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REGISTERED NUMBER: 08324226 (England and Wales)

UNAUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER 2024

FOR

HILIGHT SEMICONDUCTOR LIMITED

HILIGHT SEMICONDUCTOR LIMITED (REGISTERED NUMBER: 08324226) |

CONTENTS OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST DECEMBER 2024

Page |

| Company Information | 1 |

| Balance Sheet | 2 |

| Notes to the Financial Statements | 4 |

| HILIGHT SEMICONDUCTOR LIMITED |

COMPANY INFORMATION

FOR THE YEAR ENDED 31ST DECEMBER 2024

| DIRECTOR: | J G Steele

| REGISTERED OFFICE: | Parkers

| Cornelius House

| 178-180 Church Road

| Hove

| East Sussex

| BN3 2DJ

| REGISTERED NUMBER: | 08324226 (England and Wales)

| ACCOUNTANTS: | Parkers

| 178-180 Church Road

| Hove, East Sussex

| BN3 2DJ

HILIGHT SEMICONDUCTOR LIMITED (REGISTERED NUMBER: 08324226) |

BALANCE SHEET

31ST DECEMBER 2024

| 2024 | 2023 |

| Notes | £ | £ | £ | £ |

FIXED ASSETS

Tangible assets | 4 | 1,086,320 |  | 1,448,362 |  |

Investments | 5 | 2 |  | 2 |  |

1,086,322 |  | 1,448,364 |  |

CURRENT ASSETS

Stocks | 1,062,384 |  | 1,324,410 |  |

Debtors | 6 | 221,878 |  | 2,817,041 |  |

Cash at bank | 303,905 |  | 4,927 |  |

1,588,167 |  | 4,146,378 |  |

CREDITORS

Amounts falling due within one year | 7 | 14,441,306 |  | 19,768,597 |  |

NET CURRENT LIABILITIES | (12,853,139 | ) | (15,622,219 | ) |

TOTAL ASSETS LESS CURRENT LIABILITIES | (11,766,817 | ) | (14,173,855 | ) |

CAPITAL AND RESERVES

Called up share capital | 8 | 3,621,664 |  | 3,621,664 |  |

Share premium | 30,954,709 |  | 30,954,709 |  |

Retained earnings | (46,343,190 | ) | (48,750,228 | ) |

SHAREHOLDERS' FUNDS | (11,766,817 | ) | (14,173,855 | ) |

(11,766,817 | ) | (14,173,855 | ) |

The company is entitled to exemption from audit under Section 477 of the Companies Act 2006 for the year ended 31st December 2024.

The members have not required the company to obtain an audit of its financial statements for the year ended 31st December 2024 in accordance with Section 476 of the Companies Act 2006.

The director acknowledges his responsibilities for:

(a) | ensuring that the company keeps accounting records which comply with Sections 386 and 387 of the Companies Act 2006 and

(b) | preparing financial statements which give a true and fair view of the state of affairs of the company as at the end of each financial year and of its profit or loss for each financial year in accordance with the requirements of Sections 394 and 395 and which otherwise comply with the requirements of the Companies Act 2006 relating to financial statements, so far as applicable to the company.

HILIGHT SEMICONDUCTOR LIMITED (REGISTERED NUMBER: 08324226) |

BALANCE SHEET - continued

31ST DECEMBER 2024

The financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

In accordance with Section 444 of the Companies Act 2006, the Income Statement has not been delivered.

The financial statements were approved by the director and authorised for issue on 17th September 2025 and were signed by:

J G Steele - Director

HILIGHT SEMICONDUCTOR LIMITED (REGISTERED NUMBER: 08324226) |

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST DECEMBER 2024

1. | STATUTORY INFORMATION

| Hilight Semiconductor Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

2. | ACCOUNTING POLICIES

| Basis of preparing the financial statements

| The financial statements have been prepared on the going concern basis due to the continuing support of the principal shareholders.

| Significant judgements and estimates

| No significant judgements have had to be made by the directors in preparing these financial statements other than as regards the realisable value of the stock.

| Turnover

| Turnover represents net invoiced sales of goods and services, excluding value added tax.

| Tangible fixed assets

| Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

| Plant and machinery | - | at varying rates on cost

| Fixtures and fittings | - | 15% on cost

| Tooling (masks) | - | 10% on cost

| Computer equipment | - | 33% on cost

| The company's own production masks (tooling) are capitalised at their cumulative development cost once the design has been finalised and tested and production has commenced.

| Investments in subsidiaries

| Investments in subsidiary undertakings are recognised at cost.

| Stocks

| Stocks of finished products ready for sale and product work in progress are valued at original cost, which is expected to continue to be less than realisable value, with no provisions for obsolete or slow moving items.

| Cost includes initial purchase and subsequent processing costs at the US$ rate applicable at the time of purchase and, as all stocks are held at the third party processors, there are no costs in bringing stocks to their present location.

| 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 accounts receivable and payable, asset finance and loans from related parties.

| Financial assets that are measured at 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 profit or loss.

| For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and the 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 reporting date.

HILIGHT SEMICONDUCTOR LIMITED (REGISTERED NUMBER: 08324226) |

NOTES TO THE FINANCIAL STATEMENTS - continued

FOR THE YEAR ENDED 31ST DECEMBER 2024

2. | ACCOUNTING POLICIES - continued

| Taxation

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

| Current or deferred taxation assets and liabilities are not discounted.

| Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

| Deferred tax

| Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

| Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

| Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

| Research and development

| Expenditure on research and development is written off in the year in which it is incurred.

| Foreign currencies

| Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

| Hire purchase and leasing commitments

| Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

| The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability.

| Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

| Secondary rentals on finance lease assets retained but fully depreciated over the primary rental period are expensed as operating lease rentals with the liability disclosed as a rental commitment.

| Pension costs and other post-retirement benefits

| The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

| Grants

| Grants are credited to profit and loss account as the eligible expenditure is incurred except where costs exceed the approved budget and the completion date is uncertain when estimated time to complete is used to time apportion the income over the life of the project.

HILIGHT SEMICONDUCTOR LIMITED (REGISTERED NUMBER: 08324226) |

NOTES TO THE FINANCIAL STATEMENTS - continued

FOR THE YEAR ENDED 31ST DECEMBER 2024

2. | ACCOUNTING POLICIES - continued

| Impairment of non-financial assets

| At each reporting date non-financial assets not carried at fair value, like intellectual property, plant, property and equipment, are reviewed to determine whether there is an indication that an asset may be impaired. If there is an indication of possible impairment, the recoverable amount of any asset or group of related assets, which is the higher of value in use and the fair value less cost to sell, is estimated and compared with its carrying amount. If the recoverable amount is lower, the carrying amount of the asset is reduced to its recoverable amount and an impairment loss is recognised immediately in profit or loss.

| Stock and work in progress is also assessed for impairment at each reporting date but carried at original cost.If an impairment loss is subsequently reversed, the carrying amount of the asset or group of related assets is increased to the revised estimate of its recoverable amount, but not to exceed the amount that would have been determined had no impairment loss been recognised for the asset or group of related assets.

3. | EMPLOYEES AND DIRECTORS

| The average number of employees during the year was 6 (2023 - 2 ) .

4. | TANGIBLE FIXED ASSETS

| Plant and

| machinery

| etc

£ |

| COST

| At 1st January 2024

| and 31st December 2024 | 6,275,866 |  |

| DEPRECIATION

| At 1st January 2024 | 4,827,504 |  |

| Charge for year | 362,042 |  |

| At 31st December 2024 | 5,189,546 |  |

| NET BOOK VALUE

| At 31st December 2024 | 1,086,320 |  |

| At 31st December 2023 | 1,448,362 |  |

5. | FIXED ASSET INVESTMENTS

| Shares in

| group

| undertakings

£ |

| COST

| At 1st January 2024

| and 31st December 2024 | 2 |  |

| NET BOOK VALUE

| At 31st December 2024 | 2 |  |

| At 31st December 2023 | 2 |  |

HILIGHT SEMICONDUCTOR LIMITED (REGISTERED NUMBER: 08324226) |

NOTES TO THE FINANCIAL STATEMENTS - continued

FOR THE YEAR ENDED 31ST DECEMBER 2024

6. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |

2024 | 2023 |

£ | £ |

| Trade debtors | 107,648 |  | 21,261 |  |

| Amounts owed by group undertakings | - |  | 884,920 |  |

| Other debtors | 114,230 |  | 1,910,860 |  |

221,878 |  | 2,817,041 |  |

7. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |

2024 | 2023 |

£ | £ |

| Trade creditors | 216,117 |  | 874,700 |  |

| Taxation and social security | 8,032 |  | 7,170 |  |

| Other creditors | 14,217,157 |  | 18,886,727 |  |

14,441,306 |  | 19,768,597 |  |

8. | CALLED UP SHARE CAPITAL

| Allotted, issued and fully paid:

| Number: | Class: | Nominal | 2024 | 2023 |

| value: | £ | £ |

| 569,883 | Ordinary | 12.5p | 71,236 |  | 71,236 |  |

| 5,435,349 | A Ordinary Non-Voting | 12.5p | 679,419 |  | 679,419 |  |

| 4,454,031 | B Preferred | 12.5p | 556,754 |  | 556,754 |  |

| 4,520,155 | Series A | 12.5p | 565,019 |  | 565,019 |  |

| 2,733,298 | Series B | 12.5p | 341,662 |  | 341,662 |  |

| 143,500 | C Ordinary | 12.5p | 17,938 |  | 17,938 |  |

| 7,418,446 | Series C Convertible Preferred | 12.5p | 927,307 |  | 927,307 |  |

| 3,698,635 | Series D Convertible Preferred | 12.5p | 462,329 |  | 462,329 |  |

3,621,664 |  | 3,621,664 |  |

| Options:

| As at 1st January 2024 and 31st December 2024, the company had options in force over 2,380,600 A Ordinary Non-Voting shares, 1,299,600 at £0.125 (1,299,600 vested), 416,000 at £1.00 (416,000 vested), 295,000 at £1.60 (295,000 vested), 21,000 at £0.25 (21,000 vested) and 349,000 at $0.20 (116,000 vested).

| No options lapsed or were exercised during the year.

9. | RELATED PARTY DISCLOSURES

| At the year end the company owed £4,591,328 (2023: £5,013,708) to Roundhurst Holdings Limited, a company controlled by Mr J G Steele. The loan is interest free, designated in GBP and repayable on demand. The company also owed $1,151,287 (2023: $1,151,287) to Roundhurst Holdings Limited. Interest is charged on the loan at 6% per annum but not accrued as it will be waived on conversion into Series C shares at the lenders discretion.The loan is designated in USD.

| At the year end the company also owed $2,025,000 (2023: $2,025,000) to Atlantic Bridge III Limited Partnership, a shareholder of the company. Interest is charged on the loan at 6% per annum but not accrued as it will be waived on conversion into Series C shares at the lenders discretion.The loan is designated in USD.