Final Results

InternetQ plc

('InternetQ', the 'Group' or the 'Company')

PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2010

Profitable growth and strong cash generation

InternetQ, one of the leading providers of mobile marketing and digital entertainment solutions for mobile network operators and brands, is pleased to report maiden preliminary results for the year ended 31 December 2010.

Financial Highlights

·; Revenue up 106% to €35.5 million (2009: €17.2 million)

·; EBITDA up 370% to €5.87 million (2009: €1.2 million)

o Delivering a margin of 17% on revenue (2009: 7%)

·; Operating profit of €3.8m (2009: (€0.2)m)

·; Profit after tax of €2.6m (2009: €(1.1)m)

·; Earnings per share up to 0.28cents (2009: (0.16)cents)

·; Operating cash flow of €5.8 million and free cash flow of €2.9 million (2009: € 2.6 million and € 28 thousand respectively)

* Operating cash flow defined as Net cash from Operating Activities as per IFRS

* Free cash flow defined as Net cash from Operating Activities, minus capital expenditure, minus increase in intangible assets, plus proceeds from sale of assets

Operational Highlights

·; Successful listing on AIM, a market of the London Stock Exchange, in December 2010

·; InternetQ now connects with 55 mobile network operators, in 27 countries, effectively reaching nearly 700 million consumer subscribers

·; Continue to deliver growth in key emerging territories

o Expanded its operations in Turkey and the surrounding Middle East territories

o Established presence in Brazil, the most important market of Latin America

·; Successfully delivered hundreds of seamless mobile marketing campaigns for mobile network operators, media companies and brands

o Business Partners include Orange, Turkcell, Vodafone, Beeline, Wind, AVEA, Plus, MTV Europe, Bloomberg TV, Rotana, Bauer Media and several others

·; Significant progress made in setting up a presence in new geographical markets

o Including Russia and certain CIS territories, sub-Sahara African nations and Southeast Asia

Konstantinos Korletis, Chief Executive Officer of InternetQ commented:

"2010 has been a landmark year for our business both in terms of operational performance and our successful listing on AIM. Our investments made in previous years to expand our market reach, improve our technology and strengthen our human resources are enabling us to capitalise on a number of exciting growth opportunities.

"Moreover, our strong balance sheet and cash reserves will prove valuable in our efforts to grow organically or exploit acquisition opportunities in the areas of interest. We have made a strong start to 2011 and remain confident that trading for the current year will be in line with market expectations."

For further details:

President & Founder's Statement

The year ended 31 December 2010 was earmarked by several great achievements of company. We grew our business vertically and horizontally, successfully tapping into new markets and cross selling to our partners and clients more products and services. At the same time, we effectively managed our share floatation on AIM without losing focus or grasp of our business development and operational discipline.

The future of mobile marketing holds many challenges and opportunities for the companies of our sector. It is my strong belief that InternetQ will be among those that continue to excel, developing an expanded footprint in high growth markets and capitalizing on the strong, long-lasting relationships we have forged with our business partners over the years.

I look forward to an exciting new year and to a continued delivery of superior returns for our shareholders.

Chairman's Statement

We are pleased to report our financial results for the year ended 31 December 2010. In 2010 the Group achieved a strong performance highlighted by continuous international expansion, technology efficiency and scalability resulting in broadening of the client base, expansion of the mobile entertainment services, a successful listing on AIM and robust financial results with a strong performance in terms of revenue, profitability and cash generation.

Revenue for the year ended 31 December 2010 grew by 106% to €35.5 million (2009: €17.2 million). Both our business segments, mobile marketing and mobile entertainment, delivered a strong performance and made a positive contribution to our results. Profit before tax improved to €3.5 million (2009: loss € 1.1 million) and Profit after tax reached €2.6 million (2009: loss €1.1 million). In 2010, the Group was highly cash generative, with operating cash flow of €5.8 million and free cash flow of €2.9 million.

Our technology platform provides mobile marketing solutions and applications that enable our clients to gain better access to and improve interaction levels with mobile subscribers. Using this mobile marketing technology platform, we also provide premium digital content directly to mobile subscribers through AKAZOO, a proprietary and highly versatile online / mobile entertainment hub.

The Group is operating in a rapidly expanding and competitive market. Currently, there are over five billion mobile subscribers worldwide; this number is expected to increase to over six billion by 2013. Mobile devices are increasingly being used as a medium for delivering marketing messages which are highly targeted and measurable. Mobile network operators, who are the Group's principal customers, are keen to encourage and use these services for marketing campaigns that are often designed to be interactive with the mobile subscriber. Through the subsequent engagement, mobile network operators can drive a higher Average Revenue Per User (ARPU).

In this mobile ecosystem the Group is seeking to become a leading provider of mobile marketing solutions and of digital content. To date, the Group has managed to deliver outstanding results by remaining focused on continuously improving its technology platform and delivering targeted mobile marketing solutions. The Group has a clear orientation towards growing organically by focusing on developing markets and consistently managing costs, resources and risks while pursuing selective acquisitions in the markets of interest.

We are confident that we are in an excellent position to pursue our strategic goals as demonstrated by the persistent increase in our revenue, profits, cash generation and strong balance sheet position.

I'd like to thank our experienced and motivated management team who have developed a first class client roaster, long term business relationships and our international base.

Chief Executive Officer's Review

I am pleased to report a great performance this year. While the full year financial results were satisfactory, our second half was nothing short of transformational as our company went public.

Over the past twelve months, InternetQ consistently demonstrated robust growth, defying macro industry trends. We increased revenue by more than 106%, and our EBITDA reached 17% of revenue, posting an increase of 370% over the previous year. Most importantly, we managed to maintain a positive free cash flow while growing our business footprint and at the same time, procuring significant investments to further improve our Mobi-Dialogue marketing platform.

This impressive performance has been driven by the following:

·; Technology efficiency and the proven scalability of our business model;

·; Focus on developing markets where the mobile subscriber population grows rapidly and social interaction has been shaped around the use of mobile devices; and

·; Uncompromising discipline in managing human and capital resources.

The year of 2010 was earmarked by the following achievements:

·; Continuous growth in the home markets of Poland and Turkey where we hold a leading position;

·; Penetration of new markets like Brazil, the Middle East and certain countries of North Africa;

·; Successful roll-out of AKAZOO, a versatile online and mobile entertainment hub that offers its members content within a social network environment allowing them to interact and get rewarded for their loyalty and usage;

·; Connectivity with 55mobile network operators, in 27 countries, effectively reaching nearly 700 million consumer subscribers;

·; Record level of profitability and free cash flow, despite the continuous investments in technology and footprint expansion. Revenue approached € 35.5m, while EBITDA and free cash flow amounted to € 5.9m and € 2.9m respectively;

·; Listing of our shares to the London Stock Exchange AIM and establishment of InternetQ as a premier mobile marketing enabler with cutting edge technology and an international reach.

Industry Dynamics

Over the last twenty years, mass media marketing techniques have changed significantly. For most of the recent past, terrestrial broadcast television was the predominant marketing medium, using advertising breaks as a method of marketing. This form of communication suffered from the disadvantages of being costly, difficult to change and adapt quickly, interruptive, and for many consumers, unwelcome and irrelevant.

With the development of the internet, new methods of mass marketing have been developed to overcome many of these disadvantages. Some forms of targeted email marketing, Google ad words, Facebook and recommendation engines on Amazon and iTunes are good examples of interactive and personalised forms of mass marketing.

Most recently, the global proliferation of mobile technology together with the increasing functionality and affordability of mobile devices has helped to deliver targeted consumer-friendly mass marketing even in markets whose economies are still developing. We have entered into an era of 'mass-market personalisation', in which the individual and their personal needs, habits, preferences and desires can be identified, anticipated and marketed to. With the development of mobile networks as a widely recognised platform of communication, combined with sophisticated database management and associated computer technologies, new mass marketing techniques have evolved beyond online marketing.

This new marketing model, termed 'mobile marketing', allows businesses to actively engage with consumer subscribers, the number of which continues to increase steadfastly (currently, there are over five billion mobile subscribers worldwide, expected to increase to over six billion by 2013). Mobile marketing benefits from the fact that mobile devices are usually turned on and kept within personal reach of the user, resulting in a greater target audience. This means that the mobile device is typically open for direct communication and the marketer has the added ability to choose the timing of transmission of the marketing message, as well as the identity of the recipient. The aforementioned factors conjointly maximize the chances of eliciting a response from the mobile subscriber, in contrast to less intuitive forms of advertising which rely on a mobile subscriber going on the internet and then reacting to a marketing message.

Our Business

Within this rapidly evolving environment, InternetQ offers mobile marketing solutions that facilitate mobile network operators, media companies and brands to design and implement targeted, interactive and measurable campaigns by engaging with and entertaining mobile network subscribers via their mobile devices. Mobi-Dialogue, our proprietary technology platform, provides mobile marketing solutions, which enable our business partners to gain better access to and improve interaction levels with mobile subscribers.

Furthermore, InternetQ also provides premium digital content directly to mobile subscribers via AKAZOO, a versatile online and mobile entertainment hub that offers its members content within a social network environment allowing them to interact and get rewarded for their loyalty and usage. Over and above its content driven business focus, AKAZOO aims at developing thoroughly profiled mobile communities where, in the future, brands can market and advertise their products and services.

The InternetQ portfolio includes an array of products and services that are being continually refined, updated and tested in demanding market conditions around the globe. Solutions for mobile marketing campaign management, mobile content adaptation, aggregation, delivery and interactive subscriptions and payment gateways are at the core of several applications that we currently activate globally. Our sophisticated mobile marketing services have positioned InternetQ at the core of mobile-supported brand awareness building, by allowing the design of campaigns that combine traditional promotional channels with the high-tech benefits of promoting through mobile channels.

To market our business, in 2010, we initiated several brand development and awareness initiatives, including programs to educate customers, sales support through branding, field marketing, participation in trade fairs, workshops for mobile network operators and ongoing customer communications. Additionally, we participate in industry, customer and analyst events that we consider relevant for our business development. Our primary marketing events of the year include Mobile World Congress in Barcelona, Asia Mobile Congress World in Hong Kong and AdTech in London.

The Mobi-Dialogue Platform

Mobi-Dialogue is a superior, end-to-end, direct marketing platform that unravel the complexities of most mobile marketing activities. It is a mobile campaign management and delivery system that's already powering thousands of successful mobile marketing initiatives and employed by leading mobile network operators, television networks, radio stations, advertising agencies and consumer brands around the world. It offers comprehensive web-based management tools providing secure access to manage and maintain mobile applications all in one unified place.

Offered as a fully managed or software as a service (SaaS) product, Mobi-Dialogue is scalable and can support any sized mobile marketing campaign -from a limited interactive promotion to an ongoing loyalty-building initiative or massive permission-based marketing blast. Providing mobile marketing expertise in accessible, easy-to-understand software modules that help our business partners adapt their mobile marketing campaigns to their unique target audience, the Mobi-Dialogue platform features five integrated solution modules and a performance monitoring tool that keeps campaign vitals all in one place and us in control of the marketing outreach:

·; Promotion Suite

·; Content Publisher

·; Site Builder

·; Incentive Marketer

·; Billing Gateway

·; Performance Manager

Addressing the full cycle of mobile engagement from campaign management to digital content delivery, campaign analytics, mobile internet outreach, incentive marketing and monetization, Mobi-Dialogue delivers the critical insight to ensure optimal impact and the greatest return on the clients' marketing investments.

Additionally, our platform, and our geographically dispersed data centers (Athens and Luxemburg), enable marketing campaign initiatives to comply with local regulations regarding data collection and consumer privacy across many different countries.

Finally, as part of our high quality standards for technical support, we have adopted a 24/7 service policy, whereas we ensure online support to our customers and predominately mobile network operators, from a centralized knowledge centers in Athens.

Our Strategy

We operate in a rapidly expanding industry where mobile devices are increasingly being used for marketing campaigns because they are effective at reaching the advertisers' target audience directly and in a manner in which the end-user response can be measured.

At the same time, mobile network operators, who are InternetQ's principal customers, are keen to encourage -even use themselves- these services because marketing campaigns are by nature designed to be interactive with the mobile subscriber. Through this subsequent engagement, mobile network operators can drive their ARPU higher and create an alternative revenue stream to subscription revenue for voice services.

Within this developing world, our strategy is to become a leading provider of mobile marketing solutions, including the provision of digital content. The principal elements of our strategy are as follows:

- Expand our business activities in markets we already operate in

Make use of its existing relationships with principal mobile network operators in order to broaden and diversify our customer base. We anticipate that the continuous development of these emerging markets will cause brands and traditional media assets to utilize mobile channel as an integral part of their sales and marketing strategy.

Our impressive track record of successful mobile marketing campaigns with leading operators like Vodafone, Orange, Turkcell, Wind and numerous others will induce new customers to learn more about the advantages of mobile marketing, the breadth and distinctiveness of our technology solutions and our ability to seamlessly service them.

Moreover, in particular markets, we want to enhance our portfolio by focusing more on promising niches such as mobile payment solutions and aggregation services for a variety of mobile value added services (m-VAS).

- Penetrate new rapidly developing markets

We have identified a number of territories which satisfy our principal business development criteria. These include Russia and certain of the CIS countries, Latin America, South East Asia, parts of the Middle East and a few African nations.

Entering these new markets can be done organically or through acquisitions; whichever method we consider more expeditious and economically sound. In addition, we may evaluate acquisition propositions which will enhance our technological capabilities or give us access to important new client relationships.

- Continue to invest in our proprietary technology assets

We strongly believe it is critical to continue investing in the functionality and innovation of Mobi-Dialogue, our mobile marketing platform, by developing new technology solutions that will further strengthen and broaden its capabilities and user applications.

Furthermore, we are gradually increasing our investments on the AKAZOO digital content hub, and we are in the process of re-designing its user interface and the content provision and management tools.

- Strengthen our organisational structure

Our strategy involves a strong emphasis on technology innovation and market expansion in order to stimulate revenue growth. We are currently investing in strengthening our corporate structure, at all levels.

More specifically, we are in the process of recruiting more experienced professionals working in our sales and business development teams; increase the number of software engineers and telecom specialists and also strengthen the number of human resource, finance and administration staff in order to maintain proper control of our growing operations.

Outlook for 2011

While we remain mindful of the macroeconomic environments we do however believe that 2011 represents a year of tremendous opportunity. InternetQ is now very well positioned in one of the fastest growing segments of the mobile market.

More specifically, InternetQ expects to achieve continued revenue growth, driven by four main factors:

·; Overall industry growth

·; Increasing number of new customers in existing and new markets

·; Growing volume of business from some established customers

·; Roll out of AKAZOO in many new territories

The investments made in previous years to expand our market reach, improve our technology and strengthen our human resources are enabling us to effectively manage this expected growth. This coupled with our proven business model and a carefully managed cost base means that InternetQ is well positioned for the year ahead. Moreover, our strong balance sheet and cash reserves will prove valuable in our efforts to grow organically or exploit acquisition opportunities in the areas of interest.

Chief Financial Officer's Review

In 2010 the Group delivered a robust operating and financial performance while successfully pursuing its admission and listing on AIM, a market of the London Stock Exchange. The Group more than doubled its revenues while posting a solid operating profit, which converted into a strong positive free cash flow. Revenues were fuelled by organic growth and approximately 85% was achieved from repeat business. Investment in the Company's technology platforms was on a par with the prior year while decreasing as a percentage of revenue, a clear indication of the scalability of the business model.

Revenues for the year ended 31 December 2010 grew by 106 per cent to €35.5 million (2009: €17.2 million). Both of the Group's business segments, mobile marketing and mobile entertainment, delivered a strong performance and had a positive contribution on the Group's results. Revenues from mobile marketing activities grew by 155 per cent to €30 million (2009: €11.8 million) while revenues from mobile entertainment activities were €5.5 million, at par with the prior year (2009: €5.4 million). Poland remained the Group's dominant market by contributing 69 per cent of total revenues, while Turkey nearly doubled, and in the year ended 31 December 2010 contributed 11 per cent of total revenue generated. On the other hand, revenue generated in the Greek market continued declining in importance and dropped to 13 per cent of total revenues as opposed to 31 per cent in 2009.

Despite geographic expansion and additional general and administrative costs that were incurred in relation to the IPO, the Group achieved improved profit margins. EBITDA grew by 370% to €5.87 million (2009: €1.2 million) delivering a margin of 17% (2009: 7%). Improved profitability reflects the scalability of both the mobile marketing and entertainment segments as well as management's orientation towards maintaining a tight fixed cost base. The scalability of our operating model is also demonstrated by the decreasing capital expenditure requirements.

Total capital expenditure for the year ended 31 December 2010 was €3million, slightly larger than the prior year (2009: €2.5 million) while depreciation and amortization for the same period grew by 33% to €2.1 million (2009: €1.5 million). Operating results, despite increased depreciation and amortization, were profitable, at €3.77 million (2009: loss of €0.2 million).

Financial expenses decreased to €0.5 million (2009: €0.9 million) mainly as a result of the reduction in total bank debt to €3.4 million (2009: €5.2 million). Profit before taxes reached €3.36 million (2009: loss € 1.1 million) and after a taxation charge of €0.8 million, net income amounted to €2.6 million as opposed to losses of €1.1 million in 2009.

Net assets at 31 December 2010 were €11.7 million (2009: €2.4 million) reflecting the IPO net proceeds of €6.8 million as well as retained profit of €2.7 million. Although the Group delivered a strong free cash flow no dividend was declared in support of our organic growth prospects in the short term. Net cash at 31 December 2010 stood at €5.7 million and cash stood at €9.1 million.

In 2010, the Group was highly cash generative with operating cash flow of €5.7 million and free cash flow of €2.8 million. Operating cash flow increased by 124% (2009: € 2.6 million) as a result of the significant improvement in the working capital cycle. Debtor days dropped to approximately 50 days and net working capital employed decreased considerably notwithstanding the increase in revenue.

Group income statement for the year ended 31 December 2010

(Amounts in Euro, except share information, per share data and unless otherwise stated)

Group statement of comprehensive income for the year ended 31 December 2010

(Amounts in Euro, except share information, per share data and unless otherwise stated)

Group statement of financial position for the year ended 31 December 2010

(Amounts in Euro, except share information, per share data and unless otherwise stated)

Group statement of changes in equity for the year ended 31 December 2010

(Amounts in Euro, except share information, per share data and unless otherwise stated)

1. OPERATING SEGMENT INFORMATION

For management purposes, the Group is organised into business units based on their products and services and has two reportable operating segments as follows:

§ The Mobile Marketing operating segment: Specially designed for campaigns on mobile telecommunications networks.

§ The Mobile Entertainment operating segment: Services offering access to digital content (music, games, subscriptions).

No operating segments have been aggregated to form the above reportable operating segments.

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss and is measured consistently with operating profit or loss in the consolidated financial statements.

Transfer prices between operating segments are on an arm's length basis in a manner similar to transactions with third parties. Segment income, expenses and results will include those transfers between business segments which will then be eliminated on consolidation.

Revenues from three clients which amounted to € 28,044,428 are included within the mobile marketing segment, while revenues from two clients which amounted to € 2,676,929 are included within the mobile entertainment segment.

1. Inter-segment revenues are eliminated on consolidation.

2. Loss for other segment includes income from the investment property rental € 13,500 and fair value loss from investment properties valuation (€ 58,000). The operating assets of other segment include the carrying amount of the investment property.

3. Segment assets do not include deferred tax asset (€ 323,376), as this asset is managed on a group basis

4. Segment liabilities do not include deferred tax (€ 177,198), current income tax payable (€ 735,988), and derivatives (€ 6,328) as these liabilities are managed on a group basis.

5. Capital expenditure consists of additions of property, plant and equipment and intangible assets.

Revenues from three clients which amounted to € 9,760,000 are included within the mobile marketing segment, while revenues from two clients which amounted to € 2,228,000 are included within the mobile entertainment segment.

1. Inter-segment revenues are eliminated on consolidation.

2. Loss for other segment includes income includes income from the investment properties rental (€ 13,750) and fair value loss from investment properties valuation (€ 44,000).

3. Segment assets do not include deferred tax asset (€ 339,089), as this asset is managed on a group basis

4. Segment liabilities do not include deferred tax (€ 121,965), current income tax payable (€ 476,351), and derivatives (€ 20,044) as these liabilities are managed on a group basis.

5. Capital expenditure consists of additions of property, plant and equipment and intangible assets.

Geographic information

Revenues from external customer

The Company being only the holding company of the Group has no operations in the country of domiciliation. Revenues in Europe include revenues in Poland and in Greece corresponding to approx. 69% (51% in 2009) and 13% (31% in 2009) of the Group's revenues respectively. In addition, revenues in Turkey amount to 11% of the Group's revenues (5% in 2009).

Non-current assets

Non-current assets include property, plant and equipment, intangible assets, investment properties and other non-current financial assets.

2. FINANCE INCOME / (COSTS)

Finance income/(costs) in the accompanying financial statements are analysed as follows:

3. INCOME TAX

The amounts of income taxes which are reflected in the accompanying income statement are analysed as follows:

The reconciliation of income taxes reflected in the income statement and the amount of income taxes determined by the application of the Company's statutory tax rate to pretax income is summarized as follows:

4. EARNINGS/ (LOSS) PER SHARE

Basic earnings/ (loss) per share amounts are calculated by dividing net profit/ (loss) for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year. There were no events or conditions that could result to a dilution effect and accordingly the basic and the diluted earnings per share is the same figure.

5. SHARE CAPITAL AND SHARE PREMIUM

On 30 September 2010, the Company's preferred ordinary shares of £0.01 each were converted and re-designated as ordinary shares.

On 27 October 2010, 3,347,161 ordinary shares of £0.01 each were allotted and fully paid in cash (resulting in total proceeds of € 38,369).

On 29 October 2010, all Company's ordinary shares were sub-divided into 4 shares of £0.0025 each.

On 10 December 2010, 5,697,435 ordinary shares of £0.0025 each were allotted and fully paid in cash (resulting in total proceeds of € 17,015). As regards the placing of 5,641,025 shares at £1.20 per share in relation to Admission to trading on AIM, the total proceeds amounted to € 8,069,028.

The following tables present the movements in share capital and share premium for the Company as at 31 December 2010 and 2009:

The movement of the Company's share premium as at 31 December 2010 is analysed as follows:

6. INTEREST BEARING LOANS AND BORROWINGS

a) Long-term loans:

Long-term loans for the Group as at 31 December 2010 and 31 December 2009 are analysed as follows:

The Group has entered into two Bond Loans agreements as follows:

- During March 2007, the Group entered into a Bond Loan agreement for a principal amount of €800,000 which bears interest at the six-month Euribor plus a margin of 2.3%. The repayment of the Bond is in 12 semi-annual installments. The first 11 installments are equal and amount to € 50,900. The final installment will be made on the Bond's maturity (20/03/2014) and amounts to € 240,100. First installment was paid on September 22, 2008.

- During March 2008, the Group entered into a Bond Loan agreement for a principal amount of €500,000 which bears interest at the six-month Euribor plus a margin of 2.0%.The repayment will be made by one installment on April 8, 2013.

The purpose of the above Bond Loans is the refinancing of existing bank indebtedness and the financing of a portion of the Group's capital expenditure.

The total interest expense for long-term borrowings for the yearended 31 December 2010 amounted to € 46,261 (2009: € 62,539) for the Group and is included in financial expenses (Note 2).

b) Short-term borrowings:

The Group has short-term borrowings (overdraft facilities) with annual variable interest rates which vary from 5% to 8%. The table below presents the available credit lines of the Company together with the utilized portion.

The total interest expense for short-term borrowings for the year ended 31 December 2010, amounted to € 276,022 (2009: € 313,357) and is included in financial expenses (Note 2).

7. Other Information

The financial information for the year ended 31 December 2010 set out above has been extracted from the 2010 Annual Report and Financial Statements and is prepared on the same basis as set out in the company's AIM Admission Document dated 6 December 2010. The 2010 Annual Report and Financial Statements have been audited by Ernst & Young LLP who have given an unqualified audit opinion. The Financial Statements for 2010 are expected to be filed following the Company's Annual General Meeting to be held on 28 June 2011.

This Preliminary Announcement was approved by the Board of Directors on 28 March 2011.