FY 2023 Results

DocuSign Envelope ID: C0DBF64F-C65B-4771-8FD5-A4311BABCC2F

Registration number: 06458458

SORTED GROUP HOLDINGS PLC

ANNUAL REPORT AND CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

DocuSign Envelope ID: C0DBF64F-C65B-4771-8FD5-A4311BABCC2F

SORTED GROUP HOLDINGS PLC

DocuSign Envelope ID: C0DBF64F-C65B-4771-8FD5-A4311BABCC2F

SORTED GROUP HOLDINGS PLC

COMPANY INFORMATION

Directors

1. Wilkinson N Burton
   C Carey (Appointed 29 January 2024, Resigned 24 May 2024) P Cvetkovic (Appointed 29 January 2024)
   M Warriah (Appointed 29 January 2024)

Registered Office

Level Six

111 Piccadilly

Manchester M1 2HY

Company Secretary

Mahmoud Warriah

Level Six

111 Piccadilly

Manchester M1 2HY

Auditors

Hazlewoods LLP

Staverton Court

Staverton Cheltenham

GL51 0UX

Bankers

HSBC UK

2-4 St Ann's

Square

Manchester

M2 7HD

Nominated Advisor

Allenby Capital Limited

5 St. Helen's Place

London

EC3A 6AB

Broker

Turner Pope

Investments 8

Frederick's Place

London

EC2R 8AB

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SORTED GROUP HOLDINGS PLC

CHAIRMAN'S REPORT FOR THE YEAR ENDED 31 DECEMBER 2023

Dear Shareholders,

I am pleased to present the Chairman's statement for the Sorted Group Holdings PLC (the "Company" or the "Group") 2023 report and accounts.

2023 marked a significant turning point for Sorted Group Holdings PLC. On 28 June 2023, we announced a secured convertible bridge loan agreement (the "Convertible Loan Agreement") with Sorted Holdings Limited ("SHL") to lend it up to £2.6 million (the "Loan") for working capital purposes. The Convertible Loan Agreement had a redemption premium of 50% and was secured by a first fixed and floating charge over SHL's business and assets. At the Company's option, the Loan could be converted into shares representing nearly 100% of the fully diluted share capital of SHL.

Additionally, we simultaneously announced entering into an exclusive non-binding heads of terms for a potential acquisition of the entire issued share capital of SHL by the Company for a nominal consideration of £1.00 (the "Proposed Acquisition"). As part of the Proposed Acquisition, the Company would assume approximately £4.0 million of SHL's outstanding debt. Existing subscribers, including shareholders of SHL, would be given the opportunity to participate in a cash subscription for up to £5 million of new shares in Location Sciences Group PLC (now named as Sorted Group Holdings PLC) to align their interests with existing shareholders. The Proposed Acquisition constituted a reverse takeover under the AIM Rules for Companies (the "AIM Rules"). Accordingly, in accordance with rule 14 of the AIM Rules, the Company's ordinary shares were suspended from trading on AIM on 28 June 2023.

Post the period end, on 30 January 2024 we announced and published an AIM admission document in connection with the Proposed Acquisition. The AIM admission document detailed, inter alia, the proposed acquisition of SHL, a proposed subscription of 2,285,712 new ordinary shares at 87.50 pence per new ordinary share to raise approximately £2.0 million, a proposed 625 to 1 share consolidation, a proposed change of name and AIM ticker symbol to Sorted Group Holdings PLC and SORT respectively, director appointments, a notice of general meeting, and the restoration of trading of the Company's existing ordinary shares on AIM. Terms were agreed for the acquisition of the entire issued and to be issued share capital of SHL for an aggregate nominal consideration of approximately £66.73 to be paid in cash at completion.

The Proposed Acquisition was outlined as attractive for a number of reasons. These included:

• Significant opportunity to leverage Sorted's technology and substantial capital investment (exceeding £70 million)
• Attractive software-as-a-service ("SaaS") business model in the ecommerce sector with scalable, predictable revenue performance
• Diverse customer base of household retail brands and strong industry partnerships
• Global ecommerce market forecast to grow significantly.
• Highly fragmented market
• UK-basedbusiness with over 60 employees

On 16 February 2024, all resolutions were duly passed at a general meeting of the Company. The proposals set out in the AIM admission document completed on 19 February 2024 with the enlarged group successfully admitting to AIM on the same day ("Admission"). As part of this, Carmen Carey was appointed as Chief Executive Officer, Mahmoud Warriah as Chief Financial Officer and Petar Cvetkovic as Non-Executive Director. To reflect the Company's new name, the website changed to www.sorted.com on Admission.

The financial year ended 31 December 2023 ("FY23") presented its share of challenges, with a decline in revenue to £53,066 (2022: £110,856). However, I am pleased to report that we entered the financial year ending 31 December 2024 ("FY24") with a solid financial foundation. The successful fundraises that took place in 2021 and 2024 provided us with ample resources and, together with the loan facility agreement with Bidco 3 Limited for up to £3.0 million, enabled us to pursue our strategic acquisition objective in the backdrop of the complex business landscape.

Throughout the acquisition process, we have remained committed to our key stakeholders, particularly our shareholders. We recognise that change brings uncertainty, and we have made every effort to navigate these challenges with transparency and fairness. Our team has shown remarkable resilience and adaptability during this period of transition, and we are grateful for their dedication to our shared vision.

Looking forward, we remain cautiously optimistic. The acquisition of SHL has provided us with a valuable platform for potential growth opportunities. Armed with this knowledge, we are actively exploring avenues for sustainable expansion and enhancement of our offerings.

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SORTED GROUP HOLDINGS PLC

CHAIRMAN'S REPORT FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)

On 28 May 2024, it was announced that Carmen Carey stepped down as Chief Executive Officer ("CEO") and Executive Director of the Group with immediate effect and will continue to support Sorted during a three month notice period.

Finally, I would like to express my heartfelt gratitude to our shareholders, clients, and partners for their unwavering support throughout this transformative period. Your confidence in our ability to navigate these challenges and capitalise on emerging opportunities has been instrumental in our progress.

In conclusion, while FY23 presented its fair share of hurdles, we are well-funded and strategically positioned for the future. With a solid financial foundation, streamlined operations, and a focus on delivering a new strategic path going forward, we are confident in our ability to create long-term value for our shareholders. We thank our shareholders and stakeholders for our continued trust and support.

Yours sincerely,

Simon Wilkinson

Executive Chairman, Sorted Group Holdings PLC

Date: 18 June 2024

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SORTED GROUP HOLDINGS PLC

INDEPENDENT DIRECTORS FINANCIAL REVIEW FOR THE YEAR ENDED 31 DECEMBER 2023

Dear Shareholders,

As the Independent Director of Sorted Group Holdings PLC, I am pleased to present my report alongside the Executive Chairman's statement for the FY23 report and accounts. As a member of the board of directors of the Company (the "Board" or the "Directors"), my role is to provide an unbiased perspective and to act in the best interests of the Company and its shareholders.

Throughout FY23, I actively participated in the strategic review process and monitored the Company's performance, governance, and risk management. I have assessed the decisions made and actions taken by the Board, ensuring that they align with the company's values and objectives.

Financial Performance

The financial performance of Sorted Group Holdings PLC in FY23 reflected the challenges faced by the Company and the broader market environment. I have scrutinised the financial statements and worked closely with the team to understand the underlying causes and evaluate the appropriateness of the strategic initiatives undertaken. I have enclosed below a summary of the Group's financial performance and statement of financial position at the end of the year:

The Board made further reductions in overhead during the FY23 and the impact of these can be seen in the decreased administration costs in FY23 of £551,530 compared to the financial year ended 31 December 2022 ("FY22") of £723,149, representing a 23.7% year on year reduction. The loss before tax includes the costs of the acquisition of SHL.

Strategic Review and Actions Taken

During FY22, the Board embarked on a comprehensive strategic review to pinpoint the most viable pathways for sustainable growth and the creation of shareholder value. This exercise led to the identification of SHL as a prime target and the most viable option to provide long-term sustainable growth and create shareholder value. The acquisition of SHL completed on 19 February 2024.

Corporate Governance

We are committed to upholding the highest standards of corporate governance. Throughout the year, we monitored the Company's compliance with applicable laws, regulations, and best practices. We reviewed the effectiveness of internal controls, risk management systems, and ethical practices. We are pleased to report that Sorted Group Holdings PLC has maintained a robust governance framework, with appropriate checks and balances in place to safeguard shareholder interests.

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SORTED GROUP HOLDINGS PLC

INDEPENDENT DIRECTORS FINANCIAL REVIEW FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)

Stakeholder Relations

As the Independent Director, I place great importance on the company's relationships with its key stakeholders. I have closely monitored the engagement efforts undertaken by the team to foster a positive team culture, ensure fair treatment, and provide opportunities for professional growth. Furthermore, I have assessed the Company's relationships with clients, suppliers, and other stakeholders, ensuring that open lines of communication are maintained and that their expectations are being met.

Looking Ahead

As the Independent Director, I remain committed to our fiduciary duties and to serving the best interests of Sorted Group Holdings PLC and its shareholders. I will continue to provide oversight, guidance, and independent perspectives to the Board as the company navigates the evolving landscape. I will monitor progress against strategic objectives, evaluate risk management practices, and advocate for responsible and sustainable business practices.

Whilst the Group plans to appoint a new CEO, in the intervening period, Simon Wilkinson, the Group's Chairman, will also take on the role of Executive Chairman. In addition to Simon Wilkinson's software and general management expertise, Sorted will also draw on the significant experience of its other existing board members to oversee the operations of the business, including the distribution and logistics expertise of Petar Cvetkovic, a Non-Executive Director.

In order to recognise Simon Wilkinson's increased involvement in the operations of the business, Sorted has entered a consultancy arrangement with him whereby the Group will pay Mr Wilkinson a daily consultancy rate of £1,750.00 (the "Consultancy Arrangement"). It is anticipated that Mr Wilkinson will work a maximum of three days per week pursuant to the Consultancy Arrangement.

In conclusion, I express our appreciation for the trust placed in us by the shareholders of Sorted Group Holdings PLC. I believe that the Company's strategic initiatives, including the disposal of the Insights business and the ongoing commitment to find a new strategic direction for the Group, will position it for long-term success. I remain vigilant in our oversight role and are dedicated to the company's continued growth and value creation.

Respectfully submitted,

Dr Nigel Burton

Independent Non-Executive Director, Sorted Group Holdings PLC

Date: 18 June 2024

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SORTED GROUP HOLDINGS PLC

STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2023

The Directors present their strategic report for the year ended 31 December 2023.

Fair review of the business

The fair review of the business is set out in the Executive Chairman's and Independent Director's reviews, which describe in detail the financial results and future plans for Sorted Group Holdings PLC.

The Board monitors progress on the overall Group strategy and the individual strategic elements by reference to KPls. The primary measures are revenue, costs, EBITDA before exceptional items and working capital levels.

Principal risks and uncertainties

The principal and commercial risks to the Group are as follows:

The Board meets regularly to review specific and general risks that face the Group. The Board strives to position the Group in a way that any risks can be minimised and met, should the need arise.

The Group's performance will be dependent on the outcome of the strategic review and the implementation of the results of this review. As part of our strategic review, we have thoroughly analysed market trends, customer needs, and emerging opportunities to ensure the long-term success and sustainable growth of the company.

The Group is managing this risk by reducing the overheads of the Group and continuing to analyse new opportunities as they arise. The Board are committed to delivering shareholder value in the long-term.

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SORTED GROUP HOLDINGS PLC

STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)

Strategic risks

Following the strategic review, Sorted Group Holdings PLC has identified key initiatives, such as seeking acquisition targets and optimising operational efficiency. A significant milestone in this strategy was achieved with the purchase of Sorted Holdings Limited on 19 February 2024, aligning with the strategic goals set out in the FY23 financial accounts.

However, a strategic risk lies in the effective execution of these initiatives. Ensuring successful implementation, alignment across the organisation, and timely delivery of desired outcomes require careful planning, resource allocation, and effective management of change. Any delays, misalignment, or inadequate execution could impede the company's ability to achieve its strategic objectives and may result in lost opportunities, lower competitiveness, and suboptimal financial performance.

It is important for Sorted Group Holdings PLC to establish clear goals, allocate appropriate resources, and monitor the progress of these strategic initiatives. The Company should implement robust project management practices, establish effective communication channels, and regularly evaluate and adjust the execution plan as needed. Additionally, strong leadership and stakeholder engagement are crucial to drive alignment and foster a culture of accountability throughout the organisation.

By proactively addressing this strategic risk and implementing effective execution strategies, Sorted Group Holdings PLC can enhance its chances of successfully realising the desired outcomes of the strategic initiatives and drive long-term value for shareholders.

This report, in conjunction with the Chairman's statement and Independent Directors report, form the Strategic Report for the purposes of s414A of the Companies Act 2006.

Section 172 statement

The Directors believe that they have effectively implemented their duties under section 172 of the Companies Act 2006 through adherence to the Quoted Companies Alliance Corporate Governance Code, as disclosed on pages 14 to 16 and as published on our website: www.sorted/investor-relations/board-governance.The Chairman's Report and Chief Executive's Review details the Group's future plans to achieve its long-term strategy.

The Group is committed to maintaining an excellent reputation and strive for high standards, while maintaining an awareness of the environmental impact of the work that it does and strives to reduce its carbon footprint.

The Directors recognise the importance of the wider stakeholders in delivering their strategy and achieving sustainability within the business; in ensuring that all our stakeholders are considered as part of every decision process we believe we act fairly between all members of the company.

Mahmoud Warriah, Chief Financial Officer

Date: 18 June 2024

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SORTED GROUP HOLDINGS PLC

CORPORATE GOVERNANCE

The Board recognises the importance of good corporate governance in order to protect and build upon the substantial investments made by our diverse shareholder base. We have chosen to apply the Quoted Companies Alliance Corporate Governance Code (the 'QCA Code'), which was developed by the QCA in consultation with a number of significant institutional small company investors, as an alternative corporate governance code applicable to AIM companies. The underlying principle of the QCA Code is that "the purpose of good corporate governance is to ensure that the company is managed in an efficient, effective and entrepreneurial manner for the benefit of all shareholders over the longer term". The Board anticipates that whilst the Company will continue to comply with the QCA Code, given the Group's size and plans for the future, it will also endeavour to have regard to the provisions of the UK Corporate Governance Code as best practice guidance to the extent appropriate for a company of its size and nature.

An explanation of how these principles have been applied during FY23 is set out both below and in the Directors' remuneration, Audit Committee and internal control sections of this report.

Certain information required under the QCA code is included within the Strategic report and the Directors Remuneration Report.

The Board is responsible to the shareholders for the proper management of the Group through setting the overall strategy of the business and to review the people, performance, policies and budgets of the Group. The Board typically meets quarterly and also meets for any other extraordinary matters as they may arise. Detailed information on matters to be discussed during the meetings are circulated in advance of the meeting to ensure non-executive directors can contribute in an educated manner.

Independence

The roles of the Chairman, Simon Wilkinson, and the Independent Director, Dr Nigel Burton, have a formal division. The Chairman is responsible for delivering the outcome of the strategic review and ensure that adequate and effective resources are in place to deliver shareholder value. The Independent Director is responsible for monitoring the Board and ensuring no individual or group takes control of the Board's decision making and that all key stakeholders are fully briefed on matters and their responsibilities.

Board Balance

A minimum of 50% of the Board will always consist of non-executive directors including the Chairman. During FY23 all non-executive directors were independent of the management team and are not involved in any other business or relationship, both as an executive or non-executive, which may impair their independent nature and judgement.

Nomination Committee

The Group's nomination committee is responsible for reviewing and making proposals to the Board on the appointment of Directors and meets as necessary. During FY23, the Group's nomination committee consisted of Simon Wilkinson, who acted as Non-Executive Chairman of the committee, and Dr. Nigel Burton.

Performance Evaluation and Re-election

The Board has continued to evaluate its effectiveness and performance during FY23, taking into account the Financial Reporting Council's Guidance on Board Effectiveness. It is anticipated that following the completion of the Board strategic review, director appraisals will be performed to ensure that their performance is, and continues to be, effective, that where appropriate they maintain their independence and that they are demonstrating continued commitment to the role. The Directors will be evaluated internally based on their responsibilities to the Board. New Directors resign and stand for re-election at the Group's first AGM following their appointment. 50% of continuing Directors stand for re-election on an annual basis.

The Directors carry out continued professional development throughout the year where appropriate and each Director keeps up to date with market changes through the use of market articles and industry contacts.

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