Final Results & Notice of AGM

Final Results

and

Notice of AGM

EARNZ plc (AIM:EARN), an AIM Rule 15 cash shell which is seeking acquisitions in the energy services sector, is pleased to announce its audited results for the year ended 31 December 2023 (the "Full Year").

On 29 February 2024, the Company disposed of Verditek Italy srl and all related business assets of Verditek plc (the "Solar Business"), after receiving shareholder approval.

Following the disposal of the Solar Business, the existing Board of Directors resigned with immediate effect, and a new Board of Directors was shortly thereafter appointed being John Charlton, Elizabeth Lake and Bob Holt as well as the Company being renamed EARNZ plc on 6 March 2024.

As a result of this disposal, from 1 March 2024, the Company is regarded as an AIM Rule 15 cash shell, having ceased to own, control or conduct all, or substantially all, of its existing trading business, activities or assets. Under the AIM Rules for Companies, the Company has six months (31 August 2024) to make an acquisition or acquisitions which constitute a reverse takeover under AIM Rule 14.

The Report & Accounts for the Full Year, the contents of which are set out below, together with the Notice of Annual General Meeting ("AGM"), will be posted to shareholders and will be made available later today on the Company's website at www.earnzplc.com. The AGM will be held at 11:00 a.m. on 27 June 2024 at Shore Capital's offices, Cassini House, 57 St James' Street, London, SW1A 1LD.

CHAIR'S REVIEW

Verditek plc was renamed EARNZ plc with effect from 6 March 2024. References to "Verditek", "EARNZ" and "Company" throughout this report relate to EARNZ plc. References to "Verditek Group" or "Group" relate to the consolidated results and operations of the Company and its subsidiaries in the year.

The year to 31 December 2023 was operationally and commercially challenging for the Verditek Group. There had been growth in sales of Verditek's lightweight solar panel products, and previously reported collaborations to design and manufacture integrated roofing solutions were progressing. During the year, measures were taken, in the form of the factory move to Udine, Italy, to lower the cost base and take advantage of more flexible working arrangements. However, ultimately, sales did not increase at a rate sufficient to sustain the business, and despite a bond issue and share placing each of which raised £500,000 (before expenses) during the year, cash reserves were low at the end of the year and the operational business could not continue in its existing form without additional external fundraising.

On 28 February 2024, at a Company shareholder general meeting, the disposal of Verditek Italy srl and all related business assets of Verditek plc ("Solar Business") was approved, in return for satisfaction of the outstanding bonds and accrued interest. The Solar Business was disposed of on 29 February 2024. This disposal was necessary in order to satisfy outstanding creditor obligations of the Company, and to avoid putting the Company into administration. As a result of this disposal, from 1 March 2024, the Company is now regarded as an AIM Rule 15 cash shell, having ceased to own, control or conduct all, or substantially all, of its existing trading business, activities or assets.

Following the disposal of the Solar Business, the existing Board of Directors of the Company resigned with immediate effect, and a new Board of Directors was shortly thereafter appointed being John Charlton, Elizabeth Lake and myself. The Company was renamed EARNZ plc.

The Company's historic strategy had been to identify early-stage business opportunities in the clean technology sector, invest in them and see them through to commercial success. The focus following disposal of the Solar Business, is now to seek acquisition targets in the energy services sector. The Board of Directors believes that this sector presents some exciting commercial opportunities that will ultimately deliver positive shareholder value.

Under the AIM Rules for Companies ("AIM Rules"), the Company will need to make an acquisition or acquisitions which constitute a reverse takeover under AIM Rule 14 ("Reverse Takeover") within 6 months (by 31 August 2024) of becoming an AIM Rule 15 cash shell.

To enable acquisitions and to fund ongoing working capital requirements of the Company, there have been equity placements post year end in 2024. On 5 March 2024, shares were issued in the Company to raise £300,000. On 8 April 2024 the Company raised a further £3.7 million (before expenses) from the issue of 9,333,333 shares at 7.5 pence per share. Additionally, the Board of Directors has taken steps to amend the capital structure of the Company in order to reduce market volatility and increase liquidity in the Company's shares. Existing shares in the Company were consolidated, following approval at a shareholder general meeting on 4 April 2024, by exchanging each 100 existing shares for 1 new share.

OUTLOOK AND AIM RULE 15

On 1 March 2024, the Company had disposed of its operating business and became an AIM Rule 15 cash shell pursuant to the AIM Rules. As such, the Company is required to make an acquisition or acquisitions which constitute a reverse takeover under AIM Rule 14 or be re-admitted to trading on AIM as an investing company (which requires, inter alia, the raising of at least £6.0 million) under the AIM Rules, within six months from 1 March 2024.

The Company's strategy is to acquire businesses in the energy services sector via a reverse takeover, and it has identified certain opportunities which would constitute a reverse takeover pursuant to AIM Rule 14.

Any reverse takeover transaction will require the publication by the Company of an AIM Rules compliant admission document and will be subject to shareholder approval at a general meeting of the Company, to be convened at the appropriate time.

If the Company does not complete a reverse takeover in accordance with AIM Rule 14, or otherwise if re-admitted to trading on AIM as an investing company fails to implement its investing policy to the satisfaction of the London Stock Exchange within six months of becoming an investing company, the London Stock Exchange will suspend trading in the Company's AIM securities pursuant to AIM Rule 40.

Bob Holt,

Executive Chair

STRATEGIC REPORT

The directors present their strategic report on the Group for the year ended 31 December 2023.

EARNZ plc disposed of its interests in its Solar Business on 29 February 2024. The Company's principal business going forward is targeting acquisitions in the energy services sector, with the aim of completing one or more acquisitions before 31 August 2024 in compliance with AIM Rule 15.

For a review of the business during the year, please refer to the Chair's Review on page 1-2. For an analysis of financial performance indicators, please refer to the Financial Review on page 4.

Principal risks and uncertainties facing the business

A full review of principal risks and uncertainties facing the business during the year and going forward is given on pages 5 to 7.

S172 Statement

As required by Section 172 of the Companies Act, a director of a company must act in the way he or she considers, in good faith, would likely promote the success of the company for the benefit of the shareholders. In doing so, the director must have regard, amongst other matters, to the following issues:

• the likely consequences of any decisions in the long term (see Corporate Governance Report, pages 10 to 17);
• the interests of the company's employees (see Corporate Social Responsibility report on page 22)
• the need to foster the company's business relationships with suppliers/customers and others (see Corporate Governance Report, pages 10 to 17);
• the impact of the company's operations on the community and environment (see Corporate Social Responsibility report on page 22);
• the company's reputation for high standards of business conduct (see Corporate Governance Report, pages 10 to 22); and
• the need to act fairly between members of the company (see Corporate Governance Report, pages 10 to 22).

On behalf of the Board

John Charlton

Executive Director

FINANCIAL REVIEW

Income statement

During 2023, the Group's loss after taxation was £2,088,979 (2022: £1,821,567). The administrative expenses incurred for the year ended 31 December 2023 were £1,216,529 (2022: £1,610,791).

Loss per share

The basic and diluted loss per share was 0.5p (2022: 0.5p).

Financial Position

At 31 December 2023, the Group's net liabilities were £97,770 (2022: net assets of £1,697,356). This comprised total assets of £1,046,994 and total liabilities of £1,144,764. The total assets included property, plant and equipment of £97,513 (2022: £195,470).

Cashflow

The Group's cash balance at the period end was £53,918 (2022: £842,632). During the period the net cash outflow from operating activities was £1,255,697 (2022: 1,079,319) with financing activities generating net proceeds of £465,418 (2022: £1,394,143).

Dividends

No dividend is recommended (2022: £nil).

Capital management

The Board's objective is to maintain a financial position that is both efficient and delivers long term shareholder value. The Group had cash balances of £53,918 as at 31 December 2023 (2022: £842,632). The Board continues to monitor the balance sheet to ensure it has an adequate capital structure.

Key Performance Indicators

As the Group's revenues were still at an early stage during the period, the main measures of performance were the level of expenditure compared to budget and forecast expectations. Cash balances were also monitored against budget and forecast. Going forward, revenue, gross margin, EBITDA and cash will be key performance indicators for the Group and will be measured against previous performance, budget and forecasts.

Events after the reporting period

Events after the reporting period are described in Note 28 to the financial statements. Following receipt of the proceeds of share issues, the Group had cash of approximately £3.4 million on 31 May 2024.

John Charlton

Executive Director

RISK REPORT

Risk Management Framework

The Group has a risk register which includes all principal risks critical to the business both now as a cash shell and following completion of a potential reverse take over (RTO).

The Board retains responsibility and accountability for the effectiveness of the risk management framework and internal control systems. As the business grows the risks will continue to evolve and grow in complexity and so will the risk management processes. This will ensure continuous improvement in the organisation's risk maturity.

Approach to Risk Management

The Audit Committee, under delegated authority from the Board, is accountable for overseeing the effectiveness of the risk management process, including identification of the principal and emerging risks facing the Group. The Audit Committee has particular focus on those risks that affect accounting in general and safeguarding the Group's assets.

Principal Risks and Uncertainties

The current Board has identified the Group risks in relation to the status as a cash shell.

In addition, below this are the risks that were identified as relevant to the business throughout the reporting period.

GOVERNANCE

BOARD OF DIRECTORS

The Board of Directors of EARNZ plc as at the date of signing the report and accounts comprised:

Bob Holt OBE (Executive Chair) - appointed 29 February 2024

Bob Holt is a highly accomplished executive with over 35 years' experience in senior leadership roles across various sectors, most recently serving as CEO of Revolution Beauty Plc after joining its board as interim COO. Prior to that, he successfully led Sureserve Group Plc as Chair, overseeing its successful turnaround that resulted in over a fivefold increase in the company's share price. He is perhaps most widely known for his role in the rise of Mears Group PLC. Since being appointed as Chair in 1996, he guided the company through its successful IPO on AIM and played a pivotal role in building its order book value to £3 billion, establishing Mears as a market leader in its sector. Bob has been awarded the OBE for his services to philanthropic causes.

John Charlton (Executive Director) - appointed 29 February 2024

John Charlton spent 28 years in various senior corporate banking and risk management roles within Barclays plc, specialising latterly in listed business service companies. He joined Sureserve Group plc as Group Company Secretary in 2017 and assisted with the successful turnaround of that business. In addition, John is Trustee and Chair of The Sureserve Foundation.

Elizabeth Lake (Non-Executive Director) - appointed 13 March 2024

Elizabeth is an accomplished executive with more than 25 years' finance and commercial experience. Previously, Elizabeth joined the board of Revolution Beauty Group as CFO in May 2022 and was instrumental in turning around the business following the suspension of its shares from trading on AIM. Prior to Revolution Beauty, she was CFO of AIM quoted, Everyman Media Group. During her time at Everyman, Elizabeth successfully led the company through the challenges presented by the Covid 19 pandemic, demonstrating her ability to navigate uncertainty with strong financial and operational acumen. Prior to Everyman, Elizabeth was Chief Financial Officer at AIM quoted, Science in Sport, and before that finance director at Hugo Boss UK and Ireland. She brings extensive UK plc experience to EARNZ having also worked in finance roles at Marks & Spencer, Pearson and Thomson Reuters. Elizabeth is ACA qualified having trained at Coopers and Lybrand (now PwC).

Linda Main (Senior Independent Non-Executive Director) - appointed 1 May 2024

Linda is a chartered accountant who retired from KPMG LLP in September 2023 after a long career leading its Capital Markets Advisory Group. Linda has advised on well over 100 IPOs and significant transactions by listed companies of all sizes ranging from start ups to members of the FTSE 100. She was also a member of the UK board of KPMG where she chaired the Risk Committee and sat on the Audit Committee. Until December 2023, Linda was a member of the London Stock Exchange's AIM Advisory Group and earlier in her career sat on a number of the Quoted Companies Alliance ("QCA")'s technical committees. She has recently joined the QCA board. Linda is a Trustee of Carers Trust, a leading charity working to transform the lives of unpaid carers. Linda will chair the Company's audit and remuneration committees.

Directors in post during the year included:

Rob Richards (Chief Executive Officer) - resigned 29 February 2024

The Rt Hon. Lord David Willetts FRS (Non-Executive Chair) - resigned 29 February 2024

George Katzaros (Non-Executive Director) - resigned 29 February 2024

Gavin Mayhew (Non-Executive Director) - resigned 2 January 2024

The Board and responsibilities

The Board holds monthly meetings to review, formulate and approve the Group's strategy, budgets, corporate actions and oversee the Group's progress towards its goals. There is an Audit Committee and a Remuneration Committee in place with formally delegated duties and responsibilities and with specific terms of reference. From time-to-time separate committees may be set up by the Board to consider specific issues when the need arises. Due to the size of the Group, the Directors have decided that issues concerning the nomination of directors will be dealt with by the Board rather than a committee but will regularly reconsider whether a nominations committee is required.

Details of board meetings held in the reporting period, and attendance of Board directors is shown below:

The Audit Committee

The Audit Committee comprised The Rt Hon. Lord David Willetts FRS (resigned 29 February 2024) as Chair and Gavin Mayhew (resigned 2 January 2024) during the period. Following the resignations of these directors, the Audit Committee comprises Linda Main as Chair and Elizabeth Lake.

The Audit Committee determines the terms of engagement of the Group's auditors and will determine, in consultation with the auditors, the scope of the audit. The Audit Committee receives, and reviews reports from management and the Group's auditors relating to the interim and annual accounts and the accounting and internal control systems in use throughout the Group. The Audit Committee has unrestricted access to the Group's auditors.

The Audit Committee Report is presented on page 17.

The Remuneration Committee

The Remuneration Committee comprised George Katzaros (resigned 29 February 2024) as Chair and Gavin Mayhew resigned 2 January 2024) during the period. Following the resignations of these directors, the Remuneration Committee comprises Linda Main as Chair and Elizabeth Lake.

The Remuneration Committee reviews the scale and structure of the executive Directors' and senior employees' remuneration and the terms of their service or employment contracts, including share option schemes and other bonus arrangements. The remuneration and terms and conditions of the non-executive Directors are set by the entire Board.

The Directors' Remuneration Report is presented on pages 19 - 21.

The General Meeting is the principal forum for dialogue with shareholders. Updates on the progress of the business are regularly published on the Group's website.

On behalf of the Board

John Charlton

Executive Director

CORPORATE GOVERNANCE REPORT

The Chair has overall responsibility for corporate governance and is fully committed to good corporate governance being central to the Group's approach to creating sustainable growth and enhancing long-term shareholder value. Directors are expected to always act ethically and responsibly, reflecting our core values.

The Directors recognise that good corporate governance is a key foundation for the long-term success of the Group. As the Company is listed on the AIM market of the London Stock Exchange it is subject to the continuing requirements of the AIM Rules. The Board has therefore voluntarily adopted the principles set out in the Corporate Governance Code for small and midsized companies published by the Quoted Companies Alliance ("QCA Code").

The principles are listed below with an explanation of how the Company applies each principle, and what we do and why.

AUDIT COMMITTEE REPORT

The Audit Committee helps the Board discharge its responsibilities regarding financial reporting, external and internal audits and controls as well as reviewing the Group's annual and half-year financial statements, other financial information and internal Group reporting.

This includes:

• considering whether the Company has followed appropriate accounting standards and, where necessary, made appropriate estimates and judgments taking into account the views of the external auditors;
• reviewing the clarity of disclosures in the financial statements and considering whether the disclosures made are set properly in context;
• where the audit committee is not satisfied with any aspect of the proposed financial reporting of the Company, reporting its view to the Board of Directors;
• reviewing material information presented with the financial statements and corporate governance statements relating to the audit and to risk management; and
• reviewing the adequacy and effectiveness of the Company's internal financial controls and, review the Company's internal control and risk management systems and, except where dealt with by the Board, review and approve the statements included in the annual report in relation to internal control and the management of risk.

The Audit Committee assists by reviewing and monitoring the extent of non-audit work undertaken by external auditors, advising on the appointment of external auditors and reviewing the effectiveness of the Group's internal audit activities, internal controls and risk management systems. The ultimate responsibility for reviewing and approving the Annual Report and financial statements and the half-yearly reports remains with the Board.

For the year under review, there were no non-audit services rendered to the Group and the Company. The audit committee considered the nature and scope of engagement and remuneration paid were such that the independence and objectivity of the auditors were not impaired. Fees paid for audit services are provided in Note 6.

Significant reporting issues considered during the year included the following:

Going concern

The Committee considered the Going Concern basis on which the accounts have been prepared and can refer shareholders to the Group's accounting policy set out in Note 2.4. The directors are satisfied that the going concern basis is appropriate for the preparation of the financial statements, albeit that the directors have concluded that a material uncertainty exists as to the Company's ability to continue as a going concern beyond the AIM Rule 15 timetable, as the successful completion of any Reverse Takeover target cannot be assured at this time.

Linda Main

Chair - Audit committee

DIRECTORS' REMUNERATION REPORT

This report sets out the remuneration policy operated by the Company in respect of the Chair, Executive and Non-Executive Directors. The remuneration policy is the responsibility of the Remuneration Committee, a sub-committee of the Board. No Director is involved in discussions relating to their own remuneration.

Remuneration policy

The objective of the remuneration policy is to attract, retain and motivate high calibre executives to deliver outstanding shareholder returns and at the same time maintain an appropriate compensation balance with the other employees of the Group. There is no formal requirement for Directors to own shares in the Group.

The Remuneration Committee is comprised of independent Non-Executive Directors, and is appointed by the Board. The Remuneration Committee has terms of reference approved by the Board, which sets out a framework for determining the remuneration of the Company's Executive Chairman, Executive Directors including pension rights and compensation payments. The remuneration of Non-Executive Directors is a matter reserved for the Board. No Director or senior manager shall be involved in any decisions as to their own remuneration. The Remuneration Committee recommends and monitors the level and structure of remuneration for senior management.

The Remuneration Committee has regard to the following factors when determining remuneration:

• The pay and employment conditions across the Company and/or the Group when setting remuneration policy for Directors, especially when determining salary increases.
• The Company's appetite for risk and long term strategic goals.
• Remuneration in other companies of comparable scale

The Remuneration Committee sets appropriate Directors' compensation to reward long term success:

• A significant proportion of Executive Directors' remuneration should be structured to link rewards to corporate and individual performance and be designed to promote the long-term success of the Company. The Remuneration Committee approves the design of, and determines targets for, any performance related pay schemes operated by the Company and approves any payments made under such schemes.

The Remuneration Committee has regard to the following factors when reviewing remuneration:

• The Remuneration Committee reviews the performance of share incentive plans and discretionary bonus schemes. Each year the Remuneration Committee determines whether awards will be made, and if so, the overall amount of such awards, the individual awards to Executive Directors and other senior management and the performance targets to be used.
• The Remuneration Committee periodically reviews the ongoing appropriateness and relevance of the remuneration policy.

Directors' remuneration

The normal remuneration arrangements for Executive Directors consist of base salary, performance bonuses and other benefits as determined by the Board. The Company currently has two Executive Directors, who have service agreements that can be terminated at any time by either party giving to the other six months' written notice.

The remuneration package for an Executive Director is detailed below:

Base Salary:

Annual review of the base salary of the Executive Director considering the Executive Director's role, responsibilities and contribution to the Group performance.

Performance Bonus:

During FY23, bonus arrangements were discretionary and payable depending on the performance of the Executive Director in meeting key performance indicators and in the wider context with the performance of the Group.

As part of the Executive Director's service agreement, there was a formula for discretionary bonus based on sales contracts. Any bonus payment to the Executive was discretionary and did not form part of the Executive's contractual remuneration. The bonus formula was as follows:

• a 5% commission on sales of solar panels to customers introduced by the Executive at a sales price of €1.05/watt or above, once the Executive has introduced sales that would, but for this provision, have generated a commission equal to the Executive's annual salary (£150,000),
• a 1% commission on sales of solar panels of 10-20MW that are realised by the Group in any year (not limited to those introduced by the Executive) at a sales price of €1.05/watt or above; and
• a 2% commission on sales of solar panels of in excess of 20MW that are realised by the Group in any year (not limited to those introduced by the Executive) at a sales price of €1.05/watt or above.

No bonuses were paid in relation to the reporting period Going forward the new remuneration committee will be establishing a performance bonus scheme with relevant targets.

Benefits:

Benefits include Company pension contributions of 5%, health insurance, and life insurance

Longer term incentives:

In order to incentivise the Directors and employees, and align their interests with shareholders, the Company granted share options in previous years though no further share options were granted in the current year. The share options will vest at various future dates as described in Note 24 to the financial statements. In addition to service conditions, the vesting of the share options granted to the previous Executive Director and the Chair were subject to an earnings before interest, tax, depreciation and amortisation (EBITDA) performance condition. Following a review at the period end, it has been determined that it is not likely that any of the performance related conditions will be met.

Going forward, the Remuneration Committee are working on a new Long Term Incentive Plan.

Non-Executive Directors are remunerated solely in the form of Directors' fees and pension contributions.

At the last Annual General Meeting held on 25th July 2023, there was an ordinary resolution for shareholders to cast an advisory vote on the directors' remuneration for the year ended December 2022, as set out in the Directors' Remuneration Report included in the 2022 Annual Report and Accounts. There were 73,972,137 votes cast in favour, and 2,122,433 against. The resolution was duly passed with 97.21% in favour.

Re-election of Directors

All Directors stand for re-election on an annual basis and all Directors are aware of the need to maintain their independence and to demonstrate their continued commitment to the role. Succession planning is limited due to the current size of the Board.

The remuneration of the Directors in EARNZ plc who held office during the years to 31 December 2023 and 2022 were as follows:

The emoluments of the Directors were as follows (Audited):

In previous years, between 2018 and 2021, 4,500,000 share options had been issued to Lord Willetts, and 14,000,000 share options had been issued to Robert Richards. 15,800,000 of these options had performance conditions attached to them. At the year end, following a review of these performance conditions, it was assessed that none of these options would vest. There is a credit to the income statement in the year of £154,001 in respect of amounts previously recognized for these options. Therefore at the period end, there are 1,500,000 vested share options held by The Rt Hon. Lord David Willetts FRS and 1,200,000 vested share options held by Robert Richards: details are shown in Note 24. No options were exercised in the year. At 31 December 2023 the directors held 2,700,000 options, all of which had vested.

Linda Main

Chair - Remuneration committee

CORPORATE AND SOCIAL RESPONSIBILITY

The Company understands that its impact reaches beyond that of its core business and into the environment and society in which it operates. With integrity at the heart of our corporate social goals our aim is to make a lasting positive contribution to all our stakeholders.

In view of the limited number of stakeholders, the Company has not adopted a specific policy on Corporate Social Responsibility. However, it does seek to protect the interests of stakeholders in the Company through its policies, combined with ethical and transparent business operations.

Environment

EARNZ Plc is sensitive to the environment in which it operates. Previously the Group established well defined operating guidelines with some of the manufacturing partners where it sought their compliance with ISO14001 (a recognized standard for Environmental Management Systems) when relevant, to ensure certain environmental standards are complied with. Going forward the Company will be operating in the energy services sector, and as such will be instrumental in assisting with the delivery of de-carbonisation across the public and private sector.

Human Rights

EARNZ plc is committed to socially and morally responsible research, development and manufacturing processes for the benefit of all stakeholders. The activities of the Company are in line with applicable laws on human rights.

Employees

Employees are key to achieving the business objectives of the Company. The Board's priority is to provide a working environment in which our employees can develop to achieve their full potential and have opportunities for both professional and personal development. We aim to invest time and resource to support, engage and motivate our employees to feel valued, to be able to develop rewarding careers and want to stay with us. The Company embraces employee participation in issue raising and resolution through regular meetings with managers and values contributions from all levels regardless of their position in the business.

Shareholders

The Board of Directors actively encourages communication and they seek to protect the interest of shareholders at all times. The Company updates shareholders regularly through regulatory news, financial reports and research notes. The Company also engages directly with investors at our General Meetings or investor events.

Health and Safety

Company and Group activities are carried out in accordance with its health and safety policy which adheres to all applicable laws. Health and Safety procedures were reviewed by an external organization in Italy during the year.

DIRECTORS' REPORT

The Directors present their report and the audited financial statements for EARNZ plc ("EARNZ" or the "Company") for the year ended 31 December 2023.

The preparation of financial statements is in compliance with UK adopted International Accounting Standards and the Companies Act 2006. The Group financial statements comprise of the financial information of the parent Company and its subsidiaries (together the "Group"). The parent Company's financial statements present information about the Company as a separate entity and not about its Group.

Principal activities

EARNZ plc is a holding company based in UK. The principal activity of the Group is to develop and commercialise clean technologies.

A detailed review of the business activities of the Group is contained in the Strategic Report.

Business review and future developments

The review of the business's operations, future developments and key risks is contained in the Strategic Report. The Directors do not recommend the payment of a final dividend for the year (2022: £nil).

Directors and directors' interests

The directors who held office during the year or subsequently were as follows:

With regard to the appointment and replacement of Directors, the Company is governed by its articles of association, the Companies Act and related legislation. The articles themselves may be amended by special resolution of the shareholders.

Directors' interests

The Directors held the following beneficial interests in the shares of Verditek plc at 31st December 2023:

47,157,381

At the reporting date, the new Board of Directors have bought ordinary shares in the Company as follows:

Through family holdings, Bob Holt has interest in a further 133,333 shares bringing his total interest to 7.63%, and John Charlton has interest in a further 1,333 shares with his total interest remaining at 0.53%.

Directors' indemnities

The Company has taken out Directors' and Officers' indemnity insurance for the benefit of its Directors.

Events after the reporting date

See Note 28 of the accounts.

Financial Risk management

Details of financial risk management are provided in Note 3 to the accounts.

Political and charitable contributions

The Group made no charitable or political contributions during the year.

Going Concern

Following the Disposal, the Company has ceased to own, control, or conduct all or substantially all its previous trading business, activities and assets and, on 1 March 2024, became an AIM Rule 15 cash shell.

As such, the Company is required to make an acquisition or acquisitions which constitute a reverse takeover under AIM Rule 14 ("Reverse Takeover") or be re-admitted to trading on AIM as an investing company (which requires, inter alia, the raising of at least £6.0 million) under the AIM Rules, within the date falling six months from 1 March 2024.

If the Company does not complete a Reverse Takeover in accordance with AIM Rule 14, or otherwise if re-admitted to trading on AIM as an investing company fails to implement its investing policy to the satisfaction of the London Stock Exchange within twelve months of becoming an investing company, the London Stock Exchange will suspend trading in the Company's AIM securities pursuant to AIM Rule 40.

Accordingly, the Company will evaluate opportunities in the energy services sector, seeking to identify one or more companies, which would constitute a Reverse Takeover under AIM Rule 14.

Following the Board changes in March and May 2024, the monthly cost of maintaining the Company has reduced.

The Directors have a clear strategy to identify Reverse Takeover targets and have a number of opportunities in the pipeline. The Directors believe that the cash resources of the Company are sufficient to cover the costs of a Reverse Takeover.

As the successful completion of any Reverse Takeover target cannot be assured at this time, the directors have concluded that a material uncertainty exists as to the Company's ability to continue as a going concern beyond the AIM Rule 15 timetable. This uncertainty arises primarily because should the Company's shares be suspended from trading on AIM on 1 September 2024 or its listing is subsequently cancelled, the Directors believe that the Company's ability to raise finance for the longer term would be significantly impaired.

Notwithstanding the above, as at the date of approval of the financial statements, the base case cash flow forecast indicated that no additional cash resources will be required over the course of the next 12 months. The directors therefore consider the Group and the Company to be a going concern and have therefore prepared these financial statements on the going concern basis.

Substantial shareholdings:

The Company has been advised of the following interests in more than 3% of its ordinary share capital as at 31 December 2023:

At the signing date the Company had been advised of the following interests in more than 3% of its ordinary share capital:

Statement of Disclosure to the Auditors

The Directors of the Company at the date of approval of this report confirm that:

• As far as each director is aware, there is no relevant audit information of which the Company's and the Group's auditor is unaware; and
• each Director has taken all reasonable steps that they ought to have taken as a Director to make themselves aware of any relevant information and to establish that the Company's and the Group's auditor is aware of that information.

Auditors appointment

Haysmacintyre LLP has been appointed as auditor, and a resolution to re-appoint them will be proposed at the annual general meeting.

By order of the Board

John Charlton

Executive Director

STATEMENT OF DIRECTORS' RESPONSIBILITIES

Company law requires the Directors to prepare Group and Company financial statements for each financial year. Under that law the Directors have elected to prepare the Group consolidated financial statements in accordance with UK adopted International Accounting Standards (UK IAS) and elected to prepare the parent company financial statements under United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable laws including FRS 101 Reduced Disclosure Framework).

In preparing each of the Group and Company financial statements, the Directors are required to:

• Select suitable accounting policies and then apply them consistently;
• Make judgments and estimates that are reasonable and prudent;
• State whether they have been prepared in accordance with UK-adopted International Accounting Standards (IASs) and International Financial Reporting Standards (IFRSs) have been followed, subject to any material departures disclosed and explained;
• Prepare the Strategic Report and Directors' report which comply with the requirements of the Companies Act 2006; and

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also generally responsible for taking such steps as are reasonably open to them to safeguard the assets of the group and to prevent and detect fraud and other irregularities.

The Directors consider that the annual report and accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group's position and performance, business model and strategy. Each of the directors confirms that, to the best of their knowledge:

The Group financial statements, which have been prepared in accordance with UK IAS and Companies Act 2006, give a true and fair view of the assets, liabilities, financial position and profit of the Group; and the Annual Report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces.

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF EARNZ PLC

Qualified opinion

We have audited the financial statements of EARNZ plc (the 'parent company') and its subsidiaries (the 'Group') for the year ended 31 December 2023 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Company Statement of Financial Position, the Consolidated and Company Statement of Changes in Equity and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international accounting standards. The financial reporting framework that has been applied in the preparation of the Parent Company financial statements is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice.)

• the Group financial statements and Parent Company financial statements have been properly prepared in accordance with UK adopted international accounting standards and United Kingdom Accounting Standards FRS 101 respectively; and
• have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for qualified opinion

We were not appointed as auditor of the parent company until after 31 December 2023 and thus did not observe the counting of physical inventories at the end of the year. We were unable to satisfy ourselves by alternative means concerning the inventory quantities held at 31 December 2023, which are included in the balance sheet at £560,038, by using other audit procedures. Consequently, we were unable to determine whether any adjustment to this amount was necessary. In addition, were any material adjustment to the inventory balance to be required, the strategic report would also need to be amended.

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 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 qualified opinion.

Material uncertainty related to going concern

We draw attention to Note 2.4 in the financial statements, which indicates that following the post balance sheet disposal of the trading subsidiary, a material uncertainty exists regarding the successful completion of any reverse takeover within the AIM Rule 15 timetable required for going concern. As stated in Note 2.4, these events or conditions, along with other matters as set forth in Note 2.4, indicate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors' assessment of the Group and Parent Company's ability to continue to adopt the going concern basis of accounting included the following procedures:

• Obtaining and reviewing the directors' going concern assessment which included a working capital forecast for a period spanning at least 12 months from the date of approval of the financial statements;
• We reviewed the cash balance as at the date of approval to ensure this was sufficiently in line with the working capital forecast prepared for the going concern assessment;
• We ensured that the working capital forecast prepared was arithmetically correct;
• We evaluated judgements made by the directors in determining that a material uncertainty existed to ensure that these were reasonable, this included engaging in discussions with the directors regarding their assessment;
• We agreed significant expected cash outflows in the working capital forecast to supporting documentation to ensure these were based on accurate information;
• We ensured that reasonable sensitivity analysis applied to the working capital forecast did not results in a reasonably plausible alternative scenario whereby the Group would not be considered a going concern.

An overview of the scope of our audit

The Group comprises a parent holding company, one trading subsidiary and a number of dormant entities. The scope of our work was the audit of the financial statements of the Group and its trading subsidiary being the only material components of the Group with the Parent company being audited for statutory purposes. The trading subsidiary Verditek Solar S.r.l. was not subject to statutory audit however, in forming an opinion on the Group we have performed audit procedures on Verditek Solar S.r.l. that are comparable to that of a full statutory audit.

As the subsidiary was based in Italy, we have engaged with local component auditors to complete our planned audit procedures and we have subsequently reviewed these and engaged in discussions with the component auditors to ensure we have sufficient audit evidence to be able to form an opinion on the Group.

The scope of the audit and our audit strategy was developed by using our audit planning process to obtain and update our understanding of the Group and its environment, including the Group's system of internal control, and assessing the risks of material misstatement at the group level. Audit work to respond to the assessed risks was performed directly by the audit engagement team who performed full scope audit procedures on the parent company and the Group as a whole.

Key audit matters

In addition to the matter described in the basis for qualified opinion section and in addition to the material uncertainty in relation to going concern section above, we have determined the matters described below to be the key audit matters to be communicated in our report.

Our application of materiality

The scope and focus of our audit were influenced by our risk assessment and application of materiality. We define materiality as the magnitude of misstatement that could reasonably be expected to influence the economic decisions of the users of the financial statements. We use materiality to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and on the financial statements as a whole.

Materiality for the financial statements as a whole was set at £66,000, determined by reference to 5% of normalised loss before tax (loss before tax excluding impairment of an asset relating to an earn out). We have reported to the audit committee any corrected or uncorrected misstatements arising exceeding £3,000. Performance materiality was set at £43,000, being 65% of materiality.

Component materiality for the parent company and subsidiaries was set at £49,000, with reference to a benchmark of Group materiality.

Other information

As described in the basis for qualified opinion section of our report, we were unable to satisfy ourselves concerning the inventory quantities of £560,038 held at 31 December 2023. We have concluded that where the other information refers to the inventory balance or related balances such as cost of sales, it may be materially misstated for the same reason.

Opinions on other matters prescribed by the Companies Act 2006

Except for the possible effects of the matter described in the basis for qualified opinion section of our report, in our opinion, based on the work undertaken in the course of the audit:

Matters on which we are required to report by exception

Arising solely from the limitation on the scope of our work relating to inventory, referred to above:

• we were unable to determine whether adequate accounting records have been kept.

2006 requires us to report to you if, in our opinion:

• or returns adequate for our audit have not been received from branches not visited by us; or
• certain disclosures of directors' remuneration specified by law are not made

Responsibilities of directors

Auditor's responsibilities for the audit of the financial statements

Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to regulatory requirements for the business and trade regulations, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006, income tax, payroll tax and sales tax.

− Inspecting correspondence with regulators and tax authorities;

− Evaluating management's controls designed to prevent and detect irregularities;

− Identifying and testing journals, in particular journal entries which shared key risk characteristics; and

• Challenging assumptions and judgements made by management in their critical accounting estimates

Use of our report

Jonathan Maddison

(Senior Statutory Auditor) 10 Queen Street Place

For and on behalf of Haysmacintyre LLP London

Statutory Auditors EC4R 1AG

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Other comprehensive income

Items that will or may be reclassified to profit or loss:

*See Note 27 for details of the restatement.

The accompanying notes are an integral part of these financial statements.

All amounts are derived from continuing operations.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

*See Note 27 for details of the restatement.

John Charlton

Executive Director

Company Registration Number: 10114644

The accompanying notes are an integral part of these financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

*See Note 27 for details of the restatement.

The accompanying notes are an integral part of these financial statements.

CONSOLIDATED STATEMENT OF CASH FLOWS

The accompanying notes are an integral part of these financial statements.

*See Note 27 for details of the restatement.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Corporate information

EARNZ Plc ("EARNZ", "Company") is a public limited company incorporated, registered and domiciled in England and Wales (registration number 10114644), whose shares are quoted on the AIM on the London Stock Exchange. Its registered office is located at First Floor, Holborn Gate, 330 Holborn, London WC1V 7QT.

EARNZ is the holding company of a group of companies that were engaged in the clean technology sector during this reporting period. On 1 March 2024, the Company had disposed of its operating business and became an AIM Rule 15 cash shell pursuant to the AIM Rules.

The consolidated financial statements comprised of the Company and its subsidiaries (together referred to as "the Group") as at and for the year to 31 December 2023. The parent Company financial statements present information about the Company as a separate entity and not about its Group.

The comparative financial information is for the year ended 31 December 2022.

Accounting policies

The principal accounting policies applied in the preparation of the consolidated financial statements are set out below. These policies have been consistently applied to all periods presented, unless otherwise stated.

2.1. Basis of preparation

The financial statements have been prepared in accordance with UK adopted International Financial Reporting Standards (UK IFRS) and those part of the Companies Act 2006 applicable to companies reporting under IFRS. IFRS consists of standards issued by the International Accounting Standards Board (IASB) and the interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) as adopted by the UK.

The financial statements have been prepared on the historical cost basis except for certain assets which are stated at their fair value.

The consolidated financial statements are presented in GBP, which is also the Company's functional currency.

2.2. Basis of consolidation

The financial information consolidates the financial statements of EARNZ plc, and the entities controlled by the Company.

2.2.1. Subsidiaries

Subsidiaries are all entities (including special purpose entities) over whose financial and operating policies the Group has the power to govern, generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of the potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Accounting policies of subsidiaries are changed where necessary to ensure consistency with the policies adopted by the Group.

2.3. Changes in accounting policies and disclosures:

2.3.1. New standards, interpretations and amendments adopted in these financial statements:

• Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2);
• Definition of Accounting Estimates (Amendments to IAS 8); and

The amendments listed above did not have any impact on the amounts recognised in prior periods and do not significantly affect the current or future periods.

2.3.2 Standards, amendments and interpretations to existing standards that are not yet effective and have not been early adopted by the Company in the 31 December 2023 financial statements:

Certain new accounting standards and interpretations have been published that are not mandatory for 31 December 2023 reporting periods and have not been early adopted by the Group.

Effective from 1 January 2024:

• IFRS 16 Leases (Amendment - Liability in a Sale and Leaseback). In September 2022, the IASB finalised narrow-scope amendments to the requirements for sale and leaseback transactions in IFRS 16 Leases which explain how an entity accounts for a sale and leaseback after the date of the transaction.
• IAS 1 Presentation of Financial Statements (Amendment - Non-current Liabilities with Covenants) Amendments made to IAS 1 Presentation of Financial Statements in 2020 and 2022 clarified that liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting period. Classification is unaffected by the entity's expectations or events after the reporting date.

In June 2023, the International Sustainability Standards Board (ISSB) issued its first two standards which are effective from 1 January 2024.

• IFRS S1 General requirements for disclosure of sustainability-related financial information. This standard includes the core framework for the disclosure of material information about sustainability-related risks and opportunities across an entity's value chain.
• IFRS S2: Climate-related disclosures. This is the first thematic standard issued that sets out requirements for entities to disclose information about climate-related risks and opportunities.

Effective from 1 January 2025:

• Amendments to IAS 21 to clarify the accounting when there is a lack of exchangeability on foreign currency.

The Group will continue to assess any impact on the Group from the adoption of these amendments. It is not anticipated that any of these will have a material impact on the Group's financial statements.

2.4. Going concern

Following the Disposal, the Company has ceased to own, control, or conduct all or substantially all its previous trading business, activities and assets and, on 1 March 2024, became an AIM Rule 15 cash shell.

As such, the Company is required to make an acquisition or acquisitions which constitute a reverse takeover under AIM Rule 14 ("Reverse Takeover") or be re-admitted to trading on AIM as an investing company (which requires, inter alia, the raising of at least £6.0 million) under the AIM Rules, on or before the date falling six months from 1 March 2024.

If the Company does not complete a Reverse Takeover in accordance with AIM Rule 14, or otherwise if re-admitted to trading on AIM as an investing company fails to implement its investing policy to the satisfaction of the London Stock Exchange within twelve months of becoming an investing company, the London Stock Exchange will suspend trading in the Company's AIM securities pursuant to AIM Rule 40.

Accordingly, the Company will evaluate opportunities in the energy services sector, seeking to identify one or more companies which the Company can acquire, which would constitute a Reverse Takeover under AIM Rule 14.

Following the Board changes in March and May 2024, the monthly cost of maintaining the Company has reduced.

The directors have a clear strategy to identify Reverse Takeover targets and have a number of opportunities in the pipeline. The cash resources of the Company are sufficient to cover the costs of a Reverse Takeover.

As the successful completion of any Reverse Takeover target cannot be assured at this time, the directors have concluded that a material uncertainty exists as to the Company's ability to continue as a going concern beyond the AIM Rule 15 timetable. This uncertainty arises primarily because should the Company's shares be suspended from trading on AIM or its listing is cancelled, the Company's ability to raise finance for the longer term would be significantly impaired.

Notwithstanding the above, as at the date of approval of the financial statements, the base case cash flow forecast indicated that no additional cash resources will be required over the course of the next 12 months. The directors therefore consider the Group and the Company to be a going concern and have therefore prepared these financial statements on the going concern basis.

Management has successfully raised money in the past, but there is no guarantee that adequate funds will be available when needed in the future.

2.5. Foreign currency

The Group's consolidated financial statements are presented in Sterling. The functional currencies of the Group's subsidiaries include the Euro and the US dollar. For each entity, the Group determines the functional currency and items included in the financial statements of each entity are measured using that functional currency.

The assets and liabilities of foreign operations are translated into sterling at the rate of exchange ruling at the reporting date. Income and expenses are translated at weighted average exchange rates for the period. The exchange differences arising on translation for consolidation are recognized in Other Comprehensive Income.

2.6. Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision maker has been identified as the management team including the two main directors and two non-executive directors.

The Board considers that the Group's activity constitutes one operating and one reporting segment, as defined under IFRS 8. Management reviews the performance of the Company by reference to total results against budget.

2.7. Share-based payments

The Group has issued share options to one Non-Executive Director and one Executive Director, in return for which the Group receives services from the Non-Executive Director. The fair value of the services received in exchange for the grant of the options is recognised as an expense. The Group valued the options at the grant date using the Black Scholes valuation model to establish the relevant fair values.

The total amount to be expensed is determined by reference to the fair value of the options granted but excluding the impact of any service or non-market performance vesting conditions (for example the requirement of the grantee to remain an employee of the Group).

2.8 Deferred taxation

the initial recognition of goodwill;

2.8. Property, plant and equipment

Property, plant and equipment is stated at historic cost, including expenditure that is directly attributable to the acquired item, less accumulated depreciation and impairment losses.

Depreciation is provided to write off cost, less estimated residual values, of all property, plant and equipment, evenly over their expected useful lives, when the asset is available for use, and calculated at the following rates:

Leasehold improvements - straight line over 5 years

Plant and machinery - straight line over 7-10 years

Computer equipment - straight line over 3 years

2.9. Leased asset

At the lease commencement date, the Group recognises a right-of-use asset and a lease liability, which comprises of the building, except for short-term leases that have a lease term of 12 months or less and leases of low-value assets, which are expensed to the profit & loss over the expense term.

The right-of-use asset is initially recognised at cost, which comprises the initial amount of the lease liability plus any lease payments made at or before the commencement date, plus any initial direct costs incurred, plus any costs associated with restoring the asset to its original condition, less any lease incentive received. The right-of-use asset is subsequently stated at cost less accumulated depreciation and impairment losses.

Lease payments included in the measurement of the lease liability comprise the following:

fixed payments, including in-substance fixed payments;

The lease liability is measured at amortised cost using the effective interest method. The liability recognised at inception of the lease comprises the present value of future payments payable under the lease contract, discounted at the rate implicit in the lease. If there is no discount rate implicit in the lease, then the incremental rate of borrowing is used. The liability is remeasured when there is a change in future lease payments arising from a change in an index or rate, or there is a change in the Group's estimate of the amount expected to be payable under a residual value guarantee, or there is a change arising from the reassessment of whether the Group will be reasonably certain to exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset or is recorded in profit or loss if the carrying amount has been reduced to zero.

2.10. Financial Instruments

The Group classifies a financial instrument, or its component parts, as a financial asset, a financial liability, or an equity instrument in accordance with the substance of the contractual arrangement and the definitions of a financial liability, a financial asset and an equity instrument.

2.10.1. Financial assets

Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive income ("FVOCI"), and investments in particular at fair value through profit or loss ("FVTPL"),

Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is de-recognised, modified, or impaired.

The Group's financial assets at amortised cost includes trade receivables and loans to related parties, are included under other current financial assets. In the periods presented the Group does not have any financial assets categorised as FVOCI.

Financial assets are de-recognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and substantially all the risks and rewards are transferred.

2.10.2. Financial liabilities

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. Financial instruments are assessed at inception to identify and any component equity features, such as embedded derivatives, that need to be separated.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and only if the criteria in IFRS 9 are satisfied. Equity instruments are recognized at inception at fair value, with a corresponding reduction in the associated liability. The Group has not designated any financial liability as at fair value through profit or loss. The Group has identified an embedded derivative in its convertible loan note instrument, but has determined that the value is not material enough to require separation. The judgement of this is described in more detail in Note 2.18.2.

Loans after initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are de-recognised as well as through the EIR amortisation process.

Amortised cost is calculated by considering any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit or loss. This category generally applies to interest-bearing loans and borrowings.

A financial liability is de-recognised when the obligation under the liability is discharged, cancelled, or expires.

2.10.3. Impairment

The Group assesses all other current receivables on a forward-looking basis, with expected credit losses (ECL) associated with debt instruments measured at amortised cost. These are deemed short term (i.e., less than 12 months) and apply the Group policy for credit rating and risk management policies in place.

The impairment stages are defined as:

Stage 1 - When a receivable is recognised, ECLs resulting from default events that are possible within the next 12 months are expensed to the statement of comprehensive income (12-month ECL) and a loss allowance is established. On subsequent reporting dates, the 12-month ECL also applies to existing receivables with no significant increase in credit risk since their initial recognition. In determining whether a significant increase in credit risk has occurred since initial recognition, the Company assesses the change, if any, in the risk of default over the expected life of the receivable (that is, the change in the probability of default, as opposed to the amount of ECLs).

Stage 2 - If the receivables credit risk has increased significantly since initial recognition and is not considered low, lifetime ECLs are recognised.

Stage 3 - If the receivables credit risk increases to the point where it is considered credit-impaired, lifetime ECLs are recognised, as in Stage 2.

The impairment methodology applied for the Group is stage 1, which requires 12-month expected credit losses to be recognised until a change in credit risk occurs, in which case stage 2 would apply.

2.11. Inventories

Inventories are valued at the lower of cost and net realisable value.

Costs incurred in bringing each product to its present location and condition are accounted for, as follows:

• Raw materials: purchase cost on a first-in/first-out basis;
• Finished goods and work in progress: cost of direct materials and labour and a proportion of manufacturing overheads based on the normal operating capacity but excluding borrowing costs.

2.12. Cash and cash equivalents

2.13. Fair Value measurement

Where financial and non-financial assets and liabilities are measured at fair value, the Group use appropriate valuation techniques for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

Fair value is categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follow:

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2: inputs other than quoted prices included in Level 1 that are observable for the assets or liability, either directly (eg; as prices) or indirectly (eg; derived from prices);
• Level 3: input for the assets or liability that are based on observable market data (unobservable input).

The Group recognise transfer between level of fair value hierarchy at the end of the reporting period during which the changes have occurred.

The carrying amount of cash and cash equivalents, receivables, trade payable, accruals and other current liabilities in the Group consolidated statement of financial position approximates their fair value because of short maturities of these instruments.

2.14. Warranty provision

A warranty provision is recognised where there is a probable obligation to rectify problems with goods sold. The calculation of the warranty provision is based on historical warranty claim data. Provisions for cash outflows in excess of one year are determined by discounting expected future cashflows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of discount is recognised as a finance cost. Warranty provisions are a management estimate, please see note 2.18.1. for information about how the provision was calculated in the year.

2.15. Revenue recognition

Revenue is generated from the manufacture and supply of lightweight solar panels. The Group recognises revenue when (or as) a performance obligation in the customer contract is satisfied. Performance obligations relevant to the customer contract are to manufacture goods in accordance with the specification in the customer order form and any other regulatory or statutory requirements. The performance obligations are satisfied at the point in time when the goods are deemed to be delivered. Under the customer contract, goods are determined to be delivered Ex Works (at the factory address) under International Chamber of Commerce Incoterms. This means that once the customer is provided a shipping document which indicates that the goods are ready and available for collection from the factory, obligations of the contract have been performed and risk transfers to the customer. Revenue is measured as the fair value of the consideration received or receivable and represents amounts receivable for services provided in the normal course of business, net of discounts and sales-related taxes.

Customers are billed in advance of the delivery of goods, with 30 days terms. Upon receipt of an advanced payment a contract liability is recognized. The contract liability is released at the point in time goods are delivered. Under the Group's standard terms and conditions there is a product warranty for ongoing acceptable function of the goods for a period of 10 years, effective from the point of installation, or 3 months after delivery, whichever is earlier. This warranty is not sold as a separate component. This length of warranty is standard in the industry. This is not a separate service and is deemed an "assurance" type warranty under IFRS 15 guidance; and is therefore accounted for separately under IAS 37 instead. See note 2.14 for information about how a warranty provision is recognized and measured.

2.16. Research and Development costs

Expenditure on research activities is recognised in profit or loss as incurred. Development expenditure is capitalised only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the Group intends to and has sufficient resources to complete development and to use or sell the asset. Otherwise, it is recognised in profit or loss as incurred. Amortisation on development costs commences once the asset under development is available for use or sale. Subsequent to initial recognition, development expenditure is measured at cost less accumulated amortisation and any accumulated impairment losses.

2.17. Grant income

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognised in profit or loss in the period in which they become receivable. Grants are recognised in the statement of comprehensive income as other income.

2.18. Summary of critical accounting estimates and judgements

The estimates and judgements which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are discussed below:

2.18.1. Estimates

Share-based payments

Share options are recognised as an expense based on their fair value at date of grant. The fair value of the options is estimated through the use of a valuation model - which require inputs such as the risk-free interest rate,

expected dividends, expected volatility and the expected option life - and is expensed over the vesting period. Some of the inputs used to calculate the fair value are not market observable and are based on estimates derived from available data, such as employee exercise behaviour and employee turnover (note 24).

Warranty provision

Stock valuation

The cost calculation for finished stock panels includes some absorbed costs for factory staff and utilities. The calculation of staff cost per panel is a fixed amount based on what the cost absorption rate is when the factory is running at full capacity. Stock provisions are recognised where there is evidence that the cost initially recognised is no longer recoverable; for finished panels this is either where there the panel is classed as less than grade A standard following testing, or where there is a sale of a similar age or specification product which is lower than the cost value.

2.18.2. Judgements

Other receivables

Other receivables comprise estimated earn out payments receivable from the sale of the investment in ICSI - note 12. The estimated earn out payments are structured over several product development milestones to be achieved through to 2025. The estimated earn out payments to be received as at year end are based on this information and includes management assessment around the achievability of each individual milestone. At the year end it has been judged that any further earn out payments are unlikely, and therefore the value of the receivable has been written down to nil.

Revenue recognition

Revenue is recognised at the point that the performance obligations are satisfied. This is judged to be the point when the goods are delivered under the customer contract. The customer contract specifies that all goods are delivered "Ex Works" under International Chamber of Commerce Incoterms, meaning that they are delivered when available for collection from the factory.

Share-based payments

Management performs an assessment to determine whether non-market performance conditions of non-vested share options are likely to be met. As a result, the calculation of the share-based payment charge is adjusted where it is deemed that the number of options likely to vest has changed.

Convertible loan note

Management has assessed that the convertible loan note instrument, issued during the year, is classified wholly as a financial liability, although it includes a conversion feature that qualifies as an embedded derivative. Management has determined the value of the embedded derivative to be immaterial, and therefore it has not been separated from the host contract liability. The reason for this assessment is that the probability of the conversion feature being exercised was judged to be very low. The conversion element of the instrument had been designed as a protection feature for the debt holders, rather than as a mechanism to gain short-term gains through equity conversion. The debt holders were long-term investors in the company, one of which was a director. The loan notes were also secured against the assets of the Group. The debt holders were unlikely to exercise in the short term as the share price was expected to reduce due to liquidity issues. Together this gave a strong indication that the debt holders were unlikely to convert their holdings before the term, and therefore the value of the derivative was assessed to be low.

Financial Risk Management

3.1. Principal financial instruments and their categories

3.2. General objectives, policies and processes

The Board has overall responsibility for the determination of the Group's risk management objectives and policies and, whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes that ensure the effective implementation of the objectives and policies to the Group's finance function. The Board receives monthly reports from the CFO through which it reviews the effectiveness of the processes put in place and the appropriateness of the objectives and policies it sets.

3.2.1. Credit risk

The aggregate financial exposure is continuously monitored. The maximum exposure to credit risk is the value of the outstanding amount of bank balances. The Group's exposure to credit risk on cash and cash equivalents is considered low as the bank accounts are with banks with high credit ratings. The analysis of trade receivables and expected credit loss allocation is detailed in (note 17).

3.2.2. Liquidity risk

The Group's policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due. To achieve this aim, it seeks to maintain cash balances (or agreed facilities) to meet expected requirements for a period of at least 45 days.

The Group currently holds cash balances to provide funding for normal trading activity and is managed centrally. Trade and other payables are monitored as part of normal management routine. The Board receives rolling cash flow projections on a monthly basis as well as information regarding cash balances.

The following table sets out the contractual maturities (representing undiscounted contractual cash-flows, including contractual interest) of financial liabilities:

3.2.3. Interest rate risk

The Group's exposure to interest rate risk is limited, as its loans and borrowings are a fixed rate loan. There are no overdraft facilities. At the reporting date there were corporate bonds with principal of £500,000 which had a fixed interest rate of 7% (2022: corporate bonds with principal of £310,306 which had a fixed interest rate of 7%).

3.2.4. Foreign exchange risk

In the current year the Group is predominantly exposed to currency risk on purchases made in EUR and USD.

The following table details the Group's exposure at the end of the year to currency risk arising from recognised assets or liabilities denominated in a currency other than the functional currency of the entity to which they relate. Differences resulting from the translation of the financial statements of the entity within the Group into the Group's presentation currency are excluded:

As of 31 December 2023 the Group's exposure to changes in foreign exchange rate was as follows:

As of 31 December 2022, the Group's exposure to changes in foreign exchange rate was as follows:

The Group had revenues from customers in the following countries that were determined to be material:

The Group had 3 customers that exceeded 10% of revenue in 2023 (2022: 2 customers). All sales related to the development and commercialisation of clean technologies operating segment:

Segment information

The chief operating decision maker has been identified as the management team including the executive and non-executive directors. The chief operating decision-maker allocates resources and assesses performance of the business and other activities at the operating segment level.

The chief operating decision maker has determined that EARNZ had one operating segment, the development and commercialisation of clean technologies.

Geographical Segments

Apart from holding company activities in the UK the Group had operations in Italy in the period. An analysis of revenue, operating loss and non-current assets by geographical market is given below:

*See Note 27 for details of the restatement.

Refer to Investments and Other Receivables Notes 11-12 for further information on the ICSI revaluation.

Operating loss

*See Note 27 for details of the restatement.

Employees and directors

The average number of employees (including directors) during the period was made up as follows:

The cost of staff and directors during the period was made up as follows:

Key management personnel include both board and non-board members. Key management personnel compensation is as follows:

Please refer to the Directors' Remuneration report on pages 19-21.

Finance costs

Details of the interest rate on the loans are shown in note 20.

Income tax

Factors affecting the tax expense

The reasons for the difference between the actual tax expense for the year and the standard rate of corporation tax in the United Kingdom applied to the result for the year are as follows:

*See Note 27 for details of the restatement of prior year result.

The Group has not recognized deferred tax assets arising from the accumulated tax losses due to uncertainty of their future recovery. The deferred tax asset not recognized is £1,864,738 at 31 December 2023 (2022: £1,515,764).

Loss per share

*See Note 27 for details of the restatement of prior year result.

Basic loss per share is calculated by dividing the loss for the period from continuing operations of the Group by the weighted average number of ordinary shares in issue during the period. There were no potentially dilutive ordinary shares in either period, therefore was no difference between the basic and diluted loss per share.

Investments

The Company previously held a stake in Industrial Climate Solutions (ICSI), an unlisted company registered in Canada. This was sold during 2022 for a total consideration comprising cash on completion of £307,731 and earn out payments payable over 3 years (see note 12).

Other receivables

The estimated earn out payments from the ICSI sale are structured over several product development milestones to be achieved through to 2025. The estimated earn out payments to be received as at year end are based on management assessment of the achievability of each individual milestone. At recognition of the receivable this risk weighted compensation was discounted at an estimated cost of equity, being 14.2%.

In 2023 management received information from the ICSI Sellers' Committee that future milestones are unlikely to be met, so a full impairment of the receivable was recognized in the period.

Property, plant and equipment

Subsidiary undertakings

As at 31 December 2023 the subsidiaries of the Company, all of which have been included in these consolidated

financial statements, are as follows:

The right-of-use asset as at 31 December 2023 is the present value of a lease asset on a factory in Tolmezzo, Italy signed in May 2023 for 2 years. The rental amount is fixed for the term of the lease.

*Included within the lease asset is a deposit of £38,139 payable at inception of the lease. This has been discounted to reflect the time value of money, and that this will be repaid at the term of the lease. The discount rate applied is 7%, being the rate of borrowing of the Company during the year. The unwind of this discount reduces the right of use asset, and increases the deposit (held in Trade and other receivables, Note 17).

Inventories

During the period £582,830 inventories relating to revenue were recognized as a cost in the P&L (2022: £253,102). There was also a release of a provision against inventories to write-back defective and slow-moving stock, £47,051 (2022: £167,417), upon sale of old stock panels.

Trade and other receivables

*See Note 27 for details of the restatement of prior year other receivables.

The ageing of trade receivables and ECL allocation is as follows:

The movement in ECL in the year was as follows:

ECL

£

Cost

The fair value of the cash & cash equivalents is as disclosed above. For the purpose of the cash flow statement, cash and cash equivalents comprise of the amounts shown above.

Trade and other payables

On 9 May 2023, the Group raised £500,000 in secured convertible loan notes and shortly thereafter repaid the convertible bonds. The convertible loan notes carry a coupon of 7% per annum which is payable on the redemption date or earlier if converted. The convertible loan notes are redeemable 2 years from the date of issue and are convertible at the option of the noteholder into ordinary shares at the lower of 1.0625 pence per share, or the subscription price per ordinary share of any fundraising over £250,000 in the 6 months from the issue of the loan notes. As a result of the equity raise on 1 September 2023, the conversion price for the secured convertible loan notes has been adjusted to 0.45 pence per share. At inception an embedded derivative was identified, although this has not been separated from the loan liability as it has been determined to be immaterial. The convertible loans were redeemed post year end as part of the disposal of Verditek Solar Italy srl.

Alongside the corporate bonds in prior year, warrants were also issued to Crowd For Angels, including

• 2,250,000 warrants on 28 May 2021, with a term 36 months and exercise price 3.1p
• 1,032,530 warrants on 30 July 2021, with a term 36 months and exercise price 2.75p

The 1,032,530 warrants were exercised in 2021 and the proceeds repaid part of the Corporate bond.

The warrants were fair valued using the Black Scholes model, see note 24 for details, and recognised as a cost of issue. During the year there was an issue cost amortisation charge of £16,045 (2022: £33,226) recorded within finance costs.

Reconciliation of liabilities to cashflows arising from financing activities

A warranty provision has been recognised in the year based on historical panel warranty claim rates, at 5% of revenue. It is assumed that all of the provision will be utilized within the next year.

Lease liability

The cash outflow on lease liability payments in the year was £163,217(2022: £70,936). The interest expense on lease liabilities recognised in the year was £14,472 (2022: £16,102).

Share capital and reserves

Share-based payment reserve

The Company operates an equity-settled share-based remuneration schemes for Senior Executives, under the terms of the Company's EMI and Non-Qualifying Share Option Plan (the "Option Plan"). The options are valid for 10 years from the date of grant. After satisfaction of any performance condition included in the award the options will become exercisable in equal tranches on each anniversary of the Grant Date during the first three years.

The fair value of the employee services received in exchange for the grant of the options is recognised as an expense. The total amount to be expensed is determined by reference to the fair value of the options granted including any market performance conditions (for example the Company's share price) but excluding the impact of any service or non-market performance vesting conditions (for example the requirement of the grantee to remain an employee of the Group).

The Company uses a Black Scholes model to estimate the cost of share options. The following information is relevant in the determination of the fair value of options granted. The assumptions inherent in the use of this model are as follows:

• The option life is the estimated average period over which the options will be exercised.
• For options issued to Rob Richards and David Willetts in 2021, there is a vesting condition linked to performance of the company.
• For other options issued in 2021 and earlier, the vesting conditions are 3 years' continued service with the Group.
• No variables change during the life of the option (e.g. dividend yield remains zero).

During 2021 there were also warrants issued to Crowd For Angels, please see note 20 for details.

The key assumptions used in the fair value calculation for issues is as follows

The movement in outstanding share options and warrants are as follows:

1,500,000 options were granted under the scheme in April 2018 to Chair, Lord David Willetts, with an exercise price of 9.0p. During 2020 there were 4,000,000 options issued to CEO, Rob Richards at an exercise price of 3.0p. During 2021 there were 3,000,000 options issued to Lord David Willetts and 10,000,000 options were issued to Rob Richards at an exercise price of 3.8p.

At the period end, following an assessment that it was unlikely that performance conditions would be met for a portion of the 2020 options and 2021 options issued to Lord Willetts and Rob Richards, a reversal of previously recognized share-based payment expense was required, as a credit to the income statement. At the period end, Rob Richards held 1,200,000 share options with an exercise price of 3.0p, and David Willetts held 1,500,000 share options with an exercise price of 9.0p.

The share-based payment credit recognized in the income statement during the period was £154,010 (2022: cost of £119,672).

Reserves

The following describes the nature and purpose of each reserve within equity:

Issued share capital - Amount subscribed for share capital at nominal value. The company has one class of shares being Ordinary Shares. Holders of these shares are entitled to one vote per share at general meetings of the Company, and are entitled to dividends as declared from time to time.

Share premium - Amount subscribed for share capital in excess of nominal value. This includes share issue costs, which are deducted from share premium.

Share-based payment reserve - The share-based payment reserve represents equity settled share-based employee remuneration until such share options are exercised.

Foreign exchange reserves - Foreign exchange translation gains and losses on the translation of the financial statements of subsidiary from the functional to the presentation currency, and also foreign exchange on intra-group funding balances.

Non-controlling interests - Represents accumulated profits or losses from subsidiaries where there is less than a 100% holding.

Related Party Transactions

The Group has related party transactions with related parties who are not members of the Group.

Details of the directors' emoluments, together with the other related information, are set out in the Directors' Remuneration Report. The Company's executive and non-executive directors are considered to be key management personnel for the purposes of this disclosure.

Prior period restatement

During 2023, the Group determined that the Non-Controlling Interest Reserve recognized at prior balance sheet dates in connection with BBR Filtration should have been released to Accumulated losses at 31/12/2021.

On admission to AIM in 2017, the Company acquired 51% of BBR Filtration Limited (which in turn had a 50.49% holding in BBR Filtration USA LLC), a bio-filtration company developing a system to remove odours (e.g. hydrogen sulphide) from wastewater. BBR Filtration Limited remained a 51% owned subsidiary of the Company but ceased trading during 2019. BBR Filtration Limited was dissolved in June 2021. Therefore the residual Non-Controlling Interest Reserve, £106,887, should have been released to Accumulated losses during the year 2021.

During 2023 it was determined that a provision against VAT recognized in prior years should have been partially reversed in the prior year, as there was information available at the time which suggested that it could be recoverable. A prior year adjustment has been made as a result of there being an error identified in the estimate made as at 31 December 2022.

The errors described have been corrected by restating each of the affected line items for prior periods. The impact on shareholders' equity and assets is summarized as follows:

Events after the reporting date

On 27 February 2024 the Company entered into a loan agreement with Bob Holt, prior to his appointment as a director of the Company, for up to £300,000, of which £250,000 was drawn down on 28 February 2024 prior to the disposal of the Solar Business described below to settle outstanding liabilities of the Group. The remaining £50k has subsequently been drawn down. The loan was unsecured and interest free, convertible in part or in whole at any equity fundraising undertaken by the Company after the date of the drawdown. The loan was converted into 4,000,000 ordinary shares on 8 April 2024.

On 28 February 2024, at a general meeting of the Company, the disposal of Verditek Italy srl and all related business assets of the Company (collectively, "Solar Business") to newly incorporated private company, Verditek Solar

Limited, was approved, in return for satisfaction of the outstanding secured convertible loan notes (see Note 20) and accrued interest, £528,340. Verditek Solar Limited is a company owned by the convertible loan note holders. The disposal of the Solar Business included:

• All issued share capital in Verditek Solar Italy srl
• All intellectual property rights associated with the Group's solar operations
• The Company's interest in an agreement with Net Zero Valley to develop a solar panel manufacturing plant in Southern Italy
• The Company's interest in the joint development project with Paragraf Limited
• Any monies receivable from the earn-out agreement from the sale of ICSI

The disposal of the Solar Business completed on 29 February 2024. The Company has been regarded since 1 March 2024 as an AIM Rule 15 cash shell, having ceased to own, control or conduct all, or substantially all, of its existing trading business, activities or assets.

Following the disposal of the Solar Business, the existing Board of Directors of the Company resigned with immediate effect. The Chair, Lord Willetts, and Non-Executive Director, George Katzaros, waived any fees that they would have been contractually entitled to up until 29 February 2024. Rob Richards, the former Chief Executive of the Company, agreed to vary the terms of his service contract to receive a settlement amount of £50,000 (less payments on account made in February) in respect of fees owed under his existing contract.

A new Board of Directors was shortly thereafter appointed, being Bob Holt, John Charlton and Elizabeth Lake. The Company was renamed EARNZ plc effective from 6th March 2024. The new board intends to seek suitable acquisition targets within the energy services sector, which will constitute a reverse takeover under AIM Rule 14.

On 5 March 2024 400,000,000 shares were issued in the Company, at 0.075 pence per share, giving total proceeds of £300,000.

On 4 April 2024 there was a general meeting to approve a share consolidation, so that every 100 shares in the Company would be consolidated to 1 share. This increased the nominal value of each share from £0.0004 to £0.04, and reduced the number of shares from 954,649,497 to 9,546,495 shares.

On 8 April 2024 the Company raised a further £3.7 million (before expenses) from the issue of 39,954,644 shares at 7.5 pence per share. The loan from Bob Holt was also converted to shares at this time, at the same price.

Ultimate controlling party

There is no ultimate controlling party of the Company.

COMPANY STATEMENT OF FINANCIAL POSITION

The Company's loss for the year was £1,343,617 (2022: loss of £5,580,995).

As permitted by s408 Companies Act 2006, the Company has not presented its own statement of comprehensive income.

John Charlton

Executive Director

Company Registration Number: 10114644

The accompanying notes are an integral part of these financial statements.

COMPANY STATEMENT OF CHANGES IN EQUITY

The accompanying notes are an integral part of these financial statements.

NOTES TO THE COMPANY FINANCIAL STATEMENTS

Accounting policies

The accounting policies that are applicable, as set out in note 1 to the consolidated financial statements have been applied together with the following accounting policies that have been consistently applied in the preparation of these EARNZ PLC ("the Company") financial statements.

Basis of preparation

The financial statements of EARNZ PLC have been prepared in accordance with Financial Reporting Standard 101, 'Reduced Disclosure Framework' (FRS 101). The financial statements have been prepared under the historical cost convention, as modified and in accordance with the Companies Act 2006.

The Company has taken advantage of Section 408 of the Companies Act 2006 in not presenting its own statement of comprehensive income.

The Company has taken advantage of the following disclosure exemptions under FRS 101, on the basis that equivalent disclosures are, where required, given in the consolidated financial statements of EARNZ PLC:

• a Cash Flow Statement and related notes as required by IAS 7 - 'Statement of Cashflows';
• the requirement in paragraph 38 of IAS 1 'Presentation of Financial Statements' to present comparative information in respect of paragraph 79(a)(IV) of IAS 1 - a reconciliation of the share capital at beginning and end of the period;
• the requirements of paragraph 134 - 136 of IAS 1 'Presentation of Financial Statements' to disclose the management of the capital of the Company;
• the requirements of paragraphs 30 and 31 of IAS 8, 'Accounting Policies, Changes in Accounting Estimates and Errors' to disclose the new or revised standards that have not been adopted and information about their likely impact;
• the requirements of paragraph 17 of IAS 24, 'Related Party Disclosures' to disclose key management personnel; and
• the requirements in IAS 24 'Related Party Disclosures' to disclose related party transactions entered into between two or more members of a group, provided that any subsidiaries which is a party to the transaction is wholly owned by such a member.

Going concern

Following the Disposal, the Company has ceased to own, control, or conduct all or substantially all its previous trading business, activities and assets and, on 1 March 2024, became an AIM Rule 15 cash shell.

As such, the Company is required to make an acquisition or acquisitions which constitute a reverse takeover under AIM Rule 14 ("Reverse Takeover") or be re-admitted to trading on AIM as an investing company (which requires, inter alia, the raising of at least £6.0 million) under the AIM Rules, on or before the date falling six months from 1 March 2024.

If the Company does not complete a Reverse Takeover in accordance with AIM Rule 14, or otherwise if re-admitted to trading on AIM as an investing company fails to implement its investing policy to the satisfaction of the London Stock Exchange within twelve months of becoming an investing company, the London Stock Exchange will suspend trading in the Company's AIM securities pursuant to AIM Rule 40.

Accordingly, the Company will evaluate opportunities in the sectors the directors consider appropriate, seeking to identify one or more projects or assets which the Company can acquire, which would constitute a Reverse Takeover under AIM Rule 14.

Following the Board changes in March and May 2024, the monthly cost of maintaining the Company has reduced.

The directors have a clear strategy to identify Reverse Takeover targets and have a number of opportunities in the pipeline. The cash resources of the Company are sufficient to cover the costs of a Reverse Takeover.

As the successful completion of any Reverse Takeover target cannot be assured at this time, the directors have concluded that a material uncertainty exists as to the Company's ability to continue as a going concern beyond the AIM Rule 15 timetable. This uncertainty arises primarily because should the Company's shares be suspended from trading on AIM or its listing is cancelled, the Company's ability to raise finance for the longer term would be significantly impaired.

Notwithstanding the above, as at the date of approval of the financial statements, the base case cash flow forecast indicated that no additional cash resources will be required over the course of the next 12 months. The directors therefore consider the Group and the Company to be a going concern and have therefore prepared these financial statements on the going concern basis.

Investments in subsidiaries

The Company's investment in its subsidiaries are carried at cost less provision for any impairment. Investments include shareholder loans. Investments denominated in foreign currency are recorded using the rate of exchange at the date of acquisition. The carrying value is tested for impairment when there is an indication that the value of the investment might be impaired. When carrying out impairment tests, the recoverable amount is based upon future cash flow forecasts and these forecasts would be based upon management judgement. Where the carrying value is more than the recoverable amount, no impairment provision is made.

Trade and other receivables

The Company assesses on a forward-looking basis the expected credit loss associated with its receivables carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade receivables, the Company applies the simplified approach permitted by IFRS 9, resulting in trade receivables recognised and carried at original invoice amount less an allowance for any uncollectible amounts based on expected credit losses.

Critical accounting estimates and judgments

The preparation of financial information in conformity with FRS 101 requires the use of certain critical accounting estimates. It also requires the Directors to exercise their judgement in the process of applying the accounting policies which are detailed above. These judgements are continually evaluated by the Directors and management and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The judgements that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follow:

Impairment of investments in and amount due from subsidiaries

In determining whether there are indicators of impairment of the Company's investments in, and amounts receivable from, its subsidiary undertakings, the directors take into consideration various factors including the economic viability and expected future financial performance of the business of the subsidiary undertakings. Future cashflows from solar operations requires significant management judgement, as the solar production business is still in its early stages.

Classification of investments in and amount due from subsidiaries

Investments in subsidiaries are classified as non-current assets. Funding provided to subsidiaries is long-term in nature and not intended to be repaid on demand, and therefore it is appropriate to present the assets as non-current.

Staff costs

The average number of employees (including directors) during the period was made up as follows:

The cost of employees (including directors) during the period was made up as follows:

The details of the subsidiaries of the Company, are set out in the Note 11 to the consolidated financial statements.

The directors consider that the carrying amounts owed by and to group undertakings approximates their fair value. The amounts reported under current assets have no fixed repayment terms and repayment on demand.

Other investments

The Company previously held a stake in Industrial Climate Solutions (ICSI), an unlisted company registered in Canada. This was sold during 2022 for a total consideration comprising cash on completion of £307,731 and earn out payments payable over 3 years (see note 5).

Other receivables

The estimated earn out payments from the ICSI sale are structured over several product development milestones to be achieved through to 2025. The estimated earn out payments to be received as at year end are based on management assessment of the achievability of each individual milestone. At recognition of the receivable this risk weighted compensation was discounted at an estimated cost of equity, being 14.2%.

In 2023 management received information from the ICSI Sellers' Committee that future milestones are unlikely to be met, as so a full impairment of the receivable was recognized in the period.

Property, plant and equipment

All amounts are due within three months.

Cash and cash equivalents

See note 20 of the consolidated financial statements for details.

Share capital

For details of share capital see note 23 to the consolidated financial statements.

Share-based payment reserve

For details of the share-based payments see note 24 to the consolidated financial statements.

Related party transactions

The Group has related party transactions with entities in which directors have significant financial interests. For details of the related party transactions see note 26 to the consolidated financial statements.

Details of the directors' emoluments, together with the other related information, are set out in the Report of the Directors. There are no other related party transactions.

Commitments

The Company has no lease or capital commitments at the end of the reporting period.

Contingent liabilities

The Company has no contingent liabilities, other than what has been disclosed already.

Ultimate controlling party

The Company does not have an ultimate controlling party.

Events after reporting date

For details of events after reporting date see note 28 of the consolidated financial statements.

OFFICERS AND ADVISERS