Nova Pangaea Technologies (UK) Limited - Accounts to registrar (filleted) - small 23.1.2

REGISTERED NUMBER: 08881891 (England and Wales)

Financial Statements

for the Year Ended 31 December 2022

for

Nova Pangaea Technologies (UK) Limited

Page

Company Information

1

Balance Sheet

2

Notes to the Financial Statements

3

DIRECTORS:

S L Ellerby

W L Irvin-Braben

P J McNeill

D J Pitt-Watson

D W Morgan

REGISTERED OFFICE:

Lealholme Building

Wilton International

MIDDLESBROUGH

TS10 4RG

REGISTERED NUMBER:

08881891 (England and Wales)

SENIOR STATUTORY AUDITOR:

Kevin Shotton BA BFP FCA

AUDITORS:

Clive Owen LLP

Chartered Accountants

& Statutory Auditors

140 Coniscliffe Road

Darlington

County Durham

DL3 7RT

FIXED ASSETS

Tangible assets

4

48,206

-

CURRENT ASSETS

Debtors

5

31,520

333,416

Cash at bank

849,745

102,277

881,265

435,693

CREDITORS

Amounts falling due within one year

6

12,057,576

9,363,374

NET CURRENT LIABILITIES

(11,176,311

)

(8,927,681

)

TOTAL ASSETS LESS CURRENT LIABILITIES

(11,128,105

)

(8,927,681

)

CAPITAL AND RESERVES

Called up share capital

8

1

1

Share options

115,398

-

Retained earnings

(11,243,504

)

(8,927,682

)

SHAREHOLDERS' FUNDS

(11,128,105

)

(8,927,681

)

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

In accordance with Section 444 of the Companies Act 2006, the Statement of Income and Retained Earnings has not been delivered.

The financial statements were approved by the Board of Directors and authorised for issue on 6 July 2023 and were signed on its behalf by:

D W Morgan - Director

1.	STATUTORY INFORMATION

Nova Pangaea Technologies (UK) Limited 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.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" including the provisions of Section 1A "Small Entities" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

There were no material departures from that standard.

The principal accounting policies adopted in the preparation of the financial statements are set out below and have remained unchanged from the previous year, and also have been consistently applied within the same accounts.

Going concern

The directors consider it appropriate to prepare the financial statements on the going concern basis. The company meets its day to day working capital requirements through continued support from the ultimate parent company and the ultimate investors in the group and by way of various grant funding.

The company is developing advanced biofuel, biochemical and biopolimer technology and based on the directors' market knowledge, the directors are confident that this technology can be successfully developed and commercialised.

The directors have prepared projected cashflow information for the twelve months following the date of approval of these financial statements. In October 2022 the group was successful in raising £5.25m of additional equity investment. Following this investment the directors are confident that the group will have sufficient available cash reserves for at least twelve months from the date of sign off of these financial statements to enable it to continue the commercialisation of its product development.

The ultimate parent company Nova Pangaea (Holdings) Limited has undertaken to continue to provide sufficient financial support following investment by shareholders and have no intention to request repayment of the creditor balance in the 12 months following the date of approval of the financial statements.

On the basis of the above the directors believe it is appropriate to continue to adopt the going concern basis in the preparation of the financial statements. The financial statements therefore do not include any adjustments that would result from the going concern basis no longer being appropriate.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 Section 1A, not to disclose transactions with related parties that are deemed to have been transacted at market rates.

Turnover

Turnover is measured at the fair value of consideration received or receivable, excluding discounts, rebates, valued added tax and other sales taxes.

Income recognition

Income is recognised in line with customer agreements when the services have been provided to the customer.

Tangible fixed assets

Tangible fixed assets are fully impaired in the year in which they are purchased.

Financial instruments

Basic financial instruments are recognised at amortised cost with changes recognised in profit or loss.

Taxation

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

Current or deferred taxation assets and liabilities are not discounted.

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

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

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.

Research and development

Expenditure on research and development is written off in the year in which it is incurred.

Leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

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

Share option

Employees of the company receive remuneration in the form of share-based payments from the parent company, whereby employees render services as consideration for equity instruments.

The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using the Binomial model.

That cost would be recognised as wages costs, together with a corresponding increase in equity, over the period in which the service and, where applicable, the performance conditions are fulfilled (the vesting period). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the parent company's best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the statement of profit or loss for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the parent company's best estimate of the number of equity instruments that will ultimately vest.

3.	EMPLOYEES AND DIRECTORS

The average number of employees during the year was 20 (2021 - 16 ) .

4.	TANGIBLE FIXED ASSETS

Plant and

machinery

£

COST

Additions

48,682

At 31 December 2022

48,682

DEPRECIATION

Charge for year

476

At 31 December 2022

476

NET BOOK VALUE

At 31 December 2022

48,206

5.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2022

2021

£

£

Other debtors

1,255

309,965

Prepayments

30,265

23,451

31,520

333,416

6.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2022

2021

£

£

Trade creditors

299,322

208,034

Amounts owed to group undertakings

10,972,536

9,108,437

Taxation and social security

151,154

28,815

Other creditors

15,855

5,613

Accruals

618,709

12,475

12,057,576

9,363,374

7.	LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:

2022

2021

£

£

Within one year

47,610

47,610

Between one and five years

190,440

190,440

In more than five years

33,708

83,318

271,758

321,368

8.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

2022

2021

value:

£

£

1

Ordinary

£1

1

1

9.	DISCLOSURE UNDER SECTION 444(5B) OF THE COMPANIES ACT 2006

The Report of the Auditors was unqualified.

Kevin Shotton BA BFP FCA (Senior Statutory Auditor)

for and on behalf of Clive Owen LLP

10.	IMMEDIATE CONTROLLING PARTY

The immediate parent company is Nova Pangaea (Holdings) Limited. The registered office is Leaholme Building, Wilton International, Middlesbrough, Teesside, TS10 4RG.

11.	SHARE OPTION

Share options were issued by the parent company to employees of Nova Pangaea Technologies (UK) Limited during the period. These options are only exercisable on a sale of the business or any other transactions on changes in ownership. In addition, the employee must have remained in employment or been made redundant / retired 12 months prior to the transaction date. The options will expire on the 10th anniversary of the grant date. Share options are to be settled through equity.

There is no cash-based alternative.

The charge is considered material to the financial statement and as such appropriate provisions have been made.

Movements during the year

The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, share options during the year:

2022

2022

Number

WAEP

£

Balance at 1 January 2022

Granted during the period

104,000

0.27

Forfeited during the period

Exercise during the period

Expired during the period

Outstanding at 31 December 2022

104,000

0.27

Exercisable at 31 December 2022

-

-

Binomial model attributes a fair value to the options itself rather than to the services received. At the 31 December 2022 the fair value of the above share options was determined to be £115,398. This is considered material to the financial statements and as such an adjustment has been included to increase the employee costs and equity reserves.