Board Statement - Financial and player update

• Uncertainty has led to current financial shortfall
• Club will consider realistic offers for players
• June and July critical to club survival

The board of Heart of Midlothian plc today outlines the club's current financial position and hopes that all supporters become fully informed of the situation the club is facing.

Due to recent unexpected circumstances away from Tynecastle, the club is now experiencing a shortfall in funding.This shortfall, due to recent uncertainty, has created a significant noticeable blockage in projected revenue streams for the club.

While this hesitation is understandable it is unwittingly damaging the club's current efforts to improve its financial situation including current payments to HMRC and raising doubts over future payments to players and staff.

It is now crucial to the football club that we find a solution to bring in enough finance to allow us to trade into the new season when normal trading can resume with the benefit of SPL and game-related income streams. The payments to HMRC and players/staff salaries are the most important issues in our focus these days where very limited time remains available to the club.

However given that the revenues for season tickets has dried up and no other realistic income is available quickly enough, the club will consider offers for the players of the current squad, including the most promising talent in order for the most necessary and important payments to be made. The board had planned to bring income in through the sale of players while considering the financial forecast for next season but now this will need to happen much earlier in order to preserve the business. We understand that this will lead to significant on-field pressure but at all times we must consider the health of the club and preserve it for future generations.

We will adjust our expectations for the new season accordingly but will still be focused on the playing side of the business. Our financial deficit can, in part, be attributed to our worst league finish in over 30 years last season. This had a significant direct impact on the business. Other factors that hit revenues include the absence of Rangers Football Club from the SPL and significantly increased stadium costs particularly in relation to the Main Stand.

The biggest threat to the club at present however is hesitation and inaction. We hope that those supporters who have purposely held off will reconsider and make the decision to back the club in the best way possible in order that we can meet our targets.

Provided we can achieve security for the club, it is the view of the board that there is a viable strategy for the change of ownership to a willing buyer or investor.

The most difficult part in this is finding an agreement with the creditors, however we know that there is goodwill with Ukio Bankas, as demonstrated by the statement from the Ukio Bankas administrator yesterday. We also believe that UBIG remains supportive of Hearts.

We will be regularly updating you as the situation develops.

Hearts World