NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

 FOR THE SIX MONTHS ENDED 30 JUNE 2025

1.    General information

Aterian plc ("the Company") is an investment company, focussed on African mineral resource investment opportunities. The Company operates through its 100% owned subsidiary, Eastinco Limited ("EME Ltd"), a Rwandan tantalum, tin and tungsten exploration company, Aterian Resources Limited which holds copper-silver and base metal exploration projects in the Kingdom of Morocco and its 90% interest in Atlantis Metals (Pty) Ltd, a Botswana registered entity holding mineral prospecting licences in the Republic of Botswana.

The condensed interim financial statements for the period ended 30 June 2025 do not constitute statutory accounts as defined in section 434 of the Companies Act 2006. These financial statements have been prepared in accordance with the accounting policies set out in, and are consistent with, the audited consolidated financial statements for the twelve months ended 31 December 2024. A copy of the statutory accounts for the year ended 31 December 2024 has been delivered to the Registrar of Companies. The auditor's report on those accounts was unqualified and did not contain statements under Section 498 (2) or (3) of the Companies Act 2006 but drew attention, by way of emphasis, without qualifying the report, to the Company's assumptions on going concern which stated that the Group and Parent Company's operational existence is reliant on the ability to raise further funding through equity placing or through the support of the directors through an injection of capital. The impact of this together with other matters indicated that a material uncertainty existed that may cast significant doubt on their ability to continue as a going concern. The auditor's opinion was not modified in respect of this matter.

On 29 July 2024, the Listing Rules were replaced by the UK Listing Rules ("UKLR") under which the existing Standard Listing category was replaced by the Equity Shares (transition) category under Chapter 22 of the UKLR.  Consequently, with effect from that date the Company was admitted to the Equity Shares (transition) category of the Official List under Chapter 22 of the UKLR and to trading on the London Stock Exchange's Main Market for listed securities.

The Company is incorporated and domiciled in the UK.  The address of its registered office is 27-28 Eastcastle Street, London W1W 8DH.

The registered number of the Company is 07496976.

2.    Basis of preparation

The material accounting policies applied in the preparation of the Company's Financial Statements are set out below. These policies have been consistently applied to the period presented, unless otherwise stated.

This condensed consolidated interim financial statements for the half-year reporting period ended 30 June 2025 have been prepared in accordance with the UK-adopted International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

The interim financial statements do not include all of the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 31 December 2024, which has been prepared in accordance with UK-adopted international accounting standards and the requirements of the Companies Act 2006, and any public announcements made by Aterian Plc during the interim reporting period.

The condensed interim financial statements are unaudited and have not been reviewed by the auditors and were approved by the Board of Directors on 30 September 2025.

The Financial Statements are presented in £'000 unless otherwise stated which is the Company's functional and presentational currency.

3.    Going concern

The financial statements have been prepared on a going concern basis. The Group has not yet earned material revenues and as at 30 June 2025 was in the feasibility, optimisation and commissioning phase of its ore processing and trading facility in Rwanda. In Morocco and Botswana, each of its assets are in the early stages of exploration and feasibility assessment.

Continuing operations of the Group are currently financed from funds raised from shareholders and this will likely continue to be the case until significant revenue is generated from mining and/or trading and subsequent ore sales. In the short term the Chairman of the Company has made available to the Company a working capital facility, but the Group will likely need to raise further funds in order to progress the Group from the exploration phase into feasibility and eventually into production of revenues.

As at 30 June 2025, the Group had cash and cash equivalents of £47,000 and a working capital facility of £500,000 which is fully utilised. As at the date of this report, cash balances were approximately £120,000. The Company hopes to generate revenues and/or raise further equity to fund both day-to-day expenditure and potential growth although there can be no certainty that such funding will be forthcoming.

As part of their assessment, the Directors have prepared financial cash-flow forecasts on the basis that cost reduction and cost deferral measures can be implemented over the going concern period. The Company's base case financial projections show that the Group will continue to operate within the available facilities throughout the next 12 months. Much of the Group's planned exploration expenditure is discretionary and, if necessary, could be scaled back to conserve cash should circumstances coincide with our expectations. 

The Directors have agreed, if circumstances require, to defer payment of their fees until such time as adequate funding is received and if necessary, scale back all discretionary expenditure including exploration expenditure.

Considering recent successful fund raises the Directors are confident that they can continue to adopt the going concern basis in preparing the financial statements.

The financial statements do not include any adjustment that may arise in the event that the Group is unable to raise additional finance, realise its assets and discharge its liabilities in the normal course of business.

4.    New standards, interpretations and amendments adopted from 1 January 2025

A number of new or amended standards became applicable for the current reporting period. The Group did not have to change its accounting policies or make retrospective adjustments as a result of adopting these standards.

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Standards issued but not yet effective:

At the date of authorisation of these interim financial statements, certain standards and interpretations relevant to the Group and which have not been applied in these financial statements, were in issue but were not yet effective. In some cases, these standards and guidance have not been endorsed for use in the UK. The directors are evaluating the impact that these standards will have on the financial statements of the Group.

5.    Revenue

6.    Other Income

7.    Operating expenses by nature

8.    Interest payable and similar charges

9.    Taxation

The Group has made no provision for taxation as it has not yet generated any taxable income.

The Group had losses for tax purposes of approximately £9.8 million as at 30 June 2025 (£9.1 million as at 31 December 2024) which, subject to agreement with taxation authorities, are available to carry forward against future profits. Such losses have no expiry date. The tax value of such losses amounted to approximately £2.3 million as at 30 June 2025 (£2.1 million as at 31 December 2024). A deferred tax asset has not been recognised in respect of such losses carried forward at the period end, as there is insufficient evidence that taxable profits will be available in the foreseeable future against which the deductible temporary difference can be utilised.

10.  Loss per share

Basic loss per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

The calculation of basic and diluted loss per share is based on the following figures:

11.  Intangible exploration and evaluation assets

12.  Property, plant and equipment

13.  Trade and other receivables

14.  Trade and other payables

15.  Borrowings

PIK 8% Convertible bonds

In May 2025, the Company issued Convertible Bonds totalling £487,000 to both new and existing investors. 

These bonds have a  three year maturity term, expiring on 28 April 2028. The bonds bear interest at 8% per annum. The interest is payable in kind annually starting from 11 months after issuance.

The bonds are convertible into ordinary shares of the Company at a fixed price of 50 pence per share. The conversion price can be adjusted downwards only in two cases:

i.      at maturity, or

ii.     if the Company issues equity below the then-current conversion price, subject to a minimum of 30 pence per share.

The Company may redeem the paid amount of the Bonds in full or in part at any time prior to the Maturity Date subject to first serving 5 Business Days' prior written notice to the Bondholders

The Company shall repay to the Bondholders, if the notice is given:

-      any time up to three months prior to the Maturity Date, for an amount in cash equal to 105% of the principal amount of the Bonds so redeemed together with all accrued but unpaid Interest; or

any time within three months prior to the Maturity Date, for an amount in cash equal to 100% of the

principal amount of the Bonds so redeemed together with all accrued but unpaid interest;

-      on the Maturity Date, for an amount equal to 100% of the principal amount of the Bonds so redeemed together with all accrued but unpaid Interest in Ordinary Shares at the Future Equity Price;

-      not more than ten Trading Days following the closing bid price on the London Stock Exchange being the Reference Price or more for ten consecutive Trading Days, then for an amount in cash equal to 100% of the principal amount of the Bonds so redeemed together with all accrued but unpaid interest.

At or after maturity, repayment may be in cash or in shares at the Maturity Equity Price.

The Company also has a call option to redeem the bonds at par if its shares trade above £1.00 for 10 consecutive trading days, subject to notice. In no event can conversion occur at a price below 30 pence per share.

Derivative liability

The derivative liability element of the PIK Convertible Bonds has been valued using a Monte Carlo simulation approach. The model estimates the present value of the potential gain from converting the bonds into equity at a fixed conversion price (£0.30) over a 3-year term.

The fair value of the derivative at 30 June 2025 was calculated to be £202,132. The key assumptions used in the valuation of the derivative liability were as follows:

16.  Share capital

During the period ended 30 June 2025, the following changes to the Company's share capital took place:

-       In February 2025, the Company announced that it had completed a small private placement of 200,000 new ordinary shares of 10p each at a price of 70 pence per share, raising gross proceeds of £140,000. As part of the Placing, the investors also received 50% warrant coverage, with the issue of 100,000 warrants, with each warrant exercisable at a strike price of 70 pence per ordinary share. The warrants have a maturity date of 30 December 2027.

-       Additionally, the Company issued 365,000 new shares to the Company's Employee Benefit Trust for use as incentive and compensation for its senior executives and directors. As part of the Placing, the investors also received a total of 100,000 warrants, with each warrant exercisable at a strike price of 70 pence per ordinary share and a maturity date of 30 December 2027.

-       The EBT allocation was subsequently raised from 365,000 shares to 565,000 shares, reflecting the Company's commitment to aligning the interests of senior executives and directors with shareholders through long-term equity incentives

17.  Share-based payment arrangements

In April 2025, the Company granted 565,000 EBT options to Directors, employees and former Directors and/or employees following the expiration of existing EBT options.

The total expense recognised in the Statement of Comprehensive Income during the period in respect of options and warrants over Ordinary Shares was £30,000 (2024: £nil ). The Company issued 600,000 warrants during the period ended 30 June 2025.

During the period ended 30 June 2025, the Company issued the following warrants:

-      On 10 February 2025, each subscriber to the placing of shares on the same date received 50% warrant coverage totalling in aggregate 100,000 warrants as described in Note 16.

-      On 18 April 2025, the Company issued 500,000 warrants pursuant to a finance facility of up to $4.5 million. The warrants are exercisable at 50 pence per ordinary share with a maturity date of 30 April 2027.

18.  Related party transactions

Transactions with directors:

Charles Bray is owed £69 by the Company at 30 June 2025 (31 December 2024: £1,124).

The Company had a loan of £225,000 due to IQ EQ (Jersey) Limited, the trustees of the C Bray Transfer Trust as more fully described above in Note 15. 

Edlin Holdings Limited is an Isle of Man company which invests and operates non-US based investments.  The ultimate beneficial owners of Edlin Holdings Limited are Bray family members.

Details of Directors' remuneration is set out above in Note 5.

19.  Seasonality of the Group's business

There are no seasonal factors which materially affect the operations of the Group's business.

20.  Subsequent events

On 31 July 2025, the Company issued a total of 300,000 warrants exercisable at 40 pence per ordinary share with a maturity date of 30 December 2027.

On 30 September 2025, the Company announced it had secured US$325,000 of mezzanine funding to support general operations and expand trading activities in Rwanda, with a focus on the acquisition and sale of tantalum-niobium ("Coltan") concentrate. To complement this funding, Aterian issued 1.043 million warrants following the expiry of 0.50 million outstanding warrants, providing investors the opportunity to participate in the Company's growth trajectory. The newly issued warrants have a 40 pence exercise price and can be exercised any time until 30 December 2027.

There are no other events occurring subsequent to 30 June 2025 requiring disclosure in these interim financial statements.

21.  Reports

A copy of this half year interim report, as well as the annual statutory accounts to 31 December 2024 are available on the Company's website at www.aterianplc.com