Digital Bros S p A : Half year condensed financial statements as of December 31st, 2023

Half year condensed financial statements

as of December 31st, 2023

(first half of the fiscal year 2023/2024)

Digital Bros S.p.A.

Via Tortona, 37 - 20144 Milan, Italy

VAT number 09554160151

Share Capital: Euro 6.024.334,80 of which Euro 5.706.014,80 subscribed

Milan Companies House no. 290680-Vol. 7394 Chamber of Commerce no. 1302132

This report is available on the Company's website www.digitalbros.comInvestor Relations /

Financial Documents section

Please consider that this is an Italian to English translation: the Italian version shall always prevail in

case of any discrepancy or inconsistency

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Digital Bros Group - Half year condensed financial statements as of December 31st, 2023	2

Index
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE STRUCTURE	5
DIRECTORS' REPORT	7
1.	GROUP ORGANIZATION	7
2.	MAIN INTELLECTUAL PROPERTIES OWNED BY THE GROUP	11
3.	THE VIDEO GAMES MARKET	13
4.	ALTERNATIVE PERFORMANCE RATIOS	15
5.	SEASONALITY EFFECTS	16
6.	SIGNIFICANT EVENTS DURING THE REPORTING PERIOD	16
7.	CONSOLIDATED PROFIT AND LOSS STATEMENT AT DECEMBER 31ST, 2023	19
8.	CONSOLIDATED BALANCE SHEET AT DECEMBER 31ST, 2023	23
9.	FINANCIAL RATIOS	25
10.	SEGMENT REPORTING	26

11. INTERCOMPANY AND RELATED PARTY TRANSACTION AND

	ATYPICAL/UNUSUAL TRANSACTIONS	34
12.	TREASURY SHARES	36
13.	OPERATIONAL RISKS. FINANCIAL RISKS AND FINANCIAL INSTRUMENTS	36
14.	CONTINGENT ASSETS AND LIABILITIES	36
15.	SUBSEQUENT EVENTS	36
16.	BUSINESS OUTLOOK	37
17.	OTHER INFORMATION	37
EMPLOYEES	37
ENVIRONMENTAL ISSUES	38
HALF YEAR CONDENSED FINANCIAL STATEMENTS AS OF DECEMBER 31ST, 2023 ... 40
CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31ST. 2023	42
CONSOLIDATED PROFIT AND LOSS STATEMENT AS OF DECEMBER 31ST. 2023	43
CONSOLIDATED COMPREHENSIVE INCOME STATEMENT	44
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS OF DECEMBER 31ST. 2023 . 46
EXPLANATORY NOTE	48
1.	INTRODUCTORY NOTE	49
2.	CONSOLIDATION CRITERIA	50
3. INVESTMENTS IN JOINT-VENTURES AND ASSOCIATED COMPANIES	52

4. RECONCILIATION OF CONSOLIDATED PROFIT FOR THE PERIOD AND NET EQUITY

TO THOSE OF THE PARENT COMPANY	53
5. CONSOLIDATED BALANCE SHEET AS AT DECEMBER 31ST. 2023	55

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PROFIT AND LOSS STATEMENT	71
6.	NON-RECURRINGINCOME AND EXPENSES	73
8.	RELATED PARTY TRANSACTIONS	77
9.	ATYPICAL OR UNUSUAL TRANSACTIONS	81
STATEMENT PURSUANT TO ART. 154- BIS (5) OF THE T.U.F	82

Digital Bros Group - Half year condensed financial statements as of December 31st, 2023	4

BOARD OF DIRECTORS AND CORPORATE GOVERNANCE STRUCTURE

Board of Directors

	Name			Office	Risk &Control	Remuneration	Nomination
			Committee	Committee	Committee
	Carlotta Ilaria D'Ercole	Director			I	M	M	P
	Abramo Galante	Chairman and		E
	CEO
	Davide Galante	Director			NE
	Raffaele Galante	CEO			E
	Susanna Pedretti	Director			I	M	P	M
	Stefano Salbe (1)	Director			E
	Laura Soifer (2)	Director			I	P	M	M
	Dario Treves	Director			E
	Key:
	E: Executive Director		P: President of the Committee
	NE: Non-Executive Director	M: Member of the Committee
	I: Independent Director

1. Financial Reporting Manager pursuant to Art. 154 bis of Legislative Decree 58/98
2. Lead Independent Director

Board of Statutory Auditors

Name	Office
Maria Pia Maspes	Statutory auditor
Pietro Piccone Ferrarotti	Statutory auditor
Paolo Villa	Chairman
Andrea Serra	Substitute statutory auditor
Stefano Spiniello	Substitute statutory auditor

The Shareholders' Meeting held on October 27th, 2023 appointed the Board of Directors and the Board of

Statutory Auditors. The terms of the Directors and the Statutory Auditors will expire on the Shareholders'

Meeting which will approve the financial statements as of June 30th, 2026. On January 24th, 2024, the Group's Director Lidia Florean sadly passed away. The Board of Directors is now composed of eight members, pending the decision about the co-option of a new Board member.

On October 27th, 2023, the Shareholders' Meeting appointed Abramo Galante as Chairman of the Board of Directors. On November 9th, 2023, the Board of Directors appointed Abramo Galante and Raffaele Galante as Chief Executive Officers. The Chief Executive Officers received appropriate powers of attorney.

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On August 7th, 2007, the Board of Directors appointed the Executive Director Stefano Salbe as Financial Reporting Manager pursuant to Art. 154 bis of Legislative Decree 58/98 with appropriate powers.

Auditors

EY S.p.A.

On October 27th, 2021, the Shareholders' Meeting appointed EY S.p.A., based in Via Meravigli 12, Milan, as auditors of the Group consolidated annual and half year financial statements and Digital Bros S.p.A. annual financial statements until the approval of the financial statements as of September 30th, 2030.

Other information

The publication of Digital Bros Group's Interim Report as of September 30th, 2023 was authorized by a

resolution of the Board of Directors on November 9th, 2023.

Digital Bros S.p.A. is incorporated and operating in Italy. The Company is listed on the Euronext STAR segment of the Euronext Milan market operated by Borsa Italiana S.p.A..

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DIRECTORS' REPORT

1. GROUP ORGANIZATION

Digital Bros Group develops, publishes and distributes video games on international markets.

The Group is organized into five operational business segments:

Premium Games: main operations consist of the acquisition of video games intellectual properties from developers and the distribution of video games through an international retail sales network and digital marketplaces such as Steam, Sony PlayStation Network, Microsoft Xbox Live, Epic Game Store, etc..

The Group develops some video games through its internal studios. Video games developed by external studios are usually either acquired through an exclusive license or assigned to the Group with long-term worldwide rights.

The label used for worldwide publishing is 505 Games. A second label, Hook, publishes budget video games.

During the period, Premium Games operations were conducted by the subsidiary 505 Games S.p.A. which coordinates the operating segment, together with 505 Games France S.a.s., 505 Games Ltd., 505 Games (US) Inc., 505 Games Spain Slu and 505 Games GmbH which operate respectively on the French, UK, U.S., Spanish and German markets. Hook S.r.l. publishes budget videogames. 505 Games Interactive (US) Inc. provides consultancy services on behalf of 505 Games S.p.A..

The following studios are also incorporated in the Premium Games segment:

• the Italian company Kunos Simulazioni S.r.l., which developed and published the Assetto Corsa and the Assetto Corsa Competizione video games;
• the Czech company Ingame Studios a.s. a Brno-based studio acquired in charge of the development of Crime Boss: Rockay City. In July 2021 Digital Bros first acquired 60% of the company, while in July 2023 the Group finalized the acquisition of the remaining 40%;
• the Italian company Avantgarden S.r.l., a development studio based in Milan;
• the Italian company Supernova Games Studios S.r.l., a development studio based in Milan;
• the Canadian company Chrysalide Jeux et Divertissement Inc. (75% held by the Group) which is currently developing a brand-new video game.

A Spanish joint venture, MSE & DB S.L., was set up together with the development studio MercurySteam Entertainment S.L. in order to jointly create a new intellectual property.

Free to Play: main operations consist of the development and publishing of video games and/or applications that are available for free on digital marketplaces with in-app purchases features. Free to Play video games usually presents less technical complexity than Premium video games but, in case of success, will have a longer life cycle. Free to Play video games are continuously upgraded after the launch in order to retain players and enhance

the video game's life cycle.

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Worldwide Free to Play publishing is operated by 505 Mobile S.r.l., together with the U.S. company 505 Mobile (US) Inc., which provides consultancy services to Group companies, the UK company DR Studios Ltd. which is the developer of Free to Play video games and Hawken Entertainment Inc..

In January 2021, the Australian company 505 Games Australia Pty Ltd. acquired 100% of the shares of Infinite Interactive Pty. and Infinity Plus Two Pty.. The Australian companies own the intellectual property of the video games Puzzle Quest and Gems of War and provide the live support to such products.

In July 2022, 505 Games Mobile S.r.l. acquired 100% of D3Publisher of America Inc., now 505 Go Inc., an American publisher of Free to Play video games, including spin-offs of the Puzzle Quest series.

The labels used for Free to Play worldwide publishing are 505 Mobile and 505Go!.

Italian Distribution: consists of the distribution in Italy of video games purchased from international publishers. The operations are run by the Parent Company, Digital Bros S.p.A., under the Halifax brand.

Other Activities: all Group's remaining activities are consolidated together for reporting purposes under the

Other Activities operating segment. It includes the operations of the subsidiary Digital Bros Game Academy S.r.l. which organizes video game training and professional courses. The Group also holds a 60% stake in the UK company Seekhana Ltd..

Holding: includes all the corporate functions provided by Digital Bros S.p.A. in finance, control and business development activities. The holding company has been supported by Digital Bros China Ltd., Digital Bros Asia Pacific (HK) Ltd. and 505 Games Japan K.K. which have operated as business developers for the Asian markets. Digital Bros Holdings Ltd. has been inactive during the period.

All the companies mentioned above are 100% owned, except for Rasplata B.V. and Seekhana Ltd. which are controlled with a 60% interest and Chrysalide Jeux et Divertissement Inc. with a 75% interest.

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The organization chart of the operating companies as of December 31st, 2023 was as follows:

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During the reporting period, the Group operated in the following locations:

	Company	Address	Activity
AvantGarden S.r.l.	Via Tortona, 37 Milan	Offices
Chrysalide Jeux et Divertissement Inc. (2)	300 Rue Saint Paul - Bureau 410, Quebec City, Canada	Offices
Digital Bros S.p.A.	Via Tortona, 37 Milan	Offices
Digital Bros S.p.A.	Via Boccaccio 95, Trezzano sul Naviglio (Milan)	Logistics
Digital Bros Asia Pacific (HK) Ltd.	33-35 Hillier Street, Sheung Wan, Hong Kong	Offices
Digital Bros China (Shenzhen) Ltd.	Wang Hai Road, Nanshan district, Shenzhen, 518062,	Offices
China
Digital Bros Game Academy S.r.l.	Via Labus, 15 Milan	Offices
DR Studios Ltd.	403 Silbury Boulevard, Milton Keynes, U.K.	Offices
Game Entertainment S.r.l.	Via Tortona, 37 Milan	Offices
505	Games S.p.A.	Via Tortona, 37 Milan	Offices
505	Games Australia Pty Ltd.	333 Collins Street, South Melbourne Victoria, Australia	Offices
505	Games France S.a.s.	2, Chemin de la Chauderaie, Francheville, France	Offices
505	Games Japan K.K.	WeWork Jimbocho, 11-15, Kanda Jimbocho 2-chome	Offices
Chiyoda-ku, Tokyo, Japan
505	Games Spain Slu	Calle Cabo Rufino Lazaro 15, Las Rozas de Madrid, Spain	Offices
505	Games Ltd.	403 Silbury Boulevard, Milton Keynes, U.K.	Offices
505	Games (US) Inc.	5145 Douglas Fir Road, Calabasas, California, U.S.A.	Offices
505	Games GmbH	Brunnfeld 2-6, Burglengenfeld, Germany	Offices
505	Games Interactive (US) Inc.	5145 Douglas Fir Road, Calabasas, California, U.S.A.	Offices
505	Go Inc.	5145 Douglas Fir Road, Calabasas, California, U.S.A.	Offices
Hawken Entertainment Inc.	5145 Douglas Fir Road, Calabasas, California, U.S.A.	Offices
Hook S.r.l.	Via Tortona, 37 Milan	Offices
Ingame Studios a.s.	Moravské náměstí 249/8, Brno, Czech Republic	Offices
Kunos Simulazioni S.r.l.	Via degli Olmetti 39, Formello (Rome)	Offices
Infinity Plus Two Pty Ltd.	333 Collins Street, Melbourne Victoria, Australia	Offices
Infinite Interactive Pty Ltd.	333 Collins Street, Melbourne Victoria, Australia	Offices
505	Mobile S.r.l.	Via Tortona, 37 Milan	Offices
505	Mobile (US) Inc.	5145 Douglas Fir Road, Calabasas, California, U.S.A.	Offices
Rasplata B.V. (1)	Churchill-laan 131 2, Amsterdam, Netherlands	Offices
Seekhana Ltd. (1)	403 Silbury Boulevard, Milton Keynes, U.K.	Offices
Supernova Games Studios S.r.l.	Via Tortona, 37 Milan	Offices

1. 60% consolidated
2. 75% consolidated

Rasplata B.V. and Seekhana Ltd. are held at 60%. Chrysalide Jeux et Divertissement Inc. is held at 75%. They have been incorporated into the consolidated financial statements through full consolidation method, acknowledging the proportion of net equity and operating results belonging to minority shareholders.

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