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

Ubisense Limited (the 'Company') was incorporated on 18 July 2002, the primary activity of which is to transform physical spaces into smart spaces where software connects naturally to the real world, empowering people and revolutionising business processes.

We work with Original Equipment Manufacturers ('OEMs') and Tier 1 blue chip customers across a range of industries such as Aerospace, Automotive, Security Transit etc as their trusted SmartSpace® provider when executing digital transformation strategies to grow their business, bringing visibility of the physical world to planning, management and control systems, making real-world processes visible, measurable and controllable.

Over the last 23 years Ubisense has built a considerable name for itself and established a reputation of a trusted partner in the Real Time Location Systems (RTLS) market. It is considered by many as one of the leaders in the RTLS market.

The results of the Group for the year, as set out on page 8, show an adjusted EBITDA loss for the year of £4.1m (2023 - £3.8m). The primary market vertical that Ubisense had built its reputation on was the automotive market. As a result of negative market trends in the automotive industry and wider economy, the Group experienced a decline in revenue of 30.7% during the year ended 31 December 2024 to £10.7m (2023 - £15.4m).

The Group continues to invest in research and development activity to maintain its position as a leading provider of RTLS solutions and broadening its focus to the pharmaceutical, transit and securitymarkets.

The board monitors the performance of the Group by reference to a number of both quantitive and qualitative KPIs including:

                                        2024      2023                                         £000     £000

Revenue                                  10,703     15,449

Adjusted EBITDA                              (4,148) (3,764)

Management consider adjusted EBITDA to provide a more meaningful measure of profitability than net profit/loss for the year as it excludes the impact of amortisation and depreciation, exceptional expenses and foreign exchange gains/losses which are considered to distort the underlying operational performance of the Group.

Customer credit exposure

The Group may offer credit terms to its customers which allow payment of the debt after delivery of the goods or services. The Group is at risk to the extent that a customer may be unable to pay the debt on a specified due date.

This risk is mitigated by the following factors:

- Strong on-going customer relationships;

- Regular review of credit limits that are set on the basis of payment history and third party credit references;

- Many of the Group's customers are large blue-chip companies that are considered to be of a low credit risk.

Interest rate risk

The Group's exposure to interest rate risk relates primarily to the Group's loan from its parent company of £31.7m which is partially offset by cash held at variable rates. Interest is payable at 4% above the Bank of England base rate on the £31.7m outstanding at 31 December 2024 (2023 - £18.2m). The Group also has a credit facility with HIVC, which was drawn down to £0.3m (2023 - £2.0m) as at 31 December 2024. The loan accrued interest at 4.75% above the Bank of England base rate per annum. The facility was fully repaid in January 2025 and expired in February 2025.

On behalf of the board

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

Principal activities

The principal activity of the Company and Group continued to be that of transforming physical spaces into smart spaces where software connects naturally to the real world, empowering people and revolutionising business processes.

The results for the year are set out on page 8.

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

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

The Group has made qualifying third party indemnity provisions for the benefit of the Directors, which were made during the year and remain in force at the date of this report.

The Group has purchased and maintained throughout the year Directors' and Officers' liability insurance in respect of itself and its Directors.

The Group is committed to research and development activities in order to secure the continued growth of the Group and to maintain its position in its marketplace. Development activities, consisting mainly of direct labour costs, are amortised on a straight-line basis over their useful economic lives. The estimated useful lives of current development projects are three years.

The business is continuing to gain momentum with its partner-led expansion strategy, having successfully onboarded a number of key partners during the year and since the year end. This strategy enables the Company to expand its geographic outreach and provides access to new verticals and solution use cases.

The Company has continued to invest in product, software, infrastructure and research and development in order to accelerate this strategy.

Azets Audit Services were appointed as auditor to the Group and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed 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 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.

We have audited the financial statements of Ubisense Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2024 which comprise the Group statement of comprehensive income, the Group balance sheet, the Company balance sheet, the Group statement of changes in equity, the Company statement of changes in equity, the Group 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 Group's and the parent Company's affairs as at 31 December 2024 and of the Group's 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 group and parent 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.

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 and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

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 Group and the parent Company and their 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

• the parent company 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 parent 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 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.

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.

Extent to which the audit was considered 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 and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework.  Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.  This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

• Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud; 

• Reviewing minutes of meetings of those charged with governance;

• Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the entity through enquiry and inspection; 

• Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations; and

• Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias. 

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation.  This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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 notes on pages 14 to 37 form part of these financial statements.

The notes on pages 14 to 37 form part of these financial statements.

The notes on pages 14 to 37 form part of these financial statements.

As permitted by s408 Companies Act 2006, the Company has not presented its own profit and loss account and related notes. The Company’s loss for the year was £7,507,471 (2023 - £2,716,743 loss).

The notes on pages 14 to 37 form part of these financial statements.

The notes on pages 14 to 37 form part of these financial statements.

Ubisense Limited (“the Company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is St. Andrews House, St. Andrews Road, Chesterton, Cambridge, Cambridgeshire, CB4 1DL.

The Group consists of Ubisense 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 £'000.

The financial statements have been prepared under the historical cost convention. 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 each category of financial instrument; 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 33 ‘Related Party Disclosures’: Compensation for key management personnel.

The Company has taken advantage of exemption, under the terms of the Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Transactions between Group entities which have been eliminated on consolidation are not disclosed within the financial statements.

In the parent Company 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 Ubisense 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.

Entities in which the Group holds an interest and which are jointly controlled by the Group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the Group has a participating interest and over whose operating and financial policies the Group exercises a significant influence, are treated as associates.

Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.

If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.

Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.

The financial statements have been prepared on a going concern basis which assumes that the Group and Company will continue in operational existence for the foreseeable future. The Group has reported a EBITDA loss of £4.1m for the year ended 31 December 2024 (2023 - £3.8m) and a loss after tax of £8.8m for the year ended 31 December 2024 (2023 - £9.2m), and at 31 December 2024 had a cash balance of £2.1m (2023 - £0.7m), and had drawn down £0.3m (2023 - £2.0m) of its £3m revolving credit facility.

The Company received £11.6m of loan funding, in the year, from Abyssinian Bidco Limited, the Company's immediate parent company, and £4.512m following the year end.

The directors have obtained a letter confirming that the interest and principal of the loan amount will not be called for repayment within one year of the date of signing of the Company's financial statements.

In determining the basis for preparing the financial statements, the Directors are required to consider whether the Group and Company can continue in operational existence for the foreseeable future, being a period of not less than twelve months from the date of the approval of the financial statements.

The directors have prepared a cash flow forecast for a twelve month period following the approval of the financial statements. The cash flow forecasts contain certain assumptions regarding the level of future sales and gross margins. The Directors recognise that there are inherent uncertainties attached to the timing and quantum of future sales and receipts thereon.

As set out in note 20, in August 2024 the Company converted its £2m bank loan provided by HSBC Innovation Bank ('HINV'), a revolving credit facility with a total available revolving line commitment of £3m, with an asset-based lending facility also provided by HINV. The asset-based loan facility expires in February 2025, with the option to extend for a further 12 months if requested by the Company and at the discretion of HINV.

The directors have performed a reverse stress test to determine the level of stress the Group and Company could sustain before liquidity breaks. The stress test assumes no growth to bookings and the assumption that no further investment is received from the principal shareholder. In this scenario, the directors would defer investment in people, marketing and capital expenditure and together with reasonable delays and a low level of cuts to other expenditure, the Group and Company could sustain this level of stress over the going concern period.

The directors believe the above scenario is highly unlikely given the increase in new customer opportunities and bookings as well as the growing number of "land and expand" opportunities.

In light of the above, and taking into account the fact that the ultimate parent company has provided a signed confirmation stating that amounts owed by group undertakings will not be re-called within 12 months of the date of signing these financial statements, the directors have, at the time of approving the financial statements, a reasonable expectation that the business has adequate cash resources available to continue in business for the foreseeable future and thus continue to adopt the going concern basis of accounting in preparing the financial statements.

These financial statements do not include the adjustments that would result if the Group and Company were unable to continue as a going concern.

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:

• the Group has transferred the significant risks and rewards of ownership to the buyer;

• the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

• the amount of revenue can be measured reliably;

• it is probable that the Group will receive the consideration due under the transaction; and

• the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:

• the amount of revenue can be measured reliably;

• it is probable that the Group will receive the consideration due under the contract;

• the stage of completion of the contract at the end of the reporting period can be measured reliably; and

• the costs incurred and the costs to complete the contract can be measured reliably.

Revenues on product sales are recognised based on the individual terms of the agreements. In the case of shipments under arrangements involving significant acceptance requirements, revenue is recognised when the Group has substantially met all of its performance obligations.

Revenue earned from sales under licence arrangements is recognised when the software is made available. When the sale includes a period of support and maintenance, a proportion of the revenue is deferred and recognised rateably over the period of support. For licence rental fees, amounts are recognised over the period of the contract, commencing from when the software is available for use.

Services and training revenue from time and materials contracts is recognised in the period that the services and training are provided on the basis of time worked at agreed contractual rates and as direct expenses are incurred.

Revenue from fixed price, long-term customer specific contracts, including customisation and modification, is recognised on the stage of completion of each assignment at the period end date compared to the total estimated service to be provided over the entire contract where the outcome can be estimated reliably. If a contract outcome cannot be estimated reliably, revenues are recognised equal to costs incurred, to the extent that costs are expected to be recovered. An expected loss on a contract is recognised immediately in the income statement.

Where bundled sales including a combination of some or all of the above are made, the revenue attributable to the deal is apportioned across the constituents of the bundle and then recognised according to the policies stated above.

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, which range from 3 to 6 years.

If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 5 years.

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

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 under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

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.

In the parent Company financial statements, investments in subsidiaries 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.

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

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.

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’ to all of its financial instruments.

Financial instruments are recognised in the Group's balance sheet when the Group 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, less any provision for impairment, 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.

Discounting is omitted where the effect of discounting is immaterial. The Consolidated cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

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 recognised 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 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 and loans from fellow group companies, 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's contractual obligations expire or are discharged or cancelled.

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

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

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’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.

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 leased asset are consumed.

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non- monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Consolidated Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'administrative expenses'.

On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.

In the application of the Group’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 estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Significant management judgement is applied in determining the allocation and timing of the recognition of the revenue on fixed price, long-term customer specific contracts. In this process management takes into account milestones, hardware supplied, actual work performed and further obligations and costs expected to complete the work.

The provision for obsolete, slow-moving or defective inventory is based on management's estimation of the commercial life of inventory lines and is applied on prudent basis. In assessing this, management takes into consideration the sales history of products and the length of time that they have been available for resale.

Management use judgement to determine whether provisions are required against fixed asset investments based on the ability of the subsidiary to generate profits and cash.

In determining the amount of development cost to be capitalised, judgement is applied in estimating the amount of time engineering employees have spent on development activity. To help estimate the proportion of time spent on development, management receive input from the Chief Technology Officer and refer to working patterns of relevant engineering staff to approximate the percentage of time capitalised.

Judgement is required in determining the recoverability of amounts owed by Group undertakings, which is based the financial position of the Group undertaking and its ability to deliver profits and cash.

In 2024, exceptional costs amounted to £1,697k. These included £1,079k in termination fees, £135k in legal fees associated with the termination, and £245k relating to the engagement of a temporary Chief Financial Officer prior to the appointment of a permanent replacement. In addition, £100k was incurred in connection with fees paid to German tax authorities.

In 2023, exceptional costs amounted to £742k, which included £234k in fees related to the departure of the CEO and £135k in recruitment costs for the search of a new CEO. Additional legal expenses were also incurred, primarily related to the financing arrangements with HSBC Innovation Bank (formerly Silicon Valley Bank UK).

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 0 (2023 - 2).

The actual 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:

Factors that may affect future tax charges

The Group takes advantage of the enhanced tax deductions for research & development expenditure and expects to continue to be able to do so. Further to the claim for research & development tax credits in previous years, losses available as at 31 December 2024 were approximately £11.1m (2023: 7.4m). This asset can be used against suitable future profits in the Group and will reduce the overall tax charge when utilised. Deferred tax assets have not been recognised in respect of these losses as the timing of future taxable profits is uncertain.

During the year, the key management of the Group has been assessed to be the directors of Ubisense Limited, the parent of the Ubisense group of companies. The compensation paid or payable to key management for employee services duing the year was:

The directors are satisfied that no provisioning for impairment is required in respect of intangible assets (2023 - £NIL)

Operating lease assets comprises sensors, tags and other hardware provided to customers whose contracts are subscription-based. Subscription terms range from 3 to 8 years and hardware assets remain the property of Ubisense. Depreciation charged on these assets is recognised in cost of sales on a straight-line basis over the life of the subscription term.

Operating lease assets comprises sensors, tags and other hardware provided to customers whose contracts are subscription-based. Subscription terms range from 3 to 8 years and hardware assets remain the property of Ubisense. Depreciation charged on these assets is recognised in cost of sales on a straight-line basis over the life of the subscription term.

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

The difference between purchase price or production cost of stocks and their replacement cost is not material.

The carrying value of stocks are stated net of impairment losses totalling £90k (2023 - £0.2m). Impairment losses totalling £90k (2023 - £0.2m) were recognised in profit and loss.

Trade debtors are stated net of a provision of £269k (2023 - £595k).

All amounts under debtors are due within one year other than the amounts owed by group undertakings that are due in greater than one year, that have been classified based on expected date of receipt. Amounts owed by group undertakings are unsecured.

The bank loan is a revolving credit facility provided by HSBC Innovation Bank (“HINV”) with a total available revolving line commitment of up to £3.0 million. The loan agreement was due to mature in February 2025, with an option to extend the facility for a further 12 months at the Company’s request and at the discretion of HINV. The amount borrowed was secured on the assets of each Group company that guaranteed the loan. The facility accrued interest at a rate of 4.75% above the Bank of England base rate per annum.

In August 2024, the Company converted its £2.0 million bank loan provided by HINV into an asset-based lending facility, also provided by HINV. The asset-based lending facility was scheduled to expire in February 2025; however, the Company agreed with HINV to close the facility at that date, and all outstanding balances were settled in full.

The balance as at 31 December 2024 includes the dilapidation provision to restore leased offices to their original state. The provision is expected to be utilised in 2027.

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the Group in an independently administered fund.

At the reporting date, the Company had £57k (2023 - £85k) pension contributions outstanding in respect of the scheme.

Ordinary shares carry voting and dividend rights.

Includes any premiums received on the issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium.

Other reserves

Comprise the fair value of shares issued in exchange for shares in subsidiary undertakings.

Foreign exchange reserve

Includes all exchange differences relating to the translation of results and net assets of the Group's foreign operations from their functional currencies to the Group's presentation currency.

Profit and loss reserves represents cumulative profits and losses, net of distributions to the owners.

The Group does not have any capital commitments as at the reporting date (2023 - £NIL).

The Company has a bank loan with HSBC Innovation Bank Limited, secured as follows:

- The loan is secured by all properties, rights, assets and revenues of the group and parent companies which act as corporate guarantors of the loan .

- The companies acting as corporate guarantors are Abyssinian Bidco Limited, the immediate parent of Ubisense Limited, Ubisense GmbH and Ubisense America LLC .

- The loan balance as at 31 December 2024 was £312k (2023 - 2m). The facility was amended during the year to become a discount factoring facility and was formally closed in February 2025 following the receipt of additional funding from the Group’s investors.

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:

Since the balance sheet date, the Company received loan funding totalling £4.512m from Abyssinian Bidco Limited, the Company's immediate parent company.

Key management personnel are deemed to be the directors and their remuneration is disclosed in note 8.

The Company is a wholly owned subsidiary of Abyssinian Bidco Limited. At the year end date, the amount owed to Abyssinian Bidco Limited under the intercompany loan agreement was £31.73m (2023- £18.23m). The balance includes interest that has accrued on the loan at a rate of LIBOR / SONIA / BOE base rate plus 4%. Abyssinian Bidco Limited have confirmed that the loan will not be called for repayment within one year of the date of signing of these financial statements.

There were no other related party transactions with the Company during 2024 and 2023.

The Company's immediate parent company was Abyssinian Bidco Limited, a private limited company incorporated in England and Wales, by virtue of their 100% holding in Ubisense Limited. The Company is indirectly majority owned by the Investcorp Technology Partners IV GP L.P Fund ("Fund") domiciled in the Cayman Islands.

The Funds General Partner is indirectly owned by Investcorp Holdings B.S.C.(c) ("BSC"), which is domiciled in the Kingdom of Bahrain as a closed shareholding company.

BSC is ultimately indirectly controlled by SIPCO Holdings Limited, a private limited company incorporated in the Cayman Islands. There is no natural person that controls 25% or more of SIPCO Holdings Limited.

Accordingly, there is no ultimate controlling party.

Abyssinian Topco Limited is the largest group into which the results of the Company are consolidated. Copies of the financial statements of Abyssinian Topco Limited are available from Companies House, Crown Way, Cardiff, CF14 3UZ.

Abyssinian Topco Limited's registered office is Investcorp House, 48 Grosvenor Street, Mayfair, London, United Kingdom, W1K 3HW.