TIDMB90
RNS Number : 3136C
B90 Holdings PLC
18 June 2021
For release: 07.00, 18 June 2021
B90 Holdings plc
("B90", the "Company" or "Group")
Final Results for the year ended 31 December 2020
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 2020 (the "2020 Annual
Report").
The 2020 Annual Report can be found on the Company's website at
www.b90holdings.com .
Commenting on the results, Paul Duffen, executive Chairman
said:
"The operational results were highly impacted as a result of the
global COVID-19 pandemic, which caused a cancellation of the vast
majority of sporting events globally from mid-March 2020. Only in
June 2020, did some of the sporting events resume, and it was not
until the end of the third quarter that most sporting events
resumed.
Commenting on current trading and outlook, he added:
"The Company now has a much more stable financial platform to
grow from. The conversion of the Convertible Loan in April 2021 has
removed the vast majority of the Group's indebtedness and together
with the proceeds from our recent Subscription leaves the Company
with a much improved balance sheet. The Board believes that after a
difficult period, the Group now has a clear strategic plan to grow
its operations and revenues in a targeted way, partnering with
leading affiliates and investing further in marketing to expand
both our core customer base and geographic reach."
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as it forms part of
United Kingdom domestic law by virtue of the European (Withdrawal)
Act 2018
For further information please contact:
B90 Holdings Plc +44 (0)1624 605 764
Paul Duffen, Executive Chairman
Marcel Noordeloos, Chief Financial Officer
Strand Hanson Limited (Nominated Adviser) +44 (0)20 7409 3494
James Harris / James Dance / Rob Patrick
Whitman Howard Ltd (Broker)
Nick Lovering
Belvedere (Financial PR & IR) +44 (0)20 3687 2754
John West / Llewellyn Angus
About B90 Holdings plc
B90 Holdings plc is a group of companies focused on the
operation of its own online Sportsbook and Casino product as well
as marketing activities for other online gaming companies.
Website: www.b90holdings.com
Strategic Report
I hereby present the Annual Report for B90 Holdings plc ("B90"
or the "Company", together with its subsidiaries, the "Group") for
the financial year ended 31 December 2020.
Financial and operational highlights
Revenues from continuing operations: EUR0.8 million (compared to
EUR1.1 million in 2019)(1)
Operating result: EUR2.2 million loss (EUR4.4 million loss in
2019)
Notes:
(1) Revenue derived from the Group's marketing activities in the
sportsbook and casino vertical and from
the online operations from Bet90.
Operational review
During 2019 the Company entered into a heads of terms with
Binbar GmbH to acquire the remaining 49% of Quasar Holdings Ltd
("Quasar") which was then completed in January 2020. Quasar wholly
owns Bet90 Sports Ltd ("Bet90"), an online sportsbook and casino
gaming company, the main focus of operations since the
restructuring which started in 2018. Before the completion of this
acquisition the Group owned 51% of the issued share capital of
Quasar.
As part of the 49% acquisition in Quasar, the Directors decided
to terminate the loss making land-based operations and focus
completely on the online operations with effect from January 2020.
The results of these land-based operations have been recorded as
discontinued operations in the 2019 numbers. Although these
operations generated reasonable gross revenues, the operating and
franchising costs were high, resulting in a loss in relation to
those activities of EUR0.9 million during the year ended 31
December 2019. As a result of the cancellation of the land-based
operations, no further results were recorded during the year
2020.
The Group's operational results were highly impacted as a result
of the global COVID-19 pandamic, which caused a cancellation of the
vast majority of sporting events globally from mid-March 2020. Only
in June 2020, did some of the sporting events resume, and it was
not until the end of the third quarter that most sporting events
resumed. During this period the Company did not generate the
revenues that it had expected to, and operating costs continued as
normal. During the fourth quarter of 2020, operations showed signs
of recovery from this negative impact, but overall still resulting
in lower revenues for the year than expected.
In order to ensure sufficient funding to maintain operations,
the Company announced a number of fundraises during the year:
- on 7 May 2020, that it had raised GBP450,000 (or approximately EUR515,000);
- on 11 September 2020, that it had raised EUR450,000; and
- on 8 December 2020, that it had raised EUR700,000.
These were all under the terms of a convertible loan note, which
has a three year term and 5% annual coupon (payable in arrears at
30 June and 31 December) and convertible at a price of 5 pence per
new Ordinary Share (the "Convertible Loan Note"). The Convertible
Loan Note will automatically convert into new Ordinary Shares if
the closing mid-price of an Ordinary Share is 10 pence or more for
25 consecutive business days.
Subsequent to the reported year-end, the Company announced
further fundraises:
- on 16 March 2021, that it had raised EUR1,847,000 under the
terms of the Convertible Loan Note and
- on 30 March 2021, that it had raised GBP1.1 million (or
approximately EUR1,270,000, before expenses) through a subscription
of 7,796,427 new Ordinary Shares at a price of 14 pence per
Ordinary Share (the "Subscription").
Furthermore, on 23 April 2021, the Company announced that the
outstanding amounts under the Convertible Loan Notes automatically
converted into new Ordinary Shares, the Company's share price
having been 10 pence or higher for more than 25 consecutive
business days.
Financial review
The restructuring of the business, which began in in 2018, was
continued in 2020 which was another challenging year for the Group.
With the acquisition of the remaining 49% of Bet90, the Group's
focus became the operations of the Bet90 sportsbook and casino
brand.
Due to the impact of the global COVID-19 pandemic, the Group
faced financial difficulties, but managed to continue operations by
raising further funds from existing and new investors, via the
Convertible Loan Note described above.
The net result for the year amounted to a loss of EUR2.4 million
(2019: EUR5.2 million loss). The results for 2019 were materially
impacted by the operational loss resulting from the Bet90
land-based operations. Due to the restructuring of the Group's cost
structure, we were able to reduce salaries and general
administrative expenses during 2020, but a decrease in revenue
(mainly as a result of COVID-19) resulted in a loss for the year.
Due to the strategic changes made in 2019 to focus on the online
operations of Bet90, no further impairment charge was recorded on
the intangible assets relating to Bet90 (2019: EUR0.8 million).
Furthermore, during 2019, an impairment charge of EUR0.3 million
was recorded relating to the T4U Marketing domain name (nil in
2020). Due to limited cash resources during the year, the Group was
unable to further increase the Bet90 market spend during the
reported period.
Whilst the Group raised additional funds by way of the issue of
Convertible Loan Note and in equity since the 2020 year-end,
amounting in aggregate to EUR3.1 million, it remains reliant, inter
alia, on being able to manage its cash resources carefully and
trading being in line with management's expectations.
Board changes
During the year, the Company made no changes to its Board and
senior management.
The Company continues to seek a new CEO and an independent
Non-executive Director in-line with the developments of the Company
and further announcements will be made as and when appropriate.
Principal risks and uncertainties
The principal risks and uncertainties factors are included on
page 11 of this report.
Current trading and outlook
The Company now has a much more stable financial platform from
which to grow. The conversion of the Convertible Loan referred to
above has removed the vast majority of the Group's indebtedness and
together with the proceeds from our recent Subscription leaves the
Company with a much improved financial position . The Board
believes that after a difficult period, the Group now has a clear
strategic plan to grow its operations and revenues in a targeted
way, partnering with leading affiliates and investing further in
marketing to expand both our core customer base and geographic
reach.
Whilst trading during the first months of 2021 has been in line
with the Board's revised expectations, the Group continues to
operate at a loss, although management expects to become cash flow
positive during the second half of 2021, executing on a revised
strategic plan to grow the Group's operations and revenues in a
targeted way, entering into strategic partnerships and investing in
further marketing to expand the customer base and geographical
reach.
As a result of the fundraises completed in March 2021 and
conversion of the Convertible Loan Note in April 2021, the
financial position of the Company has significantly improved. Total
assets as per the Group's management accounts as per 30 April 2021
amount to EUR3.4 million.
Dividend
The Directors are not proposing a dividend for the year ended 31
December 2020.
Approved by the Board of Directors and signed on behalf of the
Board.
Paul J Duffen
Executive Chairman, B90 Holdings plc
17 June 2021
Directors' Report
The Directors present their report and consolidated financial
statements for the year ended 31 December 2020.
Principal activities and review of the business
B90 Holdings plc is a company focused on sports betting
operations and casinos games via its wholly owned Bet90 operation,
as well as generating marketing leads and entering into marketing
contracts for the activities of its partners in sports betting and
casinos games. In January 2020, the Company acquired the remaining
49% of Quasar Holdings Ltd. The Group therefore owns 100% of the
Bet90 operations. In conjunction with the full ownership of the
Bet90 Sports Ltd operations, the Company terminated the loss-making
land-based operations from 1 January 2020 and therefore have not
recorded any revenues relating to that during 2020.
The principal activities from 1 January 2020 are therefore
focused completely on operating the online Sportsbook and casino
operation using the domain Bet90.com. Furthermore, the Group
operates an affiliate platform, currently focusing on the German
speaking territory, using the tippen4you.com domain, of which it
owns 51%.
Results and dividends
The Group's results for the year, after taxation, amounted to a
loss of EUR2.4 million (2019: loss of EUR5.2 million). The Group's
2020 results are impacted by the cancellation of the vast majority
of global sporting events as a result of the global COVID-19
pandemic.
As a result of the above, the Directors are proposing not to pay
a dividend for the year ended 31 December 2020.
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 Company'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 revenues in any
period are carried forward and netted off against positive net
revenues in future periods on which commission might otherwise be
payable to the Group. Whilst the Group would not have to cover any
gaming or gambling losses in the existing marketing agreements, the
percentage of earnings retained by the Group might be greatly
reduced as a result of this.
Gaming or gambling losses within the Group's own Bet90
operations would though need to be covered by the Group as and when
they occur. Under the regulation of the Malta Gaming Authority, the
Company 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 Company would need to move funds from its current
account to the accounts that cover the liability to customers,
which would immediately negatively impact the Company's working
capital and its earnings for the period.
Currency risk
The Group is exposed to translation and transaction foreign
exchange risk. As the majority of the Group's transactions are
denominated in Euros, the Directors deem the Group's exposure to
exchange rate fluctuations to be minimal.
Interest rate risk
The Group's exposure to upside interest rate risk is limited.
The loans 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 at
the year-end for either the year ended 31 December 2020 or 31
December 2019. The loans on the Statement of financial position
were all converted into equity subsequent to year end, in April
2021.
Credit risk
The Group's credit risk is primarily attributable to trade
receivables. Trade receivables consist of:
-- Payment service providers (PSPs). PSPs are third-party
companies that facilitate deposits and withdrawals of funds to and
from customers' virtual wallets with the Group. These are mainly
intermediaries
that transact on behalf of credit card companies.
The risk is that a customer or a PSP would fail to discharge its
obligation with regard to the balance owed to the Group.
The Group reduces this credit risk by:
-- Monitoring balances with customers on a regular basis;
-- Monitoring balances with PSPs on a regular basis; and
-- Arranging for the shortest possible cash settlement intervals in all cases.
The Group considers that based on the factors above and on past
experience, the customers and PSP receivables used in the current
businesses are of good credit quality and there is a low level of
potential bad debt as at year-end.
An additional credit risk the Group faces relates to customers
in its own operations disputing charges made to their credit cards
("chargebacks") or any other funding method they have used in
respect of the services provided by the Group. Customers may fail
to fulfil their obligation to pay, which will result in funds not
being collected. These chargebacks and uncollected deposits, when
occurring, will be deducted at source by the payment service
providers from any amount due to the Group. The Group monitors the
need for impairment provisions by considering all reasonable and
supportable information, including that which is forward-looking.
For the year ended 31 December 2020, 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
The Group continued to experience significant difficulties
during 2020, especially after the impact of the global COVID-19
pandemic, which cancelled the vast majority of global sporting
events.
As a result of this, the Group achieved a net loss of EUR2.4
million for the year ended 31 December 2020 Furthermore, the Group
had a negative cash flow from operations of EUR1.6 million for the
year ended 31 December 2020 and the Group expects to report a loss
for the six months ending 30 June 2021. Furthermore, as per 31
December 2020, the Group shows net current liabilities of EUR4.4
million.
Whilst trading during the first months of 2021 has been in line
with the Board's revised expectations, the Group continues to
operate at a loss, although management expects the Group to become
cash flow positive during the second half of 2021, executing on a
revised strategic plan to grow the Group's operations and revenues
in a targeted way, entering into strategic partnerships and
investing in further marketing to expand the customer base and
geographical reach. Furthermore, as a result of the recent
fundraises, completed in March 2021, and the subsequent conversion
of the full outstanding amount of the convertible loan, the Company
has improved its statement of financial position significantly.
Whilst the Group raised additional funds by way of the issue of
convertible loan note and in equity since the 2020 year-end,
amounting in aggregate to EUR3.1 million, 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 mangement's expectations going forward,
the Group's ability to meet its liabilities may be impacted, in
which case the Group will need to raise further funding. In the
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 significant 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.
Subsequent events
On 16 March 2021, the Company announced that it had raised
EUR1,847,000 (or approximately GBP1,585,000) pursuant to
subscriptions for Convertible Loan Notes, at the same date resuming
trading of its shares on the London Stock Exchange, which was
suspended after the Directors announced significant uncertainties
surrounding the Company's financial position on 17 March 2020, at
the time global sporting events were cancelled as a result of the
global COVID-19 pandemic.
On 30 March 2021, the Company announced that it had raised a
further GBP1.1 million (before expenses) through a subscription of
7,796,427 new Ordinary Shares of no par value at a price of 14p per
share. In addition, the Company announced that it had entered into
two new affiliate agreements with RB Journalism SIA (trading as
Oddsen.nu) and E2 Communications Ltd, to access potential new
customers and drive additional traffic to the Bet90 platform. The
Company issued 3.5 million and 1.6 million shares respectively to
the affiliates as a prepayment of affiliate fees amounting to
EUR200,000 and EUR100,000 respectively.
Also on 30 March 2021, the Company announced that it had
received three conversion notices from holders of the outstanding
Convertible Loan Notes. The notes converted at the agreed price of
5p are in respect of EUR300,000 subscribed on 16 September 2019 and
a total of EUR260,000 subscribed on 17 March 2021. The accrued
interest amounts to EUR22,725 and forms part of the conversion as
per the terms of conversion, resulting in the issuance of 9,963,530
new Ordinary Shares .
On 23 April 2021, the Company announced that the issued
Convertible Loan had automatically converted at a price of 5p per
ordinary share of no par value in the capital of the Company, in
accordance with the terms of the Convertible Loan Note. The amount
outstanding as per 23 April 2021 under the Convertible Loan
amounted to EUR3,838,500 (approximately GBP3,328,500), plus accrued
interest amounting to EUR102,161 (approximately GBP88,836) which
resulted in an issuance of 68,346,716 new Ordinary Shares. As a
result, the Company entered into a much more stable financial
platform from which to grow. The conversion of the Convertible Loan
removed the vast majority of the Group's indebtedness and together
with the proceeds from the Subscription completed 30
March 2021, leaving the Company in a much improved financial position .
Directors and their interest
The following Directors held shares and share options as at 31
December 2020:
Number of Number of Exercise Date of grant Vesting
shares held options Price of options period
(GBP) of options
------------- ---------- --------- -------------- ------------
14 February
Paul Duffen 2,800,000 1,000,000 0.15 2019 1-4 Years
Marcel Noordeloos 3,659,954 750,000 0.25 30 June 2016 1-4 years
14 February
Marcel Noordeloos - 550,000 0.15 2019 1-4 years
Mark Rosman 2,983,798 400,000 0.25 30 June 2016 1-4 years
14 February
Mark Rosman - 550,000 0.15 2019 1-4 years
14 February
Rainer Lauffs - 250,000 0.15 2019 1-4 Years
The Group announced on 17 March 2021 that the above options were
cancelled and the same time a total of 6,215,000 options were
granted all at a price of 5p per share. Out of this, a total of
5,700,000 options were granted to directors and 515,000 to other
employees.
Directors who served during the year
Appointed
--------------
Paul Duffen 30 January
2019
Mark Rosman 19 March 2014
Marcel Noordeloos 30 June 2016
Rainer Lauffs 26 March 2018
Directors' responsibilities
The Directors are responsible for preparing the annual report
and the financial statements in accordance with applicable law and
regulations. Company law requires the Directors to keep reliable
accounting records which allow financial statements to be prepared.
In addition, the Directors have elected to prepare group financial
statements in accordance with International Financial Reporting
Standards as adopted by the European Union and applicable law. The
financial statements are required to give a true and fair view of
the state of affairs of the Group and of the profit or loss of the
Group for that year. In preparing these financial statements, the
Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgments and accounting estimates that are reasonable and prudent;
-- state whether applicable IFRSs have been followed, subject to
any material departures disclosed and explained in the financial
statements; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that
the Group will continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and prepare financial statements.
They are also responsible for safeguarding the assets of the
Company 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 Company's auditors are unaware; and
-- the Directors have taken all steps that they ought to have
taken to make themselves aware of any
relevant audit information and to establish that the auditor is aware of that information.
Auditors
The auditors of the Group are Nexia Smith & Williamson,
Chartered Accountants, who were reappointed at the 2019 Annual
General Meeting and will be proposed to be reappointed during the
2020 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. In addition, a number of
jurisdictions have regulated online gaming, and in several of those
jurisdictions the Group, or its operating partner, either holds a
licence or is planning to obtain one, if the market is considered
commercially viable. However, in some cases, lack of clarity in the
regulations, or conflicting legislative and regulatory
developments, mean that the Group may risk failing to obtain an
appropriate licence, having existing licences adversely affected,
or being subject to other regulatory sanctions, including internet
service providers blocking, blocking options to make deposits,
black-listing the Company and fines.
The Group is managing this risk by consulting with legal
advisers in various jurisdictions where its services are marketed
or which generate, or may generate, significant revenue for the
Group. Furthermore, the Group obtains regular updates regarding
changes in the law that may be applicable to its operations,
working with local counsel to assess the impact of any changes on
its operations. Furthermore, the Group's owned operations Bet90,
blocks players from certain "blocked jurisdictions" using multiple
technological methods as appropriate.
Reliance on VIP players
Although the focus of the Company is primarily on the operations
of its own brand Bet90, a large percentage of the commission based
revenue from the Group's marketing activities in the sportsbook and
casino vertical is generated by a small group of high net worth
players, described as "VIP Players". These are loyal players that
regularly deposit high amounts on the websites. 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 brand, Bet90, any
large wins by VIP players could potentially lead to recording a
loss in such cases. The Company 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 Company
may be subject to VAT or similar taxes on transactions, which have
previously been treated as exempt.
The Company seeks to include geographical diversity in its
operations. In order to mitigate the risks that arise, the Company
actively identifies, evaluates, manages and monitors its tax risks
and the geographies in which it operates. The Company works with
external local tax advisers to assist them in this process.
COVID-19 Pandemic
During 2020, the Company'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 majority of the global sporting events have continued 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 in promoting the casino
offering and is looking for external opportunities to expand its
offering to its customers.
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
acquisition in 2017 of the 51% interest in online sportsbook and
casino gaming company, Bet90. The Company acquired the remaining
49% in January 2020 and therefore now owns 100% of the
operations.
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 6, Principal activities and review of the
business)
Principle 2 - Seek to understand and meet shareholder needs and
expectations.
B90 has engaged in active dialogue with shareholders through
regular communication and the Company's Annual General Meeting and
one-on-one discussions. New information is released via the
regulatory news service (RNS) before anywhere else and the website
is update accordingly (see also page 3-4, 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 Company'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 intends to actively
seek to engage regularly with its corporate advisers to ensure
proactive communication regarding the Company's activities. In
doing so, the Company 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 Company
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 its Annual Report (see page 11 for details, going
concern statement on page 8 and post year-end fundraises on page 9)
and regularly reviews its strategies for minimising any adverse
impact to the Company 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 and
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 four Directors of which three are Executives
and one is a Non-executive, reflecting a blend of different
experience and backgrounds. Considering the 2020 fundraises, in
which the Group's Non-excutive Director Mark Rosman has
participated, the Board considers, at this moment, none of the
Directors to be completely independent as a Director in terms of
the QCA guidelines. Accordingly, the composition of the Board does
currently not satisfy the QCA recommendation that there are at
least two independent Non-executive Directors on the Board.
The Board 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 Company information and any Director needing independent
professional advice in the furtherance of his/her duties may obtain
this advice at the expense of the Group.
Although the Board is satisfied that it has a suitable balance
of knowledge of the Group, experience and skills to enable it to
discharge its duties and responsibilities effectively, and that all
Directors have adequate time to fill their roles, the Group intends
to appoint an independent Non-Executive Director in due course and
we will make further announcements as and when appropriate.
The role of the Chairman is to provide leadership of the Board
and ensure its effectiveness on all aspects of its remit to
maintain control of the Group. In addition, the Chairman is
responsible for the implementation and practice of sound corporate
governance.
Our Non-executive director is expected to devote as much time as
is necessary for the proper performance of his duties. Executive
directors are full-time employees or services providers and
expected to devote as much time as is necessary for the proper
performance of their duties.
During 2020 the Board held six (6) formal meetings either in
person or by call, all of which were attended by all Directors. The
Board also passed 6 (6) 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 Company.
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:
Paul J Duffen , Executive Chairman, aged 62, brings over 35
years in management experience in various industries and being an
entrepreneur. Paul was co-founder and Chief Executive Officer
(until 2006) of Catalyst Media Group plc, which specialised in the
sports, media and entertainment sectors, including motor racing in
the USA and Horse Racing in the UK. He subsequently served as
Executive Chairman of Hull City Football Club, securing their first
promotion to the Premier League in 2008 and Chairman of Newsdesk
Media Ltd, an international publishing Group. He currently serves
as a Director of Greenacre Capital Ltd, a property investment
company and as a non-executive Director of Animus Associates Ltd, a
business intelligence consultancy.
Marcel Noordeloos , Chief Financial Officer, aged 52, was Group
Finance Director at Playlogic International NV between 2006 and
2009 and Chief Financial Officer at Playlogic Entertainment Inc
from March 2009 until December 2010 prior to becoming Chief
Financial Officer at the Company. Marcel has held several
management positions with among others Nike EMEA (2002-2006) and
PwC (1992-2001). Marcel holds an RA Degree (Registered Accountant)
from the University of Amsterdam.
Rainer Lauffs, Chief Operating Officer, aged 48, is a business
graduate from Philipps University of Marburg (Germany) and has been
working in the online gaming world since 2006. Among other
projects, he was significantly involved in building up
PartyGaming's business in German and Dutch territories.
Mark Rosman , Non-Executive Director, aged 53, has over 15 years
of experience advising on private equity investments and managing
private equity portfolios. Mark worked for Galladio Capital
Management B.V. for eleven years and held the role of chief
operating officer from 2006 until his departure in 2010. Since
leaving Galladio, Mark has served as chief executive officer of The
Nestegg B.V., a private equity management and advisory firm that
advises high net worth individuals on the structuring and
management of investments. Mark is a law graduate from VU
University Amsterdam and has an MBA from Rotterdam School of
Management.
Due to the size of the Group, the Group has not adopted a formal
diversity policy, other than looking at educational and
professional backgrounds.
The Board also consults with external advisers, such as it
Nominated Adviser and the Company's lawyers, and with executives of
the Company on various matters as deemed necessary and appropriate
by the Board.
Principle 7 - Evaluate Board performance based on clear and
relevant objectives, seeking continuous improvement
B90's Board is small and extremely focussed on implementing the
Group's strategy. However, given the size and nature of the Group,
the Board does not consider it appropriate to have a formal
performance evaluation procedure in place, as described and
recommended in Principle 7 of the QCA Code. The Board will closely
monitor the situation as it grows.
Principle 8 - Promote a corporate culture that is based on
ethical values and behaviours
We are committed to acting ethically and with integrity. We
expect all employees, officers, directors and other persons
associated with us to conduct their day-to-day business activities
in a fair, honest and ethical manner.
For that purpose, we have adopted a Code of Business Conduct and
Ethics ("Code") which applies to all our workforce personnel.
Pursuant to the Code, employees, directors and other relevant
stakeholders are required to comply with all laws, rules and
regulations applicable to us. These include, without limitation,
laws covering anti-bribery, copyrights, trademarks and trade
secrets, data privacy, insider trading, illegal political
contributions, antitrust prohibitions, rules regarding the offering
or receiving of gratuities, environmental hazards, employment
discrimination or harassment, occupational health and safety, false
or misleading financial information or misuse of corporate assets.
The Code also includes provisions for disclosing, identifying and
resolving conflicts of interest of the employees and Board
members.
The Code includes provisions requiring all employees to report
any known or suspected violation and ensures that all reports of
violations of the Code will be handled sensitively and with
discretion. We also recognise the benefits of a diverse workforce
and are committed to providing a working environment that is free
from discrimination.
We have also adopted a share dealing code, regulating trading
and confidentiality of inside information by persons discharging
managerial responsibility and persons closely associated with them
("PDMRs").
We take all reasonable steps to ensure compliance by PDMRs and
any relevant employees with the terms of the dealing code.
Principle 9 - Maintain governance structures and processes that
are fit for purpose and support good decision-making by the
Board
Corporate Governance Committees
The Board has established two committees, of which the
composition is as follows:
Audit committee
Mark Rosman (Chairman)
Paul J Duffen
Remuneration committee
Mark Rosman (Chairman)
Paul J Duffen
The Audit Committee
The Audit Committee meets three 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 the this annual report) and their effect on the financial
statements. The Audit Committee tracked the Principal Risks and
Uncertainties through the year and kept in contact with the Group's
Management, External Service Providers and Advisers and received
regular updates. The Audit Committee is satisfied that there has
been appropriate focus and challenge on the high-risk areas.
Nexia Smith & Williamson, our external auditors, have been
in office since 2013.
The external auditors are invited to attend the Audit Committee
meeting to present their findings and this provides them with a
direct line of communication to the Non-executive Director.
The Remuneration Committee
The terms of reference of the Remuneration Committee are to:
-- recommend to the Board a framework for rewarding senior
management, including Executive Directors,
bearing in mind the need to attract and retain individuals of
the highest calibre and with the appropriate experience to make a
significant contribution to the Group; and
-- ensure that the elements of the remuneration package are
competitive and help in underpinning the
performance-driven culture of the Group.
Principle 10 - Communicate how the company is governed and is
performing by maintaining a dialogue with shareholders and other
relevant stakeholders
The Board is committed to maintaining good communication with
its shareholders and in promoting effective dialogue regarding the
Group's strategic objectives and performance. Institutional
shareholders and analysts have the opportunity to discuss issues
and provide feedback via meetings with the Company. The Annual
General Meeting and any other General Meetings that are held
throughout the year are for shareholders to attend and question the
Directors on the Company's performance. Regular progress reports
are also made via RNS announcements and the point of contacts are
Paul J. Duffen, Executive Chairman and Marcel Noordeloos, CFO.
Our Audit Committee Report is included on pages 19 to 20 of this
Annual Report. Our Remuneration Committee
Report is included on page 21 of this Annual Report.
This report was authorised for issue by the Board on 17 June
2021 .
Paul J Duffen
Executive Chairman, B90 Holdings plc
17 June 2021
Audit Committee Report
General and Composition of the Audit Committee
The Audit Committee is a sub-committee of the Board. The Audit
Committee chairman reports formally to the Board on all matters
within the Committee's duties and responsibilities and on how the
Audit Committee discharges its responsibilities.
The Audit Committee consists of two members, Mark Rosman
(Chairman) and Paul Duffen. Mark Rosman is considered to be
independent.
The biographies of the Audit Committee members are on pages
15-16 under principle six, as well as on the Company's website at
www.b90holdings.com/corporate-info .
The Audit Committee meets at twice a year at appropriate times
in the reporting and audit cycle and otherwise as required. The
Audit Committee also meets regularly with the Company's external
auditors.
Purpose and Responsibilities of Audit Committee
The purpose of the Audit Committee is to assist the Board to
carry out the following functions more efficiently and fully:
-- Oversight of the integrity of the Group's formal reports,
statements and announcements relating to the
Group's financial performance; and
-- Reviewin g compliance with internal guidelines, policies and
procedures and other prescribed internal
standards of behaviour.
To achieve such purposes, the Audit Committee has been assigned
with the following responsibilities:
-- Reviewing the half-year and full-year financial statements
with management and with the external auditors as necessary prior
to their approval by the Board;
-- Reviewing financial results announcements of the Group and
any other formal announcements relating to the Group's financial
performance and recommending them to the Board for approval;
-- Reviewing recommendations from the CFO and the external
auditors on the key financial and accounting
principles to be adopted by the Group in the preparation of the
financial statements;
-- Reviewing the Group's systems for internal financial control;
-- Considering and making recommendations to the Board, to put
to shareholders for approval at the AGM, the appointment,
re-appointment and removal of the Company's external auditors and
oversee the relationship with the external auditors;
-- Reviewing and approving the external audit plan and regularly monitoring the progress of
implementation of the plan;
-- Determining and monitoring the effectiveness and independence of the external auditors.
Main Activities in 2020 and 2021
On 16 March 2021 the Audit Committee reviewed the financial
statements for year end 31 December 2019.
On 16 March 2021 the Audit Committee reviewed the financial
results of the Company for the six months ended 30 June 2020.
External Auditors
The external auditors of the Company are Nexia Smith &
Williamson ("NS&W"). The appointment of NS&W as auditors by
the Audit Committee was based on their performance during past
years. The Audit Committee review of the external auditors
confirmed the appropriateness of their reappointment and included
assessment of their independence, qualification, expertise and
resources, and effectiveness of their audit process.
Both the Board and the external auditors have safeguards in
place to avoid the possibility that the auditors' objectivity and
independence could be compromised. The services provided by the
external auditors include the Audit-related services. In
recognition of public concern over the effect of consulting
services on auditors' independence, the external auditors are not
invited to general consulting work which can affect their
independence as external auditors.
The total remuneration of the external auditors for 2020 and for
2019 was as listed in the table below:
2020 2019
Audit services EUR105,000 EUR89,000
Review of FPPP * EUR35,000 -
*FPPP: Financial Position & Prospects Procedures Report
The Audit Committee remains mindful of the attitude investors
have to the auditors performing non-audit services. The Committee
has clear policies relating to the auditors undertaking non-audit
work and monitors the appointment of the auditors for any non-audit
work, with a view to ensuring that non-audit work does not
compromise the Company's auditors objectiveness and
independence.
The Audit Committee and the auditors found that the external
audit plan for 2020, the audit work of the external auditors for
2020 and the remuneration of the external auditors for 2020 did not
undermine the independence of the external auditors.
Financial Reporting
The Group's trading performance is monitored on an ongoing
basis. An annual budget is prepared, and specific objectives and
targets are set. The budget is reviewed and approved by the Board.
The key trading aspects of the business are monitored daily and
internal management and financial accounts are prepared monthly.
The results are compared to budget and prior year performance.
The Audit Committee has taken and will continue to take further
steps to ensure the Group's control environment is working
effectively and efficiently.
--------------------------------
Mark Rosman
Chairman of the Audit Committee
Remuneration Committee Report
General
The Remuneration Committee is responsible for determining and
recommending to the Board the framework for the remuneration of the
Board chairman, executive directors and other designated senior
executives and, within the terms of the agreed framework,
determining the total individual remuneration packages of such
persons including, where appropriate, bonuses, incentive payments
and share options or other share awards.
The Remuneration Committee consists of two members, Mark Rosman
(Chairman) and Paul Duffen. Mark Rosman is considered independent.
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.
Paul Duffen is not involved in setting
his own remuneration, this is determined by Mark Rosman only;
-- Recommending and monitoring the level and structure of
remuneration for senior management personnel;
-- Reviewing the design of all share incentive plans for
approval by the Board and shareholders.
Share option scheme
On 17 May 2016, the Company adopted a "long term incentive
senior management and Directors' stock option plan" ("the Plan").
Options granted under the Plan will entitle the participant to
acquire Ordinary Shares at a price determined in accordance with
the rules of the Plan.
The Directors' interests in the Company's share options for the
year ended 31 December 2020 are shown on page 9.
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.
---------------------------------
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 2020 which comprise
the Consolidated Statement of Comprehensive Income, the
Consolidated Statement of Financial Position, the Consolidated
Statement of Changes in Equity, the Consolidated Statement of Cash
Flows, and the notes to the consolidated financial statements,
including significant accounting policies. The financial reporting
framework that has been applied in their preparation is applicable
law and International Financial Reporting Standards (IFRSs) as
adopted by the European Union.
In our opinion, the financial statements:
-- give a true and fair view of the state of the group's affairs
as at 31 December 2020 and of the group's loss for the year then
ended; and
-- have been properly prepared in accordance with IFRSs as adopted by the European Union.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the group
in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed entities, and we have
fulfilled our other ethical responsibilities in accordance with
these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
opinion.
Material uncertainty related to going concern
We draw attention to note 1 in the financial statements, which
indicates that at 31 December 2020 the Group is only able to
continue as a going concern if it receives sufficient positive cash
flows from its existing operations as projected by the Directors.
This is contingent on future marketing activity being successful.
If projected revenues are not achieved in quantum or timing, then
the Group will need to raise equity or debt in order to meet its
liabilities as they fall due.
The Group has made a net loss for the year of EUR2.3m, has net
current liabilities of EUR4.3m as at 31 December 2020, has cash
outflow of EUR0.1m in 2020 and is projected to make losses for the
6 month period ending 30 June 2021. The business has raised EUR1.6m
in convertible loan finance during the year ended 31 December 2020,
and a further EUR3.1m in convertible loan finance after the year
ended 31 December 2020 to fund the operations of the business.
These have subsequently been converted to equity in April 2021.
In any event, the Directors consider that no further funding is
likely to be required for working capital purposes should the
business develop as anticipated. If the business continues to make
trading losses, further funds may be required, the other intangible
assets held by the Group at EUR0.17m and the goodwill held at
EUR1.4m may be impaired, additional liabilities may arise and
assets and liabilities currently classified as non-current may
become current.
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 2022, 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 2021 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.
Key audit matters
We identified the key audit matters described below as those
that were of most significance in the audit of the financial
statements of the current period. Key audit matters include the
most significant assessed risks of material misstatement, including
those risks that had the greatest effect on our overall audit
strategy, the allocation of resources in the audit and the
direction of the efforts of the audit team.
In addressing these matters, we have performed the procedures
below which were designed to address the matters in the context of
the financial statements as a whole and in forming our opinion
thereon. Consequently, we do not provide a separate opinion on
these individual matters.
Key audit matter Description of risk How the matter was addressed in the audit
Revenue Recognition Under International We reviewed the Group's accounting policy for revenue
Standards on Auditing recognition and assessed whether it
there is a presumption is in line with industry and international financial
that there are risks of reporting standards ("IFRS").
material
misstatement due to We evaluated the design and implementation of relevant
fraud in relation to internal controls that the Group uses
revenue recognition. to ensure the completeness, accuracy and timing of revenue
Where it is assessed recognised.
that a We performed substantive testing which:
material risk of fraud * Reviewed material revenue contracts with customers;
exists, that class of
transaction must be
assessed as significant * Tested the compliance with IFRS 15
risk.
Revenue is a key
performance indicator * Performed detailed testing on a sample of revenue
of the Group. Revenue transactions, including agreement to third party
based targets may place reports;
pressure
on management to
distort revenue * Where cash has been received, we agreed to bank
recognition. This may statements and remittance; and
result in overstatement
to assist in
meeting current targets * We reviewed the disclosures made by the directors in
or expectations. the financial statements.
------------------------ -----------------------------------------------------------------
Carrying value of other Other intangible assets We reviewed management's accounting policy for impairment
intangible assets should be held at the and assessed whether it is in line
lower of amortised cost with IAS 36.
or their recoverable We evaluated the design and implementation of relevant
amount. Where there is internal controls surrounding the review
an indicator of process of impairment models.
impairment such as a We performed substantive testing which:
loss being made in the * Considered historical trading performance by
financial comparing both revenue and operating profit of the
statements, an Group's trading platforms with projected revenues and
impairment review is operating profits;
undertaken.
Significant judgment is
needed in order to * We assessed and challenged the appropriateness of the
assess the assumptions concerning growth rates and inputs to the
appropriateness of the discount rate against latest market expectations;
carrying value
of these assets, in
particular with * We compared the forecast to the 2021 results to date
reference to cash which is particularly relevant as trading conditions
flows, growth rates, are evolving due to COVID-19;
discount rates
and sensitivity
assumptions. * We challenged and evaluated the directors' assertions
about the Group's future utilisation of assets by
cash generating unit; 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.
------------------------ -----------------------------------------------------------------
Carrying value of The Group holds We reviewed management's accounting policy for impairment
Goodwill Goodwill with a net and assessed whether it is in line
book value of EUR1.4m with IAS 36.
relating to the We have evaluated the design and implementation of relevant
acquisition of Bet90 internal controls surrounding
Sports Limited. An the review process of impairment models.
annual impairment We performed substantive testing which:
review is required to * Considered the implications of the Company's market
be undertaken. capital for the carrying value of goodwill;
Significant judgment is
needed in order to
assess the * Considered historical trading performance by
appropriateness of the comparing both revenue and operating profit of the
carrying value Group's Bet90 Sports and Casino activity;
of the Goodwill, in
particular with
reference to cash * We assessed and challenged the appropriateness of the
flows, growth rates, assumptions concerning growth rates and inputs to the
discount rates discount rate against latest market expectations;
and sensitivity
assumptions.
* We compared the forecast to the 2021 results to date
which is particularly relevant as trading conditions
are evolving due to COVID-19;
* We challenged and evaluated the directors' assertions
about the Group's future utilisation of assets by
cash generating unit; and
* We challenged and evaluated management's sensitivity
analysis of the key variables included within the
value in use calculations.
In performing and to support our procedures, we used our
internal valuation specialists and
third-party evidence.
------------------------ -----------------------------------------------------------------
Our application of materiality
The materiality for the group financial statements as a whole
("group FS materiality") was set at EUR50,000 (2019: EUR79,000).
This has been determined with reference to the benchmark of the
group's gross assets, which we consider to be one of the principal
considerations for members of the Group in assessing the Group's
performance. FS materiality represents 2.5% of the group's gross
assets (2019: 2%% group revenue from both continuing and
discontinued operations) as presented on the face of the
consolidated Statement of Financial Position (2019: consolidated
Statement of Total Comprehensive Income). Due to the lack of
sporting events during parts of 2020 as a result of the global
pandemic, we have changed our benchmark to gross assets as the
Group was focused on obtaining funding in order to continue as a
going concern therefore giving additional emphasis to the Statement
of Financial Position.
Performance materiality for the group financial statements was
set at EUR40,000, being 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 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 80% to reflect the few areas of accounting estimates and
judgments required within the Financial Statements.
An overview of the scope of the audit
Of the group's 14 (2019: 14) reporting components, we subjected
14 (2019: 14) to specific audit procedures where the extent of our
audit work was based on our assessment of the risk of material
misstatement and of the materiality of the Group.
The components within the scope of our work covered 100% of
group revenue, 100% of group loss before tax, and 100% of group
assets.
Other information
The other information comprises the information included in the
Annual Report and Accounts, other than the financial statements and
our auditor's report thereon. The directors are responsible for the
other information contained within the Annual Report and Accounts.
Our opinion on the financial statements does not cover the other
information and we do not express any form of assurance conclusion
thereon.
Our responsibility is to read the other information and, in
doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to be
materially misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required to determine
whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we
conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of directors
As explained more fully in the directors' responsibilities
statement set out on page 10, the directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control
as the directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the group's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud, is detailed below:
We obtained a general understanding of the Group's legal and
regulatory framework through inquiry of management concerning:
- their understanding of relevant laws and regulations;
- the entity's policies and procedures regarding compliance; and
- how they identify, evaluate and account for litigation claims.
We also drew on our existing understanding of the Group's
industry and regulation. We understand that the Group complies with
the framework through:
- Maintaining an active licence through the Malta Gaming
Authority ("MGA") by submitting monthly returns to the MGA and
maintaining records subject to random audits from the MGA.
In the context of the audit, we considered those laws and
regulations:
- which determine the form and content of the financial statements;
- which are central to the Group's ability to conduct its business; and
- where failure to comply could result in material penalties.
We identified the following laws and regulations as being of
significance in the context of the Group:
- Maltese gambling laws; and
- IFRS in respect of the preparation and presentation of the financial statements.
We evaluated potential non-compliance with these laws and
regulations by:
- Reviewing current Maltese gaming service licences and monthly
returns in relation to those licences; and
- Reviewing board minutes for evidence of non-compliance.
The senior statutory auditor led a discussion with senior
members of the engagement team regarding the susceptibility of the
entity's financial statements to material misstatement, including
how fraud might occur. The areas identified in this discussion
were:
- Manipulation of the financial statements, especially revenue
and early recognition of revenue, via fraudulent journal
entries.
The procedures we carried out to gain evidence in the above
areas included:
- Substantive work on revenue (see above KAM); 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.
Nexia Smith & Williamson
25 Moorgate
London
Statutory Auditor
EC2R 6AY
Chartered Accountants
17 June 2021
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended Year ended
31 December 31 December
2020 2019
EUR EUR
Continuing operations
Revenue 4 813,011 1,065,612
Salary expense (1,024,362) (1,347,425)
Marketing and selling expense (381,950) (931,978)
General administrative expense (1,564,866) (1,981,041)
Depreciation, amortisation and
impairment expense 10,11,13 (82,467) (1,181,601)
----------------------------- -------------
Total administrative expenses (3,053,645) (5,442,046)
----------------------------- -------------
Operating loss (2,240,634) (4,376,434)
Finance expense (140,820) (26,454)
Loss before tax 6 (2,381,454) (4,402,888)
Taxation 7 - 104,150
Loss for the period from continuing
operations (2,381,454) (4,298,738)
----------------------------- -------------
Discontinued operations
Loss for the period from discontinued
operations 4 - (907,418)
Loss and total comprehensive loss
for the period (2,381,454) (5,206,156)
----------------------------- -------------
Attributable to:
Equity holders of the Company (2,368,712) (3,799,744)
Non-controlling interests (12,742) (1,406,412)
(2,381,454) (5,206,156)
----------------------------- -------------
Loss per share attributable to
equity holders of the Company
- Basic (in EUR) 8 (0.0248) (0.0472)
- Diluted (in EUR) 8 (0.0248) (0.0472)
Loss per shares on continuing operations,
attributable to equity holders
of the Company
- Basic (in EUR) 8 (0.0248) (0.0414)
- Diluted (in EUR) 8 (0.0248) (0.0414)
Loss per shares on discontinued
operations, attributable to equity
holders of the Company
- Basic (in EUR) 8 - (0.0058)
- Diluted (in EUR) 8 - (0.0058)
The Notes on pages 32 to 54 form part of these financial
statements
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 December 31 December
Note 2020 2019
EUR EUR
Non-current assets
Goodwill 9 1,410,931 1,410,931
Other intangible assets 10 169,095 251,563
Total non-current assets 1,580,026 1,662,494
------------------------------ -------------------------------
Current assets
Trade and other receivables 12 27,496 130,883
Cash and cash equivalents 13 320,525 430,626
Total current assets 348,021 561,509
------------------------------ -------------------------------
Total assets 1,928,047 2,224,003
------------------------------ -------------------------------
Equity and liabilities
Share capital 14 - -
Additional paid-in capital 15 15,466,741 15,162,647
Reverse asset acquisition reserve 16 (6,046,908) (6,046,908)
Equity portion Convertible Bond 19 429,770 149,836
Retained earnings 17 (14,907,070) (8,910,238)
Equity attributable to owners
of the parent (5,057,467) 355,337
------------------------------ -------------------------------
Non-controlling interests 35,856 (2,817,990)
Total shareholders' equity (5,021,611) (2,462,653)
------------------------------ -------------------------------
Non-current liabilities
Borrowings 19 2,199,839 774,891
Total non-current liabilities 2,199,839 774,891
------------------------------ -------------------------------
Current liabilities
Trade and other payables 20 4,725,597 3,887,543
Corporate income tax payable 24,222 24,222
Total current liabilities 4,749,819 3,911,765
------------------------------ -------------------------------
Total equity and liabilities 1,928,047 2,224,003
------------------------------ -------------------------------
Approved by the board on 17 June 2021 and signed on its behalf
by:
Paul Duffen
Chairman
The Notes on pages 32 to 54 form part of these financial
statements
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Other
Equity reserves
Additional portion -
convertible Reverse
Share paid in Loan asset Retained Non-controlling Total
acquisition
capital capital Note reserve earnings Total interest Equity
EUR EUR EUR EUR EUR EUR EUR EUR
Balance as at
1 January
2019 - 14,344,702 - (6,046,908) (5,262,378) 3,035,416 (1,411,578) 1,623,838
----------------------------- ------------ ------------------------ ------------- -------------- ---------------------------- ---------------- -----------------------------
Loss for the
financial
period - - - - (3,799,744) (3,799,744) (1,406,412) (5,206,156)
Convertible
loan note - - 149,836 - - 149,836 - 149,836
Share based
payments - - - - 151,884 151,884 - 151,884
Issue of
share
capital - 817,945 - - - 817,945 - 817,945
Balance as at
31 December
2019 - 15,162,647 149,836 (6,046,908) (8,910,238) 355,337 (2,817,990) (2,462,653)
----------------------------- ------------ ------------------------ ------------- -------------- ---------------------------- ---------------- -----------------------------
Loss for the
financial
period - - - - (2,368,712) (2,368,712) (12,742) (2,381,454)
Convertible
loan note - - 279,934 - - 279,934 - 279,934
Acquisition of non-controlling
interest (see Note 24) - 304,094 - - (3,670,682) (3,366,588) 2,866,588 (500,000)
Share based
payments - - - - 42,562 42,562 - 42,562
Issue of
share
capital - - - - - - - -
Balance as at
31 December
2020 - 15,466,741 429,770 (6,046,908) (14,907,070) (5,057,467) 35,856 (5,021,611)
----------------------------- ------------ ------------------------ ------------- -------------- ---------------------------- ---------------- -----------------------------
The Notes on pages 32 to 54 form part of these financial
statements
CONSOLIDATED STATEMENT OF CASH FLOWS
31 December 31 December
2020 2019
EUR EUR
Cash flows from operating activities
Operating (loss)/profit (2,240,634) (5,283,852)
Adjustments for:
Share based payments 42,562 151,884
Depreciation - 1,238
Amortisation of intangibles 82,467 137,697
Impairment of intangibles - 1,042,665
------------------------------------ ------------------------------------
Cash flow from operations before
working capital changes (2,115,605) (3,950,368)
Decrease in trade and other receivables 103,389 723,329
Increase in trade and other payables 437,115 935,022
------------------------------------ ------------------------------------
Cash flow from operations (1,575,101) (2,292,017)
Tax (paid)/received - -
Cash flow from operating activities (1,575,101) (2,292,017)
------------------------------------ ------------------------------------
Cash flow from investing activities
Acquisitions of non-controlling
interest (200,000) -
Net cash outflow from investing
activities (200,000) -
------------------------------------ ------------------------------------
Cash flow from financing activities
Proceeds of issue of new shares - 300,000
Receipts from loans 1,665,000 1,391,572
Net cash inflow from financing
activities 1,665,000 1,691,572
------------------------------------ ------------------------------------
Net decrease in cash and cash
equivalents (110,101) (600,445)
Cash and cash equivalents at start
of period 430,626 1,031,071
------------------------------------ ------------------------------------
Cash and cash equivalents at end
of period 320,525 430,626
------------------------------------ ------------------------------------
The Notes on pages 32 to 54 form part of these financial
statements
Notes to the Consolidated Financial Statements
For the year ended 31 December 2020
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 Company was named Veltyco Group plc until a name change to
B90 Holdings plc was executed on 3 February 2020.
The Group is focused on the operation of its own online
Sportsbook and Casino product (Bet90 Sports Ltd) as well as
marketing activities for other online gaming companies.
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 2020 are set out below. The accounting policies
have been consistently applied, unless otherwise stated.
Basis of preparation
The Consolidated Financial Statements have been prepared in
accordance International financial reporting standards ("IFRS") in
conformity with the requirements of the EU. The Consolidated
Financial Statements have been prepared under the historical cost
convention and on a going concern basis.
Basis of consolidation
The Consolidated Financial Statements incorporate the results of
B90 Holdings plc (the "Company") and entities controlled by the
Company (its subsidiaries) (collectively the "Group"). Control is
achieved where the Company has the power over the investee, is
exposed, or has rights, to variable returns from its involvement
with the investee and has the ability to use its power to affect
its returns.
The results of subsidiaries disposed of are included in the
consolidated statement of comprehensive income to the effective
date of loss of control and those acquired from the date on which
control is transferred to the Group.
Going concern
The Group continued to experience significant difficulties
during 2020, especially after the impact of the global COVID-19
pandemic, which cancelled the vast majority of global sporting
events.
As a result of this, the Group achieved a net loss of EUR2.4
million for the year ended 31 December 2020 Furthermore, the Group
had a negative cash flow from operations of EUR1.6 million for the
year ended 31 December 2020 and the Group expects to report a loss
for the six months ending 30 June 2021. Furthermore, as per 31
December 2020, the Group shows net current liabilities of EUR4.4
million.
Whilst trading during the first months of 2021 has been in line
with the Board's revised expectations, the Group continues to
operate at a loss, although management expects to become cash flow
positive during the second half of 2021, executing on a revised
strategic plan to grow the Group's operations and revenues in a
targeted way, entering into strategic partnerships and investing in
further marketing to expand the customer base and geographical
reach. Furthermore, as a result of the recent fundraises, completed
in March 2021, and the subsequent conversion of the full
outstanding amount of the convertible loan, the Company has
improved its statement of financial position significantly.
Whilst the Group raised additional funds by way of the issue of
convertible loan note and in equity since the 2020 year-end,
amounting in aggregate to EUR3.1 million, 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 mangement's expectations going forward,
the Group's ability to meet its liabilities may be impacted, in
which case the Group will need to raise further funding. In the
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 significant 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. The balance per 31 December 2020 amount to
EUR1,410,931. The directors have used various estimates, revenue
forecasts and expected future cash flows. The recently completed
fundraises allow the Group to invest in marketing and the Directors
believe this will grow the Bet90 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.
Other areas of estimation
Convertible Bond Note
The Company issued a EUR300,000 (in September 2019), a
GBP500,000 (EUR591,200 in December 2019), a EUR515,000 (in May
2020), a EUR450,000 (in September 2020) and a EUR700,000 (in
December 2020), secured convertible bonds of 5%. Interest payable
twice a year or accrued at the request of the lender. The bonds are
repayable three years from their issue date, they can be converted
at any time into shares at a price of 5p per New Ordinary Share
("Conversion Price") at request of the holder. An automatic
conversion is triggered when the Company's shares are trading above
10p for 25 consecutive dealing days.
Under IAS 32, the convertible bonds are accounted for as a
compound financial instrument. For the calculation of the fair
value of the loan component, the Company has reviewed the market
interest rates for a comparable unsecured loan, with a 3 year term.
The market interest rate used in the calculations is 12%.
Share-Based Payments
Certain employees (including Directors and senior Executives) of
the Company receive remuneration in the form of share-based payment
transactions.
The fair value is determined using the Black-Scholes valuation
model. The Directors believe this is appropriate considering the
effects of the vesting conditions, expected exercise period and the
dividend policy of the Company.
Due to limited trading history, the expected volatility has been
based on the 5-year historical volatility of a mix of share prices
from other companies in the same industry, as well as the overall
market volatility.
New Standards, interpretations and amendments adopted by the
Group
From 1 January 2020 the Group has applied, for the first time,
certain standards, interpretations and amendments. The adoption of
the following standards and amendments to standards did not have a
material impact on the current period or any prior period upon
transition:
- IAS 8, Accounting Policies, Changes in Accounting Estimates
and Errors; amendments to the definition of "material",
- IAS 39 Financial Instruments; amendments as a result of interest rate benchmark reform
- IFRS 3 Business Combinations; amendments to the definition of a business,
- IFRS 7 Financial Instruments: Disclosures; amendments as a
result of interest rate benchmark reform, and
- IFRS 9 Financial Instruments: Recognition and Measurement;
amendments as a result of interest rate benchmark reform.
New Standards that have not been adopted by the group as they
were not effective for the year
The standards and interpretations that are issued, but not yet
effective, excluding those relating to annual improvements, up to
the date of issuance of the Group's financial statements are
disclosed below. The Group intends to adopt these standards, if
applicable, when they become effective. None of these are expected
to have a significant effect on the consolidated financial
statements of the Group as set out below:
- IAS 1 Presentation of Financial Statements Amendments to the
classification of liabilities as current or non-current 1 January
2023
- IAS 16 Property, Plant and Equipment Amendments to the
definition of sales proceeds and related costs 1 January 2022
- IAS 37 Provisions, Contingent Liabilities and Contingent
Assets; Amendments to the definition of costs to fulfil an onerous
contract 1 January 2022
- IAS 41 Agriculture Amendments to the measurement techniques
for biological assets 1 January 2022
- IFRS 1 First-time adoption of IFRS Annual improvements to IFRS
Standards 2018-2020 cycle 1 January 2022
- IFRS 3 Business Combinations Updating a reference to the Conceptual Framework 1 January 2022
- IFRS 17 Insurance Contracts Original issue 1 January 2021
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 consists of income from activities and income generated
on customer deposit and withdrawals and account fees.
Revenue from these activities comprises:
Sportsbook
Sport online gaming revenue comprises bets placed less pay-outs
to customers, adjusted for the fair value of open betting positions
, adjusted for the fair value of certain promotional bonuses
granted to customers.
Landbased revenue comprises of the bets placed less pay-outs to
customers. Commissions paid to the shop owners are recorded as cost
of sale.
Casino
Casino and Bingo 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
Company acts as the agent. Revenue from marketing contracts with
customers is recognised when the reports are received from the
customers on which the Company is basing the amounts to be
invoiced. 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 for domain names is ten years. The useful life of customer
lists is 1 to 8 years.
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 relationship Excess earnings 1-8 years
Domain names Relief from royalty 20 years
Licenses Cost approach 3 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 .
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. At this point 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. Nomimal 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 Veltyco Group plc (currently named 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.
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, 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 or less and bank overdrafts.
Finance income is recognised on bank balances as and when it is
receivable.
Trade payables
Trade payables, including customer balances, are recognised
initially at fair value and subsequently measured at amortised cost
using the effective interest method.
Financial liabilities
Financial liabilities are classified as financial liabilities
measured at amortised cost. The Group determines the classification
of its financial liabilities at initial recognition. The
measurement of financial liabilities is initially recognised at
fair value and subsequently measured at amortised cost using the
effective interest method. Amortised cost is calculated by taking
into account any issue costs and any discount or premium on
settlement. Gains and losses arising on the repurchase, settlement
or cancellation of liabilities are recognised respectively in
interest and other revenues and finance costs.
Borrowings and finance costs
Borrowings are initially recognised at fair value net of
transaction costs incurred. Borrowings are subsequently stated at
amortised cost; any difference between the proceeds (net of
transaction costs) and the redemption value is recognised in the
profit and loss over the period of the borrowings using the
effective interest method. Borrowings are classified as current
liabilities unless the Group has an unconditional right to defer
settlement of the liability for at least 12 months after the date
of the Statement of Financial Position.
Convertible Bond Note
The proceeds received on issue of the Group's convertible bond
note are allocated into their liability and equity components. The
amount initially attributed to the debt component equals the
discounted cash flows using a market rate of interest that would be
payable on a similar debt instrument that does not include an
option to convert. Subsequently, the debt component is accounted
for as a financial liability measured at amortised cost until
extinguished on conversion or maturity of the bond. The balance of
the proceeds is allocated to the equity conversion option and is
recognised in the ' Equity portion of the convertible loan note '
within shareholders' equity, net of income tax effects. Issue costs
incurred are allocated between liability and equity in proportion
to the value of each component.
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 a single
activity, being the marketing and promotion of gaming websites,
lottery and online financial trading. Therefore, the Group is
organised into one operating segment and there is one primary
reporting segment. The segment information is the same as that set
out in the Consolidated Statements of Comprehensive Income,
Consolidated Statements of Financial Position, Consolidated
Statements of Changes in Equity and Consolidated Statements of Cash
Flows.
Revenue originates from:
2020 2019
EUR EUR
British Virgin Islands - 195,790
Malta 813,011 869,822
Total 813,011 1,065,612
-------- ----------
The Board evaluates the operations based on the revenues metric.
Revenues consist of invoiced commissions for the marketing and
player acquisition services provided mainly via the BVI entity,
with none recognised in 2020, as well as revenues generated from
own operations, based in Malta. B90 operates an integrated business
model and, therefore, does not allocate operating expenses, assets
and liabilities to any of the originating countries.
During 2019 the Group operated both an online as well as offline
sportsbook and casino. At the completion of the 49% acquisition of
Quasar Holdings Ltd in January 2020, the Group also terminated
operations of the (loss making) offline sportsbook operations.
The land-based operations of the Group were discontinued with
effect from 31 December 2019. The results of these discontinued
operations were as follows:
2020 2019
EUR EUR
Revenue - 2,896,012
Net operation costs - (3,803,430)
Loss from operations - (907,418)
------- ------------
During the year the discontinued operations contributed EURnil
(2019: EUR 907,418 negative) to the Group's net operating cash
flows. No contributions to the Group's investing and financing
activities for both 2019 and 2020.
Note 5: Key management remuneration
Key management remuneration for each period was as follows:
Share Total Total
Cash based based Remuneration Remuneration
salary payments 2020 2019
EUR EUR EUR EUR
Paul Duffen 104,000 2,753 106,753 134,182
Marcel Noordeloos 144,000 3,472 147,472 149,563
Mark Rosman 37,800 2,558 40,358 54,440
Rainer Lauffs 156,000 2,646 158,646 160,309
Total 441,800 11,429 453,229 498,494
----------- ---------- -------------- --------------
Note 6: Profit for the year
Profit before taxation is stated after charging/(crediting):
Year ended Year ended
31 December 31 December
2020 2019
EUR EUR
Depreciation of property, plant
and equipment - 1,238
Amortisation of intangibles 82,467 137,698
Impairment of intangibles - 1,042,665
Short term lease expense - 3,734
Share based payment charge 42,562 151,884
Foreign exchange (gains) (823) 2,698
Note 7: Taxation
Year ended Year ended
31 December 31 December
2020 2019
EUR EUR
Loss before tax (2,381,454) (4,402,888)
------------- -------------
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 - (104,150)
Effect of different tax rates in other
countries -
-
Tax credit - (104,150)
------------- -------------
Note 8: Earnings per share (basic and diluted)
Year ended Year ended
31 December 31 December
2020 2019
EUR EUR
Earnings
Earnings for the purposes of basic and
diluted earnings per share, being net
profit after tax attributable to equity
shareholders
* Continuing operations (2,368,712) (3,336,960)
* Discontinued operations - (462,783)
* Continuing and discontinued operations (2,368,712) (3,799,744)
Number of shares
Weighted average number of ordinary
shares for the purposes of:
Basic earnings per share 95,681,159 80,528,381
Diluted earnings per share 95,681,159 80,528,381
------------- -------------
Basic loss per share (in EUR) (0.0248) (0.0472)
Diluted loss per share (in EUR) (0.0248) (0.0472)
Loss per share from continuing operations
Basic loss per share (in EUR) (0.0248) (0.0414)
Diluted loss per share (in EUR) (0.0248) (0.0414)
Loss per share from discontinued operations
Basic loss per share (in EUR)
Diluted loss per share (in EUR) - (0.0058)
- (0.0058)
------------- -------------
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 2019 1,410,931
Additions -
Impairments -
At 31 December 2019 1,410,931
----------
Additions -
Impairments -
----------
At 31 December 2020 1,410,931
----------
Net Book Value
At 1 January 2019 1,410,931
----------
At 31 December 2019 1,410,931
----------
At 31 December 2020 1,410,931
----------
Goodwill
Goodwill arose following the acquisition of 51% in Quasar
Holdings Ltd in 2017.
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 have been applied to revenue and are based
on past experience, including the results between 2017 and 2020.
Key assumptions in preparing these cash flow projections include
significant growth in revenue, a stable level of costs per customer
acquisition and the expectation that the Group will continue to
operate in the countries currently being covered. The growth
anticipated would see revenues rise significantly in the second
half of 2021. If the Directors' forecasts are not met, a material
impairment of goodwill may be necessary.
The Directors have performed an impairment review at the end of
the year. This is done based on the discounted cash flow growth
methodology, using the 2017 to 2020 results as the basis for the
review, for which a weighted average cost of capital ("WACC") rate
was used of 26% and a 2% long term growth rate after 5 years was
used for the Bet90 operations. Whereas the Directors believe the
WACC rate is conservative, an increase in WACC rate to 45%,
combined with a 50% sensitivity on profit forecast, would produce a
material impairment of goodwill.
The annual impairment review showed that no impairment was
needed for the years 2020 and 2019.
In assessing for impairment, the recoverable amount has been
based on value in use.
Note 10: Other intangible assets
Customer Brand and Licences Total
database domain names and other
EUR EUR EUR EUR
Cost
At 1 January 2019 4,061,742 4,570,103 105,000 8,736,845
Additions (1) - - - -
Disposals (4,000,000) - - (4,000,000)
------------ -------------- ----------- ------------
At 31 December 2019 61,742 4,570,103 - 4,736,845
Disposals - - - -
At 31 December 2020 61,742 4,570,103 105,000 4,736,845
------------ -------------- ----------- ------------
Amortisation
At 1 January 2019 (4,042,569) (3,197,039) (65,312) (7,304,920)
Charge for the period (19,173) (86,024) (32,500) (137,697)
Impairment - (1,042,665) - (1,042,665)
Disposals 4,000,000 - - 4,000,000
At 31 December 2019 (61,742) (4,325,728) (97,812) (4,485,282)
Charge for the period - (75,280) (7,188) (82,468)
Impairment - - - -
At 31 December 2020 (61,742) (4,401,008) (105,000) (4,567,748)
------------ -------------- ----------- ------------
Net Book Value
At 1 January 2019 19,173 1,373,064 39,688 1,431,925
------------ -------------- ----------- ------------
At 31 December 2019 - 244,375 7,188 251,563
------------ -------------- ----------- ------------
At 31 December 2020 - 169,095 - 169,095
------------ -------------- ----------- ------------
The brand and domain names relate to the acquisition of Quasar
Holdings Ltd and T4U Marketing ltd in 2017.
The database acquired in 2018 contained data from financial
trading operations and considering current operations and GDPR
rules it will be unusable for the current sportsbook operations and
was therefore destroyed in 2019.
The Directors have performed an impairment review at the end of
the year, including sensitivity analyses. This is done based on the
"relief from royalty" methodology, using the previous years results
as the basis for the review, for which a weighted average cost of
capital ("WACC") rate was used of 26% and a growth rate of 2%. A
royalty rate of 2.5% was used for the impairment review of Quasar
Holdings ltd and a 12.5% royalty rate for T4U marketing ltd.
The impairment review resulted in an impairment to brand and
domainnames of EUR259,864 for the year 2019 for T4U Marketing Ltd.
For the year 2019, an impairment of EUR782,801 was recorded for the
domainname Bet90.com, resulting in a total impairment charge for
the year 2019 of EUR1,042,665.
No impairment charge is recorded for the year 2020.
Note 11: Property, plant & equipment
Furniture
& equipment Computers Total
EUR EUR EUR
Cost
At 1 January 2019 4,500 1,005 5,505
Additions - - -
Disposals - - -
------------- ------------ --------
At 31 December 2019 4,500 1,005 5,505
Additions - - -
Disposals - - -
------------- ------------ --------
At 31 December 2020 4,500 1,005 5,505
------------- ------------ --------
Depreciation
At 1 January 2019 (3,262) (1,005) (4,267)
Charge for the period (1,238) - (1,238)
Disposals - - -
------------- ------------ --------
At 31 December 2019 (4,500) (1,005) (5,505)
Charge for the period - - -
Disposals - - -
------------- ------------ --------
At 31 December 2020 (4,500) (1,005) (5,505)
------------- ------------ --------
Net Book Value
At 1 January 2019 1,238 - 1,238
------------- ------------ --------
At 31 December 2019 - - -
------------- ------------ --------
At 31 December 2020 - - -
------------- ------------ --------
Note 12: Trade and other receivables
Year ended Year ended
31 December 31 December
2020 2019
EUR EUR
VAT receivables 27,496 59,333
Other receivables and prepayments - 71,550
Total 27,496 130,883
------------- -------------
Credit risk arises when a failure by counter parties to
discharge their obligations could reduce the amount of future cash
inflows from financial assets on hand at the reporting date. The
Group has policies in place to ensure that provision of services is
made to customers with an appropriate credit history and monitors
on a continuous basis the ageing profile of its receivables.
The Group's exposure to credit risk is influenced mainly by the
individual characteristics of each customer. However, management
also considers the factors that may influence the credit risk of
its customer base, including the default risk of the industry and
country in which customers operate. Due to the nature of the
Group's operations the Group only has a few customers.
Impairment
A provision for impairment of trade receivables is established
using an expected loss model. Expected loss is calculated from a
provision matrix based on the expected lifetime default rates and
estimates of loss on default. No impairment charge was recorded
during the year ended 31 December 2019 and 31 December 2020.
Note 13: Cash and cash equivalents
Year ended Year ended
31 December 31 December
2020 2019
EUR EUR
Cash held in current accounts 320,525 384,346
Restricted cash - 46,280
Total 320,525 430,626
------------- -------------
The restricted cash related to a regulatory amount to cover
liabilities to players at year-end.
Note 14: Share capital
Year ended Year ended
31 December 31 December
2020 2019
EUR EUR
Allotted, called up and fully paid
95,889,492 (2018: 90,889,492) - -
------------- -------------
Ordinary shares
Par value of the shares nil nil
------------- -------------
On 17 January 2020, the Company issued 5,000,000 new Ordinary
Shares pursuant to the 49% in Quasar Holdings ltd not owned at that
time.
Note 15: Additional paid in capital
Additional paid in capital represents amounts subscribed for
share capital in excess of nominal 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 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.
As at 31 December 2020, the following options have been granted
under the Plan:
A total of 4,150,000 share options have a grant date of 30 June
2016, with an exercise price of GBP0.25 for all of the options.
These options expire on its 5(th) anniversary on 30 June 2021.
Further to this, 800,000 options have a grant date of 22 May 2017,
with an exercise price of GBP0.25 for all of the options. These
800,000 options expire on its 5(th) anniversary on 22 May 2022.
These options vest over 4 equal yearly instalments starting 1 year
after grant date provided that the participant remains a Director
or employee of the Company during this period.
During 2017, a total of 262,500 of these options were exercised,
all with an exercise price of GBP0.25 per share, for which the
Company issued new Ordinary Shares. Furthermore, during 2018, a
total of 437,500 options have been exercised, all with an exercise
price of GBP0.25 per share, for which the Company issued new
Ordinary Shares. Also, during those years a total of 1,025,000
options were cancelled due to employees or directors leaving the
Company.
On 22 May 2017, the Board granted 800,000 share options to key
employees with an exercise price of GBP0.25 for all of the options.
These options expire on its 5(th) anniversary on 22 May 2022. All
options vest over 4 equal yearly instalments starting 1 year after
the grant date.
On 14 February 2019, the Board granted 2,420,000 share options
to Directors and key employees with an exercise price of GBP0.15
for all of the options. These options expire on its 5(th)
anniversary on 14 February 2024. All options vest over 4 equal
yearly instalments starting 1 year after the grant date provided
that the participant remains a Director or employee of the company
during this period
As a result of the above the total of 5,645,000 options are
outstanding at 31 December 2020.
Warrants
On 30 June 2016, the Company issued new Ordinary Shares in
relation to funds raised and loans converted as part of the reverse
merger and re-admission of the Group. As part of this fundraise and
conversion, the Company issued 1 warrant for every 5 new Ordinary
Share allotted pursuant to the conversion and subscription
agreements, exercisable at GBP0.31 per warrant at any time during
the period from the date of issue until the 5(th) anniversary of
issue.
As a result of this a total of 758,221 warrants were issued on
30 June 2016. On 2 September 2016, the Company issued a further
175,798 warrants at the same conditions as part of completion of
the subscription agreements in relation to the reverse merger.
Furthermore, on 30 June 2016, 500,000 existing warrants were
converted into 20,000 warrants as part of the 25 to 1 consolidation
of shares. These warrants have an exercise price of GBP0.75. These
warrants had an end-date of until 17 February 2019, were not
exercised and have therefore lapsed.
On 4 October 2017, the Company issued 109,846 warrants to Strand
Hanson Limited, on their appointment of being Nominated Adviser for
the Company on 4 October 2017. These warrants have an exercise
price of GBP0.895 per warrant and can be exercised during the
period from the date of issue until the 5(th) anniversary. During
2019, the Company agreed to reprice these options to an exercise
price of GBP0.15 per warrant. The other conditions have not
changed.
During 2017, a total of 733,521 warrants with an exercise price
of GBP0.31 per share were exercised, for which the Company issued
new Ordinary Shares.
No warrants have been exercised during 2019 and 2020.
As a result of the above a total of 310,344 warrants are
outstanding at 31 December 2020.
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
2018 5,767,844 0.314
Exercisable as at 1 January
2018 957,999 0.264
Options exercised on 16 February
2018 (250,000) 0.250
Options exercised on 19 July
2018 (187,500) 0.250
---------------------- -----------------
Outstanding as at 31 December
2018 5,330,344 0.335
Exercisable as at 31 December
2018 1,850,000 0.326
Options granted on 14 February
2019 2,420,000 0.150
Cancelled on 14 February 2019 (900,000) 0.650
Forfeited during 2019 (875,000) 0.250
Warrants lapsed on 17 February
2019 (20,000) 0.750
---------------------- -----------------
Outstanding as at 31 December
2019 5,955,344 0.210
Exercisable as at 31 December
2019 2,585,344 0.250
Outstanding as at 31 December
2020 5,955,344 0.210
Exercisable as at 31 December
2020 3,940,344 0.235
The options outstanding as at 31 December 2020 had a weighted
average remaining contractual life of 1.1 years. The value of the
options has been derived by using a Black Scholes pricing model for
the options granted on 22 May 2017 and granted on 14 February 2019.
The inputs into the pricing models were as follows:
Options granted Options granted Warrants
on on granted on
22 May 2017 5 July 2017 14 February
2019
Share price at grant GBP0.52 GBP0.62 GBP0.0725
date
Exercise price GBP0.25 GBP0.65 GBP0.15
Volatility 34.3% 34.3% 34.3%
Expected life 5 years 5 years 5 years
Risk free rate 2.51% 2.51% 1.4%
Expected dividend yield 0% 0% 0%
As the Company has only been trading since 30 June 2016, 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 30 June 2016 is
EUR173,129. Of this amount, EUR9,789 has been charged in the
financial statements for the year ended 31 December 2020 (2019:
EUR16,315). There is no remaining balance at the end of the year
2020.
The total value of the options granted on 22 May 2017 is
EUR287,272. Of this amount, EUR26,333 has been charged in the
financial statements for the year ended 31 December 2020 (2019:
EUR56,935). The remaining balance of EUR7,900 will be charged in
the financial statements of the year ending 31 December 2021.
The total value of the options granted on 5 July 2017 is
EUR276,712. These options were cancelled per 14 February 2019. The
unamortised balance amounting to EUR68,806 was charged to the
income statement for the year ended 31 December 2019.
The total value of the options granted on 14 February 2019 is
EUR22,250. Of this amount, EUR6,469 has been charged in the
financial statements for the year ended 31 December 2020 (2019:
EUR9,828). The remaining balance of EUR5,952 will be charged in the
financial statements of the years ending 31 December 2021 and
2022.
Note 19: Borrowings
31 December 31 December
2020 2019
EUR EUR
Convertible loan (1) 2,199,839 746,661
Loan from a shareholder - 28,230
2,199,839 774,891
------------ ------------
(1) The Convertible Loan has a 3 year term, bears a 5% coupon,
which is payable in arrears at 30 June and 31 December (with the
first payment due on 30 June 2020). The Loan can be converted by
the note holder at any time and will automatically convert into new
Ordinary Shares when the share price exceeds 10p for 25 consecutive
days. The Convertible Loan is unsecured and will be repaid in full
on its third year anniversary if not converted by this date.
The Company issued the following unsecured convertible bonds of
5%:
-- In September 2019 an amount ofEUR300,000
-- In December 2019 an amount of EUR591,200 (or GBP500,000)
-- In May 2020 an amount of EUR515,000
-- In September 2020 an amount of EUR450,000, and
-- In Decmember 2020 and amount of EUR700,000
Interest on this convertible bond was payable twice a year or
accrued at the request of the lender. The bonds are repayable three
years from their issue date, they can be converted at any time into
shares at a price of 5p per New Ordinary Share ("Conversion Price")
at request of the holder. An automatic conversion is triggered when
the Company's shares are trading above 10p for 25 consecutive
dealing days.
Under IAS 32, the convertible bonds are accounted for as a
compound financial instrument. The value of the liability component
and the equity conversion component were determined at the date the
instrument was issued. The fair value of the liability component,
included in non-current borrowings, was calculated using a market
interest rate for an equivalent instrument without conversion
option with the balance recorded as shares to be issued.
The value of the liability is held on the Statement of financial
position at amortised cost. This value will increase to its
principal value of EUR2,515,000 over the life of the instrument,
with interest costs being taken to the Consolidated Statement of
Comprehensive Income on an monthly basis.
Note 20: Trade and other payables
31 December 31 December
2020 2019
EUR EUR
Trade payables 1,823,794 1,649,049
Accrued expenses 676,764 553,406
Liabilities to customers 295,620 191,729
Other creditors 1,927,419 1,493,359
4,725,597 3,887,543
------------ ------------
Note 21: Capital commitments
At 31 December 2020 and 31 December 2019 there were no capital
commitments.
Note 22: Contingent assets and liabilities
The Group has a contingent receivable amounting to approximately
EUR200,000 relating to the affiliate operations during the years
2019 and 2020. The Group has involved legal assistance to recover
those funds.
There were no contingent liabilities at 31 December 2020 or 31
December 2019.
Note 23: 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:
2020 2019
Financial assets EUR EUR
Trade and other receivables (Note
12) 27,496 130,883
Cash and cash equivalents (Note 13) 320,525 430,626
------- -------
Total 348,021 561,509
------- -------
In accordance with IFRS 9, all financial assets are held at
amortised cost.
2020 2019
Financial liabilities EUR EUR
Trade and other payables(1) (Note
20) 3,074,010 2,551,828
Payable to directors 258,775 61,500
Compliance tax payable 716,048 720,809
Accrued liabilities 676,764 553,406
Borrowings (Note 19) 2,199,839 774,891
--------- ---------
Total 6,925,436 4,662,434
--------- ---------
(1) Excludes taxes payable.
In accordance with IFRS 9, all financial liabilities are held at
amortised cost.
Capital
The capital employed by the Group is composed of equity
attributable to shareholders. The primary objective of the Group is
maximising shareholders' value, which, from the capital
perspective, is achieved by maintaining the capital structure most
suited to the Group's size, strategy, and underlying business risk.
There are no demands or restrictions on the Group's capital.
The main financial risk areas are as follows:
Credit risk
Trade receivables
For the Group's operations in Bet90, the credit risk relates to
customers disputing charges made to their credit cards
("chargebacks") or any other funding method they have used in
respect of the services provided by the Group. Customers may fail
to fulfil their obligation to pay, which will result in funds not
being collected. These chargebacks and uncollected deposits, when
occurring, will be deducted at source by the payment service
providers from any amount due to the Group. The risk for the year
2020 has been assessed by the Board to being immaterial.
Financial assets which are past due but not impaired
2020
Up to 3 Up to 12
Not yet months months Over 1 year
overdue over due over due over due Total
EUR EUR EUR EUR EUR
Other receivables 27,496 - - - 27,496
Total 27,496 - - - 27,496
-------- --------- --------- ------------ ----------
2019
Up to 3 Up to 12
Not yet months months Over 1 year
overdue over due over due over due Total
EUR EUR EUR EUR EUR
Trade receivables - - - - -
Accrued income - - - - -
Other receivables 60,287 - - 70,597 130,883
Total 60,287 - - 70,597 130,883
-------- --------- --------- ------------ ----------
The amount over 1 year overdue relate to funds held by SATA bank
in Malta. SATA bank has lost its banking licenses and are currently
under investigation with the European Central Bank ("ECB"). Funds
have been secured by the ECB and will be released in due course,
although timing is still unsure.
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:
2020
Between
3
months More than
On demand In 3 months and 1 year 1 year Total
EUR EUR EUR EUR EUR
Trade and other
payables (1) 4,048,833 - - - 4,048,833
Accrued liabilities - 676,764 - - 676,764
Borrowings - - - 2,199,839 2,199,839
----------- ----------- ----------- ---------- -----------
Total 4,048,833 676,764 - 2,199,839 6,925,436
----------- ----------- ----------- ---------- -----------
(1) Excludes taxes payable.
2019
Between
3
months More than
On demand In 3 months and 1 year 1 year Total
EUR EUR EUR EUR EUR
Trade and other
payables (1) 3,334,137 - - - 3,334,137
Accrued liabilities - 553,406 - - 553,406
Borrowings - - - 774,891 774,891
----------- ----------- ----------- ---------- -----------
Total 3,334,137 553,406 - 774,891 4,662,434
----------- ----------- ----------- ---------- -----------
(1) Excludes taxes payable.
Note 24: List of subsidiaries
The Company held the issued shares of the following subsidiary
undertakings as at 31 December 2020:
Proportion
of ownership
and voting
Name of subsidiary Place of Incorporation power Ownership
----------------------- ----------------------- -------------- ----------------------------------
B90 Ventures Ltd Isle of Man 100% Direct
B90 Services BV The Netherlands 100% Direct
Sheltyco Enterprises British Virgin 100% Direct
Group Ltd Islands
Sheltyco Enterprises Cyprus 100% Indirect, through Sheltyco
Ltd Enterprises Group Ltd
Sheltyco Enterprises Cyprus 100% Indirect, through Sheltyco
Marketing Ltd Enterprises Group Ltd
Silkline Marketing Ltd Cyprus 100% Indirect, through Sheltyco
Enterprises Group Ltd
Tunegames Marketing Cyprus 100% Indirect, through Sheltyco
Ltd Enterprises Group Ltd
Tunegames Holding Ltd Cyprus 100% Indirect, through Sheltyco
Enterprises Group Ltd
T4U Marketing Ltd Cyprus 51% Indirect, through Sheltyco
Enterprises Group Ltd
Marsovia Holding 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
Veltyco Licensing Ltd Malta 100% Indirect, through B90 Ventures
Ltd
* On 17 January 2020 the Company announced that it had completed
the acquisition of the 49% of Quasar Holdings Ltd ("Quasar") not
owned by the Company from Binbar GmbH. Quasar wholly owns Bet90
Sports Ltd, the online sportsbook and casino gaming company.
Note 25: Reconciliation of debt
The Group had the following movement in the borrowings:
At 1 January Cash Other settlements At 31 December
2020 2020
EUR EUR EUR
Borrowings 774,891 1,424,948 - 2,199,839
------------- ---------- ------------------ ---------------
774,891 1,424,948 - 2,199,839
------------- ---------- ------------------ ---------------
At 1 January Cash Interest Converted Other settlements At 31
2019 Charged to equity December
2019
EUR EUR EUR EUR EUR
Borrowings 27,858 891,572 10,612 (149,836) (5,315) 774,891
Loans from
directors - 500,000 17,945 (517,945) - -
------------- ---------- --------- ----------- ------------------ ----------
27,858 1,391,572 28,557 (667,781) (5,315) 774,891
------------- ---------- --------- ----------- ------------------ ----------
Note 26: Related party transactions
Remuneration of Directors and key employees
Remuneration of Directors and key employees is disclosed in Note
5.
Loan from Directors
On 1 April 2019, the Company entered into separate loan
agreements with three of its Directors (Mark Rosman, Paul Duffen
and Marcel Noordeloos), raising a total of EUR500,000. This loan
amount, including accrued interest of EUR17,945, was converted into
8,400,000 New Ordinary Shares on 19 December 2019.
During the year one of the Directors, Mark Rosman, subscribed to
the 5p Convertible Loan Note. The balance due amounted to
EUR650,000 as per 31 December 2020. This amount, including the
accrued interest was converted into 11,435,541 new ordinary shares
on 23 April 2021.
Other related party transactions
Included within other creditors, the Group has accrued for
unpaid salaries with its Directors, amounting to EUR258,775 at 31
December 2020 (2019: EUR61,500).
Payables to related parties
The Group had the following amounts payable to related
parties:
Year ended Year ended
31 December 31 December
2020 2019
EUR EUR
Unpaid salaries and fees to Directors 258,775 61,500
Total 258,775 61,500
------------- -------------
The Directors have agreed to accept settlement of the unpaid
salaries and fees over a 6 month period between March and August
2021.
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 27: Ultimate controlling party
As at 31 December 2020 the Directors do not believe there to be
any single controlling party.
Note 28: Subsequent events
On 16 March 2021, the Company announced that it had raised
EUR1,847,000 (or approximately GBP1,585,000) pursuant to
subscriptions for Convertible Loan Notes, at the same date resuming
trading of its shares on the London Stock Exchange.
On 30 March 2021, the Company announced that it had raised a
further GBP1.1 million (before expenses) through a subscription of
7,796,427 new ordinary shares of no par value at a price of 14p per
share. In addition, the Company announced that it had entered into
two new affiliate agreements with RB Journalism SIA (trading as
Oddsen.nu) and E2 Communications Ltd, to access potential new
customers and drive additional traffic to the Bet90 platform. The
Company issued 3.5 million and 1.6 million Ordinary Shares
respectively to the affiliates as a prepayment of affiliate fees
amounting to EUR200,000 and EUR100,000 respectively.
Also on 30 March 2021, the Company announced that it had
received three conversion notices from holders of the outstanding
Convertible Loan Notes. The notes converted at the agreed price of
5p are in respect of EUR300,000 subscribed on 16 September 2019 and
a total of EUR260,000 subscribed on 17 March 2021. The accrued
interest amounts to EUR22,725 and forms part of the conversion as
per the terms of conversion, resulting in the issuance of 9,963,530
new Ordinary Shares .
On 23 April 2021, the Company announced that the issued
Convertible Loan had automatically converted at a price of 5p per
ordinary share of no par value in the capital of the Company, in
accordance with the terms of the Convertible Loan Note. The
remaining amount outstanding under the Convertible Loan amounted to
EUR3,838,500 (approximately GBP3,328,500), plus accrued interest
amounting to EUR102,161 (approximately GBP88,836) which resulted in
an issuance of 68,346,716 new Ordinary Shares. As a result, the
Company entered into a much more stable financial platform to grow
from. The conversion of the Convertible Loan removed the vast
majority of the Group's indebtedness and together with the proceeds
from the Subscription completed 30 March 2021, leaving the Company
with a much improved financial position . Total assets as per the
Groups management accounts as per 30 April 2021 amount to EUR3.4
million.
Company Information
Directors Paul J. Duffen Executive Chairman
Marcel Noordeloos Chief Financial Officer
Mark Rosman Non-Executive Director
Rainer Lauffs Chief Operating Officer
Registered Office 33-37 Athol Street
Douglas
Isle of Man
IM1 1LB
Tel. + 44 (0) 1624 647 979
Nominated and Financial Strand Hanson Limited
Adviser 26 Mount Row
London
W1K 3SQ
Brokers Whitman Howard Ltd
One New Change
London
EC4M 9AF
Auditors Nexia Smith & Williamson
Audit Limited
25 Moorgate
London
EC2R 6AY
Corporate lawyers BDB Pitmans LLP
50 Broadway
London
SW1H 0BL
Registered Agent Ocorian Trust (Isle of Man)
Limited
33-37 Athol Street
Douglas
Isle of Man
IM1 1LB
Registrars Neville Registrars Limited
Neville House
Steelpark Road
Halesowen
B62 8HD
Registered number 9029V
Company Website www.b90holdings.com
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END
FR VDLFFFQLZBBD
(END) Dow Jones Newswires
June 18, 2021 02:00 ET (06:00 GMT)
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