ÅrsrapportEske W. Petersen2024-03-08Erklæring om udvidet gennemgangRegnskabsklasse BBeierholmVoergaardvej 29200 Aalborg SV2021-10-012022-09-302022-10-012023-09-3033388381Medichanical Engineering ApSKlokkestøbergade179000AalborgAalborgBeierholm32895468Smedevej1 B9500HobroDanmarktrueWe have on this day presented the annual report for the financial year 01.10.22 - 30.09.23 for Medichanical Engineering ApS.The annual report is presented in accordance with the Danish Financial Statements Act.In our opinion, the financial statements give a true and fair view of the company's assets, liabilities and financial position as at 30.09.23 and of the results of the company's activities for the financial year 01.10.22 - 30.09.23.We believe that the management's review includes a fair review of the matters dealt with in the management's review.The annual report is submitted for adoption by the general meeting.Aalborg2024-02-23Eske Winther PetersenClaus HansenChairmanMichael TandrupRenaat VermeulenTo the shareholder of Medichanical Engineering ApS OpinionBased on the work performed, in our opinion, the financial statements give a true and fair view of the company's financial position at 30.09.23 and of the results of the company's operations for the financial year 01.10.22 - 30.09.23 in accordance with the Danish Financial Statements Act.Basis for OpinionWe conducted our extended review in accordance with the Danish Business Authority’s Assurance Standard for Small Enterprises and FSR – Danish Auditors’ standard on extended review of financial statements prepared in accordance with the Danish Financial Statements Act. Our responsibilities under those standards and requirements are further described in the ‘Auditor’s responsibilities for the extended review of the financial statements’ section of our report. We are independent of the company in accordance with the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (IESBA Code) and the additional ethical requirements applicable in Denmark, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our basis for conclusion.Management is responsible for the management’s review. Our conclusion on the financial statements does not cover the management’s review, and we do not express any form of assurance conclusion there on. In connection with our extended review of the financial statements, it is our responsibility to read the management’s review and in doing so consider whether the management’s review is materially inconsistent with the financial statements or our knowledge obtained during the extended review, or otherwise appears to be materially misstated. Moreover, it is our responsibility to consider whether the management’s review provides the information required under the Danish Financial Statements Act. Based on the work we have performed, we conclude that the management’s review is in accordance with the financial statements and has been prepared in accordance with the requirements of the Danish Financial Statements Act. We did not identify any material misstatement in the management’s review.Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the Danish Financial Statements Act and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting in preparing the financial statements unless management either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.Our responsibility is to express a conclusion on the financial statements. This requires that we plan and perform procedures in order to obtain limited assurance for our conclusion on the financial statements and in addition perform specifically required supplementary procedures to obtain further assurance for our conclusion. An extended review comprises procedures that primarily consist of inquiries to management and others within the company, as appropriate, analytical procedures, the specifically required supplementary procedures as well as evaluation of the evidence obtained. The procedures performed in an extended review are less than those performed in an audit, and accordingly, we do not express an audit opinion on the financial statements.Hobro2024-02-23Jacob Dahl AllentoftState Authorized Public Accountantmne46632Primary activities The company's activities comprise of the development and sale of medical instruments. Uncertainty concerning recognition and measurement In the financial statements for the financial year 01.10.22 - 30.09.23, it is important to note the following uncertainty with regard to recognition and measurement, as it has had a significant influence on the assets and liabilities recognised in the financial statements: The company has completed product development and is now focusing on establishing sales channels, marketing campaigns etc. in selected markets. The primary focus is the United States where activities amongst potential customer hospitals is largely back at the same level compared to the time prior to Covid-19 lockdowns. The company's value will depend on this market development. If the market development does not succeed, it will be necessary to write down the company's assets. Development in activities and financial affairs The income statement for the period 01.10.22 - 30.09.23 shows a profit/loss of DKK -3,423,386 against DKK -3,667,373 for the period 01.10.21 - 30.09.22. The balance sheet shows equity of DKK 1,597,674. The management considers the net profit for the year to be disappointing since re-commencing the market development in international markets, after lockdowns caused by the COVID-19 pandemic, has progressed slower than anticipated. The company has entered into an agreement with with a large distributor in the US. This leaves the management optimistic that commercial progress in the coming financial year will be sufficient to attract new external capital for growing the sales to the state of cash positive operations and beyond. In September of 2022 a new patent was granted in the US to protect intellectual proporty rights relating to the core technology of the company’s main product. Information on going concern It is the management's assessment that the company's capital availability is sufficient to cover the liquidity needs that will be in connection with the start-up of the sales process of the product. Hereby is the capital resources sufficient to cover the liquidity need that will be involved with operations in the coming financial year. Based on the information, it is management's expectation that the company is a going concern. Subsequent events After the end of the financial year, a capital increase was carried out, which added DKK 3,699,352 in additional liquidity to the company.-35234477237293389099977121242212124220-3410455-23516191037571001398524490815313158-3797513-4063291-374127-395918-3423386-3667373-3423386-366737313022384151466051302238415146605920092009200920013031584151558051424295008614242950086494111030712312379013417449568146511687463665461648631132362618674631435521017023268769541835661015745911814351-8636739-8790024159767432078931898488227261518984882272615761655880193731649994197458392665529993956347197693179790528454465454771401160159249615488041085904811542760143552101702326876954560546263566800001095667-263566-1656213-16568923313105-342338676954010157459-8636739811612876485112000112000416545446113674222212421982000000212421982000000-6095593-2000000-2124221-8219814-2000000130223840-2260876391668387963-32458935163819745832299172The annual report is presented in accordance with the provisions of the Danish Financial Statements Act (Årsregnskabsloven) for enterprises in reporting class B with application of provisions for a higher reporting class. In accordance with section 110 of the Danish Financial Statements Act, the company has not prepared consolidated financial statements. Income is recognised in the income statement as earned, including value adjustments of financial assets and liabilities. All expenses, including depreciation, amortisation, impairment losses and write-downs, are also recognised in the income statement. Assets are recognised in the balance sheet when it is probable that future economic benefits will flow to the company, and the value of such assets can be measured reliably. Liabilities are recognised in the balance sheet when it is probable that future economic benefits will flow from the company, and the value of such liabilities can be measured reliably. On initial recognition, assets and liabilities are measured at cost. Subsequently, assets and liabilities are measured as described for each item below. On recognition and measurement, account is taken of foreseeable losses and risks arising before the date at which the annual report is presented and proving or disproving matters arising on or before the balance sheet date. The annual report is presented in Danish kroner (DKK). On initial recognition, transactions denominated in foreign currencies are translated using the exchange rates applicable at the transaction date. Exchange rate differences between the exchange rate applicable at the transaction date and the exchange rate at the date of payment are recognised in the income statement as a financial item. Receivables, payables and other monetary items denominated in foreign currencies are translated using the exchange rates applicable at the balance sheet date. The difference between the exchange rate applicable at the balance sheet date and at the date at which the receivable or payable arose or was recognised in the latest annual report is recognised under financial income or expenses in the income statement. Fixed assets, inventories and other non-monetary assets acquired in foreign currencies are translated using historical exchange rates.Lease payments relating to operating and finance leases are recognised in the income statement on a straight-line basis over the lease term. Grants are recognised when there is reasonable certainty that the grant conditions have been met and that the grant will be received. Grants to cover expenses incurred are recognised on a proportionate basis in the income statement over the period in which the expenses eligible for grants are expensed. Grants are recognised under other operating income. Grants received for the production or construction of assets are recognised as deferred income under payables. For amortisable assets, the grant is recognised as the asset is amortised. Gross result comprises revenue, other operating income and raw materials and consumables and other external expenses. Income from the sale of goods is recognised in the income statement if delivery has taken place and the risk has passed to the buyer before the end of the financial year and where the selling price can be determined reliably and is expected to be paid. Revenue is measured at fair value and is determined exclusive of VAT and other taxes collected on behalf of third parties and less discounts. Other operating income comprises income of a secondary nature in relation to the enterprise’s activities, including rental income, negative goodwill and gains on the sale of intangible assets and property, plant and equipment. Costs of raw materials and consumables comprise raw materials and consumables used for the year as well as any changes in inventories, including any inventory wastage. Write-downs of inventories of raw materials and consumables are also recognised under raw materials and consumables to the extent that these do not exceed normal write-downs. Other external expenses comprise costs relating to distribution, sales and advertising and administration, premises and bad debts to the extent that these do not exceed normal write-downs. Staff costs comprise wages and salaries as well as other staff-related costs. The amortisation of intangible assets aim at systematic amortisation over the expected useful lives of the assets. Assets are amortised according to the straight-line method based on the following expected useful lives and residual values: The basis of amortisation is the cost of the asset less the expected residual value at the end of the useful life. Moreover, the basis of amortisation is reduced by any impairment losses. The useful life and residual value are determined when the asset is ready for use and reassessed annually. Intangible assets are impaired in accordance with the accounting policies referred to in the ‘Impairment losses on fixed assets’ section. Dividends from equity investments measured at cost are recognised as income in the financial year in which the dividend is declared. Impairment losses on financial assets comprise impairment of investments at a lower recoverable amount and write-downs of financial current assets at a lower net realisable value. Interest income and interest expenses, foreign exchange gains and losses on transactions denominated in foreign currencies etc. are recognised in other net financials. The current and deferred tax for the year is recognised in the income statement as tax on the profit/loss for the year with the portion attributable to the profit/loss for the year, and directly in equity with the portion attributable to amounts recognised directly in equity. Completed development projects Development projects are recognised in the balance sheet where the project aims at developing a specific product or a specific process, intended to be produced or used, respectively, by the company in its production process. On initial recognition, development projects are measured at cost. Cost comprises the purchase price plus expenses resulting directly from the purchase, including wages and salaries directlyor indirectly attributable to the development projects until the asset is ready for use. Interest on loans arranged to finance development projects in the development period is not included in the cost. Other development projects and development costs are recognised in the income statement in the year in which they are incurred. Development projects are subsequently measured in the balance sheet at cost less accumulated amortisation and impairment losses. Completed development projects are amortised using the straight-line method based on useful lives, which are stated in the ‘Amortisation and impairment losses’ section. Acquired rights Aquired rights are measured in the balance sheet at cost less accumulated amortisation and impairment losses. Acquired rights are amortised using the straight-line method based on useful lives, which are stated in the ‘Amortisation and impairment losses’ section. Gains and losses on the disposal of intangible assets Gains and losses on the disposal of intangible assets are determined as the difference between the selling price, if any, less selling costs and the carrying amount at the date of disposal. Equity investments in subsidiaries are measured in the balance sheet at cost less any impairment losses. Transaction costs directly attributable to the acquisition are recognised in the cost of equity investments. Gains or losses on disposal of equity investments are determined as the difference between the disposal consideration and the carrying amount of net assets at the time of sale, including non-amortised goodwill, as well as the expected costs of divestment or discontinuation. Gains and losses are recognised in the income statement under income from equity investments. The carrying amount of fixed assets which are not measured at fair value is assessed annually for indications of impairment over and above what is reflected in amortisation. If the company's realised return on an asset or a group of assets is lower than expected, this is considered an indication of impairment. If there are indications of impairment, an impairment test is conducted of individual assets or groups of assets. If dividends are distributed on equity investments in subsidiaries exceeding the year earnings from the enterprise in question, this is considered an indication of impairment. The assets or groups of assets are impaired to the lower of recoverable amount and carrying amount. The higher of net selling price and value in use is used as the recoverable amount. The value in use is determined as the present value of expected net cash flows from the use of the asset or group of assets as well as expected net cash flows from the sale of the asset or group of assets after the expiry of their useful lives. Impairment losses are reversed when the reasons for the impairment no longer exist. Inventories are measured at cost calculated according to the FIFO-method. Inventories are written down to the lower of cost and net realisable value. The cost of raw materials and consumables as well as goods for resale is determined as purchase prices plus expenses resulting directly from the purchase. The net realisable value of inventories is determined as the selling price less costs of completion and costs necessary to make the sale and is determined taking into account marketability, obsolescence and the expected development in the selling price. Receivables are measured at amortised cost, which usually corresponds to the nominal value, less write-downs for bad debts. Write-downs for bad debts are determined based on an individual assessment of each receivable if there is no objective evidence of individual impairment of a receivable. Deposits recognised under assets comprise deposits paid to the lessor under leases entered into by the company. Prepayments recognised under assets comprise costs incurred in respect of subsequent financial years. Cash includes deposits in bank account. An amount equivalent to internally generated development costs in the balance sheet is recognised in equity under reserve for development costs. The reserve is measured less deferred tax and reduced by amortisation and impairment losses on the asset. If impairment losses on development costs are subsequently reversed, the reserve will be restored with a corresponding amount. The reserve is dissolved when the development costs are no longer recognized in the balance sheet, and the remaining amount will be transferred to retained earnings. Current tax payable and receivable is recognised in the balance sheet as tax computed on the basis of the taxable income for the year, adjusted for tax paid on account. Deferred tax liabilities and tax assets are recognised on the basis of all temporary differences between the carrying amounts and tax bases of assets and liabilities. However, deferred tax is not recognised on temporary differences relating to goodwill which is non-amortisable for tax purposes and other items where temporary differences, except for acquisitions, have arisen at the date of acquisition without affecting the net profit or loss for the year or the taxable income. In cases where the tax value can be determined according to different taxation rules, deferred tax is measured on the basis of management’s intended use of the asset or settlement of the liability. Deferred tax assets are recognised, following an assessment, at the expected realisable value through offsetting against deferred tax liabilities or elimination in tax on future earnings. Deferred tax is measured on the basis of the tax rules and at the tax rates which, according to the legislation in force at the balance sheet date, will be applicable when the deferred tax is expected to crystallise as current tax. Long-term payables are measured at cost at the time of contracting such liabilities (raising of the loan). The payables are subsequently measured at amortised cost where capital losses and loan expenses are recognised in the income statement as a financial expense over the term of the payable on the basis of the calculated effective interest rate in force at the time of contracting the liability. Short-term financial payables are measured at amortised cost, normally corresponding to the nominal value of such payables. Other short-term payables are measured at net realisable value. Deferred income under liabilities comprises payments received in respect of income in subsequent financial years.Figures in DKK Contributed capital Share premium Reserve for develop-ment costs Retained earnings Statement of changes in equity for 01.10.22 - 30.09.23 Balance as at 01.10.22 183.566 0 11.814.351 -8.790.024 Capital increase 76.954 560.546 0 263.566 Debt conversion 80.000 1.095.667 0 0 Capital reduction -263.566 0 0 0 Transfers to/from other reserves 0 -1.656.213 -1.656.892 3.313.105 Net profit/loss for the year 0 0 0 -3.423.386 Balance as at 30.09.23 76.954 0 10.157.459 -8.636.739 It is the management's assessment that the company's capital availability is sufficient to cover the liquidity needs that will be in connection with the start-up of the sales process of the product. Hereby is the capital resources sufficient to cover the liquidity need that will be involved with operations in the coming financial year. Based on the information, it is management's expectation that the company is a going concern. In the financial statements for the financial year 01.10.22 - 30.09.23, it is important to note the following uncertainty as regards recognition and measurement as it has had a significant influence on the assets and liabilities recognised in the financial statements: The company has completed product development and is now focusing on establishing sales channels, marketing campaigns etc. in selected markets. The primary focus is the United States where activities amongst potential customer hospitals is largely back at the same level compared to the time prior to Covid-19 lockdowns. The company's value will depend on this market development. If the market development does not succeed, it will be necessary to write down the company's assets. 1. Special items Special items are income and expenses that are special due to their size and nature. The following special items were recorded in the financial year: Special items: Recognised in the income statement in: 2022/23 DKK 2021/22 DKK Public grants, Covid-19 Other operating income 220.007 1.183.916 Total 220.007 1.183.916 3. Intangible assets - continued - The development activities primarily include further development of the companys main product "X-pander" which is a medical device specifically for orthopedic surgery. The product will ensure more cost-effective hip surgeries, fewer surgical errors and fewer inconveniences for the patient. The company has completed product development of its first product and is now focusing on establishing sales channels, marketing campaigns etc. in selected markets. The company's value will depend on this market development. If the market development does not succeed, it will be necessary to write down the company's assets. It is not considered that there are special prerequisites for the recognition and measurement of development projects.30.09.23 30.09.22 DKK DKK 4. Receivables Receivables which fall due for payment more than 1 year after the end of the financial year 494.111 0 Receivables that fall due for payment more than 1 year after the end of the financial year are included in the accounting item "Receivables from group enterprises. Lease commitments The company has concluded lease agreements with terms to maturity of 3 months and total lease payments of DKK 3k, a total of DKK 9k. As security for debt to credit institutions of DKK 7.617k, a company charge has been provided comprising goodwill, intellectual property rights, motor vehicles, other plant, fixtures and fittings, tools and equipment, inventories and agricultural stock, trade receivables as well as fuels and other ancillary materials. 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