Company No: 08589048 (England and Wales)

Contents

• Company Information
• Accountants' Report
• Balance Sheet
• Notes to the Financial Statements

Directors	J J Ball (Appointed 22 January 2025)
	N J H Burkitt (Appointed 18 August 2025)
	L J Edis (Resigned 05 March 2025)
	A C Hale
	E McCartney (Appointed 22 January 2025)
	R L H Moore
	M K H Moss (Appointed 05 March 2025)
	R F J Newry
	S M Smith
	H R A Verwoert (Resigned 16 January 2025)

Registered office	17 Marble Street
	Manchester
	M2 3AW
	United Kingdom

Company number

08589048 (England and Wales)

Accountant	Kreston Reeves LLP
	Springfield House
	Springfield Road
	Horsham
	West Sussex
	RH12 2RG

In order to assist you to fulfil your duties under the Companies Act 2006, we have prepared for your approval the financial statements of Arctic Shores Limited for the financial year ended 31 December 2025 which comprise the Balance Sheet and the related notes 1 to 9 from the Company’s accounting records and from information and explanations you have given us.

As a practising member firm of the Institute of Chartered Accountants in England and Wales (ICAEW), we are subject to its ethical and other professional requirements which are detailed at www.icaew.com/regulation.

It is your duty to ensure that Arctic Shores Limited has kept adequate accounting records and to prepare statutory financial statements that give a true and fair view of the assets, liabilities, financial position and loss of Arctic Shores Limited. You consider that Arctic Shores Limited is exempt from the statutory audit requirement for the financial year.

We have not been instructed to carry out an audit or a review of the financial statements of Arctic Shores Limited. For this reason, we have not verified the accuracy or completeness of the accounting records or information and explanations you have given to us and we do not, therefore, express any opinion on the statutory financial statements.

This report is made solely to the Board of Directors of Arctic Shores Limited, as a body, in accordance with the terms of our engagement letter dated 07 March 2025. Our work has been undertaken solely to prepare for your approval the financial statements of Arctic Shores Limited and state those matters that we have agreed to state to the Board of Directors of Arctic Shores Limited, as a body, in this report in accordance with ICAEW Technical Release 07/16 AAF. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than Arctic Shores Limited and its Board of Directors as a body for our work or for this report.

Kreston Reeves LLP

Springfield House
Springfield Road
Horsham
West Sussex
RH12 2RG

27 April 2026

	Note	31.12.2025		31.12.2024
		£		£
Fixed assets
Tangible assets	3	79		7,261
		79		7,261
Current assets
Debtors	4	915,387		415,211
Cash at bank and in hand		784,917		674,766
		1,700,304		1,089,977
Creditors: amounts falling due within one year	5	( 4,219,740)		( 2,087,844)
Net current liabilities		(2,519,436)		(997,867)
Total assets less current liabilities		(2,519,357)		(990,606)
Creditors: amounts falling due after more than one year	6	0		( 681,238)
Net liabilities		( 2,519,357)		( 1,671,844)
Capital and reserves
Called-up share capital	8	7		7
Share premium account		14,421,560		14,420,540
Profit and loss account		( 16,940,924 )		( 16,092,391 )
Total shareholders' deficit		( 2,519,357)		( 1,671,844)

For the financial year ending 31 December 2025 the Company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

Directors' responsibilities:

• The members have not required the Company to obtain an audit of its financial statements for the financial year in accordance with section 476;
• The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements; and
• These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime and a copy of the Profit and Loss Account has not been delivered.

The financial statements of Arctic Shores Limited (registered number: 08589048) were approved and authorised for issue by the Board of Directors on 16 April 2026. They were signed on its behalf by:

R F J Newry Director

1. Accounting policies

The principal accounting policies are summarised below. They have all been applied consistently throughout the financial year and to the preceding financial year, unless otherwise stated.

General information and basis of accounting

Arctic Shores Limited (the Company) is a private company, limited by shares, incorporated in the United Kingdom under the Companies Act 2006 and is registered in England and Wales. The address of the Company's registered office is 17 Marble Street, Manchester, M2 3AW, United Kingdom.

The financial statements have been prepared under the historical cost convention, modified to include certain items at fair value, and in accordance with Section 1A of Financial Reporting Standard 102 (FRS 102) ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ issued by the Financial Reporting Council and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime.

The financial statements are presented in pounds sterling which is the functional currency of the Company and rounded to the nearest £.

Going concern

The directors have assessed the Balance Sheet and likely future cash flows at the date of approving these financial statements. The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence and to meet its financial obligations as they fall due for at least 12 months from the date of signing these financial statements. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

The Board remain confident in the company’s ability to continue as a going concern, with a further £150,000 of convertible loan funds available to draw down and the approval of a budget that balances costs and revenue generation to deliver a positive net cash flow by the end of the year.

Foreign currency

Transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the Balance Sheet date are reported at the rates of exchange prevailing at that date.

Exchange differences are recognised in the Profit and Loss Account in the period in which they arise except for exchange differences arising on gains or losses on non-monetary items which are recognised in the Statement of Comprehensive Income.

Turnover

Turnover is stated net of VAT and trade discounts and is recognised when the significant risks and rewards are considered to have been transferred to the buyer. Turnover from the supply of products and services represents the value of products and services provided under contracts to the extent that there is a right to consideration and is recorded at the fair value of the consideration received or receivable.

Software as a service (“SaaS”) revenue is recognised once a legally binding contract between the Company and its customer has been established and the delivery of the SaaS has commenced. SaaS revenue is recognised on an accruals basis, when invoiced in advance the income is deferred in the statement of financial position and recognised in the income statement over the length of the contract period.

Where a contract for services has only been partially completed at the Balance Sheet date turnover represents the fair value of the service provided to date based on the stage of completion of the contract activity at the Balance Sheet date. Where payments are received from customers in advance of services provided, the amounts are recorded as deferred income and included as part of creditors due within one year.

Finance costs

Finance costs are charged to the Profit and Loss Account over the term of the debt using the effective interest method so 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 capital instrument.

Taxation

Current tax
Current tax is provided at amounts expected to be paid (or recoverable) using the tax rates and laws that have been enacted or substantively enacted at the Balance Sheet date.

Tangible fixed assets

Tangible fixed assets are stated at cost or valuation, net of depreciation and any provision for impairment. Depreciation is provided on all tangible fixed assets, other than investment property and freehold land, at rates calculated to write off the cost or valuation, less estimated residual value, of each asset on a straight-line or reducing balance basis over its expected useful life, as follows:

Computer equipment

2 years straight line

Residual value represents the estimated amount which would currently be obtained from disposal of an asset, after deducting estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life.

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

Borrowing costs

Borrowing costs that are directly attributable to acquisition, construction or production of qualifying assets, are capitalised as part of the cost of those assets. Capitalisation begins when both finance costs and expenditures for the asset are being incurred and activities that are necessary to get the asset ready for use are in progress. Capitalisation ceases when substantially all the activities that are necessary to get the asset ready for use are complete.

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

Fixed asset investments

Investments in subsidiaries are measured at cost less accumulated impairment.

Investments in unlisted company shares, whose market value can be reliably determined, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the Statement of Comprehensive Income for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.

Trade and other debtors

Trade and other debtors are initially recognised at fair value and thereafter stated at amortised cost using the effective interest method less impairment losses for bad and doubtful debts, except where the effect of discounting would be immaterial. In such cases the receivables are stated at cost less impairment losses for bad and doubtful debts.

Cash and cash equivalents

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 creditors: amounts falling due within one year.

Trade and other creditors

Trade and other creditors are initially recognised at fair value and thereafter stated at amortised cost using the effective interest rate method, unless the effect of discounting would be immaterial, in which case they are stated at cost.

Financial instruments

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument.

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

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

Convertible loan notes

The convertible loan notes issued in the year may be settled in a variable number of the company's own equity instruments and are recognised as a complex financial liability in accordance with FRS
102 Section 12. The proceeds received on issue are initially measured at transaction price and subsequently measured at fair value though profit or loss, in accordance with the requirements of FRS 102 Section 12, at the end of each reporting period.

Government grants

Government grants are recognised based on the accrual model and are measured at the fair value of the asset received or receivable. Grants are classified as relating either to revenue or to assets. Grants relating to revenue are recognised in income over the period in which the related costs are recognised. Grants relating to assets are recognised over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income.

Share-based payments

Where share options are awarded to employees, the fair value of the options at the date of grant is charged to profit or loss over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.

The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the company keeping the scheme open or the employee maintaining any contributions required by the scheme).

Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period.

Where equity instruments are granted to persons other than employees, profit or loss is charged with fair value of goods and services received.

Pensions

Defined contribution pension plan

The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately
from the company in independently administered funds.

Judgments in applying accounting policies and key sources of estimation uncertainty

The preparation of the financial statements requires the directors to make judgements, estimates and assumptions that can affect the amounts reported for assets and liabilities, and the results for the year. The nature of estimation is such though that actual outcomes could differ significantly from those estimates.

The following judgements have had the most significant impact on amounts recognised in the financial statements:

Convertible loan notes

As required under FRS 102 the convertible loan notes have been measured at fair value. Due to the lack of observable market prices for similar instruments the valuation is subject to uncertainty. The convertible loan notes are convertible upon maturity (after 2 years from inception), or as a result further equity financing (where the funds raised are equal to the principal sum of the convertible loan). The directors have assessed the probability of the different outcomes and have used an expected value model with a discount rate of 17.50%, being the estimated cost of capital, to arrive at the fair value of the instruments at the reporting date. The value of the convertible notes at the reporting date is £1,359,059 and the fair value adjustment for the year is £228,249.

2. Employees

	31.12.2025		31.12.2024
	Number		Number
Monthly average number of persons employed by the Company during the year, including directors	36		47

3. Tangible assets

	Computer equipment		Total
	£		£
Cost
At 01 January 2025	80,443		80,443
Disposals	( 23,962)		( 23,962)
At 31 December 2025	56,481		56,481
Accumulated depreciation
At 01 January 2025	73,182		73,182
Charge for the financial year	7,182		7,182
Disposals	( 23,962)		( 23,962)
At 31 December 2025	56,402		56,402
Net book value
At 31 December 2025	79		79
At 31 December 2024	7,261		7,261

The company has revised its approach to acquiring computer equipment and has transitioned from purchasing assets outright to using a leasing model.

4. Debtors

	31.12.2025		31.12.2024
	£		£
Trade debtors	740,845		304,923
Prepayments and accrued income	167,262		84,854
Other debtors	7,280		25,434
	915,387		415,211

5. Creditors: amounts falling due within one year

	31.12.2025		31.12.2024
	£		£
Trade creditors	172,640		75,483
Convertible loan notes (secured)	1,359,059		0
Accruals and deferred income	2,419,741		1,758,159
Other taxation and social security	268,300		234,233
Other creditors	0		19,969
	4,219,740		2,087,844

6. Creditors: amounts falling due after more than one year

	31.12.2025		31.12.2024
	£		£
Convertible loan notes (secured)	0		681,238

The bank loan is secured by way of a fixed and floating charge over the assets of the company.

In the year the Company issued convertible loan notes against which the Company granted a debenture in respect of the repayment of the principal amount, interest, and any other amounts payable under the loan notes. The debenture was executed concurrently with the issuance of the loan note instrument.

7. Convertible loans

The Company issued £633,454 of convertible loan notes on 30 November 2024, £150,000 on 21 March 2025, £150,000 on 20 June 2025 and £150,000 on 24 July 2025. The convertible loan notes are convertible into ordinary shares of the Company at any time between the date of issue of the notes and their settlement date. On issue, the loan notes were convertible at 1 shares per £3.60 loan note. If the notes have not been converted, they will be redeemed on 1 December 2026 at par. Interest of 15% per cent will be paid annually up until that settlement date.

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

	31.12.2025
	£
Nominal value of convertible loan notes issued	1,083,453
Equity component	0
Liability components at date of issue	1,083,453
Interest charged	275,606
Interest paid	0
Liability component at 31 December 2025	1,359,059

8. Called-up share capital

	31.12.2025		31.12.2024
	£		£
Allotted, called-up and fully-paid
4,382,069 Ordinary shares of £ 0.000001 each (31.12.2024: 4,379,945 shares of £ 0.000001 each)	4.38		4.38
1,282,260 Ordinary A shares of £ 0.000001 each	1.28		1.28
500,000 Ordinary B shares of £ 0.000001 each	0.50		0.50
135,454 Ordinary A1 shares of £ 0.000001 each	0.14		0.14
135,454 Ordinary A2 shares of £ 0.000001 each	0.14		0.14
420,102 Ordinary B1 shares of £ 0.000001 each	0.42		0.42
420,102 Ordinary B2 shares of £ 0.000001 each	0.42		0.42
	7.28		7.28

9. Financial commitments

Other financial commitments

Management Share Option Scheme

The company has an Enterprise Management Investment Scheme for certain employees. Under this Scheme options can be exercised in tranches over the first 50 months from the date of grant and not after 10 years. During the year 152,000 (2024: 16,000) options were granted, 22,816 (2024: 15,040) options lapsed and 2,124 (2024: 2,456) options were exercised. There were 380,998 (2024: 253,938) options at the year end.

The weighted average exercise price at the year end is £0.57 (2024: £0.53).

Pensions

The Company operates a defined contribution pension scheme for the directors and employees. The assets of the scheme are held separately from those of the Company in an independently administered fund.

The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £69,333 (2024: £81,292). Contributions totalling £Nil (2024: £5,899 payable) were repayable from the fund at the balance sheet date and are included in debtors.