Downforce Technologies Limited

	Page
Balance Sheet	1
Notes to the Financial Statements	2—5

1. General Information

Downforce Technologies Limited is a private company, limited by shares, incorporated in England & Wales, registered number 12987689 . The registered office is 7 Albert Buildings, 49 Queen Victoria Street, London, EC4N 4SA.

2. Accounting Policies

2.1. Basis of Preparation of Financial Statements

The financial statements have been prepared under the historical cost convention and in accordance with Financial Reporting Standard 102 section 1A Small Entities "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006.

2.2. Going Concern Disclosure

The directors have not identified any material uncertainties related to events or conditions that may cast significant doubt about the company's ability to continue as a going concern.

2.3. Turnover

All revenue arose from the rendering of services. Revenue is measured at the fair value of the consideration received or receivable and represents the amount receivable for services rendered, net of discounts and rebates allowed by the Company and value added taxes.

Revenue is recognised to the extent that it is probable that economic benefits will flow to the Company and the revenue can be measured reliably. The outcome of a sales agreement or statement of work is assessed reliably and revenue is recognised on a time and materials basis namely the actuals hours in the period in which they are incurred.

If the outcome of a contract cannot be assessed reliably, contract revenue is recognised only to the extent of contract costs incurred that it is probable (i.e., more likely than not) will be recoverable and contract costs are recognised in the period in which they are incurred.

2.4. Tangible Fixed Assets and Depreciation

Tangible fixed assets are measured at cost less accumulated depreciation and any accumulated impairment losses. Depreciation is provided at rates calculated to write off the cost of the fixed assets, less their estimated residual value, over their expected useful lives on the following bases:

Fixtures & Fittings	3 year straight line
Computer Equipment	3 year straight line

2.5. Financial Instruments

The Company has chosen to adopt FRS 102, Section 11 Basic Financial Instruments and 12 Other Financial Instruments Issues of FRS 102 in respect of financial instruments.

All financial assets and liabilities are initially measured at transaction price, including transaction costs, except for those financial assets classified at fair value through profit or loss, which are initially measured at fair value (at transaction price excluding transaction costs) unless the arrangement constitutes a financing transaction.

Financial assets and financial liabilities are only offset in the Company balance sheet when, and only when, there is a legally enforceable right to set off the recognised amounts and the Company intends to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Debt instruments (other than those repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at the present value of the future cash flows and subsequently amortised using the effective interest method.

Creditors

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

Debtors

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

Cash and cash equivalents

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

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Downforce Technologies Limited

Notes to the Financial Statements (continued)

For The Year Ended 31 March 2025

2.5. Financial Instruments - continued

Convertible debt

On issuing convertible debt that contain both a liability and an equity component, the Company allocates the proceeds between the liability component and the equity component. To make the allocation, the Company first determines the amount of the liability component as the fair value of a similar liability that does not have a conversion feature or similar associated equity component.

The Company allocates the residual amount as the equity component. Transaction costs are allocated between the debt component and the equity component on the basis of their relative fair values. The Company does not revise the allocation in a subsequent period. In periods after the instruments were issued, the Company accounts for the liability component as a financial instrument in accordance with Section 11 Basic Financial Instruments or Section 12 Other Financial Instruments Issues as appropriate.

The Company has adopted a policy whereby amounts previously recognised in other reserves relating to the equity component of convertible instruments are reclassified to share premium upon conversion.

Finance costs

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

Impairment

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

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

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

Derecognition

Financial assets are derecognised when and only when:

• the contractual rights to the cash flows from the financial asset expire or are settled;

• the Company transfers substantially all of the risks and rewards of ownership of the financial asset to another party; or

• the Company, despite having retained some, but not all, significant risks and rewards of ownership, has transferred control of the asset to another party.

2.6. Foreign Currencies

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

2.7. Taxation

Income 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 profit as reported in the statement of comprehensive income because of items of income or expense that are taxable or deductible in other years and 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 end of the reporting period.

Deferred tax is recognised on timing differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable timing differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible timing differences can be utilised. The carrying amount of deferred tax assets is reviewed at the end of each reporting period 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.

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Downforce Technologies Limited

Notes to the Financial Statements (continued)

For The Year Ended 31 March 2025

2.7. Taxation - continued

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Deferred tax liabilities are presented within provisions for liabilities and deferred tax assets within debtors. The measurement of deferred tax liabilities and assets reflect the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Current and deferred tax are recognised in profit or loss for the year, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case current and deferred tax are recognised in other comprehensive income or directly in equity respectively.

2.8. Pensions

The company operates a defined pension contribution scheme. Contributions are charged to the profit and loss account as they become payable in accordance with the rules of the scheme.

2.9. Share-based payments

The fair value of employee share options is calculated when they are granted using a Black-Scholes model. The resulting cost is charged in the Profit and Loss account, as an employee benefit expense, over the vesting period of the option or award together with a corresponding increase in equity. The cumulative expense recognised is the Company's best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the Profit & Loss Account for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

3. Average Number of Employees

Average number of employees during the year was as follows: 8 (2024: 11)

4. Tangible Assets

	Fixtures & Fittings	Computer Equipment	Total
	£	£	£
Cost
As at 1 April 2024	142	39,692	39,834
Additions	-	1,257	1,257

As at 31 March 2025	142	40,949	41,091

Depreciation
As at 1 April 2024	75	21,879	21,954
Provided during the period	47	10,561	10,608

As at 31 March 2025	122	32,440	32,562

Net Book Value
As at 31 March 2025	20	8,509	8,529

As at 1 April 2024	67	17,813	17,880

5. Debtors

	2025	2024
	£	£
Due within one year
Trade debtors	343,199	211,749
Prepayments and accrued income	22,505	20,560
Other debtors	1	436

	365,705	232,745

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Downforce Technologies Limited

Notes to the Financial Statements (continued)

For The Year Ended 31 March 2025

6. Creditors: Amounts Falling Due Within One Year

	2025	2024
	£	£
Trade creditors	10,216	20,068
Other creditors	356,983	4,195,550
Taxation and social security	71,895	37,997

	439,094	4,253,615

In May 2024, all Convertible Loan Notes converted into equity due to the completion of a successful fundraise. This event discharged £3,959,215 of current liabilities shown on the balance sheet date and increased equity by the same amount.

7. Share Capital

	2025	2024
Allotted, called up and fully paid	£	£
377,429 Ordinary Shares of £ 0.00001 each	4	1

Share Capital

During the year, 259,685 new shares were issued (2024: no new shares were issued). Of these, 149,686 shares were issued via conversion of the Convertible Bonds into equity, whilst 109,999 shares were issued from new investment. In accordance with the Company’s accounting policy on financial instruments, £1,089,716 was reclassified from other reserves to share premium upon the conversion of the related debt instruments into equity.

On 17 March 2025, the Company purchased its own 9,000 deferred shares. These shares were immediately cancelled upon acquisition. As a result, the total number of issued deferred shares was reduced to nil.

Share Option Scheme

At the year end date, 54,644 (2024: 34,648) options over ordinary shares were outstanding. Of these, 11,522 (2024: 11,522) options have an exercise price of £22.00 per share, 42,410 (2024: nil) options have an exercise price of £30.00 per share and 712 (2024: 23,126) options have an exercise price of £46.00 per share.

Of these outstanding 54,644 options:

• 20,071 had vested in the year to 31st March 2025

• 17,062 will vest in the year to 31st March 2026

• 7,478 will vest in the year to 31st March 2027

• 10,033 will vest in the year to 31st March 2028

43,923 (2024: 7,172) new options over ordinary shares were granted during the reporting period. 43,411 (2024: nil) had an exercise price of £30.00 per share and 512 (2024: 7,172) had an exercise price of £46.00 per share.

Nil (2024: nil) options with an exercise price of £22/share lapsed during the year, 1,001 (2024: nil) options with an exercise price of £30/share lapsed during the year and 22,926 (2024: 14,232) options with an exercise price of £46/share lapsed during the year.

Following an assessment by the directors, there was no share-based payments expense recognised in the Profit & Loss Account on the grant of options (2024: Nil).

8. Audit Information

The auditor's report on the accounts of Downforce Technologies Limited for the year ended 31 March 2025 was unqualified.

The auditor's report was signed by Benjamin Hayes FCA (Senior Statutory Auditor) for and on behalf of Wenn Townsend , Statutory Auditor.

Wenn Townsend

30 St. Giles'

Oxford

OX1 3LE

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		2025		2024
	Notes	£	£	£	£
FIXED ASSETS
Tangible Assets	4		8,529		17,880

			8,529		17,880
CURRENT ASSETS
Debtors	5	365,705		232,745
Cash at bank and in hand		2,220,744		135,202

		2,586,449		367,947
Creditors: Amounts Falling Due Within One Year	6	(439,094 )		(4,253,615 )

NET CURRENT ASSETS (LIABILITIES)			2,147,355		(3,885,668 )

TOTAL ASSETS LESS CURRENT LIABILITIES			2,155,884		(3,867,788 )

NET ASSETS/(LIABILITIES)			2,155,884		(3,867,788 )

CAPITAL AND RESERVES
Called up share capital	7		4		1
Share premium account			9,409,117		666,584
Other reserves			-		1,089,716
Profit and Loss Account			(7,253,237 )		(5,624,089 )

SHAREHOLDERS' FUNDS			2,155,884		(3,867,788)