Warwick Audio Technologies Limited - Limited company accounts 17.3
Warwick Audio Technologies Limited - Limited company accounts 17.3
REGISTERED NUMBER: |
| WARWICK AUDIO TECHNOLOGIES LIMITED |
| REPORT OF THE DIRECTORS AND |
| UNAUDITED FINANCIAL STATEMENTS |
| FOR THE YEAR ENDED 30TH SEPTEMBER 2017 |
WARWICK AUDIO TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04451674) |
CONTENTS OF THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 30TH SEPTEMBER 2017 |
Page |
Company Information | 1 |
Report of the Directors | 2 | to | 3 |
Income Statement | 4 |
Statement of Financial Position | 5 | to | 6 |
Statement of Changes in Equity | 7 |
Notes to the Financial Statements | 8 | to | 13 |
WARWICK AUDIO TECHNOLOGIES LIMITED |
COMPANY INFORMATION |
FOR THE YEAR ENDED 30TH SEPTEMBER 2017 |
DIRECTORS: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
ACCOUNTANTS: |
The Gables |
Bishop Meadow Road |
Loughborough |
Leicestershire |
LE11 5RE |
BANKERS: |
150 Parade |
Leamington Spa |
Warwickshire |
CV32 4AG |
WARWICK AUDIO TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04451674) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 30TH SEPTEMBER 2017 |
The directors present their report with the financial statements of the company for the year ended 30th September 2017. |
PRINCIPAL ACTIVITY |
| The principal activity of the company in the year under review was that of the development and commercialisation of |
| flat, flexible loudspeakers. |
REVIEW OF BUSINESS |
The Company continues to successfully pursue its early stage strategy with the ultimate aim of delivering outstanding |
HiResTM Audio experiences to the widest possible audience. It is seeking to do this through the development and |
delivery of High Precision Electrostatic Laminate (HPEL) transducers a new and patented type of lightweight, thin film |
Electrostatic planar speaker delivering ultra high quality audio. |
The Company is targeting high growth markets where customer needs and the economics of the market are matched |
to the characteristics of the technology. In line with this strategy, the Company identified its first target segment as |
the personal audio market, and specifically the audiophile headphone segment. During 2017 it developed and |
launched a high end audiophile headphone product, the Sonoma Model One (M1) Headphone system, to worldwide |
critical acclaim. During the 2017 financial year the M1 received two initial awards including a prestigious "Wall of |
Fame" award from renowned reviewer Tyll Hertsen of Innerfidelity. Post the year end, the product has received a |
further four awards, including ToneAudio's Personal Audio Product of the Year in 2017, a HIFi+ 2017 Product of the |
Year award, and a 2018 Editors Choice Award from The Absolute Sound magazine. Amongst other outstanding |
comments, ToneAudio called the M1 "Simply the best" set of headphones that are out there. |
On the back of this reception, the Company has continued to develop its global network of distributors and dealers |
through its subsidiary Sonoma Acoustic Ltd (SAL). As of January 2018, SAL had over forty dealers in 15 countries. |
Revenues from this network are continuing to scale. SAL is now focused on building out this network to over 100, |
investing in developing the presence of the Sonoma brand to drive sales, and in bringing new Sonoma Headphone |
products to market. |
In automotive, the Company has made material progress since the launch of the M1 post the end of the financial year. |
Having laid the groundwork for re-entry to the automotive market from the validation of the technology through the |
M1, the Company has entered into joint projects with several Tier1 automotive suppliers and OEMs. These projects |
proceed under NDA. Further announcements will be made during the course of the current financial year. |
Between July 2016 and January 2017, Warwick Audio Technologies successfully completed a structured funding |
round, including a significant amount from new investors, having delivered key commercial objectives set by investors |
as a condition for the completion of the round. |
In August 2017, the Company completed a further £3.2m funding round backed by existing and new investors. This |
investment is to support the next phase of the Company's strategy the creation of new headphone products and the |
exploitation of opportunities in the automotive industry. |
Post year end, the Company has also completed a move to MIRA Technology Park, Nuneaton, Europe's largest |
independent automotive research facility. It has also completed the recruitment of a new Finance Director. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1st October 2016 to the date of this |
report. |
WARWICK AUDIO TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04451674) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 30TH SEPTEMBER 2017 |
DIRECTORS - continued |
Other changes in directors holding office are as follows: |
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: |
WARWICK AUDIO TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04451674) |
INCOME STATEMENT |
FOR THE YEAR ENDED 30TH SEPTEMBER 2017 |
2017 | 2016 |
Notes | £ | £ |
REVENUE |
Cost of sales |
GROSS (LOSS)/PROFIT | ( | ) |
Administrative expenses |
OPERATING LOSS | ( | ) | ( | ) |
Interest receivable and similar income |
(1,234,095 | ) | (840,828 | ) |
Interest payable and similar expenses |
LOSS BEFORE TAXATION | ( | ) | ( | ) |
Tax on loss | ( | ) | ( | ) |
LOSS FOR THE FINANCIAL YEAR | ( | ) | ( | ) |
WARWICK AUDIO TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04451674) |
STATEMENT OF FINANCIAL POSITION |
30TH SEPTEMBER 2017 |
2017 | 2016 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 4 |
Property, plant and equipment | 5 |
Investments | 6 |
CURRENT ASSETS |
Inventories |
Debtors | 7 |
Cash at bank |
CREDITORS |
Amounts falling due within one year | 8 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CAPITAL AND RESERVES |
Called up share capital | 10 |
Share premium |
Retained earnings | ( | ) | ( | ) |
| The directors acknowledge their responsibilities for: |
| (a) | ensuring that the company keeps accounting records which comply with Sections 386 and 387 of the Companies Act 2006 and |
| (b) | preparing financial statements which give a true and fair view of the state of affairs of the company as at the end of each financial year and of its profit or loss for each financial year in accordance with the requirements of Sections 394 and 395 and which otherwise comply with the requirements of the Companies Act 2006 relating to financial statements, so far as applicable to the company. |
WARWICK AUDIO TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04451674) |
STATEMENT OF FINANCIAL POSITION - continued |
30TH SEPTEMBER 2017 |
The financial statements were approved by the Board of Directors on by: |
WARWICK AUDIO TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04451674) |
STATEMENT OF CHANGES IN EQUITY |
FOR THE YEAR ENDED 30TH SEPTEMBER 2017 |
Called up |
share | Retained | Share | Total |
capital | earnings | premium | equity |
£ | £ | £ | £ |
Balance at 1st October 2015 | ( | ) | ( | ) |
Changes in equity |
Issue of share capital | 61,051 | - |
Total comprehensive income | - | ( | ) | - | ( | ) |
Balance at 30th September 2016 | ( | ) |
Changes in equity |
Issue of share capital | - |
Total comprehensive income | - | ( | ) | - | ( | ) |
Balance at 30th September 2017 | ( | ) |
WARWICK AUDIO TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04451674) |
NOTES TO THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 30TH SEPTEMBER 2017 |
1. | GENERAL INFORMATION |
Warwick Audio Technologies Limited is a Private Limited Company, registered in England and Wales. The |
company's registered number is 04451674. |
The financial statements are presented in sterling which is the functional currency of the company and |
rounded to the nearest £. |
The significant accounting policies applied in the preparation of these financial statements are set out below. |
These policies have been consistently applied to all years presented unless otherwise stated. |
The financial statements cover the individual entity. |
Sonoma Acoustics Limited is a subsidiary of the company, however the company is exempt by virtue of size |
from the requirement to prepare group accounts. |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
| The financial statements for the year ended 30 September 2017 are the first financial statements of Warwick |
| Audio Technologies Limited prepared in accordance with FRS102. There were no adjustments required on |
| transition to FRS102. |
Related party exemption |
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The |
Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party |
transactions with wholly owned subsidiaries within the group. |
Revenue |
| Revenue is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, |
| value added tax and other sales taxes. |
Intangible assets |
| Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost |
| less any accumulated amortisation and any accumulated impairment losses. |
Property, plant and equipment |
| Property, plant and equipment is stated at cost less depreciation. Depreciation is provided at rates calculated |
| to write off the cost less estimated residual value of each asset over its expected useful life, as follows: |
| Office construction | Straight line over 24 months |
| Tooling | Straight line over 36 months |
| Other assets | Straight line over 36 months |
Investments in subsidiaries |
Investments in subsidiary undertakings are recognised at cost less impairment. |
WARWICK AUDIO TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04451674) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 30TH SEPTEMBER 2017 |
2. | ACCOUNTING POLICIES - continued |
Inventories |
| Inventories are valued at the lower of cost and fair value less costs to complete and sell, after making due |
| allowance for obsolete and slow moving items. |
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. |
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 |
| Research expenditure is written off to the income statement in the year in which it is incurred. Development |
| expenditure is written off in the same way unless the directors are satisfied as to the technical, commercial and |
| financial viability of individual projects. In this situation, the expenditure is deferred and amortised over the |
| period during which the company is expected to benefit. |
Foreign currencies |
| Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the |
| statement of financial position date. Transactions in foreign currencies are translated into sterling at the rate |
| of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the |
| operating result. |
The cost and corresponding increase in equity in respect of equity-settled share-based payment transactions |
with employees are measured by reference to the fair value of equity instruments issued at the date of grant. |
Amounts are expensed on a straight line basis over the vesting period based on the estimate of shares that will |
eventually vest and adjusted for the effect of non market-based vesting conditions. The cost and fair value of |
the liability incurred in respect of cash-settled transactions is measured using an appropriate option pricing |
model with changes in fair value recognised in profit or loss for the period. |
WARWICK AUDIO TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04451674) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 30TH SEPTEMBER 2017 |
2. | ACCOUNTING POLICIES - continued |
Going concern |
| The Company has significant retained losses which has highlighted the need to consider the appropriateness of |
| preparing the financial statements on a going concern basis. |
| The Company continues to successfully pursue its early stage strategy with the ultimate aim of delivering |
| outstanding HiResTM Audio experiences to the widest possible audience. It is seeking to do this through the |
| development and delivery of High Precision Electrostatic Laminate (HPEL) transducers a new and patented |
| type of lightweight, thin film Electrostatic planar speaker delivering ultra high quality audio. |
| The Company is targeting high growth markets where customer needs and the economics of the market are |
| matched to the characteristics of the technology. In line with this strategy, the Company identified its first |
| target segment as the personal audio market, and specifically the audiophile headphone segment. During 2017 |
| it developed and launched a high end audiophile headphone product, the Sonoma Model One (M1) |
| Headphone system, to worldwide critical acclaim. During the 2017 financial year the M1 received two initial |
| awards including a prestigious "Wall of Fame" award from renowned reviewer Tyll Hertsen of Innerfidelity. |
| Post the year end, the product has received a further four awards, including ToneAudio's Personal Audio |
| Product of the Year in 2017, a HIFi+ 2017 Product of the Year award, and a 2018 Editors Choice Award from |
| The Absolute Sound magazine. Amongst other outstanding comments, ToneAudio called the M1 "Simply the |
| best" set of headphones that are out there. |
| On the back of this reception, the Company has continued to develop its global network of distributors and |
| dealers through its subsidiary Sonoma Acoustic Ltd (SAL). As of January 2018, SAL had over forty dealers in 15 |
| countries. Revenues from this network are continuing to scale. SAL is now focused on building out this network |
| to over 100, investing in developing the presence of the Sonoma brand to drive sales, and in bringing new |
| Sonoma Headphone products to market. |
| In automotive, the Company has made material progress since the launch of the M1 post the end of the |
| financial year. Having laid the groundwork for re-entry to the automotive market from the validation of the |
| technology through the M1, the Company has entered into joint projects with several Tier1 automotive |
| suppliers and OEMs. These projects proceed under NDA. Further announcements will be made during the |
| course of the current financial year. |
| Between July 2016 and January 2017, Warwick Audio Technologies successfully completed a structured |
| funding round, including a significant amount from new investors, having delivered key commercial objectives |
| set by investors as a condition for the completion of the round. |
| In August 2017, the Company completed a further £3.2m funding round backed by existing and new investors. |
| This investment is to support the next phase of the Company's strategy the creation of new headphone |
| products and the exploitation of opportunities in the automotive industry. Continued support of the business |
| and of management's strategy by the shareholders, coupled with commercial progress made to date, gives the |
| directors confidence that funding to continue the business through the coming twelve months will be |
| forthcoming. |
| The directors considered a period in excess of 12 months from the date of approval of the financial statements |
| when making this assessment and consider that in preparing the financial statements, they have taken into |
| account all information that could reasonably be expected to be available. |
| On this basis they consider that it is appropriate to prepare the financial statements on the going concern |
| basis. |
3. | EMPLOYEES AND DIRECTORS |
The average monthly number of employees during the year was |
WARWICK AUDIO TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04451674) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 30TH SEPTEMBER 2017 |
4. | INTANGIBLE FIXED ASSETS |
Other |
intangible |
assets |
£ |
COST |
At 1st October 2016 |
Additions |
At 30th September 2017 |
AMORTISATION |
Charge for year |
At 30th September 2017 |
NET BOOK VALUE |
At 30th September 2017 |
At 30th September 2016 |
5. | PROPERTY, PLANT AND EQUIPMENT |
Plant and |
machinery |
etc |
£ |
COST |
At 1st October 2016 |
Additions |
At 30th September 2017 |
DEPRECIATION |
At 1st October 2016 |
Charge for year |
At 30th September 2017 |
NET BOOK VALUE |
At 30th September 2017 |
At 30th September 2016 |
WARWICK AUDIO TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04451674) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 30TH SEPTEMBER 2017 |
6. | FIXED ASSET INVESTMENTS |
Shares in |
group |
undertakings |
£ |
COST |
Additions |
At 30th September 2017 |
NET BOOK VALUE |
At 30th September 2017 |
7. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2017 | 2016 |
£ | £ |
Trade debtors |
Amounts owed by group undertakings |
Other debtors |
8. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2017 | 2016 |
£ | £ |
Trade creditors |
Taxation and social security |
Other creditors |
9. | SECURED DEBTS |
The following secured debts are included within creditors: |
2017 | 2016 |
£ | £ |
Loan Notes | - |
| The loan note was secured with a fixed and floating charge over the assets of the company. |
| There was debentures issued in the year. These were fully repaid within the year. Satisfaction of the respective |
| charges were filed with Companies House on 16th January 2018. |
WARWICK AUDIO TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04451674) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 30TH SEPTEMBER 2017 |
10. | CALLED UP SHARE CAPITAL |
2017 | 2016 |
£ | £ |
Allotted, called up and fully paid |
749,815,286 Ordinary of £0.0001 each | 74,981 | 5,072 |
A Ordinary of £0.0001 each | - | 8,858 |
B Ordinary of £0.0001 each | - | 59,036 |
244,443,343 C Ordinary of £0.001 each | 244,443 | - |
597,756,169 D Ordinary of £0.0001 each | 59,776 | - |
379,200 | 74,981 |
During the year the company issued nil (2016: 590,358,874) Ordinary £0.0001 shares, 2,443,343 (2016: NIL) C |
Ordinary £0.001 shares and 597,756,169 D Ordinary £0.0001 shares with a total nominal value of £304,219 |
(2016: £61,051). Total consideration of £4,218,003 (2016: £1,924,437) was received which resulted in a share |
premium of £3,913,784 (2016: £1,863,386). |
In January 2017 the A Ordinary and B Ordinary shares were reclassified as Ordinary £0.0001 shares. |
11. | CAPITAL COMMITMENTS |
2017 | 2016 |
£ | £ |
Contracted but not provided for in the |
financial statements |