The directors present their Strategic Report together with the audited financial statements for the year ended 31 December 2024.

The principal activity of the Group during the year was the growing, packing and selling of vertically farmed bagged salad.

The Directors are pleased to report a year of significant growth, with revenue increasing 5x to £2.9m, driven by the popularity of our unwashed ready-to-eat bagged salad products under our award-winning Unbeleafable and Fresh Leaf Co brands. This top line growth benefited from increases in distribution and rate-of-sale with multiple UK retailers.

During the year, we continued to add growing and processing capacity at our state-of-the-art high care facility at Pepperness in Kent, aided by technological advances derived from our plant science laboratory in Cambridge.

Our business remains loss-making as we proceed with our growth strategy, deploying over £12m of capital expenditure during the year, and continuing to invest in capacity, facilitating further expansion in UK retail, as well as into adjacent food service and wholesale markets.

Our main investor, Generate Capital, has remained supportive throughout the year, committing a further £38m of funding via a Convertible Loan Note instrument in June 2024.

The Group uses a number of scorecards and KPIs to monitor performance, both internally and externally. These are continually assessed to allow speed of decision making and appropriate changes to strategy should it be required. Long term decision making is presented to and signed off at monthly board meetings.

Revenue is a key measure for the business and is seen as critically important for our continued success and growth.

Market Risk

The UK salad market continues to be very competitive, with a strong focus from retailers on quality and security of supply. Our differentiated products, with longer-lasting leaves which aren’t grown with pesticides, allows us to continue building a stronger position in the category and consistently deliver a higher quality product to our customers.

Liquidity Risk

GrowUp Group has access to liquidity through various facilities, however the Group aims to mitigate liquidity risk through effective cash management, to ensure sufficient liquidity is available to meet foreseeable demands.  As this is a growth business that has not yet generated positive cashflows, there is a need for further capital contribution/fund raising in the short to near term, and a further fund raising is planned in excess of £50m. Refer to the going concern disclosures on pages 4 and 17 for further detail.

Credit Risk

The Group’s main credit risks are associated with its trade receivables balance, predominantly held with large UK retailers. Deferred terms are only granted to customers who demonstrate appropriate payment history and satisfy credit worthiness procedures.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2024 for GrowUp Group Limited ("the company") and the group headed up by the company ("the group").

The principal activity of the company is that of management consultancy and research and development activities and a holding company.

The results for the year are set out on page 9.

No ordinary dividends were paid during the year (2023:nil). The directors do not recommend payment of a dividend.

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

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) including FRS 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 group and company, and of the profit or loss of the group 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;

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

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

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and 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 auditor of the company 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 auditor of the company is aware of that information.

Going concern

The directors considered the going concern assessment period to be up to 30 October 2026 as financial liabilities are expected to fall due in Q2 and Q3 2026. The Group monitors and manages its capital position and its liquidity risk regularly to ensure that it has access to sufficient funds to meet forecast cash requirements. Cash forecasts for management are regularly produced and sensitivities considered based on, but not limited to, the Group’s latest production, sales and expenditure forecasts, management’s best estimate of future energy prices, interest rates and sales growth, and the Group’s borrowing facilities.

As at 31 December 2024 the Group is in a net current liability position of £0.4 million and has overall net liabilities of £34.4 million. In 2024 the Group continued in its growth phase and had net cash outflows from operating and investing activities of £12.2 million and £11.7 million respectively, which were funded through the issue of shares, convertible loan notes and further borrowings. While the Group’s base case forecast indicates that, at a Farm level, positive monthly operational cash flows will begin to be generated during the assessment period, the Group intends to continue to grow operations and will require further funding. A further fund raising is planned in excess of £50 million during the assessment period. The directors are confident this will be successful as the Group has a record of fund raising and advisors have been appointed, however at the date of approval of the financial statements, this fund raising is not yet committed.

The base case, which assumes a successful fund raising in Q1 2026, indicates that the Group is able to operate as a going concern with sufficient headroom and remain in compliance with its loan covenants throughout the assessment period.

In line with the principal risks that have been identified to impact the financial capability of the Group to operate as going concern, a downside sensitivity scenario has been prepared reflecting the impact of loss of a key customer and a delay in the fundraising beyond the assessment period.  Management considers this represents a severe but plausible downside scenario appropriate for assessing going concern. In this downside scenario, when applied in aggregate to the base case forecast, the Group would have insufficient liquidity headroom after in Q1 2026 and would require various mitigating actions, including a delay in further capital expenditure and support from the Group’s shareholders. The directors consider these mitigating actions are realistic and feasible on the basis of the Group’s flexibility, operationally and financially, and based on a support letter received from an existing shareholder, and the track record of support provided.

Taking the above analysis into account, the Board was satisfied that, for the going concern assessment period, the Group is able to maintain adequate liquidity and comply with its lending covenants up to 30 October 2026 and has therefore adopted the going concern basis for preparing the financial statements.

Opinion on the financial statements

In our opinion, the financial statements:

• give a true and fair view of the state of the Group’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.

We have audited the financial statements of GrowUp Group Limited (“the Parent Company”) for the year ended 31 December 2024 which comprises the Group Profit and Loss, Group Balance Sheet, Company balance sheet, Group Statement of changes in equity, Company Statement of changes in equity, Group Statement of cash flows, and notes to the financial statements, including accounting policy information. 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).

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

Independence

We are independent of the Group 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.

Conclusions relating to going concern

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.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's ability to continue as a going concern for the period used for management’s going concern assessment, which is defined as the period up to 30 October 2026.

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 Directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.

Other Companies Act 2006 reporting

In our opinion, based on the work undertaken in the course of the 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 Group 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 Director's report, 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 Group’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 Group or the Parent 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.

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Non-compliance with laws and regulations

Based on:

• Our understanding of the Group and the industry in which it operates;

• Discussion with management and those charged with governance;

• Obtaining an understanding of the Group’s policies and procedures regarding compliance with laws and regulations;

we considered the significant laws and regulations to be the applicable accounting framework and UK tax legislation.

The Group is also subject to laws and regulations where the consequence of non-compliance could have a material effect on the amount or disclosures in the financial statements, for example through the imposition of fines or litigations. We identified such laws and regulations to be the Agricultural Act 2020, employment law, environmental regulations, health and safety legislation and Companies Act 2006.

Our procedures in respect of the above included:

• Review of minutes of meetings of those charged with governance for any instances of non-compliance with laws and regulations;

• Review of correspondence with tax authorities for any instances of non-compliance with laws and regulations;

• Review of financial statement disclosures and agreeing to supporting documentation; and

• Involvement of tax specialists in the audit.

Fraud

We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment procedures included:

• Enquiry with management and those charged with governance regarding any known or suspected instances of fraud;

• Obtaining an understanding of the Group’s policies and procedures relating to:

  • Detecting and responding to the risks of fraud; and

  • Internal controls established to mitigate risks related to fraud.

• Review of minutes of meetings of those charged with governance for any known or suspected instances of fraud;

• Discussion amongst the engagement team as to how and where fraud might occur in the financial statements;

• Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; and

• Considering remuneration incentive schemes and performance targets and the related financial statement areas impacted by these.

Based on our risk assessment, we considered the areas most susceptible to fraud to be management override of controls and revenue.

Our procedures in respect of the above included:

• Testing a sample of journal entries throughout the year, which met a defined risk criteria, by agreeing to supporting documentation;

• Assessing significant estimates made by management for bias; and

• Assessing fraud risks in relation to revenue and performing procedures to address these risks including:

  • Testing a sample of revenue transactions and vouching to supporting documentation

  • Reviewing transactions around the end of the reporting period to ensure revenue was recognised in the correct period. This involved checking delivery dates and payment receipts.

  • Confirming receivables balances at year end.

  • Examining any adjustments or unusual journal entries related to revenue accounts. This can help identify attempts to manipulate revenue figure.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.

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 Parent 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 Parent 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 Parent Company and the Parent Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

The notes on pages 16 to 40 form part of these financial statements.

As permitted by s408 Companies Act 2006, the company has not presented its profit and loss account and related notes. The company's loss for the year was £5,015,423 (2023 - £2,421,054 loss).

GrowUp Group Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is One Glass Wharf, Bristol, Avon, England, BS2 0ZX.

The group consists of GrowUp Group Limited and all of its subsidiaries.

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 in accordance with the provisions relating to medium-sized groups.

The company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own profit and loss account in these financial statements.

The principal accounting policies adopted are set out below.

The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:

• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

• Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements; and

• Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

On consolidated financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

The consolidated group financial statements consist of the financial statements of the parent company GrowUp Group Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

All financial statements are made up to 31 December 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

The directors considered the going concern assessment period to be up to 30 October 2026 as financial liabilities are expected to fall due in Q2 and Q3 2026. The Group monitors and manages its capital position and its liquidity risk regularly to ensure that it has access to sufficient funds to meet forecast cash requirements. Cash forecasts for management are regularly produced and sensitivities considered based on, but not limited to, the Group’s latest production, sales and expenditure forecasts, management’s best estimate of future energy prices, interest rates and sales growth, and the Group’s borrowing facilities.

As at 31 December 2024 the Group is in a net current liability position of £0.4 million and has overall net liabilities of £34.4 million. In 2024 the Group continued in its growth phase and had net cash outflows from operating and investing activities of £12.2 million and £11.7 million respectively, which were funded through the issue of shares, convertible loan notes and further borrowings. While the Group’s base case forecast indicates that, at a Farm level, positive monthly operational cash flows will begin to be generated during the assessment period, the Group intends to continue to grow operations and will require further funding. A further fund raising is planned in excess of £50 million during the assessment period. The directors are confident this will be successful as the Group has a record of fund raising and advisors have been appointed, however at the date of approval of the financial statements, this fund raising is not yet committed.

The base case, which assumes a successful fund raising in Q1 2026, indicates that the Group is able to operate as a going concern with sufficient headroom and remain in compliance with its loan covenants throughout the assessment period.

In line with the principal risks that have been identified to impact the financial capability of the Group to operate as going concern, a downside sensitivity scenario has been prepared reflecting the impact of loss of a key customer and a delay in the fundraising beyond the assessment period.  Management considers this represents a severe but plausible downside scenario appropriate for assessing going concern. In this downside scenario, when applied in aggregate to the base case forecast, the Group would have insufficient liquidity headroom after in Q1 2026 and would require various mitigating actions, including a delay in further capital expenditure and support from the Group’s shareholders. The directors consider these mitigating actions are realistic and feasible on the basis of the Group’s flexibility, operationally and financially, and based on a support letter received from an existing shareholder, and the track record of support provided.

Taking the above analysis into account, the Board was satisfied that, for the going concern assessment period, the Group is able to maintain adequate liquidity and comply with its lending covenants up to 30 October 2026 and has therefore adopted the going concern basis for preparing the financial statements.

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 on delivery of the produce, 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.

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:

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 recognised in the profit and loss account.

Due to the Group having reached substantial completion of its construction project a full review of the component parts and categorisation of the individual assets took place and with the experience now gained the anticipated useful lives of the assets was reassessed resulting in changes in the estimated useful lives of the assets.

The Group shall account for the change in depreciation method and useful life as a change in an accounting estimate in accordance with paragraphs 10.14D to 10.18. As such, the carrying value at 31 December 2023 has been deemed to be cost and is to be depreciated over the remaining useful life of the asset using the revised depreciation methods and useful lives.

During the year the company has re-assessed the useful life and depreciation method of all its assets, as a consequence depreciation in the year to 31 December 2024 on all assets held at 31 December 2023 has reduced from £3,931,772 to £1,920,822. The effect on the financial statements is an increase in fixed assets and a reduction in losses of £2,010,950.

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

At each reporting period end date, the group 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.

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

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.

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

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 group 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 group or company's balance sheet when the group or company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset and 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.

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 group 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 group 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 group or company's contractual obligations expire or are discharged or cancelled.

The component parts of compound instruments issued by the group are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangement. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar non-convertible instrument. This amount is recorded as a liability on an amortised cost basis using the effective interest method until extinguished upon conversion or at the instrument's maturity date. The equity component is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognised and included in equity net of income tax effects and is not subsequently remeasured.

Equity instruments issued by the group or 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 group or 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 group and 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 if, and only if, there is 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.

Provisions are recognised when the group has a legal or constructive present obligation as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

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 group or 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.

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

In the application of the Group and 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 are the critical judgements, apart from those involving estimates (which are dealt with separately below) that the directors have made in the process of applying the Group's accounting policies and that have the most significant effect on the amounts recognised in the financial statements.

The directors have concluded that the going concern basis of accounting is appropriate and that there are no material uncertainties, however, reaching this conclusion has involved significant judgement. These judgements centre around the company’s ability to complete a successful fundraise during the going concern assessment period, or, if the fundraise does not proceed as planned, the company’s ability to adjust its strategy whilst maintaining financial support from existing investors.  The directors have judged that a delay in the planned fundraising beyond Q1 2026 is not a material uncertainty as this can be mitigated as the company has sufficient flexibility, operationally and financially, including through delaying the capex plans, shareholder support and potential funding in accordance with the provisions of a shareholder support letter. Further details regarding the going concern position can be found in note 1.4.

The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.

The useful life of intangible and tangible assets is uncertain and so an estimate is made to determine this. Further details of these estimates can be found in note 1.7 and 1.8. The estimated life of the Vertical Farm Building is 40 years however as the expected life of the Vertical Farm is 25 years this has been used for the building when determining the period for depreciation purposes.

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

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 8 (2023 - 9).

The number of directors who are entitled to receive shares under long term incentive schemes during the year was 5 (2023 - 0).

The highest paid director has been entitled to receive shares under a long term incentive scheme during the year.

The actual (credit)/charge 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:

The software intangible assets include the Group’s Inventory management system which was created by an external development firm for the company’s specific requirements. The asset is carried at £61,542 (2023: £Nil) and has a remaining amortisation period of 24 years (2023: N/A). There are no other individually material intangible assets.

During the year the group capitalised borrowing costs amounting to £1,170,039 (2023: £1,204,274) on qualifying assets. Included in the net book value as at 31 December 2024 are £3,858,383 of capitalised borrowing costs (2023: £2,843,385). The company capitalised borrowing costs of £8,131 (2023: £13,453) during the year.

Loans to subsidiaries represents discounted intercompany loans as described fully in note 31.

Details of the company's subsidiaries at 31 December 2024 are as follows:

Amounts owed by group undertakings due after more than one year are subordinated to the other loans reflected with creditors falling due after more than one year and as such do not fall due until the other loans have been repaid.

Amounts owed by group undertakings, which are interest free and unsecured, are due within one year relate to trading balances and were settled by 31 January 2025.

Other creditors include a loan secured by a mortgage debenture incorporating a fixed and floating charge over all assets owned by the company, which is due for repayment in September 2036. Interest is charged at 10% per annum.

The Group’s financing facilities with Generate Lending Llc are secured by way of fixed and floating charges over the shares held in GrowUp Farms Limited and the land at Discovery Park, Sandwich, leased to the company by a lease dated 5 October 2021 between Buchanan Farms Limited and the company.

On 3 June 2024 this charge was extended to include security over the buildings on the land at Discovery Park, the leasehold property at Unit 7 Bourn Quarter, Cambridge, the growth chambers, bank accounts and the registered trademarks, domain names and patents applications held by the company

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 equity component of the convertible loan notes has been credited to the other reserves.

The 3-year convertible loan notes were issued on 20 June 2024. Interest is calculated at SONIA plus 3.5%. All outstanding Notes shall automatically convert into fully paid Senior Shares at the Conversion Price immediately before a Conversion Event (other than a conversion on the Longstop Date). The conversion price pursuant to an approved fund raising or an exit, a price per share equal to the price paid per share on the approved fund raising or exit discounted by 22.5%.

If on or prior to the Longstop Date, the Notes have not been redeemed in accordance with the provisions of the agreement and no Redemption Notice has been served, the Noteholder Majority shall have the right to serve a Conversion Notice on the Company (not more than 30 Business Days prior to the Longstop Date) to convert all of the Notes outstanding into fully paid Senior Shares at the Conversion Price of £212 per share.

As part of the group’s property leasing arrangements there is an obligation to repair damages which incur during the life of the lease, such as wear and tear. The cost is charged to profit and loss as the obligation arises. One provision is expected to be utilised between 2026 and 2027 and the other in 2032 as the leases terminate.

The Group has a unrecognised tax adjusted losses of £82,781,835 in relation to taxable trading losses carried forward (2023: £58,074,043), £8,021,431 of these losses relate to the company (2023: £4,965,866). These have not been recognised due to lack of certainty over future taxable profits. All tax losses arise in the UK and have no expiry date but be utilised against up to 50% of losses in a single period.

The group also has unrecognised deferred tax liabilities with a value of £12,860,978 (2023: £4,959,954). £283,321 of these liabilities relate to the company (2023: £367,061).

These liabilities arise from temporary differences on accelerated capital allowances of £51,443,916 (2023: £19,839,816), the differences related to the company are £1,133,284 (2023: £1,468,244)

All shares rank equally in terms of voting rights with the exception of the B and C shares, which have no rights to a vote.

Preferred shares are not entitled to receive a share of available profits.

Full details of the right, preferences and restrictions applicable to each class of share can be found in the Articles of Association which is publicly available at Companies House.

The convertible loan note reserve represents the equity component of the loan at initial issue less transfers to retained earnings in respect of this component using the effective interest rate method.

The Group and Company operate defined contributions pension schemes. The assets of the schemes are held separately from those of the Group and Company in independently administered funds.

Contributions totalling £45,116 (2023: £22,620) were payable by the Group to the fund at the balance sheet date and are included in creditors. The Group made contributions to the scheme in the year of £271,401 (2023:£125,628).

Contributions totalling £23,615 (2023: £13,801) were payable by the Company to the fund at the balance sheet date and are included in creditors. The Company made contributions to the scheme in the year of £179,234 (2023:£90,666).

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

Amounts contracted for but not provided in the financial statements:

After the end of the reporting period the Company made further drawdowns on the existing borrowing facility provided by Generate UK AG Holdings Limited totalling £7 million.

During the year the group entered into the following transactions with related parties:                        

Generate Lending LLC - £6,459,549 - Term loan interest charged

Generate UK AG Holdings Limited - £830,407 - Convertible loan note interest expense.

The following amounts were outstanding at the reporting end date:

Generate UK AG Holdings Limited - £21,442,089 - Non-current convertible loan note (debt element)

Generate UK AG Holdings Limited - £5,897,250 - Convertible loan loan (equity element)

Generate Lending LLC - £67,624,441 - Term loan

The Group has taken exemption from disclosure of transactions with other wholly owned subsidiaries of the same group.

During the year the company made advances to directors of £13,663 which remained outstanding at the year end. These amounts are interest free and repayable on demand.

See note 7 for disclosure of directors' remuneration.

The Company's immediate parent company is Generate UK AG Holdings Limited, a company incorporated in England & Wales and the ultimate parent company and controlling party is Generate Capital, PBC, a company incorporated in the state of Delaware, United States of America, which is the parent company of the largest group to consolidate these financial statements. The registered office of Generate Capital, PBC is 251 Little Falls Drive, Wilmington, Delaware, 19808, USA with a physical address at 560 Davies Street, Suite 250, San Francisco, California, 94111, USA

A prior period adjustment has been recognised in respect of the intercompany loan to GrowUp Farms Limited, included within debtors falling due after more than one year, as it was incorrectly recorded at its full value. The loan is non-interest bearing and subordinated to the other loans, meaning that repayment is not expected to commence until at least 2029. As such the loan has been discounted back to present value using a market rate of interest rate for a similar loan of 8.5%.

As a consequence, the loan value has been reduced by £5,021,713 and investments in subsidiary undertakings has increased by this value.

Further to this, deferred tax assets in respect of the Group losses available, restricted to the value of the deferred tax liability recognised in respect of fixed asset timing differences were recognised in the prior period to the value of £4,959,954, these amounts have now been offset against each other as they relate to income taxes levied by the same taxation authority, on GrowUp Group and GrowUp Farms who intend to realise the assets and settle the liabilities simultaneously meaning a reduction in debtors and provisions of this amount. This adjustment has no effect on equity or losses. The value of deferred tax assets and liabilities recognised at 31 December 2022 was £4,592,823.

The prior period adjustments has no effect on equity or losses at group level, details of the impact of the adjustments at company level are shown below.