SportsHero Limited
ACN 123 423 987
Annual Report
for the year ended
30 June 2021
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
CORPORATE DIRECTORY
Directors
John Dougall (Non-Executive Chairman)
Tom Lapping (Director and CEO)
Michael Higginson (Non-Executive Director)
Company Secretary
Michael Higginson
Registered Office and
Principal Place of Business
36 Prestwick Drive
Twin Waters, QLD 4564
Telephone: +61 (7) 5457 0557
Facsimile: +61 (7) 5457 0557
Website: http://sportshero.live/
Auditor
RSM Australia Partners
Level 32/2 The Esplanade
Perth WA 6000
Share Registry
Advanced Share Registry Services Limited
110 Stirling Highway
Nedlands WA 6009
Telephone: +61 (8) 9389 8033
Facsimile: +61 (8) 9262 3723
Stock Exchange Listing
Australian Securities Exchange
ASX Code: SHO
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SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
CONTENTS
PAGE
CHAIRMAN’S LETTER
OPERATIONS REPORT
DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE DECLARATION
STATEMENT OF FINANCIAL POSITION
STATEMENT OF COMPREHENSIVE INCOME
STATEMENT OF CHANGES IN EQUITY
STATEMENT OF CASH FLOWS
NOTES TO THE FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
SHAREHOLDER INFORMATION
General information
4
5
9
20
21
22
23
24
25
53
54
57
The financial statements cover SportsHero Limited as a consolidated entity consisting of SportsHero Limited
and its subsidiaries. The financial statements are presented in US dollars, which is SportsHero Limited’s
functional and presentation currency.
SportsHero Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its
registered office and principal place of business is:
36 Prestwick Drive
Twin Waters, QLD 4564
Telephone: +61 (7) 5457 0557
Facsimile: +61 (7) 5457 0557
A description of the nature of the consolidated entity's operations and its principal activities are included in
the Directors' Report, which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of Directors, on 30
September 2021. The Directors have the power to amend and reissue the financial statements.
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SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
CHAIRMAN’S LETTER
Dear Shareholder
The 2020/21 financial year has been another exciting and tumultuous year that has resulted in the Company
positioning itself to enter new markets, generate revenue at scale and leverage our existing products, data and
market position to our advantage.
As innovators in the sport prediction markets, we have developed a state-of-the-art artificial intelligence
Predictor that will enable the Company to generate new revenue opportunities, including licencing revenue,
subscription revenue, exclusive streaming revenue and royalties, affiliate gaming revenue with gaming
communities, betting companies and sporting news websites.
Our goal of deploying our premium white label solutions across multiple sports to sporting groups and other
partners globally is generating substantial momentum.
Despite the fact that no football has been played in Indonesia since the start of COVID-19, our Indonesian
focussed OlahBola football app has generated well in excess of 5 million new unique users since its 7 July
2020 launch. In that regard, I applaud and congratulate our dynamic, inventive and motivated technical team.
In addition, in February 2021 our Indonesian team secured an exclusive partnership for the Indonesian launch
of a world leading football talent scouting platform, Ellevate Football. Ellevate Football, which is to be launched
in (insert date), will be marketed to OlahBola’s growing user base and is expected to generate recurring
subscription revenue and new brand partners and advertisers who are targeting the younger Indonesian
demographic.
Having secured access to live esports tournament data and developed a deep learning esports Predictor,
SportsHero is further preparing to launch in Australia market-first esports prediction competitions.
In order to enrich our digital offerings for sports fans, sporting clubs, sporting associations, brand partners and
advertisers, we have and will continue to deliver substantial enhancements to our exciting and innovative
technologies. In so doing, SportsHero is looking to expand its offerings across multiple jurisdictions and/or
sporting codes globally.
During the financial year, the Company successfully raised A$3,287,500 in working capital from existing and
new Shareholders. As we continue to enhance and develop our innovative technologies and expand our
footprint, we remain committed to delivering on the investment of all Shareholders.
It is an exciting time to be a SportsHero shareholder and I very much look forward to regularly updating the
market as SportsHero commercialises its exclusive and unique platforms.
In closing, I wish to thank my fellow Directors and our dedicated and committed team for their hard work and
inspiration over the past year. I also take this opportunity to thank you, our shareholders, for your
encouragement and continuing support.
John Dougall
Chairman
SportsHero Limited
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SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
OPERATIONS REPORT
SportsHero’s strategy is to build a large and engaged user base of active sports fans utilising our unique and
proprietary technologies, our official associations with governing bodies and partnerships with technology
innovators and prominent market participants. We will then monetise these strategic assets with recurring
revenue generated from multiple sources, including complementary advertising income, brand sponsorship,
subscriptions, competition revenue, video streaming, ecommerce, affiliate gaming revenue and match and
gamification ticket sales.
SportsHero has developed a proprietary, intelligent, engaging sports predictor and sports platform, designed
to provide a dynamic immersive social experience, coupled with both monetary and other prizes.
Having developed a white label digital solution, SportsHero is now able to offer its digital solutions across
multiple sports to sporting groups and other partners globally.
Esports Predictor
On 9 September 2021, SportsHero announced that it was launching its state-of-the-art artificial intelligence
esports Predictor to service new markets and the rapidly expanding esports gaming markets.
The Predictor utilises the latest advancements in deep learning technology to predict the outcomes of esports
competitions prior to the match, as well as live during the competition.
Revenue Opportunities
The Predictor is expected to generate new revenue opportunities, including licensing revenue, subscription
revenue, exclusive streaming revenue and royalties, affiliate gaming revenue with potential customers that
operate gaming communities and betting companies, esports and sporting news websites and esports
tournament organisers.
The Algorithm
To increase the accuracy of the Predictor, the prediction algorithm was built on one of the largest datasets
available for ‘League of Legends’, which was compiled, developed and is fully owned by SportsHero. The
dataset autonomously analyses new matches and the data generated from those matches in order to optimise
the underlying algorithm and its accuracy. Expressed another way, the deep learning/machine learning
Predictor will autonomously become more and more precise as more data is added to its ecosystem, delivering
for SportsHero a unique esports value proposition that can be replicated across multiple sports and
jurisdictions.
In addition to providing the algorithm, the development team also built a functioning website that packages the
Predictor, the underlying players and teams library as well as an integrated live betting odds feed.
Performance Testing
Since the final stress tested version of the Predictor was complete on 13 August 2021, additional performance
testing was undertaken. In total 189 matches were predicted and the Predictor correctly predicted the head-
to-head outcome of 125 of those matches.
The total win percentage of 66.14% represents an extremely impressive result.
Analysis of the head-to-head results and the prevailing betting odds suggests that betting companies have
mispriced their odds when compared to the underlying data and percentage win rate that the Predictor’s
algorithm suggests. In that regard, the performance testing achieved the following:
the average winning odds (for a $1.00 outlay) for the matches the Predictor won was $1.78; and
the highest predicted head-to-head winning odds (for a $1.00 outlay) achieved was $3.75.
Australian Launch
Having developed a deep learning esports Predictor and secured access to live data from esports
tournaments, the Company is now looking to launch in Australia market first esports prediction competitions.
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SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
OPERATIONS REPORT
These social online competitions will include free esports “Beat the Predictor” competitions, whereby users
can compete against the Predictor and other users to climb the SportsHero leader board ladder and win money
can’t buy prizes, such as sporting memorabilia and merchandise from tournament organisers and esports
companies.
For a monthly fee, users will be able to expand their user experience by subscribing to the Company’s live
Predictor and securing monthly access to the Predictor’s esports match predictions.
Ellevate Football partnership
On 22 February 2021, SportsHero announced an exclusive 3-year partnership with the UK based Footie Group
Limited, owner of Ellevate Football.
Ellevate Football has developed a world leading football talent scouting platform. Parents of aspiring young
footballers subscribe to the Ellevate Football platform to showcase their child’s talent directly to the scouts
engaged by professional football clubs worldwide.
In accordance with a binding terms sheet, SportsHero will have exclusive access to Ellevate Football’s
technology and intellectual property for use in the Indonesian market.
SportsHero is incorporating Ellevate Football’s functionality into its rapidly growing OlahBola app, with a
planned December quarter 2021 launch date. Once pricing is finalised, a recurring subscription revenue
product for parents of talented young junior footballers will be launched to provide those players and their
parents with access to Ellevate Football’s exclusive scouting and football development programmes.
Additionally, the new Ellevate Football offer is expected to appeal to new brand partners and advertisers
targeting this younger Indonesian demographic.
Ellevate Football and SportsHero will share equally all subscription revenue, advertising and sponsorship
revenue generated from the 3-year partnership. The parties have further agreed to include an option to extend
the partnership for a further 3-year term.
OlahBola
On 7 July 2020, SportsHero successfully launched in Indonesia its first locally branded and fully localised
football app ‘OlahBola’. As at 30 June 2021, OlahBola generated in excess of 4.7 million new unique users.
Olahbola provides fans with the opportunity to predict outcomes, compete with other users and climb the
leaderboard and win prizes, including ‘money can’t buy’ experiences, merchandise and entertainment
products.
OlahBola is dedicated to international football and caters to the millions of fanatical Indonesian football fans
who follow and support international football leagues, such as the English Premier League and Spain’s La
Liga. The OlahBola app provides dynamic video content from these football leagues, providing a platform for
advertisers and, in turn, revenue opportunities for the Company.
Sportclips partnership
On 6 May 2021, the Company announced a 3-year revenue sharing partnership with UK based Sportclips
Limited. Sportclips have an exclusive subscriber agreement with Indosat Ooredoo (Indosat), Indonesia’s
second largest Telco with 60+ million paid subscribers.
Pursuant to Sportclips agreement with Indosat, Sportclips provides Indosat with an exciting sport based mobile
video subscription service. In return, Indosat markets the service directly to their customer base via direct
messaging and other digital marketing resources at Indosat’s disposal.
In consideration for the provision by SportsHero of fully localised Indonesian content, SportsHero is entitled to
50% of Sportclips 40% revenue share received from subscribers on Indosat.
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SPORTSHERO LIMITED
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OPERATIONS REPORT
As a result of the partnership, Indosat will promote and market SportsHero’s OlahBola channel to their 60+
million subscribers.
ICON Esports partnership
On 17 February 2021, the Company entered into a binding terms sheet with ICON Esports Pty Ltd (ICON)
whereby SportsHero and ICON will jointly operate and co-brand on SportsHero’s OlahBola platform an esports
focused prediction network throughout Indonesia.
In accordance with the binding terms sheet, the parties will deliver advertising and sponsorship opportunities
and share equally in all Indonesian esports revenues and operating costs.
ICON is the owner of Australia’s leading esports brand “The Chiefs Esports Club” and the parent company of
the largest esports organisation in the Oceania region. ICON generates revenue by running marketing
campaigns for global brands such as Intel, Red Bull, Marvel, Singtel (Optus) and L’Oréal. These brands follow
The Chiefs Esports Club into specific events and competitions where they get access to a large and highly
engaged fan base.
On 22 April 2021, SportsHero announced the successful trial launch of the OlahBola Esports Series following
a practice match on 8 April 2021 followed by 6 tournaments that ran until mid-August 2021.
The Mobile Legends Bang Bang tournament, comprised 1,367 teams (target of 64 teams) and 4,508 players
(target 320 players).
MolaTV revenue sharing partnership
On 11 November 2020, the Company announced a 3-year deal with MolaTV that is expected to significantly
increase SportsHero’s user engagement, user numbers and value proposition to advertisers to accelerate
revenue growth.
The MolaTV deal enables SportsHero to deliver the world’s most sought after and dynamic football content,
which can only be produced by a licensed broadcaster, that has transformed SportsHero’s OlahBola platform.
Deal overview
MolaTV provides SportsHero with broadcast game highlights of the English Premier League (EPL), the
German Football League (Bundesliga), the Dutch Football League (Eredivisie), Carabao Cup Football
(formerly the English League Cup), Copa Libertadores Football (an annual international South American
premier club competition) and any other leagues for which MolaTV are the licensed broadcaster. In that regard,
MolaTV are aggressively pursuing football rights for other major leagues throughout the world and
SportsHero’s agreement extends to include those leagues.
In accordance with the partnership, MolaTV will pay SportsHero 10% of all MolaTV subscription revenues
generated from SportsHero’s OlahBola app.
No other consideration is paid by SportsHero for the MolaTV content broadcast on OlahBola.
Kita Garuda app and PSSI
In 2019, SportsHero established an exclusive partnership with the Football Association of Indonesia (PSSI).
In accordance with the partnership, SportsHero developed the Kita Garuda app and agreed to share revenues
from football fan subscriptions and advertising campaigns on both the Kita Garuda app and web browser. PSSI
is responsible for all marketing costs, while SportsHero advises on strategy and execution.
Throughout the term of the partnership agreement, PSSI was to exclusively provide rich content, including
access to video footage of games, events and features of the Indonesian national teams and its players.
As no football has been played in Indonesia since the start of the COVID-19 pandemic in March 2020 and
concurrently the activities of PSSI effectively ceased, Kita Garuda has been unable to progress.
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ANNUAL REPORT 30 JUNE 2021
OPERATIONS REPORT
Linius Technologies - Licensing agreement
The Group has a binding agreement with leading hyper-personalised video content provider, Linius
Technologies Limited (Linius) (ASX: LNU).
Pursuant to the agreement, SportsHero secured the rights to use the Linius technology across all of the
Group’s platforms.
The Linius technology allows a user to customise a video to show only content that is relevant to the individual
requirements and viewing preferences of the user. For example, once integrated, a user of the PSSI app will
be able to search for and watch highlights of their favourite players, the best goals scored, or customise their
viewing content based on virtually any criteria, such as shots on target, goalkeeper saves, injuries,
substitutions, penalties, red cards and many more.
The integration of the Linius technology has the potential to significantly increase user engagement and viewer
numbers, which in turn is expected to result in the generation of more substantive advertising revenue.
Mint Capital Advisors - financing facility
On 10 September 2020, the Company entered into a definitive Standby Placement Agreement with Bahamas
based Mint Capital Advisors (Mint) to provide up to AU$5m in equity funding over three years (Facility). As at
30 June 2021, the Company had made only one drawdown under the Facility of $68,934 in October 2020
Equity funding provided by Mint is accessed on a discretionary basis as and when it is required. As such,
SportsHero simply needs to notify Mint that it wishes to make a drawdown (Drawdown Notice). Any shares
issued to Mint pursuant to a Drawdown Notice will be issued at a price equal to 90% of the 15 trading day
average VWAP of SportsHero shares traded on ASX for the 15 trading days following the date of issue of the
Drawdown Notice. The number of shares issued to Mint will be that number of shares equal to 5 times the
average daily traded volume of shares on ASX for the 15 previous trading days prior to the date of issue.
As at 30 June 2021, the Facility had a further 36 months before the expiry of its term. As such, as at 30 June
2021 the Company had available to it up to a maximum of AU$3,640,000 that could be drawn under the Facility.
Sports Bookmaker License
Following the inability of the joint venture company (Pay-to-Play Australia Pty Ltd) to secure a Sports
Bookmaker Licence, on 23 August 2021 the joint venture parties agreed to terminate the Pay-to-Play Australia
Pty Ltd joint venture.
COVID-19
As a consequence of the COVID-19 pandemic, nationwide curfews were imposed in Indonesia which are
significantly impacting internal demand and economic activity. In addition, all Indonesian football competitions
have been suspended since 17 March 2020.
The ongoing suspension of football in Indonesia is significantly impacting on the Company’s ability to generate
revenues from its Kita Garuda platform. In addition, the implementation of curfews, lockdowns and restrictions
are significantly impacting both the Indonesian economy and the Company’s ability to routinely conduct its
Indonesian business activities.
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SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
DIRECTORS REPORT
The Directors present their report together with the consolidated financial report for SportsHero Limited
(“SportsHero” or the “Company”) and its controlled entities (collectively the “Group”), for the year ended 30 June
2021.
Directors
(i)
Names, qualifications and experience
The names and details of the Group’s Directors in office at any time during the financial period and until the date
of this report are as follows:
John Dougall
Tom Lapping
Michael Higginson
Non-Executive Director and Chairman
Director and CEO
Non-Executive Director
John Dougall – Non-Executive Director and Chairman
Mr Dougall is the holder of Bachelor of Commerce Degree from the University of Melbourne.
Mr Dougall has worked at Chief Executive and board level in a number of technology companies based in
Melbourne, New York, Sydney, London and San Francisco. He has also served as Managing Director of four ASX
listed companies, successfully exporting Australian technology to China, India, Indonesia, The Philippines,
Vietnam and Latin America.
Mr Dougall is currently the Non-Executive Chairman of Tinybeans Group Limited (ASX: TNY), a mobile and web-
based technology company based in Sydney and New York, that connects parents with the most trusted tools
and resources to assist, in particular, young families.
He has also served as President and CEO of an Australian company that ultimately listed on the NASDAQ, selling
its software solutions to major retailers in the USA and Europe.
In addition, Mr Dougall previously served as a director to several industry associations, as chairman of the
Australian Government’s CSIRO Information Technology Advisory Board, as well as advising Government on
industry strategy and trade.
Tom Lapping – Director and CEO
Mr Lapping is highly experienced across the securities and media sectors. Since 2016, he has played an integral
role within SportsHero and was a key member of the team during the transition of the SportsHero business from
a Singaporean unlisted entity to an ASX listed public company in February 2017.
Tom is a successful entrepreneur who has accumulated extensive experience leading both established and early-
stage ventures in the Asia-Pacific region. Tom has a keen understanding of consumer behaviour and was
recognised as a 40under40 business entrepreneur award winner in Western Australia in 2003.
Michael Higginson – Non-Executive Director
Qualification: B.Bus Fin & Admin
Mr Higginson is the holder of a Bachelor of Business Degree with majors in both Finance and Administration.
Mr Higginson is a professional director and company secretary with extensive experience in public company
administration, ASX Listing Rules, the Corporations Act, capital raisings, corporate governance, financial reporting
and due diligence.
Mr Higginson was formerly an executive officer with the Australian Securities Exchange and has, over the last 34
years, held numerous directorship and company secretarial roles with a number of public listed companies across
a range of industry sectors.
Mr Higginson is a director of Cape Range Limited (ASX: CAG).
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SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
DIRECTORS REPORT
(ii)
Interests in the Shares and Options of the Group
As at the date of this report, the interest of the Directors in the shares and performance rights of the Group are:
John Dougall
Tom Lapping
Michael Higginson
TOTAL
Number of
shares
2,510,756
13,782,143
1,020,834
17,313,733
Number of
options
-
-
-
-
Number of
performance
rights
6,000,000
4,000,000
2,000,000
12,000,000
Company Secretary
Michael Higginson
Qualification: B.Bus Fin & Admin
Directors’ meetings
The number of meetings attended by each of the Directors of the Group during the financial year was:
John Dougall
Tom Lapping
Michael Higginson
Directors’ Meetings
(a)
8
8
8
(b)
8
8
8
(a) Number of meetings held and entitled to attend
(b) Number of meetings attended
Given the size of the Group and current level of activities, the Board has assumed the duties and responsibilities
typically delegated to an audit committee, risk committee, remuneration committee and nomination committee.
Corporate structure
SportsHero Limited is a company limited by shares that is incorporated and domiciled in Australia.
For details of the Company’s controlled entities, please refer to note 28.
Nature of operations and principal activities
The principal activity of the Group during the year was the development of the Group’s sports gamification
platforms.
Results of operations
The operating loss after income tax of the Group for the year ended 30 June 2021 was US$1,479,219 (2020:
US$1,259,559).
As set out in the Statement of Comprehensive Income, the two most significant expense categories for the
financial year were:
Administration expenses, totaling US$747,684 and
Employee and consulting expenses, totaling US$366,737.
The Group’s basic loss per share for the year was 0.37 US cents (2020: 0.39 US cents).
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SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
DIRECTORS REPORT
Dividends
No dividend has been paid during or is recommended for the financial year ended 30 June 2021 (2020: nil).
Review of operations
The principal activity of the Group during the financial year was the development of the Group’s sports gamification
platforms.
An overview of the Group’s operations during the financial year is set out in the Operations Report.
Significant changes in state of affairs
On 7 July 2020, the Company announced the launch of Olahbola. Olahbola being SportsHero’s first ever locally
branded and fully localised football app covering international football for the Indonesian market.
On 26 August 2020, the Company announced the appointment of Mr Rob Davies as the Company’s Indonesian
Director of Operations. In order to secure the services of Mr Davies, the Company issued Mr Davies 3,000,000
shares and 4,000,000 performance rights.
On 10 September 2020, the Company announced the signing of a definitive Standby Placement Agreement with
Mint Capital Advisors (Mint) for a financing facility of up to AU$5,000,000 and the issue of 5,000,000 shares to
the nominee of Mint. The Standby Placement Agreement has a term of 36 months and the Company is entitled
to drawdown of up to AU$140,000 per month provided the issue price (calculated in accordance with the terms of
the Standby Placement Agreement) is above a floor price of AU$0.02 per share.
On 21 September 2020, the Company announced that it had successfully secured a wholly owned Indonesian
operating entity. The securing of this entity is a key component for the Company as it will facilitate the building of
SportsHero’s Indonesian presence by enabling such things as the hiring of Indonesian staff, the opening of an
Indonesian bank account, the securing of offices in Indonesia and the collection of revenue.
On 20 October 2020, the Company announced the generation of over 1,000,000 new unique OlahBola users and
the first commercial brand collaboration with Germany’s Nivea and Indonesia’s largest e-commerce platform
Tokopedia.
On 4 November 2020, the Company announced that it had successfully completed a AU$1,337,500 placement
pursuant to the issue of 53,500,000 shares at an issue price of AU$0.025 per share and subject to the receipt of
shareholder approval the grant of 26,750,000 free attaching options each exercisable at AU$0.05 and expiring 16
December 2022 (Options). In addition and subject to the receipt of shareholder approval, a further AU$450,000
is to be raised pursuant to the issue of 18,000,000 shares, at an issue price of AU$0.025 per share, and the
granting of 9,000,000 free attaching Options.
On 11 November 2020, the Company announced the signing of a 3-year revenue sharing partnership with
MolaTV, Indonesia’s exclusive licensed broadcaster of the EPL and Bundesliga. Pursuant to the partnership, Mola
TV will pay SportsHero 10% of all MolaTV subscription revenue generated from SportsHero’s OlahBola app.
On 22 January 2021, the Company completed the raising of AU$450,000 announced on 4 November 2020.
On 5 February 2021, the Company announced the receipt of binding commitments to raise an additional
$1,500,000 pursuant to the issue of 50,000,000 shares at an issue price of AU$0.03 per shares and the granting
of 25,000,000 free attaching Options.
On 17 February 2021, the Company announced the signing of an exclusive 3-year Indonesian revenue sharing
partnership with ICON Esports Pty Ltd, owner of the Chief Esports Club. Pursuant to the partnership, the parties
will jointly operate and co brand an esports focused prediction network or SportsHero’s OlahBola app.
On 18 February 2021, the Company announced the generation of in excess of 3 million new unique OlahBola
users.
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SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
DIRECTORS REPORT
On 22 February 2021, the Company announced the signing of an exclusive 3-year partnership with the Footie
Group Limited, owner of Ellevate Football, a world leading football talent scouting platform that allows aspiring
amateur footballers to showcase their skills to scouts from leading football clubs worldwide.
On 21 April 2021, the Company announced that it was developing a world first artificial intelligence live esports
predictor. The predictor will utilise the latest advancements in deep learning to predict the outcomes of esports
competitions prior to the match, as well as during the competition.
On 23 April 2021, the Company announced the generation of in excess of 4 million new unique OlahBola users
and the launch of the first OlahBola Esports tournament in Indonesia.
On 6 May 2021, the Company announced the signing of a new 3-year revenue sharing partnership with UK based
Sportclips Limited, who have an exclusive subscriber agreement with Indosat Ooredoo (Indonesia’s second
largest Telco with 60+ million paid subscribers).
Future developments
Likely future developments in the operations of the Group are referred to in the Chairman’s Letter and Operations
Report. Other than as referred to in this report, further information as to likely developments in the operations of
the Group and expected results of those operations would, in the opinion of the Directors, be speculative and
prejudicial to the interests of the Group and its shareholders.
Subsequent events
On 2 July 2021, 4,000,000 Director performance rights were converted into 4,000,000 shares following the
attainment on or before 31 December 2021 of in excess of 3,000,000 new unique OlahBola users.
On 23 August 2021, the Pay-to-Play Australia Pty Ltd joint venture with Cross Bet Holdings Pty Ltd was
terminated.
On 9 September 2021, the Company announced the launching of its state-of-the-art artificial intelligence esports
predictor to service new markets and the rapidly expanding esports gaming market. The Company further
announced the engagement of highly experienced esports consultant, Mr Scott Russell.
The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has been financially negative for
SportsHero up to 30 June 2021, it is not practicable to estimate the potential impact, positive or negative, after
the reporting date. The situation is rapidly developing and is dependent on measures imposed by the Australian
and Indonesian Governments and other countries, such as maintaining physical distancing requirements,
quarantine, travel restrictions and any economic stimulus that may be provided.
Financial position
The Group’s working capital, being current assets less current liabilities, was US$1,241,859 as at 30 June 2021
(2020: negative US$202,208).
In the Directors’ opinion there are reasonable grounds to believe that the Group will be able to pay its debts as
and when they become due and payable.
Proceedings on behalf of the Group
No person has applied for leave of court to bring proceedings on behalf of the Group or intervene in any
proceedings to which the Group is a party for the purpose of taking responsibility on behalf of the Group for all or
any part of those proceedings.
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SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
Additional information
DIRECTORS REPORT
The earnings of the consolidated entity for the five years to 30 June 2021 are summarised below:
2021
US$
2020
US$
2019
US$
2018
US$
2017
US$
Income
EBITDA
EBIT
Loss after income tax
The factors that are considered to affect total shareholders return are summarised below:
16,841
(1,204,006) (2,276,050) (3,830,964)
(1,257,439) (2,276,625) (4,335,566)
(1,259,559) (2,276,625) (4,335,566)
40,570
(1,442,887)
(1,462,932)
(1,479,219)
463,791
3,434
9,113
(3,410,171)
(3,850,447)
(4,266,614)
Share price at financial year end (US cents)
Total dividends declared (US cents per
share)
Basic and diluted loss per share for
continued operations (US cents per share)
Basic diluted loss per share for discontinued
operations (US cents per share)
Basic loss per share (US cents per share)
Remuneration report (Audited)
2021
US
1.5
-
0.37
-
0.37
2020
US
1.3
-
0.39
-
0.39
2019
US
4.5
-
0.93
-
0.93
2018
US
5.91
-
1.55
0.29
1.84
2017
US
3.1
-
3.48
0.37
3.85
Details of Remuneration for the Year Ended 30 June 2021
Details of the remuneration for each Director and the key management personnel of the Group during the year
are set out in the following tables.
The Board’s policy for determining the nature and amount of remuneration for Directors and senior executives of
the Group is as follows:
All executives receive a base salary (which is based on factors such as length of service and experience).
The Board reviews executive packages annually by reference to the Group’s performance, executive
performance and comparable information from industry sectors.
All remuneration paid to Directors and executives is valued at the cost to the Group and expensed.
Options are valued using the Black-Scholes methodology.
Remuneration of non-executive Directors at market rates for time, commitment and responsibilities.
The Board determines payments to the non-executive Directors and reviews their remuneration annually, based
on market practice, duties and accountability. Independent external advice is sought if required.
During the financial year ended 30 June 2021, the consolidated entity did not engage any external parties for a
review of remuneration practices.
At the 2020 Annual General Meeting, 99.996% of the eligible votes received supported the adoption of the
remuneration report for the year ended 30 June 2020. The Group did not receive any specific feedback at the
Annual General Meeting regarding its remuneration practices.
The key management personnel of the Group include the Directors and Company Secretary. There were no other
persons considered key management personnel as defined in AASB 124 Related Party Disclosures.
13
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
DIRECTORS REPORT
The tables below show the 2021 and 2020 remuneration of the Directors and other key management personnel:
2021
Short-term
Post-
employment
Share-based
payments
Value of
share-based
payments
as a %
Chairman
John Dougall1
Directors
Tom Lapping
Michael Higginson
Total key
management
personnel
compensation
2020
Chairman
John Dougall*
Directors
Tom Lapping
Michael Higginson
Wayne Johnson**
Total key
management
personnel
compensation
Salary & fees
US$
Superannuation
US$
Performance
rights
US$
Total
US$
59,125
105,847
61,818
226,790
-
-
-
-
46,137
105,262
69,340
34,670
175,187
96,488
44%
40%
36%
150,147
376,937
40%
Short-term
Post-
employment
Share-based
payments
Salary & fees
US$
Superannuation
US$
Shares
US$
Total
US$
Value of
share-based
payments
as a %
36,366
112,343
63,070
23,497
235,276
-
-
-
-
-
-
-
-
36,366
112,343
63,070
23,497
0%
0%
0%
0%
235,276
0%
* Appointed on 30 October 2019
** Resigned on 29 October 2019
Related party transactions and balances
Payables to key management personnel
Amounts payable to Directors and Director related entities at the
end of the financial year, included in current liabilities
Other transactions with key management personnel
Consolidated
2021
US$
2020
US$
45,870
32,706
During the year the Group paid rent of US$2,613 (2020: US$3,021) to Mr Higginson for the provision of
the Group’s registered and principal office.
There were no other sale or purchase related transactions between the Group and key management
personnel during the year ended 30 June 2021 (2020: nil).
14
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
DIRECTORS REPORT
Other transactions with related parties
Following the receipt of shareholder approval on 15 January 2021, on 22 January 2021 the Company issued
the following securities:
1,510,756 shares to Mr Dougall in lieu of cash fees for the 2020 financial year totalling AU$33,333
4,000,000 performance rights to Mr Dougall
3,000,000 Director performance rights to Mr Dougall
6,000,000 Director performance rights to Mr Lapping;
3,000,000 Director performance rights to Mr Higginson
There were no other transactions with related parties throughout the year.
Performance Rights as a Proportion of Total Remuneration
12,000,000 Director performance rights and 4,000,000 performance rights were issued during the year ended
30 June 2021 and included as a proportion of total remuneration (2020: nil).
Ordinary Shares held by Directors
2021
Directors
J Dougall
M Higginson
T Lapping
2020
Directors
J Dougall1
M Higginson
T Lapping
W Johnson2
Balance at
beginning of
year
-
20,834
11,782,143
11,802,977
Allotted
during the
year
1,510,756
-
-
-
Purchased
during the
year
Sold during
the year
Balance at
end of year
-
-
-
-
1,510,756
-
-
20,834
- 11,782,143
13,313,733
-
Balance at
beginning of
year
Allotted
during the
year
Purchased
during the
year
Sold during
the year
Balance at
end of year
-
20,834
11,782,143
-
11,802,977
-
-
-
-
-
-
-
-
-
-
-
-
-
20,834
- 11,782,143
-
-
11,802,977
-
1. Opening balance represents shareholding upon appointment as a Director on 30 October 2019
2. Closing balance represents shareholding upon resignation as a Director on 29 October 2019
Group Performance, Shareholder Wealth and Director and Executive Remuneration
The remuneration policy has been tailored to increase goal congruence between shareholders, Directors and
executives. The achievement of this aim has been through the issue of options or performance rights to Directors
and executives to encourage the alignment of personal and shareholder interests.
Executive and non-executive Directors and other key management personnel may be granted options or
performance rights over ordinary shares.
The recipients of options or performance rights are responsible for growing the Group and increasing shareholder
value. If they achieve this goal the value of the options or performance rights granted to them will also increase.
Therefore, the options or performance provide an incentive to the recipients to remain with the Group and to
continue to work to enhance the Group’s value.
15
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
DIRECTORS REPORT
Options granted for the Year Ended 30 June 2021
2021
Directors
Balance at
beginning
of year
Granted as
Allotted
compensation Exercised
Expired
Other
changes
Balance
at end of
year
Option movements for the year
J Dougall
T Lapping
M Higginson
Total
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2020
Directors
Balance at
beginning
of year
J Dougall1
T Lapping
M Higginson
W Johnson2
Total
-
16,714,286
-
-
16,714,286
Option movements for the year
Granted as
Allotted
compensation Exercised
Expired
Other
changes
Balance
at end of
year
-
-
-
-
-
-
-
-
-
-
-
-
- (14,714,286)
-
-
-
-
-
-
-
(2,000,000)
-
-
-
-
-
-
-
-
1.Opening balance represents number of options held upon appointment as a Director on 30 October 2019.
2.Closing balance represents number of options held upon resignation as a Director on 29 October 2019.
Performance rights granted for the Year Ended 30 June 2021
Performance rights movements for the year
2021
Directors
Balance at
beginning
of year
Granted as
Allotted
compensation Exercised
Expired
Other
changes
Balance
at end of
year
J Dougall
T Lapping
M Higginson
Total
-
-
-
-
-
-
-
-
7,000,000
6,000,000
3,000,000
16,000,000
-
-
-
-
-
-
-
-
- 7,000,000
- 6,000,000
- 3,000,000
- 16,000,000
No performance rights were granted in the prior year ended 30 June 2020.
Performance rights as a proportion of total remuneration
The value of performance options issued during the year to key management personnel as a percentage of the
total remuneration paid to key management personnel was 40% (2020: 0%).
Employment Contracts of Directors and Senior Executives
On 18 October 2019, the Company entered into an agreement with Mr Dougall that set out the terms and
conditions of his appointment as a Non-Executive Director and Chairman of the Company (Agreement).
In consideration for the appointment of Mr Dougall and subject to the receipt of Shareholder approval in
accordance with the Corporations Act and the ASX Listing Rules (as required), the Company has agreed to pay
Mr Dougall the following:
Cash fee of AU$4,166.67 per month;
16
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
DIRECTORS REPORT
Share fee of AU$50,000 per annum (at an issue price equal to the VWAP of the Company’s Shares for
the year); and
Subject to shareholder approval; the granting of 4,000,000 Performance Rights, converting into 4,000,000
Shares on attainment of the Performance Hurdle set out below.
Performance Hurdle
The milestone required to trigger the conversion of the 4,000,000 Performance Rights into 4,000,000 Shares is
upon the SportsHero Limited consolidated group of companies achieving breakeven operating cash flow (or
better) for any six month period up to and including the six months ended 31 December 2022 as determined by
the audited and/or audit reviewed financial statements lodged with ASX by SportsHero Limited in compliance with
the Listing Rules of the ASX (Performance Hurdle). All Shares issued on conversion of Performance Rights
(following the achievement of the Performance Hurdle) will be subject to a voluntary 12 month escrow from their
date of issue.
Mr Lapping is paid fees at the rate of SG$15,000 per month.
Mr Higginson is paid fees at the rate of AU$2,083 per month. Total consulting and secretarial fees paid or payable
to Mr Higginson for the year are AU$82,777
As of 30 June 2021, there were no other formal contracts for Non-Executive Directors.
Fees waived by Directors during the year
During the period commencing 1 July 2020 and ending 30 November 2020, the following fees were waived by
each of the Directors as follows:
Mr Dougall waived 100% of his cash fee of AU$4,167 per month (total waived being AU$20,833)
Mr Lapping waived 50% of his cash fee of SG$15,000 per month (total waived being SG$37,500)
Mr Higginson waived 100% of his cash fee of AU$2,083 per month (total waived being AU$10,415)
Share-based compensation
The issue of options and/or performance rights to Directors and executives is to encourage the alignment of
personal and shareholder returns. The intention is to align the objectives of Directors and executives with that of
the business and shareholders. In addition, all Directors and executives are encouraged to hold shares in the
Group.
During the financial year, the Group has not paid bonuses to any Directors or executives.
Loans to key management personnel and their related parties
There are no loans to Directors or executives at reporting date (30 June 2020: nil).
End of remuneration report
Share options
At the date of this report, the unissued ordinary shares of the Group under option are as follows:
Grant date
12 September 2019
22 January 2021
9 February 2021
2 July 2021
2 July 2021
Date of Expiry
30 September 2021
16 December 2022
16 December 2022
16 December 2022
1 July 2023
Exercise Price
AU$0.10
AU$0.05
AU$0.05
AU$0.05
AU$0.05
Number Under Option
20,000,000
47,750,000
50,000,000
5,900,000
6,000,000
During the financial year ended 30 June 2021, 1,000,000 options each exercisable at $0.20 expired on 1 February
2021 and no SportsHero shares were issued following the exercise of options.
17
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
DIRECTORS REPORT
As indicated in the table above, since the end of the financial year 11,900,000 options have been issued and no
options have lapsed.
Since the end of the financial year no shares have been issued following the exercise of options.
No person entitled to exercise an option had or has any right by virtue of the option to participate in any share
issue of any other body corporate.
Performance rights
On 26 August 2020, 4,000,000 performance rights were issued on the appointment of Rob Davies as the
Company’s Indonesian Director of Operations.
On 20 October 2020, 2,000,000 shares were issued following the conversion of 2,000,000 performance rights
held by Rob Davies.
On 22 January 2021, 16,000,000 performance rights were issued to Directors following the receipt of shareholder
approval on 15 January 2021.
On 2 July 2021, 6,000,000 performance rights were issued in accordance with the Company’s Employee
Securities Incentive Plan.
On 2 July 2021, 4,000,000 shares were issued following the conversion of 4,000,000 performance rights issued
to Directors. Since the end of the financial year no other shares have been issued following the conversion of
performance rights.
Indemnification
During the financial year, the Group did not pay premiums to insure the Directors and Company Secretary of the
Group.
Non-audit services
No fees for non-audit services were paid/payable to the Group’s auditors during year (2020: nil).
Auditor’s independence declaration
The auditor’s independence declaration for the year ended 30 June 2021 has been received and immediately
follows the Directors’ Report.
Officers of the Group who are former partners of RSM Australia Partners
There are no officers of the Group who are former partners of RSM Australia Partners.
Corporate Governance
In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of the
Group support and have adhered to the principles of sound corporate governance. The Board recognises the
recent recommendations of the Australian Securities Exchange Corporate Governance Council, and considers
that SportsHero is in compliance with those guidelines which are of importance to the commercial operation of a
small cap company. The Group’s corporate governance statement and disclosures are contained on the Group’s
website at: http://sportshero.live/
18
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
DIRECTORS REPORT
This report is made in accordance with a resolution of the Directors.
John Dougall
Chairman
30 September 2021
19
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of SportsHero Limited for the year ended 30 June 2021, I
declare that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
The auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
Any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 30 September 2021
ALASDAIR WHYTE
Partner
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
STATEMENT OF FINANCIAL POSITION
As at 30 June 2021
Current assets
Cash and cash equivalents
Trade and other receivables
Total current assets
Non-current assets
Right of use assets
Plant and equipment
Total non-current assets
Total assets
Current liabilities
Trade payables
Borrowings
Lease liability
Total current liabilities
Total liabilities
Net (liabilities)/assets
Equity
Issued capital
Share based payments reserve
Foreign currency translation reserve
Accumulated losses
Total equity
Consolidated
30 June
2021
US$
30 June
2020
US$
1,377,257
1,942
1,379,199
154,589
147,655
302,244
Note
8
9
11
10
13
14
12
15
16
16
-
2,130
2,130
16,909
4,508
21,417
1,381,329
323,661
137,340
-
-
137,340
281,099
206,045
17,308
504,452
137,340
504,452
1,243,989
(180,791)
14,161,989
1,083,076
(232,203)
(13,768,873)
1,243,989
11,784,318
474,168
(149,623)
(12,289,654)
(180,791)
The above statement of financial position should be read in conjunction with the accompanying notes.
21
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2021
Continuing operations
Income
Revenue
Other revenue
Expenses
Administration expenses
Employee and consulting expenses
Depreciation expense
Interest expense
Share based payments
Share of net loss of joint venture accounted for using equity
method
Loss before income tax expense
Income tax expense
Consolidated
2021
US$
22,664
17,906
(747,684)
(366,737)
(20,045)
(16,287)
(369,036)
2020
US$
-
3,434
(657,369)
(435,634)
(53,434)
(2,120)
(12,883)
-
(101,553)
(1,479,219)
(1,259,559)
-
-
Note
3
3
4
5
10,11
21
19
7
Loss after tax expense for continuing operations
(1,479,219)
(1,259,559)
Loss for the year
(1,479,219)
(1,259,559)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Total comprehensive loss for the year
(82,580)
6,767
(1,561,799)
(1,252,792)
Basic and Diluted loss per share (US cents per share)
6
0.37
0.39
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
22
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2020
Issued
Capital
Share
Based
Payments
Reserve
Foreign
Currency
Translation
Reserve
Accumulated
Losses
Total
Equity
Note
US$
US$
US$
US$
US$
Consolidated
Balance at 01/07/2020
Comprehensive loss for the year
Shares issued during the year -
conversion of performance rights
Shares issued during the year
Share based payments
Share based payments
for settlement of liability
Shares issued during the year -
conversion of convertible notes
Transaction costs
11,784,318
-
15
15
21
35,215
2,533,747
126,758
474,168
-
(35,215)
-
242,278
25,815
-
15
246,575
(590,439)
-
401,845
(149,623)
(82,580)
(12,289,654)
(1,479,219)
(180,791)
(1,561,799)
-
-
-
-
-
-
-
-
-
-
-
-
-
2,533,749
369,036
25,815
246,573
(188,594)
Balance at 30/06/2021
14,161,989
1,083,076
(232,203)
(13,768,873)
1,243,989
Balance at 01/07/2019
Comprehensive loss for the year
Exercise of options
Shares issued during the year
Share based payments
Transaction costs
10,097,370
-
1,854,473
299,191
-
(466,716)
15,16
15
21
15
92,515
-
-
-
12,883
368,770
(156,390)
6,767
-
-
-
-
(11,030,095)
(1,259,559)
-
-
-
-
(996,600)
(1,252,792)
1,854,473
299,191
12,883
(97,946)
Balance at 30/06/2020
11,784,318
474,168
(149,623)
(12,289,654)
(180,791)
The above statement of changes in equity should be read in conjunction with the accompanying notes.
23
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
STATEMENT OF CASH FLOWS
For the year ended 30 June 2021
Cash Flows from Operating Activities
Receipts from customers
Payments to suppliers
Interest received
Note
Consolidated
2021
US$
40,484
2020
US$
-
(1,136,904)
(2,107,732)
86
3,434
Net cash flows (used) in operating activities
17
(1,096,334)
(2,104,298)
Cash Flows from Investing Activities
Payments for plant and equipment
Net cash flows (used) in investing activities
Cash Flows from Financing Activities
Issue of new share capital
Proceeds from issue of convertible notes
Share issue transaction costs
Lease liability payments
Net cash provided by financing activities
Net increase in cash and cash equivalents
Effects of exchange rate changes on cash and cash
equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
8
-
-
(5,270)
(5,270)
2,533,747
2,153,664
-
(188,594)
(17,307)
2,327,846
205,890
(97,946)
(52,848)
2,208,760
1,231,512
99,192
(8,844)
154,589
1,377,257
5,616
49,781
154,589
The above statement of cash flows should be read in conjunction with the accompanying notes
24
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
1. CORPORATE INFORMATION
The financial report of SportsHero Limited and its controlled entities (the “Group” or “consolidated entity”)
for the year ended 30 June 2021 was authorised for issue in accordance with a resolution of the Director’s
on 30 September 2021.
SportsHero Limited (“SportsHero” or the “Company”) is a company limited by shares, incorporated in
Australia, and whose securities are publicly traded on the Australia Securities Exchange.
The nature of the operations and principal activities of the Group are described in the Director’s Report.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
New or amended Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting
period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been
early adopted.
The directors of the Group do not anticipate that the application of the new or amended Accounting
Standards and Interpretations in the future will have an impact on the Group’s financial statements.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are
not yet mandatory, have not been early adopted by the consolidated entity for the annual reporting period
ended 30 June 2021.
(a) Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian
Accounting Standards and Interpretations issued by the Australian Accounting Standards Board and the
Corporations Act 2001, as appropriate for for-profit oriented entities. These financial statements also
comply with International Financial Reporting Standards as issued by the International Accounting
Standards Board.
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where
applicable, the revaluation of available-for-sale financial assets, financial assets and liabilities at fair
value through profit or loss, investment properties, certain classes of property, plant and equipment and
derivative financial instruments.
The preparation of the financial statements requires the use of certain critical accounting estimates. It
also requires management to exercise its judgement in the process of applying the consolidated entity's
accounting policies. The areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial statements are disclosed in note 2(z).
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the
consolidated entity only. Supplementary information about the parent entity is disclosed in note 18.
The report is presented in US dollars, unless otherwise stated.
25
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
(b) Going concern
The financial statements have been prepared on the going concern basis, which contemplates continuity
of normal business activities and the realisation of assets and discharge of liabilities in the normal course
of business.
As disclosed in the financial statements, the consolidated entity incurred a net loss of US$1,479,219 and
had net cash outflows from operating activities of US$1,096,334 for the year ended 30 June 2021.
The ability of the consolidated entity to continue as a going concern is principally dependent upon the
consolidated entity securing funds by raising additional capital from equity markets and managing cash
flows in line with available funds.
The Directors believe that it is reasonably foreseeable that the consolidated entity will continue as a going
concern and that it is appropriate for it to adopt the going concern basis in the preparation of the financial
statements after consideration of following factors:
The Directors expect to retain the continued support from shareholders and other financiers that
have supported the Company’s previous capital raisings to assist with meeting future funding needs;
On 10 September 2020, the Company announced the signing of a definitive Standby Placement
Agreement with Mint Capital Advisors for a financing facility of up to AU$5,000,000. The Standby
Placement Agreement has a term of 36 months and the Company is entitled to drawdown up to
AU$140,000 per month, provided the issue price (calculated in accordance with the terms of the
Standby Placement Agreement) is above a floor price of AU$0.02 per share. As at 30 June 2021,
the financing facility had a further 26 months before the expiry of its term. As such, the Company had
available to it up to a maximum of a AU$3,640,000 that could be drawn under the financing facility;
and
The consolidated entity has the ability to curtail corporate and administration expenses and overhead
cash outflows as and when required.
(c)
Statement of Compliance
The financial report complies with Australian Accounting Standards and International Financial Reporting
Standards.
Principles of Consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of
SportsHero as at 30 June 2021 and the results of all subsidiaries for the year then ended.
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity
controls an entity when the consolidated entity 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 to direct the
activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to
the consolidated entity. They are de-consolidated from the date that control ceases.
Associates and joint venture entities are consolidated using the equity method. The initial recognition of
the investment in the joint venture has been recognised at cost, with the carrying amount increased or
decreased to recognise SportsHero’s share of the profit or loss of the investee after the date of
acquisition. The share of the investee’s profit or loss is recognised in the investor’s profit or loss.
Intercompany transactions, balances and unrealised gains on transactions between entities in the
consolidated entity are eliminated. Unrealised losses are also eliminated unless the transaction provides
evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with the policies adopted by the consolidated entity.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement
of profit or loss and other comprehensive income, statement of financial position and statement of
changes in equity of the consolidated entity. Losses incurred by the consolidated entity are attributed to
the non-controlling interest in full, even if that results in a deficit balance.
26
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
(d) Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-
current classification.
An asset is current when: it is expected to be realised or intended to be sold or consumed in normal
operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within twelve
months after the reporting period; or the asset is cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least twelve months after the reporting period. All other
assets are classified as non-current.
A liability is current when: it is expected to be settled in normal operating cycle; it is held primarily for the
purpose of trading; it is due to be settled within twelve months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least twelve months after the reporting
period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
(e)
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker. The chief operating decision maker is responsible for allocating resources and
assessing performance of any operating segments.
(f)
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be
entitled in exchange for transferring goods or services to a customer. For each contract with a customer,
the Group: identifies the contract with a customer; identifies the performance obligations in the contract;
determines the transaction price which takes into account estimates of variable consideration and the
time value of money; allocates the transaction price to the separate performance obligations on the basis
of the relative stand-alone selling price of each distinct good or service to be delivered; and recognises
revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to the
customer of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer
such as discounts, rebates and refunds, any potential bonuses receivable from the customer and any
other contingent events. Such estimates are determined using either the 'expected value' or 'most likely
amount' method. The measurement of variable consideration is subject to a constraining principle
whereby revenue will only be recognised to the extent that it is highly probable that a significant reversal
in the amount of cumulative revenue recognised will not occur. The measurement constraint continues
until the uncertainty associated with the variable consideration is subsequently resolved. Amounts
received that are subject to the constraining principle are initially recognised as deferred revenue in the
form of a separate refund liability.
Advertising revenue
Advertising revenue is recognised over the term of the advertising contract as services are rendered over
time.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method
of calculating the amortised cost of a financial asset and allocating the interest income over the relevant
period using the effective interest rate, which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to the net carrying amount of the financial asset.
Other revenue
27
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
Other revenue is recognised when it is received or when the right to receive payment is established.
(g) Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash at bank and short-term
deposits with an original maturity of three months or less that are readily convertible to known amounts
of cash and which are subject to an insignificant risk of changes in value.
For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash
equivalents as defined above. The Group does not have any bank overdraft facilities.
(h)
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using
the effective interest method, less any allowance for expected credit losses. Trade receivables are
generally due for settlement within 90 days. The Group has applied the simplified approach to measuring
expected credit losses, which uses a lifetime expected loss allowance. To measure the expected credit
losses, trade receivables have been grouped based on days overdue. Other receivables are recognised
at amortised cost, less any allowance for expected credit losses.
(i)
Plant and equipment
Plant and equipment is stated at historical cost less depreciation and any accumulated impairment losses.
Historical cost includes expenditure that is directly attributable to the acquisition of these items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the
Group and the cost of the item can be measured reliably.
All other repairs and maintenance are charged to the statement of comprehensive income during the
financial period in which they are incurred.
Depreciation is calculated using the straight-line method to allocate their cost over their estimated useful
lives. The expected useful lives are.
- Equipment – 3 years
The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if
appropriate, at each financial year end.
(j)
Joint venture
Joint ventures are entities over which the consolidated entity has joint control. Investments in joint
ventures are accounted for using the equity method. Under the equity method, the share of the profits or
losses of the joint venture is recognised in profit or loss and the share of the movements in equity is
recognised in other comprehensive income. Investments in joint ventures are carried in the statement of
financial position at cost plus post-acquisition changes in the consolidated entity's share of net assets of
the joint venture. Dividends received or receivable from joint ventures reduce the carrying amount of the
investment.
When the consolidated entity's share of losses in a joint venture equals or exceeds its interest in the joint
venture, including any unsecured long-term receivables, the consolidated entity does not recognise
further losses, unless it has incurred obligations or made payments on behalf of the joint venture.
The consolidated entity discontinues the use of the equity method upon the loss of joint control and
significant influence over the joint venture and recognises any retained investment at its fair value. Any
difference between the joint venture's carrying amount, fair value of the retained investment and proceeds
from disposal is recognised in profit or loss.
28
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
(k)
Impairment of assets
At each reporting date, the consolidated entity reviews the carrying values of its tangible and intangible
assets to determine whether there is any indication that those assets have been impaired. If such an
indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs
to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying
value over its recoverable amount is expensed to the statement of comprehensive income.
Where it is not possible to estimate the recoverable amount of an individual asset, the consolidated entity
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
(l)
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included
as part of the initial measurement, except for financial assets at fair value through profit or loss. Such
assets are subsequently measured at either amortised cost or fair value depending on their classification.
Classification is determined based on both the business model within which such assets are held and the
contractual cash flow characteristics of the financial asset unless, an accounting mismatch is being
avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been
transferred and the consolidated entity has transferred substantially all the risks and rewards of
ownership. When there is no reasonable expectation of recovering part or all of a financial asset, it's
carrying value is written off.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income are
classified as financial assets at fair value through profit or loss. Typically, such financial assets will be
either: (i) held for trading, where they are acquired for the purpose of selling in the short-term with an
intention of making a profit, or a derivative; or (ii) designated as such upon initial recognition where
permitted. Fair value movements are recognised in profit or loss.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which the
consolidated entity intends to hold for the foreseeable future and has irrevocably elected to classify them
as such upon initial recognition.
Impairment of financial assets
The consolidated entity recognises a loss allowance for expected credit losses on financial assets which
are either measured at amortised cost or fair value through other comprehensive income. The
measurement of the loss allowance depends upon the consolidated entity's assessment at the end of
each reporting period as to whether the financial instrument's credit risk has increased significantly since
initial recognition, based on reasonable and supportable information that is available, without undue cost
or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-
month expected credit loss allowance is estimated. This represents a portion of the asset's lifetime
expected credit losses that is attributable to a default event that is possible within the next 12 months.
Where a financial asset has become credit impaired or where it is determined that credit risk has increased
significantly, the loss allowance is based on the asset's lifetime expected credit losses. The amount of
expected credit loss recognised is measured on the basis of the probability weighted present value of
anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.
29
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
For financial assets measured at fair value through other comprehensive income, the loss allowance is
recognised within other comprehensive income. In all other cases, the loss allowance is recognised in
profit or loss.
(m) Trade and other payables
Trade payables and other payables are carried at the transaction price minus principal repayments. They
represent liabilities for goods and services provided to the Group prior to the end of the financial year that
are unpaid and arise when the Group becomes obliged to make future payments in respect of the
purchase of these goods and services.
(n) Provisions
Provisions are recognised when the consolidated entity has a present (legal or constructive) obligation as
a result of a past event, it is probable the consolidated entity will be required to settle the obligation, and
a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision
is the best estimate of the consideration required to settle the present obligation at the reporting date,
taking into account the risks and uncertainties surrounding the obligation. If the time value of money is
material, provisions are discounted using a current pre-tax rate specific to the liability. The increase in the
provision resulting from the passage of time is recognised as a finance cost.
(o) Employee entitlements
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave
expected to be settled within 12 months of the reporting date are recognised in current liabilities in
respect of employees' services up to the reporting date and are measured at the amounts expected to
be paid when the liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the
reporting date are recognised in non-current liabilities, provided there is an unconditional right to defer
settlement of the liability. The liability is measured as the present value of expected future payments to
be made in respect of services provided by employees up to the reporting date using the projected unit
credit method. Consideration is given to expected future wage and salary levels, experience of employee
departures and periods of service. Expected future payments are discounted using market yields at the
reporting date on national government bonds with terms to maturity and currency that match, as closely
as possible, the estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are
incurred.
Share-based payments
Equity-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares that are provided to employees
in exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange
of services, where the amount of cash is determined by reference to the share price.
30
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is
independently determined using an appropriate option pricing model that takes into account the exercise
price, the term of the option, the impact of dilution, the share price at grant date and expected price
volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term
of the option, together with non-vesting conditions that do not determine whether the consolidated entity
receives the services that entitle the employees to receive payment. No account is taken of any other
vesting conditions.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any
remaining expense is recognised immediately. If a new replacement award is substituted for the
cancelled award, the cancelled and new award is treated as if they were a modification.
(p)
Leases
The determination of whether an arrangement is or contains a lease is based on the substance of the
arrangement and requires an assessment of whether the fulfilment of the arrangement is dependent on
the use of a specific asset or assets and the arrangement conveys a right to use the asset.
(q)
Income tax
The income tax expense (revenue) for the year comprises current income tax expense (income) and
deferred tax expense (income).
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated
using applicable income tax rates enacted, or substantially enacted, as at the end of the reporting period.
Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered
from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances
during the year as well unused tax losses.
Current and deferred income tax expense (income) is charged or credited directly to equity instead of the
profit or loss when the tax relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax
assets also result where amounts have been fully expensed but future tax deductions are available. No
deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a
business combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period
when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted
at the end of the reporting period. Their measurement also reflects the manner in which management
expects to recover or settle the carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the
extent that it is probable that future taxable profit will be available against which the benefits of the deferred
tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and
joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the
temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable
future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is
intended that net settlement or simultaneous realisation and settlement of the respective asset and liability
will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists,
the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either
the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous
31
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
realisation and settlement of the respective asset and liability will occur in future periods in which
significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.
Tax consolidation
SportsHero Limited and its wholly-owned subsidiaries have not formed an income tax consolidated group
under tax consolidation legislation.
(r)
Equity based payments
The Group provides benefits to its Directors and employees in the form of share-based payments,
whereby Directors and employees render services in exchange for share, options to acquire shares or
rights over shares (equity-settled transactions).
The cost of these equity-settled transactions is measured by reference to the fair value to the Group of
the equity instruments at the date at which they were granted. The fair value of options is determined
using the Black-Scholes model, taking into account the terms and conditions upon which the options were
granted.
The cost of equity-settled transactions is recognised as an expense, together with a corresponding
increase in equity, on a straight-line basis, over the period in which the vesting and/or service conditions
are fulfilled (the vesting period), ending on the date on which the relevant Directors and employees
become fully entitled to the options (the vesting date).
At each subsequent reporting date until vesting, the cumulative charge to the statement of comprehensive
income reflects:
a.
b.
c.
the grant date fair value of the options;
the current best estimate of the number of options that will ultimately vest, taking into account
such factors as the likelihood of employee turnover during the vesting period and the likelihood
of vesting conditions being met, based on best available information at balance date; and
the extent to which the vesting period has expired.
The charge to the statement of comprehensive income for the period is the cumulative amount as
calculated above less the amounts already charged in previous periods. There is a corresponding entry
to equity.
If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the
terms had not been modified. An additional expense is recognised for any modification that increases the
total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee, as
measured at the date of modification.
If an equity-settled award is cancelled, it is treated as if it has vested on the date of cancellation, and any
expense not yet recognised for the award is recognised immediately. However, if a new award is
substituted for the cancelled award and designated as a replacement award on the date that it is granted,
the cancelled and new award are treated as if they were a modification of the original award, as described
in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation
of diluted earnings per share.
(s)
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
32
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
(t)
Dividends
Dividends are recognised when declared during the financial year and no longer at the discretion of the
Group.
(u) Earnings per share
Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to
exclude any costs of servicing equity (other than dividends) and preference share dividends, divided by
the weighted average number of ordinary shares, adjusted for any bonus element.
Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for:
-
-
-
costs of servicing equity (other than dividends);
the after tax effect of dividends and interest associated with dilutive potential ordinary shares
that have been recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result
from the dilution of potential ordinary shares; divided by the weighted average number of
ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.
(v) Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST except:
-
-
where the GST incurred on a purchase of goods and services is not recoverable from the
taxation authority, in which case the GST is recognised as part of the cost of acquisition of the
asset or as part of the expense item as applicable; and
receivables and payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash
flows arising from investing and financial activities, which are recoverable from, or payable to, the taxation
authority, are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable
to, the taxation authority.
(w) Foreign currency transactions and balances
The financial statements are presented in US dollars, which is SportsHero's functional and presentation
currency.
Foreign currency transactions
Foreign currency transactions are translated into US dollars using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at financial year-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into US dollars using the exchange rates
at the reporting date. The revenues and expenses of foreign operations are translated into US dollars
using the average exchange rates, which approximate the rate at the date of the transaction, for the
period. All resulting foreign exchange differences are recognised in other comprehensive income through
the foreign currency reserve in equity.
33
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment
is disposed of.
(x) Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of
transaction costs. They are subsequently measured at amortised cost using the effective interest
method.
The component of the convertible notes that exhibits characteristics of a liability is recognised as a
liability in the statement of financial position, net of transaction costs.
On the issue of the convertible notes the fair value of the liability component is determined using a
market rate for an equivalent non-convertible bond and this amount is carried as a current liability until
extinguished on conversion or redemption as the maturity date is within 12 months. The corresponding
interest on convertible notes is expensed to profit or loss.
(y) Right to use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is
measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable,
any lease payments made at or before the commencement date net of any lease incentives received,
any initial direct costs incurred, and, except where included in the cost of inventories, an estimate of
costs expected to be incurred for dismantling and removing the underlying asset, and restoring the site
or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the
estimated useful life of the asset, whichever is the shorter. Where the consolidated entity expects to
obtain ownership of the leased asset at the end of the lease term, the depreciation is over its estimated
useful life. Right-of use assets are subject to impairment or adjusted for any remeasurement of lease
liabilities.
The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability
for short-term leases with terms of 12 months or less and leases of low-value assets. Lease payments
on these assets are expensed to profit or loss as incurred.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially
recognised at the present value of the lease payments to be made over the term of the lease, discounted
using the interest rate implicit in the lease or, if that rate cannot be readily determined, the consolidated
entity's incremental borrowing rate. Lease payments comprise of fixed payments less any lease
incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to
be paid under residual value guarantees, exercise price of a purchase option when the exercise of the
option is reasonably certain to occur, and any anticipated termination penalties. The variable lease
payments that do not depend on an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying
amounts are remeasured if there is a change in the following: future lease payments arising from a
change in an index or a rate used; residual guarantee; lease term; certainty of a purchase option and
termination penalties. When a lease liability is remeasured, an adjustment is made to the corresponding
right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.
(z) Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management take judgements, estimates and
assumptions that affect the reported amounts in the financial statements. Management continually
evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and
expenses. Management bases its judgements, estimates and assumptions on historical experience and
34
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
on other various factors, including expectations of future events, management believes to be reasonable
under the circumstances. The resulting accounting judgements and estimates will seldom equal the
related actual results. The judgements, estimates and assumptions that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within
the next financial year are discussed below.
Share-based payment transactions
The consolidated entity measures the cost of equity-settled transactions with employees and suppliers by
reference to the fair value of the equity instruments at the date at which they are granted. The fair value
is determined by using either the Binomial or Black-Scholes model taking into account the terms and
conditions upon which the instruments were granted. Probabilities have been assigned to non-market
vesting conditions for the performance rights issued. The accounting estimates and assumptions relating
to equity-settled share-based payments would have no impact on the carrying amounts of assets and
liabilities within the next annual reporting period but may impact profit or loss and equity.
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic
has had, or may have, on the consolidated entity based on known information. This consideration extends
to the nature of the products and services offered, customers, supply chain, staffing and geographic
regions in which the consolidated entity operates. Other than as addressed in specific notes, there does
not currently appear to be either any significant impact upon the financial statements or any significant
uncertainties with respect to events or conditions which may impact the consolidated entity unfavourably
as at the reporting date or subsequently as a result of the Coronavirus (COVID-19) pandemic.
3. Revenue
Revenue from customers
Advertising revenue
Other revenue
Interest revenue
Other income
Consolidated
2021
US$
22,664
22,664
86
17,820
17,906
2020
US$
-
-
3,434
-
3,434
Advertising revenue is recognised over the term of advertising contract as services are rendered over
time.
Administration expenses
4.
Administration expenses include the following:
Advertising and marketing
Professional fees
Sports subscription services
Legal
35
Consolidated
2021
US$
228,850
222,515
1,414
62,619
2020
US$
321,047
144,935
2,150
169,828
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
5.
Employee and consulting expenses
Salary and wages
6.
Loss per share
The following reflects the loss used in the basic and diluted loss
per share computations.
Loss used in calculating earnings per share
For basic and diluted earnings per share:
Loss for year attributed to continued operations
Loss for the year attributable to ordinary shareholders
Weighted average number of shares
Consolidated
2021
US$
2020
US$
366,737
366,737
435,634
435,634
Consolidated
2021
US$
2020
US$
1,479,219
1,479,219
1,259,559
1,259,559
2021
No. of shares
2020
No. of shares
Weighted average number of ordinary shares for basic and
diluted loss per share
404,900,439 319,318,140
Loss per share
Basic and diluted loss per share (US cents)
0.37
0.39
(i) Anti-dilutive options on issue are excluded from the dilutive earnings per share calculation.
(ii) Other than the issue of the securities disclosed in note 15, there has been no other
transactions involving ordinary shares or potential ordinary shares that would significantly
change the number of ordinary shares or potential ordinary shares outstanding between the
reporting date and the date of completion of these financial statements.
36
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
7.
Income taxes
Income tax recognised in profit or loss
Consolidated
2021
US$
2020
US$
Prima facie tax benefit on operating loss before income tax at 27.5%
(2020: 27.5%)
Tax effect of amounts which are not deductible (taxable) in
calculating taxable income:
Other non-deductible items
Unrecognised deferred tax asset attributable to tax losses and
temporary differences
Income tax attributable to operating loss
(406,785)
(346,379)
(177,153)
(134,542)
583,938
-
480,921
-
The consolidated entity has US$9,744,860 (2020: US$8,253,861) tax losses arising in Australia
that are available indefinitely for offset against future profit of the Group in which the losses arose.
The potential deferred tax asset of US$2,708,870 (2020: US$1,690,487), arising from tax losses
and temporary differences (as disclosed above), has not been recognised as an asset because
recovery of tax losses and temporary differences is not considered probable given the development
stage of the Company’s apps.
The potential deferred tax asset will only be obtained if:
the Group derives future assessable income of a nature and an amount sufficient to enable
the benefit to be realised;
the Group continues to comply with the conditions for deductibility imposed by tax legislation;
and
no changes in tax legislation adversely affect the Group in realising the benefit from the
related deduction for the losses.
8. Cash and cash equivalents
Cash at bank
9. Trade and other receivables
Trade receivables
Less: allowance for expected credit losses
Other receivables
Consolidated
2021
US$
2020
US$
1,377,257
1,377,257
154,589
154,589
Consolidated
2021
US$
2020
US$
-
-
1,942
1,942
158,161
(158,161)
147,655
147,655
Allowance for expected credit losses
The consolidated entity has recognised a loss of nil (2020: nil) in profit or loss in respect of the expected
credit losses for the year ended 30 June 2021.
37
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
Movements in the allowance for expected credit losses are as follows:
Opening balance
Written off in current year
Closing balance
Credit Risk
Consolidated
2021
US$
2020
US$
158,161
(158,161)
-
158,161
-
158,161
The maximum exposure to credit risk at balance date is the carrying amount (net of allowance for expected
credit losses) of those assets as disclosed in the statement of financial position and notes to the financial
statements. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining
sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults.
The Group’s exposure and the credit ratings of its counterparties are continuously monitored, and the
aggregate value of transactions concluded are spread amongst approved counterparties.
10. Property, plant and equipment
Equipment – at cost
Less: Accumulated depreciation
Foreign exchange differences
Consolidated
Balance as at 1 July 2020
Additions
Disposals
Depreciation expense
Foreign exchange differences
Balance as 30 June 2021
Balance at 1 July 2019
Additions
Depreciation expense
Foreign exchange differences
Balance as 30 June 2020
11.
Right-of-use assets
Land and buildings – right-of-use
Less: Accumulated depreciation
38
Consolidated
2021
US$
7,352
(6,015)
793
2,130
2020
US$
7,352
(2,879)
35
4,508
Equipment
US$
4,508
-
-
(3,136)
758
2,130
1,507
5,270
(2,304)
35
4,508
Consolidated
2021
US$
16,909
(16,909)
-
2020
US$
68,039
(51,130)
16,909
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
12.
Lease liabilities
Lease liability - current
13.
Trade and other payables
Current Payables
Trade payables
Accrued expenses
Consolidated
2021
US$
-
2020
US$
17,308
Consolidated
2021
US$
65,428
71,912
137,340
2020
US$
221,898
59,201
281,099
(i) Due to the short-term nature of these payables, their carrying value is assumed to
approximate their fair value.
(ii) Trade payables are non-interest bearing.
(iii) Other payables relate to discontinued operations.
14.
Borrowings
Convertible notes
Consolidated
2021
US$
-
2020
US$
206,045
On 30 June 2020, 300 Convertible Notes were issued with a face value of AU$1,000 (US$686)
and a maturity date of 1 year from the date of issue. The convertible notes accrue interest at
10% and are convertible into ordinary fully paid shares at lower of AU$0.03 or 80% of the volume
weighted average price of shares trading on ASX over the 7 trading days prior to the conversion
date. The note holder has the option to convert the convertible notes (and interest accrued) at
any time commencing from 6 months from the issue date to the maturity date. On maturity date,
all the remaining convertible notes that have not been converted, will be converted into shares.
Effective as at 30 June 2021, all 300 Convertible Notes were converted into ordinary fully paid
shares.
39
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
15. Contributed Equity
(a) Share capital
2021
Number
2021
US$
2020
Number
2020
US$
Ordinary fully paid shares
478,965,505 14,161,989 328,206,064 11,784,318
(b) Movements in ordinary shares
Opening balance
328,206,064 11,784,318 270,269,397
Shares issued at US$0.070 per share
Shares issued at US$0.035 per share
₁
Shares issued at US$0.034 per share
₂
Shares issued at US$0.018 per share
3
Shares issued at US$0.014 per share
₄
Shares issued at US$0.015 per share
5
Shares issued at US$0.176 per share
6
Shares issued at US$0.018 per share
7
Shares issued at US$0.016 per share
8
Shares issued at US$0.019 per share
9
Shares issued at US$0.018 per share
Shares issued at US$0.017 per share
Shares issued at US$0.023 per share
Shares issued at US$0.019 per share
Shares issued at US$0.013 per share
Transaction cost on share issue
10
11
12
13
14
15
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
(x)
(xi)
(xii)
(xiii)
(xiv)
(xv)
-
-
-
3,000,000
5,000,000
3,100,933
2,000,000
53,500,000
1,860,664
18,000,000
7,720,303
1,510,756
-
-
-
53,948
72,820
48,538
35,215
977,579
30,328
348,570
143,524
25,815
50,000,000 1,159,050
20,826
51,897
(590,439)
1,069,923
3,996,862
-
4,283,333
16,403,334
37,250,000
-
-
-
-
-
-
-
-
-
-
-
-
-
10,097,370
299,191
572,887
1,281,586
-
-
-
-
-
-
-
-
-
-
-
-
(466,716)
Issue price AU$0.10 translated to US$ at grant date
Issue price AU$0.05 translated to US$ at grant date
₁
Issue price AU$$0.05 translated to US$ at grant date
₂
Issue price AU$0.025 translated to US$ at grant date
₃
5 Issue price AU$0.02 translated to US$ at grant date
₄
6 Issue price AU$0.02223 translated to US$ at grant date
Issue price AU$0.025 translated to US$ at grant date
8 Issue price AU$0.025 translated to US$ at grant date
₇
478,965,505 14,161,989 328,206,064 11,784,318
9 Issue price AU$0.0223 translated to US$ at grant date
10 Issue price AU$0.025 translated to US$ at grant date
11 Issue price AU$0.024 translated to US$ at grant date
12 Issue price AU$0.022 translated to US$ at grant date
13 Issue price AU$0.03 translated to US$ at grant date
14 Issue price AU$0.0251 translated to US$ at grant date
15 Issue price AU$0.0173 translated to US$ at grant date
(i) On 24 July 2019, the Group issued 4,283,333 shares to sophisticated investors at an issue price of
AU$0.10 to raise working capital.
(ii) On 24 July 2019, the Group issued 16,403,334 shares following the exercise of 16,403,334 options each
exercisable at AU$0.05 and expiring 31 August 2019.
(iii) On 12 September 2019, the Group issued 37,250,000 shares following the exercise of 37,250,000 options
each exercisable at AU$0.05 and expiring 31 August 2019.
(iv) On 26 August 2020, the Group issued 3,000,000 shares to Rob Davies as a sign on fee at a deemed
issue price of AU$0.025 per share (share based payment expense).
(v) On 11 September 2020, the Group issued 5,000,000 shares to Mint Capital Advisors at a deemed issue
price of AU$0.020 per share in consideration for the establishment of a AU$5,000,000 Standby Placement
Facility (share based payment expense).
(vi) On 20 October 2020, the Group issued 3,100,933 at an issue price of AU$0.02223 per share to raise
AU$68,933 in working capital.
(vii) On 20 October 2020, the Group issued 2,000,000 shares to Rob Davies following the conversion of
2,000,000 Performance Rights.
40
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
(viii) On 11 November 2020, the Group issued 53,500,000 shares to sophisticated investors at an issue price
of AU$0.025 per share to raise AU$1,337,500 in working capital.
(ix) On 11 November 2020, the Group issued 1,860,664 shares at an issue price of AU$0.0223 per share
following the conversion of 38 convertible notes, each with a face value of AU$1,000, and the payment to
the noteholders of AU$2019.73 in interest.
(x) On 22 January 2021, the Group issued 18,000,000 to sophisticated investors at an issue price of
AU$0.025 per share to raise AU$450,000 in working capital.
(xi) On 22 January 2021, the Group issued 7,720,303 shares at an issue price of AU$0.024 per share
following the conversion of 175 convertible notes, each with a face value of AU$1,000, and the payment
to the noteholders of AU$10,258.90 in interest.
(xii) On 22 January 2021, the Group issued 1,510,756 shares at an issue price of AU$0.02206 per share to
Mr John Dougall in lieu of the payment of fees to the value of AU$33,333.33.
(xiii) On 9 February 2021, the Group issued 50,000,000 shares to sophisticated investors at an issue price of
AU$0.03 per share to raise AU$1,500,000 in working capital.
(xiv) On 9 February 2021, the Group issued 1,069,923 shares at an issue price of AU$0.025191 per share
following the conversion of 25 convertible notes, each with a face value of AU$1,000, and the payment to
the noteholders of AU$1,952.05 in interest.
(xv) Effective as of 30 June 2021, the Group issued 3,996,862 shares at an issue price of AU$0.0173 per
share following the conversion of 62 convertible notes, each with a face value of AU$1,000, and the
payment to the noteholders of AU$7,028.49 in interest.
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Group
in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no
par value and the Group does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon
a poll each share shall have one vote.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
When managing capital, management’s objective is to ensure the entity continues as a going concern as well
as to maintain optimal returns to shareholders and benefits for other stakeholders. Management also aims to
maintain a capital structure that ensures the lowest cost of capital available to the entity.
In order to maintain or adjust the capital structure, the entity may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares, enter into joint ventures or sell assets.
The entity does not have a defined share buy-back plan.
No dividends were paid in 2021 (2020: nil) and no dividends are expected to be paid in 2021.
There is no current intention to incur debt funding on behalf of the Group
The Group is not subject to any externally imposed capital requirements.
41
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
16. Reserves
Reserves
Share-based payments reserve
As at 1 July 2020
Share based payments
Conversion of rights
Underwriter options – transaction costs on share issue
As at 30 June 2021
Foreign currency reserve
As at 1 July 2020
Foreign currency translation
As at 30 June 2021
Nature and purpose of reserves
Share-based payment reserve
Consolidated
2021
US$
2020
US$
474,168
242,278
(35,215)
401,845
1,083,076
92,515
12,883
-
368,770
474,168
(149,623)
(82,580)
(232,203)
(156,390)
6,767
(149,623)
The share-based payments reserve records the value of share options and performance rights issued by the
Group.
Foreign currency reserve
The reserve is used to recognise exchange differences arising from translation of the financial statements of
international operations to US dollars. It is also used to recognise gains and losses on hedges of the net
investments in foreign operations.
17. Notes to Statement of Cash Flows
(a) Reconciliation of net cash used in operating activities to operating loss after income tax
Consolidated
2021
US$
2020
US$
(1,479,219)
(1,259,559)
20,045
369,036
412
53,434
12,883
2,120
13,430
(20,038)
-
(1,096,334)
34,958
(1,049,687)
101,553
(2,104,298)
Operating loss after tax
Add non-cash items:
Depreciation and amortisation
Share-based payments expense
Interest expense on lease liability
Changes in net assets and liabilities:
Movement in receivables
Movement in payables
Share of loss on joint venture
Net cash flow used in operating activities
42
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
(b) Non-cash financing and investing activities
Shares issued for provision of services
18. Parent Information
ASSETS
Current assets
Non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
TOTAL LIABILITIES
Consolidated
2021
US$
434,361
434,361
Parent
2021
US$
2020
US$
-
-
2020
US$
1,304,665
-
1,304,665
227,977
-
227,977
60,979
60,979
408,768
408,768
NET (LIABILITIES)/ASSETS
1,243,686
(180,791)
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
Loss for the year
Total comprehensive loss
11,661,989
833,683
(11,251,986)
1,243,686
9,284,318
224,775
(9,689,884)
(180,791)
(1,562,102)
(1,562,102)
(1,120,351)
(1,120,351)
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2021 (2020: nil)
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment at as 30 June
2021 and 30 June 2020.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity,
as disclosed in note 2.
43
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
19. Details of Associates and Joint Venture entities
Name of associate / joint venture
Pay-to-Play Australia Pty Ltd
Group's aggregate share of associates and joint
venture entities' profit /(loss) (where material)
Profit/(loss) from ordinary activities before
income tax
Income tax on operating activities
Reporting
entity's
percentage
holding
2020
2021
%
%
50% 50%
Contribution to
profit/(loss)
(where material)
2021
US$
-
2020
US$
(101,553)
-
(101,553)
-
-
The above joint venture (which was terminated on 23 August 2021) is accounted for using the
equity method in the consolidated financial statements.
20.
Related Party Transactions
(a) Directors and Specified Executives
The names and positions held by key management personnel in office at any time during the year are:
J Dougall
T Lapping
M Higginson
Non-Executive Director and Chair
Director and CEO
Non-Executive Director
All of the above persons were key management personnel during the year ended 30 June 2021.
(b) Key management personnel remuneration
Short-term employee benefits
(c) Payables to key management personnel
Consolidated
2021
US$
376,937
376,937
2020
US$
235,276
235,276
Amounts payable to Directors and Director related entities
at the end of the financial year, included in current
liabilities
45,870
32,706
(d) Other transactions with key management personnel
During the year the Group paid rent of US$2,613 (2020: US$3,021) to Mr Higginson for the
provision of the Group’s registered and principal office.
There were no other sale or purchase related transactions between the Group and key
management personnel during the year ended 30 June 2021 (2020: nil).
44
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
(e) Other transactions with related parties
Following the receipt of shareholder approval on 15 January 2021, on 22 January 2021 the
Company issued the following securities:
1,510,756 shares to Mr Dougall in lieu of cash fees for the 2020 financial year totalling AU$33,333
4,000,000 performance rights to Mr Dougall
3,000,000 Director performance rights to Mr Dougall
6,000,000 Director performance rights to Mr Lapping;
3,000,000 Director performance rights to Mr Higginson.
There were no other transactions with related parties throughout the year.
(f) Other Entities
There were no other transaction with other entities.
21. Share based payments
Recognised share-based payment expenses
Consolidated
2021
US$
2020
US$
Shares issued for services rendered
126,758
Performance rights vesting over period – issued in prior year
Forfeiture of performance options issued in prior year
Forfeiture of performance rights issued in prior year
Options issued for services rendered
Performance rights vesting over a period – issued in prior year
-
-
-
56,166
186,112
369,036
-
12,883
-
-
-
-
12,883
Underwriter options – transaction costs on share issue
401,845
368,770
Employee Securities Incentive Plan
On 15 January 2021, the Group established an Employee Securities Incentive Plan that allows for
securities to be granted to eligible employees and officers of the Group. The number of securities
that can be issued under the plan cannot exceed 19,833,383. The terms and conditions of the
securities issued under the plan are at the discretion of the Board.
(a) Performance rights
Performance rights granted during the 12 months ending 30 June 2021 were as follows:
i)
ii)
iii)
4,000,000 performance rights were granted on 26 August 2020 to Rob Davies, 2,000,000
converting on securing a Tier 1 partnership on or before 31 August 2021 and 2,000,000
converting on the attainment of 1,000,000 new unique users on the Company’s OlahBola or
Kita Garuda apps on or before 31 August 2021;
following the receipt of shareholder approval on 15 January 2021, 4,000,000 performance
rights were granted on 22 January 2021 to John Dougall, converting on the Company
achieving breakeven operating cash flow for any 6 month period up to and including 31
December 2022; and
following the receipt of shareholder approval on 15 January 2021, 12,000,000 performance
rights were granted on 22 January 2021 as follows:
45
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
4,000,0000 Class A performance rights, converting on the VWAP of the Company’s
shares trading on ASX exceeding AU$0.08 per share over 7 consecutive days on or
before 31 December 2021;
4,000,0000 Class B performance rights, converting on attainment on or before 31
December 2021 of not less than 3,000,000 new unique OlahBola users; and
4,000,000 Class C performance rights, converting on the achievement of a positive
EBITDA (with all share based payments being excluded from the EBITDA calculation)
during any 6 month period up to and including 31 December 2022.
On 20 October 2020, 2,000,000 performance rights granted to Rob Davies were converted into
2,000,000 shares following the attainment of 1,000,000 new unique users on the Company’s
OlahBola app.
On 2 July 2021, 4,000,000 Class B performance rights were converted into shares following the
attainment of 3,000,000 new unique users on the Company’s OlahBola app
(b) Options
Following options were granted in the 12 months ending 30 June 2021 (2020: Nil).
Grant date
Dividend yield (%)
Expected price volatility
Risk-free interest rate (%)
Expected life of options (years)
Option exercise price (AU$)
Option exercise price in AU$ translated to US$ at grant date
Share price at grant date AU$
Share price in AU$ translated to US$ at grant date
Number of options issued
FV at grant date (AU$)
FV at grant date (US$)
2 February 2021
-
100%
0.09%
1.87
0.05
0.038
0.032
0.024
5,900,000
74,708
56,166
These 5,900,000 options were issued on 2 July 2021, however, the grant date is deemed to have
been 2 February 2021.
(c) Underwriter options – transaction costs on share issue
Grant date
Dividend yield (%)
Expected price volatility
Risk-free interest rate (%)
Expected life of options (years)
Option exercise price (AU$)
Option exercise price in AU$ translated to US$ at grant date
Share price at grant date AU$
Share price in AU$ translated to US$ at grant date
Number of options issued
FV at grant date (AU$)
FV at grant date (US$)
15 January 2021
-
100%
0.08%
1.92
0.05
0.039
0.032
0.025
12,000,000
154,495
119,981
46
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
Grant date
Dividend yield (%)
Expected price volatility
Risk-free interest rate (%)
Expected life of options (years)
Option exercise price (AU$)
Option exercise price in AU$ translated to US$ at grant date
Share price at grant date AU$
Share price in AU$ translated to US$ at grant date
Number of options issued
FV at grant date (AU$)
FV at grant date (US$)
4 February 2021
-
100%
0.08%
1.86
0.05
0.038
0.035
0.027
25,000,000
364,778
281,864
2021
2020
Number of
Options
Weighted
Average
Exercise
Price
US$
At beginning of reporting year
Granted during the year
- Lapsed
- Exercised
21,000,000
97,750,000
(1,000,000)
-
0.050
0.200
-
Balance the end of reporting year
Exercisable at end of reporting year
117,750,000
117,750,000
Weighted
Average
Exercise
Price
US$
0.010
0.035
0.034
Number of
Options
68,463,094
20,000,000
(9,526,427)
(57,936,667)
21,000,000
21,000,000
The following table sets out the movements in the number of options throughout the year:
Grant
date
Expiry
date
Balance at
start of
year
Number
issued
during
year
Number
exercised
during year
Number
expired
during
year
Balance
at end of
year
Number
exercisable
at end of
year
1 Feb 18 1 Feb 21
1,000,000
12 Sept 19 30 Sept 21 20,000,000
15 Jan 21 16 Dec 22
4 Feb 21 16 Dec 22
-
-
- 47,750,000
- 50,000,000
21,000,000 97,750,000
Total
-
-
-
-
-
(1,000,000)
-
-
-
-
20,000,000
20,000,000
47,750,000
47,750,000
50,000,000
50,000,000
(1,000,000) 117,750,000 117,750,000
(d) Shares issued for services rendered
On 26 August 2020, the Group issued 3,000,000 shares to Rob Davies as a sign on fee at a deemed
issue price of AU$0.025 per share (share based payment expense).
On 11 September 2020, the Group issued 5,000,000 shares to Mint Capital Advisors at a deemed issue
price of AU$0.02 per share in consideration for the establishment of a AU$5,000,000 Standby Placement
Facility (share based payment expense).
47
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
22. Auditors’ Remuneration
Consolidated
Audit of the financial statements - RSM Australia Partners
Audit or review of financial reports
Audit services - Network firms
Audit or review of the financial statements - RSM Chio Lim LLP
2021
US$
35,321
35,321
9,773
9,773
45,094
2020
US$
30,884
30,884
9,401
9,401
40,285
23.
Commitments
There were no outstanding commitments which are not disclosed in the
financial statements as at 30 June 2021 other than:
Office rental
commitments
Within 1 year
After 1 year but not more
than 5 years
Consolidated
2021
US$
2020
US$
-
-
-
-
-
-
24. Financial Risk Management Objectives and Policies
The Group’s principal financial instruments comprise cash and short-term deposits.
The main purpose of these financial instruments is to finance the Group’s operations. The Group has
various other financial assets and liabilities such as trade receivables and trade payables, which arise
directly from its operations. It is, and has been throughout the entire year under review, the Group’s policy
that no trading in financial instruments shall be undertaken.
The main risks arising from the Group’s financial instruments are cash flow interest rate risk and equity
price risk. Other minor risks are either summarised below or disclosed at note 9 in the case of credit risk
and note 15 in the case of capital risk management. The Board reviews and agrees policies for managing
each of these risks.
Cash Flow Interest Rate Risk
The Group’s exposure to the risks of changes in market interest rates relates primarily to the Group’s
short-term deposits with a floating interest rate. These financial assets with variable rates expose the
Group to cash flow interest rate risk. The Group’s borrowings which are fixed rate convertible notes
expose the Group to fair value risk. All other financial assets and liabilities in the form of receivables and
payables are non-interest bearing. The Group does not engage in any hedging or derivative transactions
to manage interest rate risk.
The following tables set out the carrying amount by maturity of the Group’s exposure to interest rate risk
and the effective weighted average interest rate for each class of these financial instruments.
The Group has not entered into any hedging activities to cover interest rate risk. In regard to its interest
rate risk, the Group does not have a formal policy in place to mitigate such risks.
48
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
Consolidated
2021
Financial assets
Cash and cash equivalents
Trade and other
receivables
Total financial assets
Financial liabilities
Trade and other payables
Total financial liabilities
Net financial assets
Interest
Rate
1 year or
less
US$
Over 1-
5 years
US$
Notes
Non-
interest
bearing
US$
Total
US$
0%
8
9
13
-
-
-
-
-
-
-
1,377,257
1,377,257
1,942
1,942
1,379,199
1,379,199
137,340
137,399
137,340
1,241,859
137,399
1,241,859
-
-
-
Consolidated
Notes
Interest
Rate
1 year or
less
US$
Over 1-
5 years
US$
Non-
interest
bearing
US$
Total
US$
2020
Financial assets
Cash and cash equivalents
Trade and other receivables
Total financial assets for
continuing operations
Financial liabilities
Trade and other payables
Borrowings
Total financial liabilities
Net financial assets
Interest rate sensitivity
8
9
13
14
0%
10%
-
-
-
-
-
-
-
-
-
-
-
-
154,589
147,655
302,244
154,589
147,655
302,244
281,099
206,045
281,099
206,045
487,144
487,144
(184,900)
(184,900)
At 30 June 2021, if interest rates had changed by 15% during the entire year with all other variables held
constant, income for the year and equity would have been nil lower/higher (30 June 2020: Nil), as a result
of lower/higher interest income from cash and cash equivalents.
At 30 June 2021, if interest rates had changed by 15% during the entire year with all other variables held
constant, income for the year and equity would have been nil lower/higher (30 June 2020: US$3,091), as
a result of lower/higher interest income from borrowings.
A sensitivity of 15% (15%: 2020) has been selected as this is considered reasonable given the current
level of both short term and long term Australian interest rates. A 15% sensitivity would move short term
interest rates at 30 June 2021 from around 0.25% to 0.21% representing a 0.0375 basis point decrease.
Market expectations are that interest rates in Australia are more likely to move down than up in
subsequent periods.
Based on the sensitivity analysis only interest revenue from variable rate deposits and cash balances are
impacted resulting in a decrease or increase in overall income.
49
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
Liquidity risk
The Group manages liquidity risk by maintaining sufficient cash reserves and marketable securities, and
through the continuous monitoring of budgeted and actual cash flows.
Contracted maturities of payables at 30 June
Payable
- less than 6 months
Borrowings – convertible notes
- 1 year or less
Foreign exchange risk
Note
Weighted
average
interest rate
Consolidated
2021
US$
2020
US$
13
14
-
137,340
281,099
10%
-
137,340
206,045
487,144
The Group has cash and cash equivalents denominated in AU$ of US$1,304,665 (2020: US$122,675).
At 30 June 2021, if USD/AUD rates had changed by 15% with all other variables held constant, loss for
the year and equity would have been US$195,700 lower/higher (30 June 2020: US$18,401), as a result
of with change in fair value of cash and cash equivalents.
A sensitivity of 15% (15%: 2020) has been selected as this is considered reasonable given the current
level of volatility in the USD/AUD rate.
Net fair values
For financial assets and liabilities, the net fair value approximates their carrying value. No financial assets
and financial liabilities are readily traded on organised markets in standardised form, other than listed
investments. The consolidated entity has no financial assets where carrying amount exceeds net fair
values at balance date.
25. Segment Information
For management purposes the Group is organised into two strategic units:
- corporate head office in Australia
- technology development and marketing based in Singapore
- operations in Indonesia
Such structural organisation is determined by the nature of risks and returns associated with each business
segment and define the management structure as well as the internal reporting system. It represents the
basis on which the Group reports its primary segment information to the Board.
The operating segment analysis presented in these financial statements reflects operations analysis by
business. It best describes the way the Group is managed and provides a meaningful insight into the
business activities of the Group.
The following table presents details of revenue and operating loss by business segment as well as
reconciliation between the information disclosed for reportable segments and the aggregated information
in the financial statements. The information disclosed in the table below is derived directly from the
internal financial reporting system used by the Board of Directors to monitor and evaluate the
performance of our operating segments separately.
50
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
Consolidated - 2021
Revenue
Intersegment sales
Income
Total segment income
Intersegment eliminations
Total revenue
EBITDA
Profit before income tax expense
Income tax expense
Loss after income tax expense
Material items include:
Share based payments
Depreciation
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Intersegment eliminations
Total liabilities
Consolidated - 2020
Revenue
Intersegment sales
Other revenue
Total segment revenue
Intersegment eliminations
Total revenue
EBITDA
Profit before income tax expense
Income tax expense
Loss after income tax expense
Material items include:
Share based payments
Depreciation
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Intersegment eliminations
Total liabilities
Australia
US$
Singapore
US$
Indonesia
US$
Total
US$
-
1,828
1,828
-
(838,739)
(854,615)
-
(854,615)
369,036
-
1,304,665
1,304,665
-
16,078
16,078
-
-
22,664
22,664
-
-
40,570
40,570
-
40,570
(546,604)
(573,897)
-
(573,897)
(50,707)
(50,707)
-
(50,707)
(1,436,050)
(1,479,219)
-
(1,479,219)
-
20,045
66,898
66,898
-
-
369,036
20,045
9,766
9,766
1,381,329
1,381,329
60,979
-
60,979
3,057,737
(2,984,695)
73,042
58,101
(54,782)
3,319
3,176,817
(3,039,477)
137,340
Australia
US$
Singapore
US$
Total
US$
-
1,318
1,318
-
1,318
(366,265)
(421,818)
-
(421,818)
12,883
-
-
2,116
2,116
-
2,116
-
3,434
3,434
-
3,434
(837,741)
(837,741)
-
(837,741)
(1,204,006)
(1,259,559)
-
(1,259,559)
-
53,434
12,883
53,434
259,893
259,893
63,768
63,768
323,661
323,661
408,768
(324,338)
84,430
3,001,439
(2,581,417)
420,022
3,410,207
(2,905,755)
504,452
51
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
NOTES TO THE FINANCIAL STATEMENTS
26. Subsequent Events
On 2 July 2021, 4,000,000 Director performance rights were converted into 4,000,000 shares following
the attainment on or before 31 December 2021 of in excess of 3,000,000 new unique OlahBola users.
On 23 August 2021, the Pay-to-Play Australia Pty Ltd joint venture with Cross Bet Holdings Pty Ltd was
terminated.
On 9 September 2021, the Company announced the launching of its state-of-the-art artificial intelligence
esports predictor to service new markets and the rapidly expanding esports gaming market. The Company
further announced the engagement of highly experienced esports consultant, Mr Scott Russell.
The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has been financially negative
for SportsHero up to 30 June 2021, it is not practicable to estimate the potential impact, positive or
negative, after the reporting date. The situation is rapidly developing and is dependent on measures
imposed by the Australian Government and other countries, such as maintaining physical distancing
requirements, quarantine, travel restrictions and any economic stimulus that may be provided.
27. Contingent Liabilities and Contingent Assets
In the 2018 financial year the Group recognised in its financial statements a current liability of US$324,338
in relation to claims that arose in relation to a former overseas subsidiary of the Group. The Group confirms
that it has received no claims (or otherwise) in relation to this matter and no claims are currently pending
against the former overseas subsidiary. The directors are of the view that the possibility of any
reimbursement is remote.
The Group does not have any other contingent liabilities as at 30 June 2021 (2020: Nil).
The Group does not have any contingent assets as at 30 June 2021 (2020: Nil).
28. Investment in Controlled Entities
The consolidated financial statements incorporate the assets, liabilities and results of the following wholly-owned
subsidiaries in accordance with the accounting policy described in note 1:
Country of
Incorporation
Principal
Activities
Functional
Currency
Ownership
%
Australia
Parent
Australian
Dollars (AUD)
Parent entity
SportsHero Limited
Name of Controlled
Entity
Sportz Hero Pty Limited
Australia
Investment holding
SportsHero Enterprise
Pte Ltd
Singapore
PT Sport Hero
Indonesia
Indonesia
Technology
development &
marketing
Operations
29. Company Details
The registered office and principal place of business of the Group is:
36 Prestwick Drive
Twin Waters, QLD 4564
52
Australian
Dollars (AUD)
Singapore
Dollars (SGD)
Indonesia
Rupiah (IDR)
100%
100%
100%
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
DIRECTORS’ DECLARATION
In accordance with a resolution of the Directors of SportsHero Limited, I state that:
In the opinion of the Directors:
(a) the financial statements and notes of the consolidated entity are in accordance with the
Corporations Act 2001, including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2021
and of its performance for the year ended on that date; and
(ii) complying with the Australian Accounting Standards (including the Australian Accounting
Interpretations) and Corporations Regulations 2001; and
(b) the financial statements and notes also comply with International Financial Reporting Standards
as disclosed in note 2; and
(c) there are reasonable grounds to believe that the Group will be able to pay its debts as and when
they become due and payable.
This declaration has been made after receiving the declarations required to be made to the Directors in
accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2021.
Signed in accordance with a resolution of Directors made pursuant to section 295(5)(a) of the
Corporations Act 2001.
On behalf of the Board
John Dougall
Chairman
Dated this 30th day of September 2021
53
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
www.rsm.com.au
INDEPENDENT AUDITOR’S REPORT
To the Members of SportsHero Limited
Opinion
We have audited the financial report of SportsHero Ltd (Company) and its subsidiaries (Group), which comprises
the statement of financial position as at 30 June 2021, the statement of comprehensive income, the statement of
changes in equity and the statement of cash flows for the year then ended, and notes to the financial statements,
including a summary of significant accounting policies, and the directors' declaration.
In our opinion the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i)
Giving a true and fair view of the Group's financial position as at 30 June 2021 and of its financial
performance for the year then ended; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the audit of the financial report section of our
report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's
APES 110 Code of Ethics for Professional Accountants (Code) that are relevant to our audit of the financial report
in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter
How our audit addressed this matter
Share-based payment
Refer to Note 21 in the financial statements
During the financial year, the Group incurred capital
raising costs of US$401,845 and share based payment
issued and
expenses of US$56,166
US$186,112
in
accordance with AASB 2 Share-based Payment from
the issue of the following performance rights and
options:
for options
rights
for performance
issued
4,000,000 performance rights with market vesting
conditions. Management used a valuation model to
value these rights and estimated the length of the
expected vesting period.
16,000,000 performance rights were granted with
non-market based vesting conditions. Management
was required to assess the probability of achieving
the non-market performance conditions attached to
the rights.
37,000,000 options were issued to lead managers
(capital raising costs) and 5,900,000 options were
issued as consideration for services rendered.
We determined this to be a key audit matter due to the
material amount of the share-based payment and the
significant judgement involved in assessing the fair
value of the transactions in accordance with AASB 2
Share-based Payment.
Our audit procedures included:
Reviewing the key terms and conditions of the
performance rights and options issued;
Obtaining the valuation models prepared by
management and assessing whether the models
were appropriate for valuing the performance
rights and options;
Reviewing management’s assessment of the
the non-market
the
probability of achieving
performance conditions attached
performance rights;
to
Checking the mathematical accuracy of the
computation and the apportioned expense over
the vesting period;
Challenging
the
reasonableness of key
assumptions used by management to value the
options; and
Reviewing
the relevant disclosures
the
financial statements to ensure compliance with
Accounting Standards.
in
Other information
The directors are responsible for the other information. The other information comprises the information included
in the Group's annual report for the year ended 30 June 2021 but does not include the financial report and the
auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group 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 to cease operations, or have no realistic
alternative but to do so.
Auditor's responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is 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 the Australian Auditing Standards 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 this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: https://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This
description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the directors' report for the year ended 30 June 2021.
In our opinion, the Remuneration Report of SportsHero Limited, for the year ended 30 June 2021, complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 30 September 2021
ALASDAIR WHYTE
Partner
SPORTHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
SHAREHOLDER INFORMATION
Additional information required by Australian Securities Exchange Limited and not shown elsewhere in
this Annual Report is as follows. The information is made up to 10 September 2021.
Distribution schedules of security holders
Fully Paid
Shares
154
214
160
673
332
1,533
AU$0.05
Options
Expiring
16/12/22
-
-
-
9
58
67
AU$0.10
Options
Expiring
30/9/21
-
-
-
-
1
AU$0.05
Options
Expiring
1/7/23
-
-
-
-
3
1
3
Performance
Rights
-
-
-
-
6
6
1 -1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Number of
Holders
Holders of nonmarketable parcels
There are 642 fully paid ordinary shareholders who hold less than a marketable parcel of shares.
Twenty largest holders
The names of the twenty largest shareholders are:
1 MYHERO LIMITED
2 HSBC CUSTODY NOMINEES (AUSTRALIA) LTD
3 IPV CAPITAL II HK LIMITED
4 SUNSHORE HOLDINGS PTY LTD
5 ADRIAN STEPHEN PAUL + NOELINE FAYE PAUL
6 BNP PARIBAS NOMS PTY LTD
7 J & TW DEKKER PTY LTD
8 COLIN JEE FAI LOW
9 HAPPINESS INVESTMENTS PTY LTD
10 JOHN LEONARD WOODWARD
11 CITICORP NOMINEES PTY LIMITED
12 TOBY LEI
13 THOMAS NAPONG LAPPING TONAVANIK
14 PARRY CAPITAL MANAGEMENT PTY LTD
15 RODNEY LAURENCE STAGGARD
16 ALLGREEN HOLDINGS PTY LTD
17 AHMAD FAUD BIN MD ALI
18 ROBERT DAVIES
19 COLIN JEE FAI LOW
20 JEANNE GO LIM
Number of
shares
60,000,000
17,568,322
16,650,000
15,000,000
14,742,857
12,024,399
11,555,511
10,000,000
9,639,653
9,510,873
8,648,124
8,399,392
8,357,143
7,217,902
6,500,000
6.052,105
6,000,000
6,000,000
5,148,642
5,018,310
244,033,233
% Held
12.35
3.62
3.43
3.09
3.03
2.47
2.38
2.06
1.98
1.96
1.78
1.73
1.72
1.49
1.34
1.25
1.23
1.23
1.06
1.03
50.22
57
SPORTHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
SHAREHOLDER INFORMATION
The names of the twenty largest option holders are:
1 VERITAS SECURITIES LTD
2 BILAL AHMAD
3 FIRST GROWTH FUNDS LTD
4 RODNEY LAURENCE STAGGARD
5 CS THIRD NOMINEES PTY LTD
6 ALLGREEN HOLDINGS PTY LTD
7 ACTIV8 CAPITAL INVESTORS PTY LTD
8 PETER DARREN RUSSELL
9 CS1 NORTHWOOD FAMILY SUPER FUND PTY LTD
10 BLUE OLIVE CAPITAL PTY LTD
11 RED AND WHITE HOLDINGS PTY LTD
12 SUFIAN AHMAD
13 ANGELA MARGARET DAY
14 SHAPE CAPITAL PTY LTD
15 LJM CAPITAL CORPORATION PTY LTD
16 HAWERA PTY LTD
17 ACTIV8 CAPITAL VENTURES PTY LTD
18 NATHAN DANIAL YOUNG
19 DAWESVILLE NOMINEES PTY LTD
20 CINTRA HOLDINGS PTY LTD
Restricted securities
The Group has no Restricted Securities on issue.
Unquoted equity securities
Number of
options
11,900,000
10,150,000
7,666,667
6,100,000
5,000,000
5,000,000
4,346,080
3,000,000
3,000,000
2,770,000
2,750,000
2,666,667
2,300,000
1,883,334
1,850,000
1,800,000
1,500,000
1,500,000
1,500,000
1,450,000
78,132,748
% Held
11.48
9.79
7.40
5.89
4.82
4.82
4.19
2.89
2.89
2.67
2.65
2.57
2.22
1.82
1.78
1.74
1.45
1.45
1.45
1.40
75.38
Number on
issue
Number of
holders
Options to acquire fully paid shares at AU$0.10 per share and expiring 20
September 2021
Options to acquire fully paid shares at AU$0.05 per share and expiring 1
July 2023
Performance rights
20,000,000
6,000,000
20,000,000
1
3
6
Names of persons holding more than 20% of a given class of unquoted securities (other than
incentive securities)
Options expiring 30 sep 2021 – Veritas Securities Limited holds 100%
Substantial shareholder
MyHero Limited
No. of
Shares Held
% of Shares
Held
60,000,000
12.35%
58
SPORTHERO LIMITED
ANNUAL REPORT 30 JUNE 2021
SHAREHOLDER INFORMATION
On-market buy-back
There is no current on-market buy-back.
Acquisition of voting shares
No issues of securities have been approved for the purposes of Item 7 of section 611 of the Corporations
Act 2001.
Voting Rights
Ordinary fully paid shares – on a show of hands, every member present in person or by proxy shall have
one vote and upon a poll, each member shall have one vote per share.
Tax status
The Group is treated as a public company for taxation purposes.
Franking credits
The Group has nil franking credits.
59