STREAMPLAY STUDIO LIMITED — Interim / Quarterly Report 2022

May 1, 2022

29 April 2022

ASX:EM1 | ABN 31 004 766 376

Emerge Gaming Quarterly Update and Appendix 4C

Emerge Gaming Limited, (ASX: EM1) ("Emerge" or the "Company") a leading provider of competitive casual gaming and eSports technology and products, provides its report for the quarter ended on 31 March 2022 (the "Quarter").

Emerge owns and operates online "Competitive Social Gaming Platform" technology and lifestyle hubs. This technology enables cutting-edge online casual gaming tournament and competition facilitation platforms where subscribers enter tournaments, play their favourite social games, and earn rewards and prizes, while engaging socially.

During the Quarter Emerge operated the platforms through a B2C business model under the MIGGSTER brand and through a B2B2C business model partnering with multinational mobile network operators ("MNOs"), the first instance of which is operated as MTN Arena.

HIGHLIGHTS

• Cash at bank as at 31 March 2022 of A$15.7M (previous quarter A$16.6M)
• Emerge executed a binding agreement to sell the MIGGSTER Business for A$5 million whilst retaining its core IP and technology
• ~A$1.6M in receipts due to be received from customers at 31 March 2022, $548k cash receipts banked in the Quarter
• Operational focusshifted to MTN Arena. MTN Arena platforms attracts ~1,000,000 new subscribers since launch being 3% of MTN South Africa's 33 million mobile subscribers
• Emerge targeting MTN's operations in a further 8 African countries which have a combined ±175 million mobile subscribers
• R&D activities focussing on game streaming, head-to-head competition, extended brand engagement features and new social engagement features

During the Quarter, the Emerge management team focused on divestment of the MIGGSTER business with execution of a binding agreement announced on 9 March 2022.

The strategy of pursuing aggressive promotional campaigns to enable Emerge to grow its subscriber community was paused when Emerge appointed corporate advisors to guide the Company through a strategic review of its Company's commercial relationships (ASX: 23 September 2021).

Pursuant to this review, Emerge actively pursued divestment opportunities for MIGGSTER which successfully culminated in Emerge creating value for its shareholders by selling its intellectual property relating to the MIGGSTER Business for A$5,000,000 whilst retaining its core IP and technology.

Business Growth Strategy

With A$15.7m in the bank and the consideration and receivables from the operations of MIGGSTER to be banked, Emerge is well capitalised and primed to accelerate the growth of its user community and resulting revenue leveraging proven business models to grow internationally.

Emerge will use its cash in bank and the cash received from the MIGGSTER divestment to:

• invest into the implementation of growth and GTM strategies of Emerge and in particular the MTN Arena product;
• marketing and engagement with MNOs other than MTN to open up further channels;
• fund existing operational costs;
• invest into R&D to develop further innovative gaming and eSports technologies; and
• investigate potential acquisitions of complementary technologies in the gaming eSports sector.

Go-to-Market Strategies

Emerge has four GTM strategies for its products and technology: -

• B2B2C partnerships with MNOs ("Telco Strategy")
• B2C business model leveraging direct selling by consumers
• B2B distribution partnerships within the Microsoft ecosystem to MNOs and PayTV providers
• B2C over the top ("OTT") broadcasting channel activations

Emerge has a strongly established B2B2C partnership with MTN (MTN Arena). The results of the MTN Arena platform in South Africa has provided the foundation for the imminent further expansion of this commercial model through offerings to countries outside South Africa, where MTN services more than 272 million subscribers1 .

Upon completion of the new features, Emerge will have the opportunity to use its newly developed technology platform enhancements in its MTN Arena platform that has acquired in excess of 1,000,000 subscribers since launch, being 3% of MTN South Africa's 33 million mobile subscribers. MTN Arena has acquired an average of ~96,000 new subscribers per month during this quarter. During the quarter MTN continued to invest into marketing the MTN Arena platform in South Africa beyond its contractual obligations.

The Company will continue to grow its MNO expansion strategy and initially will target 8 countries (Nigeria, Ghana, Cameroon, Zambia, Sudan, Ivory Coast, Rwanda and Congo Brazzaville) in the MTN Group with a total addressable market of ~175 million mobile subscribers leveraging MTN Arena's performance in South Africa. Initial engagement and meetings between MTN country, MTN Group and Emerge have led to strong country interest in launching both the MTN Arena platform and the game streaming technology.

Emerge continues to market to other multinational MNO's and to prospective partners across its various GTM strategies.

Revenue Sources

Emerge's customer receipts to the end of the Quarter continue to be derived from user subscription revenues.

The Company continues to seek to grow and diversify revenue. In this regard Emerge began developing solutions to offer marketing to corporate brands seeking exposure to the gaming and esports industries.

Emerge continues to explore opportunities to diversify its offerings and revenue streams both organically and through acquisitions or joint ventures.

1 https://www.mtn.com/investors/financial-reporting/quarterly-trading-update (30 September 2021)

MIGGSTER Business Sale Agreement

Emerge has executed a binding agreement to sell the MIGGSTER Business to NIBIRU e-gaming AB, ("Nibiru" or the "Purchaser"), for a sale consideration of A$5,000,000 payable over 12 months.

The Purchaser has the option to elect either of the following payment terms of the transaction (MIGGSTER sale) consideration before settlement (date the agreement becomes unconditional) of the agreement:

• Initial payment of A$1,750,000 on settlement of the agreement and a deferred consideration of A$3,250,000, the payment of which will be determined quarterly over 12 months and calculated as 10% of the difference between Nibiru' s revenue derived from the MIGGSTER platforms less an amount of fixed operational, technological and staff costs, with these costs being limited to average actual costs incurred by Emerge for the MIGGSTER Business between the dates of execution and settlement of the agreement. Nibiru will make an additional payment to Emerge after 12 months for the amount of the A$3,250,000 deferred consideration that remains unpaid; or
• 12 equal monthly instalments of A$416,666.67 payable monthly in advance with the first payment due on the date of settlement of the agreement.

Under the terms of the sale agreement, the parties have until 30 April 2022 to satisfy the conditions for Settlement for the divestment. Emerge is working diligently on the process of satisfying such conditions.

Emerge's Core Technology

Emerge owns significant intellectual property relating to its development of core technology central to a gaming platform with competition, tournament, social engagement, profile, shop, messaging and all other core features.

As per last quarter, the Company continued to invest into R&D to improve is core platform technology.

Emerge has invested into game streaming technology to stream AAA and premium games, new competition features (such as Head-to-Head competition), extended brand engagement features and new social engagement features. The investment into R&D for the quarter was A$634k (previous quarter: A$570k). These new features and technologies are included in the planned release of Emerge's next generation social competition platform to be offered in partnership with existing and future commercial partners.

The Company is in final stages of product deployment and testing of its game streaming. Emerge is in negotiations with numerous potential commercial partners to launch the game streaming feature within existing products or as a separate product offering.

Emerge has made strong progress in its research and development activities and will leverage these new features in the continued execution of its GTM strategy.

Emerge Game Studio

As previously reported, Emerge launched a game studio of game developers. These game developers have been working side by side with Emerge's core eSports tournament platform developers and other game development partners to advance proprietary libraries of popular game engines using development tools to deliver competition ready premium gaming content to its tournament platforms. Ultimately, this function will add content to Emerge's operated gaming platforms.

COVID-19

As social distancing, lockdowns and semi-voluntary quarantines gradually became a global reality the gaming industry has seen a significant increase in time spent by gamers playing online games. This change in gaming culture has led to growing gamer engagement globally and provided a strong opportunity for Emerge to launch its eSports and gaming products internationally.

Company Financial and Corporate Overview

Cash at the end of the Quarter (i.e. 31 March 2022) was A$15.7M (31 December 2021: A$16.6M).

Emerge banked A$548k in cash receipts from customers this quarter. Amounts due to Emerge not yet received at the end of the quarter totalled A$1.6M, excluding MIGGSTER divestment proceeds.

The decrease in the cash receipts resulted from the divestment considerations of the MIGGSTER business which resulted in reduced promotional activities related to MIGGSTER. This adversely impacted MIGGSTER subscriptions sold and received in the Quarter.

Business expenditure totalled $1.40M for the Quarter, 24% lower than the $1.84M spent in the previous quarter. Expenditure in the Quarter comprises advertising and marketing ($55k), operating costs ($494k) and research and development ($634k) with the balance being administration and staff costs (combined for $224k).

The aggregate amount of payments to related parties and their associates included in the current quarter totalled $103k. These payments consisted of Directors' fees and salaries paid to directors, accounting and bookkeeping fees, technical consultancy fees and corporate advisory fees. All payments were on normal commercial terms.

The management team continue to incur costs with financial and commercial discipline to maximise the Company's benefit from the spend. The Company has maintained a strong flexibility in its costs through low impact termination clauses allowing for swift supplier changes in a rapidly evolving industry.

Strategy and outlook

In the next quarter the Company anticipates a reduction in its operating costs and receipt of proceeds on the successful completion of the MIGGSTER Business sale.

Emerge looks forward to implementing its growth and GTM strategies to realise value from the strong growth in the gaming and esports industries. In addition, the Company will look to finalise the divestment of the MIGGSTER business and bank the consideration proceeds.

For further information:

Investor relations:

E: info@emergegaming.com.au P: +61 2 9680 8777

About Emerge Gaming

Emerge Gaming Limited (ASX:EM1) is a leading competitive social gaming and eSports technology company. Emerge Gaming owns and operates an online casual gaming tournament platform technology and lifestyle hub. Emerge has built a competition layer for casual mobile gaming and via this platform, casual, social and hardcore gamers can play hundreds of gaming titles against each other via their mobile, console or PC, earning rewards, winning prizes and experiences.

Our products create unique gaming platform experiences for customers and marketing opportunities for businesses. The platform uses its unique IP, advanced analytics tracking and proprietary algorithms to deliver an optimum tournament gaming experience for users while providing advertisers with the perfect vehicle for delivery of their messaging to a fully engaged audience.

As a global B2B and B2C technology provider, we distribute our products internationally through proven go-to-market strategies. More information: view www.emergegaming.com.au

Forward-looking Statements

This Announcement has been made by the authority of the Board of the Company and may contain forward-looking statements. Any forward-looking statements contained in this document are not guarantees of future performance. Such statements involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of the Company. Readers should not place undue reliance upon any forward-looking statements and the Company disclaims any responsibility for any reader who does so. All numbers presented in this Announcement are unaudited.

Appendix 4C

Quarterly cash flow report for entities subject to Listing Rule 4.7B

Name of entity
EMERGE GAMING LIMITED
ABN	Quarter ended ("current quarter")
31 004 766 376	31 March 2022

Consolidated statement of cash flows		Current quarter$A'000	Year to date (9months)$A'000
1.	Cash flows from operating activities
1.1	Receipts from customers	548	2,412
1.2	Payments for
	(a)research and development	(634)	(1,899)
	(b)product manufacturing and operatingcosts	(494)	(1,710)
	(c)advertising and marketing	(55)	(302)
	(d)leased assets	-	-
	(e)staff costs	(110)	(902)
	(f)administration and corporate costs	(114)	(633)
1.3	Dividends received (see note 3)	-	-
1.4	Interest received	16	56
1.5	Interest and other costs of finance paid	-	-
1.6	Income taxes paid	-	-
1.7	Government grants and tax incentives	-	-
1.8	Other – TIL settlement	-	2,866
1.9	Net cash from / (used in) operatingactivities	(843)	(112)

2.		Cash flows from investing activities
2.1		Payments to acquire or for:
	(a)	entities	-	-
	(b)	businesses	-	(1)
	(c)	property, plant and equipment	-	(75)
	(d)	investments	-	-
	(e)	intellectual property	-	(5)
	(f)	other non-current assets	-	-

Consolidated statement of cash flows		Current quarter$A'000	Year to date (9months)$A'000
2.2	Proceeds from disposal of:
	(a)entities	-	-
	(b)businesses	-	-
	(c)property, plant and equipment	-	-
	(d)investments	-	-
	(e)intellectual property	-	-
	(f)other non-current assets	-	-
2.3	Cash flows from loans to other entities	-	-
2.4	Dividends received (see note 3)	-	-
2.5	Other (provide details if material)	-	-
2.6	Net cash from / (used in) investingactivities	-	(81)

3.	Cash flows from financing activities
3.1	Proceeds from issues of equity securities(excluding convertible debt securities)	-	-
3.2	Proceeds from issue of convertible debtsecurities	-	-
3.3	Proceeds from exercise of options	-	-
3.4	Transaction costs related to issues ofequity securities or convertible debtsecurities	-	-
3.5	Proceeds from borrowings	-	-
3.6	Repayment of borrowings	-	-
3.7	Transaction costs related to loans andborrowings	-	-
3.8	Dividends paid	-	-
3.9	Other (provide details if material)	-	20
3.10	Net cash from / (used in) financingactivities	-	20

4.	Net increase / (decrease) in cash andcash equivalents for the period
4.1	Cash and cash equivalents at beginning ofperiod	16,564	15,877
4.2	Net cash from / (used in) operatingactivities (item 1.9 above)	(843)	(112)
4.3	Net cash from / (used in) investing activities(item 2.6 above)	-	(81)

Consolidated statement of cash flows		Current quarter$A'000	Year to date (9months)$A'000
4.4	Net cash from / (used in) financing activities(item 3.10 above)	-	20
4.5	Effect of movement in exchange rates oncash held	7	24
4.6	Cash and cash equivalents at end ofperiod	15,728	15,728

5.	Reconciliation of cash and cashequivalentsat the end of the quarter (as shown in theconsolidated statement of cash flows) to therelated items in the accounts	Current quarter$A'000	Previous quarter$A'000
5.1	Bank balances	15,728	16,564
5.2	Call deposits	-	-
5.3	Bank overdrafts	-	-
5.4	Other (provide details)	-	-
5.5	Cash and cash equivalents at end ofquarter (should equal item 4.6 above)	15,728	16,564

6.	Payments to related partiesof the entityand theirassociates	Current quarter$A'000
6.1	Aggregate amount of payments to related parties and theirassociates included in item 1	103
6.2	Aggregate amount of payments to related parties and theirassociates included in item 2	-
	Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity report must include a description of, and anexplanation for, such payments.

7.	FinancingfacilitiesNote: the term "facility' includes all forms of financingarrangements available to the entity.Add notes as necessary for an understanding of thesources of finance available to the entity.	Total facilityamount at quarterend$A'000	Amount drawn atquarter end$A'000
7.1	Loan facilities	-	-
7.2	Credit standby arrangements	-	-
7.3	Other (please specify)	-	-
7.4	Total financing facilities	-	-
7.5	Unused financing facilities available at quarter end
7.6	Include in the box below a description of each facility above, including the lender, interestrate, maturity date and whether it is secured or unsecured. If any additional financingfacilities have been entered into or are proposed to be entered into after quarter end,include a note providing details of those facilities as well.

		$A'000
Net cash from / (used in) operating activities (item 1.9)		(843)
		15,728
		-
		15,728
		18.7
8.6.1	Does the entity expect that it will continue to have the current level of net operatingcash flows for the time being and, if not, why not?
8.6.2	Has the entity taken any steps, or does it propose to take any steps, to raise furthercash to fund its operations and, if so, what are those steps and how likely does itbelieve that they will be successful?
8.6.3	Does the entity expect to be able to continue its operations and to meet its businessobjectives and, if so, on what basis?
		Estimated cash available for future operating activitiesCash and cash equivalents at quarter end (item 4.6)Unused finance facilities available at quarter end (item 7.5)Total available funding (item 8.2 + item 8.3)Estimated quarters of funding available (item 8.4 divided byitem 8.1)Note: if the entity has reported positive net operating cash flows in item 1.9, answer item 8.5 as "N/A". Otherwise, afigure for the estimated quarters of funding available must be included in item 8.5.If item 8.5 is less than 2 quarters, please provide answers to the following questions:Answer: n/aAnswer: n/aAnswer: n/aNote: where item 8.5 is less than 2 quarters, all of questions 8.6.1, 8.6.2 and 8.6.3 above must be answered.

Compliance statement

• 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.
• 2 This statement gives a true and fair view of the matters disclosed.

Date: 29 April 2022

Authorised by: By the board

Notes

• 1. This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the entity's activities for the past quarter, how they have been financed and the effect this has had on its cash position. An entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so.
• 1. If this quarterly cash flow report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 107: Statement of Cash Flows apply to this report. If this quarterly cash flow report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standard applies to this report.
• 1. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.
• 1. If this report has been authorised for release to the market by your board of directors, you can insert here: "By the board". If it has been authorised for release to the market by a committee of your board of directors, you can insert here: "By the [name of board committee – eg Audit and Risk Committee]". If it has been authorised for release to the market by a disclosure committee, you can insert here: "By the Disclosure Committee".
• 1. If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying with recommendation 4.2 of the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations, the board should have received a declaration from its CEO and CFO that, in their opinion, the financial records of the entity have been properly maintained, that this report complies with the appropriate accounting standards and gives a true and fair view of the cash flows of the entity, and that their opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.