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

The principal activity of the group is the sale and distribution of non-alcoholic spirits sold in both glass and can formats across the world.

The group continues to focus on its key trading regions of USA, EU, UK, Middle East, Australia & New Zealand. The business continued to grow in the strategically important USA market, with growth in both distributor and e-commerce sales. Continued progress was made in 2025 to embed RTD Cans production in the USA market. Profitability also continued to improve, driven by tight cost control and labour restructuring, to better align labour costs to strategic markets

Revenue in 2025 was £16,610,156 an increase from £15,146,982 in 2024. The business saw an increase in losses to £12,095,510 in 2025 including an increase in share options costs of £8,685,603. The loss (before share options) comprises an improvement in sales, enhanced gross margins and headcount reductions along with a reduction in marketing investment costs.

The business continues to see very positive category trends with the on-going growth in Non-Alcoholic adult beverages as an alternative to Alcoholic beverages in both the On-Premise and Retail trade.

Liquidity risk

The group manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the group has sufficient liquid resources to meet the operating needs of the business. In order to maintain liquidity to ensure that sufficient funds are available for ongoing operations and future developments, the group ensures to the fullest extent possible its trade receivables are recovered in a timely manner and that funds are not unnecessarily tied up in inventory. The group uses invoice financing as a funding option. Forecasts are produced to assist management in identifying liquidity requirements and maintaining adequate cash reserves. The Directors of the group also actively seek equity investment into the business to provide funding to invest in inventory as well as support marketing activities to help manage the liquidity of the group.

Credit risk

All trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.

Market Competition Risk

Competitive pressure is a continuing risk for the group, which could result in it losing sales to key competitors. The group manages this risk by maintaining strong relationships with customers in all markets it operates in.

Exchange Rate Risk

The group is also exposed to movements in the US Dollar, Australian Dollar, Euro and Sterling exchange rate in respect of sales, bank deposits and intercompany loans. Risk is managed by borrowing in Euro and US Dollars to match the primary revenue-earning currencies of the group.

Several Key Performance Indicators as determined by the Directors are reviewed routinely and include the number of cases sold in each market and revenue earned per case sold. Other key performance indicators used are Revenue and Gross Margin to monitor trading performance and inventory holdings to ensure enough product is available to supply all markets.

The company intends to continue the sale and distribution of high-quality non-alcoholic spirits.

On behalf of the board

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

The principal activity of the group continued to be the manufacture and global distribution of non-alcoholic beverages via international subsidiaries.

The results for the year are set out on page 9. No ordinary dividends were paid and the directors do not recommend payment of a dividend.

The directors who held office in the year and to the date of approving the financial statements were as follows:

The group operates a treasury function which is responsible for managing the liquidity, interest and foreign currency risks associated with the group’s activities.The financial risks affecting the group are monitored and reviewed by the directors on a regular basis.

The company has entered 2026 in an improved position, building on the efficiencies made in prior years. Manufacturing capacity and speed to market has been improved with co-packer facilities now located in the US, UK, Netherlands and Australia. The company continues to focus on developing the Lyre’s brand in its key strategic markets of the US, UK, EU, Middle East and Australia. With continued strong category growth in non-alcoholic beverages the company is well positioned for the year ahead.

The company continues to work with its strategic suppliers to develop new recipes and formulations for non-alcoholic spirits.

There have been no material events that have occurred since the end of the financial year.

The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare group and company financial statements for each financial year. Under that law, the directors have 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 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 the company, and of the profit or loss of the group and the company for that period.

In preparing each of the group and company 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; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and the 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 the company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and the company, and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and 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 auditor of the group 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 group is aware of that information.

We have audited the financial statements of Zero Proof International Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2025 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows 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 group's and of the parent company's affairs as at 31 December 2025 and of the group's loss for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice;

• 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 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

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 or 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 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 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.

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 directors’ responsibilities statement set out on page 3, 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.

The extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities are instances of non-compliance with laws and regulations. The objectives of our audit are to obtain sufficient appropriate audit evidence regarding compliance with laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements, to perform audit procedures to help identify instances of non-compliance with other laws and regulations that may have a material effect on the financial statements, and to respond appropriately to identified or suspected non-compliance with laws and regulations identified during the audit.

In relation to fraud, the objectives of our audit are to identify and assess the risk of material misstatement of the financial statements due to fraud, to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud through designing and implementing appropriate responses and to respond appropriately to fraud or suspected fraud identified during the audit.

However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the group audit engagement team:

•    obtained an understanding of the nature of the industry and sector, including the legal and regulatory framework that the group and parent company operate in and how the group and parent company are complying with the legal and regulatory framework;

•    inquired of management, and those charged with governance, about their own identification and assessment of the risks of irregularities, including any known actual, suspected or alleged instances of fraud;

•    discussed matters about non-compliance with laws and regulations and how fraud might occur including assessment of how and where the financial statements may be susceptible to fraud.

As a result of these procedures we consider the most significant laws and regulations that have a direct impact on the financial statements are FRS 102, the Companies Act 2006 and tax compliance regulations. We performed audit procedures to detect non-compliances which may have a material impact on the financial statements which include reviewing financial statement disclosures, inspecting correspondence with local tax authorities and evaluating advice received from internal tax advisors.

The most significant laws and regulations that have an indirect impact on the financial statements are those related to food safety. We have performed audit procedures to inquire of management whether the group is in compliance with these laws and regulations.

The audit engagement team identified the risk of management override of controls and revenue recognition as the areas where the financial statements were most susceptible to material misstatement due to fraud. Audit procedures performed included but were not limited to testing manual journal entries and other adjustments and evaluating the business rationale in relation to significant, unusual transactions and transactions entered into outside the normal course of business and reviewing transactions either side of the year-end to assess the timing of revenue recognition.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://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 notes on pages 16 to 34 form part of these financial statements.

The notes on pages 16 to 34 form part of these financial statements.

The notes on page 16 to 34 form part of these financial statements.

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

The notes on pages 16 to 34 form part of these financial statements.

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £19,224,787 (2024 - £16,228,177 ).

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

Zero Proof International Limited (“the company”) is a private company limited by shares domiciled and incorporated in England and Wales. The registered office is Brandon House, First Floor, 90 The Broadway, Chesham, Buckinghamshire, HP5 1EG.

The group consists of Zero Proof International Limited and its subsidiaries.

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 GB pound.

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 4 'Statement of Financial Position' - Reconciliation of the opening and closing number of shares,

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

• 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.

As permitted by s408 Companies Act 2006, the company has not presented its own statement of comprehensive income.

The consolidated group financial statements consist of the financial statements of the parent company Zero Proof International Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

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.

Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.

Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.

If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.

Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.

The accounts are prepared on a going concern basis which assumes that the company and operating subsidiaries will continue to trade.

The group is financed principally through equity. The continuity of the group depends to a significant extent on the ability to raise capital and to improve group performance. During 2025 the group has successfully raised capital to strengthen the cash position. It is anticipated that this capital raising will allow the group to approach trading break-even in the reasonably foreseeable future.

The accounting principles applied to the valuation of assets and liabilities and the determination of results in these financial statements are based on the assumption of continuity of the group.

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 the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

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

Intangible assets purchased other than in a business combination are only recognised when future economic benefits are probable and the cost or value of the asset can be measured reliably.

Intangible assets are initially recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Intangible assets are amortised to profit or loss on a straight-line basis over their useful lives, as follows:

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.

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

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.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.

Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.

In the parent company financial statements, investments in associates are accounted for at cost less impairment.

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

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 accounted for using the equity method is tested for impairment as a single asset. 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, 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.

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, 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.

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 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.

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 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 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.

The Company operates an ESOP scheme for employees, with grants provided to employees on a basis vesting over a pre-determined period, generally over three years, with an 18-month cliff. Options are normally granted to employees at £0.01/share and are only exercisable on a sale event of the Group.

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

In the Group accounts, when share options are awarded to employees and contractors in group companies in respect of the Company’s shares, the fair value of the options is determined at the date of grant and charged to profit or loss over the vesting period. The credit entry is recorded in a profit and loss reserve within equity. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each Statement of Financial Position date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest.

In the Company accounts the share-based payment charge in relation to awards made to employees and contractors of other group companies is recognised as a capital contribution resulting in an increase in the investment in subsidiaries.

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 leased asset are consumed.

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 areas where uncertainty of estimate arises are in the calculation of the useful lives and recoverability of intangible assets, provision for obsolete and slow-moving inventory, provisions for bad debt and valuation of share-based payments.

Impairment of intercompany balances

The recoverable amount of investments in subsidiaries held in the company accounts is based on value in use which requires estimates in respect of the future cash flows and an appropriate discount rate. The key inputs to the value in use calculations are the discount rate of 11.8% p.a. and the future revenue growth of 15% p.a.

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

Their aggregate remuneration comprised:

The number of directors to whom retirement benefits were accruing was 0 (2024 : 0).

Factors that may affect future tax charges                                        

The group has estimated trading losses of £65m (2024: £59m) available to carry forward against future profits. No deferred tax asset has been recognised on non-trading losses carried forward due to uncertainty of the timing of their recoverability.

Impairment tests have been carried out where appropriate and impairment losses have been recognised in profit and loss as follows:

The company's subsidiaries at 31 December 2025 are as follows:

* Exemption pursuant to Section 479A of the Companies Act 2006.

Zero Proof UK Limited Company number : 11725077

**Zero Proof South Africa (Pty) Ltd is in the process of liquidation.

Details of associates at 31 December 2025 are as follows:

The Group has a 49% equity shareholding (and voting rights) in Zero Proof (Shanghai) Enterprises Co Ltd, a jointly controlled entity established in China. This investment is fully impaired as the company remains dormant.

Zero Proof (Shanghai) Enterprises Co Ltd is in the process of liquidation.

The impairment gain recognised in the group profit or loss for the period in respect of bad and doubtful trade debtors of £85,233 (2024: £11,523 loss). The impairment recognised in the company profit or loss for the period in respect of bad and doubtful trade debtors was £nil (2024 : £nil).

Amounts owed from group undertakings are unsecured and interest-free. Amounts will be repayable on a date determined by mutual agreement. No repayment is expected within the next twelve months.

An impairment loss recognised in the company profit or loss for the period in respect of intercompany debtors of £11,895,282 (2024: £13,816,921).

Amounts owed to group undertakings are unsecured and interest-free. Amounts will be repayable on a date determined by mutual agreement. No repayment is expected within the next twelve months.

The loan balance comprises rolling 120-day working capital debt facilities held in the USA and EU subsidiaries. The loans in each subsidiary are secured with a charge over finished goods inventory in that region.

The contribution outstanding at the year end was £7,431 (2024 : £8,934)

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.

Share options are granted for the par value of the parent company shares at the grant date and usually vest over a period of 3 years. The option holder is entitled to exercise the share options on the occurrence of an exit event (as detailed on the share option plan). If the options remain unexercised after the period of 10 years from the date of grant, the options expire. Furthermore, unvested options are forfeited if the employee leaves the company before they become entitled to exercise the share options.

The exercise price for all share options in issue is £0.01.

The weighted average fair value of options granted in the year was determined with reference to the price paid per share at or after the date of issue, factoring expected leavers before the options vest. This is considered to be the most appropriate valuation method due to the nature of the options and the requirement to exercise within a short period after the employee becomes entitled to the shares (the "vesting date").

During 2025, the group recognised total share-based payment expense of £8,685,603 (2024 : £2,755,332)

Group share-based payment plan:

Zero Proof International Limited is part of a group share-based payment plan, and measures its share-based payment expenses on the basis of a reasonable allocation of the expense for the Group. The allocation is based on the number of employees benefiting from the share-based payments plan employed by each group entity.

The Ordinary, Ordinary (£0.36), Series A2,and Series A3, which carry no right to fixed income, each carry the right to one vote at general meetings of the company.

The deferred shares carry no right to vote at general meetings of the company.

During the year, 95,852 Series A3 shares (£0.36), each with a nominal value of 36p, were issued.

Consideration received for shares issued in excess of their nominal value (net of transaction costs).

Cumulative profit and loss net of distributions to owners.

In order for the subsidiary company named in note 14 to take the audit exemption set out in section 479A of the Companies Act 2006, Zero Proof International has guaranteed all outstanding liabilities of Zero Proof UK Limited at 31 December 2025 until those liabilities are satisfied in full.

The group and company have taken advantage of the exemptions provided by Section 33 of FRS 102 ‘Related Party Disclosures’ and has not disclosed transactions entered into between two or more members of a group, provided that any subsidiary undertaking which is party to the transaction is wholly owned by a member of that group.

At 31 December 2025 the group owed £523 (2024: £272) to parties related by virtue of common directors.

During the year, the group made purchases of £2,914 (2024: £3,395), the parties related by virtue of common directors.

Amounts owed to related parties are unsecured, interest free, and repayable on demand.