Gaming Realms Regulatory News (GMR)

26 February 2013

Pursuit Dynamics PLC

("PDX" or the "Company')

Final results for the year ended 30 September 2012

Pursuit Dynamics (AIM: PDX) announces final results for the year to 30 September 2012 and provides shareholders with an update on developments since the year-end.

Post-year End

·; Significant Board changes in December 2012 post completion of the Placing and Open Offer

·; Firm revenue targets set by new Board for the 6 months ending 31 March 2013 and the current financial year

·; Revenue targets for the first half of the current year will not be achieved and accordingly the Board considers it prudent to explore all options for preserving shareholder value

·; The Board believe that value may be more effectively realised in other forms of ownership or partnership with other companies

·; Process now underway to reduce the cost base further including giving notice to all employees

·; In addition, Hagen Gehringer CEO has today given notice to the Board and will not be standing for re-election as a Director at the AGM scheduled for 28th March 20123

Financial Highlights (Fiscal Year 2011/12)

·; Revenue in the period of £682,000 (2010/11: £490,000)

·; Loss before tax of £17.8m (2010/11: £15.3m)

·; Cash position at year end £3.1m (2010/11: £7.3m)

·; Post-period end placing of 166.7m new Ordinary Shares and an open offer of 18.8m new Ordinary Shares at 3 pence per share resulting in net proceeds of £5.4m

·; The Cash position and value of Net Current Assets at 31 January amounts to £6m and £5.7m respectively

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CHAIRMAN'S STATEMENT

2012 turned out to be a disappointing year for Pursuit Dynamics PLC ("PDX"). We had ambitious sales targets and failed to achieve these. While we remain confident in the value of our proprietary technology your Board feels that other companies are better placed to realise value.

Strategic review

The Board of PDX kept the Group's strategy under continuous review throughout the financial year, monitoring progress very closely and continually assessing the prospects for the commercial success of the PDX technology portfolio.

The composition of the Board changed in December 2012 at the time of completion of the Placing and Open Offer and the new Board set the management team very clear criteria for demonstrating the commercial viability of the PDX technology portfolio. I am now able to provide an update on the Company's progress and the implications for its future strategy.

During the financial year, the Board reviewed the business lines that the Group was pursuing and concluded that it was necessary to focus on two areas: Brewing, Food & Beverage, and Public Health & Safety, and the Group built a substantial register of quotations. In view of the Group's poor record of converting new business opportunities into material revenues, in December 2012 the new Board set firm targets for revenue generation in these two areas for the six months ending on 31 March 2013 and the current financial year as a whole. Unfortunately it is now clear that the sales target for the first half of the year will not be achieved. Accordingly the new Board considers it prudent to explore all options for preserving shareholder value. The Board has concluded that there is still value in PDX's intellectual property portfolio, but that this value may be more effectively realised in other forms of ownership, or in partnership with other companies. This is a disappointing outcome, but one which we consider that the action we are taking is in the best interests of our shareholders.

The Board will take steps to reduce the cost base further, including giving notice to all employees, to bring it into line with the Group's revised strategy. We propose to eliminate all liabilities associated with the existing business and we will seek to sell or licence the Group's intellectual property to achieve the best available outcome for shareholders. We will review the strategic options available to the Group and will consider all means of using the Group's resources to create value for shareholders. 

Our shareholders

I would like to take this opportunity to thank our shareholders for their patience and loyalty during what has been a difficult period in the development of PDX. The Board is determined to take whatever actions are required to enable PDX to maximise the returns for our shareholders.

I would like to acknowledge that our employees have had an uncertain and difficult year, and I have been highly appreciative of their support. I would also like to thank those members of the PDX Board who left the company during 2012. I am particularly grateful for the contributions of Andy Quinn, my predecessor as Chairman; of Jeremy Pelczer, who acted as interim CEO prior to the appointment of Hagen Gehringer; and of Non-Executive Director Brian Sweeney, who served the Group diligently for many years.

Finally, I also welcome Phil Corbishley and Paul Banner, who joined the Board as Non-Executive Directors in December.

Professor Bernard Bulkin

Chairman, Pursuit Dynamics PLC

26 February 2013

OPERATIONAL AND FINANCIAL REVIEW

Following the Strategic Review announced in June 2012 our focus has been on reducing our cost base but at the same time ensuring continued investment in resources and product development in the two remaining Lines of Business ("LOBs"), Brewing, Food & Beverage and Public Health & Safety. However, following the failure to achieve revenue targets, for 2012-2013, the Board has made the decision to close or divest all operations

Review of operations

During the course of the year it became apparent that revenues were going to be significantly lower than expected. This followed the announcement that Procter & Gamble did not intend to pursue further evaluation and development and the failure to convert a number of other opportunities into exclusive licenses. As a result the Board instigated a Strategic Review, the outcome of which was announced on 28 June 2012 and the implementation of a number of plans to reduce costs.These plans included a substantial reduction in headcount and development expenditure. Resources continued to be made available to the Brewing, Food & Beverage and Public Health & Safety LOBs.

As noted in the Chairman's statement the new Board appointed in December 2012 agreed firm revenue targets for the six months ending on 31 march and the current financial year as a whole. Unfortunately these have not been achieved and as a consequence the Board's decision is to close or divest all operations.

Financial review

Revenue £0.7 million(2011; £0.5 million)

As in 2010-2011 the majority of revenues generated during the year were from the Brewing, Food and Beverage LOB which is the most mature element of our business. We also generated a small amount of revenue in the Public Health & Safety LOB.

Capital expenditure £1.6 million(2011; £1.9 million)

The majority of the capital expenditure during the year was spent on installing our ERS technologies in US ethanol production plants in addition to upgrading R&D facilities in Huntingdon and the US and also back office systems including IT. Capital expenditure slowed significantly during the second half of the year as a result of the Strategic Review and the need to focus on cost reduction and preservation of cash resources.

As a consequence of the Board's decision to close or divest all operations this has led us to write-down the cost of the ERS installations and other operational assets. We have also written-down the cost of investments in all R&D facilities and back office systems. The total cost of this impairment amounts to £3.3m and is non-cash.

Operating expenses £18.6 million(2011; £15.9 million)

Operating expenses excluding non-cash items increased from £11.8 million to £14.4 million reflecting the continuing investment in people that was made in the previous year and resulted in the average headcount increasing from 67 to 73 with a peak of 88 in January 2012. Costs were also higher due to the investments made in developing the Swiss structure and operations, in addition to continued investment in our IP.

During the second half of the year the Board took a number of decisions to reduce the operating cost base of the Group and following the outcome of the Strategic Review further actions were put in place to conserve the cash resources of the business. These actions resulted in the decision to close the Swiss structure and also a reduction in headcount to 52 in September 2012.

As a result of the Board's decision to close or divest all operations, restructuring expenditure will be incurred including advisors fees, redundancy costs for employees, costs associated with the early termination of contracts and leases. The Board estimates these costs will amount to £1.5m but the precise amount is dependent on the outcome of negotiations with employees and suppliers. These costs have not been accrued in the accounts for the year ended 30 September 2012 as these have been prepared on a going concern basis.

Cash outflow from operating activities £13.6 million(2011; £10.9 million)

The increase in cash outflow from operating expenses was due to trading losses.

Our total cash position at 30 September 2012 amounted to £3.1 million reflecting the trading losses and shortfall in revenues.

Since the year end we have raised £5.6 million (before expenses) through a Placing and Open Offer of 185.5 million new PDX shares at 3 pence per share.

Principal risks and uncertainties

Formal risk management processes are in place to identify and evaluate risks taking into account the likelihood of their occurrence, the scale of potential impact on the business and the impact of planned risk mitigation actions, so that risks can be ranked and actions suitably prioritised. Each of the risks has an identified owner to ensure management team accountability for risk mitigation measures.

The Audit Committee reviews in detail and monitors those risk mitigation plans, ensuring that plans work across the Group, as well as sharing best practice.

The Group's key risks and mitigating factors now all relate to the orderly disposal of the Group's assets and the review of strategic options available to the Group and its remaining resources to create value for Shareholders.

Hagen Gehringer

Chief Executive Officer, Pursuit Dynamics PLC

26 February 2013.

consolidated income statement

For the year ended 30 September 2012

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 30 September 2012

Consolidated BALANCE sheet

As at 30 September 2012

Consolidated CASH FLOW STATEMENT

For year ended 30 September 2012

consolidated statement of changes in equity

For the year ended 30 September 2012

EXTRACT FROM THE notes to the group financial statements

1. General information

Pursuit Dynamics PLC (the "Company" and with its subsidiaries the "Group") is a public limited company incorporated and domiciled in England & Wales, with its shares traded on AIM. The address of its registered office is Shackleton House, Kingfisher Way, Hinchingbrooke Business Park, Huntingdon, Cambridgeshire PE29 6HB.

These consolidated financial statements (the Financial Statements) are presented in pounds Sterling because this is the currency of the primary economic environment in which the Group operates. Foreign operations are included in accordance with the policies set out in Note 2 of the full Financial Statements.

2. Basis of preparation

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRSs as adopted by the EU), IFRIC interpretations and the Companies Act 2006 applicable to Companies reporting under IFRS.

The consolidated financial statements have been prepared under the historical cost convention.

The preparation of financial statements in conformity with IFRS as adapted by the EU requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and of revenues and expenses during the reported period. Although these estimates are based on management's best knowledge of the amount, event or action, actual results may ultimately differ from those estimates.

In considering the appropriate basis on which to prepare the financial statements, the Directors are required to consider whether the Group can continue in operational existence for the foreseeable future. At 30 September 2012, the Group had cash and cash equivalents of £3,125,396 and in addition, Note 28 of the full financial statements sets out the details of the Placing and Open Offer of 185.5 million new shares which raised approximately £5.4 million (after expenses).

The Board has taken a number of actions to reduce the cost base of the business whilst focusing on those areas of the business seen as most likely to secure revenues in the short-term. Despite these actions sales targets have not been achieved and following the completion of their review in February 2013 the Board have concluded that shareholder value would be best maximised by the orderly liquidation of the Group's subsidiaries assets. The Board will continue to review the strategic options available to the Group and is considering all means of using the Group's resources to create value for Shareholders.

As there is no intention to liquidate Pursuit Dynamics PLC and there are sufficient funds to meet the Group's liabilities as they fall due, the Board are therefore of the opinion that the going concern basis is appropriate for the preparation of financial statements for Pursuit Dynamics PLC.

4. Segmental information

The Group's operating segments are determined with reference to the information supplied to the Group's Chief Operating Decision Maker in order for it to allocate the Group's resources and monitor the performance of the Group. The Group considers the Chief Operating Decision Maker to be the Board of Directors.

During the year the Group was organised on a worldwide basis in five business segments: Bioenergy; Brewing, Food & Beverage; Public Health & Safety; Industrial Licensing and Waste Treatment.

The segment results for the year ended 30 September 2011 are as follows:

The segment results for the year ended 30 September 2011 are as follows:

The segment assets and liabilities at 30 September 2012 and capital expenditure for the year then ended are as follows:

The segment assets and liabilities at 30 September 2011 and capital expenditure for the year then ended are as follows:

Analysis by geographical area:

Analysis by revenue stream:

Revenues of £588,348 (2011: £375,574) are derived from 6 (2011: 3) customers. They are attributable to the following segments:

5. Loss per share

Loss per Ordinary Share (basic and fully diluted)

Basic loss per share is calculated by dividing the loss attributable to Ordinary Shareholders by the weighted average number of shares in issue during the year. For fully diluted loss per share, the weighted average number of Ordinary Shares in issue is adjusted to assume conversion of dilutive potential Ordinary Shares. The Group's potentially dilutive securities consist of share options and performance shares. As the Group is loss-making, none of the potentially dilutive securities are currently dilutive.

For basic and diluted loss per share, the weighted average numbers of shares used in the calculations are set out below:

6. Cash used in operations