Annual report Global Gaming 555 AB

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1 Annual report 2015 Global Gaming 555 AB

2 1 ( 14 ) The Board of Directors and the managing director of Global Gaming 555 AB hereby present the financial statements for the year Directors' report Information on the business. The "Company" refers in the text below to Global Gaming 555 AB including other group companies where applicable. The company's business activities consist of management, consulting in IT, production and sales (license) of software as well as through subsidiaries' games on the Internet and related activities. Subsidiaries and the valuation At the end of the financial year are the following wholly owned subsidiaries: -LMA Gaming Ltd on Cyprus -Elec Games Ltd on Malta -Elec Games Holding Ltd and Elec Games C1 on Malta during formation -Winlando Group OU in Estonia As part of the financial statements of work and as a preparation for the intended note, a valuation model has been drawn up so as to continuously and under a repeatable model determine the book value of the subsidiaries. The Board of Directors decided in the autumn of 2015 to liquidate LMA Gaming Ltd on Cyprus to focus operations on Winlando Group OU in Tallinn, Estonia. In the context of this, the agreement with existing gaming service supplier, the main asset in LMA Gaming, was transferred to Elec Games Ltd. The result of the changed activities and transfer of assets between subsidiaries is that the valuation of LMA Gaming Ltd and Winlando Group OU is written down to correspond to the restricted equity and that based on the valuation model the value of Elec Games Ltd are written up. Products and services Own brands The company has through its subsidiary Elec Games Ltd on Malta previously operated the brand TerminalPoker as a showcase for the Company's products. As a result of the purchase of Winlando Group, KotiKasino.com came about, a casino fully focused on the Finnish market.

3 2 ( 14 ) Since 2009, LMA Gaming Ltd has operated: Netticasino.com (Finland) Viking Slots (Sweden, Norway, Finland, English/International) Nettiarpa & Kultakaivos (Finland) Crazy Scratch & Slots and Games Mrspil.dk (Denmark) Lyckoskrapet (Sweden) Slotsngames.co.uk, BritsBingo & Bingohalli Turnkey The CRM system Turnkey (which was originally developed for the own brand TerminalPoker managed by the subsidiary Elec Games Ltd) has during the year acquired a number of new customers and constitutes the technical platform for the majority of sales and revenues in the subsidiary Elec Games Ltd. The strength of the product is that it is complete and available even for smaller customers. Many similar systems on the market have either higher demands for new partners in the form of capital or technology skills and/or are dependent on the partners having their own game licenses, agreements with payment services and other external systems such as management of affiliates. The system has during the year been integrated into a number of new casino suppliers. Poker InstaDeal Poker is the company's original product and has been supplied both as a stand-alone installation, service for existing gaming operators and as part of the Company's turnkey CRM solution (Turnkey). The unique feature of the product is that the players, instead of taking place at a virtual table, sign up for a pool with a desired game and input. As soon as the required number of players are in the pool, they are put out on a game table and a hand is played. Once a player has completed a hand, he comes into the pool again and as a rule will within a second come to a new table and receives new cards immediately. This type of poker is 3 to 4 times faster compared to playing on a traditional online table. Significant events during the financial year Merger with LMA Gaming Ltd through a non-cash issue Common business contacts and an interest for the Company's Turnkey product led to the board of directors in the spring of 2015 initiating talks with LMA Gaming Ltd, a company on Cyprus which markets a number of casino sites on a different technical platform. These talks led to a decision at the Annual General Meeting on 2 June 2015 that the Company would acquire LMA Gaming through a non-cash issue in exchange for shares of a value of SEK 80,448,000. This process was completed during the autumn of 2015.

4 3 ( 14 ) The purpose of the transaction is to move the brands and customers to their own platform and in this way increase the profitability of the merged businesses and strengthen the Company for a planned listing of the Company. Cash issue One of the conditions for the implementation of the aforementioned non-cash issue was that the Company paid off debts to the main shareholders. A decision on a cash issue was taken at the Annual General Meeting on 2 June 2015, which brought the company SEK 3 million. EU license A prerequisite for being able to move the customers which LMA Gaming has to one of the Company's subsidiary is that a new gaming license in Malta is obtained. During the autumn of 2015, this was began by forming a new wholly owned subsidiary on Malta: Elec Games Holding Ltd which in turn owns Elec Games C1 Ltd. Acquisition of Winlando Group OU The Company has in the past through subsidiaries purchased customer service functions from a third party. During the autumn of 2015, the Board of Directors made a decision to purchase Winlando Group OU in Tallinn, Estonia. Up until this point, the founder of Winlando operated a successful brand ( on the Company's Platform through the subsidiary Elec Games Ltd on Malta. Through the acquisition, the group gained access to the revenue from this brand, the founder's skills and contact network as well as a company on which a full-scale support organisation can be built for the Nordic market. Change of business Driven by the merger with LMA Gaming, all companies in the group are now focusing on developing, supplying and operating casino gaming sites. This also means that the Company's previous main product InstaDeal Poker is no longer to be further developed and/or offered to new customers. Significant events after the end of the financial year Expansion in Tallinn The expansion of Winlando Group OU in Tallinn will continue at a high level. At the end of the year, the subsidiary is estimated to have about 20 employees. Liquidation of LMA Gaming The liquidation of operations in LMA Gaming Ltd on Cyprus is expected to be completed during the Q whereby the liquidation of the subsidiary will be completed. EU license The work with Class 1 license on Malta continues and is expected to be completed during Q

5 4 ( 14 ) Decommissioning of poker As a direct result of the changing business focus, a number of the Company's customers of the subsidiary Elec Games Ltd were informed early in the year that the poker as a service will no longer be provided. All poker, including its own previous reference page TerminalPoker was phased out before the end of the first quarter of Change of name At the Extraordinary General Meeting on 16 February 2016, it was decided that the Company would change its name to Global Gaming 555 AB to reflect the current merged business. Also the Company description was updated. Agreement with Aktietorget In 2016, the Board of Directors made a decision to conclude a contract with Aktietorget as a trading place for the Company's share. The work of preparing the Company for the listing has been initiated. Risks In addition to the economic risks, there are risks that the markets can be regulated in terms of gameplay which may affect the Company's sales. Financing During the financial year, the Company has been financed by the income from current operations and the completion of issue. Multi-year review (tsek) /11 Net sales 8, Profit after net financial items -82,077-8,828-7,876-7,655-5,595 Balance sheet total 64,165 19,981 14,928 17,575 15,306 Equity 58,768 16,211 11,243 16,319 14,775 Financial strength 92% 81% 75% 93% 97% Proposed disposition of the company's losses The Board of Directors proposes that the funds available for: Retained earnings -37,182,297 Share premium reserve 98,163,500 Loss for the year -81,803,149 Total -20,821,946 Disposed of as follows: To be carried forward to new account -20,821,946 Total -20,821,946

6 5 ( 14 ) With regard to the performance of the company and other status, refer to the following income statements and balance sheets with additional information. Income statement /01/2014 Amounts in SEK Note Net sales 8,619, ,412 Other operating income 86,241 12,214 8,705, ,626 Operating expenses Raw materials and consumables -351,602 0 Other external costs 1-1,518,172-1,477,554 Personnel costs 2-5,848,083-4,716,688 Depreciation of tangible fixed assets , ,233 Other operating expenses -1,992,320-62,470-9,765,660-7,068,945 OPERATING INCOME -1,060,183-6,589,319 Result from financial items Result from shares in group companies 5-80,720,803-2,245,602 Other interest income and similar income statement items ,766 Interest expenses -295,643-29,003-81,016,401-2,238,839 PROFIT AFTER NET FINANCIAL ITEMS -82,076,584-8,828,158 PROFIT BEFORE TAX -82,076,584-8,828,158 Tax on profit for the year 7 273,435 9,795,810 PROFIT FOR THE YEAR -81,803, ,652

7 6 ( 14 ) Balance sheet Amounts in SEK Note ASSETS Fixed Assets Intangible fixed assets Capitalised expenditure for development work 3 0 1,782, ,782,167 Tangible fixed assets Equipment, tools and installations 4 99, ,702 99, ,702 Financial fixed assets Shares in group companies ,900,000 4,087,200 Advances 383,063 0 Deferred tax assets 10 10,069,245 9,795,810 Deposits 114, ,151 56,466,459 13,997,161 Total fixed assets 56,565,753 15,884,030 Current assets Inventories, etc. Trade goods 0 351,602 Current receivables Accounts receivables 0 35,045 Receivables from group companies 11 7,245,313 3,275,768 Other receivables 85,932 79,638 Prepaid expenses and accrued income 121,678 57,076 7,452,923 3,447,527 Cash and bank balances 146, ,676 Total current assets 7,599,421 4,096,805 TOTAL ASSETS 64,165,174 19,980,835

8 7 ( 14 ) Balance sheet Amounts in SEK Note EQUITY AND LIABILITIES Equity 12 Restricted equity Share capital 38,677,500 12,600,000 Revaluation reserve 40,912, ,590,300 12,600,000 Unrestricted equity Share premium reserve 98,163,500 40,793,000 Profit or loss brought forward -37,182,297-38,149,950 Net profit for the year -81,803, ,652-20,821,946 3,610,702 Total equity 58,768,354 16,210,702 Current liabilities Supplier debts 99, ,134 Current tax liabilities 13,502 72,995 Other liabilities 3,847,533 2,527,404 Accrued expenses and deferred income 1,435, ,600 5,396,820 3,770,133 Total liabilities 5,396,820 3,770,133 TOTAL EQUITY AND LIABILITIES 64,165,174 19,980,835 Pledged assets Other 114, ,151 Contingent liabilities None None

9 8 ( 14 ) Additional information General information The financial statements have been prepared in accordance with the Swedish Annual Accounts Act and the Swedish Accounting Standards Board general advice BFNAR 2012:1 Annual Report and consolidated financial statements (K3). The Company is a parent company, but with reference to the exemptions in the Annual Accounts Act chapter 7, paragraph 3, no consolidated accounts will be created. In the parent company's total purchase, SEK 0 concern subsidiary companies and of sales SEK 7,776 concern subsidiaries. Other assets and liabilities have been recognised at acquisition value unless otherwise specified. Receivables are reported at the amounts expected to be received. Revenue is recognised at fair value of what the company received or will receive. This means that the company reports income at the nominal value (invoice amount) if the company receives payment in cash directly at delivery. Deductions are made for discounts granted. Fixed assets Fixed assets are reported at acquisition value reduced by accumulated depreciation according to plan and any impairment depreciations. Intangible fixed assets 20% Tangible fixed assets 20% Leasing All leasing agreements are reported as operational leasing agreements. Foreign currency items Monetary items in foreign currencies are recalculated at the closing day rate. Non-monetary items are recalculated, but are reported at the exchange rate at the time of acquisition. Financial assets and liabilities Financial assets and liabilities are reported in accordance with Chapter 11 (Financial instruments valued on the basis of acquisition value) in BFNAR 2012:1. Remuneration for employees. Defined contribution plans The charges for defined contribution plans are recognised as an expense. Unpaid expenses are recognised as a liability. Plans for which pension premiums will be paid are reported as a defined contribution which means that the expenses are recognised as an expense in the income statement.

10 9 ( 14 ) Remuneration with terminations, to the extent that the remuneration does not give the company any future economic benefits are reported only as a liability and an expense when the company has a legal or constructive obligation to either a) end the employment of an employee or group of employees before the normal retirement date, or b) provide termination benefits as a result of an offer made to encourage voluntary resignation. Remuneration with terminations will only be recognised when the company has a detailed plan for the termination and has no real possibility to cancel the plan. Tax Tax on profit for the year in the profit and loss account consists of current tax and deferred tax. Current tax is tax on income for the current financial year relating to annual taxable profit and the part of the previous financial year's income tax which has not yet been declared. Deferred tax is the income tax for taxable profit concerning the future financial year as a result of past transactions or events. Deferred tax liability is recognised for all taxable temporary differences, but deferred tax on untaxed reserves is not reported separately as untaxed reserves are reported as a separate item in the balance sheet. Deferred tax assets are recognised for deductible temporary differences and for the future ability to use tax loss carryforwards. The valuation is based on how the carrying value of the corresponding assets or liabilities are expected to be recovered or settled. The amounts are based on the tax rates and tax regulations approved before the balance sheet date and have not been discounted to present value.

11 10 ( 14 ) Notes Note 1 Leasing agreement Future minimum lease payments concerning non-cancellable operating leasing agreement. Within one year 244, ,339 Between one and five years 203, ,263 Later than five years /01/ /01/2014 The year's paid leasing payments 210, ,234 Note 2 Employees and personnel costs 01/01/ /01/2014 Average number of employees Women 1 1 Men Salaries, other remuneration and social security expenses Salaries 3,969,342 3,388,771 Social expenses 1,676,734 1,401,051 (of which pension costs) (338,090) (293,584) Total salaries, other remuneration and social security expenses 5,646,076 4,789,822 Note 3 Capitalized expenditures for development work Acquisition values 3,761,418 3,761,418 Sales and disposals -3,761, ,761,418 Depreciation -1,979,251-1,226,966 Sales and disposals 1,979,251 0 Depreciation for the year according to plan 0-752, ,979,251 Reported value at year-end 0 1,782,167

12 11 ( 14 ) Note 4 Equipment, tools and installations Acquisition values 531, ,368 Purchase 52,237 0 Sales and disposals -262, , , ,758 Depreciation -427, ,247 Sales and disposals 260,775 52,140 Depreciation for the year according to plan -55,483-59, , ,056 Reported value at year-end 99, ,702 Note 5 Result from shares in group companies 01/01/ /01/2014 Impairment of the receivable Elec Games Alderney 0-2,245,602 Dividends from subsidiaries 6,265,597 0 Depreciation of shares in subsidiaries -86,986, ,720,803-2,245,602 Note 6 Other interest income and similar income statement items 01/01/ /01/2014 Other interest income 45 2,078 Exchange rate differences 0 33, ,766

13 12 ( 14 ) Note 7 Tax on earnings for the year 01/01/ /01/2014 Current tax revenue 0 0 Deferred tax 273,435 9,795,810 Reconciliation of effective tax. Profit before tax -82,076,584-8,828,158 Tax in accordance with the applicable tax rate for the parent company 22% 18,056,848 22% 1,942,195 Non-deductible expenses 22% -19,161,854 22% -510,358 Non-taxable revenues 22% 1,378,441 22% 0 The use of previously capitalised loss carryforwards 22% 0 22% 0 Activation of the previous loss carryforwards 22% 0 22% 8,363,973 Reported effective tax 273,435 9,795,810 Note 8 Shares in group companies Acquisition values 4,087,200 4,087,200 Purchase 87,886, ,973,600 4,087,200 Revaluations 40,912, ,912,800 0 Depreciations -86,986, ,986,400 0 Reported value at year-end 45,900,000 4,087,200

14 13 ( 14 ) Note 9 Specification of participations in group companies Share capital Share of votes Book value LMA Gaming Limited 100% 100% 200,000 Elec Games Ltd 100% 100% 45,000, % 100% 700,000 45,900,000 Org. no. Seat LMA Gaming Limited HE Cyprus Elec Games Ltd C44158 Malta Winlando Group OÜ Estonia Elec Games Ltd owns 100% of Elec Games Network, Costa Rica. Elec Games Ltd owns 100% of Elec Games N.V., Curacao. Note 10 Deferred tax assets and deferred tax liabilities Deferred Deferred 31/12/2015 tax asset Tax liability Net Taxable loss carry-forwards 10,069, ,049,567 Deferred Deferred 31/12/2014 tax asset Tax liability Net Taxable loss carry-forwards 9,795, ,795,810 Taxable loss carry-forwards 45,769,297 44,526,409 Note 11 Receivables, group companies Elec Games Ltd Malta 3,398,827 3,275,768 LMA Gaming Limited 3,841,048 0 Winlando Group OÜ 5, ,245,313 3,275,768

15 14 ( 14 ) Note 12 Equity Number of shares: 38,677,500 Amount at the beginning of the year Share Revaluation Share premium Balanced Annual capital reserve reserve result result 12,600, ,793,000-38,149, ,652 Disposition according to the decision of annual general meeting: 967, ,652 New issue cash 937,500 2,062,500 New issue of shares 25,140,000 55,308,000 Appreciation 40,912,800 Net profit for the year Amount at the end of the year -81,803,149 38,677,500 40,912,800 98,163,500-37,182,297-81,803,149 Solna, Per Hildebrand President Ingemar Hagblom Stefan Olsson Managing Director My audit report was submitted on Fredrik Eklu Sjödén Authorised Public Accountant

Annual report and consolidated report for the financial year 2011

Corp. ID No. 556302-5484 5484 Annual report and consolidated report for the financial year 2011 The Board and the Managing Director submit the following annual report and consolidated report. Contents