REG - Fadel Partners Inc. - Results for the year ended 31 December 2025
30/04/2026 07:02
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RNS Number : 4922C Fadel Partners Inc. 30 April 2026
30 April 2026
Fadel Partners, Inc.
('FADEL', the 'Company' or, together with its subsidiaries, the 'Group')
Results for the year ended 31 December 2025
FADEL (AIM: FADL), a global leader in AI-driven brand compliance and licensing
software, is pleased to announce its full-year results for the year ended 31
December 2025. The Company's full Annual Report and Audited Financial
Statements for the year ended 31 December 2025 will be published and made
available on the Company's website (www.fadel.com (http://www.fadel.com/) )
by 1 May 2026.
Financial Highlights
● Annual Recurring Revenue (ARR) increased 14%, driven by customer
wins in the mid-market segment and expansion within existing accounts.
● Revenue decreased by 3% due to less services revenue, resulting
from the Group's expansion into the mid-market, where projects are less
complex and shorter in duration.
● Gross Profit Margin improved to 64% due to a reduction in
lower-margin services revenue, offset partially by higher-margin licensing and
support revenue.
● Adjusted EBITDA Loss significantly improved primarily due to lower
operating expenses and ongoing efficiency gains in managing discretionary
expenditure across the business.
● Cash and Cash Equivalents at 31 December 2025 of $1.9 million,
with an undrawn $1.0 million credit facility available for further liquidity.
US Dollars ($) Year ended Year ended Change
31 December
31 December
2024
2025
Group revenue 13,022,201 12,616,439 (3%)
Licensing and Support((1)) 7,993,928 8,235,003 3%
Services((1)) 5,028,273 4,381,436 (13%)
Gross profit 8,048,971 8,129,411 1%
Gross profit margin % 62% 64%
Adjusted EBITDA((2)) Loss (3,907,271) (743,281) 81%
Cash and cash equivalents 2,607,422 1,910,755 (27%)
ARR((3)) 7,824,602 8,904,588 14%
(1) Beginning with the 2025 year-end results, the Company's services
revenue now includes revenue generated under recurring services subscription
arrangements, rather than such revenue being included within licensing and
support revenue. The prior period has been reclassified to conform to this
presentation.
(2) Earnings after capitalised commission costs and before interest, tax,
depreciation, amortization, exceptional costs and share-based payments.
(3) Annual Recurring Revenue ("ARR") now comprises only recurring license
and support revenue and no longer includes recurring services revenue. The
prior period has been reclassified to conform to this presentation.
Operational Highlights
● Launch of AI Business Insights: Introduction of AI-driven
analytics capability within IPM Suite, providing predictive modelling, natural
language dashboards and enhanced royalty analysis
● Development of Product Approval module: Advancement of the Product
Approval module during FY25, with the solution entering beta ahead of its
post-period commercial release
● Expansion of LicenSee and mid-market offering: Continued rollout
and adoption of LicenSee and modular IPM Suite deployments targeting
mid-market customers
● New customer wins across product platforms: Customer additions
during the year include Handcraft Manufacturing, Viz Media, Zak! Designs and
Bloom Fresh International (IPM Suite), and Comcast Communications and Ferrero
(Brand Vision)
● Enhanced Brand Vision capabilities: Delivery of expanded content
tracking, additional digital platform coverage and improved analytics
functionality
● Operational efficiency improvements: Delivery of a more
streamlined operating model following organisational changes initiated in late
2024
Post Period End Highlights
● Launch of FADEL AIVA: In January 2026, the Company launched AIVA,
its AI framework integrating generative, predictive and analytical
capabilities across its platforms, designed to enhance automation, improve
operational insight and support customer productivity
● Product Approval module released: The Product Approval module
reached general availability in January 2026, enabling customers to manage the
full product approval lifecycle within a single, centralised platform
● Strengthened product platform with embedded AI: AIVA has been
embedded across IPM Suite and Brand Vision, enhancing functionality including
contract ingestion, content tracking and AI-driven analytics, further
differentiating the Company's offering
● Renewal of credit facility: The Company renewed its $1 million
undrawn credit facility through May 2027, providing additional financial
flexibility to support operations and growth initiatives
Tarek Fadel, Chief Executive Officer, commented: "2025 was a year of
disciplined execution for FADEL, as we strengthened the foundations of the
business, improved operational efficiency and advanced our product
capabilities. The launch of AIVA and the Product Approval module in early 2026
marks an important step in the evolution of our platform, embedding AI more
deeply into our solutions and enhancing the value we deliver to customers.
With a growing recurring revenue base, an expanded pipeline and a more
efficient cost structure, we enter 2026 well positioned to continue executing
on our strategy."
This announcement contains inside information for the purposes of the retained
UK version of the EU Market Abuse Regulation (EU) 596/2014 ("UK MAR").
For further information, please contact:
Tarek Fadel, Chief Executive Officer
Mark Plotkin, Chief Financial Officer
Cavendish Capital Markets Limited (Nomad & Broker)
Jonny-Franklin Adams, Isaac Hooper (Corporate Finance)
Sunila De Silva (ECM)
Tel: +44 (0)20 7220 0500
FADEL Strategic Communications
Devi Gupta
press@fadel.com (mailto:press@fadel.com)
About Fadel Partners Inc.
FADEL delivers AI-enabled software to manage brand compliance and IP licensing
with precision and confidence. Its cloud-based platforms help organizations
govern content and usage rights at scale, streamline complex licensing and
royalty processes, and reduce risk across global operations. Trusted by some
of the world's most recognized brands in media, publishing, consumer goods,
high-tech, and advertising, FADEL empowers teams to protect intellectual
property, accelerate licensing workflows, and operate with clarity in an
increasingly complex digital ecosystem.
The Group's main country of operation is the United States, where it is
headquartered in New York, with further operations in the UK, France, Lebanon
and Jordan.
For more information, please visit the Group's website at: www.fadel.com
(http://www.fadel.com/) .
CHAIR'S STATEMENT
Introduction
During the year the Company completed its reorganization of key areas of the
business that it had initiated in late 2024. The goal was to drive more
efficient delivery against its strategic goals from a lower cost base while
continuing to be able to rapidly innovate. This ambitious goal has been
supported by the use of AI to enhance customer value through both internal
usage and by directly incorporating AI into its product set.
I am pleased to report that as a result, the team has been able to both meet
its market forecast for 2025, as well as make exciting progress with product
development to meet the needs of both enterprise and mid-market customers.
This against a backdrop of having reduced its operating cost base by
$3.6 million on an annualized basis.
Further details of product innovations are set out in the CEO's report on
Pages 9 - 14.
On behalf of the Board, I would like to extend my thanks to our employees for
their hard work and commitment during this important phase of the Company's
journey and through the difficult time of an organizational restructuring..
I'd also like to thank our teams in Lebanon and Jordan for their continued
professionalism and composure amid recent regional instability. Everyone's
contributions throughout the company have been instrumental in delivering the
operational and strategic progress that we report on today.
Strategic Direction
Building on the enhancements to LicenSee in FY 2024, the Company's mid-market
version of its flagship enterprise product IPM Suite, in 2025 the Company
announced two new products that were subsequently launched in January 2026.
FADEL AIVA integrates the Company's generative, analytical and predictive AI
capabilities through purpose-built AI agents to help users improve efficiency,
reduce operational risk and manage complex global licensing and marketing
activities with greater speed and confidence. AIVA is also now embedded in the
new Product Approval module, which enables licensors to manage the full
product approval lifecycle, from initial concept submission through to final
authorization, within a single, centralized platform.
The Company believes that this innovation has strengthened its product
offering, further competitively differentiating FADEL within the licensing and
brand compliance and governance market and will support new business growth in
recurring revenue in FY 2026 and beyond.
Together with a refreshed sales and marketing approach, the Company has been
able to grow its new business opportunity, for both new logos as well as
customer expansion, which has directly created materially higher sales
pipelines than in FY 2024. The results so far in FY 25 have been a creditable
14% annual growth in net new ARR. This focus on strategic product enhancements
and AI is the foundation for our growth goals for both new logos and net
revenue retention, looking forward to 2026 and beyond.
In the first half of 2025, the Board initiated a review, in conjunction with
its advisors Oaklins DeSilva+Phillips, of the Company's strategic options to
consider the full range of opportunities available to enhance shareholder
value. While several expressions of interest were received, none presented a
combination of value, structure and certainty which the Board could recommend
to shareholders. Following that full assessment, the Board concluded the
process and remains fully committed to executing against the Company's
long-term strategy of continued product innovation to meet the growing market
demand for the management of the proliferation of digital asset rights.
Corporate Governance
Last year we made several organizational changes to the Board, and I am
pleased to report that positive impacts have been felt throughout the year
through enhanced strategic discussions, improved information flows, and more
frequent trading update reports to the board.
During the year Ian Flaherty, Chief Financial Officer, resigned and following
a period of overlap transition was replaced by Mark Plotkin who joined the
Company as CFO & Company Secretary on July 28, 2025. Mark is a
Certified Public Accountant in the United States and a seasoned financial
executive with over 25 years of leadership experience across licensing,
publishing, and corporate finance at organizations like Marvel Entertainment,
The Walt Disney Company and Ernst & Young. He brings deep expertise in
GAAP, internal controls, and financial reporting. Mark is based in New York
City alongside Tarek Fadel, the founder and CEO.
Immediately following the year end, Joe Gruttadauria stepped down from his
interim role Head of Sales, returning his full focus to his Non-Executive
Director role. On behalf of the Board, I would like to thank him for stepping
up during FY 2025 to directly assist the Executive team in this way. He had
a measurable and positive impact on the Company's go-to-market motions and
sales results, which has been extremely helpful.
While Joe has resumed his full focus serving as a Non-Executive Director, he
is deemed to remain non-independent under applicable governance guidelines.
Sally Tilleray continues to Chair both the Remuneration and Audit Committees,
and I, Simon Wilson, serve on both committees to support their work.
The Board is confident that it has retained an appropriate balance of cost,
skills, experience, and independence to effectively govern the Company. The
Board also recognizes the value and importance of high standards of corporate
governance and has, since its IPO, observed the requirements of the Quoted
Companies Alliance ("QCA") Corporate Governance Code.
Our goal as a Board continues to be to strike an appropriate balance of robust
corporate governance and a nimble entrepreneurial culture that supports rapid
forward momentum in the rapidly changing technology market in which we
operate. I am therefore grateful for the contributions of our Board of
Directors who have a great breadth of experience in international software and
technology businesses, as well as the London AIM market.
I believe we have a balanced knowledge of the business and that it can
continue to grow within acceptable levels of risk tolerance.
ESG
FADEL remains committed to conducting its business responsibly and minimizing
environmental impacts across its operations. While we are a small SaaS
business and therefore have a small environmental footprint, it is important
that these values are demonstrated to our customers and other key
stakeholders, and we continue to promote them throughout our workforce, and
wider network of commercial partners. The Board continues to assess metrics
for disclosure that appropriately describe progress with ESG.
We also continued to uphold strong social and governance principles, including
a focus on ethical business practices, employee well-being, equal opportunity,
and responsible supplier engagement across all jurisdictions in which we
operate.
Stakeholder Communications
This year we took further steps to improve our regular communications to all
investors and expanding disclosures and key metrics to support enhanced
understanding of the performance of the business. For example, the Company
has expanded its disclosure of the key SaaS metric of Annual Recurring Revenue
or ARR across all product lines and limited its definition to exclude
recurring services revenue.
We utilize phone and video briefings, and the CEO and CFO also offer regular
in-person meetings. As Chair, I am available as a direct line of communication
to all shareholders in case other questions arise that need to be answered
independently, as is our Senior Independent Director, Sally Tilleray.
Looking Forward
We remain mindful of the complexities of the broader macroeconomic and
geo-political environment, especially considering the renewed conflict in the
Middle East in March which again has impacted Lebanon. Our office in Lebanon
remains fully operational and we have contingency plans already in place to
ensure business continuity while keeping employees operating safely. With our
lower cost base and improved operating cash flow, the Board continues to
manage the business with a clear focus on capital efficiency and long-term
value creation. Our recurring revenue model and broadening market reach
provide a solid foundation for continued growth in 2026 as we strive to reach
and then deliver sustainable profitability.
Simon Wilson
Chair of the Board
29 April 2026
CEO'S REVIEW
2025 was a year of solid progress for FADEL as we focused on strengthening the
foundations of the business while advancing the capabilities of our software
platforms. Throughout the year we remained focused on expanding our recurring
revenue base, enhancing product functionality and improving operational
efficiency across the Group.
While macroeconomic uncertainty and evolving trade policy discussions during
the first half of the year influenced the timing of certain customer
purchasing decisions, underlying demand for automation and data-driven
management of licensing and brand compliance activities remained strong, as
reflected in a more than doubling of the Company's sales pipeline since the
beginning of 2025. During FY25, we continued to invest in product development
initiatives designed to support organisations managing increasingly complex
intellectual property and licensing environments.
A key focus during the year was the continued integration of artificial
intelligence capabilities across our platforms, enabling enhanced analytics,
improved workflow automation and deeper operational insight for customers
managing complex licensing and brand governance activities.
Financial Performance
In FY25, the Group generated revenue of $12.6 million, compared to $13.0
million in FY24. The slight year-over-year decline was driven by lower
services revenue, which more than outweighed growth in higher-quality
recurring licensing and support revenue.
Services revenue declined as the Group strategically expanded into the
mid-market licensing space, where projects are less complex and shorter in
duration. Services revenue from existing enterprise clients also fell since
they now have greater familiarity with our product and their requested
features are in place. These trends in services are expected to continue
through FY26.
Starting with 2025 year-end results, ARR includes only recurring license and
support revenue, excluding recurring services revenue. This change was made to
better align with SaaS industry benchmark definitions and clarifies core
software revenue performance. ARR increased 14% year-on-year to $8.9 million,
reflecting continued customer adoption of both IPM Suite and Brand Vision. A
significant portion of this ARR growth occurred during the fourth quarter of
the year, positioning the Company for improved revenue visibility entering
FY26.
Operating expenses were reduced by 27% year-on-year, reflecting structural
cost initiatives implemented during late FY24 and refined throughout FY25. As
a result, adjusted LBITDA improved significantly compared to the prior year.
The Group ended the year with $1.9 million in cash and cash equivalents,
supported by disciplined expense management and improved collections. The
Company also retains access to an undrawn $1 million credit facility,
providing additional financial flexibility.
The business is now structurally leaner, more focused and better aligned to
scale profitably as ARR continues to expand.
Artificial Intelligence Strategy
Artificial intelligence continues to represent an important area of
development for FADEL as we enhance the analytical and automation capabilities
of our platforms. The Group's software solutions manage large volumes of
structured contractual, royalty and brand compliance data, providing a strong
foundation for the practical application of AI technologies within licensing
and rights management environments.
Our approach focuses on embedding intelligent capabilities directly within our
existing software platforms. During 2025 we expanded the use of AI-driven
analytics and automation tools within IPM Suite and continued development of
AI-assisted workflows designed to support licensing operations, reporting and
compliance monitoring.
Through continued investment in analytics, automation and data-driven insight,
FADEL aims to enhance the value delivered by its platforms while maintaining a
disciplined and practical approach to the deployment of emerging technologies.
IPM Suite
IPM Suite remains the core component of the FADEL platform, enabling
organisations to manage intellectual property rights, licensing agreements and
complex royalty calculations in a secure and auditable environment.
During 2025 the Company continued to expand adoption of IPM Suite,
particularly within the mid-market segment, which represents an important
growth opportunity. Mid-market customers benefit from scalable cloud
deployments and shorter implementation cycles while contributing attractive
recurring revenue streams.
Key new IPM Suite customers secured during the year included Handcraft
Manufacturing, Viz Media, Zak! Designs and Bloom Fresh International. A total
of 7 new IPM customers were added in FY25, all of which were within the
mid-market segment.
Product development during the year focused on strengthening both the
analytical capabilities and operational workflows supported by the platform.
In April 2025 the Company introduced AI Business Insights, which provides
predictive analytics, natural-language dashboards and scenario modelling tools
designed to help licensing and finance teams analyse royalty data and evaluate
licensing performance more effectively.
Additional enhancements were introduced to streamline royalty reporting and
compliance workflows, including configurable royalty reporting templates
designed to simplify reporting processes for licensees working with major
licensors. Improvements were also made to licensing workflow management and
reporting functionality across the platform.
LicenSee and IPM Mid-Market Expansion
In 2024, we launched LicenSee™, our purpose-built royalty automation
solution designed to serve smaller licensees and emerging rights holders with
simpler, lower-volume royalty requirements. The product was built to deliver
enterprise-grade automation and accuracy - without the overhead or complexity
of a full-scale IPM Suite deployment. Since launch, LicenSee has gained strong
early traction, accounting for approximately 43% of new IPM Suite customers
since 2024 and continues to build momentum through short sales cycles and
streamlined onboarding.
LicenSee validates our belief that a substantial portion of the licensing
market is underserved - especially among small and mid-sized organisations
that need to automate royalty calculations and manage contractual obligations
but lack the resources for complex systems integration. The success of these
early deployments reinforces the scalability of this model and positions
LicenSee as a high-margin, repeatable growth engine at the lower end of the
client spectrum.
At the same time, we are seeing growth in demand from the broader mid-market
organisations that are larger and more complex than LicenSee's core target,
but not yet ready for a full enterprise implementation of IPM Suite. These
companies, often regional brand owners or multi-line licensors, face
sophisticated royalty tracking and product approvals requirements but seek
faster implementation timelines, lower IT overhead, and greater
configurability than traditional enterprise solutions offer.
This segment represented a key strategic focus area for FADEL in FY25 and will
continue to be a critical category for future growth. Accordingly, we actively
developed packaging and deployment options that enabled modular adoption of
IPM Suite features, thereby extending the strength of our enterprise platform
to a broader market with mid-sized budgets and teams.
LicenSee and our flexible mid-market IPM solutions help us meet diverse client
needs-from small licensees to large global rights holders-allowing us to reach
more customers and support our long-term goal of building a scalable,
recurring revenue business.
Brand Vision
Brand Vision provides organisations with tools to monitor and manage the use
of their intellectual property and branded assets across digital channels.
As digital media ecosystems continue to expand, organisations increasingly
require systems that enable greater visibility and governance of brand usage
across multiple platforms and markets.
During 2025 Brand Vision secured several notable new customers, Comcast
Communications and Ferrero. In addition to new client acquisitions, existing
customers expanded their use of the platform through increased adoption of
content monitoring and tracking capabilities.
During the year the Company introduced several product enhancements designed
to strengthen Brand Vision's monitoring and governance capabilities, including
expanded digital asset management integrations, enhanced content tracking
coverage across additional digital and e-commerce platforms, and improved
analytics capabilities to help organisations monitor the use of branded
content online.
Product Development
Innovation continued to be at the heart of our strategy in 2025 as we invested
in the next phase of FADEL's platform evolution. Our focus throughout the year
was on enhancing the intelligence, efficiency, and scalability of our
solutions to better serve the complex needs of licensing and brand management
organizations.
In addition to launching AI Business Insights, we continued development of our
Product Approval module, which gives licensors a more streamlined and
centralized way to manage product submissions, approval workflows, and brand
governance. The module entered beta during 2025 and reached general
availability in January 2026, marking another important step in broadening the
value of our platform for customers.
We also made meaningful progress against our technology roadmap through the
adoption of cloud-based AI infrastructure, including Amazon Web Services'
Bedrock platform, which is supporting the development of AI analytics and
agent-based automation capabilities across our solutions. These investments
are helping us build a stronger foundation for greater licensing automation,
improved compliance oversight, and more actionable data-driven
decision-making.
Following year-end, we announced FADEL AIVA, a framework designed to bring
together generative, predictive, and analytical AI capabilities across the
Group's platforms. We see AIVA as an important step in our long-term vision to
embed AI more deeply into licensing and brand governance workflows, while
further differentiating FADEL's technology and positioning the Company for
continued innovation and growth.
Two‑Pronged Practical AI Approach
In 2025, we took a deliberate and disciplined approach to artificial
intelligence, focused on delivering tangible productivity gains rather than
pursuing AI as a standalone narrative. Our strategy was intentionally
two‑pronged.
First, we applied AI internally to improve the efficiency and effectiveness of
our R&D and Services teams, supporting faster development cycles, more
scalable delivery, and improved execution across the business. These
initiatives helped us operate more productively while maintaining focus on
quality, accuracy and client outcomes.
Second, we continued to embed AI‑driven capabilities directly into our core
product platforms, enabling customers to work more efficiently within their
day‑to‑day licensing, royalty and brand governance workflows. By
integrating intelligence where users already operate, we aim to reduce manual
effort, improve insight and support better decision‑making - without
compromising the auditability and governance requirements that are fundamental
to rights management environments.
We believe our combination of domain expertise, structured data architecture
and enterprise-grade deployment positions us uniquely to apply AI in a
practical and durable manner within this niche.
Delivery against growth strategy
In 2025, we expanded our mid-market presence, strengthened client
relationships, and enhanced recurring revenue potential through more targeted
execution. With IPM Suite and Brand Vision now serving both enterprise and
mid-sized organizations, we have strategically repositioned our product
portfolio to scale more efficiently across diverse verticals. As a result of
these initiatives, our pipeline has more than doubled since the start of 2025.
Our go-to-market strategy continues to centre on three key pillars:
· Purpose-built solutions enabling lower and mid-market expansion
across IPM Suite,
· Land-and-expand execution within our established enterprise
customer base across all product families, and
· Strategic AI enablement of our products designed to increase user
productivity, customer retention and create cross-sell momentum.
We delivered 14% ARR growth in 2025 - a result that reflects both progress and
the challenges of an evolving market environment. Development of AI solutions,
pricing strategy, and commercial execution leave us better positioned to scale
effectively in the periods ahead.
Looking ahead, we remain committed to deepening client engagement, aligning
product delivery more closely with mid-market needs, and reinforcing the
recurring revenue mix that supports scalable, high-margin growth.
Land and Expand
Our ability to grow recurring revenue from existing customers remains a
cornerstone of our model. In 2025, total ARR rose to $8.9 million,
representing 14% year-over-year growth. This performance was underpinned by
continued expansion in our two core platforms:
· IPM Suite ARR increased 13% to $5.6 million, reflecting strong
retention and a healthy cadence of upsells and new deals. The net retention
revenue percentage (NRR) for IPM Suite was 100% in 2025.
· Brand Vision ARR grew 22% to $2.5 million, demonstrating
deepening customer investment, especially in our Content Tracking solution.
NRR for Brand Vision in 2025 was 110%.
We added seven new IPM Suite clients in the year, including Handcraft
Manufacturing, Viz Media, Zak! Designs and Bloom Fresh International. These
wins were all in the mid-market segment, reflecting our ability to serve both
enterprise and mid-market clients through scalable implementations.
On the Brand Vision side, we welcomed Comcast and Ferrero, and existing
customers expanded their usage, extending more heavily into Content Tracking.
Our progress in expanding across product lines is also accelerating. Existing
clients can now engage with multiple components of our portfolio - using Brand
Vision for creative compliance while simultaneously managing royalties and
contracts through IPM Suite. These cross-sell motions are expected to scale
further and drive higher ARR and NRR, as more Brand Vision clients adopt
Product Approval and IPM Suite.
Sales Pipeline and Market Activity
During the first half of 2025, sales cycles lengthened as macroeconomic
uncertainty and discussions surrounding U.S. tariff policies led certain
prospective customers to defer implementation decisions. This was most evident
in enterprise implementation projects and certain mid-market licensing
opportunities.
Despite these factors, the Company's sales pipeline more than doubled since
the beginning of 2025, driven by the addition of new qualified opportunities
rather than extended sales cycles. Sales activity improved during the second
half of the year, and FADEL entered FY26 with a broader and more diversified
pipeline across both IPM Suite and Brand Vision opportunities.
Management continues to focus on strengthening sales processes, expanding
go-to-market initiatives and increasing engagement with both enterprise and
mid-market customers.
Current trading and outlook
Building on our 14% ARR growth in FY25, FADEL enters 2026 with a solid
operational foundation and disciplined commercial focus. The strategic
decisions taken in 2024 and refined in 2025, including AI platform investment,
cost optimisation, and commercial realignment, have positioned the Company for
scalable growth. Looking ahead, we expect to deliver the following in FY26:
· Continuing ARR growth, supported by broader product adoption and
deeper client penetration.
· Continued improvement in LBITDA, as the benefits of our FY24 and
FY25 cost reduction programme and increasing ARR positively impact the bottom
line.
· Sufficient net cash generated to fund operations, with also
having the Company's $1 million credit facility, which was renewed in April
2026 and remains in place through to May 2027.
The demand for systems that support rights management, licensing governance
and brand compliance continues to grow as organisations operate in
increasingly complex intellectual property environments.
The convergence of three structural forces continues to shape our opportunity:
1. The increasing complexity of global intellectual property management
2. The proliferation of digital content and omnichannel brand exposure
3. The emergence of practical, embedded AI as an operational tool
FADEL operates at the intersection of these forces.
With a strengthened recurring revenue base, a more efficient cost structure
and continued investment in an evolving AI-enabled platform, we believe FADEL
is well positioned to continue expanding its presence within the global
licensing and brand governance technology market.
While macroeconomic conditions, including evolving trade policies and
geo-political tensions, may continue to influence purchasing timelines, the
underlying need for automated rights management, royalty accuracy and brand
governance remains structural and growing.
We enter FY26 focused, more financially disciplined and strategically aligned
for the next phase of growth.
Tarek Fadel
Chief Executive Officer
29 April 2026
OUR STRATEGY AND BUSINESS MODEL
Our strategy
We believe several long-term market trends continue to position FADEL
favorably for growth. The continued expansion of digital content creation,
together with the emergence of new content formats and creation methods,
including video, social media, generative AI, and user-generated content, has
increased the complexity of how brands, publishers, and marketers manage
content and related rights. As a result, these organizations increasingly
require technology, workflows, and governance solutions to manage content
throughout its lifecycle and to ensure compliance from acquisition through
distribution and post-use review.
At the same time, companies are making broader and more strategic use of brand
licensing as a means of extending brand reach, engaging consumers, and
creating incremental revenue opportunities. These initiatives often involve
multiple stakeholders, channels, and contractual relationships, increasing the
operational and compliance demands associated with managing intellectual
property, approvals, royalties, and brand usage. We believe these dynamics
continue to drive demand for enterprise software solutions that improve
visibility, control, and efficiency across licensing and content-related
operations.
FADEL has positioned itself to address these market needs through its IP and
Brand Licensing Management, Digital Content Management, and Brand Compliance
software offerings. Our two product families serve a broad range of
participants in these markets by enabling content aggregation and
searchability, licensing and brand compliance management, and the monitoring
and tracking of talent, brand assets, and marketing and advertising content.
Our IPM Suite remains a core component of this strategy. The product continues
to be attractive to enterprise publishers and licensors, who require robust
and scalable solutions to manage complex intellectual property and licensing
operations across large portfolios, multiple counterparties, and international
markets. These customers rely on the IPM Suite to centralize and streamline
the management of contracts, rights, royalties, financial obligations, and
compliance processes.
In addition, we are seeing increasing demand for the IPM Suite from mid-market
licensees, which we believe represents the largest current source of market
demand for the product. As licensing activity expands across a broader set of
companies, these customers are increasingly seeking purpose-built software
solutions that provide greater operational discipline, financial visibility,
and risk management capabilities without the burden of legacy, highly
customized systems. We believe this trend expands the addressable market for
the IPM Suite and supports an attractive opportunity for continued growth.
We remain focused on enhancing our platform capabilities through AI-driven
features, modular packaging, and expanded IPM Suite functionality, including
our recently released Product Approvals module. We believe these investments
strengthen our ability to meet evolving customer requirements while
reinforcing our competitive differentiation across key verticals. Our product
strategy is intended to make our solutions more scalable, more configurable,
and easier to adopt across a wider range of customer profiles and use cases.
Brand Vision is also an important part of our growth strategy, addressing the
increasing need among large consumer brands for digital rights management and
content tracking across rapidly expanding volumes of marketing content. As
brands create, adapt, and distribute content across websites, social
platforms, retail media, streaming channels, and other digital touchpoints,
they must manage the rights, usage terms, approvals, and provenance associated
with images, video, and music assets. We believe this complexity is increasing
as marketing organizations work with a broader ecosystem of agencies,
creators, influencers, production partners, and technology platforms.
Our Brand Vision offering is designed to help large consumer brands bring
greater control, visibility, and compliance to this environment by enabling
the tracking and monitoring of marketing content and its underlying rights
data across asset types and channels. We believe the need for such
capabilities is becoming increasingly important as the volume, speed, and
fragmentation of content production continue to grow. This creates an
opportunity for FADEL to support customers seeking to reduce compliance risk,
improve governance, and establish more scalable processes around the creation
and use of digital marketing assets.
We introduced AIVA in late 2025 as FADEL's AI for Brand Licensing and
Royalties. AIVA reflects our strategy to embed AI directly into the workflows
that matter most to our customers, particularly in areas where licensing and
royalty operations involve significant data complexity, process intensity, and
financial oversight. We believe AI-enabled functionality can improve user
productivity, enhance decision support, and help customers manage increasingly
sophisticated licensing programs more effectively.
We expect AIVA to strengthen the value proposition of our platform by making
our solutions more intelligent, efficient, and differentiated. We believe the
introduction of AIVA supports our broader objective of extending our
leadership in IP and brand licensing management while creating additional
opportunities to expand customer adoption, deepen product usage, and drive
long-term growth across our installed base and new business pipeline.
We intend to continue investing in our platform through the integration of
AI-driven capabilities, ongoing enhancements to product functionality, the
development of new offerings, and expansion into additional customers,
industries, and geographies.
In the near term this is being done through a deliberate three-pronged
approach;
Strengthening our Go-to-Market Capabilities
We have improved our US and European sales footprint through direct hires,
enhanced training, and the integration of sales and marketing automation
tools. In parallel, we are pursuing targeted technology partnerships and
channel distribution opportunities with enterprise and mid-market ERP and
Digital Asset Management software providers to accelerate reach and sales
velocity across both enterprise and mid-market segments.
Scaling Demand Generation and Market Visibility
Investments in digital marketing, thought leadership, and content-driven
campaigns are generating broader awareness and engagement. Our redesigned
website, enhanced inbound funnel, and improved sales enablement workflows are
collectively shortening sales cycles and converting a more qualified pipeline
into revenue.
AI-Driven Product Innovation and Differentiation
We remain focused on enhancing our platform capabilities through AIVA
AI-driven features, modular packaging, and expanded IPM Suite functionality,
including our recently released Product Approvals module. These investments
ensure we meet evolving customer needs while reinforcing our competitive
differentiation across key verticals.
Our business model
IPM Suite and Brand Vision solutions are offered as license / subscription
(SaaS) respectively. In addition, the Group offers implementation services to
customers, provided under separate contracts. Implementation services are
provided to customers who require assistance with configuring the software
product they purchased, migrating legacy data into our products and
integrating our products with the rest of their systems. Therefore, the Group
has a combination of recurring revenue from the ongoing use of the software,
and one-off Services revenues for design, configuration, and implementation of
the products and solutions development for bespoke needs. We also offer
managed services contracts where our team supplements our customer's staff by
directly handling daily tasks related to the use of our products.
IPM Suite - Enterprise and Mid-Market
Licence (included in ARR)
· Annual or multi-year agreements; and
· Includes basic post-implementation support
· Recurring revenue stream; Annual Contract Value (ACV) typically
ranges from $50 thousand - $500 thousand per customer per annum
Billable Professional Services (excluded from ARR)
· Functional implementation
· Technical services
· Managed services to supplement customers' internal resources.
· Implementation revenue ($30 thousand for smaller deployments -
$100s of thousand for Enterprise scale deployments
IPM Suite - LicenSee
Licence (included in ARR)
· Annual or multi-year agreements
· Recurring revenue stream; ACV typically ranges from $10 thousand
- $50 thousand per customer per annum
Implementation Service (excluded from ARR)
· Lower implementation revenue ($5 thousand - $20 thousand)
Brand Vision
Licence (included in ARR)
· Annual or multi-year agreements
· Recurring revenue stream; ACV typically ranges from $50 thousand
- $400 thousand per customer per annum
Implementation Service (excluded from ARR)
Lower implementation revenue ($50 thousand - $100 thousand for Enterprise
scale deployments)
MARKET OVERVIEW
The Group operates within the global market for intellectual property
management, licensing and royalty administration solutions, as well as brand
compliance and content monitoring. These markets are characterised by
increasing complexity, driven by the growth of global licensing programmes,
the expansion of digital distribution channels and the increasing volume of
data associated with licensing and brand governance activities.
The global market for licensed consumer products continues to represent a
significant commercial opportunity, with industry sources, including Licensing
International, indicating that retail sales of licensed merchandise exceed
$300 billion annually. This scale reflects the widespread use of intellectual
property across sectors including media, entertainment, consumer goods and
fashion, and underpins the need for robust systems to manage licensing
agreements, royalties and contractual relationships.
In addition to consumer products licensing, the Group's solutions are also
applicable within the publishing sector, where organisations manage complex
royalty arrangements with authors, creators and other rights holders. The
global publishing market, including books, journals and digital content,
represents a substantial and established industry, with revenues estimated to
exceed $120 billion annually according to industry sources. Within this
market, the accurate calculation, reporting and payment of royalties to talent
remains a critical operational requirement, further supporting demand for
systems that provide transparency, auditability and efficiency in royalty
administration.
Organisations are required to manage large volumes of contracts, royalty
arrangements and intellectual property rights across multiple territories and
counterparties. This creates a need for systems that provide accuracy,
transparency and control over licensing operations, as well as the ability to
manage complex contractual relationships and financial obligations.
At the same time, the continued growth in digital media, e-commerce and online
content distribution has increased the importance of monitoring how
intellectual property and branded assets are used across a wide range of
platforms. As a result, organisations are placing greater emphasis on brand
governance and compliance, particularly in digital environments where content
can be widely distributed and reused.
The market for Digital Asset Management ("DAM") solutions, which underpins
many brand governance and content management activities, is estimated by
industry analysts, including Gartner and IDC, to be in excess of $5-7 billion
globally, with continued growth driven by increasing volumes of digital
content and the need for centralised asset management. In parallel, demand for
copyright monitoring, content tracking and compliance solutions continues to
expand as organisations seek greater visibility over the use of their
intellectual property across digital channels.
In response to these challenges, organisations are increasingly adopting
software solutions that enable the centralised management of licensing,
royalty and brand compliance activities. There is a continued shift away from
manual processes and fragmented systems towards integrated platforms that
support contract management, royalty calculation and reporting within a single
environment.
Alongside this shift, advances in data analytics and artificial intelligence
are increasingly influencing how organisations manage licensing and brand
governance processes. AI technologies are being applied to support enhanced
data analysis, automate elements of workflow management and improve the
monitoring of compliance across large and complex datasets. Within licensing
environments, these capabilities can provide greater insight into royalty
performance, assist in identifying anomalies and support more efficient
processing of contractual and financial data.
While the application of artificial intelligence within these markets
continues to evolve, it is expected to play an increasingly important role in
supporting operational efficiency and decision-making across licensing and
brand governance activities.
The Group's platforms, including IPM Suite and Brand Vision, are designed to
address these requirements by providing integrated solutions that support the
management of intellectual property, licensing and brand compliance
activities. The continued development of AI-enabled capabilities within these
platforms supports the Group's ability to respond to evolving customer
requirements while maintaining a focus on accuracy, control and data
governance.
OUR PRODUCTS
AIVA
AI for Brand Compliance and Licensing Operations - Intelligence in Action
AIVA is FADEL's AI designed to transform how organizations manage end-to-end
licensing and marketing compliance operations. It unifies FADEL's generative,
analytical, and predictive AI capabilities with purpose-built autonomous AI
agents embedded within the Brand Vision and IPM Suite products.
AIVA delivers intelligent automation across complex licensing and marketing
workflows:
· AIVA Reviewer Agent - Conducts initial review of Product Approval
submissions
· AIVA Contract Ingestion Agent - Instantly extracts rights terms
and obligations from licensing contracts and creates Brand Vision and IPM
Suite parties and agreements
· AIVA Media Identification - Detects and matches licensed images,
video, and music across digital distribution channels
· AIVA Business Insights - Generates dashboards, executive reports,
and predictive models using natural language prompts
AIVA Intelligence - AI assistant that provides real-time user support, while
also delivering detailed insights on agreement terms and obligations using
contract and deal intelligence.
Brand Vision
AI-Powered Brand Protection & Content Compliance
FADEL Brand Vision is an AI-powered brand protection and rights management
solution that enables global enterprises to accelerate creative production
while ensuring brand consistency, compliance, and control across the marketing
content lifecycle.
Trusted by leading global brands, Brand Vision transforms how organizations
manage and protect creative assets, driving measurable business impact.
· Lower Marketing Costs: Visibility into asset rights maximizes
content reuse and eliminates unnecessary spend
· Faster Speed-to-Market: Automated rights checks and seamless DAM
integration accelerate campaign execution
· Reduced Corporate Risk: Proactive expiration and clearance
controls minimize violations and legal exposure
· Stronger Global Collaboration: Centralized rights intelligence
aligns marketing, production, legal, and agency teams
· Actionable Insights: Advanced reporting and analytics enable
informed, data-driven decisions
Brand Vision proactively protects content beyond campaign launch. Content
Tracking with AIVA Media Identification monitors digital, social, and
e-commerce channels to identify licensed images, video, and music and flag
expired or non-compliant usage, minimizing legal and financial risk.
As content ecosystems grow more complex, FADEL Brand Vision delivers the
clarity and control organizations need to create confidently, operate
efficiently, and protect their most valuable brand assets.
IPM Suite
Smarter Licensing, Automated & AI-Optimized
FADEL's licensing management solutions, IPM Suite and LicenSee, empower
licensors, licensees, and publishers to modernize licensing operations,
support innovative business models, and drive sustainable revenue growth.
IPM Suite transforms royalty and licensing management by streamlining
licensing processes, bolstering financial accuracy, and providing brand and
sales compliance oversight.
· Revenue Innovation: Enable new licensing models across emerging
platforms and channels
· Financial Alignment: Align royalties and revenue recognition with
evolving business models and ERP financials
· Operational Efficiency: Streamline workflows from deal management
and product approval through royalty reporting
· Risk and Compliance Control: Reduce penalties and payment
discrepancies while strengthening audit readiness
· Brand Integrity: Ensure product quality and consistency through
automated approvals
Embedded AI capabilities powered by AIVA enhance efficiency and insight across
the licensing lifecycle by accelerating product approvals, extracting and
transforming contract data into structured agreements and parties in IPM
Suite, and delivering executive insights, predictive analytics, and
intelligent guidance driven by contract and deal intelligence.
LicenSee
Streamlined Royalties, Stronger Partnerships, Bigger Growth
LicenSee is an all-in-one royalty management solution designed specifically
for small to mid-market licensees. The platform automates royalty
calculations, royalty statement generation in licensor-specific formats,
compliance checks, and audit management, simplifying reporting while ensuring
financial accuracy and control.
Built on the same proven architecture as IPM Suite, LicenSee delivers
scalable, user-friendly tools that streamline workflows, reduce audit risk,
and strengthen collaboration with licensors.
By automating complex financial processes and enhancing compliance visibility,
LicenSee enables licensees to operate with confidence, improve transparency,
and focus on strategic growth.
PictureDesk
Centralize, Monetize, and Revitalize Your Digital Content
PictureDesk is a content discovery and asset management platform built for
media companies, publishers, and brands to find, manage, and monetize
published articles and digital assets.
The platform centralizes live and licensed content in a single hub, enabling
rapid response to 24/7 news cycles while streamlining editorial workflows and
content syndication.
· Operational Efficiency: Reduce repetitive editorial tasks and
improve workflow productivity by up to 20%.
· Content Monetization: Expand syndication opportunities and
maximize the value of published content.
· Real-Time Access: Manage live and licensed assets within a
centralized, searchable environment.
· Brand Impact Monitoring: Leverage AI-powered visual search and
real-time ambassador tracking to monitor and amplify brand presence.
As digital publishing accelerates and content demands intensify, PictureDesk
delivers the speed, visibility, and control organizations need to operate
efficiently and maximize content value.
CFO'S REVIEW
During 2025, we continued to strengthen financial discipline while supporting
investment in our platform and AI-enabled capabilities, enabling more
efficient delivery and innovation across the Group. This supported improved
operating efficiency and the strong progress delivered during the year.
2025 was a year of continued financial discipline and operational realignment
for FADEL. During the year we maintained focus on strengthening our recurring
revenue base, supporting AI-enabled product development and enabling more
efficient innovation across the group, while improving cost efficiency and
enhancing the quality of revenue generation.
While total revenue declined modestly year-on-year, due to a reduction in
lower-margin services revenue offset partially by higher-margin licensing and
support revenue, the underlying fundamentals of the business improved
meaningfully.
These developments reflect the benefits of the restructuring initiatives
implemented in late FY24 and further refined throughout FY25, as well as
management's continued focus on disciplined cost control and cash management.
Revenue
Beginning with the 2025 year-end results, the Company's services revenue now
includes revenue generated under recurring services subscription arrangements,
rather than such revenue being included within licensing subscription and
support revenue. The prior period amounts have been reclassified to conform to
this presentation. The Company believes that this presentation is more
consistent with prevailing SaaS industry reporting practices and with how
senior management evaluates the performance of the business.
Total revenue for the year ended 31 December 2025 was $12.6 million compared
to $13.0 million in FY24, representing a decrease of approximately 3%.
The decline reflects a reduction in services revenue, which decreased to $4.4
million (FY24: $5.0 million). This reduction was largely attributable to the
Company's strategic expansion into the mid-market licensing space, where
projects are less complex and shorter in duration. Also, technical services
revenue from existing enterprise clients has decreased since they now have
greater familiarity with our product and their requested features are in
place. The Company expects this downward trend to continue in FY26.
Licensing and support revenue increased to $8.2 million (FY24: $8.0 million),
reflecting continued adoption of the Company's core software platforms and
expansion within existing customer relationships. As the business continues to
prioritise scalable recurring revenue, we expect licensing subscription and
support revenue to represent an increasing proportion of the Group's revenue
mix over time.
Expenditure highlights
We continued to build on our 2024 cost-cutting efforts. Cost of sales
decreased by approximately 10%, moving from $5.0 million in 2024 down to $4.5
million in 2025. This reduction was driven by ongoing improvements in how we
deliver services and allocate resources. Our gross margins increased from 62%
in 2024 to 64% in 2025, primarily due to our revenue mix shifting from
lower-margin services revenue to higher-margin licensing and support revenues.
In 2025, the margins for our licensing and support revenue was 84% (83% in
2024) and the margins for our services revenue was 28% (28% in 2024).
Operating expenses for the year were $9.5 million-a decrease of approximately
27% compared to $13.1 million in FY24. These savings resulted from structural
changes and cost restructuring that began in late FY24 and continued through
FY25, including organisational streamlining, reduced administrative overhead,
and tighter expense controls. These actions aimed to better align costs with
recurring revenue, while still enabling investment in product development and
innovation.
Some of the key operating cost reductions include:
· Research and Development (R&D) expenses decreased to $3.1
million from $3.5 million in 2024, representing an 11% reduction. It's
important to highlight that, under US GAAP, we fully expense R&D costs,
while many comparable companies using IFRS accounting capitalise some
development spending. This means our expense profile is more conservative and
direct EBITDA margin comparisons are affected.
· Selling, General, and Administrative (SG&A) expenses also
decreased significantly-down 31% to $5.9 million from $8.6 million
Gross Profit
Gross profit was $8.1 million (2024: $8.0 million) with a 64% margin, slightly
higher than last year. Despite lower revenue, margins improved due to cost
control and operational efficiency. Management anticipates further margin
gains as more revenue comes from high-margin licensing subscriptions rather
than services.
Key Performance Indicators
The Board monitors a number of financial and operational Key Performance
Indicators ("KPIs") to assess the performance of the Group and to track
progress against its strategic objectives. In addition to statutory measures
prepared under U.S. GAAP, management uses certain non-GAAP metrics,
particularly those relevant to SaaS businesses, to evaluate operating
performance and long-term growth potential.
These KPIs provide additional insight into the strength of the Company's
recurring revenue base, customer retention and operational efficiency.
Adjusted EBITDA Loss
Adjusted EBITDA loss, defined as earnings after capitalized commission costs
and before interest, tax, depreciation, amortization, exceptional costs, and
share-based payments, improved significantly to approximately $0.7 million
loss for FY25 compared to a $3.9 million loss in FY24. The improvement was
driven primarily by the lower operating expense base and ongoing discipline in
managing discretionary expenditure across the business. While revenue declined
modestly year-on-year, the improvement in cost structure more than offset this
impact, resulting in a substantial narrowing of operating losses. This metric
is conservative, and when used for comparison with other companies, it should
be noted that, in accordance with U.S. GAAP, we fully expense our R&D
costs, which totalled $3.1M in 2025.
2024 2025
EBITDA $ (3,959,347) $ (812,471)
Adjustments to operating expenses
Commissions Capitalized during the period (474,965) (344,947)
Exceptional items
Corporate Strategic Initiatives - 75,000
Restructuring expenses ((1)) 251,398 92,377
Share based payments 275,643 246,760
Total Adjustments 52,076 69,190
Adjusted EBITDA $ (3,907,271) $ (743,281)
( )(1) primarily consist of severance payments made to employees affected by
our workforce reduction as part of cost-cutting initiatives. The restructuring
was necessary to reduce overhead costs and ensure long-term financial
sustainability.
Annual recurring revenue (ARR)
ARR represents the annualised value of recurring licensing subscription and
support revenue from active customer contracts at the reporting date. While
ARR is a non-US GAAP measure, ARR is a key indicator of the health and growth
of the Group's recurring revenue base and provides visibility into future
revenue streams.
Starting with 2025 year-end results, ARR includes only recurring licensing
subscription and support revenue, excluding recurring services revenue. Prior
periods have been reclassified for consistency. This adjustment better aligns
with SaaS industry standards and clarifies core software revenue performance.
We report ARR across three categories: IPM Suite (including LicenSee™),
Brand Vision, and PictureDesk. ARR increased 14% year-on-year to $8.9 million
(FY24: $7.8 million). This growth was driven by solid retention. new customer
wins and expansion within existing accounts.
As at As at ARR Growth Rate
31 December
31 December
2024
2025
$
$
IPM Suite 4,964,784 5,625,862 13%
Brand Vision 2,015,235 2,463,751 22%
PictureDesk 844,583 814,975 -4%
Total 7,824,602 8,904,588 14%
The growth in IPM was driven by seven new mid-market IPM customers secured
during the year. These customer wins underscore our ability to scale our
solutions beyond enterprise accounts. We continue to gain traction and
expand in this important market segment.
Brand Vision experienced expansion of enhanced content tracking capabilities
among existing clients and secured a new major media customer. We continue
to enhance content tracking capabilities which strengthen Brand Vision's role
as a real-time compliance layer across digital, retail, and partner platforms.
A significant portion of ARR growth was achieved during the fourth quarter of
2025, which is expected to contribute more fully to reported revenue during
2026.
Customer numbers
As with ARR metrics, we track our active client base across the same three
core categories: IPM Suite, Brand Vision, and PictureDesk. In 2025, total net
customer count decreased to 134 (2024: 140), driven by attrition in
PictureDesk, offset by new logo additions in IPM and Brand Vision.
2024 Wins Loss Merged 2025 Net logo ((1)) expansion (reduction)
IPM Suite 22 7 (2) - 27 23%
Brand Vision 15 2 - (1) 16 13%
PictureDesk 103 5 (13) (4) 91 -8%
Total 140 14 (15) (5) 134 (1)%
(1) excludes the impact of merged clients
The decline in PictureDesk customer count came from smaller "Public Cloud"
instance clients, whose ARR contributions averaged approximately $4,000 per
client.
Customer retention remained strong across the Group's core platforms of IPM
and Brand Vision during FY25. FADEL continues to benefit from the
mission-critical nature of its solutions, which support complex licensing,
royalty management and brand governance operations for global organisations.
In addition to new customer wins, the Group recorded expansion within several
existing accounts, particularly through increased adoption of enhanced content
tracking capabilities within Brand Vision and additional licensing
functionality within IPM Suite.
These upsell opportunities remain an important contributor to ARR growth and
reinforce the long-term value of the Company's land-and-expand strategy.
The Group continued to expand its customer base during the year, particularly
within the mid-market segment for IPM Suite. Key new customers secured during
FY25 included Handcraft Manufacturing, Viz Media, Zak! Designs and Bloom Fresh
International for IPM Suite, as well as Comcast Communications and Ferrero for
Brand Vision.
Growth in the mid-market IPM segment remains an important strategic focus, as
it offers shorter sales cycles and scalable recurring revenue opportunities
while complementing the Group's established enterprise customer base.
Cash and working capital
As of December 31, 2025, cash and cash equivalents stood at $1.9 million, down
from $2.6 million at the end of 2024. The Company also has an undrawn $1.0
million credit facility available, which has been renewed through May 2027 to
offer further financial flexibility if needed. There were no borrowings under
this facility as of 31 December 2025. Total year-end receivables were $3.2
million, with much of this amount collected after year-end.
Even though cash levels dropped, the year-end balance was higher than previous
market expectations. This result demonstrates ongoing efforts to manage
working capital, especially by speeding up collections and negotiating better
contract renewal terms. Cash used in operations totalled $1.1 million (2024:
$0.6 million). The 2025 outflow reflects revenue timing and normalised working
capital flows.
Mark Plotkin
Chief Financial Officer
29 April 2026
RISK MANAGEMENT
Principal Risks and Uncertainties relating to the Group and its Business
Like all businesses, we operate in an environment of risk, which the Company
mitigates and manages. These risks are carefully balanced to ensure that we
maximise returns for our shareholders. The Group has a risk management process
that identifies, reviews and takes action on a regular basis and is overseen
by the Board.
The risks and opportunities set out below are not exhaustive, and additional
risks, uncertainties and opportunities may arise or become material in the
future. Any of these risks, as well as other risks and uncertainties discussed
in this report, could have a material adverse effect on the business.
Ability to retain and attract new customers
Our growth strategy is dependent on the acquisition of new customers, which
depends on the perceived value of our products versus those offered by its
competitors. Mitigant: Our products provide solutions to complex problems that
are an important and growing part of the business model needs of large
multinationals across a wide range of sectors. Existing customers highly
value our products, as evidenced by the very low levels of churn with our
enterprise IPM customers. Since the launch of Brand Vision, we have seen an
increasing number of new logos and increasing awareness of our new AI-driven
products, and their ability to address key business challenges is creating
both new log as well as upsell opportunities.
Ability to retain and attract key staff
We recognise that to achieve our strategy we need to continue to take an
active approach to identify, attract and retain the skills and expertise
needed and to incentivise employees appropriately.
Mitigant: We ensure that we have in place the appropriate staffing levels,
with a focus on technical and commercial capabilities and that employees' and
contractors' contracts provide maximum mutual protection, should they leave
our employment. We retain key staff by providing a competitive salary and
bonus structure and the award of share options. We mitigate the risks
associated with our business through the employment of high-quality,
experienced staff and contractors, combined with efficient and effective
management overview and controls.
Concentration risk
We derive a significant portion of our revenue from a relatively concentrated
base of enterprise customers, with a limited number of clients accounting for
a large share of annual revenue. The loss of a major customer, a reduction in
contract scope, or delays in contract renewals could have a material adverse
impact on revenue and cash flow. In addition, certain customers operate in
industries that may experience cyclical demand or budgetary constraints, which
could influence purchasing decisions or project timelines. Mitigant: We
mitigate this risk through a diversified go-to-market and product strategy,
including the launch of Brand Vision, and targeting the mid-market with the
launch of LicenSee and our packaging and deployment options that enables
modular adoption of IPM Suite. In this way we are increasing recurring
license and support revenue across a larger number of customers. Management
continues to monitor customer concentration metrics and actively seeks to
broaden the customer base across industries and geographies.
Key partner and supplier relationships
We rely on a number of key partners and third-party suppliers to support the
delivery and development of our software platforms, including cloud
infrastructure providers and technology partners. Disruption to these
relationships, changes in commercial terms, service interruptions or the
failure of a key supplier to perform its obligations could adversely affect
our ability to deliver services to customers, maintain platform performance or
execute elements of our product development roadmap. Mitigant: We mitigate
this risk through careful selection of established partners, ongoing
performance monitoring and the use of contractual arrangements designed to
ensure appropriate service levels and operational continuity. Where practical,
we also maintain flexibility within our technology architecture and vendor
relationships to reduce dependency on any single supplier and to support the
transition to alternative providers if required. Most recently we have added
multiple LLM vendor relationships in support of our internal and product-based
usage of AI.
A failure, breach, or interruption, of the Group's IT systems
Our business depends on the availability, integrity, and security of its
cloud-based platforms and internal systems. A system failure, cybersecurity
breach, or material service disruption-whether internal or from a third-party
provider-could result in operational downtime, loss of data, reputational
harm, and financial impact. Mitigant: To manage this risk, we maintain a
comprehensive operational security framework. This includes role-based access
controls, environment segregation, and the encryption of data both at rest and
in transit. All infrastructure changes are governed by documented change
management procedures, with regular system backups and restore testing to
support continuity. Proactive monitoring tools are in place to detect and
respond to threats, and our security posture is validated through annual SOC
audits and third-party penetration testing. These measures are reviewed and
updated regularly to remain aligned with industry best practices and evolving
risks.
Artificial Intelligence Governance and Regulatory Risk
We continue to integrate artificial intelligence ("AI") capabilities into our
software platforms to enhance analytics, automation and compliance workflows.
As the use of AI technologies expands, we may face risks associated with
evolving regulatory frameworks, ethical considerations, and customer
expectations regarding transparency, accuracy and responsible use of AI-driven
tools. In addition, the misuse, unintended bias or incorrect outputs from AI
systems could lead to reputational damage or reduced customer confidence if
not properly governed. Mitigant: We manage these risks by adopting a
structured and controlled approach to AI development, embedding AI
capabilities within governed product environments, maintaining human oversight
of critical workflows, and monitoring emerging regulatory developments
relating to AI technologies. Management continues to evaluate industry best
practices and regulatory guidance to ensure AI functionality within the
Company's platforms is deployed responsibly and in accordance with applicable
standards.
Macro global economic risk
Our customers and the markets in which it offers its services are directly
affected by many national and international factors that are beyond our
control. Any one of the following factors, amongst others, may cause a
substantial decline in the markets to which we offer our services:
• Economic and political conditions
• The imposition of tariffs and counter-tariff measures,
particularly by or against the United States
• The level and volatility of interest rates
• Collapse of financial markets
• Concerns about inflation
• Changes in investor sentiment and consumer confidence
levels
• Legislative and regulatory changes
Uncertain economic prospects or a sustained period of financial instability
could have a material adverse effect on our business, results of operations,
financial condition and growth prospects. In particular, recent and proposed
tariff regimes-including those involving the U.S. and its trading
partners-have introduced additional uncertainty for global enterprises. These
measures have the potential to increase costs and affect buying decisions,
particularly for customers outside the U.S. who are more sensitive to price
fluctuations. Mitigant: We actively monitor macroeconomic and geopolitical
developments, including recent tariff policy changes around the world, to
assess and manage potential risks to our operations, customer relationships,
and financial performance. While we have not observed a material impact to
date, we have seen an increase in price sensitivity and delays in the sales
process among certain customer segments that have themselves been directly
impacted by tariffs.
Despite this, FADEL's products are generally positioned as cost-saving as well
as revenue generating solutions due to their AI driven automation of complex,
manual processes and identification of unlicensed use of digital assets. As
such, our software often serves as a means for customers to enhance efficiency
and reduce operational overhead-making our value proposition more compelling
in uncertain economic climates.
In addition, currency-related risks are mitigated using multi-currency
deposits and proactive planning around expected revenue and expenditure. Tax
compliance and planning are managed through local and multi-jurisdictional tax
advisors, and we continue to align our global footprint with strategic needs
to enhance operational resilience.
Geopolitical Risk - Beirut, Lebanon Office
We maintain operational offices in Beirut, Lebanon and Amman, Jordan, which
exposes us to geopolitical risks associated with political instability,
regional conflicts and the recent broader security developments in the Middle
East. Escalation of regional tensions, including those involving Iran and
neighbouring states, may result in infrastructure disruption, mobility
restrictions, regulatory changes or broader economic instability that could
affect business continuity or employee safety. Mitigant: The Group closely
monitors geopolitical developments and maintains contingency and business
continuity plans designed to mitigate potential operational disruption,
including flexible working arrangements, remote working capabilities and the
ability to redistribute operational activities across locations where
necessary. Employee safety remains a priority, and the Company maintains
communication protocols and security measures to support staff in the region,
while the presence of offices in Jordan provides geographic diversification
and additional operational resilience.
Liquidity and Funding Risk
As a growth-stage technology company, we continue to invest in product
development and customer acquisition while working toward sustained
profitability. As a result, we face risks associated with maintaining
sufficient liquidity to support ongoing operations and strategic initiatives.
Variations in revenue timing, particularly related to implementation projects
or enterprise contract cycles, could influence short-term cash flows.
Mitigant: We manage this risk through disciplined cost management, careful
monitoring of working capital and maintaining access to additional liquidity
resources, including an undrawn credit facility. During FY 2025, the annual
run rate of overhead cost was reduced by $3.6 million. Management and the
Board regularly review cash flow forecasts and funding requirements to ensure
that we maintain adequate financial flexibility to support our operations and
strategic objectives.
CORPORATE GOVERNANCE REPORT
The Directors acknowledge the importance of high standards of corporate
governance and taking account of the Company's size and stage of development,
have developed appropriate governance procedures.
Board of Directors and its Role
On 31 December 2025, the Board was made up of three Non-Executive Directors
and one Executive Director. Their biographies are detailed on pages 42 and 43.
The Board meets regularly and is responsible for providing effective
leadership to promote the Company's long-term success and oversee its
generation of shareholder value and contribution to the wider society.
The Company, as a Delaware corporation, is not required to comply with the UK
Corporate Governance Code (the 'Code'), nonetheless the Directors have decided
to adopt many of its provisions. The Company formally reports against the
Quoted Companies Alliance Corporate Governance Code (the 'QCA Code'), full
details of which are available at www.fadel.com. Below are the ten QCA Code
Principles and how they have been applied to the Company.
Principle 1: Establish a strategy and business model which promotes long-term
value for shareholders
Each year, the Company communicates its purpose, strategy and business model
in the Company's annual report and can be found within this Annual Report on
pages 15 and 17. The Board believes that the current strategy of the Company
will lead to an increase in shareholder value through the focus on:
• Growing license ARR through investment in sales
outreach and effective marketing; and
• Continuing innovation through R&D expenditure on
AI and current and new products.
The Group continually invests in the above-mentioned items. These investments
will mean the Group will remain loss making in the short-term while waiting
for recognized revenue to grow, although in FY 2025 the Group has made
significant progress to its goal of breaking even. These expenditures are also
expected to yield long-term benefits such as an increased market share in a
competitive marketplace, making its product offering more attractive to
potential customers and building a business that is resilient to
macro-economic shifts.
Principal risks facing the Group are detailed further on pages 31 - 33. The
Board periodically discusses and reviews these risks and identifies and
deploys mitigation steps to manage these risks of the business.
Principle 2: Seek to understand and meet Shareholder needs and expectations
The Board is committed to open and continuing engagement with the Company's
shareholders. There are four main ways in which the Company communicates with
its shareholders:
• The Company's Investors website;
• The Annual General Meetings ("AGM");
• The Annual Report; and
• The half-year and full-year results announcements, and
other trading updates (where required and appropriate), when the CEO and CFO
offer up investor calls; and
• The Chair and SID making themselves available for
meetings with institutional shareholders.
The Company's Chief Executive Officer and Chief Financial Officer oversee
investor relations with shareholders, prospective investors, analysts and the
various regulators. We do this via, meeting with independent investment
analysts, regular reporting processes and at our Annual General Meeting. The
Board is kept informed of the views and concerns of major shareholders by
briefings from the CEO and CFO. Any internal communications, with employee
shareholders and option holders, are handled with input from HR and the senior
management team.
We are committed to listening and communicating with shareholders to ensure
that our purpose, strategy, business model and performance are clearly
understood. We maintain an active corporate website (https://fadel.com/) and
post regular trade updates on various social media platforms (LinkedIn,
Facebook, X) to inform stakeholders of business updates and key events. These
updates also include the required financial reporting and market updates for
significant events on the Regulatory News Service. The Company's senior
management team meet on a weekly basis, and the Chief Executive Officer and
Chief Financial Officer speak with the NOMAD on at least a tri-weekly basis to
share internal developments, strategy and other matters should they arise.
As mentioned above, the AGM is one forum for dialogue with shareholders and
the Board. The Notice of Meeting will be sent to shareholders at least 21 days
before the AGM. The results of the AGM will subsequently be published on the
Company's website.
Principle 3: Take into account wider stakeholder and social responsibilities
and their implications for long-term success
The Board recognises that its long-term success comes from the continuing
efforts of employees, customers, contractors, suppliers, partners, vendors and
other stakeholders. Engaging effectively with them all strengthens those
relationships and helps us meet our commitments. The Directors and the Group
maintain an ongoing dialogue with these various stakeholders through the
channels highlighted in principle 2 above. The Board is regularly updated on
broader stakeholder engagement to stay up to date with stakeholder insights
into the issues that matter most to them and our business, thus enabling the
Board to understand and consider these issues in decision-making.
FADEL is a socially responsible business and strives to have a positive impact
on the communities in which it operates. Our geographic working location
spread, and business model, facilitates the identification of shared
challenges, and opportunities and ideas, whilst also identifying the key
resources and relationships to drive the business forward and achieve its
goals.
We welcome, and listen to, feedback from employees who all have the
opportunity to progress and develop their capabilities and careers. We have a
diverse workforce of colleagues of many nationalities, thus making
communication and feedback crucial development tools within the Group.
Principle 4: Embed effective risk management, considering both opportunities
and threats, throughout the organisation
Financial Controls
The Company's Audit, Risk and Sustainability Committee comprises Sally
Tilleray (Chair) and Simon Wilson. The Audit, Risk and Sustainability
Committee meets as often as required and at least three times a year. Its
duties and responsibilities are detailed on page 47 and 48
The Audit, Risk and Sustainability Committee main functions are:
• Internal control and risk assessment;
• Review and appointment of third-party audit and tax
services providers;
• Monitoring the integrity of the financial statements
of the Group, both the annual and interim accounts, and any other formal
announcements in relation to financial performance; and
• Review of the policies in place in regard to
sustainability and ESG.
The Audit, Risk and Sustainability Committee considers the nature, scope and
results of the external auditors work, whilst also reviewing any non-audit
services provided by the external auditors where appropriate. The ultimate
responsibility for reviewing and approving the annual report and accounts
remain with the Board as a whole.
The Chair of the Audit, Risk and Sustainability Committee reviews on an annual
basis, the membership of the Audit, Risk and Sustainability Committee and its
terms of reference.
Risk Management
Principal risks facing the Group and the industry in which it operates are
reviewed at least once a year and are detailed on pages 31 - 33. The Company
maintains a risk register that is managed by the Chief Financial Officer which
is reviewed by the Board at least once a year, on a more regular basis by the
Audit, Risk and Sustainability Committee, and the Chief Financial Officer.
Standards and policies
The Audit, Risk and Sustainability Committee reports to the Board who define
and set out the policies in communicated procedures, and these are reviewed
and revised each year to ensure consistency in application throughout the
business.
As a result of the application of these policies, alongside the identification
of any risks in connection with the annual audit, there have been no material
issues raised during the year under review, other than ordinary operational
matters.
The Company has formally adopted a social media policy which sets out to
minimise the risks to the Company through the use of social media by all
Directors, employees and vendors. This policy covers both the use of social
media for business use and personal use, and a wide variety of social media
sites, from social networking sites such as X, to the Company website.
The Company has also adopted an artificial intelligence ("AI") policy which
establishes guidelines for the appropriate and secure use of AI technologies
by Directors, employees and contractors. The policy sets out controls around
the use of approved AI tools, data input and confidentiality, and emphasises
the importance of human oversight, accountability and responsible use of
AI-generated outputs. It also restricts the use of non-approved or public AI
tools for Company-related activities and prohibits the use of confidential or
client data without appropriate safeguards. The policy is designed to support
the responsible adoption of AI while protecting the Company's data, including
customer data, systems and reputation.
Other key policies implemented include, but are not limited to, anti-bribery
procedures, a share dealing code and material contract review procedures.
Principle 5: Maintain the Board as a well-functioning, balanced team led by
the Chair
The Board has been constructed to ensure that there is the appropriate balance
of knowledge of the business, independence and experience relative to the
Group's size. The Board is currently, as of April 29, 2026, made up of the
Non-Executive Chairperson, two Non-Executive Directors and one Executive
Director, as detailed on pages 42 and 43. The Board now considers Joe
Gruttadauria to no longer be independent because of his additional
responsibilities in the sales organization held during the year ended 31
December 2025, and therefore there are an equal number of independent and
non-independent directors. The Board continues to believe it has maintained an
appropriate balance of independence and experience. This has been supported by
Sally Tilleray assuming Chair of the Remunerations Committee from Joe
Gruttadauria, and Simon Wilson joining both the Audit, Risk &
Sustainability and Remuneration Committees.
The Board meets at least six times each year with eight meetings occurring in
the 12 months ended 31 December 2025. The higher than minimum number of
meetings is expected to continue in 2026. Processes are in place to ensure
that each Director is provided on a frequent basis with such information as is
necessary to enable them to discharge their duties.
The Board is supported by the Audit, Risk and Sustainability Committee, and
the Remuneration Committee. Each committee has its own terms of reference.
Additional details on these committees can be found on page 46, including
frequency of meetings.
Key Board activities in the coming year will include reviewing of the progress
made towards the Group's goal/mission and continued monitoring of the Group's
annual development goals. In addition to these two main goals, the Board will:
• Review feedback from shareholders post full and
half-year results;
• Discuss internal governance processes;
• Review the Company's risk profile, with input from the
Audit, Risk and Sustainability Committee;
• Discuss strategic priorities, including product
updates and potential new markets; and
• Review and discuss the sustainability/ESG policy in
place, including a review of the internal culture of the Group.
The Board regularly asks Directors to confirm that they have no conflicts of
interest and that they are independent. The Company is satisfied that the
current Board is sufficiently resourced to discharge its governance
obligations on behalf of all stakeholders.
Principle 6: Ensure that between them the directors have the necessary up to
date experience, skills and capabilities
The Non-Executive Chair leads the Board, and also has ultimate responsibility
for the Company's governance structures and their effectiveness. The
Non-Executive Directors bring independence and objectivity to the Board's
deliberations, while the Executive Director is responsible for managing the
day-to-day operations of the business and delivering its strategic objectives.
In January 2025, the Board implemented a reorganization to enhance its
alignment with the Group's operational focus and growth strategy. As part of
this, Joe Gruttadauria, one of the Company's Non-Executive Directors, assumed
the additional role of Interim Head of Sales through 31 December 2025. In this
capacity, he worked closely with the sales team and the CEO to support new
business development. Joe brought significant enterprise B2B sales leadership
experience within the software sector, which the Board viewed as highly
complementary to the Company's commercial objectives.
While Joe is no longer acting Head of Sales effective 31 December 2025, he
continues to serve as a Non-Executive Director. Having held this past
operational role, Joe is no longer classified as an independent director under
applicable corporate governance guidelines. As a result, Sally Tilleray
continues to serve as the Chair of the Remuneration Committee and the Audit,
Risk and Sustainability Committee. To further support effective governance,
the Non-Executive Chair, Simon Wilson, is also a member of both committees.
The Board is confident that the current composition offers an appropriate
balance of experience, skills, and perspectives for the Group's size and
strategic direction. The Directors' qualifications are summarised on pages 42
and 43, and reflect strengths across sector knowledge, financial management,
and operational execution. This is further supported by access to training and
external advice as needed.
All Directors are encouraged to remain current on regulatory and governance
developments through regular update sessions and briefings. Independent
professional advice is available to all Directors at the Company's expense,
with prior Board approval, and the Company Secretary remains available to
support all governance matters.
Principle 7: Evaluate board performance based on clear and relevant
objectives, seeking continuous improvement
During the year the Non-Executive Chair again conducted an assessment of board
and committee effectiveness through 1:1 meetings with each member of the Board
and the new Company Secretary, frank and open group discussions among all
board directors together, and by receiving feedback from the Company's key
shareholders and NOMAD. Specific areas for improvement were identified, for
example frequency of communication and improvements in internal metric
reporting. A monitored plan of action is in place for FY 2026.
The objective of these assessments is to enable the board, its committees and
its directors to continue along a path of continuous and incremental
improvement of our governance at all levels. As part of the goal for
continuous improvement, the evaluation of board effectiveness is therefore an
on-going periodic assessment process.
Principle 8: Promote a corporate culture that is based on ethical values and
behaviours
The Board has set out and promotes a corporate culture based on sound ethical
values and behaviour, which they believe are essential in engaging with all
stakeholders. The Company promotes its corporate culture based on its five
core values:
1. Passion
2. Innovation
3. Respect
4. Trust
5. Integrity
The Company embeds all these core values in everything it does, including
annual staff training and development conversations. The Board takes
responsibility for the promotion of the above-mentioned core values, alongside
ethical values and behaviours throughout the Group. Employees have access to
the policies that promote this culture through the employee handbook, and the
annual training/updates required on these items.
The Group's purpose, strategy and business model is based on its award-winning
enterprise-ready cloud software built over the last seventeen years with a
product suite that provides solutions for content and IP creators (licensors)
and content and IP users (licensees), built on a highly scalable cloud
architecture. Its customers have complex needs. Our IPM Suite software assists
clients in managing and processing complex licensing contracts and
requirements. It streamlines licensing operations while ensuring comprehensive
oversight of brand and sales compliance. Our Brand Vision software helps
marketers and licensees accelerate their digital strategy to manage large
volumes of content and associated usage rights. The Group has a
customer-centric approach, with a significant amount of product development
taking place continuously in collaboration with customers ensuring current
market relevance.
The Board has a zero-tolerance approach to bribery, corruption, bullying,
harassment, and dishonesty. This commitment is communicated clearly to all
employees through training and communication, and specific policies that
employee are made to sign on an annual basis.
The Board also looks beyond its stakeholders to ensure the Company and its
Group entities make a meaningful contribution to society as a whole. During
the year ended 31 December 2025, the Company made $5,000 in donations across
charitable organisations in the US and Lebanon. The Company is also taking
steps to reduce its carbon footprint, through less printing of Company
documents, only making necessary business trips and making use of video
conferencing solutions wherever possible.
Principle 9: Maintain governance structures and processes that are fit for
purpose and support good decision-making by the Board
The Board meets at least 6 times each year in accordance with a scheduled
meetings calendar. Prior to the start of the financial year, the dates of that
year's Board meetings are circulated to all Board members. This is compiled to
facilitate both the financial as well as operational cadence of the Company.
The Board and its Committees receive an agenda for each meeting, alongside the
appropriate information prior to each meeting. These papers are generally
distributed at least two days before the meetings take place. The Board
meetings involve open conversation, and any Director is given the opportunity
to voice any questions or concerns. Any specific actions required after the
Board meetings are noted in the minutes, and are agreed upon by the Board,
and/or the relevant Committee. Where management input is required, this is
requested on a case-by-case basis.
The Board is ultimately responsible for the long-term success of the Company,
and its Group entities. The Board has formally adopted a schedule of matters
reserved for the Board. The Board is responsible for:
• Overall Group strategy;
• Structure and capital;
• Financial reporting and controls;
• Approval of the annual and interim results;
• Annual budgets and forecasts; and
• Board structure
The Board, alongside its Committee's and Management, continually monitors the
business risks and reviews the annual budgets and the performance in relation
to those budgets. The Non-Executive Directors (including the Chair) are
responsible for bringing independence and objectivity to decisions whilst the
Executive Directors are responsible for the day-to-day operations of the
business and delivering the strategic aims.
The Board is supported by the Audit, Risk and Sustainability Committee, and
the Remuneration Committee. Each committee has a terms of reference, about
which additional details on these committees can be found on page 46,
including how many times a year they are scheduled to meet. Each committee has
access to such resources, information, and advice as it deems necessary, at
the cost of the Company, to enable the committee to discharge its duties with
prior Board agreement.
Principle 10: Communicate how the Company is governed and is performing by
maintaining a dialogue with shareholders and other relevant stakeholders
The Company communicates with its shareholders mainly through the following
four channels:
• The Company's Investors website;
• The Annual General Meetings;
• The Annual Report;
• The half-year and full-year results announcements, and
other trading updates (where required and appropriate), with the CEO and CFO
being available for shareholder meetings; and
• The Chair and SID making themselves available for
meetings with institutional shareholders
A range of corporate information (including all Company announcements and
presentations) is also available to shareholders, investors, and the public on
the Company's corporate website (https://investors.fadel.com/). The Company's
website is updated frequently with information regarding the Group's
activities and performance. This includes the Company's reports,
presentations, notices of AGM's and results of voting.
In addition, analysts' notes and brokers' briefings are reviewed to achieve a
wide understanding of investors' views. The Company communicates with
institutional investors frequently through briefings with management. As
applicable The Company will also communicate to individual investors and
private client brokers through a dedicated email address, investor roadshows
and presentations at investor conferences.
Annual General Meeting
FADEL's Annual General Meeting will be scheduled to be held in June 2026, with
the formal date and details to be announced in the Notice of Meeting in
advance of the event.
Simon Wilson
Chair, Board of Directors
29 April 2026
THE BOARD OF DIRECTORS
Simon Wilson
Non-Executive Chair
Simon has over 20 years of experience in board and advisory roles with British
and American B2B software companies. He is a seasoned executive, specializing
in guiding both listed and growth equity-backed technology companies. He has
extensive knowledge of AIM and broad expertise across the technology sector,
having held board positions at U.K.-listed companies such as SurfControl plc,
Endace Limited, and PCI-PAL plc. Simon has also held advisory, board and Chair
positions at many international software companies including The Innovation
Group (USA), Workshare, M86 Security, Uberflip and Rootstock. He currently
serves as Chair on the boards of PCI-PAL plc (UK), and as Independent NED at
Hazelcast (USA).
Tarek Fadel
Executive Director, Chief Executive Officer
Tarek founded FADEL in 2003, he is responsible for driving its long-term
strategic plan as well as overseeing the day-to-day management of the Group.
He has more than 28 years of experience building, selling and implementing
enterprise software applications. He served at Cambridge Technology Group
between 1995 and 1997, before spending 6 years with Oracle Corporation, a
cloud technology company, where he managed a consulting practice for Oracle
responsible for the success of several large ERP and E-Commerce client
implementations and held the position of Director of Product Management
releasing several Oracle CRM products. Tarek graduated from the Lebanese
American University in Computer Science, has a Bachelor of Science in Computer
and Information Science from The City University of New York and an Executive
MBA from Columbia Business School and holds a technology patent for his work
on Method and Apparatus for e-Commerce Integration Architecture and Process.
Sally Tilleray
Senior Independent Non-Executive Director
Sally is a qualified accountant (Chartered Institute of Management Accountants
- CIMA) and an experienced UK public company director. She has served as Group
Chief Operating Officer and Group Chief Financial Officer at Huntsworth plc,
the international public relations and healthcare communications group, from
2004 to 2014. She is senior independent Non-Executive Director of Mind Gym
plc, an international behavioural science company delivering business
improvement solutions to companies across the world, which she joined at the
time of its AIM listing in 2018, Non-Executive Director of NAHL plc, the
consumer legal-focused marketing and services business since 2019 and
Non-Executive Director of Skillcast Group plc, provider of e-learning software
and content subscriptions and related professional services, which she joined
at the time of its AIM listing in 2021. She has been Non-Executive Chair of
digital experience agency, UNRVLD since 2020 and senior independent
Non-Executive Director of Nominet UK, the domain name registry which runs .UK
- part of the UK's critical national infrastructure since 2022.
Joe Gruttadauria
Non-Executive Director
Joe is experienced in building and managing sales teams. Joe served as Chief
Revenue Officer for ERP Maestro, a technology company focused on providing
access security and compliance software for companies running SAP. Prior to
joining ERP Maestro, he led strategic sales initiatives for Qstream and San
Jose-based Clarity Consultants. He has held executive leadership roles for
several successful enterprise software firms including Peoplefluent, Softscape
and Centra Software, as well as senior sales, service, and business
development positions at Oracle and SAP. Joe graduated from The State
University of New York at Fredonia in Business and has an MBA from the
Rochester Institute of Technology in Finance.
DIRECTORS' REPORT
The Directors present their report together with the audited Group and Company
financial statements for the year ended 31 December 2025.
Annual General Meeting
FADEL's Annual General Meeting will be scheduled to be held in June 2026 with
the formal date and details to be announced in the Notice of Meeting in
advance of the event.
Results and Dividends
The Group's net loss after taxes for the year was $1.5 million (2024: Net Loss
$5.8 million). The Directors do not recommend the payment of a dividend (2024:
Nil).
Going Concern
The Directors have assessed the Group's financial position and performance for
the year ended 31 December 2025 and have a reasonable expectation that the
Group has adequate resources to continue in operational existence for at least
12 months.
As at 31 December 2025, the Group held $1.9 million in cash and cash
equivalents and maintained access to a further $1.0 million in undrawn credit
facilities. While the Group reported a net loss for the year, it continues to
grow its Annual Recurring Revenue (ARR), which increased approximately 14%
year over year, and maintains strong visibility into future contracted
revenues.
In Q4 2024, the Group completed a comprehensive operational review which
resulted in a series of targeted cost reduction and organizational efficiency
measures. This review was further refined in 2025 and resulted in a reduction
in operating expense of $3.5 million in FY25 compared to FY24. The resulting
leaner operating structure extends the Group's cash runway and strengthens its
path toward cash flow breakeven.
Taking into account the Group's current cash position, cost base, access to
additional liquidity, and recurring revenue growth, the Directors consider
that the Group is well positioned to meet its obligations as they fall due for
a period of at least twelve months from the date of approval of these
financial statements. Accordingly, the Directors have adopted the going
concern basis of accounting in preparing the Consolidated Financial
Statements.
Financial Instruments
The Group's principal financial instruments comprise cash balances, short-term
deposits and receivables or payables that arise through the normal course of
business. The Group does not have any derivative financial instruments.
Board Committees
Information on the Audit, Risk and Sustainability Committee and the
Remuneration Committee is included in the Corporate Governance section on
pages 47.
Disclosure of Information to the Auditors
Each of the Directors at the date of approval of this report confirms that:
1. So far as the Directors are aware, there is no relevant audit
information of which the Group's auditors are unaware; and
2. Each Director has taken all the steps that they ought to have taken as
a Director in order to make themselves aware of any relevant audit information
and to establish that the Group's auditors are aware of that information.
(Although this confirmation is not required for the Company as it is
incorporated and registered in the State of Delaware, it is given and should
be interpreted in accordance with the provisions of s418 of the Companies Act
2006).
Directors' Third-Party Indemnity Provisions
During the year and to the date of approval of the financial statements, the
Group maintained indemnity insurance for its Directors and Officers against
liability in respect of proceedings brought by third parties.
Employees
The business depends upon maintaining a highly qualified and well-motivated
workforce and every effort is made to achieve a common awareness of the
financial and economic factors affecting performance. The Group is committed
to being an equal opportunities employer and engages employees with a broad
range of skills and backgrounds.
Independent Auditors
A resolution to reappoint Crowe U.K. LLP as Auditors will be proposed at the
forthcoming Annual General Meeting at a fee to be agreed in due course by the
Audit, Risk and Sustainability Committee and the Directors.
Nominated Adviser & Broker
The Group's Nominated Adviser and Broker is Cavendish Capital Markets Limited.
Share Capital
At 31 December 2025, 20,231,250 (2024: 20,231,250 ) ordinary shares of $0.001
each were issued and fully paid. Each ordinary share carries one vote.
Significant Shareholders
Shareholders
Impact Fund 28.7%
Tarek Fadel 20.0%
Amati AIM VCT plc 10.3%
Ziad Fadel 9.9%
Canaccord Genuity Limited 7.9%
BBEF (HOLDING) SAL 5.3%
NICOLAS JABBOUR 4.0%
Rathbone Investment Management Ltd 3.4%
Up to date details and changes of significant shareholders are contained on
the Company's website at (www.investors.fadel.com).
On behalf of the Board
Simon Wilson
Chair
29 April 2026
BOARD COMMITTEES
The Company has established two Committees of the Board as follows:
• Audit, Risk and Sustainability Committee
• Remuneration and Nominations Committee
Each committee has formally delegated duties and responsibilities with written
terms of reference.
As of the date of this report, the Audit, Risk and Sustainability Committee
consists of Sally Tilleray (Chair) and Simon Wilson and meets formally at
least three times each year and at such other times as required.
As of the date of this report the Remuneration Committee consists of Sally
Tilleray (Chair) and Simon Wilson and meets at least twice annually and
otherwise as required.
Environmental, Social and Corporate Governance Policy
The Company recognises the importance of doing business responsibly and
reducing any adverse impacts of its operations on people, the climate and the
environment, and we encourage those with whom it does business to adopt the
same values.
However, the matter has been discussed and given the present size and stage of
development of the Group it was considered inappropriate to establish a
separate committee for Environmental, Social and Governance purposes and that
this decision would be reviewed as part of its annual review process by the
Board as a whole.
In conducting its business and operations, the Company consistently upholds
its commitment to sustainable resource management, waste reduction, and the
promotion of employee wellbeing. The Company is dedicated to fostering equal
opportunities, supporting charitable initiatives, and operating ethically
across all jurisdictions where it conducts business and employs personnel.
Board and Committee Attendance in 2025
Board Audit, Risk and Sustainability Committee Remuneration Committee
Number of meetings Attended Number of meetings Attended Number of meetings Attended
Non-Executive Directors
Simon Wilson 8 8 3 3 3 3
Sally Tilleray 8 8 3 3 3 3
Joe Gruttaduria 8 8 3 2 3 2
Kenneth West((1)) - - - - - -
Executive Directors
Tarek Fadel 8 8 3 3 3 3
Ian Flaherty((2)) 5 5 3 3 2 2
Mark Plotkin ((3)) 4 4 1 1 2 2
(1) Ken West resigned from the Board of Directors with effect from 1 January
2025.
(2) Ian Flaherty resigned from the Board of Directors with effect from 5
September 2025.
(3) Mark Plotkin is the Chief Financial Officer and Board Secretary and
attended meetings in that capacity.
AUDIT, RISK AND SUSTAINABILITY COMMITTEE REPORT
"I am pleased to present this report of the Audit, Risk and Sustainability
Committee for the year 2025"
The composition and responsibilities of the Audit, Risk and Sustainability
Committee (the "Committee") are set out on page 46 of this Annual Report. The
Chief Executive Officer, Chief Financial Officer, Joe Gruttadauria, and
representatives of the Company's external auditors attend meetings by
invitation, as appropriate.
During the year ended 31 December 2025, the Committee held three formal
meetings, in addition to a number of informal discussions, to support timely
oversight of audit, risk, and compliance matters.
All Committee members attended each formal meeting. Throughout the year, Joe
Gruttadauria (Non-Executive Director), Tarek Fadel (Chief Executive Officer)
and Mark Plotkin (Chief Financial Officer), and previously Ian Flaherty during
his tenure as CFO, made themselves available to the Committee to provide
insight into the Company's financial processes, internal controls, and risk
management practices. The Committee also engaged directly with the Company's
external auditors, Crowe U.K. LLP and LMC LLP, as required.
Activities During the Year
The Committee reviewed and updated its terms of reference in January 2026,
which were approved by the Board and are published on the Company's website.
The Committee works on a planned programme of activities focused on key events
in the annual financial reporting cycle and other matters that are included in
its terms of reference. It provides oversight and guidance to contribute to
the ongoing good governance of the business, particularly by assuring that
shareholders' interests are being properly protected by appropriate financial
management, reporting and internal controls.
The committee reviewed, among other matters, the Group's revenue recognition
policy, the annual impairment review of goodwill and the appropriateness of
the Group's tax provisions. The committee also reviewed various tax matters
and approved the appointment of a new US tax compliance accounting firm for
the Group.
Financial Reporting
The Committee reviewed the half-year and annual financial statements. As part
of this review, the Committee discussed the financial statements with the
external auditor and management and considers the appropriateness of the
accounting principles, the reasonableness of significant accounting judgements
and the clarity of disclosures in the financial statements. The Committee
reviewed and challenged the external auditor's report on these matters.
The Committee also considered management's assessment of going concern
concerning the Group's cash position and commitments for the next 12 months.In
fulfilling its responsibility for monitoring the integrity of financial
reports to shareholders, the Committee gave due consideration as to whether
the Annual Report and Accounts are fair, balanced and understandable.
External Auditors
The Committee oversees the relationship with the external auditors and
monitors all their services and fees payable to them. The Committee considers
various matters when reviewing the ongoing appointment of an external auditor,
including their performance in conducting the audit and its scope and
planning, terms of engagement including remuneration, and their independence
and objectivity.
LMC the Company's component auditor and Crowe U.K. the Company's auditor were
reappointed as external auditors at the Company's Annual General Meeting in
October 2025. The Audit and Risk Committee has confirmed it is satisfied with
LMC and Crowe U.K.'s knowledge of the Company and their effectiveness as an
external auditor. As such, the Committee has recommended the reappointment of
LMC and Crowe U.K. LLP to the Board, and there will be a resolution to this
effect at the forthcoming Annual General Meeting.
Risk Management and Internal Controls
The Committee is responsible for overseeing internal financial controls and
risk management systems. Throughout the year, it reviewed key risks and the
risk register and examined updated budget and cash flow projections.
The Committee reviewed the requirement for an internal audit function and
determined this was not deemed necessary due to the relatively small size of
the Group.
Annual General Meeting
As Chair of the Committee, I will be attending the forthcoming Annual General
Meeting of the Company and will be pleased to respond to shareholder questions
on the Committee's activities.
Sally Tilleray
Chair - Audit, Risk and Sustainability Committee
29 April 2026
REMUNERATION COMMITTEE REPORT
"I am pleased to present this report of the Remuneration Committee for 2025"
The composition and responsibilities of the Remunerations Committee (the
"Committee") are set out on page 46 of this Annual Report. The Chief Executive
Officer, Chief Financial Officer, and Joe Gruttadauria attend meetings by
invitation, as appropriate.
The number of formal meetings held during the year and members' attendance
records are disclosed on page 46. In addition to its formal meetings, the
Committee held a number of informal discussions to support timely
decision-making on remuneration and governance matters. The Board and
Committee are satisfied that all responsibilities were appropriately fulfilled
in accordance with the Committee's Terms of Reference.
Remuneration policy
The Committee ensures that remuneration is set at an appropriate level for the
Group and its operations based on the following principles:
• Remuneration levels support the Group strategy
• There is an appropriate link between performance and
reward
• Directors, senior management and shareholder interests
are aligned
• Long-term incentives are linked to shareholder returns
• Recruitment, retention and motivation of individuals
is linked with skills, capabilities and experience to achieve Group objectives
• Good teamwork is ever present, enabling all employees
to share in the success of the business
No Director is present for discussions concerning their own remuneration. The
Non-Executive Directors do not have any personal interest in the matters
decided by the Committee or have any potential conflicts of interest or
day-to-day involvement in Company operations. Non-Executive Directors receive
an annual fee as remuneration and remuneration packages for Executive
Directors, senior management and employees are based on 4 elements:
• Basic salary or fees
• Benefits in kind
• Discretionary annual bonus
• Share option awards - A long-term incentive plan
(originally the Fadel Partners, Inc. 2014 Equity Incentive Plan), replaced by
the Fadel Partners, Inc. 2023 Equity Incentive Plan at IPO.
Basic salary and benefits in kind
Basic salaries and any benefits for Executive Directors are determined by the
Committee at the end of each year with any changes taking effect from Q2 of
the following year. Salaries are reviewed and adjusted taking into account
individual performance, market factors and sector conditions together with
recommendations and information from independent sources on rates of salaries
for similar roles and responsibilities.
The Chief Executive Officer did not receive a salary increase for 2025. In
addition, Non-Executive Directors' fees have been the same since the Company's
IPO in April 2023 through December 2025. In 2026, both the Chief Executive
Officer and the Non-Executive Directors will receive modest increases. The
Committee considers this a disciplined and suitable approach to remuneration
in the current environment.
Discretionary Annual Bonus
Bonuses are awarded based on a combination of business performance and
individual achievement, taking into account the overall effect on the
Company's progress against its strategic and financial objectives. Amounts
shown in the Directors' emoluments tables below represent payments made to
Directors during each financial year but principally relate to performance
achieved during the preceding financial year.
For the year ended 31 December 2025, the Committee reviewed performance
against set targets. Most metrics were met and, accordingly, FY25 bonus awards
to management below the executives-paid in FY26-were broadly in line with
target, reflecting overall achievement against those targets. The Committee
considers this outcome a fair reflection of performance and ensures management
incentives remain aligned with shareholder value.
The Committee also reviewed bonus outcomes for the Chief Executive Officer and
Chief Financial Officer. The Chief Executive Officer received an award
slightly below target in line with overall performance. In the case of the
Chief Financial Officer, who joined during the year, no formal bonus plan had
been established, and any award was therefore determined on a discretionary
basis. In reaching its decisions, the Committee considered individual
contribution alongside overall Group performance for both the Chief Executive
Officer and Chief Financial Officer.
Share based compensation
FY25 Share option schemes Option Term Opening amount at 1 Jan 2025 Granted during year Lapsed / exercised during the year Closing amount at 31 Dec 2025
Executive Directors
Tarek Fadel 2023 Equity Incentive Plan 10 years 798,720 - - 798,720
Ian Flaherty((1)) 2023 Equity Incentive Plan 10 years 252,890 - (252,890) -
Non-Executive Directors
Simon Wilson - - - -
Ken West((2)) 2014 Equity Incentive Plan 10 years 54,012 - (54,012) -
Sally Tilleray 2023 Equity Incentive Plan 10 years 10,000 - - 10,000
Joe Gruttadauria((2)) 2014 Equity Incentive Plan 10 years 54,012 - (54,012) -
(1) Ian Flaherty resigned with effect from 5 September 2025, with his options
expiring 90 days after resignation.
(2) Option term expired on the tenth anniversary of its issuance.
FY24 Share option schemes Option Term Opening amount at Granted during year Lapsed / exercised during the year Closing amount at 31 Dec 2024
1 Jan 2024
Executive Directors
Tarek Fadel 2023 Equity Incentive Plan 10 years - 798,720 - 798,720
Ian Flaherty((1)) 2023 Equity Incentive Plan 10 years - 252,890 - 252,890
Non-Executive Directors
Simon Wilson - - - -
Ken West 2014 Equity Incentive Plan 10 years 54,012 - - 54,012
Sally Tilleray 2023 Equity Incentive Plan 10 years - - - 10,000
George Kadifa((2)) 2014 Equity Incentive Plan 10 years 32,407 - (32,407) -
Joe Gruttadauria 2014 Equity Incentive Plan 10 years 54,012 - - 54,012
(1) Ian Flaherty was appointed to the Board on 26 February 2024.
(2) George Kadifa resigned with effect from 30 November 2023, with his options
expiring 90 days after resignation.
Directors' emoluments
FY25 Salary or fees and benefits Cash bonus((4)) Stock-based compensation((5)) Pension contributions Total
Executive Directors
Tarek Fadel $523,670 $35,000 $161,985 $10,074 $730,729
Ian Flaherty((1)) $227,976 $39,000 $30,785 $9,982 $307,743
Non-Executive Directors
Simon Wilson $82,500 - - - $82,500
Sally Tilleray £45,000 - £1,508 - £46,508
Joe Gruttadauria ((2)) £40,000 - - - £40,000
$60,135 $60,135
Ken West((3)) £3,333 - - - £3,333
(1) Ian Flaherty resigned from the Board of Directors with effect from 5
September 2025. Mark Plotkin, the new CFO/Company Secretary who joined the
company on 28 July 2025 is not a director of the Company.
(2) In January 2025, Joe Gruttadauria, in addition to his board duties, took
on the operating role of Interim Head of Sales to work directly with sales
team and Tarek Fadel to drive new business growth. Although Joe resigned from
this position with effect from 31 December 2025, he is no longer deemed to be
an independent director. Joe earned $60,135 in sales commissions as
compensation for these services.
(3) Ken West stepped down from his role as Chair on June 30, 2024, but
remained on the board as a Non-Executive Director until his resignation of the
31st of January 2025.
(4) Represent payments made to Directors during each financial year but
principally relate to performance achieved during the preceding financial
year.
(5) The Group records stock-based compensation in accordance with FASB ASC
Topic 718 "Compensation-Stock Compensation". The fair value of awards at the
time of the original grant is then recognised as an expense over the requisite
service period.
Sally Tilleray
Chair - Remuneration and Nominations Committee
29 April 2026
STATEMENT OF DIRECTORS' RESPONSIBILITIES REPORT
The Directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable law and regulations.
The Company is a United States of America corporation incorporated under the
laws of the State of Delaware, which does not require the Directors to prepare
audited financial statements for each financial year. However, the Group is
required to do so in order to satisfy the requirements of the AIM Rules for
listed Companies. When preparing the financial statements, the Directors are
required to prepare the Group financial statements in accordance with an
appropriate set of generally accepted accounting principles or practices, and
have elected to use those in the United States of America ("US GAAP"). In
preparing the financial statements, the directors are required to:
· select suitable accounting policies and then apply them
consistently;
· state whether applicable Generally Accepted Auditing Standards
("GAAS") have been followed, subject to any material departures being
disclosed and explained in the financial statements;
· make judgements and accounting estimates that are reasonable and
prudent; and
prepare the financial statements on the going concern basis.
The Directors must not approve the accounts unless they are satisfied that
they give a true and fair view of the state of affairs of the Company and of
the profit or loss of the Company for that period.
The Directors are responsible for keeping adequate accounting records that
correctly explain the transactions of the Company, enable the financial
position of the Company to be determined with reasonable accuracy at any time
and allow financial statements to be prepared. 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.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Information published on the website is accessible in many countries and
legislation in the United Kingdom governing the preparation and dissemination
of financial statements may differ from legislation in other jurisdictions.
The Directors' responsibility also extends to the continued integrity of the
financial statements.
This Directors' Report was approved and signed on behalf of the Board.
Tarek Fadel
Chief Executive Officer
29 April 2026
FINANCIAL STATEMENT
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF FADEL PARTNERS, INC
Opinion
We have audited the financial statements of Fadel Partners, Inc (the
"Company") and its subsidiaries (the "Group") for the year ended 31 December
2025, which comprise:
· the consolidated statements of comprehensive income for the year
ended 31 December 2025;
· the consolidated statements of financial position as at 31
December 2025;
· the consolidated statements of changes in equity for the year
then ended;
· the consolidated statements of cash flows for the year then
ended; and
· the notes to the financial statements, including a summary of
significant accounting policies.
The financial reporting framework that has been applied in the preparation of
the financial statements is applicable law and US Generally Accepted
Accounting Practice ('US GAAP').
In our opinion the financial statements:
· give a true and fair view of the state of the Group's affairs as
at 31 December 2025 and of the Group's loss for the year then ended;
· have been properly prepared in accordance with US Generally
Accepted Accounting Practice ('US GAAP').
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We are independent of
the Group and 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 as applied to listed entities, and we
have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors'
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the directors'
assessment of the Group's ability to continue to adopt the going concern basis
of accounting included obtaining and reviewing management's working capital
projections, evaluating the consistency of key assumptions by comparison to
historical performance, and assessing the ability of the Group to maintain
positive cash balances under a range of reasonably possible scenarios.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the Group's ability to continue as
a going concern for a period of at least twelve months from when the financial
statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Overview of our audit approach
Materiality
In planning and performing our audit we applied the concept of materiality. An
item is considered material if it could reasonably be expected to change the
economic decisions of a user of the financial statements. We used the concept
of materiality to both focus our testing and to evaluate the impact of
misstatements identified.
Based on our professional judgement, we determined overall materiality for the
Group financial statements as a whole to be $130,000 (2024 $130,000), based on
1% percent of Group revenue.
We use a different level of materiality ('performance materiality') to
determine the extent of our testing for the audit of the financial
statements. Performance materiality is set based on the audit materiality as
adjusted for the judgements made as to the entity risk and our evaluation of
the specific risk of each audit area having regard to the internal control
environment. This is set at $91,000 (2024: $91,000) for the group.
Where considered appropriate performance materiality may be reduced to a lower
level, such as, for related party transactions and directors' remuneration.
We agreed with the Audit, Risk and Sustainability Committee to report to it
all identified errors in excess of $6,500 (2024: $6,500). Errors below that
threshold would also be reported to it if, in our opinion as auditor,
disclosure was required on qualitative grounds.
Overview of the scope of our audit
The audit was conducted on a consolidated basis, encompassing all entities
within the scope of audit testing. The underlying audit work was performed by
a component auditor under the direction and supervision of the group
engagement team. The group team maintained ongoing communication with the
component auditor throughout the audit and at the conclusion of the audit. The
underlying working papers were obtained and reviewed by the group engagement
team, and selected audit procedures were reperformed and agreed to underlying
source documentation by the group engagement team.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) that we identified. These matters
included those which had the greatest effect on: the overall audit strategy,
the allocation of resources in the audit; and directing the efforts of the
engagement team. These matters were addressed in the context of our audit of
the financial statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
Key audit matter How the scope of our audit addressed the key audit matter
Revenue Recognition
The Group enters into revenue contracts with customers that include different · We performed substantive testing on a sample of revenue
performance obligations. Depending on the nature of the services provided and transactions by agreeing them to underlying contracts, invoices and cash
the specific contractual terms, revenue is recognised either over time or at a receipts.
point in time. Determining the appropriate timing of revenue recognition
requires judgement, particularly for certain material contracts. · We reviewed relevant contracts and assessed the appropriateness
of the revenue recognition point in accordance with ASC 606, comparing this to
Incorrect determination of the revenue recognition point could result in a management's assessment.
material misstatement of revenue recognised for the year.
· We evaluated whether sufficient evidence existed to support that
The Group's accounting policies relating to revenue recognition are set out in each of the five steps of the revenue recognition model set out in the
Note 3 to the Financial Statements. standard had been satisfied.
Assessment of Impairment Indicators for Intangible Assets
Included in the Group's statement of financial position (and note 7) are · We evaluated management's ASC 350 Step 0 impairment assessment
material intangible assets, principally comprising goodwill and for goodwill and management's ASC 360 recoverability analysis for identifiable
software‑based assets. These assets are required to be assessed for intangible assets, including whether projected undiscounted cash flows
indicators of impairment ("Step 0") to determine whether a quantitative supported the asset group carrying value and aligned with underlying business
impairment test is necessary. This assessment involves judgement in evaluating performance.
whether relevant events or changes in circumstances indicate that it is more
likely than not that the carrying value of an asset may exceed its fair value. · We evaluated management's assessment of market capitalisation
relative to net assets, including whether market‑based trends indicated a
There is a risk that impairment indicators are not appropriately identified, potential impairment trigger
which could result in an impairment assessment not being performed when
required and result in a material misstatement of the financial statements. · We assessed the completeness of the impairment indicator
assessment, challenging management's consideration of reporting unit's
operating performance and share price movements.
· We evaluated management's estimate of the reporting unit's fair
value prepared to support the Step 0 conclusion, including the use of ARR and
revenue multiples. With the involvement of our internal valuation specialists,
we performed an independent corroborative assessment of whether it was more
likely than not that the reporting unit's fair value exceeded its carrying
amount.
· We assessed whether management's conclusions were supported by
the audit evidence obtained and evaluated the appropriateness of the related
disclosures.
Our audit procedures in relation to these matters were designed in the context
of our audit opinion as a whole. They were not designed to enable us to
express an opinion on these matters individually and we express no such
opinion.
Other information
The directors are responsible for the other information contained within the
annual report. The other information comprises the information included in the
annual report, 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 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.
Responsibilities of the directors for the financial statements
As explained more fully in the directors' responsibilities statement set out
on page 44, 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 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 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.
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:
· We obtained an understanding of the legal and regulatory
frameworks that are applicable to the Group and the procedures in place for
ensuring compliance. These included the Companies Act 2006, AIM rules and tax
legislations. Our work included understanding management's compliance
procedures and considering whether any instances of non‑compliance
identified during the audit could give rise to a material misstatement.
· As part of our audit planning, we assessed the various areas of
the financial statements, including the related disclosures, to identify risks
of material misstatement. This included consideration of fraud risk, for which
we made direct enquiries of management and those charged with governance
regarding any actual or suspected fraud, as well as their assessment of the
susceptibility of the financial statements to fraud. We identified a higher
risk in areas involving significant management judgement or estimation, such
as the impairment assessments and revenue recognition. Based on this
assessment, we designed our audit procedures to focus on these specific areas
of heightened risk.
· To obtain an understanding of fraud risks and any instances of
non-compliance with laws and regulations, we:
o made enquiries of management to understand the processes in place to
ensure the Group's compliance with applicable laws and regulations;
o held discussions with individuals outside of finance; and
o reviewed legal and professional fee expenditures.
· We assessed the appropriateness of journal entries posted
throughout the year, on a sample basis, and agreeing each item to supporting
documentation and management explanations.
· We performed a detailed review of the Group's year end adjusting
journal entries and investigated any entries that appeared unusual in nature
or amount by agreeing them to supporting documentation.
· We assessed whether there was any evidence of significant
transactions occurring outside the normal course of business.
· We performed a detailed review of the financial statement
disclosures to assess their completeness, taking into account the explanations
and information obtained during the audit
Owing to the inherent limitations of an audit, there is an unavoidable risk
that some material misstatements of the financial statements may not be
detected, even though the audit is properly planned and performed in
accordance with the ISAs (UK).
The potential effects of inherent limitations are particularly significant in
the case of misstatements resulting from fraud because fraud may involve
sophisticated and carefully organized schemes designed to conceal it,
including deliberate failure to record transactions, collusions or intentional
misrepresentations being made to us.
A further description of our responsibilities is available on the Financial
Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor's report.
Use of our report
This report is made solely to the company's members, as a body. Our audit work
has been undertaken so that we might state to the company's members those
matters we are required to state to them in an auditor's report and for no
other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company and the company's
members as a body, for our audit work, for this report, or for the opinions we
have formed.
Crowe U.K. LLP
Statutory Auditor
55 Ludgate Hill
London
EC4M 7JW
29 April 2026
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
The audited, consolidated Statements of Comprehensive Income of the Group for
each of the years ended 31 December 2024 and 2025 are set out below:
Continuing operations Notes Year ended Year ended
31 December 31 December
2024* (#_ftn1) 2025
$ $
Licensing and Support 7,993,928 8,235,003
Services 5,028,273 4,381,436
Total revenue 13,022,201 12,616,439
Cost of fees and services 4,973,230 4,487,028
Gross Profit 8,048,971 8,129,411
Research and development 3,456,310 3,089,665
Selling, general and administrative expenses 8,552,008 5,852,217
Depreciation and amortisation 700,851 592,403
Net interest expense 72,583 49,302
Foreign exchange losses/(gains) 275,075 (48,036)
Other income - -
Total operating expenses 13,056,827 9,535,551
Loss before income taxes (5,007,856) (1,406,140)
Income tax (gain) / expense 818,485 91,612
Net loss after taxes (5,826,341) (1,497,752)
Foreign currency translation adjustments 134,999 411,599
Total comprehensive loss (5,691,342) (1,086,153)
Net income attributable to non-controlling 23 35
interest
Net loss attributable to the Group (5,826,364) (1,497,787)
Net loss after taxes (5,826,341) (1,497,752)
Comprehensive income attributable to non-controlling interest 23 35
Comprehensive loss attributable to the Group (5,691,365) (1,086,188)
Total comprehensive loss (5,691,342) (1,086,153)
Basic and diluted loss per Share ($) (0.28) (0.05)
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
The audited, consolidated Statements of Financial Position of the Group for
each of the years as at 31 December 2024 and 31 December 2025 are set out
below:
As at As at
31 December 31 December
2024 2025
Assets Notes $ $
Cash and cash equivalents 2,607,422 1,910,755
Accounts receivable, net 1,839,305 2,051,601
Unbilled work-in-progress 1,160,680 1,210,651
Other current assets 275,984 196,586
Current assets 5,883,391 5,369,593
Intangible assets, net 1,800,613 1,709,311
Goodwill 2,178,198 2,332,185
Furniture, equipment and purchased software 206,678 174,933
Contract costs 835,521 900,926
Right-of-use asset 134,777 44,789
Non-current assets 5,155,787 5,162,144
TOTAL ASSETS 11,039,178 10,531,737
Liabilities
Accounts payable and accrued expenses 2,542,049 2,433,919
Income tax payable 1,021,905 1,043,368
Deferred revenue 2,849,163 3,266,824
Notes payable - related parties 162,396 162,396
Current lease liability 74,248 44,789
Current liabilities 6,649,761 6,951,296
Provisions - end of services indemnity 308,824 317,602
Deferred revenue 445,799 532,843
Non-current-Lease liability 60,529 -
Non-current liabilities 815,152 850,445
Total liabilities 7,464,913 7,801,741
Shareholders' equity
Common shares 20,231 20,231
Treasury stock, at cost - (4,876)
Additional paid-in capital 25,592,686 25,839,446
Accumulated deficit (22,537,014) (24,034,801)
Cumulative translation adjustment 497,279 908,878
3,573,182 2,728,878
Non-controlling interest 1,083 1,118
Total Shareholders' equity 3,574,265 2,729,996
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 11,039,178 10,531,737
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
The audited, consolidated Statements of Changes in Equity of the Group for
each of the years 31 December 2024 and 31 December 2025 are set out below:
Preferred Preferred Common Common Additional paid in capital Accumulated Cumulative translation adjustment Non-controlling interest Total
shares shares shares shares Treasury Stock Treasury Stock $ deficit $ $ $
# $ # $ # $ $
As at 31 December 2023 (audited) - - 20,231,250 20,231 - - 25,317,043 (16,710,650) 362,280 1,060 8,989,964
Non-controlling interest - - - - - - - - - 23 23
Stock-based compensation - - - - - - 275,643 - - - 275,643
Net loss - - - - - - (5,826,364) - - (5,826,364)
Foreign exchange translation expense - - - - - - - - 134,999 - 134,999
As at 31 December 2024 (audited) - - 20,231,250 20,231 - - 25,592,686 (22,537,014) 497,279 1,083 3,574,265
Non-controlling interest - - - - - - - - - 35 35
Common stock repurchased - - - - (5,555) (4,876) - - - - (4,876)
Stock-based compensation - - - - - - 246,760 - - - 246,760
Net loss - - - - - - - (1,497,787) - - (1,497,787)
Foreign exchange translation expense - - - - - - - - 411,599 - 411,599
As at 31 December 2025 (audited) - - 20,231,250 20,231 (5,555) (4,876) 25,839,446 (24,034,801) 908,878 1,118 2,729,996
CONSOLIDATED STATEMENTS OF CASH FLOWS
The audited, consolidated Statements of Cash Flows of the Group for each of
the years ended 31 December 2024 and 2025 are set out below:
Year ended Year ended
31 December 31 December
2024 2025
$ $
Net loss after taxes (5,826,341) (1,497,752)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortisation 700,851 592,403
Non-cash stock compensation 275,643 246,760
Non-cash impact of foreign exchange on intangibles 71,102 (340,017)
Changes in assets and liabilities
Accounts receivable 469,275 (212,296)
Unbilled work-in-progress 2,543,215 (49,971)
Income tax receivable 660,624 -
Other current assets 22,590 79,398
Deferred tax asset 830,778 -
Capitalisation of commissions (474,965) (344,947)
Right of use assets 67,451 89,989
Accounts payable and accrued expenses 16,647 (189,340)
Income tax payable (240,797) 21,463
Deferred revenue 261,867 504,705
Net cash used in operating activities (622,060) (1,099,605)
Purchase of furniture, equipment and software (96,975) (3,785)
Net cash used by investing activities (96,975) (3,785)
Repurchases of common stock - (4,876)
Proceeds from line of credit 300,000 200,000
Repayment of line of credit (300,000) (200,000)
Net cash used in financing activities - (4,876)
134,999 411,599
Effect of exchange rates on cash
Net (decrease)/increase in cash and cash equivalents (584,036) (696,667)
Cash and cash equivalents, beginning of year 3,191,458 2,607,422
Cash and cash equivalents, end of year 2,607,422 1,910,755
Supplemental disclosure of cash flow information
Cash paid for interest 59,792 42,957
Cash received from interest 3,000 317
Cash paid for income taxes 207,782 101,174
Conversion of preferred stock to common shares - -
Conversion of warrants to common shares - -
Commissions and fees paid through issuance of common shares - -
NOTES TO THE FINANCIAL STATEMENTS
1. ORGANISATION AND NATURE OF BUSINESS
The Financial Information consolidates the financial information of the
Company and:
· its wholly-owned subsidiaries:
o Fadel Partners UK Limited ("Fadel UK"), and its wholly-owned subsidiary;
§ Image Data Systems (UK) Limited ("IDS"); and
o Fadel Partners France SAS ("Fadel France").
· its 99.99%-owned subsidiary, Fadel Partners SAL Lebanon ("Fadel
Lebanon").
The Company is a New York Corporation formed in July 2003 and reincorporated
in Delaware in January 2014. Fadel Lebanon was incorporated in Lebanon in
August 2014 and Fadel UK was formed in the United Kingdom ("UK") in January
2015. Fadel France was formed in France in February 2020. IDS was formed in
April 1992 in the UK, by an unrelated party, and acquired by the company on 1
October 2021. Together the entities are collectively referred to herein as the
"Group". The Group is headquartered in New York, with a presence in Los
Angeles, London, Paris and Beirut (Lebanon) and is engaged in providing and
servicing its Intellectual Property Rights and Royalty Management suite of
software.
On 6 April 2023, the Company was listed and started trading on AIM, a market
operated by the London Stock Exchange plc ("AIM").
2. LIQUIDITY AND FINANCIAL CONDITION
Under Accounting Standards Update, or ASU, Presentation of Financial
Statements-Going Concern (Accounting Standard Codification ("ASC") Subtopic
205-40) ("ASC 205-40"), the Company has the responsibility to evaluate whether
conditions and/or events raise substantial doubt about the Group's ability to
meet its future financial obligations as they become due within one year after
the date that the Consolidated Financial Information is issued. As required by
ASC 205-40, this evaluation shall initially not take into consideration the
potential mitigating effects of plans that have not been fully implemented as
of the date the Consolidated Financial Information is issued. The Company has
assessed the Group's ability to continue as a going concern in accordance with
the requirement of ASC 205-40.
As reflected in the consolidated financial information, the Group had
approximately $1.9 million in cash and cash equivalents on the Statement of
Financial Position as at 31 December 2025. As at 31 December 2025, the Group
had negative working capital of approximately $1.6 million and an accumulated
deficit approximating $24 million. Additionally, the Group had a net loss of
approximately $1.5 million and cash used in operating activities of
approximately $1.0 million during the year ended 31 December 2025.
The Group continued to expand its Annual Recurring Revenue (ARR), growing
approximately 14% year over year in 2025. The Group also maintains access to
an undrawn $1.0 million credit facility, providing additional liquidity if
required.
Taking into account the Company's cash position, access to additional
liquidity, continued ARR expansion, and the substantial cost reductions in
2025 which will be maintained in 2026, management believes the Group has
sufficient resources to meet its obligations and continue as a going concern
for a period of at least twelve months from the date of issuance of these
consolidated financial statements. Accordingly, the financial statements have
been prepared on a going concern basis.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of consolidation
The consolidated financial Information has been prepared in accordance with
accounting principles generally accepted in the United States of America ("US
GAAP"). They include the accounts of the Company, and interest owned in
subsidiaries as follows: 99.99% of Fadel Lebanon, 100% of Fadel UK and its
wholly-owned subsidiary IDS, and 100% of Fadel France. All significant
intercompany balances and transactions are eliminated on consolidation. The
non-controlling interest represents the 0.00011% share of Fadel Lebanon owned
by outside parties.
Use of estimates
The preparation of the consolidated financial information in conformity with
US GAAP requires the Group to make estimates and assumptions that affect the
reported amounts of the Group's assets and liabilities and disclosure of
contingent assets and liabilities, as at the reporting dates, as well as the
reported amounts of revenue and expenses during the reporting period. Actual
results could differ from these estimates.
Fair value measurements
Generally accepted accounting principles require the disclosure of the fair
value of certain financial instruments, whether or not recognised on the
Consolidated Statement of Financial Position, for which it is practicable to
estimate fair value. The Group estimated fair values using appropriate
valuation methodologies and market information available as of year-end.
Considerable judgment is required to develop estimates of fair value, and the
estimates presented are not necessarily indicative of the amounts that the
Group could realise in a current market exchange. The use of different market
assumptions or estimated methodologies could have a material effect on the
estimated fair values. Additionally, the fair values were estimated at year
end, and current estimates of fair value may differ significantly from the
amounts presented.
Fair value is estimated by applying the following hierarchy, which prioritises
inputs used to measure fair value into three levels and bases categorisation
within the hierarchy upon the lowest level of input that is available and
significant to the fair value measurement:
Level 1: Quoted prices in active markets for identical assets or liabilities;
Level 2: Observable inputs other than quoted prices in active markets for
identical assets and liabilities, quoted prices for identical or similar
assets or liabilities in inactive markets, or other inputs that are observable
or can be corroborated by observable market data for substantially the full
term of the assets or liabilities; and
Level 3: Inputs that are generally unobservable and typically management's
estimate of assumptions that market participants would use in pricing the
asset or liability.
Cash and cash equivalents
All highly liquid investments with maturities of three months or less at the
date of purchase are classified as cash equivalents.
Concentrations of credit risk
Financial instruments that potentially subject the Group to concentrations of
credit risk consist primarily of cash and cash equivalents, accounts
receivable and unbilled work-in-progress. The Company performs on-going
evaluations of the Group's customers' financial condition and, generally,
requires no collateral from customers.
The Group maintains its bank accounts with major financial institutions in the
United States, Lebanon, the UK, and France. At 31 December 2025, the Group
had cash balances in excess of the Federal or National insured limits at
financial institutions in the United States, France and the UK totalling some
US$0.8 million out of a total of US$1.9 million cash deposits. The Company
believes the risk is limited as the institutions are large national
institutions with strong financial positions. Cash amounts held in Lebanon are
not insured and as such minimal deposits are held in Lebanese accounts, with
payments transferred in country only on an as needed basis.
Accounts receivable, unbilled work-in-progress and credit losses
Accounts receivable is recorded at the invoiced amount and do not bear
interest. Credit is extended based on the evaluation of a customer's financial
condition and collateral is not required. Unbilled work-in-progress is revenue
which has been earned but not invoiced. An allowance is placed against
accounts receivable or unbilled work-in-progress for management's best
estimate of the amount of probable credit losses. The Company determines the
allowance based on historical write-off experience and information received
during collection efforts.
Credit losses
The Company estimates an allowance for expected credit losses on accounts
receivable in accordance with ASC 326-20, Financial Instruments - Credit
Losses. The estimate is based on historical loss experience, current
conditions, and reasonable and supportable forecasts.
Accounts receivable is primarily short-term and derived from a diversified
SaaS customer base with historically insignificant credit losses. The Company
applies a collective assessment, as receivables share similar risk
characteristics.
Given the short duration of receivables and minimal historical losses, the
allowance for credit losses is not material to the financial statements. See
Note 8 for more details.
Revenue recognition
The Group follows the guidance of ASC 606, Revenue from Contracts with
Customers, and ASC 340, Other Assets and Deferred Cost, to account for
revenue.
Sources of Revenue
The Group's revenue is primarily derived from the following sources:
1. Licensing Fees (includes basic support)
2. Subscription Services Fees
3. Customer Support
4. Implementation Services
Beginning with the year ended 31 December 2025, the Group has reclassified
certain revenue streams such that services revenue now includes revenue
generated under recurring services subscription arrangements, which were
previously presented within licensing subscription and support revenue.
Comparative amounts have been reclassified to conform to the current year
presentation. This reclassification has no impact on total revenue, operating
profit or net income. Management believes that this presentation is more
consistent with industry practice and with how the performance of the business
is evaluated.
Recognition Criteria
Revenue is recognized when control of the promised goods or services is
transferred to customers in an amount that reflects the consideration the
Group expects to receive in exchange for those goods or services. When a
contract includes variable consideration, such as overage fees, contingent
fees, or service level penalties, the Group estimates the amount to include in
the transaction price only if it is probable that a significant reversal of
cumulative revenue will not occur once the uncertainty associated with the
variable consideration is resolved.
The Group applies the following five steps to determine the amount of revenue
to recognize:
1. Identify the contract(s) with a customer.
2. Identify the performance obligations in the contract.
3. Determine the transaction price.
4. Allocate the transaction price to the performance obligations in the
contract.
5. Recognize revenue when or as the Group satisfies a performance
obligation.
Performance obligations and timing of revenue recognition
ASC 606 requires the identification of distinct performance obligations within
a contract. The Group customer agreements primarily fall into the three
distinct contract structures:
1. SaaS Offerings (Brand Vision, Picture Desk, LicenSee)
2. IPM Suite: FADEL Hosted
3. IPM Suite: Client Hosted
Each of these contract structures includes various promised goods and services
that have been assessed to determine if they are distinct or not:
Contract Structures Promised Goods Distinct Performance Obligations Revenue Recognition
and Services
1- SaaS Products - SaaS Subscriptions SaaS subscription, support, and software updates are highly interdependent and Over Time
interrelated, forming a single performance obligation.
- Support
- Software Updates
- Services Services can be provided independently of the SaaS product functionality, As Delivered
either by the customer or other third parties.
2- IPM Suite: FADEL Hosted - Software License The software license and hosting are highly interdependent and are treated as Over Time
a single performance obligation.
- Hosting
- Support / ESS Support and ESS provide additional, but not. essential, benefits separate from Over Time
the software license and hosting
- Software Updates Software updates are considered separate, allowing customers to decide on Over Time
implementation independently.
- Services Additional services are not essential to the core functionality of the As Delivered
software license and hosting.
3 - IPM Suite: Client Hosted - Software License The software license is distinct since it does not depend on other As Delivered
FADEL-managed services.
- Support / ESS These remain separate from the software license, enhancing customer experience Over Time
but not critical for core software operation.
- Software Updates Clients can choose whether to implement updates, keeping this service separate Over Time
from the primary software license obligation.
- Services Additional services are not essential to the core functionality of the As Delivered
software license and hosting.
The Group allocates the transaction price first by considering if standalone
sales data is available for each identified performance obligation. Based on a
review of historical subscription agreements, the combined Software License or
SaaS Subscription is sold and renewed on a standalone basis. Consequently, the
Group utilizes these observable inputs to develop the standalone selling
prices of these services.
The Group typically invoices customers annually, with payment terms requiring
settlement within 30 days of invoicing. Amounts invoiced are recorded as
accounts receivable and as either unearned revenue or revenue, depending on
whether control has transferred to the customer.
Costs of obtaining a revenue contract
The Group capitalises costs of obtaining a revenue contract. These costs
consist of sales commissions related to the acquisition of such contracts that
would not have been incurred if these contracts were not won.
For licenses, the Group estimated the amortisation period based on the
remaining expected life of the customer/the term for which it anticipates the
Group's contract will remain effective. It anticipates the term due to the
project size, terms, complexity and cost of implementation and transition,
making it less likely that a client will change vendors for this service.
For service and support contracts, the amortisation period is based on the
duration of the contract in consideration that it would be less difficult and
costly for clients to transition to another vendor for continued service.
Amortisation periods for customer lives typically vary between 5 and 10 years.
The Group elected not to apply the practical expedient for contracts that have
a duration of less than one year. The Group has also elected to not include
amortisation of the costs of obtaining a revenue contract within gross profit
in order to help the reader see the business through the eyes of management.
Depreciation
Furniture and equipment are stated at cost. Depreciation is computed using the
straight-line method over the estimated useful lives of the assets, generally
three to seven years. When assets are retired or otherwise disposed of, the
cost and related accumulated depreciation are removed from the accounts and
any resulting gain or loss is reflected in operations for the period. The cost
of maintenance and repairs is charged to operations as incurred. Significant
renewals and betterments are capitalised.
Intangible assets - goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortized.
Instead, goodwill is tested annually for impairment, or more frequently if
events or changes in circumstances indicate that it might be impaired and is
carried at cost less accumulated impairment losses. Impairment losses on
goodwill are taken to profit or loss and are not subsequently reversed. The
Group determined that an impairment charge was not necessary during the years
ended 31 December 2024 and 2025.
Intangible assets other than goodwill
The Group has three categories of intangible assets:
Brand assets
The Group purchased IDS in October 2021 and with it acquired a
long-established and respected brand. At the time of purchase, the Group
estimated the useful life of the brand assets acquired for financial reporting
purposes and recognises amortisation on a straight-line basis over the useful
life of the asset, typically 10 years. Purchased brand assets are reviewed for
impairment at each reporting date or when events and circumstances indicate an
impairment. The Group determined that an impairment charge was not necessary
during the years ended 31 December 2024 and 2025.
Customer relationships
The Group purchased IDS in October 2021 and with it acquired a number of
customer relationships. At the time of purchase, the Group estimated the
useful life of the customer relationships acquired for financial reporting
purposes and recognises amortisation on a straight-line basis over the useful
life of the asset, typically 10 years. Purchased customer relationships are
reviewed for impairment at each reporting date or when events and
circumstances indicate an impairment. The Group determined that an impairment
charge was not necessary during the years ended 31 December 2024 and 2025.
Software and technology assets
The Group purchased IDS in October 2021 and with it acquired a number of
software and technology assets. At the time of purchase, the Group estimates
the useful life of the software and technology assets acquired for financial
reporting purposes and recognised amortisation on a straight-line basis over
the useful life of the asset, typically 10 years. Purchased software and
technology assets are reviewed for impairment at each reporting date or when
events and circumstances indicate an impairment. The Group determined that an
impairment charge was not necessary during the years ended 31 December 2024
and 2025.
In assessing impairment, the Group evaluated both goodwill and intangible
assets in accordance with applicable accounting standards. For intangible
assets, the Group determined the relevant asset group to be the IDS
subsidiary, as the assets do not generate cash inflows independently. The
carrying value of the asset group, excluding goodwill, was compared to the
expected undiscounted cash flows over the remaining useful life of the assets.
Based on this analysis, the projected cash flows exceeded the carrying value
of the asset group and no impairment was identified.
For goodwill, the Group performed a qualitative assessment at the reporting
unit level, which is consistent with the level at which management monitors
performance. The assessment considered current operating performance,
projected future cash flows and external market data, including valuation
benchmarks for comparable SaaS businesses. Based on this evaluation, the Group
concluded that it was not more likely than not that the fair value of the
reporting unit was less than its carrying value. Accordingly, no impairment
charge was recognised.
Research and development costs:
The Group incurs research and development ("R&D") costs related to the
development of software products that are marketed externally as well as
internally hosted cloud-based solutions. As such, the Company evaluates its
software development activities under both ASC 985-20, Software to be Sold,
Leased, or Marketed and ASC 350-40, Internal-Use Software.
In accordance with these standards, the Group historically expenses all
R&D costs as incurred. While certain costs could potentially qualify for
capitalization under the applicable guidance, management has determined that,
due to the integrated nature of development activities and the inability to
reasonably segregate capitalizable costs from non-capitalizable costs on a
cost-effective basis, all costs are expensed as incurred.
Deferred revenues
The Group's contract liabilities primarily consist of amounts invoiced to
customers in advance of the delivery of services or the satisfaction of
performance obligations under licensing and services agreements.
As of 31 December, 2024 and 2025, deferred revenue balances were $3,294,962
and $3,799,667, respectively. During the year ended 31 December, 2025,
$2,656,008 of the deferred revenue was recognized as revenue (2024:
$2,650,934).
Unbilled work-in-progress
Unbilled work-in-progress represents revenue recognized over time under ASC
606, for performance obligations satisfied but not yet invoiced as of the
reporting date, and is included in contract assets on the balance sheet.
As of 31 December, 2025 and 2024, unbilled work-in progress balances were and
$1,160,680 and $1,210,651 respectively. During the year ended 31 December,
2025, $1,165,676 of the unbilled revenues was billed (2024: $1,800,426).
Segmental reporting
The Group reports its business activities in two areas:
· Licensing and support revenue; and
· Services,
which are reported in a manner consistent with the internal reporting to the
CEO, who has been identified as the chief operating decision maker.
Advertising and promotion costs
Advertising and promotion costs are expensed as incurred. These costs totalled
$463,726 for the year ended 31 December 2024 and $412,300 for the year ended
31 December 2025.
Advertising and promotion expenses include external costs related to events
and marketing activities and do not include the Company's internal costs for
these activities, mainly payroll and related costs. We applied this
classification consistently to 2024 for comparability.
Income taxes
The Group records deferred tax assets and liabilities for the estimated future
tax effects of temporary differences between the tax bases of assets and
liabilities and amounts reported in the Group's Consolidated Statements of
Financial Position, as well as operating loss and tax-credit carry-forwards.
The Group also measures deferred tax assets and liabilities using enacted tax
rates expected to be applied to taxable income in the years in which those
temporary differences are expected to be recovered or settled. Deferred tax
assets are reduced by a valuation allowance if, based on available evidence,
it is more likely than not that these benefits will not be realised.
Stock-based compensation
The Group records stock-based compensation in accordance with FASB ASC Topic
718 "Compensation-Stock Compensation". The fair value of awards granted is
recognised as an expense over the requisite service period.
Leases
The Group accounts for leases under ASC 842, Leases, which requires the
recognition of right-of-use ("ROU") assets and lease liabilities on the
Consolidated Statements of Financial Position. including those leases
classified as operating leases. Under the standard, disclosures are required
to meet the objective of enabling users of financial statements to assess the
amount, timing, and uncertainty of cash flows arising from leases.
The Group determines if an arrangement is a lease at inception. If applicable,
operating leases are included in operating lease ROU assets, other current
liabilities, and operating lease liabilities on the accompanying Consolidated
Statements of Financial Position. If applicable, finance leases are included
in property and equipment, other current liabilities, and other long-term
liabilities on the accompanying Consolidated Statements of Financial Position.
ROU assets represent the right to use an underlying asset for the lease term
and lease liabilities represent our obligation to make lease payments arising
from the lease. Operating lease ROU assets and liabilities are recognized at
commencement date based on the present value of lease payments over the lease
term.
Foreign currency
The Group's reporting currency is the US Dollar. The functional currency of
foreign operations, excluding the Lebanon entity, is the local currency for
the foreign subsidiaries. Assets and liabilities of those foreign operations
denominated in local currencies are translated at the spot (historical) rate
in effect at the applicable reporting date. The Group's Consolidated
Statements of Comprehensive Income are translated at the weighted average rate
of exchange during the applicable period. Realised and unrealised transaction
gains and losses generated by transactions denominated in a currency different
from the functional currency of the applicable entity are recorded in other
income (expense) in the Consolidated Statements of Comprehensive Income in the
period in which they occur.
Foreign currency amounts denominated in British pounds sterling ("£") and
euros ("€") are translated into U.S. dollars using average exchange rates
for the periods presented for the Consolidated Statements of Comprehensive
Income and Consolidated Statements of Cash Flows, and exchange rates in effect
at the balance sheet date for the Consolidated Statements of Financial
Position.
In accordance with applicable US GAAP, on January 1, 2023, our company
transitioned Fadel Lebanon to a USD functional currency entity due to the
hyperinflationary conditions prevalent in the Lebanese currency. As a result,
all financial statements for periods end 31 December 2024 and 2025, reflect
the Lebanon subsidiary's operations and financial position in USD.
Comprehensive loss
Comprehensive loss consists of two components:
• net loss; and
• other comprehensive loss.
Other comprehensive loss refers to revenue, expenses, gains and losses that
are recorded as an element of Shareholder's equity but are excluded from net
loss. Other comprehensive loss consists of foreign currency translation
adjustments from those subsidiaries not using the $ as their functional
currency.
Statement of cash flows
Cash flows from the Group's operations are calculated based upon the
functional currencies. As a result, amounts related to assets and liabilities
reported on the Consolidated Statements of Cash Flows will not necessarily
agree with changes in the corresponding balances on the Consolidated
Statements of Financial Position.
New Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the FASB or
other standard setting bodies and adopted by the Company as at the specified
date. Unless otherwise discussed, the Company believes that the impact of
recently issued standards that are not yet effective will not have a material
impact on the Group's Consolidated Statements of Financial Position,
Consolidated Statements of Comprehensive Income or Consolidated Statements of
Cash Flows.
Recently Issued Accounting Pronouncements
The Company adopted ASU 2023-07, Segment Reporting (Topic 280): Improvements
to Reportable Segment Disclosures, effective January 1, 2024. The adoption
resulted in expanded disclosure requirements but did not have an impact on the
Company's consolidated financial position, results of operations, or cash
flows.
The Company adopted ASU 2023-09, Income Taxes (Topic 740): Improvements to
Income Tax Disclosures, effective January 1, 2025. The adoption resulted in
expanded income tax disclosures but did not have an impact on the Company's
consolidated financial position, results of operations, or cash flows.
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting
Comprehensive Income - Expense Disaggregation Disclosures (Topic 220):
Disaggregation of Income Statement Expenses. This standard enhances the
transparency of financial reporting by requiring public entities to disclose
additional information about the nature of certain expense line items
presented in the income statement. FADEL is currently evaluating the impact of
this standard on its financial statement disclosures.
4. SEGMENTAL REPORTING
The Group reports its business activities in two areas:
· Licensing and support revenue; and
· services,
which are reported in a manner consistent with the internal reporting the
Chief Executive Officer, which has been identified as the chief operating
decision maker.
While the chief operating decision maker considers there to be only two
segments, the Group's revenue is further split between "licensing and support"
(recurring in nature) and "services" (recurring for subscription-based
services and non-recurring for implementation and other support services) and
by key product families IPM Suite and Brand Vision (which includes
PictureDesk) and hence to aid the readers understanding of our results, the
split of revenue from these categories is shown below:
Audited Audited
As at As at
31 December 31 December
2024* 2025
$ $
Revenues
Licensing and Support
IPM Suite 5,434,562 5,185,270
Brand Vision 2,559,366 3,049,733
Total Licensing and Support 7,993,928 8,235,003
Services 5,028,273 4,381,436
Total Revenues 13,022,201 12,616,439
Cost of Sales
Licensing and Support 1,340,079 1,312,865
Services 3,633,151 3,174,163
Total Cost of Sales 4,973,230 4,487,028
Gross Profit Margins
Gross profit margin - Licensing and Support 83% 84%
Gross profit margin - Services 28% 28%
Total Gross Profit Margin 62% 64%
(*) Revenues and cost of sales have been reclassified to conform to the
current year revenue presentation.
5. ACCOUNTS RECEIVABLE
Accounts receivable consists of the following:
As at As at
31 December 2024 31 December 2025
$ $
Accounts receivable 1,952,329 2,117,914
Allowance for doubtful accounts (113,024) (66,313)
Accounts receivable, Net 1,839,305 2,051,601
6. CONTRACT COSTS
The Group accounts for commission costs in accordance with ASC 606, Revenue
from Contracts with Customers, which requires the capitalization of
incremental costs of obtaining a contract when the expected amortization
period is greater than one year. These costs are amortized on a systematic
basis consistent with the pattern of transfer of the goods or services to
which the asset relates. Amortization periods for customer lives typically
range from 5 to 10 years.
As of 31 December, 2024, and 2025, the Group recorded accumulated amortization
of $1,863,969 and $2,143,511, respectively. The Group has elected not to apply
the practical expedient available under ASC 606 for contracts with a duration
of less than one year.
Contract costs consist of the following:
As at As at
31 December 2024 31 December 2025
$ $
Contract Costs - Opening balance 763,323 835,521
Commissions capitalised during the year 474,965 344,947
Amortisation charge for the year (402,767) (279,542)
Contract costs - Ending Balance 835,521 900,926
7. INTANGIBLE ASSETS
The Company recognized identifiable intangible assets and goodwill in
connection with an acquisition completed in 2021 in accordance with ASC 805,
Business Combinations. The identifiable intangible assets primarily consist of
customer relationships, developed technology, and brand assets, which are
amortized over their estimated useful lives.
The carrying value of intangible assets was as follows:
Goodwill Customer Relationships Technology Based Assets Brand Assets Total
$ $ $ $ $
As at 31 December 2025 2,332,185 396,341 2,062,041 397,778 5,188,345
Accumulated Amortisation:
As at 31 December 2024 - 120,642 625,378 120,942 866,962
Amortisation charge for the period - 38,839 202,068 38,980 279,887
As at 31 December 2025 - 159,481 827,446 159,922 1,146,849
Carrying amount:
As at 31 December 2024 2,178,198 249,530 1,300,512 250,571 3,978,811
As at 31 December 2025 2,332,185 236,860 1,234,595 237,856 4,041,496
Amortization expense for the year ended 31 December, 2024 was $273,104.
Estimated future amortization expense is approximately $270,000 annually for
each of the next five years.
Goodwill represents the excess of the purchase price over the fair value of
net assets acquired and primarily reflects expected synergies and the
assembled workforce. As of 31 December 2024, and 2025, goodwill was $2.2 and
$2.3 million respectively.
The Company evaluates goodwill for impairment annually or more frequently if
indicators of impairment exist. Based on projections of income, cash flows and
the conditions of current operations, it believes the fair value of the
reporting unit is greater than it carrying amount and no impairment is needed.
8. FURNITURE, EQUIPMENT AND PURCHASED SOFTWARE
Furniture, equipment and purchased software consist of the following:
As at As at
31 December 2024 31 December 2025
$ $
Furniture, equipment and purchased software 363,328 367,113
Accumulated depreciation (156,650) (192,180)
Furniture and equipment 206,678 174,933
Depreciation expense was $26,003 and $35,530 for the years ended 31 December
2024 and 2025, respectively.
9. LEASES
A lease is defined as a contract that conveys the right to control the use of
identified property, plant or equipment for a period of time in exchange for
consideration. The Company accounts for its leases in accordance with the
guidance in Accounting Standards Codification ("ASC") 842 ("ASC 842").
Substantially all of the leases in which the Company is the lessee are
comprised of real estate property for remote office spaces and corporate
office space. Substantially all of the leases are classified as operating
leases.
As at the year ended 31 December 2024 and 31 December 2025, the Company had
approximately$134,777 and $44,789 respectively, of operating lease ROU assets
$134,777 and $44,789, respectively of operating lease liabilities on the
Group's Consolidated Statements of Financial Position. The Company has elected
not to recognize right-of-use ("ROU") assets and lease liabilities arising
from short-term leases, leases with initial terms of twelve months or less, or
equipment leases (deemed immaterial) on the Group's Consolidated Statements of
Financial Position.
As at 31 December 2025, these leases do not contain material residual value
guarantees or impose restrictions or covenants related to dividends or the
Company's ability to incur additional financial obligations. The discount rate
for operating leases was based on market rates from a bank for obligations
with comparable terms effective at the lease inception date.
The following table presents lease costs, future minimum lease payments and
other lease information as of 31 December of the remaining years under lease:
Year Ending 31 December, Operating
2026 44,789
Total Operating Lease Liabilities 44,789
Less amounts representing interest -
Present Value of Future Minimum Lease Payments 44,789
Less current maturities 44,789
Long-term Lease Liability -
Lease Cost:
2024 2025
Operating lease - operating cash flows (fixed payments) 62,438 61,605
Weighted average remaining lease term -operating 1.7 years 0.7 years
Weighted average discount rate - operating 10% 10%
10. RETIREMENT PLAN
The Company has a 401(k) safe harbor plan that covers all employees of the
U.S. entity at least 21 years of age who have worked for the Company for at
least three months. Employees vest immediately for all employer matching
contributions. The retirement plan expense was $84,421 for the year ended 31
December 2025 and $112,333 for the year ended 31 December 2024.
The Group also maintains a provision for end-of-service indemnity for
employees of its Lebanese subsidiary, in accordance with local labor
regulations. This liability reflects the estimated obligation for benefits
payable to employees upon separation from service. During 2024, the Company
adopted a refined approach to estimating this provision, representing a change
in accounting estimate. The updated methodology incorporates a forfeiture rate
of 11.40% for 2025, derived from historical employee turnover data, and
applies a present value discounting approach using a 10% discount rate,
consistent with prevailing economic conditions in Lebanon. These changes
enhance the accuracy of the estimate by reflecting both expected employee
behavior and the time value of money. As at 31 December, 2025 the liability to
end of services indemnity was $317,602 (2024: $308,824).
11. LINE OF CREDIT: Bank of America:
The Group maintains access to a revolving credit facility with Bank of
America, N.A., originally established in June 2022 and renewed on an annual
basis. The facility provides for borrowings of up to $1.0 million to support
working capital and general corporate purposes.
During the year ended 31 December 2024 and during the year ended 31 December
2025, the Group drew $300,000 and $200,000 respectively on the facility, which
was fully repaid prior to year-end. Borrowings during the year bore interest
at a variable rate equal to the U.S. Prime Rate plus 0.95%.
The facility is secured by substantially all assets of Fadel Partners, Inc.,
and is further supported by a personal guarantee from the Group's Chief
Executive Officer, Tarek Fadel.
Subsequent to year end, on April 7, 2026, the facility was renewed and
extended through 31 May 2027.
12. INCOME TAXES
The components of income/(loss) before income taxes are as follows:
Audited Audited
As at As at
31 December 31 December
2024 2025
$ $
Domestic (4,817,109) (2,474,329)
Foreign (83,175) 1,046,347
US taxable profit before income taxes (4,900,284) (1,427,982)
Provision for income taxes consisted of the following:
Provision components are as follows: Audited Audited
As at As at
31 December 31 December
2024 2025
$ $
Current:
Foreign 90,025 208,196
Federal 7,041 (125,340)
State (109,360)
8,756
Total current expense/(income) (12,294) 91,612
Deferred:
Foreign 39,732 -
Federal 587,582 -
State 203,465 -
Total deferred expense 830,779 -
Provision for/(benefit from) income taxes (818,485) (91,612)
The differences between income taxes expected at the U.S federal statutory
income tax rate and income taxes reported were as follows:
Effective Tax Rate Reconciliation Audited Tax Rate Audited Tax Rate
As at As at As at As at
31 December 31 December 31 December 31 December
2024 2024 2025 2025
% %
$ $
U.S federal income tax (benefit) at statutory rate (1,029,060) 21 (299,876) 21
State tax (net of federal benefit) (186,769) 4 (116,008) 8
Foreign tax rate differential (8,785) - (5,889) -
Meals and entertainment - - 4,027 -
GILTI income 459,569 (9) 487,842 (34)
Stock Compensation 57,885 (1) 51,820 (4)
Change in Valuation Allowance (316,895) 6 (351,166) 25
SALT rate change - - (35,545) 2
RTP - - (43,926) 3
Deferred True-up - - 529,042 (37)
Payable True up 1,894,965 (39) (125,340) 9
Other (42,692) 1 (3,369) -
Provision for/(benefit from) income taxes 828,218 (17) 91,612 (6)
The Company is subject to taxation in the United States and certain foreign
jurisdictions. Earnings from non-U.S. activities are subject to local country
income tax.
The material jurisdictions where the Company is subject to potential
examination by tax authorities include the United States, France, Lebanon and
the UK.
U.S Companies are eligible for a deduction that lowers the effective tax rate
on certain foreign income. This treatment is referred to as the
Foreign-Derived Intangible Income deduction.
As at 31 December 2024, the Company had a federal and state NOL carry forward
of approximately $2.5 million and $2.8 million. The state NOL will expire
beginning in 2037. As at 31 December 2024, the Company had NOLs in California,
Connecticut, Florida, Massachusetts, New York and Pennsylvania.
As at 31 December 2025, the Company had a federal and state NOL carry forwards
of approximately $1.4 million, and $2.9 million, respectively. The state NOL
will begin to expire in 2037. As at 31 December 2025, the Company had NOLs in
California, Florida, Massachusetts, North Carolina, New Jersey, New York,
Pennsylvania and Rhode Island.
The Tax Cuts and Jobs Act ("TCJA") introduced a provision to tax global
intangible low-taxed income ("GILTI") of foreign subsidiaries. For the years
ended 31 December, 2024 and 2025, the Company had to include GILTI relating to
the Company's foreign subsidiaries. The Company elected to account for GILTI
as a current period cost. The One, Big, Beautiful Bill Act (OBBBA) enacted in
2025 set the GILTI tax rate to 40%.
Significant components of the Company's deferred tax assets and deferred tax
liabilities are as follows:
Deferred Tax Table Audited Audited
As at As at
31 December 31 December
2024 2025
$ $
Amortisation 780,186 567,189
Net Operating loss carry forwards 488,500 289,256
Net Operating loss carry forwards (state) 179,115 195,291
Net Operating loss carry forwards (foreign) 675,799 714,328
Reserves and accruals 152,563 94,027
Deferred revenue 111,410 135,060
Unrealized FX Gain/Loss - 79,786
R&D credit - -
Net deferred tax assets 2,387,573 2,074,937
Less valuation allowance (2,387,573) (2,074,937)
Total deferred tax assets - -
Total deferred tax liabilities - -
Deferred tax assets, net - -
As required by the authoritative guidance on accounting for income taxes, the
Company evaluates the realizability of deferred tax assets on a jurisdictional
basis at each reporting date. Accounting for income taxes requires that a
valuation allowance be established when it is more likely than not that all or
a portion of the deferred taxes will not be realized. The Company considers
all positive and negative evidence in determining if, based on the weight of
such evidence, a valuation allowance is required. In circumstances where there
is sufficient negative evidence indicating that the deferred tax assets are
not more likely than not realizable, the Company establishes a valuation
allowance. The significant 2025 pre-tax loss, coupled with cumulative book
losses projected in early future years, was significant negative evidence
considered by the Company. As a result, the Company's valuation allowance
balance as of 31 December 2025 is $2.1M.
The change in the valuation allowance is as follows:
Beginning of the Year Additions/ (Deductions) Balance at the end of the year
2024
Reserves Deducted from deferred income taxes, net: 3,535,416 (1,147,843) 2,387,573
Valuation Allowance (2,704,468) (316,895) (2,387,573)
2025
Reserves Deducted from deferred income taxes, net: 2,387,573 (312,636) 2,074,937
Valuation allowance (2,387,573) (312,636) (2,074,937)
At 31 December 2025, the Company did not have any unrecognized tax benefits
and did not anticipate any significant changes to the unrecognized tax
benefits within twelve months of this reporting date. In the year ended 31
December 2025, the Company recorded $16K of accrued interest in the income tax
payable related to the 2021 amended return.
The Company considers the earnings of its foreign entities to be permanently
reinvested outside the United States based on estimates that future cash
generation will be sufficient to meet future domestic cash needs. Accordingly,
deferred taxes have not been recorded for the $2.4 million of undistributed
earnings of the Company's foreign subsidiaries. As a result of the TCJA and
the current U.S. taxation of deemed repatriated earnings, the additional taxes
that might be payable upon repatriation of foreign earnings are not
significant. All other outside basis differences not related to earnings were
impractical to account for at this period of time and are currently considered
as being permanent in duration.
13. COMMON SHARES
The Company has authority to issue 150,000,000 shares at $0.001 par value per
Share. As at 31 December 2024 and 31 December 2025, the Company had 20,231,250
common shares of $0.001 each in issue. Shareholders may use this figure as the
denominator by which they are required to notify their interest in, or change
their interest in, the Company under the Disclosure Guidance and Transparency
Rules.
14. EARNINGS PER SHARE
The Company computes earnings (loss) per share in accordance with ASC 260,
Earnings per Share, which requires presentation of both basic and diluted
earnings per share on the face of Consolidated Statements of Comprehensive
Income. Basic earnings (loss) per share is computed by dividing net income
(loss) available to common shareholders by the weighted average number of
outstanding shares during the period.
Diluted earnings (loss) per share gives effect to all dilutive potential
common shares outstanding during the period. Due to their anti-dilutive
effect, the calculation of diluted net loss per share for the years ended 31
December 2024 and 31 December 2025 does not include stock options and
warrants. The number of dilutive shares would have been 1,846,296 and
1,396,786 as at 31 December 2024 and 31 December 2025, respectively.
Audited Audited
As at As at
31 December 31 December
2024 2025
$ $
Total comprehensive income attributable to Shareholders (5,691,342) (1,086,153)
Weighted average number of Shares 20,231,250 20,231,250
Basic and diluted earnings per share ($) (0.28) (0.05)
15. STOCK OPTION PLANS
The Group maintains equity incentive plans to provide stock-based compensation
to employees and directors.
The 2014 Equity Incentive Plan authorized 1,620,366 shares for issuance.
Options under this plan generally vest over three to four years. Following the
Company's admission to AIM in April 2023, no further grants are expected under
this plan. As of 31 December, 2025, 195,608 options remained outstanding.
On April 2, 2023, the Group adopted the 2023 Equity Incentive Plan, which
supersedes the 2014 plan. Options granted under this plan vest over four
years, have a contractual term of up to ten years, and are issued at an
exercise price not less than fair market value on the grant date. During the
year ended 31 December, 2025, 285,712 options were granted, and 1,327,750
options were outstanding at year end.
In addition, the Group has 576,924 non-plan options outstanding as of 31
December 31 2025, with an exercise price of £1.44 per share and a ten-year
term.
Determining the appropriate fair value model and the related assumptions
requires judgment. The fair value of each option granted is estimated using a
Black-Scholes option-pricing model on the date of grant as follows:
For the year ended 31 December 2024 For the year ended 31 December 2025
Estimated dividend yield 0% 0%
Expected stock price volatility 30% 41%
Risk-free interest rate 4.19% 3.88%
Expected life of option (in years) 7 7
Weighted-average fair value per share $0.62 $0.43
The assumptions were based on the following for each of the periods presented:
Expected dividend yield -The Company has never declared or paid any cash
dividends and does not anticipate paying cash dividends in the foreseeable
future, and, therefore, used an expected dividend yield of zero in the
valuation model.
Expected stock price volatility -Because the Company had limited trading
history by which to determine the volatility of its own common stock price,
the expected volatility being used is derived from the historical stock
volatilities of a representative industry peer group of comparable publicly
listed companies over a period approximately equal to the expected term of the
options.
Risk-free interest rate-The risk-free interest rate is based on U.S. Treasury
issues with remaining terms similar to the expected term on the options.
Expected life of option-The expected term represents the period that the
Company's stock-based awards are expected to be outstanding. The Company
determined the expected term using the simplified method. The simplified
method calculates the expected term as the average of the time-to-vesting and
contractual terms of the stock-based award.
Aggregate intrinsic value-Represents the total intrinsic value of
in-the-money options at the reporting date, calculated as the difference
between the share price and exercise price, multiplied by the number of
options, and presented in thousands. The Aggregate Intrinsic Value was as for
$348,265 for the year ended 31 December 2024 and was $122,022 for the year
ended 31 December 2025.
A summary of the status of the Group's option plans for the year ended 31
December 2025 is as follows:
2014 plan Non-plan 2023 plan Total
Options outstanding Number of Weighted Number of Weighted Number of Weighted Number of Weighted
Options
average
Options
average
Options
average
Options
average
(in Shares)
exercise price
(in Shares)
exercise price
(in Shares)
exercise price
(in Shares)
exercise price
As at 31 December 2024 793,830 $1.19 576,924 $1.78 1,723,952 $1.73 3,094,706 $1.60
Granted - $- - $- 285,712 $1.53 285,712 $1.53
Exercised - $- - $- - $- - $-
Forfeited or (598,222) $0.97 - $- (681,914) $1.53 (1,280,136) $1.27
expired
As at 31 December 2025 195,608 $0.97 576,924 $1.78 1,327,750 $1.53 2,100,282 $1.55
Exercisable as at 31 793,830 $1.21 576,924 $1.78 475,542 $1.81 1,846,296 $1.54
December 2024
Exercisable as at 31 December 2025 195,608 $0.97 576,924 $1.78 624,254 $1.76 1,396,786 $1.66
Forfeiture rate-The Company estimates forfeitures at the grant date based on
expected employee attrition over the vesting period. Options are subject to
service conditions and are forfeited if employment terminates prior to
vesting. The estimated forfeiture rate reflects the pattern of expected
employee departures over the vesting period and is revised, if necessary, in
subsequent periods to reflect actual forfeiture experience.
Stock option expense was for $275,643 for the year ended 31 December 2024 and
was $246,760 for the year ended 31 December 2025 and Unrecognized compensation
expense related to share options which will be recognized through 2026 was
$238,784 as at 31 December 2025, compared to $ 272,980 as at 31 December 2024.
16. RELATED PARTIES
In April 2023, the Company entered into an unsecured, non-interest-bearing
loan agreement with its Chief Executive Officer, Tarek Fadel. As of 31
December, 2024 and 2025, the outstanding balance on the loan was $162,396.
The loan is repayable only upon the Company issuing new shares at or above a
specified price.
17. CONCENTRATION OF CREDIT RISK
Billed accounts receivable and concentrations of credit risk
As at 31 December 2024, there were two significant customers (defined as
contributing at least 10%) that accounted for 49% of accounts receivable.
As at 31 December 2025, there were three significant customers (defined as
contributing at least 10%) that accounted for 45% of accounts receivable.
Unbilled work-in-progress and concentrations of credit risk
As at 31 December 2024, there were two significant customers that accounted
for 69% (34% and 35%) of unbilled work-in-progress.
As at 31 December 2025, there were four significant customers that accounted
for 87% (15%, 18%, 24% and 30%) of unbilled work-in-progress.
Accounts payable and concentrations of credit risk
As at 31 December 2024, there were two significant vendors (defined as
contributing at least 10%) that accounted for 44% of accounts payable.
As at 31 December 2025, there were two significant vendors (defined as
contributing at least 10%) that accounted for 47% of accounts payable.
Revenue concentrations
During 2024, the five largest customers accounted for an aggregate of
$6,379,336 of revenue, some 49% of revenue from continuing operations.
During 2025, the five largest customers accounted for an aggregate of
$5,809,565 of revenue, some 46% of revenue from continuing operations.
Top 5 Customers' revenue concentration 2024 2024 % of Total Revenue 2025 Revenue 2025 % of Total Revenue
Revenue
$'000
Licensing and Support 3,379 26% 3,141 25%
Services 3,000 23% 2,669 21%
Total $ 6,379 49% $ 5,810 46%
18. INCOME TAX RECEIVABLE
On 30 September 2022, a withholding tax liability of 32.5% became payable in
the UK in connection with an intercompany loan of $2,032,690 between Image
Data Systems (UK) Limited ("IDS") and Fadel UK, related to the acquisition of
IDS. This resulted in a withholding tax obligation of $660,624, which became
reclaimable on the condition that the intercompany loan was repaid or
cancelled by 31 December 2023. The tax was paid by IDS to HMRC on 21 June
2023. As the conditions for reclaim were met, the amount was recognized as a
receivable as of 31 December 2023, and the refund of $660,624 was received on
25 October 2024.
19. TREASURY SHARES (AT COST)
During the year ended 31 December 2025, the Company repurchased 5,555 shares
of its common stock for an aggregate purchase price of $4,786. The shares are
recorded as treasury stock and may be reissued for general corporate purposes,
including equity compensation plans. As of 31 December 2025, the Company held
5,555 shares in treasury.
20. SUBSEQUENT EVENTS
Management has evaluated subsequent events through the date the financial
statements were available to be issued and determined that no events require
adjustment to or disclosure in these consolidated financial statements.
In April 2026, the company extended the line of credit with Bank of America,
N.A for one more year until 31 May 2027.
COMPANY INFORMATION
Nominated Adviser and Broker
Cavendish Capital Markets Limited
One Bartholomew Close,
London, EC1A 7BL
United Kingdom
Auditor
Crowe UK LLP
55 Ludgate Hill,
London, EC4M 7JW
United Kingdom
Component Auditor
LMC CPA
1359 Broadway, Suite 1710
New York, NY 10018
United States of America
Legal Advisors (UK)
Bird & Bird LLP
12 New Fetter Lane
London EC4A 1JP
United Kingdom
Legal Advisors (US)
Buchalter
111 South Main Street, Suite 600
Salt Lake City, Utah 84111
United States of America
Registrar
Computershare
The Pavilions,
Bridgwater Road,
Bristol, BS99 6ZZ
United Kingdom
For investor relations enquiries:
press@fadel.com
* (#_ftnref1) Revenues have been reclassified to conform to the current year
revenue presentation.
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Copyright 2019 Regulatory News Service, all rights reservedRecent news on Fadel Partners
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