Diffblue Limited Filleted accounts for Companies House (small and micro)

COMPANY REGISTRATION NUMBER: 09958102

DIFFBLUE LIMITED

FILLETED UNAUDITED FINANCIAL STATEMENTS

31 January 2026

DIFFBLUE LIMITED

FINANCIAL STATEMENTS

YEAR ENDED 31 JANUARY 2026

Contents	Page

Balance sheet 1

Notes to the financial statements 2

DIFFBLUE LIMITED

BALANCE SHEET

31 January 2026

	2026	2025
Note	£	£

Fixed assets

Intangible assets	7	5,685,769	5,730,392
Tangible assets	8	9,028	30,494
Investments	9	8	–
		------------	------------
		5,694,805	5,760,886

Current assets

Debtors	10	802,189	1,115,355
Cash at bank and in hand		1,684,310	5,718,951
		------------	------------
		2,486,499	6,834,306

Creditors: amounts falling due within one year	11	( 865,917)	( 3,570,955)
		------------	------------
Net current assets		1,620,582	3,263,351
		------------	------------
Total assets less current liabilities		7,315,387	9,024,237
		------------	------------
Net assets		7,315,387	9,024,237
		------------	------------

Capital and reserves

Called up share capital	12	42,920	41,293
Share premium account		36,732,631	34,393,927
Share option reserve		469,625	224,927
Profit and loss account		( 29,929,789)	( 25,635,910)
		-------------	-------------
Shareholders funds		7,315,387	9,024,237
		-------------	-------------

These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies' regime and in accordance with Section 1A of FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.

In accordance with section 444 of the Companies Act 2006, the profit and loss account has not been delivered.

For the year ending 31 January 2026 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 year in question in accordance with section 476 ;

- The directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of financial statements .

These financial statements were approved by the board of directors and authorised for issue on 3 August 2026 , and are signed on behalf of the board by:

Ms J E Silber Director

Company registration number: 09958102

DIFFBLUE LIMITED

NOTES TO THE FINANCIAL STATEMENTS

YEAR ENDED 31 JANUARY 2026

1. General information

The company is a private company limited by shares, registered and incorporated in England and Wales. The address of the registered office is 5 New Street Square, London, EC4A 3TW.

2. Statement of compliance

These financial statements have been prepared in compliance with United Kingdom Accounting Standards, including Financial Reporting Standard 102, 'The Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland' ('FRS 102') and the Companies Act 2006.

3. Going concern

The company is still at a relatively early stage in the development and commercialisation of its agentic product portfolio. As has been the case in the current year, as will be the case going forward, the company continues to focus on product development and professional services and as such its cash outflows outweigh its income. The company therefore generated a loss of £4,293,879 in the current year. The company had cash of £1,684,310 at the year end.

Following recent and significant adjustments to the cost base the company expects current company funds to last through to mid 2027. The financial statements have been prepared on a going concern basis which the directors consider to be appropriate for the following reasons. The directors have prepared cash flow forecasts for the period covering at least 12 months from the date of approval of the financial statements which indicate that, whilst Diffblue Agents continue to be developed and in the absence of closing any new contracts or expanding existing contracts, the company will have sufficient funds from current contract commitments to meet their liabilities as they fall due for a period of at least 12 months from approval of these financial statements.

The Company had a cash balance of £850K at 1st May 2026 and has no external debt facilities. Directors have modelled a downside scenario assuming no new software license sales which projects that the company will have a positive cash balance and liquid assets that exceed liabilities through July 2027.

4. Accounting policies

Basis of preparation

The financial statements have been prepared on a going concern basis under the historical cost convention. The financial statements are prepared in sterling, which is the functional currency of the entity.

Consolidation

The company has taken advantage of the option not to prepare consolidated financial statements contained in Section 398 of the Companies Act 2006 on the basis that the company and its subsidiary undertakings comprise a small group.

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. Development expenditure is capitalised in accordance with the accounting policy below. The initial capitalisation of costs is based on management's judgement that technical and economic feasibility is confirmed, usually when a product development project has reached a defined milestone. In determining the amounts to be capitalised management makes assumptions regarding the expected future cash generation of an asset and the expected period of benefits. At each accounting period end management assesses each intangible asset for impairment and that the carrying value of the asset is exceeded by future economic benefits.

Revenue recognition

Revenue, which excludes value added tax is recognised when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the company and when specific criteria have been met for each of the activities as described below: Revenues for software license and services agreements are recognised on a straight line basis over the period of the agreement. Where consulting support or training is provided on the set up or ongoing use of the software license or service agreements, the revenues are recognised on delivery of the consulting support or training. Revenues for software development or consulting services are recognised on the percentage of completion method or separable milestone method. On the percentage of completion method, this is assessed by reference to the estimated project days in the development agreement or planning documentation as amended for project change requests and the period worked on the project to year end. Where agreements are made with specified separable milestones together with separate selling price for the milestone, revenues are recognised when each milestone is delivered to the customer based on the fair value of each milestone agreed in the contract documentation. Interest income Interest income is recognised in the profit or loss using the effective interest method.

Taxation

Current tax represents the amount of tax payable or receivable in respect of the taxable profit for the current or past reporting periods. It is measured at the amount expected to be paid or recovered using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events have occurred at the date that will result in an obligation to pay more, or a right to pay less or to receive more tax. Deferred tax asset on losses brought forward are only recognised when the existence and timing of sufficient future taxable profits is certain. Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which the timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.

Foreign currencies

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. 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 the profit and loss account. Foreign exchange gains and losses are presented in the profit and loss account within administrative expenses.

Intangible assets

Intangible assets are the costs of internal development work, primarily cost of staff developing the product and services of the business as detailed in the research and development accounting policy note below. Intangible assets initially recorded at cost, and are subsequently stated at cost less any accumulated amortisation and impairment losses.

Research and development

Research expenditure is written off in the period in which it is incurred.

Development expenditure incurred is capitalised as an intangible asset only when all of the following criteria are met:

- It is technically feasible to complete the intangible asset so that it will be available for use or sale;

- There is the intention to complete the intangible asset and use or sell it;

- There is the ability to use or sell the intangible asset;

- The use or sale of the intangible asset will generate probable future economic benefits;

- There are adequate technical, financial and other resources available to complete the development and to use or sell the intangible asset; and

- The expenditure attributable to the intangible asset during its development can be measured reliably.

Expenditure that does not meet the above criteria is expensed as incurred.

Amortisation

Amortisation is calculated so as to write off the cost or valuation of an asset over the useful economic life of that asset as follows: Development expenditure - 20% straight line following the sale of first commercial licence related to the expenditure incurred. Patent costs - 10% straight line following the sale of first commercial licence related to the expenditure incurred. Tangible assets Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation.

Depreciation

Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:

Purchased software	-	20% straight line
Fixtures and fittings	-	25% reducing balance
Computer equipment	-	33% straight line

Operating leases

Rentals under operating leases are charged to the income statement on a straight line basis over the lease term.

Investments

Fixed asset investments are initially recorded at cost, and subsequently stated at cost less any accumulated impairment losses.

Cash and cash equivalents

Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments that are readily convertible to known amounts of cash and are subject to insignificant risk of changes in value. An investment qualifies as a cash equivalent only when it has a short maturity of less than 3 months from the date of acquisition. Bank overdrafts, where applicable, are shown within borrowings in current liabilities unless they are repayable on demand forming an an integral part of the company's cash management.

Debtors

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

Impairment of fixed assets

A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date. For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets.

Creditors

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

Financial instruments

Financial assets measured at amortised cost comprise trade and other debtors that are receivable within one year. These are initially and subsequently measured at the undiscounted amount of the cash or other consideration expected to be received. Financial liabilities measured at amortised cost comprise trade creditors, other creditors and accruals. These are payable within one year so have been initially and subsequently measured at the undiscounted amount of the cash or other consideration expected to be paid. Financial liabilities that constitute a debt instrument, such as loans, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method.

Employee benefits

When employees have rendered service to the company, short-term employee benefits to which the employees are entitled are recognised at the undiscounted amount expected to be paid in exchange for that service. The company operates a defined contribution pension plan for the benefit of its employees. Contributions are expensed as they become payable.

Share based payment

The fair value of the share options at the date of grant is determined using the Black-Scholes model. This model uses key assumptions including the risk-free rate, share price and volatility of the share price. The fair value of the options at the date of grant is then charged to the Profit and Loss Account 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.

5. Employee numbers

The average number of persons employed by the company during the year amounted to 33 (2025: 44 ).

6. Development costs capitalised

In the year the following amounts were capitalised as intangible assets:

	31 Jan 26	31 Jan 25
	£	£
Employment costs	2,027,220	2,436,529
Premises, IT and other staff costs	179,673	211,721
	------------	------------
	2,206,893	2,648,250
	------------	------------

Total expenditure on research and development in the year to 31 January 2026 £2,206,893 (thirteen month period to 31 January 2025: £2,648,250).

7. Intangible assets

	Development - Test Generation Software	Patent costs	Total
	£	£	£
Cost
At 1 February 2025	17,663,990	72,692	17,736,682
Additions	–	9,735	9,735
Additions from internal developments	2,206,893	–	2,206,893
	-------------	------------	-------------
At 31 January 2026	19,870,883	82,427	19,953,310
	-------------	------------	-------------
Amortisation
At 1 February 2025	11,983,027	23,263	12,006,290
Charge for the year	2,253,008	8,243	2,261,251
	-------------	------------	-------------
At 31 January 2026	14,236,035	31,506	14,267,541
	-------------	------------	-------------
Carrying amount
At 31 January 2026	5,634,848	50,921	5,685,769
	-------------	------------	-------------
At 31 January 2025	5,680,963	49,429	5,730,392
	-------------	------------	-------------

Amortisation charge has been applied on the Test Generation Software project from 23 October 2018, this being the sale date of the first commercial licence relating to the expenditure incurred. Amortisation charge has been applied on the Patent costs from 1 January 2021.

8. Tangible assets

	Purchased software	Fixtures and fittings	Computer equipment	Total
	£	£	£	£
Cost
At 1 February 2025	19,000	6,500	159,086	184,586
Additions	–	–	1,910	1,910
Disposals	–	–	( 2,001)	( 2,001)
	------------	------------	------------	------------
At 31 January 2026	19,000	6,500	158,995	184,495
	------------	------------	------------	------------
Depreciation
At 1 February 2025	19,000	4,987	130,105	154,092
Charge for the year	–	379	22,997	23,376
Disposals	–	–	( 2,001)	( 2,001)
	------------	------------	------------	------------
At 31 January 2026	19,000	5,366	151,101	175,467
	------------	------------	------------	------------
Carrying amount
At 31 January 2026	–	1,134	7,894	9,028
	------------	------------	------------	------------
At 31 January 2025	–	1,513	28,981	30,494
	------------	------------	------------	------------

9. Investments

	Shares in group undertakings
	£
Cost
At 1 February 2025	–
Additions	8
	------------
At 31 January 2026	8
	------------
Impairment
At 1 February 2025 and 31 January 2026	–
	------------

Carrying amount
At 31 January 2026	8
	------------
At 31 January 2025	–
	------------

Investment in group undertakings represents 100% of the Common Stock of Diffblue Inc and is stated at cost. The market value is not materially in excess of the book amount.

10. Debtors

	2026	2025
	£	£
Trade debtors	13,577	148,565
Amounts owed by group undertakings	108,078	116,692
Prepayments and accrued income	87,610	193,763
Repayable tax credits on R & D expenditure	212,643	307,421
Other debtors	380,281	348,914
	------------	------------
	802,189	1,115,355
	------------	------------

11. Creditors: amounts falling due within one year

	2026	2025
	£	£
Unsecured convertible loan notes	–	2,209,006
Trade creditors	123,830	264,409
Accruals and deferred income	619,530	920,115
Social security and other taxes	101,620	154,328
Other creditors	20,937	23,097
	------------	------------
	865,917	3,570,955
	------------	------------

Convertible loan notes included above were from a funding round totalling £2million issued in November 2023. The loan notes accrued interest at 8% with a maturity date of 24 months following the date of execution of this agreement.

12. Called up share capital

Issued, called up and fully paid

	2026		2025
	No.	£	No.	£
Ordinary shares of £ 0.01 each	769,886	7,699	759,006	7,590
Series A1 shares of £ 0.01 each	3,483,279	34,833	3,361,079	33,611
Series A1 (Non Voting) shares of £ 0.001 each	388,615	389	92,000	92
	------------	------------	------------	------------
	4,641,780	42,920	4,212,085	41,293
	------------	------------	------------	------------

On 1 April 2025 480 Ordinary shares of 1p each, with an aggregate nominal value of £4.80, were issued fully paid for cash of £4.80. On 1 April 2025 1,020 Ordinary shares of 1p each, with an aggregate nominal value of £10.20, were issued fully paid for cash of £867.00. On 23 May 2025 180 Ordinary shares of 1p each, with an aggregate nominal value of £1.80, were issued fully paid for cash of £1.80. On 23 May 2025 4,200 Ordinary shares of 1p each, with an aggregate nominal value of £42.00, were issued fully paid for cash of £3,570.00. On 25 September 2025 1,383 Ordinary shares of 1p each, with an aggregate nominal value of £13.83, were issued fully paid for cash of £13.83. On 3 November 2025 122,200 Preference Series A1 shares of 1p each, with an aggregate nominal value of £1,222.00, were issued fully paid for cash of £680,654.00. On 3 November 2025 296,615 Preference Series A1 shares of 0.1p each (non voting), with an aggregate nominal value of £296.62, were issued fully paid for cash of £1,652.145.55. On 11 November 2025 3,617 Ordinary shares of 1p each, with an aggregate nominal value of £36.17, were issued fully paid for cash of £3,074.45. The Series A1 shares and the Ordinary shares rank equally for voting purposes. On a show of hands each member shall have one vote and on a poll each member shall have one vote per share held. On a distribution of assets or a return of capital all shareholders rank equally save for holders of Series A1 shares who have a liquidation preference equal to the price paid per share. Series A1 shareholders may convert their shares into Ordinary shares at a ratio of one Ordinary share for every one Series A1 A1 share at any time.

13. Share options

The Company set up an EMI share-option scheme in May 2016, updated in May 2020. The scheme is open to nominated members of staff. To be eligible for this scheme the nominated members of staff must work at least 25 hours a week for the company or work 75% of their time for the company. The options granted are time based and can be exercised at various dates in accordance with the individual agreements and must be exercised within 10 years. If the option holder ceases employment the options will lapse and be forfeited. Furthermore, the option may be exercised in the event of a change in control of the company.

The Company also set up an unapproved share-option scheme in May 2016, updated in May 2020. The scheme is open to nominated members of staff and to consultants. The options granted are time based and can be exercised at various dates in accordance with the individual agreements and must be exercised within 10 years. If the option holder ceases employment or engagement with the company the options will lapse and be forfeited. Furthermore, the option may be exercised in the event of a change in control of the company.

During the period 123,696 EMI share options were granted at a strike price of £1.12 per Ordinary share. During the period 2,043 EMI share options were exercised at a price of £0.01 per Ordinary share and 8,837 EMI share options were exercised at a price of £0.85 per Ordinary share. During the period 620 options at £0.01 per Ordinary share and 43,940 options issued at £0.85 per Ordinary share expired. During the period 91,667 options issued at £0.85 per Ordinary share lapsed.

Weighted average Number

exercise price of

per share options

£

Outstanding at the beginning of the year 0.85 551,232

Outstanding at the beginning of the year 0.01 7,661

Outstanding at the beginning of the year 0.84 41,908

Granted during the year 1.12 123,696

Expired during the year 0.01 620

Expired during the year 0.85 43,940

Forfeited during the year 0.85 91,667

Exercised during the year 0.01 2,043

Exercised during the year 0.85 8,837

Outstanding at the end of the year 0.85 406,788

Outstanding at the end of the year 0.01 4,998

Outstanding at the end of the year 0.84 41,908

Outstanding at the end of the year 1.12 123,696

Vested at the end of the year 0.87 471,823

14. Capital commitments

There were no capital or other commitments contracted or authorised by the board at 31 January 2026 (2025: Nil).

15. Controlling party

In the directors' opinion no one party has control of the company.