously to 9 months.

The share-based payment charge for the year ended 31 December 2024 was £244,813 (2023: £529,563).
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16. Transition to FRS 102
As part of the transition to FRS 102, the company has applied the requirements of Section 35 (Transition to FRS 102). The transition date is 1 January 2023, being the start of the earliest period presented.
The following reconciliations explain the impact of the transition from IFRS to FRS 102 on the company’s equity and loss for the year.

Reconciliation of Equity
At 1 January 2023 (Transition Date)
At 31 December 2023 (End of Comparative Period)
£
£
Equity under IFRS
10,594,396
(392,936)
Adjustments:
Lease accounting adjustment (IFRS 16 to FRS 102 Section 20)
(4,175)
4,161
Tax adjustment
-
(979)
image
image
Equity under FRS 102
10,590,221
image
(389,753)
image
Reconciliation of Profit or Loss for the Year Ended 31 December 2023
Year Ended 31 December 2023
£
Loss under IFRS
(11,539,004)
Adjustments:
Lease accounting adjustment (IFRS 16 to FRS 102 Section 20)
4,161
Tax adjustment
(979)
image
Loss under FRS 102
(11,535,821)
image
...CONTINUED
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16. Transition to FRS 102 - continued
 
Explanatory Notes on Adjustments

1. Lease accounting adjustment: Under IFRS 16, leases were previously recognised on the balance sheet as right-of-use assets, with corresponding lease liabilities, which were subsequently depreciated and subject to interest expense over the lease term. However, under FRS 102, operating leases are not capitalised, and instead, lease payments are expensed directly to the profit and loss account on a straight-line basis over the lease term.

As a result, the net book value of the right-of-use asset of £37,578 as at 31 December 2023 has been derecognised, along with the lease liability of £41,739, leading to a net credit impact of £4,161 on equity for the reversal of IFRS 16 adjustments.

Additionally, the depreciation and finance expense recognised under IFRS 16, amounting to £34,712, has been reversed. Instead, lease payments have been expensed directly to the profit and loss account on a straight-line basis, with a total charge of £30,551 recognised in the year. This has resulted in a £4,161 credit to profit and loss, aligning with the new lease accounting treatment under FRS 102.
2. Tax adjustment: In connection with the lease reclassification adjustment, a corresponding tax adjustment has been recognised. The £4,161 credit to profit and loss arising from the derecognition of right-of-use assets was subject to the prior year’s effective tax rate of 23.52%, resulting in an additional tax expense of £979 for 2023.

When this tax expense is offset against the lease adjustment, a net credit of £3,182 is recognised in profit or loss, thereby restating the loss for the year from £11,539,004 under IFRS to £11,535,821 under FRS 102.

The £979 tax adjustment has also been reflected on the balance sheet, without affecting the deferred tax position with HMRC, as management does not expect to generate sufficient taxable profits in the near term. The reclassification adjustments resulted in equity moving from a net debit position of £392,936 under IFRS to a net debit position of £389,753 under FRS 102.
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