Announcement PDF SportsHero Limited ACN 123 423 987 Annual Report for the year ended 30 June 2023 SPORTSHERO LIMITED ANNUAL REPORT 30 JUNE 2023 CORPORATE DIRECTORY Directors Stratos Karousos (Non- Executive Chair) - appointed 13 October 2022 Tom Lapping (Director and CEO) Michael Higginson (Non-Executive Director) John Dougall (Non-Executive Chair) - resigned 13 October 2022 Company Secretary Michael Higginson Registered Office and Principal Place of Business 36 Prestwick Drive Twin Waters, QLD 4564 Telephone: +61 (7) 5457 0557 Facsimile: +61 (7) 5457 0557 Website: http://sportshero.live/ Auditor RSM Australia Partners Level 32/2 The Esplanade Perth WA 6000 Share Registry Advanced Share Registry Services Limited 110 Stirling Highway Nedlands WA 6009 Telephone: +61 (8) 9389 8033 Facsimile: +61 (8) 9262 3723 Stock Exchange Listing Australian Securities Exchange ASX Code: SHO 2 SPORTSHERO LIMITED ANNUAL REPORT 30 JUNE 2023 CONTENTS PAGE OPERATIONS REPORT 4 DIRECTORS’ REPORT 7 AUDITOR’S INDEPENDENCE DECLARATION 17 STATEMENT OF FINANCIAL POSITION 18 STATEMENT OF COMPREHENSIVE INCOME 19 STATEMENT OF CHANGES IN EQUITY 20 STATEMENT OF CASH FLOWS 21 NOTES TO THE FINANCIAL STATEMENTS 22 DIRECTORS’ DECLARATION 51 INDEPENDENT AUDITOR’S REPORT 52 SHAREHOLDER INFORMATION 55 General information The financial statements cover SportsHero Limited as a consolidated entity consisting of SportsHero Limited and its subsidiaries. The financial statements are presented in US dollars, which is SportsHero Limited’s functional and presentation currency. SportsHero Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is: 36 Prestwick Drive Twin Waters, QLD 4564 Telephone: +61 (7) 5457 0557 Facsimile: +61 (7) 5457 0557 A description of the nature of the consolidated entity's operations and its principal activities are included in the Directors' Report, which is not part of the financial statements. The financial statements were authorised for issue, in accordance with a resolution of Directors, on 29 September 2023. The Directors have the power to amend and reissue the financial statements. 3 SPORTSHERO LIMITED ANNUAL REPORT 30 JUNE 2023 OPERATIONS REPORT The Company’s goal is to become one of the world’s most dynamic, engaging and largest sporting communities. SportsHero is positioning itself to be a world leader in the rapidly expanding esports market by introducing our artificial intelligence predictor and delivering unique esports prediction competitions. Furthermore, SportsHero is planning to apply its proprietary deep learning-based predictor across multiple sports and/or sporting events globally. SportsHero’s strategy is to build a large and engaged user base of active sports fans utilising our unique and proprietary technologies, our official associations with governing bodies and partnerships with technology innovators and prominent market participants. We will then monetise these strategic assets with recurring revenue generated from multiple sources, including complementary advertising income, brand sponsorship, subscriptions, competition revenue, video streaming, ecommerce, affiliate gaming revenue and match and gamification ticket sales. Having developed a white label digital solution, SportsHero is able to offer its digital solutions across multiple sports to sporting groups and other partners globally. Asia Pacific TALON Esports On 27 April 2023, the Company announced the execution of a 3 year legally binding agreement (Agreement) with Hong Kong based TALON Esports Limited (TALON). With a diverse range of revenue streams, including tournament winnings, sponsorship, player transfers, publisher fees and the sale of merchandise both physical and digital, as well as events and its own creative studio, TALON brings the discipline of traditional sport to competitive gaming. It is particularly known for its PSG TALON team, which plays League of Legends, in partnership with the esports division of legendary French sporting club Paris Saint-Germain. TALON is Asia Pacific’s fastest growing esports brand (with a 20m+ fan base) winning 4 out of the last 5 championships in the PCS (League of Legends). They have qualified for every international tournament since their entry into League of Legends and have continued to build a portfolio across several popular game titles, including League of Legends, Valorant, Dota2, Arena of Valor, Rainbow 6, Tekken 7 and Street Fighter V. Established in 2017, TALON has successfully grown their fan base in Asia Pacific with 20.2 million fans across all channels including players and influencers. Its partners include the likes of Animoca Brands, PSG, Nike, KFC and Mastercard. In the last 12 months with 23 TALON owned and managed social channels in 7 different languages across 7 different markets, they have achieved over: • • • 61 million average monthly impressions across all TALON channels; 10.1 million average monthly views across all TALON live and video content; and 4,000 pieces of content produced per month across the entire network. TALON works and develops with the leading Web3 platforms and are keen to leverage SportsHero’s proprietary technology in esports prediction and tournament management to enhance their esports offering to their network and clientele. TALON’s current client portfolio Pursuant to the Agreement, SportsHero’s proprietary esports prediction and tournament management platform (App) will be marketed and promoted by TALON in Hong Kong, Macau, Taiwan, the Philippines, Thailand and India (collectively the Territory). The parties have agreed that all revenue generated in the Territory from all sources, including 4 SPORTSHERO LIMITED ANNUAL REPORT 30 JUNE 2023 OPERATIONS REPORT memberships, subscriptions, advertising, sponsorship and ecommerce, will be shared equally after deducting agreed costs and expenses. SportsHero has been working directly with TALON’s co-founders Sean Zhang and Jerrold Tham to develop a white label solution to create a dynamic esports entertainment hub. As a result of these efforts, we are on target to launch, in the December 2023 quarter throughout the Territory, a new product with more features and revenue streams. China Shanghai Fumin Sports and Culture Co. Ltd In the largest esports market in the world, SportsHero has continued to build and deliver its China strategy. On 30 March 2023, the Company announced the execution of a 3 year legally binding terms sheet (Terms Sheet) with Shanghai Fumin Sports and Culture Co. Ltd (FMWH), the esports tournament and events provider of Netease Games – one of China’s largest esports game publisher. Netease Games is listed on the NASDAQ: NTES and HKEX: 9999. In accordance with the Terms Sheet, a schedule of prediction tournaments is expected to be featured on FMWH’s mobile app in the December 2023 quarter. Wuhan Monster Technology Co Ltd Wuhan Monster Technology Co Ltd (WMT) (the commercial and operating arm of the Wuhan Esports Association (WEA)) will be directly involved in the upcoming Asian Games in Hangzhou and have scheduled prediction competitions on WEA’s miniprogram. SportsHero’s executive team met with the CEO of WMT in Hangzhou to discuss and plan the best go to market strategy for the many esports tournaments scheduled in the second half of 2023. Chinese mobile app SportsHero’s executive team have been expanding our commercial partnerships and supporting the planned phase 2 release of our Chinese mobile app. The planned phase 2 release will feature in-depth data analysis of the competing esports teams. Indonesia Olahbola We are very pleased to confirm that Olahbola maintains its position as a top 5 sports influencer on TikTok and continues to attract advertisers and sponsors. Unfortunately, the prevailing economic conditions in Indonesia continue to be challenging and as such many firms have not returned to their pre-Covid advertising budgets. Olahbola now has over 1.5 million followers on Tiktok. The top performing post generated over 15.3 million views and the Olahbola page has generated over 63.6 million likes. SportsHero has completed the development of a white label product for football in Indonesia and we are currently developing a similar platform for esports, which is expected to launch in the December 2023 quarter. PSSI On 1 September 2023, the Company announced a new 3 year revenue share agreement (Agreement) with the Football Association of Indonesia (PSSI) under the new leadership and administration appointed in February 2023 and led by Mr Erick Thohir, (Chairman) and Mr Marsal Masita (Head of Commercial). Revenue generated during the 3 year agreement is to be shared PSSI 70%, SportsHero 30%. 5 SPORTSHERO LIMITED ANNUAL REPORT 30 JUNE 2023 OPERATIONS REPORT Mr Thohir is well known in the Indonesia sports scene. He is the Chairman of Indonesian Olympic Committee, owner of Satria Muda basketball club and sits in the executive board of Liga 1 team Persib Bandung Football Club. He is also renowned globally as the former owner of Inter Milan and the owner of DC United (the football club of Washington, DC) and the Philadelphia 76ers basketball club. Under PSSI’s new leadership, PSSI has embarked on a fresh commercial strategy that includes a suite of new National Team social media channels and an updated KitaGaruda web app (that was developed by SportsHero) to connect and engage with their over 80 million passionate Indonesian football fans. Football being the number one sport in Indonesia, by way of viewership and fan base. PSSI is looking forward to aggressively promoting the newly launched and updated KitaGaruda web app across all their digital and marketing channels as this will be their centralised platform for fan community and engagement. Indonesia represents the largest ‘digital’ community in the Association of South East Asian Nations (‘ASEAN’), with 191 million social media users, 370 million mobile users and 204 million internet users. Australia Aim Assist Analysis (AAA) On 19 April 2023, AAA was launched in Australia’s Apple store and Google Play stores and has achieved the following esports prediction accuracy: ● ● ● ● ● ● 72% accuracy in April, with 7 days hitting 100% accuracy 84% accuracy in May, with 12 days hitting 100% accuracy 81% accuracy in June, with 8 days hitting 100% accuracy 82% accuracy in July, with 5 days hitting 100% accuracy 77% accuracy in August, with 4 days hitting 100% accuracy 77% accuracy in September (until 20 Sep), with 6 days hitting 100% accuracy. AAA marketing and promotion campaigns ran from 19 April to 30 June across Meta, YouTube, Reddit and Google and focused on the AAA brand and product awareness. The initial marketing campaigns generated an impressive 7,040,311 impressions, which provided valuable learnings for the upcoming anticipated generation of AAA installs and subscriptions. AAA - Version 2 Following the initial and highly exploratory Version 1 marketing campaign, we are now focused on improving and delivering a product with optimum commercial appeal. Version 2 of AAA will include live streaming of esports matches, an improved dynamic display of team data and clearer icons next to prediction tips, to improve and increase user conversion to our betting partner. Personnel During the past 18 months, Scott Russell (Chief Commercial Officer) and Sam Stevens (Esports Business Development Executive) have played pivotal roles in developing EsportsHero (our Australian subsidiary) and AAA. With key partnerships now in place and our focus being set outside of the Australian market, both Scott and Sam have now ceased their employment with the Company. 6 SPORTSHERO LIMITED ANNUAL REPORT 30 JUNE 2023 DIRECTORS REPORT The Directors present their report together with the consolidated financial report for SportsHero Limited (“SportsHero” or the “Company”) and its controlled entities (collectively the “Group”), for the year ended 30 June 2023. Directors (i) Names, qualifications and experience The names and details of the Group’s Directors in office at any time during the financial period and until the date of this report are as follows: Stratos Karousos Tom Lapping Michael Higginson John Dougall Non-Executive Chair (appointed 13 October 2022) Director and CEO Non-Executive Director Non-Executive Chair (resigned 13 October 2022) Stratos Karousos - Non-Executive Director and Chair (appointed 13 October 2022) Mr Karousos is the holder of a Bachelor of Law (University of Technology, Sydney) and Master of Commerce (University of New South Wales). Mr Karousos is an experienced director and senior executive with deep corporate and legal experience gained mostly in Australia, Asia and the United States. Stratos is currently a non-executive director of robotics company Nightingale Intelligent Systems Inc (ASX: NGL). He is also the Chief Commercial Officer of productivity tool and workflow group espresso Displays and the Chief Strategy Officer of aquaculture and agriculture biotechnology group Genics. He has previously held positions as CEO and director of an ASX listed company and has held senior roles in global organisations including Wise Tech Global Limited (ASX: WTC) and Baker McKenzie. Tom Lapping – Director and CEO Mr Lapping is highly experienced across the securities and media sectors. Since 2016, he has played an integral role within SportsHero and was a key member of the team during the transition of the SportsHero business from a Singaporean unlisted entity to an ASX listed public company in February 2017. Tom is a successful entrepreneur who has accumulated extensive experience leading both established and earlystage ventures in the Asia-Pacific region. Tom has a keen understanding of consumer behaviour and was recognised as a 40under40 business entrepreneur award winner in Western Australia in 2003. Michael Higginson – Non-Executive Director Qualification: B.Bus Fin & Admin Mr Higginson is the holder of a Bachelor of Business Degree with majors in both Finance and Administration. Mr Higginson is a professional director and company secretary with extensive experience in public company administration, ASX Listing Rules, the Corporations Act, capital raisings, corporate governance, financial reporting and due diligence. Mr Higginson was formerly an executive officer with the Australian Securities Exchange and has, over the last 35 years, held numerous directorship and company secretarial roles with a number of public listed companies across a range of industry sectors. Mr Higginson is a director of Cape Range Limited (ASX: CAG) and Zuleika Gold Limited (ASX: ZAG). John Dougall – Non-Executive Chair (resigned 13 October 2022) Mr Dougall is the holder of Bachelor of Commerce Degree from the University of Melbourne. 7 SPORTSHERO LIMITED ANNUAL REPORT 30 JUNE 2023 DIRECTORS REPORT Mr Dougall has worked at Chief Executive and board level in a number of technology companies based in Melbourne, New York, Sydney, London and San Francisco. He has also served as Managing Director of four ASX listed companies, successfully exporting Australian technology to China, India, Indonesia, The Philippines, Vietnam and Latin America. Mr Dougall is currently the Non-Executive Chair of Tinybeans Group Limited (ASX: TNY), a mobile and webbased technology company based in Sydney and New York, that connects parents with the most trusted tools and resources to assist, in particular, young families. He has also served as President and CEO of an Australian company that ultimately listed on the NASDAQ, selling its software solutions to major retailers in the USA and Europe. In addition, Mr Dougall previously served as a director to several industry associations, as Chair of the Australian Government’s CSIRO Information Technology Advisory Board, as well as advising Government on industry strategy and trade. (ii) Interests in the Shares and Options of the Group As at the date of this report, the interest of the Directors in the shares, options and performance rights of the Group are: Stratos Karousos Tom Lapping Michael Higginson TOTAL Number of shares 146,911 13,782,143 1,020,834 14,949,888 Number of options - Number of performance rights - Company Secretary Michael Higginson Qualification: B.Bus Fin & Admin Directors’ meetings The number of meetings attended by each of the Directors of the Group during the financial year was: Stratos Karousos Tom Lapping Michael Higginson John Dougall Directors’ Meetings (a) (b) 3 3 6 6 6 6 3 3 (a) Number of meetings held and entitled to attend (b) Number of meetings attended Given the size of the Group and current level of activities, the Board has assumed the duties and responsibilities typically delegated to an audit committee, risk committee, remuneration committee and nomination committee. Corporate structure SportsHero Limited is a company limited by shares that is incorporated and domiciled in Australia. For details of the Company’s controlled entities, please refer to note 27. 8 SPORTSHERO LIMITED ANNUAL REPORT 30 JUNE 2023 DIRECTORS REPORT Nature of operations and principal activities The principal activity of the Group during the year was the development of the Group’s sports gamification platforms. Results of operations The operating loss after income tax of the Group for the year ended 30 June 2023 was US$2,182,894 (2022: US$1,714,648 ). As set out in the Statement of Comprehensive Income, the two most significant expense categories for the financial year were: • • Administration expenses, totaling US$1,110,831 and Employee and consulting expenses, totaling US$922,879 The Group’s basic loss per share for the year was 0.38 US cents (2022: 0.32 US cents). Dividends No dividend has been paid during or is recommended for the financial year ended 30 June 2023 (2022: nil). Review of operations The principal activity of the Group during the financial year was the development of the Group’s sports gamification platforms. An overview of the Group’s operations during the financial year is set out in the Operations Report. Significant changes in state of affairs On 7 July 2022, the Company announced that Logitech (China) Technology Co Ltd (a wholly owned subsidiary of Swiss multinational Logitech International SA) had agreed to be the first commercial sponsor for the Company’s recently launched Chinese app on Wechat. On 18 August 2022, the Company announced the launch of its first ever tier 1 professional esports prediction tournament in Australia, which was launched on 23 August 2022. On 31 August 2022 SportsHero soft launched its co-branded initial esports tournament in partnership with Wuhan Esports Association (the 2nd largest esports association in China). On 21 September 2022, the Company announced the execution of a 2 year Australian Gift Card Supplier Agreement with digital gift card supplier Prezzee Pty Ltd. On 13 October 2022, the Company announced the resignation of Mr John Dougall as a Director and the appointment of Mr Stratos Karousos as the Company’s Non-Executive Chair. On 24 November 2022, the Company announced the Australian launch of Aim Assist Analysis (AAA), a subscription based app that has been specifically designed, using SportsHero’s proprietary artificial intelligence technology, to provide esports bettors with daily high win probability esports betting recommendations. On 14 February 2023, the Company announced that AAA is available for download at both Apple and Google app stores. On 30 March 2023, the Company announced the execution of a three year partner agreement with Shanghai Fumin Sports and Culture Co Ltd (the esports tournament and events provider for Netease Games) for the promotion of SportsHero’s app (including its artificial Intelligence prediction competitions) across Netease game titles, including OPL (Onmyoji Arena Pro League). 9 SPORTSHERO LIMITED ANNUAL REPORT 30 JUNE 2023 DIRECTORS REPORT On 27 April 2023, the Company announced that it was expanding into 6 new Asia Pacific markets through an exclusive licence agreement with TALON Esports. Pursuant to the agreement, TALON Esports will white label, market and scale SportsHero’s proprietary esports prediction and tournament management platform in Hong Kong, Macau, Taiwan, the Philippines, Thailand and India. Future developments Likely future developments in the operations of the Group are referred to in the Operations Report. Other than as referred to in this report, further information as to likely developments in the operations of the Group and expected results of those operations would, in the opinion of the Directors, be speculative and prejudicial to the interests of the Group and its shareholders. Subsequent events On 1 September 2023, the Company announced the execution of a new three year revenue share agreement with the Football Association of Indonesia, known as PSSI. Under the agreement, revenue generated from PSSI’s KitaGaruda web app (that was developed by SportsHero) will be split 70/30 in PSSI’s favour. Financial position The Group’s working capital, being current assets less current liabilities, was negative US$488,620 as at 30 June 2023 (2022: US$1,582,509 ). In the Directors’ opinion there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable. Proceedings on behalf of the Group No person has applied for leave of court to bring proceedings on behalf of the Group or intervene in any proceedings to which the Group is a party for the purpose of taking responsibility on behalf of the Group for all or any part of those proceedings. Additional information The earnings of the consolidated entity for the five years to 30 June 2023 are summarised below: 2023 US$ Income EBITDA EBIT Loss after income tax 2022 US$ 2021 US$ 2020 US$ 2019 US$ 16,728 42,034 40,570 3,434 463,791 (2,170,635) (1,712,389) (1,442,887) (1,204,006) (2,276,050) (2,182,158) (1,714,648) (1,462,932) (1,257,439) (2,276,625) (2,182,894) (1.714,648) (1,479,219) (1,259,559) (2,276,625) The factors that are considered to affect total shareholders return are summarised below: Share price at financial year end (US cents) Total dividends declared (US cents per share) Basic and diluted loss per share for continued operations (US cents per share) Basic diluted loss per share for discontinued operations (US cents per share) Basic loss per share (US cents per share) 2023 US 1.7 - 2022 US 1.4 - 2021 US 1.5 - 2020 US 1.3 - 2019 US 4.5 - 0.38 0.32 0.37 0.39 0.93 0.38 0.32 0.37 0.39 0.93 10 SPORTSHERO LIMITED ANNUAL REPORT 30 JUNE 2023 DIRECTORS REPORT Remuneration report (Audited) Details of Remuneration for the Year Ended 30 June 2023 Details of the remuneration for each Director and the key management personnel of the Group during the year are set out in the following tables. The Board’s policy for determining the nature and amount of remuneration for Directors and senior executives of the Group is as follows: • • • • All executives receive a base salary (which is based on factors such as length of service and experience). The Board reviews executive packages annually by reference to the Group’s performance, executive performance and comparable information from industry sectors. All remuneration paid to Directors and executives is valued at the cost to the Group and expensed. Options are valued using the Black-Scholes methodology. Remuneration of non-executive Directors at market rates for time, commitment and responsibilities. The Board determines payments to the non-executive Directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought if required. During the financial year ended 30 June 2023, the consolidated entity did not engage any external parties for a review of remuneration practices. At the 2022 Annual General Meeting, 100% of the eligible votes received supported the adoption of the remuneration report for the year ended 30 June 2022. The Group did not receive any specific feedback at the Annual General Meeting regarding its remuneration practices. The key management personnel of the Group include the Directors and Company Secretary. There were no other persons considered key management personnel as defined in AASB 124 Related Party Disclosures. The tables below show the 2023 and 2022 remuneration of the Directors: 2023 Chair Stratos Karousos John Dougall Directors Tom Lapping Michael Higginson Total key management personnel compensation Value of share-based payments as a % Short-term Postemployment Share-based payments Salary & fees US$ Superannuation US$ Shares US$ Total US$ 47,808 19,388 - - 47,808 19,388 0% 0% 161,314 57,317 - - 161,314 57,317 0% 0% 285,827 - - 285,827 0% - 11 SPORTSHERO LIMITED ANNUAL REPORT 30 JUNE 2023 2022 Chair John Dougall Directors Tom Lapping Michael Higginson Total key management personnel compensation DIRECTORS REPORT Value of share-based payments as a % Short-term Postemployment Share-based payments Salary & fees US$ Superannuation US$ Shares US$ Total US$ 72,580 - (710)1 71,870 (1)% 147,085 69,885 - 21,607 20,882 168,692 90,767 13% 23% 289,550 - 41,779 331,329 13% (1) Reversal of value of Class C performance rights issued in prior year that are vesting over period due to change in probability for achieving vesting conditions. Related party transactions and balances Payables to key management personnel Consolidated Amounts payable to Directors and Director related entities at the end of the financial year, included in current liabilities 2023 US$ 2022 US$ 25,789 43,937 Other transactions with key management personnel During the year the Group paid rent of US$4,040 (2022: US$4,355) to Mr Higginson for the provision of the Group’s registered and principal office. There were no other sale or purchase related transactions between the Group and key management personnel during the year ended 30 June 2023 (2022: nil). Other transactions with related parties Following the receipt of shareholder approval on 29 November 2022, on 29 December 2022 the Company issued 1,456,711 shares to Mr Dougall in lieu of cash fees for the 2022 financial year totaling AU$50,000. There were no other transactions with related parties throughout the year. Performance Rights as a Proportion of Total Remuneration No performance rights were issued during the year ended 30 June 2023 and included as a proportion of total remuneration (2022: nil). On 31 December 2022, 5,000,000 performance rights issued to Mr Dougal lapsed, 2,000,000 performance rights issued to Mr Lapping lapsed and 1,000,000 performance rights issued to Mr Higginson lapsed. 12 SPORTSHERO LIMITED ANNUAL REPORT 30 JUNE 2023 DIRECTORS REPORT Ordinary Shares held by Directors 2023 Directors S Karousos M Higginson T Lapping J Dougall 2022 Directors J Dougall M Higginson T Lapping Balance at beginning of year 146,911 1,020,834 13,782,143 3,589,624 18,539,512 Allotted during the year 1,456,711 1,456,711 Purchased during the year - Balance at beginning of year 1,510,756 20,834 11,782,143 13,313,733 Allotted during the year 2,078,868 1,000,000 2,000,000 5,078,868 Purchased during the year - Sold during the year Balance at end of year - 146,911 1,020,834 13,782,143 5,046,335 19,996,223 Sold during the year Balance at end of year - 3,589,624 1,020,834 13,782,143 18,392,601 Group Performance, Shareholder Wealth and Director and Executive Remuneration The remuneration policy has been tailored to increase goal congruence between shareholders, Directors and executives. The achievement of this aim has been through the issue of options or performance rights to Directors and executives to encourage the alignment of personal and shareholder interests. Executive and non-executive Directors and other key management personnel may be granted options or performance rights over ordinary shares. The recipients of options or performance rights are responsible for growing the Group and increasing shareholder value. If they achieve this goal the value of the options or performance rights granted to them will also increase. Therefore, the options or performance provide an incentive to the recipients to remain with the Group and to continue to work to enhance the Group’s value. Options granted for the Year Ended 30 June 2023 During the year there were no options granted, converted, expired or lapsed (2022: Nil). Performance rights granted for the Year Ended 30 June 2023 2023 Directors S Karousos J Dougall T Lapping M Higginson Total Performance rights movements for the year Balance at beginning of year 5,000,000 2,000,000 1,000,000 8,000,000 Allotted - Granted as compensation Converted Expired - 5,000,000 2,000,000 1,000,000 8,000,000 13 - Balance at end of year Other changes - - SPORTSHERO LIMITED ANNUAL REPORT 30 JUNE 2023 2022 Directors Balance at beginning of year J Dougall T Lapping M Higginson Total 7,000,000 6,000,000 3,000,000 16,000,000 DIRECTORS REPORT Allotted - Granted as compensation Converted Expired - 1,000,000 2,000,000 1,000,000 4,000,000 1,000,000 2,000,000 1,000,000 4,000,000 Balance at end of year Other changes - 5,000,000 2,000,000 1,000,000 8,000,000 Performance rights as a proportion of total remuneration The value of performance options issued during the year to key management personnel as a percentage of the total remuneration paid to key management personnel was 0% (2022: 0%). Employment Contracts of Directors and Senior Executives On 18 October 2019, the Company entered into an agreement with Mr Dougall that set out the terms and conditions of his appointment as a Non-Executive Director and Chair of the Company. In consideration for the appointment of Mr Dougall, the Company agreed to pay Mr Dougall the followin