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22 March 2016

Gfinity plc

("Gfinity" or the "Company")

Unaudited interim financial statements for the period ended 31 December 2015

Gfinity (AIM: GFIN), a leading eSports business, announces its interim financial results for the six month

period ended 31 December 2015.

Delivering on strategy

58.5 million views - Proved ability to attract high viewership across calendar year 2015 from a

hard to reach and valuable demographic

Quality - Enhanced reputation for quality across game publishers, players and community

Complete turnkey solution - Continued the investment in assets, providing Gfinity with unique

capability to provide a leading, scalable end to end solution for partners Online platform - Tournament Platform for both console and PC delivering more than 25

tournaments a week

Streaming – Created one of London’s leading streaming studios in the Arena, using industry

leading 4k ready technology

Events – Hosted 27 events at the Gfinity Arena over the course of 2015 for the World’s top

players and publishers

Sponsorship/Advertising- Increasing interest from sponsors and advertisers attracted to high

viewership and targeted audience

Financial highlights

Revenues increased by 329% to £624,292 (H1 2015: £145,401); up 50% sequentially from

£415,427 in the six months to June 2015, resulting from a mix of sponsorship, fees from game

publishers and platform providers, premium subscriptions and advertising

Operating Loss increased to £1.8 million (H1 2015: Operating Loss of £1.3 million), reflecting the

planned investment to position the Company for growth

Raised a further £1.0 million (net of costs) through a placing in November 2015

Net cash as at 31 December amounted to £1.55 million (30 June 2015: £2.73 million; 31 December

2014: £4.68 million). As at the date of announcement net cash amounted to £1.25 million

Operational highlights

Gfinity Championships - The 2015 Gfinity Championships, a set of 23 tournaments featuring the

best players/teams in the world, concluded in September 2015 with viewing figures approaching

60 million

Sponsorship - First full period of a 2-year sponsorship agreement with News Corporation,

supported by a number of other sponsorship deals with partners including: Microsoft Xbox, BenQ

monitors, Virgin, TopMan, Green Man Gaming and Scuf Gaming

Exclusive World Championship - Selected by Microsoft in October 2015 to exclusively host the

UK Halo World Championship 2016

Post period

Microsoft XLEI – Selected by Microsoft to provide a dedicated link to their TV Platform with

equipment housed within the Gfinity Arena.

Xbox European Championship - Appointed by Microsoft in January 2016 to host the Xbox

European FIFA 16 Play Like a Legend Championship for a second successive year

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Mobile Gaming - Moved into mobile gaming in February 2016 when selected by Super Evil

Megacorp to stage "The Vainglory Winter Championship" finals

BT Sport – Staged exclusive Race Off event in conjunction with Formula E, with content shown

on BT Sport and attracting strong viewership

CEVO Partnership - Entered partnership with leading US online tournament organiser, CEVO to

jointly stage the Gfinity CEVO Counter Strike Pro-League Series Finals at the Gfinity Arena in

April and May 2016

Product Development

Continued the development of technological assets all to be launched in the first half of 2016,

including: Gfinity TV Player, Xbox app, PC app and Mobile App

Since 1 July 2014, the Company has invested over £1 million in such product development

initiatives, more than half of which forms part of the Company’s Administrative Expenses over

this 18 month period

Neville Upton, Co-founder and Chief Executive of Gfinity plc, commented: “It is pleasing to see another

period of excellent operational progress and a third consecutive period of revenue growth. Our strategy to

invest in the business for future growth is bearing fruit as Gfinity further enhanced its reputation as a

market leader and destination of choice for eSports gamers and spectators alike.

“Looking ahead, the eSports sector is growing unabated and the potential opportunities for Gfinity remain

vast. We have now created a very strong position from which to monetise; drawing on both the reputation

for quality that we have established with gaming publishers and fans alike and the unique suite of

technological and physical assets that we have created. We are seeing increased interest from advertisers

and sponsors who are keen to access the thriving Gfinity audience. These discussions have given us further

encouragement for the potential monetisation of the Gfinity brand and we look to the future with

confidence.”

Enquiries

Gfinity plc

Jonathan Hall, Finance Director

Neville Upton, Chief Executive Officer

+44 330 223 0860

Arden Partners plc – Nominated Adviser and Broker

Chris Hardie, Ciaran Walsh +44 20 7614 5900

Luther Pendragon – Public Relations

Harry Chathli, Alexis Gore, Oliver Hibberd +44 20 7618 9100

About Gfinity

Founded in 2012, Gfinity has quickly established itself as one of the world’s leading eSports companies.

The London-based business enjoys strong relationships with game publishers, players and the wider

eSports community and has already built a strong reputation for delivering high quality competitions, both

on-line and off-line, and producing industry leading eSports broadcasts.

The Company has over half a million registered users, eligible to compete in its online competitions and

stages world leading off-line events, which see the top players in the world, across a range of eSports titles

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travel to the Gfinity Arena in London to take part in competitions, which are broadcast on-line to millions

of viewers around the world. The Company stages events featuring a number of top video gaming titles,

across PCs, consoles and mobile devices.

The Company expects to be able to monetise the strong position that it has created through a combination

of sponsorship, advertising, broadcast income relating to Gfinity’s own events and through fees received

for creating and delivering bespoke events for sponsors and game publishers seeking to engage with the

eSports community.

Gfinity websites:

Investor: www.gfinityplc.com

Commercial: www.gfinity.net

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Overview

Gfinity is pleased to report a period of strong revenue growth and operational progress. The Company

continued to invest in the business in order to deliver on its strategy to build its brand and deliver world-

class online and offline eSports events to a global audience.

As a result of the investment Gfinity further cemented its position as one of the leading providers of

eSports tournaments in the world and is now a widely-recognised “destination” for gamers in the UK and

internationally. With a significant first mover advantage established, Gfinity is well positioned to exploit

the rapid worldwide growth in eSports.

The Company generated revenues totalling £624,292 up 329% from £145,401 in the equivalent six month

period to 30 December 2014, and up 50% sequentially from the prior six months to June 2015. Gfinity has

enjoyed three consecutive periods of revenue growth since listing on AIM providing evidence of the

potential for monetisation within the eSports sector.

Since listing on AIM, Gfinity has also continued to invest both in in building its reputation with game

publishers, prospective sponsors and the wider eSports community and in developing a range of assets,

which provide it with unique capability within the industry and a strong platform from which to monetise.

These assets include the following:

The Gfinity Arena – The only venue of its kind in the UK, designed specifically for staging

eSports events and creating eSports broadcast content

Gfinity.net online platform – An industry leading, fully flexible and automated tournament

management platform enabling Gfinity to operate online competitions in any format across a range

of titles every night of the week

Gfinity broadcast control panel – An application developed in-house, simplifying the process of

creating eSports broadcasts, allowing users to easily combine in game footage, graphics, audio and

video feeds

Gfinity TV – An online TV player, to be launched in April 2016, incorporating a range of features

not currently included in the offerings of other major live streaming platforms

Gfinity Xbox Application – A bespoke application created for Xbox One users, also to be

launched in April 2016, which will for the first time enable them to view Gfinity content,

participate in existing Gfinity events and to create their tournaments using the technology from the

Gfinity.net online platform

Gfinity PC Application – A PC based application allowing users single click entry a matching

service and featuring industry leading anti-cheat technology

In total since 1 July 2014, the Company has invested over £1 million in the above initiatives, allowing it to

provide a unique turnkey solution to partners looking to engage with the eSports community.

Gfinity is currently in discussion with a number of prospective major partners, including game publishers,

sponsors, TV broadcasters and conventional sports rights holders, although it now expects to see the next

major step change in revenue to take effect from the second half of 2016 onwards.

Operating review

The Company's focus in the period was to consolidate its reputation for delivering the highest quality

eSports events, demonstrate its ability to attract a large audience in a demographic that’s attractive to

sponsors and to continue to develop the assets that will provide it with a unique position from which to

monetise, within a very strong growth sector over the course of 2016 and beyond.

UK’s first dedicated eSports Championship season

The period saw the conclusion of the 2015 Gfinity Championships. Gfinity organised over 20 successful

tournaments between the months of March and September 2015 delivering major eSports events with a

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consistency and quality never before seen in the UK. These events were based around several of the

industry’s best selling games including Call of Duty, FIFA 2015/2016, CS:GO, StarCraft and Halo. The

popularity of the events and the fast growing demand for eSports amongst players and spectators was

demonstrated by viewing figures which approached 60 million, exceeding management expectations.

Partnerships / sponsorships

Gfinity continued to build strong relationships with games publishers and its partners. The 2015 calendar

year was the first of the Company’s partnership with News Corporation as a main partner, while during the

period the Company also benefited from revenue from partners including: Xbox, BenQ monitors, Virgin,

TopMan, Green Man Gaming and Scuf Gaming.

At the start of 2016, the Company began the second year of its sales and marketing agreement with Pitch

International ("Pitch") for Pitch to package and sell sponsorship and broadcasting rights on the Company's

behalf. This partnership has already led to a milestone agreement when Gfinity signed a major sponsorship

deal for The Sun to become Gfinity's official newspaper and online news partner in the UK and Ireland.

As Gfinity further established its brand and reputation the Company received increased interest and is

currently engaged in discussions with, a number of potential partners. Management believe there is an

opportunity through its events and widening audiences to draw in sponsors, advertisers and broadcasters

who want access to a highly engaged, defined and targeted demographic of 18-34 year olds, predominantly

male, that play and watch eSports.

Events

Outside of the Gfinity Championship Series, in November 2015, Gfinity was selected by Microsoft to

exclusively host the UK Halo World Championship 2016 qualifiers and finals, part of the Halo World

Championship, the largest Halo eSports competition in the history of the iconic franchise. The UK

Championship Finals were played in front of a live audience at the Gfinity Arena and streamed online on

Twitch TV and Xbox’s own newly launched TV player. Gfinity organised, promoted and delivered the

championship event on behalf of Microsoft.

In addition to the Halo Championships, Microsoft selected Gfinity for the second successive year to host

the European "Play Like a Legend" Championship on FIFA 16. The appointment, announced in January

2016, followed the success of last years' FIFA 15 Play Like a Legend Championship. FIFA continues to be

one of the most popular titles within the eSports community and has helped drive growth in the brand

awareness of Gfinity in key territories including UK, France and Germany.

Early in 2016, the Company also staged its first ‘driving game’ event, partnering with Formula E, to

deliver their ‘Race Off’ event, which saw qualifying drivers compete against Formula E drivers, Bruno

Senna and Nico Prost, with the footage from the event broadcast on BT Sport.

Move into mobile gaming

Gfinity made the significant move into mobile gaming for the first time after Super Evil Megacorp, a USA

headquartered developer of multiplayer online battle arena games, selected Gfinity to host the finals of its

Vainglory Winter Championship. The event was held at the Gfinity Arena from 18 - 20 March 2016 and

was the first competition held there that was played on mobile devices. Eight finalist teams from across

Europe competed for a prize money pool of $25,000. The agreement diversifies Gfinity’s offering and is

an affirmation of the ability of the Company to deliver events across all platforms and of the Gfinity

Arena’s status as a prime venue for delivery of such events.

Growth of eSports

eSports viewership has increased almost eight-fold since 2000. Newzoo, an international market research

firm focused on the games industry, released a report titled "The Global Growth of Esports: Trends,

Revenues and Audience Towards 2017". According to the report the number of eSports enthusiasts will

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jump from 205 million in 2014 to 335 million in 2017 and between 2012-2017 the industry’s audience and

revenue is projected to grow at a CAGR+20% and CAGR+29% respectively. The report goes on to state

that eSports revenue could surpass $1 billion within just a couple of years. Revenue opportunities will

typically involve game publisher investment, sponsorships, online advertising merchandise, licensing and

ticket sales. Significantly in another indication of the transition of eSports to a spectator sport, of the 205 million

people globally that currently watch eSports, 40% do not play any of the top eSports franchises, showing

that competitive gaming has evolved to a spectator sport with a fan base comparable to that of other

mainstream sports.

Financial Review

In the six months to 31 December 2015, Gfinity continued to invest heavily in establishing its reputation as

one of the leading eSports companies in the world, demonstrating the Company's capability to deliver top

quality eSports broadcasts week in week out and building the community of people both watching and

playing in Gfinity events.

Revenue for the six months to 31 December increased to £624,292 (H1 2015: £145,401), and was up 50%

sequentially in the prior six months to June 2015, resulting from a mix of sponsorship, fees from game

publishers, premium subscriptions and ticket sales.

The loss for the period of £1.8 million reflects the significant investment that the Company made in the

staging of its events, the development of Gfinity.net and marketing activities to grow the brand and is in

line with Directors expectations in the period.

As expected, administrative expenses, including staff costs, venue hire, marketing and web development

totalled £1.55 million for the period. This figure also includes £0.2m of expenditure on product

development, which has not been capitalised and £0.1m of non-cash items including depreciation and share

options charge.

As at 31 December 2015, the Company had cash in the bank of £1,554,418 and as of 22 March 2016 a total

of £1,249,583.

Outlook

The important steps taken in the first half to invest for future growth and build the Gfinity brand are

already benefitting the Company. The Gfinity Arena has become a focal point for eSports in the UK,

hosting over 25 events since it opened in March 2015, and viewership levels are increasing significantly

which attracts advertisers and sponsors seeking access to a hard to reach, targeted demographic.

Gfinity’s focus remains to continue to build its brand and enhance its reputation as a leader in delivering

quality eSports events and to crystallise the exciting opportunities that lay ahead.

As stated at the full year results, Gfinity’s ability to take advantage of these opportunities will depend on funding and the speed of revenue development through sponsorship and other forms of monetisation.

Gfinity is currently in discussion with a number of prospective major partners regarding agreements that

would represent a step-change in the Company’s development and the monetisation of its brand. These

discussions have been very encouraging and are progressing well. Given the number and significance of

the discussions being held, it is difficult to quantify the exact timing and the amount of revenues that will

be recognised in the full year 2016. The Board wants to take a prudent approach and anticipates that the

revenue from any resulting agreements will be predominantly recognised in FY17 and therefore revenues

for FY16 are likely to be below market expectations, although still significantly ahead of last year.

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The Board is confident that the right strategy is in place to deliver long term growth and looks to the future

with confidence.

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Gfinity plc

Unaudited Statement of Comprehensive Income

Six months ended 31 December 2015

6 months to

31 December

2015

6 Months to

31 December

2014

1 July 2014

to 30 June

2015

£ £ £

CONTINUING OPERATIONS

Revenue 624,292 145,401 560,828

Cost of sales (957,190) (791,003) (2,001,820)

Gross profit/(loss) (332,898) (645,602) (1,440,992)

Administrative expenses (1,550,279) (746,897) (2,142,745)

Operating loss (1,883,177) (1,392,499) (3,583,737)

Finance income 5,272 126 2,568

Loss on ordinary activities before tax (1,877,905) (1,392,373) (3,581,169)

Taxation 97,176 - –

Retained loss for the year (1,780,729) (1,392,373) (3,581,169)

Loss and total comprehensive income for the

period

(1,780,729) (1,392,373) (3,581,169)

Loss per share (basic and diluted) (0.02) (0.03) (0.06)

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Gfinity plc

Unaudited Interim statement of Financial Position

As at 31 December 2015

Notes

As at 31

December

2015

As at 30

June

2015

£ £

NON CURRENT ASSETS

Property, plant and equipment 367,807 219,848

CURRENT ASSETS

Inventories 7,846 3,218

Trade and other receivables 790,566 570,350

Cash and cash equivalents 1,554,418 2,732,561

2,352,830 3,306,129

TOTAL ASSETS 2,720,637 3,525,977

EQUITY AND LIABILITIES

Equity

Ordinary shares 5 83,414 77,845

Share premium account 5 5,642,734 4,679,536

Other reserves 3 110,625 62,447

Retained earnings (3,676,830) (1,896,101)

Total equity 2,159,943 2,923,727

Non-current liabilities

Borrowings 0 0

Current liabilities

Trade and other payables 560,694 602,250

Total liabilities 560,694 602,250

TOTAL EQUITY AND LIABILITIES 2,720,637 3,525,977

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Gfinity plc

Unaudited Interim Statement of Cash Flows

Six months ended 31 December 2015

6 months to

31 December

2015

6 months to

31 December

2014

Year ended

30 June

2015

Note £ £ £

Cash flow used in operating activities

Net cash used in operating activities 4 (1,936,349) (1,656,954) (3,431,210)

Cash flow from/(used in) investing activities

Interest received 5,272 126 2,568

Additions to property, plant and

equipment

(215,833) (69,144) (244,845)

Net cash used in investing activities (210,561) (69,018) (242,277)

Cash flow from/(used in) financing activities

Issue of equity share capital 968,767 5,814,817 5,814,773

Net cash from financing activities 968,767 5,814,817 5,814,773

Net increase in cash and cash

equivalents

(1,178,143) 4,088,845 2,141,286

Opening cash and cash equivalents 2,732,561 591,275 591,275

Closing cash and cash equivalents 1,554,418 4,680,120 2,732,561

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Gfinity plc

Unaudited Statement of Changes in Equity

Six months ended 31 December 2015

Ordinary

shares

Share

premium

Share

option

reserve

Retained

earnings

Total

equity

£ £ £ £ £

At 1 July 2014 32,367

1,330,263

8,014

(1,064,932)

305,712

Loss for the period -

-

-

(1,392,373)

(1,392,373)

Total comprehensive income -

-

-

(1,392,373)

(1,392,373)

Reduction in capital - (2,750,000) - 2,750,000 -

New shares issued 45,478 6,845,086 - - 6,890,564

Share issue costs - (745,813) - - (745,813)

Share options expensed - - 27,501 - 27,501

Total transactions with owners,

recognised directly in equity 45,478 3,349,273 27,501 2,750,000 6,172,252

At 31 December 2014 77,845

4,679,536

35,515

292,695

5,085,591

At 1 July 2014 32,367 1,330,263 8,014 (1,064,932) 305,712

Loss for the year -

-

-

(2,188,796)

(2,188,796)

Total comprehensive income -

-

-

(2,188,796)

(2,188,796)

Reduction in capital - (2,750,000) - 2,750,000 -

New shares issued 45,478 6,845,086 - - 6,890,564

Share issue costs - (745,813) - - (745,813)

Share options expensed - - 54,433 - 54,433

Total transactions with owners,

recognised directly in equity 45,478 3,349,273 54,433 2,750,000 6,199,184

At 30 June 2015 77,845

4,679,536

62,447

(1,896,101)

2,923,727

At 1 July 2015 77,845 4,679,536 62,447 (1,896,101) 2,923,727

Loss for the period -

-

-

(1,780,729)

(1,780,729)

Total comprehensive income -

-

-

(1,780,729)

(1,780,729)

New shares issued 5,569

1,052,431 - -

1,052,431

Share issue costs - (89,233) - - (89,233)

Share options expensed -

-

48,178

-

48,178

Total transactions with owners,

recognised directly in equity 5,569

963,198

48,178

-

1,016,945

At 31 December 2015 83,414

5,642,734

110,625

(3,676,830)

2,159,943

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Gfinity plc

Notes to the Unaudited Interim Financial Statements

Six months ended 31 December 2015

1. ACCOUNTING POLICIES

Basis of preparation

The interim financial statements for the six months ended 31 December 2015 have been

prepared using accounting policies that are consistent with those of the audited financial

statements for the period ended 30 June 2015 and in accordance with IAS 34, “Interim

Financial Reporting” as adopted by the European Union. The interim financial information

should be read in conjunction with the Group’s Annual Report and Accounts for the year ended

30 June 2015, which has been prepared in accordance with IFRSs as adopted by the European

Union.

The interim financial information contained in this report has been reviewed but not audited

and does not constitute statutory accounts within the meaning of section 434 of the Companies

Act 2006.

The Annual Report and Accounts for the year ended 30 June 2015 has been filed with the

Registrar of Companies. The auditors’ report on those accounts was unqualified, did not

include a reference to any matters to which the auditors drew attention by way of emphasis

without qualifying the report and did not contain statements under s498(2) or s498(3) of the

Companies Act 2006.

The interim financial statements are unaudited and were approved by the Board of Directors on

21 March 2016.

Operating leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the

lessor are classified as operating leases. Payments made under operating leases (net of any

incentives received from the lessor) are charged to the income statement on a straight line basis

over the period of the lease.

Revenue

Revenue comprises the fair value of the consideration received or receivable for the sale of

services in the normal course of the Company’s activities. Revenue is shown net of value

added tax.

The Company recognises revenue when the amount of revenue can be reliably measured, it is

probable that future economic benefits will flow to the entity, the stage of completion of the

transaction at the balance sheet date can be measured reliably and the costs incurred and the

costs required to complete the services in respect of the revenue can be measured reliably. If

the amounts have been invoiced in advanced for services, these amounts are deferred until the

service is delivered to the client at which point the income is recognised. The Company bases

its estimates on historical results, taking into consideration the type of customer, the type of

transaction and the specifics of each arrangement.

Revenue comprises of:

Sponsorship revenues: Revenue is recognised on the date the relevant sponsored event takes

place. In the event of long term sponsorship contracts, the revenue is released on a straight

line basis across the term of the contract.

Advertising revenues: Fees are earned each time a user clicks on one of the ads that are

displayed on the website. Revenue is recognised on a pay-per-click basis.

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Ticket sales: Revenue is recognised on the date the relevant event is delivered.

Event hosting and facility hire: Revenue is recognised on the date the relevant event is

delivered.

Website subscriptions: Revenue is invoiced in advance and deferred over the subscription

period.

Foreign currencies

Transactions in foreign currencies are recorded at the rates of exchange prevailing on the dates

of the transactions. At each balance sheet date, monetary assets and liabilities that are

denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet

date.

Exchange differences arising on the settlement of monetary items, and on the retranslation of

monetary items, are included in the income statement for the year.

Taxation

The taxation expense represents the sum of the tax currently payable and deferred tax.

The charge for current tax is based on the results for the period as adjusted for items that a non-

assessable or disallowed. It is calculated using tax rates that have been enacted or substantively

enacted by the balance sheet date.

Deferred tax is the tax expected to be payable or recoverable on differences between the

carrying amounts of assets and liabilities in the financial statements and the corresponding tax

bases used in the computations of taxable profit, and is accounted for using the balance sheet

liability method.

Deferred tax liabilities are generally recognised for all taxable temporary differences, and

deferred tax assets are recognised to the extent that it is probable that taxable profits will be

available against which deductible temporary differences can be utilised. Such assets and

liabilities are not recognised if the temporary difference arises from goodwill (or any discount

on acquisition) or from the initial recognition (other than in a business combination) of other

assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off

current tax assets against current tax liabilities and when they relate to income taxes levied by

the same taxation authority and the Company intends to settle its current tax assets and

liabilities on a net basis.

Deferred tax assets and liabilities are not discounted.

Property, plant and equipment

Property, plant and equipment are stated at historical cost less accumulated depreciation and

impairment, if any. Historical cost includes expenditure that is directly attributable to the

acquisition of the items. Subsequent costs are included in the carrying amount of the asset or

recognised as a separate asset, as appropriate, only when it is probable that future economic

benefits associated with the item will flow to the Company and that the cost of the item can be

measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of

the day-to-day servicing of property, plant and equipment are recognised in profit or loss as

incurred. Cost also comprises the initial estimate of dismantling and removing the asset and

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restoring the site on which it is located for which the Company are obligated to incur when the

asset is acquired, if applicable.

Depreciation is calculated using the straight-line method to allocate the cost or revalued

amounts of tangible fixed assets to their residual values over their useful economic lives, as

follows:

Office equipment – 1 year straight line

Computer equipment – 3 years straight line

Production equipment – 3 years straight line

Leasehold improvements – Over the period of the lease

The residual values and useful economic lives of the assets are reviewed, and adjusted if

appropriate, at each balance sheet date. The carrying amount of an asset is written down

immediately to its recoverable amount if the carrying amount is greater than its estimated

recoverable value. Gains and losses on disposals are determined by comparing the proceeds

with the carrying amount, and are recognised within other gains or losses in the income

statement.

Share-based payments

The Company issues share options to its employees. The Company has applied the

requirements of IFRS 2 Share-based Payments.

The Company issues equity-settled share-based payments to certain employees. Equity-settled

share-based payments are measured at fair value at the date of grant.

The fair value determined at the grant date of the equity-settled, share-based payments is

expensed on a straight-line basis over the vesting period, based on the Company’s estimate of

shares that will eventually vest.

Fair value of the equity-settled share-based payments is measured by use of a Black-Scholes

model.

Financial liabilities

Financial liabilities are obligations to pay cash or other financial instruments and are recognised

when the Company becomes a party to the contractual provisions of the instrument. Financial

liabilities are classified according to the substance of the contractual arrangements entered into.

All interest-related charges are recognised as an expense in the income statement.

Trade and other payables are not interest bearing and are recorded initially at fair value net of

transactions costs and thereafter at amortised cost using the effective interest rate method.

Financial assets

Financial assets are recognised in the balance sheet when the Company becomes a party to the

contractual provisions of the instrument and are recognised in the balance sheet at the lower of

cost and net realisable value.

Provision is made for diminution in value where appropriate.

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Income and expenditure arising on financial instruments is recognised on the accruals basis,

and credited or charged to the statement of comprehensive income in the financial period to

which it relates.

Trade receivables do not carry any interest and are initially recognised at fair value,

subsequently reduced by appropriate allowances for estimated irrecoverable amounts.

Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, and other

short-term highly liquid investments with original maturities of three months or less. These are

readily convertible to a known amount of cash and are subject to an insignificant risk of

changes in value.

Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of

new shares or options are shown in equity as a deduction, net of value-added tax, from the

proceeds.

Critical accounting judgments and estimates

Revenue Recognition:

Revenue is recognised when the work to which it relates is delivered. On long term

sponsorship contracts, covering a range of activities, revenue is recognised evenly over the

contract period.

Software development:

Expenditure of development of the Company’s website and device applications is expensed as

incurred.

Deferred tax:

The Company has not recognised a deferred tax asset in respect of their losses given that there

is no track record of taxable profits at this time. Deferred tax assets will be recognised when the

Company has established a track record of expected future taxable profit.

Provisions:

Provisions are recognised when the Group has a present or constructive obligation as a result of

a past event from which it is probable that it will result in an outflow of economic benefit that

can be reasonably estimated. Directors consider that no such provisions have been required in

the calculation of the figures in these financial statements.

2. LOSS PER SHARE

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Basic earnings per share is calculated by dividing the loss attributable to shareholders by the

weighted average number of ordinary shares in issue during the period.

IAS 33 requires presentation of diluted EPS when a company could be called upon to issue

shares that would decrease earnings per share, or increase the loss per share. For a loss making

company with outstanding share options, net loss per share would be decreased by the exercise

of options and therefore the effect of options has been disregarded in the calculation of diluted

EPS.

17

Six months

ended 31

December 2015

Six months

ended 31

December 2014

Year

ended 30

June 2015

£ £ £

Profit/ (Loss) attributable to shareholders (1,863,329) (1,392,373) (3,581,169)

Number Number Number

000's 000's 000's

Weighted average number of ordinary shares 79,404 42,238 59,895

£ £ £

Loss per ordinary share (0.02) (0.03) (0.06)

3. SHARE BASED PAYMENTS

Equity-settled share option plans

Options and warrants

The Board has authority to grant options over Ordinary shares in the Company of up to 10% of

the number of shares in issue.

2,311,590 new such options were granted in the period, while 529,816 options lapsed on

employees leaving the Company. No options were exercised during the period.

The total number of outstanding options in issue at 31 December 2015 was 6,320,774 (30 June

2015: 4,539,000).

Of the options granted during the period, a total of 399,081 options were granted to directors, as

summarised in the table below.

Director Date of option

grant

Number of

Options

granted

Exercise price Options held

post grant

Jonathan Varney 2 December 2015 200,000 £0.1962 200,000

Paul Kent 2 December 2015 100,000 £0.1962 100,000

Jonathan Hall 2 December 2015 53,571 £0.1962 1,048,571

Ginette Jarman 2 December 2015 25,510 £0.1962 25,510

Philip Shuldham-Legh 2 December 2015 20,000 £0.1962 543,000

The principal assumptions used to calculate the value of options issued for compliance with

IFRS 2 “Share Based Payments” are included below.

18

Six months

ended

31 December

2015

Year ended

30 June 2015

Weighted average exercise price £0.1507 £0.1351

Average expected life 1.5 years 1.5 years

Expected volatility 30.9% 56.4%

Risk free rate 2.19% 2.43%

Expected dividend yield 0% 0%

All options issued during the period were issued at an exercise price equivalent to the market

price at the date of the grant. The weighted average share price of options outstanding as at 31

December 2015 was £0.1507. The weighted average fair value of options issued during the

period was £0.1962. Expected volatility has been calculated with reference to actual volatility in

the Company’s share price over the period. Options may only vest at the discretion of the board

of directors.

4. NET CASH USED IN OPERATING ACTIVITIES

6 months to

31 December

2015

6 months to

31 December

2014

Year to 30

June

2015

Cash flows from operating activities

Loss before taxation (1,780,729) (1,392,499) (3,581,169)

Depreciation 67,874 6,839 39,727

Interest received (5,272) 0 (2,568)

Share based payments 48,178 27,501 54,433

(Increase) in Inventories (4,628) 0 (3,218)

(Increase) in trade and other receivables (220,216) (436,059) (429,548)

Increase in trade and other payables (41,556) 137,264 491,133

Cash used by operating activities (1,936,349) (1,656,954) (3,431,210)

Interest paid – – –

Net cash used by operating activities (1,936,349) (1,656,954) (3,431,210)

19

5. SHARE CAPITAL AND SHARE PREMIUM

Share

Capital

Share

Premium

Total

As at 1 July 2015

77,845 4,679,536 4,757,381

New ordinary shares issued

5,569 1,052,431 1,058,000

Costs of fund raising:

Direct costs of fund raising

- (89,233) (89,233)

As at 31 December 2015

83,414 5,642,734 5,726,148