Interim Results

29 March 2018

MySQUAR Limited ("MySQUAR" or the "Company")

Unaudited Interim Results Ending 31 December 2017

MySQUAR, the Myanmar-language social media, entertainment and payments platform whose principal activity is to design, develop and commercialise Myanmar-focused internet-based mobile applications, announces its unaudited interim results for the six months ended 31 December 2017.

Highlights

· Revenue for the six months ended 31 December 2017 was USD 917,180 from mobile gaming and advertising

· A news aggregator site called Mingalarbar Morning was launched in July 2017 and quickly gained traction. New features were added throughout the period including arcade games and a Q&A section

· Launched three new mobile games including Land of Magic, Kywae En and Fish Hunter 3D KoTaNgar and added Nanbat Wingabar, a new mini lottery game to Lucky Wingabar

· Additional premium features including paid sticker sets and dating packages were added to MyChat during the period

· Completed integration with Ooredoo's direct carrier billing services in September 2017

· Registered users across all apps and games exceeded 20 million by 31 October 2017 and exceeded 22 million as of 31 December 2017.

· Appointed Stephen Chong as COO, in November 2017

· A cooperation agreement with Guangzhou Ruiyou Information Technologies Co., Ltd. ("Rightyoo") was finalised on 11 December 2017, for MySQUAR's games to be distributed on Huawei's inTouch platform and for Rightyoo's games to be distributed on MySQUAR's platform

· Released a new version of Land of Magic on 21 December 2017

Post-period end highlights

· Released a new version of MyFish on 3 January 2018

· A sticker store called BTree Studio was launched on Line with 8 sticker sets and the Apple store with 5 sticker sets in January 2018

· A new mini card game called Lucky Bohn was added to Lucky Wingabar on 17 January 2018

· A capital raise of £2.11 million was completed on 7 March 2018 through the issue of Convertible Bonds

· Launched Wushu King, a strategy card game within the Wuxia martial arts world, on 15 March 2018

· The rebranded Mingalarbar Morning and MyMingalarbar (MyChat) was released with a new and improved interface on 29 March 2018.

· The Vietnam operations team is being restructured to streamline costs. Headcount is expected to be reduced by about 25% by April 2018

The results will shortly be available on the Company's website at https://investors.mysquar.com/

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

For further information:

Chief Executive Officer's Commentary

Dear Shareholders,

We have made good progress in the first half of the fiscal year with the release of three new mobile games, one mini game, the launch of Mingalarbar Morning, new premium content added to the dating feature in MyChat, the addition of Ooredoo's carrier billing services and a cooperation agreement with Rightyoo. The addition of Stephen Chong as COO in November 2017 has helped to strengthen our operations and processes to be more cost efficient. These developments reinforce MySQUAR's position as a leader in media and entertainment in Myanmar.

The addition of Ooredoo's carrier billing services in September 2017 adds another convenient payment option for users of MySQUAR's applications and games. Combined with Telenor's carrier billing services, this gives the Group access to about 58% of the market which helped to boost the number of registered users across all apps and games to over 20 million as of 31 October 2017 and exceeded 22 million as of 31 December 2017.

For the remaining fiscal year the Group will focus on three main strategies:

Mobile Gaming

MySQUAR retains its role as the leading publisher of mobile games in Myanmar with the largest portfolio of games and the widest selection of mobile game genres. During the period the Group launched one hardcore game, two casual games and one mini game. Land of Magic is the first MMORPG (massively multiplayer online role playing game) in Myanmar, Kywae En is based on a well-known board game often found played on the streets of Myanmar and Fish Hunter 3D KoTaNgar is a spin-off to the popular MyFish fish hunting game with attractive 3D graphics. Nanbat Wingabar is a mini lottery game added to the popular Lucky Wingabar casual gaming platform. Due to its popularity, a new version of Land of Magic was released in December. The gaming business continues to generate the largest part of the Group's total revenue and is expected to keep generating further revenue growth through the release of new games, implementation of new payment options and potential partnerships with mobile game publishers and developers. The Group's first mobile game cooperation agreement with Rightyoo was finalised in December 2017 for MySQUAR's games to be distributed on Huawei's inTouch platform and for Rightyoo's games to be distributed on MySQUAR's platform.

Mingalarbar Morning and MyMingalarbar

A rebranded and enhanced Mingalarbar Morning and MyChat are being launched today. Mingalarbar Morning is MySQUAR's news aggregator website which was launched in July 2017. Over the last eight months, Mingalarbar Morning has gained traction and the user data collected indicates that most of the users of Mingalarbar Morning are aged between 18 and 34. Over half of visitors are female and they utilise the site to search mainly for entertainment and lifestyle news. Therefore, going forward, the site will be branded as an entertainment and lifestyle destination to cater to the interests and needs of the product's predominantly young, female user base. Mingalarbar Morning will initially target beauty, fashion, food and education brands to use it as an advertising platform for their products and services.

MyChat is the Group's flagship chat and social networking app that was launched in March 2015. Unlike Mingalarbar Morning, the user base for MyMingalarbar is predominantly males aged between 18 and 34. MyChat will be rebranded as MyMingalarbar, an app that allows users to customise their Mingalarbar Morning experience by allowing them to select topics of interest and receive personalised news. MyMingalarbar will still retain its core features such as chat, dating and a sticker store.

As part of this effort to rationalise MySQUAR product offerings, both products have unveiled their re-designed logos today which feature similar silhouettes designed to better appeal to the Group's younger user base.

In addition, the Group launched a spin-off sticker store in January 2018 called BTree Studio that is listed on Line with 8 sticker sets and the Apple store with 5 sticker sets.

The Group discussed the decision to discontinue the partnership with Fastsell in the 2017 annual report and for the Group to develop its own marketplace in-house. The marketplace feature will be integrated into Mingarlarbar Morning along with the VOIP service of CallHome to facilitate conversations between buyers and sellers. Both initiatives continue to progress and it's estimated that the marketplace will be integrated into Mingalarbar Morning by 2018 financial year end and the VOIP feature by Q1 FY2019. Should the marketplace feature gain traction, the Group will further develop this into an e-commerce platform. CallHome has been withdrawn from the market as a standalone product.

The Group continues to leverage its agreements with Sealand Capital Galaxy Limited and Myanmar Railways.

The Group has not provided third party app development services during the financial year to date with the development team focusing on the Company's core offerings and other necessary technical work. The Group currently expects to continue this focus through 2018 but may take on 3rd party development projects if deemed appropriate to do so based on available resources.

Change Executive Management

Stephen Chong was appointed as COO to the senior management team in November 2017.

Financial Review

Revenue for the six months ending 31 December 2017, at USD 917,180, was considerably more than double the USD 340,716 achieved in the same period during the previous year. The majority of the revenue was generated from mobile gaming operations with contribution from the CallHome product and a small portion from sticker sales. 

Total expenses (including cost of sales and operating expenses) in the same period were USD 2,766,261. The Group's loss before tax was USD 1,845,037 for the six months ending 31 December 2017.

The cash balance at the end of the period was USD 68,147. During and post-period, the Group's operations have been financed by cash collections from revenue and issuance of shares.

As at 31 December 2017 the Group had total trade receivables of USD 218,401. The Group expects to collect all outstanding receivables during the 4th quarter of the current financial year.

As expected given the growth in the Group's operations, marketing and administration expenses increased substantially during the period. The increase is mainly due to the expensing of certain development costs, amortisation of intangibles which only began last year, increased costs for office rental and an increase in professional fees due to due diligence and fundraising costs. In order to keep expenses under control the Group has implemented a cost savings program that is focused on the following cost centers:

· Payroll was kept steady, with the Group's headcount going from 127 to 131 from beginning of July 2017 to the end of the period, however this will be reduced by April 2018 to 106. The majority of the cuts came from the Vietnam operations team with about a 25% reduction.

· Third party services (for example, hosting and domain services) were consistently reduced on a monthly basis over the period as a result of infrastructure optimisation and technical improvements.

During the six months ending 31 December 2017, the Group raised funds as follows:

· GBP 1,207,075 gross proceeds from the placement of 32,188,671 shares.

· GBP 130,625 gross proceeds from the exercise of 2,375,000 warrants.

As at the date of this report, the Group still has a USD 1 million credit facility provided by Rising Dragon Singapore Pte. Ltd ("Rising Dragon") available in full.

Corporate Developments

On 3 January 2018, in response to market commentary, the Company announced that it had received an approach from another organisation which may or may not lead to a takeover offer. Following receipt of this approach there has not been any substantive progress made in relation to a firm offer for the Company however should there be any further developments the Company will provide updates as appropriate.

On 8 January 2018, also in response to market commentary, the Company reiterated that an approach had been received and that it had held discussions in relation to commercial and investment opportunities with various regional participants in its area of business.

The Group continues to discuss a number of commercial and investment opportunities with various regional participants and further announcements will be made should these discussions progress to firm proposals. The Board understands that this may be frustrating for some investors who would prefer a faster pace to negotiations, however that is not necessarily the way of business in South East Asia.

On 7 March 2018 as part of the announcement of its Convertible Bond fundraising, the Company announced that it was in advanced discussions and negotiations for a potential acquisition or investment into a company that is developing mobile payment services These discussions continue and the Company will provide further updates in due course as appropriate.

Outlook

For the remainder of the financial year, the Group will concentrate on further developing its lifestyle brands including MyGame, Mingalarbar Morning and the rebranded MyMingalarbar to retain its position as the leading mobile media and entertainment provider in Myanmar. New games will continue to be released on a frequent basis, while Mingalarbar Morning and MyMingalarbar will be further enhanced.

The Group remains focused towards operating on a cash-flow breakeven business. To this end, the Group made some cost reductions in staff and greater focus is being put on monetisation through additional distribution, increasing the number of payment options for users and advertising. Discussions continue with the remaining two Mynmar focussed telcos, MPT and MyTel, which announced the launch of their services in March 2018. The Group seeks to further diversify its payment options with the leading digital wallets in Myanmar. Lastly, the Group will continue to focus on building up the sales team in Myanmar to secure more third-party advertising.

Revenue since the beginning of the second half has been similar to that seen in the first few months of the financial year, however we anticipate that revenues for the second half as a whole will see an increase on the first half due to new game launches and increasing advertising revenue. The Group looks forward to providing updates when new developments occur.

The Group intends to appoint a Marketing Director during the fourth quarter of the current financial year to heighten our visibility in Myanmar and to drive increased advertising sales.

I would like to thank my colleagues for their continued perseverance and commitment towards reaching the Group's objectives.

Eric Schaer

Chief Executive Officer

29 March 2018

UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 31 December 2017

Set out below are the unaudited results of the Operating Group for the six months ended 31 December 2017, together with the unaudited results of the comparative period (for the six months ended 31 December 2016):

UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December 2017

The unaudited statements of consolidated financial position as at 31 December 2017 and 31 December 2016 are set out below:

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the six months ended 31 December 2017

The unaudited consolidated statement of changes in equity for the six months ended 31 December 2017 is set out below:

UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended 31 December 2017

The unaudited consolidated statement of cash flows for the Operating Group are set out below;

1.  GENERAL INFORMATION

The principal activities of the Group are to design, develop and commercialise Myanmar-focused internet-based mobile applications, including social networks, mobile messaging applications, digital content, online games, online advertising, online news aggregation, mobile payment services, ecommerce, etc.

The directors do not propose the payment of an interim dividend (31 December 2016: nil).

2.  BASIS OF PREPARATION

The interim accounts have been prepared on the basis of the accounting policies set out in the annual report and accounts for the period ended 30 June 2017, which have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union.

The same accounting policies, presentation and methods of computation have been followed in these unaudited interim financial statements, as those which were applied in the preparation of the Group's annual statements for the year ended 30 June 2017, upon which the auditors gave an unqualified opinion.

The interim accounts have been drawn up using accounting policies and presentation expected to be adopted in the Group's full financial statements for the year ended 30 June 2017.

The comparative period is the six months ended 31 December 2016.

The consolidated interim financial results have not been audited or reviewed by the Group's auditors.

The business is not subject to seasonal variations.

3.  GOING CONCERN

The consolidated interim accounts have been prepared on a going concern basis, which contemplates the  continuity  of  normal  business activities  and  the realisation  of  assets  and  the  settlement  of liabilities in the ordinary course of business.

The Group reported a net loss after tax of USD 1,845,037 for the six months ended 31 December

2017 (31 December 2016: net loss USD 1,258,155). Management's assessment of the ability of the  Group  to  continue  as  a  going  concern  has  considered  cash  flow  forecasts,  including assumptions regarding revenue growth, the timing of bringing new products to market and the Group's ability to settle its liabilities as they fall due. In respect of this, the Group's Board of Directors believes that the Group has appropriate business plans to generate sufficient cash flows, as well as the availability of £2.11 million (approximately US$3.0 million) of unsecured convertible bonds to UK based fund, Atlas Capital Markets Limited and a US$1.0 million credit facility provided from Rising Dragon to sustain its business in the foreseeable future. As a result of consideration of these matters the Directors consider it appropriate to prepare the interim accounts using the going concern basis.

4.  EARNINGS PER SHARE

Basic earnings per share have been calculated by dividing the loss attributable to equity holders of the

Group after taxation by the weighted average number of shares in issue during the period.

5.  PREPAYMENTS AND OTHER ASSETS

6.  TRADE AND OTHER RECEIVABLES

7.  CASH

8.  SHARE CAPITAL

2017 2016

No. of shares USD No. of shares USD

Allocated and fully paid:

Ordinary shares  615,856,580  9,156,748  222,565,621  3,671,88

9.  BORROWINGS

10.  TRADE AND OTHER PAYABLES

11.  OPERATING LEASE COMMITMENTS

The Group had outstanding commitments for future minimum lease payments on its office premises under non-cancelable operating leases which fall due as follows:

At  the  reporting  date,  the  Group  had  outstanding  commitments  under  non-cancelable  operating leases, which fall due as follows: