Bidstack Group Plc
(Formerly Kin Group Plc)
Annual Report and Accounts
Registered number 04466195
For the year ended 31 December 2018
COMPANY INFORMATION
DIRECTORS
D Stewart
J Draper
F Petruzzelli
J McIntosh
L Mair
J Taylor
COMPANY SECRETARY
L O’Donoghue
REGISTERED NUMBER
04466195
REGISTERED OFFICE
NOMINATED ADVISER
BROKERS
INDEPENDENT AUDITORS
SOLICITORS
REGISTRARS
201 Temple Chambers
3-7 Temple Avenue
London
EC4Y 0DT
Spark Advisory Partners Limited
5 St John’s Lane
London
EC1M 4BH
Peterhouse Corporate Finance Limited
New Liverpool House
15 Eldon Street
London
EC2M 7LD
Haysmacintyre LLP
10 Queen Street Place
London
EC4R 1AG
Kepstorn Solicitors
7 St James Terrace
Lochwinnoch Road
Kilmacolm
PA13 4HB
Neville Registrars Limited
Neville House
Steelpark Road
Halesowen
B62 8HD
COMPANY WEBSITE
www.bidstackgroup.com
Contents
Chairman’s statement
Strategic report
Directors’ report
Statements of Directors’ responsibility
Independent Auditor’s report
Consolidated statement of comprehensive income
Consolidated statement of financial position
Company statement of financial position
Consolidated statement of changes in equity
Company statement of changes in equity
Consolidated statement of cash flows
Company statement of cash flows
Notes to the financial statements
1
3
9
17
18
22
23
24
25
26
27
28
29
Chairman’s statement
Introduction
2018 was a transformational year for the Company and, in September 2018, saw the Company acquire Bidstack
Limited by way of a reverse takeover (“RTO”), raise £3.5m in an over-subscribed placing, and appoint James
Draper, founder and CEO of Bidstack Limited, Francesco Petruzzelli, founder and CTO of Bidstack Limited,
and John McIntosh as CEO, CTO and FD of the Company, respectively.
Information about Bidstack
Bidstack’s software facilitates the insertion of adverts into natural advertising space (e.g. billboards) in video
games. The advertising is dynamic, targeted and automated, and works globally across multiple platforms (PC,
mobile and console). The key benefit of native in-game advertising over non-native variants (e.g. video rolls
and banner ads) is that it appears authentic and ‘‘natural’’ to the environment and does not impact the gamer’s
experience and cannot be excluded with ad-blocking software.
Advertisers can target the users they want to reach based on age, gender and location and the software is able to
display different advertisements to different users playing the same game so that adverts can be delivered to the
players most relevant to a particular brand. Bidstack is able to provide detailed campaign analytics to advertisers
and gaming data to publishers.
Bidstack’s customers are games publishers and developers (on the supply side), and advertising agencies, brands
and programmatic advertising platforms (on the demand side). Bidstack’s model is to secure exclusive access to
the native in-game advertising space within video games from the game developers or publishers and then to sell
that advertising space either direct to specific brands or through programmatic advertising platforms. Bidstack
receives advertising revenues from advertising agencies and brands and pays an agreed share to the relevant
video game publishers or developers.
I would refer you to the Chief Executive’s report for further information about developments in the business
since the RTO.
Financial Summary
The comparative numbers in these accounts cover a 12 month period to 31 December 2017 of Kin Group plc
and Bidstack Limited prior to the reverse acquisition. The comparative numbers therefore compare Kin Group
plc as a cash shell and Bidstack Limited as an early stage business. The new Group’s operations began in
September 2018 with the completion of the RTO when the measurement of consolidated revenues by the
renamed Bidstack Group Plc also started. The comparison is as follows:
Twelve months ended 31 December
Sales
Gross profit
Total overheads
Adjusted (loss) before tax*
2018
2017
£000 £000
317
76
1,263
(1,187)
10
(92)
403
(494)
*Before Acquisition related costs consisting of Transaction costs (£0.7 million) and Share based payment on
reverse acquisition (£1.4 million)
We believe the above comparison is a more meaningful comparison than the audited figures of the day to day
business, after accounting for the RTO, given the acquisition of Bidstack in September 2018 for approximately
£6.8 million, which was satisfied by the issue of new shares in the Company to the vendors at 6p per share. At
the same time, the Company raised £3.5 million through an over-subscribed placing to provide working capital.
It is worth noting that sales and the adjusted loss before tax in 2018 were in line with our projections. Net Group
cash at 31 December 2018 was just over £2.1m, also in line with our projections (2017: £1,661).
1
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Chairman’s statement (continued)
Cash management remains tight and a key focus within the business. We expect to continue to be cash negative
in the second half of 2019 as our strategic focus remains on the continued development of our software platform
alongside our product offering.
Outlook and Prospects
We are tremendously excited about Bidstack’s future.
The team has made great progress in the development of the Bidstack platform since completion of the RTO.
This includes significant improvements in connectivity, monitoring and interfaces and the creation of
dashboards to improve user experience. In addition, during that period, Bidstack has opened its platform to
programmatic direct purchasing.
These advances coupled with the high levels of interest in Bidstack’s business model we are experiencing from
games publishers, developers and other leading technology businesses all support the Directors’ belief that we
have a significant first mover advantage in the provision of dynamic native in-game advertising and that the
business will generate highly significant amounts of advertising traffic.
In order to exploit the substantial opportunity currently available to the Group, in the short term the Board
intends to prioritise investment in technical solutions which will place Bidstack in the best possible position to
operate at significantly increased scale.
We believe this strategy will result in the business being well placed to meet market expectations for 2019 and
will facilitate extensive growth in 2020. We continue to expect that revenues in 2019 will be significantly
second half weighted.
Finally, I would like to take this opportunity to welcome our new shareholders and to thank them for their
support.
Donald Stewart
Chairman
3 April 2019
2
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Strategic Report
Chief Executive’s Report
I am pleased to make this, my first, report as Chief Executive of Bidstack Group Plc. I would like to start by
thanking all my other directors and staff at Bidstack for having achieved so much both before and since the
RTO. I would also like to thank our shareholders and investors.
This is an exciting time for Bidstack. Our admission to trading on AIM marked the beginning of a new chapter
in our journey.
The Business Model
Bidstack has two sets of customers:
Advertisers on the demand side.
Video Games Developers and Publishers on the supply side.
Bidstack’s technology enables advertisers to buy billboard space that sits naturally within the virtual/video game
environment, programmatically.
Programmatic advertising enables Bidstack to sell our inventory at scale by connecting into the advertising
media’s Demand-Side Platforms (DSP’s), that have made digital advertising so frictionless and lucrative for app
and website developers.
Advertisers can buy Bidstack’s advertising inventory through their selected trading platform (DSP). Advertising
copy can be tailored to the target demographic. For instance two players can be playing each other in the same
match, one being a 20 year old male in London, the other a 40 year old female in New York, and each can be
served a different advert.
The scale of this automated buying makes us advertising agency friendly. We can enable agencies to be reactive
and push campaigns at scale, with results reporting being provided in real time through their DSP trading
platform of choice.
Bidstack’s proprietary API and SDK technology integrates into the video game engine, across multiple
platforms, whether it be mobile, PC or console.
Bidstack secures exclusive contracts with video games publishers and developers to gain access to their native
in-game advertising opportunities, typically for three years, in return for a share of the revenues received by
Bidstack from advertisers. The revenue share is agreed on a contract by contract basis with each publisher.
The shift in the market towards a Spotify style model in the gaming space (i.e. subscription streaming services)
will result in a significant increase in the adoption of high-fidelity gaming with revenue models moving away
from the legacy pay up-front concept. We are finding developers are excited by Bidstack’s net-new revenue
proposition in this new market paradigm.
Our ambition is to make Bidstack the leading global provider of in-game programmatic advertising, across any
gaming platform.
Progress since the RTO
I am pleased to report that we have made significant progress since completion of the RTO.
3
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Strategic Report (continued)
Games
Bidstack hit a key milestone in late 2018 when it commenced serving advertisements into Football Manager
2019 as well as Football Manager 2018. More recently Bidstack has also commenced serving advertisements
into Soccer Manager 2019, a free online soccer management game.
We also entered into an agreement with Codemasters to deliver advertising into two of its racing games, the first
of which, DiRT Rally 2.0, was released in February 2019. This is the Group’s first major PlayStation title. The
Group expects to commence serving programmatic advertisements on PlayStation into DiRT Rally 2 towards
the end of Q2 2019.
We are encouraged by the level of interest shown by game developers and publishers in Bidstack’s product, who
see it as non-intrusive and capable of generating additional revenues – this is particularly pertinent with the
ongoing trend to free to play and ‘available via subscription’games.
Programmatic Advertising
While Bidstack has for some time been able to place advertisements in games in response to specific insertion
orders, in December 2018 its first end-to-end fully automated programmatic system went live, in conjunction
with Pubmatic, Inc., a publisher focused sell-side platform (“SSP”). Pubmatic effectively acts as a reseller
allowing advertisers to access a wholesale type of media purchase.
At the end of February 2019 Bidstack hit another milestone when it went live with its first full integration with a
demand side platform (“DSP”), Avocet Systems Limited (“Avocet”). Following this achievement Bidstack’s
advertising inventory can be made available to buy programmatically on a DSP. A DSP allows buyers of digital
advertising space to buy advertising using multiple advertising exchange and data exchange accounts through a
single interface.
Being integrated with a DSP enables Bidstack to take bids direct and control the pricing of its advertising space.
Avocet and other DSPs enable advertisers, either direct or via an agency, to target advertising inventory that fits
their campaign demographics, based on age, gender, location etc. and allows the media buyer to trade and
optimise campaigns, with real-time reporting.
This is the first time inventory of this type has been available on a DSP platform. It’s a technical breakthrough
not just for Bidstack but for the entire advertising industry.
New appointments
In line with its business plan, the Group has made several new appointments in its sales and development teams,
and now has sixteen employees, compared with nine at the time of the RTO. We continue to recruit new people
in line with the growth of the business.
We are encouraged by the amount of interest in Bidstack which has been shown by many well respected figures
in both the video games and on-line advertising industries. To harness this enthusiasm we have established an
advisory committee of selected individuals with extensive experience in differing areas relevant to our business,
whose remit is to provide strategic input and direction to the Board and to assist with introductions to key
counterparties.
The first two appointments are Pete Beeney of Spotify and Joel Livesey of The Trade Desk.
Pete is Global Holding Company Lead at Spotify where he has spent the last six years building and managing
its global partnership with WPP. He has broad experience in the print, out-of-home and e-commerce industries.
Joel Livesey is Director of Partnerships for EMEA at The Trade Desk and oversees the relationship with supply-
side partners in the region, working with local and global partners to develop innovative strategies for its clients.
4
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Strategic Report (continued)
Industry Initiatives
Native in-game advertising is a new advertising genre.
Bidstack is working with the Internet Advertising Bureau (“IAB”), the trade group which sets technical
standards and best practices for the digital advertising industry, to create a recognised advertising category for
native in-game advertising. Moritz Natalini, who was recently appointed as Head of Products at Bidstack, is a
former IAB board member. We are very pleased to be sponsoring the IAB’s upcoming Gaming Seminar event
in November 2019.
We have also engaged with the Audit Bureau of Circulation (“ABC”), a leading industry-owned auditor for
media products and services, with specialist skills in digital ad trading, who we believe will assist Bidstack with
the independent verification of our impression statistics – which is important to our advertising customers.
Strategy
We are building out Bidstack to become the biggest media owner in the video games market. What does that
mean? In short - if you wanted to advertise in a video game, you would come to us.
Our core differentiator is agreeing exclusive-to-Bidstack, multi-year deals for the billboard space that sits
naturally within a video game environment and offering up that advertising space for a programmatic purchase,
based on the demographic profile of the gamer. Targeted and non-intrusive, whilst respecting the artwork of the
game.
The video gaming industry is experiencing remarkable growth.
Recent announcements of streaming services will see the industry evolve even further now that tech giants like
Google and Apple are investing heavily in this area. Streaming will allow gamers to access high resolution
games without having to own a console or high spec PC.
Streaming, virtual and augmented reality services - as well as the evolving business models towards
subscriptions and free to play - make our net-new revenue offering enticing to game publishers and developers.
Crucially, every game publisher we have spoken to welcomes our proposition.
We believe our business model is a win-win for developers, publishers and advertisers and will position
Bidstack well to make the most of its first mover advantage in the provision of dynamic native in-game
advertising.
Bidstack’s strategic challenge is about speed and execution. What Bidstack is doing now has never been done
before, giving us a first mover advantage in the commercialisation of programmatic native in-game advertising.
Our technology continues to be developed by our highly skilled team in the UK and Riga. We are ensuring that
the Company has the resources, connections and personnel required to maximise the considerable opportunity
we find ourselves presented with.
In summary, I believe our business is very well positioned to exploit this growth opportunity and build a highly
scalable native in-game advertising business that can carve out a significant position within the video game
advertising world.
I look forward to updating you on further developments in this exciting journey we find ourselves on as they
arise.
James Draper
Chief Executive 3 April 2019
5
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Strategic report (continued)
Principal Activity
Bidstack is an advertising technology company which provides dynamic, targeted and automated native in-game
advertising for the global video games industry across multiple platforms. Its proprietary API technology is
capable of inserting adverts into natural advertising space within video games across multiple video games
platforms (mobile, PC and console).
Key Performance Indicators
The Board’s focus for H1 2019 is on the continued technical development of the Bidstack platform to address
issues such as third party verification, high volume copy clearance, international on-line advertising regulatory
compliance, interconnectivity with major programmatic demand side platforms and fraud and brand safety.
The Group’s KPIs will provide a critical measure of the Group’s revenue potential and are evolving to reflect
the Group’s progressing business model. Available advertising space, our pipeline of additional future games,
the installed base and active user statistics for individual games and technological developments with
programmatic advertising platforms are all valuable indicators of potential revenue. Content drives players,
who can view our brand safe advertising in an increasing theatre of distribution, which ultimately generates
advertising revenue.
For forward looking performance measurement, the Board will seek to assess the Group’s various engagements
with new business prospects, and the level and speed of their progress.
Principal risks and uncertainties
The Board places a high emphasis on being risk aware. The model for the future development of the Group is
reliant on its ability to achieve a critical mass of quality native in-game advertising inventory and its ability to
derive revenue from brand and advertising agencies who want to access the audience for Bidstack’s inventory.
We track risks and uncertainties that can impact the performance of the Group, some of which are beyond the
control of the Company. These are reviewed at monthly board meetings where the Company’s performance is
assessed against budget. This enables the board to determine and mitigate the Company’s risk environment,
which includes:
team. Their
Risk: Retention of key staff
The Group is dependent on key members of its
management
services cannot be
guaranteed, and the loss of their services may have a
near-term material
the Group’s
effect
performance. There can be no assurance that the
Group will be able to attract and retain all personnel
necessary for the future development and operation
of the business.
on
Mitigation
Bidstack’s founders are significant shareholders. In
addition, the Group operates a share option scheme
to incentivise employees and enable them and to
benefit from growth in the business. The Board will
that key personnel are
continue
appropriately sourced, engaged and
incentivised
where required.
to ensure
6
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Strategic report (continued)
Principal risks and uncertainties (continued)
Risk: Competition
The Group’s investment in technology may be
affected by the development of more successful
technology or applications by competitors who may
have greater financial, marketing, operational and
technological resources than the Group.
Mitigation
The Directors believe that Bidstack has a significant
first mover advantage in terms of its technology,
products and services. We focus on development
progress and the strength of the IT team in order to
maintain this advantage as far as practicable.
Risk: Publishing partner growth
Success of the Group’s strategy relies on its on-going
ability to secure additional games with appropriate
advertising opportunities. There can be no assurance
that the Group will maintain its success in this area.
Mitigation
The Group has experienced significant in-bound
enquiries from a wide variety of game developers
and publishers. Games developers and publishers are
incentivised to provide advertising in their games by
to generate significant additional
the potential
revenues from advertising.
Risk: Converting client opportunities
Success of the Group’s strategy depends on its ability
to generate revenues from impressions of ads seen by
video game players and other observers of the
gaming environment. The major advertising agencies
operating in the programmatic space have built up
revenues from brands over a long period and may
have some discretion as to where advertising budgets
are spent. There can be no assurance that the Group
will be successful in persuading brands and agencies
that native in-game advertising is an attractive
avenue for advertising in competition to better
understood and more traditional alternatives.
other
inappropriate
Risk: Brand Safe Advertising space
It is imperative to established brands and their
agencies that their ads do not appear on a screen
alongside
and
advertisements. In addition, certain products and
product types may not be shown to game players
based on age or product type restrictions. The
appearance of ads by quality brands alongside
offensive content could result in a loss of trust by
brands and agencies which would have an adverse
effect on the perception of the Group.
content
in
and
such
agencies
and price
Mitigation
The growth of the popularity of video gaming should
ensure that appropriate brands will want to use native
in-game advertising to reach an active audience
which, by and large, does not watch television or
engage with other more traditional media outlets.
Growth in the scale of the Group’s advertising
inventory is expected to attract greater interest by
brands
advertising
opportunities, and should allow the Group to create
in-game
the world’s first programmatic native
advertising platform,
its product
accordingly. While it is still at an early stage, the
Group has already commenced monetising
its
advertising opportunities on a price per thousand
impressions basis and is working with advertising
partners to demonstrate its value in reaching an
audience which may be otherwise hard to engage.
Mitigation
Native in-game advertising is possibly the most
brand
is.
Bidstack’s platform can ensure that content is filtered
so as not to be seen by those who are too young or
are resident in territories where relevant products are
restricted. In addition, Bidstack has copy clearance
procedures with the games publishers to ensure
restricted content can be
removed. However,
the accuracy of
Bidstack’s platform relies on
information provided by gamers and, accordingly,
age restricted content could be seen by players using
the log-in details of other people.
safe advertising environment
there
7
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Strategic report (continued)
Principal risks and uncertainties (continued)
Risk: IT services and infrastructure
Like every other business dependent on the internet,
the Group cannot guarantee that there will be no
disruption in the availability or performance of the
Bidstack platform, or the terms on which it is made
available, which could have a material adverse effect
on the business.
Risk: Liquidity
The Company monitors cash flow as part of its day
to day control procedures. The board regularly
assesses cash flow projections and ensures that
appropriate resources are available to be drawn on, as
necessary.
Mitigation
The Group’s IT infrastructure is distributed across a
multiple server network. This ensures that if one
were to fail, then the Group’s architecture and
content could still be accessed by users via other
access points.
Mitigation
To manage the working capital needs of the business,
and to finance its growth plans, particularly until the
Group becomes cashflow positive, the Company
relies on being able
to arrange and maintain
sufficient financing and, where relevant, adhere to
applicable covenants of relevant facilities once
established.
Employment without discrimination
The Company is committed to employ on the basis of aptitude and ability. We hire and promote our people
regardless of gender, orientation, origin, creed, disability or any other inappropriate discrimination.
Environmental and social
In our day to day business, we commit to comply with applicable environmental laws, and the direct impact of
our operations is low. We also look to tread lightly through good housekeeping practices such as reducing
energy consumption, using sustainable resources and recycling waste.
Directors, senior managers and employees
At 31 December 2018, there were five male directors of the Company and the Company had twelve other
employees. Please see pages 13 to 14 for details of the biographies of the directors.
The Strategic Report was approved by the Board of Directors on 3 April 2019 and was signed on its behalf by:
James Draper
Chief Executive 3 April 2019
8
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Directors’ report
The directors present their report together with the audited financial statements for the year ended 31 December
2018.
Principal activity
The principal activity of the Group is the provision of native in-game advertising.
On 18 September 2018, the Company changed its name, by special resolution, from Kin Group Plc to Bidstack
Group Plc.
Results and dividends
The results of the Group for the year ended 31 December 2018 are set out on page 22 and show a loss before tax
and acquisition related costs for the period of £1,187,291 (2017: loss of £494,307). The accounting loss after tax
and acquisition related costs was £3,262,725 (2017: loss of £465,770). The directors do not recommend the
payment of a dividend (2017: £nil).
Financial instruments
Details of the use of financial instruments by the Company are contained in note 20 of the financial statements.
Substantial shareholders
On 31 December 2018 the following shareholders held an interest of 3% or more of the ordinary share capital of
the Company:
James Draper
Optiva Securities
Killik & Co
Simon Mitchell
Courtney Investments Limited
Fran Petruzzelli
Ann Gloag OBE
Ordinary shares of 0.5p % of issued share capital
20.75%
7.54%
7.54%
5.02%
3.86%
3.65%
3.00%
41,260,562
15,000,000
15,000,000
9,979,298
7,666,667
7,250,000
5,964,229
As at 31 December 2018 no other person had reported an interest of 3% or more in the Company’s ordinary
shares.
Directors
The directors who held office during the year were as follows:
D Stewart
J Draper
F Petruzzelli
J McIntosh
L Mair
J Taylor
Chairman
Executive
Executive
Executive
Non-Executive
Non-Executive
Appointed
-
19 September 2018
19 September 2018
19 September 2018
-
-
9
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Directors’ report (continued)
Directors’ emoluments
Current Directors
Chairman
D Stewart
J Draper
Executive
F Petruzzelli Executive
Executive
J McIntosh
Non-Executive
L Mair
Non-Executive
J Taylor
Salary/Fees/
Benefits
£
24,2331
65,838
40,000
9,0002
30,600
54,8713
Bonus
£
-
50,000
50,000
-
-
-
Share-
based
payment
-
13,602
240,477
3,161
-
-
Total
Emoluments
2017
£
24,233
129,440
330,477
12,161
30,600
54,871
£
-
33,833
-
-
-
-
224,542
100,000
257,240
581,782
33,833
1 Donald Stewart, Chairman. is also a partner of Kepstorn Solicitors. Fees for corporate and legal services of
£77,370 (2017: £Nil) were charged by Kepstorn during the year ended 31 December 2018, of which £60,000
related to Kepstorn’s fees for acting as the Company’s solicitors on the IPO. As at 31 December 2018, £19,080
was owed to Kepstorn Solicitors (2017: £Nil).
2 John McIntosh, Finance Director, is also a Director of C P Limited. Fees for consultancy services of £9,000
(2017: £Nil) were charged by C P Limited during the year ended 31 December 2018. £1,000 of these fees were
for services to Bidstack Ltd prior to his appointment as a director. As at 31 December 2018, £Nil was owing to
C P Limited (2017: £Nil).
3 John Taylor, Non-Executive Director, is also a Partner of Ugly Panda LLP. Fees for consultancy services to
Bidstack Ltd of £26,471 (2017: £Nil) were charged by Ugly Panda LLP during the year ended 31 December
2018. As at 31 December 2018, £409 was owing to Ugly Panda LLP.
10
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Directors’ report (continued)
Statement of compliance with the Corporate Governance Code
The Group complies with the Quoted Companies Alliance’s Corporate Governance Code (the “QCA Code”) as
revised and reissued in May 2018.
Donald Stewart, in his capacity as Non-Executive Chairman, has assumed responsibility for leading the Board
effectively and ensuring that the Group has appropriate corporate governance standards in place and that these
standards are observed and applied within the Group as a whole.
The corporate governance arrangements that the Board has adopted are intended to ensure that the Group
delivers medium and long-term value to its shareholders. The Board maintains a regular dialogue with its major
investors and other professional investors, providing them with such information on the Group’s progress as is
permitted by the AIM rules, MAR and the requirements of the relevant legislation.
It should be noted that all the Directors are shareholders and/or option holders in the Group and that both Mr
Draper and Mr Petruzzelli are founders and significant shareholders. The Directors therefore view their own
medium and long-term interests to be integrally linked to the medium and long-term value of the Group and, as
such, the interests of the Directors are directly aligned with those of the shareholders.
The Board currently consists of three Independent Non-Executives, Donald Stewart, Lindsay Mair and John
Taylor, and three Executive Directors, James Draper, Francesco Petruzzelli and John McIntosh.
Since the period end, as outlined in the Chairman’s statement on pages 1 to 2 above, the Company has
constituted an advisory committee of selected individuals with experience in areas relevant to the business
growth, whose remit is to provide strategic input and direction to the Board and to assist with introductions to
key counterparties.
The QCA Code sets out 10 principles that should be applied. These are listed on the Company’s website
at www.bidstackgroup.com together with an explanation of how the Company applies each of the
principles. Set out below are further disclosures on certain of these principles.
Principle 1 – Business Model and Strategy
Bidstack is a provider of native in-game advertising that is dynamic, targeted and automated, serving the global
video games industry across multiple platforms. Its proprietary technology is capable of inserting adverts into
natural advertising space within video games.
Bidstack has two sets of customers. On the demand side are advertising agencies, buyers for specific brands and
operators of programmatic advertising platforms. On the supply side are games publishers, owners and
developers.
As set out in the Chairman’s statement on pages 1 to 2 above, the Board has concluded that the highest medium
and long-term value can be delivered to its shareholders by focusing the Group’s resources during the first half
of 2019 on technical development.
For further information on the market, the future strategy of the Group and the risks the Board consider to be the
most significant for potential investors, Shareholders are referred to the Strategic Report set out on pages 3 to 8
above.
11
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Directors’ report (continued)
Principle 4 – Risk Management
The Board has overall responsibility for the determination of the Company’s risk management objectives and
policies and recognises the need for an effective and well-defined risk management process. The overall
objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the
Company’s competitiveness and flexibility. The Board is responsible for the monitoring of financial
performance against budget and forecast and the formulation of the Group’s risk appetite including the
identification, assessment and monitoring of the Group’s principal risks.
For further information on the risks the Board consider to be the most significant for potential investors,
Shareholders are referred to in the section headed “Principal risks and uncertainties” set out on pages 6 to 8
above.
The Board has delegated certain authorities to committees, each with formal terms of reference. As part of its
terms of reference, the Audit Committee is obliged, inter alia, to keep under review the Group’s internal
financial controls systems that identify, assess, manage and monitor financial risks, and other internal control
and risk management systems, review the adequacy and security of the Group’s arrangements for its employees
and contractors to raise concerns, in confidence, about possible wrongdoing in financial reporting or other
matters and ensure that these arrangements allow proportionate and independent investigation of such matters
and appropriate follow up action, review the Group’s procedures for detecting fraud and review the Group’s
systems and controls for the prevention of bribery.
Principle 5 – A Well-functioning Board of Directors
The Board is responsible for the management of the business of the Group, setting the strategic direction of the
Group and establishing the policies of the Group. It is the Board’s responsibility to oversee the financial position
of the Group and monitor the business and affairs of the Group on behalf of Shareholders, to whom the
Directors are accountable. The primary duty of the Board is to act in the best interests of the Group at all times.
The Board also addresses issues relating to internal control and the Group’s approach to risk management.
The Board consists of three Executive Directors, comprising the Chief Executive Officer, Finance Director and
Chief Technology Officer, and three Non-Executive Directors.
Donald Stewart chairs the Board. The Executive Directors have industry and technical knowledge and expertise
(James Draper and Fran Petruzzelli) and financial expertise (John McIntosh). The Non-Executive Directors have
legal, accounting, public market, leadership and people management experience (Donald Stewart, Lindsay Mair
and John Taylor).
Liam O’Donoghue, who is a qualified corporate lawyer and an experienced Company Secretary, is the Company
Secretary.
The Board holds board meetings monthly and whenever issues arise which require the urgent attention of the
Board. The Executive Directors are full time employees, and the Non-Executive Directors are expected to
devote at least two days per month to the affairs of the Company and such additional time as may be necessary
to fulfil their roles.
The Board has also established an Audit Committee and a Remuneration Committee. The Company considers
that, at this stage of its development, and given the current size of its Board, it is not necessary to establish a
formal Nominations Committee and nominations to the Board will be dealt with by the whole Board. This
position will be reviewed on a regular basis by the Directors.
12
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
.Directors’ report (continued)
All three Non-Executive Directors (Donald Stewart, Lindsay Mair and John Taylor) are considered to be
independent. The three Non-Executive Directors sit on the Audit Committee, which is chaired by Lindsay Mair
(who is a chartered accountant) and on the Remuneration Committee, which is chaired by John Taylor.
During the year under review the Board held eight regular board meetings, five of which were held prior to the
RTO, at which only the current non-executive directors attended, and three of which were held after the RTO, at
which all the members of the current Board attended. In addition the Board met formally a further four times
for specific purposes including to approve publication of the Report and Accounts for 2017 and to consummate
the acquisition of Bidstack Limited. All of the directors attended all of the meetings of the Board in 2018. In
addition to the Company’s formal board meetings, all of the directors regularly discuss matters affecting the
business and the strategy of the Group.
Principle 6 – Appropriate Skills and Experience of the Directors
The Group believes that the current balance of skills within the Board as a whole reflects a broad and
appropriate range of commercial, technical and professional skills relevant to the sector in which the Group
operates and its status as an AIM listed company.
Biographical details of each of the Directors and officers are set out below:
Donald Stewart - Non-Executive Chairman
Appointed to the Board on 1 December 2015, Donald is a solicitor and has practised corporate law, particularly
focused on smaller quoted companies, for almost 30 years. Between April 2013 and July 2015, he was on the
board of AIM quoted Progility Plc and, before that, had been a corporate partner in the London office of a
global law firm. He is a former director (and past chairman) of the Quoted Companies Alliance. Donald brings
extensive experience of quoted companies, legal and regulatory issues, corporate governance and of the role of
chairman. As a practising solicitor, Donald is required to keep his skills up to date through continuing
professional development.
James Draper - Chief Executive Officer
James is the co-founder and Chief Executive Officer of Bidstack. He initiated Bidstack's move into the gaming
space in 2017 and led the negotiations to secure the three-year contract with SEGA's Football Manager title. He
has been responsible for the day to day management of Bidstack, as well as overseeing its strategic direction.
Prior to Bidstack, James spent several years working within marketing and advertising with a range of clients in
the sports and b2b space. James brings core management, marketing and strategic vision and an intimate
knowledge of all aspects of the Bidstack business to the Board.
Francesco Petruzzelli - Chief Technology Officer
Fran is the co-founder and Chief Technology Officer of Bidstack. He created Bidstack's core artificial
intelligence engine, heads its development studio and oversees its team of developers and programmers. Prior to
Bidstack, Francesco founded Whaleslide, a privacy conscious search engine allowing users to control all aspects
of their online lives from one webpage. Fran brings to the Board software technical and developmental
expertise and a comprehensive understanding of the Bidstack product.
John McIntosh CA - Finance Director
After qualifying with Deloitte in 1994, John worked with Sony, advertising agencies and the BBC before
concentrating on online, multi-media businesses. He was CFO and COO of DCD Media plc for five years until
July 2011 and CFO of Progility Plc from November 2012 to April 2015, growing the business from a £12
million to £60 million turnover. Since leaving Progility John has worked as a consultant CFO for a number of
entities in UK, Europe and Hong Kong, and since October 2016 as CFO for CRS GT ltd, which is licensed to
trade as McLaren GT. John brings significant experience of CFO and COO roles in AIM quoted companies. As
a member of the Institute of Chartered Accountants of Scotland John is required to keep his skills up to date
through the ICAS Professional Development Process.
13
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Directors’ report (continued)
Lindsay Mair – Non-Executive Director
Lindsay qualified as a chartered accountant in 1987 with Touche Ross (now Deloitte) and is an experienced
investment banker with extensive capital markets experience in a broad range of sectors acquired over a thirty
year career in the City. He is a director of corporate finance at SP Angel Corporate Finance LLP and has
previously worked in the corporate finance departments of a number of City firms. He joined the Board in
Lindsay brings extensive experience of capital markets, corporate finance and
November 2017.
finance/accountancy and is a qualified executive under the AIM Rules.
John Taylor – Non-Executive Director
John works with a group who assist small cap technology stocks with their development. Prior to that he spent
eighteen months working in private equity backed portfolio companies, driving operational turnaround
initiatives and implementing costing systems. He also spent over 20 years in the Army Air Corps, leaving in
2015 with the rank of colonel. Between 2013 and 2015 he was senior strategic communications officer for the
Ministry of Defence following a career as an attack helicopter squadron pilot . He joined the Board in November
2017. John brings extensive experience of leadership, people management and presentation skills.
Liam O’Donoghue from ONE Advisory Group acts as the Company Secretary, and is responsible for ensuring
that Board procedures are followed and that the Company complies with all applicable rules, regulations and
obligations governing its operation, as well as helping the Chairman maintain good standards of corporate
governance. Liam is an ICSA Chartered Company Secretary.
The Directors have access to the Company’s external advisers e.g. NOMAD, lawyers and auditors as and when
required and are able to obtain advice from other external advisers when necessary.
All Directors have access to independent legal advice at the Company’s expense.
The Board will seek to take into account Board imbalances for future nominations, with areas to take into
account including gender balance.
Principle 7 – Evaluation of Board Performance
The first internal evaluation of the Board, its Committees and individual Directors and officers is due to be
undertaken in Q3 of 2019 and thereafter such evaluations will be undertaken on an annual basis to ensure the
Board is performing effectively as a whole. Such evaluations will be undertaken with reference to how the
Director or officer has performed in fulfilling his/her specific functions, attendance at Board and Committee
meetings as appropriate, and overall contribution to the Group as a whole.
The Board is aware that succession planning is a vital task and the management of succession planning
represents a key responsibility of the Board. The balance of skills required of the Board as a whole is under
constant review as the business develops. As a result the composition of the Board will change over time. The
Board is likely to appoint additional directors in the event that outstanding people with relevant skills are able to
make the necessary commitment to drive the business forward.
Principle 8 – Corporate Culture
The Company recognises the importance of promoting an ethical corporate culture, interacting responsibly with
all stakeholders and the communities and environments in which the Group operates. The Board considers this to
be essential if medium and long term value is to be delivered.
14
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Directors’ report (continued)
The Directors consider that at present the Group has an open culture facilitating comprehensive dialogue and
feedback, particularly with regard to providing a safe and enjoyable working environment for employees and
seeking to ensure they are remunerated and incentivised appropriately.
The Group also works directly with games publishers and developers to understand their unique requirements,
participates in gaming conferences and sponsors e-sport tournaments to get direct feedback from the players and
viewers of video games and seeks to be regarded as a good corporate citizen by all its stakeholders within its
sphere of operation.
The Directors view their own medium and long-term interests to be integrally linked to the medium and long-
term value of the Group, and, as such, the interests of the Directors are directly aligned with those of the
shareholders. The Group has adopted policies to deal with corruption and bribery and to comply with the UK
Bribery Act.
Principle 10 – Shareholder Communication
The Board delegates authority to two Committees to assist in meeting its business objectives, and the
Committees meet independently of Board meetings.
Audit Committee Report
The Audit Committee comprises Lindsay Mair as Chairman, John Taylor and Donald Stewart and meets not less
than twice a year. The committee is responsible for making recommendations to the Board on the appointment
of auditors and the audit fee and for ensuring that the financial performance of the Group is properly monitored
and reported. In addition, the Audit Committee receives and reviews reports from management and the auditors
relating to the interim report, the annual report and accounts and the internal control systems of the Group.
As noted above the Audit Committee is also responsible for reviewing the Group’s internal financial controls
systems that identify, assess, manage and monitor financial risks, other internal control and risk management
systems and other aspects of risk management.
During the year under review, the Audit Committee was responsible for adopting a new Financial Reporting
Procedures Manual which was adopted by the Company on 31 August 2018. In addition the Audit Committee
has worked with and reviewed the work of the Company’s auditors in the production of the Report and
Accounts of the Company for the year ended 31 December 2018 set out in this document.
Remuneration Committee Report
The Remuneration Committee comprises John Taylor as Chairman, Lindsay Mair and Donald Stewart, and
meets not less than twice each year. The committee is responsible for the review and recommendation of the
scale and structure of remuneration for senior management, including any bonus arrangements or the award of
share options with due regard to the interests of the Shareholders and the performance of the Enlarged Group.
During the year under review, the Remuneration Committee made recommendations to the board in relation to
the salaries and bonuses of the Chief Executive, the Chief Technical Officer and the Finance Director and,
separately, in relation to the issue of share options to certain employees of the Group. The amounts of
remuneration for each Director are set out on page 10 above. These include basic salary, bonus and the
estimated monetary value of benefits in kind.
15
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Directors’ report (continued)
Director’s interests
The beneficial interests of the directors of the Company in the ordinary share capital of the Company and options
and warrants to purchase such shares were:
31 December 2018
Director
D Stewart
J Draper
F Petruzzelli
J McIntosh
J Taylor
L Mair
31 December 2017
Director
D Stewart
F Petruzzelli
J Taylor
L Mair
Warrants
Ordinary
Shares
Ex. Price
5p
Ex. Price
20p
Ex. Price
20p
989,733
41,260,562
7,250,000
-
560,000
1,041,666
250,103
-
-
-
500,205
250,103
25,000
-
-
-
15,000
62,500
-
5,000,000
10,000,000
-
-
-
Options
Ex. Price
6p
-
-
7,500,000
1,000,000
-
-
Ex. Price
1.14p
-
-
4,799,500
-
-
-
Warrants
Options
Ordinary
Shares
Ex. Price
5p
Ex. Price
20p
Ex. Price
8p
156,400
-
60,000
312,603
250,103
-
500,205
250,103
25,000
-
15,000
62,500
-
662,0001
-
-
1 On 19 September 2018, F Petruzzelli was granted 4,799,500 options as a replacement for his 662,000 options held. The replacement
options are exercisable at 1.14p per share
Going concern
The directors consider that the Group will have adequate resources to continue in operational existence
for the foreseeable future. Consequently, they have continued to adopt the going concern basis in
preparing the financial statements.
Auditors
All of the current Directors have taken all the steps that they ought to have taken to make themselves
aware of any information needed by the Group’s auditors for the purposes of their audit and to establish
that the auditors are aware of that information.
The directors are not aware of any relevant audit information of which the auditors are unaware.
By order of the Board
Donald Stewart
Chairman
3 April 2019
16
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Statement of Directors’ responsibilities
The Directors are responsible for preparing the Strategic Report, the Directors’ Report and the financial
statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law, the
Directors have elected to prepare the Group and Company financial statements in accordance with International
Financial Reporting Standards (“IFRSs”) as adopted by the European Union. Under company law, the directors
must not approve the financial statements unless they are satisfied that they give a true and fair view of the state
of affairs of the Group and Company and of the profit or loss of the Group and Company for that period. The
Directors are also required to prepare financial statements in accordance with the rules of the London Stock
Exchange for companies trading securities on AIM.
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 the financial statements have been prepared in accordance with IFRSs as adopted by the
European Union subject to any material departures disclosed and explained in the financial statement
period; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
company will continue in business.
-
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the
Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information
included on the company’s website. Legislation in the United Kingdom governing the preparation and
dissemination of the financial statements and other information included in annual reports may differ from
legislation in other jurisdictions.
17
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Independent auditor’s report to the members of Bidstack Group Plc
Opinion
We have audited the financial statements of Bidstack Group Plc (the ‘parent company’) and its subsidiary (the
‘Group’) for the year ended 31 December 2018 which comprise the consolidated statement of comprehensive
income, consolidated and company statement of financial position, consolidated and company statement of
changes in equity, consolidated and company statement of cash flows and notes to the 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 and of the parent company’s affairs as at 31 December
2018 and of the group’s loss for the year then ended;
• have been properly prepared in accordance with IFRSs as adopted by the European Union; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
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 SME 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.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to
report to you where:
• the directors’ use of the going concern basis of accounting in the preparation of the financial statements is not
appropriate; or
• the directors have not disclosed in the financial statements any identified material uncertainties that may cast
significant doubt about the group’s or the parent company’s ability to continue to adopt the going concern basis
of accounting for a period of at least twelve months from the date when the financial statements are authorised
for issue.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the
overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters.
18
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Independent auditor’s report to the members of Bidstack Group Plc (continued)
Matter
Our Response
Accounting for the acquisition of Bidstack Limited
and related judgements and estimates
Our audit work included, but was not restricted to the
following:
On 19 September 2018, the group acquired the equity
share capital of Bidstack Limited.
determined
transaction
Management
represented a reverse acquisition in which Bidstack
Limited obtained an AIM listing.
that
the
As a reverse acquisition significant judgement and
estimation is required by management to determine the
fair value of
the
identifiable assets and liabilities acquired.
the consideration given and
the
to determine
judgement required
the
Given
applicable accounting treatment for the transaction,
together with the judgement and estimation regarding
the fair value of consideration, identifiable assets and
liabilities this was considered to be a key focus of the
audit.
Following the disposal of all of the assets and
liabilities of its subsidiary, Kin Wellness Limited,
Bidstack Group became a Rule 15 cash shell.
Reverse acquisition accounting for a cash shell falls
outside the scope of IFRS 3 Business Combinations
and the transaction has been assessed as a share
based payment in accordance with IFRS 2. We
considered the appropriateness of applying IFRS 2
rather than IFRS 3.
We reviewed the Sale and Purchase Agreement, AIM
admission document
factors
and
including the Board composition, background of the
transaction and associated
the
appropriateness of management’s judgement that this
transaction represented a reverse acquisition.
considered
to assess
terms
We agreed the inputs to the calculation of the fair
value of share consideration given. We agreed the
price per share used to the market price of the share
placing in September 2018. We considered whether
facts and circumstances existed that would have
materially
the
the
consideration between the date of the acquisition and
date of readmission.
fair value of
impacted
We have performed specific cut off tests and tests of
detail to obtain assurance over the value of the assets
and liabilities of Bidstack Limited at the acquisition
date.
Going concern
Due to the continued losses made there is a risk that
the Group may not have sufficient resources to
continue trading for the foreseeable future.
Our audit work included, but was not restricted to the
following:
We reviewed the cash flow forecasts and budgets.
We scrutinized these and challenged the assumptions
made by management.
We reviewed the forecasts against post year-end
actuals and management accounts to gain comfort
that the Group has sufficient resources to continue
trading for the foreseeable future.
19
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Independent auditor’s report to the members of Bidstack Group Plc (continued)
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, in evaluating the effect of
misstatements. We consider materiality to be the magnitude by which misstatements, including omissions,
could influence the economic decisions of reasonable users that are taken based on the financial statements.
Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also take
into account the nature of identified misstatements, and the particular circumstances of their occurrence, when
evaluating their effect on the financial statements as a whole.
We consider total assets to be the financial metric of most interest to shareholders and other users of the
financial statements following the acquisition of Bidstack Limited.
We determined materiality for the Group to be £65,000 which is 2% of total assets.
Performance materiality is the application of materiality at the individual account or balance level set at an
amount to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected
misstatements exceeds materiality for the financial statements as a whole. Performance materiality for the Group
was set at £48,750.
We agreed with the audit committee that we would report to the committee all individual audit differences
identified during the course of our audit in excess of £3,250. We also agreed to report differences below these
thresholds that, in our view warranted reporting on qualitative grounds.
An overview of the scope of our audit
Our audit was scoped by obtaining an understanding of the Group and its environment, including internal
control and assessing the risks of material misstatements.
Based on that understanding our audit was focused on the key risks as described above.
Other information
The directors are responsible for the other information. The other information comprises the information
included in the annual report, other than the financial statements and our auditor’s report thereon. 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.
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the other information. 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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the directors’ report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
• the strategic report and the directors’ report have been prepared in accordance with applicable legal
requirements.
20
Independent auditor’s report to the members of Bidstack Group Plc (continued)
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and its environment obtained in the course of the
audit, we have not identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have
not been received from branches not visited by us; or
• the parent company financial statements are not in agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the statement of directors’ responsibilities set out on page 17, 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 and the parent
company’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 company 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.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor’s report.
Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the company'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 company and the
company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Ian Cliffe (Senior Statutory Auditor)
for and on behalf of Haysmacintyre LLP, Statutory Auditors
10 Queen Street Place
London
EC4R 1AG
Date: 3 April 2019
21
Consolidated statement of comprehensive income
for the year ended 31 December 2018
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Note
Year ended
31 December 2018
£
Period ended
31 December 2017
£
Revenue
Cost of sales
Gross profit/(loss)
Administrative expenses
Operating loss before acquisition related costs
Transaction costs
Share based payment on reverse acquisition
Operating (loss)
Finance income
Finance costs
(Loss) before taxation
Taxation
(Loss) for the year
Other comprehensive income
Total other comprehensive income
Total comprehensive (loss) for the year
5
8
8
9
316,906
(240,849)
76,057
(1,263,348)
(1,187,291)
(713,744)
(1,411,478)
(3,312,513)
-
(729)
(3,313,242)
50,517
(3,262,725)
-
(3,262,725)
10,034
(101,699)
(91,665)
(402,642)
(494,307)
-
-
(494,307)
561
-
(493,746)
27,976
(465,770)
-
(465,770)
Loss per share – basic and diluted (pence)
10
(4.23)
(3.40)
The notes on pages 29 to 48 form part of these financial statements.
22
Consolidated statement of financial position
as at 31 December 2018
ASSETS
Non-current assets
Intangible assets
Property, plant and equipment
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
EQUITY AND LIABILITIES
Equity
Share capital
Share premium account
Share-based payment reserve
Merger relief reserve
Reverse acquisition reserve
Capital redemption reserve
Warrant reserve
Retained losses
Total equity
Current liabilities
Trade and other payables
Total current liabilities
Total equity and liabilities
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Note
31 December
2018
£
31 December
2017
£
11
12
14
15
17
17
17
17
17
17
17
17
16
43,842
15,752
59,594
807,691
2,106,557
2,914,248
1,562
1,362
2,924
95,869
1,661
97,530
2,973,842
100,454
5,286,429
18,000,247
258,060
6,213,021
(23,320,632)
-
71,480
(3,974,445)
2,534,160
137
669,674
17,435
-
-
23
-
(711,720)
(24,451)
439,682
439,682
124,905
124,905
2,973,842
100,454
The financial statements on pages 22 to 28 were approved by the board of Directors on 3 April 2019 and signed
on its behalf by:
Donald Stewart
Chairman of Bidstack Group Plc
The notes on pages 29 to 48 form part of these financial statements.
23
Company statement of financial position
as at 31 December 2018
ASSETS
Non-current assets
Investments
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
EQUITY AND LIABILITIES
Equity
Share capital
Share premium account
Share-based payment reserve
Merger relief reserve
Warrant reserve
Retained losses
Total equity
Current liabilities
Trade and other payables
Total current liabilities
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Note
31 December
2018
£
31 December
2017
£
13
14
15
17
17
17
17
17
17
16
7,177,841
7,177,841
-
-
846,654
2,087,120
2,933,774
82,114
835,859
917,973
10,111,615
917,973
5,286,429
18,000,247
258,060
6,213,021
76,457
(19,849,761)
9,984,453
4,417,442
15,009,243
-
-
4,977
(18,617,987)
813,675
127,162
127,162
104,298
104,298
Total equity and liabilities
10,111,615
917,973
As permitted by Section 408 of the Companies Act 2006, the income statement of the parent Company is
not presented as part of these financial statements. The parent Company’s loss for the financial year was
£1,231,774 (2017: loss of £465,770).
The financial statements on pages 22 to 28 were approved by the board of Directors on 3 April 2019 and signed
on its behalf by:
Donald Stewart
Chairman of Bidstack Group Plc
The notes on pages 29 to 48 form part of these financial statements.
24
Consolidated statement of changes in equity
for the year ended 31 December 2018
Share
capital
£
Share
premium
£
Share-based
payment
reserve
£
Merger relief
reserve
£
Reverse
acquisition
reserve
£
Capital
redemption
reserve
£
Warrant
reserve
£
Subscription
reserve
£
Retained
losses
£
Total
equity
£
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(400,000)
Balance as at 1 January 2017
118
170,679
5,586
Issue of shares
Share based payments
Loss and total comprehensive
income for the year
19
-
-
498,995
-
-
-
11,849
-
Balance as at 31 December 2017
137
669,674
17,435
Parent company reflected on
reverse acquisition
Issue of Bidstack Ltd shares prior
to acquisition
Issue of Bidstack Ltd shares to
Bidstack Group prior to acquisition
Reverse acquisition adjustment
Issue of shares
Issue of consideration shares
Issue of adviser shares
Costs of raising equity
Share-based payments
Loss and total comprehensive
income for the year
4,417,442 15,009,243
19
13
445,968
399,987
-
-
-
(169)
291,667
564,820
12,500
-
-
(1,515,629)
3,208,334
-
137,500
(307,297)
(47,533)
(17,435)
-
-
-
-
258,060
(16,142,791)
-
-
(6,777,841)
6,213,021
-
-
-
-
-
-
-
-
-
-
-
Balance as at 31 December 2018
5,286,429 18,000,247
258,060
6,213,021 (23,320,632)
The notes on pages 29 to 48 form part of these financial statements.
25
23
-
-
-
23
-
-
-
(23)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
71,480
-
187,000
(245,950)
117,456
(187,000)
-
-
-
312,014
11,849
-
-
-
-
-
-
-
-
-
-
-
-
(465,770)
(465,770)
(711,720)
(24,451)
- 19,426,685
-
-
445,987
-
- (17,676,047)
-
3,500,001
-
-
-
150,000
-
(307,297)
282,007
-
(3,262,725)
(3,262,725)
71,480
-
(3,974,445)
2,534,160
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Company statement of changes in equity
for the year ended 31 December 2018
Share capital
£
£
Share
premium
Share-based
payment
reserve
Merger relief
reserve
Warrant
reserve
Retained
losses Total equity
£
£
£
£
£
Balance as at 1 January 2017
3,764,421 13,542,578
1,057,432
Loss and total comprehensive income for the year
Issue of shares
Costs of raising funds
Share-based payments
Reversal of share-based payment charges for
forfeited/waived options
-
653,021
-
-
-
-
1,595,000
(128,335)
-
-
-
-
-
-
(1,057,432)
Balance as at 31 December 2017
4,417,442 15,009,243
-
-
-
-
-
-
-
-
Issue of shares
Issue of consideration shares
Issue of adviser shares
Costs of raising funds
Share-based payments
Loss and total comprehensive income for the year
291,667
564,820
12,500
-
-
-
3,208,334
-
137,500
(307,297)
(47,533)
-
-
-
-
-
258,060
-
-
6,213,021
-
-
-
- (19,291,215)
(926,784)
-
-
-
4,977
-
(384,204)
-
-
-
1,057,432
(384,204)
2,248,021
(128,335)
4,977
-
4,977 (18,617,987)
813,675
-
-
-
-
71,480
-
-
-
-
-
-
(1,231,774)
3,500,000
6,777,841
150,000
(307,297)
282,007
(1,231,774)
Balance as at 31 December 2018
5,286,429 18,000,247
258,060
6,213,021
76,457 (19,849,761)
9,984,453
The notes on pages 29 to 48 form part of these financial statements.
26
Consolidated statement of cash flows
for the year ended 31 December 2018
Cash flows from operating activities
(Loss) before taxation
Adjustments for:
Amortisation
Depreciation
Share based payment on reverse acquisition
Equity settled share-based payments
Finance expense
Changes in working capital
(Increase)/decrease in trade and other receivables
Increase/(decrease) in trade and other payables
Cash used in operations
Taxation received
Net cash used in operations
Cash flow from investing activities
Investment in intangible assets
Cash acquired with subsidiary
Investment in property, plant and equipment
Net cash flow generated from/(used in) investing activities
Cash flow from financing activities
Loans from shareholders
Proceeds from issue of share capital
Cost of issue
Interest paid
Net cash generated from financing activities
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
31 December
2018
31 December
2017
£
£
(3,313,242)
(493,746)
4,407
3,134
1,411,478
282,007
729
(1,611,487)
(602,523)
208,715
(2,005,295)
503
1,907
-
11,849
-
(479,487)
19,074
(133,365)
(593,778)
27,623
(1,977,672)
27,976
(565,802)
(46,687)
208,817
(17,524)
144,606
-
4,245,988
(307,297)
(729)
3,937,962
(520)
-
-
(520)
40,000
499,014
-
-
539,014
Increase/(decrease) in cash and cash equivalents in the year
2,104,896
(27,308)
Cash and cash equivalents at beginning of year
1,661
28,969
Cash and cash equivalents at the end of the year
2,106,557
1,661
The notes on pages 29 to 48 form part of these financial statements.
27
Company statement of cash flows
for the year ended 31 December 2018
Cash flows from operating activities
(Loss) before taxation
Adjustments for:
Directors remuneration waived
Expenses financed by shares
Share-based payments
Finance expense
Impairment of intercompany
Impairment of investment
CVA surplus
Changes in working capital
(Increase) in trade and other receivables
Increase in trade and other payables
Net cash (used in) operations
Cash flow from investing activities
Intercompany loan advanced
Investment in subsidiary undertakings
Net cash flow used in investing activities
Cash flow from financing activities
Issue of ordinary shares for cash
Costs directly related to issue of shares
Loans advances
Net cash generated from financing activities
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
31 December
2018
31 December
2017
£
£
(1,231,774)
(384,204)
-
150,000
282,007
-
-
-
-
(799,767)
52,033
-
3,415
35,581
1,156,629
1,171,238
(2,281,302)
(246,610)
(764,540)
22,865
(1,541,442)
(20,311)
2,793
(264,128)
-
(400,000)
(400,000)
(1,156,629)
(1,156,629)
3,500,000
(307,297)
-
3,192,703
2,000,000
(126,535)
375,000
2,248,465
Increase in cash and cash equivalents in the year
1,251,261
827,708
Cash and cash equivalents at beginning of year
835,859
8,151
Cash and cash equivalents at the end of the year
2,087,120
835,859
The notes on pages 29 to 48 form part of these financial statements.
28
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Notes to the financial statements
1 General information
Bidstack Group Plc (the “Company”) is a public limited company and is incorporated and domiciled in the UK.
The address of the registered office is 201 Temple Chambers, 3-7 Temple Avenue, London, EC4Y 0DT.
The registered number of the company is 04466195.
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 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.
Consolidation
The consolidated financial statements consolidate the financial statements of the Company and the results of its
subsidiary undertaking Bidstack Limited made up to 31 December 2018.
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.
The assets and liabilities of the legal subsidiary are recognised and measured in the consolidated financial
statements at the pre-combination carrying amounts and not re-stated at fair value.
The retained earnings and reserves balances recognised in the consolidated financial statements reflect the
retained earnings and other reserves balances of the legal subsidiary immediately before the business
combination and the results of the period from 1 January 2018 to the date of the business combination are those
of the Legal Subsidiary only.
Going concern
The financial statements have been prepared on a going concern basis which assumes that the Group will be
able to continue trading for the foreseeable future. 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 1 to 2.
The financial statements at 31 December 2018 show that the Group generated an operating loss for the period of
£3.3 million (2017: £0.5 million) after accounting for acquisition related costs (£2.1 million; 2017: £nil); with
cash used in operating activities of £2.0 million (2017: £0.6 million) and a net increase in cash and cash
equivalents of £2.1 million in the year (2017: decrease of £0.03 million). Group balance sheet also showed cash
reserves at 31 December 2018 of £2.1 million (2017: £0.01 million).
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 and are satisfied that such revised operating strategies
could be adopted, if and when necessary.
29
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Notes to the financial statements (continued)
2 Summary of significant accounting policies (continued)
This is based on the Board’s most recent forecasts for the Group, which indicate that the Group has sufficient
cash available to continue in operational existence throughout the forecast period.
Standards and interpretations adopted during the year
The adoption of the following mentioned amendments in the current year have not had a material impact on the
Group’s and Company’s financial statements:
Amendment to IAS 7 Statement of Cash Flows: Disclosure initiative
Amendment to IAS 12 Income Taxes: Recognition of deferred tax assets for
unrealised losses
EU effective date –
periods beginning
on or after
1 January 2018
1 January 2018
At the date of approval of these annual report and accounts, certain new standards, amendments and
interpretations to existing standards became effective, as they had not been previously adopted by the Group.
Information on new standards, amendments and interpretations that are relevant to the Group’s annual report
and accounts is provided below. Certain other new standards and interpretations have been issued but are not
expected to have a material impact on the Group's annual report and accounts.
IFRS 9 “Financial Instruments”
In the current year, the Group has applied IFRS 9 “Financial Instruments” (as revised in July 2014) and the
related consequential amendments to other IFRS Standards that are effective for an annual period that begins on
or after 1 January 2018.The IASB have released IFRS 9 following completion of the project to replace IAS 39
‘Financial Instruments: Recognition and Measurement’. The new standard introduces extensive changes to IAS
39’s guidance on the classification and measurement of financial assets and introduces a new ‘expected credit
loss’ model for the impairment of financial assets. IFRS 9 also provides new guidance on the application of
hedge accounting. IFRS 9 is effective for annual reporting periods beginning on or after 1 January 2018 and has
been endorsed by the European Union. The Group’s management has performed an impact assessment of the
effects of IFRS 9 on the 2018 figures and there are no material changes to the Group’s annual report and
accounts.
IFRS 15, ‘Revenue from Contracts with Customers’
In the current year, the Group has applied IFRS 15 “Revenue from Contracts with Customers” (as amended in
April 2016) which is effective for reporting periods beginning on or after 1 January 2018. IFRS 15 presents new
requirements for the recognition of revenue, replacing IAS 18 ‘Revenue’, IAS 11 ‘Construction Contracts’, and
several revenue-related Interpretations. The new standard establishes a control-based revenue recognition model
and provides additional guidance in many areas not covered in detail under existing IFRSs, including how to
account for arrangements with multiple performance obligations, variable pricing, customer refund rights,
supplier repurchase options, and other common complexities.
30
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Notes to the financial statements (continued)
2 Summary of significant accounting policies (continued)
This standard has been endorsed by the European Union. The Group’s management has performed an impact
assessment of the effects of IFRS 15 on the 2018 figures and there is no material change to the statement of
comprehensive income as presented.
New and revised IFRS Standards in issue but not yet effective
At the date of approval of these financial statements, the Group has not applied the following new and revised
IFRS Standards that have been issued but are not yet effective and, in some cases, had not yet been adopted by
the EU:
IFRS 16 “Leases”
The IASB has published IFRS 16 ‘Leases’, completing its long-running project on lease accounting. The new
Standard, which is effective for accounting periods beginning on or after 1 January 2019, requires lessees to
account for leases ‘on-balance sheet’ by recognising a ‘right-of-use’ asset and a lease liability. The date of initial
application of IFRS 16 for the Group will be 1 January 2019. It will affect most companies that report under
IFRS and are involved in leasing, and will have a substantial impact on the annual report and accounts of lessees
of property and high value equipment. This standard has been endorsed by the European Union.
The Group’s management has carried out an impact review of the implementation of IFRS 16 and has decided it
will apply the modified retrospective adoption method in IFRS 16, and, therefore, will only recognise leases on
the balance sheet as at 1 January 2019. In addition, it has decided to measure right-of-use assets by reference to
the measurement of the lease liability on that date. This will ensure there is no immediate impact to net assets on
that date.
At 31 December 2018 operating lease commitments amounted to £152,640 (see note 19), which is not expected
to be materially different to the anticipated position on 31 December 2019 or the amount which is expected to be
disclosed at 31 December 2018 under IFRS 16. The Group has assessed the lease commitments the Company
holds, as since no lease committed is longer than a year, there is no IFRS 16 impact, assuming the Group’s lease
commitments remain at this level.
Other
The Group does not expect any other standards issued by the IASB, but not yet effective, to have a material
impact on the group.
The following is a list of other new and amended standards which, at the time of writing, had been issued by the
IASB but which are effective in future periods. The amount of quantitative and qualitative detail to be given
about each of the standards will, much like the amount of detail to be given about IFRS 16, depend on each
entity’s own circumstances.
Amendments to IFRS 9 Prepayment Features with Negative Compensation (effective 1 January 2019)
Amendments to IAS 28: Long-term Interests in Associates and Joint Ventures (effective 1 January
2019)
IFRIC 23 “Uncertainty over income tax treatments”, effective 1 January 2019;
Annual Improvements to IFRSs 2015-2017 Cycle (IFRS 3 Business Combinations and IFRS
joint Arrangements, IAS 12 Income Taxes, and IAS 23 Borrowing Costs) (effective 1 January 2019)
Amendments to IAS 19: Plan amendments, curtailment on settlement (effective 1 January 2019)
IFRS 17 Insurance Contracts (effective 1 January 2021)
31
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Notes to the financial statements (continued)
2 Summary of significant accounting policies (continued)
Revenue Recognition
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:
• Sale of advertising space: the value of goods and services is recognised across the period of use.
• Sale of reseller rights: the value of goods and services is recognised upon agreement.
• Sale of development programmes and content creation: the value of goods and services supplied is
recognised on delivery of content and accepted by customers.
• Sponsorship income: the value of goods and services is recognised over the time period to which it
relates.
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.
32
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Notes to the financial statements (continued)
2 Summary of significant accounting policies (continued)
Research and Development tax credits are not recognised as receivables until the claims have been
submitted and agreed by HMRC.
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.
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
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.
33
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Notes to the financial statements (continued)
2 Summary of significant accounting policies (continued)
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.
34
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Notes to the financial statements (continued)
3 Critical accounting estimates and judgements
The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are
continually evaluated on historical experience and other factors, including expectations of future events that are
believed to be reasonable. In the future, actual experience may differ from these estimates and assumptions. The
estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amount of
assets and liabilities within the next financial year are discussed below.
Share-based payments
In order to calculate the charge for share-based compensation as required by IFRS 2, the Group makes estimates
principally relating to the assumptions used in its option-pricing model as set out in note 18.
Impairment review
Impairment testing is carried out for all non-current assets at the year-end date or where there is an indication
that impairment exists. For the purposes of impairment testing, the carrying amounts of the non-current assets
are reviewed and an impairment loss is recognised where the carrying amounts exceed the assets recoverable
amount.
Expected credit losses (ECLs)
Expected credit losses are shown in note 14. ECLs are determined based on historical data available to
management in addition to forward looking information utilising management knowledge. Adequate
information exists to support the recoverability of the net receivables balance.
4 Segmental information
During the year ended 31 December 2018 and the period ended 31 December 2017, the Group operated one
business segment, that of the provision of native in-game advertising.
Given that there is only one continuing class of business, operating within the UK, no further segmental
information has been provided.
35
Notes to the financial statements (continued)
5 Loss for the year
The loss for the year has been arrived at after charging:
Depreciation of property, plant and equipment
Amortisation of intangible assets
Equity settled share-based payments
Operating lease payments
Auditors’ remuneration
6 Auditors’ remuneration
Fees payable to the Group’s auditors in respect of:
Audit of the financial statements of the Company
Audit of the financial statements of the Company’s subsidiary
Other services in relation to the audit
Other services in relation to taxation
7 Employees and directors
Staff costs, including directors, comprise:
Wages and salaries
Social security costs
Share-based payment expense
Other benefits
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
31 December
2018
£
31 December
2017
£
3,134
4,407
282,007
82,090
29,500
1,907
503
11,849
20,583
15,500
31 December
2018
£
31 December
2017
£
15,000
10,000
2,750
1,750
29,500
12,000
-
-
3,500
15,500
31 December
2018
£
31 December
2017
£
719,246
73,385
258,060
88
1,050,779
122,506
9,191
11,849
-
143,546
36
Notes to the financial statements (continued)
7 Employees and directors (continued)
Directors’ remuneration is as follows:
Salaries and fees
Bonus
Share-based payments
Gain on exercise of share options
Other benefits
Total
Average number of directors
Average number of employees
Key management compensation
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
31 December
2018
£
224,454
100,000
257,240
117,190
88
698,972
31 December
2017
£
33,833
-
-
-
-
33,833
2018
4
9
2017
4
7
The directors consider that the key management comprises the directors of the Group and the heads of sales,
their emoluments are set out below:
31 December
2018
£
31 December
2017
£
416,136
100,000
257,240
117,190
88
890,654
33,833
-
11,849
-
-
45,682
31 December
2018
£
31 December
2017
£
40,000
50,000
240,477
330,447
33,833
-
11,849
45,682
Salaries and fees
Bonus
Share-based payments
Gain on exercise of options
Other benefits
Total
Highest paid director
Salaries and fees
Bonus
Share-based payments
Total
37
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
31 December
2018
£
31 December
2017
£
-
-
561
561
31 December
2018
£
31 December
2017
£
729
729
-
-
Notes to the financial statements (continued)
8 Finance income and finance costs
Other interest receivable and similar income
Total finance income
Other interest payable
Total finance costs
9 Taxation
Reconciliation of effective tax rate
Tax assessed for the year is lower than (2017: lower than) the standard rate corporation tax of 19% (2017:
19.25%). The differences are explained below:
Loss before tax
Tax using the UK corporation tax rate of 19% (2017: 19.25%)
Unrelieved tax losses and other deductions in the period
Research and development tax credit
Expenses not deductible for tax purposes other than goodwill amortisation
and impairment
Adjustment for prior period
Adjust closing deferred tax to average rate
Adjust opening deferred tax to average rate
Deferred tax not recognised
Other reconciling items
31 December
2018
£
31 December
2017
£
(3,313,242)
(493,746)
(629,516)
13,873
(33,109)
369,670
(5,813)
440,203
(415,532)
209,705
2
(95,046)
95,046
(27,976)
-
-
-
-
-
-
Total tax charge
(50,517)
(27,976)
The Group has tax losses of approximately £3,738,890 (2017: loss of £366,000) to carry forward against future
taxable profits.
No deferred tax asset has been recognised in relation to the trading losses available for offset against future
taxable profits. The Company has not recognised deferred tax asset due to there being insufficient evidence of
short-term recoverability.
38
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Notes to the financial statements (continued)
10 Loss per share
The loss per share is based upon the loss of £3,262,725 (2017: loss of £465,770) and the weighted average
number of ordinary shares in issue for the year of 77,234,073 (2017: 13,688,435).
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.
Total
£
1,931
520
2,451
386
503
889
2,451
46,687
49,138
889
4,407
5,296
43,842
1,562
11 Intangible assets - Group
Website costs
£
Trademarks
£
Cost
At 1 November 2016
Additions
At 31 December 2017
Amortisation
At 1 November 2016
Charge
At 31 December 2017
Cost
At 1 January 2018
Additions
At 31 December 2018
Amortisation
At 1 January 2018
Charge
At 31 December 2018
Net book value
At 31 December 2018
At 31 December 2017
1,931
-
1,931
386
451
837
1,931
46,687
48,618
837
4,355
5,192
43,426
1,094
-
520
520
-
52
52
520
-
520
52
52
104
416
468
39
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Office
equipment
£
Computer
equipment
£
-
-
-
-
-
-
-
4,819
4,819
-
161
161
4,904
-
4,904
1,635
1,907
3,542
4,904
12,705
17,609
3,542
2,973
6,515
Total
£
4,904
-
4,904
1,635
1,907
3,542
4,904
17,524
22,428
3,542
3,134
6,676
4,658
11,094
15,752
-
1,362
1,362
Investments
in
subsidiaries
£
-
7,177,847
7,177,847
-
-
-
7,177,847
Notes to the financial statements (continued)
12 Property, plant and equipment - Group
Cost
At 1 November 2016
Additions
At 31 December 2017
Depreciation
At 1 November 2016
Charge
At 31 December 2017
Cost
At 1 January 2018
Additions
At 31 December 2018
Depreciation
At 1 January 2018
Charge
At 31 December 2018
Net book value
At 31 December 2018
At 31 December 2017
13 Investments - Company
Cost
At 1 January 2018
Additions
At 31 December 2018
Impairment
At 1 January 2018
Charge
At 31 December 2018
Net book value
At 31 December 2018
40
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Notes to the financial statements (continued)
13 Investments (continued)
Principal subsidiary undertakings of the Company
On 19 September 2018, the Company acquired the entire issued share capital of Bidstack Limited (“legal
subsidiary”) for a consideration of £6,777,841, satisfied by the issue of 112,964,011 shares. As the legal
subsidiary is reversed into the Company (“legal parent”), which originally was a publicly listed cash shell
company, this transaction cannot be considered a business combination, as the legal parent does not meet the
definition of a business, under IFRS 3 “Business Combinations”. As the transaction is capital in nature and
completed through the issue of shares it falls within the scope of IFRS 2 ‘Share-based payments’. Any
difference in the fair value of shares deemed to be issued by the legal subsidiary and the fair value of net
identifiable assets in the legal parent will form part of the deemed cost of acquisition.
The Investment balance includes a loan of £0.4m from Bidstack Group to Bidstack Ltd which converted to
equity in Bidstack Ltd on 17 September 2018, prior to the Acquisition completion.
The subsidiary undertaking of the Company is presented below:
Subsidiary
Bidstack Limited
Country of
incorporation
England and Wales
Proportion of ordinary
shares held
100%
The principal activity of the Company’s subsidiary is the provision of native in-game advertising.
14 Trade and other receivables
Trade receivables
Prepayments and accrued income
Other receivables
Corporation tax
Analysis of trade receivables
Group
Company
31 December
2018
£
380,227
183,515
221,055
22,894
31 December
2017
£
-
6,000
61,893
27,976
31 December
2018
£
-
15,745
830,909
-
31 December
2017
£
-
9,792
72,322
-
807,691
95,869
846,654
82,114
2018
2017
<30
31 – 60
61 -90
> 90 Total Gross
ECL
Total Net
380,227
-
-
-
-
-
-
-
380,227
-
-
-
380,227
-
In the year ended 31 December 2018 one customer (as a reseller of the Group’s services to end users) accounted
for 93% of the Group’s revenue and 93% of the debtors outstanding at the year end.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses (ECL) which uses a
lifetime expected loss allowance for all trade receivables. The Group measures ECL based on historical data
available to management in addition to current and forward-looking information utilising managements
knowledge of their customers. Based on the analysis performed there is no material impact on the transition to
ECL The Directors consider that the carrying amount of trade and other receivables is approximately equal to
their fair value.
41
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Notes to the financial statements (continued)
14 Trade and other receivables (continued)
The Group applies the IFRS 9 simplified approach to measuring expected credit losses (ECL) which uses a
lifetime expected loss allowance for all trade receivables. The ECL balance has been determined based on
historical data available to management in addition to forward looking information utilising management
knowledge. Based on the analyses performed, management expect that all balances will be recovered, thus there
is no material impact on the transition to ECL.
Trade receivables are amounts due from customers for services performed in the ordinary course of business.
They are generally due for settlement within 30 days and therefore are all classified as current. All trade and
other receivables are non-interest bearing. The carrying amount of trade and other receivables approximates fair
value.
15 Cash and cash equivalents
Cash and cash equivalents
16 Trade and other payables
Trade payables
Taxation and social security
Other payables
Accruals and deferred income
Group
Company
31 December
2018
£
2,106,557
31 December
2017
£
1,661
31 December
2018
£
2,087,120
31 December
2017
£
835,859
Group
Company
31 December
2018
£
315,238
32,778
8,793
82,873
31 December
2017
£
39,956
31,073
49,680
4,196
31 December
2018
£
71,989
3,802
-
51,371
31 December
2017
£
71,548
4,500
-
28,250
439,682
124,905
127,162
104,298
42
Notes to the financial statements (continued)
17 Share capital and reserves
Allotted, called up and fully paid
At 31 December 2017
Issue of shares
Issue of consideration shares
Issue of adviser shares
As at 31 December 2018
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Ordinary
0.5p shares
Share capital
No.
£
25,010,280
4,417,442
58,333,340
112,964,011
2,500,000
291,667
564,820
12,500
198,807,631
5,286,429
On 31 August 2018, the Company announced that it had agreed to acquire the entire issued share capital of
Bidstack Ltd. The consideration for the Acquisition was £6.8m comprising the issue on 19 September 2018, of
112,964,011 shares at £0.06 per share. The Company also raised £3.5m by a placing of 58,333,340 shares at
£0.06 per share.
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.
Capital redemption reserve: The nominal value of shares that have been repurchased by the Company.
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.
Subscription reserve: Represents cash received as a subscription for a specific and imminent share issue but
where those shares have not been issued at the period end.
Retained losses: Cumulative realised profits less cumulative realised losses and distributions made, attributable
to the equity shareholders of the Company.
43
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Notes to the financial statements (continued)
18 Share-based payment
Options
The Company operates two equity-settled share-based remuneration schemes for employees, one being the
Enterprise Management Inventive (“EMI”) Scheme and the other is an unapproved scheme for executive
directors and certain senior management.
A condition attached to both schemes is for the option holder to remain in employment until exercised otherwise
the options become forfeited.
Outstanding at the beginning of the year
Granted during the year
Forfeited/waived during the year
Exercised during the year
Total outstanding
Total exercisable
2018
2017
Weighted
Average
Exercise Price
£
0.095
0.122
0.087
0.115
0.122
0.153
Number
2,295,390
30,132,837
(1,662,000)
(633,390)
30,132,837
22,500,000
Weighted
Average
Exercise Price
£
0.086
0.009
-
-
0.095
0.095
Number
2,180,570
114,820
-
-
2,295,390
2,295,390
On 19 September 2018, J Draper was granted 4,166,667 and 833,333 options under the EMI and unapproved
schemes respectively. The options are exercisable at 20p per share, vested immediately and expire on the 3rd
anniversary of the grant date (unless extended by the Board to a maximum of ten years). There were no vesting
conditions attached to the grant of the share options.
On 19 September 2018, F Petruzzelli was granted 17,500,000 options under the unapproved scheme. The
options are exercisable at 6p (7,500,000) and 20p (10,000,000), vested immediately and expire on the 3rd
anniversary of the grant date (unless extended by the Board to a maximum of ten years). There were no vesting
conditions attached to the grant of the share options.
On 19 September 2018, F Petruzzelli was granted 4,166,667 and 632,833 options under the EMI and
unapproved schemes respectively. The options are exercisable at 1.14p per share, vested immediately and expire
on the 10th anniversary of the grant date. There were no vesting conditions attached to the grant of the share
options. These options were granted to him in consideration of his surrendering an option, entitling him to
subscribe for 662,000 A Ordinary Shares in Bidstack Limited at an exercise price of 8.256 pence per share.
On 19 September 2018, J McIntosh was granted 1,000,000 options under the EMI scheme. The options are
exercisable at 6p per share, vest on the 3rd anniversary of their grant date and expire on the 10th anniversary of
the grant date. There were no vesting conditions attached to the grant of the share options.
On 13 December 2018, employees were granted a total of 1,833,337 options under the EMI scheme. The options
are exercisable at 6p per share, vest on the 3rd anniversary from their grant date, and expire on the 10th
anniversary of the grant date. There were no vesting conditions attached to the grant of the share options.
44
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Notes to the financial statements (continued)
18 Share-based payment (continued)
Options (continued)
The Black-Scholes model was used for calculating the cost of options. The model inputs for each of the options
issued were:
Grant date (all 2018)
Share price at grant date
Exercise prices
Expected volatility
Contractual life
19 September 19 September
6p
6p
66.39%
3 years
6p
20p
66.39%
3 years
19 September 19 September
6p
6p
66.39%
10 years
6p
1.14p
66.39%
10 years
13 December
6p
6p
63.1%
10 years
The weighted average contractual life of the options is 4 years and 186 days (2017: 7 years and 153 days)
Warrants
Outstanding at the beginning of the year
Issued during the year
Forfeited/cancelled during the year
Total outstanding and exercisable
2018
2017
Weighted
Average
Exercise Price
£
15p
6p
-
13.7p
Number
7,501,028
1,250,000
-
8,751,028
Weighted
Average
Exercise Price
£
-
15p
-
15p
Number
-
7,501,028
-
7,501,028
On 31 August 2018, 1,250,000 warrants were issued to Spark Advisory Partners. The warrants have an exercise
price of 6p, vested immediately and expire on the 3rd anniversary of the grant date.
On 19 September 2018, the expiry date of 2,501,028 existing warrants exercisable at 5p per share (of which
1,000,411 are held by three of the directors) was extended to 19 September 2020.
The Black-Scholes model was used for calculating the cost of warrants. The model inputs for each of the
warrants issued were:
Options
31 August 19 September
Share price at grant date
Exercise prices
Expected volatility
Contractual life
6p
6p
64.93%
3 years
6p
6p
64.93%
3 years
The charge for the year for warrants and options amounted to £329,540 (2017: £11,849), of which, £282,007
was charged to the statement of comprehensive income whilst the remaining £47,533 was charged to the share
premium account.
45
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Notes to the financial statements (continued)
19 Operating lease commitments
Group
Company
31 December
2018
£
152,640
31 December
2017
£
45,784
152,640
45,784
31 December
2018
£
-
-
-
31 December
2017
£
-
-
-
Within one year
20 Financial instruments
In common with other businesses, the Company is exposed to risks that arise from its use of financial
instruments. This note describes the Company’s objectives policies and processes for managing those risks and
the methods used to measure them. Further quantitative information in respect of these risks is presented
throughout these financial statements.
The significant accounting policies regarding financial instruments are disclosed in note 2.
Financial assets
Financial assets measured at amortised cost comprise trade receivables, other receivables and cash, as follows:
Trade receivables
Other receivables
Cash and cash equivalents
Total financial assets
Financial liabilities
31 December
2018
£
31 December
2017
£
380,227
221,055
2,106,557
2,707,839
-
61,893
1,661
63,554
Financial liabilities measured at amortised cost comprise trade payables, other payables and accruals, as follows:
31 December
2018
£
31 December
2017
£
Trade payables
Other payables
Accruals
315,238
8,793
39,956
49,680
4,196
82,873
Total financial liabilities
406,904
93,832
There is no significant difference between the fair value and the carrying value of financial instruments.
46
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Notes to the financial statements (continued)
20 Financial instruments (continued)
Risk management
General objectives, policies and processes
The Board has overall responsibility for the determination of the Group’s risk management objectives and
policies and, while retaining ultimate responsibility for them, it has delegated the authority for designing and
operating processes that ensure the effective implementation of the objectives and policies to the Group’s
finance function. The Board receives regular reports through which it reviews the effectiveness of the processes
put in place and the appropriateness of the objectives and policies it sets.
The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly
affecting the Group’s competitiveness and flexibility. The Group’s operations expose it to some financial risks
arising from its use of financial instruments, the most significant ones being capital risk, credit risk and liquidity
risk
Further details regarding these policies are set out below:
Capital risk management
The capital structure of the business consists of cash and cash equivalents, debt and equity. Equity comprises
share capital, share premium and retained losses and is equal to the amount shown as ‘Equity’ in the balance
sheet. Debt comprises various items which are set out in further detail above and in note 16.
The Group’s current objectives when maintaining capital are to:
-
-
-
Safeguard the Group’s ability to operate as a going concern so that it can continue to pursue its growth
plans.
Provide a reasonable expectation of future returns to shareholders.
Maintain adequate financial flexibility to preserve its ability to meet financial obligations, both current
and long term.
The Group sets the amount of capital it requires in proportion to risk. The Group manages its capital structure
and adjusts it in the light of changes in economic conditions and the risk characteristics of underlying assets.
Credit risk and impairment
Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss
to the Group. In order to minimise the risk, the endeavours only to deal with companies which are demonstrably
creditworthy and this, together with the aggregate financial exposure, is continuously monitored. The maximum
exposure to credit risk is the carrying value of its, trade and other receivables and cash and cash equivalents as
disclosed in the notes.
As disclosed in note 14, one reseller accounted for 93% of the Group’s sales in 2018. The Board recognises that
this represents a concentration of risk, and is focussed on diversifying the Group’s customer base so as to reduce
it. The Group seeks to obtain charging orders over the property of trade receivables, where appropriate. The
receivables’ age analysis is also evaluated on a regular basis for potential doubtful debts, considering historic,
current and forward-looking information.
The Company has made unsecured interest free loans to Bidstack Limited which stood at £718,774 at 31
December 2018. Although it is repayable on demand, it is unlikely to be repaid until the subsidiary is
sufficiently cash generating.
47
Bidstack Group Plc
(Formerly Kin Group Plc)
Registered number 04466195
Annual Report and Accounts
For the year ended 31 December 2018
Notes to the financial statements (continued)
20 Financial instruments (continued)
Liquidity risk
The Group's policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when
they become due. However, the Group continues to absorb cash in its operations for the time being and
management recognises the risk of insufficient cash and capital to carry on its activities and safeguard the
Group's ability to continue as a going concern.
The Board receives cash flow projections on a regular basis, which are monitored regularly. The Board will not
commit to material expenditure in respect of its ongoing development programme prior to being satisfied that
sufficient funding is available to the Group to finance the planned programmes. Regular reviews will ensure that
further steps will be taken if necessary.
21 Related parties
Transactions with subsidiaries
During the year, cash advances of £625,000 (2017: £Nil) were made to Bidstack Ltd and incurred net costs of
£93,774 that were paid on behalf by the Company (2017: £Nil). The advances are held on an interest free inter-
group loan which has no terms for repayment. At the year end the inter-Group loan amounted to £718,774
(2017: £Nil).
Transactions with other related parties
During the year the Company paid £44,687 to Barletta Media, of which Francesco Petruzzelli is a director and
shareholder. The invoices were for development work performed on the platform. All transactions have been
conducted at arm’s length. At the year end, the balance due to Barletta Media was £Nil.
22 Post balance sheet events
There were no material post balance sheet events.
48
Bidstack Group Plc
(Incorporated in England and Wales with registered number 04466195)
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the annual general meeting of Kin Group Plc (“the Company”)
will be held at Plexal, 14 East Bay Lane, The Press Centre, Here East, Queen Elizabeth Olympic Park,
Stratford, London on 29 April 2019 at 11:00 a.m. for the transaction of the following business:
Ordinary Business
To consider, and, if thought fit, pass the following Resolutions which will be proposed as Ordinary
Resolutions:
1.
2.
3.
4.
To receive and adopt the report of the Directors of the Company and the audited accounts for
the Company for the year ended 31 December 2018.
To re-appoint John Taylor as a Director of the Company who, pursuant to Article 24.1 of the
Company’s Articles of Association, retires by rotation and, being eligible, offers himself for re-
election.
To re-appoint Lindsay Mair as a Director of the Company who, pursuant to Article 24.1 of the
Company’s Articles of Association, retires by rotation and, being eligible, offers himself for re-
election.
To re-appoint haysmacintyre LLP as auditors of the Company and to authorise the Directors to
fix their remuneration.
Special Business
To consider, and, if thought fit, pass the following Resolutions of which, Resolution 5 will be
proposed as an Ordinary Resolution and Resolution 6 will be proposed as a Special Resolution:
5.
6.
THAT, in accordance with section 551 of the Companies Act 2006 (the “Act”), the Directors be
generally and unconditionally authorised to exercise all of the powers of the Company to allot
shares in the Company and to grant rights to subscribe for, or to convert any security into shares
in the Company (“Rights”) up to an aggregate nominal amount of £589,645.38, provided that
the authority granted by this Resolution shall, unless renewed, varied or revoked by the
Company, expire at the Company’s next annual general meeting, except that the Company may,
before it expires make an offer or agreement which would or might require shares to be allotted
or Rights to be granted and the Directors may allot shares or grant Rights in pursuance of that
offer or agreement. This authority is in substitution for all previous authorities conferred on the
directors in accordance with section 551 of the Act to the extent not utilised at the date it is
passed.
THAT, subject to and conditional upon the passing of Resolution 5, in accordance with sections
570 and 571 of the Act, the Directors be generally empowered to allot equity securities (as
defined in section 560 of the Act) pursuant to the authority conferred by Resolution 5, as if
section 561(1) of the Act did not apply to such allotment provided that this power shall be
limited to:
48
(a) the allotment of equity securities in connection with an offer of, or invitation to apply for,
equity securities made (i) to holders of ordinary shares in the Company in proportion (as
nearly as may be practicable) to the respective numbers of ordinary shares held by them on
the record date for such offer and (ii) to holders of other equity securities as may be
required by the rights attached to those securities or, if the directors consider it desirable,
as may be permitted by such rights, but subject in each case to such exclusions or other
arrangements as the directors may deem necessary or expedient in relation to treasury
shares, fractional entitlements, record dates or legal or practical problems in or under the
laws of any territory or the requirements of any regulatory body or stock exchange; and
(b) otherwise than in connection with sub-paragraph (a), up to an aggregate nominal amount
of £235,858.15,
provided that this authority shall expire at the Company’s next annual general meeting. The
Company may, before this authority expires, make an offer or agreement which would or might
require equity securities to be allotted after it expires and the directors may allot equity
securities pursuant to that offer or agreement.
By order of the Board
Liam O'Donoghue
Company Secretary
Registered office:
201 Temple Chambers,
3-7 Temple Avenue,
London
EC4Y 0DT
Dated: 4 April 2019
Notes
1.
2.
3.
4.
5.
6.
A member entitled to attend and vote at the above meeting is entitled to appoint a proxy or proxies to attend, speak and vote instead
of him. A proxy may demand, or join in demanding, a poll. A proxy need not be a member of the Company.
A Form of Proxy is enclosed for your use if desired. To be valid, your proxy form and any power of attorney or other authority under
which it is signed or a notarially certified copy of that power of attorney or authority must reach the Company’s Registrars, Neville
Registrars Limited, Neville House, Steelpark Road, Halesowen B62 8HD not less than 48 hours, excluding non-working days, before
the time of holding of the meeting.
Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, the Company specifies that only those shareholders of
the Company on the register of members of the Company at 11.00 a.m. on 25 April 2019 shall be entitled to attend or vote at the
meeting in respect of the number of shares registered in their name at the time. Changes to the register of members after that time
will be disregarded in determining the rights of any person to attend or vote at the meeting.
In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by
the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the
Company's register of members in respect of the joint holding (the first-named being the most senior).
You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may not
appoint more than one proxy to exercise rights attached to any one share. To appoint more than one proxy, you should contact Neville
Registrars Limited, Neville House, Steelpark Road, Halesowen B62 8HD.
In the case of a member which is a company, the proxy form must be executed under its common seal or signed on its behalf by an
officer of the company or an attorney for the company. Any power of attorney or any other authority under which the proxy form is
signed (or a duly certified copy of such power or authority) must be included with the proxy form.
21
7.
8.
CREST members who wish to appoint a proxy or proxies through the CREST Electronic Proxy Appointment Service may do so for
the meeting and any adjournment(s) thereof by using the procedures described in the CREST Manual. CREST personal members or
other CREST sponsored members, and those CREST members who have appointed a voting service provider(s), should refer to their
CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf. In order for a proxy
appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a “CREST Proxy
Instruction”) must be properly authenticated in accordance with the specifications of Euroclear UK & Ireland Limited (“EUI”) and
the CREST Manual (available via
must contain
www.euroclear.com/CREST). The message, regardless of whether it relates to the appointment of a proxy or to an amendment to the
instruction given to a previously appointed proxy, must, in order to be valid, be transmitted so as to be received by the Company’s
agent (ID 7RA11) by 11.00 a.m. on 25 April 2019. For this purpose, the time of receipt will be taken to be the time (as determined by
the timestamp applied to the message by the CREST Application Host) from which the Company’s agent is able to retrieve the
message by enquiry to CREST in the manner prescribed by CREST.
instructions, as described
information required
for such
the
in
CREST members and, where applicable, their CREST sponsors or voting services provider(s) should note that EUI does not make
available special procedures in EUI for any particular messages. Normal system timings and limitations will therefore apply in
relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST
member is a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that his CREST
sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the
CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting
service provider(s) are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST
system and timings.
9.
The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the
Uncertificated Securities Regulations 2001.
10. Except as provided above, members who have general queries about the meeting should contact Neville Registrars Limited, Neville
House, Steelpark Road, Halesowen B62 8HD. You may not use any electronic address provided either in this notice of annual
general meeting or any related documents (including the chairman's letter, the form of proxy and the Directors’ letter and explanatory
note in respect of electronic communications) to communicate with the Company for any purposes other than those expressly stated.
11. A copy of the Register of Directors’ interests in shares in the Company and copies of the Directors’ service contracts will be available
for inspection at the registered office of the Company during business hours only on any weekday (excluding Saturdays, Sundays and
public holidays) from the date of this notice until the date of the meeting and at the place of the meeting for at least 15 minutes prior
to and during the meeting.
21