H2APEX : Annual Report 2023 (until 18 January 2024 "exceet Group SCA")

1. FUNDAMENTAL INFORMATION ABOUT THE GROUP

1. STRUCTURE & REPORTING

H2APEX Group SCA (until 18 January 2024: "exceet Group SCA" and hereafter the "Company") is a company existing as a "Société en Com- mandite par Actions" under the laws of Luxem- bourg and listed on the regulated market of the Frankfurt Stock Exchange (WKN: A0YF5P / ISIN: LU0472835155) in the Prime Standard segment. Since the business combination with APEX Nova Holding GmbH (hereafter "APEX"), which has been closed on 19 January 2023, the investment focus is on developing projects for the decentralized supply of green hydrogen.

On 18 January 2024 the shareholders decided at the Extraordinary General Meeting (EGM), that the former exceet Group SCA will be renamed to H2APEX Group SCA. With the renaming a common branding with APEX Group is finalized.

H2APEX Group SCA is managed by H2APEX Management S.à r.l. (until 18 January 2024 "exceet Management S.à r.l." and hereafter the "General Partner"), a limited liability company under the law of Luxembourg (Société à responsabilité limitée (S.à r.l.)), the shares in which are held indirectly by the founders of the Active Ownership Group (AOC) Florian Schuhbauer and Klaus Röhrig (50% each).

The H2APEX Group SCA Group (hereafter the "Group" or "H2APEX") currently consists of 17 companies.

With the merger agreement between the Company and APEX, the accounting policies of the Company continued. According IFRS 10, the transaction has been recorded as "reverse acquisition". For accounting purposes, APEX Group was determined to be the economic acquirer in this "reverse acquisition". Consequently, these consolidated financial statements of the Company represent the continuation of the consolidated financial statements of APEX Nova Holding GmbH and its subsidiaries ("APEX Group") with the exemption of the capital structure, which has been adjusted to reflect the capital structure of H2APEX Group SCA as ultimate parent company.

As of 19 January 2023 the Company entered into a definitive merger agreement with APEX and its shareholders. APEX, together with its subsidiaries, is a leading developer, manufacturer and operator of green hydrogen plants for the de-carbonization of the industry and infrastructure.

Under the merger agreement, the Company agreed (i) to acquire 20.8% of the APEX shares for a cash consideration in the amount of EUR 25,000,000 and (ii) to exchange the remaining 79.2% shares in Apex for shares in the Company by way of a contribution in kind. For this purpose, the Company agreed to utilize its authorized capital and increase its share capital from EUR 311,960.18 by EUR 252,424.73 to EUR 564,384.91 by issuing 16,285,467 new shares to the shareholders of APEX. In addition, the Company agreed to adopt a long-term equity incentive plan for the Board members and key employees of the combined group allowing for the issuance of up to 3,640,000 stock options which, subject to meeting the agreed strike price and vesting conditions,

entitle the beneficiaries to subscribe to 3,640,000 new shares.

On 12 September 2023, the Company published a securities prospectus (the "Prospectus") relating to the listing of certain shares (the "New Shares") of the Company on the Frankfurt Stock Exchange (Prime Standard). The New Shares had been created by way of a capital increase through contribution in kind in connection with the business combination with APEX Nova Holding GmbH earlier this year. Prior to its publication, the Prospectus was approved by the Luxembourg Financial Supervisory Authority (Commission

de Surveillance du Sector Financier ("CSSF")) on the same day. The New Shares were admitted to trading on the Frankfurt Stock Exchange with simultaneous admission to the Prime Standard, the sub-segment with additional post-listing requirements, on 13 September 2023 and were included into the existing quotation of H2APEX shares on 15 September 2023.

On 1 March 2023, Endurance GmbH & Co. KG, a limited partnership established under German law with a business address at Körnerstr. 1, c/o Atlan Family Office GmbH, 22301 Hamburg, Germany, entered in the commercial register of the District Court of Hamburg under HRA 128782 ("Bidder") has pursuant to Sections 35 (2), 14 (2) sentence 1, (3) of the Securities Acquisition and Takeover Act ("WpÜG") by publication of the offer document within the meaning of Sections 39,

11 WpÜG ("Offer Document" ) a mandatory offer ("Offer" or "Mandatory Offer") to the shareholders of the Company (and together with its subsidiaries pursuant to Section 2 para. 6 WpÜG the Group) delivered. On 29 March 2023, the offer terminated and 1,510,538 of Company's shares has been transferred by acceptance, representing 4.15% of share capital and voting rights of the Company at that time.

1.2. THE GROUP'S BUSINESS MODEL

While the Group finished the business year 2022 as an empty shell without operating companies, starting 2023 the business model is now focused on developing, manufacturing and operating of green hydrogen plants for the de-carbonization of the industry and infrastructure. The operating business is driven by the acquired APEX Group.

APEX focuses on hydrogen plants with an electrolysis capacity of less than 1 Giga Watt. These are used to decarbonize industrial value chains and to produce green hydrogen and hydrogen derivatives such as LOHC (liquid organic hydrogen carriers) and e-fuels. They are used, for example, in the steel, chemical and cement industries as well as other energy intensive industries. In addition, APEX offers facilities for infrastructure and logistics, especially for industrial use in warehouses, ports and production facilities.

APEX is a greentech innovator and a pioneer in the green hydrogen market in Germany with its headquarters in Rostock-Laage. APEX is one of very few companies in the market that owns and operates a grid-connectedsector-coupled green hydrogen plant. This reference plant is based at its industrial park in Rostock-Laage and demonstrates the production of green hydrogen powered by APEX's own 11.5 MWp photovoltaic park, the storage of hydrogen in fiber composite pressure tanks as well as various possible uses for green hydrogen, including reconversion to electricity in a fuel cell, a combined heat and power unit, refueling infrastructure for different types of vehicles and a trailer filling station for the transport of hydrogen. With regards to this pioneer project, APEX is concluding offtake agreements with customers. APEX believes that upon start of operations in test mode at its green hydrogen plant in May 2021, this was one of the first projects of this type in Europe, and APEX has gained vast experience in the set-up, operation and maintenance of hydrogen plants in general.

Based on its track record and the industrial park, APEX intends to establish itself as an owner and operator of additional hydrogen plants in the future.

In addition to the afore-mentioned activities, APEX currently acts as general contractor and system integrator for turnkey third-party green hydrogen power plants.

As a complementary business line, APEX has a separate team active in the development and sale of hydrogen storage solutions. In contrast to production and conversion, the storage of hydrogen is still one of the key challenges in the hydrogen ecosystem and APEX is at the forefront of technological advancement. APEX intends to scale up its production for its pressure tanks in a small series production line in Rostock-Laage in the short-term, with full capacity to be reached end of 2024. APEX's current R&D focus lies on chemical storage solutions, for which it has made significant progress in the recent past and has submitted three international patent applications.

The business activities are reported according to the following segments, which represent the reporting structure: project development, operations and storage.

PROJECT DEVELOPMENT

Project Development Segment includes all work related to project development and system integration for third-party hydrogen plants. The turnkey solutions for the supply of hydrogen are modular, tech-agnostic and tailor-made to comply with complex and diverse customer requirements.

The Group is one of the few players in this market in Germany. The Group can cover a wide range of different project and plant types, from industrial parks and other industrial solutions, grid and network solutions to residential and mobility solutions.

The Group covers the entire project phase, from (pre-)feasibility studies and approval planning to design, engineering, construction and commissioning. Following the conclusion of the contract, the basis of the project is established, including the development of a concept. In a next step, the design phase (typically divided into a preliminary, final and detailed design) as well as the approval planning with the securing of regional permits and green energy begin. During this phase, orders for the main components

of the plant are also typically placed. Two major project milestones are the provision of the planning results relevant for the approvals and interfaces as well as the preparation of the execution planning. Once the design and planning phase is completed, the Group and its customer agree in writing on a design freeze, i.e., design and planning specifications are fixed and no more fundamental changes are permitted. Following the receipt of major approvals, the construction begins. Due to the size of the projects, in which the Group is involved, it usually takes several months before main components can be installed and the assembly can start. In addition to the integration of components from other manufacturers, the Group can provide

its customers with a self-developed energy management system, which is particularly valuable for decentralized energy solutions with fluctuating power production and high storage requirements. Functional tests, including tests under operating conditions, are carried out once the machinery is installed. In a final step, the plant is inspected and approved by the customer and commissioned. For small and mid-size projects, the entire project phase from pre-feasibility studies to commissioning takes approximately 28 months.

OWN OPERATIONS

Own Operations Segment includes the production and selling of green hydrogen as well as the "derivatives" electricity and heat generated at its own hydrogen plants.

In the "own operations" model, the Group produces and sells green hydrogen as well as the "derivatives" electricity and heat generated at its own hydrogen plants. Through the successful establishment of the industrial park in Rostock-Laage, the Group has demonstrated its capabilities regarding the installation and operation of a grid-connected hydrogen plant with various possible hydrogen uses and has already concluded its first offtake agreements with customers. This reference plant is the nucleus for the Group's planned future portfolio of own hydrogen production plants, and the realization of an additional hydrogen plant on the same site with the help the EU Important Project of Common European Interest (UPCEI) funding applied for and provides the basis for the launch of this pillar of the business model. In addition, the Group seeks to gain access to the "own operations" market through its project development business in order to build credibility, improve the skillset and generate cash for future growth. It also benefits from the ongoing retrofitting of existing gas pipelines, which are expected to be available for hydrogen transport from 2027 on and which the Group would also feed into.

The Group intends to develop and build further own hydrogen plants, which it will operate to benefit from a contracted and resilient revenue stream. It expects to at least partially rely on joint venture partners, including utility companies or offtakers, for the financing and construction of the plants and is already in initial discussions

in this regard. While these projects will require a significant amount of capital expenditure, the Group expects to generate a majority of its revenues with this pillar of its business model in the mid- to long-term.

STORAGE

Storage Segment includes the development and manufacturing of different hydrogen storage systems.

The Group has developed stationery and portable tanks. While the stationary tanks, which the Group developed and designed, are manufactured by third parties and are no longer offered by the Group, these portable tanks are produced in-house. Both the stationery and the portable pressure tank are type IV tanks, i.e., fiber composite tanks with plastic lining used in distribution and mobility.

1.3. BRANCHES

The Company is only acting through its subsidiaries. Besides these legal entities, there are no branches.

1.4. OBJECTIVES AND STRATEGIES

The strategy of the Group is defined in four targets:

GROW PROJECT DEVELOPMENT BUSINESS

Building on its track record from projects won in 2022 and 2023, respectively, the Group intends to grow its business in the project development area by capitalizing on its pipeline of hydrogen projects for third parties (e.g., steel plants or other energy/ emission intensive industries). While the Goup

is looking to gradually expand own hydrogen production capacity, thereby increasing revenue contribution from more resilient hydrogen offtake contracts, it believes that the third-party project development operations will be a key pillar to achieve this business shift and have a symbiotic relationship, mainly for the following reasons: (i) third party projects create profits and positive cash flows from an early stage, which is rare among hydrogen companies, helping

to reduce the cash burn from development of large-scale own production capacity, which do not generate revenues until commissioning and operation, (ii) they provide the blueprints and required skillset to efficiently scale-up own production plants, while reducing execution risk

for the Group and stakeholders involved in the projects (e.g., shareholders, debt providers, power suppliers, offtakers, governmental entities), and

1. most customers in the third-party project
   development area pursue a staggered approach of building-up hydrogen capacities, usually starting with a smaller (e.g., 10 MW) plant, which gets subsequently expanded. At the same time, most customers are not interested in owning and operating a large-scale hydrogen plant. Consequently, the Group expects that many project development customer relationships will offer follow-on revenue potential and the opportunity of (co-)owing and operating the expansion plants.

The Group's project pipeline includes several smaller (up to 10 MW) and mid-size(10-50 MW) projects, which are mostly in an early stage (i.e., pre-feasibility study phase) or in an advanced development stage (i.e., detail planning phase). However, some of them are more mature and already in the tender phase, so the Group is optimistic that it will be awarded with further significant work soon. By leveraging on its experience and first-mover advantage, in particular against the background of its industrial park in Rostock-Laage, the Group also intends to tackle larger-scale projects with attractive margins.

FOCUS ON EXPANDING PRODUCTION CAPACITY AND SALE OF GREEN HYDROGEN

The Group has developed and commissioned one of the first European grid-connected green hydrogen power plants, which demonstrates the mechanism and impact of sector coupling (Power-to-X) through different use cases, including a fuel cell, a combined heat and power unit, a refueling infrastructure for buses, trucks and cars and a trailer filling station. On the back of this pioneer project, the Group plans to establish itself as an owner-operator of sizeable hydrogen plants in the next three to five years, thereby covering the entire hydrogen project value chain from developing through building, operating (and ensuring maintenance), owning

(either on a standalone basis or together with a partner) and marketing (i.e., securing offtake). Its current project development business mainly encompasses the "building" phase and some aspects of the development phase, but the Group intends to capitalize on its EPC track record and the relationships it has built in the past years, in particular with regard to the capabilities required for these critical phases of a hydrogen project. While the construction will be intense in terms of capital expenditure, the Group will shift its financial profile towards recurring and stable revenue generation from the offtake agreements in connection with the operation of its own plants, in contrast to the one-off fees that the Group receives for the system integration of third-party plants.

The Group is exploring various avenues to fund its own plants. It wants to make use of its perceived growing appetite for credit providers to invest in hydrogen projects. In addition, the Group intends to partner with third parties

as joint venture (JV) partners, such as utility companies, offtakers or other financial investors, and is already in advanced conversations with several parties. In addition, by tapping into the "owner-operator" market for hydrogen plants, it intends to counter a potential commoditization and subsequent downward price pressure in the project development business. In the mid- to long-term, the Group, therefore, expects to generate a majority of its revenues with this business line.

KICK OFF SERIAL PRODUCTION FOR VARIOUS STORAGE SOLUTIONS

The Group has a particular focus on the development of different storage solutions. While production and conversion of green hydrogen are, by and large, well explored and rather straightforward, transport and storage continue to be key challenges in the (green) hydrogen ecosystem. Since pipelines will not connect each and every location, efficient transport solutions are constantly being investigated. The same applies to storage solutions as they are especially

complicated in urban environments, which require high safety standards. Following the development of stationary and portable pressure-based storage solutions together with long-term partners, including the Fraunhofer Institute in Rostock, the Group has started the production of such storage solutions in small numbers at its own facilities and is searching for a strategic partner to enter into serial production for these solutions in larger numbers (up to 55,000 tanks per year). In addition, the Group focuses on research in chemical storage solutions, in particular in cooperation with the Leibniz-Institut for Katalyse e.V. (LIKAT). The carrier that the Group investigates together with LIKAT for its chemical storage solution is non- toxic, unlike other carriers. The Group's research is at an advanced stage and also focuses on identifying additional fields of application. LIKAT has already developed a prototype, which shall be scaled-up in size going forward.

EXPAND GEOGRAPHICAL FOOTPRINT AND GROW EMPLOYEE BASE ORGANICALLY AND THROUGH ACQUISITIONS AND ENGAGE IN EXCLUSIVITY AGREEMENTS WITH ELECTROCHEMICAL ENGINEERING COMPANIES

The Group has grown rapidly in the past few years and is currently involved in a significant number of award processes, which could result in capacity constraints should the Group win many of them. The Group heavily relies on the profound know-how of its key personnel for its project development business and requires qualified professionals and industry experts. In addition to design and engineering personnel, the Group also needs to find additional sales team members to scale up its operations and to attract expertise with regard to project financing and contracting for the planned expansion of its "own operations" business line.

The Group has significantly grown its employee base organically in 2023 and intends to further intensify its efforts to attract qualified employees. However, since qualified personnel is often hard to find outside of metropolitan areas, the Group will also focus on growing its employee basis by

opening new offices in strategic locations. The Group believes that this approach will enhance its market share in the green hydrogen industry and, through its extended geographical footprint, the Group expects to be able to also provide

a broader geographical market coverage in Germany.

1.5. INTERNAL MANAGE- MENT SYSTEM

The aim of H2APEX management is to sustainably increase the Group's corporate value and thus the value for shareholders. It is important that revenue growth is linked to above- proportional profitability and that H2APEX is able to enhance its financial strength for investments and further, including inorganic growth. To achieve this goal, an internal control system is used.

The following aspects are in the foreground:

• Growth through the acquisition of projects and customers
• Project profitability
• Improvement of operational cash flow through efficient working capital
• Liquidity for upcoming growth through sufficient financing

The relevant key figures are in particular: revenue, EBITDA, net debt and operating cash flow. In addition to standardized controlling, these key figures are monitored in regular meetings with regard to upcoming projects, tender modalities, ongoing projects and financing options. At the same time, the cost items are subject to regular budget control. At the end of each year, revenue and cost items are budgeted for the following year. These budgeted values are then compared with the actual values every month and deviations are analyzed. H2APEX works with a dynamic budget model, which means that changes in one position can be directly accompanied by any necessary adjustments in other budgeted positions in order to ensure planned profitability.