Annual Report and Audited Accounts to 31 December 2025

Thalassa Holdings Ltd

Thalassa Holdings Ltd

("Thalassa" or the "Company")

(Reuters: THAL.L, Bloomberg: THAL:LN)

Final Results For Year Ended 31 December 2025

The information set out below is extracted from the Company's Report and Accounts for the year ended 31 December 2025, which will shortly be published on the Company's website. A copy will also be submitted to the National Storage Mechanism where it will be available for inspection.  Cross-references in the extracted information below refer to pages and sections in the Company's Report and Accounts for the year ended 31 December 2025.

2025 HIGHLIGHTS

Group Results 2025 versus 2024 GBP GBP

 2025 World-Highlights

• Cambodia and Thailand Clash
• Cardinal Robert Prevost becomes Pope Leo XIV
• India and Pakistan Clash
• The AI Race Intensifies and moves into Overdrive
• Sudan’s Civil War Continues – Over 400,000 people have so far died
• Trump administration brokers a Gaza Peace Plan
• The war in Ukraine, in its fourth year, intensifies
• Israel and the USA attack Iran’s Nuclear Facilities
• China flexes its muscles and weaponises rare-earth minerals
• Trump disrupts US Foreign Policy and launched Liberation Day April 2, 2025 introducing 10% Tariffs on most imports and up to 50% on a Country specific basis

2026 World-Highlights

• January/The US carried out large-scale strike on Venezuela and captured President Maduro and his wife
• March/The US and Israel relaunch strikes against Iran Nuclear and military facilities
• Iran confirms the death of Supreme Leader Ali Khamenei
• April/USA and Israel agree ceasefire agreement with Iran
• April/Israel continues military intervention in Lebanon
• Iran accuses Israel of breaching ceasefire agreement

2025 Stock Market Highlights

• It’s been the best three-year stretch for stocks since the Dotcom Boom.
  • S&P 500:        + 16.4%
  • Dow Jones Industrial Average:        + 13.0%
  • Nasdaq Composite:   + 20.4%
  • Russell 2000 (small caps):   + 11.3%
  • S&P 400 (mid caps):     + 5.9%
  • FTSE 100         + 21.5%
  • AIM 100     +7.7%
• The 16.4% return for S&P 500 follows returns of 24% in 2023 and 23% in 2024
• The S&P 500 and the Dow hit all-time closing highs on December 24, reaching 6,932 and 48,731 on that date, respectively.
• The Nasdaq Composite hit its all-time closing high on October 29 at 23,958.
• Since reaching their all-time highs at the end of 2025 all 3 major US indices have fallen on the back of the Iran War and soaring oil price

Top Performing US Stocks in 2025

• The top performing stock on the S&P 500 in 2025 was Western Digital, a provider of large capacity hard disk drives. It returned about 319% in 2025.
• Micron Technology, which makes high bandwidth memory and storage chips, was the second-best performer last year, returning 274% for the year.
• Seagate Technology, a rival of Western Digital in the hard disk drive space, was third with an annual return of 235%.
• The top stock on the blue-chip Dow Jones Industrial Average in 2025 was Caterpillar, the farm equipment manufacturer. It returned 69% in 2025.
• Financial service giant Goldman Sachs was second with a 64% return last year. Goldman Sachs was buoyed by a strong year for M&A.
• Third on the Dow was AI chip maker Nvidia, which returned 41% last year. It’s down from the triple-digit returns of the previous two years, but was a still as strong year for the world’s most valuable company.

US Market Valuation leaves the Earth’s atmosphere

• Having scaled unseen heights in 2024 when the Buffett Indicator, US Stock Market Value compared to US GDP, reached a high of 211%, 67% higher than the long-term trend line, 2025 saw further gains with the index reaching 230% of GDP, or an astonishing 75%, or 2.4 standard deviations higher than the long-term trend whilst Berkshire Hathaway’s cash-pile which reached a record $323 billion in 2024 continued to climb, reaching another record $373bn at the end of 2025.

2025 Micro-Highlights

• ARL
  • Completion of first Commercial Grade Node on track for completion Q2 2026.
  • Node successfully tested to a depth of 1,000 meters!
  • Engagement with potential sources of funding and strategic partners continue and planned to accelerate once commercial node is completed.
  • Initial discussion with NATO will have been held by the time of publication of these results and further meetings with defence contractors planned for the coming months.

• Tappit restitution agreement
  • Chairman’s contribution now £2.3m of up to a possible £3m with a final instalment anticipated by end of June 2026.

• Our main publicly quoted positions had a mixed performance in 2025. Newmark Security plc (NWT) increasing by 41.7%, in large part due to our publicly distributed letter to the NWT Board challenging their Executive compensation and lack of BOD independence, which have resulted in the appointment of two new non-executive directors and the departure of one long serving director. On the other hand, Surgical Innovations Group PLC (SUN) shares declined by 25%, as a result of which I joined the Board along with a new Chairman and one other independent director. Good progress has been made at the Company since these changes were undertaken. More on the company can be found at www.sigroupplc.com

• In consideration of waiving 2021, 2022, and 2023 consultancy fees of £1,013,888, the Chairman received 4,055,553 warrants pursuant to the terms of a warrant instrument executed by the Company on 19 December 2024. Each warrant confers the right on the holder to subscribe for one new ordinary share. The exercise price of each warrant is £0.30. The final exercise date for the warrants is 31 December 2029.

Sounding like a Broken Record

No one like a party pooper, someone who constantly reminds those hooked on drugs and/or alcohol who just ‘Wanna have fun” that maybe, just maybe they should reflect on their behaviour; this is true whether you are Tiger Woods, or whether you are an investor (speculator!) in the stock market. A case in point is the recent astronomical 700% increase in the shares of Avis Budget (CAR), over a two-month period (due to a short squeeze) followed by a TWO DAY 70% decline. Investing? I’m not sure about that! Or the even crazier rise and fall of WeShop (WSHP), previously lost on the Aquis market, which, delisted and then some months later listed on NASDAQ, reached a high of $200 per share before falling 95% and is now trading at a recent price of $9.87 per share.

Why would one of the World’s greatest golfers get behind the wheel and proceed to drive at speed into the back of a truck, flip his car, again, but fortunately this time walk away unscathed. Clearly the Tiger has learned nothing from his past accident. Luckily, he has so far only caused damage to himself!

The Stock market is similar to Tiger. Following its all-time high in February 2020 the NASDAQ Composite fell 30% in a month, then recovered and soared over 130% from March 2020 to November 2021 before Covid knocked the wind out of the market and left investors nursing a ~40% loss before the market again took flight gaining ~100% between December 2022 and February 2025; until it was again stopped in its tracks due to the introduction of Tariffs on Liberation Day which caused a ~25% decline in the NASDAQ Market. Again, the decline was short-lived, and the market rallied ~50% between April 2025 and October 2025. Since then, the USA and Israel have attacked Iran in an attempt to take out their nuclear enrichment and nuclear bomb manufacturing capabilities. The result is that the Strait of Hormuz has been closed and 800 ships are stranded in the Persian Gulf, and the price of oil shot up 60% between January 2026 and April 2026.

The Trump Administration facing mid-Term elections needs a quick win to add to Venezuela and Cuba. Iran appears to have been a bad bet and, if history repeats itself, the US may find itself trapped in a War it can’t actually win!

As far as the Markets are concerned, tenuous ceasefires will come and go but the chances of lasting peace is as remote today as it has been for the past 2,000 years.

Call me old fashioned but this is not investing this is gambling or should I say “predicting”!

Bubbles and AI

• Looking backwards, what happened to our 2021 bubble? The Covid stimulus bubble appeared to be bursting conventionally enough in 2022 – in the first half of 2022 the S&P declined more than any first half since 1939 when Europe was entering World War II. Previously in 2021, the market displayed all the classic signs of a bubble peaking: extreme investor euphoria; a rush to IPO and SPAC; and highly volatile speculative leaders beginning to fall in early 2021, even as blue chips continued to rise enough to carry the whole market to a handsome gain that year – a feature hitherto unique to the late-stage major bubbles of 1929, 1972, 2000, and now 2021. But this historically familiar pattern was rudely interrupted in December 2022 by the launch of ChatGPT and consequent public awareness of a new transformative technology – AI, which seems likely to be every bit as powerful and world-changing as the internet, and quite possibly much more so.
• But every technological revolution like this – going back from the internet to telephones, railroads, or canals – has been accompanied by early massive hype and a stock market bubble as investors focus on the ultimate possibilities of the technology, pricing most of the very long-term potential immediately into current market prices. And many such revolutions are in the end often as transformative as those early investors could see and sometimes even more so – but only after a substantial period of disappointment during which the initial bubble bursts. Thus, as the most remarkable example of the tech bubble, Amazon led the speculative market, rising 21 times from the beginning of 1998 to its 1999 peak, only to decline by an almost inconceivable 92% from 2000 to 2002, before inheriting half the retail world!
• So, it is likely to be with the current AI bubble. But a new bubble within a bubble like this, even one limited to a handful of stocks, is totally unprecedented, so looking at history books may have its limits. But even though, I admit, there is no clear historical analogy to this strange new beast, the best guess is still that this second investment bubble – in AI – will at least temporarily deflate and probably facilitate a more normal ending to the original bubble, which we paused in December 2022 to admire the AI stocks. It also seems likely that the after-effects of interest rate rises and the ridiculous speculation of 2020-2021 and now (November 2023 through today) will eventually end in a recession.

• The broad U.S. stock market is expensive, with the Shiller price-to-earnings ratio at 39.14 (8 April 2026) vs. a high of 44.19 (Dec. 1999) and a low of 4.78 (Dec. 1920) which is “the top 1% of history,” while total profits are also near record levels. The Mean is 17.35 and the Median 16.07
• “The paradox that worries me here for the U.S. market is that we start from a Shiller P/E and corporate profit margins that are near record levels and therefore predicting near perfection”. (Jeremy Grantham)
• “If margins and multiples are both at record levels at the same time, it really is double counting and double jeopardy — for waiting somewhere in the future is another July 1982 or March 2009, with simultaneous record-low multiples and badly depressed margins.” (Jeremy Grantham)

‘Can’t get blood out of a stone’

• When the price of an asset doubles, its future return is halved, Grantham said in his latest paper.
• “The simple rule is, you can’t get blood out of a stone”.
• To Grantham’s thinking, the long-term prospects for the U.S. stock market look “poor” as it’s generally overpriced and never has seen “a sustained rally starting from a 34 Shiller P/E.”
• “The only bull markets that continued up from levels like this were the last 18 months in Japan until 1989, and the U.S. tech bubble of 1998 and 1999, and we know how those ended,” he said. “Separately, there has also never been a sustained rally starting from full employment.”
• While AI seems likely to be at least “as powerful and world-changing as the internet,” tech revolutions tend to see “early massive hype and a stock-market bubble”.
• He cited Amazon.com Inc. AMZN as an example of speculation in the late 1990s, noting its stock plunged before the company rebounded into the giant online retailer it is today.
• “As the most remarkable example of the tech bubble, Amazon led the speculative market, rising 21 times from the beginning of 1998 to its 1999 peak, only to decline by an almost inconceivable 92% from 2000 to 2002, before inheriting half the retail world!”
• In his paper, the GMO co-founder didn’t stop at warning about looming dangers for U.S. stocks should the “AI bubble” burst and finish the job deflating the “original bubble” that had worried him.
• “It also seems likely that the after-effects of interest-rate rises and the ridiculous speculation of 2020-2021 and now (November 2023 through today) will eventually end in a recession,” Grantham cautioned.
• On a brighter note, Grantham said there’s “a reasonable choice of relatively attractive investments” in the U.S. equities market, such as “quality” stocks. He also cited resource equities, “climate-related investments,” such as solar stocks, and “deep value” as areas of the market to consider.
• “U.S. quality stocks have a long history of slightly underperforming in bull markets and substantially outperforming in bear markets,” he said, “although they did unusually well in the recent run-up.”

Non-U.S. Equities and Real Estate

• If things are so good, why on earth is the rest of the world so down at heel, with very average economic strength and average profitability and with both getting weaker? The UK and Japan are both in technical recessions; the EU, especially Germany, also looks weak; and China, which has done a lot of the heavy lifting in global growth for the last few decades, is pretty much a basket case for a while (although getting very cheap in its stock market). Global residential real estate looks particularly tricky also, although it often takes a very long time for prices to catch up or down with mortgage costs. Can any young couple in the developed world today buy a new home comparable to those bought at the same age by their parents? Peak prices as a multiple of family income multiplied by an old-fashioned looking mortgage rate (now 6.8% in the U.S.) makes for a very tough affordability calculation. And as for office space, forget about it. With the double problem of higher rates and Covid-induced work-from-home, no one is confident of anything, no one will build anything new, and all sit holding their breath as appraisals start to come down and bank loans to commercial property look increasingly dicey. And in China, extreme overbuilding threatens both housing and commercial real estate.
• Throw in a couple of wars that refuse quick endings and rising possibilities of expanded military confrontations with Russia and China, and you can see why the rest of the world is sober and much more reasonably priced than the U.S. (Understanding U.S. optimism is much more difficult.) To be more precise, I would say that in contrast to extreme overpricing of U.S. equities, those overseas are a little overpriced, offering uninspired but positive returns. The positive exceptions to this general, moderate overpricing are at the value or low-growth end of emerging market equities and non-U.S. developed equities (including Japan), which are not only much cheaper than the high-growth varieties but are selling in a range from fair price to actually cheaper than normal.

Mr Grantham has a darn good record on predicting outcomes; however, one point he consistently makes is that he cannot forecast the “when”!  I agree with Mr Gratham’s conclusion, the US Markets are clearly in a bubble, however, when that bubble will burst is quite unclear.

Duncan Soukup

CHAIRMAN’S STATEMENT

Holdings

Newmark Security plc (NWT LN) +41.7%

• THAL currently own’s 21.9% of NWT, making us the largest shareholder in the company. In last year’s AR we stated that we were “unhappy with both the operational- and financial performance of NWT”. We have since written an open letter to the NWT Board outlining our grievances. The net result is that one long serving (not so independent) Director has now been replaced by two new Independent Directors.  Whilst this is a step in the right direction, it is too little too late as far as we are concerned and we will continue to lobby, publicly, if necessary, for further actions to increase shareholder value. The shares of NWT have responded well to our actions, and we have increased our holding by ~1% to 21.9%.

 Surgical Innovations Group plc (SUN LN) -25%

• SUN’s  2024 results were disappointing and 2025’s not much better. Mr Soukup has joined the SUN Board in support of a new Chairman tasked with enhancing shareholder value.

Autonomous Robotics Ltd. (ARL)

• Development of the production standard seismic sensor flying node has now moved from design to production. All mechanical-, electronic- and electrical-parts have been manufactured, and assembly and testing of the hardware design progressed with a suitable electromechanical test rig designed, built and tested to perform bench-testing prior to field testing.