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RHYTHMONE PLC ANNOUNCES AUDITED

FULL YEAR FINANCIAL YEAR 2017 RESULTS

Company Returns to Full-Year Underlying Profitability led by 28% Growth of “Core” Revenues

London, England and San Francisco, CA – 15 May 2017 – RhythmOne plc (LSE AIM:

RTHM, “Company” or “Group”), today reports audited results for the year ending 31 March 2017

(“FY2017” or “the Period”). The Company’s FY2017 conference call will be webcast live at

https://investor.rhythmone.com at 9:30AM BST; 4:30AM EST; 1:30AM PST.

Financial Highlights (Audited)

Year ended

Year ended

31 March

31 March

2017

2016

(audited)

(audited)

Change

$000

$000

% or $

Operating Metrics:

Total Revenue1

175,381

166,716

5%

Core Revenue2

149,025

116,058

28%

Non-Core Revenue3 26,356

50,658

(48%)

Adjusted EBITDA4

1,386

(10,475)

$11,861

Cash and Cash Equivalents, and Marketable

Securities 75,204

78,486

(4%)

Statutory Metrics:

Revenue

149,025

116,058

28%

Loss from Continuing Operations (14,029)

(75,527)

$61,499

Loss from Discontinued Operations net of Tax (4,761)

(16,726)

$11,965

Loss for the year

(18,790)

(92,253)

$73,463

Loss per share attributed to RhythmOne Cents

Cents

Cents

Basic

(4.45)

(22.88)

18.43

Loss per share from Continuing Operations

Basic

(3.32)

(18.73)

15.41

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Completed transformational shift to Core mobile, video and programmatic products, resulting

in a return to revenue growth and profitability5;

Significant growth of Core mobile, video and programmatic products that has driven financial

performance across key metrics:

– Total revenues1 of $175.4M, 85% from Core products (FY2016: $166.7M, 70%)

– Core product revenues up 28% to $149.0M (FY2016: $116.1M)

– Adjusted EBITDA4 improvement of $11.9M to $1.4M (FY2016: ($10.5M Loss)

Strong half-on-half growth across key metrics:

– H2 2017 total revenues1 of $94.7M (H1 2017: $80.7M)

– H2 2017 adjusted EBITDA4 of $3.9M (H1 2017: ($2.5M Loss)

Exited all Non-Core products – including sale of Prime Visibility Agency services business;

Completed the acquisition of Perk Inc., a mobile-first supply side rewards, engagement and

content platform, enhancing the Company’s base of unique, engaged audiences;

Invested approximately $5M in product development and capital expenses to strengthen and

improve Core product lines;

Continued cost discipline, with Operating Expense from Continuing Operations before

exceptional costs during the Period of $ $60.6 (FY2016: $73.4M), a decrease of more than

18%, or $12.8M over the previous year; and

Ended the Period with a strong, debt-free balance sheet with over $75.2M in cash and cash

equivalents, and marketable securities;

Operational Highlights

RhythmOne platform now ranks #1 internationally and #2 in the US in quality as measured

by Pixalate (February 2017), and #5 in volume as measured by comScore (February 2017),

featuring within the top 5% of the competitive set;

Core operating KPIs for Continuing Operations for the Period are as follows:

Metric6 H12016 H22016 FY2016 H12017 H22017 FY2017

Volume Billions 4,012.4 6,996.3 11,008.6 7,469.4 13,099.2 20,568.5

Desktop7 % - - - 51.3 42.5 45.7

Mobile7 % - - - 48.7 57.5 54.3

Fill Rate8 % 1.69 0.62 1.01 0.58 0.31 0.41

Price9 $/CPM 0.93 1.22 1.04 1.54 2.01 1.76

Core opportunity volume and price grew by 87% and 69% year-on-year, respectively;

Expanded into 15 new international markets, which collectively represent approximately 10%

of Core programmatic revenues in the Fourth Quarter;

Enhanced proprietary brand safety technology (“RhythmGuard”) through integrations with

leading traffic quality partners, including Grapeshot, WhiteOps, Integral Ad Science,

DoubleVerify and Moat, and ad quality partners, The Media Trust and RiskIQ;

Added 29 programmatic demand side partners, including marquee platforms such as

AppNexus, Drawbridge and Opera Mediaworks;

Expanded programmatic supply relationships – adding 18 new partners including AppNexus,

FreeWheel, MobFox, SwitchConcepts and Teads;

Forged or expanded direct relationships with major brands such as Honda, Nestle, Marzetti,

Ford, Chipotle, McDonalds, US Air Force, DropBox, Square Inc., Delta Faucets, Ocean

Spray, Vistaprint, Mai Jim, JetBlue, Whole Foods, Exxon Mobile, Autozone, ADP, Black &

Decker and Capella University;

Signed over 450 publisher partners, including Lifebuzz, Arkadium, Krush, Cheetah mobile,

Comicbook.com, Spanishdictionary.com, Daily Motion and Twitch; and

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Integrated Perk’s mobile apps and websites into the RhythmMax platform, enabling

programmatic demand partners to access Perk’s engaged user base.

Commenting on the results, S. Brian Mukherjee, CEO of RhythmOne, said:

“The fundamental re-structuring of our business that we set in motion over two years ago is now

complete. We are delighted to report the achievement of our objectives for the year, marking a

dramatic shift in the revenue, product and cost profile of the Company. Driven by programmatic

growth, Core products now represent 85% of total revenues1, compared with 70% in FY2016.

During the Period, the Company took critical steps to definitively exit all remaining Non-Core

product lines that are no longer considered strategic to future growth. The exit of Non-Core

products is expected to eliminate the volatility associated with falling and unpredictable revenue

streams and, on a go forward basis, aligns Company resources and initiatives with dominant

industry growth trends.

RhythmOne has grown into a significant, recognized digital advertising platform with massive

scale, cutting edge technology and quality, differentiated supply. Based on current revenue

dynamics, we expect our unified programmatic platform, RhythmMax, to be the principal driver

of future Company growth. The platform now ranks #1 internationally and #2 in the US in quality

according to Pixalate, Inc. and #5 in volume according to comScore, Inc. We are proud to have

built and scaled what we believe is an industry-leading platform.

The significant steps we took in FY2017 to realign the business around our Core capabilities and

achieve operational efficiency have set the stage for higher quality topline growth and continued

profitability5 in the coming Financial Year. In the Company’s audited FY2017 financial

statements, Core revenue is revenue from Continuing Operations, while Non-Core revenue is

revenue from Discontinued Operations. The Company anticipates FY2018 to be a period of

continued expansion, through both organic efforts and scale acquisitions, as opportunities to

consolidate the industry proliferate.”

Notes:

1. Total revenue is revenue from Core and Non-Core product lines. It comprises revenue

recognized within both Continuing and Discontinued Operations.

2. Core revenue is revenue recognized within Continuing Operations in the audited financial

statements.

3. Non-Core revenue is revenue recognized within Discontinued Operations in the audited

financial statements.

4. This press release contains references to adjusted EBITDA and adjusted Loss for the Period

attributable to equity holders of theparent. These financial measures do not have any

standardized meaning prescribed by IFRS and are therefore referred to as non-GAAP

measures. The non-GAAP measures used by RhythmOne may not be comparable to similar

measures used by other companies. Adjusted EBITDA is defined as profit/(loss) for the year

before finance income and expense, taxes, depreciation and amortisation, share based

payment expense and exceptional costs. Management believes that this measure is a useful

supplemental metric as it provides an indicationof the results generated by the Company’s

principal trading activities prior to consideration of how the results are impacted by non-

recurring costs, how the results are taxed in various jurisdictions, or how the results are

affected by the accounting standards associated with the Group’s share based payment

expense.

5. On an adjusted EBITDA basis.

6. Comparative Core operating metrics are adjusted to include on-platform (RhythmMax) and

off-platform (third-party) products.

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7. Volume of transactions (ad requests) processed through the platform. Volumes are

continuously optimized for performance and yield.

8. Proportion of the transaction volume monetized, which is impacted by seasonality and

fluctuations in demand and supply.

9. Average price across all ad formats, expressed as Cost per Mille or Thousand Impressions.

Press Contacts for RhythmOne

Analyst and Investor Contact

Dan Slivjanovski

RhythmOne plc

Financial Media Contacts

Edward Bridges / Charles Palmer

FTI Consulting LLP

(UK) 020 3727 1000

Nomad and Broker for RhythmOne Nick Westlake (Nomad) / Lorna Tilbian / Mark Lander

Numis Securities Limited

(UK) 020 7260 1000

Overview

RhythmOne’s operating objective for FY2017 was sustainable growth and a return to underlying

profitability5, accomplished through a fundamental restructuring of the Company’s product

portfolio. Over the past two years, RhythmOne continued to invest in its Core strategic

capabilities of mobile, video and programmatic trading. Concurrently, the Company fully exited

Non-Core product lines that no longer are considered strategic to future growth. Importantly, the

measured approach RhythmOne has taken to managing a reduction in the Non-Core cost basis

ensures a neutral to net positive impact on expected future growth and profitability5.

Performance in FY2017 was led by strong growth in Core revenues and, in particular,

programmatic trading. In FY2017, the Company showed a return to underlying profitability5,

delivering approximately $1.4M in adjusted EBITDA4. The performance in the second half of the

year was particularly strong, with H22017 delivering approximately $3.9M in adjusted EBITDA4,

offsetting the adjusted EBITDA4 loss of ($2.5M) in H12017. This performance was fueled by the

rapid expansion of the Company’s unified programmatic platform, RhythmMax. Programmatic

revenues constitute the majority of Core revenues, which experienced an 87% increase in

opportunity volume year-on-year. In addition, the Company integrated Perk Inc.’s mobile and

web inventory into the RhythmMax platform, further driving programmatic revenue growth.

The Company’s product investments during the Period were fully aligned with key industry

growth vectors. Programmatic trading is now well established as the primary buying mechanism

for digital advertising. Over 78% of digital display ad spend will be executed through

programmatic channels in 2017, including $24B for mobile and $9B for video in 2017, according

to eMarketer. This number is anticipated to grow to over 84% of spend by 2019 and the allocation

of spend to mobile and video is projected to show a continued bias toward mobile and video in

the future. The programmatic growth trend points to a significant shift in how online advertising

is being bought and sold. No longer are advertisers buying ads on specific websites as a proxy for

audience segments; rather, they are buying actual audiences, across connected devices and ad

formats, based on measurable data and in real time.

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These fundamental shifts are ushering the “second coming of ad tech”. Within its Core focus, the

Company has identified two key areas of investment and differentiation in order to drive ongoing

growth within this new landscape that include:

1) Unified Programmatic Advertising Platform; and

2) Unique, Quality, Engaged Audiences at Scale

1) Unified Programmatic Advertising Platform

In FY2017, RhythmOne completed its unified, multi-channel, multi-format platform to access the

Company’s owned, controlled and extended advertising inventory. Since inception, the

RhythmMax platform has consistently maintained one of the largest supply footprints in the

industry, ranking as the #5 US platform by comScore as at February 2017 and #8 by Quantcast,

as at March 2017 – making it one of the dominant ad tech platforms in the industry to access

quality, cross-device, multi-format advertising inventory. A majority of the Company’s supply

sources is now aggregated and accessible through RhythmMax, providing advertisers with a

complete and turnkey solution.

Moreover, the platform continues to meet and exceed performance benchmarks relative to

volume, fill rate and pricing. Through RhythmMax, the Company has unified the entire supply

side of the value chain, streamlining interactions between advertisers and consumers, and

enhancing the efficiency and effectiveness of online advertising campaigns.

During the Period, RhythmOne integrated its platform with almost 50 industry-leading

programmatic supply and demand partners, including marquee names such as AppNexus,

Drawbridge and Opera Mediaworks. Demand-side integrations also continued to ramp, including

expansion into 15 new international markets. Simultaneously, RhythmOne attracted new and

repeat advertisers, such as Honda, Nestle, Marzetti, Ford, Chipotle, McDonalds, US Air Force,

Dropbox, Square Inc., Delta Faucets, Ocean Spray, Vistaprint, Maui Jim, JetBlue, Whole Foods,

Exxon Mobile, Autozone, ADP, Black & Decker and Capella University.

During FY2017, the Company continuously enhanced its proprietary brand safety filtering

technology, RhythmGuard, which eliminates suspicious and underperforming traffic before it

reaches the marketplace – improving ROI for advertisers and maximizing yield for quality

publisher partners. According to a study released by the Association of National Advertisers

(“ANA”) in 2016, ad fraud is costing the US marketing and media industry an estimated $7.2

billion each year. An important area of innovation – RhythmOne took steps to package its supply

based upon guaranteed KPIs that align with advertisers’ campaign objectives. In this regard, the

Company has developed private marketplace offerings guaranteeing viewable, verified inventory

in order to drive premium demand.

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Complementing its RhythmGuard brand safety initiative, RhythmOne also partnered with leading

viewability and verification vendors, including White Ops, Integral Ad Science, DoubleVerify,

Moat and Pixalate, whom the Company believes will be instrumental in helping to establish

common standards for the industry. RhythmOne has contributed to shaping these standards

through its work with OpenVV.org, membership in the Interactive Advertising Bureau (“IAB”)

and participation in the Trustworthy Accountability Group (“TAG”) initiative. Equally, on the

Demand side, the Company further enhanced its creative scanning and ad verification processes

through integration with The Media Trust and RisqIQ, the two leading ad quality vendors.

Complementing the significant scale, scope and reach of RhythmMax, brand safety has become

one of the fundamental tenets of the platform. RhythmOne remains committed to providing the

highest levels of quality assurance to its advertising partners as it seeks to maximize the return on

digital advertising spend.

2) Unique Quality, Engaged Audiences at Scale

In addition to platform investments in RhythmMax, the Company sought to distinguish its supply

footprint by offering unique owned, controlled and first-look audiences that are compelling to

advertisers and brands. One of the key accomplishments in FY2017 in support of the audience

initiative, was the acquisition Perk Inc. a mobile-first supply side rewards, engagement and

content platform, in an all-stock transaction. During Q4, the Company integrated Perk’s cross-

device, owned and operated inventory into RhythmOne’s unified programmatic platform,

enhancing the quality and quantity of brand and performance-focused supply, and helping to

further differentiate RhythmOne from other ad tech providers. Perk Inc. joins RhythmOne’s other

owned and operated properties, including All Music, SideReel and Celebified, which collectively

serve as a critical beta platform to enhance quality and targeting algorithms for the Company’s

controlled and extended supply.

The Company also continued to develop several new tools and services to attract and retain

quality, high-value publisher partners. Header bidding is one such tool. Also known as pre-

bidding, header bidding is an increasingly popular programmatic technique that allows publishers

to offer their inventory in advance to select partners, before putting it up for general auction

through the ad server. By letting multiple, higher value demand sources bid on the same

inventory at the same time instead of through a waterfall structure, publishers theoretically are

able to increase their yield and better monetize their content. The Company has developed a

header bidding solution that allows publishers to make RhythmOne one of their select demand

partners, and plans to continue innovating in this area to offer video header bidding, and custom,

server-to-server connections – improving the performance and profit potential of its header bidder

solution.

Another pioneering initiative designed to enhance the experience for RhythmOne publishers is

called Support Free Content. This initiative arose out of the need to recapture revenues lost due to

ad blocking. Support Free Content helps publishers address ad blocking by offering consumers

choice – gating their access to publisher content via a set of monetization options that range from

subscription, to white listing within their ad-blocker, to downloading a browser extension that

provides alternative avenues for monetization.

Finally, the Company’s Advanced Creative Platform (ACP) allows for fast and easy development

and production of highly customized video, rich media and native ad units. This scalable

platform supports the latest industry standards (VAST, VPAID, and MRAID), and allows the

Company to address increasing advertiser demands for transparent viewability and engagement

metrics. As programmatic adoption continues to grow, RhythmOne believes that the ability to

offer bespoke, high impact creative units within its platform, will be a key differentiator – and

another proxy for unique inventory.

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Market

According to eMarketer, online advertising continued to demonstrate strong growth in 2016, a

trend that is expected to extend into 2017 and beyond. Today, worldwide digital ad spend

accounts for 38% of total media ad spend, or approximately $224B of over $591B in total – and

is projected to grow at a 15% CAGR over five years (2016-2020). This represents nearly 6 times

the rate of population growth and exceeds the growth rate of virtually any other industry. By

2020, worldwide digital ad spend is expected to ramp significantly to $330B, which would equate

to almost half (46%) of total media ad spend of over $724B.

Programmatic trading, or the automated buying, selling and fulfillment of ads using technology,

is now the most common buying modality for display, mobile and video advertising. In the US,

eMarketer estimates that programmatic display ad spend will reach $33B in 2017. This is

projected to include $24B for mobile and $9B for video. Programmatic ad spending on mobile

was more than twice the size of programmatic ad spending on desktop in 2016 ($18B vs. $7B), a

ratio that is in-line with the overall state of the US digital ad industry. Moreover, video ads sold

programmatically totaled approximately $6B in 2016, representing 60% of digital video spend

overall. By 2019, that number is expected to climb to $13B and a 77% share.

Key sector trends of note include:

1. The majority of US digital display ad dollars (78%, $33B) will be spent through

programmatic channels in 2017, and that share is expected to rise (84%, $46B) by 2019. Much

of this growth is led by programmatic spend on mobile and video advertising. In 2016, mobile

programmatic accounted for 75% of all mobile display ad spending. For video, 2016 marked the

first year in which more than half of US digital video advertising was sold programmatically –

accounting for 60% of total video ad spend. Within programmatic trading, there is a distinct and

growing trend around “Direct” or “Private Marketplace” transactions, where advertisers can

access select pockets of inventory for fixed premiums.

2. An overwhelming majority of Internet users consumes video. In the US, nearly two-thirds

of the population views digital video. Concurrent with increased consumption, video advertising

spend is projected to increase at 17% CAGR over the next five years. According to eMarketer,

advertisers will spend $13 billion on video this year and that figure is projected to increase

significantly by 2020, reaching an estimated $20 billion.

3. Smartphone and tablet use is surging – and advertising dollars are following suit. In 2017,

81% of US Internet users use a smartphone and 61% use a tablet. In line with this trend, mobile

advertising spending in 2017 is expected to outpace desktop/laptop spending by $34 billion.

Within mobile, video ad spending is projected to reach nearly $6.0 billion in 2017 (over 10% of

total mobile spending).

4. Ad blocking in the US continues to be a concern for online advertisers. As at June, 2016 in

the US, approximately 26% of people use ad blockers. The estimated impact of this trend on

publishers is a potential revenue loss of between 10% and 50%. Publishers are employing a

number of tactics to preserve monetization – serving more “native” ads that are delivered directly

from publishers’ content management systems so that they are harder to block, installing anti-ad

blocking software and enabling pay walls to access content. Currently, the impact of ad blocking

on RhythmOne’s business has been minimal, since the Company only counts unblocked

inventory in its opportunity set. However, ad blocking does highlight a larger trend – the need to

establish a sustainable value exchange equation that is respectful of consumer choice, impactful

for the advertiser, sustainable for the publisher and effective at scale, which makes the

Company’s investments in unique supply and publisher tools even more critical.

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5. Ad fraud, viewability and verification continue to be top-of-mind for advertisers. The

industry has taken critical steps to monitor internally and self-correct this issue. According to the

ANA, ad fraud will cost $7.2B in 2016, up nearly $1B since 2015. Creating an environment for

clean, trustworthy transactions is an industry imperative both for the supply and demand sides of

the value chain. The Company’s proprietary RhythmGuard brand safety technology has been a

significant and differentiating asset, helping to ramp existing Demand sources and onboard new

partners during the Period.

6. Another noteworthy trend is the rise of influencer and native advertising. Both of these

advertising segments allow for brands to authentically connect with consumers, either through

their social channels and communities, or as a more integrated part of the web experience. In

2017, native ad spending is anticipated to reach $22B, with the majority of that ($19B) occurring

through mobile devices. There is also a significant opportunity to realize economies of scale by

delivering these types of advertising programs programmatically. RhythmOne launched its

RhythmInfluence offering during the Period, allowing the Company to participate in the growing

spend associated with this channel. This offering taps into the Company’s programmatic

inventory for increased scale and efficiency.

7. Proprietary data segmentation is driving efficient audience targeting. The ability to marry

third-party segments with a brand’s first party data is one of the ways advertising technology

platforms are seeking to differentiate themselves. According to the IAB, the number one topic

that will command the lion’s share of marketers’ attention in 2017 is cross-channel measurement

and attribution. One of the key benefits that RhythmOne provides is the ability to leverage data

across its significant supply footprint, including data about viewability and verification across

industries. The Company is looking to package this data as part of direct or private marketplace

deals, providing a turnkey method for advertisers to access precisely targeted, performance-

driving audiences.

8. The opportunity is global. Total worldwide digital ad spend is set to grow to $234B in 2017.

Of that, 40% is being spent in the US ($83B). This leaves a significant opportunity for growth

internationally, especially via programmatic advertising. This growth trajectory aligns with

RhythmOne’s plans to expand its programmatic offering. The Company launched the platform in

15 new international markets during the Period, with plans to add additional EU and APAC

markets in FY2018.

9. Industry consolidation continues to increase with the “Second Coming of Ad Tech.”

Figures released by Ad Ops Insider reveal there were over 185 significant M&A transactions in

the Media space from January-December 2016, with values ranging from $10M to $26B –

including such large deals as AT&T (Time Warner), with Microsoft (LinkedIn) and Verizon

(AOL and Yahoo!) being the most notable within the ad tech subsector. Industry consolidation

represents a potential path to scale quickly. As parts of the ecosystem combine and the value

chain is streamlined, there will be opportunities to augment the Company’s ad tech platform and

audience offering. One such opportunity arose in FY2017 which resulted in the acquisition of

Perk Inc., a mobile-first supply side rewards and engagement platform. By integrating Perk’s

mobile apps and websites into its unified programmatic platform, the Company can offer

additional quality, engaged audiences to advertisers – a significant differentiator. The Company

will continue to consider such strategic opportunities as it looks to expand and deepen its demand

and supply base, and strengthen its technology offering.

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Technology & Products

Throughout the Period, RhythmOne continued to invest in products, platforms, research and

development, with a focus on enhancing and expanding the Company’s programmatic trading

capabilities. The Company also invested in products and services to attract high-quality

publishers – including its header bidder product as well as its Support Free Content monetization

solution.

RhythmMax now provides a centralized platform to access cross-device, cross-format

RhythmOne inventory across owned, controlled and extended supply sources. It also provides

advertisers with flexibility in how they purchase, whether through traditional direct deals, private

“walled garden” marketplaces with closed site lists, or via auction-based mechanisms – all of

which use the OpenRTB (Real-Time Bidding) protocol. Through RhythmMax, advertisers can

reach target audiences to achieve measurable ROI at their desired spend level through a single

entry point.

To support this growth, RhythmOne has updated its international data centers and increased

capacity (server and network) across its infrastructure. These integrations let agencies and brands

access RhythmOne’s global inventory on-demand. With programmatic trading gaining in

prominence, RhythmOne’s unified platform allows the Company to represent its inventory

through automated trading channels in a highly efficient manner, at scale. However, the average

fill rate of 0.41% during the period means that less than one half of one percent of this supply was

monetized – representing a massive, captive and known growth opportunity, as additional

demand integrations are completed. Importantly, high-value ad formats such as video, rich media

and native, remain to be fully integrated and scaled, which could materially increase both fill rate

and price.

RhythmOne also made critical enhancements to its RhythmGuard technology, including the

development of automated creative scanning, ad quality verification processes and additional

algorithms to measure the quality of video advertising. These protections help to increase

transparency around supply and demand quality. The result is a highly differentiated marketplace

proposition that allows the Company to enrich inventory made available to advertisers through its

programmatic channels, and drive greater demand. Through RhythmMax, the Company can

provide one of the cleanest sources of pre-filtered, verified and targetable inventory in the

industry, at scale. These capabilities make the platform strategically important to key ecosystem

partners, including Mobile and Cable Carriers, Web, Video and App Developers, Content

Publishers, Trading Desks, Agencies and Marketers. The Company ended FY2017 ranked #1

internationally and #2 in the US on Pixalate’s Trusted Seller Index, featuring in the top 2% of

industry peers globally.

On the supply side, RhythmOne developed several tools designed to attract and retain high-

quality publisher and app developer partners. Specifically, the Company built and released header

bidder functionality, which helps advertisers better monetize their inventory. The Company

intends to continue to improve this functionality as it works with its publisher partners, and

develop functionality for video header bidding, as well as server-to-server integrations. In

addition, as part of the Company’s Support Free Content initiative, RhythmOne built a tool that

helps publishers address ad blocking by offering consumers choice – gating their access to

publisher content via a tree of monetization options. In addition, the Company released a new

version of its software development kit (SDK) for mobile app developers, allowing for easier

installation and campaign management, as well as deeper reporting features. The SDK supports

all standard video and rich media ad units and includes emerging viewability standards for both

display and video.

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Finally, RhythmOne also made enhancements to its Advanced Creative Platform (ACP), a self-

serve utility that allows demand partners to dynamically build custom rich media ads. ACP

allows for fast and easy development and production of highly customized video, rich media and

native ad units. The platform supports the latest industry standards (VAST, VPAID, and

MRAID), and allows the Company to meet advertiser demands for viewability data and detailed

engagement metrics. ACP is expected to drive parallel revenue streams – a modest software-as-a-

service (SaaS) revenue from demand partners that access the tool independently for ad

production, and greater incremental media fees for advertisers that use the tool as a value-add

platform within the RhythmOne programmatic marketplace.

These developments represent a significant step forward as the Company bundles its products and

technology to better serve advertisers and publishers in a competitive and challenging

marketplace, and continues to invest in capacity to drive future growth.

Integration and Operating Discipline

In line with its recent integration initiatives, the Company has fully integrated Perk Inc. into

RhythmOne. The Company reduced its cumulative headcount to 320 from a peak of 360 directly

following the acquisition. The Company continued to build a highly efficient and scalable

programmatic trading platform, which was the principal driver of Core growth during the Period.

Within Core, opportunity volume increased to over 20 trillion requests for the Period with limited

capital investment.

Board Changes During the Period, RhythmOne made a key change to its Board of Directors. Mr. Edward (“Ted”)

Hastings joined the Board as an Executive Director, bringing over 15 years’ experience in

building successful software, Internet and digital media companies.

Financial Results During the Period, total revenue

1 was $175.4M, compared with $166.7M for FY2016. The

Company saw strong growth in its Core revenue, increasing 28% year-on-year to $149.0M. This

has been reported within Continuing Operations on the consolidated Income Statement. Non-Core

revenue was $26.4M and has been reported within Discontinued Operations. The related

businesses lines were either sold or exited as of 31 March 2017. Cost of revenue relating to Continuing Operations increased to $98.5M in the current year,

compared with $72.7M for the year ended 31 March 2016. This cost consists primarily of traffic

acquisition and content partner charges that are directly attributable to revenue generated by the

Company. During the year, the cost of revenue as a percentage of revenue increased due to a shift

in product mix towards higher volume but lower margin products, which was in line with

management expectations. The product mix shift supports management initiatives to transition

more revenue toward programmatic trading, which will benefit from scale. Operating expenses from Continuing Operations before exceptional cost decreased from $73.4M

to $60.6M for the year ended 31 March 2017, and represented 41% of revenue (2016: 63%). The

Company expects operating expenses as a percent of revenue from Continuing Operations to

continue to decline with the ongoing investment in its programmatic trading platform, and to

continue to maintain strong financial discipline. The net loss for the year before income tax and before exceptional costs was $9.6M, down

significantly from $30.0M in the prior year. The net loss for the year after exceptional costs was

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$18.8M compared with $92.3M – which included an impairment charge – the prior year. This

was driven by Core revenue growth, tight operating cost management and significant impairment

losses in FY16. Exceptional costs for the year were $9.2M, of which $3.9M were related to Discontinued

Operations and $5.2M related to Continuing Operations, comprised largely of potential

acquisitions, restructuring and severance charges related to the Perk Inc. acquisition. Prior year

exceptional costs were $65.3M and largely comprised of impairment to goodwill and intangible

assets. At 31 March 2017 the Group had no impairment, with the assessment of goodwill and

intangible assets due to the improved performance of the Group. Management believes adjusted EBITDA

4 provides a better gauge of underlying profitability

5 and

saw an increase of almost $12M year-on-year, ending at $1.4M for FY2017. This improvement

was driven by second half growth with H22017 adjusted EBITDA4 at $3.9M versus ($3.6M)

adjusted EBITDA4 in H2 2016, an improvement of $7.5M.

The Group has maintained a strong balance sheet and liquidity position with cash and cash

equivalents, and marketable securities of $75.2M at 31 March 2017 compared with $78.5M at 31

March 2016, a decrease of $3.3M during the Period. Operating cash flows before movements in

working capital were ($3.8M) compared with ($13.3M) the year prior. Net change in working

capital was lower at ($6.6M) compared with ($10.4M) the prior year. The net change in working

capital was driven by the acquisition of Perk Inc. in fiscal Q4 and the strong revenue growth in

fiscal H22017. The balance sheet remains strong with continued disciplined cash management

and improved product mix. The principal risks and uncertainties affecting the Group remain largely unchanged since those

disclosed in the Annual Report for the year ended 31 March 2016, with the notable additions of

spend concentration among a small number of large, well-established constituents, and

heightened possibility that branded content will appear alongside objectionable or inaccurate

(fake) content.

Outlook

The Company anticipates continued revenue growth throughout Financial Year 2018, led by its

programmatic capabilities. Specifically, RhythmMax is expected to be the primary engine for

growth, facilitating the delivery of targeted, quality audiences, across devices and formats, at

scale – globally. The industry is fast culminating in the “second coming of ad tech”, characterized

by fewer, dominant, better integrated players that are able to deliver sustainable value to both

demand and supply sides of the value chain. The Company now has the unique combination of

technology, talent and relationships in place to scale both organic and inorganic growth as the

industry continues to evolve and consolidate.

In addition to organic growth, the Company also is assessing a number of strategic M&A

opportunities across demand, audience, data science and performance segments of the ecosystem,

as a means to fortify its programmatic base, and augment its scale, financial performance and

long-term competitiveness. Based on diversified growth drivers, RhythmOne enters FY2018 in a

confident position, with a product portfolio that is well aligned with industry growth trends.

12

RhythmOne plc

CONSOLIDATED INCOME STATEMENT

Results for the year to 31 March 2017

(in thousands, except per share amounts)

YEAR ENDED MARCH 31, 2017

YEAR ENDED MARCH 31, 2016

BEFORE

BEFORE

EXCEPTIONAL EXCEPTIONAL

EXCEPTIONAL EXCEPTIONAL

COSTS COSTS TOTAL

COSTS COSTS TOTAL

$000'S $000'S $000'S

$000'S $000'S $000'S

REVENUE 149,025 - 149,025

116,058 - 116,058

Cost of revenue (98,478) - (98,478)

(72,690) - (72,690)

Operating expenses (60,557) (5,245) (65,802)

(73,415) (47,192) (120,607)

LOSS BEFORE TAX AND FINANCE INCOME

(EXPENSE) (10,010) (5,245) (15,255)

(30,047) (47,192) (77,239)

Finance income 631 - 631

256 - 256

Finance expense (266) - (266)

(198) - (198)

LOSS BEFORE INCOME TAXES (9,645) (5,245) (14,890)

(29,989) (47,192) (77,181)

Tax recovery 861 - 861

1,654

1,654

LOSS FROM CONTINUING OPERATIONS (8,784) (5,245) (14,029)

(28,335) (47,192) (75,527)

Discontinued operations

Loss from discontinued operation net of tax (827) (3,934) (4,761)

1,377 (18,103) (16,726)

NET LOSS (9,611) (9,179) (18,790)

(26,958) (65,295) (92,253)

Cents

Cents

LOSS PER SHARE ATTRIBUTABLE TO

RHYTHMONE plc

Basic

(4.45)

(22.88)

Diluted

(4.45)

(22.88)

LOSS PER SHARE ATTRIBUTABLE TO CONTINUING

OPERATIONS

Basic

(3.32)

(18.73)

Diluted

(3.32)

(18.73)

13

RhythmOne plc

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Results for the year to 31 March 2017

(in thousands)

YEAR ENDED

MARCH 31,

2017

YEAR ENDED

MARCH 31,

2017

$000'S

$000'S

LOSS FOR THE YEAR (18,790)

(92,253)

Items which might be potentially reclassified to profit or loss:

Exchange difference on translation of foreign operations 245

(34)

(Loss) / Gains on marketable securities net of tax (27)

19

TOTAL COMPREHENSIVE LOSS FOR THE YEAR (18,572)

(92,268)

14

RhythmOne plc

CONSOLIDATED BALANCE SHEET

As at 31 March 2017

(in thousands)

AS AT

AS AT

31 MARCH

2017

31 MARCH

2016

$000'S

$000'S

ASSETS

NON-CURRENT ASSETS

Goodwill

48,530

37,207

Intangible assets

37,971

24,200

Property, plant and equipment

4,556

3,358

Other receivables and restricted cash

4,686

828

Deferred tax asset

19,271

19,208

Marketable securities

22,864

29,539

137,878

114,340

CURRENT ASSETS

Trade receivables

41,470

22,825

Other receivables

3,433

2,422

Cash and cash equivalents

19,338

18,222

Marketable securities

33,002

30,725

97,243

74,194

TOTAL ASSETS

235,121

188,534

LIABILITIES

NON-CURRENT LIABILITIES

Deferred tax liability

(3,863)

(318)

Other payables

(2,228)

(1,679)

Provisions for liabilities and charges

(1,502)

(5)

(7,593)

(2,002)

CURRENT LIABILITIES

Trade and other payables

(43,386)

(29,894)

Provisions for liabilities and charges

(907)

(700)

(44,293)

(30,594)

TOTAL LIABILITIES

(51,886)

(32,596)

NET ASSETS

183,235

155,938

SHAREHOLDERS' EQUITY

Share capital

8,667

7,537

Share premium account

168,159

168,045

Shares to be issued

24

24

Share based compensation reserve

28,605

26,590

Currency translation reserve

(8,591)

(8,836)

Merger reserve

107,820

65,208

Accumulated other comprehensive income

(8)

19

Retained deficit

(121,441)

(102,649)

TOTAL EQUITY

183,235

155,938

15

RhythmOne plc

CONSOLIDATED CASH FLOW STATEMENT

Results for the year to 31 March 2017

(in thousands)

YEAR ENDED

MARCH 31,

2017

YEAR ENDED

MARCH 31,

2016

$000'S

$000'S

CASH FLOWS FROM OPERATING ACTIVITIES

LOSS FOR THE YEAR (18,790)

(92,253)

Adjustments for:

Taxation (861)

(2,031)

Depreciation and amortization 10,208

26,180

Share based payments 2,015

4,415

Interest income (631)

(256)

Interest expense 266

201

Impairment of goodwill -

50,322

Loss on sale of computer equipment 82

56

Loss on disposition of PVMG assets 3,858

-

Foreign exchange gain 66

3

OPERATING CASH FLOWS BEFORE MOVEMENTS IN

WORKING CAPITAL (3,787)

(13,363)

CHANGES IN OPERATING ASSETS AND LIABILITIES

(Increase) / Decrease in trade and other receivables (11,991)

18,350

Increase / (Decrease) in trade and other payables 7,507

(14,891)

Increase / (Decrease) in provisions 1,704

(490)

(6,567)

(10,394)

Income tax refund received 1,250

4,182

Income tax paid (1,065)

-

NET CASH USED IN OPERATING ACTIVITIES (6,382)

(6,212)

CASH FLOWS FROM INVESTING ACTIVITIES

Interest received 631

256

Purchase of property, plant and equipment (2,394)

(741)

Capitalization of internal development charges (3,266)

(4,353)

Purchase of marketable securities (631)

(60,245)

Payment of deferred acquisition consideration (499)

(5,000)

Proceeds from the sale of property, plant and equipment -

4

Proceeds on disposition of PVMG assets 1,064

-

Proceeds of marketable securities 5,002

-

Acquisitions, net of cash acquired 10,229

-

NET CASH FROM / (USED IN) INVESTING ACTIVITIES 10,136

(70,079)

CASH FLOWS FROM FINANCING ACTIVITIES

Net payments on finance lease (1,050)

(1,080)

Interest payments (187)

(198)

Payment of credit facility (1,507)

-

Proceeds from issuance of shares 159

64

NET CASH USED IN FINANCING ACTIVITIES (2,585)

(1,214)

Net increase / (decrease) in cash and cash equivalents 1,169

(77,505)

Beginning cash and cash equivalents 18,222

95,734

Effect of foreign exchange on cash and cash equivalents (53)

(7)

ENDING CASH AND CASH EQUIVALENTS 19,338

18,222

16

RhythmOne plc

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Results for the year to 31 March 2017

(in thousands)

ORDINARY

SHARE

SHARES

SHARE BASED

CURRENCY

RETAINED

SHARE

PREMIUM

TO BE

COMPENSATION

TRANSLATION

MERGER

OTHER

(DEFICIT)/

TOTAL

CAPITAL

ACCOUNT

ISSUED

RESERVE

RESERVE

RESERVE

RESERVES

EARNINGS

EQUITY

$000'S

$000'S

$000'S

$000'S

$000'S

$000'S

$000'S

$000'S

$000'S

BALANCE AS AT 31

MARCH 2015

7,502

168,008

1,686

22,175

(8,802)

63,554

-

(10,426)

243,697

Net loss for the year

-

-

-

-

-

-

-

(92,253)

(92,253)

Other comprehensive loss

-

-

-

-

(34)

-

19

-

(15)

Total comprehensive loss for

the year

-

-

-

-

(34)

-

19

(92,253)

(92,268)

Issue of shares, net of costs

35

37

(1,662)

-

-

1,654

-

-

64

Credit to equity for Share

based payments

-

-

-

4,415

-

-

-

-

4,415 Tax movement on share

options

-

-

-

-

-

-

-

30

30

BALANCE AS AT 31

MARCH 2016

7,537

168,045

24

26,590

(8,836)

65,208

19

(102,649)

155,938

Net loss for the year

-

-

-

-

-

-

-

(18,790)

(18,790)

Other comprehensive loss

-

-

-

-

245

-

(27)

-

218

Total comprehensive loss for

the year

-

-

-

-

245

-

(27)

(18,790)

(18,572)

Issue of shares, net of costs

1,130

114

-

-

-

42,612

-

(2)

43,854

Credit to equity for Share

based payments

-

-

-

2,015

-

-

-

-

2,015

BALANCE AS AT 31

MARCH 2017

8,667

168,159

24

28,605

(8,591)

107,820

(8)

(121,441)

183,235

17

RhythmOne plc

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

1. Basis of preparation

This consolidated financial information has been prepared in accordance with the EU adopted

International Financial Reporting Standards (IFRSs), IFRS Interpretations Committee and

those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The

accounting policies adopted are consistent with those described in the Annual Report and

Accounts 2016 which have not changed. The financial information set out in this document

does not constitute statutory accounts for the years ended 31 March 2016 or 31 March 2017

but is derived from the Annual Report and Accounts 2017. The Annual Report and Accounts

for 2016 have been delivered to the Registrar of Companies and the Annual Report and

Accounts for 2017 will be delivered to the Registrar of Companies in due course. The

auditors have reported on those accounts and have given an unqualified report which does not

contain a statement under Chapter 3 of Part 16 of the Companies Act 2006. Full financial

statements that comply with IFRSs are included in the Annual Report and Accounts 2017

which will be made available to shareholders in due course.

The Directors have considered the financial resources of the Group and the risks associated

with doing business in the current economic environment and believe that the Group is well

placed to manage these risks successfully. In doing this, the Board has prepared a business

plan and cash flow forecast setting out key business assumptions, including the rate of

revenue growth, discount rate, terminal growth rate and cost control. The Directors have

considered these assumptions to be reasonable and that the Group has adequate resources to

continue in operational existence for the foreseeable future being a period of no less than 12

months from the date of this announcement. Accordingly, they continue to adopt the going

concern basis in preparing these financial statements.

2. Share-based payments

Included within operating costs are share based payments for the year ended 31 March 2017

was $2.0m (2016: $4.4m).

3. Taxation

The tax credit from Continued Operations for the year ended 31 March 2017 was $0.9M

(2016: tax credit $1.7M).

18

4. Earnings per share

The calculation of the basic and diluted earnings per share is based on the following

information.

YEAR

ENDED

YEAR

ENDED

31-MARCH

2017

31-MARCH

2016

$'000

$'000

(LOSS)/PROFIT

(Loss)/profit used in calculation of basic and diluted earnings per share

(18,790)

(92,253)

(Loss)/profit used in calculation of basic and diluted earnings per share from

continuing operations

(14,029)

(75,527)

SHARES

SHARES

NUMBER OF SHARES

Weighted average number of shares for the purpose of basic and adjusted* basic

earnings per share

422,606,922

403,198,763

Weighted average number of shares for the purpose of diluted and adjusted*

diluted earnings per share

422,606,922

403,198,763

5. Goodwill

During the period, RhythmOne consolidated certain product, infrastructure, sales and

marketing efforts under its trade name, RhythmOne. The Adkarma CGU was consolidated

with RhythmOne resulting in the goodwill associated with AdKarma being reclassified to the

RhythmOne CGU.

The key assumptions for the value in use calculations are those regarding the discount rates,

revenue growth rates and terminal growth rate. The Group prepares cash flow forecasts

derived from the most recent financial budgets approved by management for the next five

years and extrapolates cash flows into perpetuity using a terminal growth rate. The cash flow

forecasts were prepared using an average revenue growth rate of 6% per year for RhythmOne

and 4.7% per year for Perk and an average expense decrease in the rate of 1.7% for

RhythmOne and 3.8% for Perk respectively. The cash flows beyond the five year period are

extrapolated into perpetuity using a terminal growth rate of 2% (2016: 2%). This rate is based

on an estimated long-term growth rate for the industry and countries in which RhythmOne

operates, and does not exceed the average long-term growth rate for the relevant markets

based on the historical Consumer Price Index in the United States. The assumptions for

growth rates are based on past experience of each CGU’s trading performance and are

consistent with industry analyst expectations. The assumptions used differ between CGU’s,

reflecting the differences in products, customers and suppliers between each CGU.

The pre-tax rate used to discount the forecast cash flows is 21.6% (2016: 19%) for all CGUs.

Management estimates discount rates using pre-tax rates that reflect current market

assessments of the time value of money and the risks specific to the CGUs.

No reasonable changes in assumptions would lead to an impairment of the goodwill.

19

Goodwill:

As at 31

March 2016

Reclassifications

and acquisition

adjustments

Reclassification

As at 31

March 2017

$'000

$'000

$'000

$'000

RhythmOne 21,086

10,000

31,086

PVMG 6,121

(6,121)

-

-

AdKarma 10,000

(10,000)

-

Perk Inc

17,444

17,444

Total 37,207

11,323

-

48,530

6. Exceptional Costs from Continuing Operations

Large one-off acquisition and exceptional costs are separately identified and adjusted results

are reviewed. The types of costs included within acquisition costs are those that are directly

attributable to an acquisition, such as legal and accounting expenses, integration costs,

severance costs and retention remuneration. The types of costs that are considered

exceptional include goodwill impairment, accelerated charges related to change in intangible

asset lives, severance costs and one-time integration charges.

Acquisition and exceptional costs:

Year ended

Year ended

31-Mar

31-Mar

2017

2016

$000's

$000's

Acquisition costs:

Severance and retention costs

217

825

Onerous lease

917

-

Professional fees

1,301

309

Total acquisition costs

2,435

1,134

Exceptional costs:

Goodwill impairment

-

32,363

Change in intangible assets lives

-

12,027

Restructuring charges

2,042

595

Severance costs

768

1,073

Total exceptional costs

2,810

46,058

Total acquisition and exceptional costs

5,245

47,192

7. Share capital

The Company has one class of ordinary share, which carries no right to fixed income.

During the current year 90,631,068 shares were issued, of which 88,235,410 shares related to

the acquisition of Perk, 1,588,301 shares related to exercise of employee share options and

807,357 shares related to restricted stock units. (2016: 2,136,359 shares were issued, of which

512,877 shares related to the acquisition of Rhythm NewMedia Inc., 255,980 shares related to

exercise of employee share options and 1,367,502 shares related to restricted stock units).

20

8. Shares to be Issued and Merger reserve

The shares to be issued reserve relates to shares that are expected to be issued to former Burst

shareholders as part of the consideration who have not yet submitted the paperwork to effect

the exchange of Burst shares for RhythmOne shares.

The merger reserve arises in business combinations where shares are issued for greater than

90% of consideration. The difference between the fair value and the nominal value of the

shares transferred as consideration is taken to the merger reserve.

9. Related party transactions

Balances and transactions between the Company and its subsidiaries, which are related

parties, have been eliminated on consolidation and are not disclosed in this note.

The remuneration of the Directors, who are the Group’s key management personnel, in

accordance with IAS 24 Related Party Disclosures, is disclosed in the Directors’

Remuneration Report in our Annual report.

There were no other related party transactions in either the current or prior year.

21

10. Discontinued Operations

On March 31, 2017, the Company discontinued its Non-Core business operations. This included ceasing the operations of its consumer business

activities and the sale of certain assets and specific liabilities of Prime Visibility Media Group (“PVMG”). The results of these operations are

presented as Discontinued Operations in the Group’s Income Statement. The comparatives have been restated to show the Discontinued Operations

separately from the Continued Operations. Management committed to a plan to discontinue Non-Core operations and sell certain assets and specific

liabilities of PVMG and the disposals were finalized on March 31, 2017. Results of the Discontinued Operations for the periods presented are as

follows:

YEAR ENDED MARCH 31, 2017

YEAR ENDED MARCH 31, 2016

Before

Before

Exceptional Exceptional

Exceptional Exceptional

Costs Costs Total

Costs Costs Total

$000's $000's $000's

$000's $000's $000's

Revenue

26,356 - 26,356

50,658 - 50,658

Cost of revenue

(13,779) - (13,779)

(27,750) - (27,750)

Operating expenses

(13,404) (76) (13,480)

(21,904) (18,103) (40,007)

Loss before tax and loss on other items

(827) (76) (903)

1,003 (18,103) (17,100)

Other expense

- - -

-

-

Finance expense

- - -

(3)

(3)

Loss on disposition of assets

- (3,858) (3,858)

- - -

Loss before income taxes

(827) (3,934) (4,761)

1,000 (18,103) (17,103)

Tax recovery / (expense)

- - -

377 - 377

Profit/(loss)

(827) (3,934) (4,761)

1,377 (18,103) (16,726)

CENTS

CENTS

LOSS PER SHARE

BASIC

(1.13)

(4.15)

DILUTED

(1.13)

(4.15)

22

CASH FLOWS FROM / (USED IN) DISCONTINUED OPERATIONS

31 MARCH

2017

31 MARCH

2016

$000's $000's

Net cash (used in) / from operating activities

(776) 5,439

Net cash from / (used in) investing activities

948 (206)

Net cash (used in) financing activities

(438) (5,791)

Net cash (used in) discontinued operations (266) (558)

CONSIDERATION RECEIVED FOR SALE OF CERTAIN ASSETS AND SPECIFIC

LIABILITIES OF PVMG

31 MARCH

2017

$000's

Consideration received from the purchaser:

Cash consideration received

1,064

Deferred sales proceeds (a)

2,450

3,514

DETAILS OF NET ASSETS AND LIABILITIES OF PVMG DISPOSED OF ARE AS FOLLOWS

31 MARCH

2017

$000's

Assets disposed of:

Prepaid expenses

14

Property and equipment

15

Intangible assets

922

Goodwill

6,121

7,072

LOSS ON DISPOSITION OF ASSETS AND LIABILITIES OF PVMG

31 MARCH

2017

$000's

Consideration received 3,514

Transaction costs (300)

Net assets of PVMG disposed of

(7,072)

(3,858)

NET CASH INFLOW ON DISPOSAL OF PVMG

31 MARCH

2017

$000's

Consideration received, satisfied in cash 1,064

Transaction costs

(300)

764

23

11. Business Combination

On January 19, 2017, the Company acquired 100% of the issued and outstanding shares of

Perk Inc. (“Perk”), a Waterloo, Ontario, Canada based innovator in rewarded video for

mobile devices for consideration of $43.7m. The acquisition accelerates the Company’s

strategy to build a unified programmatic platform with unique audiences of uniform quality at

scale. Through Perk, RhythmOne plc gains access to a number of premium consumer mobile

apps and web properties, adding exclusive inventory to the Company’s supply side portfolio,

as well as strategic demand relationships. The Company issued 88,235,410 of its common

shares with a value of $43.7m in consideration for the acquisition.

The acquisition was accounted for using the acquisition method in accordance with IFRS 3,

Business Combinations, with the results of operations consolidated with those of the

Company effective January 19, 2017. Transaction costs of $0.9m were recorded in

transaction costs within net loss.

The provisional allocation of the purchase price as follows is subject to change once

management has finalized the acquisition accounting:

$000's

PURCHASE CONSIDERATION

Consideration in the Company’s shares (88,235,410 common shares) 43,697

ASSETS

Current assets

Cash 10,229

Trade accounts receivable 10,255

Other receivables 1,753

Property plant and equipment 630

Software 99

Trade names and trademarks 5,400

Technology related assets 4,700

Customer relationships & user base 9,700

LIABILITIES

Current liabilities

Trade and other payables (9,058)

Term loans (832)

Provisions (300)

Income tax payable (953)

Term loans (675)

Deferred tax liabilities (4,695)

PROVISIONAL FAIR VALUE OF NET IDENTIFIABLE ASSETS AND

LIABILITIES ASSUMED 26,253

PROVISIONAL GOODWILL 17,444