The directors present the strategic report for the year ended 31 December 2024.

The directors are pleased to report a positive performance for the financial year to December 2024.

Turnover grew strongly, increasing by 43% to £12.3m from £8.7m. This reflects the successful addition of new clients during the year, driving both licence revenue and income from product implementations. Cost of sales rose by 64%, from £4.7m to £7.7m, through deepened collaboration with systems integration partners to support delivery for the expanding client base. As a result, gross profit increased modestly to £4.6m (2023: £4.0m).

Administrative expenses increased by 33%, from £6.3m to £8.4m, reflecting continued investment in Sales, Technology and Delivery teams. As a result, the operating loss widened to £3.7m (2023: £2.3m). These investments are deliberate and position the business for scale, ensuring the platform can support a growing client base and drive long-term, sustainable growth. This drove an increase in the net loss for the year to £4.30m, compared to £2.02m in the prior year.

The balance sheet remains strong, with a positive net current asset position of £2.8m and £6.2m of cash.

The business operates robust risk management and governance frameworks both operationally and at board level, reflected in its external quality accreditations (e.g. ISO 27001).The directors consider the principal risks and uncertainties to be:

Macroeconomic Risks

Deterioration in economic conditions

Our large clients are highly exposed to broader macroeconomic conditions, including interest rate movements, inflation, and geopolitical uncertainty. Adverse changes may reduce insurers’ appetite for new technology investments, delay purchasing decisions, or impact our customers’ financial stability, which in turn could affect our growth trajectory.

Business Risks

Funding and liquidity risk

The Company’s growth strategy requires continued investment ahead of revenue, and the timing of collections from large enterprise customers can be variable. Key uncertainties relate to (i) the timing and quantum of external financing relative to operating cash flows, (ii) conversion of advanced commercial opportunities into contracted revenue and cash, and (iii) the sensitivity of cash runway to downside trading scenarios. Management monitors cash runway closely, performs sensitivity and reverse‑stress testing, and has identified specific mitigations including financing plans and cost controls. For the detailed going concern assessment (including the disclosure of material uncertainties), see Note 1.2 (Going concern) to the financial statements.

Competition

We operate in a highly competitive environment, with both established technology providers and emerging startups seeking to serve major insurance carriers. Competitors may have greater resources, more established customer relationships, or the ability to respond more quickly to market changes. Failure to differentiate our solutions or maintain a strong value proposition could adversely impact our ability to win and retain clients.

Operational risks

Retention and recruitment

Attracting and retaining talent presents a significant challenge, given the complexity of our platform and the sophisticated nature of our client base. These factors mean that the pool of candidates with the necessary expertise and aptitude is limited. Nevertheless, by fostering an inclusive culture and investing in competitive compensation, benefits, and professional development, the Company has been able to secure and retain the high-calibre specialists required to drive our business forward.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2024.

The principal activity of the company continued to be the provision of the Send Insurance Platform to Tier 1 and Tier 2 commercial and specialty insurers.

Send is an enterprise SaaS company that provides solutions enabling major insurance carriers to manage and optimise their underwriting operations. The platform supports complex commercial and specialty insurance lines that require bespoke analysis. Product offerings include solutions for insurance, delegated underwriting, reinsurance, and MGA business models, as well as premium modules. The company continues to invest in data, connectivity, and artificial intelligence to enhance underwriting efficiency and operational resilience.

The results for the year are set out on page 12.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

No preference dividends were paid.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

The Send platform has seen strong growth since its Series A in 2022 but continues to invest in platform enhancements to secure world class talent. Market conditions or investor sentiment may affect our ability to raise additional capital on acceptable terms. Insufficient funding could constrain investment in product development, sales, and client delivery, limiting our ability to execute our strategy.

The Company actively monitors cash flow and conducts regular scenario planning to ensure it is prepared for unforeseen circumstances. In 2024, the Company arranged a convertible loan note with existing shareholders to further support ongoing growth and provide additional flexibility for its liquidity requirements.

The company borrows using either overdrafts or term loans whose tenure depends on the nature of the asset and management's view of the future direction of interest rates.

The Company holds balances of foreign currencies as a result of its global presence (primarily GBP and USD) and there were significant fluctuations in exchange rates during the financial year. The Company partially mitigates this foreign exchange risk by using non-GBP income to pay non-GBP suppliers, reducing the need for conversion or hedging.

As a B2B software vendor, the Company is exposed to credit risk through the payment terms it offers to its customers. The Company has strong credit control procedures and excellent relationships with the relevant finance and operations teams at its major customers, and there were no irrecoverable debts during the financial year.

The company undertakes ongoing R&D to enhance the Send Insurance Platform, which the company elects to capitalise in these financial statements. The Company claims research and development tax relief from the UK tax authority based on qualifying expenditures.

On 25 June 2025, the Company drew down an additional £1.5 million under its existing unsecured convertible loan note. The terms remain unchanged, with a 10% coupon and conversion rights.

The Company's business activities, together with the factors likely to affect its future development, performance and position, are set out in this report. The financial position of the Company and its liquidity position are set out in the attached accounts. In addition, the principal risks and uncertainties section above details the policies and processes in place to manage financial risk, and exposures to credit and liquidity risk. The directors are committed to the development and improvement of the services already on offer as well as a commitment to future company investment.

In accordance with the company's articles, a resolution proposing that TC Group be reappointed as auditor of the company will be put at a General Meeting.

The directors are responsible for preparing the annual 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 and then apply them consistently;

• make judgements 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.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

We have audited the financial statements of Send Technology Solutions Limited (the 'company') for the year ended 31 December 2024 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the company's affairs as at 31 December 2024 and of its loss for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material uncertainty related to going concern

We draw attention to Note 1.2 in the financial statements which highlights that the company will not have sufficient liquidity to continue to realise its assets and discharge its liabilities beyond April 2026 unless additional external funding is secured and other mitigating actions are implemented. These events and conditions, along with other matters set forth in that Note, indicate that a material uncertainty exists that may cast doubt on the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

• the financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of directors' remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine 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, the directors are 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 unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Extent to which the audit was considered capable of detecting irregularities, including fraud

The objectives of our audit, in respect to fraud, are: to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and its management.

Our approach was as follows:

• We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, and through discussion with the directors and other management (as required by auditing standards), and discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations;

• We considered the legal and regulatory frameworks directly applicable to the financial statements reporting framework (FRS 102 and the Companies Act 2006) and the relevant tax compliance regulations in the UK;

• We considered the nature of the industry, the control environment and business performance, including the key drivers for management’s remuneration;

• We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit;

• We considered the procedures and controls that the company has established to address risks identified, or that otherwise prevent, deter and detect fraud; and how senior management monitors those programmes and controls.

Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included:

• testing manual journals;

• reviewing the financial statement disclosures and testing to supporting documentation;

• performing relevant analytical procedures; and

• enquiring of management

These procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/Our-Work/Audit/Audit-and-assurance/Standards-and-guidance/Standards-and-guidance-for-auditors/Auditors-responsibilities-for-audit/Description-of-auditors-responsibilities-for-audit.aspx. This description forms part of our auditor’s report.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

The notes on pages 18 to 34 form part of these financial statements.

The notes on pages 18 to 34 form part of these financial statements.

The notes on pages 18 to 34 form part of these financial statements.

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The notes on pages 18 to 34 form part of these financial statements.

The notes on pages 18 to 34 form part of these financial statements.

Send Technology Solutions Limited is a private company limited by shares incorporated in England and Wales. The registered office is 3rd Floor, 86-90 Paul Street, London, EC2A 4NE.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

Basis of preparation and assessment period

The financial statements have been prepared on a going concern basis. In forming this judgement, the Directors evaluated cash flow forecasts covering at least 12 months from the date of approval of these financial statements (the assessment period), together with stress and sensitivity analyses.

Events and conditions considered

The forecasts consider the Company’s cash resources, expected trading, and external financing. The base case indicates sufficient liquidity for the assessment period, but delays in funding or collections could create a shortfall from Q2 2026, requiring cost-saving measures. These risks highlight the importance of timely funding and effective cost controls for the Company’s status as a going concern. This assessment is based on reasonable and supportable assumptions as required by financial reporting standards, but it highlights that access to timely funding and effective execution of cost controls are critical to the Company’s ability to continue as a going concern.

Mitigating actions and funding plans

The forecasts incorporate the Directors’ plans and reasonable assumptions regarding: (a) financing—access to additional debt funding, including a term loan facility for which terms are agreed in principle and awaiting signature, assumed available for immediate drawdown upon execution; as well as an equity fundraise; (b) cash optimisation—targeted cost phasing and discretionary spend controls; and (c) working capital—expected collections from executed and near‑term contracts. Cash resources at the time of assessment include proceeds from the £1.5 million convertible loan note tranche drawn in June 2025 and the expected receipt of an R&D tax credit in November 2025.

Conclusion and material uncertainties

Following their assessment, the Directors believe it is appropriate to prepare the financial statements on a going concern basis. However, if the Company fails to secure additional funding or implement the necessary mitigating actions within the forecasted timeframes, it may not be able to realise its assets or meet its liabilities as they fall due. This situation represents a material uncertainty that could impact the Company's ability to continue as a going concern. Nevertheless, given the Company's established track record of successful fundraising, the Directors have not made any adjustments to the financial statements for this uncertainty.

Cross‑references

Liquidity risk disclosures are provided in the Directors' report - funding risk. The Strategic report contains a high‑level summary and cross‑refers back to this.

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Prior to the current accounting period, development costs were amortised on a straight line basis with a fixed end date of 31 December 2026.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally 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.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

Convertible loan notes

The proceeds received on issue of the Company's convertible debt are allocated into their liability and equity components and presented separately in the Statement of financial position. The amount initially attributed to the debt component equals the discounted cash flows using a market rate of interest that would be payable on a similar debt instrument that did not include an option to convert.

The difference between the net proceeds of the convertible debt and the amount allocated to the debt component is credited direct to equity and is not subsequently remeasured. On conversion, the debt and equity elements are credited to share capital and share premium as appropriate.

Transaction costs that relate to the issue of the instrument are allocated to the liability and equity components of the instrument in proportion to the allocation of proceeds.

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

Prior to the current accounting period amortisation was charged to reduce the amount of the asset (including additions) to zero on 31 December 2029.

From 1 January 2024 the policy was changed to write-off the cost of any capitalised development expenditure over 5 years from the end of the month in which it was incurred. Management have concluded that this policy more accurately aligns with the economic benefits being derived from the development asset.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount 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 may differ from these estimates.

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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

In valuing the liability component of the Company's convertible debt, management must make judgements regarding the discount rate, expected maturity date of the debt, and equity value at the date of conversion. Management have considered available market data to make this assessment, including the typical range of convertible loan note coupon rates, price volatility for comparable companies listed on public markets, and probabilities of share price movements up and down.

The average monthly number of persons (including directors) employed by the company during the year was:

Their aggregate remuneration comprised:

During the year part of directors' remuneration was capitalised as development.

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2023 - 4).

The actual charge/(credit) for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:

Borrowings consist of a single loan with fixed monthly repayments of £5,840 pcm. The loan carries an interest rate of 12.01% per annum and matures on 29 February 2028.

£3.5m of convertible loan notes were issued on 13 December 2024. The notes are convertible into shares of the company should any of the conversion triggers occur, or at maturity on 12 December 2029. On maturity the conversion price is the share price of the ordinary shares at 2 November 2022, when the previous round of equity financing was raised. Should the conversion be triggered by a qualifying share issue before maturity, the conversion price shall be the price paid by those equity investors discounted by 25%.

Interest of 10% will accrue annually and remain payable until maturity or conversion, whichever occurs earlier.

The interest expensed for the year is calculated by applying an effective interest rate of 10.2% to the liability component of the loan notes. The liability component is measured at amortised cost.

The net proceeds received from the issue of the convertible loan notes have been split between the financial liability element and an equity component, representing the fair value of the embedded option to convert the financial liability into equity.

The liability component is measured at amortised cost, and the difference between the carrying amount of the liability at the date of issue and the amount reported in the Balance Sheet represents the effective interest rate less interest paid to that date.

The effective rate of interest is 10.2%.

The equity component of the convertible loan notes has been credited to the equity reserve.

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

Operating lease payments represent rentals payable by the company for use of office space.

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows: