Notes to the Unaudited Financial Statements

1      General Information

GenIP plc is a public company limited by shares and registered and incorporated in England and Wales. The registered office is 12 New Fetter Lane, London, United Kingdom, EC4A 1JP. (Companies House registration number 15517400)

The principal activity of the Company is to empower organisations to better evaluate and commercialise their discoveries through two distinct, yet complementary, services:

o  Invention Evaluator - providing bespoke enhanced research reports assessing the market potential for new technological innovations and discoveries by utilising artificial intelligence driven proprietary software; and

o  Vortechs - providing executive recruitment services to match technology organisations with experienced executives and business leaders also utilising artificial intelligence driven software and proprietary data.

Key Dates

Accordingly, there is no comparative financial information included in these financial statements.

These unaudited financial statements were approved for issue on 31 March 2025.

2      Significant accounting policies

2.1   Basis of preparation

The financial statements have been prepared in accordance with UK adopted International Financial Reporting Standards and interpretations (collectively "IFRS") issued by the International Accounting Standards Board ("IASB").

These financial statements are unaudited and do not constitute statutory accounts as defined in section 434 of the Companies Act 2006. 

The financial statements have been prepared on a going concern basis, under the historical cost convention.

The financial statements are presented in US Dollars which is the Company's presentational and functional currency. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the end of the reporting period. All differences are taken to the statement of profit or loss and other comprehensive income.

The Company's shares were admitted to trading on AIM, a market operated by the London Stock Exchange on 3 October 2024. These financial statements have also been prepared in accordance with AIM Rules.

2.2   Business combination

In accordance with the terms of the Asset Purchase Agreement dated 5 September 2024, effective 4 June 2024, the Company acquired certain assets and liabilities related to Invention Evaluator and Vortechs business.

The Company accounted for this transaction using a predecessor value method and accounted for the assets and liabilities acquired using existing carrying values.

2.3   Share based payments.

The Company introduced share-based compensation prior to the listing, under which the Company receives services from employees and certain suppliers as consideration for equity instruments (shares, share options, and/or share warrants) in the Company.

The fair value of the services received in exchange for these equity instruments is recognised as an expense. The total amount to be expensed is determined by reference to the fair value of the equity instruments granted:

●     excluding the impact of any service and non-market performance vesting conditions (e.g., profitability, sales growth targets, remaining an employee of the Company over a specified time period, or fulfilling contractual obligations);

●     excluding the impact of any non-vesting conditions (e.g., requirements for employees to save or specific obligations of warrant holders).

The fair value of share warrants has been assessed at the grant date using an appropriate valuation model, taking into account the terms and conditions upon which the warrants were granted. Assumptions about the number of options and warrants expected to vest include consideration of non-market vesting conditions.

The total expense is recognised over the vesting period, which is the period during which all of the specified vesting conditions must be met. At the end of each reporting period, the Company will revise its estimates of the number of equity instruments expected to vest based on non-market vesting conditions. Adjustments to these estimates, if any, will be recognised in the income statement with a corresponding adjustment to equity.

When share options or share warrants are exercised, the Company will issue new shares. The proceeds received, net of any directly attributable transaction costs, will be credited to share capital (nominal value) and share premium.

2.4   Revenue Recognition

Revenue is measured at the fair value of the consideration received or receivable, and represents amounts receivable for the services supplied, stated net of discounts, and value added taxes.

The Company recognises revenue when the contract is identified, performance obligation is determined, transaction price (as defined for each service below) is determined and allocated to performance obligation in accordance with IFRS 15.

The Group provides the following lines of services:

Invention Evaluator services: provision of reports assessing potential of any new technology. Revenue is recognised upon delivery of a complete report, when the report is made available to each customer. Upon access to the report delivered via online portal, customers consume the benefits of the contractual obligation, and the performance obligation is met. Directors consider transaction price to be clearly determined upon payment of fixed fee for each report prior to report's delivery. Directors considered uncertainty of cash flows from sales to be limited, considering prepayment is typically made for each report prior to report's delivery.

Vortechs tech transfer recruitment services: recruitment services specialising in technology transfer executives. Revenue is recognised at three stages in the assignment, in each case when the performance obligation is met - upon engagement, when the first candidate is interviewed and when the hire is made by GenIP's customer. Directors consider transaction price to be clearly determined when both parties agree to a placement fee for each assignment. Directors considered uncertainty of cash flows from sales to be limited, considering payments are made by organisations with excellent track record of payments and clear definition of performance obligation upon which such payment is made.

3      Significant judgments and estimates

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The Directors also make estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results.

The Directors did not identify any judgments, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying value of the assets and liabilities within the next financial year.

3.1   Going concern

The Directors have assessed the ability of the Company to continue as a going concern using cash flow forecasts. The Company initially met its day to day working capital requirements through financing provided by Tekcapital Europe Limited primarily via the issue of a convertible loan note. Subsequently, the funds raised through the placement and subscription for shares and Admission to trade on AIM, together with cash generated from operating activities finance the Company's working capital requirements. The Directors are satisfied that there are sufficient resources to continue in business for the foreseeable future.

Furthermore, the Directors are not aware of any material uncertainties that may cast significant doubt upon the Company's ability to continue as a going concern. They are mindful of the rising costs of inflation but are confident they have appropriate plans in place to mitigate any such risk in relation to this. Therefore, the Financial Statements continue to be prepared on the going concern basis.

4      Segmental Analysis

IFRS 8 requires operating segments to be identified based on internal reporting. Accordingly, the determination of the Company's operating segments is based on the following organisation units for which management accounting information is reported to the Company's management and used to make strategic decisions.

●     Invention Evaluator

●     Vortechs

Destination is defined by the location of the customer.

There were no customers from which the Company earned more than 10% of its revenues.

All of the Company's service lines are sold directly to consumers and not through intermediaries. All revenue recognised in the reporting period represent performance obligations satisfied in the current period. For services transferred over time, output method was used as a measure of fulfilment of the performance obligation. Considering the nature of the accounting, tax, legal and other services being provided under the agreements, this method most faithfully depicts the transfer of the services to the customer. Payment is due in advance or on a Net 30 basis.

5      Nature of expenses

6      Earnings per share

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of Ordinary Shares outstanding during the period.

Diluted loss per share includes the potential effect of conversion of the convertible loan note balance of $140,497.

7      Intangible Fixed Assets

8      Current trade and other receivables

Trade receivables are amounts due from customers for services performed in the ordinary course of business. If collection of the amounts is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets. Trade receivables are generally due for settlement within 30 days and therefore are all classified as current.

9      Inter-company receivable

The intercompany receivable of US$215,999 is made up of $115,999 owed to GenIP from Tekcapital LLC relating to trade receivables paid to Tekcapital LLC and yet to be passed on to GenIP and a contribution of $100,000 relating to development expenditure on Invention Evaluator assets in the period.

10    Cash and Cash Equivalents

Total cash and cash equivalents are stated after payment of $896,322 of fees relating to the fundraising on 3 October 2024 (Note 13)

11    Deferred Revenue

The Group's deferred revenue balance of US$72,349 as of 31 December 2024 is made up of receipts of Invention Evaluator payments to be delivered after 31 December 2024.

12    Convertible Loan Note

A Convertible Loan Note (CLN) was issued by Tekcapital Europe Limited on 24 February 2024 with a principal amount of GBP 150,000 of which US$140,497 was drawn and outstanding at 31 December 2024. The CLN incurs interest of 10 per cent. per annum and is repayable one year after commencement or can be converted into shares of GenIP Plc. upon certain conversion events at the option of the noteholder, at then market price (no discount against future equity placements offered). During the period ended 31 December 2024, US$ Nil was converted into shares of GenIP Plc.

13    Called up      Share Capital

The Company has one class of share being Ordinary Shares with a par value of £0.00425 each. This entitles the holder to participate in dividends and repayment of capital in proportion to the number of shares held. The holder is also entitled to one vote for each share held at shareholder meetings.

14    Share Capital and Fundraise

On 3 October 2024, the Company successfully raised funds through a placing and subscription for shares at £0.39 per ordinary share and was admitted to trading on AIM. The gross proceeds from the fundraise amounted to GBP £1.75 million. The associated fees commissions and expenses of the fundraise amounted to USD $896,322.

After accounting for the fundraise costs, the net cash available was $1.52m. These funds are intended to support the growth of the business, provide working capital, and address general corporate purposes.

15    Share based payments

The fair value of the equity settled shares, options and warrants granted is expensed over the vesting period and is arrived at using the Black-Scholes model. The assumptions inherent in the use of this model are as follows:

The share-based payment expense for the period was $279,594.

16    Related parties

Related party transactions include:

Convertible Loan Note as disclosed in Note 10.

Asset Purchase Agreement:

On 5 September 2024, the Company entered into an Asset Purchase Agreement with Tekcapital plc and Tekcapital LLC. In accordance with the terms of the Agreement, effective 4 June 2024, the Company acquired certain assets and liabilities related to Invention Evaluator and Vortechs business. The following assets and liabilities were transferred to the Company as part of capital contribution of US$191,564 by Tekcapital plc, for the consideration of US$1.

Assets:

- Intangible Assets of US$183,247, representing Net Book Value of Invention Evaluator (US$397,773 cost and $318,897 accumulated depreciation) and Vortechs ($462,771 cost and $358,418 accumulated depreciation).

- Trade receivables of US$58,352 representing trade receivables of Invention Evaluator and Vortechs businesses.

Liabilities:

- Deferred income of $50,035 representing prepayments made in 2023 and 2024 by customers of Invention Evaluator before the reports were delivered.

Management Service Agreement

The Company entered into a management service agreement with Tekcapital Europe Ltd as of 23 February 2024, compensating Tekcapital Europe Limited in the amount of US$35,000 per quarter for a number of support services. This agreement expired effective 26 July 2024, with US$ 38,845 charged to the CLN (Note 10).

Phosphorix Ltd

The Company entered into a master services agreement with Phosphorix Ltd, a company owned and operated by the CTO of GenIP Plc. Phosphorix Ltd operates the Invention Evaluator platform and provides IT development services to the Company. Pricing and costing is on an arm's length basis.

17    Controlling party

In the opinion of the Directors, the Company's ultimate parent company and ultimate controlling party is Tekcapital PLC, a company incorporated in England and Wales and listed on the London Stock Exchange (AIM). Copies of the Company financial statements of Tekcapital PLC are available from Companies House, Crown Way, Cardiff CF14 3UZ or www.tekcapital.com.

18    Post balance sheet events

After the balance sheet date, Tekcapital PLC agreed to reimburse the Company $100,000 of the $119,665 IT development costs incurred in 2024. The Company retains responsibility for the remaining $19,665 and continues to benefit from the expenditure, which remains capitalised as an Intangible Asset. This agreement constitutes an adjusting post balance sheet event, as the costs were incurred before the balance sheet date and the subsequent reimbursement clarifies the financial position. The reimbursement has been recognised as Other Income in the accounts.