| Covesion Limited |
| Notes to the Accounts |
| for the year ended 31 December 2025 |
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| 1 |
Accounting policies |
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Basis of preparation |
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The accounts have been prepared under the historical cost convention and in accordance with FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland (as applied to small entities by section 1A of the standard). |
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Turnover |
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Turnover is measured at the fair value of the consideration received or receivable, net of discounts and value added taxes. Turnover includes revenue earned from the sale of goods and from the rendering of services. Turnover from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer. Turnover from the rendering of services is recognised by reference to the stage of completion of the contract. The stage of completion of a contract is measured by comparing the costs incurred for work performed to date to the total estimated contract costs. |
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Going Concern |
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The financial statements have been prepared on a going concern basis. The Directors have prepared forecasts for a period greater than one year from the date of signature of the financial statements and have a reasonable expectation that the company has adequate resources to continue in operation for the foreseeable future. |
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Revenue recognition |
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The turnover shown in the profit and loss account represents amounts invoiced during the year, exclusive of Value Added Tax. |
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Goodwill |
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Goodwill arises on business acquisitions and represents the excess of the cost of the acquisition over the company's interest in the net amount of the identifiable assets, liabilities and contingent liabilities of the acquired business. |
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Goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. It is amortised on a straight-line basis over its useful life. Where a reliable estimate of the useful life of goodwill or intangible assets cannot be made, the life is presumed not to exceed ten years. |
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Amortisation |
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Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows: |
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Goodwill and other intangibles |
- 20% straight line |
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Leasehold property |
- over the life of the lease |
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If there is an indication that there has been a significant change in amortisation rate, useful life, or the residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates. |
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Research and development |
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Research expenditure is written off in the period in which it is incurred. |
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Tangible fixed assets |
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Tangible fixed assets are measured at cost less accumulative depreciation and any accumulative impairment losses. Depreciation is provided on all tangible fixed assets, other than freehold land, at rates calculated to write off the cost, less estimated residual value, of each asset evenly over its expected useful life, as follows: |
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Plant and machinery |
15% straight line |
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Fixtures and fittings |
15% straight line/over the life of the lease |
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Equipment |
33% straight line |
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Stocks |
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Stocks are measured at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. |
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Debtors |
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Short term debtors are measured at transaction price (which is usually the invoice price), less any impairment losses for bad and doubtful debts. Loans and other financial assets are initially recognised at transaction price including any transaction costs and subsequently measured at amortised cost determined using the effective interest method, less any impairment losses for bad and doubtful debts. |
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Creditors |
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Short term creditors are measured at transaction price (which is usually the invoice price). Loans and other financial liabilities are initially recognised at transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method. |
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Taxation |
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A current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. A current tax asset is recognised in respect of a tax loss that can be carried back to recover tax paid in a previous period. Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used. Current and deferred tax assets and liabilities are not discounted. |
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Provisions |
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Provisions for the expected costs of maintenance under guarantees are charged against profits when products have been invoiced. The effect of the time value of money is not material and therefore the provisions are not discounted. |
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Foreign currency translation |
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Transactions in foreign currencies are initially recognised at the rate of exchange ruling at the date of the transaction. At the end of each reporting period foreign currency monetary items are translated at the closing rate of exchange. Non-monetary items that are measured at historical cost are translated at the rate ruling at the date of the transaction. All differences are charged to profit or loss. |
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Leased assets |
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Operating lease payments are recognised as an expense on a straight line basis over the lease term. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term on a straight line basis. |
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Government grants |
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Government grants are recognised at the fair value of the asset received or receivable. Grants are not recognised until there is reasonable assurance that the company will comply with the conditions attaching to them and the grants will be received. |
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Government grants are recognised using the accrual model. Under the accrual model, government grants relating to revenue are recognised on a systematic basis over the periods in which the company recognises the related costs for which the grant is intended to compensate. |
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Pensions |
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Contributions to defined contribution plans are expensed in the period to which they relate. |
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| 2 |
Profit before taxation |
2025 |
|
2024 |
| £ |
£ |
|
Profit before taxation is stated after charging: |
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Depreciation of tangible assets |
39,274 |
|
33,586 |
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Amortisation of intangible assets |
9,935 |
|
9,935 |
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| 3 |
Employees |
2025 |
|
2024 |
| Number |
Number |
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Average number of persons employed by the company |
33 |
|
31 |
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| 4 |
Intangible fixed assets |
£ |
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Goodwill and other intangibles: |
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Cost |
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At 1 January 2025 |
284,046 |
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At 31 December 2025 |
284,046 |
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Amortisation |
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At 1 January 2025 |
242,449 |
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Provided during the year |
9,935 |
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At 31 December 2025 |
252,384 |
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Net book value |
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At 31 December 2025 |
31,662 |
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At 31 December 2024 |
41,597 |
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Intangible assets comprise |
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Patents |
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Goodwill |
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Leasehold property |
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Total |
| £ |
£ |
£ |
£ |
|
Cost |
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At 1 January 2025 |
200,909 |
|
53,137 |
|
30,000 |
|
284,046 |
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At 31 December 2025 |
200,909 |
|
53,137 |
|
30,000 |
|
284,046 |
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Amortisation |
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At 1 January 2025 |
195,576 |
|
38,132 |
|
8,741 |
|
242,449 |
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Provided during the year |
2,000 |
|
5,627 |
|
2,308 |
|
9,935 |
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At 31 December 2025 |
197,576 |
|
43,759 |
|
11,049 |
|
252,384 |
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Net book value |
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At 31 December 2025 |
3,333 |
|
9,378 |
|
18,951 |
|
31,662 |
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At 31 December 2024 |
5,333 |
|
15,005 |
|
21,259 |
|
41,597 |
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| 5 |
Tangible fixed assets |
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Fixtures and fittings |
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Plant and machinery etc |
|
Equipment |
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Total |
| £ |
£ |
£ |
£ |
|
Cost |
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At 1 January 2025 |
14,854 |
|
238,325 |
|
48,540 |
|
301,719 |
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Additions |
88,820 |
|
110,843 |
|
6,003 |
|
205,666 |
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Disposals |
- |
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- |
|
(7,160) |
|
(7,160) |
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At 31 December 2025 |
103,674 |
|
349,168 |
|
47,383 |
|
500,225 |
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Depreciation |
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At 1 January 2025 |
5,906 |
|
147,791 |
|
30,527 |
|
184,224 |
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Charge for the year |
2,830 |
|
27,793 |
|
8,651 |
|
39,274 |
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At 31 December 2025 |
8,736 |
|
175,584 |
|
39,178 |
|
223,498 |
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Net book value |
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At 31 December 2025 |
94,938 |
|
173,584 |
|
8,205 |
|
276,727 |
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At 31 December 2024 |
8,948 |
|
90,534 |
|
18,013 |
|
117,495 |
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| 6 |
Debtors |
2025 |
|
2024 |
| £ |
£ |
|
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Trade debtors |
678,923 |
|
392,699 |
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Other debtors |
220,651 |
|
154,014 |
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|
899,574 |
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546,713 |
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| 7 |
Creditors: amounts falling due within one year |
2025 |
|
2024 |
| £ |
£ |
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Bank loans and overdrafts |
- |
|
60,000 |
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Trade creditors |
281,385 |
|
175,624 |
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Amounts owed to group undertakings and undertakings in which the company has a participating interest |
|
125,852 |
|
- |
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Taxation and social security costs |
50,133 |
|
72,451 |
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Other creditors |
412,946 |
|
223,555 |
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|
870,316 |
|
531,630 |
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| 8 |
Creditors: amounts falling due after one year |
2025 |
|
2024 |
| £ |
£ |
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Bank loans |
- |
|
50,000 |
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| 9 |
Loans |
2025 |
|
2024 |
| £ |
£ |
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Creditors include: |
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Secured bank loans |
- |
|
110,000 |
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The company's bank loan was repayable over 60 months and bore an interest rate of 3.99% over base rate and was secured by a fixed and floating charge over all assets. At 31 December 2025 a total of £Nil (2024: £110,000) remained outstanding of which £Nil (2024: £50,000) fell due for repayment within one year but was repaid early during the current year. |
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| 10 |
Provisions for liabilities and charges |
Dilapidation provision |
Deferred tax |
Total |
| £ |
£ |
£ |
|
|
At 1 January 2025 |
30,000 |
|
- |
|
30,000 |
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Movement in the year |
17,500 |
|
48,285 |
|
65,785 |
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At 31 December 2025 |
47,500 |
|
48,285 |
|
95,785 |
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Deferred tax arises in connection with accelerated capital allowances. |
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| 11 |
Share based payments |
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Equity settled |
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On 23 June 2025, all share based options were replaced by options in the new parent company. At 31 December 2025, the following share options were outstanding in respect of EMI and unapproved share option plans: |
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EMI Options |
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288,415 share options were granted with an exercise price of £0.01 per share. All of these options are fully vested. |
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Unapproved options |
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133,114 share options were granted with an exercise price of £0.01 per share. All of these options are fully vested. |
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| 12 |
Capital contribution reserve |
2025 |
|
2024 |
| £ |
£ |
|
|
At 1 January 2025 |
527,410 |
|
527,410 |
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At 31 December 2025 |
527,410 |
|
527,410 |
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| 13 |
Other financial commitments |
2025 |
|
2024 |
| £ |
£ |
|
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Total future minimum payments under non-cancellable operating leases |
|
665,265 |
|
45,485 |
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| 14 |
Controlling party |
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The ultimate controlling party is Hawthorn Photonics Inc, a company registered in the United States of America which acquired the entire share capital of the company on 23 June 2025. |
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| 15 |
Other information |
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Covesion Limited is a private company limited by shares and incorporated in England. Its registered office is: |
|
Unit F3, Adanac Park |
|
Adanac Drive, Nursling |
|
Southampton |
|
Hampshire |
|
SO16 0BT |