Final Results

RNS Number : 4472J

Bidstack Group PLC

27 April 2022

 

Certain information contained within this Announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 ("MAR") as applied in the United Kingdom. Upon publication of this Announcement, this information is now considered to be in the public domain.

27 April 2022

Bidstack Group Plc

("Bidstack" or the "Company")

Final Results for the year ended 31 December 2021

Annual Report & Accounts 2021

FY21 a commercial breakthrough year; significant revenue visibility for 2022 and 2023

Bidstack Group Plc (AIM: BIDS), the in-game brand activation platform, is pleased to announce its final results for the full year ended 31 December 2021 ("Annual Report").

The Annual Report & Accounts will be available for download today at https://www.bidstack.com/financial-reports/annual-report-2021/ and will be posted to shareholders shortly thereafter.

Financial Performance

·     Revenue up 53% at £2.6m (FY20: £1.7m);

·   Cash balance at 31 December 2021 up 202% at £7.1m (31 December 2019: £2.3m) - in line with market expectations;

· Gross margin improvement to 36% (FY20: 13%), associated with scaling and improving quality of revenue;

· Gross profit up 321% at £0.95m (FY20: £0.23m) - in line with market expectations;

· Loss after tax of £6.2m (FY20: -£6.3m) - in line with market expectations; and

· Successful placing raising gross proceeds of £10.86m in July 2021.

Key Commercial Highlights

· Secured guaranteed minimum programmatic advertising revenue of US$30m arising over two years, commencing 1 March 2022; and

· Multiple format advertising agreement signed covering the mobile portfolio of one of the world's leading AAA gaming companies, including exclusivity for one of the publisher's biggest sporting franchises.

Operational Performance

· Brand count doubled year-on-year to 70 (FY20: 35);

· Publisher portfolio nearly tripled year-on-year to 58 (FY20: 20); and

· Global footprint almost doubled, active in over 30 markets (FY20: 17).

Post Period End Highlights

· Global partnership with GroupM's Xaxis to scale brand investment into Bidstack's gaming portfolio; 

· Commenced the roll out of its media sales partnership with Azerion in multiple markets to scale advertising spend across gaming portfolio in line with the Board's expectations;

· Experienced rapid growth of its portfolio of games from 58 to over 100 across all ad-formats: in-game, in-menu and rewarded video growing DAUs, impressions, markets and addressable audience; and

· Participated in the IAB's first ever PlayFronts for the gaming industry in New York, which is an annual marketplace dedicated to advertising and partnership opportunities, showing the development of the industry.

Outlook and Prospects

· Significant revenue visibility for FY22 and FY23 with contractually guaranteed minimum revenues of US$30m scheduled to arise over the next 24 months;

· Over the coming months the arrangements with Azerion will be implemented and rolled out, and the multiple ad format deal with one of the world's leading AAA game publishers is expected to facilitate the deployment of significant demand by advertisers and brands; and

· A robust pipeline of additional AAA and independent titles in contract or in active negotiation stage.

The Board expects that revenues for FY22 will be considerably greater that FY21 but still significantly second half weighted.  This is supported by significant revenue visibility underpinned by a 2-year minimum revenue guarantee.  The phasing will reflect onboarding and ramping up of the contract throughout the year.

The Board believes that Bidstack is now well established, both in terms of product and revenue generation, as a leading player in the in-game digital advertising industry. 

Commenting on the Group's 2021 performance, James Draper, CEO of Bidstack, said:

"Landing two transformational deals at the end of the year has substantiated our strategy and given the business clarity of focus and a supportive partner to grow with.

"Securing a two-year deal worth $30 million of guaranteed revenue for our media business driven by a third party sales team allows the Company to now turn its attention to multiple other use-cases for our software.

"The market is starting to mature from a media-buying perspective and Bidstack's margin, which is now consistently above 30%, strengthened further during the period.

"We've taken a look at how the business and our industry could look in 2025 and beyond. We are in ongoing conversations surrounding granting access to our platform for non-media sales use, which leans heavily into the unique insight our business has, from a data perspective, on the video gaming landscape. The outcome of current technical development work is expected to result in the Group soon having access to software-as-a-service revenue which is over and above our media-sales revenues. Over time this is intended to diversify Bidstack's exposure to any single revenue stream.

"Our technology and services address a significant global audience. We are clear from the deals we have won that our software platform offering is at the leading edge of the in-game advertising industry. Our alignment with the right partners means we are well placed to benefit as our market continues to mature.  We look forward to Bidstack's future with confidence."

Contacts

Bidstack Group Plc James Draper, CEO	via Buchanan
SPARK Advisory Partners Limited (Nomad) Mark Brady / Neil Baldwin / James Keeshan	[phone]
Stifel Nicolaus Europe Limited (Broker) Fred Walsh / Tom Marsh	[phone]
Buchanan Communications Limited Chris Lane / Stephanie Watson / Kim van Beeck [e-mail]	[phone]

 

Extracts from the Chairman's Statement in the Annual Report

Introduction

2021 has been a further year of significant progress for Bidstack resulting not only in increased revenues for the year, but also, for the first time, in material certainty in respect of minimum revenue levels for FY22 and FY23.  In addition, capital availability and substantial gross margin improvements place the Group in a strong position for continued growth.

I am pleased with the Company's progress in 2021, which has prioritised improving the quality of revenues and gross margin alongside strategic investments in key talent and operations. During the year Bidstack deliberately elected not to pursue some lower margin revenue opportunities and has, instead, improved margins through concentrating on developing high quality, higher margin activities. 

The undoubted highlights of 2021 both came at the end of the year, proving that the Company was following the appropriate, long-term approach. 

In December 2021 Bidstack entered into two industry leading agreements: 

The first, with a global leading AAA digital interactive entertainment company, will provide Bidstack with access to a world-class mobile games portfolio including exclusive access to one of the world's largest sporting franchises.

The second, a ground-breaking initial two-year partnership agreement with Azerion Holding B.V. (Azerion), the leading pan-European digital entertainment and media platform, is expected to grow Bidstack's global sales footprint exponentially thanks to Azerion's established team of over 1,000 employees operating across 26 offices in 18 countries.

2021 Highlights

· Successful raise of £10.86m (before expenses) in July 2021;

· Secured a revenue stream of a guaranteed minimum of US$30 million advertising spend over two years, commencing 1 March 2022;

· Signed a landmark commercial partnership with Azerion, the leading pan-European digital entertainment and media platform, who are now Bidstack's exclusive commercial partner across its inventory from March 2022 until March 2024;

· Signed a multiple format advertising agreement covering the mobile portfolio of one of the world's leading AAA digital interactive entertainment companies which includes exclusivity for one of the publisher's biggest sporting franchises;

· Brand count doubled year-on-year to 70 (FY20: 35);

· Publisher portfolio nearly tripled year-on-year to 58 (FY20: 20);

· Growing global footprint: active in over 30 markets (FY20: 17); and

· Structural improvement in gross margins, associated with optimising and scaling in-game advertising revenue.

As a result, FY21 gross margins have improved significantly, to 36% (FY20:13%) and, while revenues for FY21 were below market expectations, audited gross profit and year-end cash were  in line with market expectations. In addition, after audited non-cash charges and exceptional items, net losses were also in line with market expectations.

Progress in 2021

Advertisers and Brands

In December 2021 Bidstack entered what the Directors believe to be one of the industry's largest programmatic in-game advertising deals to date, a landmark commercial partnership with Azerion, the leading pan-European digital entertainment and media platform. The deal gives Azerion's SSP and sales teams exclusive access to all of Bidstack's advertising formats and will see Azerion become Bidstack's sole external reseller. The initial two-year partnership will grow Bidstack's global sales footprint exponentially thanks to Azerion's established team of over 1,000 employees operating across 26 offices in 18 countries.

Product 

In October 2021, Bidstack launched a new mobile ad format for brands with its innovative 'in-menu' format offering clickable display banners allowing brands to deliver integrated ads into game menus, user interfaces and loading screens which can be placed on a programmatic basis. Ads appear as in-game banners alongside other menu items and players can click on the ad to discover more. In-menu ads mean that game developers can now run integrated campaigns across two separate locations within the game with Bidstack; backing up the brand awareness campaign appearing in the gameplay with clickable interactive ads in menus, loading screens and other user interfaces.

Outlook and Prospects

There are many reasons to face Bidstack's future with confidence.

With contractually guaranteed minimum revenues of US$30m scheduled to arise over the next 24 months, Bidstack has significant revenue visibility for FY22 and FY23.  The Company has a robust pipeline of additional AAA and independent titles in contract or in active negotiation stage.

Over the coming months the arrangements with Azerion will be implemented and rolled out, and the multiple ad format deal with one of the world's leading AAA game publishers is expected to facilitate the deployment of significant demand by advertisers and brands.

In addition, the Company will remain focussed on its gross margins in the coming year.

In 2022 progress has continued to be encouraging.  So far this year Bidstack has:

· announced a global partnership with GroupM's Xaxis to scale brand investment into Bidstack's gaming portfolio; 

· commenced the roll out of its media sales partnership with Azerion in multiple markets to scale advertising spend across gaming portfolio in line with the Board's expectations;

· experienced rapid growth of its portfolio of games from 58 to over 100 across all ad-formats: in-game, in-menu and rewarded video growing DAUs, impressions, markets and addressable audience;

· participated in the IAB's first ever PlayFronts for the gaming industry in New York, which is an annual marketplace dedicated to advertising and partnership opportunities, showing the development of the industry.

The Board expects that revenues for FY22 will be considerably greater that FY21 but still significantly second half weighted.  This is supported significant revenue visibility underpinned by a 2-year minimum revenue guarantee.  The phasing will reflect onboarding and ramping up of the contract throughout the year. We believe that Bidstack is now well established, both in terms of product and revenue generation, as a leading player in the in-game digital advertising industry. 

Donald Stewart

Chairman

Consolidated statement of comprehensive income

for the year ended 31 December 2021

	Note		Year ended		Year ended
			31 December 2021		31 December 2020
			£		£
Revenue	4		2,623,413		1,695,620
Cost of sales			(1,674,190)		(1,470,389)
Gross profit			949,223		225,231
Administrative expenses			(8,681,927)		(7,218,789)
Exceptional items	6		(222,555)		-
Total administrative expenses			(8,904,482)		(7,218,789)
Operating (loss)			(7,955,259)		(6,993,558)
Finance income			180		2,525
Finance costs			(3,392)		(1,179)
(Loss) before taxation			(7,958,471)		(6,992,212)
Taxation			1,661,027		597,035
(Loss) for the year			(6,297,444)		(6,395,177)
Other comprehensive income
Items that will or may be reclassified to profit or loss:
Exchange translation			10,589		-
Total comprehensive loss for the year			(6,286,855)		(6,395,177)
Loss per share - basic (pence)	11		(1.21)		(1.65)

The notes to the accounts published in the Annual Report form part of the financial statements.

Consolidated statement of financial position

as at 31 December 2021

	Note		31 December 2021	31 December 2020
ASSETS			£	£
Non-current assets
Intangible assets			248,760	279,955
Property, plant and equipment			46,519	28,388
Right of use asset			7,280	7,577
Total non-current assets			302,559	315,920
Current assets
Trade and other receivables			2,752,036	2,391,300
Cash and cash equivalents			7,086,906	2,347,114
Total current assets			9,838,942	4,738,414
Total assets			10,141,501	5,054,334
EQUITY AND LIABILITIES
Equity
Share capital	21		8,950,048	6,234,261
Share premium account	21		35,375,326	27,984,716
Share-based payment reserve	21		1,589,965	1,282,556
Merger relief reserve	21		6,508,673	6,508,673
Reverse acquisition reserve	21		(23,320,632)	(23,320,632)
Warrant reserve	21		71,480	71,480
Exchange reserve	21		10,589	-
Retained losses	21		(21,876,346)	(15,578,902)
Total equity			7,309,103	3,182,152
Non-current liabilities
Lease liability			4,180	-
Total non-current liabilities			4,180	-
Current liabilities
Trade and other payables			2,824,920	1,863,739
Lease liability			3,298	8,443
Total current liabilities			2,828,218	1,872,182
Total equity and liabilities			10,141,501	5,054,334

The notes to the accounts published in the Annual Report form part of the financial statements.

.

Consolidated statement of changes in equity

for the year ended 31 December 2021

	Share capital	Share premium	Share-based payment reserve	Merger relief reserve	Reverse acquisition reserve	Exchange Reserve	Warrant reserve	Retained losses	Total equity
	£	£	£	£	£	£	£	£	£
Balance as at 1 January 2020	5,516,759	23,283,880	734,365	6,508,673	(23,320,632)	-	71,480	(9,183,725)	3,610,800
Issue of shares	717,502	5,032,518	-	-	-	-	-	-	5,750,020
Costs of raising equity	-	(331,682)	-	-	-	-	-	-	(331,682)
Share-based payments	-	-	548,191	-	-	-	-	-	548,191
Loss & total comprehensive loss for the year	-	-	-	-	-	-	-	(6,395,177)	(6,395,177)
Balance 31 12/ 2020	6,234,261	27,984,716	1,282,556	6,508,673	(23,320,632)	-	71,480	(15,578,902)	3,182,152
Issue of shares	2,715,787	8,147,363	-	-	-	-	-	-	10,863,150
Costs of raising equity	-	(756,753)	-	-	-	-	-	-	(756,753)
Share-based payments	-	-	307,409	-	-	-	-	-	307,409
Loss for the year	-	-	-	-	-	-	-	(6,297,444)	(6,297,444)
Total other comprehensive income for the year	-	-	-	-	-	10,589	-	-	10,589
Balance 31 /12/ 2021	8,950,048	35,375,326	1,589,965	6,508,673	(23,320,632)	10,589	71,480	(21,876,346)	7,309,103

The notes to the accounts published in the Annual Report form part of the financial statements.

Consolidated statement of cash flows

for the year ended 31 December 2021

		31 December 2021	31 December 2020
		£	£
Cash flows from operating activities
(Loss) before taxation		(7,958,471)	(6,992,212)
Adjustments for:
Amortisation - Intangibles		31,195	31,574
Amortisation - Right of use asset		10,377	19,621
Depreciation		24,160	13,021
Equity settled share-based payments		307,409	548,191
Doubtful debts expenses		(2,073)	(19,265)
Interest received		(180)	(2,525)
Interest paid		3,392	1,179
Exchange differences on translation of foreign operations		10,589	-
		(7,573,602)	(6,400,416)
Changes in working capital
Decrease/(increase) in trade and other receivables		409,468	(1,241,792)
(Decrease)/increase in trade and other payables		961,182	1,457,069
Cash used in operations		(6,202,952)	(6,185,139)
Taxation received		892,895	-
Net cash used in operations		(5,310,057)	(6,185,139)
Cash flow from investing activities
Investment in intangible assets		-	(570)
Investment in property, plant and equipment		(42,291)	(19,033)
Net cash flow used in investing activities		(42,291)	(19,603)
Cash flow from financing activities
Proceeds from issue of share capital		10,863,150	5,750,020
Cost of issue		(756,753)	(331,682)
Interest paid		(3,392)	(1,179)
Principal paid on finance leases		(11,045)	(16,368)
Interest received		180	2,525
Net cash generated from financing activities		10,092,140	5,403,316
(Decrease)/Increase in cash and cash equivalents in the year		4,739,792	(801,426)
Cash and cash equivalents at beginning of year		2,347,114	3,148,540
Cash and cash equivalents at the end of the year		7,086,906	2,347,114

The notes to the accounts published in the Annual Report form part of the financial statements.

Extracts from the notes to the financial statements

2  Summary of significant accounting policies

Basis of preparation

The consolidated financial statements consolidate those of the Company and its subsidiary (together the "Group"). The financial statements have been prepared on a going concern basis in accordance with International Financial Reporting Standards (IFRSs) and International Financial Reporting Interpretation Committee (IFRIC) interpretations as endorsed by the European Union ("IFRS-EU"), and those parts of the Companies Act 2006 applicable to companies reporting under IFRS.  

Management has implemented logistical and organisational changes to underpin the Group's resilience to the impact felt by the COVID-19 pandemic, with the key focus being protecting all personnel, minimising the impact on critical work streams and ensuring business continuity. The effect on the economy may impact the Group in varying ways, which could lead to a direct bearing on the Group's ability to generate future cash flows for working capital purposes. The inability to gauge the length of such disruption further adds to this uncertainty. For these reasons the generation of sufficient operating cash flows remain a risk. Management is closely monitoring commercial and technical aspects of the Group's operations to mitigate risk and believes the Group will have access to sufficient working capital to continue operations for the foreseeable future. 

Consolidation 

The consolidated financial statements consolidate the financial statements of the Company and the results of its subsidiary undertakings Bidstack Limited, Pubguard Ltd and Bidstack SIA, made up to 31 December 2021.

Subsidiaries are entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. 

Going concern

The Board continues to adopt the going concern basis to the preparation of the financial statements as it is confident of the Group continuing operations into the foreseeable future, although material uncertainty exists in relation to the group's ability to raise funds to sustain its operations.

The Board's forecasts for the Group include due consideration of contracted minimum revenues, additional future revenues from anticipated new lines of business, potential future capital in-flows, continued operating losses, projected increase in cash-burn of the Group (and taking account of reasonably possible changes in trading performance and also changes outside of expected trading performance) for a minimum period of at least twelve months from the date of approval of these financial statements. However, the Group forecasts assume that further equity fundraising will take place in the next twelve months in in order to implement its growth strategy and operate as a going concern.  Although the entity has had past success in fundraising and continues to attract interest from investors, making the Board confident that such fundraising will be available to provide the required capital, there can be no guarantee that such fundraising will be available and, accordingly, this constitutes a material uncertainty over going concern.

Notwithstanding the above, the Board has considered various alternative operating strategies should these be necessary in the light of actual trading performance not matching the Group's forecasts given current macro-economic conditions and is satisfied that such revised operating strategies could be adopted, if and when necessary. Therefore, the Directors consider the going concern basis of preparation is appropriate.

The financial statements have been prepared on a going concern basis and do not include the adjustments that would be required should the going concern basis of preparation no longer be appropriate. The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Chairman's statement in the Annual Report.

The financial statements at 31 December 2021 show that the Group generated an operating loss for the year of £7.9 million (2020: £6.9 million) after accounting for the costs directly related to the issue of shares of £0.75 million (2020: £0.033 million); with cash used in operating activities of £6.2 million (2020: £6.2 million). Group balance sheet also showed cash reserves at 31 December 2021 of £7.1 million (2020: £2.3 million). The Group is dependent on further equity fundraising in order to operate as a going concern for at least twelve months from the date of approval of the financial statements. Although the entity has had past success in fundraising and continues to attract interest from investors, making the Board confident that such fundraising will be available to provide the required capital, there can be no guarantee that such fundraising will be available.  Accordingly, this constitutes a material uncertainty over going concern.

The Board has considered various alternative operating strategies should these be necessary in the light of actual trading performance not matching the Group's forecasts given the current macro-economic conditions, and are satisfied that such revised operating strategies could be adopted, if and when necessary.

Revenue Recognition

Under IFRS 15, revenue is recognised to depict the transfer of promised goods or services to a customer in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods and services. The underlying principle is a five-step approach to identify a contract, determine performance obligations, the consideration and the allocation thereof, and timing of revenue recognition. IFRS 15 also includes guidance on the presentation of assets and liabilities arising from contracts with customers, which depends on the relationship between Company's performance and the customers' payment.

Revenue from contracts with customers is recognised when or as the Company satisfies a performance obligation by transferring a promised good or service to a customer. A good or service is transferred when the customer obtains control of that good or service.

The Company assesses the contract with the customer to identify the separate performance obligations which would consist of an 'access rights' and the 'provision of in-game advertising inventory'. The Company transfer of the in-game advertising inventory sold usually coincides with the delivery of that inventory and the customer being able to utilise it. The Company principally satisfies its performance obligations at that point in time and recognises revenue on delivery.

Revenue represents amounts receivable for goods and services provided in the normal course of business, and excludes intragroup sales, Value Added Tax and trade discounts. Revenue comprises of:

• Sales and development of advertising space and content which is recognised on delivery accepted by the customer.

• Sponsorship income which is recognised at the point of delivery of the service.

Net finance costs

Finance costs comprise interest on bank loans and other interest payable. Interest on bank loans and other interest is charged to the Statement of Comprehensive Income over the term of the debt using the effective interest rate method so that the amount charged is at a constant rate on the carrying amount.

Finance income comprises interest receivable on loans to related parties. Interest income is recognised in the Statement of Comprehensive Income as it accrues using the effective interest method.

Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

 

Taxation

Current tax is recognised as the amount of corporation tax payable in respect of taxable profit for the current or past reporting periods using tax rates and laws that have been enacted or substantively enacted by the reporting date.

Deferred tax is recognised in respect of all timing differences at the reporting date, except as otherwise indicated.

Deferred tax assets are only recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is calculated using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.

With the exception of changes arising on initial recognition of a business combination, the tax expense/(income) is presented either in the income statement, other comprehensive income or equity depending on the transaction that resulted in the tax expense/(income).

Deferred tax liabilities are presented within provisions for liabilities and deferred tax assets within debtors.  Deferred tax assets and deferred tax liabilities are offset only if:

- the Company has a legally enforceable right to set off current tax assets against current tax liabilities, and

- the deferred tax assets and deferred tax liabilities relate to corporation tax levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously.

- Research and Development Tax Credits are recognised as receivables when an inflow of economic benefit is certain, until then a contingent asset in respect of probable Corporation Tax is disclosed.

Valuation of investments
 

Investment in subsidiary undertakings are accounted for at cost less impairment. Advances to subsidiaries are initially recorded at fair value based on a market rate of interest and subsequently at amortised cost. The difference between funds advanced and fair value is recorded in investments.

Impairment of fixed asset investments
 

An impairment review of fixed asset investments is conducted annually, and any resulting impairment loss is measured and recognised on a consistent basis. 

Leased assets

All leases are accounted for by recognising a right-of-use asset and a lease liability except for:

-  Leases of low value assets; and

-  Leases with a duration of 12 months or less.

Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with the discount rate determined by reference to the rate inherent in the lease unless (as is typically the case) this is not readily determinable, in which case the incremental borrowing rate on commencement of the lease is used.

On initial recognition, the carrying value of the lease liability also includes:

-  amounts expected to be payable under any residual value guarantee;

-  any penalties payable for terminating the lease, if the term of the lease has been estimated on the basis of the termination option being exercised.

Right of use assets are initially measured at the amount of the lease liability, reduced for any lease incentives received, and increased for:

-  lease payments made at or before commencement of the lease;

-  initial direct costs incurred; and

-  the amount of any provision recognised where the Group is contractually required to dismantle, remove or restore the leased asset.

Subsequent to initial measurement, lease liabilities increase as a result of interest charged at a constant rate on the balance outstanding and are reduced for lease payments made. Right-of-use assets are amortised on a straight-line basis over the remaining term of the lease or over the remaining economic life of the asset if, rarely, this is judged to be shorter than the lease term. When the Group revises its estimate of the term of any lease (because, for example, it re-assesses the probability of a lessee extension or termination option being exercised), it adjusts the carrying amount of the lease liability to reflect the payments to make over the revised term, which are discounted at the same discount rate that applied on lease commencement.

An equivalent adjustment is made to the carrying value of the right-of-use asset, with the revised carrying amount being amortised over the remaining (revised) lease term.

Goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and the fair value of Bidstack Group's share of the identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, Goodwill is measured at cost less accumulated impairment losses.

Intangible assets  

An intangible asset, which is an identifiable non-monetary asset without physical substance, is recognised to the extent that it is probable that the expected future economic benefits attributable to the asset will flow to the Group and that its cost can be measured reliably, the asset is deemed to be identifiable when it is separable or when it arises from contractual or other legal rights. 

Amortisation is charged on a straight-line basis through the profit or loss. The rates applicable, which represent the Directors' best estimate of the useful economic life, are:

-  Website costs - 5 years

-  Trademarks - 10 years

-  Brand - 5 years

-  Software - 5 years

Property, plant and equipment

Items of property, plant and equipment are initially recognised at cost. As well as the purchase price, cost includes directly attributable costs. Depreciation is provided on all items of property, plant and equipment, so as to write off their carrying value over their expected useful economic lives. It is provided at the following rates:

-  Computer equipment - 33.33% straight line

-  Office equipment - 20% straight line

Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.

Financial assets

The Group classifies all of its financial assets as loans and other receivables. Financial assets do not comprise prepayments. Management determines the classification of its financial assets at initial recognition.

Loans and receivables are non-derivative financial assets with fixed or determinable payments. They are initially recognised at fair value and are subsequently stated at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

The Group's financial assets held at amortised cost comprise trade and other receivables and cash and cash equivalents in the Statement of Financial Position.

Financial liabilities

Trade and other payables are recognised initially at fair value and are subsequently measured at amortised cost,  using the effective interest method.

Share Capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new share or options are shown in equity as deduction net of tax before proceeds.

Share-based payments

Where share options are awarded to employees, the fair value of the options at the date of grant is charged to the income statement over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted.

As long as all other vesting conditions are satisfied, a charge is made irrespective of whether the market vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition.

Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the income statement over the remaining vesting period. Where equity instruments are granted to persons other than employees, the income statement is charged with fair value of goods and services received.

Functional and presentation currency

Items included in the financial statements of the Group are measured using the currency of the primary economic environment in which the Group operates ("the functional currency"). The financial statements are presented in Pounds Sterling (£) which is also the Group's functional currency.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Comprehensive Income.

4  Segmental information

During the year ended 31 December 2021 and the year ended 31 December 2020, the Group operated one business segment, that of the provision of native in-game advertising across the US and in EMEA.

The revenue has been segmented based on geographical regions US and EMEA. This is used by the chief operating decision makers to perform their role.

	31 December 2021	31 December 2020
	£	£
Revenue by Geographical Region
US	863,691	399,874
EMEA	1,759,722	1,295,746
	2,623,413	1,695,620

6  Exceptional items

	31 December 2021	31 December 2020
	£	£
Nonrecurring regulatory costs	124,555	-
Restructuring costs	98,000	-
	222,555	-

11  Loss per share

The loss per share is based upon the loss of £6,297,444 (2020: loss of £6,395,177) and the weighted average number of ordinary shares in issue for the year of 519,507,993 (2020: 387,633,342).

The loss incurred by the Group means that the effect of any outstanding warrants and options would be considered anti-dilutive and is ignored for the purposes of the loss per share calculation.

21  Share capital and reserves

Allotted, called up and fully paid			Ordinary 0.5p shares	Share capital	Share Premium
			No.	£	£
At 1 January 2021			388,374,057	6,234,261	27,984,716
Issue of placing shares			543,157,516	2,715,787	8,147,363
Cost of raising equity			-	-	(756,753)
As at 31 December 2021			931,531,573	8,950,048	35,375,326

All ordinary shares are equally eligible to receive dividends and the repayment of capital and represent equal votes at meetings of Shareholders. 

The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 December 2021 or 31 December 2020, but is extracted from those accounts. Statutory accounts for 2020 have been delivered to the Registrar of Companies and those for 2021 will be delivered in due course. The auditor has reported on those accounts; their reports were unqualified but contained an emphasis of matter in respect of going concern. Note 2 of the Statutory Accounts for the year ended 31 December 2021 describes how the business is dependent on further equity funding to sustain itself over the following year. This condition indicates that a material uncertainty exists that may cast significant doubt on the entity's ability to continue as a going concern. The auditor's opinion was not modified in respect of this matter. The Statutory accounts did not contain statements under s498(2) or (3) of the Companies Act 2006.

Whilst the financial information included in this preliminary announcement has been computed in accordance with International Financial Reporting Standards, this announcement does not itself contain sufficient information to comply with IFRS.

-ENDS-

 

END

 

 

FR UNUKRUAUSUAR