Final Results

RNS Number : 3079S

Gfinity PLC

15 November 2021

The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

15 November 2021

Gfinity plc

("Gfinity" OR the "Company")

Final year results for the year ended 30 June 2021

"A year of strategic delivery, positioning the company for scalable growth"

Gfinity plc (AIM: GFIN), a world-leading esports and gaming solutions provider, today announces its audited final results for the year ended 30 June 2021.

Financial highlights

· 27% increase in revenue to £5.7m (2020: £4.5m), driven by 768% increase in revenue attached to Gfinity owned and co-owned properties.

· Significant reduction in adjusted operating loss* by 50% to £2.7m (2020: £5.5m loss).

· 61% reduction in adjusted EBITDA loss**, including the impact of gains and losses on Associates, to £2.3m (2020: 5.8m loss).

· Adjusted administrative expenses*** of £5.4m (2020: £8.3m), representing 35% year on year reduction, reflecting full year impact of business restructuring in March 2020.

· Cash and cash equivalents at year end of £1.4m (2020: £1.6m), supplemented by post year-end over-subscribed fundraise to raise £3.3m before costs for targeted acquisition.

Comment from Gfinity CEO John Clarke:

"Over the past year, Gfinity has continued to embed itself into the gaming ecosystem by providing unique esports solutions and establishing a highly engaged community of gamers through the Gfinity Digital Media Group (GDM) and our proprietary technology IP.

Our strategic focus on 'what we own' has enabled us to add significant value to gaming communities, benefitting our partners and clients, as well as creating a clear growth engine for our business in the form of the GDM. By focusing on what we can control and partnering with great brands that have a shared need, we are delivering on our strategy and are well-positioned for scalable growth.

Financial performance reflects the progress of our new strategy and we have been encouraged with what we have achieved against the backdrop of the pandemic. GDM continues to expand following several strategically important acquisitions, including Stock Informer and SiegeGG post-period, and we have grown our gaming community and enhanced our ecommerce capabilities. While our Tournament Platform is driving competitions of significant scale, our sharpened focus has also allowed us to make significant savings in operating expenditure.

Looking ahead, we are now in a position to grow and monetise at scale. Despite ongoing uncertainty around Covid-19, macro trends around gaming are attractive and we remain focused on delivering against our strategy."

Operational highlights

·Significant growth of owned and recurring revenue streams providing a strong foundation for scalable growth in future years, with GDM platform selected by leading brands to target specific gaming audiences and deliver global esports programmes.

·Commercial agreements signed with leading brands and publishers including Activision, Manchester United, Cadburys, Formula 1, Premier League and Red Bull.

Bolstered strategic partnerships to drive engagement across owned websites, including the launch of new digital motorsport competition with Abu Dhabi Motorsport Management (ADMM) and expanded relationship with global advertising technology platform Venatus.

· Added significant senior talent bringing experience with publishers and in growing digital businesses to support with delivering on strategic priorities, including two additional Non-Executive Directors.

Growth and expansion of Gfinity Digital Media Group (GDM)

· Strong growth of publishing platform, GDM, with revenues of £1.6 million.

· Acquisition of leading online fantasy and sci-fi news community, Epicstream.

· Partnerships launched with sites that add value to the user experience, such as MapGenie.

· Launch of dedicated mobile gaming website Only Mobile Gaming! (OMG!) and new virtual racing website Racinggames.gg.

Post-period highlights

· Acquisition of Megit Limited, owner and operator of the website Stock Informer, an ecommerce referral site for gamers and their lifestyles, funded via successful fundraise.

· Acquisition of SiegeGG, including technology behind leading statistical analysis of Rainbow Six Siege video game.

· Selected by Nintendo and Coca Cola Hellenic Bottling Company as operational partner for respective gaming and esports tournaments.

· Continued expansion of senior leadership team with appointment of new Head of Brands and Digital Relations.

Outlook

· Refreshed strategy positioning the business to deliver scalable growth and drive financial performance.

· Sharpened focus of growing what we own, further licensing of proprietary technology IP, and continued selection by major brands provides the Board with confidence in the long-term trajectory of the business.

· Continued management focus on limiting impacts of macro-economic factors that could create headwinds.

* Adjusted operating loss is before interest, tax, depreciation, amortisation, impairment and the share-based payment expense. It does, however, include operating lease expenditure reclassified as capital spend in line with the requirements of IFRS 16 to ensure consistency with prior years.

** Adjusted EBITDA loss is the Adjusted operating loss, plus or minus the share of gain/ loss on Associate entities, including any gain/ (loss) on disposal of such entities.

*** Adjusted administrative expenses show the underlying operating expenditure of the company, adjusting for the same items as with the adjusted operating loss.

ENDS

Notes for editors

Enquiries :

Gfinity plc John Clarke, CEO	www.gfinityplc.com Via Teneo

Teneo (Media)	Tel: +44 7880 715975
Anthony Di Natale	Gfinity@teneo.com
Canaccord Genuity Limited (AIM Nominated Adviser & Broker)	Tel: +44 (0)207 523 8150
Bobbie Hilliam / Georgina McCooke

About Gfinity

Gfinity (AIM: GFIN) is a market-leading digital media publisher and technology company in the rapidly growing esports and competitive gaming sector . Created by gamers for the world's three billion gamers, Gfinity has a unique understanding of this fast-growing global community. It uses this expertise both to provide advisory services and to design, develop and deliver unparalleled experiences and winning strategies for game publishers, sports rights holders, commercial partners and media companies.

Gfinity connects its partners with the esports community in authentic and innovative ways. This consists of on‑and-off-line competitions and industry‑leading content production. Relationships include Activision Blizzard, EA SPORTS, F1 Esports Series Red Bull, Abu Dhabi Motorsport Management and Coca Cola.

Gfinity connects directly with tens of millions of gamers each month through its digital media group, Gfinity Digital Media. Gfinity Digital Media includes websites such as: Gfinityesports, RealSport101, Epicstream, Stock Informer, StealthOptional, RacingGames.gg, MTGRocks.com and their respective social channels.

All Gfinity services are underpinned by the Company's proprietary technology platform, delivering a level playing field for all competitors and supporting scalable multi-format leagues, ladders and knockout competitions.

Chairman's Report

I have pleasure in presenting our annual accounts for the financial year-ended 30 June 2021. The team has diligently implemented the new strategic direction that CEO John Clarke set out on his appointment in March 2020. The progress of this sharpened strategy and operational focus can now be seen in the Company's financial performance. There was a 27% increase in revenue to £5.7m (2020: £4.5m), driven by a 768% increase in revenues attached to Gfinity owned and co-owned content. We are also pleased to report a 50% reduction in adjusted operating loss to £2.7m (2020: £5.5m).

This was achieved against the backdrop of continued COVID-19 restrictions which impacted client and publisher spend. I would like to take the opportunity to thank our colleagues for their continued hard work and dedication during this period to deliver such a resilient performance.

The Market

The Board of Gfinity remains confident in the prospects and position of the Company, especially as the supportive market dynamics we saw in the previous twelve months continued into this year. The gaming market continues to expand with more than 3.2 billion players globally and the industry generating revenue of US$175.8 billion.

Historically, there has been a particular focus around the growth in professional esports; the best of the best playing against each other in on-and-offline competitions. While still important, the real growth area is now grassroots competitive gameplay. Connecting with players and fans through engagement hubs that deliver entertainment, competitive play and chat forums is essential for game publishers as they look to extend the lifecycle of their games. This is equally important for brands and sports rights holders seeking ways to broaden their reach and better collect and utilise first-person data.

The continued move towards grass roots vindicates the decision taken by the Gfinity team to focus on what it owns - the Gfinity Digital Media (GDM) group and licensing its tech IP. This places the Company at the heart of the gaming ecosystem, adding value to key stakeholders, in a scalable and monetisable way. Gfinity's growing community, aligned to its tournament and engagement tech platform is a winning proposition. It has never been so highly relevant and clearly differentiated in the marketplace.

Acquisitions

Acquisitions are key to the growth of Gfinity, especially for GDM. It is a fast growing and profitable asset for the Company and there is huge opportunity to quicken its pace of growth. The first major acquisition during the period was Epicstream.com, a US-based site focusing on Marvel and Star Wars. By combining the expertise of Gfinity and Epicstream, we have seen significant growth in monthly users and revenue, reinforced by new site ideas, such as the launch of MTGRocks.com. Following the year-end, the Company also continued to add new sites to GDM, the largest being Stock Informer. We have ambitious growth aspirations for GDM and continue to look at future acquisitions that will allow us to achieve these at pace.

Adding new Non-Executive Directors

During the year we strengthened the Board with the appointment of two new non-executive directors, both adding significant expertise and value to the team. Len Rinaldi joined in December 2021 and is a former senior leader at Apple where he was General Manager for Western Europe, a role he held for seven years. Hugo Drayton also joined in June 2021. Hugo continues to serve as an Independent Non-Executive Director on the Board of Future plc, the global media production platform - a role he has held for the last six years. In addition, he was CEO of Inskin Media until 2019 - a brand advertising company he led for 10 years, from start-up to a profitable, global media business. Both Len and Hugo have already made significant contributions towards the implementation of our strategy, and we will continue to build our leadership expertise to expand our capabilities.

People and Projects

We have always prided ourselves on the dedication, can-do spirit, and innovative thinking of our people. It is through their efforts that our tech platform has been deployed with major publishers; that leading brands like Formula 1 enjoyed record viewership numbers for its 2020 esports programme; and that relationships with organisations like Abu Dhabi Motorsport Management and Red Bull go from strength to strength. It is also encouraging that post year-end, new commercial agreements have been signed with brands such as Coca Cola.

In addition, I am particularly pleased that the team has made a commitment to identify and hire more diverse talent. Gfinity is dedicated to improving diversity in the UK gaming industry, and we are proud to be a signatory of the Audeliss and INvolve initiative to drive Black inclusion in business, as well as supporting the Association for UK Interactive Entertainment (UKIE) programme called #RaiseTheGame, also focused on improving diversity.

In closing, Gfinity has made significant progress against its strategic plan. By owning one of the world's fastest-growing gamer communities, alongside valuable tech IP to facilitate engagement, it is adding clear value to the gaming ecosystem. The leadership team has positioned the business well for further growth.

Neville Upton

Chairman

15 November 2021

Chief Executive Officer's Report

When appointed Gfinity CEO in March 2020, I set out a plan to bring the economics of our business under control and reset the strategic focus to deliver scalable growth. I am pleased to say that during the past 12 months we have made significant progress in both areas.

The Gfinity team has focused on getting 'more from less' which is reflected in the reduction of both our cost base by 35% and our adjusted operating loss by 50%. In the last quarter of 2020, we delivered the Company's first ever quarterly adjusted EBITDA profit, which was an important milestone for the business. We remain focused on delivering high-margin revenue growth and month-on-month profitability by FY23, while at the same time finding ways to capture significant growth opportunities in the market.

For Gfinity to be a leader in the gaming ecosystem we need to be fully embedded into it, owning something that is highly valued by game publishers, sports rights holders and brands looking to reach gamers. The business is achieving this in two scalable areas. The first is the Gfinity Digital Media group (GDM), a digital publishing business focused on gamer lifestyles. The second is Gfinity owned technology IP, which drives everything needed to host competitions at scale and deepen engagement with gamers. We made strong progress in further developing both these areas during the year. When combined with our world class production capabilities and range of client services, it is clear to see how we are changing the dynamics of our business and the way we partner with organisations.

The progress we have made this year is testament to the talent and dedication of our colleagues who have risen to every challenge, including unprecedented lockdowns. We continue to look for exciting new talent to bring into the team and we have set ourselves the challenge of tapping into as diverse a talent pool as possible.

Continued growth of gaming

Gaming is now mainstream and growing fast. It is driven by an important consumer behaviour - young people are moving away from passive entertainment such as traditional TV, in favour of interactive engagement, which includes gaming. When combined with high-speed internet, proliferation of smartphones and tablets, increasingly captivating games, and VR and AR offerings from some of the world's biggest brands, the momentum we see today is clearly set to continue.

Strategic focus on 'what we own'

The Gfinity Digital Media group is now the foundation on which our financial model is being built. During the period the business delivered revenues of £1.6m, up from roughly £0.3m in the previous year. The financial metric that we track most closely is the annualised value of each monthly user (MAU). By the end of the financial year this figure had grown from 4p to over 15p. The GDM team is now focused in the short-to-medium-term on driving 50 million MAUs at a target of 30p per MAU, which would generate revenue of £15.0m per annum. And in the medium-to-long-term, driving 100m MAUs at 40p per MAU to generate revenue of £40.0m per annum.

The strategy to deliver this growth is now well embedded into the business with four key pillars to deliver against:

· the first is leverage existing sites such as Gfinityesports and Realsport101 and launch new sites at speed, such as MTG Rocks and OMG! focused on Magic the Gathering and mobile games respectively;

· the second is to add new sites that build on our gamer lifestyle positioning through targeted acquisitions, such as Epicstream, which we acquired in December 2020 and is focused on Marvel, Star Wars and all things gamer-geek;

· the third pillar is partner with sites that add to the user experience, like MapGenie that helps gamers track down hard to find in-game assets; and

· the fourth pillar is to add and expand affiliate and e-commerce opportunities across all sites for products that gamers need and enjoy.

Since the end of the financial year, Gfinity has added two new sites to the GDM portfolio. Stock Informer, a highly-profitable affiliate and ecommerce site for gamers and their lifestyles; and Siege.gg, a leading website for statistics, analysis and news around the Rainbow Six Siege video game. Both add significant value to our fast-growing community of gamers.

In January 2021 we also launched Manifold, a custom-built content management system (CMS) which is key to the growth and success of GDM. It allows us to scale our existing sites quicker, integrate the sites we acquire onto a single CMS system and optimise all our sites both commercially and for Google search.

Throughout the year GDM continued to grow and gain momentum, and we are excited to bring to life ideas for new sites to create and acquire, whilst increasing the annualised value per monthly user.

GDM provides multiple revenue levers and importantly provides Gfinity first-person data that can be used to create better, more targeted products and experiences for gamers. This data also facilitates more informed conversations with brands keen to connect with gamers.

Gfinity's owned tech IP

Our technology IP is a significant asset to the business. Traditionally it has been utilised for one-off bespoke projects for clients such as the Premier League, Formula 1 and Activision. This financial year, we changed this approach and created a scalable, licensed-based model around four distinct yet complimentary products: a turnkey Competition Platform, flexible for any game, any platform and any competitive format; Game Control which enables real-time competition adjudication used by the likes of Formula 1; Community, facilitating greater interaction through forums, chat, rewards and achievements, currently used by Nvidea; and Virtual Production which allows remote multiplayer participation and low-cost broadcast solutions.

For the Competition Platform we have three distinct products. Each has significant total addressable markets and the opportunity for recurring license fees. For each we already have strong proof of concepts, practical experience with several of the world's leading brands and game publishers and playbooks to deliver them. The team has made significant progress in productising our owned tech IP and in 2022 will be ready to roll out at scale.

Client Service and partnerships

During the period we also completed commercial agreements with leading brands and publishers including Activision, Manchester United, Cadburys, Formula 1, Premier League and Red Bull. These agreements are based on our ability to enable businesses to navigate the sector and provide the full range of gaming services, from operations to production.

In addition, we also delivered two seasons of V10 R-League, the first product under the Global Racing Series partnership between Gfinity and Abu Dhabi Motorsport Management. It attracted several of the world's leading motorsport virtual teams and introduced new racing formats that captured the imagination of fans across the globe. The foundation has been built and we are expecting the 2022 season to attract even more interest. We are looking for more opportunities to expand this business model across other industry sectors - specifically where Gfinity is paid for ideation, delivery, and share in the commercial upside that is generated.

Diversity and inclusion

We continue to take positive action towards creating a more diverse and inclusive work environment and are committed to participating in initiatives - large and small - that will help us achieve this goal. Some examples for this year include: modifying language used in our job posts in order to ensure we attract people from all backgrounds, and becoming a signatory of If Not Now, When? and #RaiseTheGame, initiatives focusing on improving diversity across UK business and gaming respectively. We have also created an internship program open to talent from BAME backgrounds.

We have actively advertised in more platforms and locations, reaching out to more diverse applicants than ever before and investment has been made into an ATS system which will allow us to implement anonymised hiring tactics moving forward.

The Company has also made a commitment to include unconscious bias training as part of our induction programme by the end of the FY 21/22. As part of a wider review of our inclusion practices we have enhanced our maternity and paternity policies, to allow for parents to spend more time with their family.

Outlook

The sharpened operational focus, combined with the significant reduction in our cost base, has given Gfinity the impetus to win and deliver on the major opportunity we see ahead of us. Gfinity's continued success also remains dependent upon positive business and consumer sentiment. The timing of new advertising campaigns and programmes are determined by a range of factors, including our customers. There are risks associated with these timings and therefore it is important that we remain agile, flexible and entrepreneurial, continually adding to an already strong pipeline of opportunities.

Conclusion

Gaming is here to stay and will continue to grow. Macro trends are working in our favour. Gfinity is now embedded into the gaming ecosystem and is adding value to it through the strategic focus on 'what we own'. We are staying focused on what we can control, building the GDM and our tech IP licensing business, partnering with organisations who have mutual interests and working with great brands that value our expertise. We are on an exciting journey and I would like to thank the Gfinity team, our business partners and our clients for their continued hard work and support.

John Clarke

Chief Executive Officer

15 November 2021

Chief Financial and Operations Officer's Report

Summary

The year to 30 June 2021 was one of significant financial progress for the business.

In March 2020, we announced a review of the business positioning, sharpening its strategic focus around owned properties in areas which we believe we hold a competitive advantage and can scale profitably. The results for the year to 30 June 2021 reflect the first full year impact of these changes.

In that context, I am pleased to be able to report on full year revenue growth of 27% to £5.7m. I am also particularly encouraged that this has been largely driven by revenue relating to Gfinity owned and co-owned content, which increased by 768% to £2.3m (FY20: £0.3m). Of this, £1.6m of revenue related to the Gfinity Digital Media Network (FY20: £0.3m), while £0.7m related to jointly owned esports properties, including the Global Racing Series in conjunction with Abu Dhabi Motorsports Management (FY20: £nil). The growth of these owned and recurring revenue streams provides a strong platform for scalable growth in future years.

The sharpening of focus also allowed us to make significant savings in operating expenditure. Adjusted administrative expenses of £5.4m represented a 35% year on year reduction (FY20: £8.3m), which followed a 13% reduction delivered during FY20.

The overall impact of these changes was a 50% reduction in the Adjusted Operating Loss for the year to £2.7m (FY20: £5.5m). Again, this built on a 36% reduction in the year to 30 June 2020.

In December 2020, Gfinity disposed of its 33% minority holding in Esports Awards for £0.5m. With the investment held at zero carrying value this resulted in a £0.5m gain on disposal of an associate entity. As a result, the Adjusted EBITDA loss, which includes the impact of all gains and losses on associates, reduced to £2.3m.This represented a year-on-year reduction of 61% (FY20: £5.8m).

In December 2020, we were delighted to announce the acquisition of the trade and assets of the Epicstream business. This was supplemented following the year-end by the acquisitions of the trade and assets of the SiegeGG business and of Megit Limited, the company that owns and operates the highly profitable Stock Informer brand.

These acquisitions are in line with our strategy to build a large and highly engaged digital media publishing business based around gamers and their lifestyles. The Gfinity Digital Media group will consist of a network of sites, each featuring its own unique properties of content, which add value to the experience of a particular segment of gamers. This network will benefit from the economies of scale of delivery of high-quality supporting technology and infrastructure across a larger number of sites. It will also build the scale to fully capitalise on the revenue opportunity, allowing for premium advertising rates to be earned through the direct sale of campaigns to brands and other organisations wanting to connect with gamers. This will form part of a diversified revenue model, with eCommerce and affiliate revenues also playing a growing importance in driving increases in the revenue per user across the network.

Revenue and cost of sales

Revenue of £5.7m reflects an increase of 27% year on year (FY20: £4.5m). Of this, £2.3m related to Gfinity owned and co-owned content, comprising of £1.6m in respect of Gfinity Digital Media group and £0.7m in respect of global racing series.

Across the full year to June 2021, Gfinity Digital Media averaged 10.7m monthly active unique users, delivering average annualised revenue of 15.2p per user. As the business scales, we believe that it should be possible to significantly scale both the number of users and revenue per user through:

User Numbers

Revenue per User

- Continued development of content and SEO strategy to drive growth in existing sites.

- Launch of new sites, powered by custom built content management system (CMS), e.g. RacingGames.GG (eRacing), Stealth Optional (gamer tech) and MTGRocks (Magic the Gathering).

- Acquisition of targeted sites e.g. Epicstream, StockInformer and SiegeGG.

- Increased proportion of direct campaigns, at premium rates as brands look to directly target Gfinity's owned audience.

- Growth of eCommerce and affiliate revenues.

- Deployment of additional technology and content, to drive more visits per user and increase time on site, creating more monetisation opportunities.

In the short to medium term, we are targeting growth to 50 million monthly active users (MAU) at 30p revenue per MAU, rising to 100m MAUs at 40p per MAU in the medium to longer-term.

Revenue relating to the provision of esports services, technology and content on behalf of clients was £3.4m, which represented a reduction of 20% year on year (FY20: £4.2m). This partly reflected a reduction in the number of live esports events taking place as a result of COVID-19, which only had a part year impact on the FY20 results. It also represents our shift in strategic focus, with a greater focus being placed on Gfinity's higher-margin owned properties.

Gross profit reduced slightly year-on-year to £2.6m (FY20: £2.8m). This primarily reflected a move to a more variable cost model, in line with the significant reduction in administrative expenses, with more staff brought in to support as required on a programme-by-programme basis, rather than forming part of the ongoing overhead of the business. It also reflected an investment of £0.2m in the launch and first two seasons of the Global Racing Series in conjunction with Abu Dhabi Motorsports Management.

Administrative expenses

As a Board, we monitor ourselves against Adjusted Administrative Expenses, as the measure which most closely reflects the cash costs to the business. This measure adjusts for the impact of non-cash items, including amortisation or other adjustments to the carrying value of goodwill and intangible assets, depreciation on owned assets and the share option charge. For consistency with prior years and to most closely align to cash costs, operating lease payments which are capitalised under IFRS 16 are still included within Adjusted Administrative Expenses.

Unadjusted administrative expenses include:

· Share option charge of £0.3m, which represents a significant reduction of the figure for FY20 of £1.5m, which featured an accelerated charge in respect of certain former board members

· Amortisation of intangibles and adjustments to goodwill of £0.5m (2020: £0.5m)

· Depreciation of owned assets of £0.6m (2020: £0.4m)

· Impairment of the goodwill held in respect of the acquisition of CEVO, Inc of £0.9m (2020: £nil).

CEVO, Inc was acquired by Gfinity in July 2017. Since then, the CEVO business has provided significant value to the overall Group. CEVO's esports platform continues to form the basis of the current Gfinity Esports Platform, which is used to support esports programmes for multiple clients and is central to the productisation of Gfinity's esports technology suite. CEVO also continues to deliver services to a key client under its own brand in the USA. Intangible assets identified on acquisition continue to be held in respect of both of these items. Over time, however, the operations of CEVO have become increasingly intertwined with those of Gfinity. Former CEVO directors hold senior positions within the Gfinity business, including Head of Product and Head of Technology. As a result, it has become increasingly difficult to separately quantify the value of future cash flows relating to the CEVO brand. On this basis, directors have taken the decision to write the value of goodwill down to zero. This has no impact on the underlying adjusted operating profit of the business.

Adjusted Administrative Expenses for the year to June 2021 totaled £5.4m, which represented a year on year decrease of 35% (FY20: £8.3m). Adjusted for £0.1m of Other Income received under the furlough scheme, the net overhead cost of the business reduced to £5.3m in the year to June 2021.

The reduction was principally driven by significant headcount reductions applied during a restructuring of activities in March 2020. It also included release of the company's office in April 2021, with staff now working primarily from home and from the Gfinity Arena as required.

Operating loss

The cumulative impact of the factors outlined above is that the Operating Loss for the year reduced by 50% to £2.7m (2020: £5.5m). This followed a 36% year on year reduction in FY20, as the company continues to progress towards profitability.

Share of gain/ loss in associates

In December 2020, Gfinity disposed of its 33% minority holding in Esports Awards for £500,000. This represented a strong return on an initial investment of £138,000. With the investment having been written down in line with losses in the associate, at the time of disposal, the investment was held at zero carrying value in both the Company and Consolidated Balance Sheets. Net of a debtor balance of £40,294, which was waived as part of the transaction, this disposal resulted in a gain of £459,706.

With no activity in the Gfinity Esports Australia business, which is in the process of being wound down, in the year, this meant an overall gain on associates of £459,706 (2020: loss of £308,214).

As a result, the Adjusted EBITDA loss, which includes the impact of all gains and losses on associates reduced to £2.3m. This represented a year-on-year reduction of 61% (FY20: £5.8m).

Cash and Cash Equivalents

Year-end cash of £1.4m (2020: £1.6m) was slightly ahead of expectations. At the year end, £0.2m of warrants in respect of shares acquired during the April 2020 fundraise remained outstanding, which have now expired.

Following the year end, Gfinity successfully completed an oversubscribed fundraise at market price, reflecting continued strong investor support for the business. This placing raised a further £3.3m gross (£3.1m net). Of this sum, £2.5m was used to acquire Megit Limited, owner of the Stock Informer brand, which is expected to have a strong cash positive impact on Gfinity's future performance.

Mergers and Acquisitions

In December 2020, Gfinity announced the acquisition of the trade and assets of the Epicstream business, which consisted of the Epicstream.com website and related content, together with an engaged Facebook network featuring over 6 million likes. Consideration for this consisted of 10 million shares, with a fair value at the date of acquisition of 3.6p, together with an earn out of 30% of revenue in each of the first 2 years.

Following the year-end Gfinity announced two further acquisitions:

· Megit Ltd, the parent company of the Stock Informer brand, which operates the StockInformer.co.uk and StockInformer.com sites in UK and USA respectively. Stock Informer holds a position of authority on the availability of hard to get items of stock, of particular relevance to gamers. Its proprietary technology ensures an up to date record of when such items become available allowing it to earn revenue through affiliate commissions. In the year to 31 March 2021, Megit Ltd earned revenue of £2.3m and profit before tax of £2.2m, demonstrating a highly profitable, scalable model. While the launch of next generation PlayStation and Xbox consoles means this year won't necessarily represent a benchmark for recurring income, directors believe that stock shortages will be an ongoing issue and the market leading position that Stock Informer has established with regards to this will represent a valuable addition to the GDM network.

o Consideration for the acquisition of Megit Limited comprised of:

§ £2.5m in cash

§ £2.5m in Gfinity equity settled via the issuance of 62.5m new ordinary shares at the placing price of 4p in September 2021; and

§ An earn out of 30% of revenue in each of the first 3 years post acquisition, capped at a maximum value of £1.8m.

· The trade and assets of the SiegeGG business. SiegeGG has acquired a leading position as the authority on all news and statistics relating to the competitive scene around the Rainbow Six Siege game published by Ubisoft. The business generates revenues through the licensing of its database of statistical information relating to Rainbow Six Siege esports and onsite advertising. In the year to 31 December 2020, SiegeGG reported unaudited revenues of $0.1 million and profit before tax of $40k.

o Consideration for the acquisition of SiegeGG comprised of:

§ 9 million ordinary shares, with a fair value on the date of acquisition of 4.4p

§ An earn out of 30% of revenue in each of the first 2 years post acquisition, capped at a maximum value of £1.5m.

As the earliest of these acquisitions, Epicstream has provided an excellent case study for other sites to follow. The site benefits from having been migrated to Gfinity's proprietary Content Management System "Manifold", which powers other large sites in the network and the deployment of Gfinity's content and SEO strategy. Having delivered 600,000 monthly active users in its first month under Gfinity in December 2020, the site has grown to reach around 3 million users a month and is now benefitting from being jointly commercialised through Gfinity's preferential partnerships.

While both the Stock Informer and SiegeGG acquisitions have been much more recent, initial indications are positive. Both have now been integrated into Gfinity's commercial and advertising partnerships, creating new advertising revenue streams. In the case of Stock Informer, this supplements ongoing affiliate revenues, which continue to benefit from a global chip shortage, resulting in demand outstripping supply for in-demand gaming products.

SiegeGG continues to be seen as the authority on statistics and news in relation to the Rainbow Six Siege competitive scene, which alongside advertising revenues, results in ongoing revenue streams from the licensing of this data to event organisers and broadcasters in the Rainbow Six Siege scene.

Outlook

Overall, the results outlined in this Annual Report represent a year of significant progress for the business. Directors expect revenue to continue to grow, driven largely by Gfinity owned content and technology. It is also expected that organic growth will be supplemented by further mergers and acquisitions, as Gfinity seeks to rapidly grow both the scale and the profitability of its Digital Media network.

This growth will be supplemented by an investment in the productisation of Gfinity's owned esports technology, in the expectation that the licensing of this technology will create a further scalable, repeatable and profitable revenue stream for the business.

This will enable Gfinity to fully deliver value to shareholders from the leading position it has created within the valuable esports and video gaming market.

Jonathan Hall

Chief Financial and Operations Officer 15 November 2021

Group Statement of Profit or Loss

		1 July 2020 to 30 June 2021	1 July 2019 to 30 June 2020
	Notes	1 July 2020 to 30 June 2021	1 July 2019 to 30 June 2020
		£	£
CONTINUING OPERATIONS

Revenue		5,693,385	4,485,565

Cost of sales		(3,085,409)	(1,714,740)


Gross profit/(loss)		2,607,976	2,770,825

Other Income	6	54,354	73,041

Administrative expenses	7	(7,179,327)	(10,681,476)


Operating loss		(4,516,997)	(7,837,610)

Disposal of Associate Gain / (Loss)	17	459,706	0

Share of Associate Profit / (Loss)	17	0	(308,214)

Finance income	9	4	2,622

Finance Costs	9	(10,236)	(39,768)


Loss on ordinary activities before tax		(4,067,524)	(8,182,970)

Taxation	10	221,929	457,663

Retained loss for the year		(3,845,595)	(7,725,307)



Loss and total comprehensive income for the period		(3,845,595)	(7,725,307)


Earnings per Share	11	-£0.00	-£0.01

Group Statement of Comprehensive Income

	Notes	1 July 2020 to 30 June 2021	1 July 2019 to 30 June 2020
	Notes	1 July 2020 to 30 June 2021	1 July 2019 to 30 June 2020
		£	£

Loss for the Period		(3,845,595)	(7,725,307)

Other Comprehensive Income


Items that will not be reclassified to profit or loss

Foreign exchange profit / (loss) on retranslation of foreign Subsidiaries		(12,887)	(6,117)

Other Comprehensive Income for the period		(12,887)	(6,117)


Loss and total comprehensive income for the period		(3,858,482)	(7,731,424)

Group Statement of Financial Position

	Notes	30 June 2021	30 June 2020
		£	£
NON-CURRENT ASSETS
Property, plant and equipment	12	187,366	213,288
Right of use assets	13	-	428,305
Goodwill	14	1,903,790	2,544,526
Intangible fixed assets	15	704,481	613,164
Investments in Joint Ventures and Associates	17	-	-



		2,795,637	3,799,283
CURRENT ASSETS
Trade and other receivables	18	1,586,850	1,391,332
Cash and cash equivalents	19	1,375,873	1,600,597


		2,962,723	2,991,929


TOTAL ASSETS		5,758,360	6,791,212


EQUITY AND LIABILITIES
Equity
Ordinary shares	21	930,513	725,868
Share premium account		46,511,089	44,405,085
Other reserves		3,384,914	3,132,220
Retained earnings		(47,302,697)	(43,457,102)


Total equity		3,523,819	4,806,071

Non-current liabilities
Other Payables	22	254,986	-
Deferred Tax Liabilities	20	127,835	92,059

Current liabilities
Trade and other payables	22	1,851,720	1,893,081


Total liabilities		2,234,541	1,985,141


TOTAL EQUITY AND LIABILITIES		5,758,360	6,791,212

The following notes form an integral part of these financial statements.

Signed on behalf of the board on 12 November 2021:

Neville Upton Jonathan Hall

Chairman Chief Financial and Operations Officer

Company Statement of Financial Position

	Notes	30-Jun-21	30-Jun-20
		£	£
NON-CURRENT ASSETS
Property, plant and equipment	12	179,727	187,176
Right of use assets	13	-	428,305
Investment in Subsidiaries	16	-	4,466,133
Goodwill	14	2,568,417	-
Investments in Joint Ventures & Associates	17	-	-
Intangible fixed assets	15	530,336	57,724

TOTAL NON-CURRENT ASSETS		3,278,479	5,139,338


CURRENT ASSETS
Trade and other receivables	18	2,051,596	2,843,800
Cash and cash equivalents	19	1,329,815	1,531,360


TOTAL CURRENT ASSETS		3,381,410	4,375,160


TOTAL ASSETS		6,659,890	9,514,498


EQUITY AND LIABILITIES


Equity
Ordinary shares	21	930,513	725,868
Share premium account		46,511,089	44,405,085
Other reserves		3,403,414	3,137,832
Retained earnings		(46,340,461)	(40,601,156)


Total equity		4,504,555	7,667,629


Non-current liabilities
Other creditors	22	254,986	-
Deferred tax liabilities	20	94,748	-


Current liabilities
Trade and other payables	22	1,805,601	1,846,869


Total liabilities		2,155,334	1,846,869


TOTAL EQUITY AND LIABILITIES		6,659,890	9,514,498

The following notes form an integral part of these financial statements.

As permitted by Section 408 of the Companies Act 2006, the profit and loss account of the Company is not presented as part of these financial statements. The parent Company's loss for the year amounts to

£5,739,305 (2020: loss of £7,493,221).

Signed on behalf of the board on 12 November 2021:

Neville Upton Jonathan Hall

Chairman Chief Financial and Operations Officer

Group Statement of Changes in Equity

	Ordinary shares	Share premium	Share option reserve	Retained earnings	Forex	Total equity
	£	£	£	£	£	£

At 30 June 2019	362,897	37,455,839	1,637,258	(35,731,795)	504	3,724,704


Loss for the period	-	-	-	(7,725,307)	-	(7,725,307)
Other Comprehensive Income	-	-	-	-	(6,117)	(6,117)

Total comprehensive income	-	-	-	(7,725,307)	(6,117)	(7,731,424)

Proceeds of shares issued	362,971	7,372,852	-	-	-	7,735,823
Share Issue Costs	-	(423,605)	-	-	-	(423,605)
Share options expensed	-	-	1,500,573	-	-	1,500,573

Total transactions with owners, recognised directly in equity	362,971	6,949,247	1,500,573	-	-	8,812,791


At 30 June 2020	725,868	44,405,085	3,137,831	(43,457,102)	(5,613)	4,806,070


Loss for the period	-	-	-	(3,845,595)	-	(3,845,595)
Other comprehensive income	-	-	-	-	(12,887)	(12,887)

Total comprehensive income	-	-	-	(3,845,595)	(12,887)	(3,858,482)

Proceeds of shares issued	204,645	2,110,793	-	-	-	2,315,438
Share Issue Costs	-	(4,789)	-	-	-	(4,789)
Share options expensed	-	-	265,583	-	-	265,583

Total transactions with owners, recognised directly in equity	204,645	2,106,004	265,583	-	-	2,576,232


At 30 June 2021	930,513	46,511,089	3,403,414	(47,302,697)	(18,500)	3,523,819

Company Statement of Changes in Equity

	Ordinary shares	Share premium	Share option reserve	Retained earnings	Total equity
	£	£	£	£	£

At 30 June 2019	362,897	37,455,838	1,637,258	(33,107,935)	6,348,058


Loss for the period	-	-	-	(7,493,221)	(7,493,221)
Other Comprehensive Income	-	-	-	-	-


Total comprehensive income	-	-	-	(7,493,221)	(7,493,221)


Proceeds of Shares Issued	362,971	7,372,852	-	-	7,735,823
Share issue costs	-	(423,605)	-	-	(423,605)
Share options expensed	-	-	1,500,573	-	1,500,573.00
Shares as deferred consideration	-	-	-	-	-


Total transactions with owners, recognised directly in equity	362,971	6,949,247	1,500,573	-	8,812,791


At 30 June 2020	725,868	44,405,085	3,137,831	(40,601,156)	7,667,628



Loss for the period	-	-	-	(5,739,305)	(5,739,305)
Other Comprehensive Income	-	-	-	-	-


Total comprehensive income	-	-	-	(5,739,305)	(5,739,305)


Proceeds of Shares Issued	204,645	2,110,793	-	-	2,315,438
Share issue costs	-	(4,789)	-	-	- 4,789
Share options expensed	-	-	265,583	-	265,583
Shares as deferred consideration	-	-	-	-	-


Total transactions with owners, recognised directly in equity	204,645	2,106,004	265,583	-	2,576,232


At 30 June 2021	930,513	46,511,089	3,403,414	46,340,461	4,504,555

Group Statement of Cash Flows

		30-Jun-21	30-Jun-20
		30-Jun-21	30-Jun-20
	Note	£	£

Cash flow used in operating activities
Net cash used in operating activities	23	(2,049,663)	(5,290,351)


Cash flow from/(used in) investing activities
Interest received	9	4	2,622
Additions to property, plant and equipment	12	(106,642)	(100,765)
Additions to intangible assets	15	(16,030)	(57,724)
Gain on disposal of associate		459,706	-
Investment in associate		-	(308,214)


Net cash used in investing activities		337,038	(464,081)

Cash flow from/(used in) financing activities
Issue of equity share capital		1,950,649	7,312,218
Share issue cost		-	-
Repayment of leases		(439,621)	(597,015)
Bank interest payable		(10,236)	(2,511)


Net cash from financing activities		1,500,792	6,712,692

Net increase in cash and cash equivalents		(211,833)	958,260
Effect of currency translation on cash		(12,887)	(6,117)
Opening cash and cash equivalents		1,600,596	648,454


Closing cash and cash equivalents		1,375,876	1,600,596

Company Statement of Cash Flows

		30-Jun-21	30-Jun-20
	Note	£	£

Cash flow used in operating activities
Net cash used in operating activities	23	(2,040,690)	(5,322,647)


Cash flow from/(used in) investing activities
Interest received	9	4	2,622
Additions to property, plant and equipment	12	(105,327)	(98,444)
Additions to Intangible Assets	15	(16,030)	(57,724)
Disposal of Associate Gain / (Loss)		459,706	-
Investment in Associate		-	(308,214)

Net cash used in investing activities		338,353	(461,760)

Cash flow from/(used in) financing activities
Issue of equity share capital		1,950,650	7,312,218
Repayment of leases		(439,621)	(597,014)
Bank interest payable		(10,236)	(2,511)


Net cash from financing activities		1,500,793	6,712,692

Net increase in cash and cash equivalents		(201,545)	928,285
Opening cash and cash equivalents		1,531,360	603,076


Closing cash and cash equivalents		1,329,815	1,531,360

Notes to the Financial Statements

1. GENERAL INFORMATION

Gfinity plc ("the Company") is a public company limited by shares incorporated in the United Kingdom under the Companies Act 2006, registered in England and Wales and is AIM listed. The registered number of the company is 08232509.

The functional and presentational currency is £ sterling because that is the currency of the primary economic environment in which the group operates. Foreign operations are included in accordance with the policies set out in note 2. Principal activities are discussed in the Strategic report.

2. ACCOUNTING POLICIES

Basis of preparation

The Company has prepared the accounts on the basis of all applicable International Financial Reporting

Standards (IFRS), including all International Accounting Standards (IAS), Standing Interpretations Committee (SIC) and the International Financial Reporting Interpretations Committee (IFRIC) interpretations issued by the International Accounting Standards Board (IASB) with effective dates for accounting periods beginning on or after 1 July 2020, together with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

The accounts have been prepared on the historical cost basis, except for otherwise stated below. The principal accounting policies, which have been consistently applied throughout the period presented, are set out below.

The preparation of financial statements in conformity with IFRS requires the use of certain estimates. It also requires management to exercise its judgement in the process of applying the company's accounting policies. Estimates and judgements are continually reviewed and are based on historical experience and other factors including expectations of future events that are believed to be reasonable under the circumstances.

Standards, Interpretation and amendments to published standards effective in the accounts

The Group has applied the following new standards and interpretations for the first time for the annual reporting period commencing 1 July 2020:

• Amendments to IFRS 3 Definition of a Business.

• Amendments to IAS 1 and IAS 8 Definition of Material.

• Amendments to References to the Conceptual Framework in IFRS Standards.

• Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

• Amendments to IFRS 16: COVID-19-Related Rent Concessions

The adoption of the standards and interpretations listed above has not led to any changes to the Group's accounting policies or had any other material impact on the financial position or performance of the Group.

Standards, interpretation and amendments to published standards that are not yet effective

New standards and interpretations that are in issue but not yet effective are listed below:

• Amendments to IFRS 9, IAS 39 and IFRS 7: Interest Rate Benchmark Reform

• IFRS 17 Insurance Contracts.

The adoption of the above standards and interpretations is not expected to lead to any changes to the Group's accounting policies or have any other material impact on the financial position or performance of the Group.

Going Concern

At the end of the period the Group had cash and cash equivalents amounting to £1,375,673 and the Company had cash and cash equivalents amounting to £1,329,815. Further to this at the balance sheet date, there were 20,050,500 warrants outstanding over ordinary shares in the company at an exercise price of 1p, to be exercised on or before 20 October 2021.

Following the balance sheet date, on 23 August 2021, the Company announced its intention to undertake a placing to raise £3.3m before costs (£3.1m after costs). This placing was over-subscribed and successfully completed without a significant discount to market price having to be offered. It also saw a significant investment from a new cornerstone institution in Canaccord Genuity.

Of the funds raised, £2.5m were used as the initial consideration to acquire Megit Ltd, the owner of the highly profitable Stock Informer business. This is in addition to equity and earn-out consideration outlined in the Post Balance Sheet Events note. In its last completed accounting period, to 31 March 2021, Megit Ltd recorded revenue of £2.3m and profit before tax of £2.2m. While the year to March 2021 was a particularly successful year for the company, supported by the launch of next generation consoles, the directors expect the Stock Informer business to continue to deliver significant levels of revenue, at a net margin of around 75%, allowing for incremental investment to support long term growth and diversification of the revenue model.

As outlined in the Strategic Report, over the past 18 months, the Group has significantly restructured its underlying operations, creating a significant new revenue stream in the Gfinity Digital Media business, while delivering a year-on-year reduction in adjusted administrative expenses of 35%. Even prior to the acquisition this has resulted in a significantly reduced level of cash-burn, as the business drives towards its target of profitability on an adjusted operating profit basis within the next 12 months.

Management have prepared forecasts to 31 December 2022, which indicate that if the business performs in line with target, then current cash reserves, supplemented by expected further exercise of warrants as outlined above, would provide sufficient funding to allow the Group to continue operating for a period of at least 12 months following the approval of these financial statements. Forecasts have also been prepared, which show an adverse variance to the budget scenario of 20% in Gfinity Digital Media and 25% in all other areas. Under this scenario, there are still sufficient cash reserves for the Group to operate for a period of at least 12 months following the approval of these financial statements.

As a result, the directors do not believe that further cash is required in order to deliver on current plans for the business. It should be noted, however, that in a sector that is still rapidly developing and in a period of ongoing economic uncertainty, there are inherent uncertainties within the forecasts. In this regard, in a period in which a high level of revenue growth is expected, cash flow forecasts are particularly sensitive to the delivery of new client contracts. While the directors are confident that these contracts will be secured, the timing of this cannot be certain. In this context, there remains a material risk that the cash flow forecasts are not met, which would result in additional funding being required and therefore the directors assessment of the likelihood of being able to raise such funding is critical to their conclusion that there is no material uncertainty in relation to the Group and the Company's ability to continue as a going concern.

In this context, directors' belief that further cash reserves could be secured if required are based on:

· Strong investor support, demonstrated by an over-subscribed placing completed in August 2021, which included a new cornerstone institutional shareholder;

· A historic track-record of being able to raise funds, even at a time of peak economic and political uncertainty in April 2020;

· Underlying value in owned technology and an owned community of up to 15 million gamers per month across Gfinity's owned web platforms;

· Ongoing strong investor interest in esports and broader video gaming sectors.

Consequently, the directors believe that it is appropriate for the accounts to be prepared on a going concern basis.

Basis of consolidation

The Group accounts consolidate those of the Company and all of its subsidiary undertakings drawn up to 30 June each year. Subsidiary undertakings are those entities over which the Group has the ability to govern the financial and operating policies through the exercise of voting rights. The results of subsidiaries acquired or sold are consolidated for the periods from or to the date on which control passed. Acquisitions are accounted for under the acquisition method.

Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Group's interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the excess is recognised immediately in profit or loss.

All intra group balances, transactions, income and expenses and profit and losses on transactions between the Company and its subsidiaries and between subsidiaries are eliminated.

Goodwill

Goodwill is initially recognised and measured as set out above.

Goodwill is not amortised but is reviewed for impairment at least annually. For the purpose of impairment testing, goodwill is allocated to each of the Group's cash-generating units ('CGUs') expected to benefit from the synergies of the combination. CGUs to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the CGU is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period.

Investment in associates

An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or join control over those policies.

The Group's interests in jointly controlled entities are incorporated in the financial information using the equity method of accounting. Investments in joint ventures are carried in the balance sheet at cost as adjusted by post acquisition changes in the Group's share of the net assets of the associate, less any impairment in the value of the individual investments. The Group's share of the net profit or loss of the joint venture is shown as a single line item in the Consolidated Statement of Comprehensive Income.

Where the Group transacts with a joint venture any profit or loss arising is eliminated to the extent of the Group's interest in the relevant joint venture.

The carrying amount of equity-accounted investments is tested for impairment at least annually.

Investment in subsidiaries

Investments in subsidiaries are held in the Company balance sheet at cost and reviewed annually for impairment.

Revenue

Revenue comprises the fair value of the consideration received or receivable for the sale of services in the normal course of the Group's activities. Revenue is shown net of value added tax.

To determine whether to recognise revenue, the Group follows a 5-step process: 1 Identifying the contract with a customer

2 Identifying the performance obligations 3 Determining the transaction price

4 Allocating the transaction price to the performance obligations

5 Recognising revenue when/as performance obligation(s) are satisfied.

Revenue is recognised either at a point in time or over time, when (or as) the Group satisfies performance obligations by transferring the promised goods or services to its customers. The Group 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:

• Partner programme delivery fees: Revenue recognised in line with the date at which work is performed.

• 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, except in instances where a significant proportion of the revenue relates to specific activation activities, in which case the revenue is released in line with when that work is performed.

• 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, or cost per mille (CPM) basis.

• Broadcaster revenues: Rights fees are received from linear broadcasters and online streaming platforms in return for rights to access broadcast content. Revenue is recognised once the relevant performance obligations are completed which is typically at the point the broadcast occurs.

• Licensing revenues: Fees charged for the licensing of Gfinity esports technology, outside of the scope of a broader managed esports service provision.

• Consultancy Fees: Revenue is recognised in line with the profile of resources dedicated to the programme across the assignment duration.

Leases and right-of-use-assets

The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right- of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of- use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is measured at amortised cost using the effective interest method, and is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group's incremental borrowing rate.

Short-term leases and leases of low-value assets:

The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-term leases. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

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.

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated at exchange rates prevailing on the balance sheet date. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period. Exchange differences arising from the translation of the Group's foreign operations are recognised in other comprehensive income.

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 are 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.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that the directors do not have a high degree of certainty that sufficient taxable profits will be available in the medium-term to allow all or part of the asset to be recovered.

Credits in respect of Research and Development activities are recognised at the point at which the asset becomes profitable and quantifiable. This is typically at the point at which a claim has been prepared and submitted to HMRC.

Share based payments

The Company provides equity-settled share-based payments in the form of share options. Equity-settled share-based payments are measured at fair value (excluding the effect of non-market-based vesting conditions) at the date of grant. The fair value determined at the date of grant is expensed on a straight line basis over the vesting period, based on the Company's estimate of shares which will eventually vest and adjusted for the effect of non-market based vesting conditions. The Company uses an appropriate valuation model utilising a Black-Scholes model in order to arrive at a fair value at the date share options are granted.

In instances when shares are used as consideration for goods or services the shares are valued at the fair value of the goods or services provided. The expense to the company is recognised at the point the goods or services are received.

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.

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	3 years straight line
Computer equipment	3 years straight line
Production equipment	3 years straight line
Leasehold improvements	Over the period of the lease or, where management have reasonable grounds to believe the property will be occupied beyond the terms of the lease, 3 years straight line

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.

Intangible fixed assets

Intangible assets other than goodwill are recognised where the purchase or internal development of such assets are expected to directly contribute towards the company's ability to generate revenues over a multiple years.

Intangible fixed assets are stated at historical cost less accumulated amortisation and impairment, if any. The cost of intangible assets acquired in a business combination is their fair value as at the date of acquisition. Where the cost is not clearly identifiable discounted cash flows are utilised to estimate either the cost to develop the resource or, where there are already profits attributable the asset, to estimate future cash inflows. Historical cost includes expenditure that is directly attributable to the acquisition or development 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.

Software development	3 years straight line
Web traffic acquired in business combination	3 years straight line
Technology Platform	5 years straight line
Customer Relationships	5 years

Amortisation is charged on a straight-line basis over the estimated useful economic life of the asset as follows

Research and development costs

Development expenditure is capitalised as an intangible asset, only if the development costs can be measured reliably and it is anticipated that the product being built will be completed and will generate future economic benefits in the form of cash flows to the Group.

Research expenditure that does not meet this criteria is recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.

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.

Financial liabilities and equity

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.

An equity instrument is any contract that evidence a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.

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.

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.

Warrants

Warrants are in respect of call options granted to investors by the group and are classified as equity only to the extent that they do not meet the definition of a financial liability or financial asset.

The fair value of warrants is determined at the date of grant and is recognised in equity. When the warrants are exercised, the group transfers the appropriate amount of shares to the investor, and the proceeds received net of any directly attributable transaction costs are credited directly to equity.

The group uses an appropriate valuation model utilising a Black-Scholes model in order to arrive at a fair value at the date warrants are granted.

Government Grants Policy

Grants that compensate the group for expenses incurred are recognised in profit or loss as other income in the periods in which the expenses are recognised, unless the conditions for receiving the grant are met after the related expenses have been recognised. In this case, the grant is recognised when it becomes receivable.

3. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES

Judgement: Revenue recognition:

The Group's revenue recognition policy is based on separating contracts into discrete performance obligations with revenue then recognised based on the percentage completion of each performance obligation. Where the value of each distinct performance obligation is not set out in a contract Management estimate the value of each performance obligation based on the level of resource required to complete the performance obligation in comparison to the overall level of resource required to fulfil the contract. For example, if a contract did not stipulate the value by region of a broadcast agreement management would use appropriate weighting (e.g. audience size) to estimate the value of each region, with each region viewed as a separate performance obligation. Revenue would then be recognised based on the percentage completion of each performance obligation. In instances where there is no other readily available proxy Management will estimate the value of each performance obligation based on the relative cost to deliver.

Revenue settled by means other than cash (e.g. via equity in a associate) is recognised based on the value stipulated in the contract for goods or services, which would be set at fair value, with the revenue then recognised based performance obligations in the manner described above.

There were no revenue contracts requiring judgement that impact on the reported revenue for the financial year, or contract assets or liabilities at the balance sheet date for either the current or the prior year

Judgement and estimation: Intangible assets recognised on business combinations:

Intangible assets in business combinations are recognised when the asset is separately identifiable and based on the probable future economic benefit that arises owing to the Group's control of the asset. Typically, the Group will utilise a discounted cash flow to establish the future economic benefits and therefore the fair value of the asset.

The Group identified three intangible assets in relation to the two acquisitions undertaken in the year to 30 June 2018 and three intangible assets in relation to the acquisition of EpicStream Inc. on 3 December 2020 which is mentioned in Note 28. As these assets have a finite economic life, in line with IAS 36, they are only subject to further testing for impairment when there are either internal or external indicators of impairment. Based on a review of updated cash flow projections it was decided that there were no indicators of impairment in any of the intangible assets. Following further review of updated cash flow projections relating to the relationship, it was determined that no impairment was required. This further testing is discussed in the 'Impairment testing' section below.

Estimation: Impairment testing:

On an annual basis the Group reviews relevant classes of assets, including investments, intangible assets and goodwill for indications of impairment. Where such indications exist, full impairment testing through an analysis of the value of future cash flows is undertaken. The recoverable amounts of cash generating units have been determined based on value-in-use calculations which require the use of estimates. Management has prepared discounted cash flows based on the latest strategic plan. Discount rate has been calculated using the Capital Asset Pricing model with reference to the value of UK 10 year gilts as a proxy for a risk free rate and the volatility of Gfinity's share price relative to that of AIM since listing.

Goodwill carried in relation to CEVO in the group financial statements:

Gfinity acquired CEVO, Inc in July 2017, since which time the Cevo business has provided significant value to the overall Group. Intangible assets continue to be recognized in respect of:

- CEVO's proprietary esports platform, which forms the basis of the current Gfinity Esports platform, which continues to be used to support multiple esports programmes for high-profile clients.

- CEVO's ongoing commercial relationship with Nvidia, from which it continues to derive revenue.

Over time, however, the operations of CEVO have become increasingly interlinked with those of Gfinity, with former directors of CEVO now holding senior roles within the Gfinity business, including Head of Technology and Head of Product. As a result, it has become increasingly difficult, outside of the specific intangibles, to quantify the value of future cash flows relating specifically to the CEVO brand. On that basis, directors have taken the decision in this year to impair the value of goodwill in respect of CEVO to zero. This resulted in an impairment charge of £0.9m.

Goodwill carried in relation to Real Sport:

The carrying value of goodwill in relation to RealSport was assessed using the bottom-up financial model created as part of the business planning process, which reflects the strong growth in monetisation seen through FY21.

This model assumes a monthly average number of unique visitors to the platform through FY22 of 5.3m. By way of comparison the most recent monthly total (in September 2021) was 4.9m, with growth expected in Q4, with further game releases. Thereafter it is assumed that audience numbers will increase at an a CAGR of 30% p.a. for the first 2 years, before levelling off slightly with a 5% increase thereafter.

Revenue has been calculated using a blended rate, factoring in both real time bidding and direct sale banner advertising, video advertising and cost per click affiliate revenues, giving an overall rate of 10p per annum per monthly average user.

On this basis, the net present value of future cash flows has been calculated at £5.5m. This represents a surplus of £4.1m over the carrying value of goodwill, with the intangibles recognized in respect of the RealSport acquisition having been fully amortised. On that basis, no impairment is proposed.

CEVO customer relationships:

The remaining value of CEVO customer relationship was assessed by way of an analysis of likely revenue and costs relating to the customer in question over the final year of the original intangible asset life.

These were assessed on the basis of current open purchase orders, expected renewal of purchase orders based on work that it is anticipated will renew, together with a smaller allowance for new work, based on levels secured in previous years. Cash flows were discounted using a cost of capital of 13%.

The result of the above analysis gave an NPV of £0.1m, in line with the carrying value of the intangible. No impairment is therefore proposed.

Goodwill and Intangible Assets carried in relation to Epicstream:

Three intangible assets were recognized in respect of the acquisition of Epicstream:

- The existing social audience and related domain authority of the main Epicstream site (Epicstream.com)

- The value of the Magic the Gathering social audience, which has been leveraged to create a new site (MTGRocks.com); and

- The remaining social audience from a Facebook community featuring over 6 million likes.

These assets, net of deferred tax, had a combined value of £0.5m. With the fair value of consideration estimated at £0.7m, this resulted in Goodwill of £0.3m.

The requirement for full impairment testing was assessed through a comparison of actual cash flows generated from the Epicstream business, against the cash flow projections used in calculation of the original asset values. With actual cash flows showing a positive variance to the original projections, it was considered that there was no indication of impairment and hence full, detailed impairment testing was not required.

Valuation of investment in RealSport:

The activities of the RealSport brand are now undertaken within the Gfinity Ltd entity, with Real SM Ltd not actively trading. As a result, while the goodwill relating to the RealSport brand remains, directors considered that it would not be appropriate to continue to carry a value of investment in the RealSport entity on the Gfinity company balance sheet.

The value of this investment has therefore been reclassified as goodwill, reflecting the absorption of the value of the RealSport brand within the Gfinity Ltd entity.

This has no impact on the consolidated income statement.

Valuation of investment in CEVO, Inc in the parent company financial statements:

The value of the investment held in CEVO, Inc has been reviewed in line with the calculation of the value of the goodwill and related intangible. This value has been reduced by £0.9m in the year, in line with the reduction to the carrying value of goodwill.

Judgement: Transfer of trade and assets within the group:

The transfer of trade and assets between entities under common control falls outside the scope of IFRS 3 and therefore requires judgement to develop an accounting policy that provides relevant and reliable information in accordance with IAS 8. Management have elected to account for this transaction as a 'hive-up' of trade and assets to the parent company. Accordingly, the net assets transferred to the parent company have been recorded in line with the amortised cost recognised on a consolidated basis for the corresponding net assets. The excess of the previously recognised investment value over the net assets transferred is recognised as goodwill.

4. Revenue

The Group's policy on revenue recognition is as outlined in note 2. The year ending 30 June 2021 included

£0.36m included in the contract liability balance at the beginning of the period (2020:£0.7m). The Group's revenue disaggregated by primary geographical markets is as follows:

	30 June 2021			30 June 2020
	Gfinity	Cevo	Total	Gfinity	Cevo	Total
	£	£	£	£	£	£
United Kingdom	4,144,440	-	4,144,440	3,431,492	-	3,431,492
North America	902,408	322,741	1,225,150	27,206	157,829	185,035
ROW	539,069	-	539,069	869,039	-	869,038

Total	5,585,918	322,741	5,908,659	4,327,737	157,829	4,485,565

The Group's revenue disaggregated by pattern of revenue recognition is as follows:

	30 June 2021			30 June 2020

	Gfinity	Cevo	Total	Gfinity	Cevo	Total
	£	£	£	£	£	£
Services transferred at a point in time	3,432,959	322,741	3,755,700	2,582,447	-	2,582,447
Services transferred over time	2,152,959	-	2,152,959	1,745,289	157,829	1,903,118

Total	5,585,918	322,741	5,908,659	4,327,736	157,829	4,485,565

As at 30 June 2021 the Group had the amounts shown below held on the consolidated statement of financial position in relation to contracts either performed in full during the year or ongoing as at the year end. All amounts were either due within one year or, in the case of contract liabilities, the work was to be performed within one year of the balance sheet date

	30 June 2021	30 June 2020
	£	£
Trade Receivables	1,024,696	608,189
Contract Assets	244,835	154,287
Contract Liabilities	364,024	358,246

Trade receivables are non-interest bearing and are generally on 30-day terms.

Contract assets are initially recognised for revenue earned while the services are delivered over time or when billing is subject to final agreement on completion of the milestone. Once the amounts are billed the contract asset is transferred to trade receivables.

Contract liabilities arise when amounts are paid in advance of the delivery of the service. These are then transferred to the statement of comprehensive income as either milestones are completed or work is completed overtime. Revenue of £0.36m was recognised in the year ending 30 June 2021 that was held as a contract liability as 30 June 2020. All these amounts were held in Gfinity.

5. SEGMENTAL INFORMATION

The management consider the group to operate as a single segment following the integration of Cevo's activities into that of the group (included in Chief Financial and Operations Officer's Report in Strategic Report) and therefore no segmental analysis is required.

The Group has two single external customers which have revenue equal to or greater than 10% of the group's revenue. The revenue from each of these customers is: £0.94 and £0.69m. The customers are major sports rights holders, financial services and media companies. These revenues are attributed to the Gfinity segment.

6. OTHER INCOME

There are no unfulfilled conditions or other contingencies attaching to these grants. Other income reflects government grant income received in the year in respect of the furlough scheme.

	Group
	30 June 2021	30 June 2020
	£	£
Government grant income	54,354	73,041

7. OPERATING EXPENSES

Operating loss is stated after charging:

	Group
	30 June 2021	30 June 2020
	£	£
Depreciation of property, plant and equipment	132,478	370,589
Depreciation on Right of Use assets	428,305	571,074
Amortisation & impairment of intangible fixed assets	492,700	478,553
Goodwill impairment	901,519	-
Rentals under short-term leases	439,621	514,106
Expensed development costs	150,058	185,376
Staff costs (see note Particulars of employees)	2,844,335	5,781,866
Costs of inventories expensed	-	-
Auditors' remuneration for auditing the accounts of the Company	66,500	45,000
Auditors' remuneration for other non-audit services:
- Other services related to taxation	8,408	2,500

- All other services	21,836	8,975
Net foreign exchange (gains)/ losses	34,027	(3,453)

8. PARTICULARS OF EMPLOYEES

Number of employees

The average number of people (including directors) employed by the Company during the financial period

was:

Group		Company
30 June 2021	30 June 2020	30 June 2021	30 June 2020

38	54	35	48

The aggregate payroll costs of staff (including directors) were:

	Group		Company
	30 June 2021	30 June 2020	30 June 2021	30 June 2020
	£	£	£	£
Wages and salaries	2,253,444	3,762,138	2,087,944	3,723,272
Social security costs	271,347	449,154	255,310	445,557
Pensions	53,962	70,000	53,962	41,744
Equity settled	265,583	1,500,573	265,583	1,500,573
	2,844,335	5,781,865	2,662,798	5,711,146

Total remuneration for Directors during the year was £444,428 (2020: £806,608).

The board of directors comprise the only persons having authority and responsibility for planning, directing and controlling the activities of the Group.

9. FINANCIE INCOME/COSTS

	Group
	30 June 2021	30 June 2020
	£	£
Interest income on bank deposits	4	2,622
Finance lease interest	(9,228)	(37,257)
Other interest cost	(1,009)	0
	(10,232)	(34,635)

10. TAXATION

(a) Major components of taxation expense for the period ended 30 June 2021 are:

	Group
	30 June 2021	30 June 2020
	£	£
Income Statement
Current tax
Corporation tax charge/ (credit)	(162,957)	(227,004)
Total current tax	(162,957)	(227,004)

Deferred tax
Relating to origination and reversal of temporary differences	(58,972)	(230,659)
Taxation charge/ (credit) reported in the income statement	(221,929)	(457,663)

(b) Factors affecting tax charge for the period

A reconciliation of taxation expense applicable to accounting profit before taxation at the statutory tax rate of 19% (2020: 19%), to taxation expense at the Company's effective tax rate for the period is as follows:

	Group
	30 June 2021	30 June 2020
	£	£
Loss on ordinary activities before taxation	(3,845,796)	(8,182,970)
Profit/ (Loss) multiplied by tax	(730,701)	(1,554,764)

Effect of:
Expenses not deductible for tax purposes	318,906	349,439
Movment in unrecognised deferred tax arising from tax losses	709,763	1,135,046
Movment in unrecognised deferred tax arising from other temporart timing differences	(356,940)	(160,379)
Adjustment in respect of R&D tax credits	(162,957)	(227,004)
Taxation charge/ (credit) reported in the income statement	(221,929)	(457,662)

The Group has an unrecognised deferred tax asset arising from trading losses carried forward of £10,508,932 (2020: £7,277,026) calculated at the substantively enacted Corporation tax rate at the balance sheet date of 25% (2019: 19%). These trading losses will reverse against future taxable trading profits and no asset has been recognised due to uncertainties over the timing and nature of such gains in accordance with IAS 12.

11. EARNINGS PER SHARE

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.

	Group		Company
	30 June 2021	30 June 2020	30 June 2021	30 June 2020
	£	£	£	£
Loss attributable to shareholders from continuing operations	(3,858,482)	(7,731,424)	(5,739,305)	(7,493,221)

	Number	Number	Number	Number
	000's	000's	000's	000's
Weighted average number of ordinary shares	809,795	518,172	809,795	518,172

Loss per ordinary share for continuing operations	(0.00)	(0.01)	(0.01)	(0.01)

12. PROPERTY PLANT AND EQUIPMENT

Group Property Plant and Equipment

	Office equipment	Computer & production equipment	Leasehold Improvement	Total
	£	£	£	£
Cost
At 1 July 2019	62,292	902,216	621,862	1,586,370
Additions	849	87,362	12,701	100,912
Disposals	-	-	-	-


At 30 June 2020	63,141	989,578	634,563	1,687,282


Depreciation
At 1 July 2019	15,066	740,843	347,350	1,103,259
Charge for the period	14,776	177,229	178,731	370,736
Disposals	-	-	-	-


At 30 June 2020	29,842	918,072	526,081	1,473,995


Net book value
At 30 June 2020	33,301	71,505	108,482	213,288


At 30 June 2019	47,228	161,373	274,512	483,113



	Office equipment	Computer & production equipment	Leasehold Improvement	Total
	£	£	£	£
Cost
At 1 July 2020	63,141	989,578	634,563	1,687,282
Additions	-	106,642	-	106,642
Disposals	-	(85)	-	(85)


At 31 June 2021	63,141	1,096,135	634,563	1,793,839


Depreciation
At 1 July 2020	29,842	918,072	526,081	1,473,995
Charge for the period	32,504	88,729	11,244	132,478
Disposals	-	-	-	-


At 31 June 2021	62,346	1,006,801	537,325	1,606,473


Net book value
At 31 June 2021	795	89,333	97,238	187,366


At 30 June 2020	33,301	71,505	108,482	213,288

Company Property Plant and Equipment

	Office equipment	Computer & production equipment	Leasehold Improvement	Total
	£	£	£	£
Cost
At 1 July 2019	50,894	878,100	621,861	1,550,855
Additions	849	84,894	12,701	98,444
Disposals	-	-	-	-


At 30 June 2020	51,743	962,994	634,562	1,649,299


Depreciation
At 1 July 2019	12,504	731,898	347,350	1,091,752
Charge for the period	14,776	176,864	178,731	370,371
Disposals	-	-	-	-


At 30 June 2020	27,280	908,762	526,081	1,462,123


Net book value
At 30 June 2020	24,463	54,232	108,481	187,176


At 30 June 2019	38,390	146,202	274,511	459,103


Cost
At 1 July 2020	51,743	962,994	634,562	1,649,299
Additions	-	105,327	-	105,327
Disposals	-	(85)	-	(85)


At 30 June 2021	51,743	1,068,236	634,562	1,754,541


Depreciation
At 1 July 2020	27,280	908,762	1,097,155	1,462,123
Charge for the period	12,717	88,729	11,244	112,691
Disposals	-	-	-	-


At 30 June 2021	39,997	997,491	537,326	1,574,814


Net book value
At 30 June 2021	11,746	70,745	97,237	179,727


At 30 June 2020	24,463	54,232	108,481	187,176

13. RIGHT OF USE ASSETS

The carrying value of right-of-use assets by class is:

Group and Company	Premises
	£

Cost
At 30 June 2019	-
On adoption of IFRS 16 At 30 June 2020	999,379 999,379
Accumulated depreciation
At 30 June 2019	-
Charge for the year	571,074
At 30 June 2020	571,074
Net carrying amount
At 30 June 2019	428,305
At 30 June 2020	-
Cost
At 30 June 2020	999,379
At 30 June 2021	-
Accumulated depreciation
At 30 June 2020	571,074
Charge for the year	428,305
At 30 June 2021	999,379
Net carrying amount
At 30 June 2021	-
At 30 June 2020	428,305

14. GOODWILL

Group

	£
Cost
At 1 July 2020		2,544,526
Acquisition of business		260,783
At 30 June 2021		2,805,309

Impairment
At 1 July 2020		0
Charge for the period		901,519
At 30 June 2021		901,519

Net book value
At 30 June 2021		1,903,790

At 30 June 2020		2,544,526

Company


	£
Cost
At 1 July 2020	-
Acquisition of business	260,783
Recognised on hive-up of subsidiary trade and assets	2,307,634
At 30 June 2021	2,568,417

Impairment
At 1 July 2020	-
Charge for the period	-
At 30 June 2021	-

Net book value
At 30 June 2021	2,568,417

At 30 June 2020	-

Goodwill at 1 July 2020 recognised in the Group financial statements is in respect of the acquisitions of CEVO Inc. and RealSM Ltd that took place in the year ended 30 June 2018.

Goodwill of £260,783 has been recognised in the Group and the Company financial statements following the acquisition of trade and assets of EpicStream Inc, on 3 December 2020 (note 28).

Goodwill of £2,307,634 has been recognised in the Company financial statements following the hive-up of the trade and assets of RealSM Ltd that concluded during the year. This amount has been reclassified from investment in subsidiaries (note 16).

15. INTANGIBLE FIXED ASSETS

Group

Customer Relationships

RealSport Platform

Cevo Gaming Platform

Assets Under Construction

Total

Cost

At 1 July 2019

1,198,661

935,518

281,383

57,724

2,473,286

Additions

Disposals

At 30 June 2020

1,198,661

935,518

281,383

57,724

2,473,286

Amortisation

At 1 July 2019

867,197

405,220

109,152

1,530,319

Charge for the period

108,414

313,553

56,586

478,553

At 30 June 2020

975,611

718,773

165,738

1,860,122

Net book value

At 30 June 2020

223,050

216,745

115,645

57,724

613,164

At 30 June 2019

331,464

530,298

172,231

1,033,993

Customer Relationships

RealSport Platform

Cevo Gaming Platform

Assets Under Construction

Web Platforms

Total

Cost

At 1 July 2020

1,198,661

935,518

281,383

57,724

2,473,286

Additions

7,195

Acquisitions through business combination

576,822

Disposals

At 31 June 2021

1,198,661

935,518

281,383

57,724

584,017

3,057,303

Amortisation

At 1 July 2020

975,611

718,773

165,738

1,860,122

Charge for the period

108,118

216,745

56,431

111,406

492,700

At 31 June 2021

1,083,729

935,518

222,169

111,406

2,352,822

Net book value

At 31 June 2021

114,932

59,214

57,724

472,612

704,481

At 30 June 2020

223,050

216,745

115,645

57,724

613,164

Company

Assets Under Construction

Software Development

Web Platforms

Total

Cost

At 1 July 2019

148,750

Additions

57,724

Disposals

At 30 June 2020

57,724

148,750

206,474

Amortisation

At 1 July 2019

148,750

Charge for the period

Disposals

At 30 June 2020

148,750

Net book value

At 30 June 2020

57,724

At 30 June 2019

Cost

At 1 July 2020

57,724

Additions

7,195

Acquisitions through business combination

576,822

Disposals

At 30 June 2021

57,724

584,017

641,741

Amortisation

At 1 July 2020

Charge for the period

111,406

Disposals

At 30 June 2021

111,406

Net book value

At 30 June 2021

57,724

472,612

530,336

At 30 June 2020

57,724

Assets under construction relate to costs incurred in the implementation of a new ERP system for the company. Implementation work in respect of this asset was paused in the year to focus resources on key growth activities, however, it remains the intention to complete and utilize the investment made to date in the future.

16. INVESTMENT IN SUBSIDIARIES

	Company
	30 June 2021	30 June 2020
	£	£
At 1 July	4,466,133	4,466,133
Reclassifying investment in subsidiary to goodwill	(2,307,634)	-
Impairment	(2,158,499)	-
At 30 June	-	4,466,133

The investments in subsidiaries represented the purchase of CEVO and Real Sport on 24 July 2017 and 13 March 2018 respectively. The fair value of consideration at acquisition for CEVO was £2,158,498 for 100% of the share capital and this has been fully impaired in year ended 30 June 2021 following an impairment review (note 3). The fair value at acquisition of RealSM Ltd was £2,307,634 for 100% of the share capital and this has been reclassified to Goodwill following the hive-up of the trade and assets of the subsidiary company (Note 16).

Subsidiary

undertaking

Country of

incorporation

Holding

Proportion of voting rights

and capital held

Nature of business

CEVO Inc.

USA

Ordinary shares

100%

IT Development and Tournament and event operator

RealSM Ltd

England

Ordinary Shares

100%

Online media

RealSM Ltd registered offices are The Foundliabry, 77 Fulham Palace Road, London, United Kingdom, W6 8JB. CEVO's registered address is 128 Maringo Rd, Ephrata, WA 98823

RealSM is exempt from the requirements of the Act relating to the audit of individual accounts in accordance with 479A of the C.A. 2006.

17. INVESTMENT IN ASSOCIATES

	Group		Company
	30 June 2021	30 June 2020	30 June 2021	30 June 2020
	£	£	£	£
At 1 July	-	-	-	-
Investment	-	308,214	-	308,214
Shares of Losses	-	(308,214)	-	(308,214)
Impairment	-	-	-	-
At 30 June	-	-	-	-

In the year ended 30 June 2020, the investment in associate relates to the acquisition of 33% of the Esports Awards Limited on its incorporation in February 2017 and 30% of Gfinity Esports Australia on its incorporation in August 2017. During the year end 30 June 2020, Gfinity Esports Australia ceased trading. As a result the carrying value of all investment into the entity has been written off in full. Both investments are held in Gfinity plc.

Associate undertaking	Country of incorporation	Holding	Proportion of voting rights and capital held		Nature of business
Associate undertaking	Country of incorporation	Holding	2021	2022	Nature of business
Esports Industry Awards Ltd	England	Ordinary shares	33%	33%	Dormant
Gfinity Esports Australia PTY Limited	Australia	Ordinary shares	0%	30%	Tournament and event operator

On 18 December 2020 Gfinity disposed of its 33% holding in Esports Awards Ltd, recognised under the equity method. The investment had a carrying value at the point of disposal of £nil. Net proceeds from the transaction were £459,706, resulting in a corresponding gain on disposal of £459,706.

Esports Awards LTD's registered offices are Belfry House, Champions Way, Hendon, London, England, NW4 1PX. The registered office of Gfinity Esports Australia is Suite 5, Level 1, 100 William Street, Sydney, NSW 2011.

18. TRADE AND OTHER RECIEVABLES

	Group		Company
	30 June 2021	30 June 2020	30 June 2021	30 June 2020
	£	£	£	£
Trade receivables	1,313,447	831,580	1,272,742	831,580
Provision for doubtful debts	(356,480)	(250,110)	(356,480)	(250,110)
	956,967	581,470	916,262	581,470

Other receivables	151,150	308,214	151,149	308,495
Amounts due from group undertakings	-	-	-	-
Amounts due from related undertakings	-	-	-	-
Prepayments and accrued income	479,398	501,367	450,704	448,095
Amounts due in less than one year	1,586,850	1,391,051	1,518,116	1,338,060
Amounts due from group undertakings	-	-	533,480	1,505,740
Prepayments and accrued income	-	-	-	-
Total	1,586,850	1,391,051	2,051,596	2,843,800

Amount due from group undertakings of £533,480 are considered to be due in more than one year (2020:

£1,505,740) while prepayments include a rental deposit of £101,015 that was recovered in July 2021.

The directors consider that the carrying amount of trade and other receivables approximates to their fair value due to the short-term nature of these financial assets.

19. CASH AND CASH EQUIVALENTS

	Group		Company
	30 June 2021	30 June 2020	30 June 2021	30 June 2020
	£	£	£	£
Cash at bank and in hand	1,375,873	1,600,597	1,329,815	1,531,360
Total	1,375,873	1,600,597	1,329,815	1,531,360

Cash at bank and in hand earns interest at floating rates based on daily bank deposit rates. The fair value of cash and cash equivalents does not differ from the carrying value.

20. DEFERRED TAX LIABILITIES

Group


	30 June 2021	30 June 2020
	£	£
At 1 July	92,059	322,718
Arising on business combination	94,748	-
Credited to profit or loss	(58,972)	(230,659)
At 30 June	127,835	92,059

The provision for deferred taxation is made up as follows:

Temporary timing differences on intangible assets

127,835

92,059

Company

	30 June 2021	30 June 2020
	£	£
At 1 July	-	-
Arising on business combination	115,543	-
Credited to profit or loss	(20,795)	-
At 30 June	94,748	-

Temporary timing differences on intangible assets	94,748	-

21. ISSUED CAPITAL

The Company has a single class of ordinary share with nominal value of £0.001 each. Movements in the issued share capital of the Company can be summarised as follows:

	Number	£
As at 30 June 2019	362,897,087	362,897

Issued on 31 July 2019 at £0.045	116,666,666	116,667
Issued on 2 April 2020 at £0.01	56,839,167	56,839
Issued on 21 April 2020 at £0.01	168,160,833	168,161
Issued between 22 April and 30 June 2020 at £0.01	21,304,500	21,305

As at 30 June 2020	725,868,253	725,868

Issued between 6 July 2020 and 04 June 2021 at £0.01	204,644,995	204,645

As at 30 June 2021	930,513,248	930,513

22. TRADE AND OTHER PAYABLES

	Group		Company
	30 June 2021	30 June 2020	30 June 2021	30 June 2020
	£	£	£	£
Non-current liabilities
Other Payables (Deferred consideration)	254,986	-	254,986	-
	254,986	-	254,986	-

Current liabilities
Trade payables	680,419	450,264	634,299	416,865
Other taxation and social security	65,776	103,930	65,776	91,117
Accrued expenditure and deferred revenue	1,105,526	910,582	1,105,526	910,582
Lease Liabilities	-	428,305	-	428,305
	1,851,720	1,893,081	1,805,601	1,846,869

Total	2,106,706	1,893,081	2,060,587	1,846,869

Trade and other payables principally comprise amounts outstanding for trade purchases and ongoing costs. The directors consider that the carrying amount of trade payables approximates to their fair value due to their short-term nature.

23. NOTES TO THE CASH FLOW STATEMENT

Group

	30-Jun-21	30-Jun-20
	30-Jun-21	30-Jun-20
	£	£
Cash flows from operating activities
Loss for the financial year	(3,845,595)	(7,725,307)
Depreciation of property, plant and equipment	132,478	370,589
Depreciation on right of use assets	428,305	571,074
Amortisation of intangible fixed assets	492,700	478,553
Goodwill impairment	901,519	-
Interest Received	(4)	(2,622)
Interest Payable	10,236	39,768
Share based payments	265,583	1,500,573
(Increase)/ decrease in trade and other receivables	(280,359)	931,047
Increase in trade and other payables	300,020	(1,531,582)
Share of Associate Losses	-	308,214
Disposal of fixed assets	85	-
Gain on disposal of Associate	(459,706)	-
Corporation tax charge	227,004	(457,663)
Corporation tax (paid)/ R&D credits received	(221,929)	227,004

Cash used by operating activities	(2,049,663)	(5,290,351)


Net cash used by operating activities	(2,049,663)	(5,290,351)

Company

	30-Jun-21	30-Jun-20
	£	£
Cash flows from operating activities
Loss for the financial year	(5,739,305)	(7,720,225)
Depreciation of property, plant and equipment	112,691	370,371
Depreciation on Right of Use assets	428,305	571,074
Amortisation of intangible fixed assets	111,406	0
Investment impairment	2,158,499	0
Interest Received	(4)	(2,622)
Interest Payable	10,236	39,768
Share of Associate Losses	0	308,214
Gain on disposal of Associate	(459,706)	0
Share based payments	265,583	1,500,573
(Increase)/ decrease in trade and other receivables	707,362	916,564
Increase/ (decrease) in trade and other payables	300,112	(1,533,368)
Loss on disposal of fixed assets	85	0

Taxation charge	(162,957)	0
Corporation tax (paid)/ R&D credits received	227,004	227,004

Net Operating Cashflow	(2,040,690)	(5,322,647)


Net cash used by operating activities	(2,040,690)	(5,322,647)

24. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

The Company uses a limited number of financial instruments, comprising cash, short-term deposits, and various items such as trade receivables and payables, which arise directly from operations. The Company does not trade in financial instruments. All of the Company's financial instruments are measured at amortised cost.

The Company's activities expose it to a variety of financial risks: market risk (including currency risk and interest rate risk), credit risk and liquidity risk.

Credit risk

The Company's principal financial assets are bank balances and cash, trade and other receivables.

Bank balances and cash are held by banks with high credit ratings assigned by independent credit rating agencies. Management is of the opinion that cash balances do not represent a significant credit risk.

As the Group does not hold security against trade and other receivables, its credit risk exposure is as follows:

Group		Company
30 June 2021	30 June 2020	30 June 2021	30 June 2020
£	£	£	£
1,586,850	1,146,912	2,051,596	2,599,380

The trade receivables balance represents amounts due from third parties. At the balance sheet date, the Group's trade receivables totaled £1,313,447 less a provision of £356,480 (2020: £831,580 less a provision of £250,110). The Company's receivables include £533,480 of inter-company funding (2020: £1,505,740). The Company's trade receivables totaled £1,272,742 less a provision for doubtful debt of £356,480 (2020: £831,580 less a provision for doubtful debt of £250,110).

There are no significant overdue but not impaired trade receivables at the balance sheet date. The Company balance sheet includes inter-company receivables which are not considered to be at risk as the Company retains control over the debtor however it is not anticipated that the Group companies will repay these amounts in the next 12 months.

At the balance sheet date an amount of £316,699 was due from one customer representing a concentration of credit risk. This amount has not been recovered in full since the balance sheet date, however is fully provided against in the year-end balance sheet.

Liquidity risk

All trade and other payables are due for settlement within one year of the balance sheet date. The use of instant access deposits ensures sufficient working capital is available at all times.

Foreign exchange risk

The Company operates in overseas markets by selling directly from the UK, owns an overseas subsidiary and reports in GBP. It is therefore subject to currency exposures on transactions while the Group is subject to currency exposures on consolidation of the overseas subsidiary.

Financial instruments held by the Company and their carrying values were as follows:

	Group
	30 June 2021		30 June 2020
	USD ($)	GBP (£)	USD ($)	GBP (£)
Trade and other receivables	57,048	1,524,796	0	990,979
Accrued income	39,284	216,805	65,890	102,661
Cash	56,248	1,335,540	92,689	1,525,657
Trade and other payables	58,997	2,350,781	(39,588)	(1,861,075)
Derivative financial instruments	0	0	0	0
Net current assets/ liabilities	211,577	5,427,923	118,991	758,222

	Company
	30 June 2021		30 June 2020
	USD ($)	GBP (£)	USD ($)	GBP (£)
Trade and other receivables	460,599	943,989	0	990,979
Amounts due from Group Undertakings	747,680	952,675	0	1,505,740
Accrued income	0	216,805	0	102,661
Cash	122,703	1,242,264	31,645	1,505,775
Trade and other payables	0	2,346,757	0	(1,846,869)
Derivative financial instruments	0	0	0	0
Net current assets/ liabilities	1,330,982	5,702,490	31,645	2,258,286

Financial liabilities included in the balance sheet relate to the IAS 39 category of other financial liabilities held at amortised cost.

Assets relate to loans and receivables with the exception of other receivables and prepayments which are classified as non-financial assets.

Fair value estimation

The aggregate fair values of all financial assets and liabilities are consistent with their carrying values due to the relatively short-term maturity of these financial instruments.

As cash is held at floating interest rates, its carrying value approximates to fair value.

Capital management

The Company is funded entirely through shareholders' funds.

If financing is required, the Board will consider whether debt or equity financing is more appropriate and proceed accordingly. The Company is not subject to any externally imposed capital requirements.

25. SHARE BASED PAYMENTS

Equity-settled share option plans

Options

The Company has a share option scheme for employees of the Group.

The tables below summarises the exercise terms of the various options over Ordinary shares of £0.001 each which had been granted, and were still outstanding, as at 30 June 2021.

LTIP options	Number	Weighted average exercise price (£)

Shares options as at 30 June 2019	46,859,795	0.1382
Shares options granted	47,075,621	0.0125
Share options replaced	(28,344,836)	(0.1267)
Share options forfeited	(3,879,553)	(0.1323)
LTIP share options as at 30 June 2020	61,693,027	0.0486


Shares options as at 30 June 2020	61,693,027	0.0486
Shares options granted	49,400,000	0.0409
Share options forfeited	(4,050,001)	0.0100
Share options exercised	(10,866,663)	0.0110
LTIP share options as at 30 June 2021	96,176,363	0.0556

Options for non-employee services

Non-market condition shares	Number	Weighted average exercise price (£)

Shares options as at 30 June 2019	7,500,000	0.20
Shares options granted	0	0
Share options lapsed	0	0
Share options as at 30 June 2020	7,500,000	0.20


Shares options as at 30 June 2020	7,500,000	0.20
Shares options granted	0	0
Share options lapsed	(3,500,000)	0.20
Share options as at 30 June 2021	4,000,000	0.20

Options vest over periods defined in the respective option agreements and at the discretion of the board of directors. 37,750,016 options vested during the year (2020: 28,837,544).

Of the options outstanding 38,000,000 (2020: 20,000,000) are held by directors. Full details of all options held by directors are contained within the Directors' Remuneration Report.

The principal assumptions input into the Black Scholes model to calculate the value of LTIP share options issued for compliance with IFRS 2 "Share Based Payments" are included below, where applicable.

	30 June 2021	30 June 2020
Weighted average exercise price	0.0556	0.0125
Average expected life	1.0 years	1.0 years
Expected volatility	86.62%	81.01%
Risk free rate	0%	0%
Expected dividend yield	0%	0%

All options were granted at an exercise price equivalent to the market price at the date of grant. The weighted average exercise price of LTIP options outstanding at 30 June 2021 was £0.0496 (2020: £0.0486). The weighted average fair value of options issued during the period was £0.0404 (2020: £0.0125).

The average expected life is based on directors' best estimate taking into account the vesting conditions of the options.

Expected volatility has been calculated with reference to the actual volatility of the share price since over the year prior to the date of grant.

The fair value of the non-employee services options has been based on the fair value of the services provided at the date the services were provided. This equates to a fair value of options issued in the year £nil (2020:

£nil).

All options are held in Gfinity plc with no options held over any of the subsidiaries

26. WARRNATS

The Company has granted warrants over Ordinary Shares as outlined in the table below.

	Number	Weighted average exercise price (£)
Warrants

Warrants as at 30 June 2019	0	0.000
Warrants granted	225,000,000	0.010
Warrants exercised	(21,304,500)	0.010
Warrants lapsed/forfeited	0	0.000
Warrants as at 30 June 2020	203,695,500	0.0100

Warrants as at 30 June 2020	203,695,500	0.010
Warrants granted	0	0.000
Warrants exercised	(183,645,000)	0.010
Warrants lapsed/forfeited	0	0.000
Warrants as at 30 June 2021	20,050,500	0.0100

No warrants were granted in the period. The warrants exercised were granted in year ended June 2020 and this figure represented one warrant per ordinary share acquired as part of the fundraise at an exercise price equal to that at which shares were acquired in the fundraise. All warrants are non-transferrable and have an exercise period of 18 months from the date of issue.

The fair value of warrants was calculated according to the Black Scholes model, however, no adjustment has been recognised in respect of the warrants, as directors consider this amount to be immaterial.

27. RELATED PARTY TRANSACTIONS

The Directors Remuneration Report provides details of share options issued to certain directors in the period. Further information on share options are provided in Note 24. In addition to the share options granted in the year, the directors also participated in share placings as outlined in the table below. All shares subscribed for by directors were at the same price and under the same conditions as all other participants in the placings:

June 2021, exercise of warrants at 1p per share

John Clarke

500,000

Jonathan Hall

500,000

Transactions with Group subsidiaries in the year:

CEVO: There was a management recharge from Gfinity to CEVO of £13,409 (2020: £95,767) and a recharge from CEVO to Gfinity for technology services of £215,274 (2020: £719,953). There were no cash advances to and expenses paid on behalf of CEVO by Gfinity (2020: £440,200). At the balance sheet date the intercompany loan due to Gfinity from CEVO was £533,480 (2020: £528,481).

Real Sport: There were cash advances to and expenses paid on behalf of Real Sport by Gfinity of £5,734 (2020: £157,677). At the balance sheet date the intercompany loan due to Gfinity from Real Sport was

£952,675 (2020: £977,260).

There was no revenue from transactions with associates in the year (2020: £0 from the Esports Awards Ltd and £0 with Gfinity Australia). During the period there was a gain of £459,706 from disposal of Esports Awards Ltd as mentioned in Note 17.

28. BUSINESS COMBINATIONS

Acquisition of EpicStream

On 3 December 2020 Gfinity PLC acquired the trade and assets of EpicStream Inc, an online news community for fantasy and sci-fi movies, television, video games, collectible cards and comic books. EpicStream generates revenue through programmatic ads, sponsored content, ecommerce and content creation. Gfinity will also monetise all EpicStream's social channels. The acquisition means that Gfinity will assume ownership of the EpicStream.com website, its extensive social media network and their respective historic content. The continued growth of the platform will be supported by its founders joining the Gfinity team.

Purchase consideration

Initial consideration	£
Shares (10,000,000 Ordinary shares at £0.36)	360,000
Total initial consideration	360,000

Deferred consideration
Contingent consideration at fair value	353,227
Total deferred consideration	353,227

Total consideration payable	713,227

Contingent consideration

Contingent consideration is payable based on revenue generated from the acquired assets. The amount payable is calculated at 30% of relevant revenues received in the first and second 12 month periods after the acquisition date, up to a maximum of £900,000 in each 12 month period. The fair value of the contingent consideration is currently estimated to be £353,227 based on forecast revenues at the date of the acquisition. The maximum contingent consideration payable is £1,800,000.

Net assets acquired

The fair values of the assets and liabilities of the acquired assets of EpicStream as at the date of acquisition are as follows:

	£
Intangible assets: web traffic	567,987
Deferred tax liability	(115,543)
Net identifiable assets acquired	452,445

Add: Goodwill	260,783

Net assets acquired	713,227

The goodwill that arises from the business combination reflects the profitability of the acquired trade and assets and the enhanced growth prospects for the combined business. None of the goodwill is expected to be deductible for tax purposes.

EpicStream's post acquisition revenue was £57,800 with a gross profit of £23,005. If the business had been controlled for the full year, the revenue and gross profit would have been as below:

	£
Revenue	99,086
Cost of sales	59,649
Gross profit	39,437

29. EVENTS OCCURING AFTER THE REPORTING PERIOD

Acquisition of Megit Limited and Placing

On 23 August 2021, Gfinity announced its intention and agreement, subject to completion of a successful placing and settlement of the initial consideration, to acquire Megit Limited. Megit Limited , was the private company which owns and operates the website Stock Informer, in both the UK and US. The Stock Informer brand has become an established authority on the availability of hard to find items of stock, with a particular emphasis on products of relevance to gamers, enabling it to drive profitable revenue through affiliate commissions.

On 24 August it was announced that an oversubscribed placing had been successfully completed, subject to shareholder approval, raising £3.3m prior to expenses at the prevailing market price of 4p per ordinary share. This transaction was approved by shareholders at an Extraordinary General Meeting of the company on 10 September. The transaction formally completed on 14 September 2021.

Consideration for the transaction was as outlined below:

Purchase Consideration:

	£
Initial Consideration:
Initial Cash Consideration	2,500,000
Shares (62,500,000 shares at £0.04)	2,500,000
Total Initial Consideration	5,000,000

Contingent Consideration:
30% revenue earn out on revenue earned by Stock Informer brand in the 3 years post acquisition, capped at £1,800,000:	1,260,000
Contingent Consideration	1,260,000

Estimated Total Consideration	6,260,000

The provisionally determined fair value of assets and liabilities of Megit Limited as at the date of acquisition are as follows:

Cash and cash equivalents	50,000
Receivables	347,196
Payables (incl Corporation tax)	(397,196)
Add: goodwill and intangibles	6,260,000
Net Assets Acquired:	6,260,000

Contingent Consideration:

Contingent consideration is due amounting to 30% of revenue, net of sales taxes, earned in the 3 calendar years following acquisition. This consideration is capped at £1,800,000, being 30% of £6,000,000. The fair value of this consideration has been assessed at £1,260,000, being 30% of £4,200,000.

Information not disclosed as not yet available:

At the time the financial statements were authorized for issue, the group had not yet fully completed the accounting for the acquisition of Megit Limited. In particular the fair value of assets and liabilities disclosed above have only been determined provisionally. Full analysis of the categorization between goodwill and other separately identifiable assets is also still to be calculated and as a result, any deferred tax on such assets is yet to be calculated.

Acquisition of trade and assets of Siege GG

On 8 September 2021 Gfinity announced the acquisition of the trade and assets of SiegeGG. This included the website, related social platforms, statistical database and supporting technology and methodology that has helped SiegeGG become the authority on the competitive scene around the Rainbow Six Siege game.

Consideration in respect of this transaction was as follows:

	£
Initial Consideration:
Shares (9,000,000 shares at £0.044)	396,000
Total Initial Consideration	396,000

Contingent Consideration:
30% revenue earn out on revenue earned by Stock Informer brand in the 2 years post acquisition, capped at £1,500,000:	180,000
Contingent Consideration	180,000

Estimated Total Consideration	576,000

Contingent Consideration:

Contingent consideration is due amounting to 30% of revenue, net of sales taxes, earned in the 2 calendar years following acquisition. This consideration is capped at £1,500,000. The fair value of this consideration has been assessed at £180,000, being 30% of £600,000.

No value has been ascribed to tangible fixed assets acquired under this transaction, hence the full value of the opening balance sheet will represent goodwill and intangibles. Full analysis of the categorization between goodwill and other separately identifiable assets is also still to be calculated and as a result, any deferred tax on such assets is yet to be calculated.

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