The directors present their Strategic Report for Tractable Ltd. ("Tractable") and its subsidiaries ("the Group") for the year ended 31 December 2025.
Tractable is a Business to Business ("B2B") Software as a Service ("SaaS") platform that sells and develops Artificial Intelligence ("Al") enabled technology to help accelerate the insurance claims and damage appraisal process. It has established customers and use cases in the automotive and property industry. The Group's proprietary Al software augments and automates the damage recovery process that has historically relied on an in-person visual damage appraisal.
The Group has subsidiaries based in Japan, France, Romania and a representation office in Thailand. During the year, the Group established a new subsidiary in India. The operational headquarters are based in London.
During the year, as part of the Group’s strategic decision to focus on the automotive industry, the Group disposed of its property business in Japan to a third party buyer. The property product formed a relatively small proportion of the overall Group's business, accounting for <10% of the Group's overall revenues.
The Group's turnover in 2025 has decreased by 12.5% (2024: 7.4%), driven by a combination of divestment in property product, as well as downsizing a few major customer contracts. However, the Group has continued its investment in research & development activities and sales & marketing to enable and support growth going forward.
The Group's activities expose it to the following financial risks:
Technology risk
Rapid technological advancement and artificial intelligence present both risks and opportunities to the Company. The market for artificial intelligence technology is characterized by rapid technological evolution, shifting industry standards, inherent uncertainties and an increasingly competitive landscape for the software industry as a whole. While the accelerating pace of AI development requires continuous R&D investment and innovation to prevent obsolescence, it also presents substantial commercial opportunities. The Company has successfully adapted to these technological shifts by effectively integrating advanced AI capabilities into its workflows. Management continues to actively monitor the technological landscape to maintain its competitive position.
Foreign exchange risk
The Group actively monitors foreign exchange risk and routinely assesses bank balances per currency to limit the amount of exposure to foreign exchange risk the business has. The Group limits its transactions in foreign currencies where they can in order to reduce this risk.
Credit risk
The Group actively monitors its accounts receivable balances. To date it has not had significant exposure to bad debt and has a strong accounts receivable ageing profile.
The directors use Key Performance Indicators ("KPIs") to monitor and assess Group performance. Management consider the following as their KPls:
| 2025 | 2024 |
Turnover | £13,120,848 | £15,001,809 |
Gross Margin Net current liabilities | 66% £10,750,803 | 73% £9,591,244
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A section 172 statement has not been included in the strategic report as the Company qualifies for an exemption under the medium-sized companies' regime.
This report was approved by the board and signed on its behalf:
The directors present their annual report and the audited financial statements for the year ended 31 December 2025.
The loss for the year, after taxation, amounted to £1,675,199 (2024: restated £11,603,791).
No dividends were paid or proposed in the current or prior year.
Going concern
The directors have prepared the financial statements on the going concern basis. Further details are provided in the notes to the financial statements.
The directors who served during the year and subsequent to the year end up to signing of these financial statements were:
Neither Tractable nor any of its subsidiaries made any political donations or incurred any political expenditure during the current or prior years.
There are no post balance sheet events to report.
The directors expect the business revenues to reduce in the forthcoming year, primarily as a result of customer downsell and churn in late 2025 and during 2026. However, the business has substantially optimised its operating costs and projects improvement in the overall profitability in the forthcoming year.
Matters covered in the Strategic Report
See the Strategic Report for the business review and details of the financial risk management objectives and policies.
Since the year end, Gravita Audit II Limited was appointed as auditor to the Group and in accordance with section 485 of the Companies Act 2006. They have expressed their willingness to continue in office as auditor and appropriate arrangements have been put in place for them to be deemed reappointed as auditors in the absence of an Annual General Meeting.
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 Tractable Ltd. (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).
Basis for opinion
Going concern
Other information
Opinions on other matters prescribed by the Companies Act 2006
As explained more fully in the directors' responsibilities statement, 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 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 parent company or to cease operations, or have no realistic alternative but to do so.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations. The laws and regulations applicable to the group were identified through discussions with directors and other management, and from our commercial knowledge and experience the SaaS industry. Of these laws and regulations, we focused on those that we considered may have a direct material effect on the financial statements or the operations of the group, including the Companies Act 2006, taxation legislation and employment legislation. The extent of compliance with these laws and regulations identified above was assessed through making enquiries of management and inspecting legal correspondence. The identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the group’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud;
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations; and
understanding the design of the group’s remuneration policies.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates set out in note 2 were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
enquiring of management as to actual and potential litigation and claims; and
reviewing correspondence with HMRC and the group’s legal advisors, where applicable.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
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 parent 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 parent 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 parent company and the parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
All amounts are related to continuing operations.
The notes on pages 16 to 36 form part of these financial statements.
The notes on pages 16 to 36 form part of these financial statements.
The notes on pages 16 to 36 form part of these financial statements.
The notes on pages 16 to 36 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 £2,103,123 (2024 - £13,012,596).
The notes on pages 16 to 36 form part of these financial statements.
The notes on pages 16 to 36 form part of these financial statements.
The notes on pages 16 to 36 form part of these financial statements.
Tractable Ltd. (the Company) is a private company, limited by shares, incorporated in the United Kingdom under the Companies Act 2006 and is registered in England and Wales. The address of the Company's registered office is 71-75 Shelton Street, London, WC2H 9JQ, United Kingdom.
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 preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 2).
The Company's functional and presentational currency is pound sterling.
The Parent Company is included in the consolidated financial statements, and is considered to be a qualifying entity under FRS 102 paragraphs 1.8 to 1.12.
The following exemptions available under FRS 102 in respect of certain disclosures for the Parent Company financial statements have been applied:
No separate Parent company Profit and Loss Account, Cash Flow Statement with related notes is included;
Key Management Personnel compensation has not been included; and
Certain disclosures required by FRS 102.11 Basic Financial Instruments and FRS 102.12 Other Financial Instrument Issues in respect of financial instruments not falling within the fair value accounting rules of Paragraph 36(4) of Schedule 1.
The material accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these financial statements.
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Group Profit and Loss Account from the date on which control is obtained. They are deconsolidated from the date control ceases.
In accordance with the transitional exemption available in FRS 102, the Group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102, being 01 January 2019.
The financial statements have been prepared on a going concern basis which the directors consider to be appropriate for the following reasons.
Notwithstanding net current liabilities of £10,750,803 (2024: £9,591,244) as at 31 December 2025, a loss for the year then ended of £1,675,199 (2024: £11,603,791) and operating cash outflows for the year of £1,264,542 (2024: £2,307,707), the financial statements have been prepared on a going concern basis.
The Company meets its day to day working capital requirements from operational cash flows, trading balances with the Group headed by Tractable Inc, the ultimate parent company. The directors have assessed the going concern status of the business, having regard to the financial position at year end and at the date of signing these financial statements, and taking account of financial and working capital forecasts which extend through for at least 12 months from the date of signing these financial statements. The cash forecasts are based upon approved business plans and management have stress-tested the forecasts creating a plausible downside scenario which assumes a 15% reduction in revenue. In both the base and downside, the Company will require additional funds/support, through funding from its ultimate parent company, Tractable Inc, to meet its liabilities as they fall due during 12-month period ending 30 September 2027, the going concern assessment period. This includes Tractable Inc does not recall its outstanding liabilities of £13,280,440 on 31 December 2025 as well as for them to continue providing additional financial support, to meet its liabilities as they fall due during the going concern assessment period.
Tractable Inc has indicated its intention to continue to make available such funds as are needed by the Company during the going concern assessment period. The directors of Tractable Inc have prepared cashflow forecasts of Tractable Inc consolidated group for a period of at least 12 months from the date of approval of these accounts on a conservative basis. In all scenarios, including reasonable possible downside scenario, there is enough cash balance as at year end with the Group.
As with any Company placing reliance on other group entities for financial support the directors acknowledge that there can be no certainty that this support will continue, although at the date of approval of these financial statements, they have no reason to believe that it will not do so. Consequently, the directors are confident that the Company will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of these financial statements and therefore have prepared the financial statements on going concern basis.
Revenue is recognised over time to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the Group will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.
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.
The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties, investments in ordinary shares and cash and cash equivalents.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
Investments in non-derivative instruments that are equity to the issuer are measured:
at fair value with changes recognised in the Group Profit and Loss Account if the shares are publicly traded or their fair value can otherwise be measured reliably; and
at cost less impairment for all other investments.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Group Profit and Loss Account.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Group would receive for the asset if it were to be sold at the balance sheet date.
Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an 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.
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 income as appropriate. The Company does not currently apply hedge accounting for interest rate and foreign exchange derivatives.
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 expense for the year comprises current and deferred tax. 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 and the Group operate and generate 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;
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.
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.
Short-term benefits
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 in subsequent periods.
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group 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 in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Group in independently administered funds.
Termination benefits
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.
For cash-settled share-based payments, a liability is recognised for the goods and services acquired, measured initially at the fair value of the liability. At each succeeding financial reporting period end and at the date of settlement, the fair value of the liability is remeasured, with any changes in fair value recognised in profit or loss for the period.
The cost of equity-settled transactions with counterparties is measured by reference to the fair value of the equity instruments granted at the date at which they are awarded. The cost is recognised as an expense over the vesting period, which ends on the date on which the relevant counterparties become fully entitled to the award. No expense is recognised for awards that do not ultimately vest.
At each statement of financial position date before vesting, the cumulative expense is calculated, representing the extent to which the vesting period has expired and of the number of equity instruments that will ultimately vest. The movement in cumulative expense since the previous statement of financial position date is recognised in the statement of comprehensive income, with a corresponding entry in equity.
Where the terms of an equity-settled transaction are modified or a new award is designated as replacing the cancelled or settled award, the cost based on the original award terms continues to be recognised over the original vesting period. In addition, an expense is recognised over the remainder of the new vesting period for the incremental fair value of any modification, based on the difference between the fair value of the original award and the fair value of the modified award, both as measured on the date of the modification. No reduction is recognised if this difference is negative.
Where an equity-settled transaction is cancelled, it is treated as if it had vested on the date of cancellation, and any cost not yet recognised in the statement of comprehensive income for the award is expensed immediately. Any compensation paid up to the fair value of the award at the cancellation or settlement date is deducted from equity, with any excess over fair value expensed in the statement of comprehensive income.
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
Debtors
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
Creditors
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.
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.
Share based payments
The Group recognises a charge in respect of share options granted to employees, measured at fair value at grant date using the Black-Scholes option pricing model. As the Group’s shares are not publicly traded, this valuation requires the directors to exercise significant judgement in determining key inputs, including the fair value of the underlying ordinary shares, expected volatility (estimated by reference to comparable listed companies, in the absence of the Group's own trading history), the expected term of the options, and the risk-free interest rate. Changes to these assumptions could materially affect the fair value of options granted and the resulting share-based payment charge recognised in the financial statements. Details of the assumptions applied are set out in Note 20.
The directors do not consider there to be any other material sources of estimation uncertainty or any critical accounting judgements.
An analysis of the Group's turnover is as follows:
During the year, the Group disposed of its Japanese property software product line, including related customer contracts and IP, for a total consideration of £6,182,775 and incurred £403,708 of transaction related expenses resulting in a gain on disposal of £5,779,067. As part of this transaction, the Group transferred £12,295 prepaid supplier expenses and £1,405,276 of related deferred revenue liabilities, and received £4,789,794 cash consideration.
In the prior year, the profit on digital currency disposal relates to the sale of all digital currency held. The currency was mined in 2015 with no intangible asset recognised at the time due to its immaterial nature of the related mining costs as such the other operating income represents the full sale proceeds of £Nil (2024: £2,221,535) for the total holding.
Other operating income includes £525,448 franchise fee charged to its parent company Tractable Inc. The remainder of other operating income primarily relates to income generated from the Transition Services Agreement (“TSA”) with the Japanese property software purchaser.
The prior year accounts were audited by KPMG LLP, and no other audit service fees were incurred.
The average monthly number of persons (including directors) employed by the Group and Company during the year was:
Their aggregate remuneration comprised:
There are no retirement benefits accruing to the directors under money purchase schemes or defined benefit schemes, or that exercised any share options.
No profit and loss account is presented for Tractable Ltd, the Company, as permitted by section 408(3) of the Companies Act 2006. The result after taxation of the Company for the year ended 31 December 2025 was a loss of £2103,123 (2024: £13,012,596).
The loss for the year includes an amount of £195,146 (2024: £Nil) for the Thailand Sales Representative office.
The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
The Group has fixed and floating charges on its assets relating to its Revolving Credit Facility.
Details of the Company's subsidiaries at 31 December 2025 are as follows:
Tractable Ltd. holds a representative office in Thailand and its registered office is No.89 AIA Capital Center, Room No. 2004-2007, 20th Floor, Ratchadapisek Road, Din Daeng Sub-district, Din Daeng District, Bangkok 10400.
In the prior year, the investment in Tractable GmbH was written down in full due to the decision to liquidate the entity.
Included within other debtors is an amount of £1.4m (2024: £2.3m) relating to the R&D Tax Credit receivable from HMRC.
The following are the major deferred tax liabilities and assets recognised by the Group and Company, and movements thereon:
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. As at 31 December 2025 the total amount of pension payable was £57,141 (2024: £93,395).
The Group's employees participate in the 2016 Stock Plan ("the Plan"), established in 2016 and operated by the Group's ultimate parent undertaking, Tractable Inc. Under the Plan, Tractable Inc. grants options over its own Class A Common Stock to eligible employees across the wider Tractable organisation, including employees of the Group. Options are granted as Nonstatutory Stock Options or, for qualifying UK employees, tax-advantaged Enterprise Management Incentive (EMI) options under Schedule 5 to the Income Tax (Earnings and Pensions) Act 2003.
Options vest over four years, with a one-year cliff, subject to continued employment. Vested options must generally be exercised within 90 days of cessation of employment, after which they lapse. Options are equity-settled: on exercise the employee pays the exercise price in cash and is issued shares in Tractable Inc.
As there is no recharge arrangement between Tractable Inc. and the Group in respect of the cost of options granted to the Group's employees, the Group recognises the fair value of options granted to its employees as an expense in profit or loss over the vesting period, with a corresponding credit to equity, presented within the share-based payment reserve.
The exercise prices of options outstanding at 31 December 2025 ranged from $0.35 to $6.94 (weighted average remaining contractual life: 7.13 years, as above).
Valuation
The fair value of options granted is measured at grant date using the Black-Scholes option pricing model. The following weighted average assumptions were used for options granted during the year:
Modifications
During the year, the parent repriced a number of outstanding options, reducing the exercise price to $0.35 per share, affecting 884,803 options. This repricing was implemented by cancelling the original awards (538,664 vested options, treated as expired, and 346,139 unvested options, treated as forfeited) and granting replacement awards over the same number of options to the same holders. As the replacement awards represent a continuation of the original arrangements, this has been accounted for as a modification of the original awards in accordance with FRS 102 paragraph 26.13, rather than as unrelated new grants and unrelated cancellations.
Because the replacement was effected as a cancellation and reissue, the options concerned are also reflected within the "Movements in options" table above, within the Granted, Forfeited (unvested) and Expired (vested) lines, rather than being shown as a separate modification line in that table. Of the 2,377,279 options shown as Granted during the year, 884,803 relate to replacement awards issued as part of this repricing. Of the 702,459 options shown as Forfeited (unvested) during the year, 346,139 relate to the cancellation of unvested original awards as part of the same repricing. Of the 698,089 options shown as Expired (vested) during the year, 538,664 relate to the cancellation of vested original awards as part of the same repricing.
The incremental fair value arising on modification, being the excess of the fair value of the replacement award over the fair value of the original award immediately before modification, is recognised as an expense over the remainder of the vesting period (or immediately, for options that were already vested).
Exercise prices and fair values are presented in USD as the underlying parent company's equity instruments are denominated in US dollars.
The ordinary shares have attached to them full voting and dividend rights. They do not confer any rights of redemption. On a return of capital, if the pro rata amount payable to each holder of A ordinary shares would equal less than the issue price of the A ordinary shares, the A ordinary shares shall rank ahead of the ordinary shares with respect to a distribution of capital (including on winding up).
The A ordinary shares have attached to them full voting and dividend rights. They do not confer any rights of redemption. On a return of capital (including winding up) the amount payable in respect of each A ordinary share shall be an amount per A ordinary share held equal to the higher of (A) the aggregate issue price for each A ordinary share held (provided that if there are insufficient surplus assets to pay the amounts per A ordinary share equal to the issue price, the remaining surplus assets shall be distributed to each holder of A ordinary shares pro rata to their respective holding of A ordinary shares) and (B) the pro rata share of such assets or proceeds to which each holder of A ordinary shares is entitled to according to the number of A ordinary shares held by him.
Share premium represents the amount of money that a Company receives for its shares over and above their nominal value.
Other reserves
Other reserves represent the currency translation difference on foreign currency net investments.
Profit and loss account
Profit and loss account represents cumulative profits and losses net of dividends paid and other adjustments.
Share based payment reserve
The share-based payment reserve represents the cumulative charge recognised in respect of equity-settled share-based payment arrangements, less amounts transferred to retained earnings upon exercise, lapse or cancellation of awards.
At the reporting end date the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
There are no post balance sheet events to report.
In accordance with FRS 102 Section 33, the Company has not disclosed any related party transactions between wholly owned entities within the Group.
The Group held an intercompany creditor with Tractable Inc (the immediate Parent Company) of £13,280,440 at 31 December 2025 (2024: £12,385,162).
The administrative expenses of £959,376 and other operating income of £525,448 (2024: net other operating expense £883,000) were also recognised by the Group in relation to intercompany transactions with Tractable Inc (the immediate Parent Company).
During the current year, the Group identified that share-based payment charges had not been fully recognised in previous periods in accordance with the applicable accounting standards. As a result, the comparative figures have been restated to recognise the cumulative effect of these charges.
Following the restatement, retained earnings amounted to £91,575,041 as at 31 December 2023 and £103,178,832 as at 31 December 2024.
The restatement had no impact on the Group's cash flows for either period. The adjustment relates solely to the recognition of non-cash share-based payment expenses and the corresponding reduction in retained earnings.