Company registration number 10828503 (England and Wales)
RHEON LABS LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
PAGES FOR FILING WITH REGISTRAR
RHEON LABS LTD
CONTENTS
Page
Directors' report
1
Group balance sheet
2
Company balance sheet
3
Group statement of changes in equity
4
Company statement of changes in equity
5
Notes to the financial statements
6 - 20
RHEON LABS LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 1 -

The directors present their annual report and financial statements for the year ended 31 December 2024.

Principal activities

The principal activity of the company and group continued to be that of the design and manufacture of strain rate sensitive polymer products.

 

Going concern

During 2024, the Group’s shareholders were informed of an intention to seek further investment and an allotment of new shares to facilitate the ongoing trade and growth of the business up to the point of the business being self-sufficient. During the 6 months from July 2024, the first element of this investment was secured via an Advance Subscription Agreement (ASA) which converted into equity during Q1 2025. The business now plans to complete the balance of its original target investment during Q3 2025.  

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr S Bates
Mr T Brown
Prof. P Cawley
(Resigned 14 February 2024)
Dr D Plant
Dr A Hosty
Ms T Barwin
(Appointed 1 May 2024)
Ms J Austin
(Appointed 1 May 2024)
Auditor

Azets Audit Services were appointed as auditor to the group and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

Small companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.

On behalf of the board
Mr S Bates
Director
30 April 2025
RHEON LABS LTD
GROUP BALANCE SHEET
AS AT 31 DECEMBER 2024
31 December 2024
- 2 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
6
107,428
144,562
Current assets
Stocks
9
601,096
754,800
Debtors
10
683,154
764,585
Cash at bank and in hand
2,409,316
2,079,368
3,693,566
3,598,753
Creditors: amounts falling due within one year
11
(2,732,844)
(534,994)
Net current assets
960,722
3,063,759
Total assets less current liabilities
1,068,150
3,208,321
Creditors: amounts falling due after more than one year
12
-
0
(152,315)
Net assets
1,068,150
3,056,006
Capital and reserves
Called up share capital
16
327
327
Share premium account
17
16,230,206
16,227,706
Equity reserve
18
16,187
16,187
Other reserves
19
28,864
35,255
Profit and loss reserves
21
(15,207,434)
(13,223,469)
Total equity
1,068,150
3,056,006

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

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

The financial statements were approved by the board of directors and authorised for issue on 30 April 2025 and are signed on its behalf by:
30 April 2025
Mr S Bates
Director
Company registration number 10828503 (England and Wales)
RHEON LABS LTD
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2024
31 December 2024
- 3 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
6
107,404
144,250
Investments
7
59,646
59,646
167,050
203,896
Current assets
Stocks
9
601,096
754,800
Debtors
10
754,182
903,585
Cash at bank and in hand
2,273,901
1,998,036
3,629,179
3,656,421
Creditors: amounts falling due within one year
11
(2,651,040)
(567,793)
Net current assets
978,139
3,088,628
Total assets less current liabilities
1,145,189
3,292,524
Creditors: amounts falling due after more than one year
12
-
0
(152,315)
Net assets
1,145,189
3,140,209
Capital and reserves
Called up share capital
16
327
327
Share premium account
17
16,230,206
16,227,706
Equity reserve
18
16,187
16,187
Other reserves
19
28,864
35,255
Profit and loss reserves
21
(15,130,395)
(13,139,266)
Total equity
1,145,189
3,140,209

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £1,991,129 (2023 - £2,834,990 loss).

These financial statements 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 and authorised for issue on 30 April 2025 and are signed on its behalf by:
30 April 2025
Mr S Bates
Director
Company registration number 10828503 (England and Wales)
RHEON LABS LTD
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
- 4 -
Share capital
Share premium account
Equity reserve
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
£
£
Balance at 1 January 2023
217
12,647,926
-
0
26,430
(10,407,168)
2,267,405
Year ended 31 December 2023:
Loss and total comprehensive income for the year
-
-
-
-
(2,816,301)
(2,816,301)
Issue of share capital
16
110
3,579,780
-
-
-
3,579,890
Issue of convertible loan
13
-
-
16,187
-
-
16,187
Share option issue costs
-
-
-
8,825
-
8,825
Balance at 31 December 2023
327
16,227,706
16,187
35,255
(13,223,469)
3,056,006
Year ended 31 December 2024:
Loss and total comprehensive income for the year
-
-
-
-
(1,983,965)
(1,983,965)
Issue of share capital
16
-
0
2,500
-
-
-
2,500
Share option issue costs
-
-
-
(6,391)
-
(6,391)
Balance at 31 December 2024
327
16,230,206
16,187
28,864
(15,207,434)
1,068,150
RHEON LABS LTD
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
- 5 -
Share capital
Share premium account
Equity reserve
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
£
£
Balance at 1 January 2023
217
12,647,926
-
0
26,430
(10,304,276)
2,370,297
Year ended 31 December 2023:
Loss and total comprehensive income for the year
-
-
-
-
(2,834,990)
(2,834,990)
Issue of share capital
16
110
3,579,780
-
-
-
3,579,890
Issue of convertible loan
13
-
-
16,187
-
-
16,187
Share option issue costs
-
-
-
8,825
-
8,825
Balance at 31 December 2023
327
16,227,706
16,187
35,255
(13,139,266)
3,140,209
Year ended 31 December 2024:
Loss and total comprehensive income for the year
-
-
-
-
(1,991,129)
(1,991,129)
Issue of share capital
16
-
0
2,500
-
-
-
2,500
Share option issue costs
-
-
-
(6,391)
-
(6,391)
Balance at 31 December 2024
327
16,230,206
16,187
28,864
(15,130,395)
1,145,189
RHEON LABS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
- 6 -
1
Accounting policies
Company information

Rheon Labs Ltd is a private company limited by shares incorporated in England and Wales. The registered office is 1 Broughton Street, Battersea, London, England, SW8 3QJ.

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.

The financial statements are prepared in GB pounds, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest GB pound.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Rheon Labs Ltd together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 31 December 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Armourgel Medical Limited, Rheon Labs Inc and Rheon Labs Shenzhen Trading Co. Ltd have been included in the group financial statements using the purchase method of accounting. Accordingly, the group profit and loss account and statement of cash flows include the results and cash flows of Armourgel Medical Limited, Rheon Labs Inc and Rheon Labs Shenzhen Trading Co. Ltd from their acquisition and incorporation respectively.

RHEON LABS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 7 -
1.4
Going concern

The Group made a loss before tax of £2,264,401 (2023: loss of £3,188,280). During 2024, the Group’s shareholders were informed of an intention to seek further investment and an allotment of new shares to facilitate the ongoing trade and growth of the business up to the point of the business being self-sufficient. During the 6 months from July 2024, the first element of this investment was secured via an Advance Subscription Agreement (ASA) which converted into equity during Q1 2025. The business now plans to complete the balance of its original target investment during Q3 2025. The investment is expected to facilitate the ongoing trade and growth of the business up to the point of the business being self sufficient. On this basis, the directors consider it appropriate to prepare the accounts on the going concern basis, which assumes that the Group will continue in operational existence for the foreseeable future. Notwithstanding the confidence of the Directors, the ability of the Group to secure additional funding represents a material uncertainty that may cast significant doubt on the Group’s ability to continue as a going concern and, therefore, to continue realising its assets and discharging its liabilities in the normal course of business. These financial statements do not contain any adjustment that would arise if the financial statements were not drawn up on a going concern basis.

1.5
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.

 

Product Revenue

Revenue generated from the sale of products is recognised when all the below is satisfied:

 

Non product revenue

Non product revenue is recognised when the amount of turnover can be measured reliably and it is probable that the company will receive the consideration due under the transaction.

1.6
Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred.

1.7
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:

Plant and equipment
25% straight line
Fixtures and fittings
25% straight line
Computer equipment
33.33% straight line
Laboratory equipment
25% 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 recognised in the profit and loss account.

RHEON LABS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 8 -
1.8
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.9
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible 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.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.10
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.

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.

Work in progress represents compounded RHEON material.

RHEON LABS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 9 -
1.11
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.12
Financial instruments

The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and 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.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

RHEON LABS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 10 -
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 group 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.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

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

1.13
Compound instruments

The component parts of compound instruments issued by the group 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.

1.14
Equity instruments

Equity instruments issued by the group 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 group.

1.15
Taxation

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

RHEON LABS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 11 -
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 group’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 if, and only if, there is 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.

1.16
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.17
Retirement benefits

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

1.18
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.

 

The expense in relation to options over the parent company's shares granted to employees of a subsidiary is recognised by the company as a capital contribution.

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.

RHEON LABS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 12 -

For equity-settled share-based payment transactions the Group, in accordance with IFRS 2 'Share-Based Payments' measures their value and the corresponding increase in equity, indirectly, by reference to the fair value of the equity instrument granted. The fair value of those equity instruments is measured at the grant date using the black-scholes method. The expense is apportioned over the vesting period of the financial instrument and is based on the number which is expected to vest and the fair value of those financial instruments at the date of the grant. If the equity instruments granted vest immediately, the expense is recognised in full.

1.19
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

1.20
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

2
Judgements and key sources of estimation uncertainty

In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Provisions

Provisions have been made for expected credit losses and product warranties. These provisions are estimates and the actual costs and timing of the future cash flows are dependent on future events. Any differences between expectations and the actual future liability will be accounted for in the period when such determination is made.

Share based payments

The group recognises share based payments during the period and these estimates require certain judgements and estimates to be made. The Directors' believe that they have made judgements that are further explained in the notes and which are in accordance with UK Generally Accepted Accounting Practice.

RHEON LABS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 13 -
3
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
14,200
13,000
For other services
Other taxation services
4,250
-
All other non-audit services
9,925
8,250
14,175
8,250
4
Employees

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

Group
Company
2024
2023
2024
2023
Number
Number
Number
Number
29
30
26
28
5
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
411,734
435,871
Company pension contributions to defined contribution schemes
69,498
106,133
481,232
542,004

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2023 - 4).

Remuneration disclosed above includes the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
199,284
201,665
Company pension contributions to defined contribution schemes
18,319
16,719
RHEON LABS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 14 -
6
Tangible fixed assets
Group
Plant and equipment
Fixtures and fittings
Computer equipment
Laboratory equipment
Total
£
£
£
£
£
Cost
At 1 January 2024
198,435
111,968
134,802
287,253
732,458
Additions
23,898
-
0
8,463
16,489
48,850
Disposals
-
0
-
0
(22,883)
(27,601)
(50,484)
Exchange adjustments
-
0
-
0
14
-
0
14
At 31 December 2024
222,333
111,968
120,396
276,141
730,838
Depreciation and impairment
At 1 January 2024
126,232
100,100
115,925
245,639
587,896
Depreciation charged in the year
41,652
6,983
14,286
22,383
85,304
Eliminated in respect of disposals
-
0
-
0
(22,204)
(27,601)
(49,805)
Exchange adjustments
-
0
-
0
15
-
0
15
At 31 December 2024
167,884
107,083
108,022
240,421
623,410
Carrying amount
At 31 December 2024
54,449
4,885
12,374
35,720
107,428
At 31 December 2023
72,203
11,868
18,877
41,614
144,562
Company
Plant and equipment
Fixtures and fittings
Computer equipment
Laboratory equipment
Total
£
£
£
£
£
Cost
At 1 January 2024
198,435
111,968
133,938
287,253
731,594
Additions
23,898
-
0
8,463
16,489
48,850
Disposals
-
0
-
0
(22,883)
(27,601)
(50,484)
At 31 December 2024
222,333
111,968
119,518
276,141
729,960
Depreciation and impairment
At 1 January 2024
126,232
100,100
115,373
245,639
587,344
Depreciation charged in the year
41,652
6,983
13,999
22,383
85,017
Eliminated in respect of disposals
-
0
-
0
(22,204)
(27,601)
(49,805)
At 31 December 2024
167,884
107,083
107,168
240,421
622,556
Carrying amount
At 31 December 2024
54,449
4,885
12,350
35,720
107,404
At 31 December 2023
72,203
11,868
18,565
41,614
144,250
RHEON LABS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 15 -
7
Fixed asset investments
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Investments in subsidiaries
8
-
0
-
0
59,646
59,646
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2024 and 31 December 2024
59,646
Carrying amount
At 31 December 2024
59,646
At 31 December 2023
59,646
8
Subsidiaries

Details of the company's subsidiaries at 31 December 2024 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Rheon Labs Inc
USA
Ordinary
100
Rheon Labs Shenzhen Trading Co. Ltd
China
Ordinary
100
9
Stocks
Group
Company
2024
2023
2024
2023
£
£
£
£
Raw materials and consumables
264,515
234,595
264,515
234,595
Work in progress
237,094
454,594
237,094
454,594
Finished goods and goods for resale
99,487
65,611
99,487
65,611
601,096
754,800
601,096
754,800

Work in progress represents compounded RHEON material.

RHEON LABS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 16 -
10
Debtors
Group
Company
2024
2023
2024
2023
Amounts falling due within one year:
£
£
£
£
Trade debtors
149,248
139,600
149,248
75,786
Corporation tax recoverable
280,487
375,680
280,487
375,680
Amounts owed by group undertakings
-
-
72,124
214,573
Other debtors
83,493
108,096
84,072
97,590
Prepayments
169,926
141,209
168,251
139,956
683,154
764,585
754,182
903,585
11
Creditors: amounts falling due within one year
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Convertible loan notes and advanced subscription agreements
13
2,042,425
-
0
2,042,425
-
0
Deposits from customers
215,611
62,241
91,097
59,072
Trade creditors
148,434
142,825
147,692
140,444
Amounts owed to group undertakings
-
0
-
0
58,824
63,023
Other taxation and social security
55,701
55,787
53,927
54,243
Deferred income
30,000
63,900
30,000
63,900
Other creditors
45,213
55,033
36,837
37,078
Accruals
195,460
155,208
190,238
150,033
2,732,844
534,994
2,651,040
567,793
12
Creditors: amounts falling due after more than one year
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Convertible loans
13
-
0
152,315
-
0
152,315
RHEON LABS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 17 -
13
Convertible loan notes and advanced subscription agreements
Group
Company
2024
2023
2024
2023
£
£
£
£
Liability component of convertible loan notes and advanced subscription agreements
2,042,425
152,315
2,042,425
152,315

Net proceeds of £163,797 were received in the year ended 31 December 2023 from the issue of convertible loan notes with a conversion date of 30 September 2025. These proceeds have been split between the financial liability element and an equity component, representing the fair value of the embedded option to convert the financial liability into equity. The liability portion of £147,610 was determined based on the discounted cashflows and the balance of £16,187 recognised as the equity element. The carrying value at 31 December 2024 was £158,788 including notinoal interest charges.

 

Net proceeds of £1,883,637 were received during the year ended 31 December 2024 in relation to an Advance Subscription Agreement for ordinary shares in the company. These proceeds have been recognised as a current liability at 31 December 2024 as the liability was to be settled via the issue of a variable number of those shares.

The liability component is measured at amortised cost, and the difference between the carrying amount of the liability at the date of issue and the amount reported in the Balance Sheet represents the effective interest rate less interest paid to that date.

The effective rate of interest is 4.25%.

The equity component of the convertible loan notes has been credited to the equity reserve.

14
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
233,951
267,790

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

RHEON LABS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 18 -
15
Share-based payment transactions

On 18 December 2018, 4060 options were issued to the group's directors and staff. These options have a vesting period of three years from the date of grant and an exercise price of £0.01p each.

 

On 18 January 2020, a further 410 options were issued. These options have a vesting period of three years from the date of grant and an exercise price of £167.08 each.

 

On 20 November 2020, the company split each £0.01 ordinary share into 100 £0.0001 ordinary shares. As a result the number of options above was revised to 406,000 and 41,000 respectively and the exercise prices revised to £0.0001 and £1.6708 respectively.

 

On 18 December 2020, a further 25,000 options were issued. These options have a vesting period of one year from the date of grant and an exercise price of $2.2648 each.

 

On 10 May 2022, a further 61,500 options were issued. These options have a vesting period of two years from the date of grant and an exercise price of £2.50 each.

 

On 30 June 2024, a further 18,000 options were issued. These options have a vesting period of two and a half years from the date of grant and an exercise price of £2.00 each.

 

During the year, 3,500 (2023: 30,000) share options were called away and 1,000 (2023: 40,000) exercised due to staff leaving the business. As at 31 December 2024 there were 432,000 (2023: 418,500) share options of which 419,400 (2023: 412,988) had vested.

Group and company
Number of share options
Weighted average exercise price
2024
2023
2024
2023
Number
Number
£
£
Outstanding at 1 January 2024
418,500
488,500
0.35
0.46
Granted
18,000
-
2.00
-
Forfeited
(3,500)
(30,000)
2.50
2.50
Exercised
(1,000)
(40,000)
2.50
-
Outstanding at 31 December 2024
432,000
418,500
0.40
0.35
Exercisable at 31 December 2024
419,400
412,988
0.35
0.32

The options outstanding at 31 December 2024 had an exercise of between £0.0001 and £2.50 per option, and a remaining contractual life of between 5 and 8 years.

Group
Company
2024
2023
2024
2023
£
£
£
£
Expenses recognised in the year
Arising from equity settled share based payment transactions
(6,391)
8,825
(6,391)
8,825
RHEON LABS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 19 -
16
Share capital
Group and company
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Shares of £0.0001 each
3,273,677
3,272,677
327
327

During the year, a total of 1,000 ordinary shares were issued with nominal value of £0.0001 each, with a total increase in the nominal value of the ordinary £0.0001 shares of 10p. The total consideration received by the company for these shares was £2,500 with an average issue price of £2.50, including any share premium on issue.

17
Share premium account
Group
Company
2024
2023
2024
2023
£
£
£
£
At the beginning of the year
16,227,706
12,647,926
16,227,706
12,647,926
Issue of new shares
2,500
3,579,780
2,500
3,579,780
At the end of the year
16,230,206
16,227,706
16,230,206
16,227,706
18
Equity reserve
Group
Company
2024
2023
2024
2023
£
£
£
£
At the beginning of the year
16,187
-
0
16,187
-
0
Arising in the year
-
16,187
-
16,187
At the end of the year
16,187
16,187
16,187
16,187

The equity reserve includes the accumulated movements in respect of the equity element of the convertible loan notes.

19
Other reserves
2024
2023
Group and company
£
£
At the beginning of the year
35,255
26,430
Additions
(6,391)
8,825
At the end of the year
28,864
35,255

The other reserves includes the accumulated movements in respect of the share based payment expenses and liabilities.

RHEON LABS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 20 -
20
Audit report information

As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:

The auditor's report was unqualified.

Material uncertainty related to going concern

We draw attention to note 1.4 in the financial statements, which indicates that the Group incurred a loss before tax of £2,264,401 during the year ended 31 December 2024. As stated in note 1.4, these events or conditions indicate that a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

The senior statutory auditor was Richard Monkhouse and the auditor was Azets Audit Services.
21
Profit and loss reserves
Group
Company
2024
2023
2024
2023
£
£
£
£
At the beginning of the year
(13,223,469)
(10,407,168)
(13,139,266)
(10,304,276)
Loss for the year
(1,983,965)
(2,816,301)
(1,991,129)
(2,834,990)
At the end of the year
(15,207,434)
(13,223,469)
(15,130,395)
(13,139,266)
22
Operating lease commitments
Lessee

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2024
2023
2024
2023
£
£
£
£
Within one year
180,548
111,233
180,548
111,233
Between two and five years
547,226
-
547,226
-
727,774
111,233
727,774
111,233
23
Related party transactions
Remuneration of key management personnel

Key management personnel and directors are considered the same.

Other information

The group has taken advantage of the exemption available under FRS 102 Section 33 'Related Party Disclosures' whereby it has not disclosed transactions with wholly owned subsidiaries.

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