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1 Appendix 4D FOR THE HALF YEAR ENDED 31 DECEMBER Details of the reporting period Current period 1 July 2013 to 31 December 2013 Previous corresponding period 1 July 2012 to 31 December Results for announcement to the market $ 000 Up / down Movement % 2.1 Revenues from ordinary activities 8,128 1,117 16% 2.2 Profit/(loss) from ordinary activities after tax attributable to members (4,289) (4,311) (19,618%) 2.3 Net profit/(loss) for the period attributable to members (4,289) (4,311) (19,618%) 2.4 Dividends Amount per Security (cents) Franked amount per security (cents) Current Period Final Interim N/A N/A N/A N/A Previous corresponding period Final Interim N/A N/A N/A N/A 2.5 Record date for determining entitlements to dividends N/A 2.6 During the half-year ended 31 December 2013, other than disclosed in the Directors Report, there were no significant items that impacted on the results recorded in our Statement of Profit or Loss and Other Comprehensive Income. Refer to the Directors Report contained in attached interim financial report for further explanation of the results.

2 P a g e 2 3. Net Tangible Assets per security 31 Dec Dec 2012 Net tangible asset backing per ordinary security (0.23) Details of entities over which control has been gained or lost during the period i. Name of entity (or group of entities) over which control was gained/lost Bulletproof Networks Pty Limited ii. Date control was gained/lost 24 th December 2013 iii. Consolidated profit (loss) from ordinary activities and extraordinary items after tax of the controlled entity (or group of entities) since the date in the current period on which control was acquired/lost (4,288,544) Profit (loss) from ordinary activities and extraordinary items after tax of the controlled entity (or group of entities) for the whole of the previous corresponding period 21, Details of dividends / distributions N/A as no interim dividend will be paid. 6. Details of dividend / distribution reinvestment plan At 31 December 2013, there was no dividend reinvestment plan in operation for Bulletproof Group Limited. 7. Details of associates and joint venture entities N/A 8. Accounting Standards used by foreign entities N/A 9. Qualification of audit / review N/A as there is no audit dispute or qualification. Refer to the attached interim financial report which includes our auditor s Independent Review Report.

3 Interim Financial Statements For the half-year ended 31 December 2013

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5 P a g e 3 Contents Directors Report... 5 Director details... 5 Reverse Acquisition... 5 Review of operations and financial results... 6 Significant changes in the state of affairs... 7 Auditor s Independence Declaration... 8 Auditor s Independence Declaration... 9 Consolidated statement of financial position Consolidated statement of profit or loss and other comprehensive income Consolidated statement of changes in equity Consolidated statement of cash flows Notes to the condensed interim consolidated financial statements Nature of operations General information and basis for preparation Significant accounting policies Estimates Business combination Discontinued operations Segment reporting Earnings per share Share capital Other components of equity Events after the reporting date Directors declaration Independent Auditor s Review Report... 31

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7 P a g e 5 Directors Report The Directors of present their Report together with the financial statements of the consolidated entity, being and its controlled entities ( the Group ) for the half-year ended 31 December Director details The following persons were directors of during or since the end of the financial half-year. Mr Stephe Wilks (appointed 20 January 2014) Mr Anthony Woodward (appointed 20 January 2014) Mr Lorenzo Modesto (appointed 20 January 2014) Mr David Paterson Mr Benjamin Miels (resigned 20 January 2014) Mr Jay Stephenson (resigned 20 January 2014) Reverse Acquisition This review focuses on the continuation of Bulletproof Networks, which is treated as the acquirer of Bulletproof Group (formerly Spencer Resources) for accounting purposes, effective on and from 24 December The Bulletproof Networks business is considered the ongoing business following the acquisition, and the significant changes to the respective entity s previous accounting arrangements, and their effect on the financial position of the integrated entity, are set out in more detail in the notes to the accounts.

8 P a g e 6 Review of operations and financial results Revenue for the half-year was ahead of target at $8.1M (2013: $7.0m), representing an increase of 16% on the same period in the preceding half-year. In July 2013, Mark Randall, previously Country Manager Australia and New Zealand for global hosting and cloud company Rackspace, commenced as Bulletproof s Chief Customer Officer. The resulting invigoration of the sales operation of the business, the growth in sales and account management teams, and a new Marketing Manager will all help drive future revenues, and the team has already begun to deliver improved results. A focus on Monthly Recurring Revenue (MRR) is expected to yield growth in second half Financial Year 14 revenues, as well as long term revenue growth. In November 2013, Bulletproof strengthened its leading partnership position with Amazon Web Services (AWS) and was ratified as an AWS Premier Consulting Partner for 2014 (one of 22 globally, and the only such partner in Australia and New Zealand). The AWS partnership continues to provide rapid growth opportunities to the business, with a jump in AWS-based revenues to 11% of recurring revenues in the half. The period has also seen many new customer wins (including Mazda, Bauer Media, Racing Victoria and Tennis Australia) with increase in new average customer MRR. The consolidated net loss after tax from continuing operations for the half-year was $1,160,480. This comprises $381,556 in Bulletproof Networks, and expensed broker options in connection with the recent prospectus offer of $778,924. The underlying (comparable) net loss for the period was $229k, net of costs of the acquisition (1H13: $179k loss).

9 P a g e 7 Significant changes in the state of affairs On 28 October 2013, Spencer Resources Limited ( Spencer Resources ) announced that it had signed an agreement to acquire 100% of the issued capital of Bulletproof Networks Pty Ltd ( Bulletproof Networks ). The acquisition was conditional upon: the passing of appropriate resolutions at an Extraordinary General Meeting the company raising a minimum of $1,600,000 under the subsequent offer obtaining the appropriate ASX approvals for relisting and issuing of shares On 17 December 2013 the shares of Bulletproof (formerly Spencer Resources) were suspended from official quotation pending the outcome of the resolution at the company s Extraordinary General Meeting to approve a change in activities. The Extraordinary General Meeting was subsequently held on 17 December 2013, at which the shareholders voted in favour of the following: change to nature and scale of activities change of name from Spencer Resources Limited to acquisition of Bulletproof Networks and the issue of shares to its shareholders; issuing 41,666,667 ordinary shares, 16,666,667 unlisted Class A Performance Shares and 25,000,000 unlisted Class B Performance Shares issuing up to 8,000,000 shares at a minimum issue price of $0.20 per share to raise $1,600,000 and up to an additional 2,500,000 shares at a minimum issue price of $0.20 per share to raise a further $500,000 by way of oversubscriptions On 24 December 2013 the offer closed oversubscribed, with commitments for a total of 10,500,000 shares, at a final issue price of $0.27, raising $2,835,000. On 15 January the company formally issued the shares under the offer, as well as the acquisition consideration in connection with the acquisition of Bulletproof Networks. On 20 January 2014 the Share Sale Agreement formally completed, and the shares in Bulletproof were reinstated to official quotation as from the commencement of trading on 23 January Notwithstanding the fact that the Share Sale Agreement formally completed on 20 January 2014, from an accounting perspective the acquisition date has been deemed to be 24 December 2014, on the basis of having obtained share-holders approval at the Extraordinary General Meeting held on 17 December 2013, having raised a minimum of $1,600,000 as at 24 December 2013, and by virtue of Bulletproof Networks having an ability to control the activities of Bulletproof (formerly Spencer Resources) as a result of the terms and conditions in the original Share Sale Agreement.

10 P a g e 8 Under the principles of AASB 3: Business Combinations, Bulletproof Networks is the accounting acquirer and Bulletproof (formerly Spencer Resources) is the accounting acquiree, and the transaction has therefore been accounted for as a reverse acquisition. Accordingly, the 30 June 2014 consolidated financial statements of Bulletproof (formerly Spencer Resources) will be prepared as a continuation of the financial statements of Bulletproof Networks. Consequently, the interim financial statements for the half-year ended 31 December 2013 have also been prepared as a continuation of Bulletproof Networks, presenting the Statement of Profit or Loss and Other Comprehensive Income and Statement of Cash Flows of Bulletproof Networks for the half-year ended 31 December 2013, with Bulletproof (formerly Spencer Resources) included from 24 December The comparative figures also present a continuation of Bulletproof Networks, and therefore will not reconcile to the previous Bulletproof (formerly Spencer Resources) interim financial statements for the half-year ended 31 December Auditor s Independence Declaration A copy of the auditor s independence declaration as required under section 307C of the Corporations Act 2001 is included on page 9 of the financial report and forms part of this Directors Report. Signed in accordance with a resolution of the directors Anthony Woodward Director 20 February 2014

11 Grant Thornton Audit Pty Ltd ACN Level 17, 383 Kent Street Sydney NSW 2000 Correspondence to: Locked Bag Q800 QVB Post Office Sydney NSW 1230 T F E info.nsw@au.gt.com W Auditor s Independence Declaration To The Directors of In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the review of for the half-year ended 31 December 2013, I declare that, to the best of my knowledge and belief, there have been: a b No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and No contraventions of any applicable code of professional conduct in relation to the review. GRANT THORNTON AUDIT PTY LTD Chartered Accountants C F Farley Partner - Audit & Assurance Sydney, 20 February 2014 Grant Thornton refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another s acts or omissions. In the Australian context only, the use of the term Grant Thornton may refer to Grant Thornton Australia Limited ABN and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited. Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies.

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13 Consolidated statement of financial position As at 31 December 2013 Notes 31 December June 2013 Assets $ $ Current Cash and cash equivalents 1,627, ,076 Trade and other receivables 3,535, ,667 Other current assets 704, ,374 Total current assets 5,867,068 1,902,117 Non-current Property, plant and equipment 5,502,221 5,484,452 Intangible assets 281, ,578 Other non-current assets 106, ,692 Deferred tax asset 29,090 29,090 Total non-current assets 5,919,067 5,821,812 Total assets 11,786,135 7,723,929 Liabilities Current Trade and other payables 2,864,825 1,373,256 Income received in advance 1,218,781 1,637,724 Provisions 201, ,505 Borrowings 2,223,906 2,291,295 Current tax liabilities 48,445 49,514 Total current liabilities 6,557,616 5,574,294 Non-current Provisions 28,503 62,850 Borrowings 1,270,735 1,714,406 Financial liabilities (Class B Performance Shares) 10 8,383,289 - Total non-current liabilities 9,682,527 1,777,256 Total liabilities 16,240,143 7,351,550 Net (liabilities)/assets (4,454,008) 372,379

14 P a g e 12 Notes 31 December June 2013 Equity $ $ Issued capital Shares to be issued 5 7,026,631 - Share option reserve ,924 - Other components of equity 10 (8,383,289) - Foreign currency translation reserve 101,628 61,771 Other reserves 279, ,406 Retained earnings (4,257,990) 30,554 Total equity (4,454,008) 372,379 The accompanying notes form part of these financial statements.

15 P a g e 13 Consolidated statement of profit or loss and other comprehensive income For the half-year ended 31 December December December 2012 $ $ Sales revenue 8,127,868 7,011,309 Other income 1,337 4,539 Consumables used (2,908,358) (2,335,111) Employee benefits expense (3,506,821) (2,251,914) Depreciation and amortisation expense (1,023,746) (887,429) Other expenses (1,680,038) (1,254,373) Finance costs (170,722) (185,490) (Loss)/profit before tax (1,160,480) 101,531 Tax expense - (79,559) (Loss)/profit for the period from continuing operations (1,160,480) 21,972 Loss for the period from discontinued operations 6 (3,128,064) - (Loss)/profit for the period (4,288,544) 21,972 Other comprehensive income: Exchange differences on translation of foreign operations 39,857 61,771 Other comprehensive income for the period, net of income tax 39,857 61,771 Total comprehensive income for the period (4,248,687) 83,743 Earnings per share from continuing operations Cents Cents - Basic earnings per share 8 (131) 3,401 - Diluted earnings per share 8 (131) 3,401 Earnings per share from discontinued operations - Basic earnings per share 8 (353) Diluted earnings per share 8 (353) 0.00 The accompanying notes form part of these financial statements.

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17 P a g e 15 Consolidated statement of changes in equity For the half-year ended 31 December 2013 Issued capital Shares to be issued Share option reserve Other components of equity Foreign currency translation reserve Other reserves Retained earnings Total $ $ $ $ $ $ $ $ Balance at 1 July , ,406 30, ,379 Issue of share capital Shares to be issued pursuant to offer - 2,835, ,835,000 Shares to be issued pursuant to acquisition - 4,191, ,191,631 Issue of options (note 11) , ,924 Reverse acquisition contingent consideration (8,383,289) (8,383,289) Transactions with owners 34 7,026, ,924 (8,383,289) (577,700) Loss for the period (4,288,544) (4,288,544) Other comprehensive income , ,857 Total comprehensive income for the period ,857 - (4,288,544) (4,248,687) Balance at 31 December ,026, ,924 (8,383,289) 101, ,406 (4,257,990) (4,454,008)

18 P a g e 16 For the half-year ended 31 December 2012 Issued capital Shares to be issued Share option reserve Other components of equity Foreign currency translation reserve Other reserves Retained earnings Total $ $ $ $ $ $ $ $ Balance at 1 July , , ,284 Issue of share capital Transactions with owners Profit for the period ,972 21,972 Other comprehensive income , ,771 Total comprehensive income for the period ,771-21,972 83,743 Balance at 31 December , , , ,047 The accompanying notes form part of these financial statements.

19 P a g e 17 Consolidated statement of cash flows For the half-year ended 31 December December 2013 December 2012 Cash flows from operating activities $ $ Receipts from customers 7,718,634 7,602,332 Payments to suppliers and employees (7,013,710) (5,852,805) Interest received 1,337 4,539 Income taxes paid (22,855) (116,022) Net cash provided by operating activities 683,406 1,638,044 Cash flows from investing activities Purchase of intangibles (104,795) (68,524) Purchase of property, plant and equipment (2,054) (306,957) Cash acquired on acquisition 1,421,391 - Net cash provided by/(used in) investing activities 1,314,542 (375,481) Cash flows from financing activities Payment of finance leases (856,464) (950,886) Finance costs (192,800) (179,418) Net cash used in financing activities (1,049,264) (1,130,304) Net change in cash and cash equivalents held 948, ,259 Cash and cash equivalents at the beginning of the period 679, ,586 Cash and cash equivalents at the end of the period 1,627, ,845 The accompanying notes form part of these financial statements.

20 P a g e 18 Notes to the condensed interim consolidated financial statements 1. Nature of operations and subsidiaries (the Group) principle activities include Information Technology (IT) and Cloud Computing both locally and overseas. The Group focuses on delivery of world class managed services. With the associated tagline of Mission Critical Hosting, the Group has the primary responsibility of ensuring website availability, application performance and mission-critical infrastructure is carefully monitored and appropriately managed for its clients. The Group was first in Australia to launch a public managed cloud IT service in Following an approach by Amazon Web Services (AWS), in 2012 the Group undertook the launch of cloud management services for customers using unmanaged cloud services hosted with AWS, joining its partner network and becoming a preferred provider of managed services. AWS is the world s largest and fastest growing unmanaged cloud provider. 2. General information and basis for preparation The condensed interim consolidated financial statements (the interim financial statements) of the Group are for the six months ended 31 December 2013 and are presented in Australian dollar ($), which is the functional currency of the parent company. These general purpose interim financial statements have been prepared in accordance with the requirements of the Corporations Act 2001 and AASB 134 Interim Financial Reporting. They do not include all of the information required in annual financial statements in accordance with Australian Accounting Standards, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 30 June 2013 and any public announcements made by the Group during the half-year in accordance with continuous disclosure requirements arising under the Australian Stock Exchange Listing Rules and the Corporations Act As discussed in Note 3 below, Bulletproof (formerly Spencer Resources) consider that for accounting purposes the acquisition of Bulletproof Networks was complete with effect from 24 December Bulletproof Networks was deemed to be the acquirer for accounting purposes under the principles of AASB 3 Business Combinations. Accordingly, the consolidated financial statements of Bulletproof (formerly Spencer Resources) have been prepared as a continuation of the consolidated financial statements of Bulletproof Networks from 24 December The impact of the reverse acquisition on each of the primary statements is as follows:

21 P a g e 19 Statement of Financial Position The 31 December 2013 statement of financial position represents both Bulletproof (formerly Spencer Resources) and Bulletproof Networks as at 31 December The 30 June 2013 statement of financial position represents Bulletproof Networks as at 30 June Statement of Profit or Loss and Other Comprehensive Income The 31 December 2013 statement of profit or loss and other comprehensive income comprises 6 months of Bulletproof Networks and Bulletproof (formerly Spencer Resources) for the period from 24 December 2013 to 31 December The 31 December 2012 statement of profit or loss and other comprehensive income comprises 6 months of Bulletproof Networks. Statement of Changes in Equity The 31 December 2013 statement of changes in equity comprises Bulletproof Networks equity balance at 1 July 2013, its profit for the period, and transactions with equity holders for the six-month period. It also comprises Bulletproof s (formerly Spencer Resources) transactions with equity holders for the period from 24 December 2013 to 31 December 2013 and the equity balances of Bulletproof Networks and Bulletproof (formerly Spencer Resources) as at 31 December The 31 December 2012 statement of changes in equity comprises Bulletproof Networks changes in equity for the six-month period. Statement of Cash Flows The 31 December 2013 statement of cash flows comprises the cash balance of Bulletproof Networks at 1 July 2013, the cash transactions of Bulletproof Networks for the six-month period and Bulletproof (formerly Spencer Resources) for the period from 24 December 2013 to 31 December 2013), and the cash balance of Bulletproof Networks and Bulletproof (formerly Spencer Resources) at 31 December The 31 December 2012 statement of cash flows comprises 6 months of Bulletproof Networks cash transactions. The interim financial statements have been approved and authorised for issue by the board of directors on 20 February 2014.

22 P a g e Significant accounting policies The interim financial statements have been prepared in accordance with the accounting policies adopted in the Group s last annual financial statements for the year ended 30 June 2013, except for the application of the following new standards as of 31 December 2013: AASB 10 Consolidated Financial Statements; and AASB 13 Fair Value Measurement The effects of applying these standards are described below. AASB 10 Consolidated Financial Statements AASB 10 supersedes AASB 127 Consolidated and Separate Financial Statements and Interpretation 112 Consolidation Special Purpose Entities. AASB 10 revises the definition of control and provides extensive new guidance on its application. These new requirements have the potential to affect which of the Group s investees are considered to be subsidiaries and therefore change the scope of consolidation. The requirements on consolidation procedures, accounting for changes in noncontrolling interests and accounting for loss of control of a subsidiary are unchanged. Management has reviewed its control assessments in accordance with AASB 10 and has concluded that there is no effect on the classification (as subsidiaries or otherwise) of any of the Group s investees held during the period or comparative periods covered by these financial statements. AASB 13 Fair Value Measurement AASB 13 establishes a single source of guidance for determining the fair value of assets and liabilities. AASB 13 does not change when an entity is required to use fair value, but rather, provides guidance on how to determine fair value when fair value is required or permitted by other Standards. AASB 13 also expands the disclosure requirements for all assets or liabilities carried at fair value. This includes information about the assumptions made and the qualitative impact of those assumptions on the fair value determined. Management has reviewed the adoption of AASB 13 and has concluded that there is no effect on the financial statements, because the fair value measurement requirements apply prospectively for annual periods beginning on or after 1 January 2013 (i.e. the 30 June 2014 year-end).

23 P a g e 21 In addition to the above new standards adopted this period, the following new accounting policies are also now applicable to the group, following the business combination between Bulletproof (formerly Spencer Resources) and Bulletproof Networks: a. Business Combinations Under the principles of AASB 3: Business Combinations, the transaction between Bulletproof (formerly Spencer Resources) and Bulletproof Networks is being treated as a reverse acquisition. Bulletproof Networks is the accounting acquirer and Bulletproof (formerly Spencer Resources) is the accounting acquiree. Accordingly, the 30 June 2014 consolidated financial statements of Bulletproof (formerly Spencer Resources) will be prepared as a continuation of the financial statements of Bulletproof Networks. Determination of fair value The consideration in a reverse acquisition is deemed to have been incurred by the legal subsidiary (Bulletproof Networks) in the form of equity instruments issued to the shareholders of the legal parent entity (Bulletproof (formerly Spencer Resources)). The acquisition-date fair value of the consideration transferred has been determined by reference to the fair value of the number of shares the legal subsidiary (Bulletproof Networks) would have issued to the legal parent entity (Bulletproof (formerly Spencer Resources)) to obtain the same ownership interest in the combined entity. b. Intangible Assets Internally developed software Expenditure on the research phase of projects to develop new customised software for IT and billings systems is recognised as an expense as incurred. Costs that are directly attributable to a project s development phase are recognised as intangible assets, provided they meet the following recognition requirements: the development costs can be measured reliably the project is technically and commercially feasible the Group intends to and has sufficient resources to complete the project the Group has the ability to use or sell the software the software will generate probable future economic benefits. Development costs not meeting these criteria for capitalisation are expensed as incurred. Directly attributable costs include employee (other than directors) costs incurred on software development along with an appropriate portion of relevant overheads and borrowing costs

24 P a g e 22 Subsequent measurement All intangible assets, including capitalised internally developed software, are accounted for using the cost model whereby capitalised costs are amortised on a straight-line basis over their estimated useful lives, as these assets are considered finite. Residual values and useful lives are reviewed at each reporting date. In addition, they are subject to impairment testing. The following useful lives are applied: Computer software: 3 to 5 years Internally generated assets: 3 to 5 years Other intangible assets: 1 to 3 years Amortisation has been included within depreciation, amortisation and impairment of non-financial assets. Subsequent expenditures on the maintenance of computer software and brand names are expensed as incurred. When an intangible asset is disposed of, the gain or loss on disposal is determined as the difference between the proceeds and the carrying amount of the asset, and is recognised in profit or loss within other income or other expenses. c. Financial instruments Recognition, initial measurement and derecognition Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial instrument, and are measured initially at fair value adjusted by transactions costs, except for those carried at fair value through profit or loss ( FVTPL ), which are measured initially at fair value. Subsequent measurement of financial assets and financial liabilities are described below. Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and all substantial risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires. Classification and subsequent measurement of financial liabilities The Group s financial liabilities include borrowings, trade and other payables and financial instruments. Financial liabilities are measured subsequently at amortised cost using the effective interest method, except for financial liabilities held for trading or designated at FVTPL, that are carried subsequently at fair value with gains or losses recognised in profit or loss. All derivative financial instruments that are not designated and effective as hedging instruments are accounted for at FVTPL.

25 P a g e 23 The Group has designated some financial liabilities at FVTPL, relating to the reverse acquisition contingent consideration. In addition to the 16,666,667 unlisted Class A Performance Shares issued as part of the acquisition consideration, the company also issued 25,000,000 unlisted Class B Performance Shares. These convert into a variable number of ordinary shares, subject to a meeting certain EBITDA thresholds for the year ended 30 June As a result of the conversion into ordinary shares being variable, this has been treated as a financial liability held at FVTPL, rather than as equity issued in connection with the acquisition. Upon acquisition, a financial liability has been recognised, with the opposite side being shown as a distribution from the consolidated group to the accounting acquirer s shareholders at the acquisition date, within equity. 4. Estimates When preparing the interim financial statements, management undertakes a number of judgements, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results may differ from the judgements, estimates and assumptions made by management, and will seldom equal the estimated results. The judgements, estimates and assumptions applied in the interim financial statements, including the key sources of estimation uncertainty were the same as those applied in the Group s last annual financial statements for the year ended 30 June The only exception is the estimate of the provision for income taxes which is determined in the interim financial statements using the estimated average annual effective income tax rate applied to the pre-tax income of the interim period. No other matters or circumstances have arisen since the end of the financial period which significantly affected or may significantly affect the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial years. 5. Business combination On 28 October 2013, Bulletproof (formerly Spencer Resources), announced that it had signed an agreement to acquire 100% of the issued capital of Bulletproof Networks. The transaction received approval from Bulletproof (formerly Spencer Resources) shareholders at an Extraordinary General Meeting held on 17 December Subsequent to the year end, on 20 January 2014, the Share Sale Agreement was completed. Notwithstanding the fact that the Share Sale Agreement formally completed on 20 January 2014, from an accounting perspective the acquisition date has been deemed to be 24 December 2013, on the basis of having obtained shareholders approval at the Extraordinary General Meeting held on 17 December 2013, having raised a minimum of $1,600,000 as at 24 December 2013, and by virtue of

26 P a g e 24 Bulletproof Networks having an ability to control the activities of Bulletproof (formerly Spencer Resources) as a result of the terms and conditions in the original Share Sale Agreement. Acquisition consideration As consideration for the issued capital of Bulletproof Networks, Bulletproof (formerly Spencer Resources) issued the following: 41,666,667 Shares in Bulletproof (formerly Spencer Resources); 16,666,667 unlisted Class A Performance Shares in Bulletproof (formerly Spencer Resources) 25,000,000 unlisted Class B Performance Shares in Bulletproof (formerly Spencer Resources) The conversion of the Class A Performance Shares into Ordinary Shares of Bulletproof (formerly Spencer Resources) is contingent upon either the FY2014 EBITDA exceeding $2,890,000 and interest bearing liabilities as at 30 June 2014 being less than $4,000,000, or the FY2015 EBITDA exceeding $5,000,000 and interest bearing liabilities as at 30 June 2015 being less than $4,000,000 (with EBITDA being defined in the Share Sale Agreement as being normalised to exclude non-recurring transactions and other costs). Each 1 Class A Performance Shares converts into 1 Ordinary Share. The conversion of the Class B Performance Shares into Ordinary Shares of Bulletproof (formerly Spencer Resources) is contingent upon the FY2015 EBITDA exceeding $3,500,000 and interest bearing liabilities as at 30 June 2015 not exceeding the lessor of: $5,500,000; and the sum of $4,000,000 and the amount, of any, by which the FY2015 EBITDA exceeds $3,500,000, rounded up to the nearest $100,000. The number of Ordinary Shares the Class B Performance Shares convert into is therefore variable, based on a certain formula as set out in the Share Sale Agreement, with a maximum of 25,000,000 Ordinary Shares that can be issued. Fair value of consideration transferred Under the principles of AASB 3: Business Combinations, the transaction between Bulletproof (formerly Spencer Resources) and Bulletproof Networks is being treated as a reverse acquisition. As such, the assets and liabilities of the legal subsidiary (the accounting acquirer), being Bulletproof Networks, are measured at their pre-combination carrying amounts. The assets and liabilities of the legal parent (accounting acquiree), being Bulletproof (formerly Spencer Resources) are measured at fair value on the date of acquisition.

27 P a g e 25 The consideration in a reverse acquisition is deemed to have been incurred by the legal subsidiary (Bulletproof Networks) in the form of equity instruments issued to the shareholders of the legal parent entity (Bulletproof (formerly Spencer Resources)). The acquisition-date fair value of the consideration transferred has been determined by reference to the fair value of the number of shares the legal subsidiary (Bulletproof Networks) would have issued to the legal parent entity Bulletproof (formerly Spencer Resources) to obtain the same ownership interest in the combined entity. As there is no contractual obligation to deliver a variable number of its own equity instruments, the Class A Performance Shares are classified as equity, and therefore included in the calculation of the ownership interest. However, the Class B Performance Shares convert into a variable number of Ordinary Shares which are dependent on the financial performance of the company, and are therefore classified as a financial liability. These shares have not been included in the calculation of the ownership interest. Goodwill Goodwill is calculated as the difference between the fair value of consideration transferred less the identified fair value of the net assets of the legal parent, being Bulletproof (formerly Spencer Resources). Details of the transaction are: Fair Value Fair value of consideration transferred 7,026,631 Fair value of assets and liabilities held at acquisition date: Cash and cash equivalents 1,421,391 Receivable in connection with shares issued pursuant to offer 2,835,000 Other receivables 49,908 Exploration and evaluation expenditure - Trade payables (407,733) 3,898,566 $ Identifiable assets and liabilities assumed 3,898,566 Goodwill on acquisition 3,128,064 The goodwill calculated above represents goodwill in Bulletproof (formerly Spencer Resources).

28 P a g e 26 Given the operations in the business have been discontinued, the full amount of goodwill was impaired immediately. Contribution to the Group results As the acquisition date was 24 December 2013, and there were no transactions in Bulletproof (formerly Spencer Resources) between 24 December 2013 and 31 December 2013, there is $nil revenue and $nil profit included in the consolidated revenue and consolidated profit of the Group. Bulletproof (formerly Spencer Resources) had minimal trading activities during the 6 month period and therefore if the acquisition had taken place on 1 July 2013, there would be no significant impact on the results of the consolidated group as presented. 6. Discontinued operations Upon completion of the acquisition on 24 December 2013, management decided to focus on the core business in Bulletproof Networks, and therefore it was determined that the operations within Bulletproof (formerly Spencer Resources) would be discontinued. Consequently the goodwill of $3,128,064 (see Note 5) that was recognised on consolidation was immediately impaired given that it was in relation to Bulletproof (formerly Spencer Resources). 7. Segment reporting The Group has identified its operating segments based on internal reports that are reviewed and used by the Board of Directors (chief operating decision makers) in assessing performance and determining the allocation of resources. The Group only operates in one business segment being Information Technology (IT) and Cloud Computing services. Following the discontinued operations of the former business in Bulletproof (formerly Spencer Resources), the previously capitalised exploration costs have all been fully written off. Therefore, all segment assets and liabilities, and the segment result (excluding the loss from discontinued operations), relate to the one business segment and consequently no detailed segment analysis has been prepared. The Group sources some of its revenue from the United States of America, and therefore presents the following split by geographic region.

29 P a g e 27 Sales to external customers Assets 31 December December December December 2012 $ $ $ $ Australia 8,038,092 7,011,309 10,836,352 6,586,970 United States of America 89, ,783 1,136,960 8,127,868 7,011,309 11,786,135 7,723,930 Major customers The Group supplies one single external customer in the Information Technology (IT) and Cloud Computing services segment which accounts for 19.29% (2012: 17.71%) of external revenue of the Group. The next most significant customer in the Information Technology (IT) and Cloud Computing services segment accounts for 3.57% of the external revenue of the Group (2012: 6.63%) 8. Earnings per share In accordance with the principles of reverse acquisition accounting, the weighted average number of ordinary shares outstanding during the period ended 31 December 2013 has been calculated as the weighted average number of ordinary shares of Bulletproof Networks outstanding during the period before acquisition multiplied by the exchange ratio established in the acquisition accounting, and the actual number of ordinary shares of Bulletproof (formerly Spencer Resources) outstanding during the period after acquisition. 31 December December 2012 Earnings per share from continuing operations (Loss)/profit after income tax (1,160,470) 21,972 Weighted average number of ordinary shares used in calculating basic earnings per share 885, Weighted average number of ordinary shares used in calculating diluted earnings per share 885, Basic earnings per share (cents per share) (131) 3,401 Diluted earnings per share (cents per share) (131) 3,401

30 P a g e December December 2012 Earnings per share from discontinued operations Loss after income tax (3,128,064) - Weighted average number of ordinary shares used in calculating basic earnings per share 885, Weighted average number of ordinary shares used in calculating diluted earnings per share 885, Basic earnings per share (cents per share) (353) 0.00 Diluted earnings per share (cents per share) (353) Share capital 31 December 30 June $ $ 20,358,000 fully paid ordinary shares (30 June 2013: 648) December June 2013 No. No. Ordinary shares At the beginning of the reporting period Recognition of shares in Bulletproof (formerly Spencer Resources) in accordance with the requirements of reverse acquisition accounting 20,357, At reporting date 20,358,

31 P a g e Other components of equity In addition to the 16,666,667 unlisted Class A Performance Shares issued as part of the acquisition consideration, the company also issued 25,000,000 unlisted Class B Performance Shares. These convert into a variable number of ordinary shares, subject to a meeting certain EBITDA thresholds for the year ended 30 June As a result of the conversion into ordinary shares being variable, this has been treated as a financial liability held at fair value through profit or loss, rather than as equity issued in connection with the acquisition. Upon acquisition, a financial liability has been recognised, with the opposite side being shown as a distribution from the consolidated group to the accounting acquirer s shareholders at the acquisition date, within equity. 11. Events after the reporting date On 15 January the company formally issued the shares under the offer, as well as the acquisition consideration in connection with the acquisition of Bulletproof Networks, as follows: 10,500,000 Ordinary Shares issued under the offer, issued at $0.27, raising $2,835,000; 441,666,667 Ordinary Shares as acquisition consideration; 16,666,667 unlisted Class A Performance Shares as acquisition consideration; 25,000,000 unlisted Class B Performance Shares as acquisition consideration; and 3,337,990 options issued to the broker (Taylor Collison) in lieu of services #. # Although the share options were formally issued on 15 January 2014, they formed part of the share offer and acquisition that were effective as at 24 December They have therefore been valued and expensed as at 24 December The options have a 3 year term, vest immediately, have an exercise price of $0.20, and have a fair value at grant date of $ (based on share price at grant date of $0.34, risk-free rate of 3.03%, dividend yield of 0% and volatility of 88.44%). On 20 January 2014 the Share Sale Agreement formally completed, and the shares in Bulletproof were reinstated to official quotation as from the commencement of trading on 23 January 2014.

32 P a g e 30 Directors declaration 1. In the opinion of the directors of ; a. the consolidated financial statements and notes of, as set out on pages 11 to 29 are in accordance with the Corporations Act 2001, including i. giving a true and fair view of its financial position as at 31 December 2013 and of its performance for the half-year ended on that date; and ii. complying with Accounting Standard AASB 134 Interim Financial Reporting; and b. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. Signed in accordance with a resolution of the directors: Anthony Woodward Director Dated the 20 th day of February 2014

33 Grant Thornton Audit Pty Ltd ACN Level 17, 383 Kent Street Sydney NSW 2000 Correspondence to: Locked Bag Q800 QVB Post Office Sydney NSW 1230 T F E info.nsw@au.gt.com W Independent Auditor s Review Report To the Members of We have reviewed the accompanying half-year financial report of Bulletproof Group Limited ( Company ), which comprises the consolidated financial statements being the statement of financial position as at 31 December 2013, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended on that date, notes comprising a statement or description of accounting policies, other explanatory information and the directors declaration of the consolidated entity, comprising both the Company and the entities it controlled at the halfyear s end or from time to time during the half-year. Directors responsibility for the half-year financial report The directors of are responsible for the preparation of the halfyear financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such controls as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error. Auditor s responsibility Our responsibility is to express a conclusion on the consolidated half-year financial report based on our review. We conducted our review in accordance with the Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity s financial position as at 31 December 2013 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations As the auditor of, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report. Grant Thornton refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another s acts or omissions. In the Australian context only, the use of the term Grant Thornton may refer to Grant Thornton Australia Limited ABN and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited. Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies.

34 A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Independence In conducting our review, we complied with the independence requirements of the Corporations Act Conclusion Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of is not in accordance with the Corporations Act 2001, including: a giving a true and fair view of the consolidated entity s financial position as at 31 December 2013 and of its performance for the half-year ended on that date; and b complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations GRANT THORNTON AUDIT PTY LTD Chartered Accountants C F Farley Partner - Audit & Assurance Sydney, 20 February 2014