RightBridge Ventures Group AB interim Q4 and full 2022 year financial report
SOLID FULL-YEAR GROWTH, EARNINGS WEIGHTED DOWN BY ONE – OFF, NON–CASH ITEMS and NEWLY ONBOARDED INVESTMENT.
GROUP RESULTS
FULL YEAR 2022
Revenues. The Group’s net sales amounted to to 8,445KSEK (-).
Earnings. The Group’s net results for the full year were – 15 477KSEK (-3 042KSEK). Including non – cash affecting items. The Group’s adjusted net results, excluding the non–cash item of 1) the cost of the reverse takeover at -11 379KSEK and 2) goodwill amortization at -1 536KSEK, amounted to -2 562KSEK (-3 042KSEK).
Earnings per share* amounted to SEK -0.36 (-0.05).
The equity/assets ratio** as of 31 December was 88.5% (96.5%).
FOURTH QUARTER 2022
Revenues. The Group's net sales amounted to 2,980 KSEK (0 KSEK).
Earnings. The Group’s net results for the fourth quarter were -20 131 KSEK (-657KSEK). The Group’s adjusted net results, excluding the non–cash item of 1) the cost of the reverse takeover at -11 379KSEK and 2) goodwill amortization at -1 304KSEK, amounted to -7 448KSEK (-657KSEK). The adjusted net results also include the yet-to-be-transformed investment of Tricked Asp made in November 2022. The consolidated losses of Tricked for the period, which amounted to –3 704KSEK. Excluding those, the adjusted net result for the Q4 period would be – 3 744 KSEK. The financial and operational transformation of Tricked is a key focus area for 2023/Q1.
Earnings per share* amounted to SEK -0.137 (-0.007).
*Earnings per share: earnings are divided by the average number of shares for the period. The total number of shares in the company as of 31 December 2022 amounts to 155 943 400. The average number of shares for the fourth quarter was 146 734 511. The average number of shares for 2022 is 42 936 539. The average number of shares after dilution for the fourth quarter of 2021 was 93 535 769 shares.
The average number of shares for 2021 was 63 070 590.
**Equity ratio: adjusted equity (equity and untaxed reserves less deferred tax) as a percentage of the balance sheet total.
Significant events during the period
- On October 5th, 2022, Agilit Holding AB’s subsidiary Agilit Svenska AB was distributed to the shareholders of the Company included in the company shareholders ledger before the closing of the Transaction.
- On October 6th, 2022, the reverse takeover was completed. The Consideration Shares were distributed to RightBridge Ventures AB shareholders, their registration into the Company’s shareholders ledger was submitted and a new board of directors and management took office. The new board consists of Johan Rooth as chairman of the board and Stefan Lindeberg, Kenneth Arnström and Magnus Leppäniemi as non-executive board members. Carlos Barrios was appointed as CEO. The Company registered its change of name from Agilit Holding AB to RightBridge Ventures Group AB (publ.).
- The Company effected a share reverse split with a ratio of 25:1 bringing the number of outstanding shares in the Company from 3 billion to 128 million.
- RightBridge Ventures Group closed the acquisition of approximately 80 % of the shares in Tricked Esport ApS, a Danish esports and educational organization based in Copenhagen.
- The Company announced Team Singularity’s commercial partnership with MAS Holdings, South Asia’s largest apparel tech company and their gaming wearables, GamerTechTM
- RightBridge procures a 5MSEK credit facility for increased scale-up and transformation in portfolio companies.
- Team Singularity APEX Legend squad won the APEX Legend South American championship.
Significant events after the period
- ESPL announced the completion of an IFO with PawnCake for the release of $ARENA, the utility token supporting the User Generated Tournament platform, ESPL ARENA. The value of the IFO was 1,4MUSD and the demand for tokens reached 3.7MUSD. PawnCake has not yet fully released the funds of the IFO.
- ESPL listed $ARENA token in the Korean regulated exchange ProBit Global Exchange as result of the high demand of the token in the tournaments launched on ESPL Arena
- Team Singularity’s APEX Legend squad placed 11th in the world in the Apex Legends Global Series Playoffs in Copperbox Arena in London.
- Rightbridge Ventures announced on Jan 31st that there had been a breach in the lock-up agreement and that the company would seek fine payment for the breach. The company has sent letters of notice regarding the breach to the breaching party.
- Knacks scouts a new CS:GO roaster for Team Singularity.
- 1337 esport signs a sales and advisory services agreement with sports and augmented reality technology provider YBVR.
ABOUT RIGHTBRIDGE VENTURES GROUP AB
RightBridge Ventures Group AB (“RightBridge Ventures Group” or the “Company”) is a Sweden based listed corporation with a portfolio of esports and gaming companies that entertain, distribute digital media, gaming and esports content and enable brands and corporations to access the esports and gaming consumer community.
The industry has ratified the Company’s initial investment thesis “esport and gaming is not just playing games”. Organisations that manage esports teams are increasingly developing media and entertainment companies or agencies. While ‘original’ business areas remain in the foreground of the activities, the revenue contribution of such areas is declining compared to ‘expanding’ business areas. In particular, content creation and influencer marketing play an important role. They enable esports teams to bridge the gap between video gaming, esports and streaming and authentically activate their players – and thus their most important assets – independent from the competitions, providing the opportunity to deepen the connection to their fan bases, in line with RightBridge developed synergies among the Company's portfolio firms.
Knacks Sp. Z.o.o. is a marketing and talent full-service esports agency based in Poland. It offers marketing and talent management services to players, teams, and brands in the esports industry. The agency's services include influencer marketing, social media management, content creation, and event management. Knacks Esports Marketing and Talent Agency also provides consulting services to companies looking to enter the esports industry. RightBridge Ventures Group ownership: 59.18%
1337 eSports AB is an esports and gaming specialised corporate advisory firm founded by RightBridge Ventures. The company provides solid business solutions and expertise for esports and gaming companies seeking to improve their existing operations, or/and seeking to monetise the social digital environment of esports, gaming and the Metaverse. RightBridge Ventures Group ownership: 100%
Tricked ApS is a Danish esports competitive and education organisation with over 50 employees providing esports training subscription services through several esports gaming centres, as well as online and on-site, to approximately 20 primary, secondary and vocational public and private schools across Denmark. RightBridge Ventures Group ownership: 80.02%
Esports Pte Ltd. (“ESPL” - Esports Players League) is an operator of a global esports and media network. The company's network specialises in creating a platform for gamers, game developers, game and other digital media content publishers to compete in online and on-ground tournaments, as well as to market and distribute their content. ESPL is the pioneer in User Generated Tournament - ESPL Arena. RightBridge Ventures Group ownership: 21.77%1
1 Direct ownership: 4,73%; Through 100% owned holding company iCandy Digital Pte. Ltd. 17.04%
KnotOK AB is the first corporate digital responsibility initiative that provides support to corporations and consumers to handle toxicity in the digital realm of the Metaverse. RightBridge Ventures Group ownership: 70%
Lilmix Esports AB is a professional esports organisation based in Sweden. It was founded in 2019 and currently fields teams in Counter-Strike: Global Offensive (“CS:GO”). Lilmix's CS:GO team has been particularly successful, with multiple top-three finishes in regional tournaments and online leagues. In addition to its competitive teams, Lilmix also has a content creation team that produces videos and streams on platforms like Twitch and YouTube. RightBridge Ventures Group ownership: 22%
Team Singularity ApS is an international esports organisation that fields teams of Rocket League, CS:GO and Apex Legends. The organisation has achieved notable success in the esports industry, particularly in Apex Legends. Team Singularity also has a content creation team and is involved in esports talent development. RightBridge Ventures Group ownership: 89.99%
eSports Pulze AB (“ePulze”) is a top online platform for casual and professional esports players alike. This Swedish-based platform offers daily tournaments, leagues, and ladders in popular esports titles such as Dota 2, League of Legends, and CS:GO. With its user-friendly interface, players can easily find and join competitions at all skill levels, track their progress, and connect with other players and teams. Epulze Esports also hosts live events and tournaments worldwide, making it a must-visit platform for esports enthusiasts who are looking for an exciting and competitive gaming experience. RightBridge Ventures Group ownership: 7.25%
-----------------------------------------------------------------------------------------
CEO Letter
Dear shareholders,
I imagine that this is not the first 2022 Q4 interim report in which you read that the macroeconomic environment is challenging: consumer purchase power has been drastically reduced, current digital marketing business models are questioned, leading to lay-offs and strategic realignments in tech business giants such as META or Google, esports front-page organisations such as 100 Thieves or FaZeClan are scaling down and pivoting in an effort to ride the wave of consolidation that the esports and gaming industry is immersed in.
In parallel, the esports and gaming market growth continues. The popularity of physical events and tournaments has increased after COVID, esports and gaming are increasingly used by brands to reach GenZ and Millennials, the gamers’ Average Revenue per User in Europe has reached over EUR25/month and in the Middle East is over EUR180/month. Metaverse and web 3.0 technology deployments are a fact.
With these mixed outlooks, the Company shows solid growth for 2022 for an esports and gaming company founded less than 3 years ago. Founded during one of the most turbulent economic periods in the last 20 years, we have managed to establish a challenger operator in the industry. Revenue has grown from zero in 2021 to nearly 8.5M SEK at the end of 2022, managed a portfolio of 7 companies, onboarded 3 companies in 9 months during the year and carried out a listing through a reverse takeover process.
During 2022, the Company has focused on executing the variables that it controls: ITS execution strategy based on Investments - Transformation – Synergies. This choice has taken us to be ahead of the current wave of consolidations and business-pivoting that both large and small companies in the industry are going through at the moment.
Investments. During the year, the Company has finalised three international majority investments in two esports organisations in Denmark - Team Singularity (during 2022Q2) and Tricked (during 2022Q4) and one marketing and talent agency in Poland, Knacks (during 2022Q1).
Transformation and synergy puzzle. During the year the Company has worked in the transformation of 1) Lilmix to diversify their revenue streams, adding streaming and social media marketing to their already positive sports performance, 2) Knacks to address larger assignments and internationalise successfully launch products such as Streamers League, and 3) in the transformation of Team Singularity from being a 5,5MSEK losses operation during 2021 to being a viable company today. We intend to replicate this model with Tricked during 2023/Q1.
While considering that the fundamentals of the transformation of all current portfolio companies, except the newly acquired Tricked, is well underway, the Company has also worked with the portfolio to find and execute several sales and community synergy projects, i.e., leveraging Team Singularity and Lilmix eyeballs with Knacks marketing, leveraging Knacks talent management expertise to recruit a brand new CS:GO Singularity team, etc…
Technology synergies. Taking steps into digital media distribution and web 3.0. Furthermore, during Q4 2022, ESPL spearheaded the Company’s entry into web3.0 through the planning of the launch of the utility token $ARENA to enable the User Generated Tournament (“UGT”) platform ESPL ARENA. The Company is actively working with the rest of the portfolio companies to replicate the model.
The financial results of the Company reflect its strategy and quick pace of execution. The 2022/Q4 and January – December 2022 net results reflect the phase in which the Company is: identifying undervalued assets and investing in their growth and transformation.
During Q4/2022 the high pace of investment execution weighted down the net results of the Company: the closing of the reverse takeover transaction (adding a non–cash cost of 11 379KSEK), amortisation (non-cash cost of 1 304KSEK) and the majority investment of Tricked and transformation costs during the last months of the year (consolidated loss of 3 704KSEK). Tricked transformation process has already started and we expect it to be finalized during Q1 2023.
The full-year growth results and diversification confirm the solidity of the Company’s investment thesis and portfolio management practices:
Healthy diversified revenue mix, one of the challenges of the industry
Improvement of adjusted net results by 11%, excluding one-off listing costs (1 400KSEK) compared to 2021
Sales growth of 8 445KSEK compared to 2021
In summary, the Company’s 2022 financial results represent the strategy of investments and transformation that the Company and the Company’s assets have executed during the year, which has yielded solid sales growth for 2022.
2023 expectations. We expect that the challenging macroeconomic environment continues during 2023 as well as the ongoing wave of consolidations, and business pivoting among esports and gaming companies. Yet, we have identified several elements that make us cautiously optimistic and confident in our strategy:
Investments. RightBridge Ventures Group is transaction driven. The ongoing consolidation and pivoting of the industry are weighing our transaction funnel toward both profitable companies as well as high-growth/high-demand geographical markets at attractive valuations.
Transformation. The main project for the next months is to transform Tricked into a scalable and sustainable esports business with a focus on online growth and licensing of know-how and content rights. Several organisations in Europe have started that process with positive results.
Synergies. We continue the execution of synergy projects across 3 main categories: Sales - Community - Technology.
Finally, I would like to thank our employees, board and shareholders for their continued support and contribution to the success of the RightBridge journey.
Carlos Barrios
CEO
RightBridge Ventures Group AB
-----------------------------------------------------------------------------------------
PARENT COMPANY RESULTS
The Parent Company’s revenue for the fourth quarter amounted to 0 KSEK (207 KSEK) and for the full year 83 KSEK (207 KSEK). Net result after tax was -51 390KSEK (-934KSEK) for the quarter and -56 915 KSEK (-2 406 KSEK) for the full year 2022. The results are affected by a non-cash impairment of 51 083 KSEK of the accounting value of the shares of RightBridge Ventures AB arising from the reverse acquisition.
-----------------------------------------------------------------------------------------
LIQUIDITY AND CASH FLOW
Fourth quarter 2022 (01/10/2022 - 31/12/2022)
Cash Flow from operating activities amounted to -3 581 KSEK. Cash Flow from financing activities amounted to 2 794 KSEK. Net cash flow for the period amounted to -753 KSEK. Cash and cash equivalents at the end of the period amounted to 3 068 KSEK.
Twelve months 2022 (01/01/2022 - 31/12/2022)
Cash flow from operating activities amounted to -13 382 KSEK. Cash Flow from investing activities amounted to -413 KSEK which is attributable to acquisitions. Cash Flow from financing activities amounted to 15 039 KSEK, mostly coming from several rights issues totaling 12 100 KSEK as well as raising additional debt of 2 794 KSEK during Q4. Net cash flow for the period amounted to 1 245 KSEK. Cash and cash equivalents at the end of the period amounted to 3 068 KSEK.
The Company plans to continue enhancing its liquidity position for existing transformational operations and additional acquisitions through a combination of subsequent rights issues, operational changes to improve the profitability of its subsidiaries and the use of additional efficient credit facilities where possible.
-----------------------------------------------------------------------------------------
REVERSE TAKEOVER
On the 22nd of June 2022, RightBridge Ventures AB (Publ.) carried out a reverse takeover transaction to acquire Rightbridge Ventures Group AB’s (Publ.) (previously known as Agilit Holding AB) spot on First North Growth.
The operating company RightBridge Ventures AB wanted to have its shares traded on a marketplace. Instead of doing an IPO of Rightbridge ventures AB, a reverse acquisition was made by RightBridge Ventures Group (Previously Agilit Holding AB) which was already listed. The acquiring company RightBridge Ventures Group AB(previously Agilit Holding AB) does not have any active operations nor any assets of real value – the only value that the operating company (Rightbridge Ventures AB)’s shareholders release to the owners of the listed company (Rightbridge Ventures Group AB) and that is excess of the true value of the net assets in the dormant company, this does not count as goodwill.
The K3 rulebook does not give any clear guidance on how to account for a reverse acquisition. RightBridge Ventures board has together with external specialists come to the conclusion that the excess value paid in the acquisition is to be seen as a cost of obtaining the service of being listed at First North growth. This is not seen as an immaterial asset such as goodwill. The transaction is not seen as a cost of raising capital considering the equity on a consolidated basis increases on a very limited basis. The cost is accounted for in the consolidated financial statement as a “cost of reverse acquisition”.
This affects the consolidated profit and loss with a negative value of 11 379 KSEK which is a non-cash flow affecting post.
-----------------------------------------------------------------------------------------
CONSOLIDATION
In accordance with 7 kap § 23 ÅRL the acquiring company of RightBridge Ventures Group AB is RightBridge Ventures AB because the owners of RightBridge Ventures AB gained control over RightBridge Ventures Group AB. This means that the controlling parent company is RightBridge ventures AB even though the legal parent company is RightBridge Ventures Group AB.
In the financial statements of RightBridge Ventures Group AB, the parent company will therefore be RightBridge Ventures AB and RightBridge Ventures Group AB will be seen as a subsidiary and included in the financial statements as per the date of the transaction.
-----------------------------------------------------------------------------------------
THE SHARE
RightBridge Ventures Group AB (Publ.) has been listed since 28th February 2022 on Nasdaq Stockholm First North Growth.
Up until October 6th, Agilit Holding AB’s operations were made in the company before a reverse acquisition of RightBridge Ventures AB was completed.
The number of shares in RightBridge Ventures group AB as of 31st of December is 155 943 400.
Ticker First North – RIGHTB
ISIN code SE0019070749
-----------------------------------------------------------------------------------------
ACCOUNTING PRINCIPLES
This report is prepared in accordance with the Annual Accounts Act and BFNAR 2012:1(K3). The company is applying the same accounting principles and calculation methods which were applied to the 2021 Annual Report. The board has decided to postpone the adoption of IFRS until the annual report of 2023 meaning the first report prepared in accordance with IFRS will be the annual report of 2023 which will be released during 2024.
The postponement of adopting IFRS is due to the complexity of changing the accounting framework and the board believes that the organisation needs more time in order to carry the change.
Auditors
Grant Thornton Sweden AB
Certified Adviser
Amudova AB.
PO Box 5855,
SE - 102 40 Stockholm
info@amudova.se
DECLARATION BY THE BOARD OF DIRECTORS
The Board of Directors and the CEO of Rightbridge Ventures Group AB (publ.) hereby certify that this year end report provides a true and fair overview of the operations, financial position and performance of the Group and Parent company
The board of RightBridge Ventures Group AB (Publ.) proposes to the annual general meeting not to pay dividends to the shareholders for the financial year 2022.
Stockholm, 28 February 2023
This year-end report has not been reviewed by the Company’s auditor.
Magnus Leppäniemi Stefan Lindeberg Kenneth Arnström
Johan Rooth Carlos Barrios
Chairman of the board CEO
FINANCIAL CALENDAR
Annual report
31.05.2023 Q1 January - March 2023
19.05.2023 Annual report 2022
02.06.2023 Annual General Meeting
31.08.2023 Q2 April - June 2023
30.11.2023 Q3 July - September 2023
For more information, please contact:
Carlos Barrios, CEO
Telephone: +46 70 511 25 79
Email: carlos.barrios@rightbridge.se
Johan Rooth, Chairman of the Board
Telephone: +46 70 536 77 33
Email: johan.rooth@abelco.se
Address:
Rightbridge Ventures Group AB (Publ.)
Norrlandsgatan 24
SE - 111 43
Stockholm
DISCLOSURE
This information is information that RightBridge Ventures Group AB (Publ.) is obliged to make public according to the EU's market abuse regulation. The information was provided, through the above contact person, for publication on 28.02.2023.
END
----------------------------
For further questions, please contact:
Carlos Barrios - CEO RightBridge Ventures Group AB
Telefon: +46 705 112579
E-post: carlos.barrios@rightbridge.se
RightBridge Ventures is a compounder and investment company based in Stockholm (Sweden) dedicated to investing in companies that shape the future of esports and gaming as part of the digital media and entertainment industry. For more information visit www.rightbridge.se or get updates by following us on Twitter on Instagram and LinkedIn.
RightBridge Ventures Group AB (publ)'s shares are traded on the Nasdaq First North Growth Market and Amudova AB is a Certified Adviser.