WEBIS HOLDINGS PLC

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RNS Number : 1217O

Webis Holdings PLC

29 November 2024

For immediate release 29 November 2024

Webis Holdings plc

("Webis" or the "Group")

Annual Report and Financial Statements for the year ended 31 May 2024

Webis Holdings plc, the global gaming group, today announces its audited results and the publication of its 2024 Report and Accounts ("Accounts") for the year ended 31 May 2024, extracts from which are set out below.

The Accounts are being posted to shareholders today and will be available on the Group's website www.webisholdingsplc.com and at the Group's Registered Office: Viking House, Nelson Street, Douglas, Isle of Man IM1 2AH.

For further information:

Webis Holdings plc Tel: 01624 639396

Denham Eke

Beaumont Cornish Limited Tel: 020 7628 3396

Roland Cornish/James Biddle

Nominated Adviser

Beaumont Cornish Limited ("Beaumont Cornish") is the Company's Nominated Adviser and is authorised and regulated by the FCA. Beaumont Cornish's responsibilities as the Company's Nominated Adviser, including a responsibility to advise and guide the Company on its responsibilities under the AIM Rules for Companies and AIM Rules for Nominated Advisers, are owed solely to the London Stock Exchange. Beaumont Cornish is not acting for and will not be responsible to any other persons for providing protections afforded to customers of Beaumont Cornish nor for advising them in relation to the proposed arrangements described in this announcement or any matter referred to in it.

Chair's Statement

Introduction

As reported in the 2023/24 Interim Report released in February 2024, it has been a difficult year of trading for our principal subsidiary, WatchandWager.com LLC in the USA. Following our statement in February, whilst business has improved it has not reached the targets for which we were aiming. There are many reasons for this which are outlined later in this report.

Funding Update

Shareholders will note the additional funding for the Company from our principal shareholder, which has now been signed with Galloway Limited (a related party) and was released to the markets on 18 November 2024.

Circular re delisting of Webis (WEB) from AIM

Shareholders will also note the Circular and Statement regarding the above, released on 22 November 2024, entitled "Proposed cancellation of admission of Ordinary Shares to trading on AIM and Notice of General Meeting". This document is important and requires shareholders immediate attention.

Following an in-depth review, the Board has unanimously agreed that it is in the best interests of the Company and its Shareholders to delist from AIM. The Company continues to believe WatchandWager has a unique position in the USA as one of the top five licensed operators in our sector and the Board believes that the Cancellation will reduce costs and protect shareholder value as the Group seeks to grow its business in North America and deliver on strategic goals.

In reaching this conclusion, the Board has considered the following key factors:

(a) the significant cost savings to be achieved by the Cancellation;

(b) the Directors do not believe that the Company's share price reflects the underlying value of the Company's assets (most notably, the value of certain licenses owned by the Group);

(c) the free float of the Company is only 36.9 per cent. and trading volumes in respect of the Shares are very low and this illiquidity prevents Shareholders from trading in meaningful volumes or with any frequency;

(d) the Company has not utilised its admission on AIM to raise fresh capital or issue Shares as consideration to fund acquisitions since January 2013;

(e) the Company remains reliant on its major shareholder, Mr Mellon, for funding to meet its ongoing working capital needs and despite several efforts it has been unable to attract capital on acceptable terms from third party investors, in particular through equity issues on AIM;

(f) the management time and the legal and regulatory burden associated with maintaining the Company's admission to trading on AIM is, in the Directors' opinion, disproportionate to the benefits to the Company; and

(g) the Directors believe that trading of the Ordinary Shares on AIM significantly inhibits flexibility of the business.

Strategy

We are aware that the Company continues to retain key assets in the USA, particularly in California where we are licensed and run live racetrack and advanced deposit wagering operations.

Also, we have multiple other licenses in the USA, as mentioned in this report, and we hold the largest number of content license agreements of any advance deposit wagering company globally.

Whilst our market capitalisation at time of writing is very low, we plan to use these assets for business development for those interested in entering the USA gaming market. In addition, we believe our platform and unique positioning is attractive to potential partners or even merger and acquisition opportunities, especially post the delisting, if approved.

The point is that for a new entrant to enter the USA market, it would cost them significant sums of money. As shareholders are aware, the USA gaming market continues to be the land of opportunity, and we find that our platform and positioning are of interest to some of the key players in the market. We will keep shareholders fully informed on progress on these strategic matters.

Year End Results Review

The Group amounts wagered for the year ended 31 May 2024 were US$ 110.5 million (2023: US$ 113.4 million). Gross Profit reported was US $ 4.4 million (2023: US$ 4.6 million).

Operating costs were consistent with last year at US$ 5.5 million (2023: US$ 5.5 million).

This resulted in a loss on the year of US$ 1.063 million, a downturn on the 2023 loss of US$ 0.745 million.

Shareholder equity stands at US$ (0.5) million (2023: US$ 0.6 million). Total cash stands at US$ 3.4 million (2023: US$ 3.3 million), which includes ring-fenced funds held as protection against our player liability as required under USA and Isle of Man gambling legislation.

Approach to Risk and Corporate Governance

As part of the adoption of the Quoted Companies Alliance Corporate Governance code in 2018, the Board completed an assessment of the risks inherent in the business and defined and adopted a statement of risk appetite, being the amount and type of risk, it is prepared to seek, accept, or tolerate in pursuit of value. This being: -

"The Group's general risk appetite is a moderate, balanced one that allows it to maintain appropriate growth, profitability and scalability, whilst ensuring full regulatory compliance."

The Group's primary risk drivers include: -

Strategic

Reputational

Credit

Operational

Market

Liquidity, Capital, and Funding

Regulatory and Compliance

Conduct

Our risk appetite is classified under an "impact" matrix defined as Zero, Low, Medium, and High. Appropriate steps are implemented to ensure the prudential control monitoring of risks to the Group and the Audit, Risk and Compliance Committee oversees this essential requirement. Further details of the Corporate Governance Statement will be found on pages 10 to 13 of this report and should be read in conjunction with my report.

The Board refined the Group's business plan which incorporates the risk and compliance framework.

Performance by Sector

WatchandWager

Business-to-Consumer

www.watchandwager.com /mobile

Overall, we have been pleased with the performance in this sector which is of course wagering through our principal website and mobile product. We have been hampered by poor weather conditions which created an unprecedented number of racetrack cancellations. This seems to be the new global norm and is now something that we need to allow for.

We have also seen an increasing level of competitor activity due to the growing legalisation of sports betting in multiple states in the USA. We are seeing some of the big operators simply burning money to recruit and retain new players. This is something with which we cannot reasonably compete.

That said, whilst competitor activity has created problems for our financial results, it creates an opportunity for us from a strategic perspective. Most of the major USA operations are paying large sums on cost per acquisition. What is interesting is that these operators are increasingly looking to horse racing products to stabilise their operations. This leaves our operation attractive to new investment as external companies are concerned about missing out on these gaming opportunities.

We continue to invest in our own website and mobile product so that we have the best-in-breed site for future marketing and investment opportunities.

Business-to-Business

This sector has performed in line with expectations with a steady flow of commissions from our key customers. That said, the margins continue to decrease in this sector due to increased costs from partner tracks and indeed regulatory authorities. We will continue to serve the sector and maximise revenue as best as possible, but only with a strict attention to regulatory compliance.

Cal Expo

We had a good season of racing at our racetrack at Cal Expo Sacramento and we expect to continue to operate this track in a profitable manner.

This year, we have decided to slightly adjust our racetrack programme so that we work more proactively with other California tracks. As a result, we plan to race from early December 2024 to May 2025 with a planned number of 39 race nights over the season.

Cal Expo continues to be a key asset to the Company. As a reminder to shareholders, we have a long-term contract with our landlord, who are the Californian State, until 2030.

Key risk factors

During the period we have updated our Risk Assessment procedures and will continue to do so. The Board conducts regular risk assessments on a micro and macro level.

Licenses

During the period reported, all of our licenses are active both in the Isle of Man and the USA. Particularly in the USA, we fully expect all our renewals to be approved before the end of 2024, going into 2025 and beyond.

Content

As mentioned, WatchandWager continues to offer the widest range of global content to its customers of any licensed advance deposit wagering globally. All our content agreements, both domestic USA and international, are up to date through 2024, and we fully expect that to be extended into 2025 and beyond.

Compliance

There were no compliance issues across the entire operation during the period reported.

Health & Safety

There were no Health and Safety issues across the entire operation during the period reported.

Outlook

This has been reported upon in the circular regarding the delisting of Webis. Further updates will be supplied to shareholders when we have more details.

Board Appointments

We were pleased to appoint our principal shareholder, Jim Mellon, to the Board in July 2024. Alongside other Board members, he will provide excellent insight into the strategy of the business.

Other Business Developments

USA Expanded Gaming

Whilst we were disappointed by the last failure to legalise sports betting in California, primarily created by the Native American Tribal Casino groups stalling the process, we are aware that there are now significant discussions about a more open bill to be put through the Capitol no later than 2026. Of course, with our positioning as a licensed operator and racetrack in Sacramento, we will be pushing for the new legislation as hard as possible.

Historical horseracing machines

Related to the above, we are very encouraged by the potential for historical horse racing machines to be licensed in California in the near future. The machines are pari-mutuel in nature and therefore would fall within the remit of our wagering licenses in the State. We are fully involved in lobbying to make this project a reality, and we will update shareholders as soon as we know more details. Looking at the results of these terminals in other states, particularly in Kentucky, if we were licensed to operate them this would be a significant game changer for the Company.

Acquisitions and Mergers

We consider the decision to delist the Company from AIM will make the Company more attractive for potential partnerships, mergers, and acquisitions, most likely within the USA. We will keep shareholders fully informed of any developments in this area.

Summary

Finally, I would like to thank all our shareholders and customers for their continued loyalty to the Company. In addition, I would like to thank all our staff and team for their work and commitment to the business over the year.

Denham Eke

Non-executive Chair

29 November 2024

Consolidated Statement of Comprehensive Income

For the year ended 31 May 2024

	Note	2024 US$000	2023 US$000
Amounts wagered		110,459	113,371

Revenue	1.2	50,031	50,020
Cost of sales	1.2	(45,531)	(45,303)
Betting duty paid		(88)	(100)
Gross profit		4,412	4,617
Operating costs		(5,445)	(5,488)
Other (losses) / gains		(12)	32
Other income		175	247
Operating loss	3	(870)	(592)
Finance costs	4	(193)	(153)
Loss before income tax		(1,063)	(745)
Income tax expense	6	-	-
Loss for the year		(1,063)	(745)
Total comprehensive loss for the year		(1,063)	(745)
Basic earnings per share for loss attributable to the equity holders of the Company during the year (cents)	7	(0.27)	(0.19)
Diluted earnings per share for loss attributable to the equity holders of the Company during the year (cents)	7	(0.27)	(0.19)

Statements of Financial Position

As at 31 May 2024

	Note	31.05.24 Group US$000	31.05.24 Company US$000	31.05.23 Group US$000	31.05.23 Company US$000
Non-current assets
Intangible assets	8	57	-	19	-
Property, equipment, and motor vehicles	9	525	-	661	1
Investments	10	-	3	-	3
Bonds and deposits	11	100	-	100	-
Total non-current assets		682	3	780	4
Current assets
Bonds and deposits	11	883	-	883	-
Cash, cash equivalents and restricted cash	12	3,421	1,203	3,285	1,227
Trade and other receivables	13	1,228	1,564	1,378	745
Total current assets		5,532	2,767	5,546	1,972
Total assets		6,214	2,770	6,326	1,976
Equity
Called up share capital	16	6,334	6,334	6,334	6,334
Share option reserve	16	42	42	42	42
Retained losses		(6,866)	(5,973)	(5,803)	(5,828)
Total equity		(490)	403	573	548
Current liabilities
Trade and other payables	14	3,848	84	3,712	78
Loans, borrowings, and lease liabilities	15	970	850	462	350
Total current liabilities		4,818	934	4,174	428
Non-current liabilities
Loans, borrowings, and lease liabilities	15	1,886	1,433	1,579	1,000
Total non-current liabilities		1,886	1,433	1,579	1,000
Total liabilities		6,704	2,367	5,753	1,428
Total equity and liabilities		6,214	2,770	6,326	1,976

Statements of Changes in Equity

For the year ended 31 May 2024

Group	Called up share capital US$000	Share option reserve US$000	Retained earnings US$000	Total equity US$000
Balance as at 31 May 2022	6,334	42	(5,058)	1,318
Total comprehensive loss for the year:
Loss for the year	-	-	(745)	(745)
Balance as at 31 May 2023	6,334	42	(5,803)	573
Total comprehensive profit for the year:
Loss for the year	-	-	(1,063)	(1,063)
Balance as at 31 May 2024	6,334	42	(6,866)	(490)
Company	Called up share capital US$000	Share option reserve US$000	Retained earnings US$000	Total equity US$000
Balance as at 31 May 2022	6,334	42	(5,711)	665
Total comprehensive loss for the year:
Loss for the year	-	-	(117)	(117)
Balance as at 31 May 2023	6,334	42	(5,828)	548
Total comprehensive profit for the year:
Loss for the year	-	-	(145)	(145)
Balance as at 31 May 2024	6,334	42	(5,973)	403

Consolidated Statement of Cash Flows

For the year ended 31 May 2024

	Note	202 4 US$000	2023 US$000
Cash flows from operating activities
Loss before income tax		(1,063 )	(745 )
Adjustments for:
- Depreciation of property, equipment, and motor vehicles	9	139	137
- Amortisation of intangible assets	8	12	5
- R ent concessions received	18	-	(18)
- Fi nance costs / (income) - (net)		136	94
- Decrease / (increase) in movement of restricted cash		126	(60)
- Increase in lease liabilities		57	59
- Other foreign exchange movements		7	(47)
Changes in working capital:
- Decrease / (increase) in receivables		150	(18 8)
- Increase i n payables		136	72
Cash flows from o perations		(300)	(691)
Finance income		11	7
Net cash u sed in operating activities		(289)	(684)
Cash flows from investing activities
Purchase of intangible assets	8	(50)	(1 3 )
Purchase of property, equipment, and motor vehicles	9	( 3)	( 13)
Net cash used in investing activities		(53)	(26)
Cash flows from financing activities
L oan i nterest paid		(147)	(101)
Payment of lease liabilities - principal	18	( 91)	( 89)
Payment of lease liabilities - interest	18	( 57)	( 59)
R ent concessions received	18	-	18
Repayment of loans and borrowings		(527 )	( 20)
P roceeds from l oans and borrowings		1,433	-
Net cash generated from / ( used in) financing activities	15	611	(251)
Net i ncrease / (decrease) in cash and cash equivalents		269	(961)
Cash and cash equivalents at beginning of year		2,1 48	3,062
Exchange (losses) / g ains on cash and cash equivalents		(7 )	47
Cash and cash equivalents at end of year	12	2,410	2,148

Notes to the Financial Statements

For the year ended 31 May 2024

1 Reporting entity

Webis Holdings plc (the "Company") is a company domiciled in the Isle of Man. The address of the Company's registered office is Viking House, Nelson Street, Douglas, Isle of Man, IM1 2AH. The Webis Holdings plc consolidated financial statements as at and for the year ended 31 May 2024 consolidate those of the Company and its subsidiaries (together referred to as the "Group"). The Group's primary activities are the provision of pari-mutuel wagering services, through its Isle of Man and USA based subsidiaries and the hosting of harness racing, through its USA based subsidiary.

1.1 Basis of preparation

(a) Statement of compliance

The consolidated financial statements have been prepared in accordance with UK Adopted - International Accounting Standards. They were authorised for issue by the Board on 28 November 2024.

The Group has consistently applied the accounting policies as set out in note 1.2 to all periods presented in these financial statements.

Functional and presentational currency

These financial statements are presented in US Dollars which is the Company's functional and presentational currency. Financial information presented in US Dollars has been rounded to the nearest thousand, unless otherwise indicated. All continued operations of the Group have US Dollars as their functional currency.

Other information presented

In line with the Isle of Man Companies Acts 1931-2004, the Company also presents Parent Company Statements of Financial Position, the Parent Company Statement of Changes in Equity and related disclosures. The Company applies the requirements of UK Adopted International Accounting Standards, as indicated in the relevant accounting policies below, when preparing the Company statement of financial position and related notes.

(b) Basis of measurement

The Group consolidated financial statements are prepared under the historical cost convention except where assets and liabilities are required to be stated at their fair value.

The preparation of the Group financial statements in conformity with UK Adopted - International Accounting Standards requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income, and expenses. Although these estimates are based on management's best knowledge and experience of current events and expected economic conditions, actual results may differ from these estimates.

The Directors consider the only critical estimate area to be as follows:

· Note 20 - the measurement of Expected Credit Loss ("ECL") allowance for trade and other receivables and assessment of specific impairment allowances where receivables are past due.

Going concern

The Group and Parent Company financial statements have been prepared on a going concern basis, notwithstanding material uncertainties related to events and conditions discussed below, that may cast significant doubt on the going concern assumption .

As indicated in the statement of comprehensive income, the Group has incurred a net loss in the current year of US $ 1,063,000 (2023: loss of US $ 745,000), with net operating cash outflows in the current year of US$ 300,000 (2023: outflows of US$ 691,000), and due to that, net assets reduced from US $ 573,000 to a net liability of US$ (490,000). WatchandWager.com Ltd generated a profit of US$ 124,000, while WatchandWager.com LLC incurred a loss of US$ 1,042,000. The company incurred a loss for the year of US$ 145,000 (2023: loss of US$ 117,000), reducing company net assets to US$ 403,000 (2023: US$ 548,000).

Based on forecasts prepared by the Directors, the Group and the Company may continue to sustain losses if it continues in its current structure and operations. These circumstances have necessitated the implementation of a strategic review of the Group's activities by the Directors.

As part of the implementation of this strategic review the Directors have announced that the Company will seek a cancellation of the admission of the Company's shares to trading on AIM in order to realise significant cost savings incurred as a result of the legal and regulatory burden of operating as a listed business being disproportionate to the company's size and operations. As announced on 22 November 2024, the cancellation of the Company's shares is subject to a shareholder vote which is currently scheduled to take place on 18 December 2024. The directors consider that the cancellation of the listing is a critical step in the strategic review of the business and in realising necessary cost savings and improved financial performance that will increase the future prospects of the Group, as well as improving the flexibility and attractiveness of the business to future investment.

The Directors consider that the continued development of gaming regulation in the USA may provide opportunities for the Group to grow in future, combined with the delisting making the business more attractive for potential partnerships, mergers, and acquisitions, most likely within the USA. Whilst the Directors continue to assess all strategic options in relation to the Group's business, the Directors recognise that the ultimate success of strategies adopted is difficult to predict as they may require additional liquidity to pursue the required investment.

After the year end, in November 2024, Galloway Limited (related entity) has agreed a new loan of US$ 550,000 repayable in 5 years (as well as rolling up the loan that matured during the current year), which will assist in providing the Group with liquidity to support its continued operations whilst a strategic review is completed which includes reducing the expense base of the Group.

The Group and the Company have, in previous years, received financial support from Galloway Limited, and Galloway Limited has expressed its willingness to continue to make these funds available and has undertaken not to recall these existing facilities (including the amount extended in November 2024 and the loan due to mature in March 2025) within the forecast period.

The Directors have prepared cash flow forecasts for a period of 12 months from the date of approval of these financial statements which indicate that, should the cancellation of shares from AIM occur in December 2024 (subject to shareholder vote) and taking account of reasonably possible downsides, the Group and the Company are projected to have sufficient funds for at least 12 months from the date of signing the current year financial statements as a result of the additional financial support of US$ 550,000 received from Galloway Limited in November 2024. The Directors consider that this provides a reasonable time period for the shareholder vote to occur, and should the cancellation of shares be approved, allows time for such cost saving initiatives to be implemented as well as the strategic review of the Group's activities to be completed.

The outcome of these circumstances represents a material uncertainty that may cast significant doubt upon the Company's ability to continue as a going concern and, therefore, to continue realising its assets and discharging its liabilities in the normal course of business. The financial statements do not include any adjustments that would result from the basis of preparation being inappropriate.

Based on these indications and factors, the Directors believe that it remains appropriate to prepare the financial statements on a going concern basis.

1.2 Summary of significant accounting policies

During the current year, the Group adopted all the new and revised IFRSs that are relevant to its operation and are effective for accounting periods beginning on 1 June 2023. No adoptions had a material effect on the accounting policies of the Group.

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented unless otherwise stated.

Basis of consolidation

The consolidated financial statements incorporate the results of the Group. Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue until the date that such control ceases. Control exists when the Group has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition-related costs are expensed as incurred.

Inter-company transactions, balances, and unrealised gains on transactions between the Group companies are eliminated. Unrealised losses are also eliminated. When necessary, amounts reported by subsidiaries have been adjusted to conform with the G roup's accounting policies.

Foreign currency translation

(a) Functional and presentation currency

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). As the primary activities of the Group and the primary transactional currency of the Group's customers are carried out in US Dollars, the consolidated financial statements have been presented in US Dollars, which is the Company's presentational and functional currency.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such

transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement, except when deferred in other comprehensive income as qualifying cash flow hedges and qualifying net investment hedges. Foreign exchange gains and losses that relate to borrowings are presented in the income statement within 'Finance income' or 'Finance costs'. All other foreign exchange gains and losses are presented in the income statement within 'Other (losses)/gains'.

Revenue from contracts with customers

The Group generates revenue primarily from the provision of wagering services and the hosting of races on which guests are entitled to participate in the related wagering services. Revenue is measured at fair value based on the consideration specified in a contract with a customer. The Group recognises revenue when it discharges services to a customer. Revenue has been disaggregated by geographical locations which are consistent with the operating segments (note 2).

Hosting fees (Racetrack operations) are recognised when the customers participate in the Group's pari-mutuel pools and the race audio visual signals are transmitted. Hosting fees are recorded on a gross receipts basis.

Wagering revenue from the Group's activities as the race host is recognised when a race on which wagers are placed is completed. The wagering commission from the Group's commingling of its wagering pools with a host's pool is recognised when the race on which those wagers are placed is completed. The Group acts as a principal when it allows customers to place wagers in the races it hosts and as an agent when it allows customers to place wagers in other entities' races. Where the Group acts as a principal, the entire wager is recognised as revenue and where it is an agent the wagering commission the Group retains is recognised as revenue.

Settlement terms for revenue where the Group acts as a host is usually 7 days for on and off-track wagering and 30 days from month end for ADW wagering. Where the Group acts as an agent, settlement terms are typically 30 days from month end.

Transactions fees (ADW operations) are recognised when the Group facilitates customers' deposit transactions into their betting accounts. The Group recognises revenue for transaction services net of related winnings.

Cost of sales

The Group recognises cost of sales related to the Racetrack operations in which it is the race host. The cost of sales includes direct costs such as purses, hub fees, import fees, pay-outs, and other statutory distributions.

Segmental reporting

Segmental reporting is based on the business areas in accordance with the Group's internal reporting structure, which allows the individual operating segments to be identified by the disparate nature of the principal activity they undertake. The Group determines and presents segments based on the information that internally is provided to the Board and Managing Director, the Group's chief operating decision maker.

An operating segment is a component of the Group and engages in business activities from which it may earn revenues and incur expenses. The Board and Managing Director regularly review an operating segment's results to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

Current and deferred income tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax also includes any tax arising from dividends. Current tax assets and liabilities are offset only if certain criteria are met.

Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised if they arise from

the initial recognition of goodwill; deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the reporting date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Deferred income tax liabilities are provided on taxable temporary differences arising from investments in subsidiaries except for deferred income tax liability, where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Only where there is an agreement in place that gives the Group the ability to control the reversal of the temporary difference is the liability not recognised.

Deferred income tax assets are recognised on deductible temporary differences arising from investments in subsidiaries only to the extent that it is probable the temporary difference will reverse in the future and there is sufficient taxable profit available against which the temporary difference can be utilised.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes, assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

Intangible assets - other

(a) Trademarks and licences

Separately acquired trademarks and licences are shown at historical cost. Trademarks and licences acquired in a business combination are recognised at fair value at the acquisition date. Trademarks and licences have a finite useful life and are carried at cost less accumulated amortisation and any accumulated impairment. Amortisation is calculated using the straight-line method to allocate the cost of trademarks and licences over their estimated useful lives of three years. Renewal costs are expensed in the year they relate to.

Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortised over their estimated useful lives of three years.

(b) Website design and development costs

Costs associated with maintaining websites are recognised as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique websites controlled by the Group are recognised as intangible assets when the following criteria are met:

· it is technically feasible to complete the website so that it will be available for use;

· management intends to complete the website and use it;

· there is an ability to use the website;

· it can be demonstrated how the website will generate probable future economic benefits;

· adequate technical, financial, and other resources to complete the development and to use the website are available; and

· the expenditure attributable to the website during its development can be reliably measured.

Directly attributable costs that are capitalised as part of the website include the website employee costs and an appropriate portion of relevant overheads.

Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.

Website development costs recognised as assets are amortised over their estimated useful lives, which do not exceed three years.

Property, equipment, and motor vehicles

Items of property, equipment and motor vehicles are stated at historical cost less accumulated depreciation (see below) and impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the financial position date. An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount. Depreciation is calculated using the straight-line method to allocate the cost of property, equipment, and motor vehicles over their estimated useful lives.

The estimated useful lives of property, equipment and motor vehicles for current and comparative periods are as follows:

Motor vehicles 5 years Fixtures and fittings 3 years

Plant and equipment 3-5 years

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within 'Other gains/(losses) - net' in the income statement.

Investment in subsidiary

A subsidiary is an entity controlled by the entity. The Company controls an investee when the Company is exposed or has rights to variable returns from its involvement with the investee and can affect the return through its power over the investee. Control exists when the Company has the power to govern the financial and operating policies of an entity to obtain benefits from its activities. In assessing control, potential voting rights that are currently exercisable are considered.

Investment in subsidiaries are initially recognised at cost. At subsequent reporting dates, the recoverable amounts are estimated to determine the extent of impairment losses, if any, and carrying amounts of investments are adjusted accordingly. Impairment losses are recognised as an expense. Where impairment losses subsequently reverse, the carrying amounts of the investments are increased to the revised recoverable amounts but limited to the extent of initial cost of investments. A reversal of impairment loss is recognised in the profit or loss.

Equity

Share capital is determined using the nominal value of shares that have been issued.

Equity settled share-based employee remuneration is credited to the share option reserve until related stock options are exercised. On exercise or lapse, amounts recognised in the share option reserve are taken to share capital. When the options are exercised, the Company issues new shares. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium.

Retained earnings include all current and prior period results as determined in the income statement and any other gains or losses recognised in the Statement of Changes in Equity.

Financial instruments

Recognition and measurement

Non-derivative financial instruments include trade and other receivables, cash and cash equivalents, bonds and deposits, borrowings and trade and other payables.

Financial assets and financial liabilities are recognised on the Group and the Company's balance sheet when the Group and/or the Company become party to the contractual terms of the instrument. Transaction costs are included in the initial measurement of financial instruments, except financial instruments classified as at fair value through profit or loss. The subsequent measurement of financial instruments is dealt with below.

Trade and other receivables

Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

Cash and cash equivalents

Cash and cash equivalents are defined as cash in bank and in hand as well as bank deposits, money held for processors and cash balances held on trust for the customers entitled to them. Cash equivalents are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes. These are subsequently measured at amortized cost.

Bonds and deposits

Bonds and deposits are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

Borrowings

Interest-bearing borrowings and overdrafts are recorded at the proceeds received net of direct issue costs. Finance charges, including premiums payable on settlement or redemption and direct issue costs are charged on an accrual basis using the effective interest method and are added to the carrying amount of the instrument.

Trade and other payables

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

Impairment of financial assets

The Group and the Company use an impairment model that applies to financial assets measured at amortised cost and contract assets and is detailed below. Financial assets at amortised cost include trade receivables, cash and cash equivalents, bonds and deposits.

Performing financial assets

Stage 1 (0-30 Days)

From initial recognition of a financial asset to the date on which an asset has experienced a significant increase in credit risk relative to its initial recognition, a stage 1 loss allowance is recognised equal to the credit losses expected to result from its default occurring over the next 12 months ('12-month ECL').

Stage 2 (31-90 Days)

Following a significant increase in credit risk relative to the initial recognition of the financial asset, a stage 2 loss allowance is recognised equal to the credit losses expected from all possible default events over the remaining lifetime of the asset ('Lifetime ECL'). The assessment of whether there has been a significant increase in credit risk requires considerable judgment, based on the lifetime probability of default ('PD'). Any financial asset that had been outstanding for greater than 30 days would be assessed on an individual basis to determine if it qualified as a significant increase in credit risk. Stage 1 and 2 allowances are held against performing loans; the main difference between stage 1 and stage 2 allowances is the time horizon. Stage 1 allowances are estimated using the PD with a maximum period of 12 months, while stage 2 allowances are estimated using the PD over the remaining lifetime of the asset.

Impaired financial assets

Stage 3 (After 90 Days)

When a financial asset is considered to be credit-impaired, the allowance for credit losses ('ACL') continues to represent lifetime expected credit losses, however, interest income is calculated based on the amortised cost of the asset, net of the loss allowance, rather than its gross carrying amount.

The Group applies the ECL model to two main types of financial assets that are measured at amortised cost:

Trade receivables, to which the simplified approach (provision matrix) prescribed by IFRS 9 is applied. This approach requires the recognition of a Lifetime ECL allowance on day one. In the normal course of operations, trade receivables could be considered to be in default after 90 days.

Other financial assets at amortised cost, to which the general three stage model (described above) is applied, whereby a 12-month ECL is recognised initially and the balance is monitored for significant increases in credit risk which triggers the recognition of a Lifetime ECL allowance.

ECLs are a probability-weighted estimate of credit losses. ECLs for financial assets that are not credit-impaired at the reporting date are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due in accordance with the contract and the cash flows that the Company expects to receive). ECLs for financial assets that are credit-impaired at the reporting date are measured as the difference between the gross carrying amount and the present value of estimated future cash flows. The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk. The measurement of ECLs considers information about past events and current conditions, as well as supportable information about future events and economic conditions. The Group reviews its impairment methodology for estimating the ECLs, taking into account forward-looking information in determining the appropriate level of allowance. In addition, it identifies indicators and set up procedures for monitoring for significant increases in credit risk.

Leases

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

i. As a lessee

The Group recognises a right-of-use asset and a lease liability at the lease commencement/modification date. The right-of-use asset is initially measured at cost, and subsequently at cost less accumulated depreciation and impairment loss and adjusted for certain remeasurements of the lease liability.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted at the Group's applicable incremental borrowing rate (if the rate implicit in the lease cannot be determined). The Group has measured the incremental borrowing as equal to external borrowing rates. The lease liability is subsequently increased by the interest cost of the lease liability and decreased by the lease payment made. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, a change in the estimate of the amount expected to be payable under a residual value guarantee, or as appropriate, changes in the assessment of whether a purchase or extension option is reasonably certain to be exercised, or a termination option is reasonably certain not to be exercised.

The Group has applied judgment to determine the lease term for some lease contracts in which it is a lessee that include renewal options. The assessment of whether the Group is reasonably certain to exercise such options impacts the lease term, which affects the amount of lease liabilities and right of use assets recognised.

The Group receives rent concessions on its racetrack lease when, due to external factors, the number of days raced in a season is lower than the actual number of days scheduled to be raced.

The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and the type of the asset leased.

Lease payments included in the measurement of the lease liability comprise the following:

- Fixed payments, including in-substance fixed payments;

- Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

- Amounts expected to be payable under a residual value guarantee; and

- The exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group's estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension, or termination option or if there is a revised in-substance fixed lease payment.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The Group presents right-of-use assets that do not meet the definition of investment property in 'property, equipment, and motor vehicles' and lease liabilities in 'loans, borrowings and lease liabilities' in the statement of financial position.

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

Employee benefits

(a) Pension obligations

The Group and the Company do not operate any post-employment schemes, including both defined benefit and defined contribution pension plans.

(b) Short-term employee benefits

Short-term employee benefits, such as salaries, paid absences, and other benefits, are accounted for on an accrual's basis over the period in which employees have provided services in the year. All expenses related to employee benefits are recognised in the Statement of Comprehensive Income in operating costs.

The Group and the Company recognises a liability and an expense for bonuses and profit sharing, based on a formula that takes into consideration the profit attributable to the Company's shareholders after certain adjustments. The Group and the Company recognises a provision where contractually obliged or where there is a past practice that has created a constructive obligation. Any recognised liability would be settled within 12 months of the year end.

Standards and interpretations in issue not yet adopted

A number of new standards, amendments to standards and interpretations are not yet effective for the year and have not been applied in preparing these consolidated financial statements. The Directors do not expect the adoption of the standards and interpretations to have a material impact on the Group's financial statements in the period of initial application.


Standards	Effective date (accounting periods commencing on or after)

Lease Liability in a Sale and Leaseback (Amendments to IFRS 16) Classification of liabilities as Current or Non-Current and Non-current Liabilities with Covenants (Amendments to IAS 1 Presentation of Financial Statements) Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7)	1 January 2024
Lack of Exchangeability (Amendments to IAS 21) Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures (Amendments to FRS 10 and IAS 28)* *The effective date of these amendments was deferred indefinitely. Early adoption continues to be permitted.	1 January 2025

2 Operating Segments

A. Basis for segmentation

The Group has two operating segments, which are its reportable segments. The segments offer different services in relation to various forms of pari-mutuel racing, which are managed separately due to the nature of their activities.

Reportable segments and operations provided

Racetrack operations - hosting of races through the management and operation of a racetrack facility, enabling patrons to attend and wager on horse racing, as well as utilise simulcast facilities.

ADW operations - provision of online ADW services to enable customers to wager into global racetrack betting pools.

The Group's Board of Directors review the internal management reports of the operating segment on a monthly basis.

B. Information about reportable segments

Information relating to the reportable segments is set out below. Segment revenue along with segment profit / (loss) before tax are used to measure performance as management considers this information to be a relevant indicator for evaluating the performance of the segments.


	Reportable segments
	Racetrack 2024 US$000		ADW 2024 US$000	Corporate operating costs 2024 US$000	Total 2024 US$000
External revenues	48,017		2,014	-	50,031
Segment revenue	48,017		2,014	-	50,031
Segment loss before tax	(101)		(817)	(145)	(1,063)
Interest expense	(53)		(5)	(146)	(204)
Depreciation and amortisation	(100)		(50)	(1)	(151)
Other material non-cash items:
- Impairment movement on trade receivables	-		3	-	3
Segment assets	2,213		2,728	1,273	6,214
Segment liabilities	1,886		2,451	2,367	6,704
		Reportable segments
		Racetrack 2023 US$000	ADW 2023 US$000	Corporate operating costs 2023 US$000	Total 2023 US$000
External revenues		47,865	2,155	-	50,020
Segment revenue		47,865	2,155	-	50,020
Segment profit / (loss) before tax		46	(674)	(117)	(745)
Interest expense		(58)	(3)	(99)	(160)
Depreciation and amortisation		(98)	(42)	(2)	(142)
Other material non-cash items:
- Impairment movement on trade receivables		-	(2)	-	(2)
Segment assets		2,187	2,846	1,293	6,326
Segment liabilities		1,523	2,802	1,428	5,753

C. Reconciliations of information on reportable segments to the amounts reported in the financial statements

	2024 US$000	2023 US$000
i. Revenues
Total revenue for reportable segments	50,031	50,020
Consolidated revenue	50,031	50,020
ii. Loss before tax
Total loss before tax for reportable segments	(918)	(628)
Loss before tax for other segments	(145)	(117)
Consolidated loss before tax	(1,063)	(745)
iii. Assets
Total assets for reportable segments	4,941	5,033
Assets for other segments	1,273	1,293
Consolidated total assets	6,214	6,326
iv. Liabilities
Total liabilities for reportable segments	4,337	4,325
Liabilities for other segments	2,367	1,428
Consolidated total liabilities	6,704	5,753
v. Other material items
Interest expense	(204)	(160)
Depreciation and amortisation	(151)	(142)
Impairment movement on trade receivables	3	(2)

There were no reconciling items noted between Segment information and the Financial Statements.

D. Geographic information

i. Revenues

The below table analyses the geographic location of the customer base of the operating segments.


		2024 US$000	2023 US$000
Revenue
Racetrack operations	North America	48,017	47,865
ADW operations	North America	1,479	1,701
ADW operations	British Isles	459	428
ADW operations	Caribbean	76	26
		50,031	50,020

ii. Non-current assets

The geographical information below analyses the Group's non-current assets by the Company's Country of Domicile (Isle of Man) and the United States of America. Information is based on geographical location of the Group's assets.


	2024 US$000	2023 US$000
United States of America	583	679
Isle of Man	-	2
	583	681

Non-current assets exclude financial instruments. During the year, additions to non-current assets for the reportable segments were Racetrack US$ Nil (2023: US$ 13,000) and ADW US$ 53,000 (2023: US$ 74,000).

E. Major customers

The Group does not earn revenue of 10% or more from any external customer.

3 Operating loss


Operating loss is stated after charging:	2024 US$000	2023 US$000
Auditors' remuneration - audit	156	146
Depreciation of property, equipment, and motor vehicles	139	137
Amortisation of intangible assets	12	5
Exchange losses / (gains)	4	(9)
Directors' fees	94	105

4 Finance costs

	2024 US$000	2023 US$000
Bank interest receivable	11	7
Loan and lease interest payable	(204)	(160)
Net finance costs	(193)	(153)

5 Staff numbers and cost

	2024	2023
Average number of employees - Pari-mutuel and Racetrack Operations	55	50

The aggregate payroll costs of these persons were as follows: Pari-mutuel and Racetrack Operations	2024 US$000	2023 US$000
Wages and salaries	1,678	1,694
Social security costs	122	121
	1,800	1,815

6 Income tax expense

(a) Current and Deferred Tax Expenses

The current and deferred tax expenses for the year were US$ Nil (2023: US$ Nil). Despite having made losses, no deferred tax was recognised as there is no reasonable expectation that the Group will recover the resultant deferred tax assets.

(b) Tax Rate Reconciliation

	2024 US$000	2023 US$000
Loss before tax	(1,063)	(745)
Tax charge at IOM standard rate (0%)	-	-
Adjusted for:
Tax credit for US tax losses (at 21%)	(219)	(153)
Add back tax losses not recognised	219	153
Tax charge for the year	-	-

The maximum deferred tax asset that could be recognised at year end is approximately US$ 1,380,000 (2023: US$ 1,161,000). The Group has not recognised any asset as it might not be recoverable within the allowed period. The tax losses for tax years beginning in January 2018 are currently permitted to be carried forward indefinitely. Tax losses incurred prior to that period expire after 20 years.

7 Earnings per ordinary share

The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the year.

The calculation of diluted earnings per share is based on the basic earnings per share, adjusted to allow for the issue of shares, on the assumed conversion of all dilutive share options.

An adjustment for the dilutive effect of share options in the current period has not been reflected in the calculation of the diluted loss per share, as the effect would have been anti-dilutive.

	2024 US$000	2023 US$000
Loss for the year	(1,063)	(745)
	No.	No.
Weighted average number of ordinary shares in issue	393,338,310	393,338,310
Dilutive element of share options if exercised (note 16)	14,000,000	14,000,000
Diluted number of ordinary shares	407,338,310	407,338,310
Basic earnings per share (cents)	(0.27)	(0.19)
Diluted earnings per share (cents)	(0.27)	(0.19)

The earnings applied are the same for both basic and diluted earnings calculations per share as there are no dilutive effects to be applied.

8 Intangible assets

	Software & development costs		Total
	Group US$000	Company US$000	Group US$000	Company US$000
---	---	---	---	---
Cost
Balance at 1 June 2022	612	15	612	15
Additions during the year	13	-	13	-
Disposals/decommissioned assets	(8)	(1)	(8)	(1)
Balance at 31 May 2023	617	14	617	14
Balance at 1 June 2023	617	14	617	14
Additions during the year	50	-	50	-
Balance at 31 May 2024	667	14	667	14
Amortisation and Impairment
Balance at 1 June 2022	601	15	601	15
Amortisation for the year	5	-	5	-
Disposals/decommissioned assets	(8)	(1)	(8)	(1)
Balance at 31 May 2023	598	14	598	14
Balance at 1 June 2023	598	14	598	14
Amortisation for the year	12	-	12	-
Balance at 31 May 2024	610	14	610	14
Carrying amounts
At 1 June 2022	11	-	11	-
At 31 May 2023	19	-	19	-
At 31 May 2024	57	-	57	-

The Group reviews intangible assets annually for impairment or more frequently if there are indications that the intangible assets may be impaired (see note 1). The carrying amount of US$ 57,000 of software and development costs relates primarily to development and integration costs of the US based wagering website. These assets will be fully amortised within the next 3 years.

9 Property, equipment, and motor vehicles

Group	Computer Equipment US$000	Fixtures, Fittings & Track Equipment US$000	Motor Vehicles US$000	Right-of- use Assets US$000	Total US$000
Cost
Balance at 1 June 2022	166	321	50	945	1,482
Additions during the year	-	13	-	61	74
Disposals/decommissioned assets	(49)	-	-	(118)	(167)
Balance at 31 May 2023	117	334	50	888	1,389
Balance at 1 June 2023	117	334	50	888	1,389
Additions during the year	3	-	-	-	3
Balance at 31 May 2024	120	334	50	888	1,392
Depreciation
Balance at 1 June 2022	163	268	31	296	758
Charge for the year	2	20	7	108	137
Disposals/decommissioned assets	(49)	-	-	(118)	(167)
Balance at 31 May 2023	116	288	38	286	728
Balance at 1 June 2023	116	288	38	286	728
Charge for the year	1	23	7	108	139
Balance at 31 May 2024	117	311	45	394	867
Carrying amounts
At 1 June 2022	3	53	19	649	724
At 31 May 2023	1	46	12	602	661
At 31 May 2024	3	23	5	494	525

Company	Computer Equipment US$000	Fixtures & Fittings US$000	Total US$000
Cost
Balance at 1 June 2022	37	80	117
Additions during the year	-	-	-
Balance at 31 May 2023	37	80	117
Balance at 1 June 2023	37	80	117
Additions during the year	-	-	-
Balance at 31 May 2024	37	80	117



Company	Computer Equipment US$000	Fixtures & Fittings US$000	Total US$000
Depreciation
Balance at 1 June 2022	34	80	114
Charge for the year	2	-	2
Balance at 31 May 2023	36	80	116
Balance at 1 June 2023	36	80	116
Charge for the year	1	-	1
Balance at 31 May 2024	37	80	117
Carrying amounts
At 1 June 2022	3	-	3
At 31 May 2023	1	-	1
At 31 May 2024	-	-	-

10 Investments in Subsidiaries

Investments in subsidiaries are held at cost less impairment. Details of investments are as follows:

Subsidiaries	Country of incorporation	Activity	2024 Holding (%)	2023 Holding (%)
WatchandWager.com Limited	Isle of Man	Operation of interactive wagering totaliser hub	100	100
WatchandWager.com LLC	United States of America	Operation of interactive wagering totaliser hub and harness racetrack	100	100
betinternet.com (IOM) Limited	Isle of Man	Dormant	100	100

A wholly owned subsidiary, Technical Facilities & Services Limited, was dissolved during the 31 May 2023 financial year. Impairment assessment is performed annually, and this involves assessment of the net asset value and profitability of the subsidiaries.

11 Bonds and deposits

	2024 US$000	2023 US$000
Bonds and deposits - expire within one year	883	883
Bonds and deposits - expire within one to two years	-	-
Bonds and deposits - expire within two to five years	-	-
Bonds and deposits - expire more than five years	100	100
	983	983

Cash bonds of US$ 875,000 have been paid as security deposits in relation to various US State ADW licences (2023: US$ 875,000). These cash bonds are held in trust accounts used exclusively for cash collateral, with financial institutions which have been screened for their financial strength and capitalization ratio. The financial institutions have a credit rating of A- Excellent from AM Best credit rating agency. Therefore, these bonds are considered to be fully recoverable. A rent deposit of US$ 100,000 is held by California Exposition & State Fair and is for a term ending in 2030 (2023: US$ 100,000). This is held by an entity of the Californian state government and is therefore considered fully recoverable. Rent and other security deposits total US$ 8,168 (2023: US$ 8,167). These deposits are repayable upon completion of the relevant lease term, under the terms of legally binding agreements. The fair value of the bonds and deposits approximates to the carrying value.

12 Cash, cash equivalents and restricted cash

	Group		Company
	2024 US$000	2023 US$000		2024 US$000	2023 US$000
---	---	---	---	---	---	---
Cash and cash equivalents - Company and other funds	2,410	2,148		218	116
Restricted cash - protected player funds	1,011	1,137		985	1,111
Total cash, cash equivalents and restricted cash	3,421	3,285		1,203	1,227

The Group holds funds for operational requirements and for its non-Isle of Man customers, shown as 'Company and other funds' and on behalf of its Isle of Man regulated customers and certain USA state customers, shown as 'protected player funds'.

Protected player funds are held in fully protected client accounts within an Isle of Man regulated bank and in segregated accounts within a USA regulated bank. These funds are segregated from operational funds of the Company and are held on trust for the customers entitled to them.

13 Trade and other receivables

		Group		Company
		2024 US$000	2023 US$000		2024 US$000	2023 US$000
---	---	---	---	---	---	---	---
Trade receivables		325	612		-	-
Amounts due from Group undertakings		-	-		1,494	680
Other receivables and prepayments		903	766		70	65
		1,228	1,378		1,564	745

Included within trade receivables are impairment provisions of US$ 65,566 (see note 20), (2023: US$ 68,837). Other receivables include accrued and other income due to the Group, along with sundry other debtors. Amounts due from Group undertakings are unsecured, interest free and repayable on demand.

14 Trade and other payables

		Group		Company
		2024 US$000	2023 US$000		2024 US$000	2023 US$000
---	---	---	---	---	---	---	---
Trade payables		597	436		9	8
Amounts due to customers		1,945	2,089		-	-
Taxes and national insurance		22	18		2	2
Accruals and other payables		1,284	1,169		73	68
		3,848	3,712		84	78

Other payables include distributions and purses payable for the racetrack operations, along with sundry other payables.

15 Loans, borrowings, and lease liabilities

Current liabilities

		Group		Company
		2024 US$000	2023 US$000		2024 US$000	2023 US$000
---	---	---	---	---	---	---	---
Unsecured loans (current portion)		20	21		-	-
Lease liabilities (current portion)		100	91		-	-
Secured loans - Galloway Limited		850	350		850	350
		970	462		850	350

Non-current liabilities

		Group		Company
		2024 US$000	2023 US$000		2024 US$000	2023 US$000
---	---	---	---	---	---	---	---
Unsecured loans (non-current portion)		-	26		-	-
Lease liabilities (non-current portion)		453	553		-	-
Secured loans - Galloway Limited		1,433	1,000		1,433	1,000
		1,886	1,579		1,433	1,000

Terms and repayment schedule


	Nominal interest rate	Year of maturity	2024 Total US$000	2023 Total US$000
Unsecured loans	1.00-8.90%	2025	20	47
Lease liabilities	6.00-9.50%	2023-30	553	644
Secured loan 2017 - Galloway Limited*	7.75%	2027	-	500
Secured loan 2019 - Galloway Limited*	7.00%	2024	350	350
Secured loan 2020 - Galloway Limited*	7.00%	2025	500	500
Secured loan 2023 - Galloway Limited*	11.00%	2028	1,433	-
Total loans and borrowings			2,856	2,041

During 2022, the Group received an unsecured Paycheck Protection Program ("PPP") loan for US$ 48,427, which matures on 7 May 2025 and attracts interest at 1% per annum.

The secured loans from Galloway Limited are secured over the unencumbered assets of the Group, which includes the Cash and cash equivalents - Company and other funds of US$ 2,410,000 (2023: US$ 2,148,000) and Cash bonds of US$ 875,000 (2023: US$ 875,000). In September 2023, the Group obtained additional financing from Galloway Limited, which included the Secured loan 2017 of US$ 500,000, being rolled into this financing.

In November 2024, the Group has agreed additional funding from Galloway Limited of US$ 920,000, with the Secured loan 2019 of US$ 350,000, being rolled into the new financing (see note 22).

*The fair value of the Galloway Limited loans approximates to the carrying value.

Reconciliation of movements of liabilities to cash flows arising from financing activities

	Other loans and borrowings US$000	Lease liabilities US$000	Total US$000
Balance at 1 June 2022	1,417	672	2,089
Changes from financing cash flows
Proceeds from loans, borrowings, and lease liabilities	-	59	59
Repayment of borrowings	(20)	-	(20)
Payment of lease liabilities	-	(148)	(148)
Rent concession received	-	18	18
Interest paid	(101)	(59)	(160)
Total changes from financing cash flows	(121)	(130)	(251)
Other changes
Liability-related
New leases	-	61	61
Rent concession received	-	(18)	(18)
Interest expense	101	59	160
Total liability-related other changes	101	102	203
Balance at 31 May 2023	1,397	644	2,041

Balance at 1 June 2023	1,397	644	2,041
Changes from financing cash flows
Proceeds from loans, borrowings, and lease liabilities	1,433	57	1,490
Repayment of borrowings	(527)	-	(527)
Payment of lease liabilities	-	(148)	(148)
Interest paid	(147)	(57)	(204)
Total changes from financing cash flows	759	(148)	611
Other changes
Liability-related
Interest expense	147	57	204
Total liability-related other changes	147	57	204
Balance at 31 May 2024	2,303	553	2,856

16 Share capital

	No.	2024 US$000	2023 US$000
Allotted, issued, and fully paid
At beginning and close of year: ordinary shares of 1p each	393,338,310	6,334	6,334
At 31 May: ordinary shares of 1p each	393,338,310	6,334	6,334

The authorised share capital of the Company is US$ 9,619,000 divided into 600,000,000 ordinary shares of £0.01 each (2023: US$ 9,619,000 divided into 600,000,000 ordinary shares of £0.01 each). This is the sole class of shares authorised and issued by the Company and these shares convey the right for shareholders to vote at general meetings, to receive dividends and to receive surplus assets on the liquidation of the Company. There are no preferences or restrictions attached to these shares. Neither the Company, nor its subsidiaries, hold any shares in the Company. Share options are shown below.

Options

Movements in share options during the year were as follows:


	2024	2023
At start of year - number of 1p ordinary shares	14,000,000	14,000,000
Options granted	-	-
Options lapsed	-	-
Options exercised	-	-
At end of year - number of 1p ordinary shares	14,000,000	14,000,000

The options were issued on 3 March 2016 to Ed Comins, Managing Director of the Group and vested on 3 March 2019. The options expire on 2 March 2026. The weighted average exercise price of all options is £0.01.

17 Capital commitments

As at 31 May 2024, the Group had no capital commitments (2023: US$ Nil).

18 Leases

A. Leases as lessee

The Group leases office and racetrack facilities. The office facility is leased until May 2025, with an average length of renewal of between two to three years. The racetrack facility is leased until May 2030, with extensions or renewals typically ranging between three to five years. Extension/renewal is only available to lessor on terms and conditions to be agreed between both parties. All currently available options to extend have been exercised.

The Group also leases additional office facilities with contract terms of no more than one year. These leases are short-term, and the Group has elected not to recognise right-of-use assets and lease liabilities for these leases.

Information about leases for which the Group is a lessee is presented below.

i. Right-of-use assets

Right-of-use assets related to leased properties that do not meet the definition of investment property are presented within property, equipment, and motor vehicles.

Group	Property US$000	Total US$000
Cost
Balance at 1 June 2022	945	945
Additions during the year	61	61
Disposals during the year	(118)	(118)
Balance at 31 May 2023	888	888
Balance at 1 June 2023	888	888
Additions during the year	-	-
Balance at 31 May 2024	888	888


Depreciation
Balance at 1 June 2022	296	296
Charge for the year	108	108
Disposals during the year	(118)	(118)
Balance at 31 May 2023	286	286
Balance at 1 June 2023	286	286
Charge for the year	108	108
Balance at 31 May 2024	394	394
Carrying amounts
At 1 June 2022	649	649
At 31 May 2023	602	602
At 31 May 2024	494	494

ii. Amounts recognised in profit or loss

	2024 US$000	2023 US$000
Interest on lease liabilities	57	59
Depreciation expense	108	108
Rent concessions received	-	(18)
Expenses relating to short-term leases	68	59

iii. Amounts recognised in statement of cash flows

	2024 US$000	2023 US$000
Payment of lease liabilities - principal	(91)	(89)
Payment of lease liabilities - interest	(57)	(59)
Rent concessions received	-	18

19 Related party transactions

Identity of related parties

The Parent Company has a related party relationship with its subsidiaries (see note 10), and with its Directors and executive officers and with Burnbrae Ltd (significant shareholder).

Transactions and balances with and between subsidiaries

Transactions with and between the subsidiaries in the Group, which have been eliminated on consolidation, are considered to be related party transactions. During the year, Webis Holdings plc recharged head office costs to WatchandWager.com Ltd of US$ 259,962 (2023: US$ 238,104) and to WatchandWager.com LLC of US$ 389,944 (2023: US$ 357,156). WatchandWager.com LLC recharged support costs of US$ 7,831 (2023: US$ 8,120) to WatchandWager.com Ltd. At the year end, Webis Holdings plc had receivable balances with WatchandWager.com Ltd of US$ 971,639 (2023: US$ 168,575) and with WatchandWager.com LLC of US$ 522,178 (2023: US$ 511,166). WatchandWager.com Ltd had a receivable balance of US$ 8,485,256 (2023: US$ 7,656,283) with WatchandWager.com LLC. There were no impairments on these balances.

Transactions and balances with entities with significant influence over the Group

Rental and service charges of US$ 43,365 (2023: US$ 41,617) and Directors' fees of US$ 43,987 (2023: US$ 38,681) were charged in the year by Burnbrae Limited, of which Denham Eke is a common Director and Katie Errock an employee. Trade payables at the year-end of US$ 3,582 (2023: US$ 3,580) related to rental and service charges. The Group also had loans of US$ 2,282,555 (2023: US$ 1,350,000) from Galloway Limited, a company related to Burnbrae Limited by common ownership and Directors (note 15). Interest expense of US$ 146,268 (2023: US$ 99,498) was paid on these loans.

Transactions with key management personnel

The total amounts for Directors' remuneration during the year were as follows:

		2024 US$000	2023 US$000
Emoluments	- salaries, bonuses, and taxable benefits	373	368
	- fees	94	105
		467	473

Directors' Emoluments


	Basic salary US$000	Fees US$000	Bonus US$000	Termination payments US$000	Benefits US$000	2024 Total US$000	2023 Total US$000
Executive
Ed Comins	341	-	-	-	32	373	368
Non-executive
Denham Eke*	-	25	-	-	-	25	24
Sir James Mellon	-	2	-	-	-	2	18
Richard Roberts	-	48	-	-	-	48	48
Katie Errock*	-	19	-	-	-	19	15
Aggregate emoluments	341	94	-	-	32	467	473

* Paid to Burnbrae Limited.

14,000,000 share options were issued to Ed Comins (see note 16) during 2016.

20 Financial risk management

Capital structure

The Group's capital structure is as follows:

	2024 US$000	2023 US$000
Cash and cash equivalents	2,410	2,148
Loans and similar liabilities	(2,303)	(1,397)
Net funds	107	751
Shareholders' equity	490	(573)
Capital employed	597	178

The Group's policy is to maintain as strong a capital base as possible, insofar as can be sustained due to the fluctuations in the net results of the Group and the inherent effect this has on the capital structure. The Group monitors costs on an ongoing basis and undertakes actions to grow revenue, with the aim of improving the Group's capital base. The Group does not have any external capital requirements imposed upon it.

The Group's principal financial instruments comprise cash and cash equivalents, trade receivables and payables that arise directly from its operations.

The main purpose of these financial instruments is to finance the Group's operations. The existence of the financial instruments exposes the Group to a number of financial risks, which are described in more detail below.

The principal risks which the Group is exposed to relate to liquidity risks, credit risks and foreign exchange risks.

Liquidity risk

Liquidity risk is the risk that the Group will be unable to meet its financial obligations as they fall due.

The Group's objective is to maintain continuity of funding through trading and share issues but to also retain flexibility through the use of short-term loans if required.

Management controls and monitors the Group's cash flow on a regular basis, including forecasting future cash flow. Banking facilities are kept under review to ensure they meet the Group's requirements. Funds equivalent to customer balances are held in designated bank accounts where applicable to ensure that Isle of Man Gambling Supervision Commission player protection principles are met. Other customer balances are covered by cash funds held within the Group and by receivables due from ADW racetrack settlement partners. The Directors anticipate that the business will maintain sufficient cash flow in the forthcoming period, to meet its immediate financial obligations.

The following are the contractual maturities of financial assets and financial liabilities:

2024

Financial assets

	Carrying amount US$000	Contractual cash flow US$000	6 months or less US$000	Up to 1 year US$000	1-5 years US$000	5+ years US$000
Cash, cash equivalents and restricted cash	3,421	3,421	3,421	-	-	-
Trade receivables	325	325	325	-	-	-
Other receivables	773	773	773	-	-	-
Bonds and deposits	983	983	680	203	-	100
	5,502	5,502	5,199	203	-	100

2023

Financial assets


	Carrying amount US$000	Contractual cash flow US$000	6 months or less US$000	Up to 1 year US$000	1-5 years US$000	5+ years US$000
Cash, cash equivalents and restricted cash	3,285	3,285	3,285	-	-	-
Trade receivables	612	612	612	-	-	-
Other receivables	645	645	645	-	-	-
Bonds and deposits	983	983	683	200	-	100
	5,525	5,525	5,225	200	-	100

2024

Financial liabilities

	Carrying amount US$000	Contractual cash flow US$000	6 months or less US$000	Up to 1 year US$000	1-5 years US$000	5+ years US$000
Trade payables	(597)	(597)	(597)	-	-	-
Amounts due to customers	(1,945)	(1,945)	(1,945)	-	-	-
Other payables and loans	(3,111)	(3,873)	(1,281)	(623)	(1,969)	-
Lease liabilities	(553)	(724)	(27)	(123)	(460)	(114)
	(6,206)	(7,139)	(3,850)	(746)	(2,429)	(114)

2023

Financial liabilities


	Carrying amount US$000	Contractual cash flow US$000	6 months or less US$000	Up to 1 year US$000	1-5 years US$000	5+ years US$000
Trade payables	(436)	(436)	(436)	-	-	-
Amounts due to customers	(2,089)	(2,089)	(2,089)	-	-	-
Other payables and loans	(2,153)	(2,372)	(815)	(406)	(1,151)	-
Lease liabilities	(644)	(872)	(27)	(122)	(493)	(230)
	(5,322)	(5,769)	(3,367)	(528)	(1,644)	(230)

Credit risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation.

Impairment losses on financial assets recognised in profit or loss were as follows:

	2024 US$000	2023 US$000
Non-credit impaired trade receivables	4	7
Credit impaired trade receivables	62	62
Total impairment losses	66	69

The Group's exposure to credit risk is influenced by the characteristics of the individual racetracks and the settling agents operating on behalf of these tracks. The racetracks themselves are influenced by many factors, including the product they offer, supporting sources of revenue they might generate, such as offering simulcast, slots or sports wagering facilities, current economic conditions, ownership structure, state laws and so on, all of which may affect their liquidity and ability to operate.

The Group limits its exposure to credit risk by regular settling and verification of balances due to and from settling agents, with standard terms of one month. While there is on occasion debt that is slower to be settled, historical settlements for at least the last six years show that of the current trade receivable balance, greater than 99% would be expected to be received.

In addition, the majority of the current Group customers have transacted with the Group for five years or more and none of these customers balances have been specifically impaired in that period.

The Group has continued to take a conservative approach to the assessment of the Weighted Average Loss Rate and maintained rates that are considered to reflect the risk that exists under current market conditions.

The following table provides information about exposure to credit risk and expected credit losses for trade receivables as at 31 May 2024:


2024	Weighted Average Loss Rate (%)	Gross Carrying Amount US$000	Loss Allowance US$000	N et Carrying Amount US$000	Credit Impaired
Current (not past due)	0.50%	245	(1)	244	No
1-30 days past due	1.00%	57	(1)	56	No
31-60 days past due	3.00%	10	-	10	No
61-90 days past due	5.00%	7	(1)	6	No
More than 90 days past due	7.00%	10	(1)	9	No
More than 90 days past due	100.00%	62	(62)	-	Yes
		391	(66)	325


2023	Weighted Average Loss Rate (%)	Gross Carrying Amount US$000	Loss Allowance US$000	N et Carrying Amount US$000	Credit Impaired
Current (not past due)	0.50%	421	(2)	419	No
1-30 days past due	1.00%	110	(1)	109	No
31-60 days past due	3.00%	70	(2)	68	No
61-90 days past due	5.00%	6	(1)	5	No
More than 90 days past due	7.00%	12	(1)	11	No
More than 90 days past due	100.00%	62	(62)	-	Yes
		681	(69)	612

The Group uses an allowance matrix to measure the ECLs of trade receivables from racetracks and their settling agents, which comprise a moderate number of balances, ranging from small to large. The Group has reviewed its historical losses over the past four years as well as considering current economic conditions in estimating the loss rates and calculating the corresponding loss allowance.

Classes of financial assets - carrying amounts

	2024 US$000	2023 US$000
Cash and cash equivalents	2,410	2,148
Bonds and deposits	983	983
Trade and other receivables	1,101	1,258
	4,494	4,389

Generally, the maximum credit risk exposure of financial assets is the carrying amount of the financial assets as shown on the face of the Statements of Financial Position (or in the notes to the financial statements). Credit risk, therefore, is only disclosed in circumstances where the maximum potential loss differs significantly from the financial asset's carrying amount.

The maximum exposure to credit risks for receivables in any business segment:

	2024 US$000	2023 US$000
Pari-mutuel	1,101	1,258

Of the above receivables, US$ 325,000 (2023: US$ 612,000) relates to amounts owed from racing tracks. These receivables are actively monitored to avoid significant concentration of credit risk, and the Directors consider there to be no significant concentration of credit risk.

The Directors consider that all the above financial assets that are not impaired for each of the reporting dates under review are of good credit quality. The banks have external credit ratings of at least Baa3 from Moody's.

The credit risk for liquid funds and other short-term financial assets is considered negligible since the counterparties are reputable banks with high-quality external credit ratings.

Interest rate risk

The Group finances its operations mainly through capital with limited levels of borrowings. Cash at bank and in hand earns negligible interest at floating rates, based principally on short-term interbank rates.

Any movement in interest rates would not be considered to have any significant impact on net assets at the balance sheet date as the Group and Parent Company do not have floating rate loans payable.

Foreign currency risks

The Group operates internationally and is subject to transactional foreign currency exposures, primarily with respect to Pounds Sterling, Hong Kong Dollars, and Euros.

The Group does not actively manage the exposures but regularly monitors the Group's currency position and exchange rate movements and makes decisions as appropriate.

At the reporting date the Group had the following exposure:


2024	USD US$000		GBP US$000	EUR US$000	HKD US$000	Total US$000
Current assets	4,200		550	97	557	5,404
Current liabilities	(3,847)		(269)	(41)	(639)	(4,796)
Short-term exposure	353	281		56	(82)	608


2023	USD US$000	GBP US$000	EUR US$000	HKD US$000	Total US$000
Current assets	4,703	114	86	523	5,426
Current liabilities	(3,146)	(334)	(43)	(633)	(4,156)
Short-term exposure	1,557	(220)	43	(110)	1,270

The following table illustrates the sensitivity of the net result for the year and equity with regards to the Group's financial assets and financial liabilities and the US Dollar-Sterling exchange rate, US Dollar-Euro exchange rate and US Dollar-Hong Kong Dollar exchange rate.

A 5% weakening of the US Dollar against the following currencies at 31 May 2024 would have increased / (decreased) equity and profit and loss by the amounts shown below:

2024	GBP US$000	EUR US$000	HKD US$000	Total US$000
Current assets	28	5	28	61
Current liabilities	(14)	(2)	(32)	(48)
Net assets	14	3	(4)	(13)

2023	GBP US$000	EUR US$000	HKD US$000	Total US$000
Current assets	6	4	26	36
Current liabilities	(17)	(2)	(32)	(51)
Net assets	(11)	2	(6)	(15)

A 5% strengthening of the US Dollar against the above currencies would have had the equal but opposite effect on the above currencies to the amounts shown above on the basis that all other variables remain constant.

21 Controlling party and ultimate controlling party

The Directors consider the ultimate controlling party to be Burnbrae Limited and its beneficial owner Jim Mellon by virtue of their combined shareholding of 63.10%.

22 Subsequent events

In November 2024, the Group has agreed funding of US$ 920,000 from Galloway Limited (related entity), in the form of a 5 year term loan, which will support the Group's working capital requirements. The loan will accrue interest at the rate of 13% per annum and is secured against the unencumbered assets of the Group. The loan comprises US$ 550,000 in respect of new funding and an existing debt of US$ 350,000 (plus US$ 20,000 of accrued interest), due and outstanding by the Group to Galloway Limited (see note 15).

In addition, in November 2024, the Company announced that it intends to seek shareholder approval for the cancellation of the admission of its Ordinary Shares to trading on AIM, which if approved by shareholders, would be effective in January 2025.

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