TIDMB90
RNS Number : 5547P
B90 Holdings PLC
21 June 2022
For release: 07.00, 21 June 2022
B90 Holdings plc
("B90", the "Company" or "Group")
Final Results for the year ended 31 December 2021
B90 Holdings plc (AIM: B90), the online marketing and operating
company for the gaming industry, announces its audited final
results for the year ended 31 December 2021 (the "2021 Annual
Report").
The 2021 Annual Report can be found on the Company's website at
www.b90holdings.com.
2021 Highlights
-- Successful acquisition of Oddsen.nu in September 2021
-- Acquisition and launch of Spinbookie.com in December 2021
-- Successful fundraises during year for, in aggregate, EUR5.2
million (or GBP4.5 million), to facilitate
the acquisitions and provide additional working capital
-- Convertible loan conversion in April 2021
-- Appointment of new Executive Chairman and completion of internal strategic review
Commenting on the results, Karim Peer, Executive Chairman,
said:
"The 2021 results were adversely impacted by the implementation
of local regulatory and licensing processes, in particular in
Germany where changes were introduced from 1 July 2021 and the
Netherlands where they were enforced from 1 October 2021. Given the
size of the Group at that point, the Board decided not to apply for
local licences in these territories and will keep this decision
under review as the Group grows its operations over the coming
year."
"However, I am pleased to report that we have identified four
distinct strategic pillars to help us on our journey towards
profitability. The first is the delivery of a truly scalable
platform for online and e-gaming entertainment. We will also have a
sharp focus on organic growth and acquisitions. Thirdly, we aim to
take a holistic approach to all players by offering the widest game
play options. Lastly, we will employ artificial intelligence and
analytics across our operations . T he Group ha s successfully
integrated the acquisitions made during the year and its strategic
focus now revolves around increasing revenues. We are excited about
expansion into new territories and markets, specifically in Latin
America, Canada, and Europe, supported b y the development of
affiliate programs through both further acquisitions and
partnerships."
Commenting on the Company's current trading and outlook, he
added:
"Trading during the first five months of 2022 were in line with
management expectations, which are focused on growth. The net
revenue for the first five months of 2022 has already exceeded the
revenue reported for the whole of 2021. This growth primarily comes
from the entry into the Brazilian market, where the Group launched
both of its operating brands in April 2022. The number of new
players acquired in the month of April 2022 exceeded the number of
players acquired in the full year of 2021. The team is focused on
further geographic expansion, with a particular focus on other
countries in the Latin American market, and will provide further
updates when appropriate."
-ends-
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as it forms part of
United Kingdom domestic law by virtue of the European Union
(Withdrawal) Act 2018, as amended.
For further information please contact:
B90 Holdings plc +44 (0)1624 605 764
Karim Peer, Executive Chairman
Marcel Noordeloos, Chief Financial Officer
Strand Hanson Limited (Nominated Adviser) +44 (0)20 7409
3494
James Harris / Richard Johnson / Rob Patrick
Whitman Howard Ltd (Broker)
Nick Lovering
Belvedere (Financial PR & IR) +44 (0)20 3687 2754
John West / Llewellyn Angus
About B90 Holdings plc
B90 Holdings plc is a group of companies focused on the
operation of its own online Sportsbook and Casino product as well
as marketing activities for other online gaming companies.
Website: www.b90holdings.com
Strategic Report
I am pleased to present the Annual Report for B90 Holdings plc
("B90", "Company" or together with its subsidiaries, the "Group")
for the financial year ended 31 December 2021.
Financial and operational highlights
-- Revenues: EUR0.8 million (2020: EUR0.8 million)
-- Operating result: EUR3.3 million loss (2020: EUR2.2 million loss)
-- Successful acquisition of Oddsen.nu in September 2021
-- Acquisition and launch of Spinbookie.com in December 2021
-- Successful fundraises during year for EUR5.2 million (GBP4.5
million) in aggregate, to facilitate the acquisitions and provide
additional working capital
-- Convertible loan conversion in April 2021
-- Appointment of new Executive Chairman and completion of internal strategic review
Operational review
The Group's operational results from the Bet90 Sportsbook and
Casino operations were adversely impacted by the implementation of
local regulatory and licensing processes in particular in Germany
where changes were introduced from 1 July 2021 and the Netherlands
where they were enforced from 1 October 2021. Given the size of the
Group at that point, the Board decided not to apply for local
licenses in these territories and will keep this decision under
review as the Group grows its operations over the coming year. At
the same time, the Group has been preparing for the expansion of
its operations in other territories, particularly in the
Scandinavian and also the South American markets, where it has now
successfully launched and started operating during the second
quarter of 2022.
Fundraising
The Group completed a number of successful fundraises during the
year, with new and existing investors strengthening the balance
sheet, in order to support growth; provide working capital; and to
put in place the foundation to execute on its strategic plan.
Accordingly, it announced that:
- on 17 March 2021, it had raised EUR1,847,000 (or approximately GBP1,585,000)*;
- on 30 March 2021, it had raised EUR1,276,000 (or GBP1,092,500);
- on 30 September 2021, it had raised EUR1,435,000 (or
GBP1,240,000) in connection with the acquisition of
Oddsen.nu; and
- on 22 December 2021, it had raised EUR685,000 (or GBP596,800)
in connection with the acquisition of
Spinbookie.com.
*The fundraise on 17 March 2021 was under the terms of a 3-year,
5% convertible loan note, convertible at a price of 5 pence per new
Ordinary Share (the "Convertible Loan Note"). The Convertible Loan
Note (together with the Group's 2019 and 2020 convertible loan
notes) was subsequently converted into new Ordinary Shares on 23
April 2021 having triggered the conditions of an automatic
conversion. The conversion of the convertible loan notes remove d
the vast majority of the Group's indebtedness and together with the
proceeds from the recent equity s subscription in May 2022 has le
ft the Group with an improved balance sheet.
Subsequent to the reported year-end, the Group announced a
further equity fundraise of EUR845,000 (or GBP731,000), leaving the
Group with a much improved balance sheet.
Operational Progress: Affiliate Deals and Acquisitions
In March 2021, the Group announced that it had entered into
affiliate agreements with both RB Journalism SIA, which trades as
oddsen.nu, and E-2 Communications Ltd, to access potential new
customers, and drive additional traffic to the Bet90 platform.
Oddsen is a key affiliate of the Group in Norway, with more than 15
years of operational history, where it continues to be very
successful.
Later in the year, in August 2021, the Group signed another
affiliate marketing agreement with Nordic Group Ltd, a leading
marketing and online advertising partner, with a focus on Latin
America and the Nordics, to promote all of the Group's sportsbook
and online casino services in various territories. Nordic Group has
an established and extensive marketing network in various countries
and uses a mix of content , such as blogs and websites sharing tips
and strategies, and reviews, as well as news and information about
offerings, schemes and products, across a variety of on-line and
social media. They also employ the latest search engine
optimisation and digital promotion techniques.
Subsequently in September 2021, the Group announced the
acquisition of Oddsen.nu, which has been a transformational deal
for the Group. The transaction added a valuable new domain to the
Group's online real estate, increased the Group's affiliate
marketing capability, and took the Group's operations further into
Norway, an attractive, stable and well-established market for
sports betting. Oddsen's platform can also easily be rolled out in
other markets. It now also offers a major forum, where end users
can discuss sports betting related events 24-7, and generates
winning odds tips for visitors to the website.
In December 2021, the Group announced another highly
complementary acquisition: Spinbookie.com. Through this investment,
the Group acquired the domain, business agreements, IP, and all the
operations of Spinbookie.com, an online sportsbook and casino,
which continues the development of the Group's business. Spinbookie
is a newly established , fully operational website operating on
BetConstruct, an industry leading gaming software developer
platform. Spinbookie , which has fully functional and compliant
payment options implemented , operates in different and
complementary markets to B90's existing operations and is expanding
the Group's reach in new territories in South America, facilitating
further growth and accelerating customer acquisition.
Early indications are that Spinbookie is performing well.
Marketing agreements are already driving traffic to the site which
is accelerating the Group's timeline to profitability. The combined
business is also benefitting from the Group's existing agreement
with Nordic Group, highlighted above, as well as the acquisition of
the affiliate website Oddsen.nu, which are also being used to drive
additional traffic to the Group's online assets.
Spinbookie's sportsbook product s cover most major global
sporting events, including a large range of live betting markets.
The casino offering includes suites from Microgaming, Evolution and
other key casino suite providers . Spinbookie 's operations are
operated using the existing Bet90 operational team , saving cost
and leveraging expertise .
Financial review
The net result for the year amounted to a loss of EUR3.4 million
(2020: EUR2.4 million loss), which was impacted by a number of
incidental charges. The revision of the employee stock options and
cancelling previous options led to an extra charge of EUR145,000.
Expenses related to the two acquisitions completed in 2021 amounted
to EUR150,000, plus increased amortisation charges of EUR27,000.
Furthermore, due to expanding operations, the Group had increased
salary expenses as our number of employees grew during the year.
During 2020, the Group did receive some discounts from some of its'
B2B partners as a result of the COVID-19 pandemic, saving up to 30%
of the annual costs. For 2021 no equivalent discounts have been
provided.
As a result of local regulation in countries such as Germany and
the Netherlands which took effect in 2021, sportsbook and casino
revenues decreased in 2021 compared to 2020. In order to mitigate
this, the Group launched its operations in some other territories,
such as South America and the Nordic region.
Whilst the Group has raised additional funds by way of the issue
of equity since the 2021 year-end, amounting in aggregate to EUR0.8
million, it remains reliant, inter alia, on being able to manage
its cash resources carefully and trading being in line with
management's expectations.
Board changes
During the year, the Group made a number of changes to its
Board.
On 28 April 2021, the Group announced that Rainer Lauffs was
stepping down as Chief Operating Officer, effective 31 October
2021. At the same time, the Group announced that Ronny Breivik had
been appointed CEO of B90 Ventures Ltd, the main operating
subsidiary of the Group, and would take responsibility for all
operational activities of this Group. Ronny's career in online
gaming began 1997 when he launched the first gaming portal in
Norway. While he was at Bet24.com, Ronny introduced live betting
and online poker to that Group's product portfolio. His history of
growing businesses, with a strong focus on customer acquisition,
retention and creating disruptive products based on new technology
solutions , continue to benefit the Group .
On 18 June 2021 the Group announced that it had appointed Karim
Peer as Non-Executive Director. Karim has undertaken numerous roles
including Managing Director of Open Bet, a leading provider of
sportsbook, casino gaming and betting shop technology . At Open
Bet, he help ed to acquire Alphameric plc and grew annualised
revenues to approximately GBP56m. He was also part of the team that
sold Open Bet to Vitruvian Partners in a deal worth more than
GBP200m
On 9 December 2021, the Group announced that Paul Duffen was
stepping down from his role as Executive Chairman. Paul helped to
affect the turnaround of the business and led the Group through a
challenging period and substantial change. He left the Group in a
much stronger position , having helped to develop a clear strategy.
Karim was appointed as Non-Executive Chairman on the same date, and
was subsequently appointed Executive Chairman on 16 May 2022. Karim
has the skills necessary to lead the Group as its executes its
planned growth strategy and has invaluable experience in driving
new technological solutions. He has mov ed the Group into a new
phase of development and has reset its focus , whilst building on
the strong foundations laid by Paul and the wider team.
The Group intends to strengthen the Board further over the
coming months and subsequent announcements will be made as
appropriate.
Principal risks and uncertainties
The principal risks and uncertainties factors are included on
page 12 of this report.
Current trading and outlook
Trading during the first five months of 2022 is in line with
management expectations, which are focused on growth. The net
revenue for the first five months of the year has already exceeded
the revenue reported for the whole of 2021. This growth primarily
comes from our entry into the Brazilian market, where the Group
launched both of its operating brands in April 2022. The number of
new players acquired in the month of April 2022 exceeded the total
number of players acquired in the full year of 2021 and this trend
is expected to be continuing.
The team is focused on further geographic expansion with a
particular focus on other countries in the Latin American market
and will provide further updates when appropriate.
Whilst trading during the first months of 2022 has been in line
with the Board's expectations and shows a significant increase in
revenues, the Group continues to operate at a loss and expects to
report a loss for the six months to 30 June 2022, although
management expects the Group to become cash flow positive during
the second half of 2022.
Summary
We have identified four distinct strategic pillars to help us on
our journey towards profitability. The first is the delivery of a
truly scalable platform for online and e-gaming entertainment. We
will also have a sharp focus on organic growth and acquisitions.
Thirdly, we aim to take a holistic approach to all players by
offering the widest game play options. Lastly, we will employ AI
technology and analytics across our operations
T he Group ha s successfully integrated its 2021 acquisitions
and its strategic focus now revolves around increasing revenues. We
are excited about expansion into new territories and markets,
specifically in Latin America, Canada, and Europe, supported b y
the development of affiliate programs through both further
acquisitions and partnerships.
The Group looks forward to driving growth, which will be
augmented by the Board's collective experience and gaming
knowledge.
Karim Peer
Executive Chairman, B90 Holdings plc
20 June 2022
Directors' Report
The Directors present their report and consolidated financial
statements for the year ended 31 December 2021.
Principal activities and review of the business
B90 Holdings plc is the parent company of a group focused on
sports betting operations and casinos games via its wholly owned
Bet90 and Spinbookie operations, as well as generating marketing
leads and entering into marketing contracts for the activities of
its partners in sports betting and casinos games, using its newly
acquired brand Oddsen.nu and Tippen4you.com.
The principal activities are focused completely on operating the
online Sportsbook and casino operation using the domains Bet90.com
and spinbookie.com Furthermore, the Group operates two affiliate
platforms, currently focusing on the German and Norwegian speaking
territory, using the tippen4you.com domain for Germany, of which it
now owns 100% and Oddsen.nu for Norway, an operation that was
acquired on 30 September 2021.
Results and dividends
The Group's results for the year, after taxation, amounted to a
loss of EUR3.4 million (2020: loss of EUR2.4 million).
As a result of the above, the Directors are proposing not to pay
a dividend for the year ended 31 December 2021 (2020: nil).
Future developments
Future developments are discussed in the Strategic Report.
Financial Risk Management
The Board is responsible for setting the objectives and
underlying principles of financial risk management for the Group.
The Board establishes the detailed policies such as authority
levels, oversight responsibilities, risk identification and
measurement and exposure limits.
Capital risk management
The Group's objectives when managing capital are to safeguard
the Group's ability to continue as a going concern in order to
provide returns for shareholders.
Liquidity risk
Liquidity risk exists where the Group might encounter
difficulties in meeting its financial obligations as they become
due. The Group monitors its liquidity in order to ensure that
sufficient liquid resources are available to allow it to meet its
obligations.
Large wins by customers
Inherent to the business is that there is a risk that a few
players and customers might win significant amounts of money during
the same period thus reducing the earnings of the Group, in
particular in regard to its sportsbook partner which has a higher
concentration of VIP players. In respect of its marketing
activities for its sportsbook partner, negative net commission
revenues in any period are carried forward and netted off against
positive net commission revenues in future periods on which
commission might otherwise be payable to the Group. Whilst the
Group would not have to cover any gaming or gambling losses in the
existing marketing agreements, the percentage of earnings retained
by the Group might be greatly reduced as a result of this.
Gaming or gambling losses within the Group's own Bet90
operations would though need to be covered by the Group as and when
they occur. Under the regulation of the Malta Gaming Authority, the
Group must at all times have sufficient cash balances available to
cover liabilities to customers. In the case of a large win by a
customer, the Group would need to move funds from its current
account to the accounts that cover the liability to customers,
which would immediately negatively impact the Group's working
capital and its earnings for the period.
Currency risk
Given the expansion in the Nordics and Latin America, the Group
is exposed to foreign exchange gains and losses on its trading
activities. Due to the current size of the Group, it does not
actively hedge the foreign exposure on its trading cashflows. It
monitors exposures to individual currencies, taking remediating
actions as necessary to manage any significant risks as they arise.
Due to the size of the operations in other currencies than the EURO
in 2021 the effect of a significant change in foreign currency
rates would be immaterial.
Interest rate risk
The Group's exposure to upside interest rate risk is limited.
There were no interest bearing loans on the statement of financial
position as of 31 December 2021.
Credit risk
The Group's credit risk is primarily attributable to trade
receivables and cash and cash equivalents.
-- Receivables: Customers, being third party sportsbook and
casino operators. The Group generates
commission revenues via its affiliate operations. Commissions
invoiced are payable within a month after the month invoiced.
-- Cash and Cash equivalents: Payment service providers (PSPs).
PSPs are third-party companies that facilitate deposits and
withdrawals of funds to and from customers' virtual wallets with
the Group. These are mainly intermediaries that transact on behalf
of credit card companies.
The risk is that a customer or a PSP would fail to discharge its
obligation with regard to the balance owed to the Group.
The Group reduces this credit risk by:
-- Monitoring balances with customers on a regular basis;
-- Monitoring balances with PSPs on a regular basis; and
-- Arranging for the shortest possible cash settlement intervals in all cases.
The Group considers that based on the factors above and on past
experience, the customers and PSP receivables used in the current
businesses are of good credit quality and there is a low level of
potential bad debt as at year-end.
An additional credit risk the Group faces relates to customers
in its own operations disputing charges made to their credit cards
("chargebacks") or any other funding method they have used in
respect of the services provided by the Group. Customers may fail
to fulfil their obligation to pay, which will result in funds not
being collected. These chargebacks and uncollected deposits, when
occurring, will be deducted at source by the payment service
providers from any amount due to the Group. The Group monitors the
need for impairment provisions by considering all reasonable and
supportable information, including that which is forward-looking.
For the year ended 31 December 2021, the Group has not made any
provision for this, as any provision would be immaterial.
Regulatory risk
Regulatory, legislative and fiscal regimes for betting and
gaming in key markets can change, sometimes even at short notice.
Such changes could benefit or have an adverse effect on the Group's
operations and additional costs might be incurred in order to
comply with any new laws or regulations in various
jurisdictions.
The Group closely monitors regulatory, legislative and fiscal
developments in key markets allowing the Group to assess, adapt and
takes the necessary action where appropriate. Management takes
external advice, which incorporates risk evaluation of individual
territories. Regulatory updates are provided to the Board when
changes are announced.
Whilst changing regulatory and tax regimes can offer
opportunities to the Group as well as posing risks, a significant
adverse change in jurisdictions in which the Group operates could
have a significant impact on the Groups future profitability and
cash generation.
Going concern
After the challenges in 2020 and the impact of the global
COVID-19 pandemic, the Group raised a total of EUR5.2 million
during 2021, which allowed the Group to settle overdue creditors
and to complete two acquisitions (Spinbookie.com and Oddsen.nu) in
order to drive additional revenues for the Group.
The directors expect that these acquisitions will generate cash
flow in 2022, however the Group reported a net loss of EUR3.4
million for the year ended 31 December 2021. Furthermore, the Group
had a negative cash flow from operations of EUR4.5 million for the
year ended 31 December 2021 and the Group expects to report a loss
for the six months ending 30 June 2022. Furthermore, as per 31
December 2021, the Group shows net current liabilities of EUR4.2
million.
Whilst trading during the first months of 2022 has been in line
with the Board's expectations and show a significant increase in
revenues, the Group continues to operate at a loss, although
management expects the Group to become cash flow positive during
the second half of 2022, executing on its strategic plan to grow
the Group's operations and revenues in the various verticals in a
targeted manner, entering into strategic partnerships and investing
in further marketing to expand the customer base and geographical
reach. Furthermore, as a result of the recent fundraise, completed
in May 2022, the Group has improved its financial position.
Notwithstanding that the Group has raised additional funds in
equity since the 2021 year-end, amounting to EUR845,000 (or
GBP731,000), it remains reliant, inter alia, on being able to
manage its cash resources carefully and trading being in line with
management's expectations. Should trading not be in line with
management's expectations going forward, the Group's ability to
meet its liabilities may be impacted, in which case the Group may
need to raise further funding. In such circumstance that this is
needed and whilst the directors are confident of being able to
raise such funding if required, there is no certainty that such
funding will be available and/or the terms of such funding. These
conditions are necessarily considered to represent a significant
uncertainty which may cast doubt over the Group's ability to
continue as a going concern.
Whilst acknowledging this uncertainty, the Directors remain
confident that the recent fundraise will allow the Group to expand
its operations and generate a positive operational cash flow within
a reasonable time or, if needed, be able to raise additional
funding when required, therefore the Directors consider it
appropriate to prepare the financial statements on a going concern
basis. The financial statements do not include the adjustments that
would result if the Group was unable to continue as a going
concern.
Your attention is drawn to the material uncertainty related to
going concern section of the Auditor's Report.
Subsequent events
Since the year-end, the Group has announced the following
events:
On 13 May 2022 the Group announced that, as part of the
acquisition of Oddsen.nu in September 2021, it had settled the
agreed deferred consideration of EUR1.05 million, due on or before
31 March 2022, through the issue of 13,452,632 new ordinary shares
at a price of 6.65p pence per share.
On 16 May 2022 the Group announced that it had raised GBP731,000
through a subscription for 12,713,043 new ordinary shares at a
price of 5.75 pence per share. On the same date it announced that
Karim Peer, its Non-Executive Chairman had been appointed as the
Company's new Executive Chairman.
Directors and their interest
The following Directors held shares and share options as at 31
December 2021:
Number of Number of Exercise Date of grant Vesting
shares held options Price of options period
(GBP) of options
------------- ---------- --------- --------------- ------------
Marcel Noordeloos 3,659,954 2,100,000 0.05 17 March 2021 1-4 years
Marcel Noordeloos - 3,000,000 0.13 1 October 2021 1-4 years
14 February
Mark Rosman 14,419,339 550,000 0.15 2019 1-4 years
Mark Rosman - 3,000,000 0.13 1 October 2021 1-4 years
Karim Peer - 750,000 0.13 1 October 2021 1-4 Years
Directors who served during the year
Appointed Resigned
-------------- -----------
Paul Duffen 30 January 8 December
2019 2021
Mark Rosman 19 March 2014 -
Marcel Noordeloos 30 June 2016 -
Rainer Lauffs 26 March 2018 31 October
2021
Karim Peer 18 June 2021 -
The details of the Directors' remuneration have been included
within note 5 on page 42 of this annual report.
Directors' responsibilities
The Directors are responsible for preparing the annual report
and the financial statements in accordance with applicable law and
regulations. Company law requires the Directors to keep reliable
accounting records which allow financial statements to be prepared.
In addition, the Directors have elected to prepare group financial
statements in accordance with International Financial Reporting
Standards as adopted by the European Union and applicable law. The
financial statements are required to give a true and fair view of
the state of affairs of the Group and of the profit or loss of the
Group for that year. In preparing these financial statements, the
Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgments and accounting estimates that are reasonable and prudent;
-- state whether applicable IFRSs have been followed, subject to
any material departures disclosed and
explained in the financial statements; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group will continue
in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group's
transactions and disclose with reasonable accuracy at any time the
financial position of the Group and prepare financial statements.
They are also responsible for safeguarding the assets of the Group
and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The Directors are also responsible for ensuring that they meet
their responsibilities under the AIM Rules.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
company's website. Legislation in the Isle of Man governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
In so far as each of the Directors is aware:
-- there is no relevant audit information of which the Group's auditors are unaware; and
-- the Directors have taken all steps that they ought to have
taken to make themselves aware of any relevant audit information
and to establish that the auditor is aware of that information.
Auditors
The auditors of the Group are Nexia Smith & Williamson,
Chartered Accountants, who were reappointed at the 2019 Annual
General Meeting and will be proposed to be reappointed during the
2021 Annual General Meeting.
Principal risks and uncertainties
The Board evaluates the operational risks facing the Group on an
ongoing basis to monitor for changes in risks and risk impact and
to set guidelines for risk mitigation. The most significant risks
identified by the Board are listed below.
Gambling laws and regulations are constantly evolving and
increasing
The regulatory framework of online gaming is dynamic and
complex. Change in the regulatory regime in a specific jurisdiction
can have a material adverse effect on business volume and financial
performance in that jurisdiction. During 2021, the Group was
impacted by the changes in Gambling laws in both Germany and the
Netherlands, as disclosed in the operational review on page 4 of
this report. In addition, a number of jurisdictions have regulated
online gaming, and in several of those jurisdictions the Group, or
its operating partner, either holds a licence or is planning to
obtain one, if the market is considered commercially viable.
However, in some cases, lack of clarity in the regulations, or
conflicting legislative and regulatory developments, mean that the
Group may risk failing to obtain an appropriate licence, having
existing licences adversely affected, or being subject to other
regulatory sanctions, including internet service providers
blocking, blocking options to make deposits, black-listing the
Group and fines.
The Group is managing this risk by consulting with legal
advisers in various jurisdictions where its services are marketed
or which generate, or may generate, significant revenue for the
Group. Furthermore, the Group obtains regular updates regarding
changes in the law that may be applicable to its operations,
working with local counsel to assess the impact of any changes on
its operations. Furthermore, the Group's owned operations Bet90,
blocks players from certain "blocked jurisdictions" using multiple
technological methods as appropriate.
Reliance on VIP players
Although the focus of the Group is primarily on the operations
of its own brand Bet90, a large percentage of the commission based
revenue from the Group's marketing activities in the sportsbook and
casino vertical is generated by a small group of high net worth
players, described as "VIP Players". These are loyal players that
regularly deposit high amounts on the websites. These deposit
levels vary per country and are typically the top 5% of the players
making regular deposits. The Group knows these players and makes
them feel valued, in efforts to remain an active player. A VIP
player (or also a non-VIP player) can have large winnings, in
either the sportsbook or the casino, in a certain period, which can
significantly impact the revenues on a monthly basis. A loss of any
of the VIP Players could significantly adversely affect the Group's
business, financial condition, results or future operations.
In respect of its own sportsbook and casino brands, Bet90 and
Spinbookie, any large wins by VIP players could potentially lead to
recording a loss in such cases. The Group has Terms &
Conditions in place to limit the daily win of a single player to
mitigate such a risk.
Imposition of additional gaming or other indirect taxes
Revenues earned from customers located in a particular
jurisdiction may give rise to further taxes in that jurisdiction.
If additional taxes are levied, this may have a material adverse
effect on the amount of tax payable by the Group. Further taxes may
include value added tax (VAT) or other indirect taxes. The Group
may be subject to VAT or similar taxes on transactions, which have
previously been treated as exempt.
The Group seeks to include geographical diversity in its
operations. In order to mitigate the risks that arise, the Group
actively identifies, evaluates, manages and monitors its tax risks
and the geographies in which it operates. The Group works with
external local tax advisers to assist them in this process.
COVID-19 Pandemic
During 2020, the Group's business was negatively impacted by the
cancellation of the vast majority of sporting events in its target
markets as a result of the global COVID-19 pandemic. Whereas the
pandemic continued throughout 2021 and the majority of the global
sporting events have continued already since the summer of 2020,
there is no guarantee that a future cancellation of some sporting
events in the Group's key markets will not occur, either related to
the COVID-19 pandemic, or any new pandemic. In that situation,
revenue of the Group may be significantly impacted without a
proportionate reduction (if at all) in costs. To mitigate this
risk, the Group has been more actively promoting the casino
offering and is looking for external opportunities to expand its
offering to its customers.
Information Technology and Cyber risks
The Group uses third party service providers for its operations.
The third party IT systems may be impacted by unauthorised access,
cyber-attacks, DDoS (Distributed Denial of Service) attacks, theft
or misuse of data by internal or external parties, or disrupted by
increases in usage, human error, natural hazards or disasters or
other events. Cyber-attack and data theft incidents may expose the
Group to "ransom" demands and costs of repairing physical and
reputational damage. Failure of third party IT systems,
infrastructure or telecommunications may cause significant cost and
disruption to the business and harm revenues. Lengthy down-time of
the site (including in transitioning to activated disaster recovery
servers) could also cause the Group to breach regulatory
obligations.
Data protection risk
The Group and its third party service providers processes
personal customer data, including sensitive data such as name,
address, age, bank details and gaming / betting history. Such data
could be wrongfully accessed or used by employees, customers,
suppliers or third parties, or lost, disclosed or improperly
processed in breach of data protection regulations. In particular,
the European General Data Protection Regulation ("GDPR") entered
into force in May 2018, its equivalent in the UK ("UK GDPR"),
having a significant effect on the Group's privacy and data
protection practices, as it introduced various changes to how
personal information should be collected, maintained, processed and
secured. Non-compliance with the GDPR or UK GDPR may result in
fines of the higher of EUR20 million or 4% of the Group's annual
global turnover, and the Group will be particularly exposed to
enforcement action in light of the amount of customer data it holds
and processes. In addition, various countries in the EU have
introduced domestic data protection laws incorporating the GDPR
requirements. Moreover, the Group makes use of various tracking
technologies (such as cookies, SDKs, JavaScript and other forms of
local storage), which are subject to stricter standards of consent
and transparency, both under the GDPR and the e-Privacy Directive.
The Group could also be subject to private litigation and loss of
customer goodwill and confidence.
Corporate Governance Report
As an AIM-quoted company, B90 and its subsidiaries (together,
the "Group") are required to apply a recognised corporate
governance code, demonstrating how the Group complies with such
corporate governance code and where it departs from it.
The Board of Directors of the Company ("Directors" or "Board")
have adopted the QCA Corporate Governance Code (the "QCA Code").
The Board recognises the principles of the QCA Code, which focus on
the creation of medium to long-term value for shareholders, without
stifling the entrepreneurial spirit in which small to medium sized
companies, such as B90, have been created.
Application of the QCA Code
In the spirit of the QCA Code it is the Board's job to ensure
that the Group is managed for the long-term benefit of all
shareholders and other stakeholders with effective and efficient
decision-making. Corporate governance is an important part of that
job, reducing risk and adding value to the Group. The Board will
continue to monitor the governance framework of the Group as it
grows.
B90 is an online marketing and operating company that seeks to
grow shareholder value through organic growth and acquisitions.
B90's aim is to build a portfolio of gaming brands through a
combination of strong organic growth as well as strategic
acquisitions that complement the current business.
The Board aims to achieve these objectives through the adoption
of best working practices and by leveraging its industry knowledge
and expertise. We believe that the senior management team as well
as the Board, together with their industry leading partners and
networks, have the necessary capabilities to achieve organic and
external growth in the future, as demonstrated, for example, by the
previous acquisition in 2017 of Bet90 Sports Ltd and the
acquisition of Spinbookie.com in December 2021, both operating
online sportsbook and casino. Furthermore, the Group acquired the
operations of Oddsen.nu to own its own affiliation network and
driver further revenues via that portal.
In accordance with the AIM Rules, B90 applies (and in some cases
departs from) the QCA Code in the following way:
Principle 1 - Establish a strategy and business model which
promote long-term value for shareholders
B90 is an online marketing and operating company in the gaming
sector that seeks to grow shareholder value through organic growth
and acquisitions, key aspects of which are ensuring customer
satisfaction on both a B2B and B2C basis and strengthening the B90
brand (see also page 7, Principal activities and review of the
business)
Principle 2 - Seek to understand and meet shareholder needs and
expectations.
B90 has engaged in active dialogue with shareholders through
regular communication and the Company's Annual General Meeting and
one-on-one discussions. New information is released via the
regulatory news service (RNS) before anywhere else and the website
is update accordingly (see also page 3-6, Strategic report).
Principle 3 - Take into account wider stakeholder and social
responsibilities and their implications for long-term success
The Board recognises the importance of its wider stakeholders -
employees, contractors, suppliers, customers, regulators and
advisors - to its long-term success. The Board has established
expectations that these key resources and relationships are valued
and monitored. In particular, the Group's business model of
outsourcing some its key activities requires reliable dialogue with
contractors to ensure the successful pursuit of its long-term
strategic objectives. Furthermore, the Board engages regularly with
its corporate advisers to ensure proactive communication regarding
the Group's activities. In doing so, the Group is able to take any
feedback into account and adjust its actions accordingly to ensure
it stays focused on long-term performance. The Board recognises
that the Group operates within a competitive and fast changing
industry and strives to remain alert to developments in a wider
industry/society context.
Principle 4 - Embed effective risk management, considering both
opportunities and threats, throughout the organisation
B90 operates within a complex business environment and an
industry that is fundamentally driven by regulatory processes. The
Board has set out its understanding of the principal risks and
uncertainties in this report (see page 12 for details, going
concern statement on page 9 and post year-end fundraise on page 10)
and regularly reviews its strategies for minimising any adverse
impact to the Group or its investors.
The Directors acknowledge their responsibility for the Group's
system of internal control, which is designed to ensure adherence
to the Group's policies whilst safeguarding the assets of the
Group, in addition to ensuring the completeness and accuracy of the
accounting records. Responsibility for implementing a system of
internal financial control is delegated to the CFO.
The essential elements of the Group's internal financial control
procedures involve:
-- Strategic business planning
The Board regularly reviews and discusses the Group's
performance and strategic objectives.
-- Performance review
The Directors monitor the Group's performance through the
preparation and consideration of monthly management accounts, daily
through KPIs and regular reviews of its expenditure and
projections. In addition, detailed financial projections for each
financial year are prepared and are subject to formal and regular
review against actual trading by the Board.
Principle 5 - Maintain the Board as a well-functioning, balanced
team led by the Chairman
The Board comprises of three Directors of which two are
Executive and one is a Non-Executive, reflecting a blend of
different experience and backgrounds. Considering the 2020 and 2021
fundraises, in which the Group's Non-Executive Director Mark Rosman
participated, the Board considers, at this moment, none of the
Directors to be completely independent as a Director in terms of
the QCA guidelines. Accordingly, the composition of the Board does
currently not satisfy the QCA recommendation that there are at
least two independent Non-Executive Directors on the Board. The
Board is actively looking to appoint one or two new independent
Non-Executive Directors in the near term.
The Board meets throughout the year and all major decisions are
taken by the Board as a whole. The Group's day-to-day operations
are managed by the Executive Directors. All Directors have access
to the Group information and any Director needing independent
professional advice in the furtherance of his/her duties may obtain
this advice at the expense of the Group.
Although the Board is satisfied that it has a suitable balance
of knowledge of the Group, experience and skills to enable it to
discharge its duties and responsibilities effectively, and that all
Directors have adequate time to fill their roles, the Group intends
to appoint an independent Non-Executive Director in due course and
we will make further announcements as and when appropriate.
The role of the Chairman is to provide leadership of the Board
and ensure its effectiveness on all aspects of its remit to
maintain control of the Group. In addition, the Chairman is
responsible for the implementation and practice of sound corporate
governance.
Our Non-Executive director is expected to devote as much time as
is necessary for the proper performance of his duties. Executive
directors are full-time employees or services providers and
expected to devote as much time as is necessary for the proper
performance of their duties.
During 2021 the Board held ten (10) formal meetings either in
person or by call, all of which were attended by all Directors. The
Board also passed ten (10) unanimous written resolutions.
Principle 6 - Ensure that between them the directors have the
necessary up to-date experience, skills and capabilities
The Board considers its current composition to be appropriate
and suitable with the adequate and up-to-date experience, skills
and capabilities to make informed decisions. Each member of the
Board brings a different set of skills, expertise and experience,
making the Board a diverse unit equipped with the necessary set of
skills required to create maximum value for the Group.
The Board is fully committed to ensuring its members have the
right skills. Members of the Board must be re-elected by the
shareholders of the Company if they have not been re-elected at the
previous two annual general meetings in accordance with the
Company's Articles of Association, thereby providing shareholders
the ability to decide on the election of the Company's Board.
The biographical details of the Directors are:
Karim Peer , Executive Chairman, aged 58, has undertaken
numerous roles including being Managing Director of Open Bet, a
leading provider of sportsbook, casino gaming and betting shop
technology helping acquire Alphameric plc and growing annualised
revenues to approximately GBP56m. Karim was part of the team that
sold Open Bet to Vitruvian Partners in a deal worth more than
GBP200m. Since 2014, Karim has been CEO of ClearLakeBlue Limited,
which provides strategic consultancy and advice to corporates and
private equity. His company focuses on restructuring, turnarounds
and financial planning and works with corporates to prepare them
for growth and to assist them in raising new capital.
Marcel Noordeloos , Chief Financial Officer, aged 53, was Group
Finance Director at Playlogic International NV between 2006 and
2009 and Chief Financial Officer at Playlogic Entertainment Inc (a
company active in video game development and publishing) during
2019 and 2020 prior to becoming Chief Financial Officer at the
Group. Marcel has held several management positions with among
others Nike EMEA (2002-2006) and PwC (1992-2001). Marcel holds an
RA Degree (Registered Accountant) from the University of
Amsterdam.
Mark Rosman , Non-Executive Director, aged 55, has over 20 years
of experience advising on private equity investments and managing
private equity portfolios. Mark worked for Galladio Capital
Management B.V. for eleven years and held the role of chief
operating officer from 2006 until his departure in 2010. Since
leaving Galladio, Mark has served as chief executive officer of The
Nestegg B.V., a private equity management and advisory firm that
advises high net worth individuals on the structuring and
management of investments. Mark is a law graduate from VU
University Amsterdam and has an MBA from Rotterdam School of
Management.
Due to the size of the Group, the Group has not adopted a formal
diversity policy, other than looking at educational and
professional backgrounds.
The Board also consults with external advisers, such as its
nominated adviser and the Company's lawyers, and with executives of
the Company on various matters as deemed necessary and appropriate
by the Board.
Principle 7 - Evaluate Board performance based on clear and
relevant objectives, seeking continuous improvement
B90's Board is small and extremely focussed on implementing the
Group's strategy. However, given the size and nature of the Group,
the Board does not consider it appropriate to have a formal
performance evaluation procedure in place, as described and
recommended in Principle 7 of the QCA Code. The Board will closely
monitor the situation as it grows.
Principle 8 - Promote a corporate culture that is based on
ethical values and behaviours
We are committed to acting ethically and with integrity. We
expect all employees, officers, directors and other persons
associated with us to conduct their day-to-day business activities
in a fair, honest and ethical manner.
For that purpose, we have adopted a Code of Business Conduct and
Ethics ("Code") which applies to all our workforce personnel.
Pursuant to the Code, employees, directors and other relevant
stakeholders are required to comply with all laws, rules and
regulations applicable to us. These include, without limitation,
laws covering anti-bribery, copyrights, trademarks and trade
secrets, data privacy, insider trading, illegal political
contributions, antitrust prohibitions, rules regarding the offering
or receiving of gratuities, environmental hazards, employment
discrimination or harassment, occupational health and safety, false
or misleading financial information or misuse of corporate assets.
The Code also includes provisions for disclosing, identifying and
resolving conflicts of interest of the employees and Board
members.
The Code includes provisions requiring all employees to report
any known or suspected violation and ensures that all reports of
violations of the Code will be handled sensitively and with
discretion. We also recognise the benefits of a diverse workforce
and are committed to providing a working environment that is free
from discrimination.
We have also adopted a share dealing code, regulating trading
and confidentiality of inside information by persons discharging
managerial responsibility and persons closely associated with them
("PDMRs").
We take all reasonable steps to ensure compliance by PDMRs and
any relevant employees with the terms of the dealing code.
The Board considers that the Company complies with the
requirements set in this principle.
Principle 9 - Maintain governance structures and processes that
are fit for purpose and support good decision-making by the
Board
Corporate Governance Committees
The Board has established two committees, of which the
composition is as follows:
Audit committee
Mark Rosman (Chairman)
Karim Peer
Remuneration committee
Mark Rosman (Chairman)
Karim Peer
The Audit Committee
The Audit Committee meets at least two times during the year to
review the published financial information, the effectiveness of
external audit and internal financial controls including the
specific matters set out below.
The terms of reference of the Audit Committee are to assist all
the Directors in discharging their individual and collective legal
responsibilities and during the meetings to ensure that:
-- The Group's financial and accounting systems provide accurate
and up-to-date information on its current financial position,
including all significant issues and going concern;
-- The integrity of the Group's financial statements and any
formal announcements relating to the Group's financial performance
and reviewing significant financial reporting judgments contained
therein are monitored;
-- The Group's published financial statements represent a true
and fair reflection of this position; and taken as a whole are
balanced and understandable, providing the information necessary
for shareholders to assess the Group's performance, business model
and strategy;
-- The external audit is conducted in an independent, objective,
thorough, efficient and effective manner, through discussions with
management and the external auditor; and
-- A recommendation is made to the Board for it to put to
shareholders at a general meeting, in relation to the
reappointment, appointment and removal of the external auditor and
to approve the remuneration and terms of engagement of the external
auditor.
The Audit Committee does not consider there is a need for an
internal audit function given the size and nature of the Group.
Significant issues considered by the Audit Committee during the
year have been the Principal Risks and Uncertainties (which are set
out in this annual report) and their effect on the financial
statements. The Audit Committee tracked the Principal Risks and
Uncertainties through the year and kept in contact with the Group's
Management, External Service Providers and Advisers and received
regular updates. The Audit Committee is satisfied that there has
been appropriate focus and challenge on the high-risk areas.
Nexia Smith & Williamson, our external auditors, have been
in office since 2013.
The external auditors are invited to attend the Audit Committee
meeting to present their findings and this provides them with a
direct line of communication to the Non-Executive Director.
The Remuneration Committee
The terms of reference of the Remuneration Committee are to:
-- recommend to the Board a framework for rewarding senior
management, including Executive Directors, bearing in mind the need
to attract and retain individuals of the highest calibre and with
the appropriate experience to make a significant contribution to
the Group; and
-- ensure that the elements of the remuneration package are
competitive and help in underpinning the performance-driven culture
of the Group.
Principle 10 - Communicate how the company is governed and is
performing by maintaining a dialogue with shareholders and other
relevant stakeholders
The Board is committed to maintaining good communication with
its shareholders and in promoting effective dialogue regarding the
Group's strategic objectives and performance. Institutional
shareholders and analysts have the opportunity to discuss issues
and provide feedback via meetings with the Company. The Annual
General Meeting and any other General Meetings that are held
throughout the year are for shareholders to attend and question the
Directors on the Company's performance. Regular progress reports
are also made via RNS announcements and the point of contacts are
Karim Peer, Executive Chairman and Marcel Noordeloos, CFO.
Our Audit Committee Report is included on pages 20 to 21 of this
Annual Report. Our Remuneration Committee Report is included on
page 22 of this Annual Report.
This report was authorised for issue by the Board on 20 June
2022 .
Karim Peer
Executive Chairman, B90 Holdings plc
20 June 2022
Audit Committee Report
General and Composition of the Audit Committee
The Audit Committee is a sub-committee of the Board. The Audit
Committee chairman reports formally to the Board on all matters
within the Committee's duties and responsibilities and on how the
Audit Committee discharges its responsibilities.
The Audit Committee consists of two members, Mark Rosman
(Chairman) and Karim Peer.
The biographies of the Audit Committee members are on pages
16-17 under principle six, as well as on the Company's website at
www.b90holdings.com/corporate-info .
The Audit Committee meets at twice a year at appropriate times
in the reporting and audit cycle and otherwise as required. The
Audit Committee also meets regularly with the Company's external
auditors.
Purpose and Responsibilities of Audit Committee
The purpose of the Audit Committee is to assist the Board to
carry out the following functions more efficiently and fully:
-- Oversight of the integrity of the Group's formal reports,
statements and announcements relating to the
Group's financial performance; and
-- Reviewin g compliance with internal guidelines, policies and
procedures and other prescribed internal
standards of behaviour.
To achieve such purposes, the Audit Committee has been assigned
with the following responsibilities:
-- Reviewing the half-year and full-year financial statements
with management and with the external auditors as necessary prior
to their approval by the Board;
-- Reviewing financial results announcements of the Group and
any other formal announcements relating to the Group's financial
performance and recommending them to the Board for approval;
-- Reviewing recommendations from the CFO and the external
auditors on the key financial and accounting principles to be
adopted by the Group in the preparation of the financial
statements;
-- Reviewing the Group's systems for internal financial control;
-- Considering and making recommendations to the Board, to put
to shareholders for approval at the AGM, the appointment,
re-appointment and removal of the Company's external auditors and
oversee the relationship with the external auditors;
-- Reviewing and approving the external audit plan and regularly monitoring the progress of implementation of the plan;
-- Determining and monitoring the effectiveness and independence of the external auditors.
Main Activities in 2021 and 2022
On 17 June 2021 the Audit Committee reviewed the financial
statements for year-end 31 December 2020.
On 29 September 2021 the Audit Committee reviewed the financial
results of the Company for the six months ended 30 June 2021. The
audit committee had the 2021 audit planning meeting with our
external auditors on 21 February 2022 and a completion audit
committee call was held on 14 June 2022. On 20 June 2022 the Audit
Committee reviewed the financial statements for year-end 31
December 2021.
External Auditors
The external auditors of the Company are Nexia Smith &
Williamson ("NS&W"). The appointment of NS&W as auditors by
the Audit Committee was based on their performance during past
years. The Audit Committee review of the external auditors
confirmed the appropriateness of their reappointment and included
assessment of their independence, qualification, expertise and
resources, and effectiveness of their audit process.
Both the Board and the external auditors have safeguards in
place to avoid the possibility that the auditors' objectivity and
independence could be compromised. The services provided by the
external auditors include the Audit-related services. In
recognition of public concern over the effect of consulting
services on auditors' independence, the external auditors are not
invited to general consulting work which can affect their
independence as external auditors.
The total remuneration of the external auditors for 2021 and for
2020 was as listed in the table below:
2021 2020
Audit services EUR130,000 EUR105,000
Review of FPPP * - EUR35,000
*FPPP: Financial Position & Prospects Procedures Report
The Audit Committee remains mindful of the attitude investors
have to the auditors performing non-audit services. The Committee
has clear policies relating to the auditors undertaking non-audit
work and monitors the appointment of the auditors for any non-audit
work, with a view to ensuring that non-audit work does not
compromise the Company's auditors objectiveness and
independence.
The Audit Committee and the auditors found that the external
audit plan for 2021, the audit work of the external auditors for
2021 and the remuneration of the external auditors for 2021 did not
undermine the independence of the external auditors.
Financial Reporting
The Group's trading performance is monitored on an ongoing
basis. An annual budget is prepared, and specific objectives and
targets are set. The budget is reviewed and approved by the Board.
The key trading aspects of the business are monitored daily and
internal management and financial accounts are prepared monthly.
The results are compared to budget and prior year performance.
The Audit Committee has taken and will continue to take further
steps to ensure the Group's control environment is working
effectively and efficiently.
--------------------------------
Mark Rosman
Chairman of the Audit Committee
Remuneration Committee Report
General
The Remuneration Committee is responsible for determining and
recommending to the Board the framework for the remuneration of the
Board chairman, executive directors and other designated senior
executives and, within the terms of the agreed framework,
determining the total individual remuneration packages of such
persons including, where appropriate, bonuses, incentive payments
and share options or other share awards.
The Remuneration Committee consists of two members, Mark Rosman
(Chairman) and Karim Peer. The Remuneration Committee meets at
least once a year and otherwise as required.
Key elements in Remuneration
As an AIM-quoted company, the Company is not required to comply
with the remuneration reporting requirements applicable to fully
listed companies in the UK. However, set out below are certain
disclosures relating to directors' remuneration:
-- The remuneration of executive directors and certain other
senior executives is set by comparison to market rates at levels
aimed to attract, retain and motivate the best staff, recognising
that they are key to the ongoing success of the business.
-- The remuneration of non-executive directors is a matter for
the Chairman and the executive directors
to determine.
-- No Director is involved in any decision as to his or her own remuneration.
-- The remuneration of senior management includes equity-based
payments (stock options) vested over time to retain their
employment.
Responsibilities of the Remuneration Committee
The responsibilities of the Remuneration Committee include the
below and other responsibilities as set forth in the Charter of the
Committee:
-- Setting the remuneration policy for all executive directors.
Karim Peer is not involved in setting his
own remuneration, this is determined by Mark Rosman only;
-- Recommending and monitoring the level and structure of
remuneration for senior management personnel;
-- Reviewing the design of all share incentive plans for
approval by the Board and shareholders.
Share option scheme
On 17 May 2016, the Company adopted a "long term incentive
senior management and Directors' stock option plan" ("the Plan").
Options granted under the Plan will entitle the participant to
acquire Ordinary Shares at a price determined in accordance with
the rules of the Plan.
The Directors' interests in the Company's share options for the
year ended 31 December 2021 are shown on page 10. Share options
granted as per 31 December 2021 are shown in Note 19 on page
50.
The Committee remains committed to a fair and responsible
approach to executive pay whilst ensuring it remains in line with
best practice and appropriately incentivises executive directors
over the longer term to deliver the Group's strategy. An overview
of Directors remuneration is shown in Note 5 on page 42.
---------------------------------
Mark Rosman, Chairman of the Remuneration Committee
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF B90 Holdings plc
Opinion
We have audited the financial statements of B90 Holdings plc
(the 'group') for the year ended 31 December 2021 which comprise
the Consolidated Statement of Comprehensive Income, the
Consolidated Statement of Financial Position, the Consolidated
Statement of Changes in Equity, the Consolidated Statement of Cash
Flows, and the notes to the consolidated financial statements,
including significant accounting policies. The financial reporting
framework that has been applied in their preparation is applicable
law and International Financial Reporting Standards (IFRSs) as
adopted by the European Union.
In our opinion, the financial statements:
-- give a true and fair view of the state of the group's affairs
as at 31 December 2021 and of the group's loss for the year then
ended; and
-- have been properly prepared in accordance with IFRSs as adopted by the European Union.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the group
in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed entities, and we have
fulfilled our other ethical responsibilities in accordance with
these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
opinion.
Material uncertainty related to going concern
We draw attention to note 1 in the financial statements, which
indicates that whilst trading during the first months of 2022 has
been in line with the Board's expectations and show a significant
increase in revenues, the Group has made a net loss for the year of
EUR3.4m, had net current liabilities of EUR4.2m as at 31 December
2021, had cash inflow from revenues of EUR0.8m in 2021 and is
projected to make losses for the 6-month period ending 30 June
2022.
Notwithstanding that, the Group having raised additional funds
in equity since the 2021 year-end, amounting to EUR845,000
(GBP731,000), it remains reliant, inter alia, on being able to
manage its cash resources carefully and trading being in line with
management's expectations. Should trading not be in line with
management's expectations going forward, the Group's ability to
meet its liabilities may be impacted, in which case the Group may
need to raise further funding. In such circumstance that this is
needed and whilst the directors are confident of being able to
raise such funding if required, there is no certainty that such
funding will be available and/or the terms of such funding.
These conditions represent a material uncertainty that may cast
significant doubt on the Group's ability to continue as a going
concern. Our opinion is not modified in respect of this matter.
Notwithstanding the above, in auditing the financial statements
we have concluded that the directors' use of the going concern
basis of accounting in the preparation of the financial statements
is appropriate. Our evaluation of the directors' assessment of the
group's ability to continue to adopt the going concern basis of
accounting included:
-- We challenged and reviewed management's sensitivity analysis
in their forecasts, made up to December 2023, looking at cash
generation and key assumptions such as revenue generation from
major sporting events. Where appropriate we used third party data
to review and, where necessary, challenge their inputs;
-- We reviewed and challenged the disclosures in the Annual
Report and Accounts surrounding Going Concern;
-- We compared the forecast results to those actually achieved
in the 2022 financial period so far;
-- We reviewed bank statements to monitor the cash position of
the group post year end, and obtained an understanding of
significant expected cash outflows (such as marketing expenditure)
in the forthcoming 12-month period; and
-- We considered the group's funding position and requirements.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
An overview of the scope of the audit
Of the Group's 16 (2020: 14) reporting components, we subjected
5 (2020: 14) to specific audit procedures where the extent of our
audit work was based on our assessment of the risk of material
misstatement and of the materiality of the Group.
The components within the scope of our work covered 100% of
group revenue, 93% of group loss before tax, and 100% of group
assets.
Key audit matters
We identified the key audit matters described below as those
that were of most significance in the audit of the financial
statements of the current period. Key audit matters include the
most significant assessed risks of material misstatement, including
those risks that had the greatest effect on our overall audit
strategy, the allocation of resources in the audit and the
direction of the efforts of the audit team.
In addressing these matters, we have performed the procedures
below which were designed to address the matters in the context of
the financial statements as a whole and in forming our opinion
thereon. Consequently, we do not provide a separate opinion on
these individual matters.
Key audit Description of risk How the matter was addressed
matter in the audit
Revenue Recognition Under International We reviewed the Group's accounting
Standards on Auditing policy for revenue recognition
there is a presumption and assessed whether it is
that there are risks in line with industry and international
of material misstatement financial reporting standards
due to fraud in relation ("IFRS").
to revenue recognition. We evaluated the design and
Where it is assessed implementation of relevant
that a material risk internal controls that the
of fraud exists, that Group uses to ensure the completeness,
class of transaction accuracy and timing of revenue
must be assessed as recognised.
significant risk. We performed substantive testing
Revenue is a key performance including:
indicator of the Group. * Reviewed material revenue contracts with customers;
Revenue based targets
may place pressure
on management to distort * Tested the recognition compliance with IFRS 9 & 15
revenue recognition.
This may result in
overstatement to assist * Performed detailed testing on a sample of revenue
in meeting current transactions, including agreement to third party
targets or expectations. reports;
* For affiliate marketing revenues - where cash has
been received, we agreed to bank statements and
remittance;
* For sportsbook and casino revenues - We have
corroborated the movements to the corresponding
player liability accounts; and
* We reviewed the disclosures made by the directors in
the financial statements.
-------------------------------- --------------------------------------------------------------
Acquisition The Group holds significant We reviewed the accounting
accounting Intangible assets, assessment for the Oddsen.nu
- Fair value with the majority relating & Spinbookie.com acquisitions
of assets to the recent acquisitions & assessed whether it is in
and liabilities of the Oddsen.nu operations line with industry and international
acquired and Spinbookie.com financial reporting standards
as well as Intellectual property. ("IFRS").
consideration We evaluated the design and
paid for IFRS 3 requires identification implementation of relevant
the Oddsen.nu of assets which are processes and controls surrounding
and Spinbookie either separable or the accounting assessment,
acquisitions arise from contractual valuation of the consideration
or legal rights. Therefore, paid and the fair values of
significant judgments the assets and liabilities
and estimation were acquired.
needed to determine We performed substantive testing
the fair value of the including:
assets and liabilities * Corroborated the valuation of significant balances
acquired by the business within the acquisition balance sheet to supporting
through the purchase evidence to ensure these are representative of their
price allocation ("PPA") fair value (Including the use of our internal
process for Oddsen.nu valuation specialist to review the Oddsen.nu PPA
& Recognition of the assessment);
Spinbookie.com intellectual
property under IAS
38. * For shares issued as consideration, corroborated the
value to the listed share prices.
In addition, the determination
of the fair value of
consideration payable * Assessed conditions attached to deferred pay-outs and
in relation to deferred reviewed:
pay-outs involved a
degree of estimation
on the likelihood of o whether any of the amount
earnout criteria being includes payments for future
met. employment costs rather than
consideration
o Ensured the present value
computation was mathematically
accurate and key inputs were
reasonable
* reviewed the appropriateness of disclosures in the
Company annual report.
-------------------------------- --------------------------------------------------------------
Carrying The Group holds Goodwill We reviewed management's accounting
value of with an indefinite policy for impairment and assessed
Goodwill useful life relating whether it is in line with
with indefinite to the acquisition IAS 36.
useful lives of Bet90 Sports Limited We evaluated the design and
and Other and Oddsen.nu. implementation of relevant
intangible Other intangible assets internal controls surrounding
assets should be held at the the review process of impairment
lower of amortised models.
cost or their recoverable We performed substantive testing
amount. Where there including:
is an indicator of * Challenged Management's assessment of the relevant
impairment such as CGUs with reference to the guidance set out in IAS
a loss being made in 36;
the financial statements,
an impairment review
is undertaken. * Reviewed the assessment over indicators of impairment
for other intangibles with definite useful lives.
Significant judgment
is needed in order
to assess the appropriateness * Considered the appropriateness and mathematical
of the recoverable accuracy of the model used to determine the
amount of these assets/CGUs recoverable amount of the Bet90 sports and Oddsen.nu
to which an indicator CGUs
of impairment is noted
or to which the Goodwill
has been allocated, * Considered historical trading performance by
in particular with comparing both revenue and operating profit of the
reference to forecasted Group's CGUs with projected revenues and operating
cash flows, growth profits;
rates, discount rates
and sensitivity assumptions.
* We assessed and challenged the appropriateness of the
assumptions concerning:
o Revenue growth rates to projected
player revenue models based
on player acquisition and expected
net gaming revenues per player
o Costs basis to historic cost
data including relevant affiliate
and platform agreements
o inputs to the discount rate
against latest market expectations;
and
* We challenged and evaluated management's sensitivity
analysis of the key variables included within the
value in use calculations.
In performing and to support
our procedures, we used our
internal valuation specialists
and third-party evidence.
-------------------------------- --------------------------------------------------------------
Our application of materiality
The materiality for the group financial statements as a whole
("group FS materiality") was set at EUR128,000 (2020: EUR50,000).
This has been determined with reference to the benchmark of the
group's net assets, which we consider to be one of the principal
considerations for members of the Group in assessing the Group's
performance. Group FS materiality represents 3.5% of the group's
net assets (2020: 2.5% of the group's gross assets) as presented on
the face of the Consolidated Statement of Financial Position. We
have determined net assets to be appropriate in the current year
given the additional acquisitions undertaken by the group.
Performance materiality for the group financial statements was
set at EUR102,560, being 80% (2020: 80%) of group FS materiality,
for purposes of assessing the risks of material misstatement and
determining the nature, timing and extent of further audit
procedures. We have set it at this amount to reduce to an
appropriately low level the probability that the aggregate of
uncorrected and undetected misstatements exceeds group FS
materiality. We judged this level to be appropriate based on our
understanding of the group and its financial statements, as updated
by our risk assessment procedures and our expectation regarding
current period misstatements including considering experience from
previous audits.
Other information
The other information comprises the information included in the
Annual Report and Accounts, other than the financial statements and
our auditor's report thereon. The directors are responsible for the
other information contained within the Annual Report and Accounts.
Our opinion on the financial statements does not cover the other
information and we do not express any form of assurance conclusion
thereon.
Our responsibility is to read the other information and, in
doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to be
materially misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required to determine
whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we
conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of directors
As explained more fully in the directors' responsibilities
statement set out on pages 10 & 11, the directors are
responsible for the preparation of the financial statements and for
being satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary to enable
the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the group's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud, is detailed below:
We obtained a general understanding of the Group's legal and
regulatory framework through inquiry of management concerning:
- their understanding of relevant laws and regulations;
- the entity's policies and procedures regarding compliance; and
- how they identify, evaluate and account for litigation claims.
We also drew on our existing understanding of the Group's
industry and regulation. We understand that the Group complies with
the framework through:
- Maintaining an active licence through the Malta Gaming Authority ("MGA") by submitting monthly returns to the MGA and maintaining records subject to random audits from the MGA.
In the context of the audit, we considered those laws and
regulations:
- which determine the form and content of the financial statements;
- which are central to the Group's ability to conduct its business; and
- where failure to comply could result in material penalties.
We identified the following laws and regulations as being of
significance in the context of the Group:
- Maltese gambling laws; and
- IFRS in respect of the preparation and presentation of the financial statements.
We evaluated potential non-compliance with these laws and
regulations by:
- Reviewing current Maltese gaming service licences and monthly
returns in relation to those licences; and
- Reviewing board minutes for evidence of non-compliance.
The senior statutory auditor led a discussion with senior
members of the engagement team regarding the susceptibility of the
entity's financial statements to material misstatement, including
how fraud might occur. The areas identified in this discussion
were:
- Manipulation of the financial statements, especially early
recognition of revenue, via fraudulent journal entries and
management bias in relation to the key assumptions which drive the
recoverable values of the Oddsen.nu and Quasar Holdings ltd (Bet90)
CGUs.
The procedures we carried out to gain evidence in the above
areas included:
- Substantive work on revenue recognition and the carrying value
of Goodwill with indefinite useful lives and Other intangible
assets (see above KAMs); and
- Testing journal entries, focusing particularly on postings to
unexpected or unusual accounts including unexpected entries.
A further description of our responsibilities is available on
the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities . This description forms
part of our auditor's report.
Use of our report
This report is made solely to the Group's members, as a body, in
accordance with our engagement letter dated 15 June 2021. Our audit
work has been undertaken so that we might state to the Group's
members those matters we are required to state to them in an
auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the Group and the Group's members as a body, for
our audit work, for this report, or for the opinions we have
formed.
Andrew Bond 45 Gresham Street
Senior Statutory Auditor, for and on behalf of London
Nexia Smith & Williamson
EC2V 7BG
Statutory Auditor 20 June 2022
Chartered Accountants
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended Year ended
31 December
Note 2021 31 December 2020
EUR EUR
Revenue 4 826,855 813,011
Salary expense (1,306,033) (1,024,362)
Marketing and
selling expense (430,095) (381,950)
General
administrative
expense (2,256,222) (1,564,866)
Depreciation and
amortisation
expense (109,325) (82,467)
-------------------------------------------- ---------------------------------------------
Total
administrative
expenses (4,101,675) (3,053,645)
-------------------------------------------- ---------------------------------------------
Operating loss (3,274,820) (2,240,634)
Finance expense (136,931) (140,820)
Loss before tax 6 (3,411,751) (2,381,454)
Taxation 7 - -
Loss for the
period (3,411,751) (2,381,454)
-------------------------------------------- ---------------------------------------------
Equity holders
of the Company (3,351,507) (2,368,712)
Non-controlling
interests (60,244) (12,742)
(3,411,751) (2,381,454)
-------------------------------------------- ---------------------------------------------
Loss per share attributable to equity holders
of the Company
- Basic (in EUR) 8 (0.0192) (0.0248)
- Diluted (in
EUR) 8 (0.0192) (0.0248)
The Notes on pages 34 to 58 form part of these financial
statements
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Year ended Year ended
31 December 31 December
2021 2020
Note
EUR EUR
Non-current assets
Goodwill 9 3,324,531 1,410,931
Other intangible assets 10 4,793,069 169,095
Total non-current assets 8,117,600 1,580,026
-------------------------------- --------------------------------
Current assets
Other receivables & prepayments 13 159,999 27,496
Cash and cash equivalents 14 827,302 320,525
Total current assets 987,301 348,021
-------------------------------- --------------------------------
Total assets 9,104,901 1,928,047
-------------------------------- --------------------------------
Equity and liabilities
Share capital 15 - -
Additional paid-in capital 16 27,734,003 15,466,741
Reverse asset acquisition reserve 17 (6,046,908) (6,046,908)
Equity portion Convertible Bond 20 - 429,770
Retained earnings 18 (17,987,052) (14,907,070)
Equity attributable to owners
of the parent 3,700,043 (5,057,467)
-------------------------------- --------------------------------
Non-controlling interests (24,388) 35,856
Total shareholders' equity 3,675,655 (5,021,611)
-------------------------------- --------------------------------
Non-current liabilities
Borrowings 20 - 2,199,839
Deferred tax liability 273,600 -
Total non-current liabilities 273,600 2,199,839
-------------------------------- --------------------------------
Current liabilities
Trade and other payables 21 5,130,869 4,725,597
Corporate income tax payable 24,777 24,222
Total current liabilities 5,155,646 4,749,819
-------------------------------- --------------------------------
Total equity and liabilities 9,104,901 1,928,047
-------------------------------- --------------------------------
Approved by the board on 20 June 2022 and signed on its behalf
by:
Karim Peer
Chairman
The Notes on pages 34 to 58 form part of these financial
statements
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Other
Equity reserves
Additional portion -
paid convertible Reverse
Share in Loan asset Retained Non-controlling Total
acquisition
capital capital Note reserve earnings Total interest Equity
EUR EUR EUR EUR EUR EUR EUR EUR
Balance
as at 1 January
2020 - 15,162,647 149,836 (6,046,908) (8,910,238) 355,337 (2,817,990) (2,462,653)
-------------------------------- ------------ ------------ ------------- ---------------- --------------- ------------------ ---------------
Loss for
the financial
period - - - - (2,368,712) (2,368,712) (12,742) (2,381,454)
Convertible
loan note - - 279,934 - - 279,934 - 279,934
Acquisition
of
non-controlling
interest - 304,094 - - (3,670,682) (3,366,588) 2,866,588 (500,000)
Share based
payments - - - - 42,562 42,562 - 42,562
Balance
as at 31
December
2020 - 15,466,741 429,770 (6,046,908) (14,907,070) (5,057,467) 35,856 (5,021,611)
-------------------------------- ------------ ------------ ------------- ---------------- --------------- ------------------ ---------------
Loss for
the financial
period - - - - (3,351,507) (3,351,507) (60,244) (3,411,751)
Convertible
loan note
conversions - 4,569,685 (429,770) - 126,499 4,266,414 - 4,266,414
Conversion
of payables - 772,100 - - - 772,100 - 772,100
Share based
acquisition - 3,779,059 - - - 3,779,059 - 3,779,059
Share based
payments - - - - 145,026 145,026 - 145,026
Issue of
share capital - 3,385,871 - - - 3,385,871 - 3,385,871
Costs of
raising capital - (239,453) - - - (239,453) - (239,453)
Balance
as at 31
December
2021 - 27,734,003 - (6,046,908) (17,987,052) 3,700,043 (24,388) 3,675,655
-------------------------------- ------------ ------------ ------------- ---------------- --------------- ------------------ ---------------
The Notes on pages 34 to 58 form part of these financial
statements
CONSOLIDATED STATEMENT OF CASH FLOWS
31 December 31 December
2021 2020
EUR EUR
Cash flows from operating activities
Operating (loss)/profit (3,274,820) (2,240,634)
Adjustments for:
Share based payments 145,026 42,562
Amortisation of intangibles 109,325 82,467
Cash flow used in operations before
working capital changes (3,020,469) (2,115,605)
(Increase)/decrease in trade and
other receivables (132,502) 103,389
(Decrease)/increase in trade and
other payables (733,670) 437,115
------------------------------------ ------------------------------------
Cash flow used in operations (3,886,641) (1,575,101)
Tax (paid)/received - -
Cash flow used in operating activities (3,886,641) (1,575,101)
------------------------------------ ------------------------------------
Cash flow used in investing activities
Acquisition of non-controlling interest - (200,000)
Acquisition of intangible assets (600,000) -
Net cash outflow used in investing
activities (600,000) (200,000)
------------------------------------ ------------------------------------
Cash flow from financing activities
Interest paid - -
Proceeds of issue of new shares 3,146,418 -
Receipts from loans 1,847,000 1,665,000
Net cash inflow from financing
activities 4,993,418 1,665,000
------------------------------------ ------------------------------------
Net increase/(decrease) in cash and
cash equivalents 506,777 (110,101)
Cash and cash equivalents at start
of period 320,525 430,626
------------------------------------ ------------------------------------
Cash and cash equivalents at end
of period 827,302 320,525
------------------------------------ ------------------------------------
The Notes on pages 34 to 58 form part of these financial
statements
Notes to the Consolidated Financial Statements
For the year ended 31 December 2021
Note 1: General Information
Company descriptions and activities
B90 Holdings plc (the "Company") and its subsidiaries (together
the "Group") was founded in 2012 in the Isle of Man (Company number
9029V). In July 2013, the Company listed on the AIM market of the
London Stock Exchange and completed a reverse merger in June
2016.
The Group is focused on the operation of its own online
Sportsbook and Casino product (via Spinbookie.com and Bet90.com) as
well as marketing activities for other online gaming companies
(using oddsen.nu and tippen4you.com).
Significant accounting policies
The principal accounting policies as adopted by the Group in the
preparation of its consolidated financial statements for the year
ended 31 December 2021 are set out below. The accounting policies
have been consistently applied, unless otherwise stated.
Basis of preparation
The Consolidated Financial Statements have been prepared in
accordance International financial reporting standards ("IFRS") in
conformity with the requirements of the EU. The Consolidated
Financial Statements have been prepared under the historical cost
convention and on a going concern basis.
Basis of consolidation
The Consolidated Financial Statements incorporate the results of
B90 Holdings plc (the "Company") and entities controlled by the
Company (its subsidiaries) (collectively the "Group"). Control is
achieved where the Company has the power over the investee, is
exposed, or has rights, to variable returns from its involvement
with the investee and has the ability to use its power to affect
its returns.
The results of subsidiaries disposed of are included in the
consolidated statement of comprehensive income to the effective
date of loss of control and those acquired from the date on which
control is transferred to the Group.
Going concern
After the challenges in 2020 and the impact of the global
COVID-19 pandemic, the Group raised a total of EUR5.2 million
during 2021, which allowed the Group to settle overdue creditors
and to complete two acquisitions (Spinbookie.com and Oddsen.nu) in
order to drive additional revenues for the Group.
The directors expect that these acquisitions will generate cash
flow in 2022 , however the Group achieved a net loss of EUR3.4
million for the year ended 31 December 2021. Furthermore, the Group
had a negative cash flow from operations of EUR4.5 million for the
year ended 31 December 2021 and the Group expects to report a loss
for the six months ending 30 June 2022. Furthermore, as per 31
December 2021, the Group shows net current liabilities of EUR4.2
million.
Whilst trading during the first months of 2022 has been in line
with the Board's expectations and show a significant increase in
revenues, the Group continues to operate at a loss, although
management expects the Group to become cash flow positive during
the second half of 2022, executing on its strategic plan to grow
the Group's operations and revenues in the various verticals in a
targeted manner, entering into strategic partnerships and investing
in further marketing to expand the customer base and geographical
reach. Furthermore, as a result of the recent fundraise, completed
in May 2022, the Group has improved its financial position.
Notwithstanding that the Group has raised additional funds in
equity since the 2021 year-end, amounting to GBP731,000, it remains
reliant, inter alia, on being able to manage its cash resources
carefully and trading being in line with management's expectations.
Should trading not be in line with management's expectations going
forward, the Group's ability to meet its liabilities may be
impacted, in which case the Group may need to raise further
funding. In such circumstance that this is needed and whilst the
directors are confident of being able to raise such funding if
required, there is no certainty that such funding will be available
and/or the terms of such funding. These conditions are necessarily
considered to represent a significant uncertainty which may cast
doubt over the Group's ability to continue as a going concern.
Whilst acknowledging this uncertainty, the Directors remain
confident that the recent fundraise will allow the Group to expand
its operations and generate a positive operational cash flow within
a reasonable time or, if needed, be able to raise additional
funding when required, therefore the Directors consider it
appropriate to prepare the financial statements on a going concern
basis. The financial statements do not include the adjustments that
would result if the Group was unable to continue as a going
concern.
Note 2: Critical accounting policies, estimates and
judgements
The preparation of the Consolidated Financial Statements
requires the Directors to make judgements, estimates and
assumptions that affect the application of accounting policies and
the reported amounts of assets and liabilities, income and expense.
Actual results may differ from these estimates.
Key areas of estimation uncertainty
Impairment of Goodwill and other intangible fixed assets
Determining whether goodwill and other intangible fixed assets
with a definite or indefinite useful life are impaired requires an
estimation of the value-in-use of the cash-generating units.
Goodwill was recorded following the acquisition of 51% in Quasar
Holdings Ltd in 2017, in the acquisition of the operations of
Oddsen.nu in September 2021. The total balance per 31 December 2021
amounts to EUR3.3 million. The directors have used various
estimates, revenue forecasts and expected future cash flows. The
recently completed fundraises allow the Group to invest in
marketing and the Directors believe this will grow its overall
operations to support the carrying value of goodwill. If some of
the expectations are not met, impairment of the goodwill balance
may be necessary in the future. Further details around the
estimates and assumptions used are disclosed in notes 9 and 10.
Business combinations
For business combinations, the Group estimates the fair value of
the consideration transferred, which can include assumptions about
the future business performance of the business acquired and an
appropriate discount rate to determine the fair value of any
contingent consideration. Judgement is also applied in determining
whether any future payments should be classified as contingent
consideration or as remuneration for future services.
The Group then estimates the fair value of assets acquired and
liabilities assumed in the business combination, including any
separately identifiable intangible assets. These estimates also
require inputs and assumptions including future earnings, customer
attrition rates and discount rates. The Group engages external
experts to support the valuation process, where appropriate. IFRS 3
'Business Combinations' allows the Group to recognise provisional
fair values if the initial accounting for the business combination
is incomplete. Judgement is applied as to whether changes should be
applied at the acquisition date or as post-acquisition changes.
The fair value of contingent consideration recognised in
business combinations is reassessed at each reporting date, using
updated inputs and assumptions based on the latest financial
forecasts for the relevant business. Fair value movements and the
unwinding of the discounting is recognised within operating
expense
Other areas of estimation
Convertible Bond Note
The Company issued a EUR300,000 (in September 2019), a
GBP500,000 (EUR591,200 in December 2019), a EUR515,000 (in May
2020), a EUR450,000 (in September 2020), a EUR700,000 (in December
2020) and a EUR1,847,000 (in March 2021), secured convertible bonds
of 5%. Interest payable twice a year or accrued at the request of
the lender. The bonds were repayable three years from their issue
date, and could be converted at any time into shares at a price of
5p per New Ordinary Share ("Conversion Price") at request of the
holder. An automatic conversion was triggered on 23 April 2021 as
the Company's shares were trading above 10p for 25 consecutive
dealing days.
Under IAS 32, the convertible bonds were accounted for as a
compound financial instrument. For the calculation of the fair
value of the loan component, the Company has reviewed the market
interest rates for a comparable unsecured loan, with a 3 year term.
The market interest rate used in the calculations was 12%.
Share-Based Payments
Certain employees (including Directors and senior Executives) of
the Company receive remuneration in the form of share-based payment
transactions.
The fair value is determined using the Black-Scholes valuation
model. The Directors believe this is appropriate considering the
effects of the vesting conditions, expected exercise period and the
dividend policy of the Company.
Due to limited trading history, the expected volatility has been
based on the 5-year historical volatility of a mix of share prices
from other companies in the same industry, as well as the overall
market volatility.
New Standards, interpretations and amendments adopted by the
Group
Several new and amendments to existing International Financial
Reporting Standards and interpretations, issued by the IASB, were
effective from 1 January 2021 and have been adopted by the Group
during the period with no significant impact on the consolidated
results or financial position of the Group.
New Standards that have not been adopted by the group as they
were not effective for the year
Several new standards and amendments to existing International
Financial Reporting Standards and interpretations, issued by the
IASB and adopted, or subject to endorsement, will be effective from
1 January 2022, 2023 and 2024 and have not been adopted by the
Group during the period. At this stage management are still
assessing the full impact on the consolidated results or financial
position of the Group. None are expected to have a material impact
on the consolidated financial statements in the period of initial
application.
Note 3: Significant accounting policies
The principal accounting policies applied in the preparation of
these Consolidated Financial Statements are set out below. The
policies have been consistently applied to all years presented,
unless otherwise stated.
Revenue
Revenue from contracts with customers is recognised when the
control over the services is transferred to the customer. The
transaction price is the amount of the consideration that is
expected to be received based on the contract terms.
In determining the amount of revenue from contracts with
customers, the Group evaluates whether it is a principal or an
agent in the arrangement. The Group is principal when the Group
controls the promised services before transferring them to the
customer. In these circumstances, the Group recognises revenue for
the gross amount of the consideration. When the Group is an agent,
it recognises revenue for the net amount of the consideration,
after deducting the amount due to the principal. The Group does not
record revenue when there is uncertainty around the collection of
the receivable.
Sportsbook and casino revenue
Revenue is recognised provided that it is probable that economic
benefits will flow to the Group and the revenue can be reliably
measured. Revenue is recognised in the accounting periods in which
the transactions occurred and after adding the fees and charges
applied to customer accounts, and is measured at the fair value of
the consideration received or receivable.
Revenue from these activities comprises:
Sportsbook
Sport online gaming revenue comprises bets placed less pay-outs
to customers, adjusted for the fair value of open betting positions
, adjusted for the fair value of certain promotional bonuses
granted to customers.
Landbased revenue comprises of the bets placed less pay-outs to
customers. Commissions paid to the shop owners are recorded as cost
of sale.
Casino games
Casino, Bingo and other online gaming revenue is represented by
the difference between the amounts of bets placed by customers less
amounts won , adjusted for the fair value of certain promotional
bonuses granted to customers.
The Company acts as the principal in sportsbook and casino
operations.
Marketing commission revenue
In its operations which generate marketing commissions, the
Group acts as the agent. Revenue from marketing contracts with
customers is recognised when players are losing their funds on the
operators' platforms on which the Company is basing the amounts to
be invoiced. In some cases customers agree to pay a fixed fee per
acquired player. All fees and commissions are invoiced on a monthly
basis. The transaction price is the commission amount of the
consideration that is expected to be received based on the contract
terms. The performance obligation of a revenue contract is
satisfied at the point a player's losses are incurred. Operators
typically pay a month in arrears. This gives rise to contract
assets on a short term basis.
Administrative expenses
Administrative expenses consist primarily of staff costs
(including contractors), corporate professional expenses, and
depreciation and amortisation. All expenses are recognised on an
accruals' basis.
Foreign currencies
The Group's functional and presentation currency is EURO.
Transactions in foreign currency are recorded at the rates of
exchange prevailing on the dates of the transactions. At each
statement of financial position date, monetary assets and
liabilities that are denominated in foreign currencies are
retranslated at the rates prevailing on the statement of financial
position date. Any gains or losses arising on translation are taken
to the profit and loss.
Taxation
Current tax
Current tax for each taxable entity in the Group is based on the
local taxable income at the local statutory tax rate enacted or
substantively enacted at the statement of financial position date
and includes adjustments to tax payable or recoverable in respect
of previous periods.
Deferred tax
Deferred taxation is calculated using the liability method, on
temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the Consolidated
Financial Statements. However, if the deferred tax arises from the
initial recognition of an asset or liability in a transaction other
than a business combination that at the time of the transaction
affects neither accounting nor taxable profit or loss, it is not
accounted for. Deferred tax is determined using tax rates and laws
that have been enacted (or substantively enacted) by the date of
the statement of financial position and are expected to apply when
the related deferred tax asset is realised or the deferred tax
liability is settled.
Deferred tax liabilities are provided in full.
Deferred tax assets are recognised to the extent that it is
probable that future taxable profits will be available against
which the temporary differences can be utilised.
Changes in deferred tax assets or liabilities are recognised as
a component of tax expense in the profit and loss, except where
they relate to items that are charged or credited directly to
equity in which case the related deferred tax is also charged or
credited directly to equity.
Intangible fixed assets
Acquired intangible assets
Intangible assets acquired separately consist of domain names
and customer lists and are capitalised at cost. Those acquired as
part of a business combination are recognised separately from
goodwill if the fair value can be measured reliably. These
intangible assets are amortised over the useful life of the assets,
which is mentioned at the table below.
The cost of intangible assets acquired in a business combination
is the fair value at acquisition date. The valuation methodology
used for each type of identifiable asset category is detailed
below:
Asset category Valuation methodology Useful life
----------------------- ---------------------- ------------
Customer relationships Excess earnings 3-10 years
Domain names Relief from royalty 20 years
Licenses Cost approach 3 years
Spinbookie assets Cost approach
10 years
Goodwill
Goodwill represents the excess of the fair value of the
consideration in a business combination over the Group's interest
in the fair value of the identifiable assets, liabilities and
contingent liabilities acquired. Consideration comprises the fair
value of any assets transferred, liabilities assumed and equity
instruments issued.
Goodwill is capitalised as an intangible asset with any
impairment in carrying value being charged to the profit and loss
and not subsequently reversed. Where the fair values of
identifiable assets, liabilities and contingent liabilities exceed
the fair value of consideration paid, the excess is credited in
full to the profit and loss on the acquisition. Changes in the fair
value of the contingent consideration are charged or credited to
the profit and loss . In addition, the direct costs of acquisition
are charged immediately to the profit and loss .
Goodwill is not amortised as the Group assumes an indefinite
useful life.
Non-controlling interests
Non-controlling interests in the net assets of consolidated
subsidiaries are identified separately from the Group's equity
therein. Non-controlling interests consist of the amount of those
interests at the date of the original business combination and the
non-controlling shareholder's share of changes in equity since the
date of the combination except where any non-controlling interests
have been acquired by the Group. Any share of gains or losses are
transferred to the Group's retained earnings. Total comprehensive
income is attributed to non-controlling interests even if this
results in the non-controlling interests having a deficit
balance.
Accounting for acquisition of non-controlling interests
When the Group acquires a minority interest of an entity over
which the Group already has control, the excess consideration over
the fair value of the minority interest is taken to equity
reserves.
Impairment of non-financial assets
Impairment tests on goodwill are undertaken annually and where
applicable an impairment loss is recognised immediately in the
profit and loss . Other non-financial assets are subject to
impairment tests whenever events or changes in circumstances
indicate that their carrying amount may not be recoverable. Where
the carrying value of an asset exceeds its recoverable amount
(being the higher of value in use and fair value less costs to
sell), the asset is written down accordingly through the profit and
loss .
Where it is not possible to estimate the recoverable amount of
an individual asset, the impairment test is carried out on the
asset's cash generating unit (i.e. the smallest group of assets to
which the asset belongs for which there are separately identifiable
and largely independent cash inflows).
Equity
Equity comprises the following:
-- "Share capital" represents amounts subscribed for shares at
nominal value. Nominal value per share is nil.
-- "Additional paid in capital" represents amounts subscribed
for share capital in excess of nominal value.
-- The "Reverse asset acquisition reserve" represents the
difference in carrying value between the Additional paid in capital
of B90 Holdings plc and the Share capital of Sheltyco on the
acquisition date (June 2016).
-- The "Equity portion of the convertible loan note" represents
the difference between the fair value of the entire instrument and
the fair value of the liability component at initial
recognition.
-- "Retained earnings" represents the accumulated profits and
losses attributable to equity shareholders. This also includes
issued and vested warrants and options.
Financial instruments
Trade and other receivables
Trade receivables are held in order to collect the contractual
cash flows and are initially measured at the transaction price as
defined in IFRS 15. The Group has applied IFRS 9's simplified
approach and has calculated the ECLs based on lifetime of expected
credit losses. As the contracts of the Group do not contain
significant financing components. Impairment losses are recognised
based on lifetime expected credit losses in profit or loss.
Other receivables are held in order to collect the contractual
cash flows and accordingly are measured at initial recognition at
fair value, which ordinarily equates to cost and are subsequently
measured at cost less impairment due to their short term nature. A
provision for impairment is established based on 12-month expected
credit losses unless there has been a significant increase in
credit risk when lifetime expected credit losses are recognised.
The amount of any provision is recognised in profit or loss.
Cash and cash equivalents, and finance income
Cash and cash equivalents includes cash in hand, deposits held
at call with banks, other short-term highly liquid investments with
original maturities of three months (These include Player wallets).
Finance income is recognised on bank balances as and when it is
receivable.
Trade payables
Trade payables, including customer balances, are recognised
initially at fair value and subsequently measured at amortised cost
using the effective interest method.
Financial liabilities
Financial liabilities are classified as financial liabilities
measured at amortised cost. The Group determines the classification
of its financial liabilities at initial recognition. The
measurement of financial liabilities is initially recognised at
fair value and subsequently measured at amortised cost using the
effective interest method. Amortised cost is calculated by taking
into account any issue costs and any discount or premium on
settlement. Gains and losses arising on the repurchase, settlement
or cancellation of liabilities are recognised respectively in
interest and other revenues and finance costs.
Borrowings and finance costs
Borrowings are initially recognised at fair value net of
transaction costs incurred. Borrowings are subsequently stated at
amortised cost; any difference between the proceeds (net of
transaction costs) and the redemption value is recognised in the
profit and loss over the period of the borrowings using the
effective interest method. Borrowings are classified as current
liabilities unless the Group has an unconditional right to defer
settlement of the liability for at least 12 months after the date
of the Statement of Financial Position.
Convertible Bond Note
The proceeds received on issue of the Group's convertible bond
note are allocated into their liability and equity components. The
amount initially attributed to the debt component equals the
discounted cash flows using a market rate of interest that would be
payable on a similar debt instrument that does not include an
option to convert. Subsequently, the debt component is accounted
for as a financial liability measured at amortised cost until
extinguished on conversion or maturity of the bond. The balance of
the proceeds is allocated to the equity conversion option and is
recognised in the ' Equity portion of the convertible loan note '
within shareholders' equity. Issue costs incurred are allocated
between liability and equity in proportion to the value of each
component.
Warrants
When warrants are issued, the fair value is determined using the
Black-Scholes valuation model. The Directors believe this is
appropriate considering the effects of the vesting conditions,
expected exercise period and the dividend policy of the
Company.
Due to limited trading history, the expected volatility has been
based on the 5-year historical volatility of a mix of share prices
from other companies in the same industry, as well as the overall
market volatility.
The value of the issues and vested warrants is included in
retained earnings in the equity section.
Note 4: Segment reporting
IFRS 8 requires operating segments to be identified on the basis
of internal reports about components of the Group that are
regularly reviewed by the chief operating decision maker to
allocate resources to the segments and to assess their performance.
In accordance with IFRS 8, the chief operating decision maker has
been identified as the Board. The Board reviews the Group's
internal reporting in order to assess performance and allocate
resources. The Board considers that the business comprises of two
activities:
1. Operating sportsbook and casino brands
2. Online marketing and promotion of online sportsbook and
casino websites, using affiliate agreements
Revenue originates from:
2021 2020
EUR EUR
Online sportsbook and casino
operations 640,690 813,011
Affiliate marketing 186,165 -
Total 826,855 813,011
-------- --------
The Board evaluates the operations based on the revenues metric.
Revenues consist of invoiced commissions for the marketing and
player acquisition services provided, as well as revenues generated
from own operations, based in Malta and Curaçao. The Group operates
an integrated business model and, therefore, does not allocate
general operating expenses, assets and liabilities to any of the
originating segments.
Note 5: Key management remuneration
Key management remuneration for each period was as follows:
Share Total Total
Cash based based Remuneration Remuneration
salary payments 2021 2020
EUR EUR EUR EUR
Paul Duffen 203,258 34,488 237,746 106,753
Marcel Noordeloos 155,520 35,638 191,158 147,472
Mark Rosman 50,400 20,442 70,842 40,358
Rainer Lauffs 117,000 13,592 130,592 158,646
Karim Peer 25,337 4,799 30,136 -
Total 551,515 108,959 660,474 453,229
----------- ---------- -------------- --------------
Note 6: Profit for the year
Profit before taxation is stated after charging/(crediting):
Year ended Year ended
31 December 31 December
2021 2020
EUR EUR
Depreciation of property, plant - -
and equipment
Amortisation of intangibles 109,325 82,467
Impairment of intangibles - -
Short term lease expense - -
Share based payment charge 145,026 42,562
Foreign exchange (gains) 42,589 (823)
Note 7: Taxation
Year ended Year ended
31 December 31 December
2021 2020
EUR EUR
Loss before tax (3,411,751) (2,381,454)
------------- -------------
Profit before tax multiplied by the
standard rate of corporation tax in
Isle of Man of 0% - -
Adjustments to tax charge in respect
of previous periods - -
Effect of different tax rates in other
countries
- -
Tax credit - -
------------- -------------
Note 8: Earnings per share (basic and diluted)
Year ended Year ended
31 December 31 December
2021 2020
EUR EUR
Earnings
Earnings for the purposes of basic and
diluted earnings per share, being net
profit after tax attributable to equity
shareholders
(3,351,507) (2,368,712)
Number of shares
Weighted average number of ordinary
shares for the purposes of:
Basic earnings per share 174,331,667 95,681,159
Diluted earnings per share 174,331,667 95,681,159
------------- -------------
Basic loss per share (in EUR) (0.0192) (0.0248)
Diluted loss per share (in EUR) (0.0192) (0.0248)
The Group has granted share options in respect of equity shares
to be issued, the details of which are disclosed in Note 19. Share
options and warrants outstanding are anti-dilutive due to the
losses incurred in each period.
Subsequent to year-end, on 13 May 2022, the Company has issued
13,452,632 new ordinary shares to satisfy the deferred
consideration of EUR1,050,000 as part of the Oddsen.nu acquisition.
Furthermore, on 16 May 2022, the Company issued 12,713,043 new
ordinary shares in a fundraise with certain existing
shareholders.
Note 9: Goodwill
Goodwill
EUR
Cost
At 1 January 2020 1,410,931
Additions -
Impairments -
At 31 December 2020 1,410,931
----------
Additions 1,913,600
Impairments -
----------
At 31 December 2021 3,324,531
----------
Net Book Value
At 1 January 2020 1,410,931
----------
At 31 December 2020 1,410,931
----------
At 31 December 2021 3,324,531
----------
Goodwill
Goodwill arose following:
- the acquisition of 51% in Quasar Holdings Ltd in 2017
- the acquisition of the operations of Oddsen.nu in September 2021
The addition of goodwill in 2021 is related to the Oddsen.nu
acquisition.
Key assumptions and inputs used
The key assumptions and inputs used for the assessment of the
value of the goodwill are disclosed in Note 10, as well as
assumptions used for the impairment review.
Note 10: Other intangible assets
Customer Brand and Licences Spinbookie Total
database domain names and other assets
EUR EUR EUR EUR EUR
Cost
At 1 January
2020 61,742 4,570,103 105,000 - 4,736,845
Additions - - - - -
Disposals - - - - -
---------- -------------- ----------- ----------- ------------
At 31 December
2020 61,742 4,570,103 105,000 - 4,736,845
Additions 337,000 2,399,000 - 1,997,299 4,733,299
Disposals (37,142) (3,076,603) - - (3,113,745)
----------- -----------
At 31 December
2021 361,600 3,892,500 105,000 1,997,299 6,356,399
---------- -------------- ----------- ----------- ------------
Amortisation
At 1 January
2020 (61,742) (4,325,729) (97,812) - (4,485,283)
Charge for the
period - (75,279) (7,188) - (82,467)
-----------
At 31 December
2020 (61,742) (4,401,008) (105,000) - (4,567,750)
Charge for the
period (21,063) (88,262) - - (109,325)
Disposals 37,142 3,076,603 - - 3,113,745
-----------
At 31 December
2021 (45,663) (1,412,667) (105,000) - (1,563,330)
---------- -------------- ----------- ----------- ------------
Net Book Value
At 1 January
2020 - 244,375 7,188 - 251,562
---------- -------------- ----------- ----------- ------------
At 31 December
2020 - 169,095 - - 169,095
---------- -------------- ----------- ----------- ------------
At 31 December
2021 315,937 2,479,832 - 1,997,299 4,793,069
---------- -------------- ----------- ----------- ------------
Customer database
The Customer database relates to the acquisition of the
Oddsen.nu operations in September 2021. Databases previously used
were fully amortised and due to the age of the database, these
databases have been disposed during the year as these databases
were outdated. The estimated remaining life of the customer
database is 2.5 years.
Brand and domain names
The brand and domain names relate to the following
acquisitions:
1. Quasar Holdings Ltd (owning Bet90.com) in 2017 (51%);
2. T4U Marketing ltd in 2017 (51%); and
3. Oddsen.nu in 2021 (100%).
The estimated useful life of these brand and domain names is 20
years and the remaining estimated useful lives are between 17 and
20 years.
Brand and domain names are considered to be business
operations.
The carrying value of the brand and domain names for Bet90
(Quasar Holdings ltd acquisition) as per 31 December 2021 amounts
to EUR110,821. It has a remaining estimated lifetime of 2
years.
Oddsen.nu is considered to be a single cash-generating unit
("CGU"). The carrying value of the brand and domain names for
Oddsen.nu as per 31 December 2021 amounts to EUR2,369,013 and has a
remaining estimated lifetime of 19.5 years.
Licenses and other
Licenses and other related to the MGA license which was acquired
in 2017 when the Group acquired the first 51% in Bet90. This
license was amortised in 3 years and is now fully amortised.
Spinbookie assets
In December 2021, the Group acquired the business of
Spinbookie.com, which is presented under Spinbookie assets. This
includes a fully operational sportsbook and casino operation,
operating using a Curacao gaming license. Spinbookie operates on
Betconstruct, a gaming software developer platform and has various
payment service providers and other operating tools implemented.
The assets will be amortised in 10 years and per 31 December 2021
therefore has 10 years remaining.
Impairment reviews
The Directors have performed an impairment review of intangible
fixed assets and goodwill at the end of the year.
Quasar Holdings Oddsen.nu Spinbookie Consolidated
ltd (Bet90) .com Totals
EUR EUR EUR EUR
Goodwill 1,410,931 1,913,600 - 3,324,531
Other intangibles 110,821 2,684,950 1,997,299 4,793,070
Other non-current assets - - - -
---------------- ---------- ----------- -------------
CGU Carrying value
at 31 Dec 2021 1,521,752 4,598,550 1,997,299 8,117,601
CGU Carrying value
at 31 Dec 2020 1,580,026 - - 1,580,026
Goodwill is not amortised.
In accordance with IAS 36 and the Group's stated accounting
policy, an impairment test is carried out annually on the carrying
amounts of goodwill and a review for indicators of impairment is
carried out for other non-current assets. Where an impairment test
was carried out, the carrying value is compared to the recoverable
amount of the asset or the cash-generating unit. Only the
recoverable amount for Quasar Holdings ltd (Bet90) and Oddsen.nu
were determined to be necessary given the allocation of goodwill
with an indefinite useful life requiring annual review. In each
case, the recoverable amount was the value in use of the assets,
which was determined by discounting the future cash flows of the
relevant asset or cash-generating unit to their present value.
The recoverable amount of the Quasar Holdings ltd (Bet90) and
Oddsen.nu CGUs as at 31 December 2021, of EUR2.5 million and EUR4.6
million, respectively, has been determined based on a value in use
calculation using cash flow projections from financial budgets
approved by the Directors. Key assumptions in performing the value
in use calculation are set out below.
Key assumptions and inputs used:
Cash flow projections have been prepared for a five-year period,
following which a long-term growth rate has been assumed.
Underlying growth rates, as shown in the table below for each of
Quasar Holdings ltd (Bet90) and Oddsen.nu, have been developed
through projections of future player acquisitions and net gaming
revenue based on data obtained from partners and affiliate
partners
The pre-tax discount rate that is considered by the Directors to
be appropriate is based on the Group's specific Weighted Average
Cost of Capital, adjusted for tax, which is considered to be
appropriate for the cash-generating units.
Pre-tax Underlying Underlying Long-term
discount revenue revenue growth
rate growth growth rate
applied rate rate year
year 1 years 6+
2-5
At 31 December 2021
Quasar Holdings ltd
(Bet90) 26.0% 469% 27.8% 2%
Oddsen.nu 14.3% 1% 4.7% 2%
At 31 December 2020
Quasar Holdings ltd
(Bet90) 26% 2%
Downside scenarios were applied on Quasar Holdings ltd (Bet90)
of between 25% and 40% & Oddsen.nu 5% and 10% on each year's
margins.
The calculation of value in use for the Quasar Holdings ltd
(Bet90) is most sensitive to the following assumptions:
-- Revenue - A reduction in the revenue cumulative annual growth
rate ("CAGR") for years 1-5 from 72% down to 69% would result in
the recoverable amount equalling the carrying value.
-- Weighted Average Cost of Capital - Whereas the Directors
believe the WACC rate is conservative, an increase in WACC rate to
35%, combined with the sensitivities on profit forecast, would
result in the recoverable amount equalling the carrying value.
The calculation of value in use for the Oddsen.nu is most
sensitive to the following assumptions:
-- Revenue - A reduction in the revenue cumulative annual growth
rate ("CAGR") for years 1-5 from 3.9% down to 2.9% would result in
the recoverable amount equalling the carrying value.
-- Weighted Average Cost of Capital - Whereas the Directors
believe the WACC rate is conservative, an increase in WACC rate to
15%, combined with the sensitivities on profit forecast, would
result in the recoverable amount equalling the carrying value.
The annual impairment review on goodwill and the intangible
fixed assets showed that no impairment was needed for the years
2021 and 2020.
Note 11: Business Combinations
On 30 September 2021, the Group completed the acquisition of
Oddsen.nu, a Norwegian sports-bet affiliate site. Oddsen.nu
("Oddsen") has been operating for over 20 years in its home market
of Norway. Oddsen connects publishers with affiliate programs that
allow them to promote sports book gambling-related offers. Its
operations include producing media content covering a wide range of
sports news, sport events, analysis and forecasts, which it then
publishes on its website Oddsen.nu. Oddsen also offers a major
forum, where end users can discuss sports betting related events
24-7 and has generated winning odds tips for its visitor for a
number of years, free of charge.
Details of the purchase consideration, the net assets acquired
and goodwill are as follows:
Total
EUR
Net assets acquired -
Oddsen.nu brand and domain
name 2,399,000
Existing Players with affiliate
accounts 337,000
----------
Net identifiable assets acquired 2,736,000
Goodwill 1,913,600
Deferred tax related to the
acquisition (273,600)
Total 4,376,000
----------
Purchase consideration:
Cash 600,000
Deferred payment 1,050,000
Share based payment 2,726,000
----------
Total Consideration 4,376,000
----------
The goodwill is attributable to Oddsen's strong position in the
Norwegian market and its 20 years of operating history and benefits
expected in relation to the Group's own brands. The amount of
goodwill that is expected to be tax deductible is nil.
The acquired business contributed revenue of EUR186,000 for the
3 months of operations in 2021. If the business was acquired on 1
January 2021, the business would have contributed revenues of
EUR760,000 . As the Group operates an integrated business model, it
does not allocate general operating expenses, assets and
liabilities to these operations. Expenses directly related to the
Oddsen operations are immaterial.
Note 12: Property, plant & equipment
Furniture
& equipment Computers Total
EUR EUR EUR
Cost
At 1 January 2020 4,500 1,005 5,505
Additions - - -
Disposals - - -
------------- ------------ --------
At 31 December 2020 4,500 1,005 5,505
Additions - - -
Disposals - - -
------------- ------------ --------
At 31 December 2021 4,500 1,005 5,505
------------- ------------ --------
Depreciation
At 1 January 2020 (4,500) (1,005) (5,505)
Charge for the period - - -
Disposals - - -
------------- ------------ --------
At 31 December 2020 (4,500) (1,005) (5,505)
Charge for the period - - -
Disposals - - -
------------- ------------ --------
At 31 December 2021 (4,500) (1,005) (5,505)
------------- ------------ --------
Net Book Value
At 1 January 2020 - - -
------------- ------------ --------
At 31 December 2020 - - -
------------- ------------ --------
At 31 December 2021 - - -
------------- ------------ --------
Note 13: Trade and other receivables
Year ended Year ended
31 December 31 December
2021 2020
EUR EUR
VAT receivables 42,042 27,496
Accounts receivable 89,045 -
Other receivables and prepayments 28,912 -
Total 159,999 27,496
------------- -------------
Credit risk arises when a failure by counter parties to
discharge their obligations could reduce the amount of future cash
inflows from financial assets on hand at the reporting date. The
Group has policies in place to ensure that provision of services is
made to customers with an appropriate credit history and monitors
on a continuous basis the ageing profile of its receivables.
The Group's exposure to credit risk is influenced mainly by the
individual characteristics of each customer. However, management
also considers the factors that may influence the credit risk of
its customer base, including the default risk of the industry and
country in which customers operate. Due to the nature of the
Group's operations the Group only has a few customers.
Impairment
A provision for impairment of trade receivables is established
using an expected loss model. Expected loss is calculated from a
provision matrix based on the expected lifetime default rates and
estimates of loss on default. No impairment charge was recorded
during the year ended 31 December 2020 and 31 December 2021.
Note 14: Cash and cash equivalents
Year ended Year ended
31 December 31 December
2021 2020
EUR EUR
Cash held in current accounts and
wallets 827,302 320,525
Total 827,302 320,525
------------- -------------
Included within the cash and cash equivalents are balances held
in relation to the liabilities to customers shown in Note 21.
Note 15: Share capital
Year ended Year ended
31 December 31 December
2021 2020
EUR EUR
Allotted, called up and fully paid
238,406,683 (2020: 95,889,492) - -
------------- -------------
Ordinary shares
Par value of the shares nil nil
------------- -------------
During the year the Company issued 142,517,191 New Ordinary
Shares, on the following dates:
Date: New Ordinary Pursuant to:
Shares
17 March 2021 6,917,130 Conversion of liabilities
30 March 2021 7,796,427 Equity subscription
30 March 2021 10,249,101 Conversion of liabilities
30 March 2021 3,500,000 Conversion of liabilities
30 March 2021 1,600,000 Conversion of liabilities
24 April 2021 68,346,716 Conversion of convertible
loan
28 April 2021 280,000 Conversion of liabilities
29 September 2021 8,888,465 Equity subscription
29 September 2021 787,102 Conversion of liabilities
29 September 2021 19,965,000 Acquisition of Oddsen.nu
21 December 2021 4,973,333 Equity subscription
21 December 2021 413,917 Conversion of liabilities
21 December 2021 8,600,000 Acquisition of Spinbookie.com
-------------
142,517,191
-------------
Note 16: Additional paid in capital
Additional paid in capital represents amounts subscribed for
share capital in excess of par value. Details of additions are
described in Note 15 above.
Note 17: Reverse asset acquisition reserve
The reverse acquisition completed on 30 June 2016 has been
accounted for as a share-based payment transaction in accordance
with IFRS 2. On the basis of the guidance in paragraph 13A of IFRS
2, the difference in the fair value of the consideration shares and
the fair value of the identifiable net assets should be considered
to be payment for the services to transition to a public
company.
Note 18: Retained earnings
Retained earnings represents the cumulative net gains and losses
recognised in the consolidated statement of comprehensive income
and other transactions with equity holders.
Note 19: Share based payments
Equity-settled share option scheme
On 17 May 2016, the Group adopted a "long term incentive senior
management and Directors' stock option plan", which was amended on
30 June 2016 ("the Plan"). Options granted under the Plan will
entitle the participant to acquire Ordinary Shares at a price
determined in accordance with the rules of the Plan.
As at 31 December 2021, the following options have been granted
under the Plan:
A total of 4,150,000 share options have a grant date of 30 June
2016, with an exercise price of GBP0.25 for all of the options.
During 2017, a total of 262,500 of these options were exercised,
all with an exercise price of GBP0.25 per share, for which the
Group issued new Ordinary Shares. Furthermore, during 2018, a total
of 437,500 options have been exercised, all with an exercise price
of GBP0.25 per share, for which the Group issued new Ordinary
Shares. Also, during those years a total of 1,025,000 options were
cancelled due to employees or directors leaving the Group. The
remaining options were all cancelled on 17 March 2021.
On 22 May 2017, the Board granted 800,000 share options to key
employees with an exercise price of GBP0.25 for all of the options.
These options expire on its 5(th) anniversary on 22 May 2022. All
options vest over 4 equal yearly instalments starting 1 year after
the grant date.
On 14 February 2019, the Board granted 2,420,000 share options
to Directors and key employees with an exercise price of GBP0.15
for all of the options. 1,870,000 of these options were cancelled
on 17 March 2021 and the remaining costs have been expensed in
2021. The remaining 550,000 options expire on its 5(th) anniversary
on 14 February 2024.
On 17 March 2021, the Board granted 6,215,000 share options to
Directors and key employees with an exercise price of GBP0.05 for
all of the options. These options expire on its 5(th) anniversary
on 17 March 2026. All options vest over 4 equal yearly instalments
starting 1 year after the grant date.
On 1 October 2021, the Board granted 13,530,000 share options to
Directors and key employees with an exercise price of GBP0.13 for
all of the options. These options expire on its 5(th) anniversary
on 1 October 2026. All options vest over 4 equal yearly instalments
starting 1 year after the grant date.
As a result of the above the total of 21,095,000 options are
outstanding at 31 December 2021.
Warrants
On 30 June 2016, the Company issued new Ordinary Shares in
relation to funds raised and loans converted as part of the reverse
merger and re-admission of the Group. As part of this fundraise and
conversion, the Company issued 1 warrant for every 5 new Ordinary
Share allotted pursuant to the conversion and subscription
agreements, exercisable at GBP0.31 per warrant at any time during
the period from the date of issue until the 5(th) anniversary of
issue.
As a result of this a total of 758,221 warrants were issued on
30 June 2016. On 2 September 2016, the Company issued a further
175,798 warrants at the same conditions as part of completion of
the subscription agreements in relation to the reverse merger.
On 4 October 2017, the Company issued 109,846 warrants to Strand
Hanson Limited, on their appointment of being Nominated Adviser for
the Company on 4 October 2017. These warrants have an exercise
price of GBP0.15 per warrant and can be exercised during the period
from the date of issue until the 5(th) anniversary, which is on 4
October 2022.
During 2017, a total of 733,521 warrants with an exercise price
of GBP0.31 per share were exercised, for which the Company issued
new Ordinary Shares.
On 17 March 2021, the Company issued 750,000 warrants to Strand
Hanson Limited, in the process of restoring the trading of the
Company's shares. These warrants have an exercise price of GBP0.05
per warrant and can be exercised during the period from the date of
issue until the 3(rd) anniversary.
No warrants have been exercised during 2020 and 2021.
As a result of the above a total of 859,846 warrants are
outstanding at 31 December 2021.
Details of the share options and warrants outstanding during the
period are as follows:
Weighted average
Number of share exercise price
options and warrants (GBP)
Outstanding as at 1 January
2020 5,955,344 0.210
Exercisable as at 1 January
2020 2,585,344 0.250
Outstanding as at 31 December
2020 5,955,344 0.210
Exercisable as at 31 December
2020 3,940,344 0.235
Options Cancelled on 17 March
2021 (4,295,000) 0.206
Options granted on 17 March
2021 6,215,000 0.050
Warrants granted on 17 March
2021 750,000 0.050
Warrants lapsed on 30 June
2021 (200,498) 0.310
Options granted on 1 October
2021 13,530,000 0.130
Outstanding as at 31 December
2021 21,954,846 0.131
Exercisable as at 31 December
2021 1,797,346 0.153
The options outstanding as at 31 December 2021 had a weighted
average remaining contractual life of 4.2 years, whereas the
warrants outstanding had a weighted average remaining contractual
life of 4.3 years. The value of the options has been derived by
using a Black Scholes pricing model for the options and warrants
granted on 22 May 2017, 14 February 2019, 17 March 2021 and 1
October 2021. The inputs into the pricing models were as
follows:
Options Options Options Options
granted granted granted granted
on on 14 February on 17 March on 1 October
22 May 2019 2021 2021
2017
Share price at grant GBP0.52 GBP0.0725 GBP0.0475 GBP0.13
date
Exercise price GBP0.25 GBP0.15 GBP0.05 GBP0.13
Volatility 34.3% 34.3% 35.6% 35.6%
Expected life 5 years 5 years 5 years 5 years
Risk free rate 2.51% 1.4% 0.79% 0.79%
Expected dividend
yield 0% 0% 0% 0%
As the Company has been trading since 30 June 2016, however the
liquidity in the stock is low. Furthermore, the stock price was
suspended for trading between March 2020 and March 2021, therefore
the expected volatility for all options was determined by taking
the average the Company's share price and the historical volatility
of a peer group over a 5-year period.
The total value of the options granted on 22 May 2017 is
EUR287,272. Of this amount, EUR7,655 has been charged in the
financial statements for the year ended 31 December 2021 (2020:
EUR26,333). There is no remaining charge for the financial
statements of the year ending 31 December 2022.
The total value of the options granted on 14 February 2019 is
EUR22,250. Of this amount, EUR5,952 has been charged in the
financial statements for the year ended 31 December 2021 (2020:
EUR6,469). The is no remaining balance to be charged in the
financial statements of the year ending 31 December 2022.
The total value of the options granted on 17 March 2021 is
EUR108,401. Of this amount, EUR44,697 has been charged in the
financial statements for the year ended 31 December 2021 (2020:
nil). The remaining balance of EUR63,704 will be charged in the
financial statements of the years ending 31 December 2022, 2023 and
2024.
The total value of the options granted on 1 October 2021 is
EUR660,767. Of this amount, EUR86,037 has been charged in the
financial statements for the year ended 31 December 2021 (2020:
nil). The remaining balance of EUR574,730 will be charged in the
financial statements of the years ending 31 December 2022, 2023 and
2024.
Note 20: Borrowings
31 December 31 December
2021 2020
EUR EUR
Convertible loan (1) - 2,199,839
- 2,199,839
-------------- ------------
(1) The Convertible Loan had a 3 year term, beared a 5% coupon,
which was payable in arrears at 30 June and 31 December (with the
first payment due on 30 June 2020). The Loan could be converted by
the note holder at any time and would automatically convert into
new Ordinary Shares when the share price exceeds 10p for 25
consecutive days, which occurred in April 2021. The Convertible
Loan was fully converted on 16 April 2021.
Under IAS 32, the convertible bonds are accounted for as a
compound financial instrument. The value of the liability component
and the equity conversion component were determined at the date the
instrument was issued. The fair value of the liability component,
included in non-current borrowings, was calculated using a market
interest rate for an equivalent instrument without conversion
option with the balance recorded as shares to be issued.
Note 21: Trade and other payables
31 December 31 December
2021 2020
EUR EUR
Trade payables 877,141 1,823,794
Accrued expenses 267,026 676,764
Liabilities to customers 418,139 295,620
Other creditors 1,558,323 1,927,419
Deferred consideration for the acquisition 1,050,000 -
of Oddsen.nu
Earn-out in relation with the acquisition 960,240 -
of Spinbookie.com
5,130,869 4,725,597
------------ ------------
Note 22: Capital commitments
At 31 December 2021 and 31 December 2020 there were no capital
commitments.
Note 23: Contingent assets and liabilities
There were no contingent liabilities at 31 December 2021 or 31
December 2020.
Note 24: Financial instruments - Fair Value and Risk
Management
The Group is exposed through its operations to risks that arise
from use of its financial instruments. The Board approves specific
policies and procedures in order to mitigate these risks.
The main financial instruments used by the Group, on which
financial risk arises, are as follows:
-- Cash and cash equivalents;
-- Trade and other receivables;
-- Trade and other payables; and
-- Customer deposits in case of the Bet90 operations.
Detailed analysis of these financial instruments is as
follows:
2021 2020
Financial assets EUR EUR
Trade and other receivables (Note 13) 89,045 -
Cash and cash equivalents (Note 14) 827,302 320,525
------- -------
Total 916,347 320,525
------- -------
In accordance with IFRS 9, all financial assets are held at
amortised cost.
2021 2020
Financial liabilities EUR EUR
Trade and other payables(1) (Note 21) 2,288,043 3,074,010
Deferred consideration for acquisition
of Oddsen.nu 1,050,000 -
Earn-out in relation with the acquisition
of Spinbookie.com 960,240 -
Payable to directors - 258,775
Compliance tax payable 565,560 716,048
Accrued liabilities 267,026 676,764
Borrowings (Note 20) - 2,199,839
--------- ---------
Total 5,130,869 6,925,436
--------- ---------
(1) Excludes taxes payable.
In accordance with IFRS 9, all financial liabilities are held at
amortised cost.
Capital
The capital employed by the Group is composed of equity
attributable to shareholders. The primary objective of the Group is
maximising shareholders' value, which, from the capital
perspective, is achieved by maintaining the capital structure most
suited to the Group's size, strategy, and underlying business risk.
There are no demands or restrictions on the Group's capital.
The main financial risk areas are as follows:
Credit risk
Trade receivables
For the Group's operations in Bet90, the credit risk relates to
customers disputing charges made to their credit cards
("chargebacks") or any other funding method they have used in
respect of the services provided by the Group. Customers may fail
to fulfil their obligation to pay, which will result in funds not
being collected. These chargebacks and uncollected deposits, when
occurring, will be deducted at source by the payment service
providers from any amount due to the Group. The risk for the year
2020 has been assessed by the Board to being immaterial.
Financial assets which are past due but not impaired
2021
Up to 3 Up to 12
Not yet months months Over 1 year
overdue over due over due over due Total
EUR EUR EUR EUR EUR
Trade receivables 89,045 - - - 89,045
Other receivables 70,954 - - - 70,954
Total 159,999 - - - 159,999
----------- --------- --------- ------------- ------------
2020
Up to 3 Up to 12
Not yet months months Over 1 year
overdue over due over due over due Total
EUR EUR EUR EUR EUR
Other receivables 27,496 - - - 27,496
Total 27,496 - - - 27,496
-------- --------- --------- ------------- ------------
Liquidity risk
Liquidity risk exists where the Group might encounter
difficulties in meeting its financial obligations as they become
due. The Group monitors its liquidity in order to ensure that
sufficient liquid resources are available to allow it to meet its
obligations.
The following table details the contractual maturity analysis of
the Group's financial liabilities:
2021
Between
3
months More than
On demand In 3 months and 1 year 1 year Total
EUR EUR EUR EUR EUR
Trade and other
payables (1) 4,812,134 - - - 4,812,134
Accrued liabilities - 318,735 - - 318,735
----------- ----------- ----------- ----------- -------------
Total 4,812,134 318,735 - - 5,130,869
----------- ----------- ----------- ----------- -------------
(1) Excludes taxes payable.
2020
Between
3
months More than
On demand In 3 months and 1 year 1 year Total
EUR EUR EUR EUR EUR
Trade and other
payables (1) 4,048,833 - - - 4,048,833
Accrued liabilities - 676,764 - - 676,764
Borrowings - - - 2,199,839 2,199,839
----------- ----------- ----------- ----------- -------------
Total 4,048,833 676,764 - 2,199,839 6,925,436
----------- ----------- ----------- ----------- -------------
(1) Excludes taxes payable.
Note 25: List of subsidiaries
The Company held the issued shares of the following subsidiary
undertakings as at 31 December 2021:
Proportion
of ownership
and voting
Name of subsidiary Place of Incorporation power Ownership
----------------------- ----------------------- -------------- ----------------------------------
B90 Ventures Ltd Isle of Man 100% Direct
B90 Services BV The Netherlands 100% Direct
Sheltyco Enterprises British Virgin 100% Direct
Group Ltd Islands
Sheltyco Enterprises Cyprus 100% Indirect, through Sheltyco
Ltd Enterprises Group Ltd
Sheltyco Enterprises Cyprus 100% Indirect, through Sheltyco
Marketing Ltd Enterprises Group Ltd
Silkline Marketing Ltd Cyprus 100% Indirect, through Sheltyco
Enterprises Group Ltd
Tunegames Marketing Cyprus 100% Indirect, through Sheltyco
Ltd Enterprises Group Ltd
Tunegames Holding Ltd Cyprus 100% Indirect, through Sheltyco
Enterprises Group Ltd
T4U Marketing Ltd Cyprus 51% Indirect, through Sheltyco
Enterprises Group Ltd
Quasar Holdings Ltd Malta 100% Indirect, through B90 Ventures
Ltd
Bet90 Sports Ltd Malta 100% Indirect, through Quasar Holdings
Ltd
B90 Operations Ltd Bulgaria 100% Indirect, through B90 Ventures
Ltd
It's a Winner Ltd Malta 100% Indirect, through B90 Ventures
Ltd
Spinbookie ltd Malta 100% Indirect, through B90 Ventures
Ltd
Spintastic NV Curacao 100% Direct
Note 26: Reconciliation of debt
The Group had the following movement in the borrowings:
At 1 January Cash Conversion At 31 December
2021 in Equity 2021
EUR EUR EUR
Borrowings 2,199,839 1,847,000 (4,046,839) -
------------- ---------- ------------ ---------------
2,199,839 1,847,000 (4,046,839) -
------------- ---------- ------------ ---------------
At 1 January Cash Other settlements At 31 December
2020 2020
EUR EUR EUR
Borrowings 774,891 1,424,948 - 2,199,839
------------- ---------- ------------------ ---------------
774,891 1,424,948 - 2,199,839
------------- ---------- ------------------ ---------------
Note 27: Related party transactions
Remuneration of Directors and key employees
Remuneration of Directors and key employees is disclosed in Note
5.
Other related party transactions
Included within other creditors, the Group has accrued for
unpaid salaries with its Directors, amounting to EURnil at 31
December 2021 (2020: EUR258,775).
Payables to related parties
The Group had the following amounts payable to related
parties:
Year ended Year ended
31 December 31 December
2021 2020
EUR EUR
Unpaid salaries and fees to Directors - 258,775
Total - 258,775
--------------- -------------
Intra group transactions
Transactions between Group companies have not been disclosed as
these have all been eliminated in the preparation of the
Consolidated Financial Statements.
Note 28: Ultimate controlling party
As at 31 December 2021 the Directors do not believe there to be
any single controlling party.
Note 29: Subsequent events
On 13 May 2022 the Group announced that, as part of the
acquisition of Oddsen.nu in September 2021, it had settled the
agreed deferred consideration of EUR1.05 million, due on or before
31 March 2022, through the issue of 13,452,632 new o rdinary s
hares at a price of 6.65p pence per share.
On 16 May 2022 the Group announced that it had raised EUR845,000
(or GBP731,000) through a subscription for 12,713,043 new ordinary
shares at a price of 5.75 pence per share. On the same date it
announced that Karim Peer, its Non-Executive Chairman had been
appointed as the Company's new Executive Chairman.
On 20 June 2022 the Group completed a transaction with the 49%
shareholder of T4U Marketing ltd to acquire these shares for the
consideration of 500,000 new ordinary shares.
--------------------------------------------
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END
FR EAEKEADXAEAA
(END) Dow Jones Newswires
June 21, 2022 02:00 ET (06:00 GMT)
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