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Pathway One PLC (POPP)

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Tuesday 27 January, 2009

Pathway One PLC

Annual Report and Accounts


       Audited Financial Results for the year ended 31st December 2007

Director's Report

The director presents his report and the financial statements of
the company for the year ended 31st December 2007.

PRINCIPAL ACTIVITIES AND BUSINESS REVIEW

The company is an investment company.

It is intended that the company will acquire sales and development
licenses for software and build an international distribution channel on an
outsourced basis in the forthcoming year.

On 9th July 2007 the company's shares were admitted to trading on
PLUS Markets.

The results for current the year are disappointing. The two
investments made during the year to secure licences to develop and distribute
products proved to be worthless and the cost of these investments had to be
fully written down during the year

RESULTS AND DIVIDENDS

The loss for the year amounted to £1,538,003. The director has not
recommended a dividend.

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

Management gives continuous attention to the Company's financial
position. The company is in its formative years, and has only just started
actively trading and investing.

The company monitors all cash, debtors, and creditors on an ongoing
basis to ensure that it has sufficient cash flows and funds for its working
capital requirements. There are currently no interest rate risks, exchange
risks, or price risks.

Financial Key Performance Indicators

The company monitors various financial key performance indicators
as part of its accounting and management reporting process. In view of the
fact that the company has only just started actively trading and investing it
has no previous financial key performance indicators against which to measure
its results.

Non-Financial Key Performance Indicators

The company seeks to ensure that responsible business practice is
fully integrated into the management of all its operations and into the
culture of all its business. It believes that the consistent adoption of
responsible business practice is essential for operational excellence, which
in turn is expected to ensure the delivery of its core objectives of sustained
real growth in future profitability.

In a company of this size which has only just started actively
trading and investing the directors consider there are a small number of
non-financial performance indicators, although none of these are key.

DIRECTORS

The directors who served the company during the year were as
follows:

Mr R Henstock
Mr I W Leith
Mr B G Dale         (Appointed 20th March 2007)
Mr G B Oliver       (Appointed 19th September 2007)

Mr R Darvill was appointed as a director on 7th November 2008.
Mr D J P Oakley was appointed as a director on 7th November 2008.
Mr R Henstock resigned as a director on 19th June 2008.
Mr B G Dale resigned as a director on 19th June 2008.
Mr G B Oliver resigned as a director on 19th June 2008.

In accordance with the Articles of Association the Mr I W Leith
will retire by rotation and being eligible offer himself for reelection at the
forthcoming Annual General Meeting.

In accordance with the Articles of Association Mr B G Dale and Mr G
B Oliver will have their appointments ratified at the next Annual General
Meeting.

POLICY ON THE PAYMENT OF CREDITORS

It is the company's policy to settle the terms of payment with
suppliers when agreeing the terms of each transaction, and to ensure that
those suppliers are made aware of these terms to comply with such terms
agreed.

In respect of the above policy, in accordance with Companies Act
1985 Sch 7 para 12, no average payment period can be calculated.

DIRECTOR'S RESPONSIBILITIES

The director is responsible for preparing the Annual Report and the
financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements
for each financial year. Under that law the director has elected to prepare
the financial statements in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards and applicable law).
The financial statements are required by law to give a true and fair view of
the state of affairs of the company and of the profit or loss of the company
for that period. In preparing these financial statements, the director is
required to:

- select suitable accounting policies and then apply them
  consistently;

- make judgements and estimates that are reasonable and prudent;

- state whether applicable UK Accounting Standards have been
  followed, subject to any material departures disclosed and explained in the
  financial statements;

- prepare the financial statements on the going concern basis
  unless it is inappropriate to presume that the company will continue in
  business.

The director is responsible for keeping proper accounting records
that disclose with reasonable accuracy at any time the financial position of
the company and enable him to ensure that the financial statements comply with
the Companies Act 1985. He is also responsible for safeguarding the assets of
the company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.

In so far as the director is aware:

- there is no relevant audit information of which the company's
  auditor is unaware; and

- the director has taken all steps that he ought to have taken to
  make himself aware of any relevant audit information and to establish that the
  auditor is aware of that information.

POST BALANCE SHEET EVENT

On 7th November 2008 4,000,000 ordinary shares of 1p each were
issued at par to provide additional working capital.

Signed by

Mr I W Leith
Director
Approved by the director on 26th January 2009


     Independent Auditor's Report to the Shareholders of Pathway One plc

We have audited the financial statements of Pathway One PLC for the
year ended 31st December 2007 on pages 7 to 18, which have been prepared on
the basis of the accounting policies set out on page 12.

This report is made solely to the company's shareholders, as a
body, in accordance with Section 235 of the Companies Act 1985. Our audit work
has been undertaken so that we might state to the company's shareholders those
matters we are required to state to them in an auditor's report and for no
other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company and the company's
shareholders as a body, for our audit work, for this report, or for the
opinions we have formed.

RESPECTIVE RESPONSIBILITIES OF DIRECTOR AND AUDITOR

The director's responsibilities for preparing the financial
statements in accordance with applicable law and United Kingdom Accounting
Standards (United Kingdom Generally Accepted Accounting Practice) are set out
in the Statement of Director's Responsibilities.

Our responsibility is to audit the financial statements in
accordance with relevant legal and regulatory requirements and International
Standards on Auditing (UK and Ireland).

We report to you our opinion as to whether the financial statements
give a true and fair view and are properly prepared in accordance with the
Companies Act 1985. We also report to you whether in our opinion the
information given in the Director's Report is consistent with the financial
statements.

In addition we report to you if, in our opinion, the company has
not kept proper accounting records, if we have not received all the
information and explanations we require for our audit, or if information
specified by law regarding director's remuneration and other transactions is
not disclosed.

We read the Director's Report and consider the implications for our
report if we become aware of any apparent misstatements within it.

BASIS OF AUDIT OPINION

We conducted our audit in accordance with International Standards
on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit
includes examination, on a test basis, of evidence relevant to the amounts and
disclosures in the financial statements. It also includes an assessment of the
significant estimates and judgements made by the director in the preparation
of the financial statements, and of whether the accounting policies are
appropriate to the company's circumstances, consistently applied and
adequately disclosed.

We planned and performed our audit so as to obtain all the
information and explanations which we considered necessary in order to provide
us with sufficient evidence to give reasonable assurance that the financial
statements are free from material misstatement, whether caused by fraud or
other irregularity or error. In forming our opinion we also evaluated the
overall adequacy of the presentation of information in the financial
statements.

OPINION

In our opinion:

- the financial statements give a true and fair view, in accordance
  with United Kingdom Generally Accepted Accounting Practice, of the state of
  the company's affairs as at 31st December 2007 and of its loss for the year
  then ended;

- the financial statements have been properly prepared in
  accordance with the Companies Act 1985; and

- the information given in the Director's Report is consistent with
  the financial statements.

Emphasis of matter - Going concern

In forming our opinion on the financial statements, which is not
qualified, we have considered the adequacy of the disclosures made in note 1
to the financial statements concerning the company's ability to continue as a
going concern. These indicate the existence of a material uncertainty which
may cast significant doubt about the company's ability to continue as a going
concern. The financial statements do not include the adjustments that would
result if the company was unable to continue as a going concern.

BREBNERS
Chartered Accountants & Registered Auditors
The Quadrangle
180 Wardour Street
London
W1F 8LB

27th January 2009



        Profit and Loss Account for the year ended 31st December 2007

                                            
                                            2007            2006

                                               £               £
TURNOVER                                       -               -

Administrative expenses                  966,753          (4,684)

                                        --------         --------
OPERATING (LOSS)/PROFIT                 (966,753)          4,684

Amounts written off investments     4   (571,250)              -

                                        --------         --------
(LOSS)/PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION                       (1,538,003)          4,684

Tax on (loss)/profit on ordinary  
activities                          5          -               -

                                        --------         --------
(LOSS)/PROFIT FOR THE FINANCIAL YEAR  (1,538,003)          4,684
                                        ========         ========



All of the activities of the company are
classed as continuing.
 


                                         2007            2006

                                      £       £       £       £
 
FIXED ASSETS

Investments                                   -               -

CURRENT ASSETS

Debtors                          12,698           18,400
Cash at bank                          -            4,457
                               --------         --------
                                 12,698           22,857
CREDITORS: Amounts falling
due within one year              41,138            5,306
                               --------         --------

NET CURRENT (LIABILITIES)/
ASSETS                                 (28,440)          17,551
                                      --------         --------

TOTAL ASSETS LESS CURRENT
LIABILITIES                            (28,440)          17,551
                                      ========         ========

CAPITAL AND RESERVES

Called-up equity share
capital                                287,000          110,000
Share premium account                1,315,012                -
Profit and loss account             (1,630,452)         (92,449)

                                      --------         --------
(DEFICIT)/SHAREHOLDERS' FUNDS          (28,440)          17,551
                                      ========         ========


These financial statements were approved and signed by the director
and authorised for issue on 26th January 2009.

Mr I W Leith
Director


ACCOUNTING POLICIES

Basis of accounting

The financial statements have been prepared under the historical
cost convention and in accordance with applicable accounting standards.

Going Concern

The accounts show a loss for the period of £1,538,003 arising
principally from the exceptional items referred to in Note 2 of £1,471,250.

The company balance sheet shown a deficiency of current assets and
total assets of £28,440. As described in the Directors report the company is
intending to acquire and develop software sales and licenses but currently has
been unable to acquire suitable products. The company has a very low overhead
base and the management accounts to date show a small loss arising from the
administrative expenses incurred. As described in note 13 further funds of
£40,000 were raised subsequent to the year end from further share issues. The
directors are in the process of agreeing with the companys trade creditors
settlement of amounts due at 31st December 2007 together with further amounts
incurred subsequently.

The directors have formed the opinion that the company has
sufficient working capital for a period of at least twelve months from the
date of approval of these accounts.

The directors therefore remain confident that it remains
appropriate to prepare the accounts on a going concern basis. If the
continuing support of the directors and related parties is not forthcoming
then it would not be appropriate to prepare the accounts on this basis
although the directors do not believe any write down in the value of the
assets of the company would be required or any additional liabilities would
arise.

Financial instruments

Financial instruments are classified and accounted for, according
to the substance of the contractual arrangement, as either financial assets,
financial liabilities or equity instruments. An equity instrument is any
contract that evidences a residual interest in the assets of the company after
deducting all of its liabilities.

Share based payments

FRS 20 'Share-Based Payment' requires the recognition of
equity-settled share-based payments at fair value at the date of the grant.

For the year ended 31st December 2008, the new accounting policy
has resulted in a net decrease in the profit for the year of £900,000. The
balance sheet at 31st December 2008 has been restated to reflect the increase
in shares issued and the share premium.

The Directors of Pathway One plc accept responsibility for this
announcement

Contact:

David Oakley
Pathway One plc
Tel: 020 7562 3389

Corporate Adviser
Tim Lyle
City & Merchant Corporate Finance Limited
Tel: 020 7101 7676

                                                                                                               

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