Forte Energy NL : 2015 Half-Yearly Report

Forte_Half_Yearly_Report_31_Dec_2015 Final

ABN 59 009 087 852

HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2015 Forte Energy NL Suite 3 Level 3 1292 Hay Street West Perth WA 6005 AUSTRALIA FORTE ENERGY NL (ABN 59 009 087 852) CONTENTS

Directors' Report 2

Consolidated Statement of Comprehensive Income 5

Consolidated Statement of Financial Position 6

Consolidated Statement of Changes in Equity 7

Consolidated Statement of Cash Flows 8

Notes to the Half-Year Financial Report 9

Directors' Declaration 25

Auditor's Independence Declaration 26

Independent Audit Report 27

DIRECTORS' REPORT

The Board of Directors of Forte Energy NL present their half-year report on the Consolidated Entity consisting of Forte Energy NL ("the Company" or "Forte Energy") and the entities it controlled at the end of, or during, the half-year ended 31 December 2015 ("Consolidated Entity" or "Group").

Directors

The names of the Company's Directors in office during the half-year and until the date of this report are as below. Directors were in office for this entire period unless otherwise stated.

Glenn Robert Featherby - Chairman Mark David Reilly - Managing Director

Christopher David Grannell - Non-executive Director

James Gerald Leahy - Non-executive Director (resigned 26 August 2015)

Review and Results of Operations

The Consolidated Entity reported a loss for the half-year of $1,776,607 (2014: $2,626,504).

The principal activity of the Consolidated Entity during the reporting period was the exploration for mineral resources. Currently these are focused on the Consolidated Entity's uranium projects in its wholly owned exploration licences in West Africa in the Republic of Guinea and the Islamic Republic of Mauritania and its 75% interest in the Olympic Domain project in South Australia. To preserve funds, minimal exploration activity was undertaken during the period.

Termination of Agreement with European Uranium - Slovak Republic

On 31 July 2014, Forte Energy entered into an Agreement with European Uranium Resources Ltd ("European Uranium"), whereby Forte earned a 50% interest in the Kuriskova and Novoveska Huta uranium projects in the Slovak Republic, for the payment of CAD$500,000. Further expenditure of CAD$3,500,000 over 10 years was required by Forte Energy to maintain its interest with the first year's expenditure of CAD$350,000 being an obligation.

On 16 April 2015, the Ministry of Environment in Slovakia ("Ministry") announced its intention to deny the application by Ludovika Energy to extend the existing uranium licence over the Kuriskova deposit area. Ludovika Energy then made a new application over the same area to explore for Rare Earth Elements and protect its rights over the area. Legal action was subsequently filed against the Ministry in relation to its decision not to grant the extension of the Uranium Permits.

On 2 October 2015, Forte Energy decided to terminate the agreement due to the uncertainty over the new licence applications and the legal action filed against the Ministry. The Board believed that it would be in the best interests of shareholders to cease funding the Slovakian operations and focus on other opportunities. The Company has exceeded its minimum funding commitment of CAD$350,000 and has no outstanding financial obligations under the agreement.

Proposed Reverse Takeover by BOS GLOBAL Limited

The Consolidated Entity continued to investigate resource opportunities during the reporting period. With the prolonged downturn in commodity markets and unfavourable investment sentiment for resource exploration, the Board broadened its scope to consider opportunities in other sectors. This led to the announcement on 17 December 2015 that the Company had entered into a transaction funding agreement with DJ Family Trust ("DJFT") in the form of a A$200,000 convertible note. This agreement was a first step towards reaching an in-principal agreement to enter into a corporate transaction in the financial technology sector.

DIRECTORS' REPORT (Continued)

At that time the Company also entered into a Conditional Option Agreement with DJFT over its 51% controlling stake in BOS GLOBAL Limited ("BGL"). DJFT is the private investment vehicle of Michael Travia, founder and Group Chief Executive of BGL. Forte Energy announced on 31 December 2015 that, subject to various conditions precedent still to be met, it had exercised its right by way of Option Agreement over 50.3% of BGL by way of the acquisition of 20,302,123 Ordinary Shares in BGL ("BGL Shares") held by the DJ Family Trust for Forte Energy shares.

BGL is an unlisted Australian public company focused on the aggregation of cloud technology investments targeting banks, financial institutions, insurers and professional consulting organisations. BGL has extensive FinTech experience with its established network of professional investment, enterprise sales, product marketing, product design, software development and support capabilities worldwide. BGL has publicly stated its objective to be a listed organisation in UK, Australia and United States over the coming five years. This transaction is the first step to achieving its stated goals for shareholders. For further corporate information about BGL visit www.bosglobal.biz .

Subsequent to the end of the reporting period, Forte Energy announced on 7 January 2016 that it had made an offer to the remaining shareholders of BGL to acquire their BGL Shares on the same terms as those provided to DJFT. On 13 January 2016, the Company advised that the offer had been accepted by BGL shareholders with a relevant interest in more than 90% of the remaining 49.7% of BGL Shares not held by DJFT. With more than 90% of acceptances received, Forte will be in a position to compulsorily acquire any remaining shares pursuant to s661A of the Corporations Act once the conditions of the Offer have been satisfied.

The acquisition of 100% of BGL Shares by Forte (the "Acquisition") will be treated as a reverse takeover under the AIM Rules for Companies. Consequently it will be subject to the approval of Forte Energy shareholders and, following shareholder approval, the admission of the enlarged Forte Energy to trading on AIM. Trading of the Company's shares on AIM was suspended following the announcement of the proposed transaction on 17 December 2015 and will remain suspended until the release of an Admission Document which the Company is currently preparing or termination of the acquisition.

Corporate

On 26 August 2015, Mr James Leahy resigned from the Company after more than three years as a non- executive director.

On 2 October 2015, the Company announced that its current and former directors had agreed, subject to shareholder approval, to forego their outstanding directors' fees of A$376,292, accrued from 1 October 2013 to 31 July 2015, in return for being granted warrants. The warrants have a three year expiry and an exercise price of 0.05 pence per share. Shareholders approved the grant of options at the Annual General Meeting on 27 November 2015.

During the reporting period a total of 10,592,695,123 fully paid ordinary shares were issued to Darwin Capital Limited ("Darwin") following the receipt of conversion notices from Darwin in relation to the convertible loan notes announced on 26 March 2015. The shares were issued for the exercise of conversion rights in respect of £700,000 of Convertible Loan Notes. At 31 December 2015, Convertible Loan Notes issued in March 2015 for £300,000 remain outstanding.