Company registration number 07555858 (England and Wales)
FIRST LIGHT FUSION LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
FIRST LIGHT FUSION LIMITED
COMPANY INFORMATION
Directors
A Markus
M S Thomas
(Appointed 7 February 2025)
S Brindle
Professor Y Ventikos
D Bryon
IP2IPO Services Limited
A Lusch
Company number
07555858
Registered office
Unit 10
Mead Road
Yarnton
Oxfordshire
OX5 1QU
Auditor
Gravita Audit Oxford LLP
First Floor, Park Central
40-41 Park End Street
Oxford
OX1 1JD
FIRST LIGHT FUSION LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Directors' responsibilities statement
6
Independent auditor's report
7 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 29
FIRST LIGHT FUSION LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2025
- 1 -

The directors present the strategic report for the year ended 31 March 2025.

Principal Activities

First Light is pursuing the goal of energy from Inertial Fusion Energy (“IFE”), using the simplest means possible. The focus of our work is on the unique and proprietary fuel system called (the) Targets, as well as the software, data science (AI), manufacturing, and experimental capabilities that support this. The Targets boost power (energy over time and space) within IFE systems and manage the shock wave propagation, allowing a fusion fuel capsule to be imploded using a one-or-two-sided hydrodynamic process. They can also enable high-gain, increased energy yield per pulse of the system. This can unlock substantial engineering benefits that suggest a much simpler (and therefore cheaper) power plant design. These power plants would require industry consortia to both develop their designs and to deliver their construction, and so industry partnering will be needed to enable this. The company believes, based on its own and other reliable research, that there will be a trillion dollar annual demand for clean baseload power by 2050, and that IFE can address this. In the long term, First Light Fusion’s Target technology can capture a substantial part of that value. In the short term, early revenue opportunities are being pursued in adjacent markets where the Target technology can bring substantial value.

Future Development

The company strategy is to a focus in on its core strengths - the Target and its unique capabilities – and to use these to be a catalyst to the IFE industry, advancing the industry as a whole. Having achieved fundamental proof of the Target technology through a demonstration of fusion at its own laboratories and by beating pressure records at 3rd party laboratories, the company is now seeking £20M in equity funding to demonstrate four main objectives:

The sale of Targets into adjacent industries:

The Target technology can generate extreme levels of pressure or velocity using much cheaper Driver systems than has been previously possible. The Company believes this presents a large and high value commercial opportunity and seeks to demonstrate this through high value sales contracts.

Partnerships with IFE Driver organisations:

Forming early partnerships with IFE Driver organisations (Drivers are the “sparkplugs” for IFE systems such as lasers and pulsed power) will be of mutual benefit, accelerating the deployment of IFE with shorter development pathways and more economic energy systems.

Publication of papers in scientific journals:

The Company has pursued a Trade Secret policy for many years due to the long timelines for the development of IFE. However, this has now changed with the Company’s and Industry’s rapid progress. With patent protection in place in many areas, the Company can now publish its work. This will publicly demonstrate the unique and world leading technology and gain the Company higher levels of scientific credibility.

Filing patents for Target systems using alternative driver technologies:

The Company is known only for one method of IFE – projectile fusion. However, it can apply the core technology to many more driver types. It shall seek to file patents for an alternate Driver-Target combination.

Once these goals have been achieved, the Company shall then seek to raise the balance of funding required to take it to profitability.

FIRST LIGHT FUSION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
- 2 -
Principal risks and uncertainties

Funding

Funding remains uncertain at the time of signing these accounts (see Going Concern), though £20m in equity is expected to be raised before January 2026. Some revenues are expected, but these will not have a significant impact on the cash runway. Profitability is now targeted for 2030, with revenues increasing every year as the commercial activities intensify. The company’s research and development work is therefore still dependent upon raising investment from existing investors and the private capital markets. The ability to secure this funding is dependent upon the sentiment in the general markets, the investment sentiment in the whole fusion sector, and in the specific business and scientific performance of First Light Fusion.

Liquidity

Sufficient cash also needs to be held to manage working capital needs and the uncertain, agile development pathway of the business. Detailed budgeting and forecasting are undertaken to ensure that the risks of this are managed. The lower capital requirements of the new strategy also contribute towards managing this.

Technology

Inertial Fusion has been shown to work through the ongoing demonstrations at the National Ignition Facility in the USA. This now reduces the overall risk of IFE approaches. However, fusion is still a challenging technology, and it is possible that progress could be obstructed by either scientific or engineering constraints either inside or outside of the company. With the new focus of early commercialisation, partnering, publication and patenting, the internal manageable risks include the product development for the specific industry or applications (such as Space science), the ability to publish papers in sufficiently impactful journals, and the ability to secure patents around the technology. External risks are now those of the industry as a whole as the partnering strategy diffuses these to within the partner companies or potential partner companies. Risk registers of these are maintained and the development pathway seeks to address the foreseen challenges and manage the unforeseen challenges as they emerge.

Business Partnering

Partnerships are key to the success of the company’s long term business model. A risk is that these may not be formed or that they take longer to form than expected. This would impact on the future value of the Target technology in IFE but not in other industries. The ability to generate these partnerships will depend upon the credibility of the Target technology and the company’s proprietary capabilities (software, data science, experimental capabilities and manufacturing), demonstrating the value of this in the integrated fusion system, and competition in this space from both within the IFE companies and from 3rd parties.

KPIs

Most of the meaningful progress of the company cannot be reduced to financial KPIs as this is scientific and engineering progress. Cash expenditure is the most important measure, and this is viewed against the technical progress (discussed in Performance). The cash utilised in the period is in alignment with management’s expectation of technical and commercial progress made in the period.

FIRST LIGHT FUSION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
- 3 -

Performance

The Company’s expenditure over the reporting period was as expected. It undertook an organisation re-design to enable it to execute the new commercial strategy. This resulted in a reduction in headcount. The Company appointed a new, respected CEO – Mark Thomas - to lead this commercial strategy.

The field of IFE has taken an enormous step forward in the past few years, such as the multiple demonstrations of ignition and target gain by the National Ignition Facility in the USA. This has proven that IFE is viable in a laboratory setting and paves the way for the success of First Light. It also energised the field of IFE, and now presents an opportunity for the Company to benefit from this with a strategic shift and partnering opportunities.

Since demonstrating fusion using the Targets, the company has now demonstrated the technology several times at a key partner’s facility (Sandia National Laboratories). Pressure records were set at the STAR gas gun, at the Z-Machine (the world’s most powerful Pulsed power machine), and most recently the Company broke its own record, doubling the measured pressure in quartz record on the Z-Machine to 3.67 TPa, the equivalent of 10x the pressure at the centre of the earth. Such pressures delivered in this manner are only otherwise achievable on facilities such as the National Ignition Facility (where the Gain results have been achieved) where the facility cost is an order of magnitude higher. This demonstrates that First Light’s technology boosts the performance of simpler, more costly machines, which is why it offers a simpler and more economical pathway to IFE.

Results

The loss incurred for the year was £13.4m (2024: £13.2m). The financial position of the company included assets of £16.5m (2024: £20.3m), including cash of £9.9m (2024 : £1.7m) and investments of £0.2m (2024 : £12m) (Note 17).

On behalf of the board

M S Thomas
Director
26 June 2025
FIRST LIGHT FUSION LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2025
- 4 -

The directors present their annual report and financial statements for the year ended 31 March 2025.

Principal activities

First Light Fusion Limited (“Company”) is developing its Inertial Fusion fuel-target technology (“Targets”). These Targets can bring substantial benefits to the field of Inertial Fusion Energy (“IFE”), simplifying and lowering the costs achievable for the ultimate energy source. The technology has near-term applications in many areas including the fields of Material Science and Space which the company is now seeking to commercialise.

Future Developments

The Company expects to maintain a stable activity level in the forthcoming year as the research and commercial programmes maintain their progress. Revenues are expected to grow at a modest rate as the Company increases commercial activity, selling the Target technology into adjacent markets. The company plans to publish more scientific papers highlighting the Company’s capabilities and the benefits of high-dimensional Target design. Partnering activity with the developers of IFE Drivers and technologies to form the core consortia that pioneer the deployment of IFE.

 

Results and dividends

The loss for the year, after taxation, amounted to £13.4m (2024: loss £13.2m). No dividend was paid in the current year (2024: nil).

 

Directors

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

A Markus
M S Thomas
(Appointed 7 February 2025)
N Hawker
(Resigned 22 October 2024)
S Brindle
Professor Y Ventikos
D Bryon
IP2IPO Services Limited
A Lusch
W D Goodlad
(Resigned 18 June 2025)
Financial instruments

Capital Management – Capital is managed to ensure that the Company can continue as a Going Concern and that shareholder returns are maximised. Our Capital structure consists of Investments (Note 17) and cash. Equity consists of issued capital, reserves and accumulated deficits. A convertible loan is held, which is expected to convert to equity in the first-half of the financial year.

Financial Risk Management Objectives – Domestic and International financial markets are regularly monitored to assess exposure to financial risk. Currency risks are minimised by holding positions in currencies that match our expected expenditure profile.

Research and development

The company continues to progress the research and development of its technology and so allocates a significant portion of its resources on this activity (see Note 5 on Operating loss and Note 7 on Employees). All amounts were expensed, and none was capitalised.

Post reporting date events

There are no post balance sheet events.

FIRST LIGHT FUSION LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
- 5 -
Auditor

The auditors, Gravita Audit Oxford LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

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 company’s auditor 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 company’s auditor is aware of that information.

On behalf of the board
M S Thomas
Director
26 June 2025
FIRST LIGHT FUSION LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2025
- 6 -

The directors are responsible for preparing the annual 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). 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 these financial statements, the directors are required to:

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.

FIRST LIGHT FUSION LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF FIRST LIGHT FUSION LIMITED
- 7 -
Opinion

We have audited the financial statements of First Light Fusion Limited (the 'company') for the year ended 31 March 2025 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

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

Material Uncertainty Related to Going Concern

We draw attention to Note 1.2 in the financial statements, which indicates that the company needs to secure additional funding within 12 months from the date of approval of the financial statements. At the time of approval of the financial statements no such funding is contracted or committed. As stated in Note 1.2, these events or conditions, along with other matters as set forth in Note 1.2, indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

 

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

 

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

Other information

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

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

FIRST LIGHT FUSION LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF FIRST LIGHT FUSION LIMITED (CONTINUED)
- 8 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

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

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

FIRST LIGHT FUSION LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF FIRST LIGHT FUSION LIMITED (CONTINUED)
- 9 -

To address the risk of fraud through management bias and override of controls, we:

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

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

Katherine Wilkes BSc FCA (Senior Statutory Auditor)
For and on behalf of Gravita Audit Oxford LLP, Statutory Auditor
Chartered Accountants
First Floor, Park Central
40-41 Park End Street
Oxford
OX1 1JD
30 June 2025
FIRST LIGHT FUSION LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2025
- 10 -
2025
2024
Notes
£
£
Turnover
4
55,675
3,443
Administrative expenses
(15,723,455)
(16,316,827)
Operating loss
5
(15,667,780)
(16,313,384)
Interest receivable and similar income
9
306,267
868,207
Interest payable and similar expenses
10
(158,420)
(105)
Amounts written off investments
11
(18,664)
-
Loss before taxation
(15,538,597)
(15,445,282)
Tax on loss
12
2,103,333
2,198,922
Loss for the financial year
(13,435,264)
(13,246,360)

The profit and loss account has been prepared on the basis that all operations are continuing operations.

FIRST LIGHT FUSION LIMITED
BALANCE SHEET
AS AT
31 MARCH 2025
31 March 2025
- 11 -
2025
2024
Notes
£
£
£
£
Fixed assets
Tangible assets
13
2,236,069
2,336,203
Investments
14
-
0
18,664
2,236,069
2,354,867
Current assets
Stocks
15
252,817
274,788
Debtors falling due after more than one year
16
891,433
810,392
Debtors falling due within one year
16
3,014,742
3,142,579
Investments
17
255,363
12,069,672
Cash at bank and in hand
9,871,694
1,682,337
14,286,049
17,979,768
Creditors: amounts falling due within one year
18
(10,717,167)
(2,056,433)
Net current assets
3,568,882
15,923,335
Total assets less current liabilities
5,804,951
18,278,202
Provisions for liabilities
Provisions
20
667,800
656,000
(667,800)
(656,000)
Net assets
5,137,151
17,622,202
Capital and reserves
Called up share capital
24
1,125
1,125
Share premium account
76,970,912
76,970,912
Equity reserve
717,358
-
0
Other reserves
5,307,334
5,074,479
Profit and loss reserves
(77,859,578)
(64,424,314)
Total equity
5,137,151
17,622,202
The financial statements were approved by the board of directors and authorised for issue on 26 June 2025 and are signed on its behalf by:
D Bryon
Director
Company registration number 07555858 (England and Wales)
FIRST LIGHT FUSION LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2025
- 12 -
Share capital
Share premium account
Equity reserve
Other reserves
Share-based payment reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
£
£
Balance at 1 April 2023
1,125
76,970,912
-
0
(207,408)
4,763,862
(51,177,954)
30,350,537
Year ended 31 March 2024:
Loss and total comprehensive income
-
-
-
-
-
(13,246,360)
(13,246,360)
Transfers
-
-
-
-
781,024
-
0
781,024
Other movements
-
-
-
(262,999)
-
-
(262,999)
Balance at 31 March 2024
1,125
76,970,912
-
0
(470,407)
5,544,886
(64,424,314)
17,622,202
Year ended 31 March 2025:
Loss and total comprehensive income
-
-
-
-
-
(13,435,264)
(13,435,264)
Issue of convertible loan
19
-
-
717,358
-
-
-
717,358
Transfers
-
-
-
-
333,821
-
0
333,821
Other movements
-
-
-
(100,966)
-
-
(100,966)
Balance at 31 March 2025
1,125
76,970,912
717,358
(571,373)
5,878,707
(77,859,578)
5,137,151
FIRST LIGHT FUSION LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2025
- 13 -
2025
2024
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
29
(15,657,347)
(14,601,680)
Interest paid
(298)
(105)
Income taxes refunded
2,176,102
4,230,522
Net cash outflow from operating activities
(13,481,543)
(10,371,263)
Investing activities
Purchase of tangible fixed assets
(297,615)
(1,345,583)
Proceeds from disposal of tangible fixed assets
5,600
-
0
Purchase of investment
-
0
(18,664)
Interest received
306,267
868,207
Net cash generated from/(used in) investing activities
14,252
(496,040)
Financing activities
Legal fees incurred on fundraising
(207,661)
(262,999)
Issue of convertible loans
10,050,000
-
0
Net cash generated from/(used in) financing activities
9,842,339
(262,999)
Net decrease in cash and cash equivalents
(3,624,952)
(11,130,302)
Cash and cash equivalents at beginning of year
13,752,009
24,882,311
Cash and cash equivalents at end of year
10,127,057
13,752,009
Relating to:
Cash at bank and in hand
9,871,694
1,682,337
Short term deposits included in current asset investments
255,363
12,069,672
FIRST LIGHT FUSION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
- 14 -
1
Accounting policies
Company information

First Light Fusion Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 10, Mead Road, Yarnton, Oxfordshire, OX5 1QU.

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 sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

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

1.2
Going concern

Ttruehe financial statements have been prepared on a going concern basis, which assumes the Company will have sufficient funds available to enable it to continue to trade for a period of no less than 12 months from the date of approval of the financial statements (the “assessment period”). The directors have prepared financial forecasts to estimate the likely cash requirements of the Company over the next 12 months from the date of approval of the financial statements.

As at 31 March 2025, the Company had cash of £9.9m (2024: £1.7m) and investments of £0.2m (2024: £12m). Under a base case scenario, with current spending plans, the forecast shows that the business will have sufficient cash to continue to trade and meet its obligations as they fall due until mid-January 2026 whereupon additional funding shall be required. This funding is expected to come from £20M in new equity investment that would come from both existing and new investors. Part of this £20M would be from the conversion of a £10.05M convertible loan note issued in March 2025. This is the first phase of a £60m total equity raise plan to take the Company through to profit. The funding will enable the company to progress on several technical and commercial milestones (see Future Developments in the Strategic Report) that are expected to be value inflexion points and to build revenues from early sales of the key target technology. Upon completion, this would give a cash runway beyond the assessment period. Forecasts under a severe but plausible scenario that models higher levels of expenditure, particularly as a result of higher inflation, show that the Company would not exhaust all cash resources under this scenario earlier than January 2026. This analysis does not factor in additional mitigating actions available to management if these downside assumptions materialise. Taking these mitigating actions, principally reducing uncommitted discretionary and/or non-essential spend; such as delaying the experimental program and reducing high performance computing requirements, would largely offset the downside, however, would not extend the cash runway beyond the assessment period.

The large element of research and development nature of the company's strategy means the timing of milestones and funds generated from developments are not guaranteed at this stage. Under either scenario described above, additional funding will be needed for the company to continue to operate and meet its liabilities as they fall due, and the directors anticipate that this will come from equity investment from existing and new investors. While discussions to obtain this funding are in progress, no additional funding is contracted or committed as at the date of approval of the financial statements.

Based on the progress to date, the directors have a high level of confidence that this funding will be secured before January 2026. However, as additional funding would be required within the going concern assessment period under both a base case and a severe but plausible downside scenario, and that funding is as yet not committed, these conditions indicate the existence of a material uncertainty that may cast significant doubt on the Company's ability to continue as a going concern. The financial statements do not include the adjustments that would arise if the company were unable to continue as a going concern. Given the status of the discussions to secure additional external funding, the Directors have a reasonable expectation that the planned funding will be completed within the required timeframe and therefore have concluded that continuing to adopt the going concern basis is appropriate.

FIRST LIGHT FUSION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
1
Accounting policies
(Continued)
- 15 -
1.3
Turnover

Revenue is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes.

1.4
Research and development expenditure

Research expenditure is recognised as an expense in administration expenses as incurred. Development costs are assessed to consider if they meet the capitalisation criteria set out by Section 18 of FRS 102. Development costs not meeting criteria for capitalisation are expenses as incurred.

1.5
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:

Leasehold improvements
Shorter of lease term or straight line over 10 years
Plant and equipment
Straight line over 10 years
Fixtures and fittings
Straight line over 10 years
Computers
Straight line over 4-10 years

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.

1.6
Stocks

Inventories are solely Research and Development Consumables and are not for resale. Cost is determined on the first-in, first-out (FIFO) method. Cost includes the purchase price but excludes shipping and handling.

1.7
Cash and cash equivalents

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

1.8
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 trade and other receivables 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. The company has not entered into any such financing transactions during the year (2024: none).

FIRST LIGHT FUSION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
1
Accounting policies
(Continued)
- 16 -
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. No reversals of impairment have been recorded in the current year (2024: none).

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 company 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.

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 trade and other payables 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. No financing transactions have been entered into during the year (2024: none). 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.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.9
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.

FIRST LIGHT FUSION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
1
Accounting policies
(Continued)
- 17 -
1.10
Equity instruments

Equity instruments issued by the Company are recorded at the proceeds received, net of transaction costs.

1.11
Taxation

Taxation expense for the period comprises current and deferred tax recognised in the reporting period. Tax is recognised in the profit and loss account, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case tax is also recognised in other comprehensive income or directly in equity respectively.

Current tax

Due to continuing losses, there is no charge to corporation tax. The Company recognises R&D tax credits on an accruals basis when an accurate provision can be made in accordance with the UK research and development tax credit regime applicable to small and medium sized companies.

Deferred tax

Deferred tax arises from timing differences that are differences between taxable profits and total comprehensive income as stated in the financial statements. These timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements.

Deferred tax is recognised on all timing differences at the reporting date. Unrelieved tax losses and other deferred tax assets are only recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the period end and that are expected to apply to the reversal of the timing difference.

 

Deferred tax assets are recognised only to the extent it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. The reversal of deferred tax liabilities are a source of future taxable profits where these arise under the same tax authority, regardless of whether the Company is forecasting future taxable profits or loss. Based on an assessment of timing and loss restriction rules, deferred tax assets have been recognised to the extent of the deferred tax liabilities.

1.12
Provisions

Provisions are recognised when the Company has a legal or constructive present obligation as a result of a past event, it is probable that the Company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises. The Company provisions relate to dilapidation provisions on the Company's leased property and the effect of the time value of money, is not material.

1.13
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.

FIRST LIGHT FUSION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
1
Accounting policies
(Continued)
- 18 -
1.14
Retirement benefits

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

1.15
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 entity-specific observable market data. The estimated fair value of the options granted is calculated using the Black Scholes option pricing model.

 

The share based payment awards granted vest in four equal tranches. The Company concurrently recognises the expense for each separately-vesting tranche over the vesting period for that tranche, based on an estimate of shares that will eventually vest, which is reassessed and estimated at each reporting date. A corresponding adjustment is made to equity.

The vesting period is the period over which all of the specified vesting conditions are to be satisfied.

1.16
Leases
As lessee

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 leases asset are consumed.

1.17
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

2
Change in accounting policy

In the current year, a change in accounting policy was adopted by the company with regard to depreciation rates in regards to Leasehold Improvements, Plant & Equipment, Fixtures and Fittings, and Computer Equipment.

 

Leasehold Improvements are now depreciated over the lower of the lease term or 10 years (SL) when they had been depreciated over the lower of the lease term or 4 years (SL).

Plant & Equipment are now depreciated over 10 years (SL) when they had been depreciated over 4 years (SL).

Fixtures and Fittings are now depreciated over 10 years (SL) when they had been depreciated over 4 years (SL).

Computer Equipment are now depreciated over 4 or 10 years (SL), depending on the asset, when they had been depreciated over 4 years (SL).

 

The company’s revised accounting policies are set out in note 1.5. No adjustments have been made in regards to prior year depreciation charges and accumulated depreciation brought forward as the change is a change in accounting estimate and per FRS 102 should be applied prospectively only.

FIRST LIGHT FUSION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
- 19 -
3
Judgements and key sources of estimation uncertainty

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

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised 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 Company incurs a significant amount of research and development cost. The point in time at which the Company begins capitalisation of any project is a critical accounting judgement. Management has reviewed the facts and circumstances of each project in relation to the criteria for capitalisation and have determined that none of the projects met the requirements for capitalisation. Accordingly, no development costs have been capitalised for the year ended 31 March 2025 (2024: nil) and have instead been expensed as incurred.

 

Additionally, in accordance with FRS 102 Section 17 "Leasehold Property, Plant and Equipment", physical assets can be capitalised that are used for "administrative purposes", if it is probable that future economic benefits will flow to the entity. Future economic benefits may comprise revenue from the sale of products or services, cost savings, or other benefits resulting from the use of the asset by the Company, however, an impairment assessment would require the asset to the valued at the higher of value in use ("VIU") or fair value less costs to sell ("FVLCTS"). On this basis, consideration was given to the items purchased and whether they are consumed in the creation of a prototype or if there was a possibility that they could be used across multiple prototypes. Following this review, the Company does not consider that a material level of the programme expenditure should be capitalised, as the expenditure incurred is utilised in forming part of the prototype device. The prototypes themselves are not considered to have material resale value or value in use, hence the fair value less costs to sell is not material and there is no future economic benefit from these items.

Key sources of estimation uncertainty

While not expected to result in a material change in the carrying value of assets or liabilities in the next 12 months, the following estimate was also used in applying the Company’s accounting policies:

 

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

 

The convertible loan note is a compound financial instrument and as such has both a liability and equity component. The interest rate of 21% was used in order to calculate the liability component of the loan based on the rate given if the company had external debt which did not have an equity component. The liability balance of this instrument at the report date was £9,384,069 (2024: £0) and the equity balance was £717,358 (2024: £0)

4
Turnover and other revenue
2025
2024
£
£
Turnover analysed by class of business
UK Consultancy
55,675
3,443
FIRST LIGHT FUSION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
4
Turnover and other revenue
(Continued)
- 20 -
2025
2024
£
£
Other revenue
Interest income
306,267
868,207
5
Operating loss
2025
2024
Operating loss for the year is stated after charging/(crediting):
£
£
Exchange losses
8,087
2,520
Research and development costs
2,262,163
1,430,264
Depreciation of owned tangible fixed assets
397,749
1,135,068
(Profit)/loss on disposal of tangible fixed assets
(5,600)
1,594
Share-based payments
333,821
781,024
Operating lease charges
506,199
439,897
6
Auditor's remuneration
2025
2024
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
60,000
109,760
7
Employees

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

2025
2024
Number
Number
Research and development Scientists
54
58
Research and development Support
20
19
Business Support
25
24
Commercial
1
-
Total
100
101
FIRST LIGHT FUSION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
7
Employees
(Continued)
- 21 -

Their aggregate remuneration comprised:

2025
2024
£
£
Wages and salaries
7,799,908
7,760,150
Social security costs
844,855
759,158
Pension costs
552,867
492,751
9,197,630
9,012,059
8
Directors' remuneration
2025
2024
£
£
Remuneration for qualifying services
427,793
471,127
Amounts receivable under long term incentive schemes
35,644
29,207
Company pension contributions to defined contribution schemes
25,974
33,600
489,411
533,934

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2024 - 3).

The number of directors who are entitled to receive shares under long term incentive schemes during the year was 1 (2024 - 1).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2025
2024
£
£
Remuneration for qualifying services
201,638
192,263
Amounts receivable under long term incentive schemes
35,644
29,207
Company pension contributions to defined contribution schemes
15,513
15,331

The highest paid director has been entitled to receive shares under a long term incentive scheme during the year. No share options were exercised during the year.

9
Interest receivable and similar income
2025
2024
£
£
Interest income
Interest on bank deposits
306,267
868,207
FIRST LIGHT FUSION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
- 22 -
10
Interest payable and similar expenses
2025
2024
£
£
Interest on financial liabilities measured at amortised cost:
Interest on convertible loan notes
158,122
-
0
Other finance costs:
Other interest
298
105
158,420
105
11
Amounts written off investments
2025
2024
£
£
Loss on disposal of investments held at fair value
(18,664)
-
12
Taxation
2025
2024
£
£
Current tax
UK corporation tax on profits for the current period
(2,103,333)
(2,198,922)

The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:

2025
2024
£
£
Loss before taxation
(15,538,597)
(15,445,282)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2024: 19.00%)
(2,952,333)
(2,934,604)
Tax effect of expenses that are not deductible in determining taxable profit
128,437
173,105
Adjustments in respect of prior years
22,820
-
0
Research and development tax credit
(2,126,153)
(2,198,922)
Deferred tax adjustments in respect of prior years
1,324,401
1,212,389
Surrender of tax losses for R&D tax credit
2,789,061
2,881,345
Additional deduction for R&D expenditure
(1,289,566)
(1,332,235)
Taxation credit for the year
(2,103,333)
(2,198,922)
FIRST LIGHT FUSION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
- 23 -
13
Tangible fixed assets
Leasehold improvements
Plant and equipment
Fixtures and fittings
Computers
Total
£
£
£
£
£
Cost
At 1 April 2024
1,115,036
4,588,839
441,167
1,972,638
8,117,680
Additions
9,304
228,330
7,410
52,571
297,615
Disposals
-
0
(12,900)
-
0
-
0
(12,900)
At 31 March 2025
1,124,340
4,804,269
448,577
2,025,209
8,402,395
Depreciation and impairment
At 1 April 2024
638,837
3,332,426
286,761
1,523,453
5,781,477
Depreciation charged in the year
52,779
169,992
19,727
155,251
397,749
Eliminated in respect of disposals
-
0
(12,900)
-
0
-
0
(12,900)
At 31 March 2025
691,616
3,489,518
306,488
1,678,704
6,166,326
Carrying amount
At 31 March 2025
432,724
1,314,751
142,089
346,505
2,236,069
At 31 March 2024
476,199
1,256,413
154,406
449,185
2,336,203
14
Fixed asset investments
2025
2024
£
£
Unlisted investments
-
0
18,664
Movements in fixed asset investments
Investments
£
Cost or valuation
At 1 April 2024
18,664
Written off
(18,664)
At 31 March 2025
-
Carrying amount
At 31 March 2025
-
At 31 March 2024
18,664
FIRST LIGHT FUSION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
- 24 -
15
Stocks
2025
2024
£
£
Work in progress
13,114
-
Research and development consumables
239,703
274,788
252,817
274,788
16
Debtors
2025
2024
Amounts falling due within one year:
£
£
Trade debtors
9,810
-
0
Corporation tax recoverable
2,126,153
2,198,922
Other debtors
93,582
233,204
Prepayments and accrued income
785,197
710,453
3,014,742
3,142,579
2025
2024
Amounts falling due after more than one year:
£
£
Other debtors
167,516
200,316
Prepayments and accrued income
723,917
610,076
891,433
810,392
Total debtors
3,906,175
3,952,971
17
Current asset investments
2025
2024
£
£
Short term deposits
255,363
12,069,672

Investments relate to money market deposits/funds held on deposit with an original maturity of 32 days or less. At the Statement of Financial Position date the average maturity of the deposits was 32 days (2024: 32 days). The average interest rate over the year was 3.85% (2024: 4.7%)

FIRST LIGHT FUSION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
- 25 -
18
Creditors: amounts falling due within one year
2025
2024
Notes
£
£
Convertible loans
19
9,384,069
-
0
Trade creditors
494,161
1,023,933
Taxation and social security
214,757
262,199
Deferred income
22
16,667
-
0
Other creditors
14,668
106,778
Accruals and deferred income
592,845
663,523
10,717,167
2,056,433
19
Convertible loan notes
2025
2024
£
£
Liability component of convertible loan notes
9,384,069
-

The net proceeds received from the issue of the convertible loan notes 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 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 23%.

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

20
Provisions for liabilities
2025
2024
£
£
Dilapidations provision
667,800
656,000
Movements on provisions:
Dilapidations provision
£
At 1 April 2024
656,000
Additional provisions in the year
11,800
At 31 March 2025
667,800
FIRST LIGHT FUSION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
20
Provisions for liabilities
(Continued)
- 26 -

As part of the Company’s leasing arrangements, the leasehold property is required to be returned to the position in which it was first let. This provision is for the estimated costs involved to remove modifications made to the premises. The provision is being released to the Statement of Comprehensive Income over the length of the lease. At 31 March 2025 the total amounts released to the Statement of Comprehensive Income amounted to £634,410 (2024: £557,600). The provision is expected to be utilised at the end of the lease period which is currently September 2035.

21
Deferred taxation

As at 31 March 2024 there existed a deferred tax liability of £548,442 (2024: £513,131) in respect of accelerated capital allowances. This has been offset by the deferred tax asset in respect of unrelieved trading losses and short term timing differences totaling £9,754,509 (2024: £8,102,585). This leaves a potential net deferred tax asset of £9,206,067 (2024: £7,589,454) which has not been reflected as an asset given the uncertainty of future revenue streams and as the Company is committed to significant continued investment in research and development.

 

As of the 1st of April 2024, the main rate of corporation tax and the small profits rate in the UK continued to be 25% and 19% respectively. The deferred tax calculated in the note above has used the main rate.

22
Deferred income
2025
2024
£
£
Other deferred income
16,667
-
23
Retirement benefit schemes
2025
2024
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
552,867
492,751

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

Included in the balance sheet are unpaid pension contributions of £0 (2024: £78,010).

24
Share capital
2025
2024
2025
2024
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of 0.1p each of £1 each
1,096,050
1,096,050
1,096
1,096
A Ordinary of 0.1p each of £1 each
29,529
29,529
29
29
1,125,579
1,125,579
1,125
1,125
FIRST LIGHT FUSION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
24
Share capital
(Continued)
- 27 -

There are two classes of Ordinary shares, Ordinary Shares and A Ordinary Shares. Ordinary Shares have attached to them Full voting rights and rank Pari Passu for Dividends and Distributions of any kind. A Ordinary Shares have attached to them full voting rights and rank Pari Passu for dividends which are only payable if approved by the directors. Distributions on an Exit Event or Liquidation Event are calculated in accordance with the Articles of Association.

 

Other Reserves relate to Share-based payments and fund raise costs not offset against the share premium account.

25
Share-based payment transactions
Number of share options
Weighted average exercise price
2025
2024
2025
2024
Number
Number
£
£
Outstanding at 1 April 2024
117,224
107,818
27.18
21.09
Granted
3,598
10,912
46.31
92.62
Forfeited
(1,362)
0
(1,506)
0
78.11
60.46
Outstanding at 31 March 2025
119,460
117,224
27.17
27.18
Exercisable at 31 March 2025
111,129
110,304
23.66
23.47

The Company operates one share-based payment scheme for its employees. All employees are granted share options with the Company. The options are granted with a fixed exercise price, they vest over 4 years and have a maximum term of 20 years. They are settled via equity. If the options have vested prior to the employee leaving the Company, the employee may keep them until they expire or are exercised.

 

The options are fair valued using the Black Scholes model. The Black Scholes model is internationally recognised as being appropriate to measure Employee Share Schemes. The share price used for the valuation is based on the latest fundraise.

Liabilities and expenses

During the year, the Company recognised total share-based payment expenses of £333,821 (2024: £781,024).

 

At that time, the Company took advantage of the exemption available under FRS 102, Section 35.10(b), which allowed entities transitioning to FRS 102 to exclude share options issued before the transition date from the share-based payment charge calculation. However, both the use of this exemption and the historic share options issued were incorrectly excluded from the disclosures in the prior years.

 

The prior year disclosure has therefore been updated to reflect the actual number of share options outstanding. This restatement has no financial impact on the amounts previously recorded in the primary statements.

 

 

 

 

 

 

FIRST LIGHT FUSION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
- 28 -
26
Operating lease commitments
As lessee

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

2025
2024
£
£
Within 1 year
263,266
476,660
Years 2-5
2,688,606
275,952
After 5 years
3,856,190
-
0
6,808,062
752,612
27
Related party transactions
Remuneration of key management personnel

The remuneration of key management personnel is as follows.

2025
2024
£
£
Aggregate compensation
1,363,076
882,603
Transactions with related parties

During the year the company entered into the following transactions with related parties:

Name of related party
Nature of relationship
IP2IPO Services Ltd - RobTrezona
Shareholder
William Goodlad (Oxford Science Enterprises)
Shareholder
Description of
Income
Payments
transaction
2025
2024
2025
2024
£
£
£
£
IP2IPO Services Ltd - RobTrezona
Fees for directors services and expenses
-
0
-
0
11,395
10,918
William Goodlad (Oxford Science Enterprises)
Fees for directors services
-
0
-
0
5,000
5,000
Other information

First Light Fusion have issued convertible loan notes during the year of £5,000,000 to IP2IPO Portfolio (GP) Limited (shareholder), £5,000,000 to IP2IPO Australia HP PTY Ltd (shareholder) and £50,000 to Gap Technology Holding GMBH (shareholder). These amounts have been discounted to their present value as described in note 18 and then interest has been charged at the effective interest rate. The full amount of the loan notes are outstanding at the year end.

 

 

28
Ultimate controlling party
FIRST LIGHT FUSION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
28
Ultimate controlling party
(Continued)
- 29 -

The Company is owned by a number of private shareholders and companies, IP2IPO Portifolio (Gp) Limited, holding 23.8% of the share capital of the Company, is the largest shareholder. Accordingly there is no parent entity nor ultimate controlling party.

29
Cash absorbed by operations
2025
2024
£
£
Loss after taxation
(13,435,264)
(13,246,360)
Adjustments for:
Taxation credited
(2,103,333)
(2,198,922)
Finance costs
158,420
105
Investment income
(306,267)
(868,207)
(Gain)/loss on disposal of tangible fixed assets
(5,600)
1,594
Depreciation and impairment of tangible fixed assets
397,749
1,135,068
Other gains and losses
18,664
-
Equity settled share based payment expense
333,821
781,024
Increase in provisions
11,800
34,000
Movements in working capital:
Decrease/(increase) in stocks
21,971
(17,870)
Increase in debtors
(25,973)
(556,928)
(Decrease)/increase in creditors
(740,002)
334,816
Increase in deferred income
16,667
-
Cash absorbed by operations
(15,657,347)
(14,601,680)
30
Analysis of changes in net funds
1 April 2024
Cash flows
31 March 2025
£
£
£
Cash and cash equivalents
13,752,009
(3,624,952)
10,127,057
Convertible loan notes
-
(9,384,069)
(9,384,069)
13,752,009
(13,009,021)
742,988
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