ACCOUNTS - Final Accounts preparation

The following is an analysis of the Group's revenue for the year from continuing operations:

Registered number: 12620251

HEROES TECHNOLOGY LIMITED

ANNUAL REPORT AND CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

HEROES TECHNOLOGY LIMITED

COMPANY INFORMATION

Directors	B M Kufrin
	D S Miller


Registered number	12620251


Registered office	Wisteria Grange Barn
	Pikes End
	Pinner
	London
	HA5 2EX


Independent auditors	BDO LLP
	55 Baker Street
	London
	W1U 7EU

HEROES TECHNOLOGY LIMITED

CONTENTS

	Page(s)
Group strategic report	1 - 11
Directors' report	12 - 14
Directors' responsibilities statement	15
Independent auditors' report	16 - 20
Consolidated statement of comprehensive income	21
Consolidated statement of financial position	22 - 23
Company statement of financial position	24 - 25
Consolidated statement of changes in equity	26 - 27
Company statement of changes in equity	28 - 29
Consolidated statement of cash flows	30 - 31
Notes to the consolidated financial statements	32 - 76

HEROES TECHNOLOGY LIMITED

GROUP STRATEGIC REPORT

FOR THE YEAR ENDED 31 DECEMBER 2025

Introduction

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

Principal activity

Heroes Technology Ltd (the "Company"), through its various subsidiaries, (together the "Group") operates a number of baby, juvenile and other consumer product brands across various geographies, through various eCommerce marketplace platforms as well as through various retail and distribution partners and direct-to consumer websites.

Review of business and future developments

During the year, the Group continued to experience growth, building on the successful integration of the three acquisitions completed in FY2023 and the acquisition of IL Tutto in February 2025. Growth during the year was primarily driven by the continued contribution from these businesses:

∙Trunki (acquired February 2023) – brand selling children’s ride-on suitcases and other travel products

∙Snuggle Me Organic (acquired June 2023) – brand selling baby loungers and other nursing products

∙Tutti Bambini (acquired August 2023) – brand selling nursery furniture and other products

∙IL Tutto (acquired February 2025) – brand selling premium nursery furniture and baby products, primarily in Australia

Additionally, a number of enhancements to the Group's commercial strategy were implemented across the brand portfolio, resulting in the realisation of operational efficiencies and expected future organic growth. These measures included improvements to payment terms across the Group, enhanced accounts receivable control, and the introduction of weekly trading meetings to strengthen forecast accuracy and margin management.

The Group continued to experience supply chain and fulfilment network challenges during 2025, partly as a result of continued geopolitical tensions in the Middle East and disruption to shipping routes, including the impact of elevated logistics, warehousing and fulfilment costs. In addition, inflationary pressures continued to affect operating costs, particularly across storage and distribution activities. These factors, together with ongoing efforts to optimise inventory levels following softer-than-expected demand in certain categories, continued to constrain overall profitability during the year.

Looking forward, the Group expects to continue to grow, primarily through organic growth initiatives while continuing to evaluate strategic opportunities where appropriate. To deliver on its ambitious growth objectives, management is focused on the following key growth levers:

∙Investments into New Product Development ("NPD”)

∙Expansion into new geographical markets and distribution channels, particularly "business-to-business" and "direct-to-consumer" channels

∙Cost reductions across supply chain, logistics and fulfilment networks as well as overhead costs

∙Reduced investment into slow moving and underperforming brands/products to improve profitability margins

∙Continued realisation of revenue & costs synergies following the full integration of the acquisitions, as well as elimination of overhead cost inefficiencies, through use of technology.

Page 1

HEROES TECHNOLOGY LIMITED

GROUP STRATEGIC REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2025

Review of business and future developments (continued)

On 3 July 2024, the Company underwent an organisational restructuring by which the entire share capital of the Company was acquired by a newly formed holding company (HTL Holdco Limited; the “Holding Company”) for a nominal consideration. Following the successful completion of the restructuring, the senior lender (Crayhill Capital Management LP), Alessio Bruni, Giancarlo Bruni and Riccardo Bruni held 71% of the issued share capital of the Holding Company with the remaining 29% being held by previous shareholders of the Company. Crayhill Capital Management LP became the Group’s controlling shareholder (through the Holding Company).

As part of the restructuring, the Group successfully refinanced its senior debt facility (US$ 73.5m as at June 2024), extending its maturity to December 2026. A subsequent amendment on 11 February 2026 further extended the maturity to July 2027, increased the committed acquisition facility from US$100m to US$150m and provided additional headroom under the key maintenance covenants. A further amendment in July 2026 subsequently extended the maturity to December 2027. We refer to our explanations under “Borrowings”.

Financial review

Statement of Comprehensive Income

Net revenue increased slightly in the year to £99.6m (2024 - £98.5m), representing a stable business continuation compared to the prior year. Cost of sales decreased by 3% due to changes in the channel mix. Operating profit for the year amounted to £0.3m (2024 - £11.5m loss).

Loss for the year decreased to £8.1m (2024 - £19.3m), predominantly due to the significant improvement in operating profit as well as lower intangible impairment charges compared to the prior year.

Statement of Financial Position

Total assets increased by £4.2m during the year to £61.1m (2024 - £56.9m), driven predominantly by the aforementioned trademark reversal and Il Tutto acquistion.

Inventory increased by £3.3m to £16.6m (2024 - £13.3m) to support anticipated revenue growth, new product launches and improved product availability across key sales channels.

During the year, an impairment gain of £1,397k (2024 - £6,154 charge) has been recognised in relation to Trademarks and Other Intangible Assets. Impairment charges have been recognised across a number of Cash Generation Units ("CGUs") where the value in use of the CGU was deemed less than the carrying value.

Cash and cash equivalents remained stable at £3.7m (2024 - £4.3m).

Total liabilities increased to £99.6m (2024 - £87.2m).

Current liabilities increased by £6.2m predominantly due to an increase in Trade and other payables as well as derivative financial liabilities from hedging foreign exchange. Non-current liabilities increased by £8.0m driven by an increase in loans and borrowings.

Page 2

HEROES TECHNOLOGY LIMITED

GROUP STRATEGIC REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2025

Financial review (continued)

Statement of Financial Position (continued)

The Group monitors financial performance by referencing several Business Segment Key Performance Indicators ("KPIs"), obtained through Business Information infrastructure (daily and weekly) as well as management reports (monthly, quarterly and annually). These KPIs are generally monitored on a daily, weekly, monthly and quarterly basis, are applied across brands, geographies and products and include (but are not limited to) the following:

∙Net revenue

∙Profit contribution (net revenue less inventory, Commission & fulfilment marketing costs) and respective margin

∙Group Earnings Before Interest, Tax, Depreciation and Amortisation ("EBITDA")

During the year, net revenue reached £99.6m (1.10% increase vs FY2024), profit contribution reached
£25.0m (15.57% increase vs FY2024), representing a margin of 25.08% (21.95% increase vs FY2024). Further, Group EBITDA reached £0.3m (96.34% decrease vs FY2024).

Looking ahead, the Group will maintain a strong focus on profitability metrics, including contribution margins and Group EBITDA, as operational improvements are implemented, synergies from recent acquisitions are realised, and expansion initiatives continue to develop.

Non-financial Key Performance Indiciators

In addition to financial metrics, we monitor a comprehensive set of non-financial KPIs that provide deeper insights into the Group's performance and strategic progress. Internally, we track inventory coverage in days, closely managing excess stock, and analyse product pricing trends relative to inflation to ensure competitiveness and margin protection. Externally, we assess our online market share-primarily on Amazon - and monitor category-level search volumes to understand shifts in market size and consumer interest. These indicators not only support data-driven operational decisions but also allow us to anticipate market trends, optimize resource allocation, and drive sustainable, long-term growth. By integrating these KPIs into our strategic framework, we ensure a balanced focus on both financial outcomes and operational excellence.

Page 3

HEROES TECHNOLOGY LIMITED

GROUP STRATEGIC REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2025

Environmental Matters

We are committed to monitoring and managing our environmental impact across the Group and to meeting applicable statutory and regulatory reporting requirements. As part of this commitment, we continue to monitor emissions arising from our logistics activities and to identify opportunities to improve the efficiency and environmental performance of our supply chain.

During 2025, total emissions associated with our logistics activities amounted to 1,194 tCO2e, compared with 648 tCO2e in 2024, representing an increase of approximately 84% year-on-year. The increase primarily reflects higher freight activity during the year, together with changes in global shipping routes and associated inefficiencies in maritime transport. The increase in reported emissions should therefore be considered in the context of the Group's overall logistics requirements and the external operating environment during the year.

Ocean freight remained the largest source of reported emissions, accounting for approximately 65.6% of total emissions, followed by trucking at 16.4% and air freight at 8.8%. The relatively high proportion attributable to ocean freight reflects the Group's international supply chain and continued reliance on maritime transport for the movement of products between manufacturing locations, warehouses and key markets.

During the year, continued security risks affecting vessels travelling through the Red Sea and Suez Canal resulted in a proportion of international freight being rerouted via the Cape of Good Hope. These diversions increased voyage distances and transit times and, consequently, fuel consumption and associated emissions on certain trade lanes. This was an important contributing factor to the increase in logistics-related emissions during 2025, alongside higher overall freight volumes.

The Group continues to prioritise lower-emission transport modes where operationally practicable and economically viable. Management is also evaluating opportunities to reduce emissions through improved shipment consolidation, more effective demand planning and inventory forecasting, route optimisation and greater utilisation of sea freight where feasible. These initiatives are intended not only to reduce the environmental impact of logistics activities but also to improve supply chain efficiency and reduce unnecessary transportation.

Management will continue to monitor the Group's emissions profile and the factors influencing year-on-year movements. As the Group's supply chain evolves, consideration will be given to further opportunities to improve transport efficiency, optimise freight planning and reduce emissions while maintaining appropriate levels of customer service and product availability.

The Board remains committed to monitoring the Group's environmental performance and to identifying practical opportunities to improve operational efficiency and reduce the Group's environmental impact across its supply chain. The Group will continue to assess its approach to environmental reporting and emissions reduction in light of evolving statutory requirements, stakeholder expectations and developments within its logistics network.

Page 4

HEROES TECHNOLOGY LIMITED

GROUP STRATEGIC REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2025

Employee matters

Our people remain central to our success. As of 1 January 2025, we had 102 FTEs, which decreased to 113 by 31 December 2025, reflecting a period of moderate organisational change. Over the year, 44 employees left the business, of which 22 voluntarily, 22 through performance-related or redundancy processes, while 39 new starters were onboarded. This resulted in an overall FTE churn rate of 38.1%.

The Group conducts employee engagement surveys on a bi-annual basis to monitor workforce sentiment and identify areas for improvement. The Group also offers a range of employee benefits, including flexible and remote working arrangements, aimed at supporting work-life balance and employee wellbeing. Following the significant organisational changes during the year, the Group recognises the importance of strengthening its employee retention framework and intends to develop more structured initiatives in this area going forward.

On talent development, while the Group provides on-the-job learning opportunities and informal development support, it does not currently operate formal training programmes or structured succession planning processes. As the organisation stabilises following the restructuring period, the Group intends to invest in more formalised talent development and leadership pipelines, particularly to address the gender imbalance at senior management level and to support the retention and progression of high-performing employees.

On gender diversity, our workforce maintained a broadly balanced split at junior levels (roughly 50/50 = 61 female, 65 male), while senior levels (L4-L5) were 68% female (23 female, 14 male). However, at senior management level (VP and C-Level), the balance shifts to 67% male, highlighting an area for continued focus but is a progress from the year before. Department-level composition varied considerably, with functions such as People (100% female), Marketing (86% female) and Data & Tech (70% male) reflecting sector-typical patterns.

By monitoring these non-financial KPIs, we gain insights into non-tangible factors that influence our overall performance and position us for sustainable growth. These metrics are reviewed regularly by the board to inform strategic decisions and ensure alignment with stakeholder expectations.

Page 5

HEROES TECHNOLOGY LIMITED

GROUP STRATEGIC REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2025

Principal risks and uncertainties

The Group is exposed to certain risks given the nature of the business model. The principal risks and uncertainties the Group faces, together with an explanation of how they are mitigated are as follows:

Macroeconomic environment and inflationary pressures
The Group is exposed to some macroeconomic forces which include, but are not limited to:

∙Changes in interest rates and availability of overall credit which may dampen overall consumer appetite

∙General changes to demand due to slowdown in economic growth and activity across the markets the Group operates inflationary pressures resulting in increased production costs due to increasing raw material, energy and labour costs, increasing logistics costs, as well as increasing costs of other operational expenditures and overheads

∙Trade tariffs and duties levied by governments, increasing the costs of moving goods across borders

∙Wider geopolitical factors, which may affect broader consumer sentiment

The Group will continue to monitor, prepare for, and react to these changes. The directors believe that mitigation through diversification is key and therefore the Group will continue to expand across geographies, marketplaces and product categories. Further, the Group's focus on the generally more stable baby & juvenile segment provides some level of insulation to changes in consumer sentiment.

Supply chain and logistics
The majority of the products sold by the Group are produced overseas (predominantly in Asia). As such the Group is exposed to associated risks, which could lead to extension of end-to-end production lead times, inability to maintain adequate stock levels and increased cost of goods sold and fulfilment costs. These risks could arise due to:

∙Changes in macroeconomic and political environment at production origin

∙Availability and cost of raw materials and labour at production origin

∙General disruption to shipping routes and container availability

∙Fluctuations in international container shipping rates

∙Import tariffs and duties imposed by destination countries The Group seeks to mitigate these risk by:

∙Careful inventory planning and management, with ample foresight

∙Periodic review of suppliers' production capabilities and capacity

∙Maintaining a diversified supplier base and seeking to change suppliers to ones located closer to the places of sale (to the extent economically feasible)

∙Utilisation of multiple logistics partners and diversification of freight routes

Borrowings
The Group has a senior debt facility of $150m, of which $109.8m are drawn and which is based on the latest extension maturing in December 2027. This facility is subject to certain customary covenants such as maintenance of maximum leverage and minimum liquidity ratios, amongst others. A risk exists that the Group may breach one or more of these covenants, potentially resulting in an acceleration of scheduled repayments.

To mitigate these risks, the management team continuously monitors and reassesses the Group’s borrowings. To that effect, processes and controls that seek to highlight any potential breaches well in advance of them arising have been established.

Page 6

HEROES TECHNOLOGY LIMITED

GROUP STRATEGIC REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2025

Principal risks and uncertainties (continued)

Borrowings (continued)

Following the year ended December 2025, the Group agreed further amendments to its senior lending facilities. These amendments included the capitalisation of interest until December 2027, and an extension of maturity to December 2027. The revised terms provide additional financial flexibility and support the Group’s liquidity position.

However, a risk exists that the Group may not be able to repay the principal amount of its facility (expected to reach $127m at maturity, assuming that interest is capitalised until December 2027) terminating in December 2027, in full. To mitigate this risk, the directors are considering further options for a potential extension, refinancing or repayment.

Diversification of distribution channels

A significant portion of the Group's sales continue to be generated through the Amazon marketplace and furthermore fulfilled through the Amazon fulfilment network. There is some risk that changes imposed by Amazon could adversely impact the operating and financial results. These changes include but are not limited to:

∙Adverse changes to Amazon's terms of service for third party sellers

∙Increases in commissions, fulfilment fees, storage fees and/or marketing costs

∙Restrictions on access to the Amazon platform generally

∙Adverse changes to Amazon's search, marketing and product ranking algorithms

During FY2026, the Group expects to continue to increase its share of non-Amazon marketplace sales, by expanding into other online marketplaces and through "Direct-to-Consumer" and "Business-to-Business" sales channels. Furthermore, the Group is actively seeking to expand its third-party logistics and warehousing network and expects to increase the share of customer orders fulfilled via these networks.

Foreign currency fluctuations

The Group trades across multiple geographies and generates sales in various currencies. Accordingly, it is exposed to foreign exchange rate movements. The majority of the Group’s purchases are quoted and paid in USD, while a significant portion of sales are generated in currencies other than GBP, such as USD and EUR. The Group’s principal debt facility is also denominated in USD. Consequently, fluctuations in exchange rates could adversely impact the Group’s financial results.

The Group is naturally hedged to some extent, with the majority of sales in USD aligning with most purchase expenditures, and substantial GBP and EUR sales helping to offset expenses incurred in GBP in the UK and EUR primarily in Spain.

Additionally, the Group maintains a financial hedging strategy using cross-currency forward contracts to provide further protection against the impact of foreign exchange rate movements on its financial results.

Page 7

HEROES TECHNOLOGY LIMITED

GROUP STRATEGIC REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2025

Principal risks and uncertainties (continued)

Capital market access

The Group continues to grow via acquisitions as a cornerstone of its growth plan, with these acquisitions generally financed partly with debt and partly with equity. A risk exists that capital market funding conditions change and/or the Group loses access to funding, which would impact the Group's growth trajectory.

Management seeks to mitigate this risk through:

∙Maintenance of a strong balance sheet, with focus on healthy financial metrics such as solid overall profitability, strong liquidity and adequate financial gearing

∙Maintenance of a high degree of committed capital, predominantly through the Group's debt facility, as well as cash on balance sheet

∙Continuously building new and maintaining existing relationships with a large variety of equity and debt investors

Regulatory environment

The majority of the Group's sales are derived from baby and juvenile products, which are subject to stringent laws, regulations, and compliance requirements that vary across markets. Consequently, there is a risk that changes in these frameworks could lead to:

∙Inability to continue selling certain products

∙Significant changes needed in product and packaging design

∙Increased costs for development, testing, and compliance

To mitigate these risks, the Group maintains a robust product compliance and testing framework, regularly testing and certifying products where applicable. Additionally, the Group invests heavily in new product development to anticipate and address major regulatory changes.

Page 8

HEROES TECHNOLOGY LIMITED

GROUP STRATEGIC REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2025

Subsequent events

Senior facility amendments

Following the year end, the Group agreed further amendments to its senior lending facilities. These amendments included the capitalisation of interest for a defined period, and an extension of maturity. The revised terms provide additional financial flexibility and support the Group’s liquidity position. Please see borrowings above for further details.

Shopify revenue-based financing facility

In March 2026, the Group entered into a revenue-based financing arrangement with Shopify Capital in the amount of USD 250k. The facility was drawn to support short-term working capital requirements and is repaid through a fixed percentage of daily sales.

The financing was entered into following a review of available funding options provided by Shopify Capital and forms part of the Group’s broader liquidity management framework, which includes the use of short-term, flexible financing instruments linked to trading performance.

The Group continues to monitor its liquidity position on an ongoing basis and considers access to revenue-based financing as an ancillary funding source to support working capital fluctuations. The facility does not include financial covenants; however, repayment is inherently linked to future sales performance, which may result in variability in cash outflows over time.

Additional borrowings

The Group utilised a Flexport working capital facility, shared across several segments. The facility provides a maximum exposure of USD 2.5m and is structured as a short-term working capital solution linked to trade payables and receivables timing. The facility carries an effective cost of approximately 12% (comprising a 3.15% charge per 90-day period and a 15bps monitoring fee). From July 2026, the facility is expected to be reduced in stages from USD 2.5m to USD 1.5m. At the same time, the repayment structure is expected to transition from a 90-day full repayment model to a combined 45/90-day repayment structure. Utilisation varies depending on payment terms (typically 45–90 days) and the timing of new invoice generation, and therefore fluctuates in line with working capital movements across the Group. The arrangement forms part of the Group’s broader working capital financing framework.

US tariff claim

Subsequent to the reporting date, developments relating to US tariff regulations resulted in a reimbursement of previously incurred tariff charges. USD 2.1m plus interest, recognised in June 2026.

Minnesota Warehouse

The Group completed the transition of its Minnesota warehouse operations to a third-party logistics provider, successfully transferring inventory and fulfilment activities without significant operational disruption.

Page 9

HEROES TECHNOLOGY LIMITED

GROUP STRATEGIC REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2025

Subsequent events (continued)

Changes in the composition of the Management Board

∙Neil Sharma-Burford (Executive Director) resigned on 5 February 2026.

∙Duncan Miller (Executive Director) was appointed on 4 February 2026.

∙Alessio Bruni resigned from his position as Chief Operating Officer on 1 March 2026.

∙Giancarlo Bruni resigned from his position as Chief Financial Officer on 1 March 2026.

∙Riccardo Bruni resigned from his position as Chief Information Officer on 1 March 2026.

Other events after the reporting period, not considered to be of strategic significance, are disclosed in the Directors’ Report.

S172 Reporting

In accordance with Section 172(1) of the Companies Act 2006, the directors have a duty to promote the success of the Company for the benefit of its members, while having regard to the interests of stakeholders and the long-term impact of decisions.

The directors oversaw the integration and operational optimisation of acquisitions completed in 2023, including Trunki, Snuggle Me Organic, and Tutti Bambini. Key decisions included prioritising the full integration of the acquired businesses into the Group’s systems and processes, including Netsuite and Looker, strengthening working capital management through improved supplier payment terms and enhanced accounts receivable controls, introducing weekly trading reviews to improve forecasting and performance monitoring, and implementing operational efficiency initiatives to support profitability and cash generation.

Employee interests remain central. During the period, the Group managed organisational changes, maintained employee engagement, and continued to offer flexible working arrangements to support wellbeing.

Supplier and logistics relationships are actively managed to mitigate supply chain risks through diversification, careful planning, and multiple logistics partners. Environmental considerations are also taken into account, including monitoring carbon emissions, reducing air freight reliance, and improving inventory forecasting.

In June 2026, the Group completed the closure of its warehouse in Minnesota and successfully transitioned all warehousing and fulfilment activities to a third-party logistics provider (3PL). All relevant contracts associated with the warehouse were terminated in accordance with their contractual terms, and finished goods inventory was transferred to the new provider. The transition was completed smoothly with no significant disruption to operations or customer fulfilment. In March 2026, the Group entered into a revenue-based financing arrangement with Shopify in the amount of AUD 2.9m. The facility was used to refinance the iL Tutto earn-out payment and forms part of the Group’s broader funding strategy.

As part of its broader working capital financing strategy, the Group entered into a revenue-based financing facility with Shopify Capital to support short-term working capital requirements.

Through these actions, the directors aim to take balanced decisions that promote long-term success and sustainability while considering the interests of employees, customers, suppliers, and other stakeholders.

Page 10

HEROES TECHNOLOGY LIMITED

GROUP STRATEGIC REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2025

This report was approved by the board on 3 November 2026 and signed on its behalf.

D S Miller

Director

Page 11

HEROES TECHNOLOGY LIMITED

DIRECTORS' REPORT

FOR THE YEAR ENDED 31 DECEMBER 2025

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

Principal activity

Heroes Technology Ltd (the "Company"), through its various subsidiaries, (together the "Group") operates a number of baby & juvenile and other consumer product brands across various geographies, predominantly through the Amazon marketplace platform and fulfilment network.

Results and dividends

The loss for the year, after taxation, amounted to £8,092k (2024 - loss £19,512k).

Directors

The directors who served during the year were:

B M Kufrin
N K Sharma-Burford (appointed 28 November 2025)

The following directors were appointed or resigned after the year end:

D S Miller (appointed 4 February 2026)

N K Sharma-Burford (resigned 5 February 2026)

Third party indemnity

The Company has granted an indemnity to its directors against liability in respect of proceedings brought by third parties, subject to the conditions set out in the Companies Act 2006. Such qualifying third party indemnity provision remains in force as at the date of approving the Directors' Report.

Going concern basis

Your attention is drawn to note 2.3 on pages 33 to 34, which sets out the directors’ going concern assessment, including details of the Group’s senior debt facility of $150m, of which $109.8m (2024 - $92.8m) was drawn at the reporting date. The facility currently matures in December 2027 and, as part of the assessment, the directors have considered the potential risk that the facility may not be further extended in the future. These matters are described in note 3 and indicate the existence of a material uncertainty that may cast significant doubt on the Group’s ability to continue as a going concern.

Notwithstanding this material uncertainty, the directors have a reasonable expectation, at the time of approving the financial statements, that the Company and the Group will have adequate resources to continue in operational existence for the foreseeable future, being at least 12 months from the date of approval of the financial statements. This assessment is based on a detailed review of the Group’s financial position, including cash flow projections, expected EBITDA, liquidity and compliance with financial covenants, including the expectation that the Group will be able to secure either a maturity extension of the current facility or alternative funding if required.

Accordingly, the directors consider it appropriate to prepare the financial statements on a going concern basis.

Page 12

HEROES TECHNOLOGY LIMITED

DIRECTORS' REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2025

Carbon reporting

We are committed to monitoring and managing our environmental impact through the adoption of sustainable practices across our operations, including waste reduction, water conservation and responsible sourcing initiatives.

In 2025, total carbon emissions amounted to 1,194 tCO2e (2024: 648 tCO2e). On an intensity basis, this equates to approximately 12 tCO2e per £1m of Net Revenue (2024: 6.6 tCO2e per £1m), reflecting that emissions increased at a faster rate than revenue during the year.

The increase in emissions was primarily driven by higher freight activity levels during the period. Air freight increased by approximately 21%, from 88 CBM in 2024 to 106 CBM in 2025, contributing to the overall increase in the Group's carbon footprint. Ocean freight remained the dominant mode of transportation, accounting for approximately 66% of total emissions.

The Group continues to monitor emissions closely and is evaluating further measures to improve carbon efficiency across the supply chain. These measures include shipment consolidation, transport mode optimisation, enhanced demand planning and inventory forecasting processes aimed at reducing reliance on higher-emission transport modes where operationally feasible.

Research and development

The Group engaged in research and development during the year in relation to which £213k was expensed to profit or loss (2024 - £201k) for new product development.

Matters covered in the Strategic Report

In accordance with section 414C(11) of the Companies Act 2006, information regarding likely future developments in the business of the Company has been included in the Strategic Report. Additionally, a description of how the directors foster the Company's business with suppliers, customers and others has been included within the "S172 reporting" section of the Strategic Report.

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:

∙so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and

∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.

Organisational restructuring and key transactions

Hedging adjustments, additional borrowings under the senior facility, and amendments to leverage and liquidity covenants were completed. In February 2025, the Group acquired 100% of the assets of iL Tutto International PTY Ltd.

For more detailed information, refer to the Strategic Report.

Subsequent events

Details of significant subsequent events of a strategic nature are set out in the Strategic Report. The Directors consider these disclosures appropriate as they relate primarily to the Group's strategic and operational developments subsequent to the reporting date.

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HEROES TECHNOLOGY LIMITED

DIRECTORS' REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2025

Auditors

The auditor, BDO LLP, was appointed during the prior year in accordance with section 485 of the Companies Act 2006. BDO LLP have expressed their willingness to continue in office and a resolution to reappoint them as auditor of the Company will be proposed at the forthcoming Annual General Meeting.

This report was approved by the board on 3 November 2026 and signed on its behalf.

D S Miller

Director

Page 14

HEROES TECHNOLOGY LIMITED

DIRECTORS' RESPONSIBILITIES STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2025

The directors are responsible for preparing the Group strategic report, the directors’ report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the Group financial statements in accordance with UK adopted international accounting standards and 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 company and of the profit or loss of the group for that period.

∙select suitable accounting policies and then apply them consistently;

∙make judgments and estimates that are reasonable and prudent;

∙state whether they have been prepared in accordance with UK adopted international accounting standards, subject to any material departures disclosed and explained in the financial statements;

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

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

Page 15

HEROES TECHNOLOGY LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HEROES TECHNOLOGY LIMITED

Opinion

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 and cash flows for the year then ended;

∙the Group financial statements have been properly prepared in accordance with UK adopted international accounting standards;

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

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

We have audited the financial statements of Heroes Technology Limited (“the Parent Company”) and its subsidiaries (“the Group”) for the year ended 31 December 2025 which comprise of the following:

Group	Parent Company
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position	Company Statement of Financial Position
Consolidated Statement of Changes in Equity	Company Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes 1 to 29 to the Finanical Statements including a summary of significant accounting policies. Material accounting policy information.

The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law and UK adopted international accounting standards. The financial reporting framework that has been applied in the preparation of the Parent Company financial statements is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).

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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Page 16

HEROES TECHNOLOGY LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HEROES TECHNOLOGY LIMITED (CONTINUED)

Independence

We are independent of the Group and the Parent Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

Material uncertainty related to going concern

We draw attention to note 2 in the financial statements, which indicates that the Group's senior debt facility is contractually due for repayment in December 2027. The Group does not currently have sufficient cash resources to settle the loan in full at the repayment date, and at the date of approval of these financial statements, no alternative committed refinancing arrangements have been secured. As stated in note 2, these events or conditions, along with the other matters as set forth in note 2, indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern. The financial statements do not include any adjustments that would be necessary if the Group and the Parent Company were unable to continue as a going concern. Our opinion is not modified in respect of this matter.

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.

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 Directors are responsible for the other information. The other information comprises the information included in the Group Strategic Report, Directors Report, and The Financial Statements , other than the financial statements and our auditor’s report thereon. 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.

Page 17

HEROES TECHNOLOGY LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HEROES TECHNOLOGY LIMITED (CONTINUED)

Other Companies Act 2006 reporting

In our opinion, based on the work undertaken in the course of the audit:

∙the information given in the Strategic report and the Directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

∙the Strategic report and the Directors’ report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the Group and the Parent Company and its 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.

Responsibilities of Directors

As explained more fully in the Statement of Directors Responsibilities, 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.

Auditor’s responsibilities for the audit of the financial statements

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. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the Parent Company and management.

Page 18

HEROES TECHNOLOGY LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HEROES TECHNOLOGY LIMITED (CONTINUED)

Auditor’s responsibilities for the audit of the financial statements (continued)

Extent to which the audit was capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Non-compliance with laws and regulations

Based on:

∙Our understanding of the Group and the industry in which it operates;

∙Discussion with management and those charged with governance including internal legal council; and

∙Obtaining an understanding of the Group’s policies and procedures regarding compliance with laws and regulations

we considered the significant laws and regulations to be Companies Act 2006, UK Tax Legislation, and the International Financial Reporting Standards.

The Group is also subject to laws and regulations where the consequence of non-compliance could have a material effect on the amount or disclosures in the financial statements, for example through the imposition of fines or litigations. We identified such laws and regulations to be Consumer Rights Act, Employment and Workplace Regulations and the Bribery Act.

Our procedures in respect of the above included:

∙Review of minutes of meetings of those charged with governance for any instances of non-compliance with laws and regulations;

∙Review of financial statement disclosures and agreeing to supporting documentation; and

∙Meeting held with legal council and confirmed with management any instances of non-compliance

Fraud
We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment procedures included:

∙Enquiry with management and those charged with governance regarding any known or suspected instances of fraud;

∙Obtaining an understanding of the Group’s policies and procedures relating to:

°Detecting and responding to the risks of fraud; and

°Internal controls established to mitigate risks related to fraud.

∙Review of minutes of meetings of those charged with governance for any known or suspected instances of fraud;

∙Discussion amongst the engagement team as to how and where fraud might occur in the financial statements;

∙Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;

Based on our risk assessment, we considered the areas most susceptible to fraud to be:

∙Management override of controls

∙Manual adjustments to Revenue

Page 19

HEROES TECHNOLOGY LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HEROES TECHNOLOGY LIMITED (CONTINUED)

Auditor’s responsibilities for the audit of the financial statements (continued)

Our procedures in respect of the above included:

∙Testing a sample of journal entries throughout the year, which met a defined risk criteria, by agreeing to supporting documentation.

∙Testing journal entries to revenue that met our defined risk criteria including, those with unusual account combinations that have a credit revenue impact; and

∙Assessing significant estimates and judgements applied in the preparation of the financial statements throughout the audit, individually and in aggregate, to evaluate whether there were any indications of bias in the application of these judgements.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.

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.

Hannah Pop (Senior Statutory Auditor)

for and on behalf of

BDO LLP, Statutory Auditor

London, UK
Date: 3 November 2026

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

Page 20

HEROES TECHNOLOGY LIMITED

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2025

				2025	2024
			Note	£000	£000


Revenue	4	99,558	98,473
Cost of sales		(74,584)	(76,863)
Gross profit		24,974	21,610
Administrative expenses		(14,945)	(23,567)
Other operating expenses		(6,555)	(9,580)
Profit/(loss) from operations		3,474	(11,537)
Finance income	9	32	30
Finance expense	9	(11,170)	(9,393)
Loss before tax		(7,664)	(20,900)

Tax (expense)/credit	10	(428)	1,563

Loss for the year

(8,092)

(19,337)

Other comprehensive income:
Exchange gains/(losses) arising on translation of foreign operations	-	(175)
Loss and total comprehensive expense for the year	(8,092)	(19,512)

All amounts relate to continuing operations.

The notes on pages 32 to 76 form part of these financial statements.

Page 21

HEROES TECHNOLOGY LIMITED

REGISTERED NUMBER: 12620251

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2025

	2025	2024
Note	£000	£000

Assets
Non-current assets
Property, plant and equipment	11	4,210	4,832
Intangible assets	12	21,699	19,433
Goodwill	13	7,389	6,569
Deferred tax assets	10	192	214
		33,490	31,048
Current assets
Inventories	15	16,571	13,267
Trade and other receivables	16	7,328	6,261
Cash and cash equivalents	27	3,723	4,273
Derivative financial assets	19	-	2,034
		27,622	25,835
Total assets		61,112	56,883

Page 22

HEROES TECHNOLOGY LIMITED

REGISTERED NUMBER: 12620251

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)

AS AT 31 DECEMBER 2025

				2025	2024
			Note	£000	£000


Non-current liabilities
Loans and borrowings	18	80,427	74,078
Lease liabilities	18,23	3,171	3,493
Deferred tax liability	10	106	85
		83,704	77,656
Current liabilities
Trade and other payables	17	12,240	8,828
Lease liabilities	18,23	312	720
Derivative financial liabilities	19	3,269	-
		15,821	9,548
Total liabilities		99,525	87,204
Net liabilities		(38,413)	(30,321)

Issued capital and reserves attributable to owners of the parent
Share capital	20	-	-
Share premium reserve	21	66,630	66,630
Foreign currencies translation reserve	21	540	540
Retained earnings	21	(105,583)	(97,491)
TOTAL EQUITY		(38,413)	(30,321)

The financial statements on pages 21 to 76 were approved and authorised for issue by the board of directors on 3 November 2026 and were signed on its behalf by:

D S Miller

Director

Page 23

HEROES TECHNOLOGY LIMITED

REGISTERED NUMBER: 12620251

COMPANY STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2025

	2025	2024
Note	£000	£000

Assets
Non-current assets
Property, plant and equipment	11	47	61
Intangible assets	12	5,964	1,617
Investments in subsidiaries	14	34,171	34,171
		40,182	35,849
Current assets
Inventories	15	2	2
Trade and other receivables	16	20,658	25,792
Cash and cash equivalents	27	1,160	1,055
Derivative financial assets	19	-	2,034
		21,820	28,883
Total assets		62,002	64,732

Page 24

HEROES TECHNOLOGY LIMITED

REGISTERED NUMBER: 12620251

COMPANY STATEMENT OF FINANCIAL POSITION (CONTINUED)

AS AT 31 DECEMBER 2025

				2025	2024
			Note	£000	£000


Non-current liabilities
Loans and borrowings	18	80,427	74,078
Current liabilities
Trade and other payables	17	12,440	7,586
Derivative financial liabilities	19	3,269	-
		15,709	7,586
Total liabilities		96,136	81,664
Net liabilities		(34,134)	(16,932)

Issued capital and reserves attributable to owners of the parent
Share capital	20	-	-
Share premium reserve	21	66,630	66,630
Retained earnings	21	(100,764)	(83,562)
TOTAL EQUITY		(34,134)	(16,932)

As permitted by section 408 of the Companies Act 2006, the Company has not presented its own Statement of Comprehensive Income. The Company's loss for the year was £17,202k (2024 - £14,171k).

The financial statements on pages 21 to 76 were approved and authorised for issue by the board of directors on 3 November 2026 and were signed on its behalf by:

D S Miller

Director

Date: 3 November 2026

Page 25


		HEROES TECHNOLOGY LIMITED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2025

	Share capital	Share premium	Foreign currencies translation reserve	Retained earnings	Total attributable to equity holders of parent	Total equity
	£000	£000	£000	£000	£000	£000
At 1 January 2025	-	66,630	540	(97,491)	(30,321)	(30,321)
Comprehensive income for the year
Loss for the year	-	-	-	(8,092)	(8,092)	(8,092)
Total comprehensive income for the year	-	-	-	(8,092)	(8,092)	(8,092)
At 31 December 2025	-	66,630	540	(105,583)	(38,413)	(38,413)

The notes on pages 32 to 76 form part of these financial statements.

Page 26


		HEROES TECHNOLOGY LIMITED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2024

	Share capital	Share premium	Warrants reserve	Share options reserve	Foreign currencies translation reserve	Retained earnings	Total attributable to equity holders of parent	Total equity
	£000	£000	£000	£000	£000	£000	£000	£000
At 1 January 2024	-	61,788	408	917	715	(79,479)	(15,651)	(15,651)
Comprehensive income for the year
Loss for the year	-	-	-	-	-	(19,337)	(19,337)	(19,337)
Other comprehensive income	-	-	-	-	(175)	-	(175)	(175)
Total comprehensive income for the year	-	-	-	-	(175)	(19,337)	(19,512)	(19,512)
Contributions by and distributions to owners
Issue of share capital	-	4,842	-	-	-	-	4,842	4,842
Reserve transfer	-	-	(408)	-	-	408	-	-
Share options reserve movement	-	-	-	(917)	-	917	-	-
Total contributions by and distributions to owners	-	4,842	(408)	(917)	-	1,325	4,842	4,842
At 31 December 2024	-	66,630	-	-	540	(97,491)	(30,321)	(30,321)

The notes on pages 32 to 76 form part of these financial statements.

Page 27

HEROES TECHNOLOGY LIMITED

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2025

	Share capital	Share premium	Retained earnings	Total equity
	£000	£000	£000	£000
At 1 January 2025	-	66,630	(83,562)	(16,932)
Comprehensive income for the year
Loss for the year	-	-	(17,202)	(17,202)
Total comprehensive income for the year	-	-	(17,202)	(17,202)
At 31 December 2025	-	66,630	(100,764)	(34,134)

The notes on pages 32 to 76 form part of these financial statements.

Page 28

HEROES TECHNOLOGY LIMITED

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2024

	Share capital	Share premium	Warrants reserve	Share options reserve	Retained earnings	Total equity
	£000	£000	£000	£000	£000	£000
At 1 January 2024	-	61,788	408	917	(70,716)	(7,603)
Comprehensive income for the year
Loss for the year	-	-	-	-	(14,171)	(14,171)
Total comprehensive income for the year	-	-	-	-	(14,171)	(14,171)
Contributions by and distributions to owners
Issue of share capital	-	4,842	-	-	-	4,842
Reserve transfer	-	-	(408)	-	408	-
Share options reserve movement	-	-	-	(917)	917	-
Total contributions by and distributions to owners	-	4,842	(408)	(917)	1,325	4,842
At 31 December 2024	-	66,630	-	-	(83,562)	(16,932)

The notes on pages 32 to 76 form part of these financial statements.

Page 29

HEROES TECHNOLOGY LIMITED

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2025

				2025	2024
			Note	£000	£000

Cash flows from operating activities
Loss for the year		(8,092)	(19,337)
Adjustments for
Depreciation of property, plant and equipment	11	955	1,115
Amortisation of intangible fixed assets	12	4,793	5,357
Impairment (gains)/losses on intangible assets	12	(1,397)	6,154
Non-trading equity charges		815	919
Change in derivative financial instruments		2,926	(2,360)
Non-trading exceptional charges		3,764	8,453
Finance income	9	(32)	(30)
Finance expense	9	10,588	8,855
Other exceptional expenses paid		(2,734)	-
Foreign exchange charges		(4,670)	54
Income tax expense	10	428	(1,563)
Profit on sale of fixed assets		-	(1)
Trade finance charge	9	551	508
		7,895	8,124
Movements in working capital:
(Increase)/decrease in trade and other receivables		(1,720)	730
(Increase)/decrease in inventories		(3,920)	3,420
Increase/(decrease) in trade and other payables		4,906	(4,045)
Cash generated from operations		7,161	8,229

Corporation tax paid		239	321
Net cash from operating activities		7,400	8,550
Cash flows from investing activities
Purchases of property, plant and equipment	11	(292)	(117)
Proceeds from disposal of property, plant and equipment	11	-	1
Purchase of intangibles	12	(810)	(333)
Interest received	9	32	30
Earn outs and deferred payments		-	(7,106)
Cash paid on acquisition of subsidiary		(4,475)	-
Net cash used in investing activities		(5,545)	(7,525)

Page 30

HEROES TECHNOLOGY LIMITED

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2025


				2025	2024
				£000	£000

Cash flows from financing activities
Proceeds from other loans		2,229	9,028
Repayment of lease liabilities		(710)	(886)
Interest paid		(1,555)	(3,480)
Interest element of finance lease rental		(161)	(267)
Fundraising costs paid		(1,657)	(5,413)
Trade finance cost paid		(551)	(508)
Net cash used in financing activities		(2,405)	(1,526)
Net decrease in cash and cash equivalents		(550)	(501)

Cash and cash equivalents at the beginning of year		4,273	4,774
Cash and cash equivalents at the end of the year	27	3,723	4,273

The notes on pages 32 to 76 form part of these financial statements.

Page 31

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

1.	General information

Heroes Technology Ltd (the "Company") is a private company limited by shares, incorporated in England and Wales under the Companies Act 2006. The Company's registered office is at Wisteria Grange Barn, Pikes End, Pinner, London, HA5 2EX. These consolidated financial statements comprise the Company and its subsidiaries (collectively the "Group" and individually "Group companies"). The Group is primarily involved in baby & juvenile products, and some other consumer products, across various geographies, predominantly through the Amazon marketplace platform and fulfilment network.

2.Accounting policies

2.1

Basis of preparation of financial statements

The principal accounting policies adopted in the preparation of the financial statements are set out below.

The Group financial statements have been prepared in accordance with UK adopted international accounting standards. During the year, the parent company has changed its financial reporting framework from UK adopted International Accounting Standards to FRS 101. This has had no impact on the recognition, measurement or presentation of any amounts in the financial statements. The accounting policies have been applied consistently to all the years presented, unless otherwise stated.

The preparation of financial statements in compliance with UK-adopted IFRS requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Group's accounting policies. The areas where significant judgements and estimates have been made in preparing the financial statements and their effect are disclosed in note 3.

The Group's functional and presentational currency is GBP. Values are rounded to the nearest thousand pound, unless otherwise stated.

The Company has taken advantage of the exemption available under section 408 of the Companies Act 2006 and elected not to present its individual Statement of Comprehensive Income and related notes. Additionally, no cash flow statement is presented as permitted by FRS 101.8 (h).

Basis of measurement

The financial statements have been prepared on a historical cost basis except for derivative financial liabilities and derivative financial assets, which are measured on a fair value basis on each reporting date.

Basis of consolidation
Where the Parent Company has control over an investee, it is classified as a subsidiary. The Parent Company controls an investee if all three of the following elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control.

The consolidated financial statements present the results of the Parent Company and its subsidiaries (the "Group") as if they formed 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 acquisition method. In the Consolidated Statement of Financial Position, 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 Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date on which control ceases.

Page 32

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

2.2

Changes in accounting policies

New standards, interpretations and amendments adopted from 1 January 2025

The following amendment became effective for accounting periods beginning on or after 1 January 2025:

∙Lack of Exchangeability (Amendments to IAS 21 – The Effects of Changes in Foreign Exchange Rates).

Management has assessed the impact of this amendment and concluded that it does not have a material effect on the Group’s or the Company’s financial statements.

New standards, interpretations and amendments not yet effective or endorsed

There are a number of standards, amendments to standards and interpretations issued by the IASB that are effective in future accounting periods and which the Group has not early adopted.

The following amendment is effective for annual reporting periods beginning on or after 1 January 2026:

∙Amendments to the Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and IFRS 7).

The following new standards are effective for annual reporting periods beginning on or after 1 January 2027:

∙IFRS 18 – Presentation and Disclosure in Financial Statements.

∙IFRS 19 – Subsidiaries without Public Accountability: Disclosures.

The Group is currently assessing the impact of these new standards and amendments. Based on the assessment performed to date, the Group does not expect the adoption of the amendment to IFRS 9 and IFRS 7 to have a material impact on its financial statements. IFRS 18 is expected to affect the presentation and disclosure of information in the financial statements but is not expected to change the recognition or measurement of assets, liabilities, income or expenses. IFRS 19 is not expected to have a material impact as the Group does not currently anticipate applying the standard.

At the date of authorisation of these financial statements, certain standards and amendments issued by the IASB had not yet been endorsed for use in the UK by the UK Endorsement Board (UKEB). These standards have therefore not been applied in preparing these financial statements.

IFRS 18 – Presentation and Disclosure in Financial Statements, issued by the IASB in April 2024, is effective for annual reporting periods beginning on or after 1 January 2027 and will replace IAS 1 Presentation of Financial Statements. The standard introduces new requirements for the presentation and disclosure of information in the financial statements, including revised categories and subtotals in the statement of profit or loss, enhanced principles for aggregation and disaggregation of information, and disclosures relating to management-defined performance measures. The Group is currently assessing the impact of adopting IFRS 18. While the standard is not expected to affect the recognition or measurement of assets, liabilities, income or expenses, it is expected to result in changes to the presentation and disclosure of information in the Group’s financial statements.

IFRS 19 – Subsidiaries without Public Accountability: Disclosures is effective for annual reporting periods beginning on or after 1 January 2027. Based on the Group’s current structure and reporting requirements, the Group does not expect to be eligible to apply IFRS 19.

Page 33

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

2.3

Going concern

The Company’s going concern assessment has been performed as part of the Group’s going concern assessment. The Directors have assessed the ability of the Group to continue as a going concern for a period of at least 12 months from the date of approval of the financial statements.

Debt facility details

The Group has a senior debt facility of $150m (£111.5m), of which $109.8m (£86.6m) (2024: $92.8m (£74.1m)) was drawn at the reporting date. As disclosed in Note 18, in August 2025, the Group entered into an amendment letter to the senior credit facility agreement and released the Group from the net leverage and minimum liquidity covenants until the termination date.

During the year and up to the date of approval of these financial statements, the directors have held discussions with the lender regarding the planned maturity of the facility and have obtained a facility extension to December 2027, as well as amendments to capitalise interest, to ensure the Group has sufficient liquidity to the maturity date.

Downside scenarios and mitigating actions

The directors have assessed potential downside scenarios and considered the mitigating actions available, including cost reductions and other measures to maintain sufficient liquidity. In addition, the Group’s senior lender, who is also the majority shareholder, has confirmed their current intention to work constructively with the Group to provide support including waivers, amendments, or other accommodations if required.

Material uncertainty

The Group's senior debt facility is contractually due for repayment in December 2027. Although covenant waivers and facility extensions have been granted previously, there is no formal agreement in place for the lender to renew, extend, or refinance the loan beyond its contractual maturity date. The Group does not currently have sufficient cash resources to settle the loan in full at the repayment date, and at the date of approval of these financial statements, no alternative committed refinancing arrangements have been secured.

These conditions represent a material uncertainty that may cast significant doubt on the Group’s and the Company’s ability to continue as a going concern. Therefore, the Group and the Company may be unable to realise their assets and discharge their liabilities in the normal course of business.

The financial statements do not include any adjustments that would be necessary if the Group and the Company were unable to continue as going concerns.

Directors’ expectation

The directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future, being at least 12 months from the date of approval of the financial statements. As part of the assessment, the directors have considered the potential risk that the facility may not be further extended in the future.

Page 34

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

2.3

Going concern (continued)

Key factors considered

In reaching this conclusion, the directors have considered:

∙Expected future Group EBITDA

∙Projected cash flows, taking into account all known and reasonably expected future liabilities

∙Available liquidity and compliance with financial covenants

Conclusion

Based on this review, the directors are satisfied that it is appropriate to prepare the financial statements on a going concern basis.

Notwithstanding the material uncertainty that exists, the Board’s confidence in the following factors supports this assessment:

∙Sufficient financing to meet the Group’s obligations for the next 12 months, including the expectation that the Group will be able to secure either a maturity extension of the current facility or alternative funding if required; and

∙Further growth, particularly in relation to recently acquired businesses. Together, these factors form the basis for the preparation of the Group’s financial statements on a going concern basis.

2.4

Revenue

Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. The Group recognises revenue when it transfers control over a product to a customer.

The Group does not expect to have any contracts where the period between the transfer of the promised goods to the customer and payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the transaction prices for the time value of money.

Principal versus agent

When another party is involved in providing goods to a customer, the Group determines whether the nature of its promise is a performance obligation to provide the specified goods itself (i.e. the Group is a principal) or to arrange for those goods to be provided by the other party (i.e. the Group is an agent).

The Group is a principal if it controls the specified good before that good or service is transferred to a customer.

The Group is an agent if its performance obligation is to arrange for the provision of the specified good, delivery and wrapping service by another party. In this case, the Group does not control the specified good, delivery and wrapping service provided by another party before that good is transferred to the customer. When the Group acts as an agent, it recognises revenue at the net amount to which it expects to be entitled in exchange for arranging for the specified good, delivery and wrapping service to be provided by the other party.

Page 35

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

2.5

Foreign exchange

Functional and presentational currency

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The Parent Company's functional currency and the Group's presentational currency is Sterling.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at the reporting period end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.

On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations, including goodwill arising on the acquisition of those operations, are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income and accumulated in the foreign exchange reserve. On disposal of a foreign operation, the cumulative exchange differences recognised in the foreign exchange reserve relating to that operation up to the date of disposal are transferred to profit or loss as part of the profit or loss on disposal.

2.6

Finance income and costs

Finance costs comprise interest expenses that relate to a shareholder loan and bank borrowings, and amortisation of finance costs. Finance income comprises interest income that relates to bank deposits and net changes in fair value of derivative financial instruments. Interest expenses and income are accounted for on an accruals basis in profit or loss.

2.7

Retirement benefits: Defined contribution scheme

The Group operates a defined contribution pension scheme. Contributions to the scheme are charged to profit or loss in the period to which they relate. Amounts not paid are shown in accruals as a liability in the Consolidated Statement of Financial Position.

Page 36

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

2.8

Share-based payments

(i) Employees' share option plan

The cost of share-based employee compensation arrangements, whereby employees receive remuneration in the form of shares or share options, is recognised as an employee benefit expense in the statement of profit or loss.

The total expense to be apportioned over the vesting period of the benefit is determined by reference to the fair value (excluding the effect of non-market-based vesting conditions) at the date of grant.

At the end of each reporting period the assumptions underlying the number of awards expected to vest are adjusted for the effects of non-market-based vesting conditions to reflect the conditions prevailing at that date. The impact of any revisions to the original estimates is recognised in the statement of profit or loss, with a corresponding adjustment to equity. Fair value is measured by the use of the Black-Scholes pricing model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

When share options are exercised, the Company issues new shares. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium.

(ii) Other share-based payments

Warrants have been issued by the Group to a loan provider to subscribe for a fixed number of ordinary shares of the Group and it is being treated as equity-settled share-based payment. Equity-settled share-based payment transactions with parties other than employees are measured at the fair value of services received, except where that fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the counterparty renders the service. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the duration of the loan.

2.9

Taxation

(i) Current 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 reporting date in the countries where the Group operates and generates income.

Page 37

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

2.9

Taxation (continued)

(ii) Deferred tax

Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the Consolidated Statement of Financial Position differs from its tax base, except for differences arising on:

∙The initial recognition of goodwill;

∙The initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting nor taxable profit or loss and does not give rise to equal taxable and deductible temporary differences; and

∙Investments in subsidiaries and joint arrangements where the Group is able to control the timing of the reversal of the difference and it is probable that the difference will not reverse in the foreseeable future.

Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the difference can be utilised.

The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the reporting date and are expected to apply when the deferred tax liabilities/(assets) are settled/(recovered).

Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority on either:

∙the same taxable Group company; or

∙different Group entities which intend either to settle current tax assets and liabilities on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax assets or liabilities are expected to be settled or recovered.

2.10

Property, plant and equipment

Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Group.

Depreciation is provided on all other items of property, plant and equipment so as to write off their carrying value over their expected useful economic lives. It is provided at the following rates:

		Tooling	10 years straight line
		Fixtures and fittings	5 years straight line
		Office equipment	5 years straight line
		Right-of-use assets	Over the term of the lease

Page 38

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

2.11

Intangible assets (other than goodwill)

Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses.

		Trademarks, brands and assumed contracts	4-10 years
		Computer software	8 years

2.12

Goodwill

Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any.

For the purposes of impairment testing, goodwill is allocated to each of the Group's cash-generating units (or groups of cash-generating units) that is expected to benefit from the synergies of the combination.

A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised directly in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.

On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

2.13

Impairment of property, plant and equipment and intangible assets

Impairment tests on goodwill and other intangible assets with indefinite useful economic lives are undertaken annually at the financial year end. Other non-financial assets are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the carrying value of an asset exceeds its recoverable amount (i.e. the higher of value in use and fair value less costs to sell), the asset is written down accordingly.

Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the smallest group of assets to which it belongs for which there are separately identifiable cash flows; its cash-generating units ("CGUs"). Goodwill is allocated on initial recognition to each of the Group's CGUs that are expected to benefit from a business combination that gives rise to the goodwill.
Impairment charges are included in profit or loss. An impairment loss recognised for goodwill is not reversed.

Page 39

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

2.14

Investments in subsidiaries

Investments in subsidiaries are stated at cost less any provision for impairment.

2.15

Inventories

Inventories are stated at the lower of cost and net realisable value. Costs of inventories are determined on a weighted average basis. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.

2.16

Derivative financial instruments

Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

Derivatives embedded in non-derivative host contracts that are not financial assets within the scope of IFRS 9 (e.g. financial liabilities) are treated as separate derivatives when they meet the definition of a derivative, their risks and characteristics are not closely related to those of the host contracts and the host contracts are not measured at FVTPL. Derivatives embedded in hybrid contracts that contain financial asset hosts within the scope of IFRS 9 are not separated. The entire hybrid contract is classified and subsequently measured at either amortised cost or FVTPL as appropriate.

2.17

Financial instruments

Financial assets and financial liabilities are recognised in the Statement of Financial Position when the Group becomes a party to the contractual provisions of the instrument.

Financial assets

Investments other than investments in subsidiaries are classified as either held-for-trading or not at initial recognition. At the year-end date all investments are classified as not held for trading.

Trade receivables are held in order to collect the contractual cash flows and are initially measured at the transaction price as defined in IFRS 15, as the contracts of the Group do not contain significant financing components. Impairment losses are recognised based on lifetime expected credit losses in profit or loss.

Other receivables are held in order to collect the contractual cash flows and accordingly are measured at initial recognition at fair value, which ordinarily equates to cost and are subsequently measured at cost less impairment due to their short-term nature. A provision for impairment is established based on 12 month expected credit losses unless there has been a significant increase in credit risk when lifetime expected credit losses are recognised. The amount of any provision is recognised in profit or loss.

Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity of three months or less.

The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.

Page 40

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

Financial instruments (continued)

Financial liabilities and equity

Financial liabilities and equity instruments issued by the Group are classified in accordance with the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs.

Interest bearing loans and advanced share subscriptions are initially recorded at fair value, which is ordinarily equal to the proceeds received net of transaction costs. These liabilities are subsequently measured at amortised cost, using the effective interest rate method.

The Group had issued warrants to a warrant-holder in connection with a loan facility granted to the Group. The warrants could have subscribed for a variable number of ordinary shares of the Group, and it was being treated as an embedded derivative. All warrants were exercised during 2024. An embedded derivative is a component of a hybrid contract that also includes a non-derivative host with the effect that some of the cash flows of the combined instrument vary in a way similar to a stand-alone derivative.

Derivatives embedded in hybrid contracts with hosts that are financial liabilities are treated as separate derivatives when they meet the definition of a derivative, their risks and characteristics are not closely related to those of the host contracts, and the host contracts are not measured at FVTPL. An embedded derivative is recognised initially at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. An embedded derivative is presented as a non-current liability if the remaining maturity of the hybrid instrument to which the embedded derivative relates is more than 12 months and is not expected to be realised or settled within 12 months.

The Group derecognises financial liabilities when, and only when, the Group's obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.

Page 41

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

2.18

Leasing

The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a base term of 12 months or less) and leases of low value assets (considered by the Group to be those with a value of less than £4,500). For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease. At period end, the Group has 2 lease contracts for offices which include a break-clause with advance notification of 1 to 2 months.

The right-of-use asset has been measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Group, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date.

The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. Where impairment indicators exist, the right-of-use asset will be assessed for impairment.

The lease liabilities are measured at the present value of the lease payments due to the lessor over the lease term, discounted using the interest rate implicit in the lease. If that rate is readily available or the Group's incremental borrowing rate if not.

After initial measurement, any payments made will reduce the liability and the interest accrued will increase it.

On the Statement of Financial Position, right-of-use assets have been included in property, plant and equipment.

Lease modifications

When the Group revises its estimate of the term of any lease (because, for example, it re-assesses the probability of a lessee extension or termination option being exercised), it adjusts the carrying amount of the lease liability to reflect the payments to be made over the revised term, which are discounted using a revised discount rate. The carrying value of lease liabilities is similarly revised when the variable element of future lease payments dependent on a rate or index is revised, except the discount rate remains unchanged. In both cases an equivalent adjustment is made to the carrying value of the right-of-use asset, with the revised carrying amount being amortised over the remaining (revised) lease term. If the carrying amount of the right-of-use asset is adjusted to zero, any further reduction is recognised in profit or loss.

Page 42

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

3.	Accounting estimates and judgements

In applying the Group's accounting policies, which are described in note 2, the directors are required to make judgements (other than those involving estimations) that have a significant impact on the amounts recognised and to make estimates and assumptions about the carrying amounts 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 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.

Judgements

The following is the critical judgement apart from those involving estimations (which are presented separately below), that the directors have made in the process of applying the Group's accounting policies and that have the most significant effect on the amounts recognised in financial statements.

Principal versus agent consideration

The Group is considered as an agent for some of its contracts with customers relating to selling products through Amazon marketplace. This is because the Group does not obtain the control over the products and does not carry out delivery and wrapping service before passing the product on to customers. The Group considers the indicators of acting as an agent in this instance, for example the Group not being primarily responsible for fulfilling the promise of the goods and not establishing the price of delivery or wrapping the products. When the Group satisfies the performance obligation, the Group recognises net revenue being the amount it expects to be entitled to as specified in the contracts.

Estimates and assumptions

The key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.

Valuation of acquired intangibles

Management identified and valued acquired intangible assets on acquisitions that were made during the prior period. Management has applied judgement in identifying and valuing intangible assets separate from goodwill that consist of assessing the value of trademarks, contracts, business relationships and other intangible assets. The Group consistently applies the methodologies in calculating intangible asset values in each acquisition. There are a number of assumptions in estimating the present value of future cash flows including management's expectation of future revenue, gross margin percentage and discount rates.

Assumptions are made on the useful life of an intangible and if shortened, would increase the amortisation charge recognised in profit or loss. The identified intangibles are set out in note 12.

Page 43

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

Accounting estimates and judgements (continued)

Estimates and assumptions (continued)

Impairment of intangible assets and goodwill

At each reporting date, management perform impairment assessments by estimating the recoverable amount of each asset or cash generating unit based on expected future cash flows and uses an interest rate to discount them. Estimation uncertainty relates to assumptions about future operating results and the determination of a suitable discount rate. In the year ended 31 December 2025, the Group recognised an impairment loss on Internally generated software development costs, Trademarks, brand and assumed contracts and Goodwill. See note 12 & 13.

Valuation of inventories

Management estimates the net realisable values of inventories, taking into account the most evidence available at each reporting date. The future realisation of these inventories may be affected by other market-driven changes or future technology that may reduce future selling prices.

Fair value measurement

Management uses various valuation techniques to determine the fair value of financial instruments (where active market quotes are not available). This involves developing estimates and assumptions consistent with how market participants would price the instrument. Management bases its assumptions on observable data as far as possible, but this is not always available. In that case, management uses the best information available. Estimated fair values may vary from the actual prices that would be achieved in an arm's length transaction at the reporting date, see note 19 & 24.1.

Useful life of trademark

Management reviews the estimate of the useful life of trademarks at each reporting date, based on the expected utility of the trademark. Uncertainties in these estimates relate to the forecast of demands of products and the changes in market.

The uncertainties described above in respect of the potential impairment of goodwill in the Group financial statements also represent uncertainties regarding the carrying value of the investment in subsidiaries in the Company financial statements. As at 31 December 2025 the carrying value of this investment was £34,171k (2024 - £34,171k).

Page 44

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025


Marketplace	53,389	64,782
Direct to consumer	18,954	15,184
B2B revenue	27,215	18,507
	99,558	98,473

All revenue is derived from the sale of goods and is recognised in accordance with the Group's accounting policy.

Analysis of revenue by country of destination:
	2025	2024
	£000	£000


United Kingdom	28,405	36,885
Rest of Europe	13,622	12,993
Rest of the world	57,531	48,595
	99,558	98,473

Contract balances

Group	Contract liabilities	Contract liabilities
	2025	2024
	£000	£000
Balance at 1 January	428	1,086
Amounts included in contract liabilities that were recognised as revenue during the period	(734)	(1,082)
Cash received in advance of performance and not recognised as revenue during the period	738	419
Other adjustments	(87)	5
Balance at 31 December	345	428

Page 45

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

5.	Operating profit/(loss)
		2025	2024
		£000	£000


Cost of inventories recognised as an expense	38,745	39,326
Inventory write down	486	1,159
Staff costs (see note 7)	10,133	9,454
Depreciation of property, plant and equipment (see note 11)	908	902
Amortisation of trademarks (see note 12)	4,389	5,300
Amortisation of software (see note 12)	101	72
Impairment of trademarks (see note 12)	(1,397)	5,589
Impairment of goodwill (see note 13)	-	1,555
Gain on disposal of tangible assets	-	(1)
Gain on changes in fair value of derivative financial liabilities	2,926	(2,360)
Net foreign exchange (gains)/losses	529	332
Rental expense of short-term leases under recognition exemptions of IFRS 16	357	329
Research and development expense	213	201

	Fees payable to the Group's auditors for the audit of the consolidated and parent Company's financial statements	303	275
	Non-audit services	-	29

Page 46

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

Employee benefit expenses (including directors) comprise:
Wages and salaries	9,479	8,792
National insurance	577	587
Defined contribution pension cost	77	75
	10,133	9,454

During the year ended 31 December 2025, 44 employees left the business resulting in the Group recognising redundancy costs of £325k within operating expenses (2024 - £133k). These costs relate to workforce restructuring initiatives undertaken during the period.

Key management personnel compensation Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, including the directors of the Company listed on page 11.
	2025	2024
	£000	£000


	Salaries and benefits	123	530

The monthly average number of persons, including the directors, employed by the Group during the year was as follows:
	2025	2024
	No.	No.

Legal, commercial and marketing	49	41
Finance	10	8
Data and strategy	7	14
Product procurement and innovation	41	25
Management and people	5	14
	112	102

Page 47

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

8.	Directors' remuneration
		2025	2024
		£000	£000


	Directors' emoluments	123	530

	During the year, retirement benefits were accruing to the following number of directors in respect of qualifying services:
					2025	2024


	Defined contribution schemes	2	2

The highest paid director's emoluments were as follows:
	2025	2024
	£000	£000


	Total emoluments	102	163

Finance income


	Other interest receivable	32	30
	Total finance income	32	30
	Finance expense
	Bank interest payable	90	31
	Amortised cost adjustment to loans	299	220
	Finance leases (interest portion)	161	267
	Interest on loans	10,069	8,367
	Trade finance	551	508
	Total finance expense	11,170	9,393

Page 48

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

Current tax
Current tax on loss for the year	539	417
Adjustments in respect of prior years	(141)	(28)
Total current tax	398	389
Deferred tax expense
Origination and reversal of timing differences	(65)	(1,804)
Adjustments in respect of prior years	95	(148)
Total deferred tax	30	(1,952)

Total tax expense/(credit)	428	(1,563)

Page 49

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

10.Tax expense/(credit) (continued)

10.1 Income tax recognised in profit or loss (continued)

The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to losses for the year are as follows:
	2025	2024
	£000	£000


Loss for the year	(8,092)	(19,337)
Income tax credit/expense (including income tax on associate, joint venture and discontinued operations)	428	(1,563)
Loss before income taxes	(7,664)	(20,900)

Tax using the Company's domestic tax rate of 25% (2024 : 25%)	(1,916)	(5,225)
Non-tax deductible expenses	214	2,148
Losses previously unrecognised	654	372
Effects of overseas tax rates	51	20
Adjustment in respect of prior periods	(46)	(505)
Impairment of goodwill	91	455
Share based payments	-	(229)
Other short term differences	(62)	25
Temporary differences and deductible losses not recognised Group relief	1,442	1,376
Total tax credit	428	(1,563)

Changes in tax rates and factors affecting the future tax charges

The company expects its future profits to be subject to corporation tax at the main rate of 25%, based on current legislation.

There are currently no other material enacted or substantively enacted changes in tax law or rates which are expected to materially impact the company's future current or deferred tax charges.

Page 50

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

10.Tax expense/(credit) (continued)


Deferred tax assets	192	214
Deferred tax liabilities	(106)	(85)
	86	129

The Group has an unrecognised deferred tax asset of £15,056,756 (2024 - £14,576,086) arising from losses and temporary timing differences. The Company has not recognised any deferred tax in the current or prior year.

The Company has an unrecognised deferred tax assets of £6,155,938 (2024 - £5,671,262) arising from losses and temporary timing differences.


Opening balance	Recognised in profit or loss	Closing balance
£000	£000	£000

2025
	Fair value gain on trademark in business combination	(3,362)	718	(2,644)
	Fixed asset timing difference	(90)	(44)	(134)
	Losses	3,386	(676)	2,710
	Intangible asset timing difference	175	(27)	148
	Other short term differences	20	(14)	6
		129	(43)	86

2024
	Fair value gain on trademark in business combination	(5,738)	2,376	(3,362)
	Fixed asset timing difference	(95)	5	(90)
	Losses	4,009	(623)	3,386
	Intangible asset timing difference	-	175	175
	Other short term differences	-	20	20
		(1,824)	1,953	129

Page 51

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

11.	Property, plant and equipment
	Group

	Tooling	Fixtures and fittings	Office and computer equipment	Right-of-use assets	Total
	£000	£000	£000	£000	£000
Cost
At 1 January 2024	151	657	361	5,090	6,259
Additions	26	2	89	-	117
Disposals	(40)	-	-	(45)	(85)
At 31 December 2024	137	659	450	5,045	6,291
Additions	267	5	19	-	291
Disposals	-	-	(11)	-	(11)
At 31 December 2025	404	664	458	5,045	6,571

	Tooling	Fixtures and fittings	Office and computer equipment	Right-of-use assets	Total
	£000	£000	£000	£000	£000
Accumulated depreciation and impairment
At 1 January 2024	4	96	70	400	570
Charge for the year	13	50	84	755	902
Disposals	-	-	-	(13)	(13)
At 31 December 2024	17	146	154	1,142	1,459
Charge for the year	23	40	134	711	908
Disposals	-	-	(6)	-	(6)
At 31 December 2025	40	186	282	1,853	2,361
Net book value
At 31 December 2024	120	513	296	3,903	4,832
At 31 December 2025	364	478	176	3,192	4,210

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HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

12.	Intangible assets
	Group

	Computer software	Trademarks, brands and assumed contracts	Total
	£000	£000	£000
Cost
At 1 January 2024	168	76,118	76,286
Additions through business combinations	236	63	299
At 31 December 2024	404	76,181	76,585
Additions through business combinations	408	4,951	5,359
At 31 December 2025	812	81,132	81,944

	Computer software	Trademarks, brands and assumed contracts	Total
	£000	£000	£000
Accumulated amortisation and impairment
At 1 January 2024	11	47,213	47,224
Charge for the year	72	5,300	5,372
Impairment charge	-	4,599	4,599
Foreign exchange movement	-	(43)	(43)
At 31 December 2024	83	57,069	57,152
Charge for the year	101	4,389	4,490
Impairment charge	-	(1,397)	(1,397)
At 31 December 2025	184	60,061	60,245
Net book value
At 1 January 2024	157	28,905	29,062
At 31 December 2024	321	19,112	19,433
At 31 December 2025	628	21,071	21,699

Page 53

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025


Cost	15,839	15,019
Accumulated impairment	(8,450)	(8,450)
	7,389	6,569

					2025	2024
					£000	£000

Cost
At 1 January 2025 and 2024	15,019	15,019
Additions through business combinations	820	-
At 31 December 2025 and 2024	15,839	15,019
Accumulated impairment
At 1 January 2025 and 2024	8,450	6,902
Impairment recognised in the year	-	1,578
Exchange difference	-	(30)
At 31 December 2025 and 2024	8,450	8,450

The carrying value of the goodwill for the remaining CGUs are not individually material and therefore the assumptions are presented in aggregate. The forecasts have been prepared based on minimal growth and with an EBITDA of between 9.7% to 27.7%, except for where the results from the first half of 2025 indicate higher sales. Discount rates ranging between 9.5% to 32.9% have been applied.

Page 54

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

13.	Goodwill (continued)

Impairment charges have been recognised for goodwill and trademarks where the value in use of the CGU is less than the carrying value. Impairment charges have been recognised for the following CGUs:

	Impairment Charge	Impairment Reversal	NBV	Discount Rate
Impairment overview of Goodwill, Trademarks and Brands	£000	£000	£000	(%)
WPO	240	-	697	16.2
Trunki	-	-	-	9.9
Niimo	-	(1,268)	1,303	16.0
JNW Direct	-	(425)	381	29.3
DogRook	-	(290)	290	19.8
Premium Care	-	(173)	244	21.7
Clever Yellow	79	-	373	16.3
Earth Pearl	-	-	1,001	14.8
Bumco	-	(4)	943	18.4
Theraflow	-	-	-	20.4
Bazberry	-	(30)	30	21.9
AMZPets	-	(238)	238	15.8
Good Natured	-	-	708	12.5
All Other Brands	712	-	16,855	9.5-32.9

At 31 December 2025, the reversal of impairment of goodwill and trademarks was £1,397k on the CGUs identified with impairment. If the discount rate for the CGUs was increased by 3%, goodwill would remain the same and a further impairment loss of £1,583k would be recognised on trademarks. If sales growth was reduced by 3%, a further impairment loss of £5,381k would be recognised. These impairment losses would be split between goodwill and trademarks.

Impairment of goodwill of £Nil (2024 - £1,578k) was recognised and included under other expenses in the Consolidated Statement of Comprehensive Income. None of the goodwill is expected to be tax deductible.

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HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025


13.	Goodwill (continued)

The Group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired. Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating units ("CGUs") that are expected to benefit from that business combination identified according to the brands. The carrying amount of goodwill for each brand is as follows:
	2025	2024
	£000	£000


Tutti	5,858	5,858
All other brands	1,531	711
	7,389	6,569

All other brands consists of 2 CGUs where the individual goodwill is not material.

Assets with indefinite economic lives are tested for impairment annually, while all other intangible assets are assessed when there are indicators of impairment. Impairment assessments are performed for CGUs, and the recoverable amount has been determined by discounting the associated future cash flows over a five-year period with a terminal value. Management estimated the discount rate using post-tax rates that reflect current market assessments of the time value of money and the risks specific to the market in which the CGU operates. In preparing this assessment, the following assumptions have been made:

Boba

Boba Revenue growth is projected at -9% for 2026, -1% for 2027, 2% for 2028, 2% for 2029 and 2% for 2030 with an EBITDA margin around 21%. A discount rate of 12.5% has been applied.

Tutti

Tutti Revenue growth is projected at 17% for 2026, 28% for 2027, 21% for 2028, 2% for 2029 and 0% for 2030 with an EBITDA margin around 27%. A discount rate of 9.5% has been applied.

Page 56

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025


14.	Subsidiaries
	Details of the Group's material subsidiaries at the end of the reporting period are as follows:
	Name of subsidiary	Principal activity	Registered office	Proportion of ownership interest and voting power held by the Group (%)
				2025	2024

1) Onco Group Limited	E-commerce retail business	Wisteria Grange Barn, Pikes End, Pinner, Middlesex, HA5 2EX, England	100	100
2) KG Physio Ltd	E-commerce retail business	Wisteria Grange Barn, Pikes End, Pinner, Middlesex, HA5 2EX, England	100	100
3) Davaon Limited*	E-commerce retail business	Wisteria Grange Barn, Pikes End, Pinner, Middlesex, HA5 2EX, England	100	100
4) Boba Inc.	E-commerce retail business	1712 Pioneer Ave Ste 5580, Cheyenne, Wyoming 82001, USA	100	100
5) Heroes Iberia SLU	Support services	Calle Limonero 22, 28020 Madrid, Spain	100	100
6) Heroes Technology (US) LLC	E-commerce retail business	108 Lakeland Avenue, Dover, Delaware 19901, USA	100	100
7) Heroes Growth GmbH*	Dormant	Alter Guterbahnhof Ile, 22303 Hamburg, Germany	100	100
8) Heroes Retail Ltd*	Dormant	Wisteria Grange Barn, Pikes End, Pinner, Middlesex, HA5 2EX, England	-	100
9) Tutti Frutti Direct Holdings Ltd*	Holding Company	1068 High Road, London, N20 0QP, England	100	100
10) Tutti Frutti Direct Limited**	Wholesaler	1068 High Road, London, N20 0QP, England	100	100
11) Tutti Bambini (Xiamen) Ltd**	E-commerce retail business	Room 501 No. 8 Gaopubei Road, Jimei District, Xiamen, Fujian, China	100	100
12) Heroes Australia Pty Ltd**	E-commerce retail business	Level 26, 255 George St, Sydney, New South Wales 2000	100	-

Page 57

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

14.Subsidiaries (continued)

* Heroes Retail Ltd was dissolved on 21 January 2025; Tutti Frutti Direct Holdings Ltd was dissolved on 17 March 2026; Heroes Growth GmbH was dissolved on 30 March 2026; and Davaon Limited was dissolved on 31 March 2026.

** Indirectly held.

All subsidiaries above that are incorporated in England and Wales have taken advantage of the exemption from audit for the year ended 31 December 2025 as conferred by section 479A of the Companies Act 2006.

The companies marked as dormant have never traded.

Acquistion of iL Tutto

On 6 February 2025, the Group acquired 100% of iL Tutto through its subsidiary, Heroes Australia Pty Ltd. iL Tutto is an Australian company specialising in premium nursery furniture, including cots, nursing chairs and bassinets, complementing the Group’s existing product offering in the baby and child sector.

Under the executed Share Purchase Agreement, the total consideration transferred was AUD 12.1 million. The consideration comprised the closing payment and contingent consideration of AUD 2.9 million.

The acquisition has been accounted for as a business combination using the acquisition method. The following table summarises the allocation of the consideration transferred to the assets acquired and liabilities assumed at their acquisition-date fair values:

AUD million, unless otherwise stated	NBV	FV Adjustment	FV	Allocation of Consideration (%)	FV (£m)
Fixed Assets	0.1	-	0.1	0.8	-
NWC (excluding cash)	1.2	-	1.2	10.2	0.6
Deferred tax liabilities	-	(2.5)	(2.5)	(21.1)	(1.3)
Brand	-	10.2	10.2	84.4	5.1
Goodwill (including workforce)	0.3	2.6	2.9	24.3	1.5
Enterprise value	1.6	10.3	11.9	98.6	6.0
Net cash/(debt)	0.2	-	0.2	1.4	0.1
Consideration			12.1	100.0	6.1

Page 58

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

Acquistion of iL Tutto (continued)

The iL Tutto brand was identified as a separately recognisable intangible asset and was valued at AUD 10.2 million (£5.1 million). The valuation was determined using the multi-period excess earnings method, with the relief-from-royalty method used as a cross-check.

Goodwill of AUD 2.9 million (£1.5 million) was recognised, including the value attributed to the assembled workforce. The goodwill primarily reflects the expected benefits from extending the iL Tutto brand into new markets, including Amazon, and synergies arising from combining iL Tutto’s product ranges and management capabilities with those of the Group.

Acquisition-related costs amounted to £0.4m.

From the acquisition date to 31 December 2025, the iL Tutto brand contributed £11.2m of net revenue and £2.2m of net profit to the Group.


	Finished goods and goods for resale	16,571	13,267

The replacement cost of these items at 31 December 2025 was not materially different to the amount at
which they are included in the financial statements.

An impairment charge of £486k (2024 - £1,159k) was recognised in profit or loss in relation to Finished
goods and goods for resale during the year ended 31 December 2025.

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HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025


16.	Trade and other receivables

	Group
		2025	2024
		£000	£000


Trade receivables	4,561	3,465
Trade receivables - net	4,561	3,465
Prepayments and accrued income	1,718	1,269
Other receivables	1,049	871
Corporation tax recoverable	-	656
Total trade and other receivables	7,328	6,261
Current portion - trade receivables	4,561	3,465
Current portion - prepayments and accrued income	1,718	1,269
Current portion - other receivables	1,049	871
Current portion - taxation recoverable	-	656

Trade receivables, which are the only financial assets at amortised cost, are non-interest bearing and generally have an average of 7 days. Due to their short maturities, the carrying amount of trade and other receivables is a reasonable approximation of their fair value.

Of the trade receivables balance as of 31 December 2025, £0.5 million (2024 - £1.4m) is due from the Group's largest customer.

The ageing analysis of trade receivables is as follows:
	2025	2024
	£000	£000


In 0 to 30 days	3,550	2,739
In 31 to 60 days	625	466
In 61 to 90 days	122	75
More than 90 days	264	185
Total	4,561	3,465

Page 60

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

17.	Trade and other payables

	Group
		2025	2024
		£000	£000


Trade payables	5,297	4,784
Other payables	5,272	2,979
Total financial liabilities, excluding loans and borrowings, classified as financial liabilities measured at amortised cost	10,569	7,763
Other payables - tax and social security payments	1,671	1,065
Total trade and other payables	12,240	8,828
Current portion - trade payables	5,297	4,784
Current portion - other payables	6,943	4,044
Total current portion	12,240	8,828

Trade payables comprise amounts outstanding for trade purchases and ongoing costs, and together with loans and borrowings and other payables are the only financial liabilities measured at amortised cost. The average credit period taken for trade purchases is 30 days (2024 - 30 days). No interest is charged on the outstanding balance.

The directors consider that the carrying amount of trade and other payables is a reasonable approximation of their fair value.

Page 61

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

18.	Loans and borrowings
	Group
		2025	2024
		£000	£000

Non-current
Other loans	80,427	74,078
Lease liabilities	3,171	3,493
	83,598	77,571
Current
Lease liabilities	312	720
Total loans and borrowings	83,910	78,291

Page 62

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

18.Loans and borrowings (continued)

As of 31 December 2025, other loans represent a facility that the Company has taken out, the total
amount it can drawdown is US$150m and the minimum is US$500k. The interest payable is equivalent to
13% per annum, made up of a 5% PIK rate and 8% cash pay rate. The loan is repayable in December
2027. The loan is secured over the trading subsidiaries of the Group.

Other loans are secured by a fixed charge over the Group's intellectual property, shares and equity held,
a specific cash deposit account, all assets of Tutti Frutti Direct Limited, contractual receivables, and fixed
and floating charges over the remaining assets of the Group. The facility is subject to quarterly net debt
leverage and minimum cash position covenant tests, for which full waivers have been obtained through to
maturity.

Covenants

Under the Group's Senior Facilities Agreement, the Company is required to comply with two ongoing
financial covenants.

1.Total Net Leverage ratio covenant:

The Group must ensure that its Total Net Leverage Ratio (Consolidated Total Net Debt divided by
Consolidated Pro Forma EBITDA) does not exceed prescribed maximum levels for each testing period.
The covenant is tested quarterly based on the Group's quarterly or annual financial statements and
reported to lenders via Compliance Certificates.

2.Minimum Cash Position Covenant:

The Group must maintain a minimum consolidated cash position of at least US$5 million at all times (the
"Minimum Cash Position Covenant"). Both financial covenants remain in force while any amounts are
outstanding or commitments remain available under the Senior Facilities Agreement. Failure to comply
may constitute an Event of Default, subject to certain cure rights relating to equity injections in the case of
leverage covenant breaches.

In the event that a covenant was not complied with, the loan may have become repayable on demand,
subject to the cure rights set out in the Senior Facilities Agreement.

In August 2025, the Group entered into an amendment letter to the senior credit facility agreement and
released the Group from the net leverage and minimum liquidity covenants until the termination date.

Page 63

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

Derivative financial assets
	Forward foreign exchange contracts	-	2,034

	Total derivative financial assets	-	2,034

	Current and non-current
	Current	-	2,034

					2025	2024
					£000	£000

Derivative financial liabilities
	Forward foreign exchange contracts	3,269	-

	Total derivative financial liabilities	3,269	-

Current

3,269

In August 2021, the Group entered into an agreement to issue warrants to a loan facility provider. An
initial tranche of 2% of the fully diluted share capital of the Group as at the date of the instrument
(116,289 warrants) were issued. During the period ended 31 December 2022 an additional 256,273
warrants were issued. There were no warrants outstanding at 31 December 2024 or 2025. The exercise
price of the warrants was the lower of (1) pre-money equity valuation of the fully diluted share capital of
the Group equal to USD 100 million, or (2) the pre-money valuation of the fully diluted share capital of the
Group based on the most recently closed issuance of shares of the Group prior to the proposed exercise
date of the warrants. The exercise period of the warrants was commenced immediately on the first
drawdown of loan facility and had no expiry date.

The fair value of warrants was calculated by subtracting the estimated exercise price from the share
issue price on transactions close to the reporting date. At 31 December 2025, the fair value of these
warrants was concluded to be £Nil (2024 - £Nil). The fair value was determined with reference to the
restructuring, where the share capital of the Group was bought in exchange for a nominal consideration
and a reduced equity stake in the new parent entity. Under IFRS 13, this fair value measurement is
classified under the fair value hierarchy as Level 3.

As at 31 December 2025 the Company had forward foreign exchange contract commitments to buy
$11,726,000 and $58,882,500 (2024 - to buy $11,381,000 and $58,306,500) and sell $10,673,000 and
$55,390,500 (2024 - to sell £Nil). All outstanding contracts mature within 1 year (2024 - 1 year).

The fair value of forward foreign exchange contracts are valued using observable market inputs, under
the fair value hierarchy as Level 2.

Page 64

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

20.	Share capital

Authorised	2025 Number	2025 £	2024 Number	2024 £
Shares treated as equity
Ordinary shares of £0.000001 each	7,216,157	7	7,216,157	7
	7,216,157	7	7,216,157	7
Issued and fully paid	2025 Number	2025 £	2024 Number	2024 £
Ordinary shares of 0.000001 each
At 1 January	7,216,157	7	2,000,000	2
Shares issued	-	-	199,431	-
Shares re-designation	-	-	5,016,726	5
At 31 December	7,216,157	7	7,216,157	7
	2025 Number	2025 £	2024 Number	2024 £
A Ordinary shares of 0.000001 each
At 1 January	-	-	2,614,389	3
Shares re-designation	-	-	(2,614,389)	(3)
At 31 December	-	-	-	-
	2025 Number	2025 £	2024 Number	2024 £
Series A shares of £0.000001 each
At 1 January	-	-	2,083,371	2
Shares issued	-	-	318,966	-
Shares re-designation	-	-	(2,402,337)	(2)
At 31 December	-	-	-	-

Page 65

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

Share capital (continued)

On 28 March 2024, the Company issued 318,966 Series A shares with a nominal value of £0.000001 per share for consideration of £15.19 per share. Share premium of £4,841,000 was recognised as a result. This share issue was due to conversion of Advanced Subscription Agreements.

Between 4 June 2024 and 1 July 2024, the Company issued the following shares;

∙110,538 Ordinary shares with a nominal value of £0.000001 for consideration of £0.000001 per share.

∙62,588 Ordinary shares with a nominal value of £0.000001 for consideration of £0.0085 per share. Share premium of £532 was recognised as a result.

∙5,874 Ordinary shares with a nominal value of £0.000001 for consideration of £0.0087 per share. Share premium of £51 was recognised as a result.

∙20,378 Ordinary shares with a nominal value of £0.000001 for consideration of £0.0097 per share. Share premium of £198 was recognised as a result.

∙53 Ordinary shares with a nominal value of £0.000001 for consideration of £4.57 per share. Share premium of £242 was recognised as a result.

On 31 October 2024, the Company's "A Ordinary" and "Series A" shares were re-designed as "Ordinary" shares.

Page 66

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

21.

Reserves

Share premium reserve

The share premium account is used to record the aggregate amount or value of premiums paid when the Company's shares are issued at an amount in excess of nominal value.

Share option reserve

This reserve relates to the fair value of the options granted which has been charged to the statement of profit or loss over the vesting period of the options and related taxation recognised in equity.

Foreign currencies translation reserve

The foreign exchange reserve represents the cumulative movements in foreign exchange.

Retained earnings/accumulated deficit

This reserve relates to the cumulative retained earnings less amounts distributed to shareholders.

Page 67

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

22.	Reconciliation of liabilities arising from financing activities

Group
	At 31 December 2024	Cash flows	Non-cash changes	At 31 December 2025
	£000	£000	£000	£000
Other loans	74,078	2,229	4,120	80,427
Lease liabilities	4,213	(710)	(20)	3,483
	78,291	1,519	4,100	83,910

	At 31 December 2023	Cash flows	Non-cash changes	At 31 December 2024
	£000	£000	£000	£000
Other loans	56,132	8,572	9,374	74,078
Advanced share subscriptions	4,841	-	(4,841)	-
Lease liabilities	4,935	(685)	(37)	4,213
	65,908	7,887	4,496	78,291
Company
	At 31 December 2024	Cash flows	Non-cash changes	At 31 December 2025
	£000	£000	£000	£000
Other loans	74,078	2,229	4,120	80,427
	74,078	2,229	4,120	80,427

	At 31 December 2023	Cash flows	Non-cash changes	At 31 December 2024
	£000	£000	£000	£000
Other loans	56,132	8,572	9,374	74,078
Advanced share subscriptions	4,841	-	(4,841)	-
Lease liabilities	37	-	(37)	-
	61,010	8,572	4,496	74,078

Page 68

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

23.	Leases
	Group

	(i) Leases as a lessee


	Right-of-use assets Right-of-use assets relate to the leasehold property only. The right-of-use asset is included in note 11, Property, plant and equipment.

Lease liabilities are due as follows:
	2025	2024
	£000	£000

Contractual undiscounted cash flows due
Not later than one year	985	1,206
Between one year and five years	3,240	3,768
Later than five years	-	1,730
	4,225	6,704


	Lease liabilities included in the Consolidated Statement of Financial Position at 31 December	3,483	4,213


Non-current	3,171	3,493
Current	312	720

The following amounts in respect of leases have been recognised in profit or loss:
	2025	2024
	£000	£000

	Interest expense on lease liabilities	161	197
	Short-term expense	710	452

Page 69

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

24.	Financial instruments - fair values and risk management
	24.1 Accounting classifications and fair values
	The Group's financial instruments comprise cash and cash equivalents, loans and borrowings, derivative financial assets and liabilities and items such as trade payables and trade receivables which arise directly from its operations. The main purpose of these financial instruments is to provide finance for the Group's operations. The Group's operations expose it to a variety of financial risks including credit risk, liquidity risk, interest rate risk and foreign currency exchange rate risk. Given the size of the Group, the directors have not delegated the responsibility of monitoring financial risk management to a sub-committee of the board. The policies set by the board of the directors are implemented by the Group's finance department.
			Carrying amount
	31 December 2025	Note	Fair value - hedging instruments	Mandatorily at FVTPL - others	Total
			£000	£000	£000

Financial assets not measured at fair value
Trade and other receivables	16	-	7,328	7,328
Cash and cash equivalents	27	-	3,723	3,723
Financial liabilities measured at fair value
Forward exchange contracts	19	3,269	-	3,269
Financial liabilities not measured at fair value
Other loans	18	-	80,427	80,427
Lease liabilities	18	-	3,483	3,483
Trade and other payables	17	-	12,240	12,240

Page 70

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

24.Financial instruments - fair values and risk management (continued)

24.1 Accounting classifications and fair values (continued)

		Carrying amount
31 December 2024	Note	Fair value - hedging instruments	Mandatorily at FVTPL - others	Total
		£000	£000	£000

Financial assets measured at fair value
Forward exchange contracts	19	2,034	-	2,034
Financial assets not measured at fair value
Trade and other receivables	16	-	6,261	6,261
Cash and cash equivalents	27	-	4,273	4,273
Financial liabilities not measured at fair value
Other loans	18	-	74,078	74,078
Lease liabilities	18	-	4,213	4,213
Trade and other payables	17	-	8,828	8,828

Page 71

HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

24.Financial instruments - fair values and risk management (continued)

24.2 Foreign currency risk management
The Group is exposed to foreign currency exchange rate risk. The following table details the Group's financial assets and financial liabilities denominated in a currency other than the functional currency of the entity to which they relate at reporting dates, presented in £ equivalents.
	Liabilities		Assets
	2025	2024	2025	2024
	£000	£000	£000	£000

EUR	1,147	1,003	512	959
USD	92,254	74,106	2,027	1,024
Others	4,020	826	1,456	271
	97,421	75,935	3,995	2,254

Financial assets in currencies other than the functional currency of the Group comprised cash and cash equivalents and trade and other receivables.

Financial liabilities in currency other than the functional Currency of the entity comprised trade and other payables and loans and borrowings.

As at 31 December 2025 the Company had forward foreign exchange contract commitments to buy $11,726,000 and $58,882,500 (2024 - to buy $11,381,000 and $58,306,500) and sell $10,673,000 and $55,390,500 (2024 - to sell £Nil). All outstanding contracts mature within 1 year (2024 - 1 year).

If the US dollar and euro had weakened 10% against sterling with all other variables held constant, post-tax losses would have been reduced by £9,086k (2024 - £6,648k). Conversely, if the US Dollar and Euro had strengthened by 10% against sterling with all other variables held constant, post-tax losses would have been increased by £8,260k (2024 - £7,313k).

24.3 Capital risk management

The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders and maintain an optimal capital structure to reduce the cost of capital.

The Group defines capital as being share capital plus all reserves, which amounted to a deficit of £41,339k as at 31 December 2025 (2024 - £30,321k). The board of directors monitors the level of capital as compared to the Group's long term debt commitments and adjusts the ratio of debt to capital as is determined to be necessary, by issuing new shares, reducing or increasing debt, paying dividends and returning capital to shareholders.

The Group is subject to externally imposed capital requirements in the form of a net leverage ratio covenant imposed by a lender, as set out in note 18.

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HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

24.Financial instruments - fair values and risk management (continued)

24.4 Credit risk

The Group's assets exposed to credit risk are primarily attributable to its cash and cash equivalents and trade receivables. The maximum exposure of such assets to credit risk is their carrying amounts as of the reporting date. As of 31 December 2025, 97% (2024 - 97%) of the Group's cash and cash equivalents were held by multi-national financial institutions with an AA3 credit rating. Management monitors the credit risk of financial institutions based on publicly available information. Trade receivables are mainly derived from sales to customers through Amazon and well-established retailers. Management considers the credit risk of trade receivables is minimal.

24.5 Liquidity risk
The Group actively monitors debt finance that is designed to ensure it has sufficient available funds for operations and planned expansions. The Group monitors its levels of working capital to ensure that it can meet its debt repayments as they fall.
Liquidity and interest risk tables The following table shows the contractual maturities of the Group's financial liabilities (excluding derivative financial liabilities), all of which are measured at amortised cost.
	Carrying amount	Total	Within 1 year	1 to 2 years
	£000	£000	£000	£000

31 December 2025
Trade and other payables	12,240	12,240	12,240	-
Loans and borrowing	80,427	80,427	-	80,427
	92,667	92,667	12,240	80,427

			Carrying amount	Total	Within 1 year	1 to 2 years
			£000	£000	£000	£000

31 December 2024
Trade and other payables	8,828	8,828	8,828	-
Loans and borrowings	74,078	74,078	-	74,078
	82,906	82,906	8,828	74,078

The contractual maturity of lease liabilities are not included above but are presented in note 23.

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HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

25.	Related party transactions

The Company has taken advantage of the exemption in IAS 24 to not disclose transactions with wholly owned Group entities.

During the period the Group paid salaries to other related parties (domestic partners of key management personnel) totalling £123k (2024 - £235k).

26.	Controlling party

As at year end, the controlling party of Heroes Technology Limited is Crayhill Capital GenPar LLC.

On 3 July 2024 HTL Holdco Limited acquired 100% of the Company's share capital because of a restructuring in the group. HTL Holdco Limited is therefore the Company's immediate parent at 31 December 2025. HTL Holdco Limited's registered office is Suite 1, 7th Floor 50 Broadway, London, United Kingdom, SW1H 0DB.


Cash at bank available on demand	3,723	4,273

Cash and cash equivalents in the statement of cash flows	3,723	4,273

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HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

28.	Subsequent events

Senior facility amendments

Following the year end, the Group agreed further amendments to its senior lending facilities. These amendments included the capitalisation of interest for a defined period, and an extension of maturity. The revised terms provide additional financial flexibility and support the Group’s liquidity position. Please see borrowings above for further details.

Shopify revenue-based financing facility

In March 2026, the Group entered into a revenue-based financing arrangement with Shopify Capital in the amount of USD 250k. The facility was drawn to support short-term working capital requirements and is repaid through a fixed percentage of daily sales.

The financing was entered into following a review of available funding options provided by Shopify Capital and forms part of the Group’s broader liquidity management framework, which includes the use of short-term, flexible financing instruments linked to trading performance.

The Group continues to monitor its liquidity position on an ongoing basis and considers access to revenue-based financing as an ancillary funding source to support working capital fluctuations. The facility does not include financial covenants; however, repayment is inherently linked to future sales performance, which may result in variability in cash outflows over time.

Additional borrowings

The Group utilised a Flexport working capital facility, shared across several segments. The facility provides a maximum exposure of USD 2.5m and is structured as a short-term working capital solution linked to trade payables and receivables timing. The facility carries an effective cost of approximately 12% (comprising a 3.15% charge per 90-day period and a 15bps monitoring fee). From July 2026, the facility is expected to be reduced in stages from USD 2.5m to USD 1.5m. At the same time, the repayment structure is expected to transition from a 90-day full repayment model to a combined 45-90-day repayment structure. Utilisation varies depending on payment terms (typically 45–90 days) and the timing of new invoice generation, and therefore fluctuates in line with working capital movements across the Group. The arrangement forms part of the Group’s broader working capital financing framework.

US tariff claim

Subsequent to the reporting date, developments relating to US tariff regulations resulted in a reimbursement of previously incurred tariff charges. USD 2.1m plus interest, recognised in June 2026.

Minnesota Warehouse

The Group completed the transition of its Minnesota warehouse operations to a third-party logistics provider, successfully transferring inventory and fulfilment activities without significant operational disruption.

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HEROES TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

Subsequent events (continued)

Changes in the composition of the Management Board

∙Neil Sharma-Burford (Executive Director) resigned on 5 February 2026.

∙Duncan Miller (Executive Director) was appointed on 4 February 2026.

∙Alessio Bruni resigned from his position as Chief Operating Officer on 1 March 2026.

∙Giancarlo Bruni resigned from his position as Chief Financial Officer on 1 March 2026.

∙Riccardo Bruni resigned from his position as Chief Information Officer on 1 March 2026.

29.	Disclosure exemptions - Parent Company individual financial statements

In preparing its individual financial statements under FRS 101, the Company has taken advantage of the following disclosure exemptions permitted by FRS 101:

∙the requirements of IFRS 7 Financial Instruments: Disclosures

∙the requirements of paragraphs 91 to 99 of IFRS 13 Fair Value Measurement

∙the requirements of the second sentence of paragraph 110 and paragraphs 113(a), 114, 115, 118, 119(a) to (c), 120 to 127 and 129 of IFRS 15 Revenue from Contracts with Customers

∙the requirements in paragraph 38 of IAS 1 Presentation of Financial Statements to present comparative information in respect of:

- paragraph 79(a)(iv) of IAS 1

- paragraph 73(e) of IAS 16 Property, Plant and Equipment

- paragraph 118(e) of IAS 38 Intangible Assets

∙the requirements of paragraphs 10(d), 10(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D, 111 and 134-136 of IAS 1 Presentation of Financial Statements

∙the requirements of IAS 7 Statement of Cash Flows

∙the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors

∙the requirements of paragraph 74A(b) of IAS 16

∙the requirements of paragraphs 17 and 18A of IAS 24 Related Party Disclosures

∙the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member

∙the requirements of paragraphs 130(f)(ii), 130(f)(iii), 134(d) to 134(f) and 135(c) to 135(e) of IAS 36 Impairment of Assets

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