Final Results

Gloo Networks plc

("Gloo" or "the Company")

Results for the period from incorporation to 31 March 2016

London, 1 June 2016 - Gloo Networks plc, a digital transformation company that aims to acquire and develop trusted media brands, announces its results for the period from incorporation on 16 February 2015 to 31 March 2016.

Over the period, Gloo Networks generated a loss after taxation of £2.7m, reflecting operating expenses and diligence costs incurred in the continued pursuit of its stated investment strategy. At 31 March 2016, Gloo Networks held over £27.2m in cash.

Rebecca Miskin, Gloo's Chief Executive Officer commented: "We are excited about the investment opportunities which we continue to see in the market. The media and content industries remain in a state of transition driven by digital disruption, which we are well positioned to capitalise on once we secure our platform acquisition."

Notice of Annual General Meeting

Gloo Networks announces that Notice of the Annual General Meeting of the Company is being posted to shareholders today. The Annual General Meeting is to be held at Travers Smith LLP, 10 Snow Hill, London EC1A 2AL on 7 July 2016 at 10 a.m.

The Notice will also be available on the Company's website at www.gloonetworks.com.

Enquiries:

Liberum Capital Limited (Nominated Adviser and Joint Broker)

Tel: +44 20 3100 2000

Neil Elliot

Chris Clarke

Jonathan Wilkes-Green

Numis Securities Limited (Joint Broker)

Tel: +44 20 7260 1000

Lorna Tilbian

Nick Westlake

Teneo (PR Adviser)

London - United Kingdom

Tel: +44 20 7240 2486

James Knowles

Chloe Maier

New York - USA

Tel: +1 (646) 561-3512

Aimee Baxter

Daniel Strauss

Report and Audited Consolidated Financial Statements

From incorporation

to 31 March 2016

GLOO NETWORKS PLC

Company number 09441537

CHAIRMAN'S STATEMENT AND STRATEGIC REPORT

I am pleased to present to our shareholders the Audited Consolidated Financial Statements for the period from incorporation on 16 February 2015 to 31 March 2016, consolidating the results of Gloo Networks plc ("the Company") and Gloo Networks Jersey Limited (together, the "Group").

Strategy

Gloo Networks plc is a digital transformation company that aims to connect some of the world's most-loved content with its most-valued consumers. It intends to acquire trusted consumer brands in the media sector that appeal to attractive socio-economic groups and use data and technology to change their business models to ultimately unlock value and increase profitability. The Company intends to acquire and run businesses initially with an enterprise value in the range of £250 million to £1 billion and is led by digital transformation experts Rebecca Miskin (Chief Executive Officer) and Juan Lopez-Valcarcel (Chief Product and Operations Officer). On 14 December 2015, Arnaud de Puyfontaine was appointed as Non-Executive Chairman of the Company.

Since listing in August 2015, the Company has pursued its stated strategy, and has successfully raised £30 million from a range of financial institutions. The Directors continue to review a number of potential acquisition opportunities, controlling the Group's planned levels of expenditure during the pre-acquisition phase.

Results

The Group's loss after taxation for the period from incorporation to 31 March 2016 was £2,666,998. In that period, the Group incurred £2,739,701 of administrative expenses, received interest of £72,703 and at the period end held a cash balance of £27,242,121.

Dividend policy

The Company has not yet acquired a trading business and the Directors therefore consider it inappropriate to make a forecast of the likely level of any future dividends. The Directors intend to determine the Company's dividend policy following completion of the Company's first acquisition and in any event, will only commence the payment of dividends when it becomes commercially prudent to do so. There are no arrangements in place under which future dividends are to be waived or agreed to be waived.

Risks

The Directors have carried out a robust assessment of the principal risks facing the Group including those that would threaten its business model, future performance, solvency or liquidity. Further detail in relation to the risks faced by the Group is set out on page 29.

Outlook

During the period, the Group has made encouraging progress with potential acquisition opportunities and the Directors look forward to providing further updates to shareholders in due course.

Arnaud de Puyfontaine Rebecca Miskin

Chairman Director

31 May 2016 31 May 2016

GLOO NETWORKS PLC

Company number 09441537

REPORT OF THE DIRECTORS

The Directors are pleased to submit their Report and the Audited Consolidated Financial Statements for the period from incorporation on 16 February 2015 to 31 March 2016.

Results and dividends

For the period to 31 March 2016, the Group's loss was £2,666,998.

It is the Board's policy that prior to making the first acquisition, no dividends will be paid. Following the first acquisition, subject to availability of distributable reserves, dividends will be paid to shareholders when the Directors believe it is appropriate and prudent to do so.

Future developments

The Company continues to look for opportunities in line with its defined investment strategy being the acquisition and development of businesses with an enterprise value at the time of acquisition of between £250 million and £1 billion. Gloo intends to acquire businesses that appeal to attractive socio-economic groups, and through the use of data and technology, ensure these businesses fully realise their digital potential, thereby unlocking value and increasing profitability.

Share capital

Details of shares issued by the Company during the period are set out in note 13 of the financial statements.

Directors

The Directors of the Company who served during the period and subsequent to the date of this report are:

Arnaud de Puyfontaine, Non-Executive Chairman

Date of appointment: 14 December 2015

Arnaud de Puyfontaine's career in the media and communications industry has spanned over 25 years during which time he has reshaped the European/US media landscape in a variety of international roles including Chief Executive of Hearst UK, Editions Mondadori and Emap. Arnaud is currently Chief Executive of Vivendi SA, the international media content and entertainment group. He was appointed Vivendi CEO after joining the group in November 2013 as Senior Executive Vice President of Media and Content activities.

Vivendi is the parent of Universal Music Group, the world's largest music company, and Canal+ Group, a European leader in pay TV and European TV and film production.

Previously, Arnaud was the Chief Executive Officer of Hearst UK, part of Hearst Corporation. In 2011, he led the acquisition and integration of 102 brands from the Lagardère Group, before being appointed Managing Director of Western Europe in August 2013.

At Hearst Corporation, Arnaud worked alongside Gloo Network's Chief Executive Officer Rebecca Miskin, and successfully managed an iconic media portfolio which included Cosmopolitan, Elle, Good Housekeeping and Harper's Bazaar.

Prior to this, Arnaud was Chairman and Chief Executive Officer of Editions Mondadori France, becoming General Head of all digital business for the Mondadori Group.

Arnaud joined Emap France in 1995, where he was a member of the founding team and responsible for Télé Poche, Studio Magazine and the establishment of the Emap Star Division. He was appointed Chief Executive Officer of Emap France in 1998 and joined the board of Emap Plc in 2000.

Arnaud de Puyfontaine is a graduate of the ESCP, the Multimedia Institute and Harvard Business School and was named Chevalier (Knight) of the Légion d'honneur in 2015.

Rebecca Miskin, Chief Executive OfficerDate of appointment: 16 February 2015

Rebecca Miskin is CEO of Gloo Networks, founded in 2015 with the aim of marrying technology and media to transform trusted brands into exciting new businesses. Rebecca is a global business leader and digital transformation expert with a 23 year international track record.

Before founding Gloo Networks, Rebecca acted as Digital Strategy Director and Change Agent of Hearst UK, part of Hearst Corporation, where she led the post-acquisition integration of Hachette Filipacchi UK. During this time, Rebecca successfully increased revenues, operating profits and operating margins, whilst doubling the company's digital traffic, securing their position as the largest UK magazine publisher online.

Previously, Rebecca joined NBC Universal's international headquarters in London and was subsequently headhunted to New York to spearhead the turnaround of iVillage Networks, part of a group of digital businesses purchased for US$600 million. Before NBC Universal, she also held successful roles at Time Inc., Excite and Reed Elsevier.

Since 2011, Rebecca has held the position of non-executive director on the board of Centaur Media plc where she is chair of the remuneration committee and a member of both the audit and nomination committees.

Rebecca is also actively engaged in international executive and digital mentoring and has proven herself to be an exceptional business partner to young, emerging talent.

Rebecca holds a joint honours degree in French and Italian from the University of London and a Masters in European Business Management from Cranfield University's School of Management.

Juan Lopez-Valcarcel, Chief Product and Operations Officer

Date of appointment: 24 March 2015

Juan is Chief Product and Operations Officer. He is a global digital product and operations expert with 20 years' experience.

Prior to founding Gloo Networks, Juan served as Pearson plc's Chief Digital Officer of International Operations, where he led all digital product strategy, engineering and digital partnerships outside North America and also held executive responsibilities over data science, user experience and efficacy.

Previously, Juan worked at NBC Universal in New York as Vice President for Strategy at iVillage Networks and General Manager for its display business. Before NBC Universal, he led product and technology transformation projects for media and technology companies in the US and Europe as part of Booz Allen (now Strategy&).

Juan started his digital career in 1996 as co-founder of the first local internet portal in Spain and continues to be actively engaged in the digital community as an angel investor and mentor.

He is a member of the International Academy of Digital Arts & Sciences and was appointed in 2015 as an Association Member of BUPA, the international healthcare company.

Juan holds a double degree in Law & Economics from ICADE University (Spain) and an MBA from INSEAD.

Mark Brangstrup Watts, Executive DirectorDate of appointment: 16 February 2015

Mark Brangstrup Watts founded Marwyn, the asset management and corporate finance group, in 2002 with James Corsellis. Mark is joint managing partner of Marwyn Capital LLP, which provides corporate finance advice, and Marwyn Investment Management LLP, which provides asset management solutions and investment advisory services (both of which are regulated by the Financial Conduct Authority). Mark is a director of Marwyn Asset Management Limited, a regulated fund manager and also a trustee of the Marwyn Trust, a charity focused on initiatives supporting education and entrepreneurship for young people in disadvantaged communities. Mark has a beneficial interest in Axio Capital Solutions Limited, the company secretary of the Company and the initial subscriber of the Company. Marwyn has launched 15 companies in partnership with experienced management teams across a variety of sectors, typically executing buy and build strategies. Mark has held board positions on several Official List and AIM listed companies, including Entertainment One Limited, Advanced Computer Software plc, Inspicio plc and Talarius plc.

It is currently intended that, following the completion of the Company's first acquisition, Mark will adopt a non-executive role.

James Corsellis, Executive Director

Date of appointment: 16 February 2015

James Corsellis founded Marwyn, the asset management and corporate finance group, in 2002 with Mark Brangstrup Watts. James is joint Managing Partner of Marwyn Capital LLP, which provides corporate finance advice, and Marwyn Investment Management LLP, which provides asset management solutions and investment advisory services, (both of which are regulated by the Financial Conduct Authority). James is a director of Marwyn Asset Management Limited, a regulated fund manager, and also a trustee of the Marwyn Trust, a charity focused on initiatives supporting education and entrepreneurship for young people in disadvantaged communities. James has a beneficial interest in Axio Capital Solutions Limited, the company secretary of the Company and the initial subscriber of the Company. Marwyn has launched 15 companies across a variety of sectors with James providing support to these companies, using his experience of working with a number of companies in various roles (including as Chairman of Entertainment One Limited and director of Breedon Aggregates Limited, Concateno plc and Catalina Holdings Limited) as well as his operating experience as the CEO and founder of technology business, iCollector plc and CM Interactive.

It is currently intended that, following the completion of the Company's first acquisition, James will adopt a non-executive role.

Directors' interests

The Directors have no interests in the Ordinary shares of the Company but have interests in the Participation shares which are detailed in note 17.

Directors' remuneration

The emoluments of the individual Directors for the period are detailed in note 6.

Substantial shareholdings

At 31 March 2016 the following interests in 3% or more of the issued Ordinary shares had been notified to the Company.

Independent auditors

The Directors have reason to believe that PricewaterhouseCoopers LLP conducted an effective audit. The Directors have provided the auditors with full access to all of the books and records of the Company. PricewaterhouseCoopers LLP has expressed its willingness to continue to act as auditors to the Company and a resolution for its re-appointment will be proposed at the forthcoming Annual General Meeting.

Corporate governance

The Directors recognise the importance of sound corporate governance commensurate with the size of the Group and the interests of the shareholders. The Group is governed by the Board of Directors. The Board comprises a Non-Executive Director, Arnaud de Puyfontaine and four Executive Directors: Rebecca Miskin, Juan Lopez-Valcarcel, Mark Brangstrup Watts and James Corsellis. It is intended that Mark Brangstrup Watts and James Corsellis will adopt non-executive roles following the completion of the Company's first acquisition. So far as is practicable, taking into account the size and nature of the Company, the Directors intend to comply with the Quoted Companies Alliance Corporate Governance Guidelines for Smaller Quoted Companies to the extent appropriate to the size and nature of the Company, upon completion of the first acquisition by the Company.

Audit and risk committee

At present, the Company does not consider it necessary to establish an audit committee given the nature of its board structure and operations. The Board will undertake all functions that would normally be delegated to the audit committee, including reviewing annual and interim results, receiving reports from its auditors, agreeing the auditors' remuneration and assessing the effectiveness of the audit and internal control environment. Where necessary the Board will obtain specialist external advice from either its auditors or other advisers. The Board will establish an audit committee upon completion of the first acquisition by the Company.

Nomination and remuneration committee

The Company does not intend to establish remuneration and nomination committees until the completion of the Company's first acquisition as those committees are not currently appropriate given the nature of the Company's board structure and operations. Accordingly, the Board will review the remuneration of the Directors annually and agree reasonable and market standard (as regards level) non-executive fees, based upon market information sourced from appropriate external consultants. Consideration will be given by the Board to future succession plans for members of the Board, as well as consideration as to whether the Board has the skills required to manage the Company effectively. The Board intends to establish a remuneration and nomination committee upon completion of the first acquisition of the company.

Share dealing

The Company has systems in place to ensure compliance by the Board, the Company, and its 'applicable employees' (as defined in the AIM Rules for Companies) with the provisions of the AIM Rules for Companies relating to dealings in securities of the Company and has adopted a share dealing code for this purpose. The Directors believe that the share dealing code adopted by the Board is appropriate for a Company quoted on AIM. The Board will comply with Rule 21 of the AIM Rules for Companies relating to Directors' dealings and will take all reasonable steps to ensure compliance by the Company's 'applicable employees'. The share dealing code will be reviewed by the Directors to ensure compliance with the new European Union Market Abuse Regulation, which will become effective across Europe and directly applicable to the UK on 3 July 2016.

Relations with Shareholders

The Directors are always available for communication with Shareholders and all Shareholders have the opportunity, and are encouraged, to attend and vote at the Annual General Meetings of the Company during which the Board will be available to discuss issues affecting the Company. The Board stays informed of Shareholders' views via regular meetings and other communications.

Statement of going concern

The Directors have considered the financial position of the Group and have concluded that it is appropriate to prepare the financial statements on a going concern basis.

Internal control

The Board is responsible for establishing and maintaining the Company's system of internal control and reviewing its effectiveness. Internal control systems are designed to meet the particular needs of the Company and the particular risks to which it is exposed. The procedures are designed to manage rather than eliminate risk and by their nature can only provide reasonable but not absolute assurance against material misstatement or loss.

The Board has reviewed the Company's risk management and control systems and believes that the controls are satisfactory given the nature and size of the Company.

Financial risk profile

The Company's financial instruments comprise mainly of cash and various items such as payables and receivables that arise directly from the Company's operations. Details of the risks relevant to the Group are included in the notes to the financial statements and on pages 29 to 33.

Directors' responsibilities

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and the company and of the profit or loss of the group for that period. In preparing these financial statements, the Directors are required to:

· select suitable accounting policies and then apply them consistently;

· make judgements and accounting estimates that are reasonable and prudent;

· state whether applicable IFRSs as adopted by the European Union have been followed, subject to any material departures disclosed and explained in the financial statements; and

· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions. They are also responsible for disclosing with reasonable accuracy at any time the financial position of the company and the group and enabling them to ensure that the financial statements and the Directors' Remuneration Report comply with the Companies Act 2006 and, as regards the group financial statements, Article 4 of the IAS Regulation. In addition, they have a responsibility to safeguard the assets of the Company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The Directors consider that the Annual Period End Report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for Shareholders to assess the Company's performance, business model and strategy.

Each of the Directors, whose names and functions are listed in the Chairman's Statement and Strategic Report, confirm that, to the best of their knowledge:

· the group financial statements, which have been prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and loss of the group; and

· the Chairman's Statement and Strategic Report includes a fair review of the development and performance of the business and the position of the group, together with a description of the principal risks and uncertainties that it faces.

Disclosure of information to Auditors

Each of the persons who is a Director at the date of approval of this report confirms that:

· so far as the Director is aware, there is no relevant audit information of which the Group's auditors are unaware; and

· each Director has taken all the steps that he/she ought to have taken as a Director in order to make himself/herself aware of any relevant audit information and to establish that the Group's auditors are aware of that information.

Directors' insurance

The Company also purchased and maintained throughout the financial period Directors' and Officers' liability insurance in respect of itself and its Directors. This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006.

On behalf of the Board

Rebecca Miskin Juan Lopez-Valcarcel

Director Director

31 May 2016 31 May 2016

INDEPENDENT AUDITORS' REPORT

Independent auditors' report to the member of Gloo Networks plc

Report on the financial statements

Our opinion

In our opinion:

· Gloo Networks plc's group financial statements and Company financial statements (the "financial statements") give a true and fair view of the state of the group's and of the company's affairs as at 31 March 2016 and of the group's loss and the group's and the company's cash flows for the 58 week period (the "period") then ended;

· the group financial statements have been properly prepared in accordance with International Financial Reporting Standards ("IFRSs") as adopted by the European Union;

· the Company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006; and

· the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

What we have audited

The financial statements, included within the Report and Audited Consolidated Financial (the "Annual Report"), comprise:

· the Consolidated and Company statement of financial position as of 31 March 2016;

· the Consolidated statement of comprehensive income for the period then ended;

· the Consolidated and Company statement of cash flows for the period then ended;

· the Consolidated and Company statement of changes in equity for the period then ended; and

· the notes to the financial statements, which include a summary of significant accounting policies and other explanatory information.

The financial reporting framework that has been applied in the preparation of the financial statements is IFRSs as adopted by the European Union, and applicable law and, as regards the company's financial statements, as applied in accordance with the provisions of the Companies Act 2006.

In applying the financial reporting framework, the directors have made a number of subjective judgements, for example in respect of significant accounting estimates. In making such estimates, they have made assumptions and considered future events.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion, the information given in the Strategic Report and the Report of the Directors for the financial period for which the financial statements are prepared is consistent with the financial statements

Other matters on which we are required to report by exception

Adequacy of accounting records and information and explanations received

Under the Companies Act 2006 we are required to report to you if, in our opinion:

· we have not received all the information and explanations we require for our audit; or

· adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from branches not visited by us; or

· the company financial statements are not in agreement with the accounting records and returns.

We have no exceptions to report arising from this responsibility.

Directors' remuneration

Under the Companies Act 2006 we are required to report to you if, in our opinion, certain disclosures of directors' remuneration specified by law are not made. We have no exceptions to report arising from this responsibility.

Responsibilities for the financial statements and the audit

Our responsibilities and those of the directors

As explained more fully in the Directors' Responsibilities set out on page 7, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.

Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland) ("ISAs (UK & Ireland)"). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

This report, including the opinions, has been prepared for and only for the company's members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

What an audit of financial statements involves

We conducted our audit in accordance with ISAs (UK & Ireland). An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of:

· whether the accounting policies are appropriate to the group's and the company's circumstances and have been consistently applied and adequately disclosed;

· the reasonableness of significant accounting estimates made by the directors; and

· the overall presentation of the financial statements.

We primarily focus our work in these areas by assessing the Directors' judgements against available evidence, forming our own judgements, and evaluating the disclosures in the financial statements.

We test and examine information, using sampling and other auditing techniques, to the extent we consider necessary to provide a reasonable basis for us to draw conclusions. We obtain audit evidence through testing the effectiveness of controls, substantive procedures or a combination of both.

In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Philip Stokes (Senior Statutory Auditor)

for and on behalf of PricewaterhouseCoopers LLP, Chartered Accountants and Statutory Auditors

London

May 2016

· The maintenance and integrity of the Gloo Networks plc website is the responsibility of the Directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

· Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

GLOO NETWORKS PLC

Company number 09441537

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

The Group's activities derive from continuing operations.

The notes on pages 15 to 28 form an integral part of these consolidated financial statements.

GLOO NETWORKS PLC

Company number 09441537

CONSOLIDATED AND COMPANY STATEMENTS OF FINANCIAL POSITION

The notes on pages 15 to 28 form an integral part of these consolidated financial statements.

The financial statements on pages 11 to 14 were approved by the Board of Directors on 31 May 2016 and were signed on its behalf by:

Rebecca Miskin Juan Lopez-Valcarcel

Director Director

GLOO NETWORKS PLC

Company number 09441537

CONSOLIDATED AND COMPANY STATEMENTS OF CHANGES IN EQUITY

Consolidated statement of changes in equity

 Company statement of changes in equity

The notes on pages 15 to 28 form an integral part of these consolidated financial statements.

GLOO NETWORKS PLC

Company number 09441537

CONSOLIDATED AND COMPANY STATEMENTS OF CASH FLOWS

The notes on pages 15 to 28 form an integral part of these consolidated financial statements.

GLOO NETWORKS PLC

Company number 09441537

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. GENERAL INFORMATION

Gloo Networks plc (the "Company") is a digital transformation company incorporated in England and Wales and domiciled in the United Kingdom. It is a public limited company with company number 09441537 and has its registered office at 20 Buckingham Street, London, WC2N 6EF. The Company wholly owns Gloo Networks Jersey Limited (collectively, the "Group"), which was incorporated on the formation of the Group.

2. ACCOUNTING POLICIES

(a) Basis of preparation

The Company was incorporated on 16 February 2015.

The Consolidated Financial Statements represent the period from 16 February 2015 until 31 March 2016 and have been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRS Interpretations Committee (IFRS IC) interpretations as adopted by the European Union ("IFRS"), and with those parts of the Companies Act 2006 as applicable to companies reporting under IFRS.

The Consolidated Financial Statements are prepared in accordance with IFRS under the historical cost convention and are presented in British pounds sterling, which is the presentational and functional currency of the Company.

The principal accounting policies adopted in the preparation of the Consolidated Financial Statements are set out below. The policies have been consistently applied throughout the period presented.

(b) New standards and amendments to International Financial Reporting Standards

Standards, amendments and interpretation effective and adopted by the Group:

The accounting policies adopted in the presentation of these Consolidated Financial Statements reflect the adoption of the following new standards for annual periods beginning on or after 1 January 2015.

Annual Improvements to IFRSs 2011-2013 Cycle which were not applicable to the Group.

Standards issued but not yet effective:

The following standards are issued (*subject to EU endorsement) but not yet effective. The Group intends to adopt these standards, if applicable, when they become effective. The effects of IFRS 15 and IFRS 16 are yet to be assessed. It is not expected that any of the remaining standards will have a material impact on the Group.

(c) Going concern

The Consolidated Financial Statements have been prepared on a going concern basis, which assumes that the Group will continue to be able to meet its liabilities as they fall due for the foreseeable future. As the Group has significant cash reserves, the Directors have concluded it remains appropriate to use the going concern basis.

(d) Basis of consolidation

Subsidiaries are entities controlled by the Company. Control exists when the Company is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial information of subsidiaries is fully consolidated from the date that control commences until the date that control ceases.

Intragroup balances, and any gains and losses or income and expenses arising from intragroup transactions are eliminated on consolidation.

(e) Statement of compliance

The Consolidated Financial Statements of the Group have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS").

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 3.

(f) Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits with an original maturity of three months or less.

(g) Financial liabilities

The Group recognises a financial liability on assuming a financial obligation and derecognises financial liabilities when, and only when, the Group's obligations are discharged, cancelled or they expire.

(h) Interest income and expenses

Interest income on cash deposits, and expenses are accounted for on an accruals basis.

(i) Costs directly attributable to the issue of equity

Share issue costs are placing expenses directly relating to the issue of the Company's shares. These expenses include fees payable under share placement agreements, printing, and distribution costs and legal fees and any other applicable expenses. All such costs are charged to equity and deducted from the proceeds received.

(j) Investments

Investments in subsidiaries are valued at cost less provision for impairment.

(k) Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in share premium as a deduction from the proceeds.

(l) Corporation tax

Corporation tax for the period presented comprises current and deferred tax.

Current tax is the expected tax payable on the taxable income for the period, using tax rates enacted or substantially enacted at the balance sheet date, and any adjustment to taxes payable in respect of previous periods.

Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

(m) Loss per ordinary share

The Group presents basic earnings per ordinary share ("EPS") data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares.

(n) Share based transactions

Equity-settled share based payments ("Participation shares") to Directors and others providing similar services are measured at the fair value of the equity instruments at the grant date, taking into account any market performance conditions. The fair value is expensed through administrative expenses, with a corresponding increase in equity through the share based payment reserve, on a straight line basis over the period that the employees become unconditionally entitled to the awards.

(o) Pension benefits

The Group operates a defined contribution pension scheme and pays contributions to privately administered pension plans on behalf of employees as contractually agreed, or the equivalent contribution is paid in cash to the employee. Accounting of the contributions to pension schemes is in line with the treatment of a defined contribution scheme. The Group has no further payment obligations once the contributions have been paid. The contributions are recognised as an expense on the accruals basis and are included within administrative expenses in the Statement of Comprehensive Income.

(p) Loan and other receivables

Loans and other receivables are non-derivative financial assets with fixed determinable payments that are not quoted in an active market. If collection of the amounts is expected in one year or less they are classified as current assets. If not, they are presented as non-current assets.

3. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES

The preparation of the Consolidated Financial Statements under IFRS requires the Directors to consider estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. Estimates and judgements are continually evaluated and are based on historical experience and other factors including expectations of future events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

The Directors have exercised judgement and made assumptions in relation to the classification and valuation of the equity settled Participation shares, and the calculation of the fair value of the scheme at the grant date. These assumptions are disclosed in note 17.

For the period, the Directors do not consider that they have made any other significant estimates, judgement or assumptions that would materially affect the balances reported in these financial statements.

4. SEGMENT INFORMATION

The Board of Directors is the Group's chief operating decision-maker. As the Group had not yet made an acquisition as of 31 March 2016, the Group is organised and operates as one segment.

5. OPERATIONAL LOSS

The operating loss is stated after charging auditors' remuneration of £25,000. The total auditors' remuneration related to fees payable for the audit of the parent company and consolidated financial statements of £25,000 and fees payable for non-audit services of £48,575.

6. EMPLOYEES AND DIRECTORS

(a) Staff costs for the Group during the period:

 (b) Directors' emoluments

The Board considers the Directors of the Company to be the key management personnel of the Group.

The highest paid Director, Juan Lopez-Valcarcel, received a salary of £287,724 during the period, and pension benefits of £29,293. Juan's fixed annual salary is £235,000, effective from 12 January 2015, payable monthly in arrears, plus a pension contribution of 10 per cent of his fixed annual salary. During the period Juan received an annual bonus of £227,918 as outlined in his service agreement. The annual bonus of up to 100 per cent of salary per year is subject to an annual review.

Rebecca Miskin, received a salary of £363,445 during the period, and pension benefits of £36,874. Rebecca's fixed annual salary is £295,000, effective from 8 January 2015, payable monthly in arrears, plus a pension contribution of 10 per cent of her fixed annual salary. During the period Rebecca received an annual bonus of £122,602 as outlined in her service agreement. The annual bonus of up to £125,000 per year is subject to an annual review.

Rebecca Miskin's service agreement contains a bonus arrangement, which is dependent on the completion of each acquisition of a trading business or company by the Group, until such point where the Total Enterprise Value of all acquired businesses or companies is equal to or greater than £200 million.

Up until this condition is satisfied, Rebecca shall be entitled to a cash bonus of an amount equal to 0.5 percent of the enterprise value of the transaction, as calculated by the Board (or the Remuneration Committee, if one has been established) in its sole and absolute discretion. If the Director's employment ceases prior to the completion of such acquisitions, Rebecca shall be entitled to receive a fair proportion of the bonus.

In addition to the aforementioned Director's fixed annual salary and bonuses, the Company may pay a deal bonus from time to time. No deal bonus or cash bonus is payable in respect of the completion of the first acquisition, save as set out previously.

Arnaud de Puyfontaine received a director fee of £22,177 during the period. Arnaud's director fee is £75,000, effective from 15 December 2015, payable monthly in arrears. Arnaud's director fee will be reviewed upon completion of the Company's first acquisition.

Mark Brangstrup Watts and James Corsellis are paid fees equal to the prevailing national minimum wage for 35 hours per week. During the period they each received a director fee of £13,534.

There were no share options exercised during the period. The Participation shares owned by Directors are described in note 17.

(c) Key management compensation

The following table details the aggregate compensation paid in respect of the members of the Board of Directors including the Executive Directors.

(d) Employed persons

The average monthly number of persons employed by the Group (including Directors) during the period was as follows:

(e) Pension benefits

The amount recognised as an expense for the payments made into employees' private pension arrangements was £66,167. The amount paid in lieu of payment into a private pension arrangement was £21,459.

7. EXPENSES BY NATURE

8. INCOME TAX 

Reconciliation of effective rate and tax charge:

The company is in its pre-acquisition phase and therefore, is not recognising deferred tax asset due to the uncertainty of future taxable income.

9. INVESTMENT IN SUBSIDIARIES

(a) Subsidiary undertakings of the Group

The Company directly owns the whole of the issued and fully paid ordinary share capital of its subsidiary undertaking.

The subsidiary undertakings of the Company as at 31 March 2016 is presented below:

There are no restrictions on the Company's ability to access or use the assets and settle the liabilities of the Company's subsidiary. The Company's subsidiary has issued Participation shares to management as is detailed in note 17.

10. OTHER RECEIVABLES

All receivables are current. There is no material difference between the book value and the fair value of the other receivables.

11. CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise balances held at Barclays Bank plc and are all held by the Company.

Credit risk is managed on a Group basis, Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions. For banks and financial institutions, only independently rated parties with a minimum short-term credit rating of P-1, as issued by Moody's are used by the Group.

12. TRADE AND OTHER PAYABLES

There is no material difference between the book value and the fair value of the trade and other payables.

13. CALLED UP SHARE CAPITAL

On incorporation, 200 ordinary shares of £0.01 each and 49,998 preference shares of £1.00 each in the capital of the Company were issued. The ordinary shares were each issued at a premium of £1,000 per ordinary share and the preference shares were issued at nominal value. Since then, the Company has issued the following shares:

(i) 250 ordinary shares at a premium of £1,000 on 29 April 2015;

(ii) 224,995 ordinary shares at a premium of £1.19 per share on 6 July 2015;

(iii) 1 ordinary share at a premium of £1.49 on 6 July 2015;

(iv) 374,554 ordinary shares by way of bonus issue out of the Company's share premium; and

Upon the Company's admission to AIM, a further 25,000,000 ordinary shares were issued at £1.20 per share resulting in total premium on transaction of £29,750,000. Total transaction costs taken to share premium in relation to this issue of shares were £912,508.

On 6 July 2015 the holders of the redeemable preference shares signed a deed of waiver to irrevocably and unconditionally waive their rights to redeem the 49,998 redeemable preference shares of £1.00 each held by them in the Company. The financial effect of this waiver was that the redeemable preference shares were reclassified at the date of the waiver from a liability to equity as the Company was no longer under an obligation to repay the redeemable preference shares on demand from the holders. These shares were fully redeemed on admission to AIM.

The share premium account at 31 March 2016 totalled £29,551,492.

All issued shares are fully paid. The holders of ordinary shares are entitled to receive dividends as declared and are entitled to one vote per share at general meetings of the Company.

At 31 March 2016, 130 Participation shares were issued as disclosed in note 17.

14. RESERVES

The following describes the nature and purpose of each reserve within shareholders' equity:

Share premium

The amount subscribed for share capital in excess of nominal value less any costs directly attributable to the issue of new shares.

Retained earnings

Cumulative net gains and losses recognised in the consolidated statement of comprehensive income.

Share based payment reserve

The Share based payment reserve is the cumulative amount recognised in relation to the equity settled share based payment scheme as further described in note 17.

15. INSTRUMENTS AND ASSOCIATED RISKS

The Group has the following categories of financial instruments at the period end:

The fair value and book value of the financial assets and liabilities are equal.

The Group has exposure to the following risks from its use of financial instruments:

· Market risk

· Liquidity risk

· Credit risk

This note presents information about the Group's exposure to each of the above risks and the Group's objectives, policies and processes for measuring and managing these risks.

The Group's risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls and to monitor risks and adherence limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group's activities.

Treasury activities are managed on a Group basis under policies and procedures approved and monitored by the Board. These are designed to reduce the financial risks faced by the Group which primarily relate to movements in interest rates.

Market risk

The Group's activities primarily expose it to the risk of changes in interest rates due to the significant cash balance currently held however any change in interest rates will not have a material effect on the Group. The Group's operations are entirely in their functional currency and accordingly, no translation exposures arise in trade receivables or trade payables.

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation.

The Group currently meets all liabilities from cash reserves. The Group's liability for operating expenses is monitored on an ongoing basis to ensure cash resources are adequate to meet liabilities as they fall due.

Credit risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The main credit risk relates to the cash held with financial institutions. The Company manages its exposure to credit risk associated with its cash deposits by selecting counterparties with a high credit rating with which to carry out these transactions. The counterparty for these transactions is Barclays Bank plc, which holds a short-term credit rating of P-1, as issued by Moody's. The Company's maximum exposure to credit risk is the carrying value of the cash on the balance sheet.

Capital management

The Board's policy is to maintain a strong capital base so as to maintain creditor and market confidence and to sustain future development of the business. There were no changes in the Group's approach to capital management during the period.

16. LOSS PER ORDINARY SHARE

Basic earnings per ordinary share is calculated by dividing the profit attributable to equity holders of the company by the weighted average number of ordinary shares in issue during the period. Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. Participation shares (refer note 17) have not been included in the calculation of diluted earnings per share because they are not dilutive for the period presented.

17. SHARE BASED PAYMENTS

Implementation of share incentive plan - Participation shares

Arrangements were put in place shortly after the Company's formation to create incentives for those who are expected to make key contributions to the success of the Group. The Group's success depends upon the sourcing of attractive investment opportunities, the improvement of the target businesses, and their subsequent growth or sale to realise attractive returns for shareholders. Accordingly, an incentive scheme was created to reward key contributors to the creation of value. At the period end, a total of £34,799 was recorded in the share based payment reserve. This is based on a grant date fair value of £150,200, spread over the vesting period (defined below) and recognised for the period between the grant date (defined below) and the reporting date.

On being offered, the Company may purchase the Participation shares either for cash or for the issue of new Ordinary shares at its discretion. The Company expects to settle in the issue of new Ordinary shares and has therefore recognised this as an equity settled scheme. The valuation of the Participation shares is discussed below. The Participation shares may only be sold on this basis if both the growth and at least one of the vesting conditions (defined below) have been satisfied. If these conditions have not been satisfied at the fifth anniversary of Gloo Networks Plc's Admission to AIM ''Admission'' (i.e. 11 August 2020), the Participation shares must be sold to the Company at the subscription price. Details of the Participation shares issued are shown on the next page.

Participation shares

During the period, Gloo Networks Jersey Limited issued Participation shares to Rebecca Miskin, Juan Lopez-Valcarcel, Marwyn Long Term Incentive LP, in which James Corsellis and Mark Brangstrup Watts hold indirect interests, and Puyfamily Société Civile an entity in which Arnaud de Puyfontaine is interested.

Grant date

The date at which the entity and another party agree to a share-based payment arrangement, for accounting purposes is the grant date. The grant dates for the majority of the Participation shares (120) is 5 June 2015 and 4 December 2015 for the remaining 10. This is in line with when the share-based payments were awarded.

Growth condition

The Growth Condition is that the compound annual growth of the Company's equity value must be at least 10% per annum. The Growth Condition takes into account new shares issued, dividends and capital returned to shareholders.

Vesting conditions and Vesting period

The Participation shares are subject to certain vesting conditions, at least one of which must be (and continue to be) satisfied in order for a holder of the Participation shares to exercise his or her redemption rights. The vesting period is a period during which the vesting conditions are to be satisfied. The vesting period ends on the 11 August 2020.

The vesting conditions are as follows:

(i) a sale of all or a material part of the business of Gloo Networks Jersey Limited;

(ii) a sale of all of the issued ordinary shares of Gloo Networks Jersey Limited occurring;

(iii) a winding up of Gloo Networks Jersey Limited occurring;

(iv) a sale or change of control of the Company; or

(v) it is later than the third anniversary of Admission (i.e. 11 August 2018).

Rebecca Miskin, Juan Lopez-Valcarcel and Arnaud de Puyfontaine have agreed that if they cease to be involved in the Company during the period from the Admission date to and including the third anniversary of the Admission date then in certain circumstances a proportion of their Participation shares may be forfeited in accordance with the leaver provisions in their subscription agreements.

Value

Subject to the provisions detailed above, the Participation shares can be sold to the Company for an aggregate value equivalent to 15% of the increase in ''Shareholder Value'' in the Company. Shareholder Value is broadly defined as the increase in market capitalisation of all Ordinary shares of the Company issued up to the date of sale, allowing for any dividends and other capital movements.

Holding of Participation shares

Participation shares have been created and shares have been allocated and issued as shown in the table below.

Valuation of Participation shares

The Participation shares allocated pursuant to employee shareholder agreements with Gloo Networks Jersey Limited, have been accounted for in accordance with IFRS 2, "Share Based Payments".

Details of the value of the Participation shares are set out below, based on 100% of the shares granted coming to vest:

As at period end, £34,799 has been recognised in the consolidated statement of comprehensive income and consolidated statement of financial position as a share-based payment reserve in relation to the Participation shares.

The value of the Participation shares granted under the scheme has been calculated using a Monte Carlo model. The fair value is based on a weighted average of £30.72 million raised on incorporation and ungeared volatility of 20% based on a weighted average share price over the vesting period. An expected term input range of between two and four years has been used, being the likely period of time between the date on which an acquisition takes place and the start and end of the redemption period. The participation shares are subject to a growth condition, which is a market performance condition, and as such has been taken into consideration in determining their fair value. The risk-free rate of return for the Awards was taken from zero-coupon UK Government bonds with a redemption period in line with the expected term. An average value of between 0.65% (2 years) and 1.10% (4 years) has been sourced from Thomson Datastream as at each date of grant. Due to the narrow range of risk free rates, a risk free rate of 1.00% for all scenarios has been used. The model incorporates a range of probabilities for the likelihood of an acquisition being made of a given size.

18. RELATED PARTY TRANSACTIONS

In the opinion of the Directors, there is no single controlling party.

Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party, or the parties are under common control or influence, in making financial or operational decisions.

Mark Brangstrup Watts and James Corsellis are managing partners of Marwyn Capital LLP which provides corporate finance advice and various office and finance support services to the Company. During the period Marwyn Capital LLP charged a total of £360,815 (net of VAT as applicable). Marwyn Capital LLP was owed an amount of £24,957 at the balance sheet date.

Mark Brangstrup Watts and James Corsellis are also Managing Partners of Marwyn Investment Management LLP. Marwyn Investment Management LLP entered into an employment contract with one of the Company's employees on 17 December 2014 pursuant to which the employee agreed to provide services to the Company. Marwyn Investment Management and the Company agreed that the salary and other expenses relating to that employee's engagement which were incurred by Marwyn Investment Management LLP prior to the Company's incorporation would be recharged to, and repaid by, the Company. The Company and the employee have subsequently entered into a new contract of employment dated 15 May 2015.

Mark Brangstrup Watts and James Corsellis are the ultimate beneficial owners of Axio Capital Solutions Limited which provides company secretarial, administrative and accounting services to the Group. During the period Axio Capital Solutions Limited charged £63,453 in respect of services supplied, of which £20,000 was included in placing costs and taken against share premium. Axio Capital Solutions Limited was owed an amount of £2,983 at the balance sheet date.

Marwyn Long Term Incentive LP, a partnership in which James Corsellis and Mark Brangstrup Watts are beneficially interested, holds Participation shares as disclosed in note 17.

Gloo Networks Jersey Limited entered into employee shareholders agreements with each of Rebecca Miskin and Juan Lopez-Valcarcel pursuant to which each waived certain employment rights in return for receipt of Participation shares.

Pre-Admission, MVI LP subscribed for a total of 600,000 ordinary shares as detailed in note 13. On Admission MVI LP subscribed for 8,933,333 ordinary shares at £1.20 per share pursuant to a subscription agreement dated 31 July 2015. MVI LP is managed by Marwyn Asset Management Limited, the company of which Mark Brangstrup Watts and James Corsellis are directors and ultimate beneficial owners.

At 31 March 2016, Gloo Networks Jersey, the subsidiary, owed £1,278,137 to the Company for services paid on its behalf.

19. COMMITMENTS AND CONTINGENT LIABILITIES

There were no commitments or contingent liabilities outstanding at 31 March 2016 that require disclosure or adjustment in these financial statements.

20. COMPANY LOSS FOR THE PERIOD

The Company has not presented its own statement of comprehensive income as permitted by section 408 of the Companies Act 2006. The loss and total comprehensive loss for the period and the total loss attributable to shareholders was £1,387,898.

21. POST BALANCE SHEET EVENTS

There have been no material post balance sheet events that would require disclosure or adjustment to these financial statements. 

GLOO NETWORKS PLC

Company number 09441537

RISKS

Risks applicable to investing in the Company

An investment in the Ordinary Shares involves a high degree of risk. No assurance can be given that Shareholders will realise a profit or will avoid loss on their investment. The Board has identified the following risks which it considers to be the most significant for investors in the Company. The risks referred to below do not purport to be exhaustive and are not set out in any particular order of priority. If any of the following events identified below occur, the Company's business, financial condition, capital resources, results and/or future operations and prospects could be materially adversely affected. In that case, the market price of the Ordinary Shares could decline and investors may lose part or all of their investment. Additional risks and uncertainties not currently known to the Board or which the Board currently deem immaterial may also have an adverse effect on the Company's business. In particular, the Company's performance may be affected by changes in the market and/or economic conditions and in legal, regulatory and tax requirements.

Market and competition risks

· The Company has a limited operating history

The Company was incorporated on 16 February 2015. The Company has limited financial statements and/or historical financial data. The Company is therefore subject to all of the risks and uncertainties associated with any new business enterprise including the risk that the Company will not achieve its investment objectives and that the value of an investment in the Company could decline and may result in the total loss of all capital invested. The past performance of companies, assets or funds managed by the Directors, or persons affiliated with them, in other ventures, is not necessarily a guide to the future business, results of operations, financial condition or prospects of the Company.

· Industry-specific risks

It is anticipated that that the Company will invest in businesses with a particular focus on the UK and US (and, to a lesser extent, other European) internet and media sectors. These sectors are in a transitional period and the ability of the Company to generate transactional income streams will be closely tied to the Company's ability to capture and analyse consumer data accurately, the loyalty of consumers to any acquired brand, as well as overall levels of consumer demand, which may be affected by factors beyond the Company's control, such as changes in global and local economic activity levels.

Key management risks

The Company relies heavily on a small number of key individuals, in particular the Directors, to identify, acquire and manage suitable assets, companies and/or businesses. The retention of their services cannot be guaranteed. Accordingly the loss of any such key individual may have a material adverse effect on the business, financial condition, results of operations and prospects of the Company. In addition, there is a risk that the Company will not be able to recruit executives of sufficient expertise or experience to maximise any opportunities that present themselves, or that recruiting and retaining those executives is more costly or takes longer than expected. The failure to attract and retain those individuals may adversely affect the Company's operations.

Investment risks

· Acquisition of targets

The Company's ability to implement the Investment Policy is be limited by its ability to identify and acquire suitable acquisitions or suitable ancillary acquisitions. Suitable opportunities may not always be readily available. The Company's initial and future acquisitions may be delayed or made at a relatively slow rate because, inter alia:

- the Company intends to conduct detailed due diligence prior to approving acquisitions;

- the Company may conduct extensive negotiations in order to secure and facilitate an acquisition;

- it may be necessary to establish certain structures in order to facilitate an acquisition;

- competition from other investors, market conditions or other factors may mean that the Company cannot identify attractive acquisitions or such acquisitions may not be available at the rate the Company currently anticipates;

- the Company may be unable to agree acceptable terms;

- the Company may be unable to raise bank finance on terms the Directors consider reasonable; or

- the Company may need to raise further capital to make acquisitions and/or fund the assets or businesses invested in, which may not be achieved.

· Disposals

The Company may make investments that it cannot realise through trade sale or flotation at an acceptable price. Some investments may be lost through insolvency. Any of these circumstances could have a negative impact on the profitability and value of the Company.

· Unsuccessful transaction costs

There is a risk that the Company may incur substantial legal, financial and advisory expenses arising from unsuccessful transactions which may include transaction documentation, legal, accounting and other due diligence.

· Timing of investments

As detailed above, the Company cannot accurately predict how long it will actually take to deploy the capital available to it or whether it will be able to do so at all. Any significant delay or inability to find a suitable acquisition may have a material adverse effect on the business, financial condition, results of operations and prospects of the Company.

Pursuant to the AIM Rules for Companies, if the Company has not substantially implemented its Investment Policy within 18 months of Admission, the Investment Policy will be subject to approval by Shareholders at the next annual general meeting of the Company and annually thereafter.

· Success of Investment Policy not guaranteed

The Company's level of profit will be reliant upon the performance of the assets acquired and the Investment Policy (in both its current form and as amended from time to time). The success of the Investment Policy depends on the Directors' ability to identify investments in accordance with the Company's investment objectives and to interpret market data correctly. No assurance can be given that the strategy to be used will be successful under all or any market conditions, that the Company will be able to identify opportunities meeting the Company's investment criteria, that the Company will be able to invest its capital on attractive terms or that the Company will be able to generate positive returns for Shareholders. If the Investment Policy is not successfully implemented, this may have a material adverse effect on the business, financial condition, results of operations and prospects of the Company.

· Change in Investment Policy

The Investment Policy may be modified and altered from time to time with the approval of Shareholders, so it is possible that the approaches adopted to achieve the Company's investment objectives in the future may be different from those the Directors currently expect to use. Any such change may have a material adverse effect on the business, financial condition, results of operations and prospects of the Company.

· Concentration of risk

There can be no assurance that the actual investment opportunities that the Directors are able to source for the Company will not lead to a concentration of risk. To the extent that any acquisitions are concentrated in any particular niche of the internet and media sector, region, country or asset class, downturns affecting the source of the concentration may result in a total or partial loss of the value of such investments and have a material adverse effect on the business, financial condition, results of operations and prospects of the Company.

· Material facts or circumstances not revealed in the due diligence process

Prior to making or proposing any investment, the Company will undertake legal, financial and commercial due diligence on potential investments to a level considered reasonable and appropriate by the Company on a case by case basis. However, these efforts may not reveal all material facts or circumstances that would have a material adverse effect upon the value of the investment. In undertaking due diligence, the Company will need to utilise its own resources and may be required to rely upon third parties to conduct certain aspects of the due diligence process. Further, the Company may not have the ability to review all documents relating to the investee company and assets. Any due diligence process involves subjective analysis and there can be no assurance that due diligence will reveal all material issues related to a potential investment. Any failure to reveal all material facts or circumstances relating to a potential investment may have a material adverse effect on the business, financial condition, results of operations and prospects of the Company.

Financial risks

When a suitable acquisition or ancillary acquisition is identified, it is possible that the Company will need to raise further capital to purchase such investment and / or facilitate the development of such investment. There is no guarantee that the Company will be able to raise such capital and this may prejudice the Company's ability to make and develop such investments. This inability to raise further capital may have a material adverse effect on the business, financial condition, results of operations and prospects of the Company.

Risks relating to the Ordinary Shares and their trading on AIM

· Potential Marwyn conflicts of interest

Two of the Company's five Directors, James Corsellis and Mark Brangstrup Watts, are directors of became closely related to funds managed by Marwyn Asset Management Limited, the investment manager of a significant shareholder. While Marwyn has a record of long-term support for the companies in which it invests and in whose management it is involved, and the Marwyn significant shareholder has entered into a lock-up agreement in respect of its investment in the Company, it is possible that Marwyn's interests may differ from those of other Shareholders and that the potential for conflict between the roles of James Corsellis and Mark Brangstrup Watts as Directors of the Company and related parties of Marwyn may adversely affect the interests of the Company's other Shareholders.

· Limited trading record for the Ordinary Shares

Since the Ordinary Shares were only recently listed, their market value is uncertain. The market price of the Ordinary Shares may be volatile and may go down as well as up and investors may therefore be unable to recover the value of their original investment. The Company's operating results and prospects from time to time may be below the expectations of market analysts and investors. Additionally, stock market conditions may affect the Ordinary Shares regardless of the performance of the Company. Stock market conditions are affected by many factors, such as general economic outlook, movements in or outlook on interest rates and inflation rates, currency fluctuations, commodity prices, changes in investor sentiment towards particular market sectors and the demand and supply of capital.

Accordingly, the market price of the Ordinary Shares may not reflect the underlying value of the Company's net assets and the price at which investors may dispose of their Ordinary Shares at any point in time may be influenced by a number of factors, only some of which may pertain to the Company while others may be outside the Company's control.

· Further issues of Ordinary Shares could dilute the interests of existing Shareholders

The Company may in the future issue additional securities, including Ordinary Shares, as well as options, warrants and rights relating to its securities, for any purpose. Future issues may consist of Ordinary Shares or securities having greater rights and preferences and may be priced at a discount to the market price of the Ordinary Shares and/or below the prevailing net asset value of each Ordinary Share. It may not be possible for existing Shareholders to participate in such future issues by the Company and the possibility of such future issues of Ordinary Shares may cause the market price of the Ordinary Shares to decline.

· Investing company status

The Company is currently considered to be an investing company for the purposes of the AIM Rules for Companies. As a result, it may benefit from certain partial carve-outs to the AIM Rules for Companies, such as those in relation to the classification of Reverse Takeovers. Were the Company to lose investing company status for any reason, such carve-outs would cease to apply. It is anticipated that any acquisition will be considered to be a Reverse Takeover.

· Trading on AIM

An investment in shares traded on AIM is generally perceived to involve a higher degree of risk and to be less liquid than an investment in shares listed on the Official List. AIM has been in existence since June 1995 but its future success, and the liquidity of the market for the Ordinary Shares cannot be guaranteed. Consequently, it may be more difficult for an investor to sell his or her Ordinary Shares than it would be if the Ordinary Shares were listed on the Official List, and he or she may receive less than the amount paid. In addition, there can be no guarantee that the Company will always maintain a quotation on AIM. If it fails to retain such a quotation, investors may decide to sell their Ordinary Shares, which could have an adverse impact on the price of the Ordinary Shares. If in the future the Company decides to maintain a quotation on another exchange in addition to AIM, the level of liquidity of shares traded on AIM may decline if Shareholders choose to trade on that market rather than on AIM.

· Value and liquidity of the Ordinary Shares

It may be difficult for an investor to realise his or her investment. The shares of publicly traded companies can have limited liquidity and their share prices can be highly volatile. The price at which the Ordinary Shares will be traded and the price at which investors may realise their investment will be influenced by a large number of factors, some specific to the Company and its operations and others which may affect companies operating within a particular sector or quoted companies generally. A relatively small movement in the value of an investment or the amount of income derived from it may result in a disproportionately large movement, unfavourable as well as favourable, in the value of the Ordinary Shares or the amount of income received in respect thereof. Investors should be aware that the value of the Ordinary Shares could go down as well as up, and investors may therefore not recover their original investment. Furthermore, the market price of the Ordinary Shares may not reflect the underlying value of the Company's net assets.

Risks relating to legislation and regulations

· Legislative and regulatory risks

Any investment is subject to changes in regulation and legislation. As the direction and impact of changes in regulations can be unpredictable, there is a risk that regulatory developments will not bring about positive changes and opportunities, or that the costs associated with those changes and opportunities will be significant. In particular, there is a risk that regulatory change will bring about a significant downturn in the prospects of one or more acquired businesses, rather than presenting a positive opportunity.

· Taxation

There can be no certainty that the current taxation regime in England and Wales or overseas jurisdictions within which the Company may operate will remain in force or that the current levels of corporation taxation will remain unchanged. Any change in the tax status or tax legislation may have a material adverse effect on the financial position of the Company. Investors should be aware however, that investment in the Company by way of subscription for Ordinary Shares may not be treated as a ''qualifying holding'' for the purposes of the venture capital trust rules (as set out in Part 6 Chapter 4 of the UK Income Tax Act 2007) because, the Company may not fulfil the requirements imposed upon it which need to be met in order for the Ordinary Shares to have qualifying holding status. Investors should also note that the venture capital trust legislation contains numerous complex conditions for a holding of Ordinary Shares to be a qualifying holding, several of which must be satisfied by the investing venture capital trust itself. The Company is not responsible for the satisfaction of such conditions.

· Availability of tax reliefs

The Company's strategy is not influenced by whether or not capital gains tax reliefs or enterprise investment scheme reliefs are available to Shareholders and investors should not rely on the availability of those reliefs in deciding whether to invest in the Company.

· Suitability

As an investment vehicle incorporated in England and Wales, the Company may only be marketed to, and is only suitable as an investment for, sophisticated investors with an understanding of the risks inherent in investment in emerging market jurisdictions and an ability to accept the potential total loss of all capital invested in the Company.

GLOO NETWORKS PLC

Company number 09441537

ADVISERS