XREALITY GROUP LTD — AGM Information 2015

Oct 26, 2015

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Indoor Skydive Australia Group Limited Chairman’s Address 2015 Annual General Meeting – 27 October 2015

Slides 1 and 2

Good morning ladies and gentlemen and welcome to Indoor Skydive Australia Group Limited’s Annual General Meeting for 2015.

My name is Ken Gillespie and I am the non-executive chairman of Indoor Skydive Australia Group Limited.

As a quorum is present and the meeting is validly constituted, I formally declare the 2015 Indoor Skydive Australia Group Annual General Meeting open.

Slide 3

With me today are my fellow Directors:

• Wayne Jones, also Chief Executive Officer

• Danny Hogan, also Chief Operations Officer

• David Murray,

• Stephen Baxter, and

• Malcolm Thompson, alternative director for Stephen Baxter.

The 2015 Annual Report provides a summary of each director’s experience and their role within the Company along with the statutory reporting which forms the basis of today’s meeting.

The Annual Report was distributed to those shareholders who elected to receive hard copies. It is also available on the ISA Group website: www.indoorskydive.com.au.

Slide 4

Today’s meeting will commence with a brief overview of the key activities undertaken by the ISA Group during the 2015 financial year. This will be followed by an outline of our strategy and then an update on the Australian Tunnel Roll Out.

After these updates, or overviews, we will move to the formal matters to be considered at this meeting.

There will of course be opportunities to ask questions at certain times during the meeting. Management and the Board will also be available at the end of the meeting to meet with shareholders.

Indoor Skydive Australia Group Limited: ACN 154 103 607

IndoorSkydiveAustralia.com.au

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Slide 5

The 2015 financial year was a successful year for ISA Group.

We continue to have a sound balance sheet with assets growing in line with project developments. We are grateful for the continued strong support of our shareholders, including our institutional investors. We thank you for that support.

As we have mentioned previously, we consider traditional debt funding to be the optimal form of funding for the Company’s agility at this point in time. We have received a formal offer for debt funding which, if accepted, provides us with the means to manage contingencies up to the completion of our Perth Facility without additional equity. We are in the process of concluding negotiations and anticipate issuing market announcements on this matter shortly.

2015 was the first full financial year of operations of iFLY Downunder, our Penrith indoor skydiving facility, which proved our company’s operating concept and our business model.

The Penrith operations were profitable, contributing $3.1m EBITDA to the full year results. Importantly, operations were cash flow positive from our initial opening.

Occupancy levels at Penrith continue to steadily increase with the full year overall occupancy levels being 66% compared to 64% at the end of half year period (31 December 2014).

Our first full year of operations also live tested our systems and processes. These processes were fine tuned and performed well, most notably during the high tempo periods, such as the Christmas and school holiday periods.

Our specialised vertical wind tunnel also met all operating expectations during this period. It has proved to be a robust and low maintenance system. Of particular importance to our professional skydiving community, the tunnel is aerodynamically very stable which makes it one of the world’s very best tunnels in which to fly.

The Penrith facility held an inaugural indoor skydiving championships in August this year. While this activity was conducted after the end of the financial year, it is worth noting as it points to the future potential of indoor skydiving as a sport and also for future directions in tunnel use. The event was very successful with 47 teams entering the competition. Teams entered in a number of different disciplines which

Indoor Skydive Australia Group Limited: ACN 154 103 607 p: +61 (0)2 9325 5900 | 2/201 Miller Street, North Sydney NSW 2060 | Australia

IndoorSkydiveAustralia.com.au

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cater for different skill sets and promote indoor skydiving as an interactive team sport for the novice and professional alike.

Slide 6

ISA Group continues to meet its primary strategic focus which is the achievement of local growth. This work has been successful. It is laying the foundations to capitalise on a strong local market potential while concurrently enabling preparatory work for future growth into South East Asia and beyond.

Our current focus is the Australian Tunnel Roll Out and the development of independent local IT and software systems to support local and international growth. The IT solutions being developed will enable us to operate our Group Booking Systems in multiple currencies and countries with different interfaces reflecting the individual requirements of each location.

While we are currently focused on our Australian roll out, we are very mindful of the commercial opportunities in South East Asia and Hong Kong. We are currently undertaking the necessary work to fully understand the markets in these regions, develop relationships with potential partners, and to identify the most appropriate business models to enable us to act on opportunities in this region as they arise.

For all of our opportunities we consider the most appropriate business model to provide the best return for the company including models requiring little or no capital investment.

Our Australian Tunnel Roll Out program leverages off the success of our Penrith Operations. The next two indoor skydiving facilities to be established are at Queensland’s Gold Coast and then Perth.

Our Gold Coast facility is nearing completion and will open by the end of the year. We commenced the promotion of the facility with an early bird pre-sales campaign in September focused on the Gold Coast skydiver/tunnel flyer market. The pre-sales campaign also had the dual purpose of enabling us to test the popularity of the facility prior to its opening.

The early bird sales were well received with over 600 hours sold during the 24 hour pre-sales campaign. This exceeded the number of early bird hours sold in relation to the Penrith facility and established a new record for ISA Group.

A similar pre-sales campaign will be launched for first time flyers later this year, closer to the opening date.

Indoor Skydive Australia Group Limited: ACN 154 103 607 p: +61 (0)2 9325 5900 | 2/201 Miller Street, North Sydney NSW 2060 | Australia

IndoorSkydiveAustralia.com.au

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Our Perth Facility will be ISA Group’s third indoor skydiving facility. Located 5km from the Perth CBD and on the strategic commuter highway between the CBD and domestic and international airports, the facility is expected to open in mid 2016.

The current focus of the works in Perth is to secure key long lead items which are critical to the completion of the works. An example of such items would be the high voltage supply to the facility. Fabrication of the specialised SkyVenture vertical wind tunnel equipment is nearing completion and the site has been prepared for the commencement of works in accordance with our timeline.

We are continuing to investigate the commercial potential for an Adelaide facility and to identify further potential sites in Melbourne and Sydney.

In addition to developing indoor skydiving facilities in our own right, our Exclusive Territory Development Agreement entered into with the US manufacturing company and tunnel operator SkyVenture, gives us the right to invest in each SkyVenture project in the region. SkyVenture has commenced construction on its first project located at Essendon Fields which is expected to open mid 2016. SkyVenture operations will also be marketed and operated under the iFLY Brand.

On completion of our Perth facility ISA Group will have stable operations which will provide the relevant economies of scale to promote further growth with lower additional corporate overhead. We will also have established income streams promoting flexibility and giving us the agility to act on opportunities as they arise.

Slide 7

I would like to take this opportunity to formally thank Wayne Jones, Danny Hogan and their management team for their ongoing and tireless commitment and contribution. Members of the management team are in attendance today, and I would like to introduce:

• Stephen Burns, Chief Financial Officer

• Brett Sheridan, Chief Marketing Officer, and

• Fiona Yiend, General Counsel and Company Secretary.

Please do not hesitate to introduce yourself to the management team during the informal session at the end of the meeting.

Indoor Skydive Australia Group Limited: ACN 154 103 607 p: +61 (0)2 9325 5900 | 2/201 Miller Street, North Sydney NSW 2060 | Australia

IndoorSkydiveAustralia.com.au