ECO BUILDINGS GROUP PLC

Condensed unaudited consolidated income statement and statement of comprehensive income

ECO BUILDINGS GROUP PLC

Condensed unaudited consolidated statement of financial position

ECO BUILDINGS GROUP PLC

Condensed consolidated statement of cash flows

ECO BUILDINGS GROUP PLC

Condensed consolidated statement of changes in equity

Notes to the condensed consolidated financial statements for the period ended 30 June 2025

(1)              General information

The principal activity of Eco Buildings Group plc and its subsidiary and associate companies (collectively "Eco Buildings Group" or "Group") is the production of GFRG panels for use in construction and the processing of dimensional stone.

Eco Buildings Group plc is the Group's ultimate Parent Company ("the Parent Company"). It is incorporated in England and Wales and domiciled in England. The address of its registered office is 160 Camden High Street, London, NW1 0NE. Eco Buildings Group plc shares are admitted to trading on the London Stock Exchange's AIM market.

(2)              Basis of preparation

The results presented in this report are unaudited and they have been prepared in accordance with the principles of International Financial Reporting Standards ("IFRS") as adopted by the European Union that are applicable to the financial statements for the year ending 31 December 2024.

The accounting policies applied in these results are consistent with those applied in the Group's Annual Report and Accounts for the year ended 31 December 2024 and those expected to be applicable to the financial statements for the year ending 31 December 2025.

This half yearly report does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006.  Statutory accounts for Eco Buildings Group plc for the year ended 31 December 2024 were approved by the Board on 30 June 2025 and have been filed with the Registrar of Companies. The report of the auditors on those accounts was unqualified and did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006.  These condensed interim financial statements for the six months ended 30 June 2025 have been prepared in accordance IAS 34, 'Interim financial reporting', as adopted by the European Union. The condensed interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2024, which have been prepared in accordance with IFRS as adopted by the European Union.  The Annual Report and Accounts 2024 for the Group are available at www.eco-buildingsplc.net

(3)              Going concern

The Directors have thoroughly reviewed detailed projected cash flow forecasts and believe it is appropriate to prepare this report on a going concern basis. In making this assessment, they have considered the following factors:

a)     the current working capital position and operational requirements;

b)    the proposed business plan for the combined entity including the development of sales

c)     rates of production at the newly operational plant in Durres, and the any risks that may impact the levels of production;

d)    current order book including purchase orders received in September 2025 and the companies ability to satisfy these from existing production;

e)    the timing and expected start of revenues under the contracts for construction secured by Eco Buildings

f)     the timing of expected sales receipts and completion of other existing orders, as well as collection of outstanding debtors;

g)     the sensitivities of forecast sales figures over the next two years;

h)    the timing and magnitude of planned capital expenditure including expansion of production facilities at the GFRG factory in Albania; and

i)      the level of indebtedness of the company and timing of when such liabilities may fall due, and accordingly the working capital position over the next 18 months.

The forecasts assume that the Company will execute the business plan for the combined entity..  It further assumes that production at the Fox Marble factory will continue to operate in good order.   The forecast assumes existing contracts held by the Company will be fulfilled on a timely basis, and that the factory in Durres operates in good order.    The Company also anticipates significant revenue growth through the realization of existing sales contracts and offtake agreements, as well as from newly generated sales.

The forecasts also assume that the convertible loan note expiring in 2025 will be extended.  The Directors are confident based on ongoing discussions with the investor that the loan note will be extended. They therefore consider it appropriate to prepare the financial statements on a going concern basis.

However, as at the date of approval of these financial statements, there are no legally binding agreements in place in relation to extension of terms with the loan note holder which may cast doubt about the Group's ability to continue as a going concern and therefore it may be unable to realise its assets and discharge its liabilities in the normal course of business. The financial statements do not include the adjustments that would result if the Group was unable to continue as a going concern.

There are several scenarios which management have considered that could impact the financial performance of the Company.  These include:

a)     The business plan for the combined entity, including planned capital and strategic expansions could be delayed or result in further losses for the group;

b)    Levels of production at the factory could be lower than expected; Costs of construction of the units could be higher than expected;

c)     Levels of production at the quarries can be impacted by unforeseen delays due to inclement weather or equipment failure; lower than expected quality of material being produced, and the continuing effects of the pandemic;

d)    Costs of production and construction could be higher than planned, or there could be unforeseen additional costs;

e)    Fulfilment of the Company's order book could be delayed, or the payment of amounts due under such contracts could be delayed; and

f)     The resumption of block sales to the international block market may be slower than expected.

If the cash receipts from sales are lower than anticipated the Company has identified that it has available to it several other contingent actions, that it can take to mitigate the impact of potential downside scenarios. These include seeking additional financing, leveraging existing sale agreements, reviewing planned capital expenditure, reducing overheads and renegotiation of the terms on its existing debt obligations.  

In conclusion having regard to the existing and future working capital position and projected sales, the Directors are of the opinion that the application of the going concern basis is appropriate.

(4)              Loss per share

(5)              Intangible assets

(6)              Property, plant and equipment

(7)              Borrowings

(a)   Eco Buildings Operations Limited Loan Note

On 3 March 2022 the Group entered into an agreement to acquire operational assets from Gulf Wall FZO, a company registered in Dubai, United Arab Emirates. The consideration for this purchase was the issue of shares in Eco Buildings Group Ltd and the issue of $1,000,000 (£759,763) loan note. The terms of the loan note were agreed on 7 September 2022.  The loan note has a four-year term and an interest rate of 2%.  As at 30 June 2025 the loan note held at amortised cost had a balance of €847,753. (31 December 2024 - €913,771).

(b)   Series 11 Loan Note

On 27 May 2020 Eco Buildings Group PLC reached agreement with the holders of the Series 3, 4, 6, 7, 8, 9 and 10 loan note holders to reschedule the terms of the loan notes.  The existing loan notes were cancelled and replaced by the Series 11 Loan Note.  The Series 11 Loan Note has an interest rate of 2% per annum.  The Loan note was due for conversion or repayment on the 1 December 2026 with a conversion price of 5p.  

The noteholders had the right, in the event of a change of control of the Company, to give written notice to the Company to require that the interest rate on the stock increases to 25% per annum with effect from the date of the change of control. In the event the noteholders elected to increase the interest rate, the Company may repay the stock at par, together with all accrued interest.  On 27 April 2023, the Company amended the Series 11 CLNs pursuant to which the terms of the Series 11 Instrument were altered to agree that (i) the Acquisition shall not cause the interest rate payable pursuant to the Series 11 Instrument to increase, notwithstanding that a change of control of the Company will occur, and (ii) the Series 11 CLNs would convert at a rate of 80 pence per ordinary share.

As at 30 June 2025, the Series 11 Loan Note held at amortised cost had a balance of €2,432,238 (31 December 2024 - €2,480,251).  The Stockholders' option to convert the loan has been treated as an embedded derivative and measured at fair value.  As at 30 June 2025 the derivative had a value of nil (31 December 2024 - €555).  The fair value has been assessed using a Black Scholes methodology. The derivative is classified as a level 3 derivative on the basis that the valuation includes one or more significant inputs not based on observable market data.

(c)    Gulf Loan Note

As consideration for the acquisition of Gulf Marble Investments Limited Eco Buildings Group plc issued an Unsecured Convertible Loan Note ('Gulf Loan Note') in the amount of €1,785,000.  Under the terms of the Loan Note, the holder may elect to convert at a conversion price of 130% of the 3-month volume weighted average share price.   The Loan Note was repayable from 1 October 2020.  The Loan Note carries an interest rate of Libor plus 1.5% payable annually in arrears.  The Gulf Loan Note was amended on 7 August 2021 pursuant to which the total principal amount to be repaid under the Notes was increased to €1,885,000. In addition, interest shall accrue in respect of the GM Notes at the rate of 4.5% in the period from 8 August 2021 to 1 January 2025. Furthermore, if the Company raises more than €7 million prior to the date of repayment of the Notes, 25% of the Notes are to be repaid immediately.

As at 30 June 2025, the Gulf Loan Note held at amortised cost had a balance of €2,013,984 (31 December 2024 - €1,955,036).  The Stockholders' option to convert the loan has been treated as an embedded derivative and measured at fair value.  As at 30 June 2025, the derivative had a value of nil (31 December 2024 - nil).  The fair value has been assessed using a Black Scholes methodology. The derivative is classified as a level 3 derivative on the basis that the valuation includes one or more significant inputs not based on observable market data.

(d)   Other Borrowings held at amortised cost

In July 2021 Eco Buildings Group Plc borrowed £50,000 under the Covid bounce back loan scheme.  The loan carries an interest rate of 2.5% and is repaid in monthly instalments over five years.  As at 30 June 2025 there remained €14,786 outstanding on this debt.

The Directors consider that the carrying amount of borrowings approximates their fair value at 30 June 2025.

(8)              Share capital

On the 2 June 2023 each Ordinary Share in the issued share capital of the Eco Buildings Group PLC at the 1 June 2023 was sub-divided into 13 Sub-divided Shares, following which 113,974 Sub-divided Shares were issued at nominal value. Following the Sub-divided Share Issuance, every 659 Sub-divided Shares was consolidated into one Post-Consolidation Ordinary Share and then each Post-Consolidation Share was sub-divided into one New Ordinary Share with a nominal value of 1p and one New Deferred Share with a nominal value of 50p.

The New Ordinary Shares have the same rights as the previous Ordinary Shares including voting, dividend, return of capital and other rights.

The New Deferred Shares do not have any voting rights and do not carry any entitlement to attend general meetings of the Company; nor will they be admitted to AIM or any other market.

The Share Reorganisation resulted in the Company having 8,232,857 New Ordinary Shares and 8,232,857 New Deferred Shares being in issue immediately following the Share Reorganisation. 

Issue of Shares

On the 17 January 2025 issued 3,000,000 shares in settlement of £135,000 of loan notes issued under the Series 12 Loan notes.

On the 15 May 2025 the company announced that it has raised gross proceeds of £670,000 through a firm placing of 16,750,000 new ordinary shares at a price of 4 pence per share.

On the 22 September 2025, the Company announced that it has issued 5,000,000 new ordinary shares following receipt of a conversion notice of £200,000 on the Loan Notes at a conversion price of 4 pence per share.

(9)              Events after the reporting period

On the 14 July 2025 Deferred shares held by the Company were cancelled in line with the authorities held by the Board to cancel the shares via a resolution of the Board.

On the 4 September 2025 the Company announced it had issued £300,000 of a zero coupon, 2-year loan note, convertible at 4 pence per share. The Note is convertible at any time, at the election of the Note holder, during its 24 month term into new ordinary shares in the Company at a price of 4 pence per share. No interest is payable on the Note.

The Company has also agreed to issue Warrants as part of the Note on a basis of 1 Warrant for every 2 Shares issued. The Warrants may be exercised at a price of 8p and are exercisable at any time up to the third anniversary of the date of this announcement at which time they will lapse.

On the 12 September 2025 the Company announced that it had raised gross proceeds of £600,000 through the placing of 15,000,000 new ordinary shares at the 4p.

On the 22 September 2025 the company announced that it has issued 5,000,000 new ordinary shares following receipt of a conversion notice of £200,000 on the Loan Notes issued by the Company on the 4 September 2025 at a conversion price of 4 pence per share.

Caution regarding forward looking statements

Certain statements in this announcement, are, or may be deemed to be, forward looking statements. Forward looking statements are identified by their use of terms and phrases such as ''believe'', ''could'', "should" ''envisage'', ''estimate'', ''intend'', ''may'', ''plan'', ''potentially'', "expect", ''will'' or the negative of those, variations or comparable expressions, including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors' current expectations and assumptions regarding the Company's future growth, results of operations, performance, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities. Such forward looking statements reflect the Directors' current beliefs and assumptions and are based on information currently available to the Directors