STREAMPLAY STUDIO LIMITED — Annual Report 2023

Aug 30, 2023

ASX RELEASE

Appendix 4E Preliminary Final Report Rule 4.3A

Name of entity:	STREAMPLAY STUDIO LIMITED
ABN or equivalent company reference:	31 004 766 376

1. Reporting period

Preliminary report for the financial year ended	30 June 2023
Previous corresponding period is the financial year ended	30 June 2022

2. Results for announcement to the market

				$'000
Revenues from ordinary activities (item 2.1)	Up	163%	to	1,762
Profit (loss) from ordinary activities after taxattributable to members (item 2.2)	Down	142%	to	(2,864)

Net profit (loss) for the period attributable to	Down	142%	to	(2,864)
members (item 2.3)

Dividends (item 2.4)	Amount per security	Franked amount persecurity
Interim dividendFinal dividend	NilNil	NilNil
Record date for determining entitlements tothe dividend (item 2.5)	Not Applicable

Brief explanation of any of the figures reported above necessary to enable the figures to be understood (item 2.6): Refer to item 12.

3. Statement of profit or loss and other comprehensive income

Refer to attached Financial Report for the year ended 30 June 2023.

4. Statement of financial position

Refer to attached Financial Report for the year ended 30 June 2023.

5. Statement of Cash flows

Refer to attached Financial Report for the year ended 30 June 2023.

6. Statement of changes in equity

Refer to attached Financial Report for the year ended 30 June 2023.

7. Dividends

	Date of payment	Total amount of dividend
Interim dividend – year ended 30 June 2023	N/A	N/A
Final dividend – year ended 30 June 2023	N/A	N/A

Amount per security

		Amount persecurity	Franked amountper security at% tax	Amount persecurity offoreign sourceddividend
Total dividend:	Current year	N/A	N/A	N/A
	Previous year	N/A	N/A	N/A

Total dividend on all securities

	Current period$A'000	Previous correspondingPeriod - $A'000
Ordinary securities (each class separately)	N/A	N/A
Preference securities (each class separately)	N/A	N/A
Other equity instruments (each class separately)	N/A	N/A
Total	N/A	N/A

8. Details of dividend or distribution reinvestment plans in operation are described below:

The last date(s) for receipt of election notices for participation in the dividend or distribution reinvestment plan N/A

9. Net tangible assets per security

	Current period	Previous correspondingperiod
Net tangible asset backing per ordinary security	$0.015	$0.017

10. Details of entities over which control has been gained or lost during the period: Control gained over entities

Name of entities (item 10.1)	Streamplay Pacific Pty Ltd
Date(s) of gain of control (item 10.2)	14 November 2022
Profit (loss) from ordinary activities after tax of the controlledentities for the whole of the previous corresponding period(item 10.3)	$251,280

Loss of control of entities

Name of entities (item 10.4)	N/A
Date(s) of loss of control (item 10.5)	N/A
Contribution to consolidated profit (loss) from ordinaryactivities after tax by the controlled entities to the date(s) inthe current period when control was lost (item 10.6).	N/A
Profit (loss) from ordinary activities after tax of the controlledentities for the whole of the previous corresponding period(item 10.7)	N/A

11. Details of associates and joint venture entities

Name of associate or joint venture entity (item 11.1)	% Securities held (item 11.2)
-------------------------------------------------------	-------------------------------

N/A	N/A
-----	-----

Aggregate share of profits (losses) of associates and joint venture entities (item 11.3)

Group's share of associates' and joint venture entities':	2023$	2022$
Profit (loss) from ordinary activities before tax	N/A	N/A
Income tax on ordinary activities
Net profit (loss) from ordinary activities after tax	N/A	N/A
Adjustments
Share of net profit (loss) of associates and JV entities	N/A	N/A

12. Significant information relating to the entity's financial performance and financial position.

Overview

Streamplay Studio Limited (ASX: SP8) ("Streamplay" or the "Company"), is a leading provider of competitive casual gaming and eSports technology and products. The Company, offers a diverse range of entertainment solutions for its users, including the ability to stream and play games, music, and access various telco services all in one place.

Streamplay owns and operates online "Competitive Social Gaming Platform" technology and bespoke "Cloud Streaming" technology. This IP and related services enable cutting-edge online casual gaming tournament and competition facilitation platforms where subscribers enter tournaments, play their favourite casual games, and earn rewards and prizes, while engaging socially. Music and entertainment content streaming services are also part of this offering.

Streamplay operates through an established B2B2C business model partnering with multinational Mobile Network Operators ("MNO"s) in South Africa and the Pacific Islands. Customer receipts are derived from user subscription revenues and token sales.

In the current year, Streamplay has:

• Acquired a profitable telco valued-added service (VAS) business focussed on the Pacific region.
• Integrated the new business and enabled the launch its existing product suite into the Pacific region including Fiji, Tonga and American Samoa.
• Following the acquisition, changed its name to Streamplay Studio Limited.
• Signed new partnerships with MNOs in the Pacific including Digicel in Fiji and PNCC in Palau.
• Renewed its Esports 'Service Provider' status with MTN in South Africa; gained investment from MTN in Streamplay's Game Studio; and agreed to and subsequently launched a new game streaming product with MTN (MTN Arena 5G).
• Finished the year with $15.4M in the bank (of which $9M is invested in term deposits);
• Engaged in R&D activities further developing game streaming technology, head-to-head competition, extended brand engagement features and new social engagement features.

Revenue

In the 2023 financial year, revenue from operations was $1.8M an increase of 163% over the prior year (2022: $671k). This significant increase was due to the acquisition of the VAS business and its immediate revenue contribution to the Group. In the prior period, the Company booked a one-off $4.9M gain on the sale of the Miggster business as well as a one-off payment from a legal settlement from the 2018 TIPL spinout ($2.8M). There were no such items in the current period with the bulk of other income being interest received of $413k for a total of $684k.

Explanation of Result

The consolidated operating loss of the Group after income tax amounted to $2,864,188 (2022: $6,825,430 Profit). As above this largely reflects the impact of one-off income items in the prior period. During the current year, the Company incurred an allowance for credit losses on its receivables, largely related to the balance of the consideration of the sale of the Miggster business which is yet to be collected.

In terms of Operating expenses, the Company posted total expenses of $5.15M (2022: $1.64M) consisting of the allowance for credit losses ($2.05M), development costs into its platforms ($1.05M), consulting fees ($887k), marketing ($351k) with the balance to admin, staff and other costs ($808k). Excluding the allowance and expensed development, costs were broadly consistent with the prior period at $2.0M with the uplift attributable to staff and operating costs associated with the new VAS business.

Cash Position

Cash at bank at 30 June 2023 of A$15.4M of which $6.4M as reported met the AASB definition of Cash and cash equivalents with $9M invested in long dated term deposits with Australian banks (previous quarter Cash at bank A$16.5M).

Outlook

The Company remains in a very strong financial position and looks forward to expansion of its relationships with MNOs in the Pacific as well as looking to expand its footprint with MTN on the African continent. MTN has recently agreed to allow Streamplay to open the platform up to users from other MNOs as well as allow Streamplay to control social channels associated with the live Arena and Arena 5G products. It is anticipated this will assist with building traction and take-up of these platforms.

The Company will look to broaden its revenue sources with further MNOs targeted as partners to launch gaming platforms as well as considering complementary acquisitions.

13. The financial information provided in the Appendix 4E is based on the preliminary financial report (attached), which has been prepared in accordance with Australian accounting standards.

14. Commentary on the results for the period.

Refer to explanation item 12.

15. Information on Audit.

This report is based on accounts that are in the process of being audited and are unlikely to be subject to dispute or qualification.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2023

		2023	2022
	Notes	$	$
Continuing Operations
Revenue from operating activities	2	1,761,815	671,219
Cost of Goods sold		(1,146,169)	(595,250)
Gross profit		615,646	75,969
Other income	3	684,588	7,819,257
Operating expenses		(216,499)	(110,383)
Foreign exchange gains		(25,314)	(20,222)
Administration expenses		(207,509)	(245,300)
Consulting expenses		(887,670)	(630,309)
Depreciation and amortisation		(8,590)	(21,433)
Finance costs		(104)	(1,714)
Allowance for credit losses		(2,056,544)	-
Research and Development		(1,051,279)	-
Marketing expenses		(351,432)	(136,164)
Professional expenses		(176,298)	(78,080)
Public Relations		(3,300)	(15,450)
Share based payment expenses		(77,028)	(385,250)
Staff cost and benefits		(93,310)	-
Total Operating Expenses		(5,154,877)	(1,644,305)
Profit/(Loss) before income tax from continuing operations		(3,854,643)	6,250,921
Income tax benefit/ (expenses)		990,455	(1,013,795)
Profit/(Loss) after income tax from continuing operations		(2,864,188)	5,237,126
Profit/(Loss) after income tax from discontinued operations		-	1,573,367
Profit/(Loss) after income tax for the year		(2,864,188)	6,810,493
Items that may be reclassified subsequently to Profit or loss
Other comprehensive income/(loss), net of income tax		(30,059)	14,937
Total comprehensive profit/(loss) for the year		(2,894,247)	6,825,430
Profit/ (Loss) attributable to:
Members of the parent		(2,864,188)	6,810,493
		(2,864,188)	6,810,493
Total comprehensive profit/(loss) attributable to:
Members of the parent		(2,894,247)	6,825,430
		(2,894,247)	6,825,430
Earnings/(Loss) per share
From continuing operations
Basic and diluted earnings/ (loss) per share (cents per share)		(0.25)	0.47
From discontinued operations
Basic and diluted earnings/ (loss) per share (cents per share)		-	0.14
Overall Basic and diluted earnings/ (loss) per share (cents per share)		(0.25)	0.61

The accompanying notes form part of this Consolidated Statement of Profit or Loss and Other Comprehensive Income.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2023

		2023	2022
	Notes	$	$
Current Assets
Cash and cash equivalents		6,403,743	17,867,555
Trade and other receivables		1,326,623	3,831,869
Total Current Assets		7,730,366	21,699,424
Non-current Assets
Property, plant and equipment		13,193	10,342
Investment		9,800,000	-
Intangible assets		2,929	3,905
Deferred tax assets		1,278,323	730,032
Total Non-current Assets		11,094,445	744,279
Total Assets		18,824,811	22,443,703
Current Liabilities
Trade and other payables		428,458	692,733
Provision of VAT		120,000	120,000
Provision of tax payable		965,793	2,343,361
Provision for employees' benefits		6,741
Deferred tax liability		40,928	5,063
Total Current Liabilities		1,561,921	3,161,157
Non-Current Liabilities
Deferred Considerations		312,500	-
		312,500	-
Total Liabilities		1,874,421	3,161,157
Net Assets		16,950,391	19,282,546
Equity
Issued capital	4	72,401,516	72,209,737
Reserves	5	1,204,640	864,386
Accumulated losses		(56,655,765)	(53,791,577)
Total equity		16,950,391	19,282,546

The accompanying notes form part of this Consolidated Statement of Financial Position.

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2023

		2023	2022
	Notes	$	$
Cash flows from operating activities
Receipts from customers		815,230	3,140,770
Payments to suppliers and employees		(3,332,473)	(5,770,891)
Interest received / (paid)		345,365	70,714
Proceeds on sale		(899,539)	-
Other receipts		99,053	2,865,647
Net cash used in operating activities		(2,972,363)	306,240
Cash flows from investing activities
Purchase of plant and equipment		(10,465)	(16,576)
Placement of term deposits		(9,000,000)
Proceeds from sale of business		203,725
Purchase of business		(487,500)
Disposal of business		802,792	1,750,000
Net cash (used in) / provided by investing activities		(8,491,447)	1,733,424
Cash flows from financing activities
Proceeds from exercise of options		-	-
Payment of transaction costs		-	-
Net cash provided by financing activities		-	-
Net increase/(decrease) in cash and cash equivalents		(11,463,810)	2,039,664
Cash and cash equivalents at the beginning of the year		17,867,555	15,876,873
Effects of exchange rate changes		-	(48,982)
Cash and cash equivalents at the end of the year		6,403,743	17,867,555

The accompanying notes form part of this Consolidated Statement of Cash Flows.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2023

	IssuedCapital	AccumulatedLosses	OptionReserve	RevaluationReserve	TotalEquity
	$	$	$	$	$
Balance at 1 July 2021	72,209,737	(60,602,070)	464,199	(22,840)	12,049,026
Profit for the year	-	6,810,493	-	-	6,810,493
Other comprehensive income/(loss)	-	-	-	37,777	37,777
Total comprehensive loss for the yearTransactions with owners in theircapacity as owners	-	6,810,493	-	37,777	6,848,270
Exercise of options	-	-	-	-	-
Recognition of share-based payments	-	-	385,250	-	385,250
Balance at 30 June 2022	72,209,737	(53,791,577)	849,449	14,937	19,282,546
Balance at 1 July 2023	72,209,737	(53,791,577)	849,449	14,937	19,282,546
Profit for the year		(2,864,188)			(2,864,188)
Other comprehensive income/(loss)	-	-	-	(44,996)	(44,996)
Total comprehensive loss for the yearTransactions with owners in theircapacity as owners	-	(2,864,188)	-	(44,996)	(2,909,184)
Exercise of options	191,779	-	-	-	191,779
Recognition of share-based payments	-	-	385,250	-	385,250
Balance at 30 June 2023	72,401,516	(56,655,765)	1,234,699	(30,059)	16,950,391

The accompanying notes form part of this Consolidated Statement of Changes in Equity.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023

1. BASIS OF PREPARATION

This preliminary final report for the year ended 30 June 2023 relates to the consolidated entity consisting of Streamplay Studio Limited ("Streamplay" or "the Group") and its controlled entities.

The preliminary final report has been prepared on an accruals basis and a historical cost basis except for certain current and non-current assets and financial instruments which are measured at fair value or where otherwise stated. Cost is based on the fair value of consideration given in exchange for assets.

This preliminary final report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report should be read in conjunction with the annual financial report of the year ended 30 June 2022 and any public announcements made by Streamplay during the year in accordance with the continuous disclosure requirements of the Corporations Act 2001.

The amounts contained in this preliminary final report are presented in Australian dollars, the functional currency of the consolidated entity.

STATEMENT OF COMPLIANCE

The preliminary final report is a general-purpose financial report and has been prepared in accordance with applicable Australian Accounting Standards, other pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act 2001. The preliminary final report is also in compliance with ASX listing Rule 4.3A and the disclosure requirements of ASX Appendix 4E. Australian Accounting Standards include Australian equivalents of International Reporting Standards ("AIFRS").

2. REVENUES

	30 Jun 23	30 Jun 22
	$	$
Revenue
Sales – MTN	871,313	416,036
Sales - Subscriptions	890,502	255,183
Total revenue from operating activities	1,761,815	671,219

3. OTHER INCOME

	30 Jun 23$	30 Jun 22$
Other Income
Gain on sale of business	-	4,918,255
Interest received	413,018	70,713
TIL settlement	99,052	2,808,732
Other income	172,518	21,557
Total other income	684,588	7,819,257

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023

4. ISSUED CAPITAL

a) Issued and paid up capital	30 Jun 23	30 Jun 22
	$	$
Ordinary shares fully paid	72,401,516	72,209,737

b) Movements in shares on issue	30 Jun 23		30 Jun 22
	No.	$	No.	$
Movements in ordinary shares on issue
Opening balance	1,121,184,780	72,209,737	1,121,184,780	72,209,737
Issue of shares in return on exercise of options	16,888,889	191,778	-	-
Closing Balance	1,138,073,669	72,401,516	1,121,184,780	72,209,737

5 RESERVES

a) Reserves	30 Jun 23	30 Jun 22
	$	$
Options & Share based payments reserves	1,234,699	849,449
Foreign currency translation reserve	(30,059)	14,937
Total Reserves	1,204,640	864,386
b) Movements	30 Jun 23	30 Jun 22
	$	$
Opening balance	864,386	441,359
Recognition of performance rights	385,250	385,250
Revaluation Reserve	(44,996)	37,777

6 COMMITMENTS AND CONTINGENCIES

Lease expenditure commitments

The Company's office lease is contracted on a one-year fixed term with option to renew. No significant make-good or other obligations.

Bank guarantee

There are no bank guarantees of the Group as at Balance Date.

Capital Commitments

The Group did not have any capital commitments as at Balance Date.

Contingent Liability

There were no contingencies as at 30 June 2023.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023

7 FINANCIAL INSTRUMENTS

At 30 June 2023, the carry value of all financial assets and liabilities is considered to approximate their fair values. The held for trading assets are recognised at fair value and have been classified as level 1 financial assets based on quoted prices in active markets.

8 SEGMENT INFORMATION

An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity), whose operating results are regularly reviewed by the entity's chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available. Management will also consider other factors in determining operating segments such as the existence of a line manager and the level of segment information presented to the board of directors. During the year the Company only operated in one segment and that was the development and commercialisation of online gaming platforms.

9 SUBSEQUENT EVENTS

Subsequent to year end, the balance of $2.45M payable from the sale of the Miggster business (total $5M) remained outstanding at the end of the 12-month payment period ending on 31 July 2023, as per the sale contract. With the conclusion of the payment period, Streamplay has a 3 month option to buy the platform back for $1. To date, the Company has collected $2.55M leaving a balance payable of $2.45M. The Company is pursuing this debt. Unless otherwise agreed, final payment is required before 31 October 2023 otherwise the Company will execute its option to reclaim the IP, whilst retaining the $2.55M proceeds previously received.

Other than the above, there were no matters or circumstances arising since the end of the reporting period that have significantly affected, or may significantly affect the operations of the Company and the results of those operations or the state of the affairs of the Company in the financial period subsequent to 30 June 2023.