CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS   

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

1.         COMPANY INFORMATION

Argo Blockchain plc ("the Company") is a public company, limited by shares, and incorporated in England and Wales. The registered office is Eastcastle House, 27/28 Eatcastle Street, London, England, W1W 8DH. The Company was incorporated on 5 December 2017 as GoSun Blockchain Limited.

On 21 December 2017, the Company changed its name to Argo Blockchain Limited and re-registered as a public company, Argo Blockchain plc.

On 12 January 2018, Argo Blockchain plc acquired a 100% subsidiary, Argo Innovation Labs Inc. , incorporated in Canada. 

On 22 November 2022, the Company formed Argo Holdings US Inc., a 100% subsidiary incorporated in Delaware, United States, and Argo US Holdings Inc. formed Argo US Operating LLC, a limited liability company incorporated in Delaware, United States (together, the "Group")

On 21 December 2022, Argo Innovation Facilities (US) Inc became Galaxy Power LLC. On 28 December 2022, the Group sold Galaxy Power LLC.

In March 2024, the Group sold 9366-5320 Quebec Inc.  

The principal activity of the Group is Bitcoin mining.

The ordinary shares of the Company are listed under the trading symbol ARB on the London Stock Exchange.  The American Depositary Receipts of the Company are listed under the trading symbol ARBK on Nasdaq.  The Company bond is listed on the Nasdaq Global Select Market under the trading symbol ARBKL.

2.         BASIS OF PREPARATION

The condensed consolidated interim financial statements for the six months ended 30 June 2025 have been prepared in accordance with IAS 34 'Interim Financial Reporting' and presented in US dollars which is further described in Note 3. They do not include all the information required in annual financial statements in accordance with IFRS and should be read in conjunction with the consolidated financial statements for the year ended 31 December 2025, which have been prepared in accordance with UK-adopted International Financial Reporting Standards as issued by the IASB. The report of the auditors on those financial statements was unqualified.

The financial statements have been prepared under the historical cost convention, except for the measurement to fair value certain financial and digital assets and financial instruments.

Critical accounting judgements and key sources of estimation uncertainty

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the financial statements for the year ended 31 December 2023.

During the 2024 audit, an error was identified in the Group's 2024 interim half year results. The Group had reported a gain of $3,397 on the disposal of 9366-5230 Quebec Inc.; however, the cost basis applied was incorrect. Applying the correct cost basis, the transaction resulted in a loss of $1,409. There was no impact on cash flows. Consequently, the net loss for the period ended 30 June 2024 increased by $4,807, from $32,734 to $37,541. Management has evaluated the matter and concluded that the adjustment is not material and does not require restatement of prior period financial statements

3.         ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these condensed consolidated interim financial statements are consistent with those of the previous financial year, except the change in presentational currency from British Pounds to US Dollars and recognition of power credits within Mining Margin in the Statement of Comprehensive Income.  The Group changed its presentational currency to US Dollars with effect from 1 January 2023 due to the fact its revenues, direct costs, capital expenditures and debt obligations are now predominantly denominated in US Dollars.

In order to satisfy the requirements of IAS 8 and IAS 21 with respect to a change in the presentation currency, the statutory financial information as previously reported in the Group's Annual Reports have been restated from GBP into US Dollars using the procedures outlined below:

●     Assets and liabilities were translated to US Dollars at the closing rates of exchange at each respective balance sheet date

●     Share capital, share premium and other reserves were translated at the historic rates prevailing at the dates of transactions

●     Income and expenses were translated to US Dollars at an average rate at each of the respective reporting years on a monthly basis. This has been deemed to be a reasonable approximation to exchange rates at the date of the transactions.

●     Differences resulting from the retranslation were taken to currency translation reserve within equity

●     All exchange rates used were extracted from the Group's underlying financial records

Power credits: The Group recognized power credits in relation to selling power back to the power grid.  The hosting facility sells some of the Group's power back to the power grid when economically feasible.

Going Concern

The preparation of these condensed consolidated interim financial statements requires an assessment of the appropriateness of the going concern basis of accounting.

Since year-end, the Group has continued to experience liquidity pressure driven by lower operating margins, refurbishment and re-hosting costs, and the timing of cash inflows. On 30 June 2025 the Company announced a proposed recapitalisation under a court-sanctioned restructuring plan pursuant to Part 26A of the UK Companies Act 2006 (Recapitalisation Plan).

The framework includes (i) a senior secured multi-draw term loan facility of up to US$7.5 million from Growler Mining Tuscaloosa, LLC ("Growler") to provide liquidity through the Recapitalisation Plan process; (ii) the equitisation of the Company's c.US$40 million unsecured notes; and (iii) Growler contributing assets and/or exit capital in exchange for new equity, with Growler expected to own at least 80% of the Company post-implementation and bondholders receiving equity, with existing shareholders retaining their interests subject to substantial Dilution.

Subsequent to period end, on 9 September 2025 the Company entered into a First Amended and Restated Restructuring Plan Support Agreement and executed the associated secured multi-draw term loan with Growler. An initial draw of approximately US$3.26 million was made at signing; further draws are subject to customary conditions, including the amended agreement remaining in effect. The Company continues to target a first Court hearing in late October 2025 and, if sanctioned, an effective date in early to mid-December 2025.

With respect to the Company's Nasdaq listing, the Company previously disclosed receipt of a delisting notice for minimum bid-price non-compliance and its intention to request a hearing; following the hearing, on 18 September 2025, Argo was notified by Nasdaq that the Panel had granted Argo's request for continued listing on The Nasdaq Global Select Market, subject to the condition that Argo demonstrates compliance with all applicable listing rules on or before 14 January 2026. The Panel considered Argo's recapitalization process under Part 26A of the UK Companies Act and determined that Argo's continued listing request should be granted so as to allow it to complete that process.

As at 30 June 2025, the Group had cash and cash equivalents of US$1,653,675. Subsequent funding under the Growler facility was received after the period end. The Group's financial performance and liquidity remain sensitive to bitcoin price, network hashprice/difficulty and power costs; adverse movements in these variables, particularly in combination, could reduce operating cash generation.

The Directors have reviewed cash flow forecasts covering at least twelve months from the date of approval of these interim financial statements. The forecasts reflect management's estimates of bitcoin prices, network hashprice and power costs, and assume (i) continued access to the Growler loan facility in line with approved budgets and (ii) timely sanction and implementation of the Recapitalisation Plan, including equitisation of the unsecured notes. The Company previously disclosed that it did not make the scheduled 31 July 2025 interest payment on its outstanding notes (subject to a contractual grace period that ended 30 August 2025); this is

intended to be addressed within the recapitalisation.

Material uncertainties

Notwithstanding the steps taken, the following material uncertainties exist that may cast significant doubt on the Group's and Company's ability to continue as a going concern and therefore, that the Group and Company may be unable to realise their assets and discharge their liabilities in the normal course of business:

·    successful completion of the Court process for the Recapitalisation Plan (including any required creditor and, where applicable, shareholder approvals, Court sanction, and Takeover Panel consents/waivers) within the expected timeframe

·    continued availability of funding under the Growler loan facility and the Company's ability to satisfy associated covenants, milestones and draw conditions

·    resolution of the missed notes interest payment and the equitisation of the unsecured notes

·    volatility in bitcoin price, network hashprice and power costs and their impact on operating cash flows

Conclusion

Having considered the matters described above, the Board believes it is appropriate to prepare these interim financial statements on a going concern basis. However, the Directors note that successful execution of the Recapitalisation Plan and continued access to the Growler loan facility, together with the inherent volatility of the Group's operating environment, represent material uncertainties that may cast significant doubt on the Group's and Company's ability to continue as a going concern.

4.         ADOPTION OF NEW AND REVISED STANDARDS AND INTERPRETATIONS

The Group has adopted all recognition, measurement and disclosure requirements of IFRS, including any new and revised standards and Interpretations of IFRS, in effect for annual periods commencing on or after 1 January 2024. The adoption of these standards and amendments did not have any material impact on the financial results or position of the Group.

Standards which are in issue but not yet effective:

At the date of authorisation of these financial statements, the following Standards and Interpretation, which have not yet been applied in these financial statements, were in issue but not yet effective.

The Group has not early adopted any of the above standards and intends to adopt them when they become effective.

No deferred tax asset has been recognised in respect of tax losses carried forward on the basis that there is insufficient certainty over the level of future profits to utilise against this amount.

Income tax expense

The tax on the Group's profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits of the consolidated entities as follows:

5.         TAXATION

6.         INTANGIBLE ASSETS NON-CURRENT

Intangible digital assets are cryptocurrencies owned but not mined by the Group.  The Intangible digital assets are recorded at cost on the day of acquisition. Decreases in fair value are recorded in the fair value reserve in other comprehensive income, if any, then recorded in comprehensive income.  Increases in fair value are recorded in comprehensive income up to prior losses recorded.  Increases in fair value over cost are recorded in the fair value reserve in other comprehensive income.  

The Intangible digital assets held are detailed in the table below:

7.         PROPERTY, PLANT AND EQUIPMENT

8.         TRADE AND OTHER RECEIVABLES

The directors consider that the carrying amount of trade and other receivables is equal to their fair value.

9.         INTANGIBLE FIXED ASSETS CURRENT

The Group mined crypto assets during the period, which are recorded at fair value on the day of acquisition. Movements in fair value are recorded in change in fair value of digital currencies on the statement of comprehensive loss.

10.       ORDINARY SHARES ('000)  

The Group had 720,371 Ordinary shares outstanding at 30 June 2025 and 714,875 at 31 December 2024.

The Group has in issue 63,499 warrants and options at 30 June 2025 and 63,549 at 31 December 2024.

The Group has in issue 27,876 restricted stock units at 30 June 2025 and 9,089 at 31 December 2024.

In March 2025, the Group granted 22,250 performance stock units ("PSUs") to the Chief Executive Officer ("CEO").  The PSUs vest annually over a three-year period subject to continued employment of the CEO and satisfaction of the performance conditions.  If the performance conditions are not satisfied at particular vesting dates, but are subsequently satisfied, the relevant fraction of PSUs will vest.

11.       TRADE AND OTHER PAYABLES  

The directors consider that the carrying value of trade and other payables is equal to their fair value.

12.       LOANS AND BORROWINGS  

The mortgage is secured against the building at Baie Comeau and is repayable over periods of 18 months at an interest rate of lender prime + 0.5%.     

13.       FINANCIAL INSTRUMENTS

Fair Value Estimation

Fair value measurements are disclosed according to the following fair value measurement hierarchy:

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

-     Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices), or indirectly (that is, derived from prices) (Level 2)

-     Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3). This is the case for unlisted equity securities.

The following table presents the Group's assets and liabilities that are measured at fair value at 30 June 2025 and 31 December 2024.

All financial assets are in listed/unlisted securities and digital assets.

There were no transfers between levels during the period.

The Group recognises the fair value of financial assets at fair value through profit or loss relating to unlisted investments at the cost of investment unless:

-     There has been a specific change in the circumstances which, in the Group's opinion, has permanently impaired the value of the financial asset. The asset will be written down to the impaired value;

-     There has been a significant change in the performance of the investee compared with budgets, plans or milestones;

-     There has been a change in expectation that the investee's technical product milestones will be achieved or a change in the economic environment in which the investee operates;

-     There has been an equity transaction, subsequent to the Group's investment, which crystallises a valuation for the financial asset which is different to the valuation at which the Group invested. The asset's value will be adjusted to reflect this revised valuation; or

-     An independently prepared valuation report exists for the investee within close proximity to the reporting date.

14.       COMMITMENTS

The Group's material contractual commitments relate to the hosting services agreement with Merkle Standard LLC, which provides hosting, power and support services at Merkle's facilities. The agreement for the Tennessee facility expires at the end of March 2026, and the agreement for the Washington facility expires at the end of April 2026. It is impracticable to determine monthly commitments due to large fluctuations in power usage and as such a commitment over the contract life has not been determined. The agreement is for services with no identifiable assets, therefore, there is no right of use asset associated with the agreement.

15.       RELATED PARTY TRANSACTIONS  

Key management compensation - all amounts in $000's

Key management includes Directors (executive and non-executive) and senior management. The compensation paid to related parties in respect of key management for employee services during the period was made only from Argo Blockchain PLC, amounting to:

●    $47 (2024 - $68) to Webslinger Advisors Inc. in respect of fees of Matthew Shaw (Non-executive director)

●    $73 (2024 - $63) in respect of fees for Maria Perrella (Non-executive director)

●    $77 (2024 - $68) in respect of fees for Raghav Chopra (Non-executive director)

Total director fees and remuneration, paid directly and indirectly, totalled $470 (2024: $541). 

16.       SUBSEQUENT EVENTS

In September 2025, the Group entered into a First Amended and Restated Restructuring Plan Support Agreement with Growler Mining, LLC n/k/a Growler Mining Tuscaloosa, LLC  and entered into a secured multi-draw term loan facility of up to US$7.5 million with Growler (to provide liquidity through the Recapitalization Plan process and has also entered into the Security Agreements. Upon signing the term loan facility, the Group made an initial draw of approximately US $3.26 million, with subsequent draws to be conditioned on customary closing conditions, including that the Amended RSA remain in full force and effect without having been terminated by either party.

In September 2025, Charlotte Proctor-Worrall was promoted to Chief Financial Officer.

In August 2025, Raghav Chopra resigned as a Director of the Group.

In July 2025, the Group received a letter from Nasdaq Market LLC ("Nasdaq") notifying that the Group's American Depositary Shares would be delisted from The Nasdaq Global Select Market.  In August 2025, the Group requested for continued listing on the The Nasdaq Global Select Market.  In September 2025, Nasdaq granted the Group's request for continued listing on The Nasdaq Global Select Market, subject to the condition that the Group demonstrates compliance with all applicable listing rules on or before 14 January 2026.