The director presents the strategic report for the period ended 31 December 2025.

The company's principal activity is that of online retailers and wholesaler of cosmetics, cosmetic brushes and accessories in the UK and Europe. Forma Brands UK Limited was incorporated on 12 June 2024 and began trading on 1 July 2024. This followed the purchase of the assets and brand rights from the liquidators of MC 2024 (formerly Morphe Cosmetics Ltd.). MC 2024 had undergone a pre-pack administration in June 2024, faced with a challenging business model of large format, owned retail stores on long-term leases, in a difficult post-COVID-19 trading environment.

These are therefore the company's first Annual Report and Financial Statements. They cover the 18-month period from the start of trading to 31 December 2025 and, as this is the first trading period, there are no comparative figures.

The business performed ahead of expectations in the period, delivering strong growth across the 18 months, driven by a combination of expanding distribution to new points of sale, and increasing rate of sale per distribution location (through successful product launches, improving marketing & brand awareness, and operational & in-store execution).

The result for the period includes a £5.0 million exceptional credit arising from the release of negative goodwill recognised on the company's acquisition of its opening trade and net assets (see note 9). Excluding this one-off item, the underlying result for the period was a loss before taxation of approximately £1.7 million. This loss was anticipated due to planned investment in brand/ marketing, as well as restructuring the business for long-term sustainable growth.

The Company's key financial and other performance indicators during the period were as follows:

The Company is supported by its immediate parent, Forma Brands LLC (“Forma USA”), which supplies finished goods inventory and provides additional brand and management support. During the year, Forma USA also made a capital contribution to the Company, further supporting its financial position. The UK entity operates as a limited-risk distributor, with the transfer pricing agreement reflecting this operating model and the associated allocation of functions, assets and risks between the UK entity and Forma USA.

Future developments

The Company anticipates growth in 2026, driven by further distribution expansion across the UK and Europe, new product roadmap, annualisation of drivers in the opening operating period, and continued momentum for the brand and business execution.

The Company will continue to benefit from the support of its immediate parent, Forma Brands LLC (“Forma USA”), which provides finished goods inventory, brand and management support and, where required, financial support. The Director expects this continued support, together with the Company’s operating model and planned business development, to provide a strong foundation for the Company’s continued growth and development.

The principal risks and uncertainties facing the company are broadly grouped as competition, foreign exchange risk, reliance on group support, and exposure to credit, liquidity and cash flow risk.

Competitive risk

Competitive pressures exist both from the increasing number of beauty products emerging on to the market and the introduction of new brands. The director expects competition to remain intense and will continue to use marketing and promotional activity - the company incurred advertising costs of £5.2 million during the period - to maintain and grow the company's market share.

Foreign exchange risk

With around half of turnover generated in Europe, the company has significant exposure to movements in exchange rates between sterling and the euro and other European currencies. The company recorded net exchange losses of £150k during the period (see note 6). The company currently has no formal hedging policy in place but reviews this position on an ongoing basis.

Credit, liquidity and cash flow risk

Credit risk is the risk that one party will cause a financial loss for the other party by failing to discharge an obligation. Company policies are aimed at minimising such losses and require that deferred payment terms are only granted to customers who demonstrate an appropriate payment history and satisfy credit worthiness tests. Details of the company's debtors are shown in note 11 to the financial statements.

Liquidity risk is the risk that the entity will encounter difficulty in meeting obligations associated with financial liabilities. The company aims to mitigate liquidity risk by managing cash generation from its operations and applying cash collection targets, together with the ongoing support of its parent company.

Cash flow risk is the risk of exposure to variability in cash flows attributable to a particular recognised asset or liability. The company manages this risk with support from its parent company and by access to flexible banking arrangements, in addition to planning cash inflows and outflows.

On behalf of the board

The director presents his annual report and financial statements for the period ended 31 December 2025.

The company's principal activity is that of online retailers and wholesalers of cosmetics, cosmetic brushes and accessories in the UK and Europe.

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

No ordinary dividends were paid. The director does not recommend payment of a final dividend.

The director who held office during the period and up to the date of signature of the financial statements was as follows:

Rayner Essex LLP were appointed as auditor to the company 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 director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is required to:

• select suitable accounting policies and then apply them consistently;

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

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

The director is 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. He is 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.

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 company’s auditor 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 company’s auditor is aware of that information.

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium- sized companies exemption.

We have audited the financial statements of Forma Brands UK Limited (the 'company') for the period ended 31 December 2025 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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 company's affairs as at 31 December 2025 and of its profit for the period 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 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 director's 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 twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the director 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 director is 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 director's report for the financial period for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the director's report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the director's 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, 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 director's 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 director's responsibilities statement, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has 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.

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

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

• the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

• we identified the laws and regulations applicable to the company through discussions with the directors and other management, and from our commercial knowledge and experience of the sector they operate in;

• we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation and data protection, anti-bribery, employment and GDPR regulations;

• we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and

• identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

• making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and

• considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:

• performed analytical procedures to identify any unusual or unexpected relationships;

• tested journal entries to identify unusual transactions;

• assessed whether judgements and assumptions made in determining the accounting estimates set out in note 2 were indicative of potential bias; and

• investigated the rationale behind significant or unusual transactions

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.

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 profit and loss account has been prepared on the basis that all operations are continuing operations.

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

Forma Brands UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is North West House, 119 Marylebone Road, London, NW1 5PU.

The company changed its year end to 31st December 2025 to bring it in line with the rest of the group. Therefore, the 2025 accounts are for an 18 month period, as this is the first trading accounting period, there are no comparatives.

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 £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

This 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:

• 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 financial instruments not measured at fair value; 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 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;

• Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

The financial statements of the company are consolidated in the financial statements of Beauty Brands Acquisition Intermediate LLC,These consolidated financial statements are available from its registered office at 10303 Norris Avenue, Pacoima, CA 91331, USA.

Business combinations are accounted for by recognising the identifiable assets acquired and liabilities assumed at their fair values at the date of acquisition. The consideration transferred is allocated to the identifiable net assets acquired based on their respective fair values. Any resulting goodwill or negative goodwill is recognised in accordance with the applicable accounting requirements. Assets acquired are recognised over their estimated useful economic lives, where applicable.

The financial statements have been prepared on a going concern basis. In assessing the appropriateness of this basis of preparation, the Director has considered the Company’s financial position, trading performance and expected future developments, together with the continued support available from the Company’s immediate parent, Forma Brands LLC (“Forma USA”).true

The Company reported a profit after tax of £3.2 million for the period ended 31 December 2025. This result includes a £5.0 million gain on bargain purchase (see note 9). Excluding this one-off gain, the Company generated an underlying loss before taxation of approximately £1.7 million. The underlying loss reflects planned investment in brand and marketing activities, together with expenditure incurred in restructuring and establishing the business following its acquisition in June 2024.

The Company is supported by Forma USA, which supplies finished goods inventory and provides brand and management support. During the period, Forma USA also made a capital contribution to the Company. The Company operates as a limited-risk distributor, with its transfer pricing arrangements reflecting the allocation of functions, assets and risks between the Company and Forma USA.

The Company has received written confirmation from Forma USA that it will continue to provide operational and financial support to the Company, if and when required, for a period of at least 12 months from the date of signing the Annual Report and Financial Statements.

Having considered the above, the Director has concluded that the Company has adequate resources to continue in operational existence and meet its liabilities as they fall due for the foreseeable future. Accordingly, the Director considers it appropriate to prepare the financial statements on a going concern basis.

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

Revenue is measured at the fair value of the consideration received or receivable. Estimated customer returns, rebates and other similar allowances are deducted from revenue.

Revenue from the sale of goods is recognised at the point of delivery when the risks and rewards pass to the customer.

Goodwill represents the excess of the cost of acquisition of unincorporated businesses 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.

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.

Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.

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 credited or charged to profit or loss.

At each reporting period end date, the company 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.

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.

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

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 and other short-term liquid investments with original maturities of three months or less.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with 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 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.

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 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 company 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 company after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, 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 company’s contractual obligations expire or are discharged or cancelled.

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

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

The tax currently payable is based on taxable profit for the year. Taxable profit differs from 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 company’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 when the company has 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 leases asset are consumed.

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

In the application of the company’s accounting policies, the director is 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 following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. The remaining useful economic life of the store assets are not considered a source of significant estimation uncertainty.

The provision for doubtful debts is sensitive to estimates of the ability of the debtors to meet payments due based on an assessment of their financial position and adjusted for the ability to recover inventory held by debtors for future resale. The provision is amended as the position of debtors changes. The provision for doubtful debts is not considered to be a source of significant estimation uncertainty.

The valuation of assets and liabilities acquired as part of the business acquisition involves estimation and judgement, particularly in determining their fair values and the estimated useful economic lives of the assets acquired. The useful economic lives are reviewed regularly and, where applicable, the assets are depreciated or amortised over their estimated useful economic lives.

Other operating income includes an amount arising from the transfer pricing arrangement with Forma USA, reflecting the Company’s role as a limited-risk distributor and the associated allocation of functions, assets and risks between the Company and Forma USA.

Forma Brands UK Limited was incorporated on 12 June 2024 and began trading on 1 July 2024. This followed the purchase of the assets and brand rights from the liquidators of MC 2024 (formerly Morphe Cosmetics Ltd.). MC 2024 had undergone a pre-pack administration in June 2024, faced with a challenging business model of large format, owned retail stores on long-term leases, in a difficult post-COVID-19 trading environment. The above relates to an exceptional credit arising from the release of negative goodwill recognised on the company's acquisition of its trade and net assets. See Note 20 for further information.

The average monthly number of persons (including directors) employed by the company during the period was:

Their aggregate remuneration comprised:

The actual charge for the period can be reconciled to the expected charge/(credit) for the period based on the profit or loss and the standard rate of tax as follows:

Further information in respect of the negative goodwill arising on the acquisition is set out in Note 20 - Business Combination and Acquisition of Assets.

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Capital reserves relates to a loan from the parent company that was capitalised and converted into a Capital Reserve.

This reserve may become distributable in the future.

The company has taken advantage of the disclosure exemptions available in FRS 102 not to disclose transactions between group companies as long as any subsidiary that is party to such a transaction is wholly owned within the group.

The company is 100% owned by Forma Brands LLC. The ultimate controlling party is Jefferies US Holdings LLC.

Forma Brands UK Limited was incorporated on 12 June 2024 and began trading on 1 July 2024. This followed the purchase of the assets and brand rights from the liquidators of MC 2024 (formerly Morphe Cosmetics Ltd.). MC 2024 had undergone a pre-pack administration in June 2024, faced with a challenging business model of large format, owned retail stores on long-term leases, in a difficult post-COVID-19 trading environment.

The company acquired the assets and brand rights for consideration of £715,000, with the net assets acquired having a fair value of £7,878,377, resulting in negative goodwill of £7,163,377 (note 9) being recognised.

Fair Value (book value) of identified assets acquired and liabilities assumed

The identifiable assets acquired and liabilities assumed have been recognised at their fair values at the acquisition date. The amounts recognised in respect of stock, prepayments, deposits and other costs were utilised or recognised during the first year following acquisition and have therefore been fully reflected in the results for the year.

The fair value attributed to FF&E is being recognised over its estimated useful economic life of four years, in line with the depreciation policy applied to those assets. Accordingly, the FF&E balance is being depreciated on a systematic basis over four years.