ANNUAL REPORT
& ACCOUNTS
2022
Bidstack Group PLC Annual Report and Accounts For the year ended 31 December 2022 Registered number 04466195
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Contents
Bidstack Group PLC
Annual Report and Accounts
For the year ended 31 December 2022
Registered number 04466195
CEO’s Letter
Market Opportunity
Meet the Team
Highlighting Our Finest: Celebrating the Best Moments and Achievements of the Year
Bidstack’s Platform Powering Multiple Stakeholders
Expanding our Reach: Growing our Network of Global Publishers & Developers
Bidstack and Sports Interactive: Bridging the Authenticity Gap Between Virtual and Real-World Football Experiences
Bidstack and Inlogic Games: Enhancing Realism and Unlocking New Revenue Through In-Game Advertising
Partnering with Powerhouses: Working with Global Advertisers
Why a Leading US Retail Grocer Decided It Was Time to Enter Gaming
How Winamax Extended Their Brand Reach Beyond The Traditional Matchday Window
One Football: No One Gets You Closer To The Game
Lumen: Attention-first Advertising Powered By Predictive Eye-Tracking
Introducing Bidstack Sports
Investment Case
Key financial highlights of 2022
Company Information
Chairman’s Statement
Strategic Report
Governance
Director’s Report
Statement of Directors’ Responsibilities
Independent Auditor’s Report
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Company Statement of Financial Position
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Consolidated Statement of Cash Flows
Company Statement of Cash Flows
Notes to the Financial Statements
Bidstack Group PLC
Annual Report and Accounts 2022
2
James Draper
CEO’s Letter
Bidstack is maturing as a business as we focus on ensuring our technology underpins the
growing in-game advertising economy to achieve our $100 million revenue goal over the
medium term.
2022 will be looked back upon as the year when the company made the operational shift
from early stage to a scale-up business.
The functionality of our monetisation offering to developers, additional use-cases for
our technology across the game studios we are working alongside, grow our network of
titles, encourage the IAB (Internet Advertising Bureau) and MRC (Media Rating Council)
to establish clear guidelines for measurement within the in-game advertising industry and
licensing our technology.
Looking back at 2022 we achieved all of our operational targets.
The IAB and MRC published guidelines through June and August of 2022 for intrinsic
in-game advertising, the in-gameplay format. This step has seen the quantity and size of
the request for proposals multiply through the last 12 months. Media buying software,
the demand-side platforms (DSP) are adopting intrinsic in-game as a format and we are
seeing global demand increasing.
We will see through 2023, intrinsic in-game on the open exchange, meaning fully
automated trading of our inventory. This would not have been possible without the
increased lobbying and efforts of our team working with the advertising community to
promote gaming as a format.
We’re expecting automated trading of our in-game contracted inventory to make up a
third of our 2023 revenue, which will continue to grow as a proportion.
As we have refined our offering to being a gaming supply-side platform (SSP) and a
content management system (CMS) tool, we have added additional formats into our
network.
We are empowering game developers and publishers to control all advertising spaces
through our AdConsole portal.
Bidstack Group PLC
3
Annual Report and Accounts 2022
We now empower developers to monetise intrinsic in-game, reward-video, in-menu and
sponsorship activations, all through our platform. This makes Bidstack the only gaming
SSP with this capability relative to our competition.
Why is this important? Game publishers have made it clear they don’t want multiple
monetisation platforms or SDKs to manage, so having one clear offering stands us out as a
logical partner. With our portfolio of titles growing to over 250 contracted, up 4x this time
last year. We can see our impact in the gaming ecosystem is growing.
2015
2020
2021
2017
2018/19
Bidstack is founded in2015,
initialy as programmatic OOH
35 brands across multiple
markets deploying test spend
AAA publisher agreement for a multi year and multiple advertising
format deal for the publisher’s mobile portfolio and exclusivity to
one of the world’s largest sporting gaming franchises
58 games & 70 brands are using the platform
Product offer grows to 2 ad-formats with In-Menu going live
Pivoted in 2017 into the virtual
world, contract with SEGA
Europe’s Football Manager
Acquisition of Pubguard
Bidstack Group lists on AIM
via reverse into Kin Group
In-Game SDK launch + first
programmatic campaign (TTD)
Bidstack Group PLC
Annual Report and Accounts 2022
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From our initial move into the gaming space, we’ve ensured we build out our own
proprietary technology stack, protect our processes with patents and ensure that the
platform could be licensed to third parties, potentially under a white-label. In 2022, we
signed our first licensed customer, Adways.
We entered into an agreement with Adways, where they will onboard games themselves in
Asia Pacific, on to our white-labelled SSP, before connecting their buy-side demand to our
platform and run their own in-game advertising business. Bidstack takes a percentage of
everything sold, whilst providing technical support and our infrastructure. Low touch, high
margin.
We’ve seen that sports teams have had a desire to utilise our platform. To date, sports
rights holders, such as teams or leagues, haven’t been able to control their virtual IP,
whether that be pitch, track or court-side hoardings, shirt sponsorships, car liveries or
skins, in real-time.
Through our AdConsole, sports IP can target messaging via their brand partners to gamers
based on their age, geo, gender or anything happening within the gameplay. Whether it be
a success or failure within the game.
As a club or franchise, teams can connect with fans of their team, using spaces within
the gaming application to communicate on a one-to-one level. If a team has just won
the ‘championship’ they are competing with, just like with the teams’ social media reach,
messaging can instantly be pushed out around their gaming IP to reflect that real-world
success, complete with offers to their loyal or net-new fanbase.
Teams are able to monetise themselves, or if they wish, can add their inventory to take
advantage of Bidstack’s marketplace.
The initial contract with Azerion was for global exclusivity, but as it became clear that
Azerion’s sales footprint didn’t stretch beyond Europe, the company took the decision to
add boots on the ground in the US, the biggest advertising market.
Bidstack and Azerion carved out territories from the global agreement to ensure that
Azerion’s lack of sales footprint didn’t harm our gaming network. The resellers we took
on across APAC, India and MENA have given our company true global reach to the
advertising community.
Azerion has not honoured their side of the contract and failed to pay for the services
Bidstack Group provided, thus Bidstack is pursuing Azerion for unpaid invoices.
This has given Bidstack the commercial freedom to connect the growing list of demand
sources directly into our SSP and the team we have in place now makes us more confident
than ever before that the company is about to have a revenue break-out.
Bidstack Group PLC
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Annual Report and Accounts 2022
We have the commercial freedom, vision and focus to execute throughout 2023 and
beyond to establish Bidstack as the central infrastructure for in-game monetisation and
player engagement tools.
The coming months and years will be exciting for us all to share with the shareholders who
have supported the company as we’ve gone from a listed startup to now a scale-up.
Thank you to everyone who has helped the company get to this point.
James
2022
2023
Portfolio exceeds 250 games, including a
further 2 exclusive mobile titles from a AAA
publisher
Delivered campaigns in excess of 100+ brands
Bidstack becomes a Unity Verified Solution
Partner
IAB/MRC In-game ad channel standards
published in conjunction with Bidstack
Expansion of the US, with 7 senior hires from
AdColony
Bidstack launches Rewarded Video, the most
transacted gaming ad-unit
Launch of Bidstack Sports
Bidstack Sports’ partnership with SimWin
Sports and NFL PRO ERA
Multi-year deal with Ubisoft’s most
successful mobile franchise Hungry Shark
Bidstack Group PLC
Annual Report and Accounts 2022
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The global gaming
audience is a lucrative
opportunity for advertisers
Market Opportunity
Gaming is now the largest entertainment channel as free-to-play and gaming-as-a-
service have gained traction, resulting in developers and publishers looking for alternative
monetisation avenues.
The US is the world’s largest ad market and there is an opportunity for advertisers to
follow consumer attention and increase ad spend in gaming channels. The demise of
the cookie and Apple’s removal of IDFA, plus the surge in usage of ad-blockers creates
challenges for targeted web advertising; tapping into gaming presents a compelling
opportunity to bypass these concerns.
Intrinsic in-game ad formats are new, innovative and immersive whereas rewarded video is
a proven and more mature format. Advertiser spend has historically followed eyeballs, and
as consumer engagement rises, in-game ad revenue is predicted to surpass other major
channels.
In-game advertising revenue is underpenetrated in PC & console platforms with a growing
opportunity to monetise cross-platform. Mobile is a large player contributing to over 50%
of global gaming revenue. This is expected to continue as we see increased smartphone
penetration and the greater adoption of 5G technology.
The number of global gamers will exceed
3.8 billion by 2027 which will represent
40% of the world’s population.
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Annual Report and Accounts 2022
$1tn
3.8Bn
Global advertising market
with digital growing at 7%
Global gamers growing
at 5%
2022
2027
$398bn
Global gaming market
growing at 16%+
$88bn
Games technology market
revenue to grow +7%
Global games revenue by segment (2022)
Global In-Game Advertising revenue by format, 2018-27
In-Game Advertising revenue compared to
selected advertising markets, 2022 & 2027
In-game Advertising’s share of total games revenue
Source: AdWeek
Source: Omdia
Sources: Omdia
Sources: Omdia
Source: Statista, GroupM and Omdia
TV
8%
Streaming
$59.4bn
Gaming
21%
37%
$15.7bn
$1.5bn
Percentage of media diet
Brands spending in this channel
2018
Revenue ($bn)
50
100
150
200
2019
2020
2021
2022
2023
2024
2025
2026
2027
Conventional video
Conventional non-video
Reward
Playable
Intrinsic
Linear TV
0
50
100
Revenue $bn
150
200
In-Game
Advertising
Print
OOH
Radio
2018
% of revenue from in game advertising
2019
2020
2021
2022
2023
2024
2025
2026
2027
40%
20%
60%
80%
100%
Mobile
PC
Console
2022
2027
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Annual Report and Accounts 2022
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The industry is at an inflection point as through standardisation and advancements in
technology, enables programmatic transaction of in-game ads at scale. Omdia predicts
if games monetised through ads on the big screens at the rate of traditional media
channels, it would unlock an incremental $25bn in ad revenue.
Currently, only 5% of console developers are monetising with ad-supported business
models. Both Sony and Microsoft announced plans to allow in-game advertising in free-
to-play games on their consoles.
The world’s largest publishers are investing in mobile games. Activision Blizzard, Electronic
Arts, Take-Two and Ubisoft are growing their portfolios to capitalise on this trend.
The recent mergers of Unity and Ironsource and Vungle and Liftoff is evidence of the
importance of serving the growing developer community with monetisation tools.
Revenue by platform for top gaming firms excluding hardware
Source: Company financials, superjoost analysis. Based on company reports for those firms that provide a breakout of revenues by platform.
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Annual Report and Accounts 2022
Global games revenue by segment (2022)
Mobile gaming advertising spending worldwide from 2020 - 2027
Source: Newzoo
Source: Juniper Research
*
*
*Bidstack forecast applying 2022-2025 CAGR of 25.9%
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Annual Report and Accounts 2022
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Major agency holding groups establishing gaming divisions
“This [2023] should be the year that gaming is taken seriously. There are over 3 billion gamers in the
world, and yet there are very few brands advertising within the space. Compare that to social media,
which only reached 3 billion global users in 2018. In other words, imagine it’s 2018 and almost none
of your competitors were advertising on social media, that’s the opportunity that gaming offers.”
Marcos Angelides
Chief Strategy and Innovation Officer, Spark Foundry
“5 years ago, Connected TV was an emerging channel. As we think about gaming today, we see a lot
of similarities to CTV all those years ago.”
Natrian Maxwell
GM, Emerging Channels, The Trade Desk
“This just seems obvious, we should be in gaming, we should be in immersive experiences, and
that’s the place to reach this next generation audience.”
Keith Soljacich
Head of Innovation, Publicis Media
Play
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Annual Report and Accounts 2022
Agencies and ad-tech are going all in on gaming
Advertising agencies are waking up to the potential of in-game advertising and are
establishing gaming divisions and recruiting executives from gaming powerhouses to
drive growth as awareness rises.
Bidstack’s proprietary technology is a conduit for digital advertising and gaming.
Innovative, ad experiences
with undivided audience
attention
Measurable, standardised
and turn-key ad formats in
brand-safe environments
Intrinsic, non-disruptive,
in-game monetisation
opportunities
Scalable reach to an
engaged audience on
all screens
•
Data-Powered Audience Buying
•
Massive Scale
•
Programmatic Activation
•
Brand-Safe Environments
•
Robust Measurement
•
Audience Attention
•
Innovative advertising
opportunities
What brands need
What game developers need
•
Generate revenue with ad
monetisation
•
Maintain positive user experience
•
Increase player engagement
& session times
•
Lightweight SDK that enables
flexible game updates
•
Data and reporting tools
•
Efficient development timelines
& content management
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Annual Report and Accounts 2022
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Meet the Team
James Draper is the Founder of Bidstack, leading the company through its evolution from being
the first iteration of a programmatic digital out of home platform, before pivoting and creating the
intrinsic in-game advertising industry. Now, with Bidstack Sports, Bidstack is set to create a third
industry-defining product, all within the first 8 years of trading.
Using an aggressive marketing strategy, including sponsoring recognised English football team
Norwich City FC, the company attracted worldwide interest from multiple media channels.
In 2017 James agreed a multi-year deal with SEGA Europe’s studio Sports Interactive, for Bidstack
to exclusively sell the billboards within Football Manager. This was the birth of in-game advertising.
Since then James has raised over $42 million and led the business to the forefront of the industry
he created, the in-game advertising industry, whilst listing on the London Stock Exchange, in 2018.
The irrepressible focus on ensuring Bidstack’s technology is used by multiple stakeholders within
the gaming industry, from commercial to licensing and internal marketing teams within studios,
whilst empowering media planners worldwide to utilise Bidstack’s proprietary technology to
communicate within gameplay to gamers for the first time.
Bidstack has gone from a one-man business to an industry-defining business unlocking the
advertising worlds’ billions of dollars to game developers large and small, for the first time.
James leads the companies’ vision and manages the Group day to day.
Q: How is Bidstack continuing to evolve?
Bidstack’s evolution continues as there are multiple use cases for our technology. If you boil it
down to what the technology does, it is a content management system and a supply side platform.
Our customer is the game developer or publisher. We enable these studios to monetise spaces in
and around their virtual environments as well as engage with their player base with personalised
messaging.
In 2023, we launched Bidstack Sports which is a specific product for sports simulation games.
The platform also provides access to the licensing, marketing and commercial teams within
the developer or publisher. It also introduces new customers to the platform such as the rights
holders and sports teams who view gaming as a channel to recruit fans.
Q: What goal do you have for the company?
My goal for Bidstack is to be the most widely adopted gaming supply side platform that
significantly contributes to the revenues of game developers across the world. To achieve this
Founder & CEO
James Draper
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Annual Report and Accounts 2022
goal, we will cross-pollinate our technology across gaming studios to have multiple seats on our
platform to maximise our content management use cases including sports licensing, marketing,
fan engagement and user acquisition.
Q: What is the vision for Bidstack over the next 3-5 years?
By 2028, Bidstack’s customer mix will be far broader than what it is today, driven by the structural
tailwinds in the total and serviceable addressable markets. It will grow from monetisation,
demand-side platforms, resellers, publishers to user acquisition, marketing, sports teams, rights
holders, streaming platforms and film.
The potential for intrinsic in-game advertising in consoles is the holy grail for both advertisers and
game developers that will unlock further industry growth. As awareness rises over the outlook
period, Bidstack is confident that it will be the dominant player across the major gaming platforms
and ecosystems.
We are also paying close attention to the secondary viewing audience and working with our
partners to determine the best way to measure this. Viewers of gaming streams on Twitch or
YouTube amplify the reach of in-game placements from our SDK. When this feature is launched
in the coming years it will empower game developers to monetise advertising spaces within their
video game environment.
We can envision use cases outside of purely gaming. If we look at TV shows like The Mandalorian,
the backdrop is entirely shot in Unreal Engine. This is without pointing towards a no-coding AI-
driven future where games will be easily produced by anyone wishing to play out their fantasy. We
can see this already with the likes of Roblox. But, fast forward the next 3-5 years, the user interface
and dynamicism will be increased dramatically. The technology will be doing the heavy lifting.
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He previously served as the CFO at AdColony, one of the world’s largest mobile gaming
monetisation platforms, where he led a global team of 25 finance professionals.
Prior to AdColony, Thomas served at the publicly listed parent company Opera Software
as a Financial Controller as well as working closely with the corporate development team
on acquisitions and post-deal integrations.
Q: How are you preparing Bidstack for growth?
I am confident in the go-to-market plan for 2023 which is premised on a diversified
revenue strategy. Our plan calls for quarter-on-quarter growth which is skewed towards
the second half of the year reflecting the seasonality of the advertising market.
We are preparing for growth by ensuring resources are optimised and deployed behind
key revenue lines. The investment in the US commercial team last year is now providing
a visible pipeline that is growing and compounding through existing relationships and
rebookings.
The launch of an open marketplace in Q2 2023 will reinforce revenue for our publishers
with consistent fill and grow our geographical reach.
As we enter H2 2023, our reseller network should begin to contribute materially which is a
cost-efficient approach to monetising our non-core markets.
Meet the Team
CFO
Thomas Bullen
Thomas joined Bidstack in 2023, adding
20 years of finance experience in financial
services and the fast-growing mobile
advertising technology space.
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Annual Report and Accounts 2022
Q: What are the KPIs you will be tracking to evaluate commercial progress?
As a business, revenue and gross margin are key metrics that we track to evaluate the
market growth, strength of our value proposition, moat and success of our commercial
teams.
However as we are establishing a new market, it is important to focus on lead indicators
such as the growth of our publisher portfolio which enables supply and demand
optimisation, the number of products being cross-sold and adopted by publishers and
product feature launches to enhance our offer to our existing and prospective customers.
Q: What are the key drivers that will transform the pathway to profitability?
The building blocks are in place to generate scalable and accretive revenue on a cost
base which will be growing at a much lower rate from where we are today. As we continue
to execute according to plan, operational leverage will drop through as we proliferate
buying points to access our platform of premium inventory.
We are making good progress in licensing our technology. Despite being early days, if
adoption is faster than we anticipate it can change the profile of profitability.
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Annual Report and Accounts 2022
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Lisa is Bidstack’s CSO and works closely with the management team on strategy, corporate and
business development. She graduated from the University of Technology, Sydney in 2006 and is
a qualified Chartered Accountant.
Q: What sets Bidstack apart from its competitors?
The quality of our team, product and portfolio. Over 2022 we achieved no less than 11 industry
commendations and awards recognising our team’s innovative work. I am confident that in the
year ahead we will continue to achieve, set and lead the standard for our peers.
Bidstack is a magnet for talent as evidenced by our recent executive hires in the US and our
track record of bringing onboard global leaders in gaming from EA and Sony. It is crucial
to understand the key success factors of our developers and publishers to ensure that it is
reflected in the products and features we launch.
Attracting and retaining high-calibre talent is imperative for growth and further sets us apart
from our peers in the space.
Q: How does Bidstack grow organically?
We pride ourselves on cultivating strong and genuine relationships with our developers
and publishers. We are a strategic growth partner that creates value by increasing player
engagement, generating incremental revenue and alleviating development timelines.
Meet the Team
CSO
Lisa Hau
Lisa joined Bidstack in May 2020 with c.15
years of experience most recently at WPP
a FTSE 100 where she led investor relations
and at Jefferies where she was an equity
analyst heading up coverage for European
Media and Internet.
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Annual Report and Accounts 2022
Bidstack’s platform promotes achievement of commercial goals, enrichment of marketing mix
with dynamic content and reporting tools for cohort analysis.
This is a virtuous circle when combined with relentless innovation ensures cohesive and
enduring relationships with our developers and publishers. It has led to flourishing organic
growth represented by cross-pollination of services, exponential expansion of publisher
portfolios and appetite from commercial partners to white-label our technology.
Q: What does the future hold for Bidstack?
The structural growth evident in gaming and advertising provides a solid foundation for Bidstack
to accelerate market share gains over the medium to long term. The confluence of factors such
as developers monetising their games and advertiser dollars shifting towards gaming as a mass
media channel creates prime conditions for success.
Bidstack is at an inflection point where the business has moved beyond proof of concept stage
to accretive and scalable revenue growth. There are several key catalysts which will compound
Bidstack’s valuation which are not currently captured. These are as follows: 1) console approval
will unlock valuable gaming inventory 2) acceleration of adoption and conversion of white-
labelling 3) sports technology as a growth engine to reach next-generation fans in video games.
We are proud to be working with some of the most recognisable names in the gaming industry
and are seeing growing interest from commercial partners in all markets. The quality of our
pipeline is a testament to our build and partner approach.
Bidstack’s sole focus is on enabling and enriching the game developer ecosystem with the mass
adoption of our technology.
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Throughout her career, Camila has led engineering, product, operations, and client-facing
teams. She is also well-versed in managing complex cross-platform interactions and
relations with clients, end-users, internal team members, and external partners.
Q: Can you share any details about Bidstack’s diversified revenue strategy?
In any industry diversification of revenue streams is an important consideration. This
is why we are continuing to build out our reseller network and strengthen our agency
partnerships as well as being pioneers in the open marketplace for in-game.
I had a similar experience during my time in AdColony; we were there in the very early days
of rewarded video so we need to replicate and expand the strategy into in-game to grow
our share of gaming advertising budgets.
Q: What new opportunities will arise as in-game advertising expands beyond mobile
platforms and into console?
The integration of in-game advertising on consoles presents a promising opportunity
for the gaming industry. With integration expected in the next couple of years, it is only a
Meet the Team
COO
Camila Franklin
Camila joined Bidstack in 2022, adding
more than two decades of gaming
experience to the team. She was previously
the COO at AdColony, one of the largest
gaming monetisation platforms in the world.
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matter of time before we see native in-game ads integrated into consoles. This presents a
lucrative opportunity, as CPMs (cost per thousand impressions) should be comparable to
that of Connected TV (CTV), ranging from $30-$60.
Moreover, major AAA publishers are already making significant progress in advocating for
intrinsic in-game ads and trialling the formats with their mobile IP.
Q: Is Bidstack’s technology well positioned to capitalise on the market’s growth?
The technology is well positioned for it, it’s been developed with the expansion in mind. Of
course, we will need to continue to work with console developers and those partners who
will allow us to integrate, but the technology is ready so we can go into it as soon as we
have the permissions in place.
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Celebrating the
Best Moments and
Achievements of the Year
Highlighting Our Finest
During the year, Bidstack has been active and called upon as evangelists, thought leaders,
subject matter experts, keynote speakers and strategic growth partners for developers,
advertisers and many others within the ecosystem given its broad appeal as an enabler of
commercial opportunities.
Bidstack received industry recognition on 11 occasions in 2022 with commendations and
awards covering technology, talent and campaigns. Bidstack’s success at these industry
awards showcases the commitment to excellence and innovation in the respective
categories.
MadFest is the premier marketing festival in the UK, providing a unique platform for
networking with the largest brands and the most innovative start-ups. At the festival,
Bidstack was a prominent presence, hosting a stand, presenting on stage, and
participating in the E.ON brand challenge on the Innovation Stage.
Award Body: MadFest: E.ON Brand Challenge
Category: Brand Innovation Award
Winner: Bidstack
Others Shortlisted: Picnic, KidsKnowBest, Attention Exchange, RockPaperReality
As a gaming technology company, Bidstack
unifies the advertising and gaming market
with its platform that powers multiple
stakeholders.
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As a global energy giant, E.ON was seeking a partner to collaborate with and promote
consumer behaviour changes, encouraging the adoption of more sustainable technology
solutions.
When asked why he selected Bidstack, Scott Somerville, E.ON’s Head of Brand &
Marketing, said, “The way Bidstack have thought about not just their product, their
execution, but also how you would help the brand with it too, is very impressive…It’s great
because we can borrow their equity with a really different audience, and the simplicity of
the offering made it even more appealing.”
The Campaign US Media Awards were built to honour companies that are guiding clients
through a complex and fast-moving landscape. Winners were selected on their ability
to demonstrate remarkable agility, strategic rigour and creative thinking across their
campaigns.
Since 2021 Bidstack has begun working on larger campaigns with leading brands in the US
market and we set out to celebrate the creativity and innovation of this work alongside our
partners. Winning Gold at the Campaign Media Awards in the US was an important step in
building our profile in the US market.
The campaign, which featured legendary US goalkeeper Tim Howard, made Invictus the
world’s first fragrance to create a sporting challenge in a VR environment and succeeded
in increasing purchase intent and improving brand perceptions among their target
audience.
Award Body: Campaign Media Awards US
Category: Media Owner: Best Media Strategy
Winner: Bidstack
Others Shortlisted: Aki Technologies with Primal Kitchen, Vevo with Karma Money
Award Body: Digiday – Marketing & Advertising Awards Europe
Category: Best Use Of Technology
Winner: Bidstack
Others Shortlisted: Greenhouse with Eurojackpot, MG OMD with Specsavers, 7
Stars with FreeNow, Upstream & TIM Brasil
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The Digiday Marketing and Advertising Awards Europe recognise the companies,
campaigns and technology modernising European marketing and advertising.
One of the three key pillars of our awards strategy for 2022 was to gain recognition for the
quality of our technology. We were proud to be ‘Highly Commended’ by The Drum in the
Best Tech Platform category at the Drum Awards for Digital Industries but taking home
first place in the Best Use Of Technology category at the Digiday Marketing & Advertising
Awards for Europe was an important point of recognition.
Our campaign with Marriott Bonvoy, Publicis Sport & Entertainment, and Publicis Media
perfectly demonstrated the capabilities of our technology and how it could be applied to
deliver a multi-award-winning campaign.
Other awards Bidstack received throughout 2022 include Best Regional Campaign (North
America) at The Wires, Technology Media Leader of The Year at The Media Leaders
Awards, Best Use Of VR And AR at The Drum Awards For Digital Industries, Best Creative
Use Of Innovative Formats at The Digital Media Awards, Bronze for Best Fan Engagement
By A Club (in collaboration with Norwich FC) at the Football Business Awards and Bronze
for Best Gaming & Esports Placement at Les Trophées Marketing.
By consistently leveraging cutting-edge technology, fostering a culture of continuous
learning and development, and delivering groundbreaking campaigns, Bidstack has
established itself as a formidable industry leader, poised to shape the future of advertising.
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Powering Multiple
Stakeholders
Bidstack’s Platform
Expertise and innovation in technology as well as reliable reporting and insights facilitate a
market-leading position in a dynamic gaming marketplace.
The products supporting growth are as follows:
A library of software development kits (SDK) which game publishers can integrate into
their titles to enable ad unit creation, inventory management, reporting on performance
and monetisation through direct or programmatic advertising. Key features such as
standardised formats and open measurement have been areas of focus to drive scale.
Complementary use cases such as in-house marketing and rights holder management
reinforce the organic growth opportunities.
Bidstack’s suite of products continues
to evolve and provides a solid platform for
scalable revenue acceleration and creates
value for its expanding client base.
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In-Menu
Rewarded Video
Intrinsic In-Game
Around-the-game
Around-the-game
In-the-game
These clickable mobile ad units
become a natural part of a game’s
menus, user interface or loading
screen.
Amplify in-game media with up
to 30s video ad placements that
consumers choose to engage
with to earn in-game currency and
rewards.
High-impact branding inserted
natively within game play,
replicating real-world experiencs.
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An ad management and reporting interface powered by Bidstack’s proprietary ad
server and programmatic exchange, allows game publishers to dynamically control
and monetise gaming inventories and media buyers to create, launch and optimise
advertising campaigns. AdConsole is currently accessed by clients through a managed
service, however, it is evolving into a self-serve solution for turn-key activation to address
enterprise clients.
The AdConsole Platform
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A gaming marketplace designed for efficiency, transparency and control with multiple
demand partners that enable publishers to connect to programmatic advertising spend.
Expanding programmatic capabilities to service client demand produces an engine of
always-on revenue growth.
Bidstack will continue to collaborate and lead the market with industry bodies,
independent measurement companies and third-party technology providers to develop,
standardise and measure the effectiveness of gaming environments with the objective of
growing the market for all players.
The Bidstack Exchange
Publisher
Games
Mobile
Console
PC / Laptop
VR, Switch + others
In-Game,
In-Menu
& Video
AdConsole
AdServer/SSP/
AdConsole
SDK
Demand Sources
Publisher integrates
Bidstack SDK into
games.
Industry
Standards
01
Through our SDK/
AdConsole SSP,
Bidstack’s platform
connects game
inventory to
demand (direct and
programmatic).
02
Advertisers can buy
direct or through a
DSP applying targeting
much like digital media.
03
Programmatic
Agencies
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Growing our Network
of Global Publishers
& Developers
Expanding our Reach
This has been driven by the robust uptake from premium developers for intrinsic in-game
and also the expansion of ad formats to rewarded video and in-menu. The acceleration of
onboarding reflects cross-selling opportunities across ad formats, organic growth within
publishers and introduction of new applications.
Bidstack’s product suite has evolved to provide a comprehensive solution for game
developers and publishers to monetise entire portfolios rather than just a single title.
This is creating diversified gaming genres and audiences to support Bidstack’s revenue
strategy.
The growing network includes the addition of two further titles with a AAA game publisher
and a multi-year renewal with Sports Interactive’s Football Manager which highlights the
stickiness of Bidstack’s relationships.
Bidstack became a Unity Verified Solution during the year and a recommended
monetisation solution for game developers. Unity is a leading game engine for creating
and operating interactive real-time content. Access to Bidstack’s SDK is democratised
and available to empower developers.
In 2022, Bidstack’s publisher portfolio
grew rapidly to over 250 titles compared
to 58 titles in the prior year.
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Bridging the Authenticity Gap
Between Virtual and Real-World
Football Experiences
Bidstack and Sports Interactive
In 2017, Bidstack pivoted from Out Of Home advertising into gaming - pioneering
programmatic advertising in virtual environments in the process. Bidstack’s first gaming
partnership was with the iconic Football Manager franchise, and this integration saw the
world’s first programmatic in-game ad delivered into a PC game.
The partnership with Sports Interactive acted as a proof of concept for intrinsic in-
game advertising as a new channel, and since that initial launch, Bidstack has extended
its relationship with Sports Interactive on two occasions cementing its reputation as a
trusted partner for the world’s most respected gaming studios.
Sports Interactive, a wholly-owned subsidiary of SEGA, is the world’s leading developer of
sports management simulation games. Founded in 1994 and based in Stratford, London,
it has more than 250 full-time staff and approximately 1,300 researchers. The studio has
enjoyed both critical and commercial success, having won a number of awards, including
two BAFTAs, with titles selling over a million copies annually across platforms such as
Steam, Microsoft Game Pass and the App Store.
Overview
Publisher
Games
Platforms
Category
Inventory
Sports Interactive
Football Manager 2023
Steam, Epic Games Store, Xbox PC Games Pass
Sports
Pitchside Billboards (Animated)
Extending brand footprints into virtual worlds.
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Football Manager allows players to immerse themselves in the world of football by
stepping into the shoes of a manager where the fate of their chosen club rests solely in
their hands. The critically acclaimed series has been praised for its immersive experience
and the way it takes players closer to the experience of management than ever before.
The title, which is available across PC, Console and Mobile platforms, announced a roster
of new global partnerships in 2023 which included teams such as Manchester City and
Juventus, and notably, UEFA - enabling players to compete within the most prestigious
European club football competitions for the first time.
The 2023 edition of Football Manager has been played by more than 4m players globally
to date, who have played for record session lengths whilst millions of players have
continued to enjoy older editions of the game across different formats.
About Football Manager
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“The key thing for us in the studio is that the advertising is as realistic or as virtuous
as it can possibly be within the game. Imagine if you are in a stadium or watching
a game on tv - we want the brands to be as relatable to football or as realistic as
possible so that the experience the player has is exactly the same as watching a
game live or on tv.
Underpinning all of that is the tech. That allows the game to run normally,
for advertising to be geo-targeted and it ensures there are no dropouts in
performance throughout the experience.”
Richard Trafford
Head of Partnerships & Business Development at Sports Interactive
Launching with an all-new graphics engine, the 2023 iteration of Football Manager set out
to deliver a virtual matchday experience like no other. Recreating real-world environments
with immense detail, the title redefines the fan experience, empowering audiences to
recreate moments historically they could only follow.
Sports Interactive works tirelessly to bridge the authenticity gap between virtual and
real-world football experiences, and this is often achieved by enhancing subtle details
within gameplay that audiences associate with the matchday experience. The presence
of advertising within sports stadium environments remains a core part of wider sporting
identity, be it within the venue signage, team kits or liveries – the presence of brands has
become a core pillar within sports culture.
Sports Interactive utilises Bidstack’s in-game advertising SDK to seamlessly deliver
targeted ad placements into stadium environments through highly visible and contextually
relevant animated pitchside billboards. The partnership enables the presence of globally
recognisable brands, establishing new commercial opportunities for Sports Interactive
whilst subsequently enhancing the gameplay realism.
The Matchday Experience
Sports Interactive utilises Bidstack’s in-game advertising technology to deliver a best-
in-class gameplay experience for its global fanbase by establishing a sustainable and
continuous approach to monetisation.
By delivering branded content into gameplay, Sports Interactive are able to mirror
traditional revenue models of real-world sports franchises and rights holders, establishing
key commercial partnerships that generate complementary revenue streams.
Shifting Revenue Streams
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“In-game advertising, while an important commercial tool, has been specifically
implemented in Football Manager in a way that supports the game experience
for our players. By using pitchside LEDs, the ads that the Bidstack tech serves
look just as they do in real-world football matches, preserving the ‘suspension
of disbelief’ and tying our in-game experiences to real-world campaigns and
sponsors.
For advertisers who are looking for passionate football fans for their campaigns,
our realistic in-game experience can complement live activities by timing, leagues
or countries across 17 languages.”
Matt Carroll
COO of Sports Interactive
With brands willing to invest significantly in return for access to engaged and influential
audiences, Sports Interactive utilise their medium in partnership with Bidstack’s
proprietary technology to deliver diverse global consumer audiences at scale in a brand-
safe and highly attentive environment.
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Bidstack continue to work in partnership with Sports Interactive to innovate and push
the boundaries of what is possible in virtual sporting environments, together they have
achieved the following highlights:
Highlights
Increased revenue generated by intrinsic in-game ads by more than
27x since 2019.
Delivered the world’s first programmatic in-game advertising campaign
into a PC game.
Generated consistent brand activations from Fortune-500 blue
chip brands.
Introduced a player-first monetisation approach to Sports Interactive’s
flagship game.
Ensured no drop in game performance, protecting the player experience.
Unlocked market-leading attention metrics against industry benchmarks,
making Football Manager a desirable place for brands to reach gamers.
Extended the partnership on two occasions, endorsing Bidstack as their
preferred partner despite increased competition from other in-game
advertising vendors.
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“We know the huge value that brands place on reaching sports fans through
traditional real-world commercial partnerships. With Football Manager, we’re able
to help these brands as well as the rights holders themselves talk to millions of the
most dedicated, hard-to-reach football fans with dynamic, relevant and engaging
messaging.”
Lewis Buck
Sport Partnerships Manager at Bidstack
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Enhancing Realism and
Unlocking New Revenue
Through In-Game Advertising
Bidstack and Inlogic Games
Bidstack first teamed up with Inlogic Games on the popular mobile game
Soccer Cup in 2020.
After a simple integration, Bidstack began serving ads into gameplay that became a
seamless part of the player experience. These ads (from premium advertisers) were
delivered onto pitchside LED billboards, replicating a real-world stadium feel for players
and adding to the authenticity of the game.
Building on the success of this integration, Bidstack partnered with Inlogic for a second
time in July 2021 on another sporting title, Tennis World Open.
Three years on from the initial integration, Bidstack has now delivered a multitude of
international campaigns from brands such as KFC, Samsung, Warner Brothers, Skoda and
many others across the two games - enhancing the realism of gameplay and creating a
new, sustainable revenue stream for Inlogic Games.
Overview
Publisher
Games
Platforms
Category
Inventory
Inlogic Games
Soccer Cup & Tennis World Open
Mobile (iOS and Android)
Sports
Pitchside & Courtside Billboards
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Inlogic Games is a Slovakian game studio that specialises in the development of free-
to-play mobile games. Their team has worked on more than 300 titles and has extensive
experience. They create games for a diverse range of sports, hobbies, and interests.
The first title Bidstack integrated from Inlogic was Soccer Cup (also known as Football
Cup), which has been downloaded more than 100m times. The game has been praised for
its entertaining gameplay, realistic game mechanics and graphical quality. Bidstack’s SDK
is integrated into the title to allow for dynamic ads to be delivered onto the pitchside LED
boards that are in view around the action as each game unfolds.
The second title Bidstack integrated with Inlogic was Tennis World Open, which features
26 pro tennis athletes from around the world. The 3D tennis title is available on Android
and iOS and has been downloaded more than 20m times. Bidstack’s technology is utilised
in-game to deliver intrinsic ads programmatically onto courtside banners - reflecting real-
life tennis environments.
About Inlogic Games
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Inlogic utilised Bidstack’s in-game advertising technology to bridge the gap between real
and virtual-world sporting environments, enhancing gameplay realism and delivering a
best-in-class user experience for its global player base.
The partnership enables Inlogic to utilise premium intrinsic in-game advertising
placements within Soccer Cup and Tennis World Open, establishing new commercial and
sponsorship opportunities by utilising otherwise vacant virtual spaces within gameplay.
This provides the studio with an ongoing, complementary revenue stream that doesn’t
compromise the audience’s experience.
Unlocking New Revenue
The partnership sees premium blue-chip brands seamlessly blended into virtual stadium
environments, delivering contextually relevant messaging to highly engaged audiences.
The non-intrusive placements appear on both pitchside and courtside hoardings, weaving
the presence of branded messaging into environments where audiences have come to
expect them. Inlogic further utilises these solutions to cross-promote other titles within
its continuously growing catalogue of games, enabling the studio to engage and retain its
vast international community of players.
Retaining a Global Community
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Bidstack’s lightweight and versatile SDK enables the seamless integration of branded
content into Inlogic’s titles with no impact on gameplay and minimal resource
requirements. The toolkit is a Unity Verified Solution, having been rigorously tested and
verified by Unity engineers to ensure the technology maintains the highest technical
quality and compatibility standards for Inlogic and other leading developers.
The integration process saw Bidstack consult directly with Inlogic to optimise the IAB
standard advertising placements within both titles, ensuring an optimal balance between
maximising revenue opportunities and protecting the art of the gameplay itself. The
integration saw Bidstack’s proprietary self-serve AdConsole platform also utilised by
Inlogic to monitor campaign success in real time, enabling the studio to maintain control
of the brands and placements that appear within their games.
Easy Integration
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An increase of 7.9% in overall revenue across both games (including 10.5% of
the overall revenues in Tennis World Open).
Consistent brand activations from Fortune-500 blue chip brands.
Bidstack’s seamless intrinsic In-Game advertising format has enabled
Inlogic to introduce a sustainable and audience-conscious approach to their
monetisation mix.
Inlogic’s titles outperformed Lumen benchmarks for viewability, time in
view and attention compared to display advertising norms, making them an
appealing home for brands.
“Our partnership with Bidstack has been a great one for us, as it allowed us
to enhance our player’s experience through immersive advertising that feels
authentic to our game’s world. It is always exciting to see what new brand
collaborations their team has to offer us”.
Jan Kalafut
CEO of Inlogic Games
The partnership between Bidstack and Inlogic continues to grow and evolve, and since
the initial integration, they have achieved the following highlights:
Outcomes
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“We’re delighted to see our partnership with Inlogic Games go from strength to
strength and evolve over the years. Our partnership is a prime example of how
intrinsic in-game advertising and our technology can bridge the gap between
virtual and real-world sporting experiences, creating a best-in-class user
experience that engages a global community of players”.
Antoine Jullemier
VP Gaming Bidstack
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Working with Global
Advertisers
Partnering with Powerhouses
Bidstack services all key advertising categories such as entertainment, quick service
restaurants, technology, consumer staples, autos, luxury, beauty, finance and retail. This
highlights Bidstack’s growing and diverse addressable audience that provides relevant
and brand-safe environments.
Bidstack’s in-house sales team in the US and UK are experienced in selling gaming
inventory and have deep relationships with media agencies and major brands. Bidstack’s
reach is further amplified by a complementary network of resellers in non-core markets
such as the Middle East, Europe, Asia Pacific, Latin America and Africa.
In 2022, Bidstack continued to grow its
roster of global advertisers and delivered
campaigns in even more markets.
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In 2023, Bidstack collaborated with a leading US retail grocer to launch its first-ever in-
game advertising campaign.
The campaign tapped into a new audience, which constituted 60% of the brand’s target
market as the primary food buyers for their households. Despite having no prior experience
in reaching out to gamers, the grocer recognised the potential of this channel and sought
Bidstack’s expertise to test the waters.
With close to 3,000 stores spread across the US, the grocer aimed to gain insights into how
engaging their target audience through gaming would impact their shopping behaviours
while also building awareness in a new channel. To ensure the gaming experience remained
uninterrupted, Bidstack targeted players aged over 18 with a household income of over
$50k+ with in-game ads that formed a natural part of the playing experience.
The groundbreaking campaign ran across Bidstack’s portfolio of games for a span of two
months, with ads delivered across 47 carefully selected titles that aligned with the brand,
reaching millions of gamers in the process. The campaign succeeded in delivering a
significant boost to brand awareness and created positive brand perceptions for the grocer.
Overview
Why a Leading US Retail Grocer Decided
It Was Time to Enter Gaming
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The primary objective of the campaign was to increase brand awareness with a new
audience as the retail grocer introduced their brand into gaming environments.
They had already identified that 33% of US gamers shopped at their stores, and to
successfully engage this audience, they focused on capturing user attention in an effort
to increase brand awareness, recall and consideration.
Their impactful in-game creatives were designed to fit in seamlessly with gameplay,
complementing the end-user experience and strengthening both the brand’s perception
and favourability amongst gamers and grocery shoppers with the aim of achieving further
market penetration.
Campaign ROI was measured through independent research from attention experts
Lumen, who provided a scientific and unbiased analysis of how audiences engaged with
content across various gaming environments. This research offered deeper insights into
the impact of the campaign on audience attention, benchmarking campaign performance
against other ad formats.
Secondary campaign objectives focused on brand outcomes in terms of brand suitability
for gaming environments and purchase intent following exposure to the in-game
creatives.
Campaign Objectives
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60% of gamers in the US are the main food shoppers in their household, and 33% already
frequently shopped with the retail grocer that ran this campaign. While 33% of main
household food shoppers in the US identify gaming as one of their favourite hobbies and
30% play on a games console for at least 1 hour a day.
Statistics like these highlight why the leading retail grocer approached Bidstack to extend
their brand reach beyond their traditional ad channels and into the virtual worlds of video
games. To achieve their campaign objectives, they ran a geo-targeted campaign across
the US, which saw their branding feature across 47 games in the Bidstack network - this
included titles from some of the world’s most respected gaming studios, including EA,
Nordeus, Miniclip, Fingersoft and Sports Interactive.
The preferred format for the campaign was intrinsic in-game ad placements which
allowed the brand to blend in seamlessly with gameplay without disrupting the player
experience. The plan was to deliver these intrinsic in-game ads across Bidstack’s network
including a renowned sporting title which is hugely popular in the US. This additional
activation would give the retail grocer a 100% share of voice in a highly respected game
and ensure player engagement.
The campaign aligned with other marketing activities from the grocer, and they worked
with Bidstack to optimise their in-game creatives to deliver the best possible brand
outcomes. Bidstack also worked strategically with the brand to ensure that the in-game
creatives were delivered into brand-safe environments that aligned with the retail grocer’s
company values.
Campaign Strategy
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The retail grocer was hugely successful in increasing brand awareness in a new channel
and engaging their target audience. The campaign ran across 47 different games in
brand-safe environments - delivering both brand awareness and tangible performance
metrics.
Campaign Highlights
The grocer’s ads delivered more than 77.8m impressions to more than 8.7m
unique players across the 2-month campaign.
More than 12.4m unique sessions featured the retail grocer’s brand in their
popular US sporting title, meaning that an average daily user spent around 7
minutes per day with their ads.
The ads were viewed on average for 16.4 seconds, 12.6x the mobile norm.
For every 1000 impressions, the in-game ad would generate an average of
15,908 attentive seconds, almost 21x the mobile norm.
93% of the audience exposed to the retail grocer’s in-game advertising
would consider purchasing from them in the future.
92% of the audience found the ads to be easy to read, and 89% perceived
the retail grocer to be high quality.
97% of the ads measured in Lumen’s study were physically seen by the
audience, almost double the standard mobile benchmark.
Key campaign highlights include (study findings from Lumen Research)
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“This campaign really stands out to me as a great example of how a brand can
successfully and authentically get in the game. The retail grocer had successfully
identified that they could be reaching their target audience in-game when they got
in touch with Bidstack, but they were unsure of how to approach their first foray
into a new channel.
We were delighted to work alongside them to craft this innovative campaign which
allowed them to meet their target audience in brand-safe environments, at scale,
and crucially in a way that didn’t intrude on their gaming experience.
The intrinsic in-game activations we ran as part of this campaign were hugely
successful in driving brand awareness, increasing purchase intent and captivating
audience attention, which ultimately delivered excellent ROI for the client.”
Britany Scott
VP of Brand Sales, East & Central at Bidstack
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How Winamax Extended Their
Brand Reach Beyond The
Traditional Matchday Window
Winamax
Winamax is an online poker and sports betting company based in Paris. They are the
leading poker site in France and introduced sports betting to their offering in 2014. In
2018, the company entered the Spanish market, where it continues to grow.
Winamax has long-standing associations with sport and, in particular, football - thanks
to their sponsorships of a number of high-profile football clubs in France and Spain.
Partnerships with the likes of Strasbourg, Lens, Lille, Reims and Troyes in France and, more
recently, Granada in Spain have made the Winamax brand synonymous with football.
Despite the clear associations with football in the real world, Winamax wanted to extend
their brand footprint into the virtual stadiums of Football Manager and engage their
target audience with localised messaging designed to build brand awareness and capture
attention - without intruding on their gaming experience.
The innovative partnership saw Winamax run campaigns across two markets whilst
utilising Bidstack’s age-gating technology to ensure that the messaging was delivered
responsibly and in compliance with industry standards.
Overview
Winamax is an online poker and sports
betting company based in Paris.
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With their associations to football already well established, Winamax set out to extend
their reach beyond real-world stadiums and into new channels with an ‘always-on’
campaign that extended beyond the traditional matchday window.
The campaign, which ran localised messaging for the Spanish and French markets in
the iconic Football Manager series, utilised Bidstack’s exclusive access to the gaming
inventory and their ability to age-gate advertising to ensure that the messages were
delivered to the correct audience in a way that wouldn’t be possible with a real-world
activation.
Winamax set out to build brand awareness amongst their target audience in a way that
complemented the playing experience - with advertising delivered onto pitchside LED
billboards. They wanted to build their brand equity through ads that were designed to
capture attention and help to drive positive perceptions around their market-leading
sports betting odds.
To measure this successfully, Bidstack enlisted the help of Lumen Research, who
undertook an attention study, utilising eye-tracking technology to build a better
understanding of how the ads performed when benchmarked against other channels.
Campaign Objectives
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Winamax identified gamers, particularly data-driven football fans, as the ideal audience to
reach in-game.
Statistics from Global Web Index show that 39% of football fans love playing video games
and that 29% of French gamers enjoy gambling as a hobby (55% higher than the general
population) - while in Spain, this applies to 27% of gamers (70% higher than the general
population).
With gaming identified as the ideal route to reach their intended audience, Winamax
began identifying appropriate games to run their campaign across. In Football Manager,
they found an ideal place to share their “best sports betting odds” message and thanks to
Bidstack’s age-gating technology, they were able to deliver this message with confidence.
Only gamers aged 18+ were able to view the in-game ads that were delivered onto LED
pitchside hoardings as the action unfolded around them. Delivering ads in this way
enhanced the realism of gameplay, offering gamers the kind of experience they would
expect to see in stadiums at live sporting events or through a televised broadcast.
Campaign Strategy
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Winamax’s ads were delivered to more than 69k unique players who played, on
average, 3+ sessions per day.
Ads were seen by 89% of the audience, 1.7x display norm.
Average dwell time was 2.1 seconds, 1.6x the display norm.
40% of players spontaneously recalled seeing the Winamax ad, with no
misattribution to competitor brands.
When prompted, 62% of players recalled the Winamax in-game branding.
79% of players felt the Winamax ad was suitable for Football Manager.
76% felt Winamax is a good quality brand.
43% of the audience engaged with the ad for 2.1 seconds, outperforming the
display norm of 11%).
Winamax succeeded in extending its brand reach beyond the traditional matchday
window, engaging a highly-attentive audience across two of its key markets.
Key campaign highlights include (study findings from Lumen Research):
Campaign Highlights
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No One Gets You
Closer To The Game
One Football
OneFootball is a leading football media platform connecting international fans to real-
time scores, analysis and in-depth insights. With over 100 million monthly users, the app
delivers consistent original content with no subscription - reinventing how audiences
consume football content and transforming the relationship between fans and the clubs
they support. Working in partnership with over 135 clubs, leagues, federations and players
- the platform enables a new generation of fan engagement, connecting audiences to
highly relevant and personalised football content.
In the Summer of 2022, OneFootball launched a cross-channel media campaign called
“No One Gets You Closer To The Game”, which ran internationally and set out to reinforce
the brand’s historical success as the destination of choice for football fans seeking
exclusive sports content and broadcast coverage of live football fixtures.
The campaign was designed and delivered in partnership with SPORTFIVE, a leading
global sports marketing agency specialising in ground-breaking first-to-market
campaigns. Operating across more than 50 international offices, the SPORTFIVE team
utilises the medium of sport to unite passionate fan audiences with pioneering brands,
rights holders, and premium entertainment outlets. SPORTFIVE executes on perimeter
advertising for many top football clubs across Europe, and further extend their work in
esports and gaming by utilising Bidstack’s in-game advertising formats to take that reach
into several virtual football stadiums.
The campaign launched with an emotive fan-driven cinematic trailer, highlighting the
significant role of technology and apps in bringing fans closer to the game. With Bidstack,
OneFootball sought to accelerate this message into new and innovative channels.
SPORTFIVE identified gaming as a unique opportunity to extend its reach with typically
hard-to-engage Gen Z fans.
Executive Summary
Bidstack x SPORTFIVE
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OneFootball set out to extend its reach with Gen Z users across new and innovative ad
channels. They wanted to increase brand awareness and drive app downloads in some of
their key markets, including the United Kingdom, France, Spain, Germany, Italy and Brazil.
The campaign sought to deliver localised messaging across six languages in each market,
ensuring the content remained accessible and relevant. OneFootball set out to engage
‘untameable’ football fans, reaching 16-20-year-olds across both male and female
audiences.
53% of OneFootball’s target audience expressed an active interest in gaming, with 43%
regularly playing sports-focused gaming titles. With global audiences engaging with video
games and related content, on average, three times a day, the medium presented an
opportunity to communicate directly and frequently with audiences where they actively
choose to spend their time.
Campaign Objectives
Working in partnership with Bidstack and SPORTFIVE, OneFootball utilised virtual stadium
environments within fan-favourite football gaming titles as a medium to communicate
directly with diverse global audiences. The brand’s messaging and identity were
seamlessly blended into gameplay within leading gaming franchises, including Football
Manager 2022, Top Eleven, Soccer Cup and Soccer Stars.
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As broader entertainment consumption trends have shifted, gaming has continued to
experience growth. Consumption amongst Gen Z audiences has increased by around 38%
since the pandemic. In contrast to this, mediums such as social media (-21%), television
(-7%) and cinema (-11%) have each continued to experience a decline in popularity
amongst OneFootball’s target audience.
With this in mind, OneFootball used in-game advertising to complement its broader
campaign strategy, delivering highly viewable and engaging creatives in environments
that would capture the audience’s full attention.
OneFootball utilised Bidstack’s sophisticated technology to seamlessly deliver localised
campaign creatives into leading football titles across various platforms and devices. The
partnership ensured that OneFootball remained at the forefront of the player experience,
complementing gameplay by delivering placements in environments where audiences
have come to expect the presence of advertising.
With the support of Bidstack, OneFootball were able to identify gaming titles that
delivered the most relevant audience demographics to achieve the campaign’s
objectives. Through Bidstack’s exclusive partnerships with leading games publishers,
including Sports Interactive, Nordeus, Miniclip, and Inlogic Games, they were able to
connect with audiences at scale in premium and brand-safe environment.
Campaign Strategy
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Their campaign creatives were optimised for gaming environments, primarily appearing in
the form of animated pitchside banners and utilising advanced geo-targeting and age-
gating solutions to ensure that they were delivered in the local language to their clearly
defined target audience. Each creative sported OneFootball’s striking colour palette, with
the call to action ‘One App, All the Football. Download Now.’ Focusing on visible branding
and a simple call to action ensured that the message was easily digestible, increasing
brand awareness and recall amongst audiences whilst simultaneously encouraging a
significant uptake in downloads for the app within the target regions.
By activating in-game, OneFootball were able to deliver an ‘always on’ campaign that
engaged fans outside of the typical matchday windows associated with football. By
utilising virtual stadiums, the campaign offered unrivalled levels of attention among
football fan communities while maintaining a strong association with the sport.
“Weaving the OneFootball brand into premium gaming environments presented
a unique opportunity to provide our audience with an experience that mirrors the
emotions and reward of the traditional matchday.
Utilising Bidstack’s portfolio of leading gaming titles, we set out to extend our
flagship cross-channel campaign into a new medium, communicating directly with
hard-to-reach Gen Z consumers on an entertainment format they actively choose
to engage with.”
Leonie Fabisch
Director of Gaming at SPORTFIVE
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OneFootball’s ads were delivered to more than 324k unique players, with over
10 million total impressions viewed by players during their gaming sessions.
The ads were viewed for more than 88m seconds
(equivalent to 1,026 days of gameplay).
Their in-game creatives remained in view for 8x longer than typical
IAB standards.
They delivered an average of 1.95 seconds of viewing time,
1.5x the desktop norm.
Their in-game ads were equivalent to 1,710 attentive seconds per 1000
impressions, 2.4x the desktop norm.
The campaign was delivered into Football Manager, an environment known for
capturing high levels of attention. The Football Manager ads were seen by 88%
of audiences, 1.7x the desktop display norm.
OneFootball successfully extended its brand footprint into new environments, delivering
an industry-first campaign that engaged global audiences at scale with highly targeted
and localised messaging across six key markets.
Campaign Highlights
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Attention-first Advertising
Powered By Predictive
Eye-Tracking
Lumen
Lumen’s methodology powers Bidstack’s advertisers with attention and brand outcomes
measurement across immersive environments.
Looking ahead, Bidstack intends to continue working closely with Lumen to pioneer
and validate measurement in gaming. The combination of multiple formats should
yield compelling results which will accelerate the growth of the market and spend from
advertisers.
Throughout 2022, Bidstack has deepened the relationship with Lumen Research, running
21 studies across a wide range of brand categories, game genres, and countries which
reflects the growing reach and scope of intrinsic in-game advertising.
“Gaming is evolving rapidly and extremely exciting. It calls for meaningful
measurement to ensure that attention is always linked to outcomes such as
engagement, brand lift, sales and creative performance.
Lumen’s attention technology, expertise and vision has helped define gaming for
advertisers. The growth of our relationship with Bidstack, highlights the interest
from advertisers to invest behind this compelling media channel. We look forward
to working together to continue to grow the market.”
Tanwa Edu
CSO at Lumen Research
Lumen specialises in measuring and
predicting visual advertising engagement
by using eye-tracking technology.
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Brand categories include
% Viewed
% Still Viewing At 2 Seconds
Games include
Countries include
Tech, Entertainment,
Beauty, Betting, Retail,
Financial Services
Football Manager, Tennis
World Open, DiRT Rally 2.0,
Soccer Cup
UK, US, Italy, Spain,
Germany, Brazil, Poland,
Portugal, Sweden
Lumen Display Norm
52%
Bidstack 2022 Norm
88%
Lumen Display Norm
11%
Bidstack 2022 Norm
49%
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On average Bidstack ads were seen by 88% of study participants, greatly outperforming
Lumen’s display norm of 52%. The ad boards were engaging and managed to consistently
keep hold of respondents’ attention for longer, this level of engagement is significantly
higher than Lumen’s display norm.
An Environment Built To Hold Attention
Average Dwell Time (seconds)
Attention Per 1000 Impressions (seconds)
Bidstack’s average viewed time of 5.6 seconds also significantly outperforms the display
norm. This leads Lumen to predict Bidstack ads to generate an average of 5,336 seconds
of attention per 1,000 impressions delivered, this being 7.4 times greater than the display
norm.
Lumen highlights 2 seconds as a key attention threshold for greater brand recall.
Significant Uplifts in Brand Recall and Purchase Intent
Lumen Display Norm
1.3
Bidstack 2022 Norm
5.6
Lumen Display Norm
725
Bidstack 2022 Norm
5,336
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“Cultivating meaningful relationships with trusted partners such as Lumen is a
crucial component in our continued success in the in-game advertising space.
Lumen’s cutting-edge technology and expertise provide us with invaluable insights
into the effectiveness of our in-game ads, helping us to grow confidence and
budgets among our clients and increase rebookings. The feedback loop created
by our partnership allows us to continually refine and optimise our ad campaigns
for maximum impact, while also providing clients with the transparency and
accountability they demand.
2022 saw us continue to grow our scope of testing, using a variety of games and
ad formats. Building out and evaluating our ad formats allows us to create a more
diverse and engaging advertising ecosystem within games. This not only enhances
the user experience but also enables us to deliver better results for our clients
while also providing significant value to our publisher partners, ultimately driving
sustained growth for Bidstack.”
Isabella Boyadjian
Business Insights Analyst at Bidstack
31%
Spontaneous brand recall
49%
Prompted brand recall
69%
Purchase intent
Bidstack’s ads greatly exceeded this and subsequently, saw over 30% recalling the brand
spontaneously and nearly half recalling once prompted, fuelling sales impact.
Bidstack 2022 norm:
Of those exposed to the advertising 75% then indicated that they had a positive opinion
towards the brand and over half said they thought it was better than its competition.
Nearly 70% of respondents attributed the ad to a trustworthy company and over 60%
found the ad to be suitable for the game’s environment. The majority agreement with the
ad and brand perception statements further proves that in-game ad formats are aligned
to positive user experiences that Bidstack offers, resulting in positive brand outcomes.
Not only do Bidstack’s campaigns outperform display norms, but we also witnessed
improvements from our performance in 2021.
Through conducting studies with Lumen, a trusted third-party partner, Bidstack is able
to better inform future campaigns and guide advertisers through the process, as well as
improve ad placement suggestions for incoming publishing partners to ensure all parties
get the most out of our partnership.
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Bidstack Introduces
A New Sports Division
Bidstack Sports
“We are incredibly proud to celebrate
the launch of our new business unit and
dedicated technology licensing division”
We’re incredibly proud to celebrate the launch of our new business unit and dedicated
technology licensing division, Bidstack Sports. Launching in January 2023, Bidstack
Sports has begun revolutionising the traditional sports models for fan engagement,
sponsorship revenues, and media valuations by enabling professional sports rights
holders the control to commercialise their virtual stadiums in parallel with their real-world
assets. The launch of Bidstack Sports represents a step change for the multi-billion-
dollar traditional sports industry to scale to uncharted heights, generating diverse,
differentiating, and passive licensing revenues for the business and our partners.
A Letter From Alex Nunez
Bidstack Sports is led by EA SPORTS veteran and former head of
commercial partnerships for Madden NFL, Alex Nunez, who partnered
with Pizza Hut to create the world’s first virtual stadium rights deal
inside Madden NFL 20.
Alex Nunez, SVP Bidstack Sports
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Each year, sports simulation gaming brings fans closer to the real-world experience – from
gameplay animations and athlete likenesses to the environmental and atmospheric detail
of the most iconic venues in global sports. However, whilst the visual representations of
sports simulation games are blurring the line with real-world experiences, there remains a
glaring commercial gap in sponsorship revenues.
Professional sports are a core pillar of global entertainment and culture, generating
revenues annually of over $55 Billion, of which approximately 33% are generated from
sponsorship deals. Sports franchises have traditionally achieved commercial success by
maximising sponsorship inventory and placing brands in front of fan audiences in access
points that are perceived to offer high levels of exposure, providing a safe and familiar
channel for brands to communicate with highly engaged audiences at scale.
However, until now, this multi-billion-dollar industry model has failed to take advantage
of the continued rise in the popularity of digital entertainment. As sports simulations and
gaming titles continue to evolve the broader fan experience, individual fans can now
access and recreate experiences they could historically only follow. Unlike traditional
sports, where fixtures are predefined to a limited schedule, gaming environments are
Market Landscape & Opportunity Gap
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Electronic Arts (EA) defined a new frontier for virtual sports sponsorship in 2019, signing the
first-ever virtual stadium rights deals, extending its partnership with Pizza Hut directly into the
Madden NFL franchise for the first time. The sponsorship added an all-new element of realism
to an iconic sports simulation game title for its global fanbase whilst subsequently unlocking
an all-new and sustainable revenue stream for the publisher.
Having been introduced to Bidstack in 2021, I saw the potential for the sports industry to
accelerate this trend, utilising game-changing technology to further synchronise commercial
and fan-engagement models, enabling real-world and virtual stadiums to operate in parallel.
Bidstack Sports represents the full-circle design of that vision, and we’re thrilled to shape
these all-new industry tech solutions around our partnership with SimWin Sports and NFL
PRO ERA.
Partnership Journey: SimWin Sports and NFL PRO ERA
permanently accessible, enabling unprecedented consumption levels and subsequent
exposure for branded inventory. Virtual stadiums, however, largely remain unmonetised,
with developers opting to deliver generic, often fake, advertising placements into virtual
environments in an attempt to enhance the realism of gameplay.
Through our technology, brands, publishers, and rights holders can now circumvent
traditional limitations, delivering relevant messaging to highly targeted audiences at
scale. Supported by full reporting and analytical solutions, the launch of Bidstack Sports
reinforces our commitment to drive the next wave of sports industry growth through
further converging real-world and virtual sporting experiences - delivering a next-
generation approach to fan engagement.
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SimWin is a first-of-its-kind virtual sports entertainment platform resembling every aspect of
a professional sports architecture that will showcase the power, sophistication, and control of
Bidstack technology across a diverse metaverse of sports properties and star-studded rights
holders. This landmark partnership will see Bidstack’s proprietary solutions underpin SimWin’s
stadium sponsorship and marketing ecosystem, enabling franchise owners to manage and
monetise virtual environments through advanced audience targeting, native rendering, and
data processing capabilities.
We’re delighted to announce our next dedicated Bidstack Sports agreement with StatusPRO,
creators of NFL PRO ERA, the first fully licensed NFL and NFLPA virtual reality (VR) simulation
game. Through a combination of NFL game data and StatusPRO’s athlete-led technology,
NFL PRO ERA redefines the football video gaming experience for fans.
This partnership represents a significant breakthrough for the professional sports industry
and the full vision of Bidstack Sports – for the first time in history, NFL clubs will be able
to dynamically control their virtual stadiums in parallel with existing and future real-world
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commercial partnerships. By making the solution available to all 32 NFL organisations,
StatusPRO will further advance its authentic visual recreation of the on-field experience
while unlocking the medium as a messaging vehicle for next-gen fan acquisition and
ongoing engagement. This approach to direct communication will continue to intensify the
relationships between right holders and their passionate fanbases.
By empowering teams to rapidly deliver personalised direct communication with fan
audiences, franchises will unlock a new channel for cross-promotion, supporting wider
business objectives and expanding their commercial presence for existing and future club
partners within their immersive virtual stadiums and facilities.
Our partnerships with SimWin Sports and NFL PRO ERA showcase the immediate impact and
standalone potential of Bidstack’s technology to transform every vertical of sports gaming.
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The launch of Bidstack Sports signifies a strategic evolution of our proprietary technology and
an entirely new commercial frontier for the multi-billion-dollar sports sponsorship industry.
The all-new Bidstack Sports technology suite equips sports simulation publishers with
a dedicated in-game content management platform that synchronises the commercial
control of real-world and virtual sports sponsorship assets within virtual spaces. The tools
will continue to enable publishers to monetise otherwise vacant virtual spaces whilst
simultaneously protecting and authenticating the gameplay, ensuring that developers can
further blend the experience between their art form and the real-world matchday.
Publishers have traditionally struggled to utilise this highly valuable space due to technology
constraints, with custom integrations requiring significant planning and resource allocation
to deliver and update branded activations. The content has historically been ‘hard coded’,
meaning that content is only visible after manually downloaded updates are applied, which
are typically scheduled months in advance. Bidstack’s technology circumvents this, enabling
rapid deployment to targeted audiences and empowering rights holders and brands to deliver
content relevant to different global regions, languages or gameplay styles.
Bidstack Sports has the potential to underpin the next commercial frontier for the entire
sports industry – transforming the volume and value of traditional sponsorship assets by
extending their reach into currently untapped virtual worlds.
The Future of Sports Sponsorship
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Why Invest in Bidstack?
Investment Case
Global Platform Expansion
Capitalise on the US, the world’s largest advertising market with a proven and experienced
commercial team. Clear pathway for global in-game ads monetisation. Pipeline of resellers
and launch of open marketplace to scale ROW.
Publisher Penetration
Growing publisher network and addressable audience. Cross-selling of ad formats and
services. PC and console opportunity to unlock.
IP Agnostic
Publisher network is diverse across formats, genres, platforms and size. Exposure to
gaming market tailwinds without IP risk. Diversified portfolio strategy.
Technology
Multiple use cases for publishers. Accretive licensing and white labelling opportunities.
Tried and tested proprietary technology. Patents - 3 published and 1 granted.
Pathway To Profitability
Rapid revenue acceleration in 2023E. Operational leverage to drop through in 2024E.
Open marketplace and licensing to provide recurring revenue.
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Key Financial Highlights
of 2022
£5.3m
+101%
Revenue
£3.7m
+298%
Gross Profit
72%
+35%
Gross Margin
(£7.7m)
-22%
£8.7m
+21%
Net Loss
Net Cash Balance
Overview
During 2022, Bidstack rapidly expanded across the following lead indicators and KPIs:
These growth drivers set a solid foundation for diversification, cross-selling of product
suite and scalability of revenue. The investment behind talent acquisition during the
year will strengthen Bidstack’s moat and accelerate execution into 2023.
Financial Overview
Portfolio of game publishers and developers to >250 that includes AAA titles and
independent titles.
Growing offer of ad formats to three, leading with intrinsic in-game, in-menu and
the most transacted gaming ad-unit rewarded video.
Rapid integration of US commercial team providing visibility on sales pipeline.
Entering new markets outside side of the US and UK through addition of resellers
in the Middle East, India and Asia Pacific.
Progress from the pipeline of enterprise customers licensing Bidstack’s
technology as a service.
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In 2022, Bidstack delivered gross billings of £9.3m (inclusive of all revenues and minimum
revenue guarantee) in line with its two-year commercial contract with Azerion, a pan-European
digital entertainment and media platform. As a result of the net accounting treatment under
IFRS 15, reported revenues for the year was £5.3m (+101%).
This has also driven the gross margin to rise significantly to 72% (FY21: 36.1%) that reflects the
accounting treatment and cost of sales towards servicing the Azerion contract. Excluding this
impact, the unaudited adjusted gross margin would be closer to c.40%.
By geography, the revenue mix was skewed to EMEA due to Azerion’s sales footprint. The
shortfall in the US was addressed in Q3 2022 where Bidstack invested behind a proven
commercial team.
The US is significant and important as it is the world’s largest advertising market. The
integration of the team has been rapid given the depth of experience and relationships. This
is evident in the delivery of campaigns for Fortune 500 brands, size of budgets and repeat
business. Advertising agencies and programmatic platforms are leaning in and recognise the
potential of in-game advertising.
Going forward, a global reseller network will be rolled out to smooth out seasonality, diversify
geographies and leverage specialist gaming agencies as they multiply given the opportunity
of the addressable market. This is a cost efficient approach in monetising non-core markets.
The headline operating expenses excluding share based payments was £11.3m (FY21: £8.3m).
A provision has been raised to reflect amounts outstanding from Azerion which is a key item.
Bidstack has taken appropriate legal advice and intends to claim damages for unlawful
termination. Following a preliminary hearing in the District Court in Amsterdam, Azerion
has provided Bidstack security in respect of the initial part of Bidstack’s claims. Headcount
was at 78 (FY21: 73) by the end of the year. The key areas of investment were related to the
onboarding of the US commercial team in addition to product and software engineers to
prepare for the implementation of the gaming open marketplace.
At year end, the cash balance held was £8.7m (FY21: £7.1m). This reflects the successful
fundraise in October 2022 of £10.5m which included a significant investment by Irdeto B.V. a
world leader in digital platform cybersecurity taking a 13.5% stake.
Trading and Outlook
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J Draper
G Calvert
L Hau
B Neider
D Stewart
D Reeves
D Lowther
C Franklin
04466195
WeWork the Hewett
3rd Floor, 14 Hewett Street
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Directors
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Bidstack Group PLC
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Company Information
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Contents
Chairman’s statement
76
Strategic report
79
Governance
84
Directors’ report
87
Statements of Directors’ responsibilities
97
Independent Auditor’s report
98
Consolidated statement of comprehensive income
103
Consolidated statement of financial position
104
Company statement of financial position
105
Consolidated statement of changes in equity
106
Company statement of changes in equity
107
Consolidated statement of cash flows
108
Company statement of cash flows
109
Notes to the financial statements
110
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Chairman’s Statement
Introduction
This is my first statement since becoming Chairman of Bidstack in September 2022 and I would like to thank Donald
Stewart, the outgoing Chair for all his hard work during his tenureship since the public listing in August 2018 and I
am pleased that he remains a Non-Executive Director of Bidstack.
Looking back at 2022, it has been a year in which Bidstack has strengthened its position in many important areas
as a leading platform in native in-game advertising activation technology. It has also been a year, where, coming
into 2023, Bidstack has set itself up to become more strategic, more predictable in terms of earnings and profit
and more in control of its commercial operations through direct sales to its clients and partners thus maximising
global growth opportunities.
The 2022 financial numbers speak for themselves:
•
Revenue up +101% to c.£5.3m* (FY21: £2.6m)
•
Gross margin at c.72%** (FY21: 36%)
•
Cash balance at 31 December 2022 up 21% at £8.7m (31 December 2021: £7.1m)
•
Loss after tax £7.7m (31 December 2021: £6.3m)
(*Gross billings including all gross revenues and gross Azerion minimum revenue guarantee for FY22 were £9.3m
(FY21: £2.6m), in line with our contractual arrangements.)
(** Gross margin arising as a result of the net accounting treatment of revenues and corresponding costs of sales
towards servicing the Azerion contract in accordance with IFRS15. Excluding this treatment the Board believe that
adjusted gross margin would be closer to 40%)
There are a considerable number of key highlights on which I will comment:
At a time when fundraising was generally very difficult in the industry:
•
A successful placing, raising proceeds of £10.5m in October 2022, demonstrating the confidence of our
existing investors. This included a significant first investment by Irdeto B.V., a world leader in video games
protection and anti-piracy technology taking a 13.5% stake.
Making huge strides by:
•
Growing the Bidstack global network of leading developers and publishers with over 250 titles (FY21: 58)
across in-game, in-menu and rewarded video. This includes an addition of 2 further titles with a AAA global
game publisher and a multi-year renewal with Sports Interactive’s Football Manager.
Expanding, commercial activity in North America where a significant portion of Bidstack’s potential business exists
by:
•
An increased focus on the US market. The commercial team in the US now comprises ten people.
At the same time, making significant inroads into all UK and European markets by:
•
Educating and growing markets such as the UK, France, Netherlands, Spain, Germany, Nordics, Portugal
and Belgium in advertising across Bidstack’s extensive gaming inventory
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Chairman’s Statement (continued)
Expanding Bidstack’s global reach by:
•
The onboarding of additional resellers with MMP Worldwide (MENA), AdScholars (India), Totally Awesome
(APAC), TNK Factory (South Korea) and Omega Media (Vietnam) and;
In the area of advancing technology and standardisation in the industry:
•
By forming a partnership with Unity, a cross platform game engine as a Unity Verified Solution
recommended monetisation solution for game developers across all platforms;
•
By catalysing the Internet Advertising Bureau (IAB)/The Media Rating Council (MRC) to recognise
standards for in game advertising. Advertisers now have clear benchmarks on how to measure campaign
success;
•
Acceleration of the adoption of Bidstack’s SDK by developers and publishers as breadth of ad-formats in
addition to in-game, in-menu now includes rewarded video, the most transacted ad unit in gaming;
•
Early success with enterprise customers licensing Bidstack’s technology such as mobile ad-tech company
Adways and metaverse franchise SimWin; and
•
This is the launch of our enterprise platform business and across 2023 we expect to announce multiple
partnerships through our “low touch”, high margin solution.
Operational challenges
The road in 2022 has not, however, been without obstacles on the way.
I will comment on the principal one.
The appointment of Azerion in 2021, as a global reseller of Bidstack’s offerings, boosted Bidstack’s sales capabilities
in Europe but Azerion materially underperformed against mutual expectations in North America as well as across
the rest of the world. Bidstack took immediate action to mitigate Azerion’s shortfall by appointing its own
experienced US sales team.
Azerion failed to remit properly invoiced sums due to Bidstack under the terms of the contract between the parties,
resulting in Bidstack being awarded attachments (freezing injunctions) against Azerion in December 2022 and then
defending Azerion’s petition to have these removed in the Court of Amsterdam in January 2023. Following the
judgement of the Dutch court in January, Azerion has provided Bidstack with bank guarantees for the amounts due
to Bidstack under its initial claims. Azerion’s purported termination of the contract on 30 December 2022 increased
the quantum of Bidstack’s claims materially. Following advice, the Board believes that, unfortunately, a court
hearing on these claims is not likely to occur before Q4 2023.
Whilst this legal action is regrettable, it has meant that Bidstack now has far greater control over enabling the
Company to become more agile globally.
With Bidstack’s improving revenue visibility and a growing client list, the Board is confident in Bidstack’s ability to
operate independently of any Azerion relationship.
As previously stated, Bidstack intends to vigorously continue pursuing Azerion in respect of its claims for unpaid
invoices and breaches of contract.
Bidstack Group PLC
Annual Report and Accounts 2022
78
Chairman’s Statement (continued)
Outlook, highlights for 2023 and beyond
As a Board we are excited by the future of the industry the Company has helped create, the use-cases for our
technology. The management team, led by our Founder and Chief Executive James Draper, are focused on
achieving our commercial and financial objectives.
Finally, thank you to our loyal and ‘cornerstone’ institutional and retail investors and our dedicated employees and
partners for your support throughout 2022.
Dr David Reeves
Chairman of Bidstack PLC
19th June 2023
Bidstack Group PLC
79
Annual Report and Accounts 2022
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 brand placements and content into natural advertising space within video games. Bidstack currently
offers three ad formats as follows: intrinsic in-game, in-menu and rewarded video.
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 2023 is the diversification of revenue across direct sales, open marketplace, resellers and
licensing. This includes focus on the growth of the platform which can be measured by the number of publishers
within the Bidstack network and the penetration through the cross selling of products such as ad formats and other
use cases through licensing.
The Board anticipates to grow its global Software Development Kit (SDK) footprint to ensure that it can continue to
service the growing demand for its premium inventory across Tier 1 markets, all genres and formats.
In addition, the Board expects to make material investment in 2023 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.
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 79 to 83). 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. On 15th of February 2023, Bidstack appointed Thomas Bullen
as Chief Financial Officer.
The 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:
Bidstack Group PLC
Annual Report and Accounts 2022
80
Strategic Report (continued)
Principal risks and uncertainties (continued)
Risk: Liquidity
Mitigation
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 on a
regular basis to ensure that appropriate funding
resources are ready and available to be drawn on,
when required.
Risk: Talent Retention
Mitigation
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 is a Founder-led business where the
executive team is incentivised in alignment with
Shareholders’ interests towards the long-term
growth of the Group.
In addition, the Group operates share option
schemes 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 identified, engaged and
incentivised where required.
Risk: Competition
Mitigation
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.
Bidstack’s continued focus on the growth of its
platform through onboarding a network of publishers
and providing access to growing list of advertisers in
key
markets
reinforces
the
strength
of
its
commercial value proposition.
In addition, Bidstack has an active IP strategy to
secure its position within the technological sector.
Bidstack Group PLC
81
Annual Report and Accounts 2022
Strategic Report (continued)
Principal risks and uncertainties (continued)
Risk: IT services and infrastructure
Mitigation
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 recognises 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.
Risk: Business Interruption
Mitigation
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 coronavirus pandemic presented an
environment which demonstrably increased
audiences in the gaming sector, mitigating certain
demand-side risks the Group faces.
Risk: Publishing partner growth
Mitigation
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
the world’s largest and most successful game
studios and independent developers.
Games developers and publishers are implementing
monetisation by advertising in their games to
generate sustainable and incremental revenues
from advertising.
Premium titles may require arrangements that
guarantee expected revenue. These incentives are
modelled to mitigate the risk and ensure
appropriate decisions are made on a case-by-case
basis, where appropriate.
Bidstack Group PLC
Annual Report and Accounts 2022
82
Strategic Report (continued)
Principal risks and uncertainties (continued)
Risk: Converting client opportunities
Mitigation
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 industry data from the global advertising
market highlights the growing audience in gaming
compared to the decline in traditional channels.
Historically, advertisers’ deployment of advertising
budget typically follows eyeballs.
The Group continues to work with the agency
holding groups, independent agencies, resellers and
brands direct in educating and converting
advertising spend in Bidstack’s gaming products.
Risk: Brand Safe Advertising space
Mitigation
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.
Bidstack’s platform has targeting, age-gating and a
creative approval layer which can ensure that
content is filtered by the publisher 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.
Risk: Foreign Exchange
Mitigation
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.
Bidstack Group PLC
83
Annual Report and Accounts 2022
Strategic Report (continued)
Forward looking statements
The Strategic Report on pages 79 to 83 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.
Environmental and social
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 reduce energy
consumption, using sustainable resources and recycling waste.
James Draper
CEO of Bidstack Group PLC
19th June 2023
Bidstack Group PLC
Annual Report and Accounts 2022
84
Governance
Directors, senior managers and employees
At 31 December 2022, there were six male and two female Directors of the Company and the Group had 78 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.
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.
Bidstack Group PLC
85
Annual Report and Accounts 2022
Governance (continued)
Section 172 Statement (continued)
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
•
Investor conferences
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.
•
Improving the range of benefits
offered to employees
•
Evaluation and feedback
processes for employees and
management
•
Competitive reward packages
•
Encouraging employee training
and development
•
Flat communication structure
with Executive Board
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.
•
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
Bidstack Group PLC
Annual Report and Accounts 2022
86
Governance (continued)
Section 172 Statement (continued)
The above statement should be read in conjunction with the Strategic Report (on pages 79 to 83) and the
Company’s Corporate Governance Statement.
The Strategic Report was approved by the Board of Directors on 19th June 2023 and was signed on its behalf by:
James Draper
CEO of Bidstack Group PLC
19th June 2023
Technology
Partners
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.
•
Work closely with technology
providers to understand and
resolve issues
•
Understanding from our
technology team results in
positive feedback from third
parties
Games
Developers and
Publishers
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
•
Proactive account management
to ensure cross pollination of
new products and services
Bidstack Group PLC
87
Annual Report and Accounts 2022
Directors’ report
The Directors present their report together with the audited financial statements for the year ended 31 December
2022.
This report sets out the information the company and the Group are required to disclose in the Directors’ report in
compliance with the Companies Act 2006 (the Act). This report should be read in conjunction with the Strategic
report on pages 79 to 83 and the Corporate Governance report on pages 84 to 86.
Strategic Report
The principal activity of the Group, its strategy and business model are set out on pages 79 to 83.
Corporate Governance
The Corporate Governance Report is set out on pages 84 to 86.
Results and dividends
The results of the Group for the year ended 31 December 2022 are set out on page 103 and show an operating loss
for the year of £7,686,186 (2021: loss of £6,297,444). The Directors do not recommend the payment of a dividend
(2021: £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 revenue from the US which will become Bidstack’s largest market,
open-market place, resellers and licensing. The diversification of revenues in key strategic markets and
increased access points for advertisers to access Bidstack’s inventory will improve visibility throughout the year.
However, the Group’s forecasts assume that further equity fundraising will take place in the next twelve months in
order to implement its growth strategy and operate as a going concern. The Group is currently negotiating a
convertible loan facility with a strategic investor to address its short-term cash requirements. Although the entity
has had past success in fundraising and continues to attract interest from retail, institutional and strategic
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
macroeconomic 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 2022
88
Directors’ report (continued)
Substantial Shareholders
On 31 December 2022 the following Shareholders held an interest of 3% or more of the ordinary share capital of the
Company:
Ordinary shares of
0.5p
% of issued share
capital
James Draper
39,760,562
3.06%
Irdeto B.V
175,438,596
13.50%
Seneca
62,825,439
4.83%
Rathbones
57,240,278
4.40%
Canaccord Genuity
125,465,790
9.64%
As at 31 December 2022 no other person had reported an interest of 3% or more in the Company’s ordinary shares.
Directors
The Directors who held office during the year were as follows:
D Reeves (appointed 17th June 2022)
Non-Executive Chairman
J Draper
Executive
F Petruzzelli (resigned 28th December 2022)
Executive
L Hau
Executive
G Calvert
Non-Executive
B Neider
Non-Executive
D Stewart
Non-Executive
D Lowther (appointed 28th December 2022)
Non-Executive
C Franklin (appointed 28th December 2022)
Executive
Directors’ emoluments
Directors during the year 2022
Salary/Fees/
Benefits
Share-based
payment
Total
Emoluments
£
£
£
D Reeves
Chairman
21,538
1,188
22,726
J Draper
Executive
257,154
327,910
585,064
C Franklin
Executive
136,439
7,906
144,345
L Hau
Executive
140,071
67,296
207,367
F Petruzzelli
Executive
238,821
279,543
518,364
D Stewart
Non-Executive
40,000
32,292
72,292
B Neider
Non-Executive
40,000
21,528
61,528
G Calvert
Non -Executive
30,000
21,528
51,528
904,023
759,191
1,663,214
Bidstack Group PLC
89
Annual Report and Accounts 2022
Directors’ report (continued)
Directors during the year 2021
Salary/Fees/
Benefits
Share-based
payment
Total
Emoluments
£
£
£
D Stewart
Non-Executive
40,000
885
40,885
J Draper
Executive
310,000
11,430
321,430
F Petruzzelli
Executive
310,000
11,430
321,430
L Hau
Executive
181,250
14,549
195,799
B Neider
Non-Executive
17,635
590
18,225
G Calvert
Non -Executive
20,000
590
20,590
J McIntosh
Executive
240,000
28,277
268,277
M Hayes
Non-Executive
10,000
2,690
12,690
D Wise
Non-Executive
2,500
-
2,500
1,131,385
70,441
1,201,826
On 21 December 2021, the Company adopted a new Long-Term Incentive Plan (LTIP). Awards to James Draper,
Francesco Petruzzelli and Lisa Hau.
On 9 December 2022, the Company has made an aggregate of 13,965,000 LTIP awards to Camila Franklin.
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:
The Second Awards have been made as follows:
The relevant targets are set by the Remuneration Committee based on the consensus of market expectations.
Further details on the LTIP scheme can be found in Note 22.
Name
FY2023
FY2024
FY2025
Total
Camila Franklin
3,490,901
3,490,901
3,491,948
10,473,750
Name
FY2023
FY2024
FY2025
Total
Camila Franklin
1,163,634
1,163,634
1,163,982
3,491,250
Bidstack Group PLC
Annual Report and Accounts 2022
90
Directors’ report (continued)
Statement of compliance with the Corporate Governance Code
The Group complies with the Quoted Companies Alliance’s Corporate Governance Code (the “QCA Code”) as
revised and reissued in May 2018.
David Reeves, 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. The Directors
therefore view their own medium and long-term interests to be integrally linked to the medium and long-term value
of the Group and, as such, the interests of the Directors are directly aligned with those of the Shareholders.
The Board currently consists of four Independent Non-Executives, David Reeves, Bryan Neider, Glen Calvert and
Donald Stewart, and one further Non-Executive in Doug Lowther, and three Executive Directors, James Draper,
Lisa Hau and Camila Franklin.
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
5. Maintain the Board as a well-functioning, balanced team led by the Chair
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.
Bidstack Group PLC
91
Annual Report and Accounts 2022
Directors’ report (continued)
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 places brands or content into a
pre-defined place within video games and in-game menus, user interfaces and loading screens.
Bidstack’s primary customer are the game publishers and developers who provide on an exclusive or non-exclusive
basis access to its inventory. This growing platform enables the demand side who are the advertising agencies,
buyers for specific brands and operators of programmatic advertising platforms.
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 2023 on business development, both
technical and commercial.
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 79 to
83 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 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 Strategy Officer and
Chief Operations Officer, and five Non-Executive Directors, including the Chairman.
David Reeves chairs the Board. The Executive Directors have industry and technical knowledge and expertise
(James Draper and Camila Franklin), investor relations, corporate development, strategy and financial expertise
(Lisa Hau). The Non-Executive Directors have legal, accounting, public market, leadership and people management
experience (David Reeves, Donald Stewart, Glen Calvert, Bryan Neider and Doug Lowther).
Bidstack Group PLC
Annual Report and Accounts 2022
92
Directors’ report (continued)
David Reeves, Glen Calvert, Bryan Neider and Donald Stewart are independent Non-Executive Directors. Doug
Lowther is non-independent due to Irdeto’s 13.5% strategic investment in Bidstack.
David Garvey, Chief Legal Officer. 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.
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 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. 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 nine board meetings, at which all the members of the Board attended.
In addition, the Board met formally a further seven times, and a sub-committee of the board met twice, for specific
purposes including to approve publication of the Annual Report and Accounts for 2021 and to approve publication
of the Interim Accounts for the period to 30 June 2022, to approve the Company’s fundraise in relation to an
exercise of options and the grant of options and Long-Term Incentive Plan (LTIP) awards. 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:
David Reeves – Non-Executive Chairman
David joined Bidstack in 2022 as chairman, adding more than 30 years of global experience in senior management
roles within multinational companies across the video games industry. He launched Sony PlayStation in Germany,
Switzerland & Austria in 1995 and in 1999, he was appointed Executive Vice President of Sony Computer
Entertainment (Europe) and President and CEO EMEA in 2003. In 2010, David was appointed as COO of Capcom
(Europe). David has his own consulting Company DRC Consulting Ltd, is Co-Founder of E Fundamentals, a SaaS
company providing e-commerce analytics services and is Chairman of Comcarde Ltd, an Edinburgh-based fintech
company.
James Draper – Executive Director, Chief Executive Officer
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 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 c.£40 million for Bidstack.
Bidstack Group PLC
93
Annual Report and Accounts 2022
Directors’ report (continued)
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.
Lisa Hau – Executive Director, Chief Strategy Officer
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 corporate development and strategy for
Bidstack and works closely with the management team. Lisa graduated from the University of Technology,
Sydney in 2006 and is a qualified Chartered Accountant. Lisa brings strategy, financial, capital markets and
investor relations expertise to the Board.
Camila Franklin – Executive Director, Chief Operating Officer
Camila joined Bidstack in 2022, adding more than two decades of gaming experience to the team. She was
previously the COO at AdColony, one of the largest gaming monetisation platforms in the world. Camila was also
named one of The Top Women Leaders in SaaS in 2020 and was a Bronze Stevie Award winner for Woman of the
Year in the business services industry in 2021. Throughout her career, Camila has led engineering, product,
operations, and client-facing teams. She is also well-versed in managing complex cross platform interactions and
relations with clients, end-users, internal team members, and external partners. With deep sector knowledge and
more than 20 years of experience in the mobile marketing and advertising technology industry, Camila will
operationalise and industrialise Bidstack's current growth ambitions.
Donald Stewart – Non-Executive Director
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. 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.
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)
Worldwide Studios. 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,
Bidstack Group PLC
Annual Report and Accounts 2022
94
Directors’ report (continued)
serves on the Boards of three technology start-ups and has been an advisor to a venture capital fund in Silicon
Valley.
Doug Lowther – Non-Executive Director
Doug joined Bidstack in December 2022 as a Non-Executive Director, adding more than 25 years of commercial
experience. Since April 2015 Doug has served as CEO of Irdeto B.V., which is widely regarded as the world leader in
digital platform cybersecurity. Irdeto is a 13.5% shareholder in the Company following its c.£5m strategic
investment, as announced on 5 October 2022. Previously Doug was the President and CEO of International
Datacasting and, prior to that, he served in various senior and executive roles within Irdeto based in Beijing and
Amsterdam.
All of the Directors have direct access to the Company’s external advisers including its NOMAD, lawyers,
remuneration 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 changes at the Board in 2022, a formal evaluation was not undertaken. However, the new Chairman will
conduct a full evaluation in 2023 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.
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 esports 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.
Bidstack Group PLC
95
Annual Report and Accounts 2022
Directors’ report (continued)
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 (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 as well as the audit fee and for ensuring that the financial performance of the Group is properly monitored
and reported. The Company’s auditor has been appointed since 2018 and the Audit Committee’s auditor rotation
policy in accordance with best practice and guidelines. Non audit services are assessed in context of the overall
auditor remuneration in order to determine any perceived or real threat to independence. In addition, the Audit
Committee receives and reviews reports from Management and the Auditors relating to the Interim Report, the
Annual Report and Accounts and the internal control systems of the Group.
As noted above the Audit Committee is also responsible for reviewing the Group’s internal financial controls
systems that identify, assess, manage and monitor financial risks, other internal control and risk management
systems and other aspects of risk management.
During the year under review, the Audit Committee was responsible for reviewing the Company’s Interim Report
for the period to 30 June 2022. 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 2022 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 management team.
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.
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:
Bidstack Group PLC
Annual Report and Accounts 2022
96
Directors’ report (continued)
31 December 2022
Director
Ordinary Shares
Ex. Price
1.14p
Ex. Price
6p
Ex. Price
3.6p
D Reeves
-
-
-
2,000,000
J Draper
39,760,562
-
-
-
L Hau
1,125,000
-
750,000
-
G Calvert
-
-
-
2,000,000
B Neider
750,000
-
-
2,000,000
D Stewart
3,524,876
-
-
3,000,000
Long-Term Incentive Plan (LTIPS)
Director
Ex. Price
3.6p
J Draper
36,000,000
L Hau
6,000,000
C Franklin
13,965,000
31 December 2021
Director
Ordinary Shares
Ex. Price
1.14p
Ex. Price 6p
Ex. Price 3.6p
D Stewart
3,524,876
-
-
3,000,000
J Draper
39,760,562
-
-
-
F Petruzzelli
5,750,000
4,799,500
-
-
L Hau
1,125,000
-
750,000
-
G Calvert
-
-
-
2,000,000
B Neider
750,000
-
-
2,000,000
Long-Term Incentive Plan (LTIPS)
Director
Ex. Price
3.6p
J Draper
36,000,000
F Petruzzelli
36,000,000
L Hau
6,000,000
James Draper
CEO of Bidstack Group PLC
19th June 2023
Bidstack Group PLC
97
Annual Report and Accounts 2022
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.
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
James Draper
CEO of Bidstack Group PLC
19th June 2023
Bidstack Group PLC
Annual Report and Accounts 2022
98
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 2022 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:
• give a true and fair view of the state of the group’s and of the parent company’s affairs as at 31 December 2022
and of the group’s loss for the year then ended;
• 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.
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.
Emphasis of matter
We draw your attention to note 18 in the financial statements which describe the conditions on which management
have assessed the recoverability of the amount owed by Azerion. Our opinion is not modified in this respect.
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.
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
-
Scrutinising the cash flow forecasts and budgets and challenging the assumptions made by management.
-
In particular, we reviewed the central assumption around the success of an equity fundraise and obtained
supporting evidence for this.
Bidstack Group PLC
99
Annual Report and Accounts 2022
Independent Auditor’s report to the members of Bidstack Group Plc (continued)
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.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the
relevant sections of this report.
Key Audit Matter
How our scope addressed this matter
Uncertainty
around
the
recoverability of the amounts
owed from Azerion Group N.V. due
to ongoing litigation.
We obtained and critically appraised management’s assessment for
the recoverability of the amounts owed from Azerion Group N.V.
We corroborated facts pertaining to the legal claims served by the
Group at the Dutch court against Azerion Group N.V. by making
inquiries with the Group’s lawyers engaged to represent the Group in
the litigation proceedings with at the Dutch Court.
Through our audit, we particularly challenged the central assumption
around the percentage used for a provision against the Azerion
Group N.V. debtor.
We concluded that the outcome of the litigation between the Group
and Azerion Group N.V. and accuracy of the underlying doubtful debt
provision is inherently uncertain. The debtor balance held within
Bidstack Limited is material to the Group’s consolidated financial
statements. Accordingly, the uncertainty attributable to the debtor
and provision balances constitutes a material uncertainty as
disclosed in Financial statement disclosure in Note 18.
We have also made reference to the basis of the recoverability in
the emphasis of matter paragraph above.
Going concern
Due
to
the
continued
comprehensive losses generated by
the group of £7.572 million in the year
ended 31 December 2022 (£6.286
million in 2021) 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.
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.
Revenue recognition
The
group
earned
revenue
of
£5,267,155 in the year ended 31
December 2022. There is a risk that
revenue
is
recognised
inappropriately
and
not
in
accordance with IFRS 15.
We agreed cash receipts to a sample of tested revenue transactions
in order to gain comfort over recorded sales occurrence and
completeness. We also agreed a sample of recorded revenue
transactions to appropriate evidence of customer acceptance to
evidence satisfaction of respective performance obligations.
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.
Bidstack Group PLC
Annual Report and Accounts 2022
100
Independent Auditor’s report to the members of Bidstack Group Plc (continued)
An overview of the scope of our audit
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. 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 four subsidiaries – Bidstack Limited, Bidstack SIA,
Bidstack Inc 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.
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.
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 revenue to be the financial metric of most interest to shareholders and other users of the financial
statements. Revenue is deemed to be the most appropriate benchmark.
We determined materiality for the group to be £105,000 which equated to approximately 2% of draft revenue,
which we considered was within a suitable range of acceptable values for calculating materiality.
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 £78,750.
We agreed with the management that we would report all individual audit differences identified during the course
of our audit in excess of £5,250. We also agreed to report differences below these thresholds that, in our view,
warranted reporting on qualitative grounds.
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.
Bidstack Group PLC
101
Annual Report and Accounts 2022
Independent Auditor’s report to the members of Bidstack Group Plc (continued)
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 97, 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 2022
102
Independent Auditor’s report to the members of Bidstack Group Plc (continued)
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
10 Queen Street Place
For and on behalf of Haysmacintyre LLP, Statutory Auditors
London
19th June 2023
EC4R 1AG
Bidstack Group PLC
103
Annual Report and Accounts 2022
Consolidated statement
of comprehensive income
for the year ended 31 December 2022
Note
Year ended
Year ended
31 December
2022
31 December
2021
£
£
Revenue
4
5,267,155
2,623,413
Cost of sales
(1,484,512)
(1,674,190)
Gross profit
3,782,643
949,223
Administrative expenses
5
(12,545,716)
(8,681,927)
Exceptional items
6
-
(222,555)
Total administrative expenses
(12,545,716)
(8,904,482)
Operating loss
(8,763,073)
(7,955,259)
Finance income
9
749
180
Finance costs
9
(2,998)
(3,392)
Loss before taxation
(8,765,322)
(7,958,471)
Taxation
10
1,079,136
1,661,027
Loss for the year
(7,686,186)
(6,297,444)
Other comprehensive income
Items that will or may be reclassified to profit or
loss:
Exchange gains on translation of foreign operations
113,358
10,589
Tax relating to items that may be reclassified
10
-
-
Other comprehensive income for the year, net of tax
113,358
10,589
Total comprehensive loss for the year
(7,572,828)
(6,286,855)
Loss per share – basic and diluted (pence)
11
(0.62)
(1.21)
The notes on pages 110 to 145 form part of these financial statements.
Bidstack Group PLC
Annual Report and Accounts 2022
104
Consolidated statement of financial position
as at 31 December 2022
Company number 04466195
Note
31 December
2022
31 December
2021
ASSETS
£
£
Non-current assets
Intangible assets
12
765,454
248,760
Property, plant and equipment
14
56,623
46,519
Right of use asset
16
3,920
7,280
Total non-current assets
825,997
302,559
Current assets
Trade and other receivables
18
9,319,868
2,752,036
Cash and cash equivalents
19
8,662,039
7,086,906
Total current assets
17,981,907
9,838,942
Total assets
18,807,904
10,141,501
EQUITY AND LIABILITIES
Equity
Share capital
21
10,796,670
8,950,048
Share premium account
21
43,216,919
35,375,326
Share-based payment reserve
21
2,782,896
1,589,965
Merger relief reserve
21
6,508,673
6,508,673
Reverse acquisition reserve
21
(23,320,632)
(23,320,632)
Warrant reserve
21
-
71,480
Exchange reserve
21
123,947
10,589
Retained losses
21
(29,491,052)
(21,876,346)
Total equity
10,617,421
7,309,103
Non-current liabilities
Lease liability
15
614
4,180
Total non-current liabilities
614
4,180
Current liabilities
Trade and other payables
20
8,186,323
2,824,920
Lease liability
15
3,546
3,298
Total current liabilities
8,189,869
2,828,218
Total equity and liabilities
18,807,904
10,141,501
The financial statements on pages 103 to 109 were approved by the board of Directors on 19th June 2023 and
signed on its behalf by
David Reeves
Chairman of Bidstack PLC
The notes on pages 110 to 145 form part of these financial statements.
Bidstack Group PLC
105
Annual Report and Accounts 2022
Company statement of financial position
as at 31 December 2022
Note
31 December
2022
31 December
2021
ASSETS
£
£
Non-current assets
Right of use asset
16
3,920
7,280
Investments
17
1,376,363
7,477,841
Total non-current assets
1,380,283
7,485,121
Current assets
Trade and other receivables
18
21,964,726
15,094,021
Cash and cash equivalents
19
8,249,477
6,746,220
Total current assets
30,214,203
21,840,241
Total assets
31,594,486
29,325,362
EQUITY AND LIABILITIES
Equity
Share capital
21
10,796,670
8,950,048
Share premium account
21
43,216,919
35,375,326
Share-based payment reserve
21
2,782,896
1,589,965
Merger relief reserve
21
6,508,673
6,508,673
Warrant reserve
21
-
76,457
Retained losses
21
(31,308,950)
(23,311,955)
Total equity
31,308,950
29,188,514
Non-current liabilities
Lease liability
15
614
4,180
Total non-current assets
614
4,180
Current liabilities
Trade and other payables
20
281,376
129,370
Lease liability
15
3,546
3,298
Total current liabilities
284,922
132,668
Total equity and liabilities
31,594,486
29,325,362
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
£8,760,710 (2021: loss of £1,121,182).
The financial statements on pages 103 to 109 were approved by the board of Directors on 19th June 2023 and
signed on its behalf by:
James Draper
CEO of Bidstack PLC
The notes on pages 110 to 145 form part of these financial statements.
Bidstack Group PLC
Annual Report and Accounts 2022
106
Consolidated statement of changes in equity
for the year ended 31 December 2022
Warrants issued by the Company in the year ended 31 December 2018 were classified as equity on initial recognition and shown in the warrant reserve. As at 31 December 2022
the warrants lapsed unexercised and the amount previously recognised in the warrant reserve has been reclassified to retained losses.
The notes on pages 110 to 145 form part of these financial statements.
Share capital Share premium
Share-based
payment
reserve
Merger relief
reserve
Reverse
acquisition
reserve
Exchange
Reserve
Warrant
reserve
Retained
losses
Total equity
£
£
£
£
£
£
£
£
£
Balance as at 1 January 2021
6,234,261
27,984,716
1,282,556
6,508,673
(23,320,632)
-
71,480
(15,578,902)
3,182,152
Issue of shares
2,715,787
8,147,363
-
-
-
-
-
-
10,863,150
Costs of raising equity
-
(756,753)
-
-
-
-
-
-
(756,753)
Share-based payments
-
-
307,409
-
-
-
-
-
307,409
Loss for the year
-
-
-
-
-
-
-
(6,297,444)
(6,297,444)
Total comprehensive loss for the
year
-
-
-
-
-
10,589
-
-
10,589
Balance as at 31 December 2021
8,950,048
35,375,326
1,589,965
6,508,673
(23,320,632)
10,589
71,480
(21,876,346)
7,309,103
Issue of shares
1,839,122
8,643,873
-
-
-
-
-
-
10,482,995
Issue of share options exercised
7,500
22,500
30,000
Costs of raising equity
-
(824,780)
-
-
-
-
-
-
(824,780)
Share-based payments
-
-
1,192,931
-
-
-
-
-
1,192,931
Unexercised lapsed warrants
-
-
-
-
-
-
(71,480)
71,480
-
Loss for the year
-
-
-
-
-
-
-
(7,686,186)
(7,686,186)
Total other comprehensive income
for the year
-
-
-
-
-
113,358
-
-
113,358
Balance as at 31 December 2022
10,796,670
43,216,919
2,782,896
6,508,673
(23,320,632)
123,947
-
(29,491,052)
10,617,421
Bidstack Group PLC
107
Annual Report and Accounts 2022
Company statement of changes in equity
for the year ended 31 December 2022
Share capital Share premium
Share-based
payment
reserve
Merger relief
reserve
Warrant
reserve Retained losses
Total equity
£
£
£
£
£
£
£
Balance as at 1 January 2021
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
-
-
-
-
10,863,150
Costs of raising funds
-
(756,753)
-
-
-
-
(756,753)
Share-based payments
-
-
307,409
-
-
-
307,409
Loss for the year
-
-
-
-
-
(1,121,182)
(1,121,182)
Balance as at 31 December 2021
8,950,048
35,375,326
1,589,965
6,508,673
76,457
(23,311,955)
29,188,514
Issue of shares
1,839,122
8,643,873
-
-
-
-
10,482,995
Issue of share options exercised
7,500
22,500
30,000
Costs of raising funds
-
(824,780)
-
-
-
-
(824,780)
Share-based payments
-
-
1,192,931
-
-
-
1,192,931
Unexercised lapsed warrants
-
-
-
-
(76,457)
76,457
-
Loss for the year
-
-
-
-
-
(8,760,710)
(8,760,710)
Balance as at 31 December 2022
10,796,670
43,216,919
2,782,896
6,508,673
-
(31,996,208)
31,308,950
The notes on pages 110 to 145 form part of these financial statements.
Bidstack Group PLC
Annual Report and Accounts 2022
108
Consolidated statement of cash flows
for the year ended 31 December 2022
31 December
2022
31 December
2021
Note
£
£
Cash flows from operating activities
Loss before taxation
(8,765,322)
(7,958,471)
Adjustments for:
Amortisation – Intangibles
12
71,528
31,195
Amortisation – Right of use asset
16
3,360
10,377
Depreciation
14
28,765
24,160
Equity settled share-based payments
5
1,192,931
307,409
Doubtful debts expenses
-
(2,073)
Interest received
9
(749)
(180)
Interest paid
9
2,998
3,392
Bad debt expense
18
1,456,236
-
Exchange differences on translation of foreign operations
113,358
10,589
(5,896,895)
(7,573,602)
Changes in working capital
(Increase)/decrease in trade and other receivables
18
(8,199,385)
409,468
Increase in trade and other payables
20
5,361,405
961,182
Cash used in operations
(8,734,875)
(6,202,952)
Taxation received
1,254,451
892,895
Net cash used in operations
(7,480,424)
(5,310,057)
Cash flow from investing activities
Investment in intangible assets
12
(588,222)
-
Investment in property, plant and equipment
14
(38,869)
(42,291)
Net cash flow used in investing activities
(627,091)
(42,291)
Cash flow from financing activities
Proceeds from issue of share capital
21
10,512,995
10,863,150
Cost of issue
21
(824,780)
(756,753)
Interest paid
9
(2,998)
(3,392)
Principal paid on finance leases
15
(3,318)
(11,045)
Interest received
9
749
180
Net cash generated from financing activities
9,682,648
10,092,140
Increase in cash and cash equivalents in the year
1,575,133
4,739,792
Cash and cash equivalents at beginning of year
7,086,906
2,347,114
Cash and cash equivalents at the end of the year
8,662,039
7,086,906
The notes on pages 110 to 145 form part of these financial statements.
Bidstack Group PLC
109
Annual Report and Accounts 2022
Company statement of cash flows
for the year ended 31 December 2022
31 December
2022
31 December
2021
Note
£
£
Cash flows from operating activities
Loss before taxation
(8,760,710)
(1,121,182)
Adjustments for:
Amortisation – Right of use asset
16
3,360
10,377
Share-based payments
5
1,192,931
307,409
Impairment of investments
17
6,101,478
-
Interest received
9
(749)
(180)
Expected credit loss
18
431,838
-
Interest paid
9
397
1,088
(1,031,455)
(802,488)
Changes in working capital
(Decrease) in trade and other receivables
18
(54,377)
(39,410)
Increase/(decrease) in trade and other payables
20
152,007
(114,207)
Net cash generated (used in) operations
(933,835)
(153,617)
Cash flow from investing activities
Change in intercompany
(7,248,167)
(4,678,554)
Net cash flow used in investing activities
(7,248,167)
(4,678,554)
Cash flow from financing activities
Issue of ordinary shares for cash
21
10,512,995
10,863,150
Costs directly related to issue of shares
21
(824,780)
(756,753)
Interest paid on lease liabilities
9
(397)
(1,088)
Principal paid on finance leases
15
(3,318)
(11,045)
Interest received
9
749
180
Net cash generated from financing activities
9,685,249
10,094,444
Increase in cash and cash equivalents in the year
1,503,257
4,459,785
Cash and cash equivalents at beginning of year
6,746,220
2,286,435
Cash and cash equivalents at the end of the year
8,249,477
6,746,220
The notes on pages 110 to 145 form part of these financial statements.
Bidstack Group PLC
Annual Report and Accounts 2022
110
Notes to the financial statements
1 General information
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 Wework, The Hewett, 3rd Floor, 14
Hewett Street, London, EC2A 3NP. 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 subsidiaries (together the
“Group”). The financial statements have been prepared on a going concern basis in accordance with UK-adopted
international accounting standards and those parts of the Companies Act 2006 applicable to companies reporting
under IFRS.
The effect on the economy may impact the Group in varying ways, which could lead to a direct bearing on the
Group’s ability to generate future cash flows for working capital purposes. The inability to gauge the length of such
disruption further adds to this uncertainty. For these reasons the generation of sufficient operating cash flows
remain a risk. Management is closely monitoring commercial and technical aspects of the Group’s operations to
mitigate risk and believes the Group will have access to sufficient working capital to continue operations for the
foreseeable future.
Consolidation
The consolidated financial statements consolidate the financial statements of the Company and the results of its
subsidiary undertakings Bidstack Limited, Pubguard Ltd, Bidstack SIA, Bidstack Technologies Ltd, Bidstack Sports
Limited and Bidstack Inc., made up to 31 December 2022.
Subsidiaries are entities over which the Group has control. The Group controls an entity when the Group is exposed
to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred
to the Group. They are deconsolidated from the date that control ceases.
Although the consolidated financial information has been issued in the name of Bidstack Group Plc, the legal
parent, it represents in substance continuation of the financial information of the legal subsidiary, Bidstack Ltd.
Going concern
The Board continues to adopt the going concern basis in the preparation of the financial statements as it is
confident of the Group continuing operations into the foreseeable future, although material uncertainty exists in
relation to the group’s ability to raise funds to sustain its operations.
The Board’s forecasts for the Group include revenue from existing business, additional future revenues from
anticipated new lines of business, potential future capital in-flows, continued operating losses, projected cash-burn
of the Group (and taking account of reasonably possible changes in trading performance and also changes outside
of expected trading performance) for a minimum period of at least twelve months from the date of approval of
these financial statements.
The Group forecasts assume that further equity fundraising will take place in the next twelve months in order to
implement its growth strategy and operate as a going concern. The Group is currently negotiating a convertible
loan facility with a strategic investor to address its short term cash requirements. Although the Group has had past
success in fundraising and continues to attract interest from investors, making the Board confident that such
financing options will be available to provide the required capital, there can be no guarantee that such fundraising
will be available and, accordingly, this constitutes a material uncertainty over going concern.
Bidstack Group PLC
111
Annual Report and Accounts 2022
Notes to the financial statements (continued)
2 Summary of significant accounting policies (continued)
Going Concern (continued)
The Group’s business activities, together with the factors likely to affect its future development, performance and
position are set out in the Chairman’s statement on pages 76 to 78.
The financial statements at 31 December 2022 show that the Group generated an operating loss for the year of
£8.8 million (2021: £7.9 million); with cash used in operating activities of £7.5 million (2021: £6.2 million). Group
balance sheet also showed cash reserves at 31 December 2022 of £8.6 million (2021: £7.1 million). The Group is
dependent on further equity fundraising in order to operate as a going concern for at least twelve months from
the date of approval of the financial statements.
New and amended standard, and interpretations issued and effective for the financial year beginning 1
January 2022.
The adoption of the following mentioned amendments, which were all effective for the period beginning 1 January
2022, have not had a material impact on the Group’s and Company’s financial statements:
•
Amendments to IAS 16 Property, Plant and Equipment: Proceeds before Intended Use;
•
Annual Improvements to IFRS Standards 2018-2020 (Amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41);
•
Amendments to IFRS 3 References to Conceptual Framework);
•
Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets
New standards, interpretations and amendments not yet effective
There are a number of standards, amendments to standards, and interpretations which have been issued by the
IASB that are effective in future accounting periods that the Group has decided not to adopt early.
The following amendments are effective for the period beginning 1 January 2023:
•
Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-
current and Amendments to IAS 1: Classification of Liabilities as Current or Non-current – Deferral of
Effective Date – effective 1 January 2023*
•
Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of
Accounting Policies – effective 1 January 2023
•
Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors –Definition of
Accounting Estimates – effective 1 January 2023
•
Amendments to IAS 12 Income Taxes – Deferred Tax Related to Assets and Liabilities arising from a Single
Transaction - effective 1 January 2023
The following amendments are effective for the period beginning 1 January 2024:
•
IFRS 16 Leases (Amendment – Liability in a Sale and Leaseback)
•
IAS 1 Presentation of Financial Statements (Amendment – Classification of Liabilities as Current or Non-
current)
•
IAS 1 Presentation of Financial Statements (Amendment – Non-current Liabilities with Covenants)
Bidstack Group Plc is currently assessing the impact of these new accounting standards and amendments.
Revenue Recognition
Under IFRS 15, revenue is recognised to depict the transfer of promised goods or services to a customer in an
amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods
and services. The underlying principle is a five-step approach to identify a contract, determine performance
obligations, the consideration and the allocation thereof, and timing of revenue recognition. IFRS 15 also includes
guidance on the presentation of assets and liabilities arising from contracts with customers, which depends on the
relationship between Company’s performance and the customers’ payment.
The Group recognises revenue from the follow activities:
Bidstack Group PLC
Annual Report and Accounts 2022
112
Notes to the financial statements (continued)
2 Summary of significant accounting policies (continued)
Revenue Recognition (continued)
•
Revenue from Media contracts; whereby Group’s inventory is sold to advertisers directly or
programmatically;
•
Revenue from Sponsorship contracts; whereby the Group enter into a contract with the brand direct or
advertising agency to provide a customized campaign in a chosen video game;
•
Revenue from Licensing contracts; whereby the Group enters into a contract that provides the exclusive
licensing agreement of the Pubguard Technology;
•
Revenue from Minimum Guarantee; whereby the Group entered into an exclusive contract with Azerion
as its provider of reseller services in relation to Bidstack SDK formats.
Revenue from contracts with customers is recognised when or as the Company satisfies a performance
obligation by transferring a promised good or service to a customer. A good or service is transferred when the
customer obtains control of that good or service.
The Group identified the performance obligations that related to the above stated revenue activities as follows:
•
Revenue from Media contracts; based on agreed impressions that have been delivered between the
campaign start and end date;
•
Revenue from Sponsorship contracts; the delivery of a customised placement of advertising into the
agreed game;
•
Revenue from Licensing contracts; the point at which the brand rights were made available, and the
point that exclusive licensing access to the Pubguard technology was provided;
•
Revenue from Minimum Guarantee; for the provision of an agreed amount of in-game advertising
inventory over the duration of the contract.
For each performance obligation that is satisfied over time, the Group applies a single method of measuring
progress towards complete satisfaction of the obligation. The objective is to depict the transfer of control of the
goods or services to the customer. To do this, the Group have adopted an appropriate output method. For the
Group, that is the rights to access and use the brand assets and the provision of in-game advertising inventory
over the period of the contract.
The Group identifies the transaction price that relate to the above stated revenue generating activities as follows:
•
Revenue from Media contracts; based on the Group’s rate card by CPM multiplied by the agreed
number of impressions;
•
Revenue from Sponsorship contracts; based on the cost set by the game developer. The Group
implements a cost plus model for sponsorship;
•
Revenue from Licensing contracts; determined by the contract over the duration of the term;
•
Revenue from Minimum Guarantee; the minimum guarantee’s transaction price is included within the
contract.
Revenue Recognition
The Group have applied a practical expedient which allows an entity to apply the accounting for a contract with a
customer to a portfolio of contracts with similar characteristics if the entity reasonably expects the effects on the
financial statements of applying IFRS 15. The Group have assessed the contracts and is comfortable that the
effects on the financial statements of applying IFRS 15 would not differ materially from applying this Standard to
the individual contracts (or performance obligations) within that portfolio.
The Company assesses the contract with the customer to identify the separate performance obligations which
would consist of an ‘access rights’ and the ‘provision of in-game advertising inventory’. The Company transfer of
the in-game advertising inventory sold usually coincides with the delivery of that inventory and the customer
being able to utilise it. The Company principally satisfies its performance obligations at that point in time and
recognises revenue on delivery.
Bidstack Group PLC
113
Annual Report and Accounts 2022
Notes to the financial statements (continued)
2 Summary of significant accounting policies (continued)
Revenue Recognition (continued)
The Group recognises a contract asset when revenue has been recognised on satisfying performance obligations
but have not yet been billed to the customer. Contract assets relate to impressions that have been delivered but
not billed to the customers. Contract liabilities are recognised when the Group has an obligation to transfer goods
or services to the customer for which consideration has been received from the customer. Contract liabilities
relate to advanced payments from customers against a campaign.
Net finance costs
Finance costs comprise interest on bank loans and other interest payable. Interest on bank loans and other interest
is charged to the Statement of Comprehensive Income over the term of the debt using the effective interest rate
method so that the amount charged is at a constant rate on the carrying amount.
Finance income comprises interest receivable on loans to related parties. Interest income is recognised in the
Statement of Comprehensive Income as it accrues using the effective interest method.
Taxation
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the Statement of
Comprehensive Income except to the extent that it relates to items recognised directly in equity, in which case it is
recognised in equity.
Current tax is recognised as the amount of corporation tax payable in respect of taxable profit for the current
or past reporting periods using tax rates and laws that have been enacted or substantively enacted by the
reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date, except as otherwise
indicated.
Deferred tax assets are only recognised to the extent that it is probable that they will be recovered against
the reversal of deferred tax liabilities or other future taxable profits.
Deferred tax is calculated using the tax rates and laws that have been enacted or substantively enacted by
the reporting date that are expected to apply to the reversal of the timing difference.
With the exception of changes arising on initial recognition of a business combination, the tax
expense/(income) is presented either in the income statement, other comprehensive income or equity
depending on the transaction that resulted in the tax expense/(income).
Deferred tax liabilities are presented within provisions for liabilities and deferred tax assets within debtors.
Deferred tax assets and deferred tax liabilities are offset only if:
•
the Group has a legally enforceable right to set off current tax assets against current tax liabilities, and
•
the deferred tax assets and deferred tax liabilities relate to corporation tax levied by the same taxation
authority on either the same taxable entity or different taxable entities which intend either to settle
current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities
simultaneously.
•
Research and Development Tax Credits are recognised as receivables when an inflow of economic benefit is
certain, until then a contingent asset in respect of probable Corporation Tax is disclosed.
Bidstack Group PLC
Annual Report and Accounts 2022
114
Notes to the financial statements (continued)
2 Summary of significant accounting policies (continued)
Valuation of investments
Investment in subsidiary undertakings are accounted for at cost less impairment. Advances to subsidiaries are
initially recorded at fair value based on a market rate of interest and subsequently at amortised cost. The difference
between funds advanced and fair value is recorded in investments.
Impairment of fixed asset investments
Fixed asset investments are assessed for the presence of impairment indicators, if any indicators are present then
an impairment review is conducted. An impairment review of Goodwill is conducted annually, any resulting
impairment loss is measured and recognised on a consistent basis.
Leased assets
All leases are accounted for by recognising a right-of-use asset and a lease liability except for:
•
Leases of low value assets; and
•
Leases with a duration of 12 months or less.
Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease
term, with the discount rate determined by reference to the rate inherent in the lease unless (as is typically the
case) this is not readily determinable, in which case the incremental borrowing rate on commencement of the lease
is used.
On initial recognition, the carrying value of the lease liability also includes:
•
amounts expected to be payable under any residual value guarantee;
•
any penalties payable for terminating the lease, if the term of the lease has been estimated on the basis of the
termination option being exercised.
Right of use assets are initially measured at the amount of the lease liability, reduced for any lease incentives
received, and increased for:
•
lease payments made at or before commencement of the lease;
•
initial direct costs incurred; and
•
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.
Bidstack Group PLC
115
Annual Report and Accounts 2022
Notes to the financial statements (continued)
2 Summary of significant accounting policies (continued)
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the fair value
of Bidstack Group's share of the identifiable assets and liabilities of the acquiree at the date of acquisition.
Subsequent to initial recognition, Goodwill is measured at cost less accumulated impairment losses.
Intangible assets
An intangible asset, which is an identifiable non-monetary asset without physical substance, is recognised to the
extent that it is probable that the expected future economic benefits attributable to the asset will flow to the Group
and that its cost can be measured reliably, the asset is deemed to be identifiable when it is separable or when it
arises from contractual or other legal rights.
Amortisation is charged on a straight-line basis and is included in administrative expenses through the profit or loss.
The rates applicable, which represent the Directors’ best estimate of the useful economic life, are:
•
Website costs – 5 years
•
Trademarks – 10 years
•
Brand – 5 years
•
Software – 5 years
•
Research and Development – 5 years
Property, plant and equipment
Items of property, plant and equipment are initially recognised at cost. As well as the purchase price, cost includes
directly attributable costs. Depreciation is provided on all items of property, plant and equipment, so as to write off
their carrying value over their expected useful economic lives. It is provided at the following rates:
-
Computer equipment – 33.33% straight line
-
Office equipment – 20% straight line
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term highly liquid
investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk
of changes in value.
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.
Bidstack Group PLC
Annual Report and Accounts 2022
116
Notes to the financial statements (continued)
2 Summary of significant accounting policies (continued)
Financial liabilities
Trade and other payables are recognised initially at fair value and are subsequently measured at amortised cost,
using the effective interest method.
Share Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new share or options
are shown in equity as deduction net of tax before proceeds.
Share-based payments
Where share options are awarded to employees, the fair value of the options at the date of grant is charged to the
income statement over the vesting period. Non-market vesting conditions are taken into account by adjusting the
number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative
amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting
conditions are factored into the fair value of the options granted.
As long as all other vesting conditions are satisfied, a charge is made irrespective of whether the market vesting
conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the
options, measured immediately before and after the modification, is also charged to the income statement over
the remaining vesting period. Where equity instruments are granted to persons other than employees, the income
statement is charged with fair value of goods and services received.
Functional and presentation currency
Items included in the financial statements of the Group are presented in Pounds Sterling (£) which is also the Parent
Company’s functional currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at
the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses
resulting from the settlement of transactions and from the translation at year-end exchange rates of monetary
assets and liabilities denominated in foreign currencies are recognised in the Statement of Comprehensive
Income.
Bidstack Group PLC
117
Annual Report and Accounts 2022
Notes to the financial statements (continued)
3 Critical accounting estimates and judgements
The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are
continually evaluated on historical experience and other factors, including expectations of future events that are
believed to be reasonable. In the future, actual experience may differ from these estimates and assumptions. The
estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amount of
assets and liabilities within the next financial year are discussed below.
Share-based payments
In order to calculate the charge for share-based compensation as required by IFRS 2, the Group makes estimates
principally relating to the assumptions used in its option-pricing model as set out in note 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 and
interest rates 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
Bidstack Group PLC
Annual Report and Accounts 2022
118
Notes to the financial statements (continued)
3 Critical accounting estimates and judgements (continued)
The timing in recognising revenue from contracts with customers
The Group have revenue generating activities whereby performance obligations are satisfied both at a point in time
and satisfied over time.
For revenue that is satisfied over time, which represents revenue generated from Licensing and Azerion Minimum
Guarantee (“MG”), the Group assesses the contracts in place between itself and the vendor.
With regards to the Licensing contract, a fixed fee is included in the contract that has been allocated to each
distinct good or service, which is recognised over the duration of the contract.
With regards to the MG, the transaction stand-alone price is determined within the contract. This is allocated across
the duration of the contract to define the MG applicable in FY2022, FY2023 and FY2024.
The Group ensures that any new contracts with customers are reviewed to ensure that both the timing of
satisfaction of performance obligations and the transaction price and the amounts allocated to performance
obligations are correct.
For each performance obligation that is satisfied over time, the Group applies a single method of measuring
progress towards complete satisfaction of the obligation. The objective is to depict the transfer of control of the
goods or services to the customer. For the Group, that is the rights to access and use the brand assets and the
provision of in-game advertising inventory over the period of the contract.
Revenue recognition from Azerion contract
The Company entered into a contract with Azerion on 16 December 2021 that commenced on 1 March 2022 with
a contractual term ending on 29 February 2024. The agreement stated that the Company appointed Azerion as
its sole third party provider of reseller services in relation to Bidstack’s SDK formats in the territories covered
under the agreement.
Included in the contract were prescribed amounts payable for the period 1 March 2022 to 31 December 2022, 1
January 2023 to 31 December 2023 and 1 January 2024 to 29 February 2024. In the event that the cumulative
period to date net sales revenue does not exceed the respective cumulative revenue target, Azerion would pay
the Company the shortfall amount. In the case that a payment is due, the Company would report to Azerion the
Average Media Cost that would typically apply to the shortfall amount and any documented binding minimum
guarantee obligations the Company has towards Publishers as a result of the sales shortfall. The difference
between the shortfall amount and the Average Media Cost results in the Media Cost Reimbursement which is
offset against shortfall amount due to the Company.
The Media Cost Reimbursement is determined by the minimum revenue guarantee shortfall amount less
Bidstack’s average media cost. This has then been allocated across the duration of the contract to define the MG
applicable in FY2022, FY2023 and FY2024.
Bidstack Group PLC
119
Annual Report and Accounts 2022
Notes to the financial statements (continued)
4 Segmental information
During the year ended 31 December 2022 and the year ended 31 December 2021, the Group operated one business
segment, that of the provision of native in-game advertising across the US and in EMEA.
The revenue has been segmented based on geographical regions US and EMEA, and by revenue type. This is
used by the chief operating decision makers to perform their role.
31 December
2022
31 December
2021
£
£
Revenue by Geographical Region
US
167,627
863,691
EMEA
5,099,528
1,759,722
5,267,155
2,623,413
The Group’s revenue included 1 (2021: 5) customers making up more than 10% each during the year.
31 December
2022
31 December
2021
£
£
Revenue by Type
Customer 1
4,112,331
642,270
Customer 2
-
377,375
Customer 3
-
361,758
Customer 4
-
289,239
Customer 5
-
267,914
All other customers
1,154,824
684,857
Total revenue
5,267,155
2,623,413
The Group recognises a contract asset when revenue has been recognised on satisfying performance obligations
but have not yet been billed to the customer. Contract assets relate to impressions that have been delivered but
not billed to the customers. Contract liabilities are recognised when the Group has an obligation to transfer goods
or services to the customer for which consideration has been received from the customer. Contract liabilities relate
to advanced payments from customers against a campaign. Further details of the Group’s contract assets and
liabilities can be found in Note 18 and Note 20, respectively.
The Group does not ordinarily have returns, refunds or other similar obligations in respect of their performance
obligations as the Group’s obligations are around the delivery of impressions or a hardcoded customised asset. The
Group ensures that the customers are happy to proceed in advance of going live. Should there be a discrepancy
between what the customer sees as delivered on their 3rd party verification system and what the Group has billed,
a credit note is issued.
As at 31 December 2022, the Group did not have any unsatisfied long-term contracts.
Bidstack Group PLC
Annual Report and Accounts 2022
120
Notes to the financial statements (continued)
5 Loss for the year
31 December
2022
31 December
2021
£
£
The loss for the year has been arrived at after charging:
Depreciation of property, plant and equipment
28,765
24,160
Amortisation of Right of use assets
3,360
10,377
Amortisation of intangible assets
71,528
31,195
Equity settled share-based payments
1,192,931
307,408
Premises costs payments
329,830
338,369
Auditors’ remuneration (note 7)
80,000
51,000
6 Exceptional items
31 December
2022
31 December
2021
£
£
Non-recurring regulatory costs
-
124,555
Restructuring costs
-
98,000
-
222,555
7 Auditors’ remuneration
31 December
2022
31 December
2021
£
£
Fees payable to the Group’s Auditors in respect of:
Audit of the financial statements of the Company
60,000
39,000
Audit of the financial statements of the Company’s subsidiaries
20,000
26,500
Other services in relation to the audit
-
5,500
80,000
71,000
8 Employees and Directors
Staff costs, including Directors, comprise:
31 December
2022
31 December
2021
£
£
Wages and salaries
5,190,586
4,022,066
Redundancy costs
30,000
50,000
Social security costs
724,107
318,255
Share-based payment expense
1,192,931
307,408
7,137,624
4,697,727
Bidstack Group PLC
121
Annual Report and Accounts 2022
Notes to the financial statements (continued)
8 Employees and Directors (continued)
Key management compensation
The Directors consider that the key management comprises the Directors of the Group; their emoluments are set
out below:
31 December
2022
31 December
2021
£
£
Salaries and fees
753,529
782,240
Bonus
226,815
577,473
Pension
5,102
18,223
Share-based payments
856,154
124,343
Total
1,841,600
1,502,279
Highest paid Director
31 December
2022
31 December
2021
£
£
Salaries and fees
255,833
310,000
Pension
1,321
1,320
Share-based payments
327,910
11,430
Total
585,064
322,750
9 Finance income and finance costs
31 December
2022
31 December
2021
£
£
Other interest receivable and similar income
749
180
Total finance income
749
180
31 December
2022
31 December
2021
£
£
Other interest payable
2,998
3,392
Total finance costs
2,988
3,392
Bidstack Group PLC
Annual Report and Accounts 2022
122
Notes to the financial statements (continued)
10 Taxation
Reconciliation of effective tax rate
Tax assessed for the year is lower than (2021: lower than) the standard rate corporation tax of 19% (2021: 19%). The
differences are explained below:
31 December
2022
31 December
2021
£
£
Loss before tax
(8,765,322)
(7,958,471)
Tax using the UK corporation tax rate of 19% (2021: 19%)
(1,665,411)
(1,512,110)
Fixed asset differences
(1,286)
(1,405)
Additional deduction for R&D expenditure
(695,598)
(678,618)
Surrender of tax losses for R&D expenditure
1,230,674
1,200,632
Foreign tax – other
-
(71,745)
Current tax – other
(939,199)
(916,272)
Expenses not deductible for tax purposes other than Goodwill amortisation
and impairment
276,523
76,045
Adjustment for prior period
(139,936)
(744,756)
Deferred tax not recognised
855,097
987,202
Total tax credit
(1,079,136)
(1,661,027)
The Group has tax losses of £20,000,031 (2021: loss of £17,114,866) 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.
Bidstack Group PLC
123
Annual Report and Accounts 2022
Notes to the financial statements (continued)
11 Loss per share
Basic and diluted loss per share
The calculation of basic and diluted loss per share is based on the loss attributable to ordinary shareholders of
£7,686,186 (2021: loss of £6,297,444) and the weighted average number of ordinary shares in issue for the year of
1,235,295,798 (2021: 519,507,993). The basic and diluted earnings per share are the same given the loss for the
year, making the outstanding share options and warrants anti-dilutive.
12 Intangible assets – Group
Website costs
Trademarks
Software
Brand
Goodwill
R&D
Total
£
£
£
£
£
£
£
Cost
At 1 January 2021
48,618
1,460
88,205
29,402
168,000
-
335,685
Additions
-
-
-
-
-
-
-
At 31 December 2021
48,618
1,460
88,205
29,402
168,000
-
335,685
Amortisation
At 1 January 2021
24,574
397
23,069
7,690
-
-
55,730
Charge
9,338
145
16,284
5,428
-
-
31,195
At 31 December 2021
33,912
542
39,353
13,118
-
-
86,925
Cost
At 1 January 2022
48,618
1,460
88,205
29,402
168,000
-
335,685
Additions
-
-
-
-
-
588,222
588,222
At 31 December 2022
48,618
1,460
88,205
29,402
168,000
588,222
923,907
Amortisation
At 1 January 2022
33,912
542
39,353
13,118
-
-
86,925
Charge
9,337
146
16,284
5,428
-
40,333
71,528
At 31 December 2022
43,249
688
55,637
18,546
-
40,333
158,453
Net book value
At 31 December 2022
5,369
772
32,568
10,856
168,000
547,889
765,454
At 31 December 2021
14,706
918
48,852
16,284
168,000
-
248,760
Bidstack Group PLC
Annual Report and Accounts 2022
124
Notes to the financial statements (continued)
13 Goodwill and impairment
Goodwill impairment
Goodwill in the Group is solely allocated the cash-generating unit (CGU”) Pubguard Limited (“Pubguard”) following
the 100% acquisition of the share capital of Pubguard, formally Minimised Media Limited, on 1 August 2019.
Pubguard is an adtech platform to monitor & identify, analyse and remove malicious and/or fraudulent ad traffic
from digital environments.
Pubguard’s technology naturally complements Bidstack's proprietary technology as the native in-game advertising
sector moves towards a fully open marketplace for ad buying/delivery with Pubguard's technology providing
additional security for games publishers and developers.
The Group tests goodwill annually for impairment, or more frequently if there are any indications that goodwill might
be impaired. For the year ended 31 December 2022, the recoverable amount of the CGU was determined by
reviewing the revenue generated solely by the Pubguard technology during the year. In 2022, Pubguard generated
£745,000 through the partnership with Azerion (2021: £nil).
The Group is not actively marketing the technology as a standalone product, but it has the potential to generate
similar profits to Azerion if/when sold to other partners. This substantiates that the present value of similar
revenues exceed the net assets, therefore no impairment is required. Additionally, the company intends to use
the technology as a key complementary component in the platform to enable the Group’s ability to effectively
deliver safe ads. This will allow the Group to maintain and develop the current relationship with our publishers and
enable the company to attract additional premium publishers in the future.
The book value of Goodwill as at 31 December 2022 is £168,000. Management believe that the revenue generated
via the Pubguard technology for 1 year exceeds the book value and have therefore determined that the Goodwill
balance is not impaired and requires no further testing.
Should the Group look to sell the technology, it is the belief of management that the technology will be sold for an
amount greater than the goodwill book value based on its revenue generating capabilities.
Bidstack Group PLC
125
Annual Report and Accounts 2022
Notes to the financial statements (continued)
14 Property, plant and equipment – Group
Office
equipment
Computer
equipment
Total
£
£
£
Cost
At 1 January 2021
10,885
45,531
56,416
Additions
2,913
39,378
42,291
At 31 December 2021
13,798
84,909
98,707
Depreciation
At 1 January 2021
4,201
23,827
28,028
Charge
5,333
18,827
24,160
At 31 December 2021
9,534
42,654
52,188
Cost
At 1 January 2022
13,798
84,909
98,707
Additions
2,930
35,939
38,869
At 31 December 2022
16,728
120,848
137,576
Depreciation
At 1 January 2022
9,534
42,654
52,188
Charge
1,642
27,123
28,765
At 31 December 2022
11,176
69,777
80,953
Net book value
At 31 December 2022
5,552
51,071
56,623
At 31 December 2021
4,264
42,255
46,519
Bidstack Group PLC
Annual Report and Accounts 2022
126
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 Dec
2022
No.
31 Dec
2021
No.
Number of active leases
1
1
Lease liability at year end
31 Dec
2022
£
31 Dec
2021
£
Non-current
Lease liability
614
4,180
614
4,180
Current
Lease liability
3,546
3,298
3,546
3,298
Total lease liability
4,160
7,478
Lease liabilities
Computer
Equipment
£
Total
£
At 1 January 2021
8,443
8,443
Additions
10,080
10,080
Interest expense
657
657
Lease payments
(11,702)
(11,702)
At 31 December 2021
7,478
7,478
At 1 January 2022
7,478
7,478
Interest expense
397
397
Lease payments
(3,715)
(3,715)
At 31 December 2022
4,160
4,160
Bidstack Group PLC
127
Annual Report and Accounts 2022
Notes to the financial statements (continued)
14 Lease liability (continued)
Reconciliation of minimum lease payments and the present value of lease liabilities is detailed below:
31 Dec
2022
£
31 Dec
2021
£
Within 1 year
3,715
3,715
Later than 1 year and less than 5 years
619
4,334
After 5 years
-
-
Total including interest cash flows
4,334
8,049
Less: interest cash flows
(174)
(571)
Present value of lease liabilities
4,160
7,478
Bidstack Group PLC
Annual Report and Accounts 2022
128
Notes to the financial statements (continued)
16 Right of use assets
Computer
equipment
£
Cost
At 1 January 2021
32,535
Additions
10,080
As at 31 December 2021
42,615
Amortisation
At 1 January 2021
24,958
Charge
10,377
As at 31 December 2021
35,335
Cost
At 1 January 2022
42,615
Additions
-
At 31 December 2022
42,615
Amortisation
At 1 January 2022
35,335
Charge
3,360
At 31 December 2022
38,695
Net book value
At 31 December 2022
3,920
At 31 December 2021
7,280
Bidstack Group PLC
129
Annual Report and Accounts 2022
Notes to the financial statements (continued)
17 Investments - Company
Investments
in
subsidiaries
£
Cost
At 1 January 2021
7,477,841
Additions
At 31 December 2021
7,477,841
Impairment
At 1 January 2021
-
Charge
-
At 31 December 2021
-
Cost
At 1 January 2022
7,477,841
Additions
-
At 31 December 2022
7,477,841
Impairment
At 1 January 2022
-
Charge
6,101,478
At 31 December 2022
6,101,478
Net book value
At 31 December 2022
1,376,363
At 31 December 2021
7,477,841
Impairment assessment on Investments
As at 31 December 2022, the Group assessed whether there were any indicators of impairment on the investment
balance held in the Bidstack Plc’s books.
On 31 December 2022, Bidstack Group Plc had 1,300,855,984 shares in issue that traded as 0.0278p. The market
capitalisation was £36,163,796. The Group compared the market capitalisation against the total net assets of
Bidstack Group’s Plc and concluded that the carrying values were higher.
During the period, the Group received noticed from Azerion purporting to exercise an alleged right to terminate an
existing agreement in place that ran to 2024. This resulted in lower than anticipated revenue, and projected
revenue for 2023 and 2024.
The Group concluded that both of the above events were impairment indicators, and completed an impairment
review of the investment balance.
Bidstack Group PLC
Annual Report and Accounts 2022
130
Notes to the financial statements (continued)
17 Investments - Company (continued)
The Group produced 3 sets of cash flow projections based on a best-case scenario, mid-case scenario and low-
case scenario. Each cash flow projection produced by management was based on reasonable and supportable
assumptions that represent their best estimate of the economic conditions that will exist over the period assessed.
The Group completed value in use calculations for all 3 scenarios to determine whether an impairment charge was
necessary.
Key Assumptions used for the value in use calculation
The value in use was determined by discounting future Group cash flows from 2023-2026. Our key assumptions
are as follows:
•
Group revenues, cost of sales and direct expenses have been forecasted for years 2023, 2024, 2025 and
2026.
•
The growth rate has been calculated using the average of the historic UK GBP growth and historic inflation
rate for the years 2018, 2019 and 2021. Long-term growth is assumed at 2.90% 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 2023, 2024, 2025 and 2026.
•
WACC has been calculated at 8.63% based on inputs from 31 December 2022.
•
The year-end cash balance for 2022 has been added back to the value.
Based on the above assumptions on the best case scenario, a headroom of £14,059,156 was achieved indicating
that an impairment of the investments isn’t required at 31 December 2022.
The value in use approach was repeated for both the medium-case scenario and low-case scenario. Under the two
approaches, the inputs remained the same.
Based on the medium-case scenario, an impairment of £18,099,492 was calculated which indicates an impairment
to the investments is required at 31 December 2022.
Based on the low-case scenario, an impairment of £2,492,980 was calculated which indicates an impairment to the
investments is required at 31 December 2022.
In determining the impairment charge, management looked at the weighted average cost of the
impairment/headroom from the 3 calculations after assigning a probability to them and determined that the
impairment charge against the investments for the year is £6,101,478.
Bidstack Group PLC
131
Annual Report and Accounts 2022
Notes to the financial statements (continued)
17 Investments - Company (continued)
Principal subsidiary undertakings of the Company
The subsidiary undertaking of the Company is presented below:
Subsidiaries
Country of
incorporation
Registered address
Proportion of
ordinary shares
held at year end
at year end
Bidstack Limited
England and Wales
Wework, The Hewett, 3rd Floor, 14
Hewett Street, London, EC2A 3NP
100%
Pubguard Ltd
England and Wales
Wework, The Hewett, 3rd Floor, 14
Hewett Street, London, EC2A 3NP
100%
Bidstack SIA
Latvia
Krisjana Valdemara iela 21 - 11, Riga,
Latvia
100%
Bidstack
Technologies Ltd
England and Wales
Wework, The Hewett, 3rd Floor, 14
Hewett Street, London, EC2A 3NP
100%
Bidstack Sports
Limited
England and Wales
Wework, The Hewett, 3rd Floor, 14
Hewett Street, London, EC2A 3NP
100%
Bidstack Inc.
U.S.A
122 South Michigan Avenue, Suite
1390, Chicago, Il 60603
100%
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.
The principal activity of Bidstack Technologies Ltd is that of providing the white label licensing of the Bidstack
Technology.
The principal activity of Bidstack Sports Limited is that of providing sports teams and leagues, real-time control of
the advertising and fan engagement spaces within their virtual IP.
The principal activity of Bidstack Inc. is the provision of native in-game advertising in the U.S.A.
Bidstack Group PLC
Annual Report and Accounts 2022
132
Notes to the financial statements (continued)
18 Trade and other receivables
Group
Company
31 December
2022
31 December
2021
31 December
2022
31 December
2021
£
£
£
£
Trade receivables
6,857,633
1,269,368
-
-
Contract assets
10,500
-
-
-
Prepayments
1,205,045
174,172
29,208
38,202
Other receivables
307,491
392,225
21,935,518
15,055,819
Corporation tax
939,199
916,271
-
-
9,319,868
2,752,036
21,964,726
15,094,021
As at 31 December 2022, Other receivables in the Company included an intercompany receivable due from
Bidstack Ltd of £17,885,100 (FY21: £13,294,313), an intercompany receivable due from Pubguard Ltd of £138,328
(FY21: £138,306), an intercompany receivable due from Bidstack SIA of £3,107,093 (FY21: £1,578,653) and an
intercompany receivable due from Bidstack Inc. of £1,128,920 (FY21: £Nil).
Due to Azerion impacting projected revenues going forward, an expected credit loss has been calculated on the
loans due from Bidstack Ltd, Pubguard Ltd and Bidstack SIA to Bidstack Plc. The total expected credit loss is
£431,838. The above figures are reflected net of the expected credit loss charge. and has been included in the
above figures. The provision has no impact on the consolidated results for the year.
In the year ended 31 December 2022, the Group had total impairment losses recognised in administrative expenses
in the statement of comprehensive income of £1,456,235 (2021: £4,690). In December 2021, Bidstack entered into
an agreement with Azerion to market, promote and resell Bidstack’s inventory. A key component of this agreement
was Azerion’s commitment to a minimum revenue guarantee in 2022. The relationship with Azerion deteriorated
throughout 2022, resulting in the litigation over the amounts owed Bidstack under the agreement. Bidstack
management firmly believes that the company will prevail in the litigation with Azerion and will be awarded the full
amount owed, not only for amounts outstanding at year-end of 2022, but also the amounts owed for 2023 and
2024. The outcome of the litigation and the extent of Azerion debtor recoverability is uncertain and therefore
management feels that it is prudent, due to the inherent risk involved in any litigation, to take a bad debt provision
against the amounts owed by Azerion at year-end 2022. Bidstack's external counsel cannot provide the company
with a percentage likelihood of a successful outcome. Consequently, Bidstack management has arrived at 30% as
a reasonable % to provide.
Bidstack Group PLC
133
Annual Report and Accounts 2022
Notes to the financial statements (continued)
18 Trade and other receivables (continued)
Analysis of trade receivables derived from revenue generated from Bidstack based on the days past due of the
invoices:
Current
£
1 – 30
£
31 – 60
£
61 -90
£
> 90
£
Total Gross
£
ECL
£
Total Net
£
31 December 2022
480,241
74,696
54,850
31,793
162,593
804,173
(19,792)
784,381
31 December 2021
117,545
-
190,612
282,186
50,648
640,991
-
640,991
Analysis of trade receivables derived from revenue generated from Azerion Technology B.V based on the days past
due of the invoices:
Current
£
1 – 30
£
31 – 60
£
61 -90
£
> 90
£
Total Gross
£
ECL
£
Total Net
£
31 December 2022
2,933,129
405,779
1,753,622
- 980,722
6,073,252
-
6,073,252
31 December 2021
628,377
-
-
-
-
628,377
-
628,377
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 trade receivables do not contain a significant financing
component as the credit terms offered by the Group to its customers are 45 days. The Group measures ECL based
on historical data by determining the historical default rates to be applied to the Group’s trade receivables. The
Group adjusted the historical default rates to incorporate forward looking information looking at any linear or non-
linear relationships that could impact the Group’s credit losses. The Group apply those default rates against the
trade receivables that have been analysed out into time buckets based on their risk profile to determine the ECL
to be applied. The Group separately assesses the trade receivables for any bad debt provisions.
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 56 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.
The movements in the ECL allowance for trade receivables are detailed below:
Year ended
31 December
2022
£
Opening balance
-
Increase in ECL
19,792
Closing ECL allowance
19,792
No ECL allowance is made against other receivables and none have been written off.
Bidstack Group PLC
Annual Report and Accounts 2022
134
Notes to the financial statements (continued)
19 Cash and cash equivalents
Group
Company
31 December
2022
31 December
2021
31 December
2022
31 December
2021
£
£
£
£
Cash and cash equivalents
8,662,039
7,086,906
8,249,477
6,746,220
20 Trade and other payables
Group
Company
31 December
2022
31 December
2021
31 December
2022
31 December
2021
£
£
£
£
Trade payables
1,984,567
474,661
79,142
87,901
Contract liabilities
197,066
-
-
-
Taxation and social security
136,465
532,822
4,468
6,163
Other payables
258,647
27,778
16,608
1,525
Accruals
5,609,578
1,789,659
181,158
33,781
8,186,323
2,824,920
281,376
129,370
21 Share capital and reserves
Allotted, called up and fully paid
Ordinary 0.5p
shares
Share
capital
Share
Premium
No.
£
£
As at 01 January 2022
931,531,573
8,950,048
35,375,326
Issue of placing shares
369,324,411
1,846,622
8,666,373
Cost of raising equity
-
-
(824,780)
As at 31 December 2022
1,300,855,984
10,796,670
43,216,919
All ordinary shares are equally eligible to receive dividends and the repayment of capital and represent equal votes
at meetings of Shareholders.
The following describes the nature and purpose of each reserve within owner’s equity:
Share capital: Amount subscribed for shares at nominal value.
Share premium: Amount subscribed for share capital in excess of nominal value, less costs of share issue.
Share-based payment reserve: The share-based payment reserve comprises the cumulative expense
representing the extent to which the vesting period of share options has passed and management’s best estimate
of the achievement or otherwise of non-market conditions and the number of equity instruments that will ultimately
vest.
Merger relief reserve: Effect on equity of the consideration shares issued over their nominal value.
Reverse acquisition reserve: Effect on equity of the reverse acquisition of Bidstack Limited.
Bidstack Group PLC
135
Annual Report and Accounts 2022
Notes to the financial statements (continued)
21 Share capital and reserves (continued)
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.
2022
2021
Number
Weighted
Average
Exercise
Price
Number
Weighted
Average
Exercise
Price
£
£
Outstanding at the beginning of the year
61,432,835
0.04
46,382,842
0.11
Granted during the year
20,925,350
0.03
51,503,335
0.03
Forfeited/waived during the year
(7,200,000)
0.02
(36,453,342)
0.14
Exercised during the year
(1,500,000)
0.02
-
-
Total outstanding
73,658,185
0.03
61,432,835
0.04
Total exercisable
14,382,836
0.08
11,799,503
0.09
Bidstack Group PLC
Annual Report and Accounts 2022
136
Notes to the financial statements (continued)
22 Share options and warrants (continued)
Options (continued)
The Black-Scholes model was used for calculating the cost of options. The model inputs for each of the options
issued were:
Grant date
8 Dec 22
21 Dec 21
26 July 21
Share price at grant date
0.036
0.0360
0.0193
Exercise prices
0.030
0.0360
0.0200
Risk free rate
3.095%
0.810%
0.610%
Expected volatility
149.28%
127.16%
106.85%
Expected dividend yield
0.00%
0.00%
0.00%
Contractual life
6.5 years
6.5 years
6.5 years
The weighted average contractual life of the options is 6 years and 314 days (2021: 7 years and 175 days).
The expected price volatility is based on the historical volatility (based on the expected life of the options).
Warrants
2022
2021
Number
Weighted
Average
Exercise Price
Number
Weighted
Average
Exercise Price
£
£
Outstanding at the beginning of the year
1,250,001
6p
1,250,001
6p
Lapsed during the year
(1,250,001)
6p
-
-
Total outstanding and exercisable
-
-
1,250,001
6p
The Company granted no warrants during the year ended 31 December 2022.
The charge for the year for warrants and options amounted to £381,720 (2021: £307,409), charged to the
statement of comprehensive income.
On 9 December 2022 the Company made an aggregate award of 27,930,000 LTIP awards to Camila Franklin and
Jude O’Connor.
For the purposes of the new Long Term Incentive Plan “LTIP” awards, the awards have been made in two
categories, each subject to different performance criteria.
For the first set of LTIP awards the Remuneration Committee considered that the most appropriate performance
target for the Company at this stage in its development is revenue. The vesting schedule below highlights the
details for the achievement of the awards.
Bidstack Group PLC
137
Annual Report and Accounts 2022
Notes to the financial statements (continued)
22 Share options and warrants (continued)
Long-Term Incentive Plan
Revenue
% on target
Vesting Schedule
% vesting
90 and above
100
Between 75 and 90
50-100 (straight line basis between points)
75
50
Below 75
0
The LTIP awards also include an operating cost element, which, if achieved, can increase the amount of vesting by
10%, in the event the revenue target is missed. Any awards not vesting from Year 1 will be rolled into the Year 2
awards.
The second set of LTIP awards were intended to create circumstances which ought to lead to exceptional returns
for the Company and its shareholders. The Remuneration Committee considered that EBITDA was an appropriately
more challenging performance condition for the Company at this stage. The vesting schedule below highlights the
details for the achievement of the second set of LTIP awards.
EBITDA
% on target
Vesting Schedule
% vesting
100 and above
100
Between 95 and above
75
90 and above
50
Below 90
0
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.
Revenue and EBITDA are non-market based vesting conditions and therefore were not considered when
calculating the fair value at grant date. The awards are subject to the employees being employed for 3 years,
therefore the vesting period is 3 years. In determining the number of shares to vest, the Group projected revenue
and EBITDA for three potential outcomes for each year up to 2025 and have taken the weighted probability
outcome as the basis for each years assessment. The EBITDA Target for 2022 has been met, however these
options are still subject to a service condition from date of grant for three years and as a result will not be fully
vested until this service period has elapsed.
The Revenue Target for 2022 has not been met, however any awards not vesting in Year 1 are rolled into the Year
2 award. The EBITDA Target for 2023 is not expected to be met based on management projections so the expected
options to vest with respect of these have been trued up to Nil. Management are satisfied that both the Revenue
Targets and EBITDA Targets will all other future years are expected be met.
Bidstack Group PLC
Annual Report and Accounts 2022
138
Notes to the financial statements (continued)
22 Share options and warrants (continued)
Long-Term Incentive Plan (continued)
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.
On 21 December 2021 the Company 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.
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)
75
50
Below 75
0
The LTIP awards also include an operating cost element which, if achieved, can increase the amount of vesting 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
Vesting Schedule
% vesting
100 and above
100
Between 95 and above
75
90 and above
50
Below 90
0
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.
Bidstack Group PLC
139
Annual Report and Accounts 2022
Notes to the financial statements (continued)
22 Share options and warrants (continued)
Long-Term Incentive Plan (continued)
2022
2021
Number
Weighted
Average
Exercise
Price
Number
Weighted
Average
Exercise Price
£
£
Outstanding at the beginning of the year
91,000,000
0.05
-
-
Granted during the year
27,930,000
0.05
91,000,000
0.05
Forfeited/waived during the year
(12,000,000)
0.01
Total outstanding
106,930,000
0.05
91,000,000
0.05
Total exercisable
-
-
-
-
The weighted average contractual life of the options is 2 years and 343 days (2021: 2 years and 356 days).
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
21 Dec 21
8 Dec 22
Share price at grant date`
£0.0360
£0.0300
Exercise prices
£0.005
£0.005
Risk free rate
0.810%
3.095%
Expected volatility
127.16%
149.28%
Contractual life
6.5 years
6.5 years
The expected price volatility is based on the historical volatility (based on the expected life of the options).
Bidstack Group PLC
Annual Report and Accounts 2022
140
23 Premises costs commitments
Group
Company
31 December
2022
31 December
2021
31 December
2022
31 December
2021
£
£
£
£
Within one year
263,500
336,680
-
-
More than one year
52,700
-
-
316,200
336,680
-
-
24 Financial instruments
The Group’s activities expose it to a variety of financial risks: capital risk, credit risk, liquidity risk and foreign
currency risk. The Group’s activities also expose it to non-financial risks: market risk. The Group’s overall risk
management programme seeks to minimise the potential adverse effects on the Group’s financial performance.
The Board, on a regular basis, reviews key risks and, where appropriate, actions are taken to mitigate the key risks
identified.
The significant accounting policies regarding financial instruments are disclosed in note 2.
Financial Instruments – Risk Management
The Group is exposed through its operations to the following risks:
•
Capital risk
•
Credit risk
•
Liquidity risk
•
Market risk
In common with all other businesses, the Group is exposed to risks that arise from is use of financial instruments.
This note describes the Group’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.
Principal financial instruments
The principal financial instruments used by the Group, from which financial instrument risk arises, are as follows:
•
Trade and other receivables
•
Cash and cash equivalents
•
Trade and other payables
General objectives, policies and processes
The Board has overall responsibility for the determination of the Group’s risk management objectives and policies
and, whilst retaining 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 updates from the CFO 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 as far as possible without unduly affective the Group’s competitiveness and flexibility. Further
details regarding these policies are set out below:
Bidstack Group PLC
141
Annual Report and Accounts 2022
Notes to the financial statements (continued)
24 Financial instruments (continued)
a) Categories of financial instruments
Financial assets
Financial assets measured at amortised cost comprise trade receivables, other receivables and cash, as follows:
Group
Company
31 December
2022
31 December
2021
31 December
2022
31 December
2021
£
£
£
£
Trade receivables
6,857,633
1,269,368
-
15,011,273
Other receivables
307,491
316,215
15,000
15,000
Cash and cash equivalents
8,662,039
7,086,906
8,249,477
6,746,203
Total financial assets
15,827,163
8,672,489
8,264,477
21,772,476
Financial liabilities
Financial liabilities measured at amortised cost comprise trade payables, other payables and accruals, as follows:
Group
Company
31 December
2022
31 December
2021
31 December
2022
31 December
2021
£
£
£
£
Trade payables
1,984,566
474,661
79,142
87,901
Other payables
213,773
9,440
15,526
1,524
Accruals
5,609,578
1,789,659
151,159
33,781
Total financial liabilities
7,807,917
2,273,760
245,827
123,206
There is no significant difference between the fair value and the carrying value of financial instruments.
Bidstack Group PLC
Annual Report and Accounts 2022
142
Notes to the financial statements (continued)
24 Financial instruments (continued)
b) Financial risk management
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 main financial risks arising from the Group’s and Company’s financial instruments are market risk, credit risk
and liquidity risk.
Capital risk management
The capital structure of the business consists of cash and cash equivalents, debt and equity. Equity comprises
share capital, share premium, retained losses and other reserves 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
Credit risk is the risk of financial loss to the Group and Company if a customer or counterparty to a financial
instrument fails to meet its contractual obligations. The carrying amount of financial assets represents the
maximum credit exposure and the Group holds no collateral.
For the Group, the credit risk arises primarily from the following financial instruments:
(i) Cash balances held at banks
The risk is mitigated by using only reputable financial institutions with a high credit rating of at least BBB+ and
spreading its cash balance across multiple unconnected banks.
(ii) Trade receivables.
The Board recognises that having a focus of revenue within one or few clients represents a clear counterparty
concentration of risk and is incentivised to diversify the Group’s customer base to mitigate this. Management
regularly monitor the credit risk exposure to the Group’s largest customers, defined as customers who are
expected to contribute over 10% of the Group’s revenue to ensure adherence to agreed payment terms. There was
one such significant customer in the year ended 31 December 2022 (2021: 5) further outlined in Note 4.
Bidstack Group PLC
143
Annual Report and Accounts 2022
Notes to the financial statements (continued)
24 Financial instruments (continued)
Credit risk (continued)
(ii) Trade receivables. (continued)
The receivables’ aging analysis is evaluated on a regular basis for potential doubtful debts, considering historic,
current and forward-looking information.
Specific provisions are taken for receivables that management considers to be doubtful in addition to an expected
credit loss model applied. In the application of this model, debtors are combined into ageing brackets with a historic
loss rate applied, this loss rate takes in account a risk premium based on the estimated impacts of macroeconomic
factors. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash
flows.
The Company is additionally exposed to credit risk on the intercompany balances with its subsidiaries. In particular,
the Company has made unsecured interest free loans to Bidstack Limited which stood at £17,885,100 at 31
December 2022 (2021: £13,294,313) and is repayable on demand. The Board evaluates the recoverability of the
intercompany receivables based on the projected cash flows of the entity and as disclosed in Note 18 a provision
for expected credit losses has been made during the year.
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.
Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market prices. This risk comprises currency risk and interest rate risk.
Bidstack Group PLC
Annual Report and Accounts 2022
144
Notes to the financial statements (continued)
24 Financial instruments (continued)
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 functional currency. The currencies in which these
transactions primarily are denominated are US Dollar (USD), Euros (EUR) and Dirham (AED).
The following balances held in foreign currency at the reporting date are:
Group
Company
31 December
2022
31 December
2021
31 December
2022
31 December
2021
£
£
£
£
AED
38,382
-
-
-
EUR
1,167,602
27,639
72,177
22,796
USD
5,632,175
11,110
(36,590)
-
Total net exposure
6,838,159
38,749
35,587
22,796
Sensitivity analysis
A 5 per cent strengthening of sterling against the respective currencies at 31 December 2022 would have
decreased equity and profit and loss by the amounts shown below:
Group
Profit and loss
Equity
31 December
2022
31 December
2021
31 December
2022
31 December
2021
£
£
£
£
AED
(1,919)
-
(1,919)
-
EUR
(58,380)
(1,382)
(58,380)
(1,382)
USD
(281,609)
(556)
(281,609)
(556)
Total net exposure
(341,908)
(1,938)
(341,908)
(1,938)
Company
Profit and loss
Equity
31 December
2022
31 December
2021
31 December
2022
31 December
2021
£
£
£
£
AED
-
-
-
-
EUR
(3,609)
(1,140)
(3,609)
(1,140)
USD
1,830
-
1,830
-
Total net exposure
(1,779)
(1,140)
(1,779)
(1,140)
Bidstack Group PLC
145
Annual Report and Accounts 2022
Notes to the financial statements (continued)
24 Financial instruments (continued)
Interest rate risk
Interest rate risk is the risk that future cash flows of a financial instrument will fluctuate because of changes in
interest rates. The exposure to this risk is not considered as the Company and Group have no external borrowing
and are not relying on interest income for funding.
25 Related parties
Transactions with subsidiaries
During the year, cash advances of £5,536,224 (2021: £4,493,176) were made to Bidstack Ltd and incurred net costs
of £945,437 that were paid on behalf by the Company (2021: £1,229,093). 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 £17,885,100
(2021: £13,294,313).
During the year, cash advances of £Nil (2021: £Nil) and repayments of £Nil (2021: £7,500) were made to Pubguard
Ltd. Net costs were incurred of £22 that were paid on behalf by the Company (2021: £5,158). 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 £138,328 (2021: £138,306).
During the year, net costs were incurred of £1,528,440 by Bidstack SIA that were paid on behalf of the Company
(2021: £1,416,812). 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 £3,107,093 (2021: £1,578,653).
During the year, net costs were incurred of £1,128,920 by Bidstack Inc. that were paid on behalf of the company
(2021: £Nil). The advances are held on an interest free Inter-Group loan which has no terms for repayment. At the
year end the Inter-Group loan amounts to £1,128,920 (2021: £Nil).
Transactions with other related parties
Francesco Petruzzelli, Director, claimed £38,389 (2021: £16,133) from the Company for reimbursement of expenses
for the year. As at 31 December 2022, £Nil (2021: £Nil) was due to Mr Petruzzelli from the Company.
James Draper, Director and Chief Executive Officer, claimed £Nil from the Company for reimbursement of
expenses for the year (2021: £791). As at 31 December 2022, £Nil (2021: £Nil) was owing to Mr Draper.
Neider Investments, a common entity under the control of Director Bryan Neider, invoiced the Company £Nil
(2021: £24,892). As at 31 December 2022, £Nil (2021: Nil) was owing to Neider Investments.
26 Post period end events
In June 2023, the Company implemented a prudent cost efficiency and restructuring programme to reduce the
monthly cash burn following a comprehensive business review to adapt to the current macro environment. The
Company is focused on revenue generation through maximising output from existing resources and preserving
cash.