Notes to the Consolidated Interim Financial Statements

For the six months ended 30 June 2026

1.     Basis of preparation

The consolidated interim results of Phoenix Digital Assets (Gibraltar) PLC (the "Company") and its subsidiaries (together, the "Group") for the six months ended 30 June 2026 has been prepared in accordance with IAS 34 Interim Financial Reporting and using accounting policies consistent with those applied in the predecessor Group's audited financial statements for the year ended 31 December 2025, except where the Group reorganisation described in note 2 requires a change in presentation.

The financial information for the six months ended 30 June 2026 and 30 June 2025 is unaudited. It has not been audited or reviewed by the Group's external auditors and has been reviewed by the Directors only. The comparative information for the year ended 31 December 2025 has been derived from the audited financial statements of Phoenix Digital Assets Limited (formerly Phoenix Digital Assets PLC) for that year.

The consolidated interim financial statements are presented in Pound Sterling (£), rounded to the nearest pound unless otherwise stated. The consolidated interim financial statements do not include all information and disclosures required for full annual financial statements and should be read in conjunction with the audited financial statements for the year ended 31 December 2025.

At 30 June 2026 the Group comprised Phoenix Digital Assets (Gibraltar) PLC, Phoenix Digital Assets Limited (UK) and 1319644 B.C. Ltd (Canada). All material intercompany balances and transactions are eliminated on consolidation.

2.     Group reorganisation

On 27 January 2026, pursuant to a scheme of arrangement, Phoenix Digital Assets (Gibraltar) PLC ("New Phoenix" or the "Company") acquired the entire issued share capital of Phoenix Digital Assets PLC ("Old Phoenix"). Under the Scheme, shareholders of Old Phoenix received one ordinary share in New Phoenix for each ordinary share held in Old Phoenix. New Phoenix thereby became the new parent company of the Group and Old Phoenix became a wholly owned subsidiary. Trading in the shares of New Phoenix commenced on the Aquis Stock Exchange Growth Market on 28 January 2026. Old Phoenix was subsequently re-registered as a private limited company under the name Phoenix Digital Assets Limited. As part of the reorganisation, the relevant assets and liabilities of the predecessor business were transferred to New Phoenix at their historical carrying values.

The reorganisation represented a change in the legal parent of the Group and did not result in a substantive change in the underlying business or in the relative interests of shareholders. Accordingly, the reorganisation has been accounted for in these consolidated interim financial statements as a continuation of the existing Group. Assets and liabilities have been carried forward at their historical carrying amounts and no goodwill or other fair value uplift has been recognised. In the separate entity workings, the reorganisation adjustments have been retained within intercompany balances and are eliminated on consolidation.

As part of the reorganisation, the predecessor Group's capital redemption reserve of £625,000, which arose from the cancellation of shares by the former UK parent in a prior period, was reclassified in full as part of the Group reconstruction reserve. The reclassification reflects the replacement of the predecessor parent's legal capital and reserve structure by that of New Phoenix for consolidated reporting purposes. It has no impact on total shareholders' equity or on profit or loss for the period. The capital redemption reserve is therefore presented as an opening reserve in the consolidated statement of changes in equity and has a nil closing balance at 30 June 2026.

The consolidated statement of comprehensive income for the six months ended 30 June 2026 therefore includes the results of the predecessor Group for the period before the reorganisation and the results of the Group headed by New Phoenix thereafter. The comparative information for the six months ended 30 June 2025 and the year ended 31 December 2025 represents the historical consolidated financial information of Old Phoenix and its subsidiaries (the predecessor Group).

3.     Critical accounting estimates and judgements

The preparation of the consolidated interim financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses. The principal areas of judgement and estimation continue to include the valuation of unquoted investments, valuation of share-based payments and the measurement of digital assets and tokens. During the period, management has also applied judgement in determining the appropriate accounting and presentation for the Group reorganisation described in note 2.

4.     Share based payments

The Group recognised a share-based payment expense of £216,134 for the six months ended 30 June 2026 (six months ended 30 June 2025: £21,890; year ended 31 December 2025: £444,446).

The replacement of outstanding predecessor options and warrants with equivalent instruments in New Phoenix as part of the January 2026 reorganisation has been treated as a continuation of the existing awards, with no incremental fair value recognised on the replacement. The cumulative predecessor share-based payment reserve has therefore been carried forward.

5.     Loss per ordinary share

The calculation of basic loss per share is based on the loss for the period attributable to the ordinary equity holders of the Company and the weighted average number of ordinary shares outstanding during the period.

Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume the conversion of all dilutive potential ordinary shares.

For all periods presented, there is no difference between basic and diluted loss per share due to the loss position of the Group. Share options and warrants that could potentially dilute basic earnings per share in future periods have not been included in the calculation of diluted loss per share as their effect would be anti-dilutive.

6.     Intangible Assets - digital assets and tokens

The breakdown for all digital assets and tokens held at 30 June 2026 are listed below:

7.     Investments

The country of incorporation and investment class for investments held by the Group at 30 June 2026 are listed below:

8.     Interest-bearing loans and borrowings

The Group continues to have a secured credit facility with AMINA Bank AG, a FINMA-regulated Swiss bank.

On 27 January 2026, Phoenix Digital Assets (Gibraltar) PLC drew US$6.85 million under the facility to replace the facility previously held by Phoenix Digital Assets Limited (UK). A further US$0.1 million was drawn during the period.

At 30 June 2026, the principal amount outstanding was US$6.95 million and the carrying amount of interest-bearing loans and borrowings was £5,243,268 (30 June 2025: £2,402,912; 31 December 2025: £4,957,269). The facility bears interest at SOFR plus 7.5% per annum and is secured against certain of the Group's digital assets.

9.     Events after the reporting period

Subsequent to 30 June 2026, The AMINA Bank AG facility was replaced by a facility with Sygnum Bank AG in July 2026.

In addition, subsequent to the reporting date, the Group made corporation tax payments totalling £6,646,116 against the corporation tax liability of approximately £8.3 million recognised at 30 June 2026.