Bidstack Group Plc Annual Report 2021

FY2021 Annual Report · Bidstack Group Plc

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ANNUAL REPORT
& ACCOUNTS
2021

Bidstack Group PLC Annual Report and Accounts For the year ended 31 December 2021 Registered number 04466195Contents

CEO’s Letter

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Market Opportunity

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Highlights of 2021

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Landmark Commercial Partnership with Azerion

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Growing Portfolio of Global Publishers

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Nordeus

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Turborilla

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Working with the World’s Largest Advertisers

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Paco Rabanne

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Marriott Bonvoy

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Doritos

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Measurement

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Lumen Research

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Investment Case

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ESG

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Bidstack’s Commitment to the Local Community

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Financial Overview

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Category

Brand

Platform

Food & Drinks

Doritos| Fast & Furious 9

Bidstack AdConsole

Media Owner

Bidstack

Target Audience

Racing Gamers

Bidstack Group PLC Annual Report and Accounts 2021

Bidstack Group PLC

Annual Report and Accounts 2021

Campaign Objectives

The co-branded partnership between Doritos and Fast & Furious 9 was designed
to engage action film fans that had an interest in cars and racing and promoted the
film whilst creating a brand association with the franchise for Doritos.

PepsiCo turned to their award-winning agency partner of 20 years, BGM OMD
Greece, to develop their campaign strategy, and after researching the evolving
media habits of their target audience they identified gaming as an innovative new
way to reach consumers.

The objectives of the in-game campaign were:

• To take a phased test and learn approach to a new channel – building a better

understanding of the best places to reach their target audience

• To unlock a new audience and reach them via a new touchpoint

• To achieve cross-platform reach in gaming environments

• To engage a growing, diverse and often elusive audience when they were

relaxed and focused

The Strategy

The ways consumers interact with media in their daily lives is constantly evolving.
New channels such as gaming, social media and streaming services continue to
grow in popularity, particularly amongst younger consumers. In the Greek market,
this is no different, with 54% of console gamers and 44% of mobile gamers playing
for at least 30 minutes every day and a growing number also tuning in to watch
gaming content on platforms such as Twitch.

With ad-blocking on the rise across all demographics (40% of internet users in
Greece are now utilising ad-blocking tech with this figure rising to 47% amongst
gamers), innovative advertisers are reacting by exploring new ways to reach their
target audience when they are focused, relaxed and engaged through gaming.

Unlike other advertising formats, gaming offers advertisers unparalleled levels of
attention. People rarely devote their entire attention to television, in fact 98% of
internet users in Greece admit to being distracted whilst watching, with 84% saying
they are often on their phones and 33% saying they play games whilst watching

Bidstack Group PLC Annual Report and Accounts 2021

TV. Whilst TV viewers can be distracted by these other screens, premium gaming
environments require 100% of a player’s attention.

Research from the audience insights platform GWI indicated that 66% of the Greek
internet population play mobile games and for many (60%) playing mobile games
has become a part of daily life for them. When we narrow this down to look at racing
gamers we can see that 73% of racing gamers in Greece are male and that 73% of
that demographic fall between the ages of 16 and 44 years old, whilst 83% of this
audience utilise more than one gaming device.

With this in mind BGM OMD Greece set out to run an in-game advertising campaign
for Doritos to promote their Fast & Furious 9 tie-in and searched the market for the
best in-game advertising solutions. They partnered with Bidstack and looked to run
in-game ads across their racing vertical, creating branded experiences in virtual
environments that were aligned with the film’s racing theme.

Bidstack Group PLC

Annual Report and Accounts 2021

The Execution

The Doritos x Fast & Furious 9 ads were brought to life in-game in a way that was
designed to deliver high levels of attention whilst respecting the playing experience
with ads that blended in seamlessly with gameplay on trackside banners, flags and
billboards.

The custom in-game creative featured across PC, tablet and iOS and Android
mobile devices in titles such as Mad Skills Motocross 3 (Turborilla), Touchgrind BMX
2 (Illusion Labs), Mr Bean – Special Delivery (Gamebake), SuperTrucks Offroad 2
(Meltdown Interactive) and Dirt Trackin’ Sprint Cars (Flying Squirrel Games).

Campaign Results

BGM OMD became the first advertising agency to deliver a programmatic in-game
advertising campaign in Greece. Their in-game campaign for Doritos and Fast &
Furious 9 delivered:

• More than 439k impressions to 10k unique gamers across 23 days

• 29,571 minutes of cross-platform ad exposure in an entirely new environment

• A media first for the Greek market that connected Doritos and Fast & Furious 9

with their target audience via a new touchpoint

• 39% of racing gamers that identified as Fast & Furious fans said their preferred
snack brand was Doritos (64% higher than the general internet population)

Bidstack Group PLC Annual Report and Accounts 2021

“Online gaming has become an important part of the internet ecosystem with

more and more people investing time into gaming as a form of entertainment.

At a time when the use of ad blocking in the Greek market is on the rise, online

gaming is a vehicle that allows us to reach 100% of our target audience. We

collaborated with the Bidstack team to create the very first programmatic in-

game campaign in Greece, connecting the Doritos campaign - which had as

its central theme the Fast & Furious 9 movie - with auto and racing games. The

campaign, which started in the summer of 2021 across PC, mobile and tablet

devices, saw the Doritos x Fast & Furious 9 ad creative served directly into the

gameplay where the ad became an authentic and natural part of the action

and didn’t disrupt or intrude on the playing experience for the gamer. The

result? More than 30,000 minutes of play for young gamers with the constant

company of the Doritos ad!”

Ilias Charalampidis
Digital Account Director at BGM OMD Greece

Bidstack Group PLC

Annual Report and Accounts 2021

Measurement
Lumen Research

An independent measurement
of Bidstack’s in-game advertising
format.

Lumen Research is the attention specialist that utilises eye-tracking and heat mapping
technologies to measure and predict the reality of visual engagement.

Eye-tracking offers a simple, scientific and objective measure of the reality of attention.

Instead of asking people questions about what they think they saw, Lumen’s technology
passively monitors what they actually look at.

Traditional ad measurement tools are being redefined and reimagined to catch up with
in-game advertising.

Dropping tracking pixels into game engines is simply not effective, which is why Bidstack
is at the forefront of defining new industry standards for in-game advertising with bodies
and partners such as the IAB, Moat, Comscore, TAG and Nielsen.

Bidstack partnered exclusively with Lumen Research in 2019 to formulate a process to
demonstrate campaign success to clients when it comes to marketing in the metaverse
by measuring the reality of attention. The relationship continues to grow into new ad
formats and genres of games which reflects the strength of Bidstack’s evolving portfolio.

Throughout 2021, Bidstack has run seven studies across two foundational genres,
racing (DiRT Rally) and sports (Football Manager), with leading brands in key advertising
categories such as luxury, retail, technology, banking and hospitality. The findings for
advertisers reinforce post campaign analysis, drive organic growth through rebooking and
prove the effectiveness of brand awareness.

Bidstack Group PLC Annual Report and Accounts 2021

Bidstack Group PLC

Annual Report and Accounts 2021

Bidstack’s in-game ad formats are more viewable with greater dwell time

% viewed

The ad boards in each study successfully gained high levels of attention where Bidstack
saw a significant uplift versus the Lumen desktop display norm. This is likely due to the
ad boards being in view throughout the entire gameplay of Football Manager and in DiRT
Rally. It appears that brand awareness campaigns through in-game advertising will likely
result in high attention amongst gamers, especially when compared to standard display
formats.

Average view time (s)

Bidstack Group PLC Annual Report and Accounts 2021

The average time spent viewing each ad board across all the studies was 1.8 seconds,
which is higher than the Lumen norm of 1.3 seconds. The favourable in-view placement of
ad boards, reflecting the real world within both Football Manager and DiRT Rally, may have
helped to increase the time spent engaging with each ad. This provides tangible evidence
that stadium and racing genres are a natural fit for in-game advertising.

Quality of engagement fuels sales impact for advertisers

Attention curve

The attention curve shows the distribution of total viewed time across each ad. On
average, over half the sample engaged with various ad boards for up to 1 second, followed
by around a third who engaged with ad boards for 2 seconds which is well above the
desktop display norm.

Higher engagement is correlated to brand recall which translates into sales impact.

Bidstack Group PLC

Annual Report and Accounts 2021

Attentive seconds per ‘000 impressions

Each advertisement tested within Bidstack’s platform in either Football Manager or DiRT
Rally is predicted by Lumen Research to generate 2.4 times more seconds of “eyes-on”
attention for every 1000 impressions served. The overall attention produced across the
2021 Lumen studies significantly outperformed the display norm. This is thought to be
most likely due to the ad boards being viewed by nearly 100% of the sample and for a
longer duration.

Bidstack’s in-game advertising format scores above average for brand
recall and perception

Spontaneous and prompted brand recall

Bidstack Group PLC Annual Report and Accounts 2021

The ad boards displayed across Football Manager and DiRT Rally captured high levels of
attention and viewed time, which Lumen considered likely resulted in participants’ ability
to recall brands both on a spontaneous and prompted level. The level that participants
were able to recall each brand across the studies (when prompted) fell in line with the
desktop display norm.

Ad perceptions

Across the studies over 50% agreed the ads were of a trusted company and were well
suited to their gaming experience.

Brand perceptions

Brand perceptions of trustworthiness, good quality and likeability saw a meaningful uplift
compared to the control sample.

Bidstack Group PLC

Annual Report and Accounts 2021

Investment Case
Why Invest in Bidstack?

Five reasons to invest in Bidstack.
Bidstack is well positioned to capitalise
from market tailwinds.

1. Attractive and growing total addressable market

Bidstack is well positioned to capture a share of the growth trends in the >$200bn
global gaming market and the shift in the >$850bn global media spend towards the
gaming audience.

2. Market positioning

The quality of Bidstack’s commercial partners illustrates their confidence in the
Company’s ability to capture an increasing market share in an emerging market. The
endorsement of Bidstack and its technology is demonstrated by the growing number
of AAA publishers integrating the Company’s technology and Bidstack’s recent signing
of what is believed to be the largest programmatic in-game advertising deal on record.

3. White-labelling Bidstack’s proprietary technology

Technology - only and SaaS licensing deals present Bidstack with a currently untapped
opportunity to drive additional recurring revenues across platforms, game engines and
publishers..

Bidstack Group PLC Annual Report and Accounts 2021

4. Product led growth

Bidstack is focused on the scalability of its products and the value of its data at an
enterprise level.

5. Talent

Bidstack has an ambitious leadership team, best-in-class engineering talent and a
strong operating Board with deep relationships with publishers, advertisers, regulators
and other commercial partners across the industry.

Bidstack Group PLC

Annual Report and Accounts 2021

ESG
Bidstack’s commitment
to the local community

A letter from Nana,
founder and CEO of BADU Sports.

BADU Sports focuses on educational and community development, using sports as
our initial tool of engagement to achieve our aims. We aim to offer positive role models,
advice and guidance, so that from an early age our young people form the positive
habit of goal setting.

While we provide a high standard in physical education to develop a healthier body,
we also provide mentoring to develop a healthier mind. In addition to this, we maintain
high expectations for all our members of staff to ensure that all children we engage,
develop to the best of their abilities.

As a result of the pandemic families and schools we work with were going to be hit the
hardest. There is a poverty of knowledge that means many in our community do not
know where to go to access the support they need.

We aimed to bridge this gap, by being a place that supported them through all their
needs – from food distribution, to mental health support, to a space to work.

Here East and Plexal were pivotal in providing us with the space and resources we
needed to deliver for our community. All of the organisations here get it and want
to help.

Bidstack Group PLC Annual Report and Accounts 2021

Here East is a campus full of genuinely good people. This is evident by our
relationship with Bidstack, they understood our vision and allowed opportunities to
be created for our organisation, young people and families.

Our relationship with Bidstack allowed us to be a part of a partnership with Norwich
City Football Club which saw us featured on their home and away shirts. This was
definitely a pinch me moment. Most importantly this relationship has created
opportunities for young people to see a larger organisation at work and be involved
in this.

We are grateful for the work we have done and are doing together and now we look
forward to developing this further into the future.

Nana

Bidstack Group PLC

Annual Report and Accounts 2021

Financial Overview

In 2021, Bidstack accelerated through
its second year of commercialisation
in its core markets the UK and US.

£2.6m

£0.95m

36%

(£6.3m) £7.1m

Revenue

Gross Profit

Gross Margin

Net Loss

Net Cash Balance

Overview

The number of advertisers Bidstack work with has grown to over 70 (FY20: 35) and the
portfolio of game titles has risen to 58. The campaigns are evolving from test spends
to recurring campaign spend in multiple markets. The business has also witnessed a
significant increase in the visibility of its pipeline as the fundamentals of the business
have matured.

This culminated in the transformational agreements announced towards the end of
2021 where we first secured a global leader in digital interactive entertainment’s AAA
mobile portfolio across multiple formats, including exclusivity for one of its biggest
sporting franchises, and, second, a $30m revenue guarantee for 2 years commencing
1 March 2022. These are significant transactions for the whole of the emerging in-
game advertising industry, not just for Bidstack.

Trading

In 2021, Bidstack delivered revenue of £2.6m (FY20: £1.7m) which grew by 55%. More
importantly, the business has focussed on converting higher margin transactions
during the year. The significant increase in Bidstack’s gross margin to 36% (FY20: 13%)
is testament to the great work undertaken by the commercial teams.

Bidstack Group PLC Annual Report and Accounts 2021

Revenue and gross margin (£M)

FY19 £0.14m/FY20 £1.7m/FY21 £2.6M] [FY19 25%/FY20 13%/FY21 36%

The transition from test spend to “on-plan” campaign spend is a positive mix driver
which has also improved the quality of revenue. This is reflected in the growth of
both of our core markets with the US growing 116% year on year and EMEA by 36%,
compared to 2020.

The headline operating expenses (excluding exceptional items) of £8.7m (FY20:
£7.2m) grew by 20% year on year. The increase is primarily driven by staff costs which
represents the investment in headcount (excluding Directors) averaging 73 in 2021
(FY20: 49). This investment was crucial and allowed the business to continue to build
out its commercial team and drive execution across sales and publisher business
development while reinforcing the product team.

Bidstack Group PLC

Annual Report and Accounts 2021

Operating expenses (Excluding exceptional items) (£M)

Net loss (£M)

Bidstack Group PLC Annual Report and Accounts 2021

Cash flow bridge 2019 - 2021 (£M)

FY19 £3.1m/ FY20 £2.4m/ FY21 £7.1

At the year end, the cash balance held was £7.1m (FY20: £2.3m), in line with market
expectations. The movement reflects the successful fundraise in July 2021 of
£10.86m (before expenses), significant improvement in gross margin and enhanced
the investment in innovation qualifying for R&D tax credits. Net cash used in
operations before tax adjustments has remained relatively flat at £6.2m over the last
two years, reflecting the Group’s careful management of its working capital.

Bidstack Group PLC

Annual Report and Accounts 2021

Bidstack Group PLC Annual Report and Accounts 2021

Bidstack Group PLC
Company Information

Directors

Company Secretary

Registered Number

Registered Office

Nominated Adviser

Broker

Independent Auditors

Solicitors

Registrars

J Draper
F Petruzzelli
G Calvert
L Hau
B Neider
D Stewart

D Garvey

04466195

Plexal Here East
14 East Bay Lane
London
E15 2GW

Spark Advisory Partners Limited
5 St John’s Lane
London
EC1M 4BH

Stifel Nicolaus Europe Limited
150 Cheapside
London
EC2V 6ET

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

Bidstack Group PLC

Annual Report and Accounts 2021

Chairman’s Statement

Introduction

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

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

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

In December 2021 Bidstack entered into two industry leading agreements:

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

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

2021 Highlights

• Successful raise of £10.86m (before expenses) in July

2021.

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

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

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

• Brand count doubled year-on-year to 70 (FY20: 35).

• Publisher portfolio nearly tripled year-on-year to 58

(FY20: 20).

• Growing global footprint: active in over 30 markets (FY20:

17).

• Structural improvement in gross margins, associated with

optimising and scaling in-game advertising revenue.

As a result, FY21 gross margins have improved significantly,
to 36% (FY20: 13%) and, while revenues for FY21 were below

Bidstack Group PLC Annual Report and Accounts 2021

market expectations, audited gross profit and year-end
cash were in line with market expectations. In addition, after
audited non-cash charges and exceptional items, net losses
were also in line with market expectations.

Progress in 2021

Publishers and Developers

During FY21, Bidstack has made significant progress in
onboarding titles across stadium, racing and open world
environments as well as Unity, Unreal and custom games
engines adding 38 titles to its portfolio of games.

These titles include the following:

In July 2021, the Company’s portfolio was bolstered by its
exclusive partnership with mobile games company Nordeus,
for its flagship football management game “Top Eleven”, a
partnership with Rebound Capital Games for its mobile title
Tennis Manager 2021 and a partnership with T-Bull S.A. (WSE:
TBL), one of the largest mobile game developers in Poland,
for its free-to-play title Racing Classics PRO: Drag Race &
Real Speed.

In August 2021 the Company announced a partnership with
Motionlab Interactive for its leading mobile game, PDC
Darts Match and a partnership with the independent Turkish
developer Suji Games commencing with its free-to-play
simulation title Hyper Airways.

Chairman’s Statement (continued)

The Company announced the addition of Football Kicks,
the third title from Slovakian mobile games studio Inlogic, in
September 2021 adding to previous titles Soccer Cup and
Tennis World Open.

October 2021 brought the announcement of an exclusive
partnership with Toronto based game studio Tangent
Interactive Media Inc. for its interactive story game
Storylines: Fashion & Passion, which is scheduled for release
in Spring 2022.

In November 2021, Bidstack announced a new partnership
with Wildlife Studios Limited, creators of one of the world’s
most popular mobile tennis games, Tennis Clash and the
addition of three new and exclusive titles from Dovetail
Games, Train Simulator 2022, Train Sim World 2 and
Bassmaster Fishing 2022.

In December 2021, Bidstack entered into an agreement
with a leading, global AAA game publisher. The multi-year
and multiple advertising format deal gives the Company
the ability to place advertising across the publisher’s mobile
portfolio. The deal also gives Bidstack exclusivity to one of
the world’s largest sporting franchises.

In the same month the Company’s portfolio of games was
further extended through three new gaming partners: Gold
Town Games (World Hockey Manager), Spinoff Games (Disc
Golf Valley) and, one of Europe’s top mobile game developers
for an award-winning life simulation title.

Advertisers and Brands

In April 2021, Bidstack’s brand activations were publicly
recognised in the Campaign Media Awards 2021 by winning
the Fashion & Beauty category with Publicis’ Starcom UK for
Paco Rabanne, which significantly increased its online sales,
spontaneous awareness and propensity among young men
to see its “Invictus” fragrance as a great gift for men in their
early twenties through its in-game campaign.

During the year Bidstack worked with leading brands
across travel, technology, apparel, luxury and food delivery
platforms. This highlights the growing diversification of the
roster of brands and campaign spend evolving from test
spend to recurring on-plan spend which provides visibility.

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

Azerion has subsequently listed on the Euronext Amsterdam
through a SPAC on 1 February 2022 where they will continue
to grow their digital entertainment and media company.

Product

Bidstack announced in February 2021, the results of its work
with leading media measurement vendor Moat by Oracle
(“Moat”) to verify in-game inventory as a trustworthy media
channel. The campaign was run with Dentsu’s DGame on
Football Manager 2021 in the UK on behalf of a leading global
financial institution that measured general invalid traffic
(“GIVT”). The analysis of Bidstack’s PC inventory compared to
Moat’s benchmark performed 3.5x better than the industry
and more than 99% observed impressions were verified as
GIVT free.

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

2021 also saw material developments with the IAB, the
Company’s industry trade body, in defining “in-game” as
a new formal advertising category and providing scalable
guidelines. The establishment of an IAB US committee, of
which Bidstack is an active member, is expected to expand
the foundational framework which is being delivered in the
UK. Progress is encouraging, with key industry stakeholders
across the value chain unified in creating industry standards
which should enable frictionless growth.

Board and Advisory Committee Appointments

On 22 April 2021, Lisa Hau joined the Board as an Executive
Director and Glen Calvert became an independent Non-
Executive Director.

Prior to joining Bidstack in May 2020, Lisa led investor
relations at WPP PLC following five years as an equity
research analyst heading up coverage for the European
media and internet sector with Jefferies, a leading
multinational investment bank.

Glen is the founder of Kaizan.ai, an AI start up that augments
the intelligence of teams, having been COO of Fnatic Ltd,
widely regarded as one of the biggest brands and most
successful esports teams. Previously Glen was a founder
and CEO of programmatic marketing company Affectv and,
prior to that, a member of the founding team at Struq, an
advertising personalisation platform, which was acquired by
Quantcast in 2014. Glen joined Bidstack’s advisory Board in
August 2020.

Bidstack Group PLC

Annual Report and Accounts 2021

Chairman’s Statement (continued)

On 23 July 2021 Bryan Neider joined the Board as an independent Non-Executive Director and Chair of
the Audit Committee.

Bryan, a Certified Public Accountant, is a technology, media and gaming veteran who brings more
than 25 years of experience from his tenure at Electronic Arts, a global leader in digital interactive
entertainment, where he served in a variety of leadership roles. Bryan is currently CEO of AbilityPath,
an organisation creating opportunities for greater independence for children, youth and adults through
diverse, individualised education and support services. He also serves on several not-for-profit boards, is
a founding Board member for Santa Clara University’s Centre for Innovation and Entrepreneurship, is an
advisory Board member for the College of Business and Economics at California State University, serves
on the boards of three technology start-ups and has been an advisor to a venture capital fund in Silicon
Valley. He was appointed to the Bidstack Advisory Committee in October 2019.

On 1 February 2021 the Company announced it has accepted the resignation of Derek Wise from the
Board to pursue other business interests.

On 22 April 2021 Mike Hayes stepped down from the Board and onto the Company’s Advisory Committee,
to continue supporting Bidstack’s journey with his valuable industry experience with game developers
and investors.

On 30 September 2021, John McIntosh resigned from his Executive Board position as Chief Financial
Officer in order to pursue other business opportunities. Since then Bhavesh Hirani, Head of Finance,
has been acting as Interim Chief Financial Officer of the Company. Bhavesh is a qualified Chartered
Management Accountant and joined Bidstack in November 2020 from Reward Insight Ltd, an award
winning customer loyalty platform. He previously held roles with Ministry of Sound, Playphone Inc and
Havas Media.

I would like to take the opportunity to thank each of Derek, Mike and John for their respective service on
the Board and Board Committees, their sage advice and their valuable contributions to the growth and
success of the business.

Financial Summary

The summary income results for the Company for the year under review are as follows:

12 months ended 31 December

Sales

Gross Profit

Total Overheads

2021

£000

2,623

949

8,904

2020

£000

1,695

225

7,218

Adjusted (loss) before tax

(7,958)

(6,992)

The Company raised £10.86m (before expenses) in July 2021 as a result of a placing and subscription of
543,157,516 million new ordinary shares with institutional and other investors, including certain directors,
at 2 pence per share.

The Company ended 2021 with cash reserves of £7.1 million (2020: £2.35 million). While the Company
is currently well capitalised, the Board remains focussed on maintaining improved gross margins and
managing the Group’s operational costs that allow Bidstack to deliver against signed opportunities and
deliver additional long-term value for Shareholders.

Bidstack Group PLC Annual Report and Accounts 2021

Chairman’s Statement (continued)

Outlook and Prospects

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

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

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

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

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

• announced a global partnership with GroupM’s Xaxis to scale brand investment into Bidstack’s gaming

portfolio;

• commenced the roll out of its media sales partnership with Azerion in multiple markets to scale

advertising spend across gaming portfolio in line with the Board’s expectations;

• experienced rapid growth of its portfolio of games from 58 to over 100 across all ad-formats: in-game,

in-menu and rewarded video growing DAUs, impressions, markets and addressable audience;

• participated in the IAB’s first ever PlayFronts for the gaming industry in New York, which is an annual

marketplace dedicated to advertising and partnership opportunities, showing the development of the
industry.

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

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

Donald Stewart
Chairman

27 April 2022

Bidstack Group PLC

Annual Report and Accounts 2021

Strategic Report

Principal Activity

Bidstack is an advertising technology company which
provides dynamic, targeted and automated in-game
advertising for the global video games industry across
multiple platforms. Its proprietary technology is capable of
inserting adverts into:

• natural advertising space within video games;

•

in-game menus and start up screens; and

• by way of rewarded video;

across multiple video games platforms (mobile, PC and
console)

Going Concern

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

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

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

Bidstack Group PLC Annual Report and Accounts 2021

The financial statements have been prepared on a going
concern basis and do not include the adjustments that
would be required should the going concern basis of
preparation no longer be appropriate. The Group’s business
activities, together with the factors likely to affect its future
development, performance and position are set out in the
Chairman’s statement on pages 60 to 63.

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

Key Performance Indicators

The Group’s KPI’s provide a critical measure of the Group’s
revenue potential and are constantly evolving to reflect the
Group’s progressing business model.

The Board’s focus for 2022 is primarily the execution and
the roll out of its arrangements with Azerion and Xaxis to
place multiple ad formats within Bidstack’s rapidly growing
inventory across mobile, PC, cloud gaming and VR formats
whilst maintaining gross margin. Bidstack expects to add
significant numbers of further games from its robust pipeline
of AAA and independent titles. Additional supply across
console games is also anticipated in the coming twelve
months.

In addition, the Board expects to make material investment in
2022 to progress further use-cases for Bidstack’s technology
to create technology-only and software-as-a-service
transactions that are expected to drive additional recurring
revenue over and above the Group’s advertising revenue.

Strategic Report (continued)

Principal risks and uncertainties

The Board places a high degree of emphasis on de-risking the operations of the business wherever possible. The model for the
future development of the Group is outlined in the Strategic Report (pages 64 to 67). The Management Team aim to operate
the business to ensure objectives are met while not putting the business at significant financial, operational or reputational risk.

The Interim Chief Financial Officer has been charged with managing the Group’s company-level risks. The risk items are
monitored and updated monthly. The risk table below is reviewed at the Audit Committee. We monitor risks and uncertainties
that can impact the performance of the Group, some of which are beyond the control of the Group. These are reviewed at
monthly board meetings where the Company’s performance is assessed against its strategy and budget. This enables the
Board to determine and mitigate the Company’s risk environment, which includes:

Risk

Mitigation

Liquidity – Until the Group reaches a positive cash generative
position, the Group’s future cash position remains subject to
the availability of funding and continued shareholder support.
The funding of its costs together with future growth, place
sustained demand on the Group’s overall cash resources.
The Group relies on being able to arrange and maintain
sufficient financing.

Management monitors the working capital requirements of
the business to finance its growth plans as part of its day-to-
day control procedures.

The Board assesses cash flow projections monthly (and more
regularly when required) to ensure that appropriate funding
resources are ready and available to be drawn on, when
required.

Pandemic – In a dynamic, ever-moving coronavirus
environment the Group is dependent on its staff being able
to operate to the best of their ability, its suppliers being able
to be engaged and then deliver and its customers having
unimpeded access to Bidstack’s products and services.

While the stay at home message across the world has
provided the gaming sector with an unparalleled boost
an increasing return to apparent normality appears to be
accompanied by continued growth in the sector. The risk is
whether the Company can successfully harness this growth
and manage the demands on the Company’s product suite.

Management has been monitoring the risk and potential
impact of the Coronavirus on the business, its principal risks
and the operations. As the Group’s products and principal
operations are cloud based the Company’s systems can all
be accessed remotely by all our staff. Bidstack has managed
to operate effectively throughout the pandemic and, as staff
return to full time office working and face to face meetings,
the Company’s operations remain highly effective.

Our key suppliers are technology led and therefore service
continues to be provided.

Talent retention – The Group is dependent on key members
of its management team. Their services cannot be
guaranteed, and the loss of their services may have a near-
term material effect on the Group’s 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.

Bidstack’s founders remain material Shareholders and are
also incentivised in alignment with Shareholders’ interests
towards the long-term growth of the Group. In addition,
the Group operates a share option scheme to incentivise
other employees and enable them to benefit from growth
in the business. The Board will continue to ensure that
key personnel are appropriately sourced, engaged and
incentivised where required.

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.

The Board believes that its contract with Azerion together
with the growth of its inventory portfolio and positive
testimonials received from clients following integration
provides tangible evidence that Bidstack’s technology is
perceived as best-in-class.

Continued next page →

Bidstack Group PLC

Annual Report and Accounts 2021

Strategic Report (continued)

Principal risks and uncertainties (continued)

Risk

Mitigation

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.

The Group’s IT infrastructure is distributed across a multiple
server network. This ensures that if one server were to fail,
the Group’s architecture and content could still be accessed
by users via other access points. Management undertakes
a regular risk review against best practice methods.
Management also recognise the opportunity to utilise third
party technology solutions when time or resources are
not immediately available; or until the appropriate internal
resource can be sourced.

Business Interruption – Ability to appropriately prepare for
and respond to a crisis or major disruption to key operations
either across the Group, in a key region/location, or via a
critical supplier - such as the Group’s business environment
being subject to the conditions noted above by the global
impact of the Coronavirus pandemic.

We acknowledge the importance of proactively ensuring a
consistent and effective business continuity management
process across the Group. The shut-down of parts of the
global business world due to the COVID pandemic presented
an environment which demonstrably increased audiences in
the Gaming sector, mitigating certain demand-side risks the
Group faces.

Publishing partner growth – Success of the Group’s strategy
relies on its on-going ability to secure additional games with
advertising opportunities. There can be no assurance that
the Group will maintain its success in this area.

The Group continues to engage with a number of AAA game
studios and others in relation to the provision of popular
titles. Games developers and publishers are incentivised
to provide advertising in their games by the potential to
generate significant additional revenues from advertising.
Premium titles may require arrangements that guarantee
a percentage of expected revenue. These incentives
are modelled to mitigate the risk and ensure appropriate
decisions are made on a case by case basis, where
appropriate.

Converting client opportunities – Success of the Group’s
strategy depends on its ability to generate revenues from
impressions of advertisements 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.

The announcement of the Group’s recent arrangements with
GroupM’s Xaxis provides evidence 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. The
Group continues to work with other leading communication
agencies to create additional advertising trading agreements
and frameworks.

Continued next page →

Bidstack Group PLC Annual Report and Accounts 2021

Strategic Report (continued)

Principal risks and uncertainties (continued)

Risk

Mitigation

Brand Safe Advertising space – It is imperative to
established brands and their agencies that their ads do not
appear on a screen alongside other inappropriate content
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.

Native in-game advertising is possibly the most brand
safe advertising environment there 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.

Foreign Exchange – The Company is exposed to a variety
of currencies and currently earns revenue in US dollars,
Sterling and Euros. Brexit is no longer a specific issue for
the Company’s operations but its impact may still cause
fluctuations in the near-term value of Sterling, making
forecasting more difficult.

Given the early level of the sector maturity and the difficulty
of estimating future cash flows the Group’s current finance
strategy is not to hedge long-term currency positions.
There is anticipated to be a degree of natural hedging in
some markets, where both revenues and costs arise in local
currency.

Forward looking statements

Environmental and social

The Strategic Report on pages 64 to 67 has been prepared
for the Shareholders of the Company, and no other
persons. The Strategic Report may contain forward-looking
statements or anticipated outcomes that are subject to the
principal risks noted above along with, the economic and
sector specific circumstances within the markets in which
the business operates. The purpose is to assist Shareholders
of the Company to assess the strategies adopted by the
Group and the potential for those strategies to succeed,
and for no other purpose. The Directors believe that the
expectations reflected in the Strategic Report are reasonable
but they may be affected by all of the principal risks, which
could cause actual results to differ materially from those
currently anticipated. No assurances can be given that the
forward-looking statements in the Strategic Report will be
realised. The forward-looking statements reflect the data and
knowledge available at the time.

Employment without discrimination

The Company is committed to offering employment 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.

In our day-to-day business, we commit to comply with
applicable environmental laws, and the Directors believe
that the direct impact of the Group’s operations on the
environment is low. We also look to tread lightly through
good housekeeping practices such as reducing energy
consumption, using sustainable resources and recycling
waste.

In addition, Bidstack has worked closely with Badu Sports,
which mentors and inspires young, underrepresented people
in East London providing social inclusion and opportunity
revolving around the local community. Bidstack brought
Badu together with Norwich City Football Club to provide
Badu participants with first-hand experience and exposure
to a professional football club and the many roles that exist
within it in a way the Directors believe will be transformational
for many young lives. The three-way partnership resulted in
a joint nomination for Best Corporate Social Responsibility
Scheme Award at the Football Business Awards 2021.

Bidstack Group PLC

Annual Report and Accounts 2021

Governance

Directors, senior managers and employees

At 31 December 2021, there were five male and one female directors of the Company and the Company had 74 other
employees.

Section 172 Statement

Under section 172 of the Companies Act 2006 (“Section 172”), a director of a company must act in a way that they consider, in
good faith, and would most likely promote the success of the company for the benefit of its members as a whole, taking into
account the non-exhaustive list of factors set out in Section 172.

Section 172 also requires directors to take into consideration the interests of other stakeholders set out in Section 172(1) in their
decision making.

Bidstack’s key stakeholders include its investors, employees, advertisers and advertising agencies, technology partners and
games developers and publishers.

The Company’s strategy is to expand and further monetise its product suite primarily through the execution and roll out
of its arrangements with Azerion and Xaxis to place multiple ad formats within Bidstack’s rapidly growing inventory across
mobile, PC, cloud gaming and VR formats. In addition, the Company expects to further develop its associated complementary
technologies to create technology-only and software-as-a-service transactions that are expected to drive additional recurring
revenue over and above the Group’s advertising revenue. Upon the successful implementation of the Company’s strategy, the
Company is likely to have an expanded range of internal and external stakeholders, relations with which the Board will take into
consideration when making decisions on Company strategy.

Engagement with our Shareholders plays an essential role in Bidstack’s business. We are cognisant of fostering an effective
and mutually beneficial relationship with our Shareholders. Our understanding of our Shareholders is factored into boardroom
discussions regarding the potential long-term impacts of our strategic decisions.

Post the reporting period end, the Directors have continued to have regard to the interests of the Company’s stakeholders,
including the potential impact of the Group’s future activities on the community, the environment and the Company’s
reputation when making decisions. The Directors also continue to take all necessary measures to ensure the Company is acting
in good faith and fairly between Shareholders and is promoting the success of the Company for its Shareholders in the long-
term.

The table below acts as our Section 172 statement by setting out the key stakeholder groups, their interests and how the
Company engages with them. Given the importance of stakeholder focus, long-term strategy and reputation to the Company,
these themes are also discussed elsewhere in this Annual Report.

Stakeholder

Why we engage

How we engage

Our Investors

We maintain and value regular dialogue with our
financial stakeholders throughout the year and place
great importance on our relationship with them. We
know that our investors expect a comprehensive
insight into the financial performance of the Company,
and awareness of long-term strategy and direction. As
such, we aim to provide high levels of transparency and
clarity about our results and long-term strategy and
to build trust in our future plans. In addition, we seek
independent analyst coverage and comment regularly
to Shareholders in relation to the Group’s performance
vis-à-vis market expectations.

• Regular independent analysis of the
Group and its performance for the
benefit of investors

• Annual Report

• Company website

• Shareholder circulars

• AGM

• RNS announcements

• Press releases

Continued next page →

Bidstack Group PLC Annual Report and Accounts 2021

Governance (continued)

Section 172 Statement (continued)

Stakeholder

Why we engage

How we engage

Our Employees

Our people are at the heart of the growth of our
business. Effective employee engagement leads to
an effective, incentivised, healthier workforce who
are invested in the success of the Group and who
are all pulling in the same direction. Our engagement
seeks to address any employee concerns regarding
working conditions, health and safety, training and
development, as well as workforce diversity.

Advertisers and
Advertising Agencies

The advertisers and advertising agencies which work
with the Group have unique requirements that require
understanding, diligence and trust in our offering. We
listen to and engage with advertisers and agencies on
a constant basis to ensure that we understand their
needs and can provide solutions that address them.
We strive to ensure that relevant information is easily
accessible and customer concerns are dealt with in a
timely and professional manner.

• Introduction of the role of

Head of People and Culture.

• Improving the range of benefits

offered to employees

• Evaluation and feedback processes
for employees and management

• Competitive rewards packages

• Encouraging employee training

and development

• Flat communication structure

with Executive Board

• Continual dialogue and

communication at both commercial
and technology levels with
advertisers and advertising agencies

• Continual review of feedback to

ensure satisfaction

• Dedicated team for Client Services
and Operations to ensure advertiser
and agency concerns are addressed

• Face to face meetings with brands
and agencies to further develop
relationships

Technology Partners

Games Developers
and Publishers

Our technology is at the centre of our business. We
connect with programmatic sales and publishing
platforms, media measurement and verification, game
engines and other interfaces. We are also expanding
our business with technology only and software-as-
a-service offerings. We work closely with third party
software engineers and developers and technology
suppliers such as Moat by Oracle.

• Appointed Chief Technology and

Product Officer

• Work closely with technology

providers to understand and resolve
issues

• Understanding from our technology
team results in positive feedback
from third parties

We have a growing number of games developers
and publishers with whom we have built strong
relationships with and strongly value. These developers
and publishers are key to growing our inventory of
advertising opportunities which is the bedrock of our
attractiveness to advertisers and advertising agencies.
We establish effective technical and commercial
engagement channels to ensure our relationships
remain collaborative and forward focused, and to
foster relationships of mutual trust and loyalty.

• Building strong partnerships with
games developers and publishers
through open two-way dialogue,
technology integration processes
and regular face to face meetings

• The integration of our technology
into additional games provides
tangible evidence of the success
of our relationships with games
developers and publishers allowing
ongoing review and monitoring of
relevant performance levels

Bidstack Group PLC

Annual Report and Accounts 2021

Governance (continued)

Section 172 Statement (continued)

The above statement should be read in conjunction with the Strategic Report (on pages 64 to 67) and the
Company’s Corporate Governance Statement.

The Strategic Report was approved by the Board of Directors on 27 April 2022 and was signed on its behalf by:

James Draper
CEO of Bidstack Group PLC

27 April 2022

Bidstack Group PLC Annual Report and Accounts 2021

Directors’ Report

The directors present their report together with the audited
financial statements for the year ended 31 December 2021.

making the Board confident that such fundraising will be
available to provide the required capital, there can be
no guarantee that such fundraising will be available and,
accordingly, this constitutes a material uncertainty over
going concern.

Substantial Shareholders

On 31 December 2021 the following Shareholders held an
interest of 3% or more of the ordinary share capital of the
Company:

Shareholder

Ordinary shares
of 0.5p

% of issued share
capital

James Draper

39,760,562

Rathbones

31,248,102

Ayanda Capital

30,000,000

4.27%

3.35%

3.22%

Canaccord Genuity

99,150,000

10.64%

As at 31 December 2021 no other person had reported an
interest of 3% or more in the Company’s ordinary shares.

Strategic Report

The principal activity of the Group, its strategy and business
model are set out on pages 64 to 67.

Corporate Governance

The Corporate Governance Report is set out on pages
68 to 70.

Results and dividends

The results of the Group for the year ended 31 December
2021 are set out on page 85 and show an operating loss
for the year of £7,955,259 (2020: loss of £6,993,558). The
directors do not recommend the payment of a dividend
(2020: £Nil).

Financial risk management

The Group’s financial instruments comprise cash, liquid
resources and various items, such as trade receivables and
trade payables that arise directly from its operations. The
main risks arising from the Group’s financial instruments are
currency risk, interest rate risk, credit risk and liquidity risk.
The Directors review the policies for managing each of these
risks on an on-going basis. These policies have remained
unchanged from previous periods. Details of the use of
financial instruments by the Company are contained in
note 24 of the financial statements.

Going Concern

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

The Board’s forecasts for the Group include due
consideration contracted minimum revenues, additional
future revenues from anticipated new lines of business,
potential future capital in-flows, continued operating
losses, projected increase in cash-burn of the Group (and
taking account of reasonably possible changes in trading
performance and also changes outside of expected trading
performance) for a minimum period of at least twelve months
from the date of approval of these financial statements.
However, the Group forecasts assume that further equity
fundraising will take place in the next twelve months in in
order to implement its growth strategy and operate as a
going concern. Although the entity has had past success in
fundraising and continues to attract interest from investors,

Bidstack Group PLC

Annual Report and Accounts 2021

Directors’ Report (continued)

Directors

The Directors who held office during the year were as follows:

Director

D Stewart

J Draper

F Petruzzelli

L Hau

G Calvert

B Neider

Non-Executive Chairman

Executive

Non-Executive

–

Appointed 22 April 2021

Appointed 23 July 2021

J McIntosh

Executive

Resigned 30 September 2021

M Hayes

D Wise

Non-Executive

Resigned 22 April 2021

Resigned 01 February 2021

Directors’ Emoluments

Directors during
the year

D Stewart1

Chairman

J Draper

Executive

F Petruzzelli

Executive

L Hau

Executive

B Neider

Non-Executive

G Calvert

Non-Executive

Salary/Fees/
Benefits
£

Share-based
payment
£

Total
Emoluments
£

2020

40,000

310,000

181,250

17,635

20,000

885

40,885

80,859

11,430

14,549

590

28,277

2,690

321,430

151,971

321,430

151,314

195,799

18,225

20,590

268,277

151,661

12,690

2,500

48,039

56,186

J McIntosh

Executive

240,000

M Hayes

Non-Executive

D Wise

Non-Executive

10,000

2,500

1,131,385

70,441

1,201,826

640,030

1 Donald Stewart, Chairman, is also a consultant to Kepstorn Solicitors. Fees for corporate and legal services of £42,450 (2020: £32,430) were charged by Kepstorn during

the year ended 31 December 2021, of which £38,730, related to Kepstorn’s fees for in relation to the fundraise in July 2021. As at 31 December 2021, £Nil was owed to

Kepstorn Solicitors (2020: £Nil).

Bidstack Group PLC Annual Report and Accounts 2021

Directors’ Report (continued)

Long Term Incentive Plan

On 21 December 2021, the Company adopted a new Long Term Incentive Plan (LTIP). On the
recommendation of the Remuneration Committee, the Company made an aggregate of 91,000,000
Long Term Incentive Plan awards, including awards to James Draper, Francesco Petruzzelli and Lisa Hau.

The LTIP awards to each of the Directors in each set of awards will vest over a three year period. All of the
LTIP awards, when vested, will be exercisable on payment of nominal value only.

The First Awards have been made to the Directors as follows:

Name

2022

2023

2024

Total

James Draper

6,000,000

18,000,000

Francesco Petruzzelli

6,000,000

18,000,000

Lisa Hau

1,000,000

3,000,000

The Second Awards have been made to the Directors as follows:

Name

2022

2023

2024

Total

James Draper

6,000,000

18,000,000

Francesco Petruzzelli

6,000,000

18,000,000

Lisa Hau

1,000,000

3,000,000

The relevant targets will be set by the Remuneration Committee based on the consensus of market
expectations.

Further details on the LTIP scheme can be found in Note 22.

Bidstack Group PLC

Annual Report and Accounts 2021

Directors’ Report (continued)

Statement of compliance with the Corporate Governance
Code

5. Maintain the Board as a well-functioning, balanced team

led by the chair

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 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.

6. Ensure that between them the Directors have the

necessary up-to-date experience, skills and capabilities

7. Evaluate Board performance based on clear and relevant

objectives, seeking continuous improvement

8. Promote a corporate culture that is based on ethical values

and behaviours

9. Maintain governance structures and processes that

are fit for purpose and support good decision-making
by the Board

10. Communicate how the company is governed and is

performing by maintaining a dialogue with Shareholders
and other relevant stakeholders.

Set out below are further disclosures on certain particularly
relevant principles.

Principle 1 – Business Model and Strategy

Bidstack is a provider of multi format 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 and in-game
menus, user interfaces and loading screens.

The Board currently consists of three Independent Non-
Executives, Donald Stewart, Bryan Neider and Glen Calvert,
and three Executive Directors, James Draper, Francesco
Petruzzelli and Lisa Hau.

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.

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.

As set out in the Strategic Report 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 2022 on business development, both
technical and commercial.

The QCA Code sets out ten 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. The ten principles
are:

1. Establish a strategy and business model which promote

long-term value for Shareholders

2. Seek to understand and meet Shareholder needs and

expectations

3. Take into account wider stakeholder and social

responsibilities and their implications for long-term
success

4. Embed effective risk management, considering both

opportunities and threats, throughout the organisation

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 64 to 67 above.

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

Bidstack Group PLC Annual Report and Accounts 2021

Directors’ Report (continued)

Statement of compliance with the Corporate Governance Code (continued)

principal risks.

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, Chief Operations Officer and
Managing Director, and three Non-Executive Directors,
including the Chairman.

Donald Stewart chairs the Board. The Executive Directors
have industry and technical knowledge and expertise
(James Draper and Francesco Petruzzelli), investor relations,
operations and financial expertise (Lisa Hau) with additional
financial expertise being provided by Bhavesh Hirani (Head
of Finance) and John McIntosh (CFO). The Non-Executive
Directors have legal, accounting, public market, leadership
and people management experience (Donald Stewart, Glen
Calvert and Bryan Neider). David Garvey, General Counsel
and EVP of Operations, acts as 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.

Committee and nominations to the Board will be dealt with by
the whole Board. This position is reviewed on a regular basis
by the Directors.

All the Non-Executive Directors are Shareholders and the
Board does not consider this affects the performance of
their duties. All three Non-Executive Directors sit on the
Audit Committee, which is chaired by Bryan Neider (who
is a Certified Public Accountant) and on the Remuneration
Committee, which is chaired by Glen Calvert.

During the year under review the Board held eight regular
board meetings, at which all the members of the Board
attended. In addition, the Board met formally a further five
times for specific purposes including to approve publication
of the Annual Report and Accounts for 2020 and to approve
publication of the Interim Accounts for the period to 30 June
2021, to approve the Company’s fundraise and in relation
to the grant of options and Long Term Incentive Plan (LTIP)
award. 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 practiced corporate law, particularly
focused on smaller quoted companies, for over 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 and is currently a Founder and Director
of Tecc Capital PLC, quoted on the Access segment of the
AQSE Growth Market. Donald brings extensive experience
of quoted companies, legal and regulatory issues, corporate
governance and of the role of Chairman. As a practicing
Solicitor, Donald is required to keep his skills up to date
through continuing professional development.

James Draper - Chief Executive Officer

The Board has 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

James founded Bidstack in 2015 utilising more than 15 years
of commercial experience to launch his own business. Since
the initial launch he has seen the Company grow from a one
man operation to an international business which trades on

Bidstack Group PLC

Annual Report and Accounts 2021

Directors’ Report (continued)

Statement of compliance with the Corporate Governance Code (continued)

the AIM Market of the London Stock Exchange. Under his
stewardship, Bidstack became the first ever Crowdcube
funded company to go public after he pivoted the business
into video gaming in 2017 with an industry-establishing deal
with SEGA Europe and has since raised over £25 million for
Bidstack. James leads the business as a whole and brings
core management, marketing and strategic vision and an
intimate knowledge of all aspects of the Bidstack business to
the Board.

Francesco Petruzzelli - Managing Director

Francesco has more than 10 years of international,
commercial and start-up experience. As a founder of multiple
tech start-ups he joined Bidstack in 2015 as Chief Technology
Officer and Co-Founder, where he focused on shaping the
development of the in-game advertising category, evolving
Bidstack’s technical ecosystem and driving innovation and
growth. Francesco now leads the team’s commercial strategy
across all aspects of the business and brings to the Board
software technical and development experience, technical
sales and a comprehensive understanding of the Bidstack
business.

Lisa Hau – Executive Director

Lisa joined Bidstack in April 2020 with more than 15 years
international experience most recently at WPP, a constituent
of the FTSE 100 where she led investor relations and
Jefferies where she was an equity analyst heading coverage
for European Media and Internet. Lisa oversees day to
day operations for Bidstack and works closely with the
Management Team on strategy, corporate and business
development and investor relations. Lisa graduated from the
University of Technology, Sydney in 2006 and is a qualified
Chartered Accountant. Lisa brings operations, financial,
capital markets and investor relations expertise to the Board.

Glen Calvert – Non-Executive Director

Glen joined the Board in April 2021 having been on Bidstack’s
advisory Board since August 2020. Having been COO of
Fnatic Ltd, widely regarded as one of the biggest brands and
most successful esports teams, since January 2019. During
2021 he launched Kaizan.ai, an AI start up that augments the
intelligence of client success teams. Previously Glen was
a Founder and CEO of programmatic marketing company
Affectv and, prior to that, a member of the founding team
at Struq, an advertising personalisation platform, which was
acquired by Quantcast in 2014. Glen brings considerable
experience to the Board including strong relationships
across the esports and AI sectors and among the investor
community.

Bryan Neider – Non-Executive Director

Bryan, a Certified Public Accountant, joined the Board in
July 2021 and is a tech, media and gaming veteran who adds
significant public company and finance experience and
knowhow to the Board. He became a Bidstack Advisor in
October 2019 and brings more than 25 years of leadership
experience from his time with Electronic Arts (EA). There
he played a key role in their IPO, oversaw global business
development efforts, served as their CFO and COO and
headed up their Global Operations team. Bryan currently
serves as the CEO of AbilityPath an organisation creating
opportunities for greater independence for children,
youth and adults through diverse, individualised education
and support services. He also serves on several not-for-
profit boards, is a founding Board member for Santa Clara
University’s Centre for Innovation and Entrepreneurship,
is an advisory Board member for the College of Business
and Economics at California State University, serves on
the boards of three technology start-ups and has been an
advisor to a venture capital fund in Silicon Valley.

All of the Directors have direct access to the Company’s
external advisers including its 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.

Principle 7 – Evaluation of Board Performance

Due to significant changes to the Board of Directors during
the year, a decision was taken to defer the internal evaluation
of the Board, its Committees and individual Directors and
officers to Q2 of 2022, 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 would appoint additional
directors in the event that outstanding people with relevant
skills are able to make the necessary commitment to drive
the business forward.

Bidstack Group PLC Annual Report and Accounts 2021

Directors’ Report (continued)

Statement of compliance with the Corporate Governance Code (continued)

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 reviewing the Company’s Interim Report for
the period to 30 June 2021. In addition, the Audit Committee
has worked with and reviewed the work of the Company’s
Auditors in the production of the Annual Report and
Accounts of the Company for the year ended 31 December
2021 set out in this document.

Remuneration Committee Report

The Remuneration Committee comprises Glen Calvert as
Chairman, Bryan Neider and Donald Stewart which 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 certain recommendations to the Board in relation
to the salaries of the Chief Executive, the Chief Technical
Officer, Chief Operations Officer, the Chief Financial Officer
and certain Senior Employees.

In addition, for the year under review the Remuneration
Committee did make recommendations to the Board in
relation to the award of bonuses, share options and LTIP
awards for the Executive Directors details of which have
been disclosed under Director’s interests below and certain
other Senior Employees.

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.

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 esport
tournaments to get direct feedback from the players and
viewers of video games, works closely and supportively with
the IAB, the Company’s industry trade body, and seeks to be
regarded as a good corporate citizen by all its stakeholders
within its sphere of operation. In addition, Bidstack has
worked closely with Badu Sports, which mentors and inspires
young, underrepresented people in East London providing
social inclusion and opportunity revolving around the local
community.

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 Bryan Neider as Chairman,
Donald Stewart and Glen Calvert 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.

Bidstack Group PLC

Annual Report and Accounts 2021

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 2021

Director

Ordinary
Shares

Ex. Price
1.14p

Ex. Price
6p

D Stewart

3,524,876

J Draper

39,760,562

F Petruzzelli

5,750,000

4,799,500

L Hau

G Calvert

B Neider

1,125,000

750,000

Long Term Incentive Plan (LTIPS)

Director

D Stewart

J Draper

F Petruzzelli

L Hau

G Calvert

B Neider

Ex. Price
3.6p

36,000,000

6,000,000

31 December 2020

Director

Ordinary
Shares

D Stewart

2,024,876

J Draper

39,760,562

Options

Ex. Price
1.14p

J McIntosh

M Hayes

950,000

500,000

Bidstack Group PLC Annual Report and Accounts 2021

750,000

Ex. Price
6p

Ex. Price
14.4p

1,000,000

700,000

F Petruzzelli

5,750,000

4,799,500

7,500,000

Ex. Price
3.6p

3,000,000

2,000,000

Ex. Price
20p

1,000,000

5,000,000

10,000,000

500,000

300,000

Directors’ Report (continued)

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

27 April 2022

Bidstack Group PLC

Annual Report and Accounts 2021

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.

Bidstack Group PLC Annual Report and Accounts 2021

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 subsidiaries
(the ‘group’) for the year ended 31 December 2021 which
comprise a consolidated statement of comprehensive
income, a consolidated statement of financial position, a
company statement of financial position, a consolidated
statement of changes in equity, a company statement of
changes in equity, a consolidated statement of cash flows
and a 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 UK adopted international accounting standards.

In our opinion, the financial statements:

In auditing the financial statements, we have concluded that
the directors’ use of the going concern basis of accounting in
the preparation of the financial statements is appropriate.

Our evaluation of the directors’ assessment of the entity’s
ability to continue to adopt the going concern basis of
accounting included:

• Reviewing the cash flow forecasts and budgets covering

the period of at least 12 months from the financial
statement approval date

• Scrutinizing the cash flow forecasts and budgets and
challenged the assumptions made by management.

•

In particular, we challenged the central assumption
around the success of an equity fundraise and obtained
supporting evidence for this.

• give a true and fair view of the state of the group’s and
of the parent company’s affairs as at 31 December
2021 and of the group’s loss for the year then ended;

We concur with management that, the reliance of
management on equity fundraising as a key source of funding
in the foreseeable future constitutes a material uncertainty.

• have been properly prepared in accordance with UK
adopted international accounting standards; and

• have been prepared in accordance with the
requirements of the Companies Act 2006.

Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.

An overview of the scope of our audit

Basis for opinion

We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further
described in the Auditor’s responsibilities for the audit
of the financial statements section of our report. We
are independent of the group in accordance with the
ethical requirements that are relevant to our audit of the
financial statements in the UK, including the FRC’s Ethical
Standard as applied to listed entities, and we have fulfilled
our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis
for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to note 2 in the financial statements
which indicates that the group is dependent on further
equity funding to sustain itself over the following year
and that there is no guarantee that such fundraising will
be available. As stated in note 2 this condition indicates
that a material uncertainty exists that may cast significant
doubt on the group’s ability to continue as a going
concern. Our opinion is not modified in respect of this
matter.

As part of designing our audit, we determined materiality
and assessed the risks of material misstatement in the
financial statements. In particular, we looked at where the
directors made subjective judgements, for example in
respect of significant accounting estimates that involved
making assumptions and considering future events that
are inherently uncertain. As in all of our audits, we also
addressed the risk of management override of internal
controls, including evaluating whether there was evidence
of bias by the directors that represented a risk of material
misstatement due to fraud. We tailored the scope of our
audit to ensure that we performed enough work to be able
to give an opinion on the financial statements as a whole,
taking into account the structure of the group and the parent
company, the accounting processes and controls, and the
industry in which they operate.

We performed a full scope audit of Bidstack Group plc
and its three subsidiaries – Bidstack Limited, Bidstack SIA
and Pubguard Limited. Our audit consisted principally of
substantive tests of detail as this was deemed the most
efficient and effective way of amassing sufficient reliable
audit evidence.

Bidstack Group PLC

Annual Report and Accounts 2021

Independent Auditor’s report to the members of Bidstack Group PLC (continued)

Our application of materiality (continued)

Key audit matters

Key audit matters are those matters that, in our professional judgment, 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.
We have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matter

Going concern

Due to the continued losses made by the group of £6.3
million in the year ended 31 December 2021 (£6.4 million in
2020) there is a risk that the Group may not have sufficient
resources to continue trading for the foreseeable future
(see note 2).

As set out in note 2, a material uncertainty has been
disclosed in relation to the Group’s going concern status.

Revenue recognition

The group earned revenue of £2,623,413 in the year ended
31 December 2021. There is a risk that revenue is recognised
inappropriately and not in accordance with IFRS 15.

How our scope addressed this matter

The ”Material uncertainty related to going concern” section
of the audit report features the explanation of how our audit
scope addressed the Key Audit Matter around Going concern
and the Material uncertainty associated with it.

We agreed cash received to revenue in order to gain comfort
over its occurrence and completeness. We also agreed a
sample of recorded revenue transactions to appropriate
evidence of customer acceptance.

We have reviewed and challenged management’s judgment
in applying relevant requirements of IFRS 15

As a result of our procedures we conclude that the group’s
revenue is stated accurately in all material aspects.

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. Total assets is deemed to be the most
appropriate benchmark as the Group is still in early stage
growth and, as such, revenue and net loss are volatile and not
representative of the longer term prospects of the business

We originally determined materiality for the group to be
£179,000 which equated to approximately 2% of draft total
assets, which we considered was within a suitable range
for calculating materiality using a gross asset benchmark.
Although the final reported gross assets increased from
the draft total assets, we did not consider it necessary to
revise the materiality threshold because we considered that
materiality of 1.7% of total assets remained appropriate.

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 £134,250.

We agreed with the management that we would report all
individual audit differences identified during the course
of our audit in excess of £8,950. We also agreed to report
differences below these thresholds that, in our view,
warranted reporting on qualitative grounds.

Bidstack Group PLC Annual Report and Accounts 2021

Independent Auditor’s report to the members of Bidstack Group PLC (continued)

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.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company 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 directors’ responsibilities statement set out on page 80, 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 group or the parent 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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with
our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to
which our procedures are capable of detecting irregularities, including fraud is detailed below:

Bidstack Group PLC

Annual Report and Accounts 2021

Independent Auditor’s report to the members of Bidstack Group PLC (continued)

Our application of materiality (continued)

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud

Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws
and regulations related to regulatory requirements for the business and trade regulations, and we considered the extent to
which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations
that have a direct impact on the preparation of the financial statements such as the Companies Act 2006, income tax, payroll
tax and sales tax.

We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including
the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to
revenue and management bias in accounting estimates. Audit procedures performed by the engagement team included:

• Discussions with management including consideration of known or suspected instances of non-compliance with laws and

regulation and fraud;

• Evaluating management’s controls designed to prevent and detect irregularities;

•

Identifying and testing journals, in particular journal entries posted with unusual account combinations; and

• Challenging assumptions and judgements made by management in their critical accounting estimates and judgements.

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

27 April 2022

Bidstack Group PLC Annual Report and Accounts 2021

Consolidated statement
of comprehensive income

for the year ended 31 December 2021

Note

Year ended
31 December 2021
£

Year ended
31 December 2020
£

Revenue

Cost of Sales

Gross Profit

Administrative expenses

Exceptional items

Total administrative expenses

Operating loss before acquisition related costs

Finance income

Finance costs

(Loss) before taxation

Taxation

(Loss) for the year

Other comprehensive income

Items that will or may be reclassified to profit or loss:

Exchange translation

Total comprehensive (loss) for the year

2,623,413

(1,674,190)

949,223

(8,681,927)

(222,555)

(8,904,482)

1,695,620

(1,470,389)

225,231

(7,218,789)

(7,955,259)

(6,993,558)

180

(3,392)

(7,958,471)

1,661,027

(6,297,444)

2,525

(1,179)

(6,992,212)

597,035

(6,395,177)

10,589

(6,286,855)

(6,395,177)

Loss per share – basic (pence)

(1.21)

(1.65)

The notes on pages 92 to 115 form part of these financial statements.

Bidstack Group PLC

Annual Report and Accounts 2021

Consolidated statement of financial position

as at 31 December 2021

ASSETS

Non-current assets

Intangible assets

Property, plant and equipment

Right of use asset

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

Warrant reserve

Exchange reserve

Retained losses

Total equity

Non-current liabilities

Lease liability

Total non-current liabilities

Current liabilities

Trade and other payables

Lease liability

Total current liabilities

Note

Year ended
31 December 2021
£

Year ended
31 December 2020
£

248,760

46,519

7,280

302,559

2,752,036

7,086,906

9,838,942

279,955

28,388

7,577

315,920

2,391,300

2,347,114

4,738,414

10,141,501

5,054,334

8,950,048

35,375,326

1,589,965

6,508,673

6,234,261

27,984,716

1,282,556

6,508,673

(23,320,632)

71,480

10,589

(21,876,346)

7,309,103

4,180

2,824,920

3,298

2,828,218

71,480

(15,578,902)

3,182,152

1,863,739

8,443

1,872,182

Total equity and liabilities

10,141,501

5,054,334

The financial statements on pages 85 to 91 were approved by the board of Directors on 27 April 2022 and signed on its behalf by

Donald Stewart
Chairman of Bidstack Group PLC

The notes on pages 92 to 115 form part of these financial statements.

Bidstack Group PLC Annual Report and Accounts 2021

Company statement of financial position

as at 31 December 2021

ASSETS

Non-current assets

Right of use asset

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

Non-current liabilities

Lease liability

Total non-current liabilities

Current liabilities

Trade and other payables

Lease liability

Total current liabilities

Note

Year ended
31 December 2021
£

Year ended
31 December 2020
£

7,280

7,477,841

7,485,121

15,094,021

6,746,220

21,840,241

7,577

7,477,841

7,485,418

10,376,056

2,286,435

12,662,491

29,325,362

20,147,909

8,950,048

35,375,326

1,589,965

6,508,673

76,457

(23,311,955)

29,188,514

4,180

129,370

3,298

132,668

6,234,261

27,984,716

1,282,556

6,508,673

76,457

(22,190,773)

19,895,890

243,576

8,443

252,019

Total equity and liabilities

29,325,362

20,147,909

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 £1,121,182 (2020: loss of £1,154,593).

The financial statements on pages 85 to 91 were approved by the board of Directors on 27 April 2022 and signed on its behalf by:

Donald Stewart
Chairman of Bidstack Group PLC

The notes on pages 92 to 115 form part of these financial statements.

Bidstack Group PLC

Annual Report and Accounts 2021

Consolidated statement of
changes in equity

for the year ended 31 December 2021

Share
capital
£

Share
premium
£

Share-based
payment
reserve
£

Merger
relief
reserve
£

Reverse
acquisition
reserve
£

Exchange
reserve
£

Warrant
reserve
£

Retained
losses
£

Total
equity
£

Balance 01/01/2020

5,516,759

23,283,880

734,365

6,508,673

(23,320,632)

Issue of shares

717,502

5,032,518

Costs of raising equity

Share-based payments

Loss & total comprehensive
income for the year

(331,682)

548,191

Balance 31/12/2020

6,234,261

27,984,716

1,282,556

6,508,673

(23,320,632)

Issue of shares

2,715,787

8,147,363

Costs of raising equity

Share-based payments

Loss for the year

Loss & total comprehensive
income for the year

(756,753)

307,409

10,589

71,480

(9,183,725)

3,610,800

5,750,020

(331,682)

548,191

(6,395,177)

71,480

(15,578,902)

3,182,152

10,863,150

(756,753)

307,409

(6,297,444)

10,589

Balance 31/12/2021

8,950,048

35,375,326

1,589,965

6,508,673

(23,320,632)

10,589

71,480

(21,876,346)

7,309,103

The notes on pages 92 to 115 form part of these financial statements.

Bidstack Group PLC Annual Report and Accounts 2021

Company statement of changes
in equity

for the year ended 31 December 2021

Share
capital
£

Share
premium
£

Share-based
payment
reserve
£

Merger
relief
reserve
£

Warrant
reserve
£

Retained
losses
£

Total
equity
£

Balance 01/01/2020

5,516,759

23,283,880

734,365

6,508,673

76,457

(21,036,180)

15,083,954

Issue of shares

717,502

5,032,518

Costs of raising funds

Share-based payments

Loss for the year

(331,682)

548,191

5,750,020

(331,682)

548,191

(1,154,593)

Balance 31/12/2020

6,234,261

27,984,716

1,282,556

6,508,673

76,457

(22,190,773)

19,895,890

Issue of shares

2,715,787

8,147,363

Costs of raising funds

Share-based payments

Loss for the year

(756,753)

307,409

10,863,150

(756,753)

307,409

(1,121,182)

Balance 31/12/2021

8,950,048

35,375,326

1,589,965

6,508,673

76,457

(23,311,955)

29,188,514

The notes on pages 92 to 115 form part of these financial statements.

Bidstack Group PLC

Annual Report and Accounts 2021

Consolidated statement of cash flows

as at 31 December 2021

Cash flows from operating activities

(Loss) before taxation

Adjustments for:

Amortisation – Intangibles

Amortisation – Right of use asset

Depreciation

Equity settled share-based payments

Doubtful debts expenses

Interest received

Interest paid

Exchange differences on translation of foreign operations

Changes in working capital

Decrease/(increase) in trade and other receivables

(Decrease)/increase 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

Investment in property, plant and equipment

Net cash flow used in investing activities

Cash flow from financing activities

Proceeds from issue of share capital

Cost of issue

Interest paid

Principal paid on finance leases

Interest received

Net cash generated from financing activities

Increase/(Decrease) in cash and cash equivalents in the year

Cash and cash equivalents at beginning of year

Cash and cash equivalents at the end of the year

The notes on pages 92 to 115 form part of these financial statements.

Bidstack Group PLC Annual Report and Accounts 2021

Year ended
31 December 2021
£

Year ended
31 December 2020
£

(7,958,471)

(6,992,212)

31,195

10,377

24,160

307,409

(2,073)

(180)

3,392

10,589

31,574

19,621

13,021

548,191

(19,265)

(2,525)

1,179

(7,573,602)

(6,400,416)

409,468

961,182

(6,202,952)

892,895

(5,310,057)

(42,291)

10,863,150

(756,753)

(3,392)

(11,045)

180

10,092,140

4,739,792

2,347,114

7,086,906

(1,241,792)

1,457,069

(6,185,139)

(570)

(19,033)

(19,603)

5,750,020

(331,682)

(1,179)

(16,368)

2,525

5,403,316

(801,426)

3,148,540

2,347,114

Company statement of cash flows

for the year ended 31 December 2021

Year ended
31 December 2021
£

Year ended
31 December 2020
£

(1,121,182)

(1,154,593)

10,377

307,409

(180)

1,088

(802,488)

(39,410)

(114,207)

(153,617)

(4,678,554)

10,863,150

(756,753)

(1,088)

(11,045)

180

10,094,444

4,459,785

2,286,435

6,746,220

19,621

548,191

(2,525)

1,134

(588,172)

48,018

168,602

216,620

(5,785,700)

5,750,020

(331,682)

(1,134)

(16,368)

2,525

5,403,361

(753,891)

3,040,326

2,286,435

Cash flows from operating activities

(Loss) before taxation

Adjustments for:

Amortisation – Right of use asset

Share based payments

Interest received

Interest paid

Changes in working capital

Decrease/(increase) in trade and other receivables

(Decrease)/increase in trade and other payables

Net cash generated from/(used in) operations

Cash flow from investing activities

Change in intercompany

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

Interest paid on lease liabilities

Principal paid on finance leases

Interest received

Net cash generated from financing activities

Increase/(Decrease) in cash and cash equivalents in the year

Cash and cash equivalents at beginning of year

Cash and cash equivalents at the end of the year

The notes on pages 92 to 115 form part of these financial statements.

Bidstack Group PLC

Annual Report and Accounts 2021

Notes to the financial statements

1 - General information

Going concern

Bidstack Group PLC (the “Company”) is a public limited
company, limited by shares (not guarantee) and is
incorporated and domiciled in the UK. The address of the
registered office is Plexal Here East, 14 Easy Bay Lane,
London, E15 2GW. 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 on a going concern
basis in accordance with International Financial Reporting
Standards (IFRSs) and International Financial Reporting
Interpretation Committee (IFRIC) interpretations as endorsed
by the European Union (“IFRS-EU”), and those parts of the
Companies Act 2006 applicable to companies reporting
under IFRS.

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

Consolidation

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

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

Although the consolidated financial information has been
issued in the name of Bidstack Group PLC, the legal parent,
it represents in substance continuation of the financial
information of the legal subsidiary, Bidstack Ltd.

Bidstack Group PLC Annual Report and Accounts 2021

Notes to the financial statements (continued)

2 - Summary of significant accounting policies (continued)

the Board confident that such fundraising will be available
to provide the required capital, there can be no guarantee
that such fundraising will be available. Accordingly, this
constitutes a material uncertainty over going concern.

New and amended standard, and interpretations issued and
effective for the financial year beginning 1 January 2021.

The adoption of the following mentioned amendments,
which were all effective for the period beginning 1 January
2021, have not had a material impact on the Group’s and
Company’s financial statements:

•

Interest Rate Benchmark Reform – Phase 2 (Amendments
to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16)

New standards, interpretations and amendments not yet
effective

At the date of approval of these financial statements, the
following standards and interpretations which have not been
applied in these financial statements were in issue, but not
yet effective (and in some cases had not been adopted by
the EU):

presentation of assets and liabilities arising from contracts
with customers, which depends on the relationship between
Company’s performance and the customers’ payment.

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

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

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

• Amendment to IFRS 3 Business Combinations –

• Sales and development of advertising space and

Reference to the Conceptual Framework – effective 1
January 2022*

content which is recognised on delivery accepted by the
customer.

• Amendments to IAS 37: Provisions, Contingent Liabilities

• Sponsorship income which is recognised at the point of

and Contingent Assets – effective 1 January 2022*

delivery of the service.

• Annual Improvements to IFRS Standards 2018-2020

Net finance costs

Cycle – effective 1 January 2022*

• Amendments to IAS 1 Presentation of Financial

Statements: Classification of Liabilities as Current or
Non-current and Amendments to IAS 1: Classification of
Liabilities as Current or Non-current – Deferral of Effective
Date – effective 1 January 2023*

• Amendments to IAS 1 Presentation of Financial

Statements and IFRS Practice Statement 2: Disclosure of
Accounting Policies – effective 1 January 2023*

• Amendments to IAS 8 Accounting policies, Changes
in Accounting Estimates and Errors –Definition of
Accounting Estimates – effective 1 January 2023*

*Not yet endorsed in the UK

Bidstack Group PLC is currently assessing the impact of
these new accounting standards and amendments.

Revenue Recognition

Under IFRS 15, revenue is recognised to depict the transfer
of promised goods or services to a customer in an amount
that reflects the consideration to which the Company
expects to be entitled in exchange for those goods and
services. The underlying principle is a five-step approach
to identify a contract, determine performance obligations,
the consideration and the allocation thereof, and timing of
revenue recognition. IFRS 15 also includes guidance on the

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

Bidstack Group PLC

Annual Report and Accounts 2021

Notes to the financial statements (continued)

2 - Summary of significant accounting policies (continued)

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.

borrowing rate on commencement of the lease is used.

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

• Amounts expected to be payable under any residual value

guarantee;

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

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

• The company has a legally enforceable right to set off
current tax assets against current tax liabilities, and

• The deferred tax assets and deferred tax liabilities relate

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

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

Valuation of investments

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

Impairment of fixed asset investments

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

Leased assets

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

• Leases of low value assets; and

• Leases with a duration of 12 months or less.

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

• Any penalties payable for terminating the lease, if the

term of the lease has been estimated on the basis of the
termination option being exercised.

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

• Lease payments made at or before commencement of

the lease;

•

Initial direct costs incurred; and

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

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

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

Goodwill

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

Intangible assets

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

Bidstack Group PLC Annual Report and Accounts 2021

Notes to the financial statements (continued)

2 - Summary of significant accounting policies (continued)

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:

shown in equity as deduction net of tax, before proceeds.

Share-based payments

• Website costs – 5 years

• Trademarks – 10 years

• Brand – 5 years

• Software – 5 years

Property, plant and equipment

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

• Computer equipment – 33.33% straight line

• Office equipment – 20% straight line

Cash and cash equivalents

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

Financial assets

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

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

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

Financial liabilities

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

Share Capital

Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new share or options are

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.

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

Bidstack Group PLC

Annual Report and Accounts 2021

Notes to the financial statements (continued)

3 - Critical accounting estimates and judgements (continued)

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 22.

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 18. 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.

Impairment of Goodwill

The Group records all assets and liabilities acquired in
business combinations, including goodwill, at fair value.
Goodwill is not amortised but is subject, at a minimum, to
annual tests of impairment. The initial goodwill recorded,
and subsequent impairment review require management to

determine appropriate assumptions (which are sources of
estimation uncertainty) in relation to cash flow projections,
the terminal growth rate and the discount rate used to
discount cash flows to present value.

Useful economic lives of intangible and tangible assets

Annual amortisation and depreciation charge for intangible
and tangible assets is sensitive to changes in the estimated
useful economic lives and residual values of the assets.
The useful economic lives and residual values are re-
assessed annually. They are amended when necessary to
reflect current estimates, based on cash generating unit
performance, technological advances, future investments,
economic utilisation and the physical condition of the assets.

Impairment of investment in subsidiary undertakings of
the Company

Each year the Company considers whether there are
any indications that the investments in its subsidiary
undertakings are impaired. Some indications of impairment
are both external such as changes in technology, interest
rates and the impact of Covid-19 on the subsidiary
undertaking and internal such as losses incurred in the year.
In the event indicators of impairment are identified the
Group performs stress-tested net cash flow assessments
on the forecasted cash flow projections on the subsidiary
undertaking and provide for any shortfall in the carry value
of the subsidiary undertaking against future cashflow
projections.

4 - Segmental information

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

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

Revenue by Geographical Region

EMEA

31 December
2021
£

31 December
2020
£

863,691

399,874

1,759,722

1,295,746

2,623,413

1,695,620

Bidstack Group PLC Annual Report and Accounts 2021

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 & equipment

Amortisation of Right of use assets

Amortisation of intangible assets

Equity settled share-based payments

Premises costs payments

Auditors’ remuneration (note 7)

6 - Exceptional items

Nonrecurring regulatory costs

Restructuring costs

7 - 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

31 December
2021
£

31 December
2020
£

24,160

10,377

31,195

307,409

338,369

51,000

13,022

19,621

31,575

548,191

326,386

42,700

31 December
2021
£

31 December
2020
£

124,555

98,000

222,555

31 December
2021
£

31 December
2020
£

19,000

26,500

5,500

51,000

17,000

21,000

4,700

42,700

Bidstack Group PLC

Annual Report and Accounts 2021

Notes to the financial statements (continued)

8 - Employees and directors

Staff costs, including directors, comprise:

Wages and salaries

Redundancy costs

Social security costs

Share-based payment expense

Directors’ remuneration is as follows:

Salaries and fees

Bonus

Pension

Redundancy

Share-based payment expense

Average number of directors

Average number of employees

Key management compensation

31 December
2021
£

31 December
2020
£

4,022,066

2,792,060

50,000

318,255

307,408

306,064

425,002

4,697,729

3,523,126

31 December
2021
£

31 December
2020
£

576,250

527,500

4,623

30,000

70,441

1,208,814

2021

520,000

3,284

116,745

640,029

2020

The directors consider that the key management comprises the directors of the Group and the Head of
Sales, their emoluments are set out below:

Salaries and fees

Bonus

Pension

Share-based payments

Total

Bidstack Group PLC Annual Report and Accounts 2021

31 December
2021
£

31 December
2020
£

782,240

577,473

18,223

124,343

1,502,279

729,322

18,028

161,687

909,037

Notes to the financial statements (continued)

8 - Employees and directors (continued)

Highest paid director

Salaries and fees

Pension

Share-based payments

Total

9 - Finance income and finance costs

Other interest receivable and similar income

Total finance income

Other interest payable

Total finance costs

31 December
2021
£

31 December
2020
£

310,000

150,000

1,320

11,430

1,971

322,750

151,971

31 December
2021

180

31 December
2020
£

2,525

31 December
2021
£

31 December
2020
£

3,392

1,179

Bidstack Group PLC

Annual Report and Accounts 2021

Notes to the financial statements (continued)

10 - Taxation

Reconciliation of effective tax rate

Tax assessed for the year is lower than (2020: lower than) the standard rate corporation tax of 19% (2020:
19%). The differences are explained below:

31 December
2021
£

31 December
2020
£

Loss before tax

(7,958,471)

(6,992,208)

Tax using the UK corporation tax rate of 19% (2020: 19%)

(1,512,110)

(1,328,520)

Fixed asset differences

Additional deduction for R&D expenditure

Surrender of tax losses for R&D expenditure

Foreign tax – other

Current tax – other

Expenses not deductible for tax purposes other than goodwill
amortisation and impairment

Adjustment for prior period

Deferred tax not recognised

Total tax charge

(1,405)

(678,618)

1,200,632

(71,745)

(916,272)

76,045

110,994

(744,756)

(597,034)

987,202

1,390,248

(1,661,027)

(597,035)

The Group has tax losses of approximately £17,114,866 (2020: loss of £14,612,816) 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 Group has not recognised deferred tax asset due to there being insufficient
evidence of short-term recoverability.

11 - Loss per share

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

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

100

Bidstack Group PLC Annual Report and Accounts 2021

Notes to the financial statements (continued)

12 - Intangible assets - Group

Website costs
£

Trademarks
£

Software
£

Brand
£

Goodwill
£

Total
£

48,618

14,915

9,659

24,574

48,618

24,574

9,338

33,912

890

570

1,460

193

204

397

1,460

397

145

542

88,205

29,402

168,000

335,115

570

88,205

29,402

168,000

335,685

6,785

16,284

23,069

2,262

5,428

7,690

24,155

31,575

55,730

88,205

29,402

168,000

335,685

88,205

29,402

168,000

335,685

23,069

16,284

39,353

7,690

5,428

13,118

55,730

31,575

86,925

Cost

At 1 January 2020

Additions

At 31 December 2020

Amortisation

At 1 January 2020

Charge

At 31 December 2020

Cost

At 1 January 2021

Additions

At 31 December 2021

Amortisation

At 1 January 2021

Charge

At 31 December 2021

Net Book Value

At 31 December 2021

14,706

918

48,852

16,284

168,000

248,760

At 31 December 2020

24,044

1,063

65,136

21,712

168,000

279,955

Bidstack Group PLC

Annual Report and Accounts 2021

101

Notes to the financial statements (continued)

13 - Goodwill and impairment

Goodwill impairment

The requirement for an impairment of Goodwill has been tested under the value in use method. Under
both the standard review and the sensitised review, it was determined that an impairment of Goodwill will
not be required due to resulting headroom available under both approaches.

Key Assumptions used for the value in use calculation

The value in use was determined by discounting future group cash flows from 2022-2025. Our key
assumptions are as follows:

• Group revenues, cost of sales and direct expenses have been forecasted for years 2022, 2023, 2024

and 2025.

• Long-term growth is assumed at 3% p.a.

• Tax rate is assumed at 25% which is in line with the rate in the years we have earnings.

• Capex requirements have been forecasted for the years 2022, 2023 and 2024. For 2025, it is assumed

to be in line with 2024.

• WACC has been calculated at 8.82% based on inputs from 31st December 2021.

• The year end cash balance for 2021 has been added back to the group value

Based on the above assumptions, a headroom of £263.9m was achieved indicating that an impairment of
Goodwill isn’t required as at 31 December 2021.

Under the sensitised value in use approach, we have made to following assumptions:

• Growth rate into perpetuity is at 2% (1% decrease)

• WACC at 9.82% (increase of 1%)

• Tax rate assumed at 20%

• Working capital investment as a percentage of revenue growth has increased by 1%

Based on the sensitised assumptions, a headroom of £212.8m was achieved which indicates an
impairment of Goodwill isn’t required as at 31 December 2021.

Management is satisfied that a reasonable change in the key assumptions used in assessing the
recoverable amounts of the cash generating unit would not give rise to the recoverable amount
exceeding the value in use of the Group.

102

Bidstack Group PLC Annual Report and Accounts 2021

Notes to the financial statements (continued)

14 - Property, plant and equipment - Group

Office
Equipment
£

Computer
Equipment
£

Cost

At 1 January 2020

Additions

Business combinations

At 31 December 2020

Depreciation

At 1 January 2020

Charge

At 31 December 2020

Cost

At 1 January 2021

Additions

At 31 December 2021

Depreciation

At 1 January 2021

Charge

At 31 December 2021

Net book value

8,407

2,478

10,885

1,217

2,984

4,201

10,885

2,913

13,798

4,201

5,333

9,534

28,976

16,555

45,531

13,789

10,038

23,827

45,531

39,378

84,909

23,827

18,827

42,654

Total

37,383

19,003

56,416

15,006

13,022

28,028

56,416

42,291

98,707

28,028

24,160

52,188

At 31 December 2021

4,264

42,255

46,519

At 31 December 2020

6,684

21,704

28,388

Bidstack Group PLC

Annual Report and Accounts 2021

103

Notes to the financial statements (continued)

15 - Lease liability

Nature of leasing activities

Bidstack Group PLC leases several computer equipment assets for its office space. Lease terms are
negotiated on an individual basis and contains separate terms and conditions. The Group did not hold any
property related long-term lease commitments during the year.

31 December 2021
No.

31 December 2021
£

4,180

3,298

7,478

Lease Liability
£

8,443

10,080

657

(11,702)

7,478

31 December 2021
£

3,715

4,335

8,050

Number of active leases

Lease liability at year end

Non-current

Lease liability

Current

Lease liability

Total lease liability

Analysis of lease liability

At 1 January 2021

Additions

Interest expense

Lease payments

At 31 December 2021

Analysis of gross value of lease liabilities

Maturity of the lease liabilities is analysed as follows:

Within 1 year

Later than 1 year and less than 5 years

After 5 years

At 31 December 2021

104

Bidstack Group PLC Annual Report and Accounts 2021

Notes to the financial statements (continued)

16 - Right of use assets

Cost

At 1 January 2021

Additions

At 31 December 2021

Amortisation

At 1 January 2021

Charge

At 31 December 2021

Computer
Equipment
£

32,535

10,080

42,615

24,958

10,377

35,335

Cost

At 1 January 2020

Additions

At 31 December 2020

Amortisation

At 1 January 2020

Charge

At 31 December 2020

Net book value

7,280

Net book value

17 - Investments - Company

Cost

At 1 January 2021

Additions

Investments
in subsidiaries
£

Cost

7,477,841

At 1 January 2020

Additions

At 31 December 2021

7,477,841

At 31 December 2020

Impairment

At 1 January 2021

Charge

At 31 December 2021

Impairment

At 1 January 2020

Charge

At 31 December 2020

Computer
Equipment
£

32,047

488

32,535

5,337

19,621

24,958

7,577

Investments
in subsidiaries
£

7,477,841

Net book value

7,477,841

Net book value

7,477,841

Bidstack Group PLC

Annual Report and Accounts 2021

105

Notes to the financial statements (continued)

17 - Investments - Company (continued)

Principal subsidiary undertakings of the Company

On 05 October 2020, the Group incorporated a company, Bidstack SIA, in Latvia. On the date of incorporation, the entire issue
of 2,800 shares was allotted and issued to Bidstack Limited for £2,614 (€2,800)

The subsidiary undertaking of the Company is presented below:

Subsidiary

Country of
incorporation

Proportion of ordinary
shares directly held

Registered office

Bidstack Limited

England and Wales

100%

Pubguard Limited

England and Wales

100%

Bidstack SIA

Latvia

100%

Plexal, Here East, 14 East Bay Lane,
London, E15 2GW

Krišjāņa Valdemāra iela 21 - 11, Rīga,
Latvia, LV-1010

The principal activity of Bidstack Limited is the provision of native in-game advertising. The principal activity of Pubguard
Limited is to provide content security and assurance to cross platform advertisers. The principal activity of Bidstack SIA is that
of computer programming activities.

18 - Trade and other receivables

Group

31 December
2021
£

31 December
2020
£

Company

31 December
2021
£

31 December
2020
£

Trade receivables

1,269,368

1,200,922

Prepayments and accrued income

Other receivables

Corporation tax

174,172

392,225

916,271

370,479

273,357

546,542

38,202

33,337

15,055,819

10,342,719

2,752,036

2,391,300

15,094,021

10,376,056

As at 31 Dec 2021, the Company receivables included an Intercompany receivable due from Bidstack Ltd of £13,294,313 (FY20:
£10,030,230).

Analysis of trade receivables

Days

<30

31-60

61 -90

> 90

Total Gross

ECL

Total Net

2021

2020

745,922

190,612

282,186

50,648

1,269,368

855,855

276,779

9,010

59,278

1,200,922

106

Bidstack Group PLC Annual Report and Accounts 2021

1,269,368

1,200,922

Notes to the financial statements (continued)

18 - 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 Group measures ECL based on historical data available to management in addition
to current and forward-looking information utilising managements knowledge of their customers. The Directors consider that
the carrying amount of trade and other receivables is approximately equal to their fair value.

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.

19 - Cash and cash equivalents

Group

31 December
2021
£

31 December
2020
£

Company

31 December
2021
£

31 December
2020
£

Cash and cash equivalents

7,086,906

2,347,114

6,746,220

2,286,435

20 - Trade and other payables

Trade payables

Taxation and social security

Other payables

Accruals

21 - Share capital and reserves

Allotted, called up and fully paid

At 1 January 2021

Issue of placing shares

Cost of raising equity

Group

31 December
2021
£

474,661

532,822

27,778

1,789,659

2,824,920

31 December
2020
£

494,671

153,353

46,086

1,169,629

1,863,739

Company

31 December
2021
£

31 December
2020
£

87,901

6,163

1,525

33,781

129,370

92,896

4,200

146,480

243,576

Ordinary 0.5p
shares
No.

Share
Capital
£

Share
Premium
£

388,374,057

6,234,261

27,984,716

543,157,516

2,715,787

8,147,363

(756,753)

As at 31 December 2021

931,531,573

8,950,048

35,375,326

Bidstack Group PLC

Annual Report and Accounts 2021

107

Notes to the financial statements (continued)

21 - Share capital and reserves (continued)

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

The following describes the nature and purpose of each reserve within owner’s equity:

Share capital: Amount subscribed for shares at nominal value.

Share premium: Amount subscribed for share capital in excess of nominal value, less costs of share issue.

Share-based payment reserve: The share-based payment reserve comprises the cumulative expense representing the extent
to which the vesting period of share options has passed and management’s best estimate of the achievement or otherwise of
non-market conditions and the number of equity instruments that will ultimately vest.

Merger relief reserve: Effect on equity of the consideration shares issued over their nominal value.

Reverse acquisition reserve: Effect on equity of the reverse acquisition of Bidstack Limited.

Warrant reserve: The warrant reserve comprises the cumulative expense representing the extent to which the vesting period
of warrants has passed and management’s best estimate of the achievement or otherwise of non-market conditions and the
number of equity instruments that will ultimately vest.

Exchange reserve: The exchange reserve represents foreign exchange differences in re-translation.

Retained losses: Cumulative realised profits less cumulative realised losses and distributions made, attributable to the equity
Shareholders of the Company.

22 - Share options and warrants

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.

2021

Number

Weighted Average
Exercise Price
£

2020

Number

Weighted Average
Exercise Price
£

Outstanding at the beginning of the year

Granted during the year

Forfeited/waived during the year

Total outstanding

Total exercisable

46,382,842

51,503,335

(36,453,342)

61,432,835

11,799,503

0.11

0.03

0.14

0.04

0.09

38,549,503

7,833,339

46,382,842

33,049,500

0.18

0.11

0.13

108

Bidstack Group PLC Annual Report and Accounts 2021

Notes to the financial statements (continued)

22 - Share options and warrants (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

26 Jul 21

21 Dec 21

29 Oct 19

04 Jun 20

Share price at grant date

0.0193

0.0360

0.2050

0.0563

Exercise prices

0.0200

0.0360

0.19

0.1075

0.25

0.60

Risk free rate

0.610%

0.810%

0.750%

0.307%

Expected volatility

106.85%

127.16%

94.59%

129.53%

Contractual life

6.5 years

10 years

The weighted average contractual life of the options is 4 years and 173 days (2020: 4 years and 279 days).

During the year, in order to incentivise staff, the company replaced 9,416,673 options with an equivalent number of options on
more favourable terms.

The expected price volatility is based on the historical volatility (based on the expected life of the options).

Warrants

2021

2020

Weighted Average
Exercise Price
£

Number

Weighted Average
Exercise Price
£

Number

Outstanding at the beginning of the year

1,250,001

3,887,912

Issued during the year

Forfeited during the year

Exercised during the year

(1,637,500)

(1,000,411)

Total outstanding and exercisable

1,250,001

10p

The Company granted no warrants during the year ended 31 December 2021.

The charge for the year for warrants and options amounted to £307,408 (2020: £548,192), charged to the statement of
comprehensive income

Long Term Incentive Plan

On 21 December 2021 the Company adopted a new Long Term Incentive Plan (“LTIP”) and issued 91,000,000 LTIP awards.
For the purposes of the new LTIP awards to the Executives and others, the awards have been made in two categorises, each
subject to difference performance criteria.

Bidstack Group PLC

Annual Report and Accounts 2021

109

Notes to the financial statements (continued)

22 - Share options and warrants (continued)

Long Term Incentive Plan (continued)

Revenue is the performance target of the first set of LTIP awards. The vesting schedule below highlights
the details of the achievement of the awards.

Revenue
% on target

Vesting Schedule
% vesting

90 and above

100

Between 75 and 90

50-100 (straight line basis between points)

Below 75

The LTIP awards also include an operating cost element which, if achieved, can increase the amount of
vesting y 10%, in the event the revenue target is missed. Any awards not vesting from Year 1 will be rolled
into the Year 2 award.

EBITDA - Earnings Before Interest, Tax, Depreciation and Amortisation is the performance target of the
second set of LTIP awards. The vesting schedule below highlights the details of the achievement of the
awards.

EBITDA
% on target

100 and above

Between 95 and above

90 and above

Below 90

Vesting Schedule
% vesting

100

The LTIP awards to each of the Executives in each set of awards will vest over a three year period. All of
the LTIP awards, when vested, will be exercisable on payment of nominal value only.

The relevant targets will be set by the Remuneration Committee based on the consensus of market
expectations. Notwithstanding the above performance criteria, all of the LTIP awards will vest in the event
of a change of control of the Company.

110

Bidstack Group PLC Annual Report and Accounts 2021

Notes to the financial statements (continued)

22 - Share options and warrants (continued)

Long Term Incentive Plan (continued)

Outstanding at the beginning of the year

Granted during the year

Total outstanding

Total exercisable

2021

Number

91,000,000

Weighted Average
Exercise Price
£

2020

Number

Weighted Average
Exercise Price
£

0.05

The weighted average contractual life of the options is 2 years and 356 days (2020: none).

The Black-Scholes model was used for calculating the fair value of the LTIP options at grant date. The model inputs for each of
the options issued were:

Grant date

Share price at grant date

Exercise prices

Risk free rate

Expected volatility

Contractual life

21 Dec 21

£0.0360

0.810%

127.16%

6.5 years

The expected price volatility is based on the historical volatility (based on the expected life of the options).

23 - Premises costs commitments

Group

31 December
2021
£

31 December
2020
£

Company

31 December
2021
£

31 December
2020
£

Within one year

333,580

352,800

Bidstack Group PLC

Annual Report and Accounts 2021

111

Notes to the financial statements (continued)

24 - 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:

Group

31 December
2021
£

31 December
2020
£

Company

31 December
2021
£

31 December
2020
£

1,269,368

1,200,922

15,011,273

10,332,718

316,215

7,086,906

8,672,489

97,626

15,000

10,000

2,347,113

6,746,203

2,286,435

3,645,661

21,772,476

12,629,153

Trade receivables

Other receivables

Cash and cash equivalents

Total financial assets

Financial liabilities

Financial liabilities measured at amortised cost comprise trade payables, other payables and accruals, as follows:

Group

31 December
2021
£

474,661

9,440

1,789,659

2,273,760

31 December
2020
£

494,671

7,918

1,164,629

1,667,218

Company

31 December
2021
£

87,901

1,524

33,781

123,206

31 December
2020
£

92,896

172,581

265,477

Trade payables

Other payables

Accruals

Total financial liabilities

There is no significant difference between the fair value and the carrying value of financial instruments.

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

112

Bidstack Group PLC Annual Report and Accounts 2021

Notes to the financial statements (continued)

24 - Financial instruments (continued)

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 19.

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 company 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.

The Board recognises that having a focus of revenue within one or few clients represents a concentration of risk and is
incentivised to diversify the Group’s customer base to mitigate this. The Group seeks to obtain credit insurance, or obtain
advance payment on 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 £13,294,313 at 31 December 2021
(2020: £10,030,230) and is repayable on demand.

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.

Foreign currency risk

The Group operates internationally and is exposed to foreign currency risk arising on cash and cash equivalents and receivables
denominated in a currency other than the respective functional currencies of the Group. The currencies in which these
transactions primarily are denominated are US Dollar (USD) and Euros (EUR).

The following balances held in foreign currency at the reporting date are:

EUR

USD

Total financial liabilities

Sensitivity analysis

Group

31 December
2021
£

27,639

11,110

38,749

31 December
2020
£

44,758

Company

31 December
2021
£

22,796

31 December
2020
£

42,521

Bidstack Group PLC

Annual Report and Accounts 2021

113

Notes to the financial statements (continued)

24 - Financial instruments (continued)

A 5 per cent increase of sterling against the respective currencies at 31 December 2021 would have
increased/(decreased) equity and profit and loss by the amounts shown below:

Group

EUR

USD

Total net exposure

Company

EUR

USD

Total net exposure

Profit and loss

31 December
2021
£

31 December
2020
£

1,382

556

1,938

2,238

Profit and loss

31 December
2021
£

31 December
2020
£

1,140

2,126

Equity

31 December
2021
£

(1,382)

(556)

(1,938)

Equity

31 December
2021
£

(1,140)

31 December
2020
£

(2,238)

31 December
2020
£

(2,126)

25 - Related parties

Transactions with subsidiaries

During the year, cash advances of £4,493,176 (2020: £5,897,736) were made to Bidstack Ltd and incurred
net costs of £1,229,093 that were paid on behalf by the Company (2020: £376,746). 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 £13,294,313 (2020: £10,030,230).

During the year, cash advances of £nil (2020: £17,900) and repayments of £7,500 (2020: £73,677) were
made to Pubguard Ltd. Net costs were incurred of £5,158 that were paid on behalf by the Company
(2020: £54,496). 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 £138,306 (2020: £140,648).

During the year, net costs were incurred of £1,416,812 by Bidstack SIA that were paid on behalf of the
Company (2020: £160,841). 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 amounts to £1,578,653 (2020: £161,841).

Transactions with other related parties

John McIntosh, Finance Director invoiced £3,631 (2020: £1,902) to the Company for reimbursement of
expenses for the year. As at 31 December 2021, £1,307 (2020: £2,278) was owing to Mr McIntosh.

Francesco Petruzzelli, Director, claimed £16,133 (2020: £14,457) from the Company for reimbursement
of expenses for the year. As at 31 December 2021, £nil (2020: £655) was due from Mr Petruzzelli to the
company.

James Draper, Director and Chief Executive Officer, claimed £791 from the Company for reimbursement

114

Bidstack Group PLC Annual Report and Accounts 2021

of expenses for the year (2020: £1,610). As at 31 December 2021, £Nil (2020: £Nil) was owing to Mr Draper.

Neider Investments, a common entity under the control of Director Bryan Neider, invoiced the company
£24,892 (2020: Nil). £17,365 relates to services carried out in his role as Director and £7,527 relate to a
reimbursement of expenses for the year. As at 31 December 2021, £Nil (2020: Nil) was owning to Neider
Investments.

Bidstack Group PLC

Annual Report and Accounts 2021

115

Appendix

Glossary

AAA (Triple-A) Games

An informal classification of games produced and distributed by a mid-sized or major
publisher.

Ad Approval

Process of vetting and approving an ad creative prior to it being served.

Ad Inventory

Available advertisement inventory generated and made available to be sold.

Ad Measurement

This is a broad term in advertising encompassing metrics, analytics and outcomes that are
measurable for the media buyer.

Ad Server

A platform that allows an advert to be served onto an ad unit.

Ad Unit

A container placed alongside online content that allows advertisement creatives to be
displayed.

Agency Holding Groups

Typically, this includes the big 6 media agency holding groups which are: WPP, Omnicom,
Publicis, Denstu, IPG (Interpublic Group) and Havas.

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Bidstack Group PLC Annual Report and Accounts 2021

Appendix Glossary Continued

Artificial Intelligence (AI)

AI is intelligence demonstrated by machines.

Banner

An online advertisement ad unit which has specific dimensions.

Brand Awareness

Measures the extent which customers are able to recall or recognise a brand under two
different conditions; exposed and non-exposed groups.

Brand Perception

Measures the consumers perceived quality of the brand.

Brand Recall

Refers to the ability of the consumer to correctly generate a brand from memory when
prompted by a product category.

Brand Recognition

Refers to the ability of the consumer to confirm they have seen or heard of a given brand.

Brand Uplift Studies

Brand uplift studies measure how well a brand has been perceived by an audience.
Metrics and analytics include brand awareness, brand recall, brand recognition, brand
perception and purchase intent.

Campaign Activation

A process of putting an advertisement campaign together to be launched and activated
on content.

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Annual Report and Accounts 2021

117

Appendix Glossary Continued

Comscore

An American media measurement and analytics company providing marketing data and
analytics to enterprises; media and advertising agencies.

CPG

Consumer Packaged Goods; sometimes referred as FMCG, Fast Moving Consumer Goods.

Deal ID

The identification of a private programmatic campaign deal shared between the
respective buyers and seller.

Demand or Buy Side

Any media buyer looking to purchase advertisement inventory. This would include
advertisers, brands, media agencies, resellers, DSPs or publishers.

Dentsu DGame

A specialist gaming division within the agency holding group, Dentsu.

Display ads

An online form of advertising typically displaying static or animated advertisement creatives.

Esports

Competitive gaming which is typically played by professional gamers on multiplayer video
games for spectators.

F2P games

Also known as free-to-play games, are games that are free to download and play with
revenue generated from microtransactions, loot boxes and/or advertisements.

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Bidstack Group PLC Annual Report and Accounts 2021

Appendix Glossary Continued

Game Engine

A software development environment designed for game developers to build games.

IAB

The Internet Advertising Bureau is an advertising business organisation the develops
industry standards, conducts research and provides legal support for the online
advertising industry.

IAB Gold Standard

Certification offered by the IAB when a media organisation has evidenced measures to
reduce ad fraud, uphold brand safety, improve user experience and comply with GDPR
and ePrivacy laws.

In-Housing

Bring tasks and responsibilities back in-house away from outsourced or 3rd parties.

In-Stream

Advertisements occurring during live video streams of an activity such as a live stream of
an esport tournament.

Interstitials

Interstitial ads are full-screen ads that cover the interface of their host app.

Long tail

Refers to small publishers that cover niche content with generally low traffic levels.

Loot Boxes

A form of monetisation, players buy boxes directly to redeem virtual items or currency.

Bidstack Group PLC

Annual Report and Accounts 2021

119

Appendix Glossary Continued

Lumen

Lumen is an independent company that measure audience attention through
eye-tracking technology. https://www.lumen-research.com/

Machine Learning

An application of AI that provides systems the ability to automatically learn and improve
from experience without being explicitly programmed.

Malvertising

Also known as malicious ads, is the use of online advertisements to spread malware
and compromise systems. Generally this occurs through the injection of unwanted or
malicious code into ads.

Metadata

A set of data that describes and gives information about other data. In other words it is
“data about data”.

Microtransactions

A business model where users can purchase virtual items for small amounts of money.
Microtransactions often appear in free-to-play games.

Nielsen

An information, data and market measurement firm.

O&O

Owned and operated, in media this usually refers to published content along with the
monetisable opportunities around it.

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Bidstack Group PLC Annual Report and Accounts 2021

Appendix Glossary Continued

Open Exchange

An open digital advertising marketplace which aggregates inventory from multiple
partners allowing buyers to bid manually or programmatically to purchase ad impressions.

Moat by Oracle

A measurement and marketing analytics suite designed to help advertisers, publishers
and platforms measure media performance.

Purchase Intent

Is defined as a measure of the strength of a consumers intention to perform a specific
behaviour or make the decision to buy a product or service.

Rewarded Video

An ad unit that offers users a clear value exchange where users opt-in to watch a video
advert and receive in-app rewards in return.

SDK

Software development kit, is a collection of software development tools in one installable
package.

Self-service

Where a platform offers the client the necessary tools and features to manage their own
usage of a service.

Self-Sign-Up

A setup allowing a consumer to sign up and use a service without interaction with the
service provider.

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121

Appendix Glossary Continued

Supply or Sell Side

Any partner looking to sell advertisement inventory. This would include game developers,
game publishers, streaming platforms or game engines.

Supply Side Platform or Sell Side Platform

Commonly referred to as an SSP, is a platform enabling online publishers to manage their
own advertising inventory, populate it with ads and receive revenue.

Third Party Verification

A process of getting an independent party to review and confirm a customer’s information
and intentions to ensure accuracy.

Tracking Pixels

A small snippet of code that allows you to track and gather information on online activities
from whether a creative has been displayed to how they browse.

User interface, a means in which a person controls a software application
or hardware device.

Viewability

A measure of whether a given advert was actually seen by a human being, as opposed to
being out of view or served as the result of automated activity.

Virtual reality, a simulated experience that can be similar to or completely different from
the real world.

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Contact
Let’s continue
the conversation

We’re always excited to start new
conversations with anyone interested
in Bidstack, we look forward to hearing
from you.

investors@bidstack.com

Bidstack Group PLC

Annual Report and Accounts 2021

123