Investment company Ultimate Sports Group updated the market on recent developments on Friday, following its announcement last June that the development of the UltimatePlayer.me digital platform - designed to increase the participation of children in school sports -had seen a number of challenges.
The AIM-traded firm said that, although it saw positive feedback from coaches, children and parents using the platform and a gradual increase in uptake from users, the success of the product remained dependent on a "significant" additional spend on marketing, advertising and promotion to secure its commercial viability.
"In light of the challenge experienced to date in generating meaningful revenues from the UltimatePlayer.me digital platform and the general current market conditions, the directors do not consider significant additional expenditure to be justified and accordingly in the near term, no further marketing spend will be deployed towards this part of the company," the board said in its statement on Friday.
The directors said they reviewed, on a regular basis, the level of intangible assets as they related to the capitalised software development costs of the Ultimate Player platform, which currently amounted to £0.52m.
Having taken the decision not to make additional investment into the Ultimate Player platform, they said they believed it was appropriate that a full provision should be made against the capitalised costs in the financial statements for the year ended 31 December.
"The company's principal subsidiary is Sport in Schools, and its turnover for the year ended 31 December is expected to be no less than £1.3m against £1.25m for the year ended 31 December 2016," the board said.
"SIS accounts for the majority of group's turnover and is a profitable ongoing business despite margins coming under pressure in the second half of the year.
"[It] will continue to incorporate the UltimatePlayer.me programme in its offering."
Ultimate Sports Group said its annual results for the year ended 31 December 2017 would be published on or before 30 June.
As at 31 December, the company had net cash balances of approximately £0.13m.