Consolidated Statement of Cash Flows

for the financial year ended 30 September 2025

NOTES TO THE FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2025

1.      Accounting policies

TomCo Energy Plc is a Company incorporated in the Isle of Man (IoM registration number:6969V; England & Wales registration number FC022829).  The address of the registered office is 1^st Floor, Sixty Circular Road, Douglas, Isle of Man IM1 1AE, The Company is a public limited company limited by shares, quoted on the AIM market of the London Stock Exchange. The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated.

1.1     Basis of preparation

The financial statements have been prepared in accordance with UK-adopted International Accounting Standards.

The financial statements are presented in GBP. The Company's functional currency is also GBP and has been assessed by the Directors based on consideration of the currency and economic factors that mainly influence the Company's investments, operating costs, financing and related transactions. Changes to these factors may have an impact on the judgement applied in the determination of the Company's functional currency.

Assets and liabilities in foreign currencies are translated into sterling at the rate of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of the transaction. Foreign exchange differences arising on translation are recognised in profit or loss.

The preparation of financial statements in conformity with UK-adopted International Accounting Standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 1.2.

The Group's financial statements have been prepared in accordance with UK-adopted International Financial Reporting Standards ("IFRS") and with those parts of the Isle of Man Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historic cost convention, except where IFRS requires assets and liabilities to be stated at fair value.

1.2     Critical Estimates and Judgements

The preparation of financial statements in conformity with IFRS requires the use of estimates and assumptions. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates. Details of the Group's significant accounting judgments are set out in these financial statements and include:

Judgements and estimates

-     Internally generated development assets

Following the redemption of the Group's 10% interest in Tar Sands Holdings II LLC ("TSHII") during 2024, the directors determined that a full impairment provision against its Oil Sands Technology and related assets was appropriate as at 30 September 2024. The reasons for this decision were:

a)    given the uncertainties concerning obtaining appropriate project financing for Greenfield, as highlighted in the 2024 accounts' directors' report, there is doubt as to the availability of adequate financial resources to develop and use the Group's previously capitalised assets such that the directors cannot determine reliably their value in use; and

b)    in the current conditions, there is uncertainty concerning the fair value less costs to sell of the assets concerned.

The directors consider that the factors that led to their decision to impair as at 30 September 2024 still exist, and therefore any reversal of the provision is inappropriate.

Estimates

-     Share based payments

Estimates are required in determining the fair value of share warrants granted including future share price volatility and the instrument life. Volatility is estimated using TomCo's historic share prices for a period of time that matches the exercise period of the warrant or option concerned. This assumes that historic share price volatility is the best estimate of future volatility. The Black-Scholes model is used for valuing the warrants. Estimates are also made of the likely time of exercise of the warrants.

In 2021, the Company acquired the remaining 50% of Greenfield. The wholly deferred consideration comprised the potential issue of 592.8 million new ordinary shares to Valkor, contingent on the receipt by the Group of third party funding via a loan or credit facility for the construction of an oil sands processing facility by 25 August 2024. No such loan or credit facility was secured by such date, such that the obligation to issue the consideration shares lapsed. Nevertheless, under IFRS 2 there is no reversal of the original credit to reserves of £1.063 million which represents the estimate of the fair value of the contingent issue, determined by reference to the cost of the assets acquired.

1.3     Going concern

The Group's financial statements have been prepared on a going concern basis, which presumes that the Group will be able to meet its obligations as they fall due for the foreseeable future. At 27 March 2026, the Group had cash reserves of approximately £0.4 million. The Directors have prepared a cash flow forecast for the twelve months to 31 March 2027.

As set out in the Chairman's statement, as part of the recent transaction with the Group's partner, Valkor, the Company has issued new ordinary shares to Valkor in part settlement of half of its outstanding loan to Greenfield (the "Valkor Loan"), and the terms of the remainder of the Valkor Loan, which is unsecured, were varied such that the loan is now scheduled for repayment on 23 February 2027, and, subject to meeting its normal working capital requirements, Greenfield intends to apportion one third of future Financings (as defined in the amended loan agreement) to satisfaction of the outstanding balance.

The forecast, which includes all commitments at the date of this report and reflects receipt of the gross proceeds of £0.55m from the equity fundraising announced on 23 February 2026, indicates that the Group will need to secure approximately an additional £0.6m in Q3 2026, including the amount needed to repay the remaining half of the Valkor loan, in order to meet its currently envisaged working capital requirements for the twelve months to 31 March 2027, beyond which further funding will be required. As at 30 September 2025 the Company had negative equity of £0.30 million including the Valkor loan of £0.42 million. The recent capitalisation of half of this loan and the planned repayment in Q3 2026 of the second half of the loan should resolve the issue of negative equity.

Based on the historical and recent support from new and existing investors and historical debt raisings, the Board reasonably believes that additional funding can be obtained when required, via further debt or equity issuances, and, in the meantime, it is carefully preserving the Group's existing cash reserves and taking measures to reduce costs and defer expenditure (including directors' salaries) such that it continues to consider it appropriate to prepare the financial statements on a going concern basis. However, the Board's ability to raise such additional funds cannot be guaranteed. As a consequence, there is a material uncertainty as to the going concern status of the Group. These financial statements do not include the adjustments that would result if the Group was unable to continue as a going concern.

1.4     Future changes in accounting standards

The following standards have been published and are mandatory for accounting periods beginning after 1 January 2026 but have not been early adopted by the Group:

i.      Amendments to IFRS 9 and IFRS 7 - Amendments to the classification and measurement of financial instruments; and

ii.     Annual improvements of IFRS: minor amendments concerning IFRS 1, IFRS 7, IFRS 9, IFRS 10 and IAS 7.

The following standards have been published and are mandatory for accounting periods beginning after 1 January 2027 but have not been early adopted by the Group:

iii.    IFRS 18 - Presentation and Disclosure in Financial Statements

·      Replaces IAS 1.

·      Introduces structured categories in the income statement: operating, investing, and financing.

·      Requires new subtotals: "Operating profit or loss" and "Profit or loss before financing and income tax".

·      Mandatory disclosure of Management Performance Measures (MPMs) with reconciliations.

iv.    Enhanced aggregation/disaggregation guidance for clearer financial reporting.

    ii.     IFRS 19 - Subsidiaries without Public Accountability: Disclosures

·    Provides reduced disclosure requirements for eligible subsidiaries applying full IFRS recognition and measurement principles.

Management does not expect that adoption of the standards listed above will have a material impact on the financial statements of the Group in future periods.

1.5     Basis of consolidation

The Group's financial statements consolidate the accounts of the parent company, TomCo Energy plc, and all of its subsidiary undertakings (see note 22) drawn up to 30 September 2025. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

The acquisition of subsidiaries where the acquisition represents the purchase of a business is accounted for on the purchase basis. A subsidiary is consolidated where the Company has control over an investee. The Group controls an investee if all three of the following elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control. On acquisition, all of the subsidiary's assets and liabilities which existed at the date of acquisition are recorded at their fair values reflecting their condition at the time. If, after re-assessment, the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the excess is recognised immediately in the statement of comprehensive income.

Acquisitions of subsidiaries where the IFRS 3 definition of a business combination are not met are accounted for as the purchase of the relevant assets less liabilities at cost.

1.6     Segmental reporting

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 Board of Directors.

Based on an analysis of risks and returns, the Directors consider that the Group has two principal business segments based on geographical location. The loss before taxation arises principally within the UK and US. Net assets are principally in the UK and the US.

1.7     Finance income

Finance income is accounted for on an effective interest basis.

1.8     Finance costs

Interest on debt instruments is recognised by reference to the effective interest rate computed after the deduction of issue costs.

1.9     Property, plant and equipment

Property, plant and equipment employed in exploration and evaluation activities are carried at cost. Following a review of the Group's current activities, these assets remain fully impaired as at 30 September 2025.

1.10   Intangible assets

Exploration and development licences

The Group applies the full cost method of accounting for oil and gas operations. For evaluation properties, all mineral leases, permits, acquisition costs, geological and geophysical costs and other direct costs of exploration appraisal, renewals and development are capitalised as intangible fixed assets in appropriate cost pools, with the exception of tangible assets, which are classed as property, plant and equipment. Costs relating to unevaluated properties are held outside the relevant cost pool and are not amortised until such time as the related property has been fully appraised. When a cost pool reaches an evaluated and bankable feasibility stage, the assets are transferred from intangible to oil properties within property, plant and equipment. These assets were impaired in full during the prior year.

Development assets

Greenfield has incurred expenditure on researching and developing the design and operation of a pilot plant and processes for oil sands extraction that is not of a scale economically feasible for commercial production. Development expenditure at acquisition was measured at cost. Development expenditure incurred following the acquisition of Greenfield that meets the requirements of IAS 38 for recognition as intangible assets are capitalised. All other expenditure is expensed. No amortisation will be charged on such assets until future commercial exploitation of the processes commences. These assets were impaired in full during the prior year.

1.11   Impairment

Exploration and development licences

Exploration and development assets are assessed for impairment when facts and circumstances suggest that the carrying amount may exceed the recoverable amount. In accordance with IFRS 6 the Group firstly considers the following facts and circumstances in their assessment of whether the Group's exploration and evaluation assets may be impaired, namely whether:

-     the period for which the Group has the right to explore in a specific area has expired during the period or will expire in the near future, and is not expected to be renewed;

-     substantive expenditure on further exploration for and evaluation of mineral resources in a specific area is neither budgeted nor planned;

-     exploration for and evaluation of hydrocarbons in a specific area have not led to the discovery of commercially viable quantities of hydrocarbons and the Group has decided to discontinue such activities in the specific area; and

-     sufficient data exists to indicate that although a development in a specific area is likely to proceed, the carrying amount of the exploration and evaluation assets is unlikely to be recovered in full, either from successful development or by sale.

1.12   Taxation

Taxation expense represents the sum of current tax and deferred tax.

Current tax is based on taxable profits for the financial period using tax rates that have been enacted or substantively enacted by the reporting date. Taxable profit differs from net profit as reported in the statement of comprehensive income because it excludes items of income or expenses that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.

Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. If deferred tax arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit nor loss, it is not accounted for. Deferred tax is determined using tax rates that have been enacted or substantively enacted at the reporting date and that are expected to apply when the related deferred income tax asset is realised, or the deferred tax liability is settled.

Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Deferred tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversals of the temporary differences is controlled by the Group and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax is charged or credited in the statement of comprehensive income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

1.13   Foreign currencies

The accounts have been prepared in pounds sterling being the presentational currency of the Group. The functional currency of TomCo Energy plc is also pounds sterling. The functional currency of the US subsidiaries is US dollars. Assets and liabilities held in the Group or overseas subsidiaries in currencies other than the functional currency are translated into the functional currency at the rate of exchange ruling at the reporting date.

Transactions entered into by Group entities in a currency other than the functional currency of the entity concerned are recorded at the rates ruling when the transactions occur. Exchange differences arising from the settlement of monetary items are included in the statement of comprehensive income for that period.

1.14   Leases

The Group is party as lessee only to low value or short-term leases. Rentals payable under such leases, net of lease incentives, are charged to the statement of comprehensive income on a straight-line basis over the period of the lease.

1.15   Financial assets at amortised cost

These assets are non-derivative financial assets which are held in a business model whose objective is to collect contractual cashflows and whose contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal outstanding. They arise principally through types of contractual monetary asset such as receivables. They are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment. Impairment provisions are recognised based on expected credit losses over the asset's life. 

The Group's assets held at amortised cost comprise trade and other receivables and cash and cash equivalents in the consolidated statement of financial position.

1.16   Financial Instruments

            Trade and other receivables

Trade receivables are measured at initial recognition at fair value and are subsequently measured at amortised cost using the effective interest rate method. Trade and other receivables are accounted for at original invoice amount less any provisions for doubtful debts. Provisions are made where there is evidence of a risk of non-payment, taking into account the age of the debt, historical experience and general economic conditions. If a trade debt is determined to be uncollectable, it is written off, firstly against any provisions already held and then to the statement of comprehensive income. Subsequent recoveries of amounts previously provided for are credited to the statement of comprehensive income.

Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss in accordance with the expected credit loss model under IFRS 9. For trade and other receivables which do not contain a significant financing component, the Company applies the simplified approach. This approach requires the allowance for expected credit losses to be recognised at an amount equal to lifetime expected credit losses. For other debt financial assets the Company applies the general approach to providing for expected credit losses as prescribed by IFRS 9, which permits for the recognition of an allowance for the estimated expected loss resulting from default in the subsequent 12-month period. Exposure to credit loss is monitored on a continual basis and, where material, the allowance for expected credit losses is adjusted to reflect the risk of default during the lifetime of the financial asset should a significant change in credit risk be identified.

The majority of the Company's financial assets are expected to have a low risk of default. A review of the historical occurrence of credit losses indicates that credit losses are insignificant due to the size of the Company's clients and the nature of its activities. The outlook for the natural resources industry is not expected to result in a significant change in the Company's exposure to credit losses. As lifetime expected credit losses are not expected to be significant, the Company has opted not to adopt the practical expedient available under IFRS 9 to utilise a provision matrix for the recognition of lifetime expected credit losses on trade receivables. Allowances are calculated on a case-by-case basis based on the credit risk applicable to individual counterparties.

Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:              

·      In the principal market for the asset or liability; or

·      In the absence of a principal market, in the most advantageous market for the asset or liability principal or the most advantageous market accessible by the Group.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

·      Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities

·   Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

·   Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy, as explained above.

1.17   Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at the bank and other short-term liquid investments with original maturities of three months or less.

1.18   Financial liabilities at amortised cost

Financial liabilities at amortised cost include debt instruments and the host contract element of hybrid liabilities containing embedded derivatives. These liabilities are measured initially at transaction price, less issue costs and the separation of the fair value of embedded derivatives. They are subsequently measured at amortised cost using the effective interest method.

1.19   Trade payables

Trade payables are recognised at amortised cost. All of the trade payables are non-interest bearing.

1.20   Share capital

Ordinary shares are classified as equity. Shares issued in the period are recognised at the fair value of the consideration received.

1.21   Warrants

Warrants issued as part of financing transactions in which the holder receives a fixed number of shares on exercise of the warrant are fair valued at the date of grant and recorded within the warrant reserve. Fair value is measured by the use of the Black-Scholes model.

On expiry or exercise, the fair value of warrants is credited to reserves as a change in equity.

1.22   Share-based payments

Equity-settled share-based payments to directors are measured at the fair value of the equity instruments at the grant date. Details regarding the determination of the fair value of equity-settled share-based transactions is set out in Note 18.

The fair value determined at the grant date is expensed on a straight-line basis over the vesting period or periods, based on the Group's estimate of equity instruments that will eventually vest. At each balance sheet date, the Group revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expenses reflects the revised estimate, with a corresponding adjustment to equity reserves.

In respect of equity-settled arrangements within the scope of IFRS 2 representing contingent consideration for the acquisition of assets, the value of the equity instruments is presumed to be equivalent to the fair value of the assets acquired. In the case of assets acquired on the acquisition of Greenfield, cost is deemed to be the best estimate of fair value.

2.       Segmental reporting - Analysis by geographical segment

The loss before taxation arises within principally the UK and US. Net assets are principally in the UK and US. Based on an analysis of risks and returns, the Directors consider that the Group has two principal business segments based on geography, with the UK primarily representing head office costs of the Group. 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 Board of Directors. The Directors therefore consider that no further segmentation is appropriate.