Registered number: 607450

Carbon Revolution Public Limited Company

Carbon Revolution Public Limited Company

The directors present their annual report and the audited consolidated financial statements Carbon Revolution plc and its subsidiaries (hereinafter referred to as “Carbon Revolution” or the “Group”) for the financial year ended 30 June 2024, which are set out on pages 12 to 68, and audited entity financial statements of Carbon Revolution plc (“Carbon Revolution plc” or the “Company”) for the financial year ended June 30, 2024, which are set out on pages 70 to 76.

The principal activities of the company are the manufacture and sale of carbon fiber wheels, as well as research and development projects relating to carbon fiber wheel technology.

On November 3, 2023 (the “Closing Date”), Twin Ridge Capital Acquisition Corp., a Cayman Islands exempted company (“Twin Ridge”), Carbon Revolution PLC (formerly known as Poppetell Limited), a public limited company incorporated in Ireland with registered number 607450, Carbon Revolution Limited, an Australian proprietary limited company with Australian Company Number (ACN) 128 274 653 (formerly a public company listed on the Australian Securities Exchange and now named Carbon Revolution Pty Ltd) (“Carbon Revolution Limited”) and Poppettell Merger Sub, a Cayman Islands exempted company and wholly-owned subsidiary of Carbon Revolution PLC (“MergerSub”), consummated the capital reorganization (the “Transaction”) pursuant to the terms of a Business Combination Agreement, dated November 29, 2022, as amended or supplemented from time to time, pursuant to which, among other things, Twin Ridge merged with and into MergerSub, with MergerSub surviving as a wholly-owned subsidiary of Carbon Revolution PLC, with shareholders of Twin Ridge receiving Ordinary Shares of Carbon Revolution PLC, par value US $0.0001 (“Ordinary Shares”), in exchange for their existing Twin Ridge ordinary shares and existing Twin Ridge warrant holders having their warrants automatically exchanged by Carbon Revolution PLC of the obligations under such warrants, including to become exercisable in respect of Ordinary Shares instead of Twin Ridge ordinary shares (the “Capital Reorganization”). In addition, Twin Ridge, Carbon Revolution Limited and Carbon Revolution PLC implemented a scheme of arrangement under Part 5.1 of the Australian Corporations Act 2001 (Cth) and a capital reduction under Part 2J.1 of the Corporations Act 2001 (Cth) in accordance with the Scheme Implementation Deed, dated as of November 30, 2022, as amended or supplemented from time to time (the “Scheme Implementation Deed”, which resulted in all shares of Carbon Revolution Limited being canceled in return for consideration, with Carbon Revolution Limited issuing one share to Carbon Revolution PLC (resulting in Carbon Revolution Limited becoming a wholly-owned subsidiary of Carbon Revolution PLC) and Carbon Revolution PLC issuing Ordinary Shares to the shareholders of Carbon Revolution Limited. In addition, Carbon Revolution PLC undertook a capital reduction under Irish law immediately after the issuance of ordinary shares to consummate the Transaction and issuance of preference shares to Orion Infrastructure Capital (“OIC”). The capital reduction was undertaken for no consideration to shareholders. Refer to Note 6.7 of the financial statements for the details of the Transaction and Note 4.4 of the financial statements for the changes in issued capital that occurred during the period.

Revenue for the Group for the year ended June 30, 2024 of A$71.5 million increased by 86.8% compared to the year ended June 30, 2023. Revenue from sale of wheels increased by 80.3% compared to the prior period, with a ramp to full production of the Range Rover Sport SV program combined with increased volumes shipped for the Corvette Z06 / E-Ray program.

Gross loss of the Group increased from A$16.8 million to A$110.8 million for the year ended June 30, 2024. This increase was primarily driven by an impairment of A$83.7 million of fixed and right of use assets and an increase in manufacturing overheads, largely related to increased scale, an extended shift structure and production ramp. In addition, increased scrap costs were incurred, associated with commissioning, introduction and ramp up of new programs while commissioning the Mega-line. Although still negative, as a percentage to revenue, gross loss (excluding impairment) has improved from -44.0% in 2023 to -37.9% in 2024. This improvement comes with the benefit of the positive contribution from volume growth, combined with labor productivity and improved wheel quality, somewhat offset by increased manufacturing overheads included in cost of goods sold. Raw material costs were impacted by the ongoing inflationary environment.

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The financial statements for the Group include total impairment of assets of A$102.6 million arising from impairment testing, which included revised growth expectations for the Company considering the uncertainties and risk driven by the political and economic environment in the US market, that could have a significant impact on wheel sales and also taking into account the low market value of the Company and its continued loss making position. This A$102.6 million impairment included impairment of property, plant and equipment (A$76.6 million) and right of use assets (A$7.1 million) which have both been recognized in the profit and loss statement in the impairment of assets line. Additionally, an impairment of intangible assets (A$18.9 million) has been recognized in the profit and loss statement in the research and development expense line.

The directors consider that the following are the principal risk factors that could materially and adversely affect the Company and Group’s future operating profits or financial position:

The results of the Group for the year are set out in the Consolidated Statements of Profit or Loss and Other Comprehensive Income on page 20 and in the related notes.

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There were no dividends during the 2024 or 2023 financial years.

The Group was involved in research and development activities and during the year incurred $5.8 million in development costs that were capitalised and a further $17.0 million of research costs that were expensed. Capitalised developments costs were fully impaired during the financial year.

The directors, who held office at any time during the year, were as follows:

Robert A. Lutz, Chair of the board (appointed November 3, 2023)

Jacqueline Dedo (appointed November 3, 2023)

Burt Jordan (appointed November 3, 2023)

Chris Leary (appointed February 23, 2024)

Jonathan Magaziner (appointed February 23, 2024)

Matti Masanovich (appointed November 3, 2023)

Dale McKee (appointed November 3, 2023)

Donald Hampton, Jr. (appointed March 19, 2025)

Jake Dingle (resigned March 19, 2025)

James Campbell Douglas (appointed November 3, 2023, resigned February 21, 2024)

Lucia Estana Cade (appointed November 3, 2023, resigned February 21, 2024)

Mark William Bernhard (appointed November 3, 2023, resigned February 21, 2024)

Rolando Ebuna (resigned November 3, 2023)

Ronan Donohoe (resigned November 3, 2023)

The directors and secretary who held office at 30 June, 2024 had 30,952 ordinary shares of the company or other group companies (2023: Nil).

The company did not make any political donations (2023: $Nil) disclosable in accordance with the Electoral Act, 1997.

During the year the company made a charitable donation of $nil (2023: $nil).

The going concern basis of preparation assumes that the Group will continue in operation one year after the date these consolidated financial statements are issued and will be able to realize assets and discharge liabilities and commitments in the normal course of business. The consolidated financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported revenue and expenses that may be necessary if these financial statements were prepared on an alternative basis, which would be required in the event that the Group is unable to continue as a going concern.

The Group has incurred losses since inception, incurred a consolidated net loss of $221.1 million, $118.5 million before impairment (2023: $79.2 million) and used $76.8 million (2023: $52.5 million) of cash in operating activities during the year ended June 30, 2024 and has a consolidated net current liability position at June 30, 2024 of $9.6 million (2023: consolidated net current asset position: $25.9 million).

The Group expects to continue to incur net losses and negative cash flows from operating activities in accordance with its operating plan over the next twelve months from signing date. However, the Group expects that unit

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production costs will continue to reduce as new wheel programs are introduced and other planned efficiency measures are implemented, and the Group expects capital costs related to the capacity build of the Australian plant will reduce in the next twelve months from signing date as the current phase of capacity expansion at the Australian plant has been substantially completed.

As an early-stage growth company, the Group's ability to access additional capital is critical to fund operating losses, finalise the development and launch of awarded wheel programs and complete the current phase of expansion of manufacturing facilities to scale up production capacity. As the Group’s current level of cash and cash equivalents and other committed funding sources are not sufficient to execute our business plan, failure to achieve management’s forecast performance or obtain additional financing will have a material, adverse impact on our business operations including developing, launching and producing new wheel programs and satisfying obligations as they become due.

The Group’s principal sources of liquidity at signing date are:

As a result of our recurring losses from operations, accumulated deficit and projected capital needs, significant doubt exists regarding the Group’s ability to continue as a going concern for at least one year after the issuance date of these consolidated financial statements.

The Group’s ability to continue as a going concern is contingent upon successful execution of the Group’s intended plan over the next twelve months from signing date to improve liquidity and working capital. This plan relates to initiatives that were agreed upon for the next twelve months from signing date and includes, but is not limited to:

In addition to successfully achieving these initiatives, it is also critical that the Group complies with the New Debt PIUS loan covenants and OIC financing milestones and continues to receive support from suppliers and customers through favourable payment terms and extension of customer bailment arrangements.

Under current arrangements, the Group is due to commence making repayments of principal in relation to its loan facilities in June 2026. The Group is currently forecasting that it will not be generating sufficient cash to make these repayments and as such the repayment terms will require renegotiation of its debt financing arrangements or a new facility put in place with extended repayment terms.

There is significant doubt that the Group will be successful in achieving these initiatives. As a result, the circumstances noted above indicate the existence of a material uncertainty that may cast significant doubt on the entity’s ability to continue as a going concern and that the company may, as a consequence, be unable to realise its assets and discharge its liabilities in the normal course of business.

Furthermore, recent macroeconomic market conditions, particularly impacting automotive manufacturers in the USA and their suppliers, and the implementation of tariffs on goods imported into the USA may negatively impact the demand for the Group’s products, or its commercial arrangements with its customers which may have a detrimental effect on the Group’s operations and financial position.

There can be no assurance that the Group will be able to obtain the financing needed to achieve its goals on acceptable terms or at all. Additionally, any equity or equity linked financings would likely have a dilutive effect on the holdings of existing stockholders.

On July 10, 2024, US$5 million (AUD$7.4 million) was released from escrow and the Group issued an aggregate principal amount of additional Series 2024-A Notes to OIC, in connection with the satisfaction of the applicable conditions for the fourth Escrow Release. The Company also issued to the OIC Investors a warrant to purchase a number of shares equal to 2.5% of the Group’s shares outstanding, determined on a “Fully-Diluted Basis” in the same manner as applicable to the existing warrants previously issued to the OIC.

On July 29, 2024, US$5 million (AUD$7.6 million) was released from escrow and the Group issued an aggregate principal amount of additional Series 2024-A Notes to OIC in such amount. OIC waived certain conditions for the fifth Escrow Release to enable the release of funds prior to August 1, 2024 and without measurement of the Group’s performance with respect to the applicable monthly milestones for such release as of July 31, 2024. The Group also issued to the OIC a warrant to purchase a number of shares equal to 2.5% of the Group’s shares outstanding, determined on a “Fully-Diluted Basis” in the same manner as applicable to the existing warrants previously issued to the OIC.

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Directors’ report(continued)

On September 5, 2024, US$5 million (AUD$7.4 million) was released from escrow and the Group issued an aggregate principal amount of additional Series 2024-A Notes to OIC in such amount. The Group also issued to OIC a warrant to purchase a number of shares equal to 2.5% of the Company’s shares outstanding, determined on a “Fully-Diluted Basis” in the same manner as applicable to the existing warrants previously issued to the OIC.

On October 30, 2024, US$5 million (AUD$7.6 million) was released from escrow and the Group issued a corresponding aggregate principal amount of additional Series 2024-A Notes to OIC. OIC waived one of the conditions for the release of the Seventh Escrow Release. The Group also issued to OIC a warrant to purchase a number of shares equal to 2.5% of the Group’s shares outstanding, determined on a “Fully-Diluted Basis” in the same manner as applicable to the existing warrants previously issued to the OIC. Proceeds from the OIC investment will be used to fund operations and investments in capacity in the near term.

Under an agreement the Group had previously reached relating to transaction cost deferrals from the capital reorganization (as per Note 3.6.1) with the relevant creditors, US$5 million (A$7.6 million) was payable on November 3, 2024, with the remainder to be paid from the proceeds of certain fundraising transactions or on a straight line basis over 5 years (depending on the option selected by the supplier). The US$5 million (A$7.6 million) payment was not made in November 2024 and a further US$10.0 million (A$15.0 million) is now payable or payable in twelve months from signing date, unless the relevant suppliers agree to or accept further deferral of the transaction costs for at least twelve months from signing date and until sufficient cashflow can be generated from operations or alternative sources of funding are obtained to pay down these debts.

On December 20, 2024, the Group and the OIC entered into Amendment No. 4 to the Securities Purchase Agreement, providing for the funding of US$25 million (AUD$40.1 million) in five tranches, each equal to US$5 million (AUD$8.0 million), subject to satisfying certain conditions in exchange for preferred shares issued by the Group or debt instruments issued by Carbon Revolution Operations. Pursuant to other documents entered into simultaneously therewith, the OIC will purchase notes of a new series, Series 2025-A Notes. In connection with the funding of each of the five tranches of US$5 million (AUD$8.0 million), the Group will issue to the OIC, pro rata in proportion to the amount of their investment relative to the total amount invested by the OIC in each tranche, penny warrants to purchase an aggregate number of shares equal to 5.0% of the Company’s shares outstanding, determined on a “Fully-Diluted Basis” in the same manner as applicable to the existing warrants previously issued to the OIC.

On December 20, 2024, upon the satisfaction of the first of the release conditions, US$5 million (AUD$8.0 million) was funded in exchange for the issuance to the OIC of US$5 million (AUD$8.0 million) aggregate principal amount of Series 2025-A Notes and the release from the payment reserve fund of US$400,000 (AUD$642,024) in exchange for interest thereon payable at a rate of 12% per annum, of which 8.5% is payable in cash and 3.5% is payable in-kind for the benefit of the Existing Lenders. Additionally, the OIC Investors (4.63%) and the Existing Lenders (0.37%) were issued penny warrants to purchase an aggregate number of shares equal to 5.0% of the Company’s shares outstanding, determined on a “Fully-Diluted Basis” in the same manner as applicable to the existing warrants previously issued to the OIC, and otherwise containing the same terms as the warrants issued to the OIC in prior reserve releases.

On January 21, 2025, upon the satisfaction of the conditions to the release of a second instalment of the aggregate of US$25 million (AUD$40.1 million) for which the conditions were agreed upon in December, US$5 million (AUD$8.0 million) was funded in exchange for interest payable thereon at the rate described above and the issuance to the OIC Investors of US$5 million (AUD$8.0 million) aggregate principal amount of Series 2025-A Notes, and the simultaneous release from the payment reserve fund of US$400,000 (AUD$642,710) as an additional term advance in exchange for interest payable thereon at the rate described above. Additionally, as required in respect of

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Directors’ report(continued)

each US$5.4 million (AUD$8.6 million) tranche of funding to be released under the above amendments agreed on December 20, 2024 (incorporating US$5 million (AUD$8.0 million) released by the OIC Investors and US$400,000 (AUD$642,024) released from the payment reserve fund under the New Debt Program), the OIC Investors (4.63%) and the Existing Lenders (0.37%) were issued penny warrants to purchase an aggregate number of shares equal to 5.0% of the Group’s shares outstanding, determined on a “Fully-Diluted Basis” in the same manner as applicable to the existing warrants previously issued to the OIC Investors, and otherwise containing substantially the same terms as the warrants issued to the OIC Investors in prior reserve releases.

On March 7, 2025, upon the satisfaction of the conditions to the release of a third instalment of the aggregate of US$25 million (AUD$40.1 million) for which the conditions were agreed upon in December, US$5 million (AUD$7.9 million) was funded in exchange for interest payable thereon at the rate described above and the issuance to the OIC Investors of US$5 million (AUD$7.9 million) aggregate principal amount of Series 2025-A Notes, and the simultaneous release from the payment reserve fund of US$400,000 (AUD$632,091) as an additional term advance in exchange for interest payable thereon at the rate described above. Additionally, as required in respect of each US$5.4 million (AUD $8.6 million) tranche of funding to be released under the above amendments agreed on December 20, 2024 (incorporating US$5 million (AUD$8.0 million) released by the OIC Investors and US$400,000 (AUD$642,024) released from the payment reserve fund under the New Debt Program), the OIC Investors (4.63%) and the Existing Lenders (0.37%) were issued penny warrants to purchase an aggregate number of shares equal to 5.0% of the Group’s shares outstanding, determined on a “Fully-Diluted Basis” in the same manner as applicable to the existing warrants previously issued to the OIC Investors, and otherwise containing substantially the same terms as the warrants issued to the OIC Investors in prior reserve releases.

On May 09, 2025, upon the satisfaction of the conditions to the release of a forth instalment of the aggregate of US$25 million (AUD$40.1 million) for which the conditions were agreed upon in December, US$5 million (AUD$8.0 million) was funded in exchange for interest payable thereon at the rate described above and the issuance to the OIC Investors of US$5 million (AUD$7.8 million) aggregate principal amount of Series 2025-A Notes, and the simultaneous release from the payment reserve fund of US$400,000 (AUD$625,356) as an additional term advance in exchange for interest payable thereon at the rate described above. Additionally, as required in respect of each US$5.4 million (AUD$5.4 million) tranche of funding to be released under the above amendments agreed on December 20, 2024 (incorporating US$5 million (AUD$7.8 million) released by the OIC Investors and US$400,000 (AUD$642,024) released from the payment reserve fund under the New Debt Program), the OIC Investors (4.63%) and the Existing Lenders (0.37%) were issued penny warrants to purchase an aggregate number of shares equal to 5.0% of the Group’s shares outstanding, determined on a “Fully-Diluted Basis” in the same manner as applicable to the existing warrants previously issued to the OIC Investors, and otherwise containing substantially the same terms as the warrants issued to the OIC Investors in prior reserve releases.

Since June 30, 2024, there have been a number of other amendments to the New Debt Program and OIC Financing, including changes to financial covenants under the New Debt Program and funding milestones under the OIC Financing, and there have been a number of waivers by the counterparties to the New Debt Program for various events of default, including relating to breaches of loan covenants and a milestone (or milestones) have been waived under the OIC Financing.

On May 30, 2025, the Company received a notification letter (the “Letter”) from the Listing Qualifications Department of the Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, based upon the Company's annual report on Form 20-F for the fiscal year ended June 30, 2024 which was filed with the Securities and Exchange Commission on May 14, 2025, the Company is not in compliance with the minimum stockholder’s equity requirement for continued listing set forth in Nasdaq Listing Rule 5450(b)(1)(A), which requires companies listed on the Nasdaq Global Select Market to maintain a minimum of $10,000,000 in stockholders’ equity for continued listing,

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or to meet the continued listing requirements under the alternative listing standards. The Letter has no immediate effect on the listing or trading of the Company’s ordinary shares or warrants on Nasdaq. The Letter stated that, under Nasdaq rules, the Company has 45 calendar days to submit a plan to regain compliance with the above rule or with the continued listing requirements under the alternative standards, and that if a plan is submitted and accepted, Nasdaq could grant the Company an exception of up to 180 calendar days from May 30, 2025, or until November 26, 2025, to regain compliance. If Nasdaq does not accept the Company’s plan, then the Company will have the opportunity to appeal that decision to a Nasdaq hearings panel.

The directors do not anticipate that the activities of the Company and its subsidiaries will materially change in the foreseeable future.

As required by section 167(3) of the Companies Act 2014, the directors confirm that the Company has established an audit committee.

The measures taken by the directors to ensure compliance with the requirements of section 281 to 285 of the Companies Act 2014 with regard to keeping of accounting records, are the employment of appropriately qualified accounting personnel and the maintenance of computerised accounting systems. The company accounting records are maintained at the company registered office at:

10 Earlsfort Terrace, Dublin 2, D02 T380, Ireland

Information regarding subsidiaries is provided in Note 6.1 to the Consolidated Financial Statements and the business conducted by these subsidiaries is described above. See “Directors’ Report—principal activities.”

We, the directors of the company who held office at the date of approval of these Financial Statements are responsible for securing the company's compliance with its relevant obligations; and we confirm that the following matters have been done under section 225(2) in fulfilling its responsibilities:

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware

The auditors, KPMG, was appointed during the period and have indicated their willingness to continue in office in accordance with section 383(2) of the Companies Act 2014.

Statement of directors’ responsibilities in respect of the director’s report and the financial statements

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare Group and Company financial statements for each financial year. prepare the Group financial statements in accordance with IFRS as adopted by the EU. The directors have elected to prepare the Company financial statements in accordance with FRS 101 Reduced Disclosure Framework and applicable law

Under company law the directors must not approve the Group and Company financial statements unless they are satisfied that they give a true and fair view of the assets, liabilities and financial position of the Group and Company and of the Group’s profit or loss for that year.

In preparing the Group and Company financial statements, the directors are required to:

The directors are responsible for keeping adequate accounting records which disclose with reasonable accuracy at any time the assets, liabilities, financial position of the Group and Company and the profit and loss of the Group and which enable them to ensure that the financial statements are prepared in accordance with the applicable accounting framework and comply with the provision of the Companies Act 2014. The directors are also responsible for taking all reasonable steps to ensure such records are kept by its subsidiaries which enable them to ensure that the financial statements of the Group comply with the provisions of the Companies Act 2014. They are responsible for such internal controls as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have a general responsibility for safeguarding the assets of the Company and the Group, and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The directors are also responsible for preparing a directors’ report that complies with the requirements of the Companies Act 2014.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Group’s and Company’s website https://investors.carbonrev.com/. Legislation in the Republic of Ireland concerning the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

We have audited the financial statements of Carbon Revolution Public Limited Company (‘the Company’) and its consolidated undertakings (‘the Group’) for the year ended 30 June 2024, which comprise the Consolidated Statement of Profit or Loss and Other Comprehensive Income, Consolidated and Company Statements of Financial Position, Consolidated and Company Statements of Changes in Equity, Consolidated Statement of Cash Flows and related notes, including the material accounting policies set out in note 1.

The financial reporting framework that has been applied in the preparation of the Group financial statements is Irish Law and International Financial Reporting Standards (IFRS) as adopted by the European Union and, as regards the Company financial statements, Irish Law and FRS 101 Reduced Disclosure Framework issued in the United Kingdom by the Financial Reporting Council.

In our opinion:

We conducted our audit in accordance with International Standards on Auditing (Ireland) (ISAs (Ireland)) 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 have fulfilled our ethical responsibilities under, and we remained independent of the Group in accordance with ethical requirements that are relevant to our audit of financial statements in Ireland, including the Ethical Standard issued by the Irish Auditing and Accounting Supervisory Authority (IAASA), as applied to listed entities.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

We note that the prior period financial statements were not audited. Consequently, ISAs (Ireland) require the auditor to state that the corresponding figures contained within these financial statements are unaudited. Our opinion is not modified in respect of this matter.

We draw attention to Note 1.3 in the financial statements, which indicates that the Group incurred a net loss during the year and is in a net liability position as at the year end and that the Group expects to incur net losses and negative cash flows from operating activities in accordance with its operating plan over the next twelve months from signing date. As stated in Note 1.3, these events or conditions, indicate that a material uncertainty exists that may cast significant doubt on the Group and the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Significant judgement is involved in the director’s conclusion that risks and circumstances described in note 1.3 to the financial statements represent a material uncertainty over the ability of the Group and Company to continue as a going concern for a period of at least one year from the date of approval of the financial statements.

Clear and full disclosure of the facts and the directors’ rationale for the use of the going concern basis of preparation, including that there is a related material uncertainty, is a key financial statement disclosure and so was the focus of our audit in this area.

Auditing standards require that to be reported as a key audit matter. In auditing the financial statements, we have concluded that the director’s use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Our evaluation of the director’s assessment of the Group and Company’s ability to continue to adopt the going concern basis of accounting included:

Based on the audit evidence obtained, we found management’s conclusion that the financial statements should be prepared on a going concern basis, including a description of a material uncertainty, to be reasonable. We found the disclosure of the material uncertainty to be appropriate in the circumstances.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

We identified the areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements and risks of material misstatement due to fraud, using our understanding of the entity's industry, regulatory environment and other external factors and inquiry with the directors. In addition, our risk assessment procedures included:

We discussed identified laws and regulations, fraud risk factors and the need to remain alert among the audit team.

Firstly, the Group and Company are subject to laws and regulations that directly affect the financial statements including companies and financial reporting legislation We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items, including assessing the financial statement disclosures and agreeing them to supporting documentation when necessary.

Secondly, the Group and Company are subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation We identified the following areas as those most likely to have such an effect: health and safety, anti-bribery, employment law, environmental law, regulatory capital and liquidity and NASDAQ reporting requirements.

Auditing standards limit the required audit procedures to identify non-compliance with these non-direct laws and regulations to inquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. These limited procedures did not identify actual or suspected non-compliance.

We assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. As required by auditing standards, we performed procedures to address the risk of management override of controls and the risk of fraudulent revenue recognition. We identified a fraud risk in relation to the Group revenue in respect of performance obligations satisfied over time and also for performance obligations satisfied at a point in time.

In response to the fraud risks, we also performed procedures including:

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it.

In addition, as with any audit, there remains a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

In addition to the matter described in the material uncertainty related to going concern section, in arriving at our audit opinion above, the additional key audit matter for the Group is outlined below:

Impairment of the Group’s Cash Generating Unit ($103m)

Refer to Note 3.5.1 and 3.5.2 (accounting policy and financial disclosures)

Impairment over the Company’s investment in subsidiaries - $53m

Refer to Note 3.1.1 (accounting policy) and Note 3 (financial disclosures)

Materiality for the Group financial statements and Company financial statements as a whole was set at $2m and $0.02m respectively, determined with reference to benchmarks of loss before tax and total assets respectively (of which it represents 2.3% and 0.75% respectively.

We consider loss before tax to be the item of most interest to the users of the Group’s financial statement in assessing its financial performance for the year.

Performance materiality for the Group financial statements and Company financial statements as a whole was set at $1.3m and €0.01m respectively, determined with reference to benchmarks of of materiality (of which it represents 65%).

In applying our judgement in determining performance materiality, we considered a number of factors including it being an initial audit engagement.

We applied materiality to assist us determine what risks were significant risks and the procedures to be performed. We applied materiality to assist us planning and performing the audit, determining what risks were significant risks and the procedures to be, in evaluating the effect of identified misstatements on the audit and in forming our audit opinion.

We reported to the Audit Committee any corrected or uncorrected identified misstatements exceeding $0.1m and $0.001m for the Group and Company respectively, in addition to other identified misstatements that warranted reporting on qualitative grounds.

Our audit was undertaken to the materiality level specified above and was all performed by a single engagement team overseen by KPMG Dublin. In total, we identified 4 components, having considered the Group’s legal and operational structure and two components were subject to audit procedures.

The directors are responsible for the other information presented in the Annual Report together with the financial statements. The other information comprises the information included in the directors’ report. The financial statements and our auditor’s report thereon do not comprise part of the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated below, any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work we have not identified material misstatements in the other information.

Based solely on our work on the other information undertaken during the course of the audit, we report that:

We have obtained all the information and explanations which we consider necessary for the purposes of our audit.

In our opinion the accounting records of the Company were sufficient to permit the financial statements to be readily and properly audited and the financial statements are in agreement with the accounting records.

The Companies Act 2014 requires us to report to you if, in our opinion, the disclosures of directors’ remuneration and transactions required by Sections 305 to 312 of the Act are not made. We have nothing to report in this regard.

As explained more fully in the directors’ responsibilities statement set out on page 12 the directors are responsible for: the preparation of the financial statements including being satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; assessing the Group and Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless they either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (Ireland) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A fuller description of our responsibilities is provided on IAASA’s website at https://iaasa.ie/publications/description-of-the-auditors-responsibilities-for-the-audit-of-the-financial-statements/.

Our report is made solely to the Company’s members, as a body, in accordance with Section 391 of the Companies Act 2014. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members, as a body, for our audit work, for this report, or for the opinions we have formed.

6 June 2025

 

Michael Gibbons

for and on behalf of

KPMG

Chartered Accountants, Statutory Audit Firm

1 Stokes Place

St. Stephen's Green

Dublin 2

D02 DE03

This note sets out the accounting policies adopted by Carbon Revolution Public Limited Company (“Carbon Revolution PLC” or “the Company”) and its consolidated entities, collectively known as “Carbon Revolution”, the “consolidated entity” or the “Group” in the preparation and presentation of the financial statements. Where an accounting policy is specific to one note, the policy is described within the note to which it relates.

The financial statements were authorized for issue by the directors as of June 6, 2025.

Carbon Revolution PLC is a public company limited by shares and is incorporated and domiciled in Ireland. The register number of the company is 607450. Its principal activity is the holding company for the Carbon Revolution group of companies which undertake the manufacture and sale of carbon fiber wheels, as well as research and development projects relating to carbon fiber wheel technology.

The address of Carbon Revolution PLC’s registered office is 10 Earlsfort Terrace, Dublin 2, D02 T380, Ireland. Carbon Revolution PLC’s principal place of business is Building Nr, 75 Pigdons Road, Waurn Ponds VIC 3216, Australia.

On November 3, 2023 (the “Closing Date”), Twin Ridge Capital Acquisition Corp., a Cayman Islands exempted company (“Twin Ridge”), Carbon Revolution PLC (formerly known as Poppetell Limited), a public limited company incorporated in Ireland with registered number 607450, Carbon Revolution Limited, an Australian proprietary limited company with Australian Company Number (ACN) 128 274 653 (formerly a public company listed on the Australian Securities Exchange and now named Carbon Revolution Pty Ltd) (“Carbon Revolution Limited”) and Poppettell Merger Sub, a Cayman Islands exempted company and wholly-owned subsidiary of Carbon Revolution PLC (“MergerSub”), consummated the capital reorganization (the “Transaction”) pursuant to the terms of a Business Combination Agreement, dated November 29, 2022, as amended or supplemented from time to time, pursuant to which, among other things, Twin Ridge merged with and into MergerSub, with MergerSub surviving as a wholly-owned subsidiary of Carbon Revolution PLC, with shareholders of Twin Ridge receiving Ordinary Shares of Carbon Revolution PLC, par value US $0.0001 (“Ordinary Shares”), in exchange for their existing Twin Ridge ordinary shares and existing Twin Ridge warrant holders having their warrants automatically exchanged by Carbon Revolution PLC of the obligations under such warrants, including to become exercisable in respect of Ordinary Shares instead of Twin Ridge ordinary shares (the “Capital Reorganization”). In addition, Twin Ridge, Carbon Revolution Limited and Carbon Revolution PLC implemented a scheme of arrangement under Part 5.1 of the Australian Corporations Act 2001 (Cth) and a capital reduction under Part 2J.1 of the Corporations Act 2001 (Cth) in accordance with the Scheme Implementation Deed, dated as of November 30, 2022, as amended or supplemented from time to time (the “Scheme Implementation Deed”, which resulted in all shares of Carbon Revolution Limited being canceled in return for consideration, with Carbon Revolution Limited issuing one share to Carbon Revolution PLC (resulting in Carbon Revolution Limited becoming a wholly-owned subsidiary of Carbon Revolution PLC) and Carbon Revolution PLC issuing Ordinary Shares to the shareholders of Carbon Revolution Limited. In addition, Carbon Revolution PLC undertook a capital reduction under Irish law immediately after the issuance of ordinary shares to consummate the Transaction and issuance of preference shares to Orion Infrastructure Capital (“OIC”). The capital reduction was undertaken for no consideration to shareholders. Refer to Note 6.7 for the details of the Transaction and Note 4.4 for the changes in issued capital that occurred during the period.

For financial reporting purposes, on completion of the Capital Reorganization, the historical consolidated financial statements of Carbon Revolution Limited became the historical consolidated financial statements of Carbon Revolution PLC and its subsidiaries as a continuation of the predecessor. The capital structure presented for the year ended June 30, 2024 is that of Carbon Revolution PLC. During the year ended June 30, 2024, Carbon Revolution Limited was delisted from the Australian Securities Exchange on November 6, 2023 and subsequently converted to a proprietary limited company under Australian corporate law and as of June 30, 2024 is known as Carbon Revolution Pty Ltd. Refer to Note 6.7 for the details of the Transaction and Note 4.4 for the changes in issued capital that occurred during the period.

Notes to the Financial Statements

For the years ended June 30, 2024 and 2023

These consolidated financial statements have been prepared in accordance with IFRSs as adopted by the European Union which comprise standards and interpretations approved by the International Accounting Standards Board (IASB). The consolidated financial statements have been prepared under the historical cost convention except for certain warrants which are measured at fair value through the Profit and loss. The consolidated financial statements are presented in Australian dollars which is also the functional currency of its Australian subsidiaries including Carbon Revolution Pty Ltd (formerly Carbon Revolution Limited) which was the parent of the Carbon Revolution consolidated group in 2023. References to Carbon Revolution Limited and Carbon Revolution Pty Limited in the financial statements are to the former Australian incorporated parent of the consolidated Carbon Revolution group. The functional currency of Carbon Revolution PLC is the United States dollar. All amounts have been rounded to the nearest thousand, unless otherwise stated.

The going concern basis of preparation assumes that the Group will continue in operation one year after the date these consolidated financial statements are issued and will be able to realize assets and discharge liabilities and commitments in the normal course of business. The consolidated financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported revenue and expenses that may be necessary if these financial statements were prepared on an alternative basis, which would be required in the event that the Group is unable to continue as a going concern.

The Group has incurred losses since inception, incurred a consolidated net loss of $221.1 million, $118.5 million before impairment (2023: $79.2 million) and used $76.8 million (2023: $52.5 million) of cash in operating activities during the year ended June 30, 2024 and has a consolidated net current liability position at June 30, 2024 of $9.6 million (2023: consolidated net current asset position: $25.9 million).

The Group expects to continue to incur net losses and negative cash flows from operating activities in accordance with its operating plan over the next twelve months from signing date. However, the Group expects that unit production costs will continue to reduce as new wheel programs are introduced and other planned efficiency measures are implemented, and the Group expects capital costs related to the capacity build of the Australian plant will reduce in the next twelve months from signing date as the current phase of capacity expansion at the Australian plant has been substantially completed.

As an early-stage growth company, the Group's ability to access additional capital is critical to fund operating losses, finalise the development and launch of awarded wheel programs and complete the current phase of expansion of manufacturing facilities to scale up production capacity. As the Group’s current level of cash and cash equivalents and other committed funding sources are not sufficient to execute our business plan, failure to achieve management’s forecast performance or obtain additional financing will have a material, adverse impact on our business operations including developing, launching and producing new wheel programs and satisfying obligations as they become due.

The Group’s principal sources of liquidity at signing date are:

As a result of our recurring losses from operations, accumulated deficit and projected capital needs, significant doubt exists regarding the Group’s ability to continue as a going concern for at least one year after the issuance date of these consolidated financial statements.

The Group’s ability to continue as a going concern is contingent upon successful execution of the Group’s intended plan over the next twelve months from signing date to improve liquidity and working capital. This plan relates to initiatives that were agreed upon for the next twelve months from signing date and includes, but is not limited to:

In addition to successfully achieving these initiatives, it is also critical that the Group complies with the New Debt PIUS loan covenants and OIC financing milestones and continues to receive support from suppliers and customers through favourable payment terms and extension of customer bailment arrangements.

Under current arrangements, the Group is due to commence making repayments of principal in relation to its loan facilities in June 2026. The Group is currently forecasting that it will not be generating sufficient cash to make these repayments and as such the repayment terms will require renegotiation of its debt financing arrangements or a new facility put in place with extended repayment terms.

There is significant doubt that the Group will be successful in achieving these initiatives.

As a result, the circumstances noted above indicate the existence of a material uncertainty that may cast significant doubt on the entity’s ability to continue as a going concern and that the company may, as a consequence, be unable to realise its assets and discharge its liabilities in the normal course of business.

Furthermore, recent macroeconomic market conditions, particularly impacting automotive manufacturers in the USA and their suppliers, and the implementation of tariffs on goods imported into the USA may negatively impact the demand for the Group’s products, or its commercial arrangements with its customers which may have a detrimental effect in the Group’s operations and financial position.

Notes to the Financial Statements

For the years ended June 30, 2024 and 2023

There can be no assurance that the Group will be able to obtain the financing needed to achieve its goals on acceptable terms or at all. Additionally, any equity or equity linked financings would likely have a dilutive effect on the holdings of existing stockholders.

The consolidated financial statements comprise the financial statements of Carbon Revolution PLC and of its subsidiaries as of the reporting date. Carbon Revolution PLC controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

The financial statements of subsidiaries are prepared for the same reporting period as the parent entity, using consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies which may exist. Subsidiaries are consolidated from the date on which control is established and are de-recognized from the date that control ceases.

All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of Carbon Revolution are eliminated in full upon consolidation.

Any changes in Carbon Revolution’s ownership interests in subsidiaries that do not result in Carbon Revolution losing control over the subsidiaries are accounted for as equity transactions.

The Company has overseas subsidiaries in the United States of America (“US”) and Australia. The functional currency of the Company is the United States dollar. The functional currency of its subsidiaries are the local currency being the United States dollar or Australian dollar based on the country in which each subsidiary is domiciled.

The results and financial position of all of Carbon Revolution’s entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

The presentation currency of the consolidated financial statements is the Australian dollar.

In preparing these consolidated financial statements, management has made judgements, estimates and assumptions that affect the application of Carbon Revolution’s accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognized prospectively. The significant judgements made by management in applying Carbon Revolution’s accounting policies and the key sources of estimation uncertainty are outlined in detail within the specific note to which they relate.

Information about critical judgements in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements are included in the following notes.

Notes to the Financial Statements

For the years ended June 30, 2024 and 2023

Sales taxes being Goods and Services Tax (“GST”) in Australia and Value Added Tax (“VAT”) in Ireland is recognized in these financial statements as follows:

Certain reclassifications have been made to the prior years’ consolidated financial statements of Carbon Revolution Pty Limited to conform to the current year’s presentation. These reclassifications had no impact on net loss, shareholders’ (deficit) equity, or cash flows as previously reported.

Revenue is recognized either at a point in time or over time, when (or as) Carbon Revolution satisfies performance obligations by transferring the promised goods or services to its customers, regardless of when the payment is received. Revenue is measured at the fair value of consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duty. Carbon Revolution has concluded that it is the principal in all of its revenue arrangements since it is the primary obligor in all the revenue arrangements, has pricing discretion, and is also exposed to inventory and credit risks.

Notes to the Financial Statements

For the years ended June 30, 2024 and 2023

Carbon Revolution recognizes as revenue from contracts with customers the amount that is received as consideration for the transfer of goods or services to customers. The relevant point in time or period of time is the transfer of control of the goods or services to the customer (control approach).

To determine when to recognize revenue and at what amount, the five-step model is applied. By applying the five-step model to contracts with customers, distinct performance obligations are identified. The transaction price is determined – and allocated to the performance obligations. The allocation of the transaction price in the case of more than one performance obligation at hand would be performed by using observable prices if possible. Otherwise, the allocation would be performed using the adjusted market assessment approach or the approach of cost plus a margin. For every performance obligation that, is distinct within the context of the contract, the revenue recognition is determined to be at a point in time or to be satisfied over time.

Revenue from the sale of Carbon Revolution wheels and tooling is based on the contracted sales price. Discounts on the invoice amounts can be granted to the customer in return for significant advance payments, $1.4 million of

Notes to the Financial Statements

For the years ended June 30, 2024 and 2023

discounts is provided to one of the main customers during the year for the advance payment arrangement (2023: nil). All sales relate to customer-specific products and revenue is recognized over time when there is an enforceable right to payment and no alternative use. Otherwise, revenue is recognized at a point in time when the customer obtains control of the distinct good or service. Payment terms for both revenue recognized over time and at a point in time depend on the individual customer and are on average between 60 and 120 days.

Sales are recognized when control is transferred. Control is transferred over time and revenue is recognized over time by reference to the progress towards complete satisfaction of the relevant performance obligation if one of the following criteria is met:

The output-based measurement method is used for revenue recognized over time based on products ready to be picked up by the customer or shipped to the customer or where applicable a practical expedient is used based on the date of invoice. Specifically, Carbon Revolution recognized revenue when the completed wheels are boxed and made ready for shipment or when wheels are transferred to freight forwarders depending on the contract terms.

Under Carbon Revolution’s standard contract terms, end customers have a right to claim for faulty wheels within a specified warranty period. While a warranty provision is recorded at the time of the product sale based on an assessment of possible future claims, historically, Carbon Revolution has not experienced material warranty claims.

Revenue from a contract to provide engineering, design and testing services is recognized over time based on the stage of completion of the contract. The Group have assessed that the stage of completion determined as the proportion of the milestones achieved under the customer contract is an appropriate measure of progress towards complete satisfaction of these performance obligations.

In certain circumstances where a contract to provide engineering, design and testing services is only fulfilled with the delivery of certain prototypes, the revenue is recognized at a point in time. The recognition occurs when Carbon Revolution transfers the prototype wheels to the buyer and with it the significant risks and rewards of ownership, in accordance with the relevant customer contracted commercial terms.

Contract assets arise from customer-specific goods and services where performance obligations are delivered in advance of the right to invoice for revenue recognized over time. Contract assets are reduced when the customer is invoiced.

Contract assets are created when the wheels have completed the final production inspection, and are boxed and available for shipment.

Contract liabilities include advance payments by customers for deliveries of goods and for services to be performed. In the case of these advance payments by customers for deliveries of goods and for services to be performed, for which contract liabilities are recognized, the customer has already paid the consideration – or part of the consideration – but Carbon Revolution has not yet satisfied its performance obligation or has done so only to a limited extent. The provision of the corresponding services to the customers by Carbon Revolution in these cases reduces the level of the associated contract liabilities.

Interest income is recognized on a time proportionate basis that takes into account the effective yield on the financial asset.

Notes to the Financial Statements

For the years ended June 30, 2024 and 2023

Government grants income includes amounts received or receivable by Carbon Revolution. Grants are recognized where there is reasonable assurance that the grant will be received and all attached conditions have been complied with. When the grant relates to an expense item, it is recognized as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to Carbon Revolution with no future related costs are recognized in the Consolidated Statements of Profit or Loss and Other Comprehensive Income in the period in which they become receivable. When the grant relates to an asset, it is recognized as income in equal amounts over the expected useful life of the related asset.

Carbon Revolution operates in one business segment, being the manufacture and sale of carbon fiber wheels. This single segment is based on the internal reports that are reviewed and used by the Chief Executive Officer, who is also the Chief Operating Decision Maker (“CODM”), in assessing performance and determining allocation of resources. The accounting policies adopted for internal reporting to the CODM are consistent with those adopted in the financial statements. Revenue is allocated based on the domicile of the Carbon Revolution entity that is responsible for contracting and fulfilment with customers. Carbon Revolution PLC, domiciled in the Republic of Ireland, is the parent of the Carbon Revolution consolidated group in 2024. Consequently, prior period results have been reclassified between countries of origination.

Included in revenues, are revenues of $67.0 million (2023: $35.8 million, 2022: $39.3 million) which arose from sales to the Carbon Revolution's four major customers, representing 44% (2023: 31%), 31% (2023: 12%), 19% (2023: 50%) and 5% (2023: 6%) of Carbon Revolution's revenue. No other single customers contributed 10 per cent or more to Carbon Revolution's revenue in either 2023 or 2024.

Revenue originated and non-current assets by geography comprise:

Notes to the Financial Statements

For the years ended June 30, 2024 and 2023