Company No:
Contents
| Directors | J J Ball (Appointed 22 January 2025) |
| A M C Crawford (Resigned 27 September 2024) | |
| L J Edis (Resigned 05 March 2025) | |
| A C Hale | |
| E McCartney (Appointed 22 January 2025) | |
| R L H Moore (Appointed 27 September 2024) | |
| M K H Moss (Appointed 05 March 2025) | |
| R F J Newry | |
| S M Smith | |
| H R A Verwoert (Resigned 16 January 2025) |
| Registered office | 17 Marble Street |
| Manchester | |
| M2 3AW | |
| United Kingdom |
| Company number | 08589048 (England and Wales) |
| Chartered accountants | Kreston Reeves LLP |
| Springfield House | |
| Springfield Road | |
| Horsham | |
| West Sussex | |
| RH12 2RG |
| Note | 31.12.2024 | 31.12.2023 | ||
| £ | £ | |||
| Fixed assets | ||||
| Tangible assets | 3 |
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| 7,261 | 20,950 | |||
| Current assets | ||||
| Debtors | 4 |
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| Cash at bank and in hand |
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| 1,089,977 | 2,870,459 | |||
| Creditors: amounts falling due within one year | 5 | (
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| Net current (liabilities)/assets | (997,867) | 379,878 | ||
| Total assets less current liabilities | (990,606) | 400,828 | ||
| Creditors: amounts falling due after more than one year | 6 | (
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| Net (liabilities)/assets | (
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| Capital and reserves | ||||
| Called-up share capital | 8 |
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| Share premium account |
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| Profit and loss account | (
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| Total shareholders' (deficit)/funds | (
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Directors' responsibilities:
The financial statements of Arctic Shores Limited (registered number:
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R F J Newry
Director |
The principal accounting policies are summarised below. They have all been applied consistently throughout the financial year and to the preceding financial year, unless otherwise stated.
Arctic Shores Limited (the Company) is a private company, limited by shares, incorporated in the United Kingdom under the Companies Act 2006 and is registered in England and Wales. The address of the Company's registered office is 17 Marble Street, Manchester, M2 3AW, United Kingdom.
The financial statements have been prepared under the historical cost convention, modified to include certain items at fair value, and in accordance with Section 1A of Financial Reporting Standard 102 (FRS 102) ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ issued by the Financial Reporting Council and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime.
The financial statements are presented in pounds sterling which is the functional currency of the Company and rounded to the nearest £.
The directors have assessed the Balance Sheet and likely future cash flows at the date of approving these financial statements. The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence and to meet its financial obligations as they fall due for at least 12 months from the date of signing these financial statements. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
Exchange differences are recognised in the Profit and Loss Account in the period in which they arise except for exchange differences arising on gains or losses on non-monetary items which are recognised in the Statement of Comprehensive Income.
Finance costs are charged to the Profit and Loss Account over the term of the debt using the effective interest method so the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
Current tax is provided at amounts expected to be paid (or recoverable) using the tax rates and laws that have been enacted or substantively enacted at the Balance Sheet date.
| Computer equipment |
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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.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
Investments in subsidiaries are measured at cost less accumulated impairment.
Investments in unlisted company shares, whose market value can be reliably determined, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the Statement of Comprehensive Income for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument.
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.
Financial assets and liabilities are only offset in the Balance Sheet when, and only when there exists a legally enforceable right to set off the recognised amounts and the Company intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Convertible loan notes
The convertible loan notes issued in the year may be settled in a variable number of the company's own equity instruments and are recognised as a complex financial liability in accordance with FRS
102 Section 12. The proceeds received on issue are initially measured at transaction price and subsequently measured at fair value though profit or loss, in accordance with the requirements of FRS 102 Section 12, at the end of each reporting period.
Government grants are recognised based on the accrual model and are measured at the fair value of the asset received or receivable. Grants are classified as relating either to revenue or to assets. Grants relating to revenue are recognised in income over the period in which the related costs are recognised. Grants relating to assets are recognised over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income.
Where share options are awarded to employees, the fair value of the options at the date of grant is charged to profit or loss over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the company keeping the scheme open or the employee maintaining any contributions required by the scheme).
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period.
Where equity instruments are granted to persons other than employees, profit or loss is charged with fair value of goods and services received.
Defined contribution pension plan
The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately
from the company in independently administered funds.
The preparation of the financial statements requires the directors to make judgements, estimates and assumptions that can affect the amounts reported for assets and liabilities, and the results for the year. The nature of estimation is such though that actual outcomes could differ significantly from those estimates.
The following judgements have had the most significant impact on amounts recognised in the financial statements:
Convertible loan notes
As required under FRS 102 the convertible loan notes have been measured at fair value. Due to the lack of observable market prices for similar instruments the valuation is subject to uncertainty. The convertible loan notes are convertible upon maturity (after 2 years from inception), or as a result further equity financing (where the funds raised are equal to the principal sum of the convertible loan). The directors have assessed the probability of the different outcomes and have used an expected value model with a discount rate of 17.50%, being the estimated cost of capital, to arrive at the fair value of the instruments at the reporting date. The value of the convertible notes at the reporting date is £681,237 and the fair value gain for the year is £47,784.
| 31.12.2024 | 31.12.2023 | ||
| Number | Number | ||
| Monthly average number of persons employed by the Company during the year, including directors |
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| Computer equipment | Total | ||
| £ | £ | ||
| Cost | |||
| At 01 January 2024 |
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| Additions |
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| Disposals | (
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| At 31 December 2024 |
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| Accumulated depreciation | |||
| At 01 January 2024 |
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| Charge for the financial year |
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| Disposals | (
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| At 31 December 2024 |
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| Net book value | |||
| At 31 December 2024 | 7,261 | 7,261 | |
| At 31 December 2023 | 20,950 | 20,950 |
| 31.12.2024 | 31.12.2023 | ||
| £ | £ | ||
| Trade debtors |
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| Amounts owed by Group undertakings |
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| Prepayments |
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| Other debtors |
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| 31.12.2024 | 31.12.2023 | ||
| £ | £ | ||
| Bank loans (secured) |
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| Trade creditors |
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| Accruals and deferred income |
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| Other taxation and social security |
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| Other creditors |
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| 31.12.2024 | 31.12.2023 | ||
| £ | £ | ||
| Bank loans (secured) |
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| Amounts owed to directors |
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| Convertible loan notes (secured) |
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In the year the Company issued convertible loan notes against which the Company granted a debenture in respect of the repayment of the principal amount, interest, and any other amounts payable under the loan notes. The debenture was executed concurrently with the issuance of the loan note instrument.
The Company issued £633,454 of convertible loan notes on 30 November 2024. The convertible loan notes are convertible into ordinary shares of the Company at any time between the date of issue of the notes and their settlement date. On issue, the loan notes were convertible at 1 shares per £3.60 loan note. If the notes have not been converted, they will be redeemed on 1 December 2026 at par. Interest of 15% per cent will be paid annually up until that settlement date.
The net proceeds received from the issue of the convertible loan notes have been split between the liability element and an equity component, representing the fair value of the embedded option to convert the liability into equity of the Company, as follows:
| 31.12.2024 | |
| £ | |
| Nominal value of convertible loan notes issued | 342,625 |
| Equity component | 200,838 |
| Liability components at date of issue | 543,463 |
| Interest charged | 137,775 |
| Interest paid | 0 |
| Liability component at 31 December 2024 |
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| 31.12.2024 | 31.12.2023 | ||
| £ | £ | ||
| Allotted, called-up and fully-paid | |||
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| 7.28 | 7.28 |
Other financial commitments
Management Share Option Scheme
The company has an Enterprise Management Investment Scheme for certain employees. Under this Scheme options can be exercised in tranches over the first 50 months from the date of grant
and not after 10 years. During the year, 16,000 (2023: 106,175) options were granted. 15,040 (2023: 49,366) options lapsed. During the year 2,456 (2023: 22,898) options were exercised. There were 253,938 (2023: 255,434) options at the year end.
The weighted average exercise price at the year end is £0.53 (2023: £0.53).
Pensions
The Company operates a defined contribution pension scheme for the directors and employees. The assets of the scheme are held separately from those of the Company in an independently administered fund.
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £81,292 (2023: £108,991). Contributions totalling £5,899 (2023: £1,336 payable) were repayable from the fund at the balance sheet date and are included in debtors.