TGS P.L.C Individual Financial Statements Final 2021

Company Registration Number: C 72231

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements

31 December 2021

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

Pages

Directors’ report 1 - 7

Corporate Governance – Statement of Compliance 8 - 10

Statement of financial position 11

Statement of comprehensive income 12

Statement of changes in equity 13

Statement of cash flows 14

Notes to the financial statements 15 - 43

Independent auditors’ report 44 - 50

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

Directors’ report

The board of directors present the audited financial statements of Together Gaming Solutions p.l.c. (the

“Company”) registration number C 72231 for the year ended 31 December 2021. The Company is a

subsidiary of Gameday Group plc and is part of the broader group of companies of Gameday Group plc as

the parent undertaking (the “Group”).

The Company has its head office and registered address at The Burlington Complex, Level 1, Dragonara

Road, St. Julians STJ3141, Malta.

Principal activities

The Company is the B2B service provider arm of the Group and owner of the Group’s key intellectual

property asset (the “Intangible Asset”) mainly the ‘AleAcc’ iGaming platform (the “Platform”) that it provides

to its clients under a Malta Gaming Authority B2B licence. The Company offers its iGaming platform as a

‘turnkey’ solution to various licensed operators (including the Group’s licensed B2C iGaming operator). The

Company also offers its iGaming platform to third party white label iGaming operators as part of a full-

service ‘white label’ solution for launching and operating online casino and sportsbook websites.

The Company previously also owned the Bethard Brand (the “Brand”), including the Bethard, Fastbet and

Betive domains, which it licensed to other Group Companies (operating under the Brand). On 18 June

2021, the Company transferred the Brand to a fellow subsidiary company at fair value which equated to

book value as part of a wider group restructuring exercise which included the sale of the Group’s B2C

gaming activity by the Group’s parent company to a third-party. This transaction followed a strategic

decision by the Group (following industry developments in the B2C market over the past year) to focus on

its B2B business, with the Company being at the forefront of this new strategy. Consequently, the Company

shall no longer be licencing the Brand to other Group companies. To this end, the Company intends to

increase its B2B marketing activities and will continue to provide full white label solution services to third-

party white label iGaming operators, as well as, offering ‘turnkey’ solution of the Company’s proprietary

iGaming platform to licensed third-party B2C operators. Currently, the Group intends to retain its B2C

licences solely for the purposes of supporting the Company’s B2B business and white label clients.

Review of the business

During the year, revenue was mainly generated from three different streams: white label services; licensing

of the Brand (Royalties); and turnkey services. Following the disposal of the Brand on 18 June 2021,

revenue from Royalties and Turnkey fees generated from the Brand discontinued. Whilst this had an impact

on short-term profitability, the disposal generated initial proceeds of €16,198,432 and the Company

refocused its efforts on generating third party B2B revenue in order to drive future growth.

During the year under review, revenue totalled €8,982,530 (2020: €15,794,016). Net of directly attributable

costs, the revenue of the Company as disclosed in the financial statements amounted to €3,810,743 (2020:

€9,123,628) corresponding to a year-on-year decrease of 58%. As described above, the revenue decrease

was mainly attributable to the sale of the Brand which resulted in significantly lower Royalty income.

Revenue during 2021 was derived from: i) licensing of the Brand (Royalties) amounting to €1,730,059

(2020: €5,803,910); ii) leasing of the platform (Turnkey services) amounting to €514,693 (2020: €598,429);

and iii) White label services amounting to €1,565,991 (2020: €2,721,289).

Cost of sales amounted to €2,577,627 (2020: €6,685,922) and mainly consisted of marketing costs relating

to the Brand of €1,287,325 (2020: €4,969,317) and other direct costs (including platform costs) of

€1,290,302 (2020: €1,716,605).

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

Directors’ report - continued

Review of the business - continued

Other expenses amounted to €3,413,346 (2020: €3,455,233) and mainly consisted of depreciation and

amortisation amounting to €2,496,410 (2020: €2,309,193) and employee benefit expenses (including

director fees) amounting to €358,613 (2020: €349,628). The increase in personnel costs related to

recruitment made during the year that was required to meet the Company’s extended operational activity.

Financing costs amount to €969,903 (2020: €639,554) which mainly relate to the 5.9% interest on the bonds

issued by the Company in July 2019. A related party owning 26.19% of the bonds issued, waived its rights

to receive the related bond interest for the year ended 2021. Finance costs for the period amounting to

€969,903 are net of €309,037 relating to this waiver.

The Company registered a loss for the year amounting to €4,144,547 (2020: €1,343,687).

Following the disposal of the Brand and the restructuring of the Group, the Company is now focusing its

efforts on developing its B2B activities to replace discontinued revenue streams with third party business

from white label and turnkey services.

Management expects that, following the disposal of the Brand and the restructuring of its business, there

will be a short-to-medium-term mismatch between revenues and operational costs which is expected to

result in short-to-medium-term losses. Nevertheless, the Company expects revenues from its new B2B

initiatives to reach levels that match its operational cost base by late 2022 and to consistently outweigh

operational costs by 2023.

Financial Position

The Company’s financial position is set out in the statement of financial position on page 11.

At 31 December 2021, the Company’s total asset base stood at €36,683,864 (2020: €46,633,014). The

main assets of the Company following the sale of the Brand, comprise the technology platform (the

“Platform”) which is stated at a net book value of €10,885,068 (2020: €12,332,841) and trade and other

receivables of €9,920,737 (2020: €7,713,551) of which €8,569,237 (2020: €6,576,910) are related party

receivables.

During the year, the Company de-recognised a Deferred Tax asset of €1,040,371 which was previously

recognised in 2020 relating to the Brand.

Following the sale of the Brand, an initial payment of €16,198,432 was received by the Company hence

significantly improving the Company’s liquidity position with a current asset ratio of 11.9 at the end of 2021

(2020: 1.02).

The Company’s main liabilities are €20,000,000 (2020: €20,000,000) bonds issued to the public during the

year 2019 and trade payables amounting to €2,078,462 (2020: €8,234,878).

Included in trade and other receivables at year-end is a balance receivable from Gameday Group plc of

€8,801,568 in connection with the disposal of the Brand. As disclosed in the subsequent event note in

these financial statements, on 25 March 2022, an intra-group restructuring exercise took place resulting in

the settlement of part of this balance amounting to €5,185,521 through the transfer and subsequent

cancellation of a number of the Company's bonds at a selling price of €99 per bond, being the average

market price on the date of sale. These bonds had a total nominal value of €5,237,900. The remaining

balance owed by the parent company to the Company at 25 March 2022 stood at €3,616,047.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

Directors’ report - continued

Financial Position - continued

During the year, the Company’s share capital remained constant at €20,580,000 in line with 2020. The

Company’s debt leverage at 31 December 2021 was less than 50% (2020: less than 50%) and its liquidity

position remains sufficient for the Company to continue to honour its liabilities for the foreseeable future.

Results and dividends

The financial results are set out in the statement of comprehensive income on page 12. During the year,

the directors did not declare any dividend (2020: Nil).

Principal risks and uncertainties faced by the Company

Exposure to online Gambling Industry

The Company’s main objective is to operate software and iGaming platforms and to provide related services

to software and iGaming companies. The Company does not conduct any online gambling operations;

however, it is dependent on the online gambling industry, which includes its primary client and the rest of

its customers. The entire revenue stream of the Company is concentrated within the iGaming sector and is

subject to this concentration risk and performance risk of this sector.

Constant changing laws and regulations

The laws and regulations surrounding the online gambling industry are complex, constantly evolving and in

some cases, also subject to uncertainty and restrictions. Laws and gaming regulations are constantly being

introduced in various European and other countries thus prohibiting or restricting operations therein. Future

changes to laws and regulations, could have a material adverse effect on the Group’s business, financial

condition and the results of its operations. During H2 2021, Germany regulated its Gaming industry

impacting negatively revenues for several gaming operators and white label operators across the Gaming

Industry. In line with all other gaming operators, the Company, the revenue of which is also directly

dependent on the online Gambling industry, experienced reduced revenues consequent to this regulatory

development. The Company expects further jurisdictions to regulate their gaming industry with the

consequence that there would be similar impacts on revenues.

COVID-19 and its further potential impact on financial and operational performance

All of the Company’s revenue streams are dependent on the operational performance of the Company’s

Gaming operator clients including white label operators and licensed gaming operators.

COVID-19 and its adverse implication on the worldwide economy persisted during 2021. Temporary

regulatory restrictions were extended in a number of jurisdictions to safeguard vulnerable players during

this period. The persistence of the pandemic created instability in the gaming industry overall, with a direct

negative impact on overall revenues generated by gaming operators and white label operators.

The Company’s primary client had revenue exposure to sports betting of 39% in 2020 and nearly 37%

during H1 2021. The latter percentage decreased during Q1 2021 due to pressures resulting from regulatory

restrictions. Casino revenues represented 61% of the total revenue for H2 2020; whilst for the H1 2021,

total casino revenues represented 63% of the total revenues. Notwithstanding responsible gaming

regulatory restrictions being extended, casino activity showed positive recovery for this client, as it shifted

its focus on less restrictive markets which consequently resulted in more casino revenue in the period 2021

compared to H2 2020. The revenues generated from this main client were parted ways following the sale

of the Brand intangible asset on 18 June 2021.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

Directors’ report - continued

COVID-19 and its further potential impact on financial and operational performance - continued

Revenues generated from Turnkey services and white label services may be also subject to the same

aforementioned pressures.

Establishing Revenue growth from diversified B2B activities

Prior to the disposal of the Brand, the Company’s performance was highly dependent on the performance

of Bethard, a related party from which it generated a substantial part of its revenues. Following the sale of

the Brand and discontinuation of this revenue stream, the Company needs to re-focus its efforts in attracting

new customers in order to develop its revenues to present levels and beyond, in order to consistently

sustain its operational cost-base and generate profits. Such efforts are expected to take time in order to

yield the necessary results and whilst management is confident that its initiatives will generate the required

results, this may take longer than expected to materialize.

In addition to the above, the Directors also consider the following risks as being relevant to the Company:

• Global economic uncertainties following the armed conflict between Russia and Ukraine;

• Consolidation of Gambling regulation across Europe;

• Compliance and regulatory risk, being the risk relating to regulation that could result in restrictions

in its customers' operations and risks associated with unregulated markets;

• Credit risk, being the risk that customers do not pay for the services rendered;

• Impairment risk of intangible assets, being the risk that long term assets such as intangibles are

particularly at risk of impairment due to the fact that the carrying value may be impacted by several

unwarranted events and economic circumstances. Intangible assets having an indefinite useful life

are tested for impairment on an annual basis to ensure the Company's total asset value is not

overstated on the statement of financial position after taking into consideration events and

economic circumstances that occur between annual impairment tests in order to determine if it is

"more likely than not" that the market value of the indefinite useful life intangible asset has dropped

below its carrying value;

• Technological and systems development; and

• Dependence on key individuals having technical expertise of iGaming software development and

its associated technology.

The aforementioned risks are not an exhaustive list of potential risks and uncertainties faced by the

Company. If any of the risks occur, the Company’s business operations, financial condition, and operating

results may be adversely affected.

Going concern assessment

A baseline scenario of profitability and liquidity projections for the period 2022 to 2023 has been reset

adopting prudent and cautious assumptions in the light of the disposal of the Brand and the consequent

need to build-up new revenues. The revised projections also take into account the disruptions being caused

by the continuing COVID-19 pandemic and the restrictions and regulations arising therefrom.

The prudent base case scenario anticipates a slow ramp-up of white label and turnkey business as the

Company refocuses its effort on attracting new B2B customers following the disposal of the Brand. Whilst

the projections indicate that 2022 revenue is likely to fall short of the Company’s operating cost base,

management expects a positive EBITDA in 2023. Operating cash flows are projected to be positive

throughout the projected period and whilst investment in new marketing initiatives and development of the

Company’s technology platform are expected to eat into some of the existing cash reserves, the projections

indicate sufficient liquidity for the foreseeable future.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

Directors’ report - continued

Going concern assessment - continued

Accordingly, Management and the Board are confident that the Company is well positioned to meet its

commitments for at least the next twelve months and accordingly concur with the going concern

assumptions for the preparation of these financial statements. Reference should also be made to Note 1.1

to these financial statements.

Performance expectations 2022

Following the disposal of the Brand, Management’s focus in 2022 will be on developing its B2B business

and attracting new customers and developing markets in order to return revenue to pre-disposal levels and

beyond and in order to cover its operational cost-base and generate profits. In the meantime, the Company

continues to face challenges relating to the ongoing pandemic, geopolitical instability from the current

conflict in Ukraine, as well as increased gaming regulation in traditional markets. Management recognises

that such initiatives will require time to materialise and accordingly expects revenue to fall short of the

Company’s operational cost base in 2022. Notwithstanding this, operational cash flows for 2022 are

expected to be positive due to working capital changes resulting primarily from an increase in related party

payables following the Group restructuring relating to the disposal of the brand.

In 2022, the Company is expected to generate additional cash from the deferred proceeds of the disposal

of the Brand as well as interest income from the investment of excess cash balances. Management

envisages significant investment in marketing initiatives to kick-start new B2B initiatives and continued

investment in the technology platform. Such investment activities together with Bond interest obligations

are expected to exceed the positive operating cash flows and the deferred proceeds from the disposal of

the brand resulting in a reduction in liquidity as the Company invests in developing future growth.

Whilst the prevailing volatile economic environment has hindered performance in the first quarter of the

year, management nevertheless expects the Company to be on course to achieve its performance

expectations for the year. Whilst such expectations forecast a temporary decrease in profitability and

liquidity, management expects the investment in 2022 to place the Company in a position to generate

positive EBITDA in 2023 and net profits in 2024.

Directors

The directors of the Company who held office during the year were:

Mr. Erik Johan Sebastian Skarp

Mr. Benjamin Delsinger

Mr. Edward Licari

Mr. Etienne Borg Cardona – resigned on 31 December 2021

Mr. Kari Pisani

Mr. Michael Warrington

Mr. David Bonnet – appointed 10 January 2022

Mr. Edward Licari also held the office of Company Secretary during the year.

The Board meets on a regular basis to discuss performance, position and other matters. The Company’s

Articles of Association require each director to retire from office at least once every three years, with retiring

directors eligible for re-election.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

Directors’ report - continued

Statement of directors’ responsibilities for the financial statements - continued

The directors are required by the Companies Act (Cap. 386) to prepare financial statements which give a

true and fair view of the state of affairs of the Company as at the end of each reporting period and of the

profit or loss for that period.

In preparing the financial statements, the directors are responsible for:

• ensuring that the financial statements have been drawn up in accordance with International

Financial Reporting Standards as adopted by the EU;

• selecting and applying appropriate accounting policies;

• making accounting estimates that are reasonable in the circumstances; and

• ensuring that the financial statements are prepared on the going concern basis unless it is

inappropriate to presume that the Company will continue in business as a going concern.

The directors are also responsible for designing, implementing and maintaining internal control relevant to

the preparation and the fair presentation of the financial statements that are free from material

misstatement, whether due to fraud or error, and that comply with the Companies Act (Cap. 386). They are

also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the

prevention and detection of fraud and other irregularities.

The financial statements of the Company for the year ended 31 December 2021 are included in the Annual

Report 2021, which is made available on the Company’s website. The directors are responsible for the

maintenance and integrity of the Annual Report on the website in view of their responsibility for the controls

over, and the security of, the website. Access to information published on the Company’s website is

available in other countries and jurisdictions, where legislation governing the preparation and dissemination

of financial statements may differ from requirements or practice in Malta.

Auditors

PricewaterhouseCoopers resigned from the post of auditors to the Company with effect from 30 August

2021. RSM Malta was appointed as auditors of the Company on 15 October 2021.

Disclosure in terms of the Capital Markets Rules

Going concern statement pursuant to Capital Markets Rule 5.62

During the period, the Company leased its Brand and offered its Platform as a turnkey solution to licensed

B2C iGaming operators. Furthermore, the Company (together with the Group’s licensed B2C iGaming

operators) offers its Platform to white label iGaming operators as part of a full-service ‘white label’ solution

for launching and operating online casino and sportsbook websites. On 18 June 2021, the Company

transferred its Brand to Prozone Limited being a Group subsidiary, in preparation for the sale of the Group’s

B2C business which took place on 1 July 2021.

The aforementioned sale transaction followed a recent strategic decision by the Group (following industry

developments in the B2C market over the past year) to focus on its B2B business, with the Company at the

forefront of this new strategy. To this end, the Company intends to increase its B2B marketing activities and

will continue to provide full white label services to third-party branded casino/sportsbook websites, as well

as, standalone licensing of the Company’s proprietary iGaming platform to licensed third-party B2C

operators. The Group intends to retain its B2C licences solely for the purposes of supporting the Company’s

B2B business and white label clients.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

Directors’ report - continued

Statement of directors’ responsibilities for the financial statements - continued

Notwithstanding the above transaction, the Company’s revenues will still be driven by the gambling activity

of online users of its customer’s websites and there still remains a risk that the prolongation of the prevailing

unfavourable economic conditions due to COVID-19, the persistence of temporary restrictive gaming

regulation, the introduction of new laws and regulations in a number of unregulated jurisdictions and the

prevailing Global economic uncertainties post the Ukraine and Russia armed conflict could keep on

suppressing overall activity.

The Company’s executive management has re-evaluated prudently the performance of the Company for

2021 and 2022, including the sale of the Brand and the expected increase in the B2B activities and

initiatives, the consequent need to build up new revenues following the sale of the Brand and taking into

account the disruptions being caused by the pandemic, restrictions, and regulations arising therefrom, the

introduction of new laws and regulations in a number of unregulated jurisdictions and the prevailing Global

economic uncertainties post the Ukraine and Russia armed conflict. The prudent base case assumptions

adopted indicate that the Company will be able to honour its obligations as and when they fall due.

Uncertainties in the industry and in the global economic environment may however result in the Company

experiencing delays in fulfilling expected liquidity and profitability projections. These events or conditions

may indicate the existence of material uncertainty which may cast doubt about the Company’s future ability

to generate expected cashflows and profitability. Management and the Board nevertheless remain confident

that the Company shall meet its commitments within the next 12 months and consequently, shall continue

operating as a going concern.

Pursuant to Capital Markets Rule 5.70.1

The Company had an agreement with Bethard Group Limited, a related party, for the sharing of the lease

of office space leased from a third party which was terminated in 2020. The Company agreed to enter into

a new lease agreement with a new third party to lease office space as from 1

January 2021.

Statement by the directors on the financial statements and other information included in the annual

report

The directors declare that to the best of their knowledge, the financial statements included in the Annual

Report are prepared in accordance with the requirements of International Financial Reporting Standards

as adopted by the EU and give a true and fair view of the assets, liabilities, financial position and profit of

the Company and that this report includes a fair review of the development and performance of the business

and position of the Company, together with a description of the principal risks and uncertainties that it faces.

Signed on behalf of the Company’s Board of Directors on 28 April 2022 by Mr. Erik Johan Sebastian Skarp

(Director and Chairman of the Board) and Mr. Michael Warrington (Director) as per the Directors’

Declaration on ESEF Annual Financial Report submitted in conjunction with the Annual Report and

Financial Statements.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

Corporate Governance - Statement of Compliance

The Capital Markets Rules issued by the Malta Financial Services Authority require listed companies to

observe The Code of Principles of Good Corporate Governance (the “Code”). Although the adoption of the

Code is not obligatory, companies with securities that are listed on a ‘regulated market’ (and are subject to

the Capital Markets Rules) are required to include, among other things, in their Annual Report, a corporate

governance statement and a statement by the directors on the company’s compliance with the Code of

Principles of Good Corporate Governance, accompanied by a report of the auditors thereon. Companies

that do not have any listed equity securities, including Together Gaming Solutions p.l.c. (the “Company”),

are exempt from certain requirements relating to the contents of this corporate governance statement.

Compliance

The Company’s Board of Directors (the “Board”) believe in the principles espoused by and the adoption of

the Code and the Company has endorsed them to the extent that they are considered complementary to

the size, nature, and operations of the Company. In particular, the Board believes that, due to the

Company’s size, operations and particular circumstances, it is not necessary for the Board to establish the

remuneration, nomination and board performance evaluation committees (and the related supporting

principles and Code Provisions) that are suggested in the Code, and that the function of these can efficiently

be undertaken by the Board itself. However, the Board in any case undertakes, on an annual basis, a

review of the remuneration paid to the directors and carries out an evaluation of their performance. The

shareholders approve the remuneration paid to the directors at the annual general meeting.

The Board

The Board is responsible for devising a strategy, setting policies and the management of the Company. It

is also responsible for reviewing internal control procedures, financial performance and business risks

facing the Company. The Board is also responsible for decisions relating to the redemption of the Bond,

and for monitoring that its operations are in conformity with all relevant rules and regulations.

Directors meet regularly, mainly to review the operational and financial performance of the Company, any

significant matters arising, and to review internal control processes. The Board met formally, remotely nine

times during the year under review. Save for one meeting missed by one board member, all meetings were

attended by the full Board. Board members are notified of forthcoming meetings by the Company Secretary

with the issue of an agenda and supporting documents, which are circulated in advance of the meeting. All

the directors have access to independent professional advice at the Company’s expense should they so

require and frequently make use of this facility on various issues.

Throughout the year under review, the Board has regularly reviewed management performance. The

Company has in place systems whereby the directors obtain timely information from the Managing Director

and other members of the executive management team, not only at meetings of the Board but at regular

intervals or when the need arises.

The Board is composed of one executive, two non-executive and three independent non-executive

directors, as listed below:

Mr Benjamin Delsinger (Managing Director)

Mr Erik Johan Sebastian Skarp (Chairman and Non-Executive Director)

Mr Edward Licari (Non-Executive Director)

Mr Michael Warrington (Independent Non-Executive Director)

Mr Etienne Borg Cardona (Independent Non-Executive Director) - Resigned on 31 December 2021

Mr.David Bonnet (Independent Non-Executive Director) - Appointed 10 January 2022

Mr Kari Pisani (Independent Non-Executive Director)

The Company Secretary of the Company is Edward Licari.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

Corporate Governance - Statement of Compliance - continued

The Board - continued

The Board meets on a regular basis to discuss performance, position and other matters. The Company’s

Articles of Association require each director to retire from office at least once every three years, with retiring

directors eligible for re-election.

Internal controls & risk management in relation to financial reporting

The Board is generally responsible for the Company’s system of internal controls and risk management

system in relation to the financial reporting and for reviewing its effectiveness. The monitoring of these

controls and systems has been delegated to the Audit Committee (as described below). Such a system is

designed to achieve business objectives while managing, rather than eliminating, the risk of failure to

achieve business objectives and can only provide reasonable assurance against material error, losses or

fraud.

Authority to manage the Company is delegated to the Managing Director and the rest of the executive

management within the limits set by the Board. Systems and procedures are in place for the Company to

control, report, monitor and assess risks and their financial implications, and to take timely corrective actions

where necessary. The Group’s finance department carries out the monthly bank, creditors and debtor

reconciliations, performs monthly debtor settlement reports, manages employee payroll, manages and

administers the accounting and finance functions, prepares monthly management accounts and other data

reporting and trend analysis. A policy was put in place during the initial Board meetings held by the current

Board that lays down the minimum required reports that should be made available to the Board in order to

keep it informed in a structured and systematic manner on the operational and financial performance of the

Company. Regular financial budgets and strategic plans are prepared, and performance against these

plans is actively monitored and reported to the directors on a regular basis.

The Board and Audit Committee are satisfied with the effectiveness of the Company’s system of internal

controls.

Audit Committee

The Board established an Audit Committee (the “Committee”) in 2019 to assist the Board in fulfilling its

supervisory and monitoring responsibilities. The Committee operates according to detailed terms of

reference established by the Board that reflect the requirements of the Capital Markets Rules as well as

current good corporate governance best practices. These terms of reference establish its composition, role,

responsibilities and function, the parameters of its remit, as well as the basis for the processes that it is

required to comply with. The Committee, which meets at least eight times a year, is a sub-committee of

the Board and is directly responsible and accountable to the Board.

The primary purpose of the Committee is to assist the Directors in conducting their role effectively so that

the Company’s decision-making capability and the accuracy of its reporting and financial results are

maintained at a high level at all times. Among other responsibilities, the Committee is responsible for

monitoring the financial reporting process and monitoring of the effectiveness of the Issuer’s internal quality

control and risk managements system in relation to the financial reporting of the Issuer.

The Audit Committee is composed entirely of independent non-executive Directors (each of which satisfies

the independence criteria set out in the Capital Markets Rules). In accordance with the Capital Markets

Rules, the members of the Audit Committee who were designated as competent in auditing and/or

accounting were Mr Etienne Borg Cardona and Mr Michael Warrington. Unless otherwise decided by the

Board from time to time, the Board shall appoint a new Audit Committee Chairman for each financial year.

Mr Michael Warrington was appointed as new Audit Committee Chairman during 2021 replacing Etienne

Borg Cardona who had been appointed Audit Committee Chairman in 2020.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

Corporate Governance - Statement of Compliance - continued

Audit Committee - continued

The Members of the Audit Committee are:

Etienne Borg Cardona (Member) - Resigned on 31 December 2021

Michael Warrington (Chairman) - Appointed on Chairman on 1 May 2021

David Bonnet (Member) - Appointed on 10 January 2022

Kari Pisani (Member)

Relations with bondholders and the market

The Company publishes interim and annual financial statements, and when required, company

announcements. The Board feels these provide the market with adequate information about its activities.

Conflicts of Interest

On joining the Board and regularly thereafter, directors and officers of the Company are informed and

reminded of their obligations on dealing in securities of the Company within the parameters of law and

Capital Markets Rules. The Company has also set reporting procedures in line with the Capital Markets

Rules, Code of Principles, and internal code of dealing.

Signed on behalf of the Company’s Board of Directors on 28 April 2022 by Michael Warrington (Director,

Chairman of the Audit Committee) and Kari Pisani (Director) as per the Directors’ Declaration on ESEF

Annual Financial Report submitted in conjunction with the Annual Report and Financial Statements.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

Statement of financial position

Year ended 31 December

2021

2020

Notes

€

ASSETS

Non-current assets

Intangible assets

10,885,068

37,332,841

Right-of-use assets

265,262

Property, plant and equipment

7,608

10,696

Deferred tax asset

1,040,371

Total non-current assets

11,157,938

38,383,908

Current assets

Trade and other receivables

9,920,737

7,713,551

Cash and cash equivalents

15,605,189

535,555

Total current assets

25,525,926

8,249,106

Total assets

36,683,864

46,633,014

EQUITY AND LIABILITIES

Capital and reserves

Share capital

20,580,000

Accumulated losses

(6,090,896)

(1,946,349)

Total equity

14,489,104

18,633,651

Non-current liabilities

Borrowings

19,842,990

19,764,485

Lease liabilities

141,172

Total non-current liabilities

19,984,162

19,764,485

Current liabilities

Trade and other payables

2,078,462

8,234,878

Lease liabilities

132,136

Total current liabilities

2,210,598

8,234,878

Total liabilities

22,194,760

27,999,363

Total equity and liabilities

36,683,864

46,633,014

The notes on pages 15 - 43 are an integral part of these financial statements.

Signed on behalf of the Company’s Board of Directors on 28 April 2022 by Mr. Erik Johan Sebastian Skarp

(Director and Chairman of the Board) and Mr. Michael Warrington (Director) as per the Directors’

Declaration on ESEF Annual Financial Report submitted in conjunction with the Annual Report and

Financial Statements.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

Statement of comprehensive income

Year ended 31 December

2021

2020

Notes

€

Revenue

3,810,743

9,123,628

Cost of sales

(2,577,627)

(6,685,922)

Gross profit

1,233,116

2,437,706

Administrative expenses

(3,413,346)

(3,455,233)

Net impairment recovery/(losses) on financial and

contract assets

45,957

(303,069)

Operating loss

(2,134,273)

(1,320,596)

Finance costs

(969,903)

(639,554)

Loss before tax

(3,104,176)

(1,960,150)

Tax (expense)/credit

(1,040,371)

616,463

Loss for the year - Total comprehensive loss

(4,144,547)

(1,343,687)

The notes on pages 15 - 43 are an integral part of these financial statements.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

Statement of changes in equity

Accumulated

capital

losses

Total

€

Balance at 1 January 2020

20,580,000

(602,662)

19,977,338

Comprehensive loss

Loss for the year

(1,343,687)

Total comprehensive loss

(1,343,687)

Balance at 31 December 2020

20,580,000

(1,946,349)

18,633,651

Balance at 1 January 2021

20,580,000

(1,946,349)

18,633,651

Comprehensive loss

Loss for the year

(4,144,547)

Total comprehensive loss

(4,144,547)

Balance at 31 December 2021

20,580,000

(6,090,896)

14,489,104

The notes on pages 15 - 43 are an integral part of these financial statements.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

Statement of cash flows

Year ended 31 December

Notes

2021

2020

€

Cash flows from operating activities

Loss before tax

(3,104,176)

(1,960,150)

Adjustments for:

Depreciation and amortisation

4,5,6

2,496,410

2,309,193

Finance costs

969,903

639,554

362,137

988,597

Change in operating assets and liabilities:

Movement in trade and other receivables

6,781,099

6,783,773

Net impairment losses on financial and contract assets

(45,957)

303,069

Movement in trade and other payables

(5,511,395)

(6,936,570)

Net cash generated from operating activities

1,585,884

1,138,869

Cash flows from investing activities

Payments for the acquisition of intangible assets

(912,918)

(616,459)

Proceeds from the sale of intangible assets

4, 8

15,552,390

Payments for property, plant and equipment

(6,693)

Net cash generated from/(used in) investing activities

14,639,472

(623,152)

Cash flows from financing activities

Principal elements of lease payments

(144,000)

(67,523)

Bond interest payments

(870,963)

(693,964)

Net cash used in financing activities

(1,014,963)

(761,487)

Net movement in cash and cash equivalents

15,210,393

(245,770)

Cash and cash equivalents at beginning of year

535,555

781,325

Loss allowance on cash and cash equivalents

(140,759)

Cash and cash equivalents at end of year

15,605,189

535,555

Non-cash investing and financing activities are disclosed in Note 8.

The notes on pages 15 - 43 are an integral part of these financial statements.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

Notes to the financial statements

1. Summary of significant accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out

below. These policies have been consistently applied to all the years presented, unless otherwise

stated.

1.1 Basis of preparation

These financial statements have been prepared in accordance with the requirements of International

Financial Reporting Standards (IFRSs) as adopted by the EU and with the requirements of the

Maltese Companies Act (Cap. 386). The financial statements have been prepared under the

historical cost convention. The preparation of financial statements in conformity with IFRSs as

adopted by the EU requires the use of certain accounting estimates. It also requires directors to

exercise their judgment in the process of applying the Company’s accounting policies (see Note 3 –

Critical accounting estimates and judgments).

Going concern

During the period, the Company leased its Brand and offered its Platform as a turnkey solution to

licensed B2C iGaming operators. Furthermore, the Company (together with the Group’s licensed

B2C iGaming operators) offers its Platform to white label iGaming operators as part of a full-service

‘white label’ solution for launching and operating online casino and sportsbook websites. On 18 June

2021, the Company transferred its Brand to Prozone Limited being a Group subsidiary, in preparation

for the sale of the Group’s B2C business which took place on 1 July 2021.

The aforementioned sale transaction followed a recent strategic decision by the Group (following

industry developments in the B2C market over the past year) to focus on its B2B business, with the

Company at the forefront of this new strategy. To this end, the Company intends to increase its B2B

marketing activities and will continue to provide full white label services to third-party branded

casino/sportsbook websites, as well as, standalone licensing of the Company’s proprietary iGaming

platform to licensed third-party B2C operators. The Group intends to retain its B2C licences solely for

the purposes of supporting the Company’s B2B business and white label clients.

Notwithstanding the above transaction, the Company’s revenues will still be driven by the gambling

activity of online users of its customer’s websites and there still remains a risk that the prolongation

of the prevailing unfavourable economic conditions due to COVID-19, the persistence of temporary

restrictive gaming regulation, the introduction of new laws and regulations in a number of unregulated

jurisdictions and the prevailing Global economic uncertainties post the Ukraine and Russia armed

conflict could keep on supressing overall activity.

The Company’s executive management has re-evaluated prudently the performance of the Company

for 2021 and 2022, including the sale of the Brand and the expected increase in the B2B activities

and initiatives, the consequent need to build-up new revenues following the sale of the Brand and

taking into account the disruptions being caused by the pandemic, restrictions and regulations arising

therefrom, the introduction of new laws and regulations in a number of unregulated jurisdictions and

the prevailing Global economic uncertainties post the Ukraine and Russia armed conflict. The prudent

base case assumptions adopted indicate that the Company will be able to honour its obligations as

and when they fall due. Uncertainties in the industry and in the global economic environment may

however result in the Company experiencing delays in fulfilling expected liquidity and profitability

projections. Assumptions factor ongoing disruption to operations over the short to medium term. The

prudent base case scenario anticipates lower activity and revenues with yet as much stronger liquidity

position during 2022 consequent to the sale of the Brand asset.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

1. Summary of significant accounting policies - continued

1.1 Basis of preparation - continued

Going concern - continued

The aforementioned events or conditions may indicate the existence of material uncertainty which

may cast doubt about the Company’s future ability to generate expected cashflows and profitability.

Based on the above, Management and the Board nevertheless reasonably expect that the Company

will retain adequate resources to continue its operation for the foreseeable future. For this reason,

they continue to adopt the going concern basis in the preparation of the financial statements.

Standards, amendments and interpretations to published standards effective in 2021

In 2021, the Company has adopted new standards, amendments and interpretations to existing

standards that are mandatory for the Company’s accounting period beginning 1 January 2021. None

of these have had any impact on the amounts recognised in prior periods and are not expected to

significantly affect the current or future periods.

Standards, amendments and interpretations to published standards that are not yet effective

Certain new and amended accounting standards and interpretations have been published that are

not mandatory for 31 December 2021 reporting periods and have not been early adopted by the

Company. These standards are not expected to have a material impact on the entity in the current or

future reporting periods and on foreseeable future transactions.

1.2 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, who is responsible for allocating

resources and assessing performance of the operating segments has been identified as the board

of directors that makes strategic decisions. The board of directors considers the Company to consist

of one single segment (2020: one segment), both from a business perspective and a geographical

perspective in line with IFRS 8.

1.3 Foreign currency translation

(a) Functional and presentation currency

Items included in these financial statements are measured using the currency of the primary

economic environment in which the entity operates (‘the functional currency’). The Euro is the

Company’s functional and presentation currency.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates

prevailing on the dates of the transactions. Foreign exchange gains and losses resulting from the

settlement of such transactions and from the translation of monetary assets and liabilities

denominated in foreign currencies at year-end exchange rates are generally recognised in the

statement of comprehensive income on a net basis.

Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency

are translated at the exchange rate on the date of the transaction.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

1. Summary of significant accounting policies - continued

1.4 Intangible assets

(a) Recognition, measurement and de-recognition

The Company’s intangibles are analysed between brand and platform (computer software).

An intangible asset is recognised if it is probable that the expected future economic benefits that are

attributable to the asset will flow to the Company and the cost of the asset can be measured reliably.

Intangible assets are initially measured at cost. The cost of a separately acquired intangible asset

comprises its purchase price and any directly attributable cost of preparing the asset for its intended

use.

(a) Recognition, measurement and de-recognition

Costs associated with maintaining the platform are recognised as an expense as incurred.

Development costs that are directly attributable to the design and testing of identifiable and unique

software products controlled by the Company are recognised as intangible assets when the following

criteria are met:

• it is technically feasible to complete the software so that it will be available for use;

• management intends to complete the software and use or sell it;

• there is an ability to use or sell the software;

• it can be demonstrated how the software will generate probable future economic benefits;

• adequate technical, financial and other resources to complete the development and to use

or sell the software are available; and

• the expenditure attributable to the software during its development can be reliably measured.

Directly attributable costs that are capitalised as part of the platform include employee costs and an

appropriate portion of relevant overheads.

Research expenditure and development expenditure that do not meet the criteria above are

recognised as an expense as incurred. Development costs previously recognised as an expense are

not recognised as an asset in a subsequent period.

Capitalised development costs are recorded as intangible assets and amortised from the point at

which the asset is ready for use.

Intangible assets are derecognised on disposal or when no future economic benefits are expected

from their use or disposal. Gains or losses arising from derecognition represent the difference

between the net disposal proceeds, if any, and the carrying amount, and are included within ‘other

income/(expense)’ in the statement of comprehensive income in the period of derecognition.

(b) Amortisation of intangible assets

Intangible assets with a finite useful life are amortised over their useful life and reviewed for

impairment whenever there is an indication that the asset may be impaired. The estimated useful

lives of intangible assets are as follows:

Useful life

Brand

Indefinite

Platform (Computer software)

7 years

The amortisation period and the amortisation method for an intangible asset are reviewed at least at

the end of each reporting period. Intangible assets with indefinite useful lives are not systematically

amortised and are tested for impairment annually or whenever there is an indication that the

intangible asset may be impaired. The useful life of these assets is reviewed annually to determine

whether their indefinite life assessment continues to be supportable.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

1. Summary of significant accounting policies - continued

1.4 Intangible assets - continued

If the events and circumstances do not continue to support the assessment, the change in the useful

life assessment from indefinite to finite is accounted for prospectively as a change in accounting

estimate and on that date the asset is tested for impairment. Commencing from that date, the asset

is amortised systematically over its useful life.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s

carrying amount is greater than its estimated recoverable amount (Note 1.5).

1.5 Impairment of non-financial assets

Non-financial assets with indefinite useful lives, such as the brand, are reviewed at each reporting

date to determine whether there is any impairment trigger. The carrying amounts of the Company’s

non-financial assets with finite useful lives, as well as those with indefinite useful lives, are reviewed

for impairment whenever there is an indication that the asset may be impaired. The asset’s

recoverable amount is estimated annually for intangible assets with indefinite useful lives and is also

estimated for all non-financial assets if an indication of impairment exists.

For impairment testing, assets are grouped together into the smallest group of assets that generates

cash inflows from continuing use that are largely independent of the cash inflows of other assets or

cash-generating units (‘CGUs’). The recoverable amount of an asset or CGU is the greater of its

value in use and its fair value less costs to sell. Value in use, is based on the estimated future cash

flows, discounted to their present value using a pre-tax discount rate that reflects current market

assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated

recoverable amount. Impairment losses are recognised in profit or loss.

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed

the carrying amount that would have been determined, net of depreciation or amortisation, if no

impairment loss had previously been recognised.

1.6 Property, plant and equipment

(a) Recognition, measurement and de-recognition

All property, plant and equipment are measured at cost less accumulated depreciation and any

accumulated impairment losses. They are initially measured at cost, that includes expenditure that

is directly attributable to the acquisition of the asset. 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 Company and the cost of the item

can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs

and maintenance are charged to the statement of comprehensive income during the financial period

in which they are incurred.

Items of property, plant and equipment are derecognised on disposal or when no future economic

benefits are expected from their use or disposal. Gains and losses on disposals of property, plant

and equipment are determined by comparing the proceeds with carrying amount and are recognised

within ‘other income/(expense)’ in the statement of comprehensive income in the period of

derecognition.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

1. Summary of significant accounting policies - continued

1.6 Property, plant and equipment - continued

(b) Depreciation of property, plant and equipment

All property, plant and equipment are depreciated over their useful life and reviewed for impairment

whenever there is an indication that the asset may be impaired. Depreciation is calculated over the

depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its

residual value.

Depreciation is recognised in the statement of comprehensive income on a straight-line basis over

the estimated useful lives of each part of an item of property, plant and equipment, or, in the case of

leasehold improvements, the shorter lease term, since this most closely reflects the expected pattern

of consumption of the future economic benefits embodied in the asset. Their estimated useful lives

are as follows:

Years

Computer equipment

Furniture and fixtures

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of

each reporting period. An asset’s carrying amount is written down immediately to its recoverable

amount if the asset’s carrying amount is greater than its estimated recoverable amount.

1.7 Financial assets

1.7.1 Classification

The Company classifies its financial assets in the following measurement categories:

• those to be measured subsequently at fair value (either through other comprehensive income

(OCI) or through profit or loss); and

• those to be measured at amortised cost.

The classification depends on the entity’s business model for managing the financial assets and the

contractual terms of the cash flows. For assets measured at fair value, gains and losses will be

recorded in either profit or loss or OCI. The Company reclassifies debt investments when and only

when its business model for managing those assets changes.

1.7.2 Recognition and derecognition

Regular way purchases and sales of financial assets are recognised on trade-date, the date on which

the Company commits to purchase or sell the asset. Financial assets are derecognised when the

rights to receive cash flows from the financial assets have expired or have been transferred and the

Company has transferred substantially all the risks and rewards of ownership.

1.7.3 Measurement

At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a

financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly

attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at

FVPL are expensed in profit or loss.

Financial assets with embedded derivatives are considered in their entirety when determining

whether their cash flows are solely payment of principal and interest.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

1. Summary of significant accounting policies - continued

1.7 Financial assets - continued

1.7.3 Measurement - continued

(a) Debt instruments

Subsequent measurement of debt instruments depends on the Company’s business model for

managing the asset and the cash flow characteristics of the asset. The Company classifies its debt

instruments as follows:

• Amortised cost: Assets that are held for collection of contractual cash flows where those cash

flows represent solely payments of principal and interest are measured at amortised cost.

Interest income from these financial assets is included in finance income using the effective

interest rate method. Any gain or loss arising on derecognition is recognised directly in profit

or loss and presented in other gains/(losses) together with foreign exchange gains and

losses. Impairment losses are presented as separate line item in the statement of profit or

loss.

The Company does not hold any financial assets that are classified into any of the other IFRS 9

categories of financial assets.

1.7.4 Impairment

The Company assesses on a forward-looking basis the expected credit loss associated with its debt

instruments carried at amortised cost. The impairment methodology applied depends on whether

there has been a significant increase in credit risk.

For trade receivables, the Company applies the simplified approach permitted by IFRS 9, which

requires expected lifetime losses to be recognised from initial recognition of the receivables, see Note

2b for further details. For cash and cash equivalents, the Company considers having low credit risk

since the credit risk rating of the banking institution it banks with is equivalent to the globally

understood definition of ‘investment grade’. The Company considers this to be Baa3 or higher per

Moody’s or BBB- or higher per Standard & Poor’s or Fitch.

1.8 Trade and other receivables

Trade receivables are presented as current assets unless collection is expected after more than one

year. If not, they are presented as non-current assets.

Trade and other receivables are recognised initially at fair value and subsequently measured at

amortised cost using the effective interest method, less loss allowance. The carrying amount of the

asset is reduced using an allowance account, and the amount of the loss is recognised in profit or

loss. When a receivable is uncollectible, it is written off against the allowance account for trade and

other receivables. Subsequent recoveries of amounts previously written off are credited against profit

or loss.

1.9 Cash and cash equivalents

Cash and cash equivalents are carried in the statement of financial position at face value. In the

statement of cash flows, cash and cash equivalents comprise deposits held at call with banks.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

1. Summary of significant accounting policies - continued

1.10 Share capital

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

ordinary shares are shown in equity as a deduction, net of tax, from the proceeds.

1.11 Financial liabilities

The Company recognises a financial liability in its statement of financial position when it becomes a

party to the contractual provisions of the instrument. The Company’s financial liabilities are classified

in the following categories: at fair value through profit or loss and as financial liabilities which are not

at fair value through profit or loss (classified as ‘Other liabilities’) under IFRS 9.

Financial liabilities not at fair value through profit or loss are recognised initially at fair value, being

the fair value of consideration received, net of transaction costs that are directly attributable to the

acquisition or the issue of the financial liability. These liabilities are subsequently measured at

amortised cost. The Company derecognises a financial liability from its statement of financial position

when the obligation specified in the contract or arrangement is discharged, is cancelled or expires.

1.12 Trade and other payables

Trade payables comprise obligations to pay for services that have been acquired in the ordinary

course of business from suppliers. Accounts payable are classified as current liabilities if payment is

due within one year or less (or in the normal operating cycle of the business if longer). If not, they

are presented as non-current liabilities.

Trade and other payables are recognised initially at fair value and subsequently measured at

amortised cost using the effective interest method.

1.13 Offsetting financial instruments

Financial assets and financial liabilities are offset, and the net amount reported in the statement of

financial position when there is a legally enforceable right to set off the recognised amounts and there

is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

1.14 Borrowings

Borrowings are recognised initially at the fair value of proceeds received; net of transaction costs

incurred. Borrowings are subsequently carried at amortised cost; any difference between the

proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the

period of the borrowings using the effective interest method.

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer

settlement of the liability for at least twelve months after the end of the reporting period.

1.15 Current and deferred tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or

loss, except to the extent that it relates to items recognised in other comprehensive income or directly

in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity,

respectively.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

1. Summary of significant accounting policies - continued

1.15 Current and deferred tax - continued

Deferred tax is recognised, using the liability method, on temporary differences arising between the

tax bases of assets and liabilities and their carrying amounts in the financial statements. However,

deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred

tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other

than a business combination that at the time of the transaction affects neither accounting nor taxable

profit or loss. Deferred tax is determined using tax rates (and laws) that have been enacted or

substantially enacted by the end of the reporting period and are expected to apply when the related

deferred tax asset is realised or the deferred tax liability is settled.

Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will

be available against which the temporary differences can be utilised.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current

tax assets against current tax liabilities and when 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 there is an intention to settle the balances on a net basis.

1.16 Employee benefits

Short-term obligations

Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating

sick leave that are expected to be settled wholly within 12 months after the end of the period in which

the employees render the related service are recognised in respect of employees’ services up to the

end of the reporting period and are measured at the amounts expected to be paid when the liabilities

are settled. The liabilities are presented as current employee benefit obligations under trade and

other payables in the statement of financial position.

1.17 Revenue recognition

Revenue comprises the fair value of the consideration received or receivable for the sale of services

in the ordinary course of the Company’s activities. The Company recognises revenue when the

amount of revenue can be reliably measured, it is probable that future economic benefits will flow to

the entity and when specific criteria have been met for each of the Company’s activities as described

further below.

Royalty fees arising from the licensing of the Brand

Such revenue is calculated as a fixed percentage of the underlying gross gaming revenue generated

by Bethard Group Limited, a related party, offset by the brand related expenses incurred by the

Company, subject to certain minimum thresholds. This revenue stream falls in scope of IFRS 15.

Following the sale of the brand during the year, this revenue stream was no longer generated.

Provision of platform services

In contracting with own license operators (operators that own their own licences) in offering them the

use of the Platform, the Company generates revenue by entering into a revenue share or a fixed

arrangement where such revenue is apportioned on an accrual basis over the whole term of the

contract. This revenue steam falls in scope of IFRS 15.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

1. Summary of significant accounting policies - continued

1.17 Revenue recognition - continued

Revenue from white label services

In contracting with white label customers (operators that are rebranded under another name), the

Company is using its B2B licence and combining this with Bethard Group Limited’s B2C licence in

offering the white label service to the third party. Revenue earned by the Company from white label

services is stated net of direct related costs.

The consideration for such services generally also includes an initial setup fee. In accordance with

IFRS 15, the set-up is not seen as a distinct performance obligation as the customer cannot benefit

from the set-up itself but from the agreement as a whole. Accordingly, the set-up fee is being deferred

over the period of the agreement.

All revenue generated from the various revenue streams is being treated as one revenue segment

in line with internal management reporting.

1.18 Leases

1.18.1 Company’s leasing activities and how these are accounted for

The Company has entered into non-cancellable lease arrangements for the use of immovable

properties. These rental contracts are typically made for fixed periods but may have extension options

as described below.

Contracts may contain both lease and non-lease components. The Company allocates the

consideration in the contract to the lease and non-lease components based on their relative stand-

alone prices. However, for leases of real estate for which the Company is a lessee, it has elected not

to separate lease and non-lease components and instead accounts for these as a single lease

component. Lease terms are negotiated on an individual basis and contain a wide range of different

terms and conditions. The lease agreements do not impose any covenants other than the security

interests in the leased assets that are held by the lessor. Leased assets may not be used as security

for borrowing purposes.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease

liabilities include the net present value of the following lease payments:

• fixed payments (including in-substance fixed payments), less any lease incentives

receivable;

• variable lease payments that are based on an index or a rate, initially measured using the

index or rate as at the commencement date;

• amounts expected to be payable by the Company under residual value guarantees;

• the exercise price of a purchase option if the Company is reasonably certain to exercise that

option; and

• payments of penalties for terminating the lease, if the lease term reflects the Company

exercising that option.

Lease payments to be made under reasonably certain extension options are also included in the

measurement of the liability. The lease payments are discounted using the interest rate implicit in the

lease. If that rate cannot be readily determined, the lessee’s incremental borrowing rate is used, being

the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset

of similar value to the right-of-use asset in a similar economic environment with similar terms, security

and conditions.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

1. Summary of significant accounting policies - continued

1.18 Leases - continued

1.18.1 Company’s leasing activities and how these are accounted for - continued

To determine the incremental borrowing rate, the Company:

• where possible uses recent third-party financing received by the individual lessee as a

starting point, adjusted to reflect changes in financing conditions since third party financing

was received;

• uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for

leases held by the Company, which does not have recent third-party financing; and

• makes adjustments specific to the lease, e.g. term, country, currency, and security.

Lease payments are allocated between principal and finance costs. The finance cost is charged to

profit or loss over the lease period so as to produce a constant periodic rate of interest on the

remaining balance of the liability for each period.

Right-of-use assets are measured at cost comprising the following:

• the amount of the initial measurement of lease liability;

• any lease payments made at or before the commencement date less any lease incentives

received;

• any initial direct costs; and

• restoration costs.

Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease

term on a straight-line basis. If the Company is reasonably certain to exercise a purchase option, the

right-of-use asset is depreciated over the underlying asset’s useful life.

Payments associated with short-term leases and all leases of low-value assets are recognised on a

straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of

12 months or less.

1.18.2 Extension and termination options

Extension and termination options are included in the leases of the Company. These are used to

maximise operational flexibility in terms of managing the assets used in the Company’s operations.

The extension and termination options held are exercisable by the Company.

1.19 Finance costs

The Company's finance costs include interest payable on borrowings and lease liabilities. Interest

expense is recognised using the effective interest method.

1.20 Dividend distribution

Dividend distribution to the Company’s shareholders is recognised as a liability in the Company’s

financial statements in the period in which the dividends are approved by the Company’s

shareholders.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

2. Financial risk management

2.1 Financial risk factors

The Company’s activities potentially expose it to a variety of financial risks: market risk (including

cash flow and fair value interest rate risk), credit risk, and liquidity risk. The Company’s overall risk

management focuses on the unpredictability of financial markets and seeks to minimise potential

adverse effects on the Company’s financial performance. The Company did not make use of

derivative financial instruments to hedge risk exposures during the current and preceding financial

years. The Board of Directors provides principles for overall risk management, as well as policies

covering risks referred to above and specific areas such as investment of excess liquidity.

(a) Market risk

(i) Foreign exchange risk

Foreign exchange risk arises from future commercial transactions and recognised assets and

liabilities which are denominated in a currency that is not the Company’s functional currency. The

Company has no significant currency risk since substantially all assets and liabilities are

denominated in Euro.

(ii) Cash flow and fair value interest rate risk

Interest rate risk arises from the effects of fluctuations in the prevailing levels of markets interest rates

on fair values of financial assets and liabilities and future cash flows.

As at the reporting date, the Company has fixed-rate interest-bearing debt (Note 10). Accordingly,

its revenue and operating cash flows are substantially independent of changes in market interest

rates. In this respect, the Company is potentially exposed to fair value interest rate risk in view of the

fixed interest nature of these instruments, which are however measured at amortised cost.

As at the statement of financial position date, the Company’s exposure to changes in interest rates

on bank accounts held with financial institutions was limited and the directors consider any defined

shift in interest rates to have an immaterial effect on the Company and its operations.

(b) Credit risk

Credit risk is the risk of a financial loss to the Company if a counterparty to a financial instrument fails

to meet its contractual obligations. The Company’s exposure to credit risk at the end of the reporting

period is analysed as follows:

2021

2020

€

Trade receivables (Note 7)

725,823

162,684

Amounts due from related parties (Note 7)

8,802,568

7,049,361

Cash at bank (Note 8)

15,750,065

539,672

Maximum exposure to credit risk

25,278,456

7,751,717

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

2. Financial risk management - continued

2.1 Financial risk factors - continued

(b) Credit risk - continued

Impairment of financial assets

The Company has three types of financial assets that are subject to the expected credit loss model:

• trade receivables;

• debt investments carried at amortised cost; and

• cash and cash equivalents

Trade receivables

The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses

a lifetime expected loss allowance for all trade receivables. To measure the expected credit losses,

trade receivables have been grouped based on shared credit risk characteristics and the days past

due. The expected loss rates are based on the payment profiles of sales generated in sixteen months

and monitored over the period between 1 July 2019 and 31 December 2021, and the corresponding

historical credit losses experienced within this period. The historical loss rates are adjusted to reflect

current and forward-looking information. On that basis, the loss allowance as at 31 December 2021

for trade receivables was determined to be €53,533 (2020: €50,384).

The loss allowance for trade receivables as at 31 December 2021 and 2020 reconcile to the opening

loss allowances as follows:

2021

2020

€

Opening loss allowance as at 1 January

50,384

31,244

Increase in loss allowance on trade receivables recognised in profit

or loss during the year

52,403

164,860

Receivables written off during the year as uncollectible

(49,254)

(145,720)

Closing loss allowance at 31 December (Note 7)

53,533

50,384

Debt investments carried at amortised cost

The Company’s debt investments carried at amortised cost primarily relate to amounts due from its

parent company, Gameday Group Limited (Note 7). The Company measures credit risk and expected

credit losses on the amount due from its parent company using probability of default, exposure at

default, and loss given default. The directors consider both historical analysis and forward-looking

information in determining any expected credit loss.

At 31 December 2021, the directors consider that related party balances are held with counterparties

with an average rating based on the Company's internal rating scale. The directors consider that there

may exist a probability of default taking into account the financial standing of the relevant counterparties

and their ability to meet their contractual obligations.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

2. Financial risk management - continued

2.1 Financial risk factors - continued

(b) Credit risk - continued

Following the sale of the Intangible Asset specifically, the ‘Bethard’ brand, a balance of €8,801,568 was

still due to the Company by Gameday Group plc in connection with this transaction. On 25 March 2022,

an intra-group restructuring exercise took place with the end result that the parent company settled an

amount of €5,185,521 due in terms of this balance receivable through the resale of a number of the

Company's bonds at a selling price of €99 per bond, being the average market price on the date of sale.

These bonds had a total nominal value of €5,237,900 to the Company (Note 22). The remaining balance

owed by the Gameday Group plc to the Company as at 25 March 2022 was of €3,616,047.

As a result, the credit loss allowance was calculated on the remaining outstanding balance and the

Company recognized a loss allowance provision €233,331 (2020: €472,451) based on the 12-month

expected credit losses, resulting in a reduction of the loss allowance by €239,420 (2020: increase of

€134,093).

Net impairment recovery/(loss) on financial and contract assets recognised in profit or loss

During the year, the following recovery/(loss) were recognised in profit or loss in relation to impaired

financial assets:

2021

2020

€

Increase in loss allowance recognised in profit or loss during the

year

(3,149)

(19,140)

Receivables written off during the year as uncollectible

(49,254)

(145,720)

Recovery/(impairment) on other financial assets

98,360

(138,209)

Recovery/(impairment) on financial and contract assets

45,957

(303,069)

The Company is exposed to liquidity risk in relation to meeting future obligations associated with its

financial liabilities, which comprise principally interest-bearing borrowings and trade and other

payables (refer to Notes 10 and 12). Prudent liquidity risk management includes maintaining

sufficient cash to ensure the availability of an adequate amount of funding to meet the Company’s

obligations and ensuring that alternative funding is available when the bonds are due for repayment.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

2. Financial risk management - continued

2.1 Financial risk factors - continued

The following table analyses the Company’s financial liabilities into relevant maturity groupings

based on the remaining period at the reporting date to the contractual maturity date. The amounts

disclosed in the tables below are the contractual undiscounted cash flows. Balances due within 12

months equal their carrying balances, as the impact of discounting is not significant.

Demand

Due within

one year

Between 1

and 2 Years

Between 2

and 7 Years

Total

31 December 2021

€

Borrowings (Note 10)

435,481

870,963

16,504,027

17,810,471

Trade and other payables (Note 12)

441,861

1,636,601

2,078,462

Lease liabilities (Note 5)

91,103

91,102

273,308

Total

441,861

2,163,185

962,066

16,595,129

20,162,241

31 December 2020

Borrowings (Note 10)

1,042,000

1,180,000

24,720,000

26,942,000

Trade and other payables (Note 12)

52,591

8,182,287

8,234,878

Total

52,591

9,224,287

1,180,000

24,720,000

35,176,878

The Company continues to assess its funding requirements to ensure that adequate funds are in

place to meet its financial liabilities when they fall due.

2.2 Fair value estimation

Management analyses financial instruments carried at fair value, by the valuation method. The

different levels have been defined as follows:

• Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).

• Inputs other than quoted prices included within level 1 that are observable for the asset or liability,

either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2).

• Inputs for the asset or liability that are not based on observable market data (that is, unobservable

inputs) (level 3).

If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair

value hierarchy, then the fair value measurement is categorised in its entirety in the same level of

the fair value hierarchy as the lowest level input that is significant to the entire measurement. The

Company recognises transfers between levels of the fair value hierarchy at the end of the reporting

period during which the change has occurred. Significant unobservable inputs and valuation

adjustments are regularly reviewed.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

2. Financial risk management - continued

2.2 Fair value estimation - continued

At 31 December 2021 and 2020, the carrying amounts of other financial instruments, comprising cash

at the bank, receivables, payables, borrowings and accrued expenses reflected in the financial

statements are reasonable estimates of fair value in view of the nature of these instruments or the

relatively short period of time between the origination of the instruments and their expected realisation.

2.3 Capital risk management

The Company’s objectives when managing capital are:

• to safeguard the Company’s ability to continue as a going concern in order to provide returns for

shareholders and benefits for other stakeholders;

• to maintain an optimal capital structure to reduce the cost of capital; and

• to comply with requirements of the Prospectus issued in relation to the 5.9% bonds (Note 10).

The board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market

confidence to sustain the future development of the business.

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends

paid to shareholders, issue new shares or sell assets. The Company’s equity, as disclosed in the

statement of financial position, constitutes its capital. The Company maintains the level of capital by

reference to its financial obligations and commitments arising from operational requirements. In view

of the nature of the Company’s activities, the capital level as at the end of the reporting period is

deemed adequate by the directors.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

3. Critical accounting estimates and judgments

Estimates and judgments are continually evaluated and based on historical experience and other

factors including expectations of future events that are believed to be reasonable under the

circumstances. Revisions to estimates are recognised prospectively.

This note provides an overview of the areas that involved a higher degree of judgement or complexity,

and of items that are more likely to be materially adjusted due to estimates and assumptions turning

out to be wrong. Detailed information about each of these estimates and judgments is included in

other notes together with information about the basis of calculation for each affected line item in the

financial statements. In the opinion of the directors, the accounting estimates and judgments made

in the course of preparing these financial statements are not difficult, subjective or complex to a

degree that would warrant their description as critical in terms of the requirements of IAS 1 except for

impairment of intangible assets with an indefinite useful life. For further detail about intangibles

assigned a definite useful life refer to Note 4.

Impairment of intangible assets with an indefinite useful life

IAS 36 requires management to undertake an annual test for impairment of intangible assets with an

indefinite useful life. Impairment testing is an area involving management judgement. It requires

assessments as to whether the carrying value of assets can be supported by the net present value

of future cash flows derived from such assets using cash flow projections that have been discounted

at an appropriate rate.

In calculating the net present value of the future cash flows, certain estimates are required to be

made in respect of highly uncertain matters, including management’s expectation of growth in

revenues. These estimates are considered to be critical particularly in light of current market

circumstances.

The directors evaluated the Brand, representing the Intangible asset with an indefinite useful life, for

impairment on a yearly basis. The brand had a fair value and book value of €25,000,000 as at 31

December 2020. During 2021, the Brand was subject to a transfer at a consideration of €25,000,000,

being the amount equal to its fair value as at 31 December 2020.

Allowance for expected credit losses

The allowance for expected credit losses assessment requires a degree of estimation and

judgement. It is based on the lifetime expected credit loss, grouped based on days overdue, and

makes assumptions to allocate an overall expected credit loss rate for each group. These

assumptions include recent sales experience, historical collection rates, the impact of the

Coronavirus (COVID-19) pandemic and forward-looking information that is available. The allowance

for expected credit losses, as disclosed in note 2.1 b), is calculated based on the information

available at the time of preparation. The actual credit losses in future years may be higher or lower.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

4. Intangible assets

Total

Platform

Brand

€

Year ended 31 December 2020

Opening net book amount

38,961,330

13,961,330

25,000,000

Additions

616,459

Amortisation charge

(2,244,948)

Closing net book amount

37,332,841

12,332,841

25,000,000

As at 31 December 2020

Cost

41,030,307

16,030,307

25,000,000

Accumulated amortisation

(3,697,466)

Closing net book amount

37,332,841

12,332,841

25,000,000

Year ended 31 December 2021

Opening net book amount

37,332,841

12,332,841

25,000,000

Additions

912,918

Amortisation charge

(2,360,691)

Disposals

(25,000,000)

Closing net book amount

10,885,068

As at 31 December 2021

Cost

16,943,225

Accumulated amortisation

(6,058,157)

Closing net book amount

10,885,068

Additions to the platform of €912,918 are capitalised costs, based on services received from

unrelated third parties.

For impairment testing, assets are grouped together into the smallest group of assets that generates

cash inflows from continuing use that are largely independent of the cash inflows of other assets or

cash-generating units (‘CGUs’). The recoverable amount of an asset or CGU is the greater of its

value in use and its fair value less costs to sell. Value in use, is based on the estimated future cash

flows discounted to their present value using a pre-tax discount rate that reflects current market

assessments of the time value of money and the risks specific to the asset or CGU. Management

has concluded that the Brand and Platform are two separate cash-generating units for the purposes

of IAS 36. This conclusion is based on the fact that the performance and cash flows of the different

assets are independent on those generated by other assets and the Company monitors and manages

its operations as two separate units.

Having considered the constant development of the Company’s Platform, the Company’s future plans

and the fact that this component of intangibles has been assigned a definite useful life and is being

accordingly amortised, management considers that the Platform is not demonstrating any impairment

triggers. The directors had evaluated the Brand for impairment as at 31 December 2020 and were of

the view that the carrying amount, after also obtaining an independent external valuation from experts

in the field of intangible valuations, amounting to €25,000,000 was recoverable. The recoverable

amount of the acquired Brand was assessed on the basis of value-in-use calculations (through the

discounted cash flow approach, specifically the Relief from Royalty method), and a detailed

assessment was performed at the end of the prior reporting period.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

4. Intangible assets - continued

On 18 June 2021, the Company entered into an Intellectual Property Rights Purchase and Transfer

Agreement with Prozone Limited, wherein the Company transferred the Bethard brand including the

Bethard, Fastbet and Betive domains to Prozone Limited for a purchase consideration of

€25,000,000, being an amount equivalent to the fair value of the brand as at 31 December 2020.

5. Leases

The Company entered into an office lease agreement as at 1 January 2021 for a period of 3 years,

ending 31 December 2023. On the same date, the Company entered into a cost-sharing agreement

with a fellow subsidiary, whereby both parties agreed to share the cost of the lease on an agreed

pro-rata basis. Nonetheless, the Company has a substantive right to substitute the asset throughout

the period of use. Accordingly, the cost-sharing agreement does not constitute a lease and therefore,

income earned from such an arrangement is considered a service agreement and not a sublease of

the premises.

In the comparative period, the Company terminated the lease agreement which was entered into for

the rental of office premises. The below table shows the right-of-use assets and corresponding lease

liabilities position as of 31 December 2021.

Rights-of-

use assets

- premises

€

Cost

Opening balance

Additions

265,262

Balance at 31 December 2021

265,262

Accumulated amortisation

Opening balance

Amortisation

132,631

Balance at 31 December 2021

132,631

Carrying amount

As at 31 December 2020

As at 31 December 2021

265,262

2021

€

Rights-of-use assets - premises

265,262

Lease liabilities:

Current

132,136

Non-current

141,172

273,308

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

5. Leases - continued

The statement of profit or loss shows the following amounts relating to leases:

2021

2020

€

Depreciation charge of right-of-use assets

Premises

132,631

61,308

I Interest expense (included in net finance expense) (Note 16)

19,416

3,652

The cash outflow in 2021 relating to the principal elements of lease payments captured by IFRS 16

amounted to €144,000 (2020: €67,523).

6. Property, plant and equipment

Total

Office

Equipment

Furniture &

Fittings

€

Year ended 31 December 2020

Opening netbook amount

6,940

4,709

2,231

Additions

6,693

6,439

254

Depreciation charge

(2,937)

(2,704)

(233)

Closing netbook amount

10,696

8,444

2,252

As at 31 December 2020

Cost

13,857

11,353

2,504

Accumulated depreciation

(3,161)

(2,909)

(252)

Closing netbook amount

10,696

8,444

2,252

Year ended 31 December 2021

Opening netbook amount

10,696

8,444

2,252

Depreciation charge

(3,088)

(2,838)

(250)

Closing netbook amount

7,608

5,606

2,002

As at 31 December 2021

Cost

13,857

11,353

2,504

Accumulated depreciation

(6,249)

(5,747)

(502)

Closing net book amount

7,608

5,606

2,002

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

7. Trade and other receivables

2021

2020

€

Trade receivables from contracts with customers

725,823

162,684

Less: Loss allowance on trade receivables

(53,533)

(50,384)

Trade receivables, net of loss allowance

672,290

112,300

Amounts due from related parties, net of loss allowance (Note 2

and Note 18)

8,569,237

6,576,910

Indirect taxation

495,030

590,940

Prepayments and accrued income

184,180

433,401

9,920,737

7,713,551

Amounts due from related parties as at 31 December 2021 are net of a loss allowance of €233,331

(2020: €472,451). These amounts are unsecured, interest-free, and repayable on demand.

8. Cash and cash equivalents

For the purposes of the statement of cash flows, the year-end cash and cash equivalents comprise

the following:

2021

2020

€

Cash at bank and in hand

15,750,065

539,672

Less expected credit losses

(144,876)

(4,117)

15,605,189

535,555

Net debt reconciliation

The following is an analysis of net debt and the movements in net debt for each of the periods

presented:

2021

2020

€

Borrowings (including bond issue costs) (Note 10)

(19,842,990)

(19,764,485)

Lease liabilities (Note 5)

(273,308)

Cash and cash equivalents

15,605,189

535,555

Net debt

(4,511,109)

(19,228,930)

As disclosed in Note 10, borrowings are subject to a fixed rate of interest and non-cash movements

relate to the amortisation of bond issuance costs and the accrual of bond interest costs.

As per Note 2.1.b, the Borrowings balance was reduced by €5,237,900, leaving a borrowings

outstanding balance of €14,762,100 as at 25 March 2022.

Per the Statement of Cash Flows, the proceeds from the sale of intangible assets amounted to

€15,552,390. As per Note 18, the initial payment was €16,198,432 however this balance was set-

off by €646,042 against creditors.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

9. Share capital

2021

2020

€

Authorised

30,000,000 (2020: 30,000,000) ordinary shares of €1 each

30,000,000

Issued and fully paid

20,580,000 (2020: 20,580,000) ordinary shares of €1 each

20,580,000

The holders of ordinary shares are entitled to receive dividends as declared from time to time and

are entitled to one vote per share at meetings of the Company. All shares rank equally with regard

to the Company’s residual assets.

10. Borrowings

2021

2020

€

Non-current

5.9% 2024-2026 Bonds

19,842,990

19,764,485

2021

2020

€

Principal bonds outstanding

20,000,000

Gross amount of bond issue costs

(403,061)

Amortisation of bond issue costs to 31 December

246,051

167,546

Amortised cost and closing carrying amount

19,842,990

19,764,485

Interest on the 5.9% 2024-2026 Bonds is payable annually in arrears, on 22 July of each year. As at

31 December 2021, the Bonds were trading at slightly above par at €101.00 with the most recent

trading price of €99 as at 18 April 2022.

Accrued interest as at 31 December 2021 amounts to €389,854 (2020: €388,951) as disclosed in

Note 12.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

11. Deferred tax

Deferred taxes are calculated on temporary differences under the liability method using a principal

tax rate of 35% (2020: 35%). The deferred tax liabilities are mainly considered to be of a non-current

nature.

Movement in temporary differences during the year:

2021

2020

€

Year ended 31 December

At beginning of the year

1,040,371

423,908

Unabsorbed tax losses

595,043

Deferred tax on financial assets

21,420

De-recognition of deferred tax assets

(1,040,371)

At 31 December

1,040,371

2021

2020

€

De-recognition of deferred tax assets

(1,040,371)

Unabsorbed tax losses

595,043

Temporary difference on loss allowance for financial assets

21,420

Tax (expense)/credit

(1,040,371)

616,463

All amounts listed in the above table are recognised in profit and loss. In 2021, after evaluating an

internal Deferred Tax Asset analysis, management is of the view that the most prudent approach

would be to derecognise the existing Deferred Tax Assets of €1,040,371, as at 31 December

2021, thus resulting in an equivalent tax expense of €1,040,371 for the year ending 31 December

2021.

12. Trade and other payables

2021

2020

€

Trade and other payables

701,979

7,116,040

Amount owed to related parties (Note 18)

441,861

52,591

Accruals and deferred income

544,768

677,296

Accrued interest on bonds

389,854

388,951

2,078,462

8,234,878

Amounts owed to related parties are interest-free, unsecured, and repayable on demand.

Included within the trade and other payables as at 31 December 2020 was an amount of €6,976,072

equivalent to SEK 70,000,000, linked to marketing accruals due to a third party holding a minority

share in the ultimate parent Company resulting in a minority indirect shareholding in the Company.

The balance was fully settled on 10 February 2021.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

13. Revenue

2021

2020

€

Income generated from related parties

3,699,811

8,548,328

Income generated from third parties

110,932

575,300

3,810,743

9,123,628

The Company generated revenues in the form of turnkey fees and royalties from the licensing of the

Brand and platform fees charged to licensed operators. Additionally, it generated revenue from white

label services offered to white label customers. The Company’s revenue in 2021 and 2020 was

therefore split as follows:

2021

2020

€

White label services

1,565,991

2,721,289

Royalties - licensing of the Brand

1,730,059

5,803,910

Turnkey fees

514,693

598,429

Revenue

3,810,743

9,123,628

All revenue generated from the various revenue streams is being treated as one revenue segment

in line with internal management reporting. Following the sale of the Brand on 18 June 2021, the

Company parted ways with its Royalties revenue stream and Turnkey fees generated from the

Brand intangible asset.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

14. Expenses by nature

2021

2020

€

Cost of sales

Brand awareness marketing

1,287,325

4,969,317

Other direct costs (including platform costs)

1,290,302

1,716,605

Total cost of sales

2,577,627

6,685,922

Administrative expenses

Employee benefit expense (Note 15)

358,613

349,628

Management fees

150,000

Professional fees

286,858

269,541

Depreciation and amortisation (Notes 4, 5, 6)

2,496,410

2,309,193

Bank charges

10,874

3,582

Exchange rate variance

(42,587)

198,822

Other operating expenses

153,178

174,467

Total administrative expenses

3,413,346

3,455,233

Auditor’s fees

Fees charged by the auditor for services rendered during the financial year ended 31 December relate

to the following:

2021

2020

€

Annual statutory audit

28,000

45,000

Other non-audit services

500

2,008

28,500

47,008

During 2021, other non-audit services related to assisting with ESEF compliance. During 2020, other

non-audit services fees mainly related to assistance in review of interim financial statements.

15. Employee benefit expenses

2021

2020

€

Wages and salaries

347,056

325,673

Social security costs

11,557

23,955

358,613

349,628

The average number of employees employed during the year to 31 December 2021 amounted to 7

employees (2020: 5 employees).

Included in the total employee benefit expense is an amount of €171,159 (2020: €149,929) relating to

directors’ fees, €63,750 (2020: €61,250) relating to non-executive directors and €107,409 (2020:

€88,679) relating to fees paid to an executive director.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

16. Finance costs

2021

2020

€

Interest payable on bonds

870,963

468,356

Amortisation of transaction costs

78,505

167,546

Lease interest and finance charges

19,416

3,652

Other finance costs

1,019

969,903

639,554

Interest payable on bonds falls due on the 22 July of each financial year for the bond duration. The

first interest payment fell due on 22 July 2021. The amount of interest payable was €1,180,000.

Following a waiver of interest amounting to €309,037 due to a related party owning 52,379 bonds

waiving off its right to receive the interest, consequently, the amount of interest paid to the remaining

bondholders on 22 July 2021 was €870,963.

The amount of accumulated interest due from 22 July 2021 to 31 December 2021 amounted to

€526,958. Following a waiver of interest amounting to €138,007 by a related party owning 52,379

bonds, the total interest payable to the remaining bondholders is €389,854.

17. Tax expense

2021

2020

€

Deferred tax expense/(credit) (Note 11)

1,040,371

(616,463)

Deferred tax expense/(credit) for the year

1,040,371

(616,463)

The tax on the Company’s (loss)/profit before tax differs from the theoretical amount that would

arise using the basic tax rate as follows:

2021

2020

€

Loss before tax

(3,104,176)

(1,960,150)

Tax at 35%

(1,086,462)

(686,052)

Tax effect of:

Deductible temporary differences

(1,153,644)

Current-year losses for which no deferred tax asset is recognised

2,239,371

Disallowed expenses & other differences

735

69,589

Derecognition of deferred tax asset

1,040,371

(616,463)

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

18. Related parties

The companies forming part of Gameday Group plc are considered by the directors to be related

parties as these companies are ultimately owned by the same ultimate beneficiaries.

The Company is a subsidiary of Gameday Group plc which is the ultimate parent company. The

registered office of both companies is situated at Level 1, Burlington Court, Dragonara Road, St

Julians STJ3143, Malta. Gameday Group plc had 60 shareholders, most of whom had less than

10% shareholding. Gameday Group plc has no ultimate controlling party.

Gameday Group plc prepares the consolidated financial statements of the Group, of which

Together Gaming Solutions p.l.c. forms part. These financial statements are filed and available for

public inspection at the Registrar of Companies in Malta.

The companies forming part of Gameday Group plc include Bethard Group Limited and World Class

Entertainment Limited. Together Gaming Solutions p.l.c. carried out related party transactions with

both subsidiary companies of Gameday Group plc and also with its parent company.

The following transactions were carried out with related parties:

(1) During 2021, Bethard Group Limited waived a total interest amounting to €309,037 receivable from

the 52,379 bonds owned.

(2) During 2021, Together Gaming Solutions p.l.c. retained the following trading agreements and

carried out related party trading transactions in line with these agreements:

• a business development services agreement with Worldclass Services Limited allowing for

the recharging of expenses including the share attributable to white label customers (refer

to Note 13).

• an intangible asset licence agreement with Worldclass Services Limited giving rise to

revenues earned from related parties (refer to Note 13).

• an agreement with Bethard Group Limited for the sharing of office space leased (refer to

Note 5)

• a management services agreement with Bethard Group Limited (refer to Note 14).

(3) Effective 1 January 2021, the Company acquired the fastbet.com domain and the betive.com

domain from Bethard Group Ltd for zero consideration.

(4) On 18 June 2021, the Company entered into an Intellectual Property Rights Purchase and Transfer

Agreement with Prozone Limited wherein the Company transferred the Bethard brand including the

Bethard, Fastbet, and Betive domains to Prozone Limited for a purchase consideration of

€25,000,000. Concurrently, the Company entered into a Novation and Allotment Agreement with

Gameday Group plc and Prozone Ltd wherein Gameday Group plc assumed the obligations of

Prozone Limited towards the Company arising out of the Intellectual Property Rights Purchase and

Transfer Agreement dated 18 June 2021. Consequently, Gameday Group plc was owed

€25,000,000 by Prozone Limited and in turn, Gameday Group plc owed the Company €25,000,000.

Gameday Group plc paid, €16,198,432 (where €33,000 was offset against payable to Gameday

Group plc, and €613,042 was offset against a third-party creditor), leaving an outstanding balance

of €8,801,568 as at 31 December 2021.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

18. Related parties - continued

Related party balances at year end were as follows:

2021

2020

€

Amounts due from fellow subsidiary

1,000

7,049,361

Amounts due from immediate parent

8,801,568

8,802,568

7,049,361

Amounts owed to immediate parent

(33,000)

Amounts owed to fellow subsidiaries

(441,861)

(19,591)

(441,861)

(52,591)

19. Commitments

During previous year, the Company entered into marketing agreements through which it was

committed to future cash outflows of €2,240,250 as at 31 December 2020, which were not provided

for in the financial statements. During 2021, there were no future outflows committed to, as follows:

2021

2020

€

Within one year

746,750

Within two to three years

1,493,500

Total

2,240,250

Legal proceedings have been instituted by the Company during 2021 against its former brand

ambassador to which the aforementioned marketing agreement relates to in order to seek redress in

relation to a dispute that arose between the parties in terms of obligations assumed contractually.

TOGETHER GAMING SOLUTIONS P.L.C.

Annual Report and Financial Statements - 31 December 2021

20. Significant risks and uncertainties

The Company and its fellow subsidiaries operate in the online gaming industry. For internet-based

betting operations, there is uncertainty as to which country’s law ought to be applied, as the internet

operations can be linked to several jurisdictions. Legislation concerning internet betting is under

investigation in many jurisdictions. As at today certain EU countries have regulated their market by

means of country-specific licenses whilst at present discussions are in progress on the liberalisation

of several other markets in Europe.

The Company monitors the legal situation within the EU and in certain jurisdictions outside the EU,

and if any of its key markets were to regulate, the Company and its fellow subsidiaries if feasible

would obtain the required licenses to be in a position to continue operating in that jurisdiction. The

Rest of the World geographic area includes geographies with unclear gambling laws, which over time

may affect the Company’s revenue, earnings, and expansion opportunities, depending on what legal

changes may take place.

Future developments and their consequences for the online gaming market are uncertain. The

Company’s assessment is that both regulations, and the introduction of legislation, both within and

outside the EU, or changes in national legislation regarding, inter alia, stakes, marketing, restrictions

regarding online gaming or taxes, etc., in jurisdictions in which the Company’s services could be

made available could result in a material adverse impact on the Company’s operations, financial

position and earnings. Violations of existing legislation could lead to significant fines or tax exposures

that have not been provided for. The legal and technical solutions, as well as restraints on marketing,

that the Company may apply in order to limit users’ access in certain jurisdictions may prove to be

insufficient. This could pose both a risk and an opportunity to the Company.

Covid-19 has brought added risk in the form of temporary responsible gaming restrictions as well as

a number of further gambling measures put in place by the regulators, cancellation of global and

worldwide sports events and general reduction in disposable incomes which could all have a risk of

negatively impacting gaming revenues.

Following the sale of the Brand asset and parting ways with its main revenue-generating client, the

Company may need time to re-establish its revenues to present levels and beyond to steadily

outweigh operational costs. The Company’s remaining clients are in their majority still in an early

growth stage and expected revenues from its new B2B business activities may take a longer time to

establish and consolidate than originally forecasted.

In addition to the above, the following risks are also relevant to the Company: