ulbi20160929_8ka.htm

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 
 

FORM 8-K/A

Amendment No. 2

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 
 

September 30, 2016

(Date of Report)

 
 

ULTRALIFE CORPORATION

(Exact name of registrant as specified in its charter)

 
 
 

Delaware

000-20852

16-1387013

(State of incorporation)

(Commission File Number)

(IRS Employer Identification No.)

 

 2000 Technology Parkway, Newark, New York

 

14513

(Address of principal executive offices)

 

(Zip Code)

 

(315) 332-7100

(Registrant’s telephone number, including area code)

 
 
 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 



 

 
 

 

 

Explanatory Note

 

Ultralife Corporation (the “Company”) is filing this Amendment No. 2 on Form 8-K/A (“Amendment No. 2”) to amend its Current Report on Form 8-K as filed with the Securities and Exchange Commission (the “SEC”) on January 20, 2016 (the “Original Form 8-K”), as amended on Form 8-K/A as filed with the SEC on March 31, 2016 (the “Amended Form 8-K”). The Amended Form 8-K provided historical audited financial statements of the business acquired as required under Item 9.01(a). This Amendment No. 2 amends the historical audited financial statements of the business acquired to make certain revisions, among them the inclusion of an independent auditor’s report pursuant to auditing standards generally accepted in the United States of America.

 

 

Item 2.01 Completion of Acquisition or Disposition of Assets

 

On January 13, 2016, Ultralife UK Limited (the “Merger Subsidiary”), a U.K. corporation and a wholly-owned subsidiary of Ultralife Corporation (the “Company”), completed the acquisition of all of the outstanding ordinary shares of Accutronics Limited (“Accutronics”), a U.K. corporation based in Newcastle-under-Lyme, U.K., from Intrinsic Equity Limited, Catapult Growth Fund Limited Partnership, MJF Pension Trustees Limited, Robert Andrew Phillips and Michael Allen (collectively, the “Sellers”). There are no material relationships between the Company or Merger Subsidiary and any of the Sellers, other than pertaining to this acquisition. Accutronics is a leading independent designer and manufacturer of smart batteries and charger systems for high-performance, feature-laden portable and handheld electronic devices.

 

The acquisition was completed pursuant to the terms of a Share Purchase Agreement dated January 13, 2016, by and among the Merger Subsidiary and the Sellers. The Merger Subsidiary paid at the time of closing an aggregate purchase price of £7.575 million (approximately $11.0 million) in cash, and in exchange the Merger Subsidiary received all of the outstanding shares of Accutronics ordinary stock. Monies to fund the purchase price were advanced to the Merger Subsidiary from the Company’s general corporate funds.

 

The purchase price was subject to adjustment based on the difference between actual and estimated amounts of working capital of Accutronics as well as the amount of net cash/indebtedness of Accutronics. The adjustment resulted in a final payment to the Sellers in the amount of £0.133 million on February 24, 2016, bringing the total aggregate purchase price to £7.708 million (approximately $11.2 million).

 

 
 

 

 

The Stock Purchase Agreement was filed with our Form 10-K for the fiscal year ended December 31, 2015 to provide investors and security holders with information regarding the terms, provisions, conditions, and covenants and is not intended to provide any other factual information respecting the Company, or Accutronics. In particular, the Stock Purchase Agreement contains representations and warranties made to and solely for the benefit of the parties thereto, allocating among themselves various risks of the transactions. The assertions embodied in those representations and warranties are qualified or modified by information in confidential disclosure schedules that the parties have exchanged in connection with signing the Stock Purchase Agreement. Moreover, information concerning the subject matter of the representations and warranties may be subject to limitations agreed upon by the parties and standards of materiality applicable to the parties that differ from those applicable to investors, and may change after the date of the Stock Purchase Agreement. This subsequent information may or may not be fully reflected in our public disclosures. Accordingly, investors and security holders should not rely on the representations and warranties in the Stock Purchase Agreement as characterizations of the actual state of any fact or facts.

 

 

 

 

Item 9.01 Financial Statements and Exhibits

 

(a)

Financial Statements of Business Acquired

 

The historical audited financial statements of Accutronics for the most recent fiscal year ended August 31, 2015, are filed herewith in Exhibit 99.1. These financial statements were prepared in accordance with accounting standards generally accepted in the United Kingdom and audited in accordance with auditing standards generally accepted in the United States of America. As disclosed in Note 4 to these audited financial statements, the application of accounting standards generally accepted in the United States of America would not materially impact the balance sheet and statements of income and cash flows.

 

 

 

(b)

Pro Forma Financial Information

 

The pro forma financial information required by this item is presented below. The financial information provided for Accutronics in the Pro Forma Financial Information has been recast to be consistent with the Company’s fiscal year ended December 31, 2015.

 

 
 

 

 

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

The following unaudited pro forma condensed combined financial statements are based on our historical consolidated financial statements and Accutronics’ recasted historical financial statements as adjusted to give effect to the Company’s acquisition of Accutronics. The unaudited pro forma condensed combined statement of operations for the twelve months ended December 31, 2015 gives effect to the transaction had it occurred on January 1, 2015. The unaudited pro forma condensed combined balance sheet as of December 31, 2015 gives effect to the transaction had it occurred on January 1, 2015.

 

The assumptions and estimates underlying the unaudited adjustments to the pro forma condensed combined financial statements are described in the accompanying notes, which should be read together with the pro forma combined financial statements.

 

The unaudited pro forma condensed combined financial statements should be read together with the Company’s historical financial statements, which are included in the Company’s latest annual report on Form 10-K, and Accutronics historical information included herein. The financial information provided for Accutronics in the unaudited pro forma condensed combined financial statements has been recast to be consistent with the Company’s fiscal year ended December 31, 2015. Accutronics’ results for this twelve-month period are derived by adding their results for the four months subsequent to its financial statements for its fiscal year ended August 31, 2015 and subtracting the comparable months from the preceding year.

 

 

Unaudited Pro Forma Condensed Combined Balance Sheet

Year Ended December 31, 2015

(In Thousands, Except Per Share Information)

 

   

Ultralife Corporation

                     
   

and Subsidiaries

   

Accutronics Ltd

   

Pro Forma

     

Pro Forma

 
   

Historical

   

Historical

   

Adjustments

 

Notes

 

Combined

 
                           

Current Assets:

                         
                           

Cash, Cash Equivalents and Restricted Cash

  $14,533     $1,304     -$11,161  

a

  $4,676  
                           

Trade Accounts Receivable

  11,430     1,344             12,774  
                           

Inventories

  23,814     2,093             25,907  
                           

Prepaid Expense and Other Current Assets

  2,077     289             2,366  
                           

Deferred Income Taxes

  92                   92  
                           

Current Assets

  51,946     5,030     -11,161       45,815  
                           

Property, Equipment and Improvements

  9,038     368             9,406  
                           

Goodwill

  16,283           4,383  

b

  20,666  
                           

Intangible Assets

  3,946           4,776  

c

  8,722  
                           

Other Non-Current Assets

  309                   309  
                           

Total Assets

  $81,522     $5,398     -$2,002       $84,918  
                           

Current Liabilities:

                         
                           

Accounts Payable

  $6,494     $1,009             $7,503  
                           

Accrued Compensation and Related Benefits

  2,377                   2,377  
                           

Accrued Expenses and Current Liabilities

  1,749     1,134             2,883  
                           

Income Taxes Payable

  227     111             338  
                           
    10,847     2,254             13,101  
                           

Deferred Income Taxes

  4,631     74     860  

d

  5,565  
                           

Other Non-Current Liabilities

  28     209             237  
                           

Total Liabilities

  15,506     2,536     860       18,902  
                           

Total Shareholders' Equity

  66,016     2,862     -2,862  

e

  66,016  
                           

Total Liabilities and Shareholder's Equity

  $81,522     $5,398     -$2,002       $84,918  

 

 
 

 

 

Unaudited Pro Forma Condensed Combined Statement of Operations

Year Ended December 31, 2015

(In Thousands, Except Per Share Information)

 

   

Ultralife Corporation

                     
   

and Subsidiaries

   

Accutronics Ltd

   

Pro Forma

     

Pro Forma

 
   

Historical

   

Historical

   

Adjustments

 

Notes

 

Combined

 
                           

Revenues

  $76,427     $13,108             $89,535  
                           

Cost of Products Sold

  53,111     9,058             62,169  
                           

Gross Profit

  23,316     4,050             27,366  
                           

Operating Expenses:

                         

Research & Development

  5,473     363             5,836  

Selling, General & Administrative

  14,128     2,433             16,561  

Intangible Asset Amortization

  235     0     370  

f

  605  

Intangible Asset Impairment

  150     0             150  
    19,986     2,795     370       23,151  
                           

Operating Income

  3,330     1,255     -370       4,215  
                           

Other (Expense) Income

                         

Interest Income (Expense), Net

  -245     -63             -308  

Miscellaneous

  65     16             81  
    -180     -48             -228  
                           

Income Before Income Taxes

  3,150     1,207     -370       3,987  
                           

Income Tax Provision

  310     120     -74  

g

  356  
                           

Net Income

  2,840     1,087     -296       3,631  
                           

Net Loss Attributable to Non-Controlling Interest

  29     0             29  
                           

Net Income Attrributable to Ultralife

  2,869     1,087     -296       3,660  
                           

Net Income Per Share - Basic

  $0.18     $0.07     $-0.02       $0.23  
                           

Net Income Per Share - Diluted

  $0.17     $0.07     $-0.02       $0.22  
                           

Weighted Average Shares Outstanding - Basic

  16,182                   16,182  
                           

Weighted Average Shares Outstanding - Diluted

  16,458                   16,458  

 

See accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information

 

 

 

Notes to the Unaudited Pro Forma Condensed Combined Financial Information

(In Thousands, Except Per Share Information)

 

 

Note 1 – Basis of Presentation

 

The historical consolidated financial statements have been adjusted in the pro forma condensed combined financial statements to give effect to the pro forma events that are (1) directly attributable to the business combination, (2) factually supportable and (3) with respect to the pro forma condensed combined statement of operations, expected to have a continuing impact on the combined results following the business combination.

 

The business combination was accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations. As an acquirer for accounting purposes, the Company has estimated the fair value of Accutronics’ assets acquired and liabilities assumed and ensured that the accounting policies of Accutronics were consistent with that of the Company.

 

 
 

 

 

The pro forma condensed combined financial statements do not necessarily reflect what the combined company’s financial condition or results of operations would have been had the acquisition occurred on the dates indicated. They also may not be useful in predicting the future financial condition and results of operations of the combined company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.

 

The condensed combined pro forma financial information does not reflect the realization of any expected cost savings or other synergies from the acquisition of Accutronics as a result of restructuring activities, other cost savings initiatives or sales synergies following the completion of the business combination.

 

 

Note 2 – Foreign Currency and US GAAP Conversion

 

The recast historical financial information of Accutronics was prepared in accordance with United Kingdom Generally Accepted Accounting Standards and presented in British Pounds Sterling. The recast historical information was translated from British Pounds Sterling to US Dollars using the following historical exchange rates:

 

   

$/£

 
         

Statement of Operations - 12 Month Average Exchange Rate for Year Ended December 31, 2015

  1.57  
         

Balance Sheet - Exchange Rate for Acquisition Date (January 13, 2016)*

  1.45  
         
         

* The Balance Sheet translation rate was not materially different from the December 31, 2015 rate.

       

 

 

The Company utilized a third party independent accounting firm to analyze any material differences between UK and US GAAP for Accutronics. Based on this review and the due diligence performed by the Company, we are not aware of any material differences requiring adjustment in the pro forma condensed combined financial statements.

 

 

Note 3 – Funding Transaction

 

The Company completed the acquisition of Accutronics for approximately £7.708 million (approximately $11.2 million) in cash. The Company utilized monies from its general corporate funds for the acquisition.

 

 

Note 4 – Preliminary Purchase Price Allocation

 

The Company has performed a preliminary valuation analysis of the fair market value of Accutronics’ assets and liabilities to identify, value and assign estimated useful lives to intangible assets and to determine goodwill. The resulting valuation analysis is considered preliminary as it has not been audited by the Company’s independent registered public accountant at the time of this filing. The following table summarizes the allocation of the preliminary purchase price as of the acquisition date (in thousands):

 

 
 

 

 

Cash

    $1,304  
         

Accounts Receivable

    1,344  
         

Inventory

    2,093  
         

Prepaids and Other Current Assets

    289  
         

Property, Plant & Equipment

    368  
         

Identifiable Intangible Assets

    4,776  
         

Goodwill

    4,383  
         

Accounts Payable

    -1,009  
         

Accrued Expenses

    -1,134  
         

Income Taxes Payable

    -111  
         

Non-Current Liabilities

    -209  
         

Deferred Income Taxes

    -74  
         

Deferred Taxes on Intangible Assets

    -860  
         

Total Consideration

    $11,161  

 

 

The preliminary purchase price allocation has been used to prepare pro forma adjustments in the pro forma balance sheet and income statement. The final purchase price allocation will be determined when the Company’s allocation is audited. The final allocation could differ materially from the preliminary allocation used in the pro forma adjustments. The final audited allocation may include (1) changes in allocations to intangible assets such as customer contracts and relationships, trade name and intellectual property as well as goodwill, (2) changes to deferred taxes and (3) other changes to assets and liabilities.

 

 

Note 5 – Pro Forma Adjustments

 

The pro forma adjustments are based on our preliminary estimates and assumptions that are subject to change. The following adjustments have been reflected in the unaudited pro forma condensed combined financial information:

 

 

(a)

Represents the total aggregate purchase price for the acquisition of £7.708 million (approximately $11.2 million).

 

 

(b)

Reflects the adjustment to record goodwill associated with the acquisition of $4.383 million as shown in Note 4. The amount of the goodwill adjustment is based on the preliminary valuation analysis based on financial data as of the Company’s fiscal year ended December 31, 2015. The resulting valuation analysis is considered preliminary as it has not been audited by the Company’s independent registered public accountant at the time of this filing.

 

 
 

 

 

 

(c)

Reflects the adjustment to allocate the purchase price to identifiable intangible assets as shown in Note 4. The Company performed an appraisal to identify and value intangible assets, which they determined to be customer contracts and relationships, trade name and intellectual property. The fair value of the identifiable intangible assets was determined using the “income approach” requiring a forecast of all of the expected future cash flows. The resulting valuation analysis is considered preliminary as it has not been audited by the Company’s independent registered public accountant at the time of this filing. The following table summarizes the estimated fair value, the estimated useful life and the estimated annual amortization for each of the identifiable intangible assets resulting from the valuation analysis:

 

                   

Annual

 
           

Estimated

   

Estimated

 
   

Estimated Fair

   

Useful Lives

   

Amortization

 
   

Value

   

in Years

   

Expense

 
   

($ 000's)

           

($ 000's)

 
                         

Customer Contracts and Relationships

    $3,223       15       $215  
                         

Trade Name

    421       10       42  
                         

Intellectual Property

    1,132       10       113  
                         

Pro Forma Adjustments

    $4,776               $370  

 

 

The unaudited estimates of fair value and estimated useful lives could differ from final amounts upon completion of the Company’s annual audit, and the difference could have a material effect on the accompanying unaudited pro forma condensed combined financial statements. A doubling or halving of the attrition estimates used to estimate the fair value of the customer contracts and relationships could cause a corresponding increase or decrease in the balance between intangible assets and goodwill by approximately 11% to 12%. An increase or decrease in the estimated useful lives of the identifiable intangible assets by five years could cause a corresponding change in the balance of intangible assets by approximately +5% or -16%, respectively, with the offset to goodwill. There would also be a corresponding impact to the annual intangible amortization expense.

 

 

(d)

Reflects the adjustment to the deferred tax liabilities resulting from the acquisition. The estimated increase in deferred taxes liabilities stems from the fair value adjustments for non-deductible intangible assets based on the long-term enacted corporation tax rate for the United Kingdom of 18%. The estimate of deferred income tax balances is preliminary and subject to change once the valuation analysis is audited by the Company’s independent registered public accountant. The following table summarizes the pro forma estimated deferred tax adjustment for each identifiable intangible asset:

 

 

   

Estimated Fair

   

Estimated

   

Deferred

 
   

Value

   

Tax Rate

   

Tax

 
   

($ 000's)

           

($ 000's)

 
                         

Customer Contracts and Relationships

    $3,223       18%       $580  
                         

Trade Name

    421       18%       76  
                         

Intellectual Property

    1,132       18%       204  
                         

Pro Forma Adjustments

    $4,776               $860  

 

 
 

 

  

 

(e)

Represents the adjustment to eliminate the shareholders’equity of Accutronics in accordance with purchase accounting for the acquisition.

 

 

(f)

Reflects the adjustment for the annual intangible asset amortization as described in Note 5 (c).

 

 

 

(g)

Reflects the income tax effect of pro forma adjustments based on the statutory UK tax rate for 2015.

 

 

Note 6 – Non-Recurring Transaction Costs

 

The Company incurred non-recurring transaction costs of approximately $.25 million which are directly attributable to the Accutronics’ acquisition. These costs, including one-time accounting, legal and due diligence services as well as stamp duties related to the acquisition of the UK-based company, were incurred in the first quarter of 2016 and, accordingly, are not reflected in the pro forma condensed combined financial statements presented herein.

 

 
 

 

  

(c)

Exhibits

 

99.1

Historical Audited Financial Statements for Accutronics for the Year Ended August 31, 2015

 

 
 

 

 

SIGNATURES

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: September 30, 2016

 

ULTRALIFE Corporation

     
     
 

By:

/s/ Philip A. Fain

   

Philip A. Fain

   

Chief Financial Officer and Treasurer

     
     

 

ex99-1.htm

Exhibit 99.1

 

 

Registered number: 06999250

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accutronics Limited

 

Non Statutory Directors' Report and Financial Statements

 

For the Year Ended 31 August 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

Accutronics Limited

 

Company Information


 

Directors

M Allen

 

L S Saunders (appointed 13 January 2016)

 

K R Bird (appointed 30 June 2016)

   
   
Registered number 06999250
   
   
Registered office Unit 20 Loomer Road
  Chesterton
  Newcastle-under-Lyme Staffordshire
  ST5 7LB
   
   
Independent auditors Dains LLP
  15 Colmore Row
  Birmingham
  B3 2BH

  

 
 

 

 

 

Accutronics Limited

 

Contents


 

 

Page

Strategic Report

1

   

Directors' Report

2 - 3

   

Independent Auditors' Report

3 - 4

   

Statement of Comprehensive Income

5

   

Balance Sheet

6

   

Statement of Changes in Stockholders' Equity

7 - 8

   

Statement of Cash Flows

9

   

Notes to the Financial Statements

10 - 23

 

 
 

 

 

 Accutronics Limited

 

Strategic Report

For the Year Ended 31 August 2015


 

Business review

 

The Directors are pleased to report another successful year for the company. This was a year that saw a high level of activity in new product development, but still yielded a turnover of £8.56 million and operating profit was £737k, a significant improvement on the prior year. Our liquidity remains strong and the company continues to have the appropriate headroom to enable it to move forward into the coming year and continue to execute the strategic growth plans established for Accutronics Limited.

 

We have made progress in expanding our customer base and expect this to continue in the coming year. We are pleased with the new customer relationships we have forged over the last year and will continue to build ever stronger relationships with existing customers. This continues to strengthen yet further the business and allows us to continue to focus on delivering the latest battery technology to OEMs worldwide in a range of professional markets including Medical and specialist electronics markets.

 

The continued strong investment in New Product Development and R & D continues to enhance our own ready for market platform, Entellion. This, along with our innovative approach to unique bespoke battery solutions, our focus on quality and our excellent levels of customer service continues to ensure that we deliver for all our stakeholders.

 

Principal risks and uncertainties

 

The company's operations expose it to a variety of financial risks including, principally, currency risk which it seeks to mitigate where possible.

 

Currency risk

 

The company has exposure to currency fluctuations in both the Euro and US Dollar but have appropriate policies and instruments in place to monitor and control this potential exposure.

 

Financial key performance indicators

 

The gross margin for the period is 32.6% (2014 - 30.4%) and is deemed appropriate for the business given its required infrastructure and its need to invest in R & D.

 

The operating profit margin for the period is 8.7% (2014 - 4.4%), again acceptable given the R & D investment currently being made.

 

Other key performance indicators

 

Headcount, at 75 FTE, remains appropriate given the current order book and requirements. This report was approved by the board on 28 September 2016 and signed on its behalf.

 

 

 

 

 

 

M Allen

Director

 

 
Page 1

 

 

Accutronics Limited

 

Directors' Report

For the Year Ended 31 August 2015


 

The directors present their report and the financial statements for the year ended 31 August 2015.

 

Principal activity

 

The principal activity of the company in the year continued to be that of a developer and manufacturer of custom rechargeable batteries for professional applications.

 

Results and dividends

 

The profit for the year, after taxation, amounted to £630,643 (2014 - £311,974).

 

Particulars of dividends paid are detailed in the notes to the financial statements.

 

Directors

 

The directors who served during the year were:

 

R A Phillips (resigned 23 September 2016)

 

J B Grenfell (resigned 13 January 2016)

 

M Allen

 

On 13 January 2016, J S Heir and L S Saunders were appointed as directors. On 30 June 2016, J S Heir resigned as a director and K R Bird was appointed as a director.

 

Directors' responsibilities statement

 

The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under Company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the directors are required to:

 

 

select suitable accounting policies for the Company's financial statements and then apply them consistently;

 

 

make judgments and accounting estimates that are reasonable and prudent;

 

 

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements and other information included in Directors' Reports may differ from legislation in other jurisdictions.

 

 
Page 2

 

 

Accutronics Limited 

 

Directors' Report (continued)

For the Year Ended 31 August 2015


 

Future developments

 

Details of future developments are given in the strategic report.

 

Disclosure of information to auditors

 

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:

 

 

so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

 

 

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

 

Post balance sheet events

 

On 13 January 2016, 100% of the issued share capital of the company was acquired by Ultralife UK Limited, a company ultimately owned by Ultralife Corporation which is a business headquartered in Newark, New York, whose products and services range from portable power solutions to communications and electronice systems. Ultralife serves government, defence and commercial customers across the globe covering business segments including Battery & Energy Products and Communication Systems. Ultralife has operations in North America, Europe and Asia.

 

Auditors

 

The auditors, Dains LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

 

This report was approved by the board on 28 September 2016 and signed on its behalf.

 

 

 

 

 

 

 

M Allen

Director

 

 
Page 3

 

 

Accutronics Limited

 

Independent Auditors' Report to the Shareholders of Accutronics Limited


 

We have audited the accompanying financial statements of Accutronics Limited (the Company), which comprise the balance sheet as of 31 August 2015, the related statement of income, changes in stockholders' equity and cash flows for the year then ended, and the related notes to the financial statements.

 

Management's responsibility for the financial statements

 

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United Kingdom; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

 

Auditor's responsibility

 

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

 

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

 

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

 

Opinion on financial statements

 

In our opinion the financial statements referred to above present fairly, in all material respects, the financial position of Accutronics Limited as of 31 August 2015 and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United Kingdom.

 

 

 

 

 

/s/ Dains LLP 

 

Birmingham, United Kingdom

 

28 September 2016

 

 
Page 4

 

 

Accutronics Limited

 

Statement of Comprehensive Income

For the Year Ended 31 August 2015


 

 

   

Note

   

2015

£

   

2014

£

 

Turnover

    5       8,562,211       7,533,916  

Cost of sales

            (5,770,594 )     (5,240,414 )

Gross profit

            2,791,617       2,293,502  

Distribution costs

            (93,387 )     (93,622 )

Administrative expenses

            (1,960,751 )     (1,871,635 )

Operating profit

    6       737,479       328,245  

Interest payable and expenses

    10       (37,873 )     (21,443 )

Profit before tax

            699,606       306,802  

Tax on profit

    11       (68,963 )     5,172  

Profit for the year

            630,643       311,974  

Other comprehensive income for the year

                       

Total comprehensive income for the year

            630,643       311,974  

The notes on pages 10 to 23 form part of these financial statements.

                       

 

 
Page 5

 

 

Accutronics Limited

 

Balance Sheet

As at 31 August 2015


 

   

Note

   

£

   

2015

£

   

£

   

2014

£

 

Fixed assets

                                       

Tangible assets

    13               279,483               232,493  
                      279,483               232,493  

Current assets

                                       

Stocks

    14       1,474,624               1,292,167          

Debtors: amounts falling due within one year

    15       1,672,652               1,299,015          

Cash at bank and in hand

    16       824,633               239,327          
              3,971,909               2,830,509          

Creditors: amounts falling due within one year

    17       (2,075,763 )             (1,242,816 )        

Net current assets

                    1,896,146               1,587,693  

Total assets less current liabilities

                    2,175,629               1,820,186  

Creditors: amounts falling due after more than one year

                    (59,843 )             (173,609 )

Provisions for liabilities

                                       

Deferred tax

    19       (50,991 )             (29,522 )        
                      (50,991 )             (29,522 )

Net assets

                    2,064,795               1,617,055  
                                         

Capital and reserves

                                       

Called up share capital

    20               254,453               250,000  

Profit and loss account

    21               1,810,342               1,367,055  
                      2,064,795               1,617,055  

 

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 28 September 2016.

 

 

 

 

M Allen

Director

 

 

The notes on pages 10 to 23 form part of these financial statements.

 

 
Page 6

 

 

Accutronics Limited

 

Statement of Changes in Stockholders' Equity

For the Year Ended 31 August 2015


 

 

   

Called up

share capital

£

   

Profit and

loss account

£

   

Total equity

£

 

At 1 September 2014

    250,000       1,367,055       1,617,055  
                         

Comprehensive income for the year

                       

Profit for the year

    -       630,643       630,643  
                         

Contributions by and distributions to owners

                       

Dividends: Equity capital

    -       (187,356 )     (187,356 )

Shares issued during the year

    4,453       -       4,453  

At 31 August 2015

    254,453       1,810,342       2,064,795  

 

 
Page 7

 

 

Accutronics Limited

 

Statement of Changes in Stockholders' Equity

For the Year Ended 31 August 2014


 

   

Called up

share capital

£

   

Profit and

loss account

£

   

Total equity

£

 

At 1 September 2013

    250,000       1,077,980       1,327,980  
                         

Comprehensive income for the year

                       

Profit for the year

    -       311,974       311,974  
                         

Contributions by and distributions to owners

                       

Dividends: Equity capital

    -       (22,899 )     (22,899 )

At 31 August 2014

    250,000       1,367,055       1,617,055  

 

The notes on pages 10 to 23 form part of these financial statements.

 

 
Page 8

 

 

Accutronics Limited

 

Statement of Cash Flows

For the Year Ended 31 August 2015


 

   

2015

£

   

2014

£

 

Cash flows from operating activities

               
Profit for the financial year     630,643       311,974  

Adjustments for:

               

Depreciation of tangible assets

    94,314       86,672  

Profit on disposal of tangible assets

    -       (150 )

Interest charge

    37,873       21,443  

Taxation charge

    68,963       (5,172 )

(Increase)/decrease in stocks

    (182,457 )     21,044  

(Increase)/decrease in debtors

    (378,116 )     13,822  

Decrease in creditors

    (93,465 )     (377,598 )

Corporation tax received/(paid)

    4,480       (4,480 )

Non cash consideration for issue of ordinary shares

    4,453       -  

Net cash generated from operating activities

    186,688       67,555  

Cash flows from investing activities

               

Purchase of tangible fixed assets

    (141,304 )     (162,884 )

Sale of tangible fixed assets

    -       150  

Net cash from investing activities

    (141,304 )     (162,734 )

Cash flows from financing activities

    -       -  

Other new loans

    -       11,113  
Repayment of other loans     (7,844 )     -  

Dividends paid

    (100,000 )     (22,899 )

Interest paid

    (37,873 )     (21,443 )

Net cash used in financing activities

    (145,717 )     (33,229 )

Net (decrease) in cash and cash equivalents

    (100,333 )     (128,408 )

Cash and cash equivalents at beginning of year

    99,480       227,888  

Cash and cash equivalents at the end of year

    (853 )     99,480  

Cash and cash equivalents at the end of year comprise:

               

Cash at bank and in hand

    824,633       239,327  

Bank overdrafts

    (825,486 )     (139,847 )
      (853 )     99,480  

 

The notes on pages 10 to 23 form part of these financial statements.

 

 
Page 9

 

 

Accutronics Limited

 

Notes to the Financial Statements 

For the Year Ended 31 August 2015 


 

1.

General information

 

Accutronics Limited is a company limited by shares, incorporated in England and Wales. Its registered office is Unit 20 Loomer Road, Chesterton, Newcastle-under-Lyme, Staffordshire, ST5 7LB.

 

2.

Accounting policies

 

 

2.1

Basis of preparation of financial statements

 

The non statutory financial statements have been prepared under the historical cost convention and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland and the Companies Act 2006 (UK GAAP).

 

On 13 January 2016, 100% of the issued share capital of the company was acquired by Ultralife UK Limited, a company ultimately owned by Ultralife Corporation which is a business headquartered in Newark, New York. As a result of this acquisition, these non statutory financial statements have been prepared in order to meet the disclosure requirements of the US Securities and Exchange Commission (SEC).

 

The preparation of these financial statements requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).

 

A reconciliation of United Kingdom Generally Accepted Accounting Practice (UK GAAP) to United States of America Generally Accepted Accounting Principles (US GAAP) is provided in note 4.

 

 

2.2

Revenue

 

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

 

Sale of goods

 

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:

 

 

the Company has transferred the significant risks and rewards of ownership to the buyer;

 

 

the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

 

 

the amount of revenue can be measured reliably;

 

 

it is probable that the Company will receive the consideration due under the transaction; and

 

 

the costs incurred or to be incurred in respect of the transaction can be measured reliably.

 

 
Page 10

 

 

Accutronics Limited

 

Notes to the Financial Statements 

For the Year Ended 31 August 2015


 

2.

Accounting policies (continued)

 

 

2.3

Tangible fixed assets

 

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated 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.

 

The Company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the Company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.

 

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight line method.

 

Depreciation is provided on the following basis:

 

Leasehold improvements               - Over the term of the lease

Plant and machinery                       - 20% straight line

Furniture, fittings and equipment - 33% straight line

 

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

 

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the statement of comprehensive income.

 

 

2.4

Stocks

 

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

 

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

 

 

2.5

Debtors

 

Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 

 

2.6

Cash and cash equivalents

 

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

 

In the Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

 

 
Page 11

 

 

Accutronics Limited

 

Notes to the Financial Statements 

For the Year Ended 31 August 2015


  

2.

Accounting policies (continued)

 

 

2.7

Financial instruments

 

The Company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.

 

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade payables or receivables, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in case of an out-right short-term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost.

 

Investments in non-convertible preference shares and in non-puttable ordinary and preference shares are measured:

 

 

at fair value with changes recognised in the profit and loss account if the shares are publicly traded or their fair value can otherwise be measured reliably;

 

 

at cost less impairment for all other investments.

 

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the profit and loss account.

 

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

 

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the balance sheet date.

 

Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

 

 

2.8

Creditors

 

Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 

 
Page 12

 

 

Accutronics Limited

 

Notes to the Financial Statements 

For the Year Ended 31 August 2015


 

2.

Accounting policies (continued)

 

 

2.9

Grant income

 

Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to the profit and loss Account at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.

 

Grants of a revenue nature are recognised in the Profit and Loss Account in the same period as the related expenditure.

 

 

2.10

Foreign currency translation

 

Functional and presentation currency

 

The Company's functional and presentational currency is GBP.

 

Transactions and balances

 

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

 

At each period end foreign currency monetary items are translated using the closing rate. Non- monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

 

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit and loss account except when deferred in other comprehensive income as qualifying cash flow hedges.

 

 

2.11

Finance costs

 

Finance costs are charged to the profit and loss account over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 

 

2.12

Dividends

 

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the stockholders at an annual general meeting. Dividends on shares recognised as liabilities are recognised as expenses and classified within interest payable.

 

 

2.13

Operating leases: the Company as lessee

 

Rentals paid under operating leases are charged to the profit and loss account on a straight line basis over the lease term.

 

 
Page 13

 

 

Accutronics Limited

 

Notes to the Financial Statements 

For the Year Ended 31 August 2015


  

2.

Accounting policies (continued)

 

 

2.14

Pensions

 

Defined contribution pension plan

 

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payments obligations.

 

The contributions are recognised as an expense in the profit and loss account when they fall due. Amounts not paid are shown in accruals as a liability in the balance sheet. The assets of the plan are held separately from the Company in independently administered funds.

 

 

2.15

Borrowing costs

 

All borrowing costs are recognised in the profit and loss account in the year in which they are incurred.

 

 

2.16

Provisions for liabilities

 

Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.

 

Provisions are charged as an expense to the Profit and Loss Account in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the Balance Sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.

 

When payments are eventually made, they are charged to the provision carried in the Balance Sheet.

 

 
Page 14

 

 

Accutronics Limited

 

Notes to the Financial Statements 

For the Year Ended 31 August 2015


 

2.

Accounting policies (continued)

 

 

2.17

Current and deferred taxation

 

The tax expense for the year comprises current and deferred tax. Tax is recognised in the profit and loss account, except that a change attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

 

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

 

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance Sheet date, except that:

 

 

The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and

 

 

Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

 

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

 

 

2.18

Research and development

 

 

Research expenditure is written off in the year in which it is incurred.

 

Development costs not considered to meet the criteria for capitalisation as intangible fixed assets are written off in the year of expenditure.

 

 

3.

Judgments in applying accounting policies and key sources of estimation uncertainty

 

In the application of the Company's accounting policies, which are described in note 2, the directors are requirement to make judgments, estimates and assumptions about the carrying amounts 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 could differ from those estimated. 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 if the revision affects only that period, or in the period of revisions and future periods if the revision affects both current and future periods.

 

Tangible fixed assets are depreciated over their useful lives taking into account residual values where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing the asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual values consider such things as future market conditions, the remaining life of the asset and projected disposal values.

 

 
Page 15

 

 

Accutronics Limited

 

Notes to the Financial Statements 

For the Year Ended 31 August 2015


 

4.

Reconciliation of UK GAAP to US GAAP

 

The application of US GAAP would not materially impact on the balance sheet, profit or loss or cash flows when compared to the financial statements prepared under UK GAAP.

 

 

5.

Turnover

 

The whole of the turnover is attributable to the company's principal activity.

 

Analysis of turnover by country of destination:

 

 

   

2015

£

   

2014

£

 
                 

United Kingdom

    449,560       371,795  

Rest of Europe

    7,526,596       6,637,531  

Rest of the world

    586,055       524,590  
      8,562,211       7,533,916  

 

 

 

6.

Operating profit

 

The operating profit is stated after charging:

 

   

2015

£

   

2014

£

 

Development work

    115,702       113,108  

Depreciation of tangible fixed assets

    94,314       86,672  

Exchange differences

    82,102       153,341  

Other operating lease rentals

    71,108       69,566  

 

7.

Auditors' remuneration

 

   

2015

£

   

2014

£

 
                 

Fees payable to the Company's auditor and its associates for the audit of the Company's annual financial statements

    9,500       9,200  

 

 

Fees payable to the Company's auditor and its associates in respect of:

               
                 

All other services

    4,840       3,250  
      4,840       3,250  

 

 
Page 16

 

 

Accutronics Limited

 

Notes to the Financial Statements 

For the Year Ended 31 August 2015


  

8.

Employees

 

Staff costs, including directors' remuneration, were as follows:

 

   

2015

£

   

2014

£

 

Wages and salaries

    1,776,225       1,680,330  

Social security costs

    158,127       157,282  

Cost of defined contribution scheme

    52,544       44,960  
      1,986,896       1,882,572  

 

 

The average monthly number of employees, including the directors, during the year was as follows:

 

   

2015

No.

   

2014

No.

 

Production

    46       39  

Directors

    2       2  

Engineers

    10       12  

Sales

    5       5  

Administration and support

    13       11  
      76       69  

 

 

9.

Directors' remuneration

 

   

2015

£

   

2014

£

 

Directors' emoluments

    171,946       163,959  

Company contributions to defined contribution pension schemes

    6,411       6,361  
      178,357       170,320  

 

During the year retirement benefits were accruing to 1 director (2014 - 1) in respect of defined contribution pension schemes.

 

 

10.

Interest payable and similar charges

 

 

   

2015

£

   

2014

£

 

Bank interest payable

    28,818       13,750  

Other interest payable

    9,055       7,693  
      37,873       21,443  

  

 
Page 17

 

 

Accutronics Limited

 

Notes to the Financial Statements 

For the Year Ended 31 August 2015


 

11.

Taxation

 

   

2015

£

   

2014

£

 

Corporation tax

               

Current tax on profits for the year

    47,495       -  

Adjustments in respect of previous periods

    (1 )     (4,356 )

Total current tax

    47,494       (4,356 )
                 

Deferred tax

               

Origination and reversal of timing differences

    21,469       628  

Effect of changes in tax rates

    -       (1,444 )

Total deferred tax

    21,469       (816 )

Taxation on profit/(loss) on ordinary activities

    68,963       (5,172 )

 

 

Factors affecting tax charge for the year

 

The tax assessed for the year is lower than (2014 - lower than) the standard rate of corporation tax in the UK of 20% (2014 - 20%). The differences are explained below:

 

   

2015

£

   

2014

£

 

Profit on ordinary activities before tax

    699,606       306,802  

Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 20% (2014 - 20%)

    139,921       61,360  
Effects of:                
                 

Expenses not deductible for tax purposes, other than goodwill amortisation and impairment

    2,359       1,760  

Adjustments to tax charge in respect of prior periods

    (1 )     (4,356 )

Short term timing differences leading to an increase in taxation

    297       43  

Non-taxable income

    (3,109 )     -  

Adjustment in research and development tax credit leading to a decrease in the tax charge

    (69,982 )     (66,973 )

Other differences leading to a (decrease)/increase in the tax charge

    (522 )     2,994  

Total tax charge for the year

    68,963       (5,172 )

 

 
Page 18

 

  

Accutronics Limited

 

Notes to the Financial Statements 

For the Year Ended 31 August 2015


  

12.

Dividends    

 

   

2015

£

   

2014

£

 

Dividends paid on equity capital

    187,356       22,899  
      187,356       22,899  

 

13.

Tangible fixed assets

 

   

Leasehold

improvements

£

   

Plant and

machinery

£ 

   

Furniture, fittings and

equipment

£ 

   

Total

£

 

Cost

                               

At 1 September 2014

    -       198,039       243,687       441,726  

Additions

    42,718       62,019       36,567       141,304  

At 31 August 2015

    42,718       260,058       280,254       583,030  

Depreciation

                               

At 1 September 2014

    -       41,369       167,864       209,233  

Charge for period on owned assets

    6,040       41,579       46,695       94,314  

At 31 August 2015

    6,040       82,948       214,559       303,547  

Net book value

                               

At 31 August 2015

    36,678       177,110       65,695       279,483  

At 31 August 2014

    -       156,670       75,823       232,493  

 

 
Page 19

 

 

Accutronics Limited

 

Notes to the Financial Statements 

For the Year Ended 31 August 2015


 

14.

Stocks

 

   

2015

£

   

2014

£

 

Raw materials and consumables

    673,305       742,454  

Work in progress

    418,763       203,137  

Finished goods and goods for resale

    382,556       346,576  
      1,474,624       1,292,167  

 

15.

Debtors

 

   

2015

£

   

2014

£

 

Trade debtors

    963,749       964,116  

Other debtors

    589,815       232,252  

Prepayments and accrued income

    119,088       98,168  

Tax recoverable

    -       4,479  
      1,672,652       1,299,015  

 

16.

Cash and cash equivalents

 

   

2015

£

   

2014

£

 

Cash at bank and in hand

    824,633       239,327  

Less: bank overdrafts

    (825,486 )     (139,847 )
      (853 )     99,480  

 

17.

Creditors: Amounts falling due within one year

 

   

2015

£

   

2014

£

 

Bank overdrafts

    825,486       139,847  

Trade creditors

    649,283       602,845  

Corporation tax

    47,495       -  

Taxation and social security

    36,959       39,865  

Other creditors

    187,095       192,269  

Accruals and deferred income

    329,445       267,990  
      2,075,763       1,242,816  

 

 Included within accruals and deferred income at the year end are preferential dividends payable of £110,255 (2014 - £22,899). 

 

 
Page 20

 

 

Accutronics Limited

 

Notes to the Financial Statements 

For the Year Ended 31 August 2015


  

18.

Financial instruments

 

 

 

   

2015

£

   

2014

£

 
                 
Financial assets                

Financial assets measured at undiscounted amount receivable

    2,378,197       1,435,695  
      2,378,197       1,435,695  

Financial liabilities

               

Financial liabilities measured at undiscounted amount payable

    (1,661,864 )     (934,961 )
      (1,661,864 )     (934,961 )

 

Financial assets measured at undiscounted amount receivable comprise cash at bank, trade debtors and other debtors.

 

Financial liabilities measured at undiscounted amount payable comprise bank overdrafts, trade creditors and other creditors.

 

 

19.

Deferred taxation

 

 

   

2015

£

 
         

At beginning of year

    29,522  

Charged to the profit or loss

    21,469  

At end of year

    50,991  

 

The provision for deferred taxation is made up as follows:

 

   

2015

£

 
         

Accelerated capital allowances

    51,944  

Other timing differences

    (953 )
      50,991  

 

 
Page 21

 

 

Accutronics Limited

 

Notes to the Financial Statements 

For the Year Ended 31 August 2015


  

20.

Share capital

 

 

   

2015

   

2014

 
   

£

   

£

 

Shares classified as equity

               
Allotted, called up and fully paid                

179,453 (2014 - 175,000) Ordinary shares of £1 each

    179,453       175,000  

75,000 'A' Ordinary shares of £1 each

    75,000       75,000  
      254,453       250,000  

 

On 11 May 2015 the company issued and allotted 4,453 Ordinary shares of £1 each, at par.

 

Each Ordinary share is entitled to one vote in any circumstances and each share is also entitled pari passu to dividend payments or any other distribution, including a distribution arising from a winding up of the company.

 

The 'A' Ordinary shares shall be a separate class of shares for the purpose of paying dividends or other distributions but, in all other respects, shall rank pari passu with the Ordinary shares.

 

 

21.

Reserves

 

Profit & loss account

 

The profit and loss account represents cumulative profits or losses, net of dividends paid and other adjustments.

 

 

22.

Pension commitments

 

The Company contributions to the personal pension plans of a number of employees. The charge in the year represents the amounts contributed to these schemes in the period. Contributions for the year amounted to £37,533 (2014 - £32,621). Included in creditors are contributions totalling £9,192 (2014 -

£6,566) which were payable to the funds at the balance sheet date.

 

 
Page 22

 

 

Accutronics Limited

 

Notes to the Financial Statements 

For the Year Ended 31 August 2015


  

23.

Commitments under operating leases

 

At 31 August 2015 the Company had future minimum lease payments under non-cancellable operating leases as follows:

 

   

2015

£

   

2014

£

 

Land and buildings

               

Not later than 1 year

    55,000       55,000  

Later than 1 year and not later than 5 years

    -       10,000  

Total

    55,000       65,000  

 

   

2015

£

   

2014

£

 

Other

               

Not later than 1 year

    13,979       19,329  

Later than 1 year and not later than 5 years

    5,407       19,385  

Total

    19,386       38,714  

 

 

24.

Related party transactions

 

During the year R A Phillips, a director of the company, was paid an interim dividend of £20,000 (2014 - £Nil).

 

 

25.

Controlling party

 

At the balance sheet date, in the opinion of the directors, there is no one ultimate controlling party.

 

As detailed in the directors report, on 13 January 2016 the entire issued share capital of the company was acquired by Ultralife UK Limited. The ultimate parent company is Ultralife Corporation. There is no one ultimate controlling party.

 

Page 23