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

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

The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.

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

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

Heartfelt Technologies Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Heartfelt Technologies, Platinum Building, St Johns Innovation Park, Cambridge, United Kingdom, CB4 0DS.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

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

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

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

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:

Investments in subsidiary undertakings are recognised at cost.

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

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell.

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.

Taxation for the year comprises of current tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

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

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.

Government grants relating to turnover are recognised as income over the periods when the related costs are incurred.

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

The company holds a 100% interest in Heartfelt Medical Limited, a dormant company registered in England and Wales.

On 20 July 2016 the company established the Heartfelt Technologies Limited Enterprise Management Incentive Share Option Scheme. The purpose of the scheme is to create an incentive to work for the company and to motivate employees to help the company achieve its business aims.

At 1 January 2024, 428,000 EMI share options were outstanding, 365,000 with an exercise price of £0.0001 and 63,000 with an exercise price of £1.30 per share. During the year, 41,038 EMI Share Options were granted. No EMI Share Options lapsed, cancelled or exercised. At 31 December 2024, 469,038 Share Options were outstanding.

The company also operates an unapproved Share Option scheme. At 1 January 2024, 64,200 Options were outstanding at an exercise price of £0.0001 per share. During the year 2,320 options were granted at an exercise price of £3.12 per share. 4,000 options were exercised during the year. At 31 December 2024, 62,520 options were outstanding.

Options typically vest over performance periods which are up to 4 years.

During the year, the company recognised total charge of £30,600 (2023 - £48,785) which related to equity settled share based payment transactions.

The reserves as at 31 December 2023 have been restated to account for the cumulative movement in share based payment and derecognition of grant funded R&D expenditure capitalised incorrectly in that year. These have now been correctly reflected and transferred to the Equity Reserve and Retained Earnings.

Subsequent movement in the share based payment for the period ended 31 December 2024 have been accounted for in the Profit and Loss and then transferred to the Equity Reserve.