REG - B90 Holdings PLC - Final Results
30/06/2023 07:00
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RNS Number : 4662E B90 Holdings PLC 30 June 2023
For release: 07.00, 30 June 2023
B90 Holdings plc
("B90", the "Company" or "Group")
Final Results for the year ended 31 December 2022
B90 Holdings plc (AIM: B90), the online marketing and operating company for
the gaming industry, announces its audited final results for the year ended 31
December 2022 (the "2022 Annual Report").
The 2022 Annual Report can be found on the Company's website at
www.b90holdings.com (http://www.b90holdings.com) .
Commenting on the results, Ronny Breivik, Interim Executive Chairman said:
"As an entrepreneurial gaming business, we believe that the business has
strong growth potential through a strategic and deliberate 'buy and build'
M&A strategy. This is backed by strong execution, and organic growth
stemming from focused inhouse marketing activities. We can be characterized as
a challenger brand in the Gaming industry, and one of the few pure plays
listed on the AIM market and we are determined to make more use of the
opportunities afforded by our listing."
Financial and operational highlights
● Revenues substantially increased : €2.1 million (2021: €0.8
million)
● Operating loss increased to €4.2 million (2021: €3.3 million
loss), partially due to impairment charges on goodwill and increased
amortisation of intangible assets
● Launch of new operating brand: Spinbookie: targeting new
territories in North and Latin America
● Completion of acquisitions and successful integration of marketing
affiliate businesses: Oddesn.nu and Tippen4you focusing on Nordic and European
markets
● Successful fundraises during the year totalling over €1.8
million (£1.6 million) in aggregate, to facilitate the acquisitions and
provide additional working capital
● Appointment of new (Interim) Executive Chairman and further
changes to the Board
● Post year end developments:
o appointment of senior industry figure Mark Blandford as senior adviser and
investor; and
o further fundraisings totalling €3.9 million (£3.3 million) from new and
existing investors to support investment in marketing and growth of
operations, including funding separately announced today.
Commenting on current trading and outlook, Ronny Breivik added:
"We have achieved a great deal during 2022 and importantly have continued that
momentum into 2023. We have substantially strengthened our balance sheet,
increased revenues and reduced our adjusted EBITDA. Alongside this we have
improved our affiliate strategies, investing in our direct marketing
activities and operations. To support these initiatives, we have
strengthened both our management and advisory teams.
We will continue to focus on carefully selected Latin American, and other
developed European markets. The additional capital raised will help fund our
increased operations in the region to improve retention rates and produce an
improved spend per customer. We are grateful to shareholders for their
continuing support.
Overall, I am delighted with the progress that the Company is making and we
look forward with increased optimism and confidence."
The information communicated in this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of
the European Union (Withdrawal) Act 2018, as amended.
-Ends-
For further information please contact:
B90 Holdings plc +44 (0)1624 605 764
Ronny Breivik, Interim Executive Chairman
Marcel Noordeloos, Chief Financial Officer
Strand Hanson Limited (Nominated Adviser) +44 (0)20 7409 3494
James Harris / Richard Johnson / Rob Patrick
Zeus Capital Limited (Joint Broker) +44 (0)20 3829 5000
Louisa Waddell / Tim Dainton
Panmure Gordon (UK) Limited (Joint Broker) +44 (0)20 7886 2500
Simon J French
Belvedere (Financial PR & IR) +44 (0)20 3008 6864
John West / Llewellyn Angus
About B90 Holdings plc
B90 Holdings plc is a group of companies focused on the operation of its own
online Sportsbook and Casino product as well as marketing activities for other
online gaming companies.
Website: www.b90holdings.com (http://www.b90holdings.com)
Strategic Report
CHAIR'S STATEMENT
Introduction
This is my first statement as Chair of the Company, having been appointed as
(Interim) Executive Chairman, in November 2022 and I am delighted to present
the Annual Report for B90 Holdings plc ("B90", "Company" or together with its
subsidiaries, the "Group") for the financial year ended 31 December 2022.
B90 Holdings plc is a group of companies focused on the operation of our own
online Sportsbook and Casino product as well as marketing activities for our
own and third party online gaming companies.
Our focus is currently on two core divisions:
· betting and gaming websites; and
· service provision, through media platforms and affiliate marketing.
We operate under four principal brands: Bet90, Spinbookie, Oddesn.nu and
Tippen4you with revenues generated through both online gaming revenue and
marketing commission from other platforms.
As an entrepreneurial gaming business, we believe that the business has strong
growth potential both organically and via a 'buy and build' M&A
strategy. We can be characterized as a challenger brand in the Gaming
industry, and one of the few pure plays listed on the AIM market and we are
determined to make more use of the opportunities afforded by our listing.
We are bank debt free (but do have Convertible Loan Notes issued) and we have
identified four distinct strategic pillars to help us on our journey towards
profitability. The first is the delivery of a truly scalable platform for
online and e-gaming entertainment. Secondly, we will concentrate on both
organic growth and acquisitions. Next, we aim to take a holistic approach to
all players by offering the widest game play options and finally we will
employ AI and other leading technology and analytics across our operations to
drive efficiencies and support operations and marketing.
We are excited about expansion into new territories and markets, specifically
in Latin America, Canada, and Europe, supported by the development of
affiliate programs through both further acquisitions and partnerships.
Financial and operational highlights
● Revenues substantially increased : €2.1 million (2021: €0.8
million)
● Operating loss increased to €4.2 million (2021: €3.3 million
loss), partially due to impairment charges on goodwill and increased
amortisation of intangible assets
● Launch of new operating brand Spinbookie; targeting new
territories in North and Latin America
● Completion of acquisitions and successful integration of marketing
affiliate businesses: Oddesn.nu and Tippen4you focusing on Nordic and European
markets
● Successful fundraises during the year totalling over €1.8
million (£1.6 million) in aggregate, to facilitate acquisitions and provide
additional working capital
● Appointment of new (Interim) Executive Chairman and further
changes to the Board
● Post year end developments:
o appointment of Mark Blandford, a senior industry figure and considered by
many to be one of the founders of the developed online gaming industry, as
senior adviser and investor; and
o further fundraisings totalling €3.9 million (£3.3 million) from new and
existing investors to support investment in marketing and growth of
operations.
Operating Review
2022 has been a year of transition for the Company setting strong foundations
for future operational and financial growth. With unique products and strong
brands in global iGaming (sportsbook and casino) markets, we continue to build
strong customer relationships, increasing our revenues by approximately 160%
compared to the prior comparable period and substantially increasing our
customer numbers across our target markets of Scandinavia and South America.
In May 2022, we completed the integration of Oddsen.nu, a key affiliate within
our Group that operates in Norway. Oddsen.nu boasts a prominent forum,
enabling users to engage in continuous discussions about sports betting events
throughout the day. One of the main features of Oddsen.nu is its longstanding
commitment to providing winning betting tips to its user base without any
charges. Consequently, the business has met our expectations and successfully
expanded our market reach into developed markets.
Alongside this, we introduced our Spinbookie brand, strategically positioned
in distinct yet complementary markets to enhance B90's existing operations.
Spinbookie delivers a comprehensive casino experience, featuring renowned
providers like Evolution and other prominent casino vendors for the ultimate
enjoyment of our users. Additionally, the brand offers an extensive
sportsbook, encompassing a wide array of major global sporting events,
including a diverse selection of live betting options. To amplify our reach,
we have established marketing agreements designed to attract more traffic to
the platform.
Spinbookie's existing full casino and sportsbook product covers most major
global sporting events, including a large range of live betting markets. The
casino offering includes suites from Microgaming, Evolution, and other key
casino suite providers. Marketing agreements are now in place and driving
traffic to Spinbookie and we are pleased with the growth in customer numbers
and average spend that it is starting to produce.
Increased activity and ownership of both these brands helped to positively
impact Group revenues, as we also expanded operations in other territories,
particularly in Latin American and Nordic markets.
In June 2022 we also announced the acquisition of the remaining 49% stake in
Tippen4you, which is now fully owned by the Group. That website is an
established forum platform focused on the German market. It earns revenues by
entering into affiliate agreements with operators who are active in the German
market.
Fundraisings
The Group completed a number of successful fundraises during the year, with
new and existing investors strengthening the balance sheet, in order to
support growth; provide working capital; and to put in place the foundation to
execute on its strategic plan. Accordingly, we announced that:
- on 16 May 2022, the Company had raised €860,000 (or £731,000)
through a subscription for 12,713,043 new ordinary shares by certain existing
investors at a price of 5.75 pence per share;
- on 9 September 2022, the Company had raised €358,000 (or
£305,000) through a subscription for 7,625,000 new ordinary shares by
existing and new investors at a price of 4 pence per share;
- on 22 December 2022, the Company had raised €649,000 (or
£540,000) through subscriptions for convertible loan notes.
This fundraise on 22 December 2022 was under the terms of a new 3-year, 10%
convertible (unsecured) loan note (the "Convertible Loan Note"). The
Convertible Loan Notes have a term of three years from issue and are
convertible no earlier than 1 January 2024, at the request of the Loan
Note holder, at a 10% discount to the volume weighted average price for
the five trading days prior to the conversion notice. The Loan Notes
are convertible, at the discretion of the Company, at any time and on the
same terms.
Subsequent to the reported year-end, the Group announced further fundraises,
all under the terms of the Convertible Loan Note, of £500,000 on 6 February
2023, £1,100,000 on 5 April 2023 and is announcing a further €2,000,000 on
30 June 2023, leaving the Group with a much improved balance sheet.
Financial review
The net result for the year amounted to an after-tax loss of €4.3 million
(2021: €3.4 million loss), which was primarily the result of the increased
amortization charges and a partial impairment on goodwill. Revenues have
increased significantly from €0.8 million in 2021 to €2.1 million in 2022.
EBITDA adjusted for incidental costs, improved over the prior period, and is
as follows:
2022 2021
Net Loss (4,268,196) (3,411,751)
Amortisation & Depreciation 462,205 109,325
Impairment of Goodwill 1,095,320 -
Stock option expense 349,364 145,026
Tax (13,680) -
EBITDA (2,374,987) (3,157,400)
One-off expenses:
- Severance payments 129,152 -
- EGM expenses 83,908 -
Adjusted EBITDA (2,161,927) (3,157,400)
Whilst the Group has raised additional funds by way of the issue of
convertible loan notes since the 2022 year-end, amounting in aggregate to
£3.3 million, it remains reliant, inter alia, on being able to manage its
cash resources carefully and trading being in line with management's
expectations.
Currently the Board expects this to be the case and the business is trading
in-line with management expectations.
Principal risks and uncertainties
The principal risks and uncertainties factors are included on page 12 of this
report.
Board changes and appointment of strategic adviser
Martin Fleisje and I were both appointed to the Board with effect from 7th
November 2022.
I was appointed Interim Executive Chairman, having initially joined B90 as CEO
of B90 Ventures Ltd, the main operating subsidiary of the Group in April 2021.
My background is in online gaming since 1997, having launched the first gaming
portal in Norway. In the early 2000s, I was involved in a start-up,
OddsAlive.com, which was subsequently sold to BetInternet. From 2004 until
2006 I worked with Sportingbet.com. Since then, before joining B90, I focused
on building successful affiliate websites in different sector verticals.
Martin was appointed as an independent non-executive Director. Martin is chief
financial officer of Induct AS, a Norwegian software company. Prior to joining
Induct AS, Martin spent the majority of his career in wealth management and
sales most recently with Kraft Finans AS and Pioner Kapital AS, both based in
Norway.
In November 2022, we also announced that, Karim Peer, Executive Chairman and
Nigel Eastwood, non-executive Director had stepped down from their positions
on the Board and left the Company, having been appointed earlier in the year
in May 2022 and September 2022 respectively. The Board wishes to thank Karim
and Nigel for their contribution to the Group and wishes them both well in
their future endeavours.
Following the above changes, the Directors continue to review the composition
of the Board, both at executive and non-executive level, including seeking to
identify and recruit one or more additional independent Directors to further
enhance the Board's experience and expertise. We are making good progress in
our search.
In February 2023, following the reported period, we were delighted to announce
that Mark Blandford had invested in the business and agreed to act as a
strategic adviser to the Company. Mark is senior industry figure and
considered by many to be one of the founders of the developed online gaming
industry. He has pioneered the development, financing, and monetising of
digital Pay2Play entertainment companies over the last fifteen years and
having worked with him previously at Sportingbet, I am extremely pleased that
he has invested in B90 and has now agreed to become a strategic adviser to the
Company. His experience, advice, market insight and knowledge, as well as
his network of contacts, will be invaluable to us as we embark on the next
phase of our growth.
Summary and Outlook
We have achieved a great deal during 2022 and importantly have continued that
momentum into 2023. In the first few months of 2023, we have substantially
strengthened our balance sheet by securing additional funding, we
significantly increased revenues in 2022 compared to 2021 and reduced our
adjusted EBITDA loss. Alongside this we have improved our customer relations
management and retention programmes and augmented our affiliate strategies,
investing in our direct marketing activities and operations. To support
these initiatives, we have strengthened both our management and advisory
teams.
Our focus for 2023 is to accelerate revenue growth by utilising focused
investment in marketing to improve site traffic and subsequently generate
higher gaming volumes. In tandem, we are committed to reducing operating
losses and providing investors with more visibility on the path to cash
generation. We also are actively seeking further value accretive
acquisitions and various forms of partnerships such as licensing agreements.
We will continue to focus on carefully selected Latin American, and other
developed European markets. Additional capital raised will help fund our
increased operations in the region to improve retention rates and produce an
improved spend per customer. We are grateful to shareholders for their
continuing support.
Overall, I am delighted with the progress that the Company is making and we
look forward with increased optimism and confidence.
Ronny Breivik
(Interim) Executive Chairman, B90 Holdings plc
29 June 2023
Directors' Report
The Directors present their report and consolidated financial statements for
the year ended 31 December 2022.
Principal activities and review of the business
B90 Holdings plc is the parent company of a group focused on sports betting
operations and casinos games via its wholly owned Bet90 and Spinbookie
operations, as well as generating marketing leads and entering into marketing
contracts for the activities of its partners in sports betting and casino
games, using its wholly owned brands Oddsen.nu (which has its main focus on
Norway) and Tippen4you.com (with a focus on Germany).
Results and dividends
The Group's results for the year, after taxation, amounted to a loss of €4.3
million (2021: loss of €3.4 million).
As a result of the above, the Directors are proposing not to pay a dividend
for the year ended 31 December 2022 (2021: nil).
Future developments
Future developments are discussed in the Strategic Report.
Financial Risk Management
The Board is responsible for setting the objectives and underlying principles
of financial risk management for the Group. The Board establishes the
detailed policies such as authority levels, oversight responsibilities, risk
identification and measurement and exposure limits.
Capital risk management
The Group's objectives when managing capital are to safeguard the Group's
ability to continue as a going concern in order to provide returns for
shareholders.
Liquidity risk
Liquidity risk exists where the Group might encounter difficulties in meeting
its financial obligations as they become due. The Group monitors its
liquidity in order to ensure that sufficient liquid resources are available to
allow it to meet its obligations.
Large wins by customers
Inherent to the business is that there is a risk that a few players and
customers might win significant amounts of money during the same period thus
reducing the earnings of the Group, in particular in regard to its sportsbook
partner which has a higher concentration of VIP players. In respect of its
marketing activities for its sportsbook partner, negative net commission
revenues in any period are carried forward and netted off against positive net
commission revenues in future periods on which commission might otherwise be
payable to the Group. Whilst the Group would not have to cover any gaming or
gambling losses in the existing marketing agreements, the percentage of
earnings retained by the Group might be greatly reduced as a result of this.
Gaming or gambling losses within the Group's own Bet90 and Spinbookie
operations would though need to be covered by the Group as and when they
occur. The Group must at all times have sufficient cash balances available to
cover liabilities to customers. In the case of a large win by a customer, the
Group would need to move funds from its current account to the accounts that
cover the liability to customers, which would immediately negatively impact
the Group's working capital and its earnings for the period.
Currency risk
Given the expansion in the Nordics and Latin America, the Group is exposed to
foreign exchange gains and losses on its trading activities. Due to the
current size of the Group, it does not actively hedge the foreign exposure on
its trading cashflows. It monitors exposures to individual currencies, taking
remediating actions as necessary to manage any significant risks as they
arise. Due to the size of the operations in other currencies than the Euro
in 2022 the effect of a significant change in foreign currency rates would be
immaterial.
Interest rate risk
The Group's exposure to upside interest rate risk is limited. The convertible
loan notes on the statement of financial position have a fixed interest
rate. The Directors do not consider the impact of possible interest rate
changes based on current market conditions to be material to the net result
for the year or the equity position as at 31 December 2022.
Credit risk
The Group's credit risk is primarily attributable to trade receivables and
cash and cash equivalents.
● Receivables: Customers, being third party sportsbook and
casino operators. The Group generates commission revenues via its affiliate
operations. Commissions invoiced are payable within a month after the month
invoiced.
● Cash and Cash equivalents: Payment service providers
(PSPs). PSPs are third-party companies that facilitate deposits and
withdrawals of funds to and from customers' virtual wallets with the Group.
These are mainly intermediaries that transact on behalf of credit card
companies.
The risk is that a customer or a PSP would fail to discharge its obligation
with regard to the balance owed to the Group.
The Group reduces this credit risk by:
● Monitoring balances with customers on a regular basis;
● Monitoring balances with PSPs on a regular basis; and
● Arranging for the shortest possible cash settlement
intervals with their PSP's.
The Group considers that based on the factors above and on past experience,
the customers and PSP receivables used in the current businesses are of good
credit quality and there is a low level of potential bad debt as at year-end.
An additional credit risk the Group faces relates to customers in its own
operations disputing charges made to their credit cards ("chargebacks") or any
other funding method they have used in respect of the services provided by the
Group. Customers may fail to fulfil their obligation to pay, which will
result in funds not being collected. These chargebacks and uncollected
deposits, when occurring, will be deducted at source by the payment service
providers from any amount due to the Group. The Group monitors the need for
impairment provisions by considering all reasonable and supportable
information, including that which is forward-looking. For the year ended 31
December 2022, the Group has not made any provision for this, as any provision
would be immaterial.
Regulatory risk
Regulatory, legislative and fiscal regimes for betting and gaming in key
markets can change, sometimes even at short notice. Such changes could benefit
or have an adverse effect on the Group's operations and additional costs might
be incurred in order to comply with any new laws or regulations in various
jurisdictions.
The Group closely monitors regulatory, legislative and fiscal developments in
key markets allowing the Group to assess, adapt and takes the necessary action
where appropriate. Management takes external advice, which incorporates risk
evaluation of individual territories. Regulatory updates are provided to the
Board when changes are announced.
Whilst changing regulatory and tax regimes can offer opportunities to the
Group as well as posing risks, a significant adverse change in jurisdictions
in which the Group operates could have a significant impact on the Groups
future profitability and cash generation.
Going concern
Although the Group has increased revenues by c. 160% to €2.1 million, the
Group still operates at a loss. Whereas the directors believe the acquisitions
completed in 2021 (Oddsen.nu and Spinbookie) will continue to drive increased
revenues in the future, the reported net loss amounts to €4.3 million for
the year ended 31 December 2022. Although this loss was significantly impacted
by an impairment charge and increased amortization of intangible assets, the
Group had a negative cash flow from operations of €2.3 million for the year
ended 31 December 2022. Furthermore, the Group expects to report a loss for
the six months ending 30 June 2023.
As per 31 December 2022, the Group shows total current liabilities of €3.2
million and a negative working capital position of €2.7 million. Whilst the
Directors believe that its revised strategy will show a significant increase
in revenues, the Group continues to operate at a loss, although management
expects the Group to become cash flow positive during the second half of 2023,
executing on its revised strategic plan to grow the Group's operations and
revenues in the various verticals in a targeted manner.
Furthermore, as a result of the recent fundraise, which is announced on 30
June 2023, amounting to €2 million, the Group has improved its financial
position at the time of release of this report, with a total of €3.9 million
(or £3.3 million) raised during 2023 to date.
Should trading not be in line with management's expectations going forward,
the Group's ability to meet its liabilities may be impacted, in which case the
Group may need to raise further funding. In such circumstance that this is
needed and whilst the directors are confident of being able to raise such
funding if required, there is no certainty that such funding will be available
and/or the terms of such funding. These conditions are necessarily considered
to represent a material uncertainty which may cast doubt over the Group's
ability to continue as a going concern.
Whilst acknowledging this uncertainty, the Directors remain confident that the
recent fundraise will allow the Group to expand its operations and generate a
positive operational cash flow within a reasonable time or, if needed, be able
to raise additional funding when required, therefore the Directors consider it
appropriate to prepare the financial statements on a going concern basis.
The financial statements do not include the adjustments that would result if
the Group was unable to continue as a going concern.
Your attention is drawn to the material uncertainty related to going concern
section of the Auditor's Report.
Subsequent events
On 6 February 2023 the Company announced that it had raised a further
€570,000 (£500,000) through subscriptions for convertible loan notes. In
addition, the Company has agreed to issue a further €127,692 (£112,500)
Loan Notes to a key marketing partner in lieu of cash settlement due for
services.
On 7 February 2023 the Company announced the appointment of Mark Blandford as
a strategic adviser to the Company. Mark is a senior industry figure and
considered by many to be one of the founders of the developed online gaming
industry. Having started his career as the owner of a traditional 'bricks and
mortar' bookmaker's chain for over 15 years, he then recognised the potential
of the internet for the industry in the mid-1990s. In 1998 he founded
Sportingbet.com, and in 2001 floated the company on AIM. Mark stepped down
from the Board of Sportingbet in 2007 before its eventual sale in 2013 with
the assets being split between William Hill and GVC. In 2002, he was awarded
AIM Entrepreneur of the Year.
On 5 April 2023, the Company announced that it had raised a further €1.27
million (£1.1 million) through subscriptions for convertible loan notes.
On 19 April 2023, the Company announced that it had granted options over, in
aggregate, 11,500,000 ordinary shares to certain directors and employees of
the Company.
On 30 June 2023, the Company is announcing that it has raised a further €2
million (£1.72 million) through subscriptions for convertible loan notes, the
funds of which are expected to be received before 12 July 2023.
Directors and their interest
The following Directors held shares and share options as at 31 December 2022:
Number of shares held Number of options Exercise Date of grant Vesting period
Price (£) of options of options
Ronny Breivik 29,132,809* 3,000,000 0.13 1 October 2021 1-4 years
Marcel Noordeloos 3,659,954 2,100,000 0.05 17 March 2021 1-4 years
Marcel Noordeloos - 3,000,000 0.13 1 October 2021 1-4 years
Mark Rosman 23,419,019 550,000 0.15 14 February 2019 1-4 years
Mark Rosman - 3,000,000 0.13 1 October 2021 1-4 years
*This includes a 34.65% ownership by Ronny Breivik in Performance Media ltd, a
company that owns 31,084,450 shares in the Company and the shares held by
Entercreation ltd, a company that owns 8,600,000 shares in the Company.
During 2022, Karim Peer (Executive Chairman until 7 November 2022) and Nigel
Eastwood (non-executive director until 7 November 2022) held 2,100,000 and
750,000 options respectively. These options are included in the table in Note
18.
Directors who served during the year
Appointed Resigned
Karim Peer 18 June 2021 7 November 2022
Ronny Breivik 7 November 2022 -
Mark Rosman 19 March 2014 -
Marcel Noordeloos 30 June 2016 -
Nigel Eastwood 26 September 2022 7 November 2022
Martin Fleisje 7 November 2022 -
The details of the Directors' remuneration have been included within note 5 on
page 40 of this annual report.
Directors' responsibilities
The Directors are responsible for preparing the annual report and the
financial statements in accordance with applicable law and regulations.
Company law requires the Directors to keep reliable accounting records which
allow financial statements to be prepared. In addition, the Directors have
elected to prepare group financial statements in accordance with International
financial reporting standards (''IFRS") as adopted by the European Union.
The financial statements are required to give a true and fair view of the
state of affairs of the Group and of the profit or loss of the Group for that
year. In preparing these financial statements, the Directors are required
to:
● select suitable accounting policies and then apply them
consistently;
● make judgments and accounting estimates that are
reasonable and prudent;
● state whether applicable IFRSs have been followed,
subject to any material departures disclosed and explained in the financial
statements; and
● prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the Group will continue in
business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group's transactions and disclose with
reasonable accuracy at any time the financial position of the Group and
prepare financial statements. They are also responsible for safeguarding the
assets of the Group and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The Directors are also responsible for ensuring that they meet their
responsibilities under the AIM Rules.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the company's website.
Legislation in the Isle of Man governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions.
In so far as each of the Directors is aware:
● there is no relevant audit information of which the
Group's auditors are unaware; and
● the Directors have taken all steps that they ought to
have taken to make themselves aware of any relevant audit information and to
establish that the auditor is aware of that information.
Auditors
The auditors of the Group are CLA Evelyn Partners Limited (previously named
Nexia Smith & Williamson), Chartered Accountants, who were reappointed at
the 2022 Annual General Meeting and will be proposed to be reappointed at the
2023 Annual General Meeting.
Principal risks and uncertainties
The Board evaluates the operational risks facing the Group on an ongoing basis
to monitor for changes in risks and risk impact and to set guidelines for risk
mitigation. The most significant risks identified by the Board are listed
below.
Gambling laws and regulations are constantly evolving and increasing
The regulatory framework of online gaming is dynamic and complex. Change in
the regulatory regime in a specific jurisdiction can have a material adverse
effect on business volume and financial performance in that jurisdiction. A
number of jurisdictions have regulated online gaming, and in several of those
jurisdictions the Group, or its operating partner, either holds a licence or
is planning to obtain one, if the market is considered commercially viable.
However, in some cases, lack of clarity in the regulations, or conflicting
legislative and regulatory developments, mean that the Group may risk failing
to obtain an appropriate licence, having existing licences adversely affected,
or being subject to other regulatory sanctions, including internet service
providers blocking, blocking options to make deposits, black-listing the Group
and fines.
The Group is managing this risk by consulting with legal advisers in various
jurisdictions where its services are marketed or which generate, or may
generate, significant revenue for the Group. Furthermore, the Group obtains
regular updates regarding changes in the law that may be applicable to its
operations, working with local counsel to assess the impact of any changes on
its operations. Furthermore, the Group's owned operations Bet90 and
Spinbookie, blocks players from certain "blocked jurisdictions" using multiple
technological methods as appropriate.
Reliance on VIP players
Although the focus of the Group is primarily on the operations of its own
brands Bet90 and Spinbookie, a large percentage of the commission-based
revenue from the Group's marketing activities in the sportsbook and casino
vertical is generated by a small group of high net worth players, described as
"VIP Players". These are loyal players that regularly deposit high amounts
on the websites. These deposit levels vary per country and are typically the
top 5% of the players making regular deposits. The Group knows these players
and makes them feel valued, in efforts to remain an active player. A VIP
player (or also a non-VIP player) can have large winnings, in either the
sportsbook or the casino, in a certain period, which can significantly impact
the revenues on a monthly basis. A loss of any of the VIP Players could
significantly adversely affect the Group's business, financial condition,
results or future operations.
In respect of its own sportsbook and casino brands, Bet90 and Spinbookie, any
large wins by VIP players could potentially lead to recording a loss in such
cases. The Group has Terms & Conditions in place to limit the daily win of
a single player to mitigate such a risk.
Imposition of additional gaming or other indirect taxes
Revenues earned from customers located in a particular jurisdiction may give
rise to further taxes in that jurisdiction. If additional taxes are levied,
this may have a material adverse effect on the amount of tax payable by the
Group. Further taxes may include value added tax (VAT) or other indirect
taxes. The Group may be subject to VAT or similar taxes on transactions, which
have previously been treated as exempt.
The Group seeks to include geographical diversity in its operations. In order
to mitigate the risks that arise, the Group actively identifies, evaluates,
manages and monitors its tax risks and the geographies in which it operates.
The Group works with external local tax advisers to assist them in this
process.
COVID-19 Pandemic
During 2020, the Group's business was negatively impacted by the cancellation
of the vast majority of sporting events in its target markets as a result of
the global COVID-19 pandemic. Whereas the pandemic continued throughout 2021
and early 2022 and the majority of the global sporting events have continued
already since the summer of 2020, there is no guarantee that a future
cancellation of some sporting events in the Group's key markets will not
occur, either related to the COVID-19 pandemic, or any new pandemic. In that
situation, revenue of the Group may be significantly impacted without a
proportionate reduction (if at all) in costs. To mitigate this risk, the Group
has been more actively promoting the casino offering and is looking for
external opportunities to expand its offering to its customers.
Information Technology and Cyber risks
The Group uses third party service providers for its operations. The
third-party IT systems may be impacted by unauthorised access, cyber-attacks,
DDoS (Distributed Denial of Service) attacks, theft or misuse of data by
internal or external parties, or disrupted by increases in usage, human error,
natural hazards or disasters or other events. Cyber-attack and data theft
incidents may expose the Group to "ransom" demands and costs of repairing
physical and reputational damage. Failure of third-party IT systems,
infrastructure or telecommunications may cause significant cost and disruption
to the business and harm revenues. Lengthy down-time of the site (including in
transitioning to activated disaster recovery servers) could also cause the
Group to breach regulatory obligations.
Data protection risk
The Group and its third-party service providers processes personal customer
data, including sensitive data such as name, address, age, bank details and
gaming / betting history. Such data could be wrongfully accessed or used by
employees, customers, suppliers or third parties, or lost, disclosed or
improperly processed in breach of data protection regulations. In particular,
the European General Data Protection Regulation ("GDPR") entered into force in
May 2018, its equivalent in the UK ("UK GDPR"), having a significant effect on
the Group's privacy and data protection practices, as it introduced various
changes to how personal information should be collected, maintained, processed
and secured. Non-compliance with the GDPR or UK GDPR may result in fines of
the higher of €20 million or 4% of the Group's annual global turnover, and
the Group will be particularly exposed to enforcement action in light of the
amount of customer data it holds and processes. In addition, various countries
in the EU have introduced domestic data protection laws incorporating the GDPR
requirements. Moreover, the Group makes use of various tracking technologies
(such as cookies, SDKs, JavaScript and other forms of local storage), which
are subject to stricter standards of consent and transparency, both under the
GDPR and the e-Privacy Directive. The Group could also be subject to private
litigation and loss of customer goodwill and confidence.
Corporate Governance Report
As an AIM-quoted company, B90 and its subsidiaries (together, the "Group") are
required to apply a recognised corporate governance code, demonstrating how
the Group complies with such corporate governance code and where it departs
from it.
The Board of Directors of the Company ("Directors" or "Board") have adopted
the QCA Corporate Governance Code (the "QCA Code"). The Board recognises the
principles of the QCA Code, which focus on the creation of medium to long-term
value for shareholders, without stifling the entrepreneurial spirit in which
small to medium sized companies, such as B90, have been created.
Application of the QCA Code
In the spirit of the QCA Code it is the Board's job to ensure that the Group
is managed for the long-term benefit of all shareholders and other
stakeholders with effective and efficient decision-making. Corporate
governance is an important part of that job, reducing risk and adding value to
the Group. The Board will continue to monitor the governance framework of the
Group as it grows.
B90 is an online marketing and operating company that seeks to grow
shareholder value through organic growth and acquisitions. B90's aim is to
build a portfolio of gaming brands through a combination of strong organic
growth as well as strategic acquisitions that complement the current business.
The Board aims to achieve these objectives through the adoption of best
working practices and by leveraging its industry knowledge and expertise. We
believe that the senior management team as well as the Board, together with
their industry leading partners and networks, have the necessary capabilities
to achieve organic and external growth in the future, as demonstrated, for
example, by the previous acquisition in 2017 of Bet90 Sports Ltd and the
acquisition of Spinbookie.com in December 2021, both operating online
sportsbook and casino. Furthermore, the Group acquired the operations of
Oddsen.nu in September 2021 and the not owned minority interest in
Tippen4you.com to own its own affiliation networks and driver further revenues
via these portals.
In accordance with the AIM Rules, B90 applies (and in some cases departs from)
the QCA Code in the following way:
Principle 1 - Establish a strategy and business model which promote long-term
value for shareholders
B90 is an online marketing and operating company in the gaming sector that
seeks to grow shareholder value through organic growth and acquisitions, key
aspects of which are ensuring customer satisfaction on both a B2B and B2C
basis and strengthening the B90 brand (see also page 7, Principal activities
and review of the business)
Principle 2 - Seek to understand and meet shareholder needs and expectations.
B90 has engaged in active dialogue with shareholders through regular
communication and the Company's Annual General Meeting and one-on-one
discussions. New information is released via the regulatory news service (RNS)
before anywhere else and the website is updated accordingly (see also page
3-6, Strategic report).
Principle 3 - Take into account wider stakeholder and social responsibilities
and their implications for long-term success
The Board recognises the importance of its wider stakeholders - employees,
contractors, suppliers, customers, regulators and advisors - to its long-term
success. The Board has established expectations that these key resources and
relationships are valued and monitored. In particular, the Group's business
model of outsourcing some its key activities requires reliable dialogue with
contractors to ensure the successful pursuit of its long-term strategic
objectives. Furthermore, the Board engages regularly with its corporate
advisers to ensure proactive communication regarding the Group's activities.
In doing so, the Group is able to take any feedback into account and adjust
its actions accordingly to ensure it stays focused on long-term performance.
The Board recognises that the Group operates within a competitive and fast
changing industry and strives to remain alert to developments in a wider
industry/society context.
Principle 4 - Embed effective risk management, considering both opportunities
and threats, throughout the organisation
B90 operates within a complex business environment and an industry that is
fundamentally driven by regulatory processes. The Board has set out its
understanding of the principal risks and uncertainties in this report (see
page 12 for details, going concern statement on page 9 and post year-end
fundraise on page 10) and regularly reviews its strategies for minimising any
adverse impact to the Group or its investors.
The Directors acknowledge their responsibility for the Group's system of
internal control, which is designed to ensure adherence to the Group's
policies whilst safeguarding the assets of the Group, in addition to ensuring
the completeness and accuracy of the accounting records. Responsibility for
implementing a system of internal financial control is delegated to the CFO.
The essential elements of the Group's internal financial control procedures
involve:
● Strategic business planning
The Board regularly reviews and discusses the Group's performance and
strategic objectives.
● Performance review
The Directors monitor the Group's performance through the preparation and
consideration of monthly management accounts, daily through KPIs and regular
reviews of its expenditure and projections. In addition, detailed financial
projections for each financial year are prepared and are subject to formal and
regular review against actual trading by the Board.
Principle 5 - Maintain the Board as a well-functioning, balanced team led by
the Chairman
The Board comprises of four Directors of which two are Executive and two are
Non-Executive, reflecting a blend of different experience and backgrounds.
Considering the shareholding of Mark Rosman, the Board considers, at this
moment, that only Martin Fleisje is completely independent as a Director in
terms of the QCA guidelines. Accordingly, the composition of the Board does
currently not satisfy the QCA recommendation that there are at least two
independent Non-Executive Directors on the Board. The Board is actively
looking to appoint at least one additional independent Non-Executive Director
in the near term.
The Board meets throughout the year and all major decisions are taken by the
Board as a whole. The Group's day-to-day operations are managed by the
Executive Directors. All Directors have access to the Group information and
any Director needing independent professional advice in the furtherance of
his/her duties may obtain this advice at the expense of the Group.
Although the Board is satisfied that it has a suitable balance of knowledge of
the Group, experience and skills to enable it to discharge its duties and
responsibilities effectively, and that all Directors have adequate time to
fill their roles, the Group intends to appoint an independent Non-Executive
Director in due course and we will make further announcements as and when
appropriate.
The role of the Chairman is to provide leadership of the Board and ensure its
effectiveness on all aspects of its remit to maintain control of the Group. In
addition, the Chairman is responsible for the implementation and practice of
sound corporate governance.
Our Non-Executive directors are expected to devote as much time as is
necessary for the proper performance of their duties. Executive directors are
full-time employees or services providers and expected to devote as much time
as is necessary for the proper performance of their duties.
During 2022 the Board held eight (8) formal meetings either in person or by
call, all of which were attended by all Directors. The Board also passed eight
(8) unanimous written resolutions.
Principle 6 - Ensure that between them the directors have the necessary up
to-date experience, skills and capabilities
The Board considers its current composition to be appropriate and suitable
with the adequate and up-to-date experience, skills and capabilities to make
informed decisions. Each member of the Board brings a different set of skills,
expertise and experience, making the Board a diverse unit equipped with the
necessary set of skills required to create maximum value for the Group.
The Board is fully committed to ensuring its members have the right skills.
Members of the Board must be re-elected by the shareholders of the Company if
they have not been re-elected at the previous two annual general meetings in
accordance with the Company's Articles of Association, thereby providing
shareholders the ability to decide on the election of the Company's Board.
The biographical details of the Directors are:
Ronny Breivik (Interim Executive Chairman)
Ronny (49) has worked in online gaming since 1997 and launched the first
gaming portal in Norway. In the early 2000s, Ronny was involved in a
start-up, OddsAlive.com, which was subsequently sold to BetInternet in 2003.
From 2004 until 2006 Ronny worked with Sportingbet.com, while also taking on
the role of Product Manager for Bet24.com, which was later sold to the Modern
Times Group. While at Bet24.com, Ronny introduced live betting and online
poker to that company's product portfolio, creating and honing a profitable
business model for live betting and online poker. From 2006 until 2011, Ronny
was the CEO of M&B Poker Invest Ltd, which specialized in betting
affiliation. During this time, Ronny co-founded and was one of the pioneers
of the world's first 'rakeback' site, arguably disrupting the online poker
world.
Marcel Noordeloos (Chief Financial Officer):
Marcel (54) was Group Finance Director at Playlogic International NV between
2006 and 2009 before becoming Chief Financial Officer of Playlogic
Entertainment Inc (listed on Nasdaq in New York) in March 2009. Marcel became
Chief Financial Officer at B90 Holdings plc in January 2011. Marcel has held
several management positions with among others Nike (2002-2006) and PwC (1992
- 2001). Marcel holds an RA Degree (Registered Accountant) from the University
of Amsterdam.
Mark Rosman (Senior non-executive Director):
Mark (56), Senior non-executive Director, has over 20 years of experience
advising on private equity investments and managing private equity portfolios.
Mark worked for Galladio Capital Management BV for eleven years and held the
role of Chief Operating Officer from 2006 until his departure in 2010. Since
leaving Galladio, Mark has serviced as Chief Executive Officer of The Nestegg
BV, a private equity management and advisory firm that advises high net worth
individuals on the structuring and management of investments. Mark is a law
graduate from VU University Amsterdam and has an MBA from the Rotterdam School
of Management.
Martin Fleisje (Non-executive Director):
Martin (42), Non-Executive Director, is currently chief financial officer of
Induct AS, a Norwegian software company. Prior to joining Induct AS, Martin
spent the majority of his career in wealth management and sales most recently
with Kraft Finans AS and Pioner Kapital AS, both based in Norway.
Due to the size of the Group, the Group has not adopted a formal diversity
policy, other than looking at educational and professional backgrounds.
The Board also consults with external advisers, such as its nominated adviser
and the Company's lawyers, and with executives of the Company on various
matters as deemed necessary and appropriate by the Board.
Principle 7 - Evaluate Board performance based on clear and relevant
objectives, seeking continuous improvement
B90's Board is small and fully focussed on implementing the Group's strategy.
However, given the size and nature of the Group, the Board does not consider
it appropriate to have a formal performance evaluation procedure in place, as
described and recommended in Principle 7 of the QCA Code. The Board will
closely monitor the situation as it grows.
Principle 8 - Promote a corporate culture that is based on ethical values and
behaviours
We are committed to acting ethically and with integrity. We expect all
employees, officers, directors and other persons associated with us to conduct
their day-to-day business activities in a fair, honest and ethical manner.
For that purpose, we have adopted a Code of Business Conduct and Ethics
("Code") which applies to all our workforce personnel. Pursuant to the Code,
employees, directors and other relevant stakeholders are required to comply
with all laws, rules and regulations applicable to us. These include, without
limitation, laws covering anti-bribery, copyrights, trademarks and trade
secrets, data privacy, insider trading, illegal political contributions,
antitrust prohibitions, rules regarding the offering or receiving of
gratuities, environmental hazards, employment discrimination or harassment,
occupational health and safety, false or misleading financial information or
misuse of corporate assets. The Code also includes provisions for disclosing,
identifying and resolving conflicts of interest of the employees and Board
members.
The Code includes provisions requiring all employees to report any known or
suspected violation and ensures that all reports of violations of the Code
will be handled sensitively and with discretion. We also recognise the
benefits of a diverse workforce and are committed to providing a working
environment that is free from discrimination.
We have also adopted a share dealing code, regulating trading and
confidentiality of inside information by persons discharging managerial
responsibility and persons closely associated with them ("PDMRs").
We take all reasonable steps to ensure compliance by PDMRs and any relevant
employees with the terms of the dealing code.
The Board considers that the Company complies with the requirements set in
this principle.
Principle 9 - Maintain governance structures and processes that are fit for
purpose and support good decision-making by the Board
Corporate Governance Committees
The Board has established two committees, of which the composition is as
follows:
Audit committee
Martin Fleisje (Chairman)
Mark Rosman
Remuneration committee
Mark Rosman (Chairman)
Martin Fleisje
The Audit Committee
The Audit Committee meets at least two times during the year to review the
published financial information, the effectiveness of external audit and
internal financial controls including the specific matters set out below.
The terms of reference of the Audit Committee are to assist all the Directors
in discharging their individual and collective legal responsibilities and
during the meetings to ensure that:
● The Group's financial and accounting systems provide
accurate and up-to-date information on its current financial position,
including all significant issues and going concern;
● The integrity of the Group's financial statements and
any formal announcements relating to the Group's financial performance and
reviewing significant financial reporting judgments contained therein are
monitored;
● The Group's published financial statements represent a
true and fair reflection of this position; and taken as a whole are balanced
and understandable, providing the information necessary for shareholders to
assess the Group's performance, business model and strategy;
● The external audit is conducted in an independent,
objective, thorough, efficient and effective manner, through discussions with
management and the external auditor; and
● A recommendation is made to the Board for it to put to
shareholders at a general meeting, in relation to the reappointment,
appointment and removal of the external auditor and to approve the
remuneration and terms of engagement of the external auditor.
The Audit Committee does not consider there is a need for an internal audit
function given the size and nature of the Group.
Significant issues considered by the Audit Committee during the year have been
the Principal Risks and Uncertainties (which are set out in this annual
report) and their effect on the financial statements. The Audit Committee
tracked the Principal Risks and Uncertainties through the year and kept in
contact with the Group's Management, External Service Providers and Advisers
and received regular updates. The Audit Committee is satisfied that there has
been appropriate focus and challenge on the high-risk areas.
CLA Evelyn Partners Limited (previously named: Nexia Smith & Williamson),
our external auditors, have been in office since 2013.
The external auditors are invited to attend the Audit Committee meeting to
present their findings and this provides them with a direct line of
communication to the Non-Executive Directors.
The Remuneration Committee
The terms of reference of the Remuneration Committee are to:
● recommend to the Board a framework for rewarding senior
management, including Executive Directors, bearing in mind the need to attract
and retain individuals of the highest calibre and with the appropriate
experience to make a significant contribution to the Group; and
● ensure that the elements of the remuneration package are
competitive and help in underpinning the performance-driven culture of the
Group.
Principle 10 - Communicate how the company is governed and is performing by
maintaining a dialogue with shareholders and other relevant stakeholders
The Board is committed to maintaining good communication with its shareholders
and in promoting effective dialogue regarding the Group's strategic objectives
and performance. Institutional shareholders and analysts have the opportunity
to discuss issues and provide feedback via meetings with the Company. The
Annual General Meeting and any other General Meetings that are held throughout
the year are for shareholders to attend and question the Directors on the
Company's performance. Regular progress reports are also made via RNS
announcements and the point of contacts are Ronny Breivik, (Interim) Executive
Chairman and Marcel Noordeloos, CFO.
Our Audit Committee Report is included on pages 20 to 21 of this Annual
Report. Our Remuneration Committee Report is included on page 22 of this
Annual Report.
This report was authorised for issue by the Board on 29 June 2023.
Ronny Breivik
(Interim) Executive Chairman, B90 Holdings plc
29 June 2023
Audit Committee Report
General and Composition of the Audit Committee
The Audit Committee is a sub-committee of the Board. The Audit Committee
chairman reports formally to the Board on all matters within the Committee's
duties and responsibilities and on how the Audit Committee discharges its
responsibilities.
The Audit Committee consists of two members, Martin Fleisje (Chairman) and
Mark Rosman.
The biographies of the Audit Committee members are on pages 16-17 under
principle six, as well as on the Company's website at
www.b90holdings.com/corporate-info .
The Audit Committee meets at twice a year at appropriate times in the
reporting and audit cycle and otherwise as required. The Audit Committee also
meets regularly with the Company's external auditors.
Purpose and Responsibilities of Audit Committee
The purpose of the Audit Committee is to assist the Board to carry out the
following functions more efficiently and fully:
● Oversight of the integrity of the Group's formal
reports, statements and announcements relating to the Group's financial
performance; and
● Reviewing compliance with internal guidelines, policies
and procedures and other prescribed internal standards of behaviour.
To achieve such purposes, the Audit Committee has been assigned with the
following responsibilities:
● Reviewing the half-year and full-year financial
statements with management and with the external auditors as necessary prior
to their approval by the Board;
● Reviewing financial results announcements of the Group
and any other formal announcements relating to the Group's financial
performance and recommending them to the Board for approval;
● Reviewing recommendations from the CFO and the external
auditors on the key financial and accounting principles to be adopted by the
Group in the preparation of the financial statements;
● Reviewing the Group's systems for internal financial
control;
● Considering and making recommendations to the Board, to
put to shareholders for approval at the AGM, the appointment, re-appointment
and removal of the Company's external auditors and oversee the relationship
with the external auditors;
● Reviewing and approving the external audit plan and
regularly monitoring the progress of implementation of the plan;
● Determining and monitoring the effectiveness and
independence of the external auditors.
Main Activities in 2022 and 2023
On 20 June 2022 the Audit Committee reviewed the financial statements for
year-end 31 December 2021.
On 22 September 2022 the Audit Committee reviewed the financial results of the
Company for the six months ended 30 June 2022. The audit committee had the
2022 audit planning meeting with our external auditors on 23 May 2023 and a
completion audit committee call was held on 27 June 2023. On 29 June 2023 the
Audit Committee reviewed the financial statements for year-end 31 December
2022.
External Auditors
The external auditors of the Company are CLA Evelyn Partners Limited ("EP").
The appointment of EP as auditors by the Audit Committee was based on their
performance during past years. The Audit Committee review of the external
auditors confirmed the appropriateness of their reappointment and included
assessment of their independence, qualification, expertise and resources, and
effectiveness of their audit process.
Both the Board and the external auditors have safeguards in place to avoid the
possibility that the auditors' objectivity and independence could be
compromised. The services provided by the external auditors include the
Audit-related services. In recognition of public concern over the effect of
consulting services on auditors' independence, the external auditors are not
invited to general consulting work which can affect their independence as
external auditors.
The total remuneration of the external auditors for 2022 and for 2021 was as
listed in the table below:
2022 2021
Audit services €135,000 €130,000
The Audit Committee remains mindful of the attitude investors have to the
auditors performing non-audit services. The Committee has clear policies
relating to the auditors undertaking non-audit work and monitors the
appointment of the auditors for any non-audit work, with a view to ensuring
that non-audit work does not compromise the Company's auditor's objectiveness
and independence.
Through the discussions with the auditors and review of the scoped work no
matters were identified over the independence of the external auditors.
Financial Reporting
The Group's trading performance is monitored on an ongoing basis. An annual
budget is prepared, and specific objectives and targets are set. The budget is
reviewed and approved by the Board. The key trading aspects of the business
are monitored daily and internal management and financial accounts are
prepared monthly. The results are compared to budget and prior year
performance.
The Audit Committee has taken and will continue to take further steps to
ensure the Group's control environment is working effectively and efficiently.
--------------------------------
Martin Fleisje
Chairman of the Audit Committee
Remuneration Committee Report
General
The Remuneration Committee is responsible for determining and recommending to
the Board the framework for the remuneration of the Board chairman, executive
directors and other designated senior executives and, within the terms of the
agreed framework, determining the total individual remuneration packages of
such persons including, where appropriate, bonuses, incentive payments and
share options or other share awards.
The Remuneration Committee consists of two members, Mark Rosman (Chairman) and
Martin Fleisje. The Remuneration Committee meets at least once a year and
otherwise as required.
Key elements in Remuneration
As an AIM-quoted company, the Company is not required to comply with the
remuneration reporting requirements applicable to fully listed companies in
the UK. However, set out below are certain disclosures relating to directors'
remuneration:
● The remuneration of executive directors and certain
other senior executives is set by comparison to market rates at levels aimed
to attract, retain and motivate the best staff, recognising that they are key
to the ongoing success of the business.
● The remuneration of non-executive directors is a matter
for the Chairman and the executive directors to determine.
● No Director is involved in any decision as to his or her
own remuneration.
● The remuneration of senior management includes
equity-based payments (stock options) vested over time to retain their
employment.
Responsibilities of the Remuneration Committee
The responsibilities of the Remuneration Committee include the below and other
responsibilities as set forth in the Charter of the Committee:
● Setting the remuneration policy for all executive
directors;
● Recommending and monitoring the level and structure of
remuneration for senior management personnel;
● Reviewing the design of all share incentive plans for
approval by the Board and shareholders.
Share option scheme
On 17 May 2016, the Company adopted a "long term incentive senior management
and Directors' stock option plan" ("the Plan"). Options granted under the
Plan will entitle the participant to acquire Ordinary Shares at a price
determined in accordance with the rules of the Plan.
The Directors' interests in the Company's share options for the year ended 31
December 2022 are shown on page 10. Share options granted as per 31 December
2022 are shown in Note 18 on page 48.
The Committee remains committed to a fair and responsible approach to
executive pay whilst ensuring it remains in line with best practice and
appropriately incentivises executive directors over the longer term to deliver
the Group's strategy. An overview of Directors remuneration is shown in Note 5
on page 40.
---------------------------------
Mark Rosman, Chairman of the Remuneration Committee
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF B90 HOLDINGS PLC
Opinion
We have audited the financial statements of B90 Holdings plc (the 'group') for
the year ended 31 December 2022 which comprise the Consolidated Statement of
Comprehensive Income, the Consolidated Statement of Financial Position, the
Consolidated Statement of Changes in Equity, the Consolidated Statement of
Cash Flows and the notes to the consolidated financial statements, including a
summary of significant accounting policies. The financial reporting
framework that has been applied in their preparation is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by the European
Union.
In our opinion, the financial statements:
· give a true and fair view of the state of the group's affairs as at 31
December 2022 and of the group's loss for the year then ended; and
· have been properly prepared in accordance with IFRSs as adopted by the
European Union.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We are independent
of the group in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the FRC's Ethical
Standard as applied to listed entities, and we have fulfilled our other
ethical responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Our approach to the audit
Of the Group's 16 (2021: 16) reporting components, we subjected 6 (2021: 5) to
audits for group reporting purposes where the extent of our audit work was
based on our assessment of the risk of material misstatement and of the
materiality of the Group.
For the remaining 10 components, we performed analysis at a group level to
re-examine our assessment that there were no significant risks of material
misstatement within these.
The components within the scope of our work covered 100% of group revenue, 98%
of group loss before tax, and 100% of group assets.
All audit work relevant to this opinion has been performed by the Group audit
team in the UK.
Emphasis of matter related to impairment of other intangible assets
We draw attention to note 10 in the financial statements, which explains, for
Quasar Holdings Ltd (Bet90.com) and Spinbookie assets, the revenue growth
included as part of the annual impairment review is reliant on revenue
increases in excess of 146% in year 1 and 16% for years 2-5. The ultimate
outcome of this matter is not certain, and the financial statements do not
reflect any impairment that might be required against the Spinbookie assets,
or further impairment on Quasar Holdings Ltd should the revenue growth rates
not be achieved.
Our opinion is not modified in respect of this matter.
Key audit matters
In addition to the matter described in the Material uncertainty related to
going concern and Emphasis of matter sections, we have determined the matters
described below to be the key audit matters being those that were of most
significance in the audit of the financial statements of the current period.
Key audit matters include the most significant assessed risks of material
misstatement, including those risks that had the greatest effect on our
overall audit strategy, the allocation of resources in the audit and the
direction of the efforts of the audit team.
In addressing these matters, we have performed the procedures below which were
designed to address the matters in the context of the financial statements as
a whole, and in forming our opinion thereon. Consequently, we do not provide
a separate opinion on these individual matters.
Key audit matter Description of risk How the matter was addressed in the audit
Revenue Recognition Revenue is a key performance indicator of the Group. Revenue based targets We reviewed the Group's accounting policy for revenue recognition and assessed
may place pressure on management to distort revenue recognition. This may whether it is in line with industry and international financial reporting
result in overstatement to assist in meeting current targets or expectations. standards ("IFRS").
We evaluated the design and implementation of relevant internal controls that
the Group uses to ensure the completeness, accuracy and timing of revenue
Relevant disclosures in the Annual report & Accounts 2022: recognised.
Note 3: Accounting policies and Note 4: Segmental reporting We performed substantive testing including:
· Reviewed material revenue contracts with customers;
· Tested the recognition compliance with IFRS 9 & 15;
· Performed detailed testing on a sample of revenue transactions,
including agreement to third party reports;
· For affiliate marketing revenues - where cash has been received, we
agreed to bank statements and remittance;
· For sportsbook and casino revenues - We have corroborated the
movements to the corresponding player liability accounts; and
· We reviewed the disclosures made by the directors in the financial
statements.
Carrying value of Goodwill with indefinite useful lives and Other intangible The Group holds Goodwill with an indefinite useful life relating to the We reviewed management's accounting policy for impairment and assessed whether
assets acquisition of Quasar Holdings Ltd (Bet90.com) and It's a winner Limited it is in line with IAS 36.
(Oddsen.nu).
We evaluated the design and implementation of relevant internal controls
Other intangible assets should be held at the lower of amortised cost or their surrounding the review process of impairment models.
recoverable amount. Where there is an indicator of impairment such as
performance being worse than expected, an impairment review is undertaken. We performed substantive testing including:
Significant judgment is needed in order to assess the appropriateness of the · Challenged Management's assessment of the relevant CGUs with
recoverable amount of these assets/CGUs to which an indicator of impairment is reference to the guidance set out in IAS 36;
noted or to which the Goodwill has been allocated, in particular with
reference to forecasted cash flows, growth rates, discount rates and · Reviewed the assessment over indicators of impairment for other
sensitivity assumptions. intangibles with definite useful lives;
· Considered the appropriateness and mathematical accuracy of the
model used to determine the recoverable amount of the Quasar Holdings Ltd
Relevant disclosures in the Annual report & Accounts 2022: (Bet90.com), It's a winner Limited (Oddsen.nu) and Spinbookie CGUs;
Note 2: Critical accounting policies, Note 9: Goodwill and Note 10: Other · Considered historical trading performance by comparing both revenue
intangible assets and operating profit of the Group's CGUs with projected revenues and operating
profits;
· We assessed and challenged the appropriateness of the assumptions
concerning:
o Revenue growth rates to projected player revenue models based on player
acquisition and expected net gaming revenues per player;
o Costs basis to historic cost data including relevant affiliate and
platform agreements;
o inputs to the discount rate against latest market expectations; and
· We challenged and evaluated management's sensitivity analysis of
the key variables included within the value in use calculations.
In performing and to support our procedures, we used our internal valuation
specialists and third-party evidence.
Materiality
The materiality for the group financial statements as a whole ("group FS
materiality") was set at €148,100 (2021: €128,000). This has been
determined with reference to the benchmark of the group's net assets, which we
consider to be one of the principal considerations for members of the Group in
assessing the performance of the group. Group FS materiality represents 5%
(2021: 3.5%) of the group's net assets as presented on the face of the
Consolidated Statement of Financial Position. We have determined net assets to
be appropriate in the current year given Group is still investing in
developing its revenues and profitability. The group FS materiality was set at
a higher percentage compared to prior year after reflecting on other possible
parameters that might be used as well as the primary parameter described in
the forgoing. The materiality value determined is in line with that used
within the prior period
Performance materiality for the group financial statements was set at
€103,670 (2021: €102,560). being 70% (2021: 80%) of group FS
materiality, for purposes of assessing the risks of material misstatement and
determining the nature, timing and extent of further audit procedures. We
have set it at this amount to reduce to an appropriately low level the
probability that the aggregate of uncorrected and undetected misstatements
exceeds group FS materiality. We judged this level to be appropriate based
on our understanding of the group and its financial statements, as updated by
our risk assessment procedures and our expectation regarding current period
misstatements including considering experience from previous audits. It was
set at 70% to reflect our judgement on the risk of misstatements in the
current period in the context of areas of judgement and estimation in the
financial statements.
Material uncertainty related to going concern
We draw attention to note 1 in the financial statements, which indicates that
the Group has made a net loss for the year of €4.3m, had net current
liabilities of €2.7m as at 31 December 2022, negative cash flow from
operations of €2.3 million for the year ended 31 December 2022 and is
projected to make losses for the 6-month period ending 30 June 2023.
Notwithstanding that, the Group having raised additional funds in equity since
the 2022 year-end, amounting to €3.9 million (or £3.3 million), of which
€2 million is yet to be received, it remains reliant, inter alia, on being
able to manage its cash resources carefully and trading being in line with
management's expectations. Should trading not be in line with management's
expectations going forward or there is a delay to the receipt of the agreed
funding, the Group's ability to meet its liabilities may be impacted, in which
case the Group may need to raise further funding. In such circumstance that
this is needed and whilst the directors are confident of being able to raise
such funding if required, there is no certainty that such funding will be
available and/or the terms of such funding.
These conditions represent a material uncertainty that may cast significant
doubt on the Group's ability to continue as a going concern. Our opinion is
not modified in respect of this matter.
Notwithstanding the above, in auditing the financial statements we have
concluded that the directors' use of the going concern basis of accounting in
the preparation of the financial statements is appropriate. Our evaluation of
the directors' assessment of the group's ability to continue to adopt the
going concern basis of accounting included:
· We challenged and reviewed management's sensitivity analysis in
their forecasts, made up to December 2024, looking at cash generation and key
assumptions such as revenue generation from major sporting events. Where
appropriate we used third party data to review and, where necessary, challenge
their inputs;
· We reviewed and challenged the disclosures in the Annual Report
and Accounts surrounding Going Concern;
· We compared the forecast results to those actually achieved in
the 2023 financial period so far;
· We reviewed bank statements to monitor the cash position of the
group post year end, and obtained an understanding of significant expected
cash outflows (such as marketing expenditure) in the forthcoming 12-month
period; and
· We considered the group's funding position and requirements.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the Annual Report
and Accounts, other than the financial statements and our auditor's report
thereon. The directors are responsible for the other information contained
within the Annual Report and Accounts. Our opinion on the financial
statements does not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express any form of
assurance conclusion thereon. Our responsibility is to read the other
information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge
obtained in the course of the audit or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a
material misstatement in the financial statements themselves. If, based on
the work we have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement set out
on page 11, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and
for such internal control as the directors determine is necessary to enable
the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the group's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the group or to
cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities,
outlined above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud, is detailed below:
We obtained a general understanding of the Group's legal and regulatory
framework through inquiry of management concerning:
- their understanding of relevant laws and regulations;
- the entity's policies and procedures regarding compliance; and
- how they identify, evaluate and account for litigation claims.
We also drew on our existing understanding of the Group's industry and
regulation. We understand that the Group complies with the framework through:
- Maintaining an active licence through the Curacao Gaming Authority
("CGA") by maintaining records subject to random audits from the CGA.
In the context of the audit, we considered those laws and regulations:
- which determine the form and content of the financial statements;
- which are central to the Group's ability to conduct its business;
and
- where failure to comply could result in material penalties.
We identified the following laws and regulations as being of significance in
the context of the Group:
- Curacao gambling laws; and
- IFRS in respect of the preparation and presentation of the financial
statements.
We evaluated potential non-compliance with these laws and regulations by:
- Reviewing current Curacao gaming service licence; and
- Reviewing board minutes for evidence of non-compliance.
The senior statutory auditor led a discussion with senior members of the
engagement team regarding the susceptibility of the group's financial
statements to material misstatement, including how fraud might occur. The
areas identified in this discussion were:
- Manipulation of the financial statements, especially early
recognition of revenue, via fraudulent journal entries and possible management
bias in relation to the key assumptions which drive the recoverable values of
the Oddsen.nu, Quasar Holdings ltd (Bet90) and Spinbookie.com CGUs.
The procedures we carried out to gain evidence in the above areas included:
- Substantive work on revenue recognition and the carrying value of
Goodwill with indefinite useful lives and Other intangible assets (see above
KAMs); and
- Testing journal entries, focusing particularly on postings to
unexpected or unusual accounts including unexpected entries.
A further description of our responsibilities is available on the Financial
Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities
(http://www.frc.org.uk/auditorsresponsibilities) . This description forms
part of our auditor's report.
Use of our report
This report is made solely to the Group's members, as a body, in accordance
with our engagement letter dated 15 June 2021. Our audit work has been
undertaken so that we might state to the Group's members those matters we are
required to state to them in an auditor's report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Group and the Group's members as a
body, for our audit work, for this report, or for the opinions we have formed.
Andrew
Bond
45 Gresham Street
Senior Statutory Auditor, for and on behalf
of
London
CLA Evelyn Partners Limited
EC2V 7BG
Statutory Auditor
Chartered
Accountants
29 June 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended Year ended
31 December 2022 31 December 2021
Note € €
Revenue 4 2,138,212 826,855
Salary expense (2,112,893) (1,306,033)
Marketing and selling expense (763,821) (430,095)
Other administrative expense (1,950,016) (2,256,222)
Depreciation, amortisation and impairment expense (1,557,525) (109,325)
Total administrative expenses (6,384,255) (4,101,675)
Operating loss (4,246,043) (3,274,820)
Finance expense (35,833) (136,931)
Loss before tax 6 (4,281,876) (3,411,751)
Taxation 7 13,680 -
Loss for the period (4,268,196) (3,411,751)
Equity holders of the Company (4,268,196) (3,351,507)
Non-controlling interests - (60,244)
(4,268,196) (3,411,751)
Loss per share attributable to equity holders of the Company
- Basic (in €) 8 (0.0164) (0.0192)
- Diluted (in €) 8 (0.0164) (0.0192)
The Notes on pages 33 to 56 form part of these financial statements
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Restated
Year ended Year ended
31 December 31 December
2022 2021
Non-current assets Note € €
Goodwill 9 2,229,211 3,324,531
Other intangible assets 10 4,330,864 4,793,069
Property, plant and equipment 11 - -
Total non-current assets 6,560,075 8,117,600
Current assets
Other receivables & prepayments 12 193,627 159,999
Cash and cash equivalents 13 359,053 827,302
Total current assets 552,680 987,301
Total assets 7,112,755 9,104,901
Equity and liabilities
Share capital 14 - -
Additional paid-in capital 15 30,966,848 27,734,003
Reverse asset acquisition reserve 16 (6,046,908) (5,086,668)
Retained earnings 17 (21,957,873) (17,987,052)
Equity attributable to owners of the parent 2,962,067 4,660,283
Non-controlling interests - (24,388)
Total shareholders' equity 2,962,067 4,635,895
Non-current liabilities
Convertible loan note 19 655,646 -
Deferred tax liability 23 259,920 273,600
Total non-current liabilities 915,566 273,600
Current liabilities
Trade and other payables 20 3,210,344 4,170,629
Corporate income tax payable 24,778 24,777
Total current liabilities 3,235,122 4,195,406
Total equity and liabilities 7,112,755 9,104,901
Approved by the board on 29 June 2023 and signed on its behalf by:
Ronny Breivik
(Interim) Executive Chairman
The Notes on pages 33 to 56 form part of these financial statements
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Additional Equity portion Other reserves -
Share paid in convertible Loan Reverse asset Retained Non-controlling Total
capital capital Note acquisition reserve* earnings Total interest Equity
€ € € € € € € €
Balance as at 1 January 2021 - 15,466,741 429,770 (6,046,908) (14,907,070) (5,057,467) 35,856 (5,021,611)
Loss for the financial period - - - - (3,351,507) (3,351,507) (60,244) (3,411,751)
Convertible loan note conversions - 4,569,685 (429,770) - 126,499 4,266,414 - 4,266,414
Conversion of payables - 772,100 - - - 772,100 - 772,100
Share based acquisition (restated) - 3,779,059 - 960,240 - 4,739,299 - 4,739,299
Share based payments - - - - 145,026 145,026 - 145,026
Issue of share capital - 3,385,871 - - - 3,385,871 - 3,385,871
Costs of raising capital - (239,453) - - - (239,453) - (239,453)
Balance as at 31 December 2021 - 27,734,003 - (5,086,668) (17,987,052) 4,660,283 (24,388) 4,635,895
Loss for the financial period - - - - (4,268,196) (4,268,196) - (4,268,196)
Share based acquisition - 2,037,840 - (960,240) (51,988) 1,025,612 24,388 1,050,000
Share based payments - - - - 349,363 349,363 - 349,363
Issue of share capital - 1,219,800 - - - 1,219,800 - 1,219,800
Costs of raising capital - (24,795) - - - (24,795) - (24,795)
Balance as at 31 December 2022 - 30,966,848 - (6,046,908) (21,957,873) 2,962,067 - 2,962,067
* the other reserves include (1) Reserves relating to reverse asset
acquisition from prior periods & (2) Contingent earn-out shares issuable
in relation to the Spinbookie acquisition. The balances as per 31 December
2021 has been reclassified.
The Notes on pages 33 to 56 form part of these financial statements
CONSOLIDATED STATEMENT OF CASH FLOWS
31 December 31 December
2022 2021
€ €
Cash flows from operating activities
Operating (loss)/profit (4,246,043) (3,274,820)
Adjustments for:
Share based payments 349,364 145,026
Impairment of goodwill 1,095,320 -
Amortisation of intangibles 462,205 109,325
Bad debt expense 23,450 -
Cash flow used in operations before working capital changes (2,315,704) (3,020,469)
(Increase)/decrease in trade and other receivables (57,077) (132,502)
Increase/(Decrease) in trade and other payables 61,062 (733,670)
Cash flow used in operations (2,311,719) (3,886,641)
Tax (paid)/received - -
Cash flow used in operating activities (2,311,719) (3,886,641)
Cash flow from investing activities
Acquisition of intangible assets - (600,000)
Net cash outflow used in investing activities - (600,000)
Cash flow from financing activities
Interest paid - -
Proceeds of issue of new shares 1,195,004 3,146,418
Receipts from loans 648,466 1,847,000
Net cash inflow from financing activities 1,843,470 4,993,418
Net increase/(decrease) in cash and cash equivalents (468,249) 506,777
Cash and cash equivalents at start of period 827,302 320,525
Cash and cash equivalents at end of period 359,053 827,302
The Notes on pages 33 to 56 form part of these financial statements
Notes to the Consolidated Financial Statements
For the year ended 31 December 2022
Note 1: General Information
Company descriptions and activities
B90 Holdings plc (the "Company") and its subsidiaries (together the "Group")
was founded in 2012 in the Isle of Man (Company number 9029V). In July 2013,
the Company listed on the AIM market of the London Stock Exchange and
completed a reverse merger in June 2016.
The Group is focused on the operation of its own online Sportsbook and Casino
product (via Spinbookie.com and Bet90.com) as well as marketing activities for
other online gaming companies (using oddsen.nu and tippen4you.com).
Significant accounting policies
The principal accounting policies as adopted by the Group in the preparation
of its consolidated financial statements for the year ended 31 December 2022
are set out below. The accounting policies have been consistently applied,
unless otherwise stated.
Basis of preparation
The Consolidated Financial Statements have been prepared in accordance with
International financial reporting standards (''IFRS") as adopted by the
European Union. The Consolidated Financial Statements have been prepared under
the historical cost convention and on a going concern basis.
Basis of consolidation
The Consolidated Financial Statements incorporate the results of B90 Holdings
plc (the "Company") and entities controlled by the Company (its subsidiaries)
(collectively the "Group"). Control is achieved where the Company has the
power over the investee, is exposed, or has rights, to variable returns from
its involvement with the investee and has the ability to use its power to
affect its returns.
The results of subsidiaries disposed of are included in the consolidated
statement of comprehensive income to the effective date of loss of control and
those acquired from the date on which control is transferred to the Group.
Going concern
Although the Group has increased revenues by approximately 160% to €2.1
million, the Group still operates at a loss. Whereas the directors believe the
acquisitions acquired in 2021 (Oddsen.nu and Spinbookie) will continue to
drive increased revenues in the future, the reported net loss amounts to
€4.3 million for the year ended 31 December 2022. Although this loss was
significantly impacted by an impairment charge and increased amortization of
intangible assets, the Group had a negative cash flow from operations of
€2.3 million for the year ended 31 December 2022. Furthermore, the Group
expects to report a loss for the six months ending 30 June 2023.
As per 31 December 2022, the Group shows total current liabilities of €3.2
million and a negative working capital position of €2.7 million. Whilst the
Directors believe that its revised strategy will show a significant increase
in revenues, the Group continues to operate at a loss, although management
expects the Group to become cash flow positive during the second half of 2023,
executing on its revised strategic plan to grow the Group's operations and
revenues in the various verticals in a targeted manner.
Furthermore, as a result of a recent fundraise, which is announced on 30 June
2023, amounting to €2 million, the Group has improved its financial position
at the time of release of this report, with a total of €3.9 million (or
£3.3 million) raised during 2023 to date.
Should trading not be in line with management's expectations going forward,
the Group's ability to meet its liabilities may be impacted, in which case the
Group may need to raise further funding. In such circumstance that this is
needed and whilst the directors are confident of being able to raise such
funding if required, there is no certainty that such funding will be available
and/or the terms of such funding. These conditions are necessarily considered
to represent a significant uncertainty which may cast doubt over the Group's
ability to continue as a going concern.
Whilst acknowledging this uncertainty, the Directors remain confident that the
recent fundraise will allow the Group to expand its operations and generate a
positive operational cash flow within a reasonable time or, if needed, be able
to raise additional funding when required, therefore the Directors consider it
appropriate to prepare the financial statements on a going concern basis.
The financial statements do not include the adjustments that would result if
the Group was unable to continue as a going concern.
Note 2: Critical accounting policies, estimates and judgements
The preparation of the Consolidated Financial Statements requires the
Directors to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets and
liabilities, income and expense. Actual results may differ from these
estimates.
Key areas of estimation uncertainty
Impairment of Goodwill and other intangible fixed assets
Determining whether goodwill and other intangible fixed assets with a definite
or indefinite useful life are impaired requires an estimation of the
value-in-use of the cash-generating units. Goodwill was recorded following the
acquisition of 51% in Quasar Holdings Ltd in 2017, in the acquisition of the
operations of Oddsen.nu in September 2021. The total balance per 31 December
2022 amounts to €2.2 million. The directors have used various estimates,
revenue forecasts and expected future cash flows. The recently completed and
announced fundraises allow the Group to invest in marketing and the Directors
believe this will grow its overall operations to support the carrying value
of goodwill. If some of the expectations are not met, impairment of the
goodwill balance may be necessary in the future. Further details around the
estimates and assumptions used are disclosed in notes 9 and 10.
Other areas of estimation
Convertible Bond Note
The Company issued a £541,000 (in December 2022) unsecured convertible
bonds of 10%. Interest will be accrued and convert with the principal amount.
The bonds are repayable three years from their issue date, and could be
converted, at request of the lender, any day after 31 December 2023 at a 10%
discount to the volume weighted average price for the five trading days prior
to the conversion notice. The Loan Notes are convertible, at the discretion of
the Company, at any time and on the same terms.
The convertible bonds were accounted as a financial liability as required
under IFRS 9. The convertible bonds includes conversion at a 10% discount to
the market price, and pays a 10% interest. The directors believe these terms
are in line with market conditions.
Share-Based Payments
Certain employees (including Directors and senior Executives) of the Company
receive remuneration in the form of share-based payment transactions.
The fair value is determined using the Black-Scholes valuation model. The
Directors believe this is appropriate considering the effects of the vesting
conditions, expected exercise period and the dividend policy of the Company.
Due to limited trading history, the expected volatility has been based on the
5-year historical volatility of a mix of share prices from other companies in
the same industry, as well as the overall market volatility.
New Standards, interpretations and amendments adopted by the Group
Several new and amended existing International Financial Reporting Standards
and interpretations, issued by the IASB, were effective from 1 January 2022
and have been adopted by the Group during the period with no significant
impact on the consolidated results or financial position of the Group.
New Standards that have not been adopted by the group as they were not
effective for the year
Several new standards and amendments to existing International Financial
Reporting Standards and interpretations, issued by the IASB and adopted, or
subject to endorsement, will be effective from 1 January 2023 and 2024 and
have not been adopted by the Group during the period. At this stage management
are still assessing the full impact on the consolidated results or financial
position of the Group. None are expected to have a material impact on the
consolidated financial statements in the period of initial application.
Note 3: Significant accounting policies
The principal accounting policies applied in the preparation of these
Consolidated Financial Statements are set out below. The policies have been
consistently applied to all years presented, unless otherwise stated.
Revenue
Revenue from contracts with customers is recognised when the control over the
services is transferred to the customer. The transaction price is the amount
of the consideration that is expected to be received based on the contract
terms.
In determining the amount of revenue from contracts with customers, the Group
evaluates whether it is a principal or an agent in the arrangement. The Group
is principal when the Group controls the promised services before transferring
them to the customer. In these circumstances, the Group recognises revenue for
the gross amount of the consideration. When the Group is an agent, it
recognises revenue for the net amount of the consideration, after deducting
the amount due to the principal. The Group does not record revenue when there
is uncertainty around the collection of the receivable.
Sportsbook and casino revenue
Revenue is recognised provided that it is probable that economic benefits will
flow to the Group and the revenue can be reliably measured. Revenue is
recognised in the accounting periods in which the transactions occurred and
after adding the fees and charges applied to customer accounts, and is
measured at the fair value of the consideration received or receivable.
Revenue from these activities comprises:
Sportsbook
Sport online gaming revenue comprises bets placed less pay-outs to customers,
adjusted for the fair value of open betting positions, adjusted for the fair
value of certain promotional bonuses granted to customers.
Casino games
Casino, Bingo and other online gaming revenue is represented by the difference
between the amounts of bets placed by customers less amounts won, adjusted for
the fair value of certain promotional bonuses granted to customers.
The Company acts as the principal in sportsbook and casino operations.
Marketing commission revenue
In its operations which generate marketing commissions, the Group acts as the
agent. Revenue from marketing contracts with customers is recognised when
players are losing their funds on the operators' platforms on which the
Company is basing the amounts to be invoiced. In some cases, customers agree
to pay a fixed fee per acquired player. All fees and commissions are invoiced
on a monthly basis. The transaction price is the commission amount of the
consideration that is expected to be received based on the contract terms. The
performance obligation of a revenue contract is satisfied at the point a
player's losses are incurred. Operators typically pay a month in arrears. This
gives rise to contract assets on a short term basis.
Administrative expenses
Administrative expenses consist primarily of staff costs (including
contractors), corporate professional expenses, and depreciation and
amortisation. All expenses are recognised on an accruals' basis.
Foreign currencies
The Group's functional and presentation currency is EURO. Transactions in
foreign currency are recorded at the rates of exchange prevailing on the dates
of the transactions. At each statement of financial position date, monetary
assets and liabilities that are denominated in foreign currencies are
retranslated at the rates prevailing on the statement of financial position
date. Any gains or losses arising on translation are taken to the profit and
loss.
Taxation
Current tax
Current tax for each taxable entity in the Group is based on the local taxable
income at the local statutory tax rate enacted or substantively enacted at the
statement of financial position date and includes adjustments to tax payable
or recoverable in respect of previous periods.
Deferred tax
Deferred taxation is calculated using the liability method, on temporary
differences arising between the tax bases of assets and liabilities and their
carrying amounts in the Consolidated Financial Statements. However, if the
deferred tax arises from the initial recognition of an asset or liability in a
transaction other than a business combination that at the time of the
transaction affects neither accounting nor taxable profit or loss, it is not
accounted for. Deferred tax is determined using tax rates and laws that have
been enacted (or substantively enacted) by the date of the statement of
financial position and are expected to apply when the related deferred tax
asset is realised or the deferred tax liability is settled.
Deferred tax liabilities are provided in full.
Deferred tax assets are recognised to the extent that it is probable that
future taxable profits will be available against which the temporary
differences can be utilised.
Changes in deferred tax assets or liabilities are recognised as a component of
tax expense in the profit and loss, except where they relate to items that are
charged or credited directly to equity in which case the related deferred tax
is also charged or credited directly to equity.
Intangible fixed assets
Acquired intangible assets
Intangible assets acquired separately consist of domain names and customer
lists and are capitalised at cost. Those acquired as part of a business
combination are recognised separately from goodwill if the fair value can be
measured reliably. These intangible assets are amortised over the useful
life of the assets, which is mentioned at the table below.
The cost of intangible assets acquired in a business combination is the fair
value at acquisition date. The valuation methodology used for each type of
identifiable asset category is detailed below:
Asset category Valuation methodology Useful life
Customer relationships Excess earnings 4 years
Brand and domain names Relief from royalty 20 years
Licenses Cost approach 4 years
Spinbookie assets Cost approach 10 years
Goodwill
Goodwill represents the excess of the fair value of the consideration in a
business combination over the Group's interest in the fair value of the
identifiable assets, liabilities and contingent liabilities acquired.
Consideration comprises the fair value of any assets transferred, liabilities
assumed and equity instruments issued.
Goodwill is capitalised as an intangible asset with any impairment in carrying
value being charged to the profit and loss and not subsequently reversed.
Where the fair values of identifiable assets, liabilities and contingent
liabilities exceed the fair value of consideration paid, the excess is
credited in full to the profit and loss on the acquisition. Changes in the
fair value of the contingent consideration are charged or credited to the
profit and loss. In addition, the direct costs of acquisition are charged
immediately to the profit and loss.
Goodwill is not amortised as the Group assumes an indefinite useful life.
Non-controlling interests
Non-controlling interests in the net assets of consolidated subsidiaries are
identified separately from the Group's equity therein. Non-controlling
interests consist of the amount of those interests at the date of the original
business combination and the non-controlling shareholder's share of changes in
equity since the date of the combination except where any non-controlling
interests have been acquired by the Group. Any share of gains or losses are
transferred to the Group's retained earnings. Total comprehensive income is
attributed to non-controlling interests even if this results in the
non-controlling interests having a deficit balance.
Accounting for acquisition of non-controlling interests
When the Group acquires a minority interest of an entity over which the Group
already has control, the excess consideration over the fair value of the
minority interest is taken to equity reserves.
Impairment of non-financial assets
Impairment tests on goodwill are undertaken annually and where applicable an
impairment loss is recognised immediately in the profit and loss. Other
non-financial assets are subject to impairment tests whenever events or
changes in circumstances indicate that their carrying amount may not be
recoverable. Where the carrying value of an asset exceeds its recoverable
amount (being the higher of value in use and fair value less costs to sell),
the asset is written down accordingly through the profit and loss.
Where it is not possible to estimate the recoverable amount of an individual
asset, the impairment test is carried out on the asset's cash generating unit
(i.e. the smallest group of assets to which the asset belongs for which there
are separately identifiable and largely independent cash inflows).
Equity
Equity comprises the following:
• "Share capital" represents amounts subscribed for shares
at nominal value. Nominal value per share is nil.
• "Additional paid in capital" represents amounts
subscribed for share capital in excess of nominal value.
• The "Reverse asset acquisition reserve" represents the
difference in carrying value between the Additional paid in capital of B90
Holdings plc and the Share capital of Sheltyco on the acquisition date (June
2016).
• The "Equity portion of the convertible loan note"
represents the difference between the fair value of the entire instrument and
the fair value of the liability component at initial recognition.
• "Retained earnings" represents the accumulated profits
and losses attributable to equity shareholders. This also includes issued and
vested warrants and options.
Business combinations
For business combinations, the Group estimates the fair value of the
consideration transferred, which can include assumptions about the future
business performance of the business acquired and an appropriate discount rate
to determine the fair value of any contingent consideration. Judgement is also
applied in determining whether any future payments should be classified as
contingent consideration or as remuneration for future services.
The Group then estimates the fair value of assets acquired and liabilities
assumed in the business combination, including any separately identifiable
intangible assets. These estimates also require inputs and assumptions
including future earnings, customer attrition rates and discount rates. The
Group engages external experts to support the valuation process, where
appropriate. IFRS 3 'Business Combinations' allows the Group to recognise
provisional fair values if the initial accounting for the business combination
is incomplete. Judgement is applied as to whether changes should be applied at
the acquisition date or as post-acquisition changes.
The fair value of contingent consideration recognised in business combinations
is reassessed at each reporting date, using updated inputs and assumptions
based on the latest financial forecasts for the relevant business. Fair value
movements and the unwinding of the discounting is recognised within operating
expense.
Financial instruments
Trade and other receivables
Trade receivables are held in order to collect the contractual cash flows and
are initially measured at the transaction price as defined in IFRS 15. The
Group has applied IFRS 9's simplified approach and has calculated the ECLs
based on lifetime of expected credit losses. As the contracts of the Group do
not contain significant financing components. Impairment losses are recognised
based on lifetime expected credit losses in profit or loss.
Other receivables are held in order to collect the contractual cash flows and
accordingly are measured at initial recognition at fair value, which
ordinarily equates to cost and are subsequently measured at cost less
impairment due to their short term nature. A provision for impairment is
established based on 12-month expected credit losses unless there has been a
significant increase in credit risk when lifetime expected credit losses are
recognised. The amount of any provision is recognised in profit or loss.
Cash and cash equivalents, and finance income
Cash and cash equivalents includes cash in hand, deposits held at call with
banks, other short-term highly liquid investments with original maturities of
three months (These include Player wallets). Finance income is recognised on
bank balances as and when it is receivable.
Trade payables
Trade payables, including customer balances, are recognised initially at fair
value and subsequently measured at amortised cost using the effective interest
method.
Financial liabilities
Financial liabilities are classified as financial liabilities measured at
amortised cost. The Group determines the classification of its financial
liabilities at initial recognition. The measurement of financial liabilities
is initially recognised at fair value and subsequently measured at amortised
cost using the effective interest method. Amortised cost is calculated by
taking into account any issue costs and any discount or premium on
settlement. Gains and losses arising on the repurchase, settlement or
cancellation of liabilities are recognised respectively in interest and other
revenues and finance costs.
Borrowings and finance costs
Borrowings are initially recognised at fair value net of transaction costs
incurred. Borrowings are subsequently stated at amortised cost; any
difference between the proceeds (net of transaction costs) and the redemption
value is recognised in the profit and loss over the period of the borrowings
using the effective interest method. Borrowings are classified as current
liabilities unless the Group has an unconditional right to defer settlement of
the liability for at least 12 months after the date of the Statement of
Financial Position.
Convertible Bond Note
The proceeds received on issue of the Group's convertible bond note are
recorded as a long-term liability. Any accrued and unpaid interest is added to
the principal amount.
Warrants
When warrants are issued, the fair value is determined using the Black-Scholes
valuation model. The Directors believe this is appropriate considering the
effects of the vesting conditions, expected exercise period and the dividend
policy of the Company.
Due to limited trading history, the expected volatility has been based on the
5-year historical volatility of a mix of share prices from other companies in
the same industry, as well as the overall market volatility.
The value of the issues and vested warrants is included in retained earnings
in the equity section.
Note 4: Segment reporting
IFRS 8 requires operating segments to be identified on the basis of internal
reports about components of the Group that are regularly reviewed by the chief
operating decision maker to allocate resources to the segments and to assess
their performance. In accordance with IFRS 8, the chief operating decision
maker has been identified as the Board. The Board reviews the Group's
internal reporting in order to assess performance and allocate resources.
The Board considers that the business comprises of two activities:
1. Operating sportsbook and casino brands
2. Online marketing and promotion of online sportsbook and casino
websites, using affiliate agreements
Revenue originates from:
2022 2021
€ €
Online sportsbook and casino operations 1,391,208 640,690
Affiliate marketing commissions 747,004 186,165
Total 2,138,212 826,855
The Board evaluates the operations based on the revenues metric. Revenues
consist of invoiced commissions for the marketing and player acquisition
services provided, as well as revenues generated from own operations, based in
Malta and Curaçao. The Group operates an integrated business model and,
therefore, does not allocate general operating expenses, assets and
liabilities to any of the originating segments.
Note 5: Key management remuneration
Key management remuneration for each period was as follows:
Cash based Share based payments Total Total
salary Remuneration 2022 Remuneration 2021
€ € € €
Ronny Breivik 104,335 67,151 171,486 -
Martin Fleisje - - - -
Paul Duffen - - - 237,746
Marcel Noordeloos 162,000 78,979 240,979 191,158
Mark Rosman 50,400 67,151 117,551 70,842
Rainer Lauffs - - - 130,592
Karim Peer 294,993 28,295 323,288 30,136
Nigel Eastwood 19,443 - 19,443 -
Total 631,171 241,576 872,747 660,474
Directors received severance payments of €129,152 (2021: €nil).
Note 6: Profit for the year
Profit before taxation is stated after charging/(crediting):
Year ended Year ended
31 December 2022 31 December 2021
€ €
Depreciation of property, plant and equipment - -
Amortisation of intangibles 462,205 109,325
Impairment of goodwill 1,095,320 -
Bad debt expense 23,450 -
Short term lease expense 28,018 21,018
Share based payment charge 394,364 145,026
Foreign exchange losses 13,778 42,589
Note 7: Taxation
Year ended Year ended
31 December 2022 31 December 2021
€ €
Loss before tax (4,281,876) (3,411,751)
Profit before tax multiplied by the standard rate of corporation tax in Isle - -
of Man of 0%
Adjustments to tax charge in respect of previous periods - -
Effect of different tax rates in other countries
Release of deferred tax liability relating to acquisition 13,680 -
Tax credit 13,680 -
Note 8: Earnings per share (basic and diluted)
Year ended Year ended
31 December 2022 31 December 2021
€ €
Earnings
Earnings for the purposes of basic and diluted earnings per share, being net
profit after tax attributable to equity shareholders
(4,268,196) (3,351,507)
Number of shares
Weighted average number of ordinary shares for the purposes of: 260,483,323 174,331,667
Basic earnings per share
Diluted earnings per share 260,483,323 174,331,667
Basic loss per share (in €) (0.0164) (0.0192)
Diluted loss per share (in €) (0.0164) (0.0192)
The Group has granted share options in respect of equity shares to be issued,
the details of which are disclosed in Note 18. Share options and warrants
outstanding are anti-dilutive due to the losses incurred in each period.
Note 9: Goodwill
Goodwill
€
Cost
At 1 January 2021 1,410,931
Additions 1,913,600
Impairments -
At 31 December 2021 3,324,531
Additions -
Impairments (1,095,320)
At 31 December 2022 2,229,211
Net Book Value
At 1 January 2021 1,410,931
At 31 December 2021 3,324,531
At 31 December 2022 2,229,211
Goodwill
Goodwill arose following:
- the acquisition of 51% in Quasar Holdings Ltd in 2017
- the acquisition of the operations of Oddsen.nu in September 2021
The addition of goodwill in 2021 is related to the Oddsen.nu acquisition. The
impairment of goodwill in 2022 is related to the acquisition of Quasar
Holdings.
Key assumptions and inputs used
The key assumptions and inputs used for the assessment of the value of the
goodwill are disclosed in Note 10, as well as assumptions used for the
impairment review.
Note 10: Other intangible assets
Customer database Brand and domain names Licences and other Spinbookie assets Total
€ € € € €
Cost
At 1 January 2021 61,742 4,570,103 105,000 - 4,736,845
Additions 337,000 2,399,000 - 1,997,299 4,733,299
Disposals (37,142) (3,076,603) - - (3,113,745)
At 31 December 2021 361,600 3,892,500 105,000 1,997,299 6,356,399
Additions - - - - -
Disposals - - (105,000) - (105,000)
At 31 December 2022 361,600 3,892,500 - 1,997,299 6,251,399
Amortisation
At 1 January 2021 (61,742) (4,401,008) (105,000) - (4,567,750)
Charge for the period (21,063) (88,262) - - (109,325)
Disposals 37,142 3,076,603 - - 3,113,745
At 31 December 2021 (45,663) (1,412,667) (105,000) - (1,563,330)
Charge for the period (84,250) (178,225) - (199,730) (462,205)
Disposals - - 105,000 - 105,000
At 31 December 2022 (129,913) (1,590,892) - (199,730) (1,920,535)
Net Book Value
At 1 January 2021 - 169,095 - - 169,095
At 31 December 2021 315,937 2,479,832 - 1,997,299 4,793,069
At 31 December 2022 231,687 2,301,608 - 1,797,569 4,330,864
Customer database
The Customer database relates to the acquisition of the Oddsen.nu operations
in September 2021. Databases previously used were fully amortised and due to
the age of the database, these databases have been disposed during the year as
these databases were outdated. The estimated remaining life of the customer
database is 1.5 years.
Brand and domain names
The brand and domain names relate to the following acquisitions:
1. Quasar Holdings Ltd (owning Bet90.com) in 2017 (51%);
2. T4U Marketing ltd in 2017 (51%); and
3. Oddsen.nu in 2021 (100%).
Brand and domain names are considered to be business operations.
The carrying value of the brand and domain names for Bet90 (Quasar Holdings
ltd acquisition) as per 31 December 2022 amounts to €52,546. It has a
remaining estimated lifetime of 1 year.
Oddsen.nu is considered to be a single cash-generating unit ("CGU"). The
carrying value of the brand and domain names for Oddsen.nu as per 31 December
2022 amounts to €2,249,063 and has a remaining estimated lifetime of 18.75
years.
Licenses and other
Licenses and other related to the MGA license which was acquired in 2017 when
the Group acquired the first 51% in Bet90. This license was amortised in 3
years and was fully amortised. The Company surrendered the MGA license during
2022 as it had moved its operational brands under a Curacao license.
Spinbookie assets
In December 2021, the Group acquired the business of Spinbookie.com, which is
presented under Spinbookie assets. This includes a fully operational
sportsbook and casino operation, operating using a Curacao gaming license.
Spinbookie operates on Betconstruct, a gaming software developer platform and
has various payment service providers and other operating tools implemented.
The assets will be amortised in 10 years and per 31 December 2022 therefore
has 9 years remaining.
Impairment reviews
The Directors have performed an impairment review of intangible fixed assets
and goodwill at the end of the year.
Quasar Holdings ltd (Bet90) Oddsen.nu Spinbookie .com Consolidated Totals
€ € € €
Goodwill 315,611 1,913,600 - 2,229,211
Other intangibles 52,546 2,480,749 1,797,569 4,330,864
Other non-current assets - - - -
CGU Carrying value at 31 Dec 2022 368,157 4,394,349 1,797,569 6,560,075
CGU Carrying value at 31 Dec 2021 1,521,752 4,598,550 1,997,299 8,117,601
Goodwill is not amortised.
In accordance with IAS 36 and the Group's stated accounting policy, an
impairment test is carried out annually on the carrying amounts of goodwill
and a review for indicators of impairment is carried out for other non-current
assets. Where an impairment test was carried out, the carrying value is
compared to the recoverable amount of the asset or the cash-generating unit.
The recoverable amount for Quasar Holdings ltd (Bet90), Oddsen.nu and
Spinbookie were determined to be necessary given the allocation of goodwill
with an indefinite useful life requiring annual review. In each case, the
recoverable amount was the value in use of the assets, which was determined by
discounting the future cash flows of the relevant asset or cash-generating
unit to their present value.
The recoverable amount of the Quasar Holdings ltd (Bet90), Oddsen.nu and
Spinbookie CGUs as at 31 December 2022, of €0.4 million, €4.6 million and
€1.8 million respectively, has been determined based on a value in use
calculation using cash flow projections from financial budgets approved by the
Directors. Key assumptions in performing the value in use calculation are set
out below.
Key assumptions and inputs used:
Cash flow projections have been prepared for a five-year period, following
which a long-term growth rate has been assumed. Underlying growth rates, as
shown in the table below for each of Quasar Holdings ltd (Bet90), Spinbookie
and Oddsen.nu, have been developed through projections of future player
acquisitions and net gaming revenue based on data obtained from partners and
affiliate partners
The pre-tax discount rate that is considered by the Directors to be
appropriate is based on the Group's specific Weighted Average Cost of Capital,
adjusted for tax, which is considered to be appropriate for the
cash-generating units.
Pre-tax Underlying Underlying Long-term
discount rate revenue growth rate revenue growth rate
applied year 1 growth rate year 6+
years 2-5
At 31 December 2022
Quasar Holdings ltd (Bet90) 18.45% 163% 15.7% 2%
Oddsen.nu 14.6% 1% 5% 2%
Spinbookie assets 18.45% 146% 18% 2%
At 31 December 2021
Quasar Holdings ltd (Bet90) 26.0% 469% 27.8% 2%
Oddsen.nu 14.3% 1% 4.7% 2%
Downside scenarios were applied on Quasar Holdings ltd (Bet90) of between 20%
and 30%, for Oddsen.nu 5% and 0% and for Spinbookie 20% and 40% on each year's
margins.
The Group has impaired the goodwill related to Quasar Holdings ltd (Bet90) for
the amount of €1,095,320. A further downward adjustment of 1% in revenue
will result in a further impairment of €142,628 or an upward adjustment of
1% in WACC rate will result in a further impairment of €45,909.
The calculation of value in use for the Oddsen.nu is most sensitive to the
following assumptions:
● Revenue - A reduction in the revenue cumulative annual growth rate
("CAGR") for years 1-5 from 5.3% down to 4.9% would result in the recoverable
amount equalling the carrying value.
● Weighted Average Cost of Capital - Whereas the Directors believe
the WACC rate is conservative, an increase in WACC rate to 14.9%, combined
with the sensitivities on profit forecast, would result in the recoverable
amount equalling the carrying value.
The calculation of value in use for the Spinbookie is most sensitive to the
following assumptions:
● Revenue - A reduction in the revenue cumulative annual growth rate
("CAGR") for years 1-5 from 36.9% down to 27.7% would result in the
recoverable amount equalling the carrying value.
● Weighted Average Cost of Capital - Whereas the Directors believe
the WACC rate is conservative, an increase in WACC rate to 37.4%, combined
with the sensitivities on profit forecast, would result in the recoverable
amount equalling the carrying value.
The annual impairment review on goodwill and the intangible fixed assets
showed that an impairment was needed for the Quasar Holdings ltd goodwill for
the year 2022. For the other assets, no impairment was necessary for the years
2022 and 2021.
Note 11: Property, plant & equipment
Furniture & equipment
Computers Total
€ € €
Cost
At 1 January 2021 4,500 1,005 5,505
Additions - - -
Disposals - - -
At 31 December 2021 4,500 1,005 5,505
Additions - - -
Disposals (4,500) (1,005) (5,505)
At 31 December 2022 - - -
Depreciation
At 1 January 2021 (4,500) (1,005) (5,505)
Charge for the period - - -
Disposals - - -
At 31 December 2021 (4,500) (1,005) (5,505)
Charge for the period - - -
Disposals 4,500 1,005 5,505
At 31 December 2022 - - -
Net Book Value
At 1 January 2021 - - -
At 31 December 2021 - - -
At 31 December 2022 - - -
Note 12: Trade and other receivables
Year ended Year ended
31 December 2022 31 December 2021
€ €
VAT receivables 37,113 42,042
Accounts receivable 52,532 89,045
Other receivables and prepayments 103,982 28,912
Total 193,627 159,999
Credit risk arises when a failure by counter parties to discharge their
obligations could reduce the amount of future cash inflows from financial
assets on hand at the reporting date. The Group has policies in place to
ensure that provision of services is made to customers with an appropriate
credit history and monitors on a continuous basis the ageing profile of its
receivables.
The Group's exposure to credit risk is influenced mainly by the individual
characteristics of each customer. However, management also considers the
factors that may influence the credit risk of its customer base, including the
default risk of the industry and country in which customers operate. Due to
the nature of the Group's operations the Group only has a few customers.
Impairment
A provision for impairment of trade receivables is established using an
expected loss model. Expected loss is calculated from a provision matrix
based on the expected lifetime default rates and estimates of loss on default.
We have recorded an impairment charge of €23,450 for the year ended 31
December 2022 (€nil for the year ended 31 December 2021).
Note 13: Cash and cash equivalents
Year ended Year ended
31 December 2022 31 December 2021
€ €
Cash held in current accounts and wallets 359,053 827,302
Total 359,053 827,302
Included within the cash and cash equivalents are balances held in relation to
the liabilities to customers shown in Note 20.
Note 14: Share capital
Year ended Year ended
31 December 2022 31 December 2021
€ €
Allotted, called up and fully paid
282,144,816 (2021: 238,406,683) Ordinary shares - -
Par value of the shares nil nil
During the year the Company issued 43,738,133 New Ordinary Shares, on the
following dates:
Date: New Ordinary Shares Pursuant to:
13 May 2022 13,452,532 Acquisition of Oddsen.nu deferred consideration
16 May 2022 12,713,043 Equity subscription
21 June 2022 500,000 Acquisition of 49% inT4U Marketing ltd
9 September 2022 7,625,000 Equity subscription
9 September 2022 847,558 Conversion of payables
9 September 2022 8,600,000 Deferred consideration for Spinbookie.com
43,738,133
Note 15: Additional paid in capital
Additional paid in capital represents amounts subscribed for share capital in
excess of par value. Details of additions are described in Note 14 above.
Note 16: Reverse asset acquisition reserve
The reverse acquisition completed on 30 June 2016 has been accounted for as a
share-based payment transaction in accordance with IFRS 2. On the basis of the
guidance in paragraph 13A of IFRS 2, the difference in the fair value of the
consideration shares and the fair value of the identifiable net assets should
be considered to be payment for the services to transition to a public
company.
Note 17: Retained earnings
Retained earnings represents the cumulative net gains and losses recognised in
the consolidated statement of comprehensive income and other transactions with
equity holders.
Note 18: Share based payments
Equity-settled share option scheme
On 17 May 2016, the Group adopted a "long term incentive senior management and
Directors' stock option plan", which was amended on 30 June 2016 ("the
Plan"). Options granted under the Plan will entitle the participant to
acquire Ordinary Shares at a price determined in accordance with the rules of
the Plan.
During the years ending 31 December 2021 and 31 December 2022, the following
options have been granted under the Plan:
On 17 March 2021, the Board granted 6,215,000 share options to Directors and
key employees with an exercise price of £0.05 for all of the options. These
options expire on its 5(th) anniversary on 17 March 2026. All options vest
over 4 equal yearly instalments starting 1 year after the grant date.
On 1 October 2021, the Board granted 13,530,000 share options to Directors and
key employees with an exercise price of £0.13 for all of the options. These
options expire on its 5(th) anniversary on 1 October 2026. All options vest
over 4 equal yearly instalments starting 1 year after the grant date.
On 22 June 2022, the Board granted 2,000,000 share options to a Director with
exercise price of £0.05. These options expire on its 5(th) anniversary on 22
June 2027. All options vest over 4 equal yearly instalments starting 1 year
after the grant date.
There are 22,955,000 options are outstanding at 31 December 2022.
Warrants
On 17 March 2021, the Company issued 750,000 warrants to one of its advisers,
in the process of restoring the trading of the Company's shares. These
warrants have an exercise price of £0.05 per warrant and can be exercised
during the period from the date of issue until the 3(rd) anniversary.
On 9 September 2022, the Company issued 3,588,500 warrants in a package to
investors subscribing for equity. These warrants have exercise price of £0.04
per warrant and can be exercised during the period from the date of issue
until the 3(rd) anniversary.
No warrants have been exercised during 2021 and 2022.
As a result of the above a total of 4,338,500 warrants are outstanding at 31
December 2022.
Details of the share options and warrants outstanding during the period are as
follows:
Number of share options and warrants Weighted average exercise price (£)
Outstanding as at 1 January 2021 5,955,344 0.210
Exercisable as at 1 January 2021 3,940,344 0.235
Options Cancelled on 17 March 2021 (4,295,000) 0.206
Options granted on 17 March 2021 6,215,000 0.050
Warrants granted on 17 March 2021 750,000 0.050
Warrants lapsed on 30 June 2021 (200,498) 0.310
Options granted on 1 October 2021 13,530,000 0.130
Outstanding as at 31 December 2021 21,954,846 0.131
Exercisable as at 31 December 2021 1,797,346 0.153
Options forfeited on 31 January 2022 (90,000) 0.072
Options lapsed on 22 May 2022 (800,000) 0.250
Options granted on 22 June 2022 2,000,000 0.050
Warrants granted on 9 September 2022 3,588,500 0.040
Warrants lapsed on 30 June 2021 (109,846) 0.150
Options granted on 9 November 2022 750,000 0.050
Outstanding as at 31 December 2022 27,293,500 0.090
Exercisable as at 31 December 2022 9,664,750 0.079
The options outstanding as at 31 December 2022 had a weighted average
remaining contractual life of 3.6 years, whereas the warrants outstanding had
a weighted average remaining contractual life of 2.4 years. The value of the
options has been derived by using a Black Scholes pricing model for the
options and warrants granted on 17 March 2021, 1 October 2021 and 22 June
2022. The inputs into the pricing models were as follows:
Options granted on 17 March 2021 Options granted on 1 October 2021 Options granted on 22 June 2022 Options granted on 9 November 2022
Share price at grant date £0.0475 £0.13 £0.05 £0.035
Exercise price £0.05 £0.13 £0.05 £0.05
Volatility 35.6% 35.6% 37.4% 37.4%
Expected life 5 years 5 years 5 years 5 years
Risk free rate 0.79% 0.79% 3.38% 3.38%
Expected dividend yield 0% 0% 0% 0%
Although the Company has been trading its shares on the AIM market of the
London Stock Exchange since 30 June 2016, the liquidity in the stock is low.
Furthermore, the stock price was suspended for trading between March 2020 and
March 2021, therefore the expected volatility for all options was determined
by taking the average the Company's share price and the historical volatility
of a peer group over a 5-year period.
The total value of the options granted on 17 March 2021 is €108,401. Of this
amount, €35,005 has been charged in the financial statements for the year
ended 31 December 2022 (2021: €44,697). The remaining balance of €28,699
will be charged in the financial statements of the years ending 31 December
2023 and 2024.
The total value of the options granted on 1 October 2021 is €660,767. Of
this amount, €302,852 has been charged in the financial statements for the
year ended 31 December 2022 (2021: €86,037). The remaining balance of
€271,878 will be charged in the financial statements of the years ending 31
December 2023 and 2024.
The total value of the options granted on 21 June 2022 is €42,853. Of this
amount, €11,507 has been charged in the financial statements for the year
ended 31 December 2022 (2021: nil). The remaining balance of €31,346 will
be charged in the financial statements of the years ending 31 December 2023,
2024 and 2025.
Note 19: Borrowings
31 December 2022 31 December 2021
€ €
Convertible loan(1) 648,466 -
Accrued interest 7,180 -
655,646 -
(1) The 2022 Convertible Loan has a 3 year term, bears a 10% coupon, which
accrues and is added to the principal amount. The Loan can be converted by the
note holder at any time after 31 December 2023 or by the Company at any time.
The conversion price is equal to the 5 day volume weighted average trading
with a 10% discount.
The convertible bonds are accounted for as a liability under IFRS 9.
Note 20: Trade and other payables
31 December 2022 31 December 2021
€ €
Trade payables 1,201,131 877,141
Accrued expenses 465,707 267,026
Liabilities to customers 115,542 418,139
Other creditors 1,427,964 1,558,323
Deferred consideration for the acquisition of Oddsen.nu - 1,050,000
3,210,344 4,170,629
Note 21: Capital commitments
At 31 December 2022 and 31 December 2021 there were no capital commitments.
Note 22: Contingent assets and liabilities
There were no contingent liabilities at 31 December 2022 or 31 December 2021.
Note 23: Deferred tax
31 December 2022 31 December 2021
€ €
At 1 January 273,600 -
Recorded as part of acquisition - 273,600
Charged to profit and loss (13,680) -
At 31 December 259,920 273,600
During 2022 the expected net reversal of deferred tax of €13,680 relates to
amortization of intangible assets.
Deferred tax assets of approximately €392,000 (2021: €374,000) have not
been recognized in respect of losses that can be carried forward against
future taxable income.
Note 24: Financial instruments - Fair Value and Risk Management
The Group is exposed through its operations to risks that arise from use of
its financial instruments. The Board approves specific policies and procedures
in order to mitigate these risks.
The main financial instruments used by the Group, on which financial risk
arises, are as follows:
● Cash and cash equivalents;
● Trade and other receivables;
● Trade and other payables; and
● Customer deposits in case of the Bet90 operations.
Detailed analysis of these financial instruments is as follows:
2022 2021
Financial assets € €
Trade and other receivables (Note 12) 52,532 89,045
Cash and cash equivalents (Note 13) 359,053 827,302
Total 411,585 916,347
In accordance with IFRS 9, all financial assets are held at amortised cost.
2022 2021
Financial liabilities € €
Trade and other payables(1) (Note 20) 2,179,077 2,288,043
Deferred consideration for acquisition of Oddsen.nu - 1,050,000
Accrued liabilities 465,707 267,026
Borrowings (Note 19) 655,646 -
Total 3,300,430 3,605,069
(1)Excludes taxes payable.
In accordance with IFRS 9, all financial liabilities are held at amortised
cost.
Capital
The capital employed by the Group is composed of equity attributable to
shareholders. The primary objective of the Group is maximising shareholders'
value, which, from the capital perspective, is achieved by maintaining the
capital structure most suited to the Group's size, strategy, and underlying
business risk. There are no demands or restrictions on the Group's capital.
The main financial risk areas are as follows:
Credit risk
Trade receivables
For the Group's operations in Bet90, the credit risk relates to customers
disputing charges made to their credit cards ("chargebacks") or any other
funding method they have used in respect of the services provided by the
Group. Customers may fail to fulfil their obligation to pay, which will
result in funds not being collected. These chargebacks and uncollected
deposits, when occurring, will be deducted at source by the payment service
providers from any amount due to the Group. The risk for the year 2022 has
been assessed by the Board to being immaterial.
Financial assets which are past due but not impaired
2022
Not yet overdue Up to 3 months over due Up to 12 Over 1 year over due Total
months over due
€ € € € €
Trade receivables 52,532 - - - 52,532
Other receivables 141,095 - - - 141,095
Total 193,627 - - - 193,627
2021
Not yet overdue Up to 3 months over due Up to 12 Over 1 year over due Total
months over due
€ € € € €
Trade receivables 89,045 - - - 89,045
Other receivables 70,954 - - - 70,954
Total 159,999 - - - 159,999
Liquidity risk
Liquidity risk exists where the Group might encounter difficulties in meeting
its financial obligations as they become due. The Group monitors its
liquidity in order to ensure that sufficient liquid resources are available to
allow it to meet its obligations.
The following table details the contractual maturity analysis of the Group's
financial liabilities:
2022
On demand In 3 months Between 3 More than 1 year Total
months and 1 year
€ € € € €
Borrowings - - - 655,646 655,646
Trade and other payables(1) 2,009,077 170,000 - - 2,179,077
Accrued liabilities 12,666 453,041 - - 465,707
Total 2,021,743 623,041 - 655,646 3,300,430
(1)Excludes taxes payable.
2021
On demand In 3 months Between 3 More than 1 year Total
months and 1 year
€ € € € €
Trade and other payables(1) 3,286,334 - - - 3,286,334
Accrued liabilities - 318,735 - - 318,735
Total 3,286,334 318,735 - - 3,605,069
(1)Excludes taxes payable.
Note 25: Reclassification of Spinbookie consideration
An adjustment of €960,240 was made to the 31 December 2021 Statement of
Financial position to reclassify the contingent consideration payable in
relation to the Spinbookie acquisition from Trade and other payables to Other
reserves within Equity. This has occurred following a reconsideration of the
relevant clauses within the sale and purchase agreement and Management
conclude that the fact pattern with the agreement represents equity in nature
rather than liability. This resulted in the following impact:
Balance as originally stated at 31 December 2021 Reclassification adjustment Balance as restated at 31 December 2021
€ € €
Impact on statement of financial position
Trade and Other payables (5,130,869) 960,240 (4,170,629)
Other Reserves 6,046,908 (960,240) 5,086,668
This reclassification adjustment has been reversed in the accounts ending 31
December 2022.
The consideration to Spinbookie was settled in September 2022, by issuing
8,600,000 new ordinary shares.
Note 26: List of subsidiaries
The Company held the issued shares of the following subsidiary undertakings as
at 31 December 2021:
Name of subsidiary Place of Incorporation Proportion of ownership and voting power Ownership
B90 Ventures Ltd Isle of Man 100% Direct
B90 Services BV The Netherlands 100% Direct
Sheltyco Enterprises Group Ltd British Virgin Islands 100% Direct
T4U Marketing Ltd Cyprus 100% Indirect, through Sheltyco Enterprises Group Ltd
Quasar Holdings Ltd Malta 100% Indirect, through B90 Ventures Ltd
Bet90 Sports Ltd Malta 100% Indirect, through Quasar Holdings Ltd
B90 Operations Ltd Bulgaria 100% Indirect, through B90 Ventures Ltd
It's a Winner Ltd Malta 100% Indirect, through B90 Ventures Ltd
Spinbookie ltd Malta 100% Indirect, through B90 Ventures Ltd
Spintastic NV Curacao 100% Direct
Note 27: Reconciliation of debt
The Group had the following movement in the borrowings:
2022
At 1 January 2022 Cash Accrued interest At 31 December 2022
€ € € €
Borrowings - 648,466 7,180 655,646
- 648,466 7,180 655,646
2021
At 1 January 2021 Cash Other settlements At 31 December 2021
€ € €
Borrowings 2,199,839 1,847,000 (4,046,839) -
2,199,839 1,847,000 (4,046,839) -
Note 28: Related party transactions
Remuneration of Directors and key employees
Remuneration of Directors and key employees is disclosed in Note 5.
Other related party transactions
Included within other creditors, the Group has accrued for unpaid salaries
with its Directors, amounting to €45,250 at 31 December 2022 (2021: €nil).
Intra group transactions
Transactions between Group companies have not been disclosed as these have all
been eliminated in the preparation of the Consolidated Financial Statements.
Note 29: Ultimate controlling party
As at 31 December 2022 the Directors do not believe there to be any single
controlling party.
Note 30: Subsequent events
On 6 February 2023 the Company announced that it had raised a further
€570,000 (or £500,000) through subscriptions for convertible loan notes. In
addition, the Company has agreed to issue a further €127,692 (or £112,500)
Loan Notes to a key marketing partner in lieu of cash settlement due for
services.
On 7 February 2023 the Company announced that it had appointed Mark Blandford
as a strategic adviser to the Company with immediate effect. Mark is a senior
industry figure and considered by many to be one of the founders of the
developed online gaming industry. Having started his career as the owner of a
traditional 'bricks and mortar' bookmaker's chain for over 15 years, he then
recognised the potential of the internet for the industry in the mid-1990s. In
1998 he founded Sportingbet.com, and in 2001 floated the company on AIM. Mark
stepped down from the Board of Sportingbet in 2007 before its eventual sale in
2013 with the assets being split between William Hill and GVC. In 2002, he was
awarded AIM Entrepreneur of the Year.
On 5 April 2023, the Company announced that it had raised a further €1.27
million (£1.1 million) through subscriptions for convertible loan notes.
On 19 April 2023, the Company announced that it had granted options over, in
aggregate, 11,500,000 ordinary shares to certain directors and employees of
the Company.
On 30 June 2023, the Company is announcing that it has raised a further €2
million (£1.72 million) through subscriptions for convertible loan notes, the
funds of which are expected to be received before 12 July 2023.
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