TIDMB90
RNS Number : 4662E
B90 Holdings PLC
30 June 2023
For release: 07.00, 30 June 2023
B90 Holdings plc
("B90", the "Company" or "Group")
Final Results for the year ended 31 December 2022
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 2022 (the "2022 Annual
Report").
The 2022 Annual Report can be found on the Company's website at
www.b90holdings.com .
Commenting on the results, Ronny Breivik, Interim Executive
Chairman said:
"As an entrepreneurial gaming business, we believe that the
business has strong growth potential through a strategic and
deliberate 'buy and build' M&A strategy. This is backed by
strong execution, and organic growth stemming from focused inhouse
marketing activities. We can be characterized as a challenger brand
in the Gaming industry, and one of the few pure plays listed on the
AIM market and we are determined to make more use of the
opportunities afforded by our listing."
Financial and operational highlights
-- Revenues substantially increased : EUR2.1 million (2021: EUR0.8 million)
-- Operating loss increased to EUR4.2 million (2021: EUR3.3
million loss), partially due to impairment charges on goodwill and
increased amortisation of intangible assets
-- Launch of new operating brand: Spinbookie: targeting new
territories in North and Latin America
-- Completion of acquisitions and successful integration of
marketing affiliate businesses: Oddesn.nu and Tippen4you focusing
on Nordic and European markets
-- Successful fundraises during the year totalling over EUR1.8
million (GBP1.6 million) in aggregate, to facilitate the
acquisitions and provide additional working capital
-- Appointment of new (Interim) Executive Chairman and further changes to the Board
-- Post year end developments:
o appointment of senior industry figure Mark Blandford as senior
adviser and investor; and
o further fundraisings totalling EUR3.9 million (GBP3.3 million)
from new and existing investors to support investment in marketing
and growth of operations, including funding separately announced
today.
Commenting on current trading and outlook, Ronny Breivik
added:
"We have achieved a great deal during 2022 and importantly have
continued that momentum into 2023. We have substantially
strengthened our balance sheet, increased revenues and reduced our
adjusted EBITDA. Alongside this we have improved our affiliate
strategies, investing in our direct marketing activities and
operations. To support these initiatives, we have strengthened both
our management and advisory teams.
We will continue to focus on carefully selected Latin American,
and other developed European markets. The additional capital raised
will help fund our increased operations in the region to improve
retention rates and produce an improved spend per customer. We are
grateful to shareholders for their continuing support.
Overall, I am delighted with the progress that the Company is
making and we look forward with increased optimism and
confidence."
The information communicated in 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.
-Ends-
For further information please contact:
B90 Holdings plc +44 (0)1624 605 764
Ronny Breivik, Interim Executive
Chairman
Marcel Noordeloos, Chief Financial
Officer
Strand Hanson Limited (Nominated
Adviser) +44 (0)20 7409 3494
James Harris / Richard Johnson
/ Rob Patrick
Zeus Capital Limited (Joint
Broker) +44 (0)20 3829 5000
Louisa Waddell / Tim Dainton
Panmure Gordon (UK) Limited
(Joint Broker) +44 (0)20 7886 2500
Simon J French
Belvedere (Financial PR & IR) +44 (0)20 3008 6864
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
CHAIR'S STATEMENT
Introduction
This is my first statement as Chair of the Company, having been
appointed as (Interim) Executive Chairman, in November 2022 and I
am delighted 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 2022.
B90 Holdings plc is a group of companies focused on the
operation of our own online Sportsbook and Casino product as well
as marketing activities for our own and third party online gaming
companies.
Our focus is currently on two core divisions:
-- betting and gaming websites; and
-- service provision, through media platforms and affiliate marketing.
We operate under four principal brands: Bet90, Spinbookie,
Oddesn.nu and Tippen4you with revenues generated through both
online gaming revenue and marketing commission from other
platforms.
As an entrepreneurial gaming business, we believe that the
business has strong growth potential both organically and via a
'buy and build' M&A strategy. We can be characterized as a
challenger brand in the Gaming industry, and one of the few pure
plays listed on the AIM market and w e are determined to make more
use of the opportunities afforded by our listing.
We are bank debt free (but do have Convertible Loan Notes
issued) and 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. Secondly, we will concentrate on both organic growth
and acquisitions. Next, we aim to take a holistic approach to all
players by offering the widest game play options and finally we
will employ AI and other leading technology and analytics across
our operations to drive efficiencies and support operations and
marketing.
We are excited about expansion into new territories and markets,
specifically in Latin America, Canada, and Europe, supported by the
development of affiliate programs through both further acquisitions
and partnerships.
Financial and operational highlights
-- Revenues substantially increased : EUR2.1 million (2021: EUR0.8 million)
-- Operating loss increased to EUR4.2 million (2021: EUR3.3
million loss), partially due to impairment charges on goodwill and
increased amortisation of intangible assets
-- Launch of new operating brand Spinbookie; targeting new
territories in North and Latin America
-- Completion of acquisitions and successful integration of
marketing affiliate businesses: Oddesn.nu and Tippen4you focusing
on Nordic and European markets
-- Successful fundraises during the year totalling over EUR1.8
million (GBP1.6 million) in aggregate, to facilitate acquisitions
and provide additional working capital
-- Appointment of new (Interim) Executive Chairman and further changes to the Board
-- Post year end developments:
o appointment of Mark Blandford, a senior industry figure and
considered by many to be one of the founders of the developed
online gaming industry , as senior adviser and investor; and
o further fundraisings totalling EUR3.9 million (GBP3.3 million)
from new and existing investors to support investment in marketing
and growth of operations.
Operating Review
2022 has been a year of transition for the Company setting
strong foundations for future operational and financial growth.
With unique products and strong brands in global iGaming
(sportsbook and casino) markets, we continue to build strong
customer relationships, increasing our revenues by approximately
160% compared to the prior comparable period and substantially
increasing our customer numbers across our target markets of
Scandinavia and South America.
In May 2022, we completed the integration of Oddsen.nu, a key
affiliate within our Group that operates in Norway. Oddsen.nu
boasts a prominent forum, enabling users to engage in continuous
discussions about sports betting events throughout the day. One of
the main features of Oddsen.nu is its longstanding commitment to
providing winning betting tips to its user base without any
charges. Consequently, the business has met our expectations and
successfully expanded our market reach into developed markets.
Alongside this, we introduced our Spinbookie brand,
strategically positioned in distinct yet complementary markets to
enhance B90's existing operations. Spinbookie delivers a
comprehensive casino experience, featuring renowned providers like
Evolution and other prominent casino vendors for the ultimate
enjoyment of our users. Additionally, the brand offers an extensive
sportsbook, encompassing a wide array of major global sporting
events, including a diverse selection of live betting options. To
amplify our reach, we have established marketing agreements
designed to attract more traffic to the platform.
Spinbookie's existing full casino and sportsbook product covers
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.
Marketing agreements are now in place and driving traffic to
Spinbookie and we are pleased with the growth in customer numbers
and average spend that it is starting to produce.
Increased activity and ownership of both these brands helped to
positively impact Group revenues, as we also expanded operations in
other territories, particularly in Latin American and Nordic
markets.
In June 2022 we also announced the acquisition of the remaining
49% stake in Tippen4you, which is now fully owned by the Group.
That website is an established forum platform focused on the German
market. It earns revenues by entering into affiliate agreements
with operators who are active in the German market.
Fundraising s
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, we announced that:
- o n 16 May 2022, the Company had raised EUR860,000 (or
GBP731,000) through a subscription for 12,713,043 new ordinary
shares by certain existing investors at a price of 5.75 pence per
share;
- o n 9 September 2022, the Company had raised EUR358,000 (or
GBP305,000) through a subscription for 7,625,000 new ordinary
shares by existing and new investors at a price of 4 pence per
share;
- o n 22 December 2022, the Company had raised EUR6 49 ,000 (or
GBP540,000) through subscriptions for convertible loan notes.
This fundraise on 22 December 2022 was under the terms of a new
3-year, 10% convertible (unsecured) loan note (the "Convertible
Loan Note"). The Convertible Loan Notes have a term of three years
from issue and are convertible no earlier than 1 January 2024, at
the request of the Loan Note holder, at a 10% discount to the
volume weighted average price for the five trading days prior to
the conversion notice. The Loan Notes are convertible, at the
discretion of the Company, at any time and on the same terms.
Subsequent to the reported year-end, the Group announced further
fundraise s, all under the terms of the Convertible Loan Note, of
GBP 500,000 on 6 February 2023, GBP1,100,000 on 5 April 2023 and is
announcing a further EUR2,000,000 on 30 June 2023 , leaving the
Group with a much improved balance sheet.
Financial review
The net result for the year amounted to a n after-tax loss of
EUR 4.3 million (2021: EUR3.4 million loss), which was primarily
the result of the increased amortization charges and a partial
impairment on goodwill . Revenues have increased significantly from
EUR0.8 million in 2021 to EUR2.1 million in 2022.
EBITDA adjusted for incidental costs , improved over the prior
period, and is as follows:
2022 2021
------------ -------------
Net Loss (4,268,196) (3,411,751)
Amortisation & Depreciation 462,205 109,325
Impairment of Goodwill 1,095,320 -
Stock option expense 349,36 4 145,026
Tax ( 13,680 ) -
(2, 374 ,
EBITDA 987 ) (3,157,400)
------------ -------------
One-off expenses:
129,152 -
* Severance payments
83,908 -
* EGM expenses
------------ -------------
(2, 161 ,
Adjusted EBITDA 927 ) (3,157,400)
------------ -------------
Whilst the Group has raised additional funds by way of the issue
of convertible loan notes since the 2022 year-end, amounting in
aggregate to GBP3.3 million, it remains reliant, inter alia, on
being able to manage its cash resources carefully and trading being
in line with management's expectations.
Currently the Board expects this to be the case and the business
is trading in-line with management expectations.
Principal risks and uncertainties
The principal risks and uncertainties factors are included on
page 12 of this report.
Board changes and appointment of strategic adviser
Martin Fleisje and I were both appointed to the Board with
effect from 7th November 2022.
I was appointed Interim Executive Chairman, having initially
joined B90 as CEO of B90 Ventures Ltd, the main operating
subsidiary of the Group in April 2021 .
My background is in online gaming since 1997 , having launched
the first gaming portal in Norway. In the early 2000s, I was
involved in a start-up, OddsAlive.com, which was subsequently sold
to BetInternet. From 2004 until 2006 I worked with Sportingbet.com
. Since then, before joining B90, I focused on building successful
affiliate websites in different sector verticals.
Martin was appointed as an independent non-executive Director.
Martin is chief financial officer of Induct AS, a Norwegian
software company. Prior to joining Induct AS, Martin spent the
majority of his career in wealth management and sales most recently
with Kraft Finans AS and Pioner Kapital AS, both based in
Norway.
In November 2022, we also announced that, Karim Peer, Executive
Chairman and Nigel Eastwood, non-executive Director had stepped
down from their positions on the Board and left the Company, having
been appointed earlier in the year in May 2022 and September 2022
respectively. The Board wishes to thank Karim and Nigel for their
contribution to the Group and wishes them both well in their future
endeavours.
Following the above changes, the Directors continue to review
the composition of the Board, both at executive and non-executive
level, including seeking to identify and recruit one or more
additional independent Directors to further enhance the Board's
experience and expertise. We are making good progress in our
search.
In February 2023, following the reported period, we were
delighted to announce that Mark Blandford had invested in the
business and agreed to act as a strategic adviser to the Company.
Mark is senior industry figure and considered by many to be one of
the founders of the developed online gaming industry. He has
pioneered the development, financing, and monetising of digital
Pay2Play entertainment companies over the last fifteen years and
having worked with him previously at Sportingbet, I am extremely
pleased that he has invested in B90 and has now agreed to become a
strategic adviser to the Company. His experience, advice, market
insight and knowledge , as well as his network of contacts, will be
invaluable to us as we embark on the next phase of our growth.
Summary and Outlook
We have achieved a great deal during 2022 and importantly have
continued that momentum into 2023. In the first few months of 2023,
we have substantially strengthened our balance sheet by securing
additional funding, we significantly increased revenues in 2022
compared to 2021 and reduced our adjusted EBITDA loss. Alongside
this we have improved our customer relations management and
retention programmes and augmented our affiliate strategies,
investing in our direct marketing activities and operations. To
support these initiatives, we have strengthened both our management
and advisory teams.
Our focus for 2023 is to accelerate revenue growth by utilising
focused investment in marketing to improve site traffic and
subsequently generate higher gaming volumes. In tandem, we are
committed to reducing operating losses and providing investors with
more visibility on the path to cash generation. We also are
actively seeking further value accretive acquisitions and various
forms of partnerships such as licensing agreements.
We will continue to focus on carefully selected Latin American,
and other developed European markets. Additional capital raised
will help fund our increased operations in the region to improve
retention rates and produce an improved spend per customer. We are
grateful to shareholders for their continuing support.
Overall, I am delighted with the progress that the Company is
making and we look forward with increased optimism and
confidence.
Ronny Breivik
(Interim) Executive Chairman, B90 Holdings plc
29 June 2023
Directors' Report
The Directors present their report and consolidated financial
statements for the year ended 31 December 2022.
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 casino games, using its wholly
owned brands Oddsen.nu (which has its main focus on Norway) and
Tippen4you.com (with a focus on Germany).
Results and dividends
The Group's results for the year, after taxation, amounted to a
loss of EUR 4.3 million (2021: loss of EUR3.4 million).
As a result of the above, the Directors are proposing not to pay
a dividend for the year ended 31 December 2022 (2021: 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 and
Spinbookie operations would though need to be covered by the Group
as and when they occur. 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 2022 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.
The convertible loan notes on the statement of financial position
have a fixed interest rate. The Directors do not consider the
impact of possible interest rate changes based on current market
conditions to be material to the net result for the year or the
equity position as at 31 December 2022.
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 with their PSP's.
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 2022, 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
Although the Group has increased revenues by c. 160% to EUR2.1
million, the Group still operates at a loss. Whereas the directors
believe the acquisitions completed in 2021 (Oddsen.nu and
Spinbookie) will continue to drive increased revenues in the
future, the reported net loss amounts to EUR 4.3 million for the
year ended 31 December 202 2 . Although this loss was significantly
impacted by an impairment charge and increased amortization of
intangible assets, the Group had a negative cash flow from
operations of EUR 2.3 million for the year ended 31 December 202 2.
Furthermore, the Group expects to report a loss for the six months
ending 30 June 202 3 .
As per 31 December 202 2 , the Group shows total current
liabilities of EUR 3 .2 million and a negative working capital
position of EUR2.7 million. Whilst the Directors believe that its
revised strategy will 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
2023 , executing on its revised strategic plan to grow the Group's
operations and revenues in the various verticals in a targeted
manner .
Furthermore, as a result of the recent fundraise, which is
announced on 30 June 202 3, amounting to EUR2 million , the Group
has improved its financial position at the time of release of this
report, with a total of EUR 3.9 million (or GBP 3.3 million )
raised during 2023 to date.
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 material 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
On 6 February 2023 the Company announced that it had raised a
further EUR570 ,000 (GBP500,000) through subscriptions for
convertible loan notes. In addition, the Company has agreed to
issue a further EUR127,692 ( GBP112,500 ) Loan Notes to a key
marketing partner in lieu of cash settlement due for services.
On 7 February 2023 the Company announced the appoint ment of
Mark Blandford as a strategic adviser to the Company. Mark is a
senior industry figure and considered by many to be one of the
founders of the developed online gaming industry. Having started
his career as the owner of a traditional 'bricks and mortar'
bookmaker's chain for over 15 years, he then recognised the
potential of the internet for the industry in the mid-1990s. In
1998 he founded Sportingbet.com, and in 2001 floated the company on
AIM. Mark stepped down from the Board of Sportingbet in 2007 before
its eventual sale in 2013 with the assets being split between
William Hill and GVC. In 2002, he was awarded AIM Entrepreneur of
the Year .
On 5 April 2023, the Company announced that it had raised a
further EUR1.27 million (GBP1.1 million) through subscriptions for
convertible loan notes.
On 19 April 2023, the Company announced that it had granted
options over, in aggregate, 11,500,000 ordinary shares to certain
directors and employees of the Company.
On 30 June 2023, the Company is announcing that it has raised a
further EUR2 million (GBP1.72 million) through subscriptions for
convertible loan notes, the funds of which are expected to be
received before 12 July 2023.
Directors and their interest
The following Directors held shares and share options as at 31
December 2022:
Number of Number of Exercise Date of grant Vesting
shares held options Price of options period
(GBP) of options
------------- ---------- --------- --------------- ------------
29,132,809
Ronny Breivik * 3,000,000 0.13 1 October 2021 1-4 years
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
23 ,419, 14 February
Mark Rosman 019 550,000 0.15 2019 1-4 years
Mark Rosman - 3,000,000 0.13 1 October 2021 1-4 years
* This includes a 34.65% ownership by Ronny Breivik in
Performance Media ltd, a company that owns 31,084,450 shares in the
Company and the shares held by Entercreation ltd, a company that
owns 8,600,000 shares in the Company.
During 2022, Karim Peer (Executive Chairman until 7 November
2022) and Nigel Eastwood (non-executive director until 7 November
2022) held 2,100,000 and 750,000 options respectively. These
options are included in the table in Note 18.
Directors who served during the year
Appointed Resigned
---------------- ----------------
Karim Peer 18 June 2021 7 November 2022
Ronny Breivik 7 November 2022 -
Mark Rosman 19 March 2014 -
Marcel Noordeloos 30 June 2016 -
Nigel Eastwood 26 September 7 November 2022
2022
Martin Fleisje 7 November 2022 -
The details of the Directors' remuneration have been included
within note 5 on page 40 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 ("IFRS") as adopted by the European Union . 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 CLA Evelyn Partners Limited
(previously named Nexia Smith & Williamson), Chartered
Accountants, who were reappointed at the 202 2 Annual General
Meeting and will be proposed to be reappointed at the 202 3 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. 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 and
Spinbookie, 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 brands Bet90 and Spinbookie, 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 early 2022 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 in September 2021 and the not owned
minority interest in Tippen4you.com to own its own affiliation
networks and driver further revenues via these portals.
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 d 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 four Directors of which two are Executive
and two are Non-Executive, reflecting a blend of different
experience and backgrounds. Considering the shareholding of Mark
Rosman, the Board considers, at this moment, that only Martin
Fleisje is 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 at least one additional
independent Non-Executive Director 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 s are expected to devote as much time
as is necessary for the proper performance of their 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 2022 the Board held eight (8) formal meetings either in
person or by call, all of which were attended by all Directors. The
Board also passed eight (8) 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:
Ronny Breivik (Interim Executive Chairman)
Ronny (4 9 ) has worked in online gaming since 1997 and launched
the first gaming portal in Norway. In the early 2000s, Ronny was
involved in a start-up, OddsAlive.com, which was subsequently sold
to BetInternet in 2003. From 2004 until 2006 Ronny worked with
Sportingbet.com, while also taking on the role of Product Manager
for Bet24.com, which was later sold to the Modern Times Group.
While at Bet24.com, Ronny introduced live betting and online poker
to that company's product portfolio, creating and honing a
profitable business model for live betting and online poker. From
2006 until 2011, Ronny was the CEO of M&B Poker Invest Ltd,
which specialized in betting affiliation. During this time, Ronny
co-founded and was one of the pioneers of the world's first
'rakeback' site, arguably disrupting the online poker world.
Marcel Noordeloos ( Chief Financial Officer ):
Marcel (54) was Group Finance Director at Playlogic
International NV between 2006 and 2009 before becoming Chief
Financial Officer of Playlogic Entertainment Inc (listed on Nasdaq
in New York) in March 2009. Marcel became Chief Financial Officer
at B90 Holdings plc in January 2011. Marcel has held several
management positions with among others Nike (2002-2006) and PwC
(1992 - 2001). Marcel holds an RA Degree (Registered Accountant)
from the University of Amsterdam.
Mark Rosman (Senior non-executive Director):
Mark (5 6 ), Senior non-executive Director, has over 20 years of
experience advising on private equity investments and managing
private equity portfolios. Mark worked for Galladio Capital
Management BV for eleven years and held the role of Chief Operating
Officer from 2006 until his departure in 2010. Since leaving
Galladio, Mark has serviced as Chief Executive Officer of The
Nestegg BV, 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 the Rotterdam School of
Management.
Martin Fleisje (Non-executive Director):
Martin (42), Non-Executive Director, is currently chief
financial officer of Induct AS, a Norwegian software company. Prior
to joining Induct AS, Martin spent the majority of his career in
wealth management and sales most recently with Kraft Finans AS and
Pioner Kapital AS, both based in Norway.
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 fully 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
Martin Fleisje (Chairman)
Mark Rosman
Remuneration committee
Mark Rosman (Chairman)
Martin Fleisje
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.
CLA Evelyn Partners Limited (previously named: 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 Directors.
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
Ronny Breivik, (Interim) 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 29 June
2023 .
Ronny Breivik
(Interim) Executive Chairman, B90 Holdings plc
29 June 2023
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, Martin Fleisje
(Chairman) and Mark Rosman.
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
-- Reviewing 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 2022 and 2023
On 20 June 2022 the Audit Committee reviewed the financial
statements for year-end 31 December 2021.
On 22 September 2022 the Audit Committee reviewed the financial
results of the Company for the six months ended 30 June 2022. The
audit committee had the 2022 audit planning meeting with our
external auditors on 23 May 2023 and a completion audit committee
call was held on 27 June 2023. On 29 June 2023 the Audit Committee
reviewed the financial statements for year-end 31 December
2022.
External Auditors
The external auditors of the Company are CLA Evelyn Partners
Limited ("EP"). The appointment of EP 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 2022 and for
2021 was as listed in the table below:
2022 2021
Audit services EUR1 35 ,000 EUR130,000
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 auditor ' s objectiveness and
independence.
Through the discussions with the auditors and review of the
scoped work no matters were identified over 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.
--------------------------------
Martin Fleisje
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 Martin Fleisje . 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;
-- 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 2022 are shown on page 10 . Share options
granted as per 31 December 2022 are shown in Note 18 on page 48
.
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 40 .
---------------------------------
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 2022 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 a summary of 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 2022 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.
Our approach to the audit
Of the Group's 16 (2021: 16) reporting components, we subjected
6 (2021: 5) to audits for group reporting purposes 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.
For the remaining 10 components, we performed analysis at a
group level to re-examine our assessment that there were no
significant risks of material misstatement within these.
The components within the scope of our work covered 100% of
group revenue, 98% of group loss before tax, and 100% of group
assets.
All audit work relevant to this opinion has been performed by
the Group audit team in the UK.
Emphasis of matter related to impairment of other intangible
assets
We draw attention to note 10 in the financial statements, which
explains, for Quasar Holdings Ltd (B et 90.com) and Spinbookie
assets, the revenue growth included as part of the annual
impairment review is reliant on revenue increases in excess of 146%
in year 1 and 16% for years 2-5. The ultimate outcome of this
matter is not certain, and the financial statements do not reflect
any impairment that might be required against the Spinbookie
assets, or further impairment on Quasar Holdings Ltd should the
revenue growth rates not be achieved.
Our opinion is not modified in respect of this matter.
Key audit matters
In addition to the matter described in the Material uncertainty
related to going concern and Emphasis of matter sections, we have
determined the matters described below to be the key audit matters
being 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 Revenue is a key We reviewed the Group's accounting
Recognition performance indicator policy for revenue recognition
of the Group. Revenue and assessed whether it is in
based targets may line with industry and international
place pressure on financial reporting standards
management to distort ("IFRS").
revenue recognition. We evaluated the design and implementation
This may result in of relevant internal controls
overstatement to that the Group uses to ensure
assist in meeting the completeness, accuracy and
current targets or timing of revenue recognised.
expectations. We performed substantive testing
including:
Relevant disclosures * Reviewed material revenue contracts with customers;
in the Annual report
& Accounts 2022:
Note 3: Accounting * Tested the recognition compliance with IFRS 9 & 15;
policies and Note
4: Segmental reporting
* Performed detailed testing on a sample of revenue
transactions, including agreement to third party
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.
------------------------------- -------------------------------------------------------------
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 IAS
with indefinite to the acquisition 36.
useful lives of Quasar Holdings We evaluated the design and implementation
and Other Ltd (B et 90.com) of relevant internal controls
intangible and It's a winner surrounding the review process
assets Limited (Oddsen.nu). of impairment models.
Other intangible We performed substantive testing
assets should be including:
held at the lower * Challenged Management's assessment of the relevant
of amortised cost CGUs with reference to the guidance set out in IAS
or their recoverable 36;
amount. Where there
is an indicator of
impairment such as * Reviewed the assessment over indicators of impairment
performance being for other intangibles with definite useful lives;
worse than expected,
an impairment review
is undertaken. * Considered the appropriateness and mathematical
Significant judgment accuracy of the model used to determine the
is needed in order recoverable amount of the Quasar Holdings Ltd
to assess the appropriateness (Bet90.com), It's a winner Limited (Oddsen.nu) and
of the recoverable Spinbookie CGUs;
amount of these assets/CGUs
to which an indicator
of impairment is * Considered historical trading performance by
noted or to which comparing both revenue and operating profit of the
the Goodwill has Group's CGUs with projected revenues and operating
been allocated, in profits;
particular with reference
to forecasted cash
flows, growth rates, * We assessed and challenged the appropriateness of the
discount rates and assumptions concerning:
sensitivity assumptions.
Relevant disclosures o Revenue growth rates to projected
in the Annual report player revenue models based on
& Accounts 2022: player acquisition and expected
Note 2: Critical net gaming revenues per player;
accounting policies, o Costs basis to historic cost
Note 9: Goodwill data including relevant affiliate
and Note 10: Other and platform agreements;
intangible assets 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.
------------------------------- -------------------------------------------------------------
Materiality
The materiality for the group financial statements as a whole
("group FS materiality") was set at EUR148,100 (2021: EUR128,000).
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
performance of the group. Group FS materiality represents 5% (2021:
3.5%) of the group's net 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 Group is
still investing in developing its revenues and profitability. The
group FS materiality was set at a higher percentage compared to
prior year after reflecting on other possible parameters that might
be used as well as the primary parameter described in the forgoing.
The materiality value determined is in line with that used within
the prior period
Performance materiality for the group financial statements was
set at EUR103,670 (2021: EUR102,560). being 70% (2021: 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. It was set at 70% to reflect our judgement on the
risk of misstatements in the current period in the context of areas
of judgement and estimation in the financial statements.
Material uncertainty related to going concern
We draw attention to note 1 in the financial statements, which
indicates that the Group has made a net loss for the year of
EUR4.3m, had net current liabilities of EUR2.7m as at 31 December
2022, negative cash flow from operations of EUR2.3 million for the
year ended 31 December 2022 and is projected to make losses for the
6-month period ending 30 June 2023.
Notwithstanding that, the Group having raised additional funds
in equity since the 2022 year-end, amounting to EUR 3.9 million (or
GBP3. 3 million), of which EUR2 million is yet to be received, 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 or there is a delay to the receipt of
the agreed funding, 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 2024, 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 2023 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.
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, except to the extent otherwise explicitly stated
in our report, 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 page 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 Curacao Gaming
Authority ("CGA") by maintaining records subject to random audits
from the CGA.
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:
- Curacao 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 Curacao gaming service licence; 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
group'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 possible
management bias in relation to the key assumptions which drive the
recoverable values of the Oddsen.nu, Quasar Holdings ltd (Bet90)
and Spinbookie.com 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
CLA Evelyn Partners Limited EC2V 7BG
Statutory Auditor
Chartered Accountants 29 June 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended Year ended
31 December 2022 31 December 2021
Note EUR EUR
Revenue 4 2,138,212 826,855
Salary expense (2,112,893) (1,306,033)
Marketing and selling
expense (763,821) (430,095)
Other administrative
expense (1,950,016) (2,256,222)
Depreciation,
amortisation
and impairment expense (1,557,525) (109,325)
--------------------------------------- --------------------------------------
Total administrative
expenses (6,384,255) (4,101,675)
--------------------------------------- --------------------------------------
Operating loss (4,246,043) (3,274,820)
Finance expense (35,833) (136,931)
Loss before tax 6 (4,281,876) (3,411,751)
Taxation 7 13,680 -
Loss for the period (4,268,196) (3,411,751)
--------------------------------------- --------------------------------------
Equity holders of the
Company (4,268,196) (3,351,507)
Non-controlling interests - (60,244)
(4,268,196) (3,411,751)
--------------------------------------- --------------------------------------
Loss per share attributable to equity holders
of the Company
- Basic (in EUR) 8 (0.0164) (0.0192)
- Diluted (in EUR) 8 (0.0164) (0.0192)
The Notes on pages 33 to 56 form part of these financial
statements
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Restated
Year ended Year ended
31 December 31 December
2022 2021
Non-current assets Note EUR EUR
Goodwill 9 2,229,211 3,324,531
4,330,86
Other intangible assets 10 4 4,793,069
Property, plant and equipment 11 - -
6,560,07
Total non-current assets 5 8,117,600
------------------------------ -------------------------------
Current assets
Other receivables & prepayments 12 193,627 159,999
Cash and cash equivalents 13 359,053 827,302
Total current assets 552,680 987,301
------------------------------ -------------------------------
7,112,75
Total assets 5 9,104,901
------------------------------ -------------------------------
Equity and liabilities
Share capital 14 - -
Additional paid-in capital 15 30,966,848 27,734,003
Reverse asset acquisition reserve 16 (6,046,908) (5,086,668)
Retained earnings 17 (21,957,873) (17,987,052)
Equity attributable to owners
of the parent 2,962,067 4,660,283
------------------------------ -------------------------------
Non-controlling interests - (24,388)
Total shareholders' equity 2,962,067 4,635,895
------------------------------ -------------------------------
Non-current liabilities
Convertible loan note 19 655,646 -
Deferred tax liability 23 259,920 273,600
Total non-current liabilities 915,566 273,600
------------------------------ -------------------------------
Current liabilities
Trade and other payables 20 3,210,344 4,170,629
Corporate income tax payable 24,77 8 24,777
3,235,12
Total current liabilities 2 4,195,406
------------------------------ -------------------------------
7,112,75
Total equity and liabilities 5 9,104,901
------------------------------ -------------------------------
Approved by the board on 29 June 2023 and signed on its behalf
by:
Ronny Breivik
(Interim) Executive Chairman
T he Notes on pages 33 to 56 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
reserve
capital capital Note * earnings Total interest Equity
EUR EUR EUR EUR EUR EUR EUR EUR
Balance as at
1 January ( 14,907,070 ( 5,021,611
2021 - 15, 466,741 429,770 (6,046,908) ) (5,057,467) 35,856 )
----------------------------- ------------- ------------ ------------- -------------- ------------- ---------------- ---------------
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
(restated) - 3,779,059 - 960,240 - 4,739,299 - 4,739,299
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 - (5,086,668) (17,987,052) 4,660,283 (24,388) 4,635,895
----------------------------- ------------- ------------ ------------- -------------- ------------- ---------------- ---------------
Loss for the
financial ( 4,268,196 ( 4,268,196 ( 4,268,196
period - - - - ) ) - )
Share based ( 960,240
acquisition - 2,037,840 - ) (51,988) 1,025,612 24,388 1,050,000
Share based
payments - - - - 349,363 349,363 - 349,363
Issue of
share
capital - 1,219,800 - - - 1,219,800 - 1,219,800
Costs of
raising
capital - (24,795) - - - (24,795) - (24,795)
Balance as at
31 December 30, 966
2022 - , 848 - (6,046,908) (21,957,873) 2,962,067 - 2,962,067
----------------------------- ------------- ------------ ------------- -------------- ------------- ---------------- ---------------
* the other reserves include (1) Reserves relating to reverse
asset acquisition from prior periods & (2) Contingent earn-out
shares issuable in relation to the Spinbookie acquisition. The
balances as per 31 December 2021 has been reclassified.
The Notes on pages 33 to 56 form part of these financial
statements
CONSOLIDATED STATEMENT OF CASH FLOWS
31 December 31 December
2022 2021
EUR EUR
Cash flows from operating activities
Operating (loss)/profit (4,246,043) (3,274,820)
Adjustments for:
Share based payments 349,364 145,026
Impairment of goodwill 1,095,320 -
Amortisation of intangibles 462,205 109,325
Bad debt expense 23,450 -
Cash flow used in operations before
working capital changes (2,315,704) (3,020,469)
(Increase)/decrease in trade and
other receivables (57,077) (132,502)
Increase/(Decrease) in trade and
other payables 61,062 (733,670)
--------------------------------- ---------------------------------
Cash flow used in operations (2,311,719) (3,886,641)
Tax (paid)/received - -
Cash flow used in operating activities (2,311,719) (3,886,641)
--------------------------------- ---------------------------------
Cash flow from investing activities
Acquisition of intangible assets - (600,000)
Net cash outflow used in investing
activities - (600,000)
--------------------------------- ---------------------------------
Cash flow from financing activities
Interest paid - -
Proceeds of issue of new shares 1,195,00 4 3,146,418
Receipts from loans 648,466 1,847,000
Net cash inflow from financing
activities 1, 843 , 470 4,993,418
--------------------------------- ---------------------------------
Net increase/(decrease) in cash
and cash equivalents (468,249) 506,777
Cash and cash equivalents at start
of period 827,302 320,525
--------------------------------- ---------------------------------
Cash and cash equivalents at end
of period 359,053 827,302
--------------------------------- ---------------------------------
The Notes on pages 33 to 56 form part of these financial
statements
Notes to the Consolidated Financial Statements
For the year ended 31 December 2022
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 2022 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 with International financial reporting standards
("IFRS") as adopted by the European Union . 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
Although the Group has increased revenues by approximately 160%
to EUR2.1 million, the Group still operates at a loss. Whereas the
directors believe the acquisitions acquired in 2021 (Oddsen.nu and
Spinbookie) will continue to drive increased revenues in the
future, the reported net loss amounts to EUR 4.3 million for the
year ended 31 December 202 2 . Although this loss was significantly
impacted by an impairment charge and increased amortization of
intangible assets, the Group had a negative cash flow from
operations of EUR 2.3 million for the year ended 31 December 202 2.
Furthermore, the Group expects to report a loss for the six months
ending 30 June 202 3 .
As per 31 December 202 2 , the Group shows total current
liabilities of EUR 3 .2 million and a negative working capital
position of EUR2.7 million. Whilst the Directors believe that its
revised strategy will 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
2023 , executing on its revised strategic plan to grow the Group's
operations and revenues in the various verticals in a targeted
manner .
Furthermore, as a result of a recent fundraise, which is
announced on 30 June 202 3, amounting to EUR2 million , the Group
has improved its financial position at the time of release of this
report, with a total of EUR 3.9 million (or GBP 3.3 million )
raised during 2023 to date.
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 2022
amounts to EUR 2.2 million. The directors have used various
estimates, revenue forecasts and expected future cash flows. The
recently completed and announced 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.
Other areas of estimation
Convertible Bond Note
The Company issued a GBP54 1 ,000 (in December 2022) unsecured
convertible bonds of 10%. Interest will be accrued and convert with
the princip al amount. The bonds are repayable three years from
their issue date, and could be converted, at request of the lender,
any day after 31 December 2023 at a 10% discount to the volume
weighted average price for the five trading days prior to the
conversion notice. T he Loan Notes are convertible, at the
discretion of the Company, at any time and on the same terms.
T he convertible bonds were accounted as a financial liability
as required under IFRS 9. The convertible bonds includes conversion
at a 10% discount to the market price, and pays a 10% interest. The
directors believe these terms are in line with market
conditions.
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 amended existing International Financial
Reporting Standards and interpretations, issued by the IASB, were
effective from 1 January 2022 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 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.
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 4 years
Brand and domain names Relief from royalty 20 years
Licenses Cost approach 4 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.
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
.
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 recorded as a long-term liability . Any accrued and unpaid
interest is added to the principal amount.
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:
2022 2021
EUR EUR
Online sportsbook and casino
operations 1,391,208 640,690
Affiliate marketing commissions 747,004 186,165
Total 2,138,212 826,855
---------- --------
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 2022 2021
EUR EUR EUR EUR
Ronny Breivik 104,335 67,151 171,486 -
Martin Fleisje - - - -
Paul Duffen - - - 237,746
Marcel Noordeloos 162,000 78,979 240,979 191,158
Mark Rosman 50,400 67,151 117,551 70,842
Rainer Lauffs - - - 130,592
Karim Peer 294,993 28,295 323,288 30,136
Nigel Eastwood 19,443 - 19,443 -
Total 631,171 241,576 872,747 660,474
----------- ---------- -------------- --------------
Directors received severance payments of EUR129,152 (2021:
EURnil).
Note 6: Profit for the year
Profit before taxation is stated after charging/(crediting):
Year ended Year ended
31 December 31 December
2022 2021
EUR EUR
Depreciation of property, plant - -
and equipment
Amortisation of intangibles 462,205 109,325
Impairment of goodwill 1,095,320 -
Bad debt expense 23,450 -
Short term lease expense 28,018 21,018
Share based payment charge 394,364 145,026
Foreign exchange losses 13,778 42,589
Note 7: Taxation
Year ended Year ended
31 December 31 December
2022 2021
EUR EUR
Loss before tax (4,281,876) (3,411,751)
------------- -------------
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
Release of deferred tax liability relating
to acquisition 13,680 -
Tax credit 13,680 -
------------- -------------
Note 8: Earnings per share (basic and diluted)
Year ended Year ended
31 December 31 December
2022 2021
EUR EUR
Earnings
Earnings for the purposes of basic and
diluted earnings per share, being net
profit after tax attributable to equity
shareholders
(4,268,196) (3,351,507)
Number of shares
Weighted average number of ordinary
shares for the purposes of:
Basic earnings per share 260,483,323 174,331,667
Diluted earnings per share 260,483,323 174,331,667
------------- -------------
(0 . 01 64
Basic loss per share (in EUR) ) (0.0192)
(0 . 01 64
Diluted loss per share (in EUR) ) (0.0192)
The Group has granted share options in respect of equity shares
to be issued, the details of which are disclosed in Note 18 . Share
options and warrants outstanding are anti-dilutive due to the
losses incurred in each period.
Note 9: Goodwill
Goodwill
EUR
Cost
At 1 January 2021 1,410,931
Additions 1,913,600
Impairments -
At 31 December 2021 3,324,531
------------
Additions -
Impairments (1,095,320)
------------
At 31 December 2022 2,229,211
------------
Net Book Value
At 1 January 2021 1,410,931
------------
At 31 December 2021 3,324,531
------------
At 31 December 2022 2,229,211
------------
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. The impairment of goodwill in 2022 is related to the
acquisition of Quasar Holdings.
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
2021 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
Additions - - - - -
Disposals - - (105,000) - (105,000)
----------- -----------
At 31 December
2022 361,600 3,892,500 - 1,997,299 6, 251,399
---------- -------------- ----------- ----------- ------------
Amortisation
At 1 January
2021 (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)
Charge for the
period (84,250) (178,225) - (199,730) (462,205)
Disposals - - 105,000 - 105,000
-----------
At 31 December ( 129,913 (1, 590 (1, 920
202 2 ) , 892 ) - (199,730) , 535 )
---------- -------------- ----------- ----------- ------------
Net Book Value
At 1 January
2021 - 169,095 - - 169,095
---------- -------------- ----------- ----------- ------------
At 31 December
2021 315,937 2,479,832 - 1,997,299 4,793,069
---------- -------------- ----------- ----------- ------------
At 31 December 2,301,60 1,797, 4,330,86
2022 231, 687 8 - 569 4
---------- -------------- ----------- ----------- ------------
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 1.5 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%).
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 2022 amounts
to EUR 52,546 . It has a remaining estimated lifetime of 1
year.
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 2022 amounts to EUR2, 249 , 063 and
has a remaining estimated lifetime of 18. 7 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 was fully amortised. The
Company surrendered the MGA license during 2022 as it had moved its
operational brands under a Curacao license.
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 2022
therefore has 9 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 315,611 1,913,600 - 2,229,211
1,797,56
Other intangibles 52, 546 2, 480,749 9 4,330,864
Other non-current assets - - - -
---------------- ----------- ----------- -------------
CGU Carrying value 1,797,56 6,560,07
at 31 Dec 2022 368,157 4,394,349 9 5
CGU Carrying value
at 31 Dec 2021 1,521,752 4,598,550 1,997,299 8,117,601
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. The recoverable
amount for Quasar Holdings ltd (Bet90) , Oddsen.nu and Spinbookie
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) ,
Oddsen.nu and Spinbookie CGUs as at 31 December 2022, of EUR 0.4
million , EUR4.6 million and EUR 1.8 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) , Spinbookie 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 2022
Quasar Holdings ltd
(Bet90) 18.45% 163 % 15.7 % 2 %
14. 6
Oddsen.nu % 1% 5 % 2%
Spinbookie assets 18.45% 146% 18% 2%
At 31 December 2021
Quasar Holdings ltd
(Bet90) 26.0% 469% 27.8% 2%
Oddsen.nu 14.3% 1% 4.7% 2%
Downside scenarios were applied on Quasar Holdings ltd (Bet90)
of between 20 % and 3 0% , for Oddsen.nu 5% and 0 % and for
Spinbookie 20% and 40% on each year's margins.
The Group has impaired the goodwill related to Quasar Holdings
ltd (Bet90) for the amount of EUR1,095,320. A further downward
adjustment of 1% in revenue will result in a further impairment of
EUR142,628 or an upward adjustment of 1% in WACC rate will result
in a further impairment of EUR45,909.
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 5.3 % down to 4 .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
14.9 %, 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 Spinbookie is most
sensitive to the following assumptions:
-- Revenue - A reduction in the revenue cumulative annual growth
rate ("CAGR") for years 1-5 from 36.9 % down to 27.7 % 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
37.4% , 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 an impairment was needed for the Quasar
Holdings ltd goodwill for the year 2022. For the other assets, no
impairment was necessary for the years 2022 and 2021.
Note 1 1 : Property, plant & equipment
Furniture
& equipment Computers Total
EUR EUR EUR
Cost
At 1 January 2021 4,500 1,005 5,505
Additions - - -
Disposals - - -
------------- ------------ --------
At 31 December 2021 4,500 1,005 5,505
Additions - - -
Disposals (4,500) (1,005) (5,505)
------------- ------------ --------
At 31 December 2022 - - -
------------- ------------ --------
Depreciation
At 1 January 2021 (4,500) (1,005) (5,505)
Charge for the period - - -
Disposals - - -
------------- ------------ --------
At 31 December 2021 (4,500) (1,005) (5,505)
Charge for the period - - -
Disposals 4,500 1,005 5, 505
------------- ------------ --------
At 31 December 2022 - - -
------------- ------------ --------
Net Book Value
At 1 January 2021 - - -
------------- ------------ --------
At 31 December 2021 - - -
------------- ------------ --------
At 31 December 2022 - - -
------------- ------------ --------
Note 12 : Trade and other receivables
Year ended Year ended
31 December 31 December
2022 2021
EUR EUR
VAT receivables 37,113 42,042
Accounts receivable 52,532 89,045
Other receivables and prepayments 103,982 28,912
Total 193,627 159,999
------------- -------------
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. We have recorded an impairment charge
of EUR23,450 for the year ended 31 December 202 2 (EURnil for the
year ended 31 December 202 1) .
Note 13 : Cash and cash equivalents
Year ended Year ended
31 December 31 December
2022 2021
EUR EUR
Cash held in current accounts and
wallets 359,053 827,302
Total 359,053 827,302
------------- -------------
Included within the cash and cash equivalents are balances held
in relation to the liabilities to customers shown in Note 20 .
Note 14 : Share capital
Year ended Year ended
31 December 31 December
2022 2021
EUR EUR
Allotted, called up and fully paid
282,144,816 (2021: 238,406,683) Ordinary - -
shares
------------- -------------
Par value of the shares nil nil
------------- -------------
During the year the Company issued 43,738,133 New Ordinary
Shares, on the following dates:
Date: New Ordinary Pursuant to:
Shares
13 May 2022 13,452,532 Acquisition of Oddsen.nu deferred
consideration
16 May 2022 12,713,043 Equity subscription
21 June 2022 500,000 Acquisition of 49% inT4U Marketing
ltd
9 September 2022 7,625,000 Equity subscription
9 September 2022 847,558 Conversion of payables
9 September 2022 8,600,000 Deferred consideration for
Spinbookie.com
-------------
43,738,133
-------------
Note 15 : 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 14 above.
Note 16 : 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 17 : 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 18 : 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.
During the years ending 31 December 2021 and 31 December 2022,
the following options have been granted under the Plan:
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.
On 22 June 2022, the Board granted 2,000,000 share options to a
Director with exercise price of GBP0.05. These options expire on
its 5(th) anniversary on 22 June 2027. All options vest over 4
equal yearly instalments starting 1 year after the grant date.
There are 22,955,000 options are outstanding at 31 December
2022.
Warrants
On 17 March 2021, the Company issued 750,000 warrants to one of
its advisers, 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.
On 9 September 2022, the Company issued 3,588,500 warrants in a
package to investors subscribing for equity. These warrants have
exercise price of GBP0.04 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 2021 and 2022.
As a result of the above a total of 4,338,500 warrants are
outstanding at 31 December 2022.
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
2021 5,955,344 0.210
Exercisable as at 1 January
2021 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
Options forfeited on 31 January
2022 (90,000) 0.072
Options lapsed on 22 May 2022 (800,000) 0.250
Options granted on 22 June
2022 2,000,000 0.050
Warrants granted on 9 September
2022 3,588,500 0.040
Warrants lapsed on 30 June
2021 (109,846) 0.150
Options granted on 9 November
2022 750,000 0.050
Outstanding as at 31 December
2022 27,293,500 0.090
Exercisable as at 31 December
2022 9,664,750 0.079
---------------------- -----------------
The options outstanding as at 31 December 2022 had a weighted
average remaining contractual life of 3.6 years, whereas the
warrants outstanding had a weighted average remaining contractual
life of 2.4 years. The value of the options has been derived by
using a Black Scholes pricing model for the options and warrants
granted on 17 March 2021, 1 October 2021 and 22 June 2022. The
inputs into the pricing models were as follows:
Options Options Options Options
granted granted granted granted
on 17 March on 1 October on 22 June on 9 November
2021 2021 2022 2022
Share price at grant GBP0.0475 GBP0.13 GBP0.05 GBP0.0 35
date
Exercise price GBP0.05 GBP0.13 GBP0.05 GBP0.05
Volatility 35.6% 35.6% 37.4% 37.4%
Expected life 5 years 5 years 5 years 5 years
Risk free rate 0.79% 0.79% 3.38% 3.38%
Expected dividend
yield 0% 0% 0% 0%
Although the Company has been trading its shares on the AIM
market of the London Stock Exchange since 30 June 2016, 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 17 March 2021 is
EUR108,401. Of this amount, EUR35,005 has been charged in the
financial statements for the year ended 31 December 2022 (2021:
EUR44,697). The remaining balance of EUR28,699 will be charged in
the financial statements of the years ending 31 December 2023 and
2024.
The total value of the options granted on 1 October 2021 is
EUR660,767. Of this amount, EUR302,852 has been charged in the
financial statements for the year ended 31 December 2022 (2021:
EUR86,037). The remaining balance of EUR271,878 will be charged in
the financial statements of the years ending 31 December 2023 and
2024.
The total value of the options granted on 21 June 2022 is EUR
42,853 . Of this amount, EUR 11,507 has been charged in the
financial statements for the year ended 31 December 2022 (2021:
nil). The remaining balance of EUR 31,346 will be charged in the
financial statements of the years ending 31 December 2023, 2024 and
2025.
Note 19 : Borrowings
31 December 31 December
2022 2021
EUR EUR
Convertible loan (1) 648,466 -
Accrued interest 7,180 -
655,646 -
------------ ------------
(1) The 2022 Convertible Loan has a 3 year term, bears a 10%
coupon, which accrues and is added to the principal amount. The
Loan can be converted by the note holder at any time after 31
December 2023 or by the Company at any time. The conversion price
is equal to the 5 day volume weighted average trading with a 10%
discount.
The convertible bonds are accounted for as a liability under
IFRS 9.
Note 20 : Trade and other payables
31 December 31 December
2022 2021
EUR EUR
1, 201 ,
Trade payables 131 877,141
Accrued expenses 4 65,707 267,026
Liabilities to customers 115,542 418,139
Other creditors 1,427,964 1,558,323
Deferred consideration for the acquisition
of Oddsen.nu - 1,050,000
3,210,344 4,170,629
------------ ------------
Note 21 : Capital commitments
At 31 December 2022 and 31 December 2021 there were no capital
commitments.
Note 22 : Contingent assets and liabilities
There were no contingent liabilities at 31 December 2022 or 31
December 2021.
Note 23: Deferred tax
31 December 31 December
2022 2021
EUR EUR
At 1 January 273,600 -
Recorded as part of acquisition - 273,600
Charged to profit and loss (13,680) -
At 31 December 259,920 273,600
------------ ------------
During 2022 the expected net reversal of deferred tax of
EUR13,680 relates to amortization of intangible assets.
Deferred tax assets of approximately EUR392,000 (2021:
EUR374,000) have not been recognized in respect of losses that can
be carried forward against future taxable income.
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:
2022 2021
Financial assets EUR EUR
Trade and other receivables (Note 12
) 52,532 89,045
Cash and cash equivalents (Note 1 3
) 359,053 827,302
-------- --------
Total 411,585 916,347
-------- --------
In accordance with IFRS 9, all financial assets are held at
amortised cost.
2022 2021
Financial liabilities EUR EUR
Trade and other payables(1) (Note
20 ) 2,179,077 2,288,043
Deferred consideration for acquisition
of Oddsen.nu - 1,050,000
Accrued liabilities 4 65,707 267,026
Borrowings (Note 19 ) 655,646 -
---------- ----------
Total 3,300,430 3,605,069
---------- ----------
(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
2022 has been assessed by the Board to being immaterial.
Financial assets which are past due but not impaired
2022
Up to Up to
3 months 12
Not yet over months Over 1 year
overdue due over due over due Total
EUR EUR EUR EUR EUR
Trade receivables 52,532 - - - 52,532
Other receivables 141,095 - - - 141,095
Total 193,627 - - - 193,627
--------- ---------- ---------- -------------- --------------
2021
Up to Up to
3 months 12
Not yet over months Over 1 year
overdue 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
--------- ---------- ---------- -------------- --------------
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:
2022
Between
3
months
In 3 and 1 More than
On demand months year 1 year Total
EUR EUR EUR EUR EUR
Borrowings - - - 655,646 655,646
Trade and other
payables (1) 2,009,077 170,000 - - 2,179,077
Accrued liabilities 12,666 453,041 - - 465,707
----------- --------- -------- ------------ --------------
Total 2,021,743 623,041 - 655,646 3,300,430
----------- --------- -------- ------------ --------------
(1) Excludes taxes payable.
2021
Between
3
months
In 3 and 1 More than
On demand months year 1 year Total
EUR EUR EUR EUR EUR
Trade and other
payables (1) 3,286,334 - - - 3,286,334
Accrued liabilities - 318,735 - - 318,735
----------- --------- -------- ---------- --------------
Total 3,286,334 318,735 - - 3,605,069
----------- --------- -------- ---------- --------------
(1) Excludes taxes payable.
Note 25: Reclassification of Spinbookie consideration
An adjustment of EUR960,240 was made to the 31 December 2021
Statement of Financial position to reclassify the contingent
consideration payable in relation to the Spinbookie acquisition
from Trade and other payables to Other reserves within Equity. This
has occurred following a reconsideration of the relevant clauses
within the sale and purchase agreement and Management conclude that
the fact pattern with the agreement represents equity in nature
rather than liability. This resulted in the following impact:
Balance as originally Reclassification Balance as restated at 31
stated at 31 December 2021 adjustment December 2021
EUR EUR EUR
Impact on statement of
financial position
Trade and Other payables (5,130,869) 960,240 (4,170,629)
Other Reserves 6,046,908 (960,240) 5,086,668
This reclassification adjustment has been reversed in the
accounts ending 31 December 2022.
The consideration to Spinbookie was settled in September 2022,
by issuing 8,600,000 new ordinary shares.
Note 2 6 : 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
T4U Marketing Ltd Cyprus 100% 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 2 7 : Reconciliation of debt
The Group had the following movement in the borrowings:
202 2
At 1 Cash Accrued At 31
January interest December
2022 2022
EUR EUR EUR EUR
Borrowings - 648,466 7,180 655,646
----------- -------- ---------- ----------
- 648,466 7,180 655,646
----------- -------- ---------- ----------
2021
At 1 January Cash Other settlements At 31 December
2021 2021
EUR EUR EUR
Borrowings 2,199,839 1,847,000 (4,046,839) -
------------- ---------- ------------------ ---------------
2,199,839 1,847,000 (4,046,839) -
------------- ---------- ------------------ ---------------
Note 28 : 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 EUR45,250 at 31
December 2022 (2021: EURnil).
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 29 : Ultimate controlling party
As at 31 December 2022 the Directors do not believe there to be
any single controlling party.
Note 30 : Subsequent events
On 6 February 2023 the Company announced that it had raised a
further EUR570,000 (or GBP500,000 ) through subscriptions for
convertible loan notes. In addition, the Company has agreed to
issue a further EUR127,692 (or GBP112,500 ) Loan Notes to a key
marketing partner in lieu of cash settlement due for services.
On 7 February 2023 the Company announced that it had appointed
Mark Blandford as a strategic adviser to the Company with immediate
effect. Mark is a senior industry figure and considered by many to
be one of the founders of the developed online gaming industry.
Having started his career as the owner of a traditional 'bricks and
mortar' bookmaker's chain for over 15 years, he then recognised the
potential of the internet for the industry in the mid-1990s. In
1998 he founded Sportingbet.com, and in 2001 floated the company on
AIM. Mark stepped down from the Board of Sportingbet in 2007 before
its eventual sale in 2013 with the assets being split between
William Hill and GVC. In 2002, he was awarded AIM Entrepreneur of
the Year .
On 5 April 2023, the Company announced that it had raised a
further EUR1.27 million (GBP1.1 million) through subscriptions for
convertible loan notes.
On 19 April 2023, the Company announced that it had granted
options over, in aggregate, 11,500,000 ordinary shares to certain
directors and employees of the Company.
On 30 June 2023, the Company is announcing that it has raised a
further EUR2 million (GBP1.72 million) through subscriptions for
convertible loan notes, the funds of which are expected to be
received before 12 July 2023.
--------------------------------------------
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END
FR EAEKNADLDEAA
(END) Dow Jones Newswires
June 30, 2023 02:00 ET (06:00 GMT)
B90 (LSE:B90)
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