REGISTERED NUMBER: 11756188 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MAY 2025

FOR

SEDNA SYSTEMS EUROPE LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Statement of Profit or Loss

10

Statement of Profit or Loss and Other Comprehensive Income

11

Statement of Financial Position

12

Statement of Changes in Equity

14

Statement of Cash Flows

15

Notes to the Statement of Cash Flows

16

Notes to the Financial Statements

17

DIRECTORS:

W F Dobie

R I Scott

REGISTERED OFFICE:

10 John Street

London

WC1N 2EB

REGISTERED NUMBER:

11756188 (England and Wales)

AUDITORS:

Oury Clark Chartered Accountants

Statutory Auditors

Herschel House

58 Herschel Street

Slough

Berkshire

SL1 1PG

The directors present their strategic report for the year ended 31 May 2025.

REVIEW OF BUSINESS

Total revenue includes subscriptions to online software products and professional services which include implementation and consulting services. Revenue is an important measure of growth in the customer base and the success of sales and product development efforts. The Company's operating costs include costs incurred on behalf of other companies within the Sedna Group, such as development and administrative support.

The Company experienced a decrease in revenue during the year, with revenue being £9,511,518 for the 12 months ending 31 May 2025 (2024: £10,557,555).The loss before income tax for the Company was £3,624,201 (2024: £4,417,025). This is after non-cash items related to share based payment charges of £1,080,974 (2024: £657,373), impairment of intercompany debtor balance of £(373,931) (2024: £2,256,197), impairment of the directors' loan account £1,162,521 (2024: £nil) and depreciation and amortisation of £488,851 (2024: £505,232). Excluding these non-cash items the loss before tax was £1,265,786 (2024: £998,223).

Cash and cash equivalents have increased to £1,463,452 (2024: £637,200) for the year ended 31 May 2025. The directors have forecast that there are sufficient resources in the Company and with the support of its parent company, Sedna Communications Ltd, expect the Company to be able to continue operations and expect the operating loss to narrow over the next two years.

The directors expect revenue to increase in the next financial year, but do not envisage significant changes to the Company.

Key performance indicators

The Company also monitors the average number of full time equivalent employees ("FTEs") as an important non-financial indicator. Monitoring trends in our FTEs count assists the Company in understanding its ability to attract and retain key talent and also provides insight into operating efficiency. During the year the average FTEs count was 64 (2024: 84) and year end FTEs count was 66 (2024:73).

PRINCIPAL ACTIVITIES

The Company is part of the Sedna Group. The principal activity of the Company is the provision of a cloud based communication platform for managing the information and communication requirements of customers with complex operations. The Company provides these services directly to customers and also provides services to other group companies in relation to the principal activity of the Group.

The Sedna Group was formed when Sedna Communications Ltd acquired the entire issued share capital of Sedna Systems Pte Ltd on 8 June 2021, via a paper-for-paper share issue. At the date of acquisition, Sedna Systems Pte Ltd was the parent

company of Sedna Systems Europe Limited.

The activities were unchanged during the year and no significant changes to the principal business activities are expected in the forthcoming year.

PRINCIPAL RISKS AND MITIGATING ACTIVITIES

The directors consider that the principal risks faced by the Company are as follows:

- Data security and technology risk

The loss of confidential data or technology disruption caused by either internal or external factors could result in financial loss or reputational damage. The Company ensures ongoing vulnerability monitoring and completes annual technology

audits, risk assessments and penetration testing to ensure the robustness of the Sedna platform.

- Commercial relationships

The Company is exposed to changes in relationships with both customers and suppliers. It is a key task of operational management to enhance relationships with customers and suppliers. The Company continues to make significant investments in our product and in our sales functions to ensure enhanced relationships with customers and suppliers.

- Liquidity risks

The Company's approach to managing liquidity is to ensure as far as possible that it will have sufficient liquidity to meet its liabilities as they fall due. Funding rounds at the Group level and support from Sedna Communications Ltd have mitigated

this risk. The Company also continues to manage its liquidity risks through focus on cash management, cash preservation and through ensuring sufficient financing is available for current and planned expenditure

ON BEHALF OF THE BOARD:

W F Dobie - Director

29 May 2026

The directors present their report with the financial statements of the company for the year ended 31 May 2025.

DIVIDENDS

No dividends will be distributed for the year ended 31 May 2025.

The directors believe that no dividend should be paid during the financial year.

DIRECTORS

W F Dobie has held office during the whole of the period from 1 June 2024 to the date of this report.

Other changes in directors holding office are as follows:

R I Scott was appointed as a director after 31 May 2025 but prior to the date of this report.

T D Monson ceased to be a director after 31 May 2025 but prior to the date of this report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors 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 UK-adopted international accounting standards. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

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

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Oury Clark Chartered Accountants, are deemed to be re-appointed under Section 487 (2) of the Companies Act 2006.

ON BEHALF OF THE BOARD:

W F Dobie - Director

29 May 2026

Opinion

We have audited the financial statements of Sedna Systems Europe Limited (the 'company') for the year ended 31 May 2025 which comprise the Statement of Profit or Loss, the Statement of Profit or Loss and Other Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity, the Statement of Cash Flows and Notes to the Statement of Cash Flows, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the UK.

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 May 2025 and of its loss for the year then ended;

-	have been properly prepared in accordance with IFRSs as adopted by the UK; 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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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 company's ability to continue as a going concern for a period of at least 12 months and 1 day 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 section of this report.

Emphasis of matter

We draw attention to Note 2 in the financial statements, which describes the Company’s dependence on the financial support of its parent undertaking and management’s assessment of going concern.

As described in that note, the parent company has indicated its intention to provide financial support to the Company for a period of at least twelve months from the date of approval of these financial statements. The parent company forms part of a wider group which is in discussions with a lender in respect of a new financing facility intended to replace existing borrowings. This financing is subject to a number of conditions, including the provision of audited financial statements, and had not been finalised at the date of approval of these financial statements.

The directors have concluded that, based on the support available from the parent company, the Company has adequate resources to continue in operational existence for the foreseeable future.

Our opinion is not modified in respect of this matter.

Other information

The directors are responsible for the other information. The other information comprises the information in the Report of the Directors and the Strategic Report, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be misstated. If we identify such inconsistencies or apparent 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 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 the audit:

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified any matters in the Strategic Report or the Report of the Directors that are inconsistent with our overall view of the financial statements.

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

-

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

-

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

-

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

-

we have not received all the information and explanations we require for our audit; or

-

the director was not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption from the requirement to prepare a Strategic Report or in preparing the Report of the Directors.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page four, 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 necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

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 a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below:

Identifying and assessing potential irregularities, including fraud

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:

- Considering the nature of the industry, sector, control environment and current business activities, including possible performance targets and subsequent remuneration.

- Enquiring of management concerning policies and procedures relating to complying with laws and regulations and whether there were any instances of non-compliance.

- Enquiring of management concerning policies and procedures relating to mitigating, detecting and responding to fraud risk and whether there has been any actual or possible instances of fraud.

Discussing with the engagement team regarding how and where fraud may occur in the financial statements along with the possible indicators of fraud. We identified the following areas most likely to be susceptible to fraud:

1. Revenue recognition;

2. Management override;

Discussing with the engagement team the legal and regulatory framework in which the company operates and in particular those which would have an impact on the financial statements. The key laws and regulations considered were the Companies Act 2006, UK tax legislation and UK employment law.

Audit response to the risks identified

As noted above, we identified revenue recognition and management override as matters that would most likely be susceptible to fraud. Our procedures to respond to these risks included the following:

1. Performing a sales test of detail to ensure revenue is recognised in the correct period;

2. Reviewing the nominal ledger and journals posted during the year to ensure there is no evidence of management override;

Further, we also identified compliance with the Companies Act 2006, UK tax legislation and UK employment law as being key areas where there may be possible non-compliance. Our procedures to respond to these risks included the following:

1. Review the financial statement disclosures with completion of a disclosure checklist and testing to supporting documentation to assess compliance with the Companies Act 2006;

2. Review the corporation tax return to ensure it complies with UK tax legislation and completion of our detailed corporation tax checklist;

3. Safeguard review of the financial statements by a qualified accountant independent of the audit team;

4. Safeguard review of the corporation tax computation by someone independent of the audit team and CTA qualified;

5.Checking a sample of compliance with right to work checks and reviewing legal fees for indications of material issues arising out of non-compliance with employment law.

The above matters and identified laws and regulations and potential fraud risks were communicated to all engagement team members, in order to enable the team to have the ability to identify such risks. The whole team remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

There are inherent limitations in the audit procedures described above and the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

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 a Report of the Auditors 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.

Ian Phipps (Senior Statutory Auditor)

for and on behalf of Oury Clark Chartered Accountants

Statutory Auditors

Herschel House

58 Herschel Street

Slough

Berkshire

SL1 1PG

29 May 2026

CONTINUING OPERATIONS

Revenue

3

9,511,518

10,557,555

Other operating income

268,508

-

Administrative expenses

(13,283,965

)

(14,813,286

)

OPERATING LOSS

(3,503,939

)

(4,255,731

)

Finance costs

5

(122,163

)

(161,294

)

Finance income

5

1,901

-

LOSS BEFORE INCOME TAX

6

(3,624,201

)

(4,417,025

)

Income tax

7

(105,479

)

(286,873

)

LOSS FOR THE YEAR

(3,729,680

)

(4,703,898

)

LOSS FOR THE YEAR

(3,729,680

)

(4,703,898

)

OTHER COMPREHENSIVE INCOME

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(3,729,680

)

(4,703,898

)

Note

Prior year adjustment

8

(286,873

)

TOTAL COMPREHENSIVE INCOME SINCE LAST ANNUAL REPORT

(4,016,553

)

ASSETS

NON-CURRENT ASSETS

Owned

Property, plant and equipment

10

310,687

497,162

Right-of-use

Property, plant and equipment

10, 17

415,430

686,351

Trade and other receivables

11

482,059

529,817

1,208,176

1,713,330

CURRENT ASSETS

Trade and other receivables

11

28,485,799

17,257,442

Cash and cash equivalents

12

1,463,452

637,200

29,949,251

17,894,642

TOTAL ASSETS

31,157,427

19,607,972

EQUITY

SHAREHOLDERS' EQUITY

Called up share capital

13

100

100

Capital contribution reserve

14

3,686,877

2,605,902

Retained earnings

14

(17,511,730

)

(13,782,050

)

TOTAL EQUITY

(13,824,753

)

(11,176,048

)

LIABILITIES

NON-CURRENT LIABILITIES

Contract liabilities

3

-

1,789

Financial liabilities - borrowings

Lease liabilities

16, 17

266,401

661,762

266,401

663,551

CURRENT LIABILITIES

Trade and other payables

15

40,683,212

28,604,222

Contract liabilities

3

3,228,812

991,412

Financial liabilities - borrowings

Lease liabilities

16, 17

411,404

237,962

Tax payable

392,351

286,873

44,715,779

30,120,469

TOTAL LIABILITIES

44,982,180

30,784,020

TOTAL EQUITY AND LIABILITIES

31,157,427

19,607,972

The financial statements were approved by the Board of Directors and authorised for issue on 29 May 2026 and were signed on its behalf by:

W F Dobie - Director

Called up

Capital

share

Retained

contribution

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 June 2023

100

(9,078,152

)

1,948,530

(7,129,522

)

Changes in equity

Total comprehensive income

-

(4,417,025

)

657,372

(3,759,653

)

Balance at 31 May 2024

100

(13,495,177

)

2,605,902

(10,889,175

)

Prior year adjustment

-

(286,873

)

-

(286,873

)

As restated

100

(13,782,050

)

2,605,902

(11,176,048

)

Changes in equity

Total comprehensive income

-

(3,729,680

)

1,080,975

(2,648,705

)

Balance at 31 May 2025

100

(17,511,730

)

3,686,877

(13,824,753

)

Cash flows from operating activities

Cash generated from operations

1

(282,707

)

(1,217,365

)

Lease interest paid

(122,163

)

(161,294

)

Tax paid

(1

)

-

Net cash from operating activities

(404,871

)

(1,378,659

)

Cash flows from investing activities

Purchase of tangible fixed assets

(34,399

)

(110,973

)

Sale of tangible fixed assets

7,395

3,647

Interest received

1,901

-

Net cash from investing activities

(25,103

)

(107,326

)

Cash flows from financing activities

Directors' loan impairments

(1,162,522

)

-

Change in group balances

1,416,743

3,879,186

Intercompany debt impairments

373,931

(2,256,197

)

Payment of lease liabilities

(99,756

)

(146,910

)

Amount introduced by directors

1,162,522

-

Amount withdrawn by directors

(312,529

)

(843,780

)

Cash payments for interest on leases

(122,163

)

(161,294

)

Net cash from financing activities

1,256,226

471,005

Increase/(decrease) in cash and cash equivalents

826,252

(1,014,980

)

Cash and cash equivalents at beginning of year

2

637,200

1,652,180

Cash and cash equivalents at end of year

2

1,463,452

637,200

1.	RECONCILIATION OF LOSS BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS

31.5.25

31.5.24

as restated

£

£

Loss before income tax

(3,624,201

)

(4,417,025

)

Depreciation charges

488,851

503,836

Profit on disposal of fixed assets

(4,451

)

(1,306

)

Share based payment movement

1,080,975

657,373

Impairment of intercompany debt

(373,931

)

2,256,197

Impairment of directors' loan account

1,162,522

-

Finance costs

122,163

161,294

Finance income

(1,901

)

-

(1,149,973

)

(839,631

)

Increase in trade and other receivables

(966,333

)

(420,284

)

(Decrease)/increase in trade and other payables

(402,012

)

64,306

Increase/(decrease) in contract liabilities

2,235,611

(21,756

)

Cash generated from operations

(282,707

)

(1,217,365

)

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

Year ended 31 May 2025

31.5.25

1.6.24

£

£

Cash and cash equivalents

1,463,452

637,200

Year ended 31 May 2024

31.5.24

1.6.23

as restated

£

£

Cash and cash equivalents

637,200

1,652,180

1.	STATUTORY INFORMATION

Sedna Systems Europe Ltd (the 'Company') is a private company, limited by shares, registered in England and Wales. The Company's registered number and registered office address can be found on the Company Information page. The Company's trading address during the year was 65 Buckingham Gate, London, SW1E 6AS.

2.	ACCOUNTING POLICIES

Basis of preparation

These financial statements have been prepared in accordance with UK-adopted international accounting standards and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention.

Going concern

The financial statements have been prepared on a going concern basis.

The Company is dependent on the financial support of its parent undertaking. The parent company has indicated its intention to provide financial support to the Company for a period in excess of twelve months from the date of approval of these financial statements. In support of this, the Company has received a letter of support from its parent company confirming that it will provide such financial assistance as is necessary to enable the Company to meet its liabilities as they fall due.

The parent company forms part of a wider group which has incurred losses in the current and prior years and whose forecasts indicate that additional funding will be required to enable the group to meet its liabilities as they fall due for a period of at least twelve months from the date of approval of the financial statements. The group is currently seeking to secure a new financing arrangement to replace its existing facilities; however, completion of this financing is subject to conditions, including the provision of audited financial statements and lender approval, and has not been finalised at the date of approval of these financial statements.

Notwithstanding this, the directors have a reasonable expectation that the parent company will continue to provide adequate financial support to the Company. Accordingly, the directors consider it appropriate to adopt the going concern basis of preparation in preparing these financial statements.

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

Critical accounting judgements and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Key sources of estimation uncertainty

Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows:

As described in the accounting policies of the financial statements, depreciation of tangible assets has been based on estimated useful lives and residual values deemed appropriate by the directors. Estimated useful lives and residual values are reviewed annually and revised as appropriate. Revisions take into account actual asset lives and residual values as evidenced by disposals during current and prior accounting periods.

Management also use judgement in relation to the interest rate used to discount the cash payments associated with the IFRS 16 lease.The rate implicit in the lease cannot be readily determined therefore the rate used is equivalent to the incremental borrowing rate for the Group at the inception of the lease.

Current versus non-current classification

The Company presents assets and liabilities in the statement of financial position based on current/non-current classification. An asset is current when it is:

-

Expected to be realised or intended to be sold or consumed in the normal operating cycle

-

Held primarily for the purpose of trading

-

Expected to be realised within 12 months after the reporting period, or

-

Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least

twelve months after the reporting period

All other assets are classified as non-current.

A liability is current when it is:

-

Expected to be settled in the normal operating cycle

-

Held primarily for the purpose of trading

-

Due to be settled within 12 months after the reporting period, or

-

There is no unconditional right to defer the settlement of the liability for at least twelve months after the

reporting period

The Company classifies all other liabilities as non-current.

The directors have classified those interest-bearing loans and borrowings as non-current at the balance sheet date where the directors do not believe the Company will be required to make any repayments within 12 months.

Revenue recognition

REVENUE FROM CONTRACTS WITH CUSTOMERS

The Company provides a cloud-based communication platform for the maritime and shipping industries. Revenue is primarily derived from contracts that encompass subscriptions to the Company's online software products and professional services including implementation and consulting. Customers do not have the right to take possession of the online software products.

The Company recognises revenue from contracts with customers using a five-step model, which is described below:

-

identify the contract with a customer;

-

identify the performance obligations in a contract;

-

determination of the transaction price;

-

allocate the transaction price to the performance obligations identified in the contract; and

-

recognize revenue when (or as) performance obligations are satisfied.

Identify the contract with a customer

A customer contract is identified when the Company and a customer have executed an agreement or online acceptance that requires the Company to grant access to its online software products and provide professional services in exchange for consideration from the customer.

A signed customer order form is generally regarded as a contract with a customer.

Identify the performance obligations in a contract

A performance obligation is a promise to provide a distinct service or a series of distinct services. A service that is promised to a customer is distinct if the customer can benefit from the service either on its own or together with other readily available resources, and a company's promise to transfer the service to the customer is separately identifiable from other promises in the contract.

The main subscription-based services provided to customers are:

- Sedna Email

The provision of the cloud-based communication platform, Sedna Email, is the main revenue source for the Company. Customers generally enter into a contract for a specific number of seat subscriptions. Additional services not considered as distinct from Sedna Email include implementation, data storage and technical support. Management have determined that a typical contract only to provide said services contains one combined performance obligation.

- Sedna Pre-fixture

The provision of an AI-driven subscription-based service that consolidates various data sources into a unified actionable data view. Management have determined that the provision of Sedna Pre-fixture is distinct from Sedna Email, therefore contracts that include both Sedna Email and Sedna Pre-fixture have multiple performance obligations.

- Sedna Automations

The provision of a subscription-based service that integrates various data sources to build and streamline workflows. Management have assessed that the provision of Sedna Automations is distinct from Sedna Email, therefore contracts that include both Sedna Email and Sedna Automations have multiple performance obligations.

- Other professional services

The provision of services is assessed by management as being distinct from Sedna Email, Sedna Pre-fixture and Sedna Automations if the customer can benefit from the service without any of the subscription-based services.

Determination of the transaction price

The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for providing services to a customer. Generally, the total transaction price is the amount stated on the signed order form.

The Company estimates any variable consideration it will be entitled to at contract inception and will reassess as circumstances change, when determining the transaction price. The Company does not include variable consideration to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognised will occur when any uncertainty associated with the variable consideration is resolved. Therefore, the Company does not recognise revenue for Sedna Email seat overages at contract inception, as it is not possible to determine with certainty the number of overages a customer will utilize. Accrued income is accounted for in the financial statements where a customer has utilised overages which have not been invoiced for by the balance sheet date.

Allocate the transaction price to the performance obligations identified in the contract

If the contract contains a single performance obligation, the Company allocates the entire transaction price to the single performance obligation. For contracts containing multiple performance obligations, the transaction price is allocated to each performance obligation based on the relative standalone selling price ("SSP") of the services provided to the customer. Given the highly variable nature of the Company's subscription-based services, management have assessed that the SSPs are taken to be the amounts stated on the signed order forms as this is a faithful representation of the amount the Company can expect to receive for satisfying a specific performance obligation.

Recognise revenue when (or as) performance obligations are satisfied

Revenues are recognised as and when the Company satisfies its contractual performance obligations.

Revenues for subscription-based services are recognised evenly over the subscription period beginning on the later of the date the Group's software products are made available to customers or the subscription start date stated in the contract.

The Company recognises revenue from other professional services as the services are provided where they are distinct from the subscription arrangement.

-Contract liabilities

Invoices are generally raised in advance of the contract commencement date for no longer than 1 year of services, with 1 month payment terms. The invoices are initially recorded as contract liabilities that are then recognised as revenue as the performance obligations are satisfied.

The Company has elected to use the practical expedient available under IFRS 15, which allows entities to disregard the effects of a significant financing component if the period between the transfer of goods or services and payment is one year or less.

The Group does not offer an option to purchase a warranty. However, it does offer an assurance-type warranty that provides guarantee of the quality. Assurance-type warranties do not result in a change to current practice for the recognition of revenue.

TRANSFER PRICING REVENUE

The Company also generates revenue that falls outside the scope of IFRS 15 relating to the services it provides to the parent company and fellow group undertakings. A transfer pricing study is undertaken annually using the Transactional Net Margin Method (TNMM) to determine appropriate adjustments, in order to comply with OECD guidelines.

Foreign currencies

The functional and presentational currency of the Company is Great British pounds (£).

Transactions in foreign currencies are initially recorded by the Company at its respective functional currency spot rate at the date the transaction first qualifies for recognition.

Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rate of exchange at the reporting date. Differences arising on settlement of monetary items are recognised in profit or loss.

In determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which the Company initially recognises the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, the Company determines the transaction date for each payment or receipt of advance consideration.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined.

Cash and cash equivalents

Cash represents cash in hand and deposits held on demand with financial institutions. Cash equivalents are short-term, highly-liquid investments with original maturities of three months or less (as at their date of acquisition). Cash equivalents are readily convertible to known amounts of cash and subject to an insignificant risk of change in that cash value.

In the presentation of the Statement of Cash Flows, cash and cash equivalents also include bank overdrafts. Any such overdrafts are shown within borrowings under ‘current liabilities’ on the Statement of Financial Position.

Trade and other receivables

A receivable represents the Company's right to an amount of consideration that is unconditional (i.e. only the passage of time is required before payment of the consideration is due).

The Company's financial assets at amortised cost includes trade receivables and loans to employees.

Capitalised contract acquisition costs

The incremental direct costs of obtaining a contract, which primarily consist of sales commissions paid for new subscription contracts, are deferred and amortised on a straight-line basis over a period of three years. Sales commissions are paid on initial contracts with new customers and for expansion of contracts with existing customers. Commissions are not paid on customer renewals. Where other commissions are paid that are not directly attributable to the acquisition of a customer contract, these commissions are expensed as incurred.

The Company determined the three-year period by taking into consideration the products sold, expected customer life, expected contract renewals, technology life cycle and other factors.

Trade and other payables

Trade and other payables are carried at amortised cost and, due to their short-term nature, they are not discounted. They represent liabilities for goods and services provided to the Company prior to the end of the financial year that are unpaid and arise when the Company becomes obliged to make future payments in respect of the purchase of these goods and services. The amounts are unsecured and are usually paid within 30 days of recognition.