Getech : Annual Report 2023

GETECH GROUP PLC

Annual Report and Accounts

Year ended 31 December 2023

Getech Group plc | Annual Report | 2023

Highlights

Financial highlights

• Revenue £4.0 million (2022: £5.1 million)
• Orderbook £4.6 million (2022: £4.6 million)
• Annualised Recurring Revenue £2.8 million (2022: £2.4 million)
• Cash at bank £0.4 million (2022: £4.3 million)
• Kitson House sold for £0.65 million in January 2024, Nicholson House remains an asset for sale valued at £0.85 million

Operational highlights

• New Globe and gravity & magnetics data customers added, plus 42% year-on-year increase in subscription licenses
• Globe 2023 released on plan, with new features applicable across multiple energy sectors (oil & gas, mining, carbon capture and storage (CCS) & geothermal)
• Added new capabilities to our minerals exploration capabilities, including artificial intelligence & machine learning, as well as new solutions for lithium, porphyry copper and clean gases (such as natural hydrogen and helium)
• Joint exploration venture agreement signed with East Star Resources to pursue copper exploration in Kazakhstan
• Strategic minerals exploration projects delivered for multiple organisations, including East Star Resources, Asian Battery Metals and Western Australia's Centre for Exploration Targeting
• Signed joint exploration agreement with a major European-headquartered global industrial and energy company focussing on natural hydrogen exploration
• Strategic collaboration with Cozairo to identify CCS opportunities
• Strategic partnership with Eavor to jointly locate and appraise a portfolio of geothermal projects in Latin America, with additional Geothermal partnerships signed with Expro and RED Engineering Design
• Completed a geothermal screening project for the manufacturing sites of a multinational FMCG company

FY 2024 Current Trading

• Unaudited revenues in the first 4 months 17% ahead of the same period last year
• Benefit of the rationalisation actions in 2023 taking effect in full for 2024
• New business wins in H1 with strong H2 pipeline
• Targeting EBITDA/Cash positive

Michael Covington, Chairman of Getech, said, "Getech is a different business now compared to the start of 2023. We have taken important decisions to lighten the cost base and refocus the business on its strengths which are to help our clients locate sub-surface energy and mineral resources. Whether it is more sustainable sources of hydrocarbons, critical minerals for the energy transition such as copper or lithium, geothermal resources or extractable geologic sources deposits of hydrogen, we are already supporting our clients. We are particularly excited about using new AI tools and resources that have the potential to accelerate key aspects of our unique geo data driven approach."

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Getech Group plc | Annual Report | 2023
Contents
Highlights	2
FY 2024 Current Trading	2
Chairman's Statement	4
How we Create Value for Shareholders	6
Operational Review	7
Sustainability	12
Financial Review	15
Risk Management	17
Section 172 Statement	20
Board of Directors	22
Corporate Governance Framework	24
Remuneration Committee Report	28
Audit Committee Report	32
Directors' Report	34
Independent Auditor's Report to the Members of Getech Group plc	37
Group statement of Comprehensive Income	44
Group Statement of Financial Position	45
Group statement of Changes in Equity	46
Group Statement of Cash Flows	47
Note to the Group Statement of Cash Flows	48
Notes to the Group Financial Statements	49
Company Statement of Financial Position	87
Company Statement of Changes in Equity	88
Notes to the Company Financial Statements	89
Advisors	96

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Getech Group plc | Annual Report | 2023

STRATEGIC REPORT

Chairman's Statement

Introduction

I am pleased to report on a year of significant progress against a challenging market backdrop. This began with changes to the management team in February 2023 with the appointment of Richard Bennett as CEO having previously been Non-executive Chairman and I moved from Non-Executive Director to become Non-Executive Chairman in February 2024.

During this period, the Company has been significantly refocused and restructured back onto a tight focus on its core competencies. We are now at a point of inflection and our strategy will remain being absolutely focused on sustainably growing underlying profitability whilst investing in enhancing our advanced geoscience technological and product distribution capabilities.

In 2021, the Company acquired H2 Green, a developer of green hydrogen transportation hubs. This early-stage company has required significant investment to progress whilst being affected by significant delays in key Government incentive policies. Operating both the core business and H2 Green was overstretching our resources and so we took the decision either to seek operational partners to help us develop or exit the H2 Green projects, while at the same time significantly reducing the H2 Green headcount and cost-base. This contributed to reducing the ongoing costs of the business by 25%, a reduction of c. £2 million per annum, thereby resetting the financial base of the business.

We have refocused on our core competence of data-ledsub-surface exploration. We continue to target diversification of our customer base beyond oil and gas, with the ambition that at least 50% of our business should come from exploration companies focused on finding the natural resources that are vital for the energy transition such as critical minerals, geothermal and carbon storage.

Our financial performance in 2023 reflected the transition we undertook. We generated revenues of £4.0 million (2022: £5.1 million), held our order book at £4.6 million and increased our Annualised Recurring Revenue (ARR) to £2.8 million (2022: £2.4 million). As previously reported, we recorded an adjusted EBITDA loss of £2.7 million, reflecting the cost of investment in H2 Green, and a period of reduced revenue from core customers and the early stages of transitioning the business.

Cash resources have been depleted by the above commercial factors so we are keeping a tight rein on discretionary expenditures and budgets generally and pursuing a sale of Nicholson House. Working capital remains lower than in the past and the Board naturally views rebuilding it as a priority in 2024. Alongside the sale of Nicolson House, the Board is exploring other options to enhance our working capital. A restoration of cash resources would facilitate further investment into sales and business development, as well as advance our AI and Machine Learning enhancements to make our products more relevant to our key markets, and in particular critical minerals and natural hydrogen.

There are signs in 2024 that customers are returning to investing in exploration activities. Unaudited revenues in the first 4 months of 2024 were ahead of the same period last year, and we continue to see good upside potential in our principal markets.

Data-ledsub-surface exploration

We are applying the Company's core geoscience data and skills to support exploration of these vital energy resources. To achieve the energy transition, a substantial number of new,

Getech Group plc | Annual Report | 2023

STRATEGIC REPORT

very large discoveries are required. Whilst the more easily identifiable discoveries have been made, the future depends on finding deeper and less obvious resources, which is where Getech can deploy its global geoscience data and proven expertise.

Getech has the largest commercially available database of potential fields data (magnetic and gravity data) that is accessed through our Globe platform usually as a "Software as a Service" (SaaS) type subscription which we provide via our new cloud based Maptium® platform. Moreover, when AI and Machine Learning techniques are applied, these can rapidly search our data for the indications of specific minerals and improve exploration success rates. Over the last year, we have continued to develop our Globe platform, advance our AI/ML technology and introduce new search capabilities for critical minerals including copper and lithium, as well as well as the source rocks for natural hydrogen (also called 'white' or 'geologic' hydrogen). We expect to continue development throughout 2024 and add search capabilities for other high-demand commodities to our platform.

Business model

We have continued to migrate Globe and our geoscience data products to a subscription model which has significantly increased annual recurring revenue (ARR), improving the Group's financial stability. A core focus is to grow ARR to in-excess of the cost-base over time and we are confident of being able to do so. Alongside this, we have also introduced to specific customers or projects an equity participation model in return for lower initial fees. This is creating a future share in assets with the potential to generate substantially higher returns from our data than has been achieved historically.

Outlook

Energy security remains a key concern, catalysing, in our opinion, increased activity over the last 12 months in the traditional oil and gas exploration sector. Meanwhile, the mining sector continues to report significant anticipated supply gaps across multiple commodities that should all be essential to delivering the Energy Transition.

Getech's corporate strategy is a response to these strong underlying trends and focuses on monetising the Company's capabilities across the geo-energy sector as well as seeking opportunities for transformational growth in critical minerals and potentially geological hydrogen. We are working on resolving our near-term liquidity concerns while at the same time evolving our offerings and unique propositions; growing our order book; expanding our pipeline; innovating our business models; and despite some near-term uncertainty over the route through to working capital self-sufficiency, we see exciting strategic prospects for the business.

Michael Covington

Chairman

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Getech Group plc | Annual Report | 2023

STRATEGIC REPORT

How we Create Value for Shareholders

Sectors

• Oil & gas exploration and operations monitoring
• Critical minerals exploration
• Natural hydrogen & helium exploration
• Geothermal exploration and project feasibility studies

Our offering & differentiators

• The world's largest commercially available Gravity and Magnetic database
• A detailed geological model of the last 400 million years of earth history, in 'Globe'
• Deep geospatial and geoscience understanding
• Integrating our products and expertise with artificial intelligence and machine learning to create unique and successful exploration outcomes for our customers

Value proposition to customers

• Enhance understanding of geologic risk and uncertainty
• Improve exploration success rates through identification of prospective locations
• Reduce exploration costs and accelerate projects to shorten 'time-to-value'

How we monetise

• Annual Recurring Revenue through subscriptions to our data, products and services
• Hybrid model of revenue plus carried interest/royalty for selected asset opportunities
• Enterprise licensing for super-majors and large explorer customers

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Getech Group plc | Annual Report | 2023

STRATEGIC REPORT

Operational Review

The last year was a transitional period while making significant progress towards an evolved strategy. New sales wins were more challenging to find than in previous years, but the Company maintained high oil and gas customer retention rates, added new software customers, increased annually recurring revenue and continued to repurpose its offerings for the energy transition, including making significant progress in enhancing its mineral exploration capabilities with artificial intelligence and machine learning.

Business overview

Getech's strategy focuses on monetising its proprietary data and expertise through subscription sales, solutions and selective asset participation. We generate revenue by locating new energy and mineral resources using the world's largest commercially available database of potential fields (gravity and magnetics) data assembled over c. 30 years and our proprietary Earth digital twin, called 'Globe'.

Developed over the last c. 14 years, Globe uniquely models Earth's evolution over the past 400 million years, combining extensive data with a user-friendly software interface. Its integrated geological, climatic and oceanographic data offer valuable insights for locating natural resources in the subsurface, including petroleum, carbon storage, geothermal, natural hydrogen and critical mineral assets. Globe is an innovative product that collects geoscience and earth observation data, and through proprietary computational modelling and AI-led machine learning techniques, identifies favourable exploration opportunities for our customers.

Getech's subsurface expertise is crucial for numerous net zero strategies, positioning the Company to advance decarbonisation across multiple industries.

Oil and gas

In response to a renewed focus on energy security, Getech saw high customer retention rates in its oil and gas activities in 2023.

This was underpinned by the continuing development of our flagship product 'Globe'. The latest release, Globe 2023, included new content and analytical tools designed to aid in the exploration of oil and gas, including updated palaeosurface geology layers that can also assist in identifying potential carbon storage sites by better understanding the composition and quality of reservoirs. During the year, new Globe customers were added, including a new three-year subscription for an Asian oil and gas company.

In H2 2023, Getech signed a strategic collaboration agreement with US headquartered Cozairo, a specialist in carbon capture and storage (CCS) and a blue hydrogen project development company. Through this partnership agreement, the two companies will work collaboratively to identify CCS opportunities, providing a more complete market offering for CCS solutions to address the challenge of climate change.

2023 saw a 42% year on year increase in the number of subscription licenses for Getech's other software products: Data Assistant, Exploration Analyst and Unconventionals Analyst. This was largely driven by strong growth in the US onshore shale gas operations and investment banking sectors. This licence expansion was underpinned by new releases of all three software products, delivering enhanced functionality and performance across the product suite.

Our GIS Services team increased its revenues over the prior year and saw renewals of key strategic contracts - including the Company's largest single services contract with a major

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Getech Group plc | Annual Report | 2023

STRATEGIC REPORT

energy joint venture, which was renewed for multiple years and so helps ensure strong future revenue visibility.

Unfortunately, in 2023, our Gravity and Magnetic Solutions team had a challenging year. While data sales were increased compared to the prior year, the team's customer project work was adversely affected by the delay of several large contracts - due to factors outside of our control - leading to below forecast performance for our expert G&M services. In 2024 to date, we have seen stronger demand for these services and have a solid pipeline of opportunities from which to win new services revenue.

Critical minerals

Crucial to electrification required for the energy transition, the copper market has an expected supply gap of 6.5 million tonnes per year by 2031. Getech's unique data and analytics are ideal for discovering new sedimentary-hosted copper deposits in unexplored areas, which account for about 20% of total copper production today. However, this source is more widely distributed than others and can be processed with a lower carbon footprint. Additionally, 80% of cobalt, a key component of batteries that also plays a critical role in the energy transition, comes from sediment-hosted copper mines.

In H2 2023, Getech successfully completed an exploration project for Asian Battery Minerals, a participant in the 2023 BHP Xplor accelerator program, targeting potential nickel deposits in Mongolia. Also in H2 2023, Getech joined a consortium of academia and industry to speed up the understanding of copper deposits required for the discovery of critical metal needed for renewable technologies. The three-year Kupferschiefer project aims to create maps of mineral prospective areas within the Central European Basin. The project, led by the University of Western Australia's Centre for Exploration Targeting (CET), has university funding as well as industry sponsors, including the University of Warsaw, First Quantum Minerals, Teck Resources and BHP.

In the first few months of 2024, Getech has built on these successes by entering into a joint venture agreement with East Star Resources plc, a London listed copper exploration company, to pursue copper exploration in Kazakhstan. Using our proprietary data, enhanced by in-house Artificial Intelligence (AI) capabilities, we are conducting a mineral systems analysis and structural interpretation for sedimentary-hosted copper to pinpoint prospective areas in mineral rich, yet underexplored, basins in Kazakhstan. East Star will lead the application process for the tenements / licences and spearhead operational activities. In return for our services, we will have a call option to obtain shares at nil cost in the JV Company, equivalent to 5% of its issued capital, once exploration licenses are secured within the project areas. Getech's 5% share is protected against dilution until a decision to mine has been made at one or more of the mining licenses.

This transaction is the first example of our equity participation strategy and demonstrates a change from generating fee income from subsurface searches to asset participation with the potential to generate substantially more value from our unique data and expertise.

Lithium is forecast to experience a 40-fold demand increase by 2050, driven by its essential role in renewable energy storage and electric vehicles. Finding new resources of lithium is time critical as it takes five to ten years to develop and commission a mine. According to the IEA's recent critical minerals review, exploration spending for lithium increased by 90% in 2022, the highest growth rate among all energy transition minerals.

In H2 2023, Getech launched a solution to identify global sedimentary lithium deposits. Using its Globe earth model as key input data, Getech's novel solution integrates additional

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Getech Group plc | Annual Report | 2023

STRATEGIC REPORT

structural interpretation, paleoclimate modelling and advanced geospatial analysis to predict resource locations.

To assist with its continuing efforts in the sector, Globe 2023 introduced numerous features aimed specifically at mineral exploration - such as a new dynamic plate model, enhanced paleogeographies and extended palaeosurface geology coverage. These improvements are designed to deepen understanding of the ancient land surface and its composition, a crucial aspect in successful resource exploration. The enhancements to the plate model in particular shed light on how tectonic movement has influenced the location of resources in the present day. In addition, Globe 2023 contains significant enhancements to its stratigraphic lexicon. This updated data, combined with its paleogeographic and palaeosurface geology reconstructions, offers exhaustive details about the composition of sedimentary basins, which is instrumental in locating basin ores such as sedimentary copper as well as lithium.

Geothermal and corporate decarbonisation

Getech's subsurface expertise combined with advanced analytics enables the rapid and cost-effective identification of locations that are potentially prospective for geothermal energy.

In January 2023 Getech and Eavor - a global geothermal technology company - signed a strategic partnership to jointly locate and appraise a portfolio of geothermal projects in Latin America. Eavor was already a customer of Getech's data and services, and through this work Getech has generated revenue and demonstrated its geothermal expertise. This has now translated to an asset-based partnership that is broader, more strategic and more valuable for both parties.

In H2 2023, Getech completed a geothermal study for Angus Energy, demonstrating significant potential in a UK development. Angus Energy is committed to leveraging its oil & gas drilling and engineering expertise to develop geothermal energy projects. To achieve this, the company enlisted Getech's subsurface expertise to locate and assess promising areas for geothermal energy production in Southwest England. Getech identified favourable locations for geothermal energy applications and delivered an in-depth geoscientific interpretation that included structural mapping, depth estimation and heat flow analysis. The assessment, which featured 2D modelling and 3D inversions, enables Angus Energy to make informed and cost-effective decisions regarding future development phases. Leveraging market-leading geologic and geophysical data, advanced geoscientific techniques and state-of-the-art technology, Getech is uniquely positioned to locate the energy and mineral resources necessary for the energy transition.

In H1 2024, we have extended the capabilities that we can offer low carbon geoenergy projects by partnering with Expro and RED Engineering Design. Expro is a leading provider of energy services with expertise in well evaluation and integrity. Initially, the primary focus of this partnership is to identify and expedite opportunities within the emerging low carbon energy sector. The partnership with RED Engineering Design, part of the ENGIE Group, focuses on advancing the decarbonisation of energy sources through innovative geothermal solutions.

Getech also offers tailored decarbonisation solutions that help non-explorer customers replace high-emission energy sources with low-carbon alternatives, such as geothermal, green hydrogen, CCS, wind and solar energy. These solutions include global screening of manufacturing sites and logistics operations, as well as location-specific feasibility studies. With expertise in geospatial energy optimisation, Getech can determine the most efficient approach to lower the emissions of assets.

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Getech Group plc | Annual Report | 2023

STRATEGIC REPORT

In 2023, Getech completed a geothermal screening project for the manufacturing sites of a multinational FMCG company. We rapidly ranked c.130 sites worldwide based on their potential to replace current energy consumption with geothermal energy for decarbonisation purposes. The ranking was determined through the evaluation of numerous subsurface and above-ground factors. In addition to assessing the geothermal potential of each site, Getech provided a comparison against the relative potential for solar and wind energy.

We believe there are many industries that could benefit from our integrated decarbonisation solution - from consumer goods and manufacturing to logistics companies. Our proprietary data and unparalleled expertise in applying geoscience and geospatial analytics to solve specific energy challenges make Getech a perfect partner in the net zero transition.

Green hydrogen (electrolytic)

H2 Green Ltd, a Getech subsidiary, was established to develop green hydrogen transportation hub projects in the UK, in order to profit from the continued decarbonisation of transport and industrial processes.

During 2023, and following our change in CEO, we conducted a review of strategic business priorities for the Group, which concluded that a) a sufficient number of offtake partners had not materialised to progress our green hydrogen projects in the short-term, and b) support for green hydrogen from Government was not emerging quickly enough nor strongly enough to support our portfolio of projects.

As a result, we took the decision to focus on seeking operational partners to help us develop or exit the Inverness and Shoreham Port projects; while at the same time significantly reducing the H2 Green head count and cost-base; and made an accounting impairment against the goodwill recognised on the acquisition of H2 Green.

Inverness project

In March 2023, the Inverness project was chosen to receive a UK Government grant from the Net Zero Hydrogen Fund. However, our strategic review (which began after we had submitted the grant funding application) concluded that as the grant was awarded on a 'match funding' basis it would have required an unsustainable level of up-front capital from Getech and so we withdrew our application.

Since then, we have exited the Inverness project by transferring all the rights, obligations and liabilities of our MOU with The Highland Council to a confidential third-party in exchange for financial considerations that apply if and as project development milestones are achieved over the coming years - comprising two milestone related payments, totalling £615k.

Shoreham Port project

H2 Green had previously secured exclusive development rights for green hydrogen, renewable energy and importing ammonia at Shoreham Port in West Sussex to help establish a green energy hub.

We continue to maintain our project exclusivity and are working with Shoreham Port to find a development partner to advance the project. We expect the project to develop at a scale commensurate for the local demand of green hydrogen within the vicinity of the Port.

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