Notes to the Unaudited Condensed Interim Financial Statements

For the six-month period ended 31 March 2026

1.      General information

capAI plc (the "Company") is a public limited company incorporated in England and Wales on 20 April 2011. During the previous reporting period, on 4 February 2025, the Company changed its name from Dukemount Capital plc to capAI plc to reflect its strategic repositioning in the AI sector.

The Company was admitted to the Official List of the Financial Conduct Authority by way of a Standard Listing and to trading on the Main Market of the London Stock Exchange on 29 March 2017. Following UK Listing Reforms effective 29 July 2024, the Company has been mapped to the Equity Shares (Transition) category, under which it continues to comply with the Standard Listing requirements.

The interim report and financial statements for the six-month period ended 31 March 2026 comprise the results of the Company and its subsidiaries (together referred to as the "Group").

The Group's principal activity is the development and commercialisation of artificial intelligence technologies through its strategic framework: Identify, Incubate and Invent. It focuses on sourcing, building and scaling high-efficiency, high-impact ventures, with an initial emphasis on media and medicine, while retaining flexibility to pursue exceptional opportunities across the broader AI, deep tech and longevity landscape.

The Company's registered office is 9 Innovation Place, Douglas Drive, Godalming, Surrey, GU7 1JX.

2.      Basis of preparation

These condensed consolidated interim financial statements have been prepared under the historical cost convention, on a going concern basis, and in accordance with International Financial Reporting Standards, International Accounting Standards and IFRIC interpretations as adopted for use in the United Kingdom ("IFRS"). The condensed consolidated interim financial statements contained in this document do not constitute statutory accounts. In the opinion of the Directors, the condensed consolidated interim financial statements fairly present the financial position, performance and cash flows for the period. The Board of Directors approved this Interim Financial Report on 30 June 2026.

The Group's accounting reference date is 30 September. Accordingly, this interim reporting period covers the six months from 1 October 2025 to 31 March 2026, with comparatives presented for the six-month period ended 31 March 2025 and the year ended 30 September 2025.

Statement of compliance

The interim report includes the condensed consolidated interim financial statements, which have been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting'. These financial statements should be read in conjunction with the Group's annual financial statements for the year ended 30 September 2025, which were prepared in accordance with IFRS as adopted in the United Kingdom.

Accounting policies

The accounting policies and methods of computation followed in the preparation of the interim financial statements are consistent with those used in the Group's annual financial statements for the year ended 30 September 2025. There have been no new accounting standards or interpretations adopted in the current period that have a material impact on the financial information.

Going concern

The Directors have assessed the Group's ability to continue as a going concern, taking into account its financial position as at 31 March 2026 and developments since the period end. While the Group had sufficient resources at the reporting date, this position was further strengthened through proceeds received from the exercise of warrants.

The Directors believe it is appropriate to prepare these interim financial statements on a going concern basis. While further funding may be required to support the execution and scale-up of the Group's AI strategy, the Board is confident in its ability to secure such funding as and when required. This confidence is underpinned by the Group's strategic repositioning into a high-growth and topical sector, strong shareholder alignment, and the depth of experience within the Board and leadership team, and the Group's established track record of raising capital.

However, the potential requirement for additional capital represents a material uncertainty that may cast significant doubt over the Group's ability to continue as a going concern. Notwithstanding this uncertainty, the Directors are satisfied that the going concern basis remains appropriate.

3.      Investment in subsidiaries

Details of subsidiaries

The following subsidiaries were held by the Group during the period ended 31 March 2026:

capMedia, Inc - Country of incorporation: United States of America - Date of incorporation: 7 July 2025 - Registered office: 16192 Coastal Highway, Lewes, Delaware 19958, USA - Principal activity: Development and commercialisation of AI-enabled platforms, primarily in media-related applications - Ownership: 100%

capMedia (UK) Ltd - Country of incorporation: United Kingdom - Date of incorporation: 11 March 2016 - Registered office: 9 Innovation Place, Douglas Drive, Godalming, Surrey, England, GU7 1JX - Principal activity: Dormant - Ownership: 100%

capMedical (UK) Ltd - Country of incorporation: United Kingdom - Date of incorporation: 12 June 2019 - Registered office: 9 Innovation Place, Douglas Drive, Godalming, Surrey, England, GU7 1JX - Principal activity: Dormant - Ownership: 100%

capMedical, Inc - Country of incorporation: United States of America - Date of incorporation: 7 October 2025 - Registered office: 16192 Coastal Highway, Lewes, Delaware 19958, USA - Principal activity: Development and commercialisation of AI-enabled platforms in healthcare and longevity applications - Ownership: 100%

capMedia (UK) Ltd was formerly known as capAI opportunities Ltd (and before that, Dukemount Limited). capMedical (UK) Ltd was formerly known as DKE Care and Leisure Ltd. Both UK entities were renamed on 19 September 2025 to align with the Group's strategic repositioning. capMedical, Inc was incorporated during the period on 7 October 2025. All subsidiaries are consolidated in the Group financial statements.

4       Trade and other receivables

5.      Earnings per share

Basic (loss)/earnings per share is calculated by dividing the total comprehensive (loss)/income attributable to equity holders of the Group by the weighted average number of ordinary shares in issue during the period.

Diluted earnings per share for the period ended 31 March 2026 includes the potential impact of outstanding share options and warrants, where these are dilutive.

As the Group reported a net loss for the six-month period ended 31 March 2026, the diluted loss per share is the same as the basic loss per share. The effect of all potentially dilutive instruments, including share options and warrants outstanding at the period end, would be anti-dilutive and has therefore been excluded from the diluted earnings per share calculation.

6.      Share capital

On 6 October 2025, the Company implemented a 10:1 share consolidation, whereby every ten existing ordinary shares were consolidated into one ordinary share.

As a consequence of the share consolidation, the number of options and conditional awards outstanding and their exercise prices were adjusted in accordance with the terms of the relevant option awards. These adjustments were mechanical in nature and did not result in any modification to the fair value of the awards for the purposes of IFRS 2 Share-based Payment.

On 4 November 2025, the Company received notice for a warrant exercise and issued 20,500,000 ordinary £0.0001 shares for a total consideration of £124,688.

In February 2026, the Company completed a fundraise and issued 27,250,000 ordinary shares at £0.01 per share, comprising 25,250,000 shares placed for cash raising gross proceeds of £252,500 and 2,000,000 shares issued in settlement of £20,000 of professional fees.

Both classes of deferred Shares have no voting rights, no entitlement to attend General Meetings of the Company, no right to any dividend or other distribution and will carry only the right to participate in any return of capital to the extent of the amount paid up or credited as paid up on each deferred Share after the holders of existing ordinary shares have received, not only the aggregate amount paid up on those shares, but also £1 million per new ordinary share.

As at 31 March 2026, there were two classes of deferred shares in issue:

·    61,624,316 deferred shares of £0.009 each, and

·    969,316,623 deferred shares of £0.00099 each,

totalling 1,030,940,939 deferred shares with an aggregate nominal value of £1,514,242.

7.      Share premium

8.      Share based payments

Warrants

Warrants issued for services provided are accounted for as equity-settled share-based payments under IFRS 2 - Share-Based Payment. These comprise adviser warrants granted in consideration for professional services rendered to the Company. During the period, 757,500 warrants were issued to AlbR Capital Limited, the Company's corporate broker, in connection with the February 2026 placing, representing 3% of the placing shares issued. These warrants are exercisable at £0.00375 per share and expire on 5 March 2027. The fair value of such warrants has been determined using the Black-Scholes option pricing model and is recognised in the statement of comprehensive income over the relevant service period.

No warrants were issued to investors pursuant to the February 2026 placing.

As at 31 March 2026, the Company had the following warrants outstanding:

Share options

The Company has implemented equity-settled share-based payment arrangements for its directors, accounted for under IFRS 2 - Share-Based Payment. During the period, Richard Edwards resigned as Executive Director on 16 December 2025 and was treated as a good leaver under the capAI Long Term Incentive Plan (see further detail below). Jack Allardyce was appointed Executive Director on the same date and was granted options over 8,166,667 ordinary shares. The options have been granted under performance-linked incentive schemes designed to align director remuneration with shareholder value creation.

Vesting of the options is conditional on achieving specific share price hurdles and maintaining continuous service over defined periods. The fair value of each grant has been determined using the Black-Scholes option pricing model, with the total value expensed over the vesting periods in accordance with IFRS 2.

Richard Edwards resigned as Executive Director on 16 December 2025 and was treated as a good leaver in accordance with the terms of his option awards. His vested options (First Tranche and Second Tranche) were retained in full, comprising 28,000,000 options exercisable at £0.00315 per share from the January 2025 grant and 25,000,000 options exercisable at £0.0001 per share from the March 2025 grant.

His retained options are exercisable until 17 December 2027. The anti-dilution provisions apply to the First and Second Tranches of the March 2025 award only; these provisions were disapplied in respect of the Third Tranche pursuant to the departure agreement. Under IFRS 2, the Group recognises the cumulative charge attributable to the retained and accelerated awards, with the charge on lapsed awards reversed.

On 17 December 2025, Jack Allardyce was granted options on his appointment as Executive Director under the capAI Long Term Incentive Plan. The award comprises two tranches: 4,000,000 options at an exercise price of £0.00315 per share and 4,166,667 options at an exercise price of £0.0001 per share, in each case with a share price at the date of grant of £0.0130 per share. The options vest on 12 March 2026, in line with the vesting date of Richard Edwards' retained awards. The total fair value of £94,794, determined using the Black-Scholes option pricing model (inputs disclosed in the table below), has been recognised as a share-based payment charge in the period.

As at 31 March 2026, the Company had the following options outstanding:

In accordance with the directors' remuneration arrangements as disclosed in the Company's RNS dated 12 March 2025, the Company has committed that, in the event the Company's current outstanding warrants (including those issued as part of the March 2025 conditional fundraising) and previous options (as set out in the RNS dated 29 January 2025) are exercised, Professor Nag will be granted further options proportionately and on the same terms as his existing awards, to maintain his options as a consistent percentage of the enlarged issued share capital. In respect of Richard Edwards, the anti-dilution protection applies only to the March 2025 First Tranche and Second Tranche options retained following his good leaver treatment; pursuant to his departure agreement dated 17 December 2025, the anti-dilution provisions were disapplied in respect of his March 2025 Third Tranche.

Fair value measurement

A Black-Scholes model has been used to determine the fair value of both warrants and share options at the respective grant dates. The model incorporates several factors, including:

·      the market price of the Company's shares at grant date,

·      the exercise price of the instrument,

·      expected share price volatility,

·      expected life of the option/warrant,

·      risk-free interest rate, and

·      the expected level of future dividends (assumed nil).

The inputs into the model were as follows:

The share options granted on 29 January 2025 and 12 March 2025 have a contractual life of 10 years from their respective grant dates. For the purposes of calculating the fair value under IFRS 2, the Company has applied an expected option life of 3 years from the respective grant dates, consistent with small-cap market norms.

The Company has applied an expected volatility of 20% in valuing share-based payment arrangements using the Black-Scholes model. This reflects historical share price movement and is considered appropriate for a UK small-cap issuer, such as the Company. Volatility is assessed at the grant date and is not adjusted retrospectively.

Share-based payment expense

The total fair value of equity-settled share-based payment arrangements granted during the period was determined using the Black-Scholes option pricing model, as detailed above.

The following table presents the fair value of the share-based awards granted during the period and the corresponding charge recognised in the income statement:

The fair value of each option was determined using the Black-Scholes model, assuming a three-year option life, consistent with small-cap norms. Although the awards vest in tranches over shorter service milestones and share price performance targets, the Board considers the options to form part of a longer-term incentive plan. Accordingly, the total fair value is recognised on a straight-line basis over a three-year service period, reflecting the substance of the arrangement.

The remainder of the fair value of the share options will be recognised in future periods over the three-year service period, in accordance with the requirements of IFRS 2.

Options granted 4 November 2025 (anti-dilution awards)

Pursuant to the anti-dilution provisions disclosed in the RNS dated 12 March 2025, the exercise of warrants in November 2025 triggered conditional option awards to maintain Executive Directors' options as a consistent percentage of the enlarged issued share capital. The following options were conditionally awarded on 4 November 2025:

Professor Ronjon Nag: 39,300,000 options

Richard Edwards: 9,800,000 options

The share price on 4 November 2025 was 2.11 pence per share. The exercise price and vesting conditions mirror the terms of the original March 2025 awards. The IFRS 2 fair value measurement for these anti-dilution awards requires complex analysis given the modification and proportionate adjustment mechanics.

9.      Trade and other payables

10.   Related Party Transactions

During the period and up to the date of this report, the Group entered into the following related party transactions in accordance with IAS 24:

Directors' participation in fundraisings

The director participation in the February 2026 fundraise were as follows:

·      Professor Ronjon Nag, Executive Chairman has subscribed for 2,000,000 Fundraise Shares;

·      Jack Allardyce, has subscribed for 2,000,000 Fundraise Shares.

Professional fees

Included within administrative expenses for the six-month period ended 31 March 2026 is an accrual of £6,000 in respect of accounting services relating to bookkeeping and VAT work. This amount is payable to Coat Capital Limited, a company jointly owned by Richard Edwards, who served as a director of the Company until 16 December 2025, and his spouse.

Included within administrative expenses for the six-month period ended 31 March 2026 is a consultancy fee of £3,500 payable to Alkyl Energy Ltd, a company a company jointly owned by Jack Allardyce, Executive Director, and his spouse. This fee relates to consultancy services provided prior to Mr Allardyce's appointment as a director of the Company.

Management charges

During the period, capAI plc charged capMedical Inc a management fee of £2,000 in respect of services provided in connection with the incorporation of that entity. The balance was outstanding as at 31 March 2026 and is included within intercompany receivables in the Group balance sheet, being eliminated on consolidation.

During the period, capAI plc charged capMedia, Inc a management fee of £16,000 in respect of management services provided for the three months to 31 March 2026. The balance was outstanding as at 31 March 2026 and is included within intercompany receivables in the Group balance sheet, being eliminated on consolidation.

Following the period end, capAI plc raised an invoice of £12,000 to capMedia, Inc in respect of management services for the three months to 31 March 2026. This amount was accrued as income in the Company's standalone accounts at 31 March 2026 but does not appear in the consolidated Group balance sheet as it is eliminated on consolidation.

11.   Events after the Reporting Period

In April 2026, the remaining investor warrants issued as part of the April 2025 placing, exercisable at 0.8p per share, expired unexercised.

In May 2026 the Company received notice of exercise of warrants to subscribe for a total of 5,290,000 new ordinary shares of nominal value £0.0001 each in the capital of the Company (The total consideration paid to the Company in connection with the exercise of such Warrants is £19,838.

The New Ordinary Shares will rank pari passu with the existing Ordinary Shares.