Final Results Year Ended 31 December Notice of AGM

MicroSalt Plc (AIM: SALT) , a leading manufacturer of full-flavour natural salt with approximately 50% less sodium, is pleased to announce its first set of full-year results following the successful admission of the Company to the AIM market of the London Stock Exchange in February 2024.

2024 was a foundational year for MicroSalt as we began receiving large, recurring purchase orders for our bulk product in Q4 2024 and completed the R&D for new patent pending product (MicroSalt Premium) designed for the Quick Service Restaurants (QSR) and Fast Service Restaurants (FSR) sales channels.

In late 2024, we established regular and repeating revenue with one of the world's leading food and beverage companies across several countries (Mexico, US, Canada) and an international seasoning and flavour supplier. This resulted in Q1 2025 bulk sales exceeding total bulk sales in FY 2024.

Highlights include:

• Repeat purchase orders totalling 44mT (metric tonnes) of MicroSalt were received from Customer 1, the Mexican business of one of the largest beverage and snack food companies in the world. Most of this volume occurred in Q4 and has continued on a monthly basis throughout 2025.
• Repeat purchase orders from the Canadian business unit of one of the largest beverage/snack food companies in the world were received totalling 7.3 mT. Most of this volume occurred in Q4 and has continued on a monthly basis throughout 2025.
• Repeat purchase orders were received from the US business unit of one of the largest beverage/snack food companies in the world totalling 5.9mT. Most of this volume occurred in Q4 and has continued monthly throughout 2025.
• Continued to build a strong pipeline with significant volume customer prospects at advanced stages with a range of national and multi-national companies with scope for MicroSalt to be nominated as a supplier on larger product lines once established with these key customers. Taken altogether, we are reaffirming the guidance of revenue of at least US$2.5 million for FY 2025, representing almost 300% increase versus FY 2024, with further growth expected. In Q1 2025, our bulk sales exceeded total bulk sales made during FY 2024.
• R&D efforts delivered a patent pending product line extension called MicroSalt Premium. This innovation specifically addresses the bulk density of the MicroSalt base product to enhance its use in the QSR/FSR sales channels. The French fry category alone is significant with over 2 billion servings annually in the US, with the new revenue potential in the foodservice channel with restaurants, hospitals, hotels, heartcare and single serve packaging. The product is in final consideration for rollout with a top international brand in Q3 of 2025.
• FY 2024 revenue of US$ 0.75m (2023: US$ 0.6m) reflects primarily B2C sales, with a material ramp up in B2B sales commencing in Q4 2024 into 2025.
• The net loss of US$ 5.8m (2023: US$ 3.5m) reflects the one-off nature of IPO costs ($1.3m), as well as what we also consider a non-recurring R&D spend in 2024 related to the launch of Microsalt Premium in January 2025, and finally preparation for the launch of the first two major food manufacturing customers within the Company's B2B solution. The Company also expects significant improvement to its gross margins in 2025, as our sales mix is becoming much more reliant on bulk sales at the expense of lower margin consumer sales of its B2C products which made up most of our FY 2024 sales mix.

Post-period end highlights

• In April 2025, we announced that total bulk sales in Q1 2025 reached 98mT (216,190 lbs.) setting a new Company record and establishing three consecutive quarters of sales growth. Importantly, bulk revenue in Q1 2025 represents 142% of the total bulk revenue for all of 2024. This includes shipments to existing markets of Canada, Mexico, United States and newly opened markets in Great Britain and Belgium.

The launch of our MicroSalt Premium product line in January targeting the quick service and fast service restaurant (QSR/FSR) market with a focus on French fries, has been very well received and is already in final consideration for rollout with a top international brand in Q3 of this year. This further demonstrates the expanding footprint of MicroSalt's functionality beyond just topical applications and into new markets such as cheese, peanut butter, chicken breading and coatings.

· In February 2025, we took action to strengthen our balance sheet ahead of an anticipated increase in orders through a successful and oversubscribed fundraising of £2.3 million (c.US$2.9 million). The proceeds of the Subscription are being used mainly to invest in inventory to satisfy expected B2B customer demand in 2025 from leading snack manufacturers and targeting the very significant "French fry" market with our MicroSalt Premium product. The Company has already received positive early interest from a leading global fast-food chain for application to a number of their products, including French fries.

Rick Guiney, CEO of MicroSalt, commented:

"This has been a transformational year for MicroSalt. Following our successful IPO, and with continued evidence of the timeliness and essential nature of MicroSalt's products, we are now a recognised and preferred choice for product reformulation globally.

"MicroSalt's progress is reflected in the material improvement in revenue generation during Q4 2024 that continued into the early months of 2025, driven by recurring orders from one of the world's largest snack food businesses. The repeat nature of orders and the work undertaken to date to reformulate some of the world's leading snack food brands provide us with clear revenue visibility and the ability to reaffirm 2025 revenue guidance of at least $2.5 million.

"We are very excited about the growth of our MicroSalt products and its ever-widening acceptance within the food manufacturing community. Our growth story is now evidenced by growing sales volume, the number of topical applications, and countries served. Continued regulatory support for lower sodium food products acts as a catalyst to our growth both in the US and across the globe in short and long term."

Notice of Annual General Meeting

The Annual General Meeting ("AGM") of MicroSalt Plc will be held at the offices of Bird & Bird LLP, 12 New Fetter Lane, London EC4A 1JP on 27 June 2025 at 12.30 p.m. (British Summer Time). The annual report and the formal notice of the 2024 AGM will be posted to shareholders on 2 June 2025.

The notice of AGM will be available to review on the Company's website at: www.microsalt.co

For more information, please visit www.microsaltinc.co, follow on X @MicroSaltPLC or contact:

Tim Thompson / Alison Allfrey / Anna Probert microsalt@flagstaffcomms.com

Chief Executive Officer's statement

Introduction

The Company's mission is to reduce excess sodium consumption which significantly contributes to hypertension and heart disease, by providing a full-flavour salt with approximately 50% less sodium than traditional salt for food manufacturers and consumers.

To achieve this, the Group has developed a patent protected and scalable manufacturing process that produces a salt crystal that is approximately 100 times smaller than traditional salt. Due to its micron sized particles, MicroSalt has improved adhesion to food (compared with traditional salt crystals) and dissolves much faster on the tongue, thereby delivering the same sense of saltiness as traditional snacks but using approximately half the amount of sodium.

In 2024, we have established regular and repeating revenue with one of the world's leading food and beverage companies across a number of countries (Mexico, US, Canada) as well as an international seasoning and flavour supplier. We have established an active B2B pipeline for future growth and we have created a groundbreaking product innovation that is already opening up significant additional revenue opportunities in 2025. Specifically, in 2024 we focused on two key initiatives:

· Worked with existing and new B2B accounts on the rollout of bulk Microsalt into a number of product lines across several international food manufacturers. This included expanding our presence to include MicroSalt® on additional food products within the same customer and to vertically integrate into the seasoning and flavour manufacturers. Our go to market efforts have extended across continents, with inroads in Asia, Australia, South Africa, the UK, Germany, Canada, Latin America and South America, all of which have boosted our already vibrant sales pipeline, and resulted in significant sales volume increases in Q4 2024 and Q1 2025.

· Completed R&D and final testing of our new patent pending product (Microsalt Premium) designed for the Quick Service Restaurants (QSR) and Fast Service Restaurants (FSR) sales channels. Premium not only provides entry into the foodservice segment including restaurants, hotels, hospitals, healthcare and single serve packaging, it provides a foot hold into the entire lower sodium efforts associated with the fast-food channel (Fries, bread, cheese, chicken, etc). In the US alone, over 4.5 billion pounds of French fries were consumed each year, with 2 billion orders from just the fast-food industry.

This work resulted in our Q1 2025 bulk sales alone exceeding our 2024 B2B sales. Total bulk sales in Q1 2025 reached 98mT (216,190 lbs.) setting a new Company record and establishing three consecutive quarters of sales growth.

Looking ahead, our future is extremely bright, as evidenced by growing sales volume, an increased number of topical applications, expanded sales channels, and countries served. Continued regulatory support for lower sodium food products acts as a catalyst to our growth both in the US and across the globe and safeguards the longevity of MicroSalt as a key component.

Financial summary

The Company's revenue of US$0.75m (2023: US$0.57m) and net loss of US$5.4m (2023: US$3.5m) are reflective of the costs associated with the IPO ($1.3m), R&D associated with the launch of the Premium product and preparation for the launch of the first two major food manufacturing customers within the Company's existing B2B solution.

This groundwork resulted in significant B2B sales volume increase in Q4 2024, which continued well into 2025.

Accordingly, most of the revenue in 2024 was D2C (Direct to Consumer). With initial B2B orders received in the latter part of 2024 and multiple other B2B opportunities in various stages of testing, combined with IPO readiness preparation, we expect bulk ingredient sales to become vast majority of our sales mix in 2025 and beyond.

Inventories increased to US$0.7m (2023: US$0.6m), predominately due to an increase in raw materials, again in preparation for the expected bulk orders from the Company's first two major food manufacturing B2B customers (Customers 1, 2).

Trade and other receivables decreased to US$0.9m (2023: US$1.3m), predominately due to IPO deferred costs included in 2023, which completed 1 February 2024.

Trade and other payables decreased to US$1.4m (2023: US$1.7m), predominately due to payments to trade payables post IPO.

Borrowings also increased to US$2.7m (2023: US$2.5m), predominately due to increases in the convertible loan notes and its interest issued by Tekcapital Group to MicroSalt prior to the IPO.

Operations summary

A key focus of the business during 2024 was of our larger-volume B2B opportunities with a number of multinational Fast-moving consumer goods (FMCG) companies and food manufacturers. Several of these opportunities completed the R&D, production and consumer testing phases. In particular, the Group was an approved supplier of Customers 1 and 2, which although separate entities, operate under the same group. Customer 1, (which has 80% of the Mexican snack food market) launched three existing popular products using MicroSalt in Q3/Q4 for which 44 mT of MicroSalt were delivered. Customer 1 also provided non-binding annualised volume targets, across a number of items and geographies. Furthermore, the Company began negotiating a joint development agreement along with additional item roll outs with Customer 2 which is expected to be executed in the second half of 2025.

R&D efforts delivered a patent pending product line extension, MicroSalt Premium. This innovation specifically addresses the bulk density of the MicroSalt base product to enhance its use in the QSR/FSR sales channels. The French fries category alone is significant with over 2 billion servings annually in the US, with the new revenue potential in the foodservice channel with restaurants, hospitals, hotels, heartcare and single serve packaging.

Sales and marketing

MicroSalt attended a number of US based and international food shows, which has been the core focus of its sales and outreach efforts. In 2024, the Company also attended shows and events in the UK, Canada, Germany, France and Dubai. These are in addition to the major industry events in the US market. These events provide venues for live demonstrations of MicroSalt and in person exchanges with both new and existing prospects. This has resulted in an extremely vibrant pipeline of pending sales successes while representing a cross section of company sizes and geographies.

The Company also invested actively in brand awareness via social media campaigns, LinkedIn, newsletters and customer educational pieces in order to provide industry exposure to Microsalt and its capabilities. The Company also appointed British celebrity chef Jack Stein as a Brand Ambassador. Post-period end, the Company also added new sales executives to its team to service the multitude of commercial opportunities in its pipeline.

Intellectual property

In May 2024 the United States Patent and Trademark Office granted and issued MicroSalt's patent entitled 'Low Sodium Salt Composition'. The Patent concerns the production of MicroSalt having claims directed to a low-sodium salt that adheres better to foods than a traditional salt that is not adhered to a carrier particle, and that is produced according to MicroSalt's claimed improved production process. An additional patent has also been applied for and is pending relative to the manufacturing process of MicroSalt Premium.

Political/regulatory update

The World Health Organisation (WHO) has set a target of reducing global sodium intake by 30% by 2025, which it estimates will save 7 million lives by 2030. WHO research also found that every US$1 spent on sodium reduction translates to US$12 in healthcare cost savings for treating cardiovascular disease. Governmental pressure continues to increase across the UK, the EU, and Latin America with new regulations in Canada for 2025 regulatory efforts. Additionally, local dieticians and purchasing authorities are taking action, regardless of any legal mandates, to lower sodium.

The US FDA has issued initial guidance on pending front of pack (F.O.P) labels highlighted high, medium or low as it pertains to sodium, fat, and sugar. We expect this will force all US based manufacturers to examine their respective sodium levels with the understanding that high sodium levels will no longer be isolated to the back of the package. Items labelled as high may also be subject to further restrictions as governmental regulations continue, thereby incentivising the food industry to provide healthier, lower sodium food.

Current trading and outlook

2024 was a pivotal year for MicroSalt, marked by foundational efforts and strategic growth. It was a year of building as we promote our vision of a healthier future through reduced sodium in today's diets. We are discovering more and more possibilities and commercial opportunities for 2025 and beyond.

· Q1 2025 total bulk sales reached 98mT (216,190 lbs.) setting a new Company record and establishing three consecutive quarters of sales growth. Importantly, bulk revenue in Q1 2025 represents 142% of the total bulk revenue for all of 2024. This includes shipments to existing markets of Canada, Mexico, United States and newly opened markets in Great Britain and Belgium. The Company also expects significant improvement to its gross margins in 2025, as the sales mix is becoming much more reliant on bulk sales at the expense of lower margin consumer sales of its B2C products which made up most of our FY 2024 sales mix.

• On 1 February 2025, the Company completed its second fundraise, raising approximately £2.4m (US$3.1m). The proceeds of the fundraise are being used mainly to invest in inventory to satisfy expected B2B customer demand in 2025.
• The launch of our MicroSalt Premium product line in January 2025 targeting the quick service and fast service restaurant (QSR/FSR) market with a focus on French fries, has been very well received and is already in final consideration for rollout with a top international brand Q3 of this year.
• New sales staff were added to specifically address the opportunity for MicroSalt Premium within QSR/FSR market.

The Group throughout 2024 and Q1 2025 has proven it is fundamentally strong in its structure, financing, IP, market opportunity and product acceptance to support our unequivocal belief in its future as a dominant supplier as the world turns to lower sodium options.

Finally, I must recognise, on behalf of the Board, our sincere thanks to all stakeholders in the business who have supported us and are making possible the achievement of our mission and objectives.

Rick Guiney

Chief Executive Officer

Consolidated statement of profit or loss and other comprehensive income

Other comprehensive income

Items that may or may not be recognised in profit or loss:

The notes on pages 11 to 30 form part of these financial statements

Consolidated statement of financial position

Rick Guiney

Chief Executive Officer

The notes on pages 11 to 30 form part of these financial statements

Consolidated statement of changes in equity

The notes on pages 11 to 30 form part of these financial statements

Consolidated statement of cash flows

The notes on pages 11 to 30 form part of these financial statements

Notes to the consolidated financial statements

General information

MicroSalt Plc (the "Company") is a private company limited by shares and registered and incorporated in England and Wales. The registered office is 12 New Fetter Lane, London, United Kingdom, EC4A 1JP.

Accounting policies

2.1 Basis of preparation

These consolidated financial statements have been prepared in accordance with UK-adopted International Accounting Standards ("IFRS").

New standards, amendments and interpretations

Standards and interpretations which are effective in the current year

None of the standards which became effective during the period which are applicable to the Group, have had a material impact.

Standards and interpretations that are not yet effective

2.2 Going concern

The Directors have assessed the ability of the Group to continue as a going concern using cash flow forecasts. The Group meets its day to day working capital requirements through cash raised from the admission to AIM and revenue sales. On 1 February 2025, the Company completed its second raise on the AIM Market of the London Stock Exchange, raising approximately £2.4m (US$3.1m) in order to solidify its funding to continue its aggressive growth strategy including R&D, sales support and production requirements. The Directors are satisfied that there are sufficient resources to continue in business for the foreseeable future and for at least 12 months from the date of signing these financial statements.

Notes to the consolidated financial statements (continued)

Accounting policies (continued)

Furthermore, the Directors are not aware of any material uncertainties that may cast significant doubt upon the Group's ability to continue as a going concern. They are mindful of the ongoing conflict in Russia and Ukraine and rising costs of inflation but are confident they have appropriate plans in place to mitigate any such risk in relation to this. Therefore, the financial statements continue to be prepared on the going concern basis.

2.3 Revenue recognition

IFRS 15 "Revenue from Contracts with Customers" is a principle-based model of recognising revenue from contracts with customers. The model comprises five steps with revenue being recognised when control over goods and services are transferred to the customer.

The Group's revenue consists of product sales. Revenue is recognised when the Group delivers a product to the customer. Payment of the transaction price is due immediately when the customer purchases the product and takes delivery or in the case of certain business to business transactions on credit terms.

Revenue is measured at the fair value of the consideration received, excluding discounts, rebates and sales taxes or duty.

2.4 Basis of consolidation

The consolidated financial statements present the results of the Company and its subsidiaries as if they form a single entity.

Profit or loss and each component of other comprehensive income are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When changes in ownership in a subsidiary do not result in a loss of control, the non-controlling shareholders' interests are initially measured at the non-controlling interests' proportionate share of the subsidiaries net assets. Subsequent to this, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests' share of subsequent changes in equity.

When necessary, adjustments are made to the financial information of subsidiaries to bring their accounting policies in line with the Group's accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

2.5 Other operating income and grants

Other operating income represents all other income received by the Group. This includes R&D Expenditure Credits which are a form of government grant.

Government grants are recognised at their fair value where there is a reasonable assurance that the grant will be received, and the Group will comply with all attached conditions. Government grants relating to costs are deferred and recognised in the statement of profit or loss and other comprehensive income over the period necessary to match them with the costs that they are intended to compensate.

The grant income received has been accounted for in accordance with IAS 20 'Accounting for Government Grants and Disclosure of Government Assistance' and is shown in other operating income in the statement of profit or loss and other comprehensive income whilst research and development expenditure is shown gross of grant income.

2.6 Finance expense

Finance expense comprises of interest payable on convertible loan notes which are expensed in the period in which they are incurred and reported in finance costs.

Notes to the consolidated financial statements (continued)

2 Accounting policies (continued)

2.7 Foreign currency translation

The functional currency of the Company is GB Pounds Sterling. For the purposes of the consolidated Interim Financial Information, the results and financial position of the Company and its subsidiary are presented in US Dollars which is the Group's presentational currency.

Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the end of the reporting period. All differences are taken to the statement of profit or loss and other comprehensive income.

The assets and liabilities of the Group are expressed in US Dollars using exchange rates prevailing at the balance sheet date. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising, if any, are classified as other comprehensive income and are transferred to the Group's translation reserve.

2.8 Current and deferred taxation

The tax expense for the period comprises current and deferred tax. Tax is recognised in the statement of profit and loss, except that a charge attributable to an item of income or 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 UK where the Group operates and generates taxable income.

2.9 Property, plant and equipment

Items of property, plant and equipment are stated at historical cost less accumulated depreciation.

Notes to the consolidated financial statements (continued)

Accounting policies (continued)

2.10 Intangible assets

Intangible assets that are acquired by the Group are stated at cost less accumulated amortisation and accumulated impairment losses.

Amortisation is charged to the administrative expenses in the statement of profit or loss and other comprehensive income on a straight-line basis over the estimated useful lives of intangible assets unless such lives are indefinite. Intangible assets with an indefinite useful life are systematically tested for impairment at each balance sheet date.

Intangible assets are amortised from the date they are available for use. The estimated useful lives are as follows on a straight-line basis:

2.11 Inventories

Weighted average cost is used to determine the cost of ordinarily interchangeable items.

2.12 Cash and cash equivalents

Notes to the consolidated financial statements (continued)

Accounting policies (continued)

2.13 Financial assets

2.14 Financial liabilities

The Group's financial liabilities held at amortised cost comprise trade payables and other short-dated monetary liabilities, and borrowings in the consolidated statement of financial position.

Borrowings are initially recognised at fair value net of any transaction costs directly attributable to the issue of the instrument. Such interest-bearing liabilities are subsequently measured at amortised cost using the effective interest rate method, which ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the consolidated statement of financial position.

Notes to the consolidated financial statements (continued)

Accounting policies (continued)

2.15 Impairment of assets

Assets that are subject to depreciation or amortisation are assessed at each reporting date to determine whether there is any indication that the assets are impaired.

Where there is any indication that an asset may be impaired, the carrying value of the asset is tested for impairment. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. Non-financial assets that have been previously impaired are reviewed at each reporting date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.

2.16 Equity instruments

Equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all liabilities and comprises the following:

• "Share capital" represents the nominal value of equity shares;
• "Share premium" represents the excess value of equity shares above the nominal value;
• "Share-based payment reserve" represents the cumulative fair value of options;
• "Capital contribution reserve" represents non-cash contributions from equity holders;
• "Accumulated losses" represents retained earnings less retained losses;
• "Translation reserve" represents the Cumulative gains and losses on translating the net assets of the Company to the presentation currency of the Group" and
• "Non-controlling interests" represents the cumulative net profits/(losses) in relation to non-controlling interests.

2.17 Convertible loan notes

Convertible loan note instruments issued by the Group are assessed to whether the transaction price relates to both the underlying financial instrument and the warrants issued representing the same economic arrangement, and therefore fair value of the whole arrangement. The Group assesses whether the underlying financial instrument (loan notes) and the conversion feature should be classified as a liability or equity instrument. As part of this assessment, the Group considers whether the conversion feature is closely related to the host contract, requiring a separate assessment of the host contract and the conversion feature. It was determined that the conversion feature was not closely related to the host contract, meeting the criteria for recognition as a separate embedded derivative.

Conversion feature: There is an obligation to convert the loan notes into variable number of ordinary shares of MicroSalt Inc. on conversion events. The conversion feature is at market price as there is no discount against future equity placement offered. Therefore, the conversion feature is not a derivative because the value of the conversion feature does not change in response to the share price, and as such the conversion feature is a financial liability.

Therefore, the fair value of the overall transaction price is initially recognised as a financial liability and subsequently measured at amortised cost.

Notes to the consolidated financial statements (continued)

Accounting policies (continued)

2.18 Share-based payments

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period with a corresponding adjustment to equity. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met.

Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each statement of financial position date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.

When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the fair value of the original share-based payment at date of grant.

• Significant accounting judgements, estimates and assumptions

The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires the Group management to exercise judgement and use assumptions in applying the Group's accounting policies. The resulting accounting estimates calculated using these judgements and assumptions will, by definition, seldom equal the related actual results but are based on historical experience and expectations of future events. Management believe that the estimates utilised in preparing the financial statements are reasonable and prudent.

Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The judgements and key sources of estimation uncertainty that have a significant effect on the amounts recognised in the financial statements are discussed below:

Critical judgements

Information about critical judgements that may have most significant effect on recognition and measurement on assets, liabilities and expenses is provided below:

Going Concern

The Group liabilities exceeded its assets as at 31 December 2024, mainly due to the convertible loan notes (CLN) issued by Teckcapital for US$2,746,000. Management knows that the CLN holder is our most significant shareholder which considerably mitigates the risk associated with these CLN. The going concern basis is being upheld by future cashflow forecasts which involves significant management judgement.

Notes to the consolidated financial statements (continued)

Investment in subsidiary (company only)

The valuation of the investment in subsidiary is supported by the company delivering on its future business plan. The future business plan is underpinned by forecast cash flows which involve significant management judgements. If the Group was to underperform the forecast performance of the business plan, there is a risk that this balance might be impaired.

Revenue from contracts with customers

All Group revenue was generated from the sale of goods across North America and recognised at the date the goods were delivered. 3 customers make up 10% or more of revenue in the period ended 31 December 2024 (2023:1).

Segmental reporting

Factors that management used to identify the Group's reportable segments:

The Chief Operating Decision Maker ("CODM") has been identified as the Directors. The CODM reviews the Group's internal reporting in order to assess performance and allocate resources. The CODM has determined that there is one single operating segment, the development and sale of low sodium salt and snack foods.

Operating loss

Notes to the consolidated financial statements (continued)

Auditors' remuneration

During the year the Group obtained the following services from the Group's auditors:

The average monthly number of employees and Directors during the year was as follows:

The remuneration of the highest paid Director who served during the year was Rick Guiney which consisted of base salary of US$200,000 (2023: US$150,000), paid by MicroSalt Inc.

Notes to the consolidated financial statements (continued)

Finance expense

The main rate of UK corporation tax for the year ended 31 December 2024 was 25%. On 1 April 2023, the main rate of UK corporation tax increased from 19% to 25%, resulting in an effective tax rate of 23.5% for the year ended 31 December 2023.

At the Statement of Financial Position date, the Directors estimate that the Group has unused tax losses of US$9,763,000 (2023: US$7,096,000).

Losses may be carried forward indefinitely in accordance with the applicable taxation regulations.

Notes to the consolidated financial statements (continued)

Basic and diluted loss per share

The weighted average number of shares for both periods presented has been adjusted for the effect of the 3200:1 share subdivision and subsequent 1:520 share consolidation.

Intangible assets

Trade receivables are amounts due from customers for goods sold in the ordinary course of business. They are generally due for settlement immediately or within 30 days for certain credit customers and therefore are all classified as current. Trade receivables are non-interest bearing. The carrying amount of trade and other receivables approximates fair value.

Prepayments as of December 31, 2023 include US$690,000 of deferred costs in relation to the IPO of the Company on AIM, which completed 1 February 2024.

Analysis of trade receivables based on age of invoices:

The Group applies the IFRS 9 simplified approach to measuring expected credit losses (ECL) which uses a lifetime expected loss allowance for all trade receivables. The ECL balance has been determined as US$8,000 (2022: US$11,000) based on historical data available to management in addition to forward looking information utilising management knowledge. The ECL is based on 90% of trade receivables over 60 days past due being recoverable and therefore an ECL of 10% of trade receivables has been recognised. Based on the analyses performed there is no material impact on the transition to ECL from previous methods of estimating the provision for doubtful accounts.

Cash and cash equivalents

Other payables include amounts owed to related parties (see note 25).

Borrowings

On 1 June 2022, the Group issued convertible loan notes ("CLNs") with a principal amount of US$2,000,000 of which US$2,000,000 was drawn and outstanding at 31 December 2024 (2023: US$2,000,000). The Group issued further CLNs on 1 March 2023 and 1 October 2023, with principal amounts of US$2,000,000 each, of which US$267,000 (2023: US$909,000) and US$Nil (2023: US$Nil) were drawn down at 31 December 2024, respectively.

The CLNs incur interest of 10% per annum and are repayable four years after commencement or can be converted into ordinary shares of MicroSalt Inc. upon certain conversion events at the option of the noteholder. During the year ended 31 December 2024, US$Nil (2023: US$500,000) was converted into ordinary shares of MicroSalt Inc.

Notes to the consolidated financial statements (continued)

Share capital

All issues are for cash unless otherwise stated.

On 15 June 2023, the Company performed a share subdivision to issue 3,200 new ordinary shares for every existing 1 share. Subsequently, on 30 September 2023, the Company performed a share consolidation to issue 1 share for every existing 520 shares.

On 1 February 2024, the company issued 7,871,423 shares at £0.43 per new share; also on July 01, 2024, the company issued 4,799,981warrants at £0.473 per new share. The cost associated to the IPO process included legal, financial and advisory services for about USD820,000.

On 1 February 2024, the Company completed its IPO on the AIM Market of London Stock Exchange plc raising approximately £3.1m (US$3.9m)

On 29 June 2023, the Company cancelled the share premium account of the Company, and the amount of the share premium account was transferred to distributable reserves. The Cancellation of Reserve was carried out by way of the solvency statement procedure under section 641(1)(a) of the Companies Act.

Notes to the consolidated financial statements (continued)

Share-based payments

The Group operates an equity settled share-based remuneration scheme for employees. Options are granted for nil consideration and carry no dividend or voting rights. The terms and conditions of the grants are detailed below:

1100% of the share options vest in one annual instalment 12 months after the grant date.

22.78% of the share options vest in equal monthly instalments over 36 months from the grant date.

333.33% of the share options vest 12 months after the grant date, 33.33% of the share options vest 24 months after the grant date and the remaining 33.33% of share options vest 36 months after the grant date.

450% of the share options vest six months after the grant date and 50% of the share options vest 12 months after the grant date.

5These options vest on an exit event, such as a sale, takeover or IPO.

The number of options and exercise price for the Options granted before 2023 have been adjusted for the effect of a 3200:1 share subdivision and subsequent 1:520 share consolidation which occurred in 2023.

All options granted have an expected volatility of 80%.

On 30 September 2023, all of the options held with MicroSalt Inc. were cancelled and reissued with the Company on the same terms as the existing agreements. As such, the fair value of the options did not increase as a result of the modification and therefore no adjustment was made to share-based payment expense in 2023.

Details of the number of share options granted, exercised, lapsed and outstanding at the end of each period as well as the weighted average exercise prices in US$ ("WAEP") are as follows:

The number of share options and WAEP have been adjusted for the period 2023 for the effect of the 3200:1 share subdivision and subsequent 1:520 share consolidation.

Notes to the consolidated financial statements (continued)

Financial instruments

The Group's financial instruments comprise cash and cash equivalents, trade and other receivables, trade and other payables, accruals, and convertible loan note liabilities, that arise directly from its operations.

Financial assets

Financial risk management

Foreign exchange risk

The Group operates internationally and is exposed to currency risk arising on cash and cash equivalents, receivables and payables denominated in a currency other than the respective functional currencies of the Group entities, which are primarily US Dollars and Sterling. The Group's manages foreign currency risk by, where possible, settling liabilities denominated in a currency other than its functional currency with cash already denominated in that currency.

Notes to the consolidated financial statements (continued)

Financial instruments (continued)

Sensitivity analysis

A 10% strengthening of sterling against the Group's primary currencies at 31 December 2024 would have decreased equity and profit or loss by the amounts shown below:

A 10% weakening of sterling against the Group's primary currencies at 31 December 2024 would have an equal but opposite effect on the amounts shown above.

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows associated with the instrument will fluctuate due to changes in market interest rates. The Group's only interest-bearing borrowings are at a fixed interest rate of 10%, therefore interest rate risk exposure for the Group is minimal.

It is the Group's policy to settle payables within the credit terms allowed and the Group does therefore not incur interest on overdue balances.

Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. In order to minimise the risk, the Group endeavours only to deal with companies which are demonstrably creditworthy and this, together with the aggregate financial exposure, is continuously monitored. The maximum exposure to credit risk is the carrying value of its financial receivables, trade and other receivables and cash and cash equivalents as disclosed in the note above.

The receivables age analysis is evaluated on a regular basis for potential doubtful debts, considering historic, current and forward-looking information. The Group applies the IFRS 9 simplified approach to measuring expected credit losses (ECL) which uses a lifetime expected loss allowance for all trade receivables The ECL is based on 90% of trade receivables over 60 days past due being recoverable. Further disclosures regarding trade and other receivables are provided within note 16.

Credit risk also arises on cash and cash equivalents and deposits with banks and financial institutions. For banks and financial institutions, only independently rated parties with minimum rating "B+" are accepted. Currently the financial institution whereby the Group holds significant levels of cash is JP Morgan Chase Bank, N.A. which is rated AA-.

Notes to the consolidated financial statements (continued)

• Financial instruments (continued)
• Liquidity risk

The Group seeks to maintain sufficient cash balances. Management review cash flow forecasts on a regular basis to determine whether the Group has sufficient cash reserves to meet future working capital requirements and to take advantage of business opportunities.

A maturity analysis of the Group's total liabilities is shown below:

Group

The convertible loan notes issued by Tekcapital Group and its interests are repayable US$2,189,000 in 2027 and US$557,000 in 2028.

Related party disclosures

Key management personnel remuneration is disclosed in note 9 above.

The non-cash change in 2024 relates a balance due to the ultimate controlling party that was settled by issue of convertible loan note. The non-cash change in 2023 relates to the capital contributions from the ultimate controlling party.

Events after the reporting date

On 1 February 2025, the Company completed its second raise on the AIM Market of the London Stock Exchange, raising approximately £2.4m (US$3.1m).