FORTIFAI LTD — Interim / Quarterly Report 2021

Apr 19, 2021

MIGHTY KINGDOM LIMITED (FORMERLY KNOWN AS MIGHTY KINGDOM GROUP PTY LIMITED) A.B.N. 39.627.145.260

FINANCIAL REPORT

FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

MIGHTY KINGDOM LIMITED A.B.N.39.627.145.260 DIRECTORS' REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

The Directors of Mighty Kingdom Limited present their report together with the financial statements of the consolidated entity, being Mighty Kingdom Limited (the Company) and its controlled entities (the Group) for the half-year ended 31 December 2020.

DIRECTORS

The names of the Directors who held office during or since the end of the half-year and until the date of this report are noted below, Directors were in office for this entire period unless otherwise stated.

Philip James Mayes	Managing Director	appointed 28 June 2018
Anthony Michael Lawrence	Executive Director	appointed 20 August 2020
Jindou Andre Lee	Executive Director	appointed 20 August 2020 and
		resigned on 16 December 2020
Megan Brownlow	Non-Executive Director	appointed 17 December 2020
Guthrie Michelle Lee	Non-Executive Director	appointed 17 December 2020

PRINCIPAL ACTIVITIES

The Group's principal activities are developing a broad portfolio of video games for console, PC and mobile platforms. Mobile games and apps developed and/or published by the Group are made available for customers on different App's stores, including Apple's App Store, Google's Google Play and Valve's Steam Store. In addition to receiving fees for development work from clients, The Group monetises its games and apps through In-App purchases and advertising offered to the consumers within games and apps for smartphones and tablets.

REVIEW AND RESULTS OF OPERATIONS

The consolidated after-tax loss of the Group for the half-year ended 31 December 2020 amounted to $1,743,934 (2019 half-year: loss $2,993,697).

During the period the Group commenced due diligence in preparation for an Initial Public Offering ("IPO") which at reporting date was still in progress.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

(a) Issuance of Convertible Notes

The Company raised pre-IPO funding of $3,965,000 (before transaction costs) via the issuance of convertible notes with a face value of $1 each in December 2020. If the IPO is successfully completed prior to the maturity of the notes, the convertible notes would be converted into the ordinary shares prior to the issue of new shares to investors based on the IPO conversion price determined by the terms of the convertible note deed poll.

(b) Issuance of Share Options

• On 20 November 2020, the Company issued 12,488,859 options with an exercise price of $0.15 each to certain employees.

On 16 December 2020, the Company issued 649,252 options with an exercise price of $0.30 each. to a non-executive director.

(c)

Other items

At a general meeting of the Company held on 9 November 2020, Shareholders resolved:

• To repeal the Company’s existing constitution in its entirety and adopt the ASX-compliant constitution; and

• To convert each existing ordinary share of the Company into 7 ordinary shares (shares split) and reconstructed non-redeemable preference share capital in the same manner.

On 27 November 2020, the Company converted from a proprietary company limited by shares to a public company limited by shares, with a corresponding name change from "Mighty Kingdom Group Pty Ltd" to "Mighty Kingdom Limited".

MIGHTY KINGDOM LIMITED A.B.N.39.627.145.260 DIRECTORS' REPORT

EVENTS ARISING SINCE THE END OF THE REPORTING PERIOD

The following events have occurred since balance date:

(a) Initial Public Offering ("IPO")

The Company has lodged a prospectus with ASIC on the 10th March 2021 for its an IPO and admission to the official list of the ASX. The listing process is expected to be finalised in the first half of calendar year 2021.

(b) Issuance of Share Options

In March 2021, the Company issued 973,878 options with an exercise price of $0.30 each to non-executive directors.

No other matters or circumstances have arisen since the end of the reporting period which significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years.

Signed in accordance with a resolution of the Directors

MAYES, PHILIP JAMES Dated this 6th day of April 2021

MIGHTY KINGDOM LIMITED A.B.N.39.627.145.260 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

Revenue 3 Other income 4 Employee benefit expenses 5 Depreciation and amortisation expenses Other expenses 6 Finance costs Loss before income tax Income tax benefit Loss for the period Other comprehensive income Other comprehensive income for the period, net of income tax Total comprehensive loss for the period Loss per share - basic and diluted 15	Consolidated
	Half-year 31 Dec 2020 Half-year 31 Dec 2019
	$ $ 1,518,843 972,744 1,357,309 422,305 (3,619,114) (3,393,550) (80,298) (74,678) (891,784) (855,275) (68,250) (65,243)
	(1,783,294) (2,993,697) 39,360 -
	(1,743,934) (2,993,697)
	- -
	- -
	(1,743,934) (2,993,697)
	(0.03) (0.06)

This statement should be read in conjunction with the notes to the financial statements.

MIGHTY KINGDOM LIMITED A.B.N.39.627.145.260 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2020

Notes Assets Current assets Cash and cash equivalents Trade and other receivables 7 Contract assets Other assets Total current assets Non current assets Deferred tax asset Property, plant and equipment Right-of-use assets Total non-current assets Total assets Liabilities Current liabilities Trade and other payables 9 Contract liabilities Employee benefits 10 Loans and borrowings 11 Lease liabilities Total current liabilities Non-current liabilities Trade and other payables 9 Deferred tax liabilities Employee benefits 10 Loans and borrowings 11 Lease liabilities Total non-current liabilities Total liabilities Net liabilities Equity / (deficit) Share capital 12 Share-based payment reserve 13 Retained losses Total equity/ (deficit)	Consolidated
	31 Dec 2020 30 Jun 2020 $ $ 2,995,325 81,656 592,889 1,646,276 86,068 - 66,590 32,958
	3,740,872 1,760,890
	942,523 837,526 221,646 201,587 417,645 468,782
	1,581,814 1,507,895
	5,322,686 3,268,785
	1,426,590 2,693,889 48,394 452,015 1,611,213 1,432,058 3,780,789 378,788 96,909 93,943
	6,963,895 5,050,693
	1,569,564 - 896,371 830,734 65,511 91,455 - 99,853 339,653 388,824
	2,871,099 1,410,866
	9,834,994 6,461,559
	(4,512,308) (3,192,774)
	3,501,000 3,501,000 424,400 - (8,437,708) (6,693,774)
	(4,512,308) (3,192,774)

This statement should be read in conjunction with the notes to the financial statements.

MIGHTY KINGDOM LIMITED A.B.N.39.627.145.260 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

Cash flows from operating activities Receipts from customers Payments to suppliers and employees Other income Interest paid Research and development incentive Other government stimulus income Net cash (used in) operating activities Cash flows from investing activities Purchase of property, plant and equipment Net cash (used in) investing activities Cash flows from financing activities Proceeds from issue of non-redeemable preference shares Proceeds from issue of convertible notes Transaction costs related to issuance of convertible notes Loan repayment made during the period Net cash provided by financing activities Net change in cash and cash equivalents held Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the period	Consolidated
	Half-year 31 Dec 2020 Half-year 31 Dec 2019
	$ $ 1,635,383 1,084,167 (3,723,885) (2,919,839) 114,955 - (68,292) (47,119) 560,937 958,683 1,157,429 38,737
	(323,473) (885,371)
	(49,217) (36,657)
	(49,217) (36,657)
	- 750,000 3,965,000 - (400,000) - (153,233) (28,413)
	3,411,767 721,587
	3,039,077 (200,441) (43,752) 262,641
	2,995,325 62,200

This statement should be read in conjunction with the notes to the financial statements.

MIGHTY KINGDOM LIMITED A.B.N.39.627.145.260 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

Balance at 1 July 2019 Loss for the year Other comprehensive income Total comprehensive income for the year Transactions with owners in their capacity as owners: - contributions of equity - non-redeemable preference shares - dividends paid or provided for Balance at 30 June 2020 Loss for the period Other comprehensive income Total comprehensive income for the period Transactions with owners in their capacity as owners: - Share-based payments (Note 14) - dividends paid or provided for Balance at 31 December 2020	Consolidated
	Share Share-based Retained Total Capital payment losses reserve $ $ $ $ 2,501,000 - (3,104,109) (603,109) - - (3,589,665) (3,589,665) - - - -
	- - (3,589,665) (3,589,665)
	1,000,000 - - 1,000,000 - - - -
	3,501,000 - (6,693,774) (3,192,774)
	- - (1,743,934) (1,743,934) - - - -
	- - (1,743,934) (1,743,934)
	- 424,400 - 424,400 - - - -
	3,501,000 424,400 (8,437,708) (4,512,308)

This statement should be read in conjunction with the notes to the financial statements.

MIGHTY KINGDOM LIMITED A.B.N.39.627.145.260 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

1. GENERAL INFORMATION

Mighty Kingdom Limited is a public company limited by shares that is incorporated and domiciled in Australia.

The Group's principal activities are developing a broad portfolio of video games for console, PC and mobile platforms. Mobile games and apps developed and/or published by the Group are made available for customers on different App's stores, including Apple's App Store, Google's Google Play and Valve’s Steam Store. In addition to receiving fees for development work from clients, The Group monetises its games and apps through In-App purchases and advertising offered to the consumers within games and apps for smartphones and tablets.

2.1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation of the half-year financial report

The Interim Financial Statements are for the six months ended 31 December 2020 have been prepared in accordance with AASB 134 ‘Interim Financial Reporting’. They do not include all of the information required in annual financial statements in accordance with AASB, and should be read in conjunction with the consolidated financial statements for the year ended 30 June 2020.

The Interim Financial Statements have been approved for issue by the Board of Directors on 6 April 2021.

Accounting policies are consistent with those included in the financial statements for the year ended 30 June 2020, other than the new policy introduced as follows:

Share-based payments

Equity-settled share-based compensation benefits are provided to employees and directors.

Equity-settled transactions are awards of shares, or options over shares, that are provided to employees and directors in exchange for the rendering of services.

The cost of equity-settled transactions is measured at fair value on grant date. Fair value is independently determined using either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option. Judgements are also applied in relation to estimations of the number of options which are expected to vest, by reference to historic attrition rates and expected outcomes under relevant performance conditions.

The cost of equity-settled transactions is recognised as an expense with a corresponding increase in equity over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous periods.

Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are satisfied.

MIGHTY KINGDOM LIMITED A.B.N.39.627.145.260 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT) FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

• 2.2 NEW ACCOUNTING STANDARDS AND INTERPRETATIONS ADOPTED DURING THE PERIOD

The accounting policies and methods of computation are the same as those adopted in prior years except new and amended accounting standards which came into effect on 1 July 2020, both of which are detailed below.

The 31 December 2020 financial statements, and respective notes to the financial statements have been prepared in accordance with the new and amended accounting standards. The accounting policies in the notes below have also been updated to reflect the new and amended accounting standards in effect during the period.

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

• AASB 2018-6 Amendments to Australian Accounting Standards – Definition of a Business;

• AASB 2020-3 Amendment to AASB 9 – Fees in the ‘10 per cent’ Test for Derecognition of Financial Liabilities (Part of Annual Improvements 2018–2020 Cycle);

• AASB 2020-4 Amendments to AASs – Covid-19-Related Rent Concessions;

• AASB 2019-1 Amendments to AASs – References to the Conceptual Framework; and

• AASB 2019-5 Amendments to AASs – Disclosure of the Effect of New IFRS Standards Not Yet Issued in Australia.

The group also elected to adopt the following standards and amendments early:

• AASB 2018-7 Amendments to Australian Accounting Standards – Definition of Material.

The amendments listed above did not have any material impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future periods.

2.3

STANDARDS ISSUED BUT NOT YET EFFECTIVE

• There are a number of new accounting standards and amendments issued, but not yet effective, none of which have been early adopted by the Group in this interim Financial Report. The new standards and amendments (noted below), when applied in future periods, are not expected to have a material impact on the financial position of the Group.

• Amendments to IAS 1: Classification of Liabilities as Current or Non-current;

• AASB 2020-3 Amendments to AASB 3 – Reference to the Conceptual Framework; and

• AASB 2020-3 Amendments to AASB 137 – Onerous Contracts —Cost of Fulfilling a Contract.

2.4

GOING CONCERN

For the half-year ended 31 December 2020 the Group was in a net liability position of $4,512,308 having made a loss of $1,743,934 (2020: half-year loss of $2,993,697) and had cash outflows from operating activities of $323,473 (2020: cash outflows of $1,352,759). The group’s current operations and stage of development has required significant cash investment as it continues to develop contracts and commercialise its revenue base. In addition, the COVID-19 pandemic, announced by the World Health Organisation on 31 March 2020, is having a negative impact on world stock markets, currencies and general business activity. The timing and extent of the impact and recovery from COVID19 is unknown but it may have an impact on business activities. These conditions indicate a material uncertainty that may cast a significant doubt about the Group’s ability to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business.

In order to continue as a going concern, the Group is required to:

• Successfully commercialise a number of development contracts leading to a material increase in sales revenue, and accordingly receipts from customers;

• Raise additional working capital either by an Initial Public Offering for listing on the ASX or equity/debt fund raising in order to meet the Group’s strategic objectives; and

• Continue to meet the repayment plan with the Australian Tax Office (as outlined within Note 9).

MIGHTY KINGDOM LIMITED A.B.N.39.627.145.260 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT) FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

2.4 GOING CONCERN (CONT)

The Directors are satisfied they will be able to raise additional working capital as required and thus it is appropriate to prepare the financial statements on a going concern basis. In arriving at the position the Directors believe that the Group will:

• Be successful in the commercialisation of a number of development contracts leading to a material increase in sales revenue, and accordingly receipts from customers;

• Have sufficient cash available for the Group to continue operating until it can raise further capital;

• Be successful in an Initial Public Offering for listing on the ASX or raise additional capital through debt/equity funding. The Company has lodged a prospectus with ASIC on the 10th March 2021 for a capital raise of $18,000,000 through an Initial Public Offering and the listing process is expected to be completed in the first half of calendar 2021; and

• Have the continued support of its shareholders and financiers as demonstrated by the recent success in raising funds $4,000,000 through convertible notes.

Should the Group not be able to continue as a going concern, it may be required to realise its assets and discharge its liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the financial statements. The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or liabilities that might be necessary should the entity not continue as a going concern.

3 REVENUE Software development revenue Online game revenue Advertising revenue Licence revenue Recognised over time Disaggregation of revenue The following table presents revenue disaggregated by platform: Mobile Multi-platforms (including console and PC) Other 4 OTHER INCOME Government grant income Research and development incentive Other income	Consolidated
	Half-year Half-year 31-Dec-20 31-Dec-19
	$ $ 1,236,135 738,184 116,708 137,572 24,942 18,955 141,058 78,033
	1,518,843 972,744
	1,518,843 972,744 986,102 477,544 391,684 417,167 141,057 78,033
	1,518,843 972,744
	1,150,094 138,099 154,717 280,469 52,498 3,738
	1,357,309 422,305

MIGHTY KINGDOM LIMITED A.B.N.39.627.145.260 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT) FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

5 EMPLOYEE BENEFIT EXPENSES Wages and salaries Contributions to defined contribution superannuation funds Increase in provision for annual and long service leave Share based payments (Note 14) Payroll tax expense Other employee benefits 6 OTHER EXPENSES Product development expenses Subcontract labour Royalty expenses Channel costs Consulting, accounting, auditing and legal fees Insurance IT and other computer expenses Rent and occupancy expenses Other administration and overhead expenses 7 TRADE AND OTHER RECEIVABLES Trade receivables GST receivable Other receivables Research and development incentive receivable Related party receivables - Amount receivable from director / shareholder	Consolidated
	Half-year Half-year 31-Dec-20 31-Dec-19
	$ $ 2,869,740 2,750,823 262,759 231,054 54,305 311,982 424,400 - - 99,691 7,910 -
	3,619,114 3,393,550
	268,901 154,076 55,375 178,738 46,769 41,132 35,012 41,271 95,178 78,340 5,593 4,161 91,578 161,647 - 46,148 293,378 149,762
	891,784 855,275
	Consolidated
	31 Dec 2020 30 Jun 2020
	$ $ 14,380 638,656 187,613 102,197 218,184 326,491 154,717 560,937 17,995 17,995
	592,889 1,646,276

MIGHTY KINGDOM LIMITED A.B.N.39.627.145.260 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT) FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

SHARES IN CONTROLLED ENTITIES Name and interest in controlled entity Mighty Kingdom Games Pty Ltd Mighty Kingdom Services Pty Ltd Mighty Kingdom IP Pty Ltd Rise Games Pty Ltd	Equity interest held
	31 Dec 2020 30 Jun 2020
	% % 100 100 100 100 100 100 100 100

8 SHARES IN CONTROLLED ENTITIES

• (a) The subsidiaries listed above have share capital consisting solely of ordinary shares, which are held directly by the Group.

• (b) Each subsidiary’s principal place of business is Australia which is also its country of incorporation or registration.

TRADE AND OTHER PAYABLES Current Trade payables Accrued expenses GST payables Taxes payable (a) Other payables Amounts payable to related entities - Amount payable to director / shareholder Non-current Taxes payable (a)	Consolidated
	31 Dec 2020 30 Jun 2020
	$ $ 287,045 171,654 178,031 129,707 120,297 85,950 600,000 2,066,627 236,297 235,031 4,920 4,920
	1,426,590 2,693,889
	1,569,564 -

9 TRADE AND OTHER PAYABLES

• (a) On 20 November 2020, Mighty Kingdom Services Pty Ltd arranged an interest-free payment plan with the Australian Taxation Office (ATO) to repay the outstanding tax liabilities over the next four years, which related to its outstanding GST and PAYG withholding obligations ("New Payment Plan"). This New Payment Plan is a replacement to the arrangement that was previously in place as of 30 June 2020.

Conditions of the New Payment Plan:

• Make payments on due dates stipulated on the arrangement. The dates are regular instalments 'until August 2024; and

• Lodge and pay all ongoing tax obligations by their due dates.

The breach of any conditions above results payment of the full amount and any accrued general interest charge (GIC).

MIGHTY KINGDOM LIMITED A.B.N.39.627.145.260 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT) FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

10 EMPLOYEE BENEFITS Current Accrual for salaries and wages Provision for annual leave Provision for Covid-19 leave Provision for long service leave Other employee statutory liabilities Non-current Provision for long service leave 11 LOANS AND BORROWINGS Current Obligations under finance leases and hire purchase contracts Unsecured loan from South Australian Film Corporation (SAFC) (b) Bank overdraft Secured bank loan (a) Convertible notes (c) Non-current Secured bank loan (a)	Consolidated
	31 Dec 2020 30 Jun 2020
	$ $ 271,822 342,165 405,764 380,572 481,966 540,104 164,753 117,449 286,908 51,768
	1,611,213 1,432,058
	65,511 91,455
	- 1,821 200,000 200,000 - 125,408 - 51,559 3,580,789 -
	3,780,789 378,788
	- 99,853
	- 99,853

(a) Commonwealth Bank of Australia facility

Mighty Kingdom Limited and its controlled entities, negotiated with the Commonwealth Bank of Australia to provide a finance facility to the Mighty Kingdom Limited amounting to $250,000 at a variable rate of 6.85% p.a. As at 31 December 2020 carrying amount of the loan amounted to $nil (June 2020: $184,560).

The facilities are secured by Mighty Kingdom Games Pty Ltd comprising: first ranking charge over all present and subsequently acquired property and a guarantee limited to $400,000 by Michelle Choi Yi Lee and $400,000 by Philip James Mayes.

(b) South Australian Film Corporation (SAFC) facility

The SAFC has agreed to lend the Group $200,000 loan amount for working capital cashflow purposes. The loan was originally repayable on or before 30 September 2020. However, on request the SAFC board has approved an extension to the repayment until 31 March 2021.

MIGHTY KINGDOM LIMITED A.B.N.39.627.145.260 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT) FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

11 LOANS AND BORROWINGS (CONT)

(c) Convertible notes

The Company raised pre-IPO funding of $3,965,000 (before transaction costs) via the issuance of convertible notes with a face value of $1 each in December 2020. If the IPO is successfully completed prior to the maturity of the notes, the convertible notes would be converted into the ordinary shares prior to the issue of new shares to investors based on the IPO conversion price determined by the terms of the convertible note deed poll.

Convertible notes are initially recognised at fair value, net of transaction costs incurred. Convertible notes are subsequently measured at amortised cost.

12 SHARE CAPITAL Ordinary shares - fully paid (a) (b) (a) Movements in ordinary share capital Balance at beginning of the period Shares issued during the period Shares split during the period Balance at end of the period (b) Movements in preference share capital Balance at beginning of the period Issued during the period Shares split during the period Balance at end of the period Non-redeemable preference	31 Dec 2020 30 Jun 2020 Shares Shares 52,500,000 7,500,000	Consolidated
		31 Dec 2020 30 Jun 2020
		$ $ 1,000 1,000
	19,541,659 2,810,605	3,500,000 3,500,000
		Consolidated
		Total $ 7,500,000 1,000 - - 45,000,000 - Number of Shares
		52,500,000 1,000
		Consolidated
		Total $ 2,810,605 3,500,000 - - 16,731,054 - Number of Shares
		19,541,659 3,500,000

The Group's non-redeemable preference shares are classified as equity because they bear discretionary dividends, do not contain any obligations to deliver cash or other financial assets and do not require settlement in a variable number of the Group's equity instruments. Each preference share will be convertible into ordinary shares at a initial conversion price which equals to the issue price of the relevant preference share and is adjusted pursuant to the operations of the terms of the relevant share subscription agreement. Each holder of the preference shares is entitled to convert some or all of the preference shares into ordinary shares at any time on ten business days written notice to the Company.

MIGHTY KINGDOM LIMITED A.B.N.39.627.145.260 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT) FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

13 OTHER RESERVES

Share-based payment reserve

The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their remuneration, and other parties as part of their compensation for services.

14 SHARE BASED PAYMENTS

Employee share options

The company operates an optino plan for employees.

The Employee Share Option Plan ("ESOP") allows for the grant of employee share options to any Each employee share option entitles the holder to one share on the exercise of the employee share Employee share options will vest automatically on the listing date and the option expiry date is the The table below shows the number and movement in, share options during the period:

Balance as at 1 July 2020 Granted during the period Exercised during the period Balance as at 31 December 2020	- 12,488,859 - Number of options
	12,488,859

Employee share options

Utilising Black Scholes option-pricing model the employee share option have a fair value of $0.102 per option (exercise price $0.15). Share-based payment expenses of $324,400 was recorded in the profit or loss during the period.

Non-executive director share options

On 16 December 2020, Michelle Guthrie (Chair) was granted 649,252 Options, by way of an initial equity-based sign-on incentive. Each Option issued entitles the holder to one ordinary share in the Company on exercise and is exercisable within 3 years of the grant date.

Non-executive director share options vest immediately upon the option grant.

Utilising Black Scholes option-pricing model the non-executive director options have a fair value of $0.154 per option (exercise price $0.30). Share-based payment expenses of $100,000 has been recorded in the profit or loss during the period.

15 LOSS PER SHARE

Both the basic and diluted loss per ordinary share is calculated by dividing the net loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period. There are not considered to be any dilutive securities as the Group has recognised a loss for the period.

Net loss attributable to equity holders of the Company Basic / diluted loss per share ($) ` Weighted average number of ordinary shares	Consolidated
	Half-year 31 Dec 2020 Half-year 31 Dec 2019
	(1,743,934) (2,993,697) 52,500,000 52,500,000 (0.03) (0.06)

MIGHTY KINGDOM LIMITED A.B.N.39.627.145.260 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT) FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

16 EVENTS AFTER THE REPORTING PERIOD

The following events occurred after the reporting period:

(a) Initial Public Offering ("IPO")

• The Company has lodged a prospectus with ASIC on the 10th March 2021 for its an IPO and admission to the official list of the ASX. The listing process is expected to be finalised in the first half of calendar year 2021.

(b) Issuance of Share Options

In March 2021, the Company issued 973,878 options with an exercise price of $0.30 each to non-executive directors.

No other matters or circumstances have arisen since the end of the reporting period which significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years.

`

MIGHTY KINGDOM LIMITED A.B.N.39.627.145.260 DIRECTORS' DECLARATION FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

In accordance with a resolution of the Directors of Mighty Kingdom Limited, the Directors of the Company declare that:

In the opinion of the directors:

• 1 The financial statements and notes of the consolidated entity (a) present fairly the consolidated entity’s financial position as at 31 December 2020 and of its performance for the period ended on that date;

• (b) comply with Australian Accounting Standard AASB 134 Interim Financial Reporting;

• 2 there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

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On behalf of the Board
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DIRECTOR

Dated this 6th day of April 2021

`

Level 3, 170 Frome Street Adelaide SA 5000 Correspondence to: GPO Box 1270 Adelaide SA 5001

T +61 8 8372 6666

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Independent Auditor’s Review Report

To the Members of Mighty Kingdom Limited (Formerly known as Mighty Kingdom Group Pty Limited)

Report on the review of the half-year financial report

Conclusion

We have reviewed the accompanying half-year financial report of Mighty Kingdom Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 31 December 2020, and the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the half year ended on that date, a description of accounting policies, other selected explanatory notes, and the directors’ declaration.

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the accompanying half-year financial report of Mighty Kingdom Limited:

• a presents fairly, in all material respects, the Mighty Kingdom Limited’s financial position as at 31 December 2020 and of its performance for the half year ended on that date; and

• b complies with Accounting Standard AASB 134 Interim Financial Reporting .

Basis for Conclusion

We conducted our review in accordance with ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity . Our responsibilities are further described in the Auditor’s Responsibilities for the Review of the Financial Report section of our report. We are independent of the Company in accordance with the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the annual financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

Material uncertainty related to going concern

We draw attention to Note 2.4 in the financial report, which indicates that the Group incurred a net loss of $1,743,934, and had cash outflows from operating activities of $323,473 during the half year ended 31 December 2020, as of that date, the Group had a net asset deficiency of $4,512,308. As stated in Note 2.4, these events or conditions, along with other matters as set forth in Note 2.4, indicate that a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern. Our conclusion is not modified in respect of this matter.

Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389

www.grantthornton.com.au

‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.

Liability limited by a scheme approved under Professional Standards Legislation.

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Directors’ responsibility for the half-year financial report

The Directors of the Company are responsible for the preparation and fair presentation of the half-year financial report in accordance with Accounting Standard AASB 134 Interim Financial Reporting and for such internal control as the Directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half year financial report is not in accordance with the Accounting Standard AASB 134 Interim Financial Reporting including presenting fairly the Group’s financial position as at 31 December 2020 and its performance for the half-year ended on that date, and complying with Accounting Standard AASB 134 Interim Financial Reporting .

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

GRANT THORNTON AUDIT PTY LTD Chartered Accountants

J L Humphrey Partner – Audit & Assurance Adelaide, 6 April 2021