TIDMBIDS
RNS Number : 2830D
Bidstack Group PLC
20 June 2023
The headline for the Bidstack Group Plc announcement released on
20 June 2023 at 7:00 under RNS No 2223D should read "Final Results
and Annual Report". The announcement text is unchanged and is
reproduced in full below.
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.
20(th) June 2023
Bidstack Group Plc
("Bidstack" or the "Company" or the "Group")
Final Results for the year ended 31 December 2022
Annual Report & Accounts 2022
Bidstack Group Plc (AIM: BIDS), the in-game brand activation
platform, is pleased to announce its final results for the
financial year ended 31 December 2022 ("Annual Report").
The 2022 Annual Report & Accounts will be available for
download today at
http://www.bidstack.com/financial-reports/annual-report-2022/ and
will be posted to shareholders shortly thereafter.
Financial Performance Highlights
-- Revenue up 101% at GBP5.3m* (FY21:GBP2.6m)
-- Gross profit up 298% at GBP3.7m (FY21: GBP0.95m)
-- Gross margin improvement to 72%** (FY21: 36%)
-- Loss after tax GBP7.7m (FY21: GBP6.3m)
-- Cash balance at 31 December 2022 up 21% at GBP8.7m (31 December 2021: GBP7.1m)
*Unaudited gross billings, including all revenues and Azerion
minimum revenue guarantee invoiced for FY22, were c.GBP9.3m (FY21:
GBP2.6m), in line with contractual arrangements previously
indicated. However, as a result of the net accounting treatment of
revenues in accordance with IFRS 15, Bidstack's reported revenues
for FY22 are GBP5.3m.
** Gross margin has risen significantly as a result of the net
accounting treatment of revenues and corresponding costs of sales
towards servicing the Azerion contract in accordance with IFRS 15.
Excluding this treatment the unaudited adjusted gross margin would
be closer to 40%.
Operational Performance Highlights
-- Successful placing raising proceeds of c.GBP10.5m in October
2022, including a significant investment by Irdeto B.V., a world
leader in digital platform cybersecurity, taking a 13.5% stake in
the Company;
-- Growing global network of premium developers and publishers
with over 250 titles (FY21: 58) across in-game, in-menu and
rewarded video. This includes an addition of two further titles
with a AAA game publisher and a multi-year renewal with Sports
Interactive's Football Manager;
-- Growing revenue per agency holding group as the number of
blue chip brands rise as intrinsic in-game becomes a key growth
initiative;
-- Partnership with Unity, a cross platform game engine as a
Unity Verified Solution recommended tool for game developers across
all platforms;
-- Onboarding of additional resellers with MMP Worldwide (MENA),
AdScholars (India), Totally Awesome (APAC), TNK Factory (South
Korea) and Omega Media (Vietnam);
-- Internet Advertising Bureau (IAB)/The Media Rating Council
(MRC) have recognised standards for in-game advertising.
Advertisers now have clear benchmarks on how to measure campaign
success; and
-- Enterprise customers licensing Bidstack's technology such as
mobile ad-tech company Adways and multi-year deal with metaverse
franchise SimWin Sports.
Post Period End Highlights
-- Revenues for H1 2023 expected to be approximately GBP2.0m (H1
2022 GBP2.05m) showing Bidstack's strong recovery following
re-engagement with agencies and programmatic platforms after the
termination of the Azerion commercial partnership in December 2022.
The prior year comparison included a minimum revenue guarantee
which contrasts with the high quality of commercial revenue
generated through the Company's internal sales team this year;
-- Following a comprehensive business review the Company has
implemented a cost efficiency and restructuring programme to reduce
average monthly cash burn by approximately 40% going forward;
-- Bidstack filed comprehensive claims against Azerion in Dutch
courts demanding the full amounts owed by Azerion under the
agreement of 16 December 2021; and
-- The Group is currently negotiating a convertible loan
facility with a strategic investor and expects to be able to make
further updates in due course.
Trading Update
-- Launch of programmatic "open marketplace" advertising with
live connections across The Trade Desk, Magnite, Media Math and
Xandr;
-- A pipeline of brand and performance programmatic platforms
including OpenX, Equative, Stackadapt and Adform to be integrated
in the coming year;
-- Roster of resellers with experience in gaming and new media
channels across APAC, MENA, LATAM and EMEA are being onboarded;
-- Reinforcing product with attribution and viewability through
integrations with Kochava and solutions with IAS and MOAT;
-- Highlights across the gaming network include Ubisoft's
marquee mobile franchise Hungry Shark Evolution and organic growth
within publishers such as Miniclip adding further titles. Publisher
retention and feedback remains strong driven by account management,
advertising activity and platform development; and
-- First-ever NFL club to partner with Bidstack Sports and adopt
Bidstack's technology to operate real world and virtual stadiums in
partnership with StatusPRO's NFL Pro Era, a fully licensed virtual
reality game.
-- Multiple negotiations progressing across sports leagues, teams and publishers.
Outlook
The US sales team is now fully integrated providing materially
improved revenue visibility. Bidstack is also increasing the
strength of its relationships with key games publishers and
developers through cross-selling the Group's products. In addition
Bidstack's reseller network is expanding and automated open
marketplace revenue is starting to appear.
The Directors believe that Bidstack's strategy positions the
Company well for future growth with its growing global footprint
being serviced by additional resellers and the Company's
programmatic open marketplace offering now taking root. Bidstack is
making robust progress with its key commercial partners and is
attracting interest from other significant industry players. As the
market continues to develop, further accretive and multi-year
enterprise partnership opportunities are coming to fruition.
For FY23, the Board currently expects the Group's results to be
in line with market expectations.
James Draper, CEO of Bidstack, said:
"FY22 was a year where Bidstack made the operational shift from
early stage to a scale up business. Bidstack grew its market share
in the industry, which can be measured across indicators such as
the growing number of agencies activating blue chip global
advertisers, our new markets, our increased portfolio of games and
the growing size of average campaign budgets.
The US team is now well integrated and hitting the ground
running providing the business with ever improving visibility of
growing revenue. There is solid momentum in relation to the
publishers and game developers as we cross-sell our products and
organically grow the portfolio of games.
Current trading reflects our rapid commercial adjustment
following the termination of the sales agency arrangements with
Azerion. Following a thorough debrief of the market intelligence
gained through our relationship with Azerion and, having reignited
our agency relationships directly, we are now beginning to roll-out
our new look reseller network and automated open market revenue is
beginning to flow into our network.
As we look ahead to H2 2023, the intrinsic in-game market
remains resilient as major catalysts, such as additional gaming
platforms, begin to explore in-game advertising. We believe this
will increase the volume of high-fidelity titles within our network
and drive increased revenues. Larger screens will command a higher
price point from marketers. Publishers are expressing their desire
to utilise our technology for monetisation, content management
systems (CMS) and as a marketing channel. We have rolled out
promising proof of concepts in the sports genre, unifying
publishers, licence holders and sports teams.
We have reviewed our cost base and reduced our average monthly
cash burn significantly going forward, to preserve and extend our
runway. The alignment ensures that our resources are being
maximised for sustainable and accelerated revenue generation.
We are obsessed at Bidstack in ensuring our technology is fully
utilised by our clients, the game developers. Generating brand
activation revenue, improving player engagement through one-to-one
messaging from publisher-to-gamer via our CMS, and a toolset that
through our sports offering, can save them money whilst improving
the authenticity of the gaming environment."
-S-
Contacts
Bidstack Group Plc
James Draper, CEO
SPARK Advisory Partners Limited (Nomad)
Mark Brady / Neil Baldwin / James Keeshan
+44 (0) 203 368 3550
Stifel Nicolaus Europe Limited (Broker)
Fred Walsh / Tom Marsh
+44 (0) 20 7710 7600
Extracts from the Annual Report
Chairman's Statement
Introduction
This is my first statement since becoming Chairman of Bidstack
in September 2022 and I would like to thank Donald Stewart, the
outgoing Chair for all his hard work during his tenureship since
the public listing in August 2018 and I am pleased that he remains
a Non-Executive Director of Bidstack.
Looking back at 2022, it has been a year in which Bidstack has
strengthened its position in many important areas as a leading
platform in native in-game advertising activation technology. It
has also been a year, where, coming into 2023, Bidstack has set
itself up to become more strategic, more predictable in terms of
earnings and profit and more in control of its commercial
operations through direct sales to its clients and partners thus
maximising global growth opportunities.
The 2022 financial numbers speak for themselves:
-- Revenue up +101% to c.GBP5.3m* (FY21: GBP2.6m)
-- Gross margin at c.72%** (FY21: 36%)
-- Cash balance at 31 December 2022 up 21% at GBP8.7m (31 December 2021: GBP7.1m)
-- Loss after tax GBP7.7m (31 December 2021: GBP6.3m)
(*Gross billings including all gross revenues and gross Azerion
minimum revenue guarantee for FY22 were GBP9.3m (FY21: GBP2.6m), in
line with our contractual arrangements.)
(** Gross margin arising as a result of the net accounting
treatment of revenues and corresponding costs of sales towards
servicing the Azerion contract in accordance with IFRS15. Excluding
this treatment the Board believe that adjusted gross margin would
be closer to 40%)
There are a considerable number of key highlights on which I
will comment:
At a time when fundraising was generally very difficult in the
industry:
-- A successful placing, raising proceeds of GBP10.5m in October
2022, demonstrating the confidence of our existing investors. This
included a significant first investment by Irdeto B.V., a world
leader in video games protection and anti-piracy technology taking
a 13.5% stake.
Making huge strides by:
-- Growing the Bidstack global network of leading developers and
publishers with over 250 titles (FY21: 58) across in-game, in-menu
and rewarded video. This includes an addition of 2 further titles
with a AAA global game publisher and a multi-year renewal with
Sports Interactive's Football Manager.
Expanding, commercial activity in North America where a
significant portion of Bidstack's potential business exists by:
-- An increased focus on the US market. The commercial team in
the US now comprises ten people.
At the same time, making significant inroads into all UK and
European markets by:
-- Educating and growing markets such as the UK, France,
Netherlands, Spain, Germany, Nordics, Portugal and Belgium in
advertising across Bidstack's extensive gaming inventory
Expanding Bidstack's global reach by:
-- The onboarding of additional resellers with MMP Worldwide
(MENA), AdScholars (India), Totally Awesome (APAC), TNK Factory
(South Korea) and Omega Media (Vietnam) and;
In the area of advancing technology and standardisation in the
industry:
-- By forming a partnership with Unity, a cross platform game
engine as a Unity Verified Solution recommended monetisation
solution for game developers across all platforms;
-- By catalysing the Internet Advertising Bureau (IAB)/The Media
Rating Council (MRC) to recognise standards for in game
advertising. Advertisers now have clear benchmarks on how to
measure campaign success;
-- Acceleration of the adoption of Bidstack's SDK by developers
and publishers as breadth of ad-formats in addition to in-game,
in-menu now includes rewarded video, the most transacted ad unit in
gaming;
-- Early success with enterprise customers licensing Bidstack's
technology such as mobile ad-tech company Adways and metaverse
franchise SimWin; and
-- This is the launch of our enterprise platform business and
across 2023 we expect to announce multiple partnerships through our
"low touch", high margin solution.
Operational challenges
The road in 2022 has not, however, been without obstacles on the
way.
I will comment on the principal one.
The appointment of Azerion in 2021, as a global reseller of
Bidstack's offerings, boosted Bidstack's sales capabilities in
Europe but Azerion materially underperformed against mutual
expectations in North America as well as across the rest of the
world. Bidstack took immediate action to mitigate Azerion's
shortfall by appointing its own experienced US sales team.
Azerion failed to remit properly invoiced sums due to Bidstack
under the terms of the contract between the parties, resulting in
Bidstack being awarded attachments (freezing injunctions) against
Azerion in December 2022 and then defending Azerion's petition to
have these removed in the Court of Amsterdam in January 2023.
Following the judgement of the Dutch court in January, Azerion has
provided Bidstack with bank guarantees for the amounts due to
Bidstack under its initial claims. Azerion's purported termination
of the contract on 30 December 2022 increased the quantum of
Bidstack's claims materially. Following advice, the Board believes
that, unfortunately, a court hearing on these claims is not likely
to occur before Q4 2023.
Whilst this legal action is regrettable, it has meant that
Bidstack now has far greater control over enabling the Company to
become more agile globally.
With Bidstack's improving revenue visibility and a growing
client list, the Board is confident in Bidstack's ability to
operate independently of any Azerion relationship.
As previously stated, Bidstack intends to vigorously continue
pursuing Azerion in respect of its claims for unpaid invoices and
breaches of contract.
Outlook, highlights for 2023 and beyond
As a Board we are excited by the future of the industry the
Company has helped create, the use-cases for our technology. The
management team, led by our Founder and Chief Executive James
Draper, are focused on achieving our commercial and financial
objectives.
Finally, thank you to our loyal and 'cornerstone' institutional
and retail investors and our dedicated employees and partners for
your support throughout 2022.
Dr David Reeves
Chairman
Consolidated statement of comprehensive income
for the year ended 31 December 2022
Note Year ended Year ended
31 December 31 December
2022 2021
GBP GBP
Revenue 4 5,267,155 2,623,413
Cost of sales (1,484,512) (1,674,190)
------------ -----------
Gross profit 3,782,643 949,223
Administrative expenses 5 (12,545,716) (8,681,927)
------------ -----------
Exceptional items 6 - (222,555)
------------ -----------
Total administrative expenses (12,545,716) (8,904,482)
------------ -----------
Operating loss (8,763,073) (7,955,259)
Finance income 9 749 180
Finance costs 9 (2,998) (3,392)
Loss before taxation (8,765,322) (7,958,471)
Taxation 10 1,079,136 1,661,027
------------ -----------
Loss for the year (7,686,186) (6,297,444)
Other comprehensive income
Items that will or may be reclassified
to profit or loss:
Exchange gains on translation
of foreign operations 113,358 10,589
Tax relating to items that may
be reclassified 10 - -
------------ -----------
Other comprehensive income for
the year, net of tax 113,358 10,589
------------ -----------
Total comprehensive loss for
the year (7,572,828) (6,286,855)
============ ===========
Loss per share - basic and diluted
(pence) 11 (0.62) (1.21)
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 2022
Company number 04466195
Note 31 December 31 December
2022 2021
ASSETS GBP GBP
Non-current assets
Intangible assets 12 765,454 248,760
Property, plant and equipment 14 56,623 46,519
Right of use asset 16 3,920 7,280
------------------------ ------------
Total non-current assets 825,997 302,559
======================== ============
Current assets
Trade and other receivables 18 9,319,868 2,752,036
Cash and cash equivalents 19 8,662,039 7,086,906
------------------------ ------------
Total current assets 17,981,907 9,838,942
======================== ============
Total assets 18,807,904 10,141,501
======================== ============
EQUITY AND LIABILITIES
Equity
Share capital 21 10,796,670 8,950,048
Share premium account 21 43,216,919 35,375,326
Share-based payment reserve 21 2,782,896 1,589,965
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
Exchange reserve 21 123,947 10,589
Retained losses 21 (29,491,052) (21,876,346)
------------------------ ------------
Total equity 10,617,421 7,309,103
======================== ============
Non-current liabilities
Lease liability 15 614 4,180
------------------------ ------------
Total non-current liabilities 614 4,180
======================== ============
Current liabilities
Trade and other payables 20 8,186,323 2,824,920
Lease liability 15 3,546 3,298
Total current liabilities 8,189,869 2,828,218
======================== ============
Total equity and liabilities 18,807,904 10,141,501
======================== ============
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 2022
Share-based Merger Reverse
Share Share payment relief acquisition Exchange Warrant Retained Total
capital premium reserve reserve reserve Reserve reserve losses equity
GBP GBP GBP GBP GBP GBP GBP GBP GBP
Balance as at
1 January
2021 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
comprehensive
loss for the
year - - - - - 10,589 - - 10,589
Balance as at
31 December
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
============ ============ =========== =========== ============== ========= ======== ============== ============
Issue of
shares 1,839,122 8,643,873 - - - - - - 10,482,995
Issue of share
options
exercised 7,500 22,500 30,000
Costs of
raising
equity - (824,780) - - - - - - (824,780)
Share-based
payments - - 1,192,931 - - - - - 1,192,931
Unexercised
lapsed
warrants - - - - - - (71,480) 71,480 -
Loss for the
year - - - - - - - (7,686,186) (7,686,186)
Total other
comprehensive
income for
the year - - - - - 113,358 - - 113,358
Balance as
at 31
December
2022 10,796,670 43,216,919 2,782,896 6,508,673 (23,320,632) 123,947 - (29,491,052) 10,617,421
============ ============ =========== =========== ============== ========= ======== ============== ============
Warrants issued by the Company in the year ended 31 December
2018 were classified as equity on initial recognition and shown in
the warrant reserve. As at 31 December 2022 the warrants lapsed
unexercised and the amount previously recognised in the warrant
reserve has been reclassified to retained losses.
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 2022
31 December 31 December
2022 2021
Note GBP GBP
Cash flows from operating activities
Loss before taxation (8,765,322) (7,958,471)
Adjustments for:
Amortisation - Intangibles 12 71,528 31,195
Amortisation - Right of use asset 16 3,360 10,377
Depreciation 14 28,765 24,160
Equity settled share-based payments 5 1,192,931 307,409
Doubtful debts expenses - (2,073)
Interest received 9 (749) (180)
Interest paid 9 2,998 3,392
Bad debts expense 18 1,456,236 -
Exchange differences on translation
of foreign operations 113,358 10,589
(5,896,895) (7,573,602)
Changes in working capital
(Increase)/decrease in trade and other
receivables 18 (8,199,385) 409,468
Increase in trade and other payables 20 5,361,405 961,182
----------- -----------
Cash used in operations (8,734,875) (6,202,952)
Taxation received 1,254,451 892,895
----------- -----------
Net cash used in operations (7,480,424) (5,310,057)
Cash flow from investing activities
Investment in intangible assets 12 (588,222) -
Investment in property, plant and
equipment 14 (38,869) (42,291)
----------- -----------
Net cash flow used in investing activities (627,091) (42,291)
Cash flow from financing activities
Proceeds from issue of share capital 21 10,512,995 10,863,150
Cost of issue 21 (824,780) (756,753)
Interest paid 9 (2,998) (3,392)
Principal paid on finance leases 15 (3,318) (11,045)
Interest received 9 749 180
Net cash generated from financing
activities 9,682,648 10,092,140
Increase in cash and cash equivalents
in the year 1,575,133 4,739,792
Cash and cash equivalents at beginning
of year 7,086,906 2,347,114
Cash and cash equivalents at the end of
the year 8,662,039 7,086,906
=========== ===========
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 subsidiaries (together the "Group"). The financial
statements have been prepared on a going concern basis in
accordance with UK-adopted international accounting standards and
those parts of the Companies Act 2006 applicable to companies
reporting under IFRS.
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, Bidstack SIA, Bidstack
Technologies Ltd, Bidstack Sports Limited and Bidstack Inc., made
up to 31 December 2022.
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.
Although the consolidated financial information has been issued
in the name of Bidstack Group Plc, the legal parent, it represents
in substance continuation of the financial information of the legal
subsidiary, Bidstack Ltd.
Going concern
The Board continues to adopt the going concern basis in 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 revenue from
existing business, additional future revenues from anticipated new
lines of business, potential future capital in-flows, continued
operating losses, projected 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.
The Group forecasts assume that further equity fundraising will
take place in the next twelve months in order to implement its
growth strategy and operate as a going concern. The Group is
currently negotiating a convertible loan facility with a strategic
investor to address its short term cash requirements. Although the
Group has had past success in fundraising and continues to attract
interest from investors, making the Board confident that such
financing options 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.
In addition to 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.
2 Summary of significant accounting policies (continued)
Going concern (continued)
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 on pages 2 to 5.
The financial statements at 31 December 2022 show that the Group
generated an operating loss for the year of GBP8.8 million (2021:
GBP7.9 million); with cash used in operating activities of GBP7.5
million (2021: GBP6.2 million). Group balance sheet also showed
cash reserves at 31 December 2022 of GBP8.6 million (2021: GBP7.1
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.
New and amended standard, and interpretations issued and
effective for the financial year beginning 1 January 2022.
The adoption of the following mentioned amendments, which were
all effective for the period beginning 1 January 2022, have not had
a material impact on the Group's and Company's financial
statements:
-- Amendments to IAS 16 Property, Plant and Equipment: Proceeds before Intended Use;
-- Annual Improvements to IFRS Standards 2018-2020 (Amendments
to IFRS 1, IFRS 9, IFRS 16 and IAS 41);
-- Amendments to IFRS 3 References to Conceptual Framework);
-- Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets
New standards, interpretations and amendments not yet
effective
There are a number of standards, amendments to standards, and
interpretations which have been issued by the IASB that are
effective in future accounting periods that the Group has decided
not to adopt early.
The following amendments are effective for the period beginning
1 January 2023:
-- Amendments to IAS 1 Presentation of Financial Statements:
Classification of Liabilities as Current or Non-current and
Amendments to IAS 1: Classification of Liabilities as Current or
Non-current - Deferral of Effective Date - effective 1 January
2023*
-- Amendments to IAS 1 Presentation of Financial Statements and
IFRS Practice Statement 2: Disclosure of Accounting Policies -
effective 1 January 2023
-- Amendments to IAS 8 Accounting policies, Changes in
Accounting Estimates and Errors -Definition of Accounting Estimates
- effective 1 January 2023
-- Amendments to IAS 12 Income Taxes - Deferred Tax Related to
Assets and Liabilities arising from a Single Transaction -
effective 1 January 2023
The following amendments are effective for the period beginning
1 January 2024:
-- IFRS 16 Leases (Amendment - Liability in a Sale and Leaseback)
-- IAS 1 Presentation of Financial Statements (Amendment -
Classification of Liabilities as Current or Non-current)
-- IAS 1 Presentation of Financial Statements (Amendment -
Non-current Liabilities with Covenants)
Bidstack Group Plc is currently assessing the impact of these
new accounting standards and amendments.
2 Summary of significant accounting policies (continued)
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.
The Group recognises revenue from the follow activities:
-- Revenue from Media contracts; whereby Group's inventory is sold to advertisers directly or programmatically;
-- Revenue from Sponsorship contracts; whereby the Group enter
into a contract with the brand direct or advertising agency to
provide a customized campaign in a chosen video game;
-- Revenue from Licensing contracts; whereby the Group enters
into a contract that provides the exclusive licensing agreement of
the Pubguard Technology;
-- Revenue from Minimum Guarantee; whereby the Group entered
into an exclusive contract with Azerion as its provider of reseller
services in relation to Bidstack SDK formats.
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 Group identified the performance obligations that related to
the above stated revenue activities as follows:
-- Revenue from Media contracts; based on agreed impressions
that have been delivered between the campaign start and end
date;
-- Revenue from Sponsorship contracts; the delivery of a
customised placement of advertising into the agreed game;
-- Revenue from Licensing contracts; the point at which the
brand rights were made available, and the point that exclusive
licensing access to the Pubguard technology was provided;
-- Revenue from Minimum Guarantee; for the provision of an
agreed amount of in-game advertising inventory over the duration of
the contract.
For each performance obligation that is satisfied over time, the
Group applies a single method of measuring progress towards
complete satisfaction of the obligation. The objective is to depict
the transfer of control of the goods or services to the customer.
To do this, the Group have adopted an appropriate output method.
For the Group, that is the rights to access and use the brand
assets and the provision of in-game advertising inventory over the
period of the contract.
The Group identifies the transaction price that relate to the
above stated revenue generating activities as follows:
-- Revenue from Media contracts; based on the Group's rate card
by CPM multiplied by the agreed number of impressions;
-- Revenue from Sponsorship contracts; based on the cost set by
the game developer. The Group implements a cost plus model for
sponsorship;
-- Revenue from Licensing contracts; determined by the contract over the duration of the term;
-- Revenue from Minimum Guarantee; the minimum guarantee's
transaction price is included within the contract .
2 Summary of significant accounting policies (continued)
Revenue Recognition
The Group have applied a practical expedient which allows an
entity to apply the accounting for a contract with a customer to a
portfolio of contracts with similar characteristics if the entity
reasonably expects the effects on the financial statements of
applying IFRS 15. The Group have assessed the contracts and is
comfortable that the effects on the financial statements of
applying IFRS 15 would not differ materially from applying this
Standard to the individual contracts (or performance obligations)
within that portfolio.
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.
The Group recognises a contract asset when revenue has been
recognised on satisfying performance obligations but have not yet
been billed to the customer. Contract assets relate to impressions
that have been delivered but not billed to the customers. Contract
liabilities are recognised when the Group has an obligation to
transfer goods or services to the customer for which consideration
has been received from the customer. Contract liabilities relate to
advanced payments from customers against a campaign.
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.
Taxation
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 .
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).
2 Summary of significant accounting policies (continued)
Taxation ( continued)
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 Group 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
Fixed asset investments are assessed for the presence of
impairment indicators, if any indicators are present then an
impairment review is conducted. An impairment review of Goodwill is
conducted annually, 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
2 Summary of significant accounting policies (continued)
- the amount of any provision recognised where the Group is
contractually required to dismantle, remove or restore the leased
asset.
Leased assets (continued)
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 and is included
in administrative expenses 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
- Research and Development - 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.
2 Summary of significant accounting policies (continued)
Financial assets (continued)
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
presented in Pounds Sterling (GBP) which is also the Parent
Company'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 2022 and the year ended 31
December 2021, 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, and by revenue type. This is used by the chief operating
decision makers to perform their role.
31 December 31 December
2022 2021
GBP GBP
Revenue by Geographical Region
US 167,627 863,691
EMEA 5,099,528 1,759,722
5,267,155 2,623,413
=========== ===========
The Group's revenue included 1 (2021: 5) customers making up
more than 10% each during the year.
31 December 31 December
2022 2021
GBP GBP
Revenue by Type
Customer 1 4,112,331 642,270
Customer 2 - 377,375
Customer 3 - 361,758
Customer 4 - 289,239
Customer 5 - 267,914
All other customers 1,154,824 684,857
Total revenue 5,267,155 2,623,413
=========== ===========
The Group recognises a contract asset when revenue has been
recognised on satisfying performance obligations but have not yet
been billed to the customer. Contract assets relate to impressions
that have been delivered but not billed to the customers. Contract
liabilities are recognised when the Group has an obligation to
transfer goods or services to the customer for which consideration
has been received from the customer. Contract liabilities relate to
advanced payments from customers against a campaign. Further
details of the Group's contract assets and liabilities can be found
in Note 18 and Note 20, respectively.
The Group does not ordinarily have returns, refunds or other
similar obligations in respect of their performance obligations as
the Group's obligations are around the delivery of impressions or a
hardcoded customised asset. The Group ensures that the customers
are happy to proceed in advance of going live. Should there be a
discrepancy between what the customer sees as delivered on their
3(rd) party verification system and what the Group has billed, a
credit note is issued.
As at 31 December 2022, the Group did not have any unsatisfied
long-term contracts.
11 Loss per share
Basic and diluted loss per share
The calculation of basic and diluted loss per share is based on
the loss attributable to ordinary shareholders of GBP7,686,186
(2021: loss of GBP6,297,444) and the weighted average number of
ordinary shares in issue for the year of 1,235,295,798 (2021:
519,507,993 ). The basic and diluted earnings per share are the
same given the loss for the year, making the outstanding share
options and warrants anti-dilutive.
21 Share capital and reserves
Allotted, called up and Ordinary Share Share
fully paid 0.5p shares capital Premium
No. GBP GBP
As at 01 January 2022 931,531,573 8,950,048 35,375,326
Issue of placing shares 369,324,411 1,846,622 8,666,373
Cost of raising equity - - (824,780)
As at 31 December 2022 1,300,855,984 10,796,670 43,216,919
========================== ============= ========== ===========
All ordinary shares are equally eligible to receive dividends
and the repayment of capital and represent equal votes at meetings
of Shareholders.
The following describes the nature and purpose of each reserve
within owner's equity:
Share capital : Amount subscribed for shares at nominal
value.
Share premium : Amount subscribed for share capital in excess of
nominal value, less costs of share issue.
Share-based payment reserve: The share-based payment reserve
comprises the cumulative expense representing the extent to which
the vesting period of share options has passed and management's
best estimate of the achievement or otherwise of non-market
conditions and the number of equity instruments that will
ultimately vest.
Merger relief reserve: Effect on equity of the consideration
shares issued over their nominal value.
Reverse acquisition reserve: Effect on equity of the reverse
acquisition of Bidstack Limited.
Warrant reserve: The warrant reserve comprises the cumulative
expense representing the extent to which the vesting period of
warrants has passed and management's best estimate of the
achievement or otherwise of non-market conditions and the number of
equity instruments that will ultimately vest.
Exchange reserve: The exchange reserve represents foreign
exchange differences in re-translation.
Retained losses: Cumulative realised profits less cumulative
realised losses and distributions made, attributable to the equity
Shareholders of the Company.
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END
FR SELSWSEDSESM
(END) Dow Jones Newswires
June 20, 2023 03:18 ET (07:18 GMT)
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