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

The principal activity of the company and group continued to be that of providing expert software engineering and consultancy services to help its customers adopt technology transformations and boost the value they create for the modern industry. We have extensive knowledge about Scala, FinTech, Dev tooling and Data. We strongly support the IT community, launch conferences, meetups and contribute to open source initiatives.

On the 27 December 2021 the Group was reorganized in a way that Virtuslab Ltd. became a shareholder of Virtuslab Sp. z o.o. (Ltd.), Poland, Sensinum Sp. z o.o. (Ltd.), Poland and Virtuslab GmbH (Ltd.), Germany. Before reorganization Virtuslab Sp. z o.o. was formally a superior company to other companies. From an operating perspective Virtuslab Sp. z o.o. remains a central company which provides services to other Companies from the Group and Customers. At the end of first quarter of 2023 the Group acquired a new company, SoftwareMill Group (Poland) which became a subsidiary of Virtuslab Sp. z o.o. This was a strategic acquisition to increase the Group's position on the market especially in the area of Scala development language. In April 2026 Virtuslab Ltd. established a new subsidiary Virtuslab Inc. in the United States, Delaware. The primary goal of the subsidiary is to strengthen local sales operations.

The market environment in 2025 remained stable. However, towards the end of the year, a noticeable recovery compared with previous periods was observed, enabling the Group to increase revenue to £29.7m (2024: £26.5m), while maintaining a stable gross profit margin of 43% (2024: 45%). Operating profit for the year was £2.6m (2024: £1.3m) and was higher than in the previous period due to new projects and reduction of R&D investments and administration costs in previous year. Operating profit before amortization and depreciation (EBITDA) for the year was £4.4m (2024: £3.0m) - in 2023 the Group started amortisation of Softwaremill goodwill (2025: £1.2m, 2024: £1.2m).

The Group made a profit before tax of £2.1m (2024: £0.7m) and the net asset position of the Group was £9.1m (2024: £7.3m) as at the balance sheet date.

In the course of normal business, the directors assess the significant risks faced and take action to mitigate their potential impact. The following risks, whilst not intended to be a comprehensive analysis, constitute (in the opinion of directors) the principal risks and uncertainties currently facing the Group.

Access to skilled staff risk

Key factor to success is access to skilled and experienced employees who can provide high-quality services for customers. Lack of adequate employees may cause problems with delivery of services for existing customers but also limits Group’s development.

Risk is mitigated by an established People and Talent Acquisition Team which actively and permanently analyzes the market and searches potential candidates. Additionally the Group has expanded its locations and strengthened its position in a number of local IT Communities.

Margin erosion risk

The Group operates in a highly competitive environment on a global market (IT services can be provided remotely from almost any country). Current advantage of access to the highly skilled employees and consultants in Poland at comparatively lower costs compared to western Europe is still decreasing as salaries in the IT industry in Europe are still leveling what can finally lead to the lower margins.

The Group is mitigating this risk by permanent increasing of skills of its staff and quality of provided services and takes action to negotiate adequate rates with its customers.

Cyber security risk

Data loss and compliance with security requirements. Data loss or non-compliance may potentially result in high financial or reputation damages.

The Group has implemented ISO27001 standard and continues to invest in robust cybersecurity measures to protect against potential breaches and ensure the integrity of systems and improvement of security procedures.

Regular internal and external audits are conducted.

Economic risks

(e.g. War in Ukraine, Inflation, Brexit)

A broader economic downturn, whether regional or global, can impact customers spendings and investments and thus also demand for IT services.

The Group maintains flexibility in its business strategies to adapt to the changing environments. The Directors also monitor the ongoing war in Ukraine and its impact on the situation on the markets and since 2026 also the armed conflict between Iran and the coalition of the United States and Israel which has significantly increased the risk of economic destabilisation in the Middle East region, which may contribute to increases in energy commodity prices on global markets.

Financial risks

(e.g. Foreign Currency Risk, Interest Rate Risk, Concentration)

Operating in international markets exposes the Group to currency exchange fluctuations. The Group, where it is possible, employs hedging mechanisms to mitigate the impact of adverse exchange rate movements to ensure the stability of financial results. Changes in interest rates can affect borrowing costs and investment returns. A rise in interest rates may increase the debt-servicing expenses. The Group actively manages interest rate risk through prudent financial planning and hedging strategies. The Group is still exposed to significantly high concentration of revenue from its biggest customer but its share continues to decrease due to development of the Group.

Analysis of KPIs is discussed in the business review section of the strategic report.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) is effectively the group operating profit plus depreciation charged and amortisation charged.

The group meets its day-to-day working capital requirements through current cash flows and its bank facilities. The current economic conditions continue to create uncertainty over (a) the level of demand for the group’s products and services, and (b) the availability of bank finance for the foreseeable future. The group’s forecasts and projections, taking account of a severe but plausible change in trading performance, show that the group should be able to operate within the level of its current facilities. Additionally Group may adjust it's level of R&D and sales investments without significant impact on short term revenue. Adjustment of investment spending is mitigation factor in case of negative changes.

In 2025 the Group fulfilled all covenant obligations and based on the current forecast the Group expects to meet covenants also in following periods.

After making enquiries, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. The group therefore continues to adopt the going concern basis in preparing its financial statements.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2025.

The results for the year are set out on page 11.

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

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

The group maintains insurance policies on behalf of all the directors against liability arising from negligence, breach of duty and breach of trust in relation to the group.

The Group invests constantly in new technologies and software products. In 2025 the Group continued development of new versions and functionalities within all products (mainly Nexelem, Scala OSS). The size of the development initiatives was maintained at a level defined in the second half of 2024. In 2025 the Group continued development works within Scala related to a grant received from The National Centre for Research and Development in Poland in 2024. In the following year the Group will maintain the current level of spending for R&D activities.

In April 2026 Virtuslab Ltd. established a new subsidiary Virtuslab Inc. in the United States, Delaware.

The company will continue to work on expanding its market offer using innovative technologies, development of its own products and geographical expansion. The Group verifies results and future steps of this strategy regularly and adjusts if needed. At the same time, the Group plans further expansion through acquisitions of additional companies in order to increase the scale and scope of its operations. By diversifying its operations, expanding its customer portfolio and continuously expanding the products and services offered, the Group tries to minimize different risks. The Group should continue to develop in the following years but potential increases of revenue and number of staff depend on current market situation. Potential development will depend mainly on the economic situation on the European and US markets.

The truegroup has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of financial risk management objectives and policies, and indication of exposure to price risk, credit risk, liquidity risk and cash flow risk.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

This report has been prepared in accordance with the provisions applicable to groups and companies entitled to the exemptions of the small companies regime.

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

United Kingdom company law requires the directors to prepare financial statements for each financial year. Under that law, the directors have elected to prepare the group and parent company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and parent company, and of the profit or loss of the group for that period.

In preparing these financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

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

• state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

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

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

We have audited the financial statements of VIRTUSLAB LTD (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2025, which comprise the consolidated statement of comprehensive income, the consolidated and company balance sheets, the consolidated and company statements of changes in equity, the consolidated statement of cash flows and 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 United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ (United Kingdom Generally Accepted Accounting Practice).

In our opinion:

• the financial statements give a true and fair view of the state of the group's and the parent company's affairs as at 31 December 2025 and of the group's profit for the year then ended;

• the financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the ‘Auditor’s responsibilities for the audit of the financial statements’ section of our report. We are independent of the group and the parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

We are responsible for concluding on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group's and the parent company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the auditor’s opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future events or conditions may cause the group or the parent company to cease to continue as a going concern.

In our evaluation of the directors’ conclusions, we considered the inherent risks associated with the group's and the parent company's business model including effects arising from macro-economic uncertainties such as cost of living crisis and global wars, we assessed and challenged the reasonableness of estimates made by the directors and the related disclosures and analysed how those risks might affect the group's and the parent company's financial resources or ability to continue operations over the going concern period.

In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is 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 the audit:

• the information given in the strategic report and the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.

Matter on which we are required to report under the Companies Act 2006

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors’ report.

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

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

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

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

• we have not received all the information and explanations we require for our audit.

As explained more fully in the statement of directors' responsibilities set out on page 9 to 33, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below:

• We enquired of management and those charged with governance, concerning the Group’s policies and procedures relating to:

• the identification, evaluation and compliance with laws and regulations;

• the detection and response to the risks of fraud; and

• the establishment of internal controls to mitigate risks relating to fraud or non-compliance with laws and regulations.

• We communicated relevant laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

• We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group and determined that the most significant are those that relate to the reporting frameworks (FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and Companies Act 2006) and the relevant tax compliance regulations in the jurisdictions in which the Group operates.

• We enquired of management and those charged with governance, whether they were aware of any instances of non-compliance with laws and regulations or whether they had any knowledge of actual, suspected, or alleged fraud.

• We assessed the susceptibility of the group's consolidated financial statements to material misstatement, including how fraud might occur and the risk of management override of controls.

• Audit procedures performed by the engagement team included:

• identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud;

• challenging assumptions and judgements made by management in its significant accounting estimates;

• identifying and testing journal entries, in particular journals relating to management estimates, assessing the extent of compliance with the relevant laws and regulations as part of our procedures on the related financial statement line item;

• In addition, we completed audit procedures to conclude on the compliance of disclosures in the annual report and accounts with applicable financial reporting requirements. In addition, we completed audit procedures to conclude on the compliance of disclosures in the annual report and accounts with applicable financial reporting requirements.

• These audit procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error and detecting irregularities that result from fraud is inherently more difficult than detecting those that result from error, as fraud may involve collusion, deliberate concealment, forgery or intentional misrepresentations. Also, the further removed non-compliance with laws and regulations is from events and transactions reflected in the financial statements, the less likely we would become aware of it;

• Assessment of the appropriateness of the collective competence and capabilities of the engagement team included consideration of the engagement team's:

• understanding of, and practical experience with audit engagements of a similar nature and complexity through appropriate training and participation;

• knowledge of the industry in which the Group operates;

• understanding of the legal and regulatory requirements specific to the Group including:

• the provisions of the applicable legislation;

• the applicable statutory provisions.

• We communicated relevant laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

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.

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

As permitted by section 408 of the Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £43,577 (2024 - £67,652 profit).

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

Virtuslab Ltd (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Level 18, 40 Bank Street (Hq3), Canary Wharf, London, E14 5NR.

The group consists of Virtuslab Ltd and all of its subsidiaries. The principal activity of the group is disclosed in the strategic report.

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.

The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:

• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for 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 33 ‘Related Party Disclosures’: Compensation for key management personnel.

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

At the end of 2021 the whole of the share capital of Virtuslab Sp. z o.o. (Ltd.), Poland, Sensinum Sp. z o.o. (Ltd.), Poland and Virtuslab GmbH (Ltd.), Germany. was acquired by the Company via a share for share exchange agreement. The Group has adopted the principles of merger accounting from FRS 102.

In accounting for the above the Company took group reconstruction relief and recognised a minimum share premium on the difference between the nominal value of the shares issued via the share for share exchange agreement and the net assets of the above named entities as at 31 December 2021. In addition to the minimum share premium, a merger reserve was created and this was calculated as the difference between the consideration received for the shares issued and the amount recognised as the minimum share premium.

The consolidated group financial statements consist of the financial statements of the parent company Virtuslab Ltd together with all entities controlled by the parent company (its subsidiaries).

As part of the consolidation and due to the application of merger accounting, a merger difference reserve is created. This is calculated as the difference between the value of the investments in the parent company financial statements and the nominal value of the share capital within the financial statements of the subsidiaries.

All financial statements are made up to 31 December 2025. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

The group meets its day-to-day working capital requirements through current cash flows and its bank facilities. The current economic conditions continue to create uncertainty over (a) the level of demand for the group’s products and services, and (b) the availability of bank finance for the foreseeable future. The group’s forecasts and projections, taking account of a severe but plausible change in trading performance, show that the group should be able to operate within the level of its current facilities. Additionally Group may adjust it's level of R&D and sales investments without significant impact on short term revenue. Adjustment of investment spending is mitigation factor in case of negative changes.

In 2025, Virtuslab received an official waiver letter from ING in which the bank agreed not to enforce the rights it has under the Finance Documents. Based on the current forecast the Group expects to meet revised covenants in following periods.

After making enquiries, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. The group therefore continues to adopt the going concern basis in preparing its financial statements.

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes.

Revenue from software development is recognised in months when services were actually performed at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes.

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised as part of development costs in intangible assets to the extent that the technical, commercial and financial feasibility can be demonstrated.

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

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

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Costs associated with maintaining computer software are recognised as an expense as incurred.

Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the group are recognised as intangible assets when the following criteria are met:

• It is technically feasible to complete the software so that it will be available for use.

• Management intends to complete the software and use or sell it.

• There is an ability to use or sell the software.

• It can be demonstrated how the software will generate probable future economic benefits.

• Adequate technical, financial and other resources to complete the development and to use or sell the

software are available.

• The expenditure attributable to the software during its development can be reliably measured.

Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, 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 recognised in the profit and loss account.

In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

The carrying amount of the investments is tested for impairment. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.

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.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

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

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

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method 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.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

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

Basic financial liabilities, including creditors, bank loans, 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.

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

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

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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

The Group’s financial statements are presented in Sterling (£). The individual financial statements of each Group entity are prepared in the currency of the primary economic environment in which the entity operates (its functional currency). These financial statements are then translated into the Group’s presentation currency for consolidation purposes as described below.

The Company's functional and presentational currency is Sterling.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date.

Exchange differences are recognised in profit and loss in the period in which they arise. However, in the consolidated financial statements exchange differences arising on monetary items that form part of the the net investment in a foreign operation are recognised in other comprehensive income and are not reclassified to profit or loss.

For the purpose of presenting consolidated financial statements, the assets and liabilities of the group's foreign operations are translated from their functional currency to Sterling using the closing exchange rate. Income and expenses are translated using the average rate for the period. Exchange rate differences arising on the translation of group companies are recognised in other comprehensive income.

In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

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

Annually, the group considers whether intangible assets, including goodwill, as well as investments into subsidiaries, are impaired. Where an indication of impairment is identified the estimation of recoverable value requires estimation of the recoverable value of the cash– generating units (CGUs). This requires estimation of the future cash flows from the CGUs or fair value less costs to sell.

As at 31 December 2025 management have not identified any indicators of impairment.

The group’s forecasts and projections, taking account of a severe but plausible change in trading performance and also eventual changes of economic conditions. An uncertainty over the level of demand for the group’s products and services remains a key source of uncertainty. In analyzed forecasts and scenarios the Group always estimates to meet all contractual requirements and bank covenants. In case of potential problems or failure of meeting them Group plans to mitigate them by adjusting of short them strategy e.g. reducing R&D and sales investments or renegotiating of contracts.

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

Their aggregate remuneration comprised:

Some of the directors are not remunerated for their position as a director by this group or any other group to which this group belongs.

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

Included within tangible fixed assets are assets held under finance leases or hire purchase contracts, as follows:

Details of the company's subsidiaries at 31 December 2025 are as follows:

Included within other debtors is £1,418,619 (2024: £1,439,974) relating to VAT recoverable, and £162,397 (2024: £105,973) relating to related party loans.

List of security measures granted by Virtuslab Sp. z o.o. or a partner of Virtuslab Sp. z o. o., i.e. Virtuslab Limited based on the loan agreement of 27 March 2023 between ING Bank Śląski S.A. as the lender and Virtuslab Sp. z o. o., as the borrower:

• Financial and registered pledges on 100% of shares held by Virtuslab Limited in the share capital of Virtuslab Sp. z o.o. up to the highest security amount of EUR 17,529,505

• Financial and registered pledges on 100% of shares held by Virtuslab Sp. z o.o. in the share capital of SoftwareMill Sp. z o.o. up to the highest security amount of EUR 17,529,505

• Registered pledge on the assets of Virtuslab Sp. z o.o. up to the highest security amount of EUR 17,529,505

Interest on the loans are charged at 2% above the WIBOR 3M interest rate in Poland. Overdraft interest is charged at 1.8% above the WIBOR 3M interest rate plus a 0.2% quarterly fee and a 0.5% fee for any unused amount.

Finance lease payments represent rentals payable by the company or group for certain items of IT equipment. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3-5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

The deferred tax asset set out above is expected to reverse within 12 months and relates to the utilisation of tax losses against future expected profits of the same period.

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

The shares have attached to them full voting, dividend and capital distribution rights.

The share premium account includes the minimum share premium relating to group reconstruction relief, this amounted to £2,129,640. This was calculated as the difference between the nominal value of the shares issued as part of the share for share exchange agreement 27 December 2021, and the net assets of the subsidiary companies as at 31 December 2021.

The remaining share premium relates to a share for share agreement dated 31 March 2023. This is the difference in the nominal value of the share issued and the consideration received for the share.

At the end of 2021 the Group was reorganized in a way that Virtuslab Ltd. became a shareholder of Virtuslab Sp. z o.o. (Ltd.), Poland, Sensinum Sp. z o.o. (Ltd.), Poland and Virtuslab GmbH (Ltd.), Germany. Before reorganization Virtuslab Ltd was a subsidiary established and owned by Virtuslab Sp. z o.o. (Ltd.).

As a result of group reconstruction relief being applied on the inclusion of Virtuaslab Sp. Z o.o, Sensinum Sp. Z o.o and Virtuslab Gmbh in the consolidated financial statement a merger reserve was created. This reserve represents the difference between the consideration received as part of the share for share agreement and the minimum share premium recognised in the accounts of the parent company.

As a result of group reconstruction relief, on consolidation a merger difference reserve is created. This reserve represents the difference between the value of the investment by the parent company in the subsidiaries and the nominal value of the subsidiaries share capital.

Retained earnings relate to the cumulative profit and loss net of distributions to owners.

The remuneration of key management personnel is as follows.

During the year the group entered into the following transactions with related parties:

The following amounts were outstanding at the reporting end date:

The related party balances are repayable on demand, unsecured and free of interest. Trading balances fall due within the usual terms given to other customers.

The following amounts were outstanding at the reporting end date:

The related party balances are repayable on demand, unsecured and free of interest. Trading balances fall due within the usual terms given to other customers.

Transactions between group companies, which are related parties, have been eliminated on consolidation and are not disclosed in this note.

The immediate parent undertaking is AQ Sphere Midco Limited (registered office address: Eagle House, 108-110 Jermyn Street, London, SW1Y 6HB).

The ultimate parent undertaking is AQ Sphere Holdings Limited (registered office: Eagle House, 108-100 Jermyn Street, London, SW1Y 6HB).