The director presents the strategic report for the year ended 31 December 2024.
The principal activities of the Group are the development and commercialisation of innovative mental health care solutions. The solutions comprise both software and clinical services designed to be tailored to individual needs with a range of solutions from preventative to treatment, including clinically–proven digital therapeutics where clinically indicated. Customers include insurance companies, private employers, and public health systems (e.g., NHS).
The Company also acts as an investment holding company.
During the year to 31 December 2024, the Group was focused on growing sales of Koa Care 360, a flexible mental health solution providing care navigation, preventative services, clinical treatment via online access to a licensed clinician, and navigation to other health and wellbeing services. Koa Care 360 allows simple and effective triage of an individual and provides them with the most appropriate care solution.
The focus markets were the US, UK, and Australia and significant investment was made in sales and marketing resources in those territories. As a result of the above, sales within Koa Care 360 jumped 64% YoY mainly due to a significant uptake in licenses from ComPsych.
In addition to Koa Care 360, the group also expanded sales of four anxiety treatments for adults, adolescents, and children to the NHS in England with 9 NHS Trusts being signed up in the first year of the franchise.
Future Developments
By 31 December 2024 promising growth had been achieved in the UK and Australia. In early 2025, the US strategy was revised based on performance. In FY25 H2, the board and its investors decided to sell the Koa Health Group and on 19th December 2025, it was purchased by PsychPlus, a US privately held company in the mental health space.
Going Concern
The Koa Health Group is currently loss making and the parent company, PsychPlus has pledged a letter of support saying that it will continue to provide sufficient financial support to meet its financial obligations for at least 12 months from the date of signing.
Cash flows projections have been prepared and it is envisaged that Koa Health Group will reach cash break even within 12 months of signing.
The Directors have overall responsibility for the Group's approach to assessing and managing risk, with Group management being responsible for the implementation of policies on risk control and compliance with such policies. A well-established Risk Committee continued to identify risks and mitigation strategies, plus review progress with mitigation.
Financial and Commercial Risk
The Group is at a critical scale-up point and as such is reliant on sales and marketing success to grow revenues to the point where the group is able to fund its own operations rather than be reliant on external funding. This success is to some extent open to external risks such as the economic climate, and competition.
Technical and Information Security Risk
Due to the nature of the sensitive data involved in the provision of healthcare, data security is of utmost importance. In order to ensure all risks are identified against Data Processing regulations, Information Security standards and contractual requirements, an asset based approach to risk is used. The asset list is matrixed against the threats facing the business, example threats are hackers, natural disasters, power outages, technical failures, accidents and so on. The resulting matrix defines all the incidents where controls are needed.
Clinical Risk
During the period, services delivered by the Group included teletherapy as part of Koa Care 360 and access to digital therapeutics. As a result, clinical risk is considered of the utmost importance and policies and processes are in place to monitor and manage appropriately. Where teletherapy is delivered by third parties, risks to the Group are mitigated via the contracts in place with third parties together with appropriate insurance cover. A Clinical Governance Committee was established to oversee clinical KPIs such as utilisation, clinical outcomes, and patient and clinician satisfaction.
During the period, the Group worked on a number of research and development projects. This included a unified, comprehensive mental health service called Koa Care 360 based on our Koa Care triage and care navigation platform and our Foundations wellbeing application and 4 Digital Therapeutics based on content licensed from Oxford University. iCT-SAD for Social Anxiety, iCT-PTSD, OSCA for adolescent anxiety and OSI for child anxiety. In this period we achieved 13 granted patents from a portfolio of 55 open filings. We also deployed LLMs for future work on responsible AI.
In the year to 31 December 2024 Group turnover was £1,930,957 with an operating loss of £51,745,990.
The loss is a result of ongoing research and development costs in addition to the significant investment in commercial costs supporting the US market strategy.
As the company was formed in July 2023 there are no full year comparatives.
During the year, the Group recognised impairment charges of £37,115,883 (2023: £nil) following a review of the carrying value of certain assets. Impairment assessments were performed in accordance with applicable accounting standards, comparing the recoverable amount of the relevant cash-generating units to their carrying value. The review was based on updated forecasts, discount rates and market conditions prevailing at the reporting date.
On behalf of the board
The director presents his annual report and financial statements for the year ended 31 December 2024.
The results for the year are set out on page 9.
No ordinary dividends were paid. The director does not recommend payment of a further dividend.
The director who held office during the year and up to the date of signature of the financial statements was as follows:
The auditor, Moore Kingston Smith LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
This report has been prepared in accordance with the provisions applicable to medium-sized groups.
United Kingdom company law requires the director to prepare financial statements for each financial year. Under that law, the director has elected to prepare the group and parent company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law, the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the group and parent company, and of the profit or loss of the group for that period.
In preparing these financial statements, the director is required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and parent company will continue in business.
The director is responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and parent company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and parent company, and enable them to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the group and parent company, and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Disclaimer of opinion on financial statements
We were engaged to audit the financial statements of Koa Health Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the Group Statement of Comprehensive Income, the Group Balance Sheet, the Company Balance Sheet, the Group Statement of Changes in Equity, the Company Statement of Changes in Equity, the Group 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).
Basis for disclaimer of opinion on financial statements
Opinions on other matters prescribed by the Companies Act 2006
Notwithstanding our disclaimer of an opinion on the financial statements, in our opinion, based on the work undertaken in the course of our audit:
The information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
The strategic report and the director's report have been prepared in accordance with applicable legal requirements.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the group and company.
Our approach was as follows:
We obtained an understanding of the legal and regulatory requirements applicable to the group and company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation.
We obtained an understanding of how the group and company complies with these requirements by discussions with management and those charged with governance.
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
We inquired of management and those charged with governance as to any known instances of noncompliance or suspected non-compliance with laws and regulations.
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. 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.
Use of our report
This report is made solely to the parent 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 parent 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 parent company and the parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
All the activities of the group are from continuing operations.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £67,550,260 (2023 - £1,521,043 loss for the period).
Koa Health Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 55 Baker Street, London, United Kingdom, W1U 7EU. The group does not consider itself to have a principal place of business due to adopting a remote-first working policy as a group.
The group consists of Koa Health Limited and all of its subsidiaries.
The comparative period includes the period from the date of incorporation of the parent company on the 18 July 2023 to 31 December 2023, in order to align with the desired year end. Therefore the comparative figures disclosed are not directly comparable.
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.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company Koa Health Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 December 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.
Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.
If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.
Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.
The Group is currently loss making and is dependent upon the continued financial support of its ultimate parent company to meet its liabilities as they fall due and to continue its operations.
The directors have prepared detailed cash flow forecasts covering a period of at least 12 months from the date of authorisation of these financial statements. These forecasts indicate that the Group expects to achieve cash break-even during this period and, accordingly, expects to become self-sufficient in terms of its cash requirements following the achievement of cash break-even.
The ultimate parent company has provided a letter of support confirming its intention to provide the Group with sufficient financial support for at least 12 months from the date of authorisation of these financial statements. The directors have considered the financial position and resources of the parent company and its ability and intention to provide the required support.
Having considered the cash flow forecasts, the Group's funding requirements and the support available from the parent company, the directors consider that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the directors have concluded that it is appropriate to prepare these financial statements on a going concern basis.
The directors acknowledge that the Group's ability to continue as a going concern is dependent upon the continued provision of financial support from its parent company until the Group achieves cash break-even.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Turnover is recognised in relation to the provision of the Koa platform which provides digital wellbeing solutions, and recognised on a straight line basis over the length of the service provided. Where contracts cover the year end, income is deferred accordingly. Revenue from the rendering of services is measured by reference to the stage of completion of the service transaction at the end of the reporting period provided that the outcome can be reliably estimated. When the outcome cannot be reliably estimated, revenue is recognised only to the extent that it is probable the expenses recognised will be recovered.
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.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
In the parent company financial statements, investments in associates are accounted for at cost less impairment.
Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
At each reporting period end date, the group 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
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.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
Where the group has issued warrants, these entitle the holder to subscribe for a fixed number of preferred shares at a fixed exercise price. As the warrants require settlement through the issue of a fixed number of the parent company's own equity instruments for a fixed amount of cash, they are classified as equity in accordance with FRS 102 Sections 11 and 12. No asset or liability is recognised on issue, and the warrants are not subsequently remeasured.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
Other operating income
Other operating income is recognised from the leasing of the Koa IP to third party investors for cash advances secured against the Research and Development tax credit available from the Spanish Government for qualifying expenditure in relation to the Koa IP. Income from this stream is recognised when the entity responsible, Koa Health Digital Solutions SLU, has complied with the necessary regulation to reach benchmarks as defined within the contract. Until this point the amount is recognised as deferred income once invoiced. This balance is disclosed as operating lease commitments, as a lessor.
In the application of the group’s accounting policies, the director is 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.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Capitalisation of Trademarks, Patents, and IP work
Costs incurred in relation to the development of the Koa IP are capitalised to the extent that they meet the criteria for capitalisation under FRS 102. This is defined as the development phase, with the development phase being defined as the project being able to demonstrate the following conditions;
- Technical feasibility of completing the intangible asset so that it will be available for use or sale.
- The intention to complete the asset for use or sale.
- The ability to use or sell the asset
- How the asset will generate future economic benefits and the existence of the market for the output of such an asset
- The availability of adequate technical, financial and other resources to complete the development
- The ability to reliably measure the expenditure attributable to the asset during development
The entity will capitalise costs that meet the above criteria.
Impairment reviews are performed annually, or more frequently where indicators of impairment arise, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly.
For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.
For impairment testing of goodwill, the goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the companies are assigned to those units.
As at 31 December 2024, management used their best estimate of consideration arising from the post year end change in ownership to assess the carrying value of assets within the company and the group.
Subsequent to the reporting date, the group completed the sale of the business. The consideration received under this arm's length transaction was considered by management to provide highly relevant evidence of the recoverable value of the business at 31 December 2024. In estimating recoverable amount at the reporting date, management used the subsequent sale transaction together with adjustments considered necessary to reflect conditions existing at 31 December 2024.
The determination of the consideration involves significant judgement, as aspects of the calculation are dependent on assumptions about future performance. Management has adopted a prudent approach in assessing the contingent consideration, identifying those elements that are considered probable and excluding assumptions subject to a high level of estimation uncertainty.
As a result of this review, impairments as per note 11 have been recognised. At a group level, impairments have been recognised in respect of both classes of intangible fixed assets, being goodwill and patents & licenses. At a company level, impairments have been recognised in respect of fixed asset investments and amounts due from group undertakings.
The impairments have been determined based on management’s best estimate of how each component of the consideration reflects the recoverable amount of the related assets.
Future performance may differ from management’s forecasts. If the actual performance of the Group is lower than anticipated, additional impairment charges may be required.
In assessing the impairments recognised in the year ended 31 December 2024 management have made their best estimate of when these impairments arose. The view taken is that these impairments relate to the year ended 31 December 2024 in their entirety and were not indicative of impairments required at the previous balance sheet date.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2023 - 1).
The actual charge/(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:
The group has UK tax losses of £8,056,809 (2023: £5,010,038) and foreign tax losses of £22,113,971 (2023: £10,886,961) available to set against future taxable profits. A deferred tax asset has not been recognised in the Statement of Financial Position due to uncertainty of the timing of future taxable profits.
There are also unused tax losses in overseas subsidiaries for which no deferred tax asset has been recognised as there is insufficient evidence that future taxable profits will be available against which the losses can be utilised.
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:
The impairment losses in respect of goodwill and intangible assets are recognised in administration expenses in the profit and loss account.
More information on impairment movements in the year is given in note 11.
Details of the company's subsidiaries at 31 December 2024 are as follows:
The principal activities of the subsidiary companies was the same as the parent company, the provision of a mental health and wellbeing platform.
Included within accruals in the prior year was a provision for settlement between Koa Digital Solutions SLU and a third party for a total cost of £1,355,619 relating to agreement held with the group under the previous group structure. The full amount was settled during the current year and no further costs require providing for.
The loan note instruments are unsecured with an implicit interest rate of 5%.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
Rights and particulars of classes of shares are shown as below:
Preferred Shares
Each share is entitled to one vote in any circumstance
Each share is entitled pari passu to dividend payments or any other distribution
Each share is entitled pari passu to participate in a distribution arising from a winding up of the company
Each share is non-redeemable
On the 23 January 2024, 129,780 preferred shares were issued at a par value of £0.01 each for consideration of £1 each.
On the 17 September 2024, 311,637 preferred shares were issued at a par value of £0.01 each for consideration of £1 each.
On the 8 July 2024, 6,692,784 preferred shares were issued at a par value of £0.01 each for consideration of £0.01 each and 2,802,587 preferred shares were issued at a par value of £0.01 each for consideration of £1 each.
On the 24 December 2024, 63 preferred shares were issued at a par value of £0.01 each for consideration of £0.01 each and 673,695 preferred shares were issued at a par value of £0.01 each for consideration of £1 each.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
As lessor
Group
No related party transactions took place during the year other than those already disclosed in the financial statements and the following transactions.
During the year Koa Health Digital Solutions Limited incurred costs in respect of recharged time for administrative and legal support totalling £13,031 (2023: £nil) in respect of Ancora Finance LLP ("Ancora"). During the year Ancora held a substantial shareholding in Koa Health Limited and had an elected representative director of Koa Health Limited on the board.
Koa Health Digital Solutions SLU entered into a commercial agreement with DigitalEjis Limited (a company for which a director of Koa Health Limited holds significant interest in). Koa Health Digital Solutions SLU provided mental health services to DigitalEjis for which it received consideration of £25,392 (2023: £nil).
Company
No other related party transactions took place during the year other than those already disclosed in the financial statements. The entity has taken the exemption from disclosing related party transactions with companies under the same control in a wholly owned group in accordance with FRS 102 - Section 33 "Related Party Disclosures."