REGISTERED NUMBER: 07330136 (England and Wales)

UNIVERSAL MATTER GBR LTD

REPORT OF THE DIRECTORS AND

AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

Page

Company Information

1

Report of the Directors

2

Report of the Independent Auditors

4

Statement of Comprehensive Income

7

Balance Sheet

8

Statement of Changes in Equity

9

Notes to the Financial Statements

10

DIRECTORS:

Mr C. D. Kefalos

Mr G. Hoffman

Mr J. V. Leeuwen

REGISTERED OFFICE:

Office 2 Innovation Centre

Wilton Site

Redecar

Cleveland

TS10 4RF

REGISTERED NUMBER:

07330136 (England and Wales)

INDEPENDENT AUDITORS:

Baines Jewitt Limited

Statutory Auditors

Spitfire House

19 Falcon Court

Preston Farm Industrial Estate

Stockton-on-Tees

TS18 3TU

The directors present their report with the financial statements of the Company for the year ended 31 December 2024.

PRINCIPAL ACTIVITY

The principal activity of the Company in the year under review was that of the manufacture, dispersion and development of applications for graphene. The company's operations are primarily located within the UK.

REVIEW OF BUSINESS

The company has continued to develop graphene based products for commercial purposes. This is supported by the group and the directors consider these products to have long-term uses.

RESEARCH AND DEVELOPMENT

The company continues to be heavily involved in the development of graphene based products for which patents are in the process of being obtained.

FUTURE DEVELOPMENTS

The company will continue to develop new and existing processes relating to graphene based products.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2024 to the date of this report.

Mr C. D. Kefalos

Mr G. Hoffman

Mr J. V. Leeuwen

GOING CONCERN

The company has incurred an operating loss of £2,309,000 (2023: £3,269,000) during the year which was anticipated as the company continues develop the commercial application of graphene based products.

The on-going development of the graphene products and its functionality has continued to indicate a strong foundation for growth, however the timing of revenue remains uncertain and ultimately demonstrates the need for continued financial support from the parent undertaking, Universal Matter Inc.

The directors of the parent undertaking have confirmed in writing that they will provide further funding should the need arise. The directors of the parent undertaking have prepared budgets and forecasts for the period ending 31 December 2026 which consider expected future cash flows for the wider group. The forecasts are based on a number of key assumptions, including those relating to the availability of finance to fund the operations of the group. Those forecasts indicate that further fundraising will need to be completed within the next twelve months in order to enable the group to meet its liabilities as they fall due.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Report of the Directors 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:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the Company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

AUDITORS

The auditors, Baines Jewitt Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies.

ON BEHALF OF THE BOARD:

Mr G. Hoffman - Director

21 August 2025

Opinion

We have audited the financial statements of Universal Matter GBR Ltd (the 'Company') for the year ended 31 December 2024 which comprise the Income Statement, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of 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 101 'Reduced Disclosure Framework' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the Company's affairs as at 31 December 2024 and of its loss for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

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 Auditors' 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 the going concern disclosure within the accounting policies in the financial statements, which indicate that the company is dependent on the parent undertaking raising further funding in the next twelve months to allow the Company to meet its liabilities as they fall due. As stated in the accounting policies, these events or conditions, along with the other matters as set forth in the accounting policies, 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 director's 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 directors are responsible for the other information. The other information comprises the information in the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

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.

In connection with our audit of the financial statements, 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 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 the audit:

-	the information given in the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Report of the Directors has been prepared in accordance with applicable legal requirements.

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 Report of the Directors.

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

-	adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

-	the financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit; or

-	the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption from the requirement to prepare a Strategic Report or in preparing the Report of the Directors.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on pages two and three, 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 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.

Auditors' 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 a Report of the Auditors 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:

Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to Health & Safety and Employment law, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006.

We evaluated management's opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls). Audit procedures performed by the engagement team included:

-

discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulation and fraud;

-

evaluation and testing of the operating effectiveness of management's controls designed to prevent and detect irregularities;

-

challenging assumptions and judgements made by management in their significant accounting estimates; and

-

identifying and testing journal entries, in particular any journal entries posted with unusual account combinations or posted by senior management.

Auditors' responsibilities for the audit of the financial statements continued

There are inherent limitations in the audit procedures described above and the further removed noncompliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

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 a Report of the Auditors 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.

Jemma Hoggard FCA (Senior Statutory Auditor)

for and on behalf of Baines Jewitt Limited

Statutory Auditors

Spitfire House

19 Falcon Court

Preston Farm Industrial Estate

Stockton-on-Tees

TS18 3TU

4 September 2025

TURNOVER

4

99

184

Cost of sales

375

638

GROSS LOSS

(276

)

(454

)

Administrative expenses

2,124

2,824

(2,400

)

(3,278

)

Other operating income

91

9

OPERATING LOSS

(2,309

)

(3,269

)

Interest receivable and similar income

8

-

(2,301

)

(3,269

)

Interest payable and similar expenses

7

15

50

LOSS BEFORE TAXATION

8

(2,316

)

(3,319

)

Tax on loss

10

(72

)

(540

)

LOSS FOR THE FINANCIAL YEAR

(2,244

)

(2,779

)

OTHER COMPREHENSIVE INCOME

Item that may be reclassified subsequently to profit or loss:

Capital contribution

-

1,026

Income tax relating to item that may be reclassified subsequently to profit or loss

-

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

-

1,026

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(2,244

)

(1,753

)

FIXED ASSETS

Owned

Intangible assets

11

812

793

Tangible assets

12

728

827

Right-of-use

Tangible assets

12, 16

50

218

1,590

1,838

CURRENT ASSETS

Stocks

13

62

79

Debtors

14

845

1,162

Cash at bank

531

56

1,438

1,297

CREDITORS

Amounts falling due within one year

15

(4,323

)

(2,003

)

CONTRACT LIABILITIES

Amounts falling due within one year

4

(59

)

(191

)

NET CURRENT LIABILITIES

(2,944

)

(897

)

TOTAL ASSETS LESS CURRENT LIABILITIES

(1,354

)

941

CONTRACT LIABILITIES

Amounts falling due after more than one year

4

5

56

NET (LIABILITIES)/ASSETS

(1,359

)

885

CAPITAL AND RESERVES

Called up share capital

17

-

-

Share premium

2,645

2,645

Retained earnings

18

(4,004

)

(1,760

)

SHAREHOLDERS' FUNDS

(1,359

)

885

The 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 21 August 2025 and were signed on its behalf by:

Mr G. Hoffman - Director

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

£'000

£'000

£'000

£'000

Balance at 1 August 2022

-

(7

)

2,645

2,638

Total comprehensive income

-

(1,753

)

-

(1,753

)

Balance at 31 December 2023

-

(1,760

)

2,645

885

Total comprehensive income

-

(2,244

)

-

(2,244

)

Balance at 31 December 2024

-

(4,004

)

2,645

(1,359

)

1.	STATUTORY INFORMATION

Universal Matter GBR Ltd is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The company changed it's accounting period end from 31 July to 31 December in 2023 so as to be co-terminus with the rest of the new ownership's group.This means that the information presented in the financial statements is not comparable.

2.	ACCOUNTING POLICIES

Accounting convention

These financial statements have been prepared in accordance with Financial Reporting Standard 101 "Reduced Disclosure Framework" and the Companies Act 2006) The financial statements have been prepared under the historical cost convention..

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 £1,000, unless otherwise stated.

As described in note 21, these accounts are the first that have been prepared in accordance with Financial Reporting Standard 101 (FRS 101). The previous financial statements were prepared in accordance with International Financial Reporting Standards.

Going concern

The company has incurred an operating loss of £2,309,000 (2023: £3,269,000) during the year which was anticipated as the company continues to develop the commercial application of graphene based products.

The on-going development of the graphene products and its functionality has continued to indicate a strong foundation for growth, however the timing of revenue remains uncertain and ultimately demonstrates the need for continued financial support from the parent undertaking, Universal Matter Inc.

The Directors of the parent undertaking have confirmed in writing that they will provide further funding should the need arise. The directors of the parent undertaking have prepared budgets and forecasts for the period ending 31 December 2026 which consider expected future cash flows for the wider group. The forecasts are based on a number of key assumptions, including those relating to the availability of finance to fund the operations of the group. Those forecasts indicate that further fundraising will need to be completed within the next twelve months in order to enable the group to meet its liabilities as they fall due.

The Directors of the parent undertaking, and the Directors of the Company, remain confident that the group will be able to secure the required funding through equity fundraise or other assumptions. However, the timing and availability of funding sources is currently outside of the control of the parent undertaking. The assumption that the group will successfully complete further equity fundraising therefore represents a material uncertainty which casts significant doubt over the company's ability to continue as a going concern.

Whilst noting the material uncertainty above, the Directors of the Company continue to adopt the going concern basis in preparing the financial statements. The financial statements do not include any adjustments that would result from the going concern basis of preparation being inappropriate.

The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 101 "Reduced Disclosure Framework":

•

the requirements of paragraphs 45(b) and 46 to 52 of IFRS 2 Share-based Payment;

•

the requirement in paragraph 38 of IAS 1 Presentation of Financial Statements to present comparative information in respect of:

-

paragraph 79(a)(iv) of IAS 1;

-

paragraph 73(e) of IAS 16 Property, Plant and Equipment; and

-

paragraph 118(e) of IAS 38 Intangible Assets;

•

the requirements of paragraphs 10(d), 10(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D, 111 and 134 to 136 of IAS 1;

•

the requirements of

-

paragraphs 1 to 44E, 44H(b)(ii) and 45 to 63 of IAS 7 Statement of Cash Flows; and

-

paragraphs 44F, 44G, 44H(a), 44H(b)(i), 44H(b)(iii) and 44H(c) of IAS 7;

•

the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors;

•

the requirements of paragraphs 17 and 18A of IAS 24 Related Party Disclosures;

•

the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group;

Turnover

Turnover is recognised at the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of business and is shown net of value added tax. The company primarily generates revenues from the sale of graphene based products and dispersions. Product sales are recognised following despatch.

Intangible assets other than goodwill

Intangible assets acquired separately from a business combination are initially recognised at cost and are subsequently recognised at cost less accumulated amortisation and accumulated impairment losses. Intangible assets, which comprise licences and intellectual property, are amortised to the income statement using the straight line method over the shorter of their estimated useful life and period of contractual rights. The estimated useful life and period of contractual rights is expected to be 20 years.

Intellectual property is written off over its expected useful life of 10 years.

Impairment of tangible and intangible assets

At each reporting end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If 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.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.

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.

Impairment of tangible and intangible assets continued

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.

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.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Plant and machinery

-

Over 5 to 10 years

Fixtures and fittings

-

20% on cost

Computer equipment

-

33% on cost

Financial assets

Financial assets are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.

At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.

Financial assets at fair value through profit or loss

When any of the above-mentioned conditions for classification of financial assets is not met, a financial asset is classified as measured at fair value through profit or loss. Financial assets measured at fair value through profit or loss are recognized initially at fair value and any transaction costs are recognised in profit or loss when incurred. A gain or loss on a financial asset measured at fair value through profit or loss is recognised in profit or loss, and is included within finance income or finance costs in the statement of income for the reporting period in which it arises.

Financial assets held at amortised cost

Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (eg trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary.

Impairment of financial assets

Financial assets carried at amortised cost are assessed for indicators of impairment at each reporting end date.

The expected credit losses associated with these assets are estimated on a forward-looking basis. A broad range of information is considered when assessing credit risk and measuring expected credit losses, including past events, current conditions, and reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

Financial liabilities

The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.

Other financial liabilities

Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

Derecognition of financial liabilities

Financial liabilities are derecognised when, and only when, the company's obligations are discharged, cancelled, or they expire.

Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Taxation

Current tax

The tax expense or credit represents the sum of the tax currently payable or receivable together with the movement in deferred tax.

The tax currently receivable is based on the taxable loss for the year and includes the benefit of research and development tax credits. Taxable loss differs from the loss before tax as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items of income or expense that are never taxable or deductible. The Company's receivable for current tax is calculated using tax rates that have been enacted or substantively enacted as at the balance sheet date.

Research and development tax credits for the year are calculated after having taken into account the level of research and development work carried out during the year.

Deferred tax

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary 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.

Deferred tax continued

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 income statement, 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 when the company has 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.

Research and development

It is the Company's policy to recognise an intangible asset for development of its product once the criteria have been met. Otherwise all costs in the research phase will be recognised in the statement of comprehensive income for the period in which they are incurred. Costs that are directly attributable to the development phase of a product are recognised as intangible assets, provided they meet the following recognition requirements:

-

completion of the intangible asset is feasible so that it will be available for use or sale:

-

the company intends to complete the intangible asset and use or sell it;

-

the company has the ability to use or sell the intangible asset;

-

the intangible asset will generate probable future economic benefits. Among other things, this requires that there is a market for the output from the intangible asset or for the intangible asset itself, or, it it is to be used internally, the asset will be used in generating such benefits;

-

there are adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and

-

the expenditure attributable to the intangible asset during its development can be measured reliably.

Development costs not meeting these criteria for capitalisation are expensed as incurred. No development costs have been capitalised to date as the criteria for recognition have not been met.

Foreign exchange

Transactions in currencies other than the functional currency (foreign currency) are initially recorded at the exchange rate prevailing on the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary assets and liabilities denominated in foreign currencies are translated at the rate ruling at the date of the transaction, or, if the asset or liability is measured at fair value, the rate when that fair value was determined.

All translation differences are taken to profit or loss, except to the extent that they relate to gains or losses on non-monetary items recognised in other comprehensive income, when the related translation gain or loss is also recognised in other comprehensive income.

Leases

At inception, the company assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property.

The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.

Leases continued

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the company is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in: future lease payments arising from a change in an index or rate; the company's estimate of the amount expected to be payable under a residual value guarantee; or the company's assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.

Employee benefits

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

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 inventories or non-current 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.

Retirement benefits

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

Grants

Government grants are recognised when there is reasonable assurance that the grant conditions will be met and the grants will be received.

3.	CRITICAL ACCOUNTING 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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.

Critical judgements

Research and development tax credits

Research and development tax credits for the period ended 31 December 2024 totalling £219,022 (2023: £580,034) have been calculated using estimates and judgements consistent with the prior year detailed computation submitted to HMRC. Estimation is applied in assessing the amount of time allocated to R&D programmes and is used in concluding upon the extent to which the company's activity will qualify for the enhanced relief. Further disclosures relating to research and development tax credits are included note 2 of the financial statements.

Deferred tax assets

Deferred tax assets and liabilities require management judgment in determining the amounts to be recognised. In particular, judgment is used when assessing the extent to which deferred tax assets should be recognised with consideration given to the timing and level of future taxable income.

In previous years the company has not recognised a deferred tax asset in relation to the cumulative tax losses. Having given due consideration to whether it is pertinent to recognise a deferred tax asset the Board, following preparation of detailed short to medium term profit and loss account forecasts, has determined that there has been no substantive change in circumstances and as such has concluded that it is not appropriate to recognise a deferred tax asset at this time. The unprovided asset of £6,148,000 (2023: £5,734,000) will only be recognised once it is probable that future taxable profits will be available against which the asset can be utilised.

Capitalisation of development costs

The company's accounting policy in respect of development costs is set out above. The directors have exercised their judgement in assessing whether development costs incurred during the year meet the conditions set out in IAS 38. Having carefully considered the expenditure in the year and the current state of development of the business, the directors have concluded that no such costs should be capitalised as there is currently insufficient evidence that any asset with probably generate future economic benefits. This judgement will be reviewed on an ongoing basis.

Research and development costs totalling £1,178,000 (2023: £1,813,000) have been expensed during the year, as disclosed in note 2 to the financial statements.

4.

TURNOVER

Revenue

An analysis of the company's revenue is as follows:

2024

2023

£'000

£'000

Revenue analysed by class of business

Applications for graphene

99

184

2024

2023

£'000

£'000

Revenue analysed by geographical market

UK

80

112

Europe

2

15

Rest of World

17

57

99

184

Lease liabilities

Contract balances

Period

1.8.22

Year Ended

to

31.12.24

31.12.23

£'000

£'000

Contract liabilities

Current

Contract liabilities

59

191

Non-current

Contract liabilities

5

56

64

247

5.	EMPLOYEES AND DIRECTORS

Period

1.8.22

Year Ended

to

31.12.24

31.12.23

£'000

£'000

Wages and salaries

1,151

1,696

Social security costs

108

176

Other pension costs

62

96

1,321

1,968

The average number of employees during the year was as follows:

Period

1.8.22

Year Ended

to

31.12.24

31.12.23

Engineering, technical and production

17

19

Other

8

9

25

28

Period

1.8.22

Year Ended

to

31.12.24

31.12.23

£

£

Directors' remuneration

-

-

6.	EXCEPTIONAL ITEMS

Period

1.8.22

Year Ended

to

31.12.24

31.12.23

£'000

£'000

Exceptional items

-

95

Exceptional items in the prior year related to costs incurred as a result of the change in ownership of the company.

7.

INTEREST PAYABLE AND SIMILAR EXPENSES

Period

1.8.22

Year Ended

to

31.12.24

31.12.23

£'000

£'000

Lease interest

15

50

8.	LOSS BEFORE TAXATION

The loss before taxation is stated after charging:

Period

1.8.22

Year Ended

to

31.12.24

31.12.23

£'000

£'000

Cost of inventories recognised as expense

38

21

Depreciation - owned assets

176

310

Depreciation - assets on hire purchase contracts or finance leases

176

211

Loss on disposal of fixed assets

90

27

Intellectual property amortisation

41

-

Foreign exchange differences

12

22

Research and development costs

1,178

1,813

Government grants

(91

)

(9

)

Depreciation and amortisation charges are included within administrative expenses on the income statement.

Included within research and development cost are staff costs totalling £859,000 (2023: £1,573,000) which are also included as part of wages and salaries above and in note 5.

9.	AUDITORS' REMUNERATION

2024

2023

Fees payable to the company's auditor and its associates:

£'000

£'000

For audit services

Audit of the financial statements of the company

37

14

For other services

Other services

-

-

10.

TAXATION

Analysis of tax income

Period

1.8.22

Year Ended

to

31.12.24

31.12.23

£'000

£'000

Current tax:

Tax

(219

)

(580

)

Adjustment for prior years

147

40

Total tax income in statement of comprehensive income

(72

)

(540

)