Notes to The Consolidated Financial Statements

1.    General Information

Gelion Plc ('Gelion' or the 'Company') is a 100% owner of:

·      Gelion Technologies Pty Ltd, an Australian subsidiary which is involved in the research and development of sulfur based battery technologies and integration solutions;

·      Gelion Europe Ltd (formerly OXLiD Ltd), a UK subsidiary which is involved in the research and development of sulfur based battery technologies;

·      Battery Minerals Ltd, a UK subsidiary which is involved in the development of the recycling technology of lithium-ion battery; and

·      OXLiD Ltd, a UK non-trading subsidiary.

Gelion is a public limited company, limited by shares, incorporated and domiciled in England and Wales. The Company was incorporated on 26 September 2015. The registered office of the Company is at c/o External Services Limited, 20 Central Avenue, St Andrews Business Park, Norwich, NR7 0HR.

The registered office has changed from Noble Street on 4 February 2026. The registered company number is 09796512.

Gelion Plc was originally incorporated as Gelion UK Ltd. On 12 November 2021, Gelion UK Ltd was re-registered as a public limited company under the Companies Act and its name was changed to Gelion plc. 

The Board, Directors and management referred to in this document refers to the Board, Directors and management of Gelion.

2.    Accounting Policies

2.1          Basis of preparation

The interim consolidated financial statements for the period 1 July 2025 to 31 December 2025 are unaudited. The financial statements also incorporate the unaudited figures for the interim period 1 July 2024 to 31 December 2024 and the audited figures for the year ended 30 June 2025 (where applicable). These interim consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the 2025 annual report.

These interim financial statements are presented in Great British Pounds (GBP) unless otherwise stated, which is the Company's presentational currency and the parent company's functional currency. Amounts are rounded to the nearest thousand, unless otherwise stated. The functional currency of the subsidiaries are both Great British Pounds (GBP) and Australian Dollars (AUD). Some numerical figures included in this Interim Report have been subject to rounding adjustments.

2.2          Going Concern

The interim financial statements have been prepared on a going concern basis which assumes that the Group and Company will have sufficient funds available to enable it to continue to trade for the foreseeable future being a period of at least 12 months from the date of approval of these financial statements. In making their assessment that this assumption is correct, the Directors have undertaken an in-depth review of the business, its current prospects, and cash resources as set out below.

The Company is a holding entity and therefore the going concern assessment for the Company was performed as part of the Group's assessment.

As at 31 December 2025, the Group had cash in bank of £10.5 million.

In determining the going concern status of the business, the Directors have reviewed the Group's cash flow

forecast for the period to 28 February 2027 ("the going concern period"), including a reasonable possible

downside sensitivity of a 10% increase in non-controllable operating costs (excluding payroll).

At the end of the going concern period, the Group is forecast to retain a reasonable proportion of the funds raised in the recent capital raise. As a worst-case scenario, if no further cash receipts were received through R&D tax incentives, RDEC refunds, and grant income between the date of approval of these financial statements and 28 February 2027 with no mitigating actions being taken, the Group would still retain a positive cash balance at the end of the going concern period.

After due consideration of the forecast and current cash resources including the capital raise approved on 5 November 2025, the Directors confirm that they are satisfied that the Group and Company will be able to continue to operate and meet its liabilities as they fall due over the going concern period to 28 February 2027. Accordingly, the Board has concluded that the going concern basis of preparation of the Group and Company Financial Statements is appropriate and that there are no material uncertainties that would cast doubt on that basis of preparation.

2.3          Earnings per share

Basic earnings/loss per share

Basic earnings/loss per share is calculated by dividing:

•    the profit or loss attributable to owners of Gelion Plc, excluding any costs of servicing equity other than Ordinary Shares; by

•    the weighted average number of Ordinary Shares outstanding during the period, adjusted for bonus elements in Ordinary Shares issued during the period.

Diluted earnings/loss per share

Diluted earnings/loss per share adjusts the figures used in the determination of basic earnings/loss per share to take into account:

•      the after-income tax effect of interest and other financing costs associated with dilutive potential Ordinary Shares; and

•      the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential Ordinary Shares.

2.4          Share-based payments

The Group provides benefits to its employees in the form of share-based payments, whereby employees render services in exchange for shares or rights over shares (equity-settled transactions) in the parent entity.

The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using a Black- Scholes model. This calculation is completed by the parent entity.

The cost of these equity-settled transactions is recognised as an expense, with a corresponding increase in equity, over the period in which the service conditions are fulfilled (the vesting period), ending on the date on which the relevant employees become fully entitled to the award (the vesting date).

At each subsequent reporting date until vesting, the cumulative charge to P&L is the product of:

•      the grant date fair value of the award;

•      the current best estimate of the number of awards that will vest;

•      the expired portion of the vesting period; and

•      the removal of any fair value attributable to share options that have contractually lapsed or expired.

The charge to profit and loss for the period is the cumulative amount as calculated above less the amounts already charged in previous periods. There is a corresponding entry to the share-based payment reserve in equity.

If a share-based payment arrangement is modified, the minimum expense recognised over the vesting period is the original fair value. If the modification increases fair value, the additional fair value is recognised over the remaining vesting period.

2.5          Non-Recurring Items

The Group considers certain unusual or infrequent items that either because of their size or their nature, or relevance to the business as are non-recurring and disclose separately to report the underlying performance of the business. For an item to be considered as a separate item, it must initially meet at least one of the following criteria:

•      It is a significant item, which may cross more than one accounting period.

•      It has been directly incurred as a result of either an acquisition / divestment or funding related or arises from a major business change.

•      It is unusual in nature, e.g. outside the normal course of business.

If an item meets at least one of the criteria, the Board, through the Audit and Risk Committee, then exercises judgement as to whether the item should be classified as an allowable adjustment to IFRS performance measures and disclosed separately.

2.6          Foreign currency translation

The functional currency of each company in the Group is that of the primary economic environment in which the entity operates. Monetary assets and liabilities denominated in foreign currencies are translated into GBP at the rates of exchange ruling at the period end. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction.

All differences are taken to the Statement of Comprehensive Income. On consolidation, the assets and liabilities of the Group entities that have a functional currency different to the presentational currency are translated into GBP at the closing rate at the date of the Statement of Financial Position. Income and expenses for each statement of profit or loss are translated at average exchange rates for the period. Exchange differences are recognised in other comprehensive income and accumulated in a foreign exchange translation reserve.

2.7          Critical accounting judgements and key sources of estimation uncertainty

The key sources of estimation uncertainty and critical judgements disclosed in the annual financial statements for the year ended 30 June 2025 remain unchanged at the interim reporting date, with the exception of the estimate relating to the R&D tax credit.

2.7.1     R&D tax incentives

From 1 July 2011, the Australian Taxation Office has provided a tax incentive, in the form of a refundable tax

offset of 43.5%, for eligible research and development expenditure.

Both Gelion Europe Ltd and Battery Minerals are eligible to claim Research and Development Expenditure Credit (RDEC) under the SMEs program.

The Group does not recognise a receivable for R&D tax incentive or the RDEC at half-year and recognises this at the year-end only based on total eligible expenditure incurred during the year. As such, no R&D tax incentive receivable or RDEC has been recognised for the period ended 31 December 2025.

3.    Other income

Grant income relates to approved grant funding for Gelion Technologies Pty Limited, Gelion Europe Ltd and Battery Minerals through the Australian Renewable Energy Agency (ARENA), the Advanced Propulsion Centre (APC) and Faraday Battery Challenge (FBC) programs. The grant funding is recognised on an accrual basis and are claimed either on a monthly, quarterly or annual basis with the funds received in the month after the claim submission.

4.    Administrative Expenditure

Administrative expenditure includes non R&D personnel and related costs (including salaries, benefits and payroll tax), regulatory and compliance, legal and costs associated with consultancy services.

5.    R&D Expenditure

R&D expenditure includes R&D & technical personnel and related costs (including salaries, benefits and payroll tax) and costs associated with product research, design and development.

6.    Share-Based Payments

The Directors recognise the role of the Group's staff in contributing to its overall success and the importance of the Group's ability to incentivise and motivate its employees. Therefore, the Directors believe that certain employees should be given the opportunity to participate and take a financial interest in the success of the Company, aligning employee interests with shareholders and Company goals.

A new Share Option Plan was introduced in FY23 to motivate and incentivise key talent to assist the Group in achieving its strategic aims whilst remaining consistent with its tolerance for risk, all set within delegated limits set out at the time of the IPO.

These options are structured as nominal cost options. The options will normally vest in three equal tranches over three years, subject to continued employment.

Share-based payment expenses are calculated using the graded vesting method, whereby a larger portion of the total expense is recognised in earlier vesting periods and decreases in the subsequent years. This expense pattern aligns with the economics of these awards, as employees render a greater proportion of the services required to earn the awards during the initial vesting periods.

Issued during the six months period to 31 December 2025

•      On 31 August 2025, 727,265 options were granted that will vest in three equal tranches, the first anniversary is 31 August 2026, followed by annual vesting on 31 August 2027 and 31 August 2028. The options were granted with the exercise price of 0.1 pence and will be exercisable up to the tenth anniversary of the grant.

•      On 1 December 2025, 1,494,887 options were granted that will vest in three equal tranches, the first anniversary is 31 August 2026, followed by annual vesting on 31 August 2027 and 31 August 2028. The options were granted with the exercise price of 0.1 pence and will be exercisable up to the tenth anniversary of the grant.

Issued during the six months period to 30 June 2025

•      On the 6 January 2025, 300,000 options were granted under an Unapproved share option scheme to Director Dr Graham Cooley that will vest in three equal tranches, the first anniversary being 6 January 2026, followed by annual vesting on 6 January 2027 and 6 January 2028, subject to continuing to be a Director of the Group. The options were granted with the exercise price of 0.1 pence and will be exercisable up to the tenth anniversary of the grant.

•      On the 15 March 2025, 1,500,000 options were granted under an Unapproved share option scheme to advisor Prof. Markus Antonietti that will vest in three equal tranches, the first anniversary being 15 March 2026, followed by annual vesting on 15 March 2027 and 15 March 2028, subject to continuing as an advisor to Gelion PLC. The options were granted with the exercise price of 0.1 pence and will be exercisable up to the fifth anniversary of the grant.

•      On 25 March 2025, 706,899 options were granted that will vest in three equal tranches, the first anniversary being 31 August 2025, followed by annual vesting on 31 August 2026 and 31 August 2027. The options were granted with the exercise price of 0.1 pence and will be exercisable up to the tenth anniversary of the grant.

•      On 30 April 2025, 1,113,737 options were granted that will vest in three equal tranches, the first anniversary being 31 August 2025, followed by annual vesting on 31 August 2026 and 31 August 2027. The options were granted with the exercise price of 0.1 pence and will be exercisable up to the tenth anniversary of the grant.

Issued during the six months period to 31 December 2024

•      No options were issued during this period.

Summary of movements in awards:

The range of exercise prices for options outstanding at 31 December 2025 was £0.001 to £1.45 (2024: £0.001 to £1.45).

The weighted average remaining contractual life for the share options outstanding as at 31 December 2025 was 5.41 years (2024: 5.05 years).

Of the total number of options outstanding at 31 December 2025, 11,035,318 (31 December 2024: 8,371,128) had vested and were exercisable.

7.    Non-Recurring Items

Non-recurring costs in the 6 month period to 31 December 25 include one-off capital raise related expenses as well as deferred consideration relating to the acquisition of Gelion Europe Ltd (formerly OXLiD Ltd). These have been separately disclosed to assist the user of the financial information to understand and compare the underlying results of the Company.

8.    Loss Per Share

The calculation of the loss per share is based on the loss for the financial period after taxation of £3,313,000 (2024: £3,613,000) and on the weighted average of 192,922,306 (2024: 136,446,587) Ordinary Shares in issue during the period.

During the 6 month period to 31 December 2025, the parent company issued 52,500,000 shares as part of the capital raise in November 2025. On 18 December 2025, 69,673 shares were issued as a result of options exercised.

There were 16,620,562 share options outstanding as of 31 December 2025 (30 June 2025: 14,468,083). The impact of these options would be to reduce the diluted loss per share and therefore they are antidilutive. Hence, the diluted loss per share reported for the periods under review is the same as the earnings per share.

9.    Other receivables

R&D tax incentives are granted by the Australian Taxation Office and the HMRC in the form of tax offsets. The key judgements applied in the recognition of this receivable are detailed in note 2.7. The RDEC receivable at 31 December 25 relates to HMRC R&D tax offset for eligible expenditure for the period ending 30 June 25.  Grant income relates to receivables in Gelion Technologies Pty Limited for grant funding from ARENA and Gelion Europe Ltd for grant funding in the UK, obtained through the Faraday Battery Challenge (FBC) and the Advanced Propulsion Centre (APC).

The Directors consider that the carrying value of other receivables approximates to their fair value.

10.  Issued Capital and Reserves

Share capital and premium

a)     On 24 December 2024, 11,397,837 new ordinary shares of £0.001 have been issued at a price of 15 pence per share.

Transaction costs incurred in the issuing of shares in the period ended 31 December 2024 of £278,000 of which £245,000 was offset against share premium and £33,000 was expensed.

b)    On 3 January 2025, 1,033,334 new ordinary shares of £0.001 have been issued at a price of 15 pence per share.

c)     On 6 May 2025, 28,381,093 new ordinary shares of £0.001 have been issued at a price of 9 pence per share.

Transaction costs incurred in the issuing of shares in the period ended 30 June 2025 of £263,000

of which £206,000 was offset against share premium and £57,000 was expensed.

d)    On 5 November 2025, 52,500,000 new ordinary shares of £0.001 have been issued at a price of 20 pence per share.

Transaction costs incurred in the issuing of shares in the period ended 31 December 2025 of

£643,000 of which £557,000 was offset against share premium and £86,000 was expensed.

Nature and purpose of other reserves

Other reserves

-              Share-based payments reserve

The share-based payments reserve is used to recognise the value of equity-settled share-based payments provided to employees, including key management personnel, as part of their remuneration. Refer to note 6 for further details of these plans.

-               Foreign currency translation reserve

The subsidiary's functional currency is AUD and therefore on consolidation a foreign exchange gain or loss on translation of net assets is recognised through other comprehensive income at each reporting date. These gains or losses are accumulated in a foreign currency translation reserve.

-               Capital reduction reserve

Immediately following the Second Bonus Issue in 2021, the balance standing to the credit of the share premium account was cancelled and the amount so cancelled was credited to a distributable reserve called the 'capital reduction reserve'.

-               Merger relief reserve

On 29^th November 2023, The Company completed the acquisition of 100% of ordinary shares of Gelion Europe Ltd. The transaction consideration involved a combination of cash and issuance of 10,508,582 ordinary shares in Gelion. The investment was recognised at fair value, and the excess of the fair value over the nominal value of the issued share capital is recorded within equity as a merger relief reserve.

-               Prepaid equity reserve

The prepaid equity reserve is used to recognise capital paid in advance of shares issued. The Directors participated in the December 2024 capital raise and £155,000 was received by the parent as capital paid in advance of shares issued prior to 31 December 2024. The shares were issued on 8 January 2025 and this contribution has therefore been recognised as prepaid equity reserve. 

Other non-distributable reserves:

11.  Events subsequent to period end

The directors are not aware of any events subsequent to the reporting period that require adjustment or disclosure in the financial statements.

12.  Alternative Performance Measure (APM)

The Group uses the following non-IFRS performance measure to provide additional insight into financial performance. This measure supplements, but does not replace, IFRS reporting and may not be directly comparable to similar measures used by other companies.

Alternative Performance Measures (APMs) should be viewed as supplementary information only and not in isolation.

When determining whether an item qualifies as an allowable adjustment to IFRS measures, the Group considers items that are significant either due to their size or nature, and that are non-recurring. To qualify as an allowable adjustment, an item must meet at least one of the following criteria:

·      It is a significant item, which may span more than one accounting period.

·      It is directly incurred as a result of an acquisition, divestment, or arises from a major business change.

·      It is unusual in nature, occurring outside the normal course of business.

If an item meets any of these criteria, the Board, through the Audit and Risk Committee, exercises judgment on whether it should be classified as an allowable adjustment to IFRS performance measures.

Allowable Adjustments

The following have been defined as allowable adjustments:

a)     Acquisition-related costs - Costs directly incurred in relation to acquisitions.

b)    Capital raise and ARENA grant application costs - Costs associated with capital raising and ARENA grant applications.

c)     Other non-recurring costs - Includes losses on disposal of fixed assets, write-offs of IP intangibles, and agent fees related to new premises.

d)    Share-based payments expense - non-cash expenses relating to employee incentive schemes.

Purpose and Use

This measure provides a consistent view of underlying results derived from core business activities. It is widely used by securities analysts, investors, and other stakeholders to evaluate financial performance and compare performance across periods.

Management closely monitors this measure to assess the Group's operating performance, support financial and strategic decision-making, and better understand underlying trends on a comparable, period-on-period basis.

Measure

1.    Adjusted EBITDA loss is calculated by excluding certain costs (as detailed in the table) from Operating loss:

Reconciliation:

Operating loss to Adjusted EBITDA loss

2.    Adjusted loss after taxation is calculated by excluding non-recurring expenses from reported loss from ordinary activities after taxation.

Reconciliation: