Synaptec Ltd - Accounts to registrar (filleted) - small 23.2.5

REGISTERED NUMBER: SC472060 (Scotland)

Financial Statements for the Year Ended 31 December 2023

for

Synaptec Ltd

Page

Company Information

1

Statement of Financial Position

2

Notes to the Financial Statements

3

DIRECTORS:

P J G Orr

Dr C Booth

N A Ellis

Dr P Niewczas

D C N Pratt

D M Larssen

J McPhillimy

R W Finesy

J J C Simpson

SECRETARY:

P J G Orr

REGISTERED OFFICE:

2 Atlantic Square

31 York Street

Glasgow

G2 8AS

REGISTERED NUMBER:

SC472060 (Scotland)

AUDITORS:

Johnston Carmichael LLP

227 West George Street

Glasgow

G2 2ND

FIXED ASSETS

Tangible assets

4

160,014

151,175

Investments

5

250

250

160,264

151,425

CURRENT ASSETS

Stocks

6

419,577

304,751

Debtors

7

981,483

460,648

Cash at bank

799,214

2,429,079

2,200,274

3,194,478

CREDITORS

Amounts falling due within one year

8

536,591

216,778

NET CURRENT ASSETS

1,663,683

2,977,700

TOTAL ASSETS LESS CURRENT LIABILITIES

1,823,947

3,129,125

CREDITORS

Amounts falling due after more than one year

9

-

48,500

NET ASSETS

1,823,947

3,080,625

CAPITAL AND RESERVES

Called up share capital

10

284

284

Share premium

5,640,058

5,640,058

Share based payments reserve

11

303,001

156,814

Retained earnings

(4,119,396

)

(2,716,531

)

SHAREHOLDERS' FUNDS

1,823,947

3,080,625

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 Income Statement has not been delivered.

The financial statements were approved by the Board of Directors and authorised for issue on 2 May 2024 and were signed on its behalf by:

D C N Pratt - Director

1.	STATUTORY INFORMATION

Synaptec Ltd is a private company, limited by shares , registered in Scotland. 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.

The company has taken advantage of the exemption under section 399 of the Companies Act 2006 not to prepare consolidated accounts, on the basis that the group of which this is the parent qualifies as a small group. The financial statements present information about the company as an individual entity and not about its group.

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 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.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows:

Valuation of stock

The valuation of stock requires the directors to exercise judgement in capitalising various categories of expenditure. Costs capitalised include raw materials, direct and indirect labour, and an apportionment of overheads. Estimations around stock are reviewed frequently to ensure that they remain appropriate and that the cost of stock is not in excess of its net realisable value.

Valuation of share options

Fair values used in calculating the amount to be expensed as a share-based payment is subject to a level of uncertainty. The company is required to calculate the fair value of the equity-settled instruments granted to employees in terms of the share option schemes. These fair values are calculated by applying a valuation model, which is in itself judgmental, and takes into account certain inherently uncertain assumptions. Estimations around share-based payments are reviewed yearly to ensure that these remain appropriate within the financial statements.

Turnover

Turnover represents income from the sale of the company's products and is recognised at the fair value of the consideration received or receivable for goods provided in the normal course of business. Turnover is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Where product sales include predetermined milestones such as product testing or installation, turnover is recognised on completion of these milestones.

Tangible fixed assets

Tangible fixed assets are stated at historical cost less accumulated depreciation and any impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged to profit or loss over the estimated useful life economic lives as follows-

- Plant and machinery - Over 3 to 5 years on straight line basis

- Computer and equipment - Over 2 to 3 years on straight line basis.

Basic financial liability

Basic financial liabilities, including certain creditors and other loans, are initially recognised at transaction price. Financial liabilities classified as payable within one year are not amortized. Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Investments in subsidiaries

Investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals or impairment losses are recognised immediately in the profit and loss account.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost includes expenditure incurred in acquiring the stocks, production or conversion costs and other costs in bringing them to their existing location and condition .

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its estimated selling price less costs to complete and sell. The impairment is recognized immediately within profit and loss.

Classification of financial liabilities

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 company after deducting all of its liabilities.

Taxation

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

Current 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 statement of financial position date.

Research and Development tax credits are recognised at the fair value of the asset received or receivable when there is reasonable assurance that claims will be successful.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position 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.

Foreign currencies

Transactions in foreign currencies are translated to the company's functional currency at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated to the functional currency at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognized in profit or loss.

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.

Government grants

Government grants are recognsied at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

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

Going concern

The directors believe the company has adequate resources to continue in operational existence for the foreseeable future, being a period of at least 12 months from the signing of the financial statements.

In forming this assessment, the directors have considered existing company resources as well as trading and cash flows projections. To support the company through its scale up phase the directors have raised significant funding from an equity raise post year end. It is expected that the funding raised will be sufficient to support the business until it becomes cash generative from 2026.

Based on the factors above, the directors deem it appropriate to continue to prepare the financial statements on a going concern basis.

Share-based payments

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted. Where material, the fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.

3.	EMPLOYEES AND DIRECTORS

The average number of employees during the year was 32 (2022 - 26 ) .

4.	TANGIBLE FIXED ASSETS

Plant and

Computer

machinery

equipment

Totals

£

£

£

COST

At 1 January 2023

245,218

27,689

272,907

Additions

77,144

13,446

90,590

Disposals

(13,087

)

-

(13,087

)

At 31 December 2023

309,275

41,135

350,410

DEPRECIATION

At 1 January 2023

104,173

17,559

121,732

Charge for year

64,815

7,775

72,590

Eliminated on disposal

(3,926

)

-

(3,926

)

At 31 December 2023

165,062

25,334

190,396

NET BOOK VALUE

At 31 December 2023

144,213

15,801

160,014

At 31 December 2022

141,045

10,130

151,175

5.	FIXED ASSET INVESTMENTS

Shares in

group

undertakings

£

COST

At 1 January 2023

and 31 December 2023

250

NET BOOK VALUE

At 31 December 2023

250

At 31 December 2022

250

Synaptec Ltd is the ultimate group holding company of the Synaptec Group. Synaptec Ltd has one wholly owned subsidiary, Synaptec Instruments Ltd SC684349, registered in Scotland. Synaptec Instruments Ltd is currently dormant.

6.

STOCKS

31.12.23

31.12.22

£

£

Stocks

419,577

304,751

7.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.12.23

31.12.22

£

£

Trade debtors

651,592

107,759

Other debtors

188

3,071

Accrued income

79,530

96,512

Tax

210,311

202,692

VAT

-

34,616

Prepayments

39,862

15,998

981,483

460,648

8.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.12.23

31.12.22

£

£

Trade creditors

222,958

64,374

Social security and other taxes

35,714

30,820

VAT

25,346

-

Other creditors

12,136

6,688

Accruals and deferred income

240,437

114,896

536,591

216,778

9.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

31.12.23

31.12.22

£

£

Accruals and deferred income

-

48,500

10.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

31.12.23

31.12.22

value:

£

£

284,145

Ordinary

£0.00

1

284

284

The company operates an equity settled EMI Share Option Scheme. During the year, 3,674 (2022 - 1,869) share options were granted to employees by the company. At 31 December 2023, the total number of options outstanding under the scheme was 13,157 (2022 - 10,083) with an exercise price ranging between £12.48 and £55.46. The share options vest on their grant date but can only be exercised on certain exit events or at the discretion of the board.

11.

RESERVES

Share

based

payments

reserve

£

At 1 January 2023

156,814

Credit to equity for equity settled share based payment transactions

146,187

At 31 December 2023

303,001

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

The Report of the Auditors was unqualified.

James Hamilton (Senior Statutory Auditor)

for and on behalf of Johnston Carmichael LLP

13.	POST BALANCE SHEET EVENTS

On 1 February 2024, the directors secured investment to further expand their operations through subscription of 70,147 Ordinary shares within the company equating to around £4.3 million. The company has also negotiated a loan agreement with one of its investors which will make available a loan facility of up to £2 million to the Company when required to fund accelerated expansion.