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Registered number: 11990587
ROOTSHELL SECURITY LTD
FINANCIAL STATEMENTS
INFORMATION FOR FILING WITH THE REGISTRAR
FOR THE YEAR ENDED 31 DECEMBER 2025
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ROOTSHELL SECURITY LTD
REGISTERED NUMBER: 11990587
BALANCE SHEET
AS AT 31 DECEMBER 2025
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Net current (liabilities)/assets
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Total assets less current liabilities
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The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The Company has opted not to file the profit and loss account in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 21 September 2026.
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T Allen
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The notes on pages 2 to 12 form part of these financial statements.
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ROOTSHELL SECURITY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Rootshell Security Ltd (the 'Company') is a company incorporated in the United Kingdom under the Companies Act. The Company is a private company limited by shares, registered in England and Wales.
The registered office is Ground Floor, 200 Cedarwood Crockford Lane, Chineham, Basingstoke, England, RG24 8WD.
The principal activity of the Company in the year under review was that of the provision of cyber threat management services.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006. The disclosure requirements of Section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The following principal accounting policies have been applied:
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Exemption from preparing consolidated financial statements
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The Company, and the Group headed by it, qualify as small as set out in section 383 of the Companies Act 2006 and the parent and Group are considered eligible for the exemption to prepare consolidated accounts.
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ROOTSHELL SECURITY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
The Directors have assessed the Company's ability to continue as a going concern and have prepared detailed trading and cash flow forecasts covering a period of at least twelve months from the date of approval of these financial statements.
As at 31 December 2025, the Company held cash balances of £946,471 and generated turnover of £5,096,386 during the year. The Company reported a loss before tax of £1,055,053; however, this included a non-recurring intercompany write-off of £698,922 together with goodwill amortisation of £32,737. The intercompany write-off relates primarily to staffing costs incurred within the Company's US entity. As the Group continues to contract US customers directly through the UK trading entity, the Directors took the decision to write off the balance during the year rather than continue to carry the intercompany debtor.
Following a strategic transition towards recurring Continuous Testing contracts and software-related revenues, the Company's revenue base has become increasingly recurring and predictable in nature. Since the year end, management has continued to see growth in Annual Recurring Revenue, increased levels of contracted future revenue and improved trading performance. The Directors' forecasts reflect the continued growth of recurring revenues, improvements in operational efficiency and a continued move towards profitability during 2026.
The Company continues to maintain a strong cash position and positive working capital profile. The Directors have reviewed forecast cash flows, contracted revenue, customer retention trends and available cash resources and believe the Company has sufficient resources to meet its obligations as they fall due.
The Company has funding support through shareholder loans which, together with accrued interest, totalled £1,212,146 at 31 December 2025. These loans are unsecured and classified as repayable on demand. The Directors have confirmed that they do not intend to seek repayment of either the principal balances or accrued interest during the going concern assessment period and have taken this support into account when assessing the Company's liquidity and funding requirements.
Having considered the Company's current trading performance, forecast cash flows, contracted revenue base, available cash resources and funding arrangements, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and for a period of at least twelve months from the date of approval of these financial statements.
Accordingly, the Directors continue to adopt the going concern basis in preparing these financial statements.
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ROOTSHELL SECURITY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is GBP and balances are rounded to the nearest whole £.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Revenue is measured as the fair value of the consideration we expect to be entitled to, in exchange for transferring products or providing services to our customers and is recognised when the significant risks and rewards are transferred to the customer.
We account for contracts with our customers when both parties have approved the contract and are committed to perform their respective obligations, each party's rights regarding products or services to be transferred are identified, payment terms are identified, the contract has commercial substance and collection of the consideration is probable. We utilise written contracts as the means to establish the terms and conditions by which our products, product updates and support and/or consulting services are sold to our customers.
Our revenues are generated primarily by licensing our Rootshell software, and providing consulting services in relation to penetration testing to our customers. Generally, revenue from software license sales are recognised ratably over time; and revenues from consulting services are recognised as performed. Revenue is recorded net of applicable taxes. Our specific revenue recognition policies are as follows:
Software license fees
Our software license fees revenues are primarily from sales of term-based license contracts, under which we grant customers the license right to use the software for a specified period. The risks and rewards of term-based software licenses are satisfied over time, and associated revenue is recognised over the life of the license.
For customer contracts that include software license fees, implementation and/or other consulting services, the portion of the transaction price allocated to software licenses is generally recognised over the life of the license. The implementation and consulting services are typically distinct performance obligations and qualify for separate recognition. The portion of the transaction price allocated to implementation and other consulting services is generally recognised as such services are performed. See Contracts with Multiple Elements below.
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ROOTSHELL SECURITY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
Consulting Services
We also provide consulting services, including implementation services, consulting, and penetration testing services. Most of our services are sold under specific services agreement terms, and are priced separately from other promises, as they do not significantly customise or modify the software, are generally not essential to the functionality of our software products and are also available from third-party vendors.
The majority of our consulting services agreements are provided under time and materials contracts, and the related revenues are recognised over time as the services are provided.
Contracts with Multiple Elements
We also enter into contracts that may include a combination of our various products and services offerings including, software licenses and consulting services. We account for individual elements separately.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.
The cost and corresponding increase in equity in respect of equity-settled share-based payment transactions with employees are measured by reference to the fair value of equity instruments issued at the date of grant. Amounts are expensed on a straight-line basis over the vesting period based on the estimate of shares that will eventually vest and adjusted for the effect of non-market-based vesting conditions. The cost and fair value of the liability incurred in respect of cash-settled transactions is measured using an appropriate option pricing model with changes in fair value recognised in profit or loss for the period.
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ROOTSHELL SECURITY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Goodwill
Goodwill represents the difference between the amount paid on acquiring the penetration testing business and the fair value of the identifiable assets and liabilities acquired. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the Profit and Loss Account over its useful economic life.
The estimated useful lives range as follows:
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Research and development costs
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In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research is recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured.
If it is not possible to distinguish between the research phase and the development phase of an internal project the expenditure is treated as if it were all incurred in the research phase only.
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ROOTSHELL SECURITY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Investments in subsidiaries are measured at cost less accumulated impairment.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the balance sheet date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the balance sheet date.
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ROOTSHELL SECURITY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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Judgments in applying accounting policies and key sources of estimation uncertainty
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In the application of the Company's accounting policies the directors are required to make judgements, estimates and assumptions about the carrying value of assets and liabilities that are not readily apparent from other sources. The estimates and assocoated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ to these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to the accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The Company has opened an Enterprise Management Incentive (EMI) scheme and issued options to certain employees. The options are exercisable upon a sale or exit of the Company. However, the directors do not believe that an exit is likely at the date of signing of the financial statements and therefore a share based payments charge has not been recognised in the financial statements.
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The average monthly number of employees, including directors, during the year was 57 (2024 - 53).
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ROOTSHELL SECURITY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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Charge for the year on owned assets
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Goodwill is being amortised over 5 years which is considered to be the average life of a customer and therefore deemed to be an appropriate period over which to recognise the cost of goodwill acquired.
Amortisation is included in administrative expenses.
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ROOTSHELL SECURITY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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Charge for the year on owned assets
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Investments in subsidiary companies
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ROOTSHELL SECURITY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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Amounts owed by group undertakings
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Prepayments and accrued income
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Cash and cash equivalents
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Creditors: Amounts falling due within one year
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Other taxation and social security
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Accruals and deferred income
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At the year end and included within other creditors are amounts owed to shareholders of £975,597 (2024: £975,597) and interest accruing at 10% per annum on the loans of £236,549 (2024: £138,722). The loans are unsecured and repayable on demand.
The amounts owed to group undertakings are unsecured, interest free and repayable on demand.
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The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £59,526 (2024: 54,874). Contributions totalling £18,052 (2024: £12,981) were payable to the fund at the balance sheet date and are included in other creditors.
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ROOTSHELL SECURITY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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Commitments under operating leases
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At 31 December 2025 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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There is no ultimate controlling party of Rootshell Security Limited.
The auditor's report on the financial statements for the year ended 31 December 2025 was unqualified.
The audit report was signed on 21 September 2026 by Anthony Campbell (Senior Statutory Auditor) on behalf of Nortons Assurance Limited.
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