Final Results and Notice of AGM

Fitbug Holdings Plc / Epic: FITB.L / Index: AIM / Sector: Leisure

27 June 2011

Fitbug Holdings Plc ('Fitbug' or 'the Company')

Final Results and Notice of AGM

Fitbug Holdings Plc, the AIM traded company operating in the health and wellness sector, announces its results for the year ended 31 December 2010 and gives notice of its AGM to be held at 1st Floor Waterside House, 47-49 Kentish Town Road, London NW1 8NX on Wednesday 20 July 2011 at 1.00 pm. The report and accounts for the year ended 31 December 2010 will be sent to shareholders on 27 June 2011 and will be available on the Company's website at www.fitbugholdings.com.

Overview

·; An online personal health and well-being service - offers a web based platform and activity tracking devices which combine to coach, track, motivate and reward lifestyle change

·; Fitbug's updated software platform Version 4.0 launched in the US, allowing the roll-out of fully integrated and white label sites and developing the capability of the Fitbug business

·; Increasing blue-chip client base across diverse corporate, private medical insurance and health sectors as corporate appetite increases

·; Revenue increased by 30% to £1,132,000 and pre-tax loss reduced by 64% to £929,000 (2009: £871,000 and £2,608,000 respectively)

·; Focussed on driving revenue growth during 2011 having built a robust platform, a solid business proposition and with growing market interest

·; Appointment of Fergus Kee, previous Managing Director of Bupa's £2.1 billion revenue UK and North American division to drive growth and bolster presence in the important USA health market - now has 18.5% stake in Fitbug

·; Strong 2011 progress securing important new client and partner agreements in the UK, France, Israel and the US

Executive Chairman's Statement

2010 saw important progress in developing the capability of the Fitbug business, and entry into the large US market. The latest edition of the Fitbug software platform, Version 4.0, was launched, allowing the roll-out of multi-lingual and white label sites. The launch of the fitbug.com site in the US and the white label solutions for both Holmes Place and Yorbody demonstrate the potential this provides to build partnerships with organisations which can benefit from Fitbug's technology.

In hand with the fitbug.com launch in the US, The Vitality Group ('TVG') introduced the Fitbug service as a core component of its US programme. TVG is the sister company to PruHealth and a subsidiary of South Africa based health insurer Discovery Holdings Limited ('Discovery'). The TVG programme is similar to that offered in the UK by PruHealth and in South Africa by Discovery, whereby participants earn reward points for engaging in a healthy lifestyle. Early progress with TVG has been encouraging, with a number of employer schemes introduced in 2010. Reseller agreements were also signed with US based fitness equipment supplier SciFit and Patterson Medical, which distributes a medical supplies catalogue to over 300,000 medical professionals.

Significantly, the new software also enabled the business to deliver generic and bespoke workplace competitions. These included virtual walking challenges, such as a 'Walk to Johannesburg' competition launched for the FIFA World Cup 2010 by a leading credit card company. In the US a 'Walk round the World' challenge was developed for Staples, the global office supplies group.

I joined the Fitbug Board as Executive Chairman in April this year, having spent the previous 18 years with international healthcare company, Bupa, where most recently I was Managing Director of Bupa's UK and North America Division and CEO of Bupa Insurance Limited. The decision to join Fitbug and invest personally to take an 18.5% stake in the business was not one I took lightly or hurriedly. Prior to joining, I spent time reviewing the business and advising on strategy and prospects. So far this year I have spent five weeks in the US with Paul Landau, CEO of Fitbug Ltd, meeting with existing and prospective partners and customers, assessing the market potential and how best to realise that potential. I have also met with the key UK customers.

My strong conclusion is that, notwithstanding the historical performance, the business is now well placed to deliver future revenue and profit growth. The potential market opportunity is huge - obesity is now one of the biggest global health challenges. The World Health Organisation ('WHO') projects that by 2015, approximately 2.3 billion adults will be overweight and more than 700 million will be obese, with consequent increases in chronic disease and cost. Telling people to join the gym is not the answer - individuals need solutions like Fitbug that will help them gradually change their activity and nutritional behaviour in a manner that is sustainable for the long term.

The market opportunity is most tangible in the US. The population is bigger and spend on healthcare much higher, both in absolute terms and per capita, averaging US$17,500 in 2009. The continued increase in healthcare costs, forecast to rise to 19.5% of GDP by 2017, is widely recognised as unsustainable. In an effort to slow the rate of increase in cost, the Obama reforms, which will extend health insurance to the 45 million uninsured, will allow employers to allocate up to 20% of total health spend to incentives and rewards to encourage employees to lead more healthy lives. These changes will drive increased focus on consumer engagement, activity tracking and behaviour change and play strongly in favour of Fitbug's capability.

I believe that Fitbug is now well placed to capitalise on this growing market opportunity, both in the US and internationally, for a number of reasons:

·; The business platform is now built, operating and proven with customers

·; The Fitbug business has been built with a primary focus on the B2B market, with software flexibly to support tailored customer requirements on a white label basis at lower commercial price points

·; Fitbug has strong experience of supporting health incentive and reward schemes, first developed working with PruHealth in the UK

·; Fitbug has experience of running virtual competitions and challenges for the NHS and large employers

·; Proven health and customer satisfaction outcomes delivered with a broad mix of customers over a five year period

·; Fitbug has a reliable track record established with clients in the US through 2010

·; Fitbug has established and effective working relationship with its manufacturing partner, a leading OEM supplier, with a strong track record on reliability and cost

Since the start of 2011 Fitbug has secured a number of important new client and partner agreements. Through TVG, we have commenced roll-out of two large employer schemes in the US. More than 16,000 employees from both companies will clock their steps to earn Vitality Points, redeemable for merchandise or other great rewards. The first of these is a leading supplier of services to healthcare providers in the US. The company provided its employees with the newest addition to Fitbug's product line, a simpler entry level device, to 10,000 employees within a division of this 65,000 employee group. The second employer scheme deployed Fitbug devices to 6,000 employees of a US headquartered pharmaceutical company. Fitbug has also signed an agreement to provide workplace health programmes with a major UK high street bank. The bank will be rolling out Fitbug branded products to its private wealth division of circa 2,750 employees having concluded successful pilot studies during 2010.

We have also signed a new partnership agreement with Anxa, a premier provider of wellness and nutrition products and services in Europe and Asia. Under the terms of the agreement, Fitbug's proprietary health and well-being technology will be marketed to Anxa's subsidiary, Aujourdhui.com, which is France's leading diet club. We will provide Aujourdhui.com with tracking devices and data feeds to facilitate the introduction of 'Le Booster', an activity component that will sit alongside its existing diet propositions and will be marketed to its 60,000 members.

Additionally, Fitbug has agreed an order worth £200,000 from existing customer Holmes Place International, a leading health and fitness club operator in the Middle East and Europe. This follows the successful launch of Holmes Place's new membership category in 2010, Holmes Place 2Go, which is achieving significant traction and sales. This will see additional Fitbug devices and services delivered on a phased basis over the next 18 months.

Our relationship with Discovery offers strong growth potential over the next 18 months. In South Africa Fitbug recently announced a partnership agreement with Discovery Health's rewards subsidiary Vitality Healthstyle Pty Limited. Discovery Health is South Africa's largest private medical insurer, and this relationship will see Fitbug's proprietary health and well-being technology marketed to members of Discovery's Vitality rewards programme.. With a Vitality collector base in excess of 1.8 million, coupled with a high awareness within the scheme of how to earn points by walking, we are optimistic that this will prove to be a material opportunity.

In the UK, following the acquisition of Standard Life Healthcare by PruHealth and the completion of the integration, all Standard Life Health customers will over the next year be offered the opportunity to renew onto PruHealth products which include Fitbug as a core component.

Financials

The above progress, together with a strong focus on costs, resulted in a reduced pre-tax loss for the year ended 31 December 2010 of £929,000 (2009: loss of £2,608,000) which includes a profit of £43,000 (2009 loss: £902,000) relating to discontinued operations. Revenue for the year from continuing operations was £1,132,000 (2009: £871,000) and the Group's cash balance at 31 December 2010 was £357,000 (2009: £550,000).

In April 2011 we agreed with NW1 Investments Ltd to convert £175,000 of outstanding debt to 3,500,000 ordinary shares at a price of 5 pence and absolve the accrued interest. The Company has also agreed that the terms of the remaining £325,000 loan be amended to be repayable in five equal instalments from April 2012 through to April 2016. All interest will accrue to the end of the loan term and become payable in April 2016. This agreement, together with my own investment, strengthens the balance sheet, and the revised loan terms give greater certainty and security regarding future funding. Our plans to support and accelerate business development in the US will require additional capital. The Board is currently considering options with regard to how this requirement can best be fulfilled, including the possibility of issuing new capital.

In April 2011, the Company granted share options under its Enterprise Management Agreement to certain directors, including myself. Whilst these share options carry exercise prices of 5, 7.5 and 10 pence, they importantly also carry an additional condition that no options can be exercised until the share price moves above 15 pence. I believe that this additional condition rightly sets a high bar appropriate to Fitbug's history and circumstances, strongly aligns the interests of senior executives and shareholders, and demonstrates our belief and confidence in Fitbug's future potential to deliver value to shareholders.

Outlook

A number of further product sale and strategic partnership discussions are in hand, some at an advanced stage, which we hope to conclude and be able to announce through the second half of 2011. With the platform built, the proposition in good shape and with growing market interest, the over-riding focus of the business is now on driving revenue growth. As Executive Chairman, with a deep knowledge of the corporate health, wellness and health insurance markets in both the UK and the US, this is also the area where I can add most value. It is also my top priority.

The Board and I would like to thank Allan Fisher for the time he has given Fitbug as Chairman over recent years. He has been instrumental in building the business to its current stage, where it is, I believe, now well placed to deliver profitable growth. I would also like to take this opportunity to thank our shareholders for their support, and the hugely committed Fitbug team for their hard work, determination, enthusiasm and loyalty.

Fergus Kee

Executive Chairman

27 June 2011

**ENDS**

For further information visit www.fitbugholdings.com or contact:

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2010

Consolidated Statement of Changes in Equity

For the year ended 31 December 2010

Consolidated Statement of Financial position

At 31 December 2010

Consolidated Statement of Cash Flows

For the year ended 31 December 2010

Notes to the Consolidated Financial Statements for the year to 31 December 2010

1. General Information

Fitbug Holdings Plc is a company incorporated in the UK and its activities are as described in the chairman's statement.

The preliminary announcement of results is not the company's statutory accounts. Statutory accounts for the year ended 31 December 2010 have not been delivered to the Registrar of Companies. The auditors have reported on the statutory accounts for the year ended 31 December 2010 on 27 June 2010 and their report was unqualified and included a reference to a matter to which the auditor drew attention by way of emphasis without qualifying the report.

Emphasis of matter

The auditors' report drew attention by emphasis of matter to issues surrounding going concern as set out in note 2 below.

2. Basis of preparation and significant accounting policies

The consolidated financial statements of Fitbug Holdings Plc have been prepared in accordance with International Financial Reporting Standards (IFRSs), International Accounting Standards (IAS) and International Financial Reporting Interpretations Committee (IFRIC) interpretations (collectively "IFRSs") as adopted for use in the European Union and as issued by the International Accounting Standards Board, and with those parts of the Companies Act applicable to companies reporting under IFRS.

Going concern

The financial statements have been prepared on the going concern basis which assumes that the Group and the Company will have sufficient resources to enable it to continue trading for the foreseeable future.

The directors have identified that there is a requirement for additional funding to support the development of the business, and in particular planned growth in the US, will require additional capital. The Board is currently considering options with regard to how this requirement can best be fulfilled, including the possibility of raising new equity. Certain directors have additionally agreed to make available a term loan facility of up to £225,000, repayable on 30 June 2012.

The independent directors of the Company, being Paul Landau, Andrew Brummer and Geoffrey Simmonds consider, having consulted with Seymour Pierce, that the terms of the loan facility are fair and reasonable in so far as the shareholders are concerned.

Based on their forecasts, the directors believe that the combination of these factors will provide sufficient capital to enable the Company to continue trading and meet its development objectives. However, these forecasts are necessarily based on the achievement of and timings of revenue targets some of which, although believed to be reasonable by the directors, are nevertheless outside the Group's direct control. If significant delays were to take place, these may render the Group's cash resources insufficient.

If the Group and Company are unable to continue as going concerns, then adjustments would be necessary to write assets down to their recoverable amounts, non-current assets and liabilities would be reclassified as current accounts and liabilities and provisions would be required for any costs associated with closure.

3. Loss per share

The loss per share from continuing and discontinued operations is based on a loss of the year attributable to equity holders of the Parent Company of £929,000 (2009: £2,608,000) and the weighted average number of ordinary shares in issue for the year of 47,357,058 (2009: 20,987,194). The loss per share from continuing operations is based on a loss for the year of £972,000 (2009: £1,706,000) and the same number of ordinary shares.

The exercise of the outstanding options would reduce the loss per share and hence have an anti-dilutive effect.

There are 1,450,000 (2009: 1,450,000) shares that could potentially be issued under the terms of options that will potentially reduce future earnings per share.

As of 27 June 2011, 13,500,000 shares have been issued since 31 December 2010. In addition, options have been granted over 12,000,000 shares since 31 December 2010.