Approved on general meeting 26 April 2022
Chairman of the meeting
CVR no. DK 33 59 71 42
Annual report 2021
Table of contents
2
Table of content
5th Planet Games at-a-glance 3
CEO Letter 4
Business Development 5
Outlook 5
Financial review 5 - 8
Key figures 9
Risk management in practice 9 - 10
Corporate Governance 11
Remuneration Report 11 - 12
Board of Directors and Executive Management 13 - 14
Shareholder information 15 - 16
Statement by the Board of Directors and the Executive Management on the annual report 17
Independent auditor's report 18 - 21
Financial statements
Consolidated income statement and statement of other comprehensive income 22
Consolidated balance sheet 23 - 24
Consolidated statement of changes in equity 25
Consolidated cash flow statement 26
Notes to the financial statement 27 - 49
Parent company 50 - 56
Management’s review
3
5TH PLANET GAMES AT-A-GLANCE
• An international, publicly traded games publishing and development company founded in 2011.
• A company that creates, develops, and publishes games on a global basis.
• Strong portfolio of titles available across all platforms.
• Truly passionate about games and committed to making and publishing titles that will engage and bring gen-
uine joy to people for years.
• Enters into strategic partnerships with global IP holders for increased visibility, awareness, and games per-
formance.
• Focused on games of the highest quality and a publishing function managed by an experienced executive
team from Europe and the USA
Management’s review
4
CEO LETTER
I was appointed as Interim CEO of 5th Planet Games A/S in September 2021 having most recently served as
EMEA General Manager and VP of Sales and Operations at Skybound Entertainment. I arrived at 5th Planet
Games with over 25 years’ experience in the European Video Games Market, my work largely focused on sales,
distribution, and licensing.
With regard to the 2021 financial results; whilst I am obviously disappointed to report another year of loss-mak-
ing operations, overall, I feel extremely positive about the business and will outline the reasons for this positive
outlook here.
Reducing costs and re-focusing our efforts - after a detailed internal review, the decision was made in late Sep-
tember 2021 to close our studio in Berlin. This decision sees us reduce the operating costs of the business to
historically low levels and allows us to focus on developing a more compelling pipeline of content, not just fo-
cused on mobile, but for all available games’ platforms globally. I am particularly pleased to report that all the
employees of the Berlin studio were able to secure new positions without delay.
Completing our investment agreement with Skybound Games Studios– in early September we were able to an-
nounce the closing of our investment agreement with Skybound Entertainment. This agreement not only brings
significant new investment into the business, it delivers two proven, world-class IPs in the form of Before Your
Eyes and the global hit The Walking Dead, but just as importantly it brings experienced and talented new board
members into 5th Planet Games in Jon Goldman and David Alpert. 2022 will also see the next two tranches of
Skybound’s cash investment into 5th Planet Games which will total around USD 4,500,000 or DKK 29,000,000.
The performance of our back catalogue and our first new game – we continue to proactively manage our exist-
ing back catalogue of mobile games, and indeed secured new distribution agreements for several titles before
the close of 2021; our mobile back catalogue continues to make a profitable contribution to the business and in
Hugo we have another IP that continues to attract attention from new licensing and distribution partners. The
first live game to come out of the agreement with Skybound, Before Your Eyes, continues to win critical acclaim,
sales are ahead of forecast, and we have exciting new distribution agreements currently being closed.
Building a compelling pipeline of new publishing opportunities – in conjunction with the team at Skybound
Games Studios we have already built a compelling pipeline of new potential publishing opportunities and have
been working hard to close these opportunities as soon as possible; these new opportunities cover a range of
different game genres and platforms, but they are all under-pinned by quality and have been validated by a
proven and experienced evaluation and production team. I genuinely look forward to announcing details of
these publishing opportunities in the coming weeks, months, and years; collectively, they are truly transforma-
tional for our business.
So, in summary, my positive outlook comes from the work that myself, the board, and the management team
have done in late 2021, and starting 2022 with costs at an all-time low, a strong cash position, profitable prod-
ucts in the market and some truly exciting opportunities ahead of us.
Yours sincerely
Mark Stanger – Interim CEO, 5th Planet Games A/S, 4 April 2022.
Management’s review
5
BUSINESS DEVELOPMENT
In 2021 it was decided to stop all further development on the Viking game, close down the Berlin office, and
stop all further development on the new Tintin and Lego games.
Following the investment agreement with Skybound Games Studio a co-publishing agreement on the new game
Before Your Eyes now is a part of the game portfolio and we continue to focus on that, plus the back catalogue
of mobile content already deployed.
OUTLOOK
Following the investment agreement with Skybound Games Studio we expect significant increase in revenue
and improvement in EBITDA. Revenue is estimated to increase to a level of DKK 10-20m in 2022 while the
EBITDA is expected to increase to a level of DKK-5-1m.
The Company has entered into investment agreement with Skybound which for 2022 and 2023 can have some
significant impact on financial income and cost. Therefore, the company cannot estimate the net result for 2022.
Reference is made to “Accounting impact FY 2022-2023 of the Skybound investment agreement” on page 7.
FINANCIAL REVIEW
It has been a year with focus on capital structure and cost control. The capital structure for the company has
been secured with general meeting approval on 7 September 2021 of the investment agreement with Skybound
Games Studios. The cost control has been secured by the close of the development activities in the Berlin of-
fice.
Skybound investment agreement:
The investment agreement with Skybound Games Studios secures an investment of around USD 10.5m over
two years against an ownership of 58.8% (all else being equivalent).
The details from the investment agreement with Skybound Games Studios was announced on 10
August 2021
(approved on general meeting on 7 September 2021) and the main elements are:
Principal Investment Structure – NOK 92,515,500 (equivalent to USD 10.5 million)
The investment structure as set out in the investment agreement, which is contingent on the approval of the
transaction by 5th Planet Games’ shareholders at the general meeting (as defined below) and certain other con-
ditions, will take place in the following four tranches over up to a two-year period (each, a "Tranche"):
- Tranche 1 subscription: Shortly after the eneral meeting, Skybound Games will subscribe for 21,677,765
shares of nominal DKK 0.05 at a subscription price of NOK 0.60968, total NOK 13,216,500 (equivalent to
USD 1,500,000) against cash payment. Tranche 1 has been executed.
- Tranche 2 subscription: No later than 12 May 2022, Skybound Games will subscribe for 36,129,608 shares
of nominal DKK 0.05 at a subscription price of NOK 0.60968, total NOK 22,027,500 (equivalent to USD
2,000,000) against cash payment.
- Tranche 3 subscription: No later than 51 weeks after the general meeting, Skybound Games will subscribe
for 43,355,530 shares of nominal DKK 0.05 at a subscription price of NOK 0.60968, total NOK 26,433,000
(equivalent to USD 3,500,000) against cash payment.
- Tranche 4 subscription and exercise: At the general meeting, Skybound Games will subscribe for 50,581,452
warrants, each warrant entitling Skybound Games to subscribe for 1 share of nominal DKK 0.05, against an
exercise price of NOK 0.60968, total NOK 30,838,500 (equivalent to USD 3,500,000). Skybound Games has
contractually committed to exercising these warrants for a cash payment within 24 months of the general
meeting.
Management’s review
6
Immediately following the general meeting and the completion of the Tranche 1 subscription, the total number of
issued shares in 5th Planet Games is 127,995,975 and Skybound Games holds 21,677,765 shares in 5th Planet
Games, which is equivalent to 16.94% of the outstanding and issued share capital of 5th Planet Games. This is
also status a per 31 December 2021.
After completion of Tranches 1-4, the total number of shares in 5th Planet Games will, all else being equal, be
258,062,565 and Skybound Games will have subscribed for 151,744,355 shares in 5th Planet Games equiva-
lent to 58.8% of its outstanding and issued share capital, assuming no other changes to the share capital.
All else being equal, following completion of Tranche 2 as set out above, Skybound Games will pass the thresh-
old of 33% ownership as set out in the Danish Capital Markets Act and be obligated to make a mandatory offer
to all shareholders in 5th Planet Games for all issued shares in 5th Planet Games at the same price as in the
Tranche 2 subscription (NOK 0.60968 per share of nominal DKK 0.05).
Additional Warrants and Other Significant Items
Milestone Warrants
In addition to the Tranches described above, Skybound Games has the right to subscribe for 31,103,882 war-
rants, each warrant entitling Skybound Games to subscribe for one share of nominal DKK 0.05 at an exercise
price of NOK 0.90, total NOK 27,993,494 (equivalent to USD 3,177,107) when the following milestones are met
(the "Milestone Warrants"):
- 13.6% of the Milestone Warrants upon 5th Planet Games having a market value of USD 60,000,000 or more.
- 13.6% of the Milestone Warrants upon 5th Planet Games having a market value of USD 75,000,000 or more.
- 13.6% of the Milestone Warrants upon 5th Planet Games having a market value of USD 100,000,000 or
more.
- 13.6% of the Milestone Warrants upon 5th Planet Games having a market value of USD 125,000,000 or
more.
- 45.6% of the Milestone Warrants upon 5th Planet Games having a consolidated revenue of at least DKK
62,756,000 in any of the financial years 2022, 2023, or 2024.
Indemnification Warrants
As part of the investment agreement, 5th Planet Games has provided certain representations and warranties to
Skybound Games. Should Skybound Games suffer a loss due to certain specific warranties not being true, ac-
curate and not misleading, Skybound Games will, at its own discretion, have the option of being indemnified
from its loss by exercising up to 2,200,000 warrants (depending on the loss), each warrant entitling Skybound
Games to subscribe for 1 share of nominal DKK 0.05 at par value (the “Indemnification Warrants”).
Warrant Pool
As part of the transactions contemplated by the investment agreement, the creation of a new warrant pool of
22,621,005 warrants was also decided. Each warrant entitles the holder to subscribe for 1 share of nominal
DKK 0.05, with the exercise price to be decided by the board of directors, which shall generally be equal to the
market value at the time of issuance, other than for warrants issued to employees of the Company as part of a
general incentive program for which the exercise price under certain circumstances may be below the market
value. The warrant pool will be reserved for the board of directors to grant to employees, management, board
members, and consultants.
After completion of all transactions contemplated by the investment agreement, as summarized above, 5th
Planet Games anticipates that there will be a total of 258,062,565 shares and 78,424,887 warrants issued in 5th
Planet Games (excluding the 2,200,000 Indemnification Warrants), assuming no other changes to the share
capital.
Co-Publishing Agreements
Subject to the necessary approvals on the general meeting, the satisfaction of all other conditions and the clos-
ing of the Tranche 1 investment contemplated by the investment agreement, Skybound Games and 5th Planet
Games will enter into agreements granting 5th Planet Games certain co-publishing rights to The Walking Dead
and to Before Your Eyes in exchange for a co-funding commitment. More information about this to follow after
the general meeting.
Management’s review
7
The Skybound investment agreement secures the capital structure for the company and supports the strategy
and long-term value creation for the company.
Accounting impact FY 2021 of the Skybound investment agreement:
Principal Investment Structure:
Tranche 1 has been executed and has been treated as capital increase less cost connected to the capital in-
crease and the agreement.
Tranche 2-4 is qualified as a derivative financial assets/liability that is calculated on basis of the actual currency
rate NOK/DKK and the share price for companies shares until the amount is received.
Milestone warrants and co-publishing agreements
Milestone warrants are classified as payments for the right to enter into agreements of co-publishing rights of
The Walking Dead and Before Your Eyes. The value of the IP rights has been calculated using Monte Carlo
simulations. The total value has been calculated to DKK 6.9m.
Indemnification Warrants
The indemnifications warrants are not considered to be a significant risk for the company and are therefore not
recognized as an obligation in the report.
Accounting impact FY 2022-2023 of the Skybound investment agreement:
In the investment agreement between 5th Planet Games and Skybound, it has been agreed with regard to invest-
ment Tranches 1-4 that Skybound shall pay a fixed price of NOK 0.61 per share, which is settled in US dollars
based on the official exchange rate at the time of each investment. As 5th Planet Games' functional currency is
Danish kroner, this structure entails a currency risk from an accounting perspective to Norwegian kroner for future
investment tranches (Tranche 2-4). From an accounting perspective, 5th Planet Games must assess the fair value
of the future investment Tranches (Tranche 2-4) considering the development in the share price of the 5th Planet
Games share as well as the DKK/NOK exchange rate. As the share price, in particular, may fluctuate significantly,
this calculation may result in very significant fluctuations to the results before finance and shareholders' equity of
5
th
Planet Games in connection with financial statements prepared prior to the completion of the last investment
tranche (Tranche 4) in September 2023. These significant fluctuations from an accounting perspective will be
leveled in later periods and no later than in the first financial statements after September 2023.
Comments to the result of the year:
The result for 2021 has been disappointing.
5th Planet Games did not launch any games in 2021. Development of Vikings was stopped in the summer of
2021 after disappointing soft launch and the Berlin development studio was closed down in the autumn of 2021
where further development of Tintin and Lego was also stopped.
As a consequence of the studio closure, the result from the discontinuing operations is classified on its own line
with a net loss according to IFRS rules. The 2020 figures have been reclassified in the same way. In note 28 a
statement showing both continued, discontinued, and total income is specified.
Revenue in 2021 from continued operations was DKK 4.8m, up from DKK 2.8m in 2020 (continued operations).
Revenue was primarily generated from license income - casino games and royalties from Before Your Eyes.
Research and development costs DKK 4.0m from continued operations compared with DKK 1.2m (continued
operations) includes both internal and external costs related to the development of Vikings and Before Your
Eyes.
Other external expenses from continued operations, which includes administrative salaries, administrative ex-
penses, listing-related costs, etc. accounted for DKK 10.2m in 2021 compared with DKK 6.7m in 2020 (contin-
ued operation). The increase is primary due to increased cost regarding salaries, share based salaries and ex-
ternal consulting fees.
Management’s review
8
Financial performance not satisfactory
EBITDA before special items for continued operations was a loss of DKK 9.5m in 2021 (2020: DKK -5.6m for
continuing operations). The increased loss was due to increase in costs.
Special Items was a loss of DKK 5.3m. The amount includes an impairment loss of DKK 4.7m regarding co-pro-
ductions rights received in connection with Skybound investment agreement. Reference is made to note 12.
Depreciation and amortization for 2021 was DKK 0.3m (2020: DKK 0.0m for continued operations).
Net financials were a profit of DKK 8.4m (2020: DKK -0.7m for continued operations). The financial profit was
mainly exchange rate profit for NOK and USD DKK 0.8m and calculated income from derivative financials in-
struments of DKK 7.7m. The amount DKK 7.7m is the fair calculated value of Tranche 2-4 from the investment
agreement with Skybound Games Studios. For further explanation reference, please see note 16.
In 2021, 5th Planet Games incurred a loss before tax of DKK 6.7m (2020: loss of DKK 6.3m for continued oper-
ations) and a loss from discontinued operations of DKK 9.6 (2020m: loss of DKK10.1m for discontinued opera-
tions.
For total operations, the loss before tax was the same DKK 16.3m (2020: DKK 16.4m including discontinued
operations) was incurred.
A net loss for total operations for the year of DKK 16.3m was recorded (2020: net loss of DKK 14.2m including
discontinued operations).
Total assets increased in 2021
Total assets amounted to DKK 28.4m as of 31 December 2021, a DKK 1.0m decrease compared to 31 Decem-
ber 2020 due to decrease of cash position by DKK 10.1m, and a new asset “derivative financials instrument” of
DKK 7.7m. The amount is the calculated fair value of Tranche 2-4 from the Investment agreement with Sky-
bound Game Studios. The amount represents the value the agreement would have had as per 31 December
2021 if Skybound should have subscribed at the exchange rate NOK/DKK and the company’s share price as
per 31 December 2021.
For further explanation reference, please see note 16.
Cash flow negative due to loss of the year
In 2021, the cash flow from operating activities totaled a loss of DKK 17.4m (2020: loss of DKK 7.5m). Cash
flows from financing activities totaled DKK 13.7m (2020: DKK 25.0m). The cash position as of 31 December
2021 amounted to DKK 13.6m (2020: DKK 23.7m).
Equity
The group’s equity as of 31 December 2021 was DKK 23.4m (2020: DKK 20.9m). The equity ratio at year-end
was 85% (2020: 76%).
Capital increases issued in 2021
In September 2021, Skybound Games Studios Inc, invested DKK 9.6m (NOK 13.2m) in the company and
21,677,765 new shares were issued to Skybound. Costs related the investment and prospectus etc. amounted
to DKK 2.0m
Management’s review
9
KEY FIGURES
RISK MANAGEMENT IN PRACTICE
Risk management is a high priority at 5th Planet Games. The Board of Directors and the management monitor
the company’s risk factors closely to minimize risk exposure. This ensures quick reaction time if conditions
change. A risk assessment is made prior to every major decision.
RISKS AND UNCERTAINTIES
The most important risks facing 5th Planet Games are related to market/commercial risk and development risk.
However, where the conventional game development is associated with large risks due to long development
periods with substantial associated costs and a high risk of failure, 5th Planet Games is focused on developing
and utilizing modular code bases in order to reduce the development time and risk of failure significantly.
• Financial risk
5th Planet Games is in a development stage and does not yet generate positive cash flows. Therefore,
the company relies on having credit facilities and/or on fresh capital from its owners.
• Market/commercial risk
For every launch of a new game there is a risk that it will not generate satisfactory downloads and reve-
nue, which can lead to a decision to discontinue the game or stop updating it. In such case, the amount
spent on development costs and other costs will be written down with a negative impact on the financial
results for the period. To reduce that risk, all new games run a soft launch period in a limited market to
test user response and use it to optimize the game.
• Product development risk
When developing new products there is a risk that the product will not be finished because of changes in
market sentiment, for example. In such case, the amount spent on the project will be lost.
• Foreign currency risk
5th Planet Games’ revenue, costs and cash position is for a significant part related to USD and a signifi-
cant change in the DKK/USD exchange rate could result in loss related hereto.
Also, in the investment agreement between 5th Planet Games and Skybound, it has been agreed that
investment Tranches 1-4 that Skybound must pay a fixed price of NOK 0.61 per share, which is settled in
US dollars based on the official exchange rate at the time of each investment. As 5th Planet Games'
IFRS IFRS IFRS IFRS IFRS
DKK ´000 2021 2020 2019 2018 2017
*Revenue 4,809 2,848 2,180 3,855 3,618
*Gross profit 4,688 2,663 2,044 3,550 3,457
*Loss before special items (EBITDA) -9,465 -5,580 -17,814 -9,908 -18,834
*Operating profit/loss (EBIT) -15,066 -5,580 -18,391 -22,830 -25,976
*Net Financials 8,385 -713 -126 65 -456
Loss from discontinued operations -9,651 -8,248 -15,866 -20,779 -
Net loss for the year -16,254 -14,249 -32,223 -43,544 -23,489
Total assets 28,359 27,380 13,267 37,331 70,188
Investments other equipment 0 34 149 426 301
Capitalized and expensed development costs 11,142 18,381 18,381 17,184 11,066
Equity 23,461 20,889 6,972 26,637 56,028
*Figures for 2021,2020, 2019 and 2018 are only for continued operations.
Management’s review
10
functional currency is DKK, this structure entails a currency risk from an accounting perspective to NOK
for future investment tranches (Tranche 2-4).
The financial impact from currency fluctuations can be significant since management is not hedging the
currency risk.
• Disputes
The company may from time to time be involved in disputes, including disputes regarding intellectual
property rights, all with ensuing risks and costs, which could have a material adverse effect on 5th Planet
Games’ business, financial condition, and results of operations.
• Partnership risk
5th Planet Games enters into various agreements with celebrities and IP holders about developing and
launching games. If such celebrities and IP holders lose popularity with the general public, revenue may
fall dramatically. To minimize that risk, we carefully evaluate the celebrity persons involved before enter-
ing into any agreement.
• Coronavirus/Covid-19 risk
The consequence of the serious virus spreading worldwide is unpredictable at present but the board
does not for now expect it to have substantial influence on the company. However, derivative effects of
the global crisis can have unforeseen consequences for the company.
For further information on risk, see the section “Risk factors” on pp. 8-9 and 14-16 of the prospectus dated 11
November 2021.
Management’s review
11
CORPORATE GOVERNANCE
The Board of Directors serves as a qualified dialogue partner for the daily management. The Board of Directors
combines key industry insights, important business- and financial skills as well as many years of management
experience.
Environment impact
5th Planet Games products and co-production products are nonphysical products as all products are online prod-
ucts and most meetings are held online to reduce travel activities.
Social responsibility
Diversity policy
Data policy
Corporate governance report
5th Planet Games’ Board of Directors and Management continually work with corporate governance principles to
ensure that the management structure and control systems are appropriate and satisfactory. 5th Planet Games
2021 statutory report on corporate governance, cf. the Danish Financial Statements Act, Section 107b, is available
on 5th Planet Games website at https://www.5thplanetgames.com/investors/documents/ or direct link
https://www.5thplanetgames.com/wp-content/uploads/2022/03/CG-rapport-2021-1.pdf
The Company complies with 22 of the 39 Danish recommendations on corporate governance
https://corporategovernance.dk/
Remuneration report
At the General Meeting on 26 April 2022 the Board of Directors will propose approval of polices for Company
remuneration, but until then the responsibility to propose such remuneration has lied with the Chairman of the
Board.
Remuneration – Board of Directors
The remuneration of members of the Board of Directors is, due to the current size and structure of the company,
comprised of direct payments and warrants.
Management’s review
12
Remuneration – Executive Management
The remuneration of the Executive Management teams is following the recommendation by the Chairman of the
Board of Directors. The current remuneration program for the Executive Management team is comprised of both
a monetary remuneration as well as a pool of warrants.
Remuneration of the Board of Directors
DKK ´000 Joined Resigned
Fixed
base
fee
Share-
based
payments
Total
Fixed
base
fee
Share-
based
payments
Total
Fixed
base
fee
Share-
based
payments
Total
*Jon Edward Goldman 07-09-2021 12 0 12 0 0 0 0 0 0
Henrik Nielsen 27-11-2019 38 389 427 0 0 0 0 0 0
David Alpert 07-09-2021 12 0 12 0 0 0 0 0 0
Søren Kokbøl 27-04-2021 38 32 70 0 0 0 0 0 0
Kim Friland 27-04-2021 07-09-2021 50 48 98 0 0 0 0 0 0
Bjarke Ingemann Finlov 27-04-2021 07-09-2021 25 0 25 0 0 0 0 0 0
Peter Ekman 27-11-2019 07-09-2021 25 0 25 0 0 0 0 0 0
Caspar Rose 06-02-2015 27-04-2021 0 15 15 30 107 137 15 163 178
Jesper Theill Eriksen 24-04-2018 27-11-2019 0 0 0 0 0 0 15 58 73
Kevin John Terkelsen 21-12-2017 27-11-2019 0 0 0 0 0 0 15 58 73
Total 200 484 684 30 107 137 45 279 324
*Chairman of the Board
2021
2020
2019
Remuneration of Executive Management
DKK ´000 Joined Resigned
Fixed
base
fee
Share-
based
payments
Total
Fixed
base
fee
Share-
based
payments
Total
Fixed
base
fee
Share-
based
payments
Total
Mark Stanger, CEO 07-09-2021 372 0 372 0 0 0 0 0 0
Henrik Nielsen, CEO
1
29-09-2017 22-01-2021 40 113 153 480 2,119 2,599 482 4,220 4,702
Caspar Rose, CEO
2
22-01-2021 07-09-2021 350 224 574 0 0 0 0 0 0
Anders Egholdt Søgard, CFO 01-02-2018 31-12-2019 0 0 0 0 0 0 752 260 1,012
Total 762 337 1,099 480 2,119 2,599 1,234 4,480 5,714
1. As of 22/1 2021 Henrik Nielsen retired as CEO from 5th Planet Games A/S. The remuneration until January 2021 is included in the above table whereas the severance payment 1.965 TDKK
(Fixed base fee 213 TDKK and Share based Payments 982 TDKK) is not included.
2. As of 7/9 2021 Caspar Rose retired as CEO from 5th Planet Games A/S. The remuneration until September 2021 is included in the above table, whereas the severance payment 337 TDKK
(Fixed base fee 150 TDKK and Share based Payments 187 TDKK) is not included.
2021
2020
2019
Management’s review
13
MANAGEMENT
Company Board of Directors
Jon Goldman (m)
(1965)
Chairman of the Board
Position:
Chairman of the Board
Skybound Group
Educational background:
Harvard University
Kyoto University
UCLA Anderson School of
Management
Competencies:
Financial strategy
Capital Markets
Current Directorships:
none
Member of the boards of:
Skybound Games Studios and
Group companies
LiveLike
Free Range
WAVEXR, INC.
FLAVOURWORKS
Shares in 5th Planet Games
A/S:
0 shares
Warrants in 5th Planet
Games A/S:
0 warrants
Independent Board Member:
No
Election Term:
1 year
Board member since:
7 September 2021
Henrik Nielsen (m)
(1967)
Board Member
Position:
CEO of HNI Trading ApS
Educational background:
M.Sc. in Marketing and Strat-
egy from the Copenhagen
Business School
Competencies:
Strategy and Finance
Current Directorships:
HNI TRADING ApS
Member of the boards of:
NIL TECHNOLOGY ApS
Ejendomsselskabet Green
ApS and Holdingselskabet
RED ApS
Shares in 5th Planet Games
A/S:
4,619,262 shares
Warrants in 5th Planet
Games A/S:
13,101,821 warrants
Independent Board Member:
Yes
Election Term:
1 year
Board member since:
27 November 2019
David Alpert (m)
(1975)
Board Member
Position:
CEO of Skybound Group
Educational background:
Havard University
New York University Law
School
Competencies:
Digital Entertainment
Strategic Partnerships
Company Management
Current Directorships:
Skybound Games Studios and
certain of its subsidiaries
Member of the boards of:
Skybound Games Studios and
Group companies
Shares in 5th Planet Games
A/S:
0 shares
Warrants in 5th Planet
Games A/S:
0 warrants
Independent Board Member:
Yes
Election Term:
1 year
Board member since:
7 September 2021
Søren Kokbøl Jensen (m)
(1963)
Board Member
Position:
CEO of Gotskills ApS
Educational background:
N/A
Competencies:
Entrepreneurship
Digital Media
Business strategy
Current Directorships:
BOOTIDE ApS
Gotskills ApS
ECLIPSE HOLDING ApS
Member of the boards of:
Level UP Garage ApS
HYDR ESPORT ApS
Shares in 5th Planet Games
A/S:
0 shares
Warrants in 5th Planet
Games A/S:
240,000 warrants
Independent Board Member:
Yes
Election Term:
1 year
Board member since:
27 April 2021
Management’s review
14
Executive Management
Mark Stanger (m)
(1967)
CEO
Employed since September 2021
Educational background:
Economics and Business – Wyggeston
and Queen Elizabeth College,
Leicester.
Chairman of the board of:
n/a
Member of the boards of:
Skybound Games UK Limited
Skybound Games Europe BV
Shares in 5th Planet Games A/S:
0 shares
Warrants in 5th Planet Games A/S:
0 warrants
Management’s review
15
SHAREHOLDER INFORMATION
An investment in 5th Planet Games is an investment in games - a market in continuous strong growth.
5th Planet Games shares
The official share price as of 31 December 2021 was NOK 0.89 with a market capitalization of NOK 113.7m (DKK
85.0m). Total turnover of shares in 2021 was 246 million with a total transaction value of NOK 251m.
Share Capital
The nominal share capital of 5th Planet Games as of 31 December 2021 was DKK 6,399,798,80, consisting of
127,995,975 shares of DKK 0.05 each. 5th Planet Games has only one share class. The Board of Directors and
the Executive Management regularly assess whether the share capital and share structures are aligned with the
interests of the shareholders and the company.
Shareholding structure
5th Planet Games shareholders are primarily residents of Denmark, Norway, and the United States of America.
As of 31 December 2021, only Skybound Game Studios Inc. holds with their 21,677,765 shares (16.9%) more
than 5% of the share capital or the votes.
As of 31 December 2021, members of the Board of Directors and their related parties held 26,297,027 shares
(nominal value DKK 1,614,851), corresponding to 20,6% of the share capital and a market value of DKK 17.5m.
As per 31 December 2021 members of management held 0 shares.
Annual general meeting
The Annual General Meeting will be held on 26 April 2022 at 13:00 at Charlottehaven, Hjørringgade 12C, 2100
Copenhagen Ø, Denmark.
Dividend and allocation of profit
The Board of Directors recommends to the annual general meeting that no dividend be declared in respect of the
2021 financial year. The Board of Directors recommends to the shareholders that the loss for the year of DKK
16.3m, to be transferred to retained earnings.
Investor queries
Any questions or comments from shareholders, analysts, and other stakeholders should be addressed to CEO
Mark Stanger via the investor e-mail: ir@5thplanetgames.com
Master Data:
Stock Exchange: EURONEXT EXPAND OSLO
Sector: Communication
ISIN Code: DK0060945467
Symbol: 5PG
LEI Code: 213800MC2SGVSIBN7J53
Share capital DKK: 6,399,798.80
Denomination: DKK 0.05
No. of Shares: 127,995,975
Negotiable instruments: Yes
Voting restrictions: No
Management’s review
16
Information in accordance with the Danish Financial Statements Act, Section 107 a
Adoption of amendments to the Articles of Association, dissolution of the company, merger, or demerger requires
a resolution adopted by at least a two-thirds majority of the votes cast as well as of the share capital represented
at the general meeting.
The Board of Directors consists of from three to seven members elected each year at the annual general meeting
of the company for the period until the next annual general meeting. Board members are eligible for re-election.
The Board of Directors appoints its own chairman and vice chairman.
The present 5th Planet Games’ Board of Directors consists of four members headed by Jon Goldman as chair-
man. The present members of the Board of Directors are presented on page 13.
Going forward, two of the Members of the Board of Directors are independent of the company.
The Board of Directors proposes that the members of the Board of Directors for the year 2022 shall receive a
fixed remuneration of DKK 50,000 for all board members.
For 2022 and 2023 however, it will be proposed at the general meeting on 26 April 2022 that Jon Goldman, Da-
vid Alpert, and Henrik Nielsen shall receive an additional fee of DKK 345,000 (equal to USD 52,500) due to sig-
nificant extra work to develop the business.
Furthermore, it is proposed, that the Board of Directors in the future may be granted warrants, exercisable at
market value in the Company in combination with the above-mentioned fixed remuneration.
Until 3 April 2034 (AOA 2.2 – Warrants for employed etc.), the Board of Directors is authorized to increase the
company’s share capital in one or more issues without pre-emptive rights for the existing shareholders of the
company by up to a total nominal amount of DKK 1,300,000 against cash. The current authorization amount is
DKK 1,235,000.
Until 6 September 2023 (AOA 2.3 – investment warrants Skybound), the Board of Directors is authorized to in-
crease the company’s share capital in one issue without pre-emptive rights for the existing shareholders of the
company with DKK 2,529,072,60 against issue of 50,581,452 shares to an exercise price of NOK 0.60968 against
cash payment.
Without any time, limitation (AOA 2.4 – milestone warrants Skybound), the Board of Directors is authorized to
increase the company’s share capital in one issue without pre-emptive rights for the existing shareholders of the
company with DKK 1,555,194.10 against issue of 31,103,882 shares to an exercise price of NOK 0.90 against
cash payment if certain milestones have been achieved.
Without any time limitation (AOA 2.5 – indemnification warrants Skybound), the Board of Directors is authorized
to increase the company’s share capital in one issue without pre-emptive rights for the existing shareholders of
the company with DKK 110,000 against issue of 2,200,000 shares to an exercise price of DKK 0.05.
Until 1 July 2036 (AOA 2.6 – Warrants for employed etc.), the Board of Directors is authorized to increase the
company’s share capital in one or more issues without pre-emptive rights for the existing shareholders of the
company by up to a total nominal amount of DKK 1,131,050.25 against cash.
Until 3 April 2024 (AOA 2.6), the Board of Directors is authorized to increase the company’s share capital in one
or more issues without pre-emptive rights for the existing shareholders of the company by up to a total nominal
amount of DKK 3,500,000 against cash or non-cash consideration or by conversion of debt. Such capital increase
shall take place at market price. The current authorization amount is DKK 2,525,288.
Until 1 June 2025 (AOA 2.11), the Board of Directors is authorized to increase the company’s share capital in one
or more issues with pre-emptive rights for the existing shareholders of the company by up to a total nominal
amount of DKK 10,000,000 against cash. Such capital increase can take place under market price. The current
authorization amount is DKK 7,750,000.
The group has not entered into contracts with change of control clauses
Statement by the Board of Directors and the Executive Management on the annual report
17
Copenhagen, 4 April 2022
Executive Management
Mark Stanger
Board of Directors:
Jon Goldman
Chairman Henrik Nielsen
David Albert Søren Kokbøl Jensen
Independent Auditors Report
18
Our opinion
Basis for opinion
Key audit matters
Independent Auditors Report
19
Statement on management's review
Management’s responsibilities for the financial statements
Independent Auditors Report
20
Auditor's responsibilities for the audit of the financial statements
Independent Auditors Report
21
Report on compliance with the ESEF Regulation
Copenhagen, 4 April 2022
Grant Thornton
Statsautoriseret Revisionspartnerselskab
CVR-nr. 34 20 99 36
Martin Bomholtz Mathias John Vintersbølle
State-Authorized Public Accountant State-Authorized Public Accountant
MNE-nr 34117 MNE-nr. 47837
Consolidated statement of financial position
22
DKK´000 Note 2021 2020
Revenue 4 4,809 2,848
Costs of sales 121 185
Gross Profit 4,688 2,663
Research and development costs 5 3,998 1,289
Marketing expenses 0 277
Other expenses 5 10,155 6,677
Loss before special items, deprecation and amortisation (EBITDA) -9,465 -5,580
Special items 7 5,262 0
Depreciation and amortisation 12,13,14 339 0
Operating loss (EBIT) -15,066 -5,580
Financial income 7 8,483 117
Financial expenses 9 98 830
Loss before tax -6,681 -6,293
Tax on loss for the year 10 -78
-292
Loss for the year from continuing operations -6,603 -6,001
Loss for the year from discontinued operations 28 -9,651 -8,248
Loss for the year -16,254 -14,249
Other comprehensive income 0 -12
Comprehensive income -16,254 -14,261
Distribution of comprehensive income:
Parent company´s shareholders -16,254 -14,249
Non-controlling interests 0 -12
Total -16,254 -14,261
Basic earnings per share:
From Continued operations (DKK) 11 -0.058 -0.078
From discontinued operations (DKK) 11 -0.069 -0.107
Total DKK) -0.127 -0.185
Diluted earnings per share:
From Continued operations (DKK) 11 -0.058 -0.078
From discontinued operations (DKK) 11 -0.069 -0.107
Total DKK) -0.127 -0.185
Consolidated statement of financial position
23
ASSETS:
DKK´000 Note 2021 2020
Non-current assets
Acquired rights 12 1,814 0
Completed development projects 12 0 0
Plant and equipment 13 0 95
Right-of-use assets 14 0 733
Total non-current assets 1,814 828
Current Assets:
Trade receivables 15 1,924 633
Income tax receivable 10 52 2,196
Other receivables 2,911 57
Accrual expenses 322 0
Derivative financials instruments 16 7,729 0
Cash 13,607 23,666
Total current assets 26,545 26,552
Total assets 28,359 27,380
Consolidated statement of financial position
24
EQUITY AND LIABILITIES:
DKK´000 Note 2021 2020
Equity:
Share capital 6,400 5,316
Reserves 0 0
Retained earnings 17,061 15,573
Total Equity 17 23,461 20,889
Non-current liabilities
Lease liabilities 14 0 532
Other payables 17 930 1,488
Total non-current liabilities 930 2,020
Current liabilities
Lease liabilities 14 0 251
Related parties 0 0
Received prepayments 0 86
Accrual income 572 0
Trade payables 1,746 1,374
Other payables 18 1,650 2,760
Total current liabilities 3,968 4,471
Total Liabilities 4,898 6,491
Total equity and liabilities 28,359 27,380
Statement of changes in equity
25
Other
DKK´000 reserves
Equity as at 01.01.2021 5,316 0 0 0 15,573 20,889
Net Loss -16,254 -16,254
Other comprehensive income 0 0 0
Comprehensive income 0 0 0 0 -16,254 -16,254
Capital increase 1,084 8,484 9,568
Costs related to capital increase -1,995 -1,995
Share-based payments 11,253 11,253
Transfer of reserves -6,489 6,489 0
Transactions with owners 1,084 0 0 0 17,742 18,826
Equity as at 31.12.2021 6,400 0 0 0 17,061 23,461
Equity as at 01.01.2020 2,687 0 0 0 4,285 6,972
Net Loss -14,249 -14,249
Other comprehensive income 0 -12 -12
Comprehensive income 0 0 0 0 -14,261 -14,261
Capital increases by:
Loan conversation 379 -379 0
Right Issue 2,250 28,962 31,212
Convertible loans issued 1,675 1,675
Convertible loans repaid -4,405 -4,405
Costs related to capital increase -3,292 -3,292
Share-based payment 2,988 2,988
Transfer of reserves -28,962 3,109 3,292 22,561 0
Transactions with owners 2,629 0 0 0 25,549 28,178
Equity as at 31.12.2020 5,316 0 0 0 15,573 20,889
Total equity
Reserves
Share
capital
Share
premium
Conver-
tible loan
Retained
earnings
Consolidated cash flow statement
26
DKK´000 Note 2021 2020
Loss before tax -16,332 -16,383
Depreciation, amortisation and impairment losses 5,364 309
Share-based payments 4,360 2,988
Financial income, reversed -8,484 -117
Financial expenses, reversed 135 894
Change in working capital -4,523 673
Operating cash flow -19,480 -11,636
Financial income, received 0 2
Financial expenses, paid -135 -894
Income tax received 2,222 5,013
Cash flow generated from operations -17,393 -7,515
Purchase of equipment 0 -34
Sale of right of use assests 544 0
Purchase of IP rights -6,895 0
Cash flow from investing activities -6,351 -34
Proceeds from cash capital increase 7,573 27,920
Proceeds convertible loan 0 1,675
Repayment convertible loan 0 -4,405
Purchase of IP rights financed by issue of warrants 6,895 0
Lease liabilities, repayment -783 -235
Cash flow from financing activities 13,685 24,955
Total cash flow for the period -10,059 17,406
Cash, beginning of period 23,666 6,272
Net foreign exchange difference 0 -12
Cash, end of period 13,607 23,666
Consolidated notes
27
1. Accounting policies
2. Significant accounting estimates and judgments
3. Capital resources
4. Revenue
5. Staff costs
6. Share-based payments
7. Special Items
8. Financial income
9. Financial expenses
10. Tax
11. Earnings per share
12. Intangible assets
13. Other equipment
14. Right-of-use assets and lease liabilities
15. Trade receivables
16. Derivative financials instruments
17. Equity
18. Other payables
19. Contingent liabilities
20. Security provided
21. Financial risks and financial instruments
22. Financial assets and liabilities
23. Fair value measurement of financial instruments
24. Consolidated companies and related parties
25. Fee to parent company auditors appointed at the annual general meeting
26. Events occurring after the balance sheet date
27. Adoption of the annual report for publication
28. Discontinued operations
Consolidated notes
28
1. Accounting policies
5th Planet Games A/S is a limited liability compa ny domiciled in De nmark. The consolidated financial state-
ments for 2021 have been prepared in accordance with International Financial Reporting Standards (IFRS) as
approved by the EU and additional Danish disclosure requirements.
Danish kroner (DKK) is the group's presentation currency and the functional currency of the parent company.
The consolidated financial statements are presented in Danish kroner (DKK) rounded off to the nearest DKK
1,000.
Implementation of new and revised standards and interpretations
The IASB has issued new standards and revisions to existing standards and new interpretations that are man-
datory for accounting periods commencing on or after 1 January 2020. The implementation of these new or
revised standards and interpretations has not had any significant impact on the net loss for the year or the
financial statement.
Principal accounting policies set out below have been consistently applied in the preparation of the
consolidated financial statements for all the years presented.
Earnings per share
Basic earnings per share are calculated as the net result for the period that accrues to the parent company´s
shares divided by the weighted average number of ordinary shares outstanding.
Diluted earnings per share are calculated as the net result for the period that accrues to the parent company´s
shares divided by the weighted average number of ordinary shares outstanding adjusted by the dilutive effect
of potential shares.
Segment reporting
No separate business areas or separate business units have been identified in connection with single games
or geographical markets. As a consequence, no segment reporting is made concerning business areas or
geographical areas. Assets located outside Denmark amounts to less than 10% of the group assets. Due to
materiality no segment reporting is made on geographical criteria.
Consolidated financial statements
The consolidated financial statements comprise 5th Planet Games A/S (parent company) and the companies
(subsidiaries) controlled by the parent company. A company is regarded as controlled by the parent company
when the parent company is exposed or entitled to variable returns on its involvement in the company and has
the ability to affect those returns through its power over the company.
The consolidated financial statements are prepared based on the financial statements of 5th Planet Games
A/S and its subsidiaries. The consolidated financial statements are prepared by combining items of a uniform
nature calculated in accordance with the group's accounting policies, eliminating intercompany income and
expenditure, intercompany balances, and dividends as well as gains and losses on transactions between the
consolidated companies.
Business combinations
Newly acquired or newly-founded companies are recognized in the consolidated financial statements as from
the time of acquisition and the time of foundation, respectively. The time of acquisition is the time at which
control of the company is actually obtained. Divested or discontinued companies are recognized in the con-
solidated statement of comprehensive income up until the time when control ceases.
When new companies are acquired and the group obtains control of an acquired company, it is recognized in
accordance with the acquisition method, according to which the newly acquired company's identifiable assets,
liabilities and contingent liabilities are measured at fair value at the date of acquisition.
The acquisition price of a company is the fair value of the price paid for the acquired company. Costs relating
to the acquisition are recognized in the income statement when paid.
Positive differences (goodwill) between the acquisition price of the acquired company on the one hand and the
fair value of the assets, liabilities and contingent liabilities acquired on the other are recognized as goodwill
and tested for impairment at least once a year.
Consolidated notes
29
Foreign currency translation
On initial recognition, transactions in currencies other than the functional currency of the individual company
are recognized at the exchange rate applicable at the transaction date. Receivables, payables, and other
monetary items denominated in foreign currency not settled at the balance sheet date are translated using the
exchange rate applicable at the balance sheet date.
Exchange rate differences between the exchange rate applicable at the transaction date and the exchange
rate at the date of payment and the balance sheet date, respectively, are recognized in the income statement
as financial income or financial expenses. Property, plant and equipment and intangible assets, inventories,
and other non-monetary assets purchased in foreign currency and measured based on historical cost are
translated at the exchange rate applicable at the transaction date.
Tax
Tax for the year, consisting of current tax and changes in deferred tax, is recognized in the income statement
at the portion attributable to tax on the profit or loss for the year, and directly in equity or in other comprehensive
income at the portion attributable to amounts recognized directly in equity or in other comprehensive income,
respectively.
Current tax payables and receivables are recognized in the balance sheet as tax computed on the basis of the
taxable income for the year and taxes paid or refunded.
Current tax for the year is computed based on the tax rules and tax rates applicable at the balance sheet date.
Deferred tax is recognized using the balance sheet liability method on the basis of all temporary differences
between the carrying amounts and tax bases of assets and liabilities, except for deferred tax on temporary
differences due to either initial recognition of goodwill or initial recognition of a transaction that is not a business
combination, and where the temporary difference ascertained at the time of initial recognition does not affect
either the tax result or the taxable income. The deferred tax is calculated based on the planned use of the
individual asset or settlement of the individual liability.
Deferred tax is measured by applying the tax rules and tax rates expected to be applicable when the deferred
tax is expected to crystallize as current tax. Any change in deferred tax as a result of changes in tax rules or
rates is recognized in the income statement unless the deferred tax is attributable to transactions that have
previously been recognized directly in equity or in other comprehensive income. In the latter case, the change
is recognized directly in equity or in other comprehensive income, respectively.
Deferred tax assets, including the tax base of tax losses allowed for carry forward, are recognized in the bal-
ance sheet at the expected realizable value, either through offsetting against deferred tax liabilities or as a net
tax asset for offsetting against future positive taxable incomes to the extent that there is convincing evidence
that sufficient taxable profit will be available against which the unused tax losses can be utilized. An assess-
ment is made at each balance sheet date of whether it is probable that sufficient taxable income will be gen-
erated in future to enable utilization of the deferred tax asset.
The group is subject to joint taxation. The current Danish income tax is allocated between the jointly taxed
companies in proportion to their taxable incomes.
Statement of comprehensive income
Revenue
Revenue from the sale of games and in-app purchases is recognized in the income statement if delivery has
taken place and the risk has passed to the purchaser before the balance sheet date, and if the revenue can
be determined reliably and is expected to be received. For sales of games and in-app purchases where deliv-
ery takes place via third parties (platform distribution partners), 5th Planet Games is the primary contractual
party for the users and fixes the prices. Sales of games and in-app purchases are consequently measured as
the fee paid by the user for the delivery, while costs for the third party are recognized under cost of sales.
Income from the provision of advertising services is recognized as revenue as the agreed services are pro-
vided. For sales of advertising services provided via third parties (platform distribution partners), 5th Planet
Games is the primary contractual party for the users and fixes the prices. Income from advertising services is
consequently measured exclusive of costs for such third parties.
Revenue is measured at the fair value of the fee received or receivable and is stated exclusive of VAT and
discounts.
Consolidated notes
30
Cost of sales
Cost of sales comprises commission paid to stores handling app sales, such as iTunes, Google Play, etc.
Gross profit
Gross profit comprises revenue deducted with commissions to stores, such as iTunes, Google Play, etc.
Research and development costs
Research and development costs comprise external research and development costs and internal staff costs
related to research and development activities that are not capitalized in the balance sheet.
Marketing expenses
Marketing expenses comprise expenses relating to marketing expenses and royalty expenses.
Other expenses
Other external expenses comprise expenses relating to administrative staff and other administrative expenses,
costs of premises, bad debts, operating leases, etc.
Special items
Special items comprise material non-recurring expenses. These items are presented separately because they
are treated as one-off occurrences.
Net financials
Net financials comprise interest income and interest expenses as well as realized and unrealized gains and
losses on transactions in foreign currency.
Amortization of capital losses and borrowing costs relating to financial liabilities is recognized on an ongoing
basis as part of interest expenses.
Share-based payments
Share-based payments of the group are equity-settled warrants granted to employees, for which an option
pricing model is used to estimate the fair value at grant date. That fair value is charged on a straight-line basis
as an expense in the consolidated statement of profit or loss over the period that the employee becomes
unconditionally entitled to the options (vesting period), with a corresponding increase in equity.
Equity is also increased by the proceeds received, as and when employees choose to exercise their options.
Balance sheet
Fair value
Fair values are categorized into different levels in a fair value hierarchy based on the degree to which the
inputs to the measurement are observable and the significance of the inputs to the fair value measurement in
its entirety:
• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for
identical assets or liabilities.
• Level 2 fair value measurements are those derived from inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived
from prices).
• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the
asset or liability that are not based on observable market data (unobservable inputs).
Acquired rights
On initial recognition, acquired rights is recognized and measured in the balance sheet at cost less accumu-
lated amortization and impairment losses. The amortization period is the expected useful lives for the IP rights
normally 2-5 years.
Development projects
Development costs comprise staff costs and fees for sub-suppliers directly attributable to the development of
new games. Development projects which are clearly defined and whose technical feasibility and sufficiency of
Consolidated notes
31
resources have been demonstrated and which the company intends to complete, and market are recognized
as development projects in the balance sheet if the costs can be determined reliably and there is sufficient
certainty that future earnings will cover the development costs. Recognized development projects are meas-
ured at cost less accumulated amortization and impairment losses.
Other development costs are recognized in the income statement under other external expenses or staff costs
when paid.
Once completed, development projects are amortized according to the straight-line method over their esti-
mated useful lives from the time when the asset is ready for use. Development projects relating to a game are
regarded as being ready for use at the time when the game is launched and made available to the users at
the latest. The first launch may be either a soft launch whose main purpose is to gain experience about user
preferences and behavior in the game with a view to making improvements, or a hard launch where the main
purpose is to generate commercial income. The amortization period is usually five years from soft launch and
three years from hard launch. Amortization methods, useful lives and residual values are reviewed every year.
Property, plant, and equipment
Property, plant, and equipment is measured in the balance sheet at the lower of cost less accumulated depre-
ciation and the recoverable amount.
Cost comprises the acquisition price, costs directly related to the acquisition, and costs for preparation of the
asset until such time as the asset is ready for use. The depreciation period is usually three to five years.
Depreciation methods, useful lives and residual values are reviewed every year.
Leases
The company assesses whether a contract is or contains a lease at inception of the contract. The company
recognizes right-of-use assets and corresponding lease liabilities at the lease commencement date, except for
short-term leases and leases of low value. For these leases, the lease payments are recognized as an oper-
ating expense on a straight-line basis over the term of the lease.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liabilities
adjusted for any lease payments made at or before the commencement date, plus any initial costs incurred.
The right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment
losses. The right-of-use assets are from the commencement date depreciated over the shorter period of lease
term and useful life of the underlying asset. The estimated useful lives of right-of-use assets are determined
on the same basis as those of the company’s corresponding assets such as property, plants, and equipment.
In addition, the right-of-use assets are periodically reduced by impairment losses, if any, and adjusted in ac-
cordance with lease liabilities.
The lease liabilities are initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, the company’s incremental borrowing rate.
Lease payments included in the measurement of the lease liabilities comprise the following:
• Fixed payments.
• Variable payments, dependent on an index or rate.
• The exercise price of a purchase option if it is reasonably certain that the option will be exercised.
• Amounts expected to be payable under residual value guarantees.
The lease liabilities are subsequently measured at amortized cost using the effective interest method. It is
remeasured when there is a change in future lease payments arising from a change in an index or rate, if there
is a change in the estimate of the amount expected to be payable under a residual value guarantee, or if
management changes its assessment of whether it will exercise a purchase, extension, or termination option.
When the lease liabilities are remeasured in this way, a corresponding adjustment is made to the carrying
amount of the right-of-use assets or is recorded in profit or loss if the carrying amount of the right-of-use assets
has been reduced to zero.
Financial instruments
Financial assets and financial liabilities are recognized when the group becomes a party to the contractual
provisions of the financial instrument. Financial assets are derecognized when the contractual rights to the
Consolidated notes
32
cash flows from the financial asset expire, or when the financial asset and substantially all the risks and rewards
are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled, or expires.
All financial assets and liabilities are initially measured at fair value adjusted for transaction costs (where ap-
plicable). Financial assets and liabilities, other than those designated and effective as hedging instruments,
are classified into the following categories:
• amortised cost
• fair value through profit or loss (FVTPL)
• fair value through other comprehensive income (FVOCI).
Derivative financial instruments are accounted for at fair value through profit and loss (FVTPL) except for
derivatives designated as hedging instruments in cash flow hedge relationships. The group only has financial
instruments classified as FVTPL. Derivative financial instruments in this category are measured at fair value
with gains or losses recognised in profit or loss. All income and expenses recognised in profit or loss are
presented within finance costs or finance. The fair values of financial assets and liabilities in this category are
determined by reference to active market transactions or using a valuation technique where no active market
exists.
Non-current financial assets
Other receivables recognized under non-current assets comprise deposits and are measured at the lower of
accumulated cost and the recoverable amount.
Impairment of assets (impairment test)
The carrying amount of property, plant, and equipment, and intangible assets with determinable useful lives is
tested for impairment every year. If indications of impairment are identified, the recoverable amount of the
asset is calculated to determine the amount of any impairment loss.
The recoverable amount of development projects in progress and goodwill are determined every year, regard-
less of whether any indications of impairment exist.
If an asset does not produce inflows independently of other assets, the recoverable amount is determined for
the smallest cash-generating unit of which the asset forms part.
The higher of fair value less selling costs and value in use is used as the recoverable amount of the asset. The
value in use is determined as the present value of the expected net cash flows from use of the asset. If the
recoverable amount of the asset is lower than the carrying amount, the carrying amount is written down to the
recoverable amount.
Where cash-generating units are concerned, the impairment loss is distributed in such a way that goodwill is
written down for impairment first, and subsequently any remaining impairment loss is distributed on the other
assets in the unit. However, individual assets cannot be written down to a value lower than their fair value less
expected selling costs. Impairment losses are recognized in the income statement.
Receivables
Receivables comprise trade receivables and other receivables. Receivables are included in the category loans
and receivables, which are financial assets with fixed or determinable payments that are not listed in an active
market and are not derivative financial instruments.
On initial recognition, receivables are measured at fair value and subsequently at amortized cost, which usually
corresponds to the nominal value, less write-downs for bad debts.
Any write-downs for bad debts are determined on the basis of an individual assessment of the individual re-
ceivable.
Prepayments
Prepayments recognized under assets comprise costs incurred in respect of the subsequent financial year.
Prepayments are measured at cost.
Dividend
Dividend is recognized as a liability at the time of adoption by the general meeting.
Consolidated notes
33
Treasury shares
Acquisition costs and consideration for treasury shares and dividend from such are recognized directly in equity
under retained earnings.
Liabilities
Non-current liabilities comprise other credit institutions. Payables to credit institutions are measured at cost at
the time of contracting such payables (raising of loans). Subsequently, the liabilities are measured at amortized
cost, meaning that the difference between the proceeds from the loan and the repayable amount is recognized
in the income statement over the period of the loan as a financial expense according to the effective interest
method.
Other financial liabilities comprise bank debt, trade payables, other payables to public authorities, and other
liabilities. On initial recognition, other financial liabilities are measured at fair value less any transaction costs.
Subsequently, the liabilities are measured at amortized cost according to the effective interest method, so that
the difference between the proceeds and the nominal value is recognized in the income statement as a finan-
cial expense over the period of the loan.
Provisions
Provisions are recognized when the following criteria are fulfilled:
• we have a legal or constructive obligation as a result of an earlier event
• the settlement of the obligation is expected to result in an outflow of resources
• the obligation can be measured reliably
For onerous contracts, a provision is made when the expected income to be derived from a contract is lower
than the unavoidable cost of meeting our obligations under the contract.
Mandatory subscription and investment shares and warrants
Generally, contracts on own shares that require physical settlement of a fixed number of own shares for a fixed
consideration are classified as equity and added to or deducted from equity. This is referred to as the fixed-
for-fixed criterion.
Rights to mandatory subscription of shares and investment warrants are financial instruments issued to an
investor to subscribe shares of the parent company. These financial instruments are classified as derivative
assets / liabilities when either the subscription or settlement amount is not fixed amount of a currency similar
to the functional currency of the group or the number of shares is not fixed. When issued pro rata to all existing
shareholders of the parent company the financial instruments are exempted from this accounting treatment
and are classified as equity in the consolidated financial statements.
These financial instruments are initially recognized and measured at fair value. Subsequently, these are meas-
ured at fair value with changes recognized through profit or loss.
Cash flow statement
The cash flow statement shows cash flows from operating, investing, and financing activities as well as cash
at the beginning and end of the year.
Cash flows from operating activities are presented in accordance with the indirect method and are determined
as the operating profit or loss adjusted for non-cash operating items, changes in working capital and paid
financial income, financial expenses, and income tax.
Cash flows from investing activities comprise payments in connection with the acquisition and sale of compa-
nies and financial assets as well as the purchase, development, improvement, and sale of property, plant and
equipment, and intangible assets.
Cash flows from financing activities comprise changes in the parent company's share capital and associated
costs as well as the raising and repayment of loans, the repayment of interest-bearing debt, the purchase and
sale of treasury shares and the payment of dividends.
Consolidated notes
34
Cash flows in currencies other than the functional currency are recognized in the cash flow statement using
average exchange rates unless they deviate significantly from the actual exchange rates at the transaction
dates.
Cash and cash equivalents comprise cash less overdraft facilities that are an integrated part of the cash man-
agement.
2. Significant accounting estimates and judgments
In connection with the preparation of the consolidated financial statements, management makes a number of
accounting estimates and judgments that affect the recognized values of assets, liabilities, income, expenses,
and cash flows as well as their presentation.
Accounting estimates reflect management's best estimates in terms of amounts where the measurement is
subject to uncertainty, typically because the estimate is based on assumptions concerning future events. The
accounting estimates are based on historical experience and other assumptions deemed relevant, but
the actual results may, naturally, deviate from the estimates made. The estimates are regularly reassessed,
and the effect of changes is recognized in the consolidated financial statements.
Accounting judgments reflect decisions made by management as to how the accounting policies are applied
in specific situations where the accounting treatment depends on qualitative assessments. Examples could be
when the risk passes or how a certain transaction or item is best presented to provide reliable and relevant
information.
The following accounting estimates and judgments have had significant impact on the consolidated financial
statements for 2020:
Impairment test
The carrying amount of property, plant and equipment, and intangible assets with determinable useful lives is
tested for impairment every year. If indications of impairment are identified, the recoverable amount of the
asset is calculated to determine the amount of any impairment loss.
The recoverable amount of development projects in progress and goodwill are determined every year, regard-
less of whether any indications of impairment exist.
Cash-generating units comprising goodwill and development projects in progress are tested for impairment at
least once a year and more frequently in case of indications of impairment.
Valuation of warrants
The fair value of the initial warrants based on the Black & Scholes model. The fair value of issued warrants
vesting if certain market cap milestones are reached and the fair value of issued warrants vesting if certain
future revenue milestones are reached, are based on Monte Carlo Simulations and the Black & Scholes model.
The fair value valuations based on the Black & Scholes model were based on the following parameters:
• Underlying share price
• Exercise price
• Time to maturity
• Volatility
• Risk-free rate
The fair value valuations based on Monte Carlo simulations were based on the following parameters:
• Starting-point share price
• Exercise price
• Terms regarding timing of exercise
• Volatility
• Risk-free interest rate
The starting-point share price is estimated based on a ten-days weighted average up to the last trading day
prior to the issue day. The exercise price for the warrants is stated in the individual warrant agreements and
in the investment agreement between the company and Skybound. The initial warrants have a time to maturity
of ten years. The milestone warrants have varying terms regarding the time to maturity. The volatility of 5th
Planet Games has been estimated based on a peer group analysis of publicly listed comparable companies
in Europe. The peer group consists of companies with diversified portfolios of free-to play/low-cost games. The
Consolidated notes
35
volatility has been estimated based on two-year rolling weekly volatilities of the peer group companies. As risk-
free rate the yield-to-maturity on ten years Norwegian Government bonds has been applied.
The investment contract with Skybound of fixed future capital increases to be conducted in financial year 2022
and 2023, cf. Tranches 2-4 of the agreement. The future capital increases are mandatory for both parties. At
inception the fair value of the contract is zero or minimal. At subsequent measurement the fair value is as-
sessed applying similar valuation model as for forward sale of shares. Consequently, the fair value change in
response to the change in the underlying parameters, NOK and the share price.
Classification of mandatory subscription and investment shares and warrants
On 7 September 2021, the parent company of the group entered into an investment agreement with Skybound
Games Studios (the investor). The investor receives right to subscribe mandatorily and investment shares and
warrants (collectively “rights”) which can be exercised on different dates depending on the tranches. Each right
can be exercised for one share (i.e., 1:1 conversion ratio) and the number of shares that will be issued is fixed
for all these tranches. Upon settlement, the fixed exercise amount in Norwegian kroner (NOK) is settled by the
investor by paying its US dollar (USD) equivalent. The functional and presentation currency of the parent
company and the Group is Danish kroner (DKK). Hence, although the exercise amount is fixed in NOK, the
equivalent amount in DKK is variable depending on the prevailing exchange rate between DKK and USD at
settlement date. This variable amount does not qualify the definition of equity instrument and therefore, these
rights are classified as derivative financial assets / liabilities.
3. Capital resources
The Company´s capital resources as per 31.12.2021:
According to the most recent budgets approved by management, the existing capital resources are sufficient
to continue the full operation of the group as planned for 2022.
DKK´000 2021 2020
Short term capital assets
Trade receivables 1,924 633
Other receivables 2,911 57
Cash 13,607 23,666
Total short term capital assets 18,442 24,356
Short term capital liabilities:
Trade liabilities 1,746 1,374
Other payables 1,650 1,588
Lease liabilities 0 251
Total short capital liabilities 3,396 3,213
Total net capital recourses 15,046 21,143
Other capital recourses on a longer term but within one year:
Tax refund 0 2,183
Estimated net proceeds from Tranche 2 and 3 from Skybound investment 28,950 0
Total other capital recourses on a longer term but within one year 28,950 2,183
Total net capital resources for the year 43,996 23,326
Consolidated notes
36
4. Revenue
DKK´000 2021 2020
Sales of games and in-app purchases 554 656
Sales of Service (advertising devices) 651 309
License income 3,589 1,360
Other revenue 15 523
Total 4,809 2,848
5. Staff costs
DKK´000 2021 2020
Wages and salaries 2,811 1,752
Pensions 200 169
Other social security costs 15 10
Share-based payment 3,818 2,722
Total 6,844 4,653
Total Staff costs are recognized as follows:
Research and development costs 0 26
Administrative expenses 6,844 4,627
Total 6,844 4,653
Average number of employees during the year, continuing activities 4 4
Number of employees end of year, continuing activities 3 3
Average number of employees during the year, discontinuing activates 15 12
Number of employees end of year, discontinuing activities 0 17
Remuneration of board of directors and executive management:
Board of directors:
Cash remuneration 200 30
Share-based payment 484 107
Total 684 137
Executive management
Gross Salary 1,125 480
Pension Contribution 0 0
Share-based payment 1,506 2,118
Total 2,631 2,598
Consolidated notes
37
6. Share-based payment
5th Planet Games has established a warrant program for executive management (CEO), board members,
employees, and others and for 2021 there has been issued warrants according to Skybound Investment Agree-
ment.
Specification of share-based payments in 2021 and 2020:
Warrant plans.
The plans provide board members, executive management, employees and other with the option to purchase
ordinary shares of 5th Planet Games A/S at a fixed price. There are no cash settlement alternatives. Warrants
has been granted with monthly vesting over 24-48 months subject to continued employment. The exercise
price of the share options is, in general, equal to the market price less 25% at the date of grant.
The table below summarizes the number of options that were outstanding, their weighted average exercise
price (WAEP) as of 31 December 2021, as well as the movements during the period.
The estimate of the grant date fair value of each option issued is based on a Black & Scholes model, taking
into account the terms and conditions on which the share options were granted. However, the performance
conditions are only considered in determining the number of instruments that will ultimately vest.
DKK´000 2021 2020
Share-based payments management 1,506 2,118
Share-based payments board of directors 484 107
Share-based payments employee 1,828 498
Share-based payments development, discontinued operations -41 363
Share-based payments / reservation holiday payment adjustments 341 -98
Total share-based payments expensed 4,118 2,988
Share-based payments capital increase cost 240 0
Share-based payments IP rights 6,895 0
Total share-based payments 11,253 2,988
Number Number Number Number Number
The weighted
average
exercise
price
Board
(VEAP
TOTAL CEO Member Employee Other WAEP (NOK)
Outstanding, beginning of the period
22,933,695 13,101,821 1,648,535 7,750,339 433,000 0.90
Granted
56,384,356 1,722,167 17,871,279 0 36,790,910 0.91
Forfeited
-3,464,621 -1,243,787 -212,500 -2,008,334 0 0.79
Exercised
0 0 0 0 0 -
Expired
0 0 0 0 0 -
Outstanding, end of the period
75,853,430 13,580,201 19,307,314 5,742,005 37,223,910 0.91
Exercisable at end of the period
19,957,756 12,090,177 1,986,709 4,774,969 1,105,901 0.93
The range of exercise prices for options
min: 0.4 0.6 0.4 0.6 1.0
outstanding (NOK)
max: 2.9 0.9 2.9 1.9 2.3
9.1 7.9 9.5 7.0 9.7
The weighted average remaining contractual life for the share
options outstanding (year)
Consolidated notes
38
Inputs to the model included the following factors
Expected volatility was determined taking into consideration the volatility of the company’s share price over a
12-month period.
For change in derivative financials instruments reference is made to note 16.
Foreign exchange gains are due to increase in exchange rate of NOK and USD during the year.
Warrant Plan November June September Oktober November January
2017 2018 2018 2018 2018 2019
Grant date 16/11 2017 1/6 2018 1/9 2018 1/10 2018 17/11 2018 1/1 2019
Weighted average share price (NOK)
2.5 2.9 2.4 1.76 1.3 0.94
Exercise price (NOK) 1.5 - 5.8 2.9 1.8 1.32 1.3 0.71
Historical and expected volatility 69.6 80 80 80 80 80
Option life (Years) 2 - 10 2 - 10 3 - 10 4 - 10 3 - 10 1 - 10
Expected dividends 0 0 0 0 0 0
Risk-free interest rate (%) -0.62 - 0.17 0.64 0.31 0.41 0.34 0.39
Warrant Plan May June January November September September
2019 2019 2020 2020 2021 2021
Grant date 23/5 2019 3/6 2019 1/2 2020 1/2 2020 7/9 2021 7/9 2021
Weighted average share price (NOK)
0.76 0.9 0.41 0.88 0.91 0,94
Exercise price (NOK) 0.57 0.68 0.41 0.7 0.91 0,94
Historical and expected volatility 131 131 87 137 65 65
Option life (Years) 0 - 10 1 - 10 0 - 10 0 - 10 0 - 10 0 - 10
Expected dividends 0 0 0 0 0 0
Risk-free interest rate (%) 0.07 0.07 -0.4 -0.5 1.3 1.3
7. Special Items
DKK´000 2021 2020
IP rights, impairment losses 4,742 0
IP rights, expensed 520 0
Total 5,262 0
8. Financial income
DKK´000 2021 2020
Interest income on assets measured at amortized cost 0 2
Change in derivative financials instruments, fair value 7,729 0
Foreign exchange gains, net 754 115
Total 8,483 117
Consolidated notes
39
10. Tax
9. Financial expenses
DKK´000 2021 2020
Interest income on liabilities measured at amortized cost 98 45
Interest Lease liabilities 0 0
Other financial costs 0 785
Total 98 830
DKK´000 2021 2020
Tax on loss for the year:
Net result for the year before tax -16,332 -16,383
Tax rate 22% 22%
Expected tax expenses -3,593 -3,604
Adjustment for non-deductible expenses 794 715
Prior-year adjustments -78 -155
Change in tax assets (not recognized) 2,799 910
Total tax on loss for the year -78 -2,134
Specification of tax on loss for the year:
Current tax 0 49
Tax credit scheme/joint taxation contributions 0 -2,183
Prior-year adjustments -78 0
Total tax on loss for the year -78 -2,134
Breakdown on unrecognized deferred tax assets:
Tax losses carried forward (available indefinitely) 88,261 75,100
Other 1,271 5,878
Basis at year end 89,532 80,978
Tax rate 22% 22%
Calculated Potential deferred tax assets 19,697 17,815
Write-down of deferred tax assets -19,697 -17,815
Recognized deferred tax assets 0 0
Consolidated notes
40
11. Earnings per share
DKK´000 2021 2020 2021 2020
Net loss for the period -6,603 -6,001 -7,797 -8,248
Average number of shares (in thousands) 113,148 76,799 113,148 76,799
Average number of treasury shares 0 0 0 0
Average number of shares in circulation 113,148 76,799 113,148 76,799
Diluted average number of shares in circulation 113,148 76,799 113,148 76,799
Earnings per share of DKK 0,05 each (in DKK) -0.058 -0.078 -0.069 -0.107
Diluted earnings per share of DKK 0,05 each (in DKK) -0.058 -0.078 -0.069 -0.107
Discontinued operations
Continued operations
Consolidated notes
41
Impairment test
Because of long time to market for one of the IP acquired, management has performed an impairment test
using the DCF model and a discount rate on 20%. On this basis, management concluded that the IP right is
impaired and consequently recognized the write-down of this by DKK 4.7m.
12 Intangible assets
DKK´000
Completed
development
s projects
Acquired
rights
Total
Financial Year 2021
Costs as at 01.01.2021 13,047 0 13,047
Additions 0 6,895 6,895
Transfer 0 0 0
Disposals 0 0 0
Costs as at 31.12.2021 13,047 6,895 19,942
Amortisation and impairment
losses as at 01.01.2021 13,047 0 13,047
Impairment losses 0 4,742 4,742
Amortisation 0 339 339
Disposals 0 0 0
Amortisation and impairment
losses as at 31.12.2021 13,047 5,081 18,128
Carrying amount as at 31.12.2021 0 1,814 1,814
Financial Year 2020
Costs as at 01.01.2020 13,047 0 13,047
Additions 0 0 0
Transfer 0 0 0
Disposals 0 0 0
Costs as at 31.12.2020 13,047 0 13,047
Amortisation and impairment
losses as at 01.01.2020 13,047 0 13,047
Impairment losses 0 0 0
Amortisation 0 0 0
Disposals 0 0 0
Amortisation and impairment
losses as at 31.12.2020 13,047 0 13,047
Carrying amount as at 31.12.2020 0 0 0
Consolidated notes
42
13 Other Equipment
DKK´000 2021 2020
Financial Year 2021
Costs as at 01.01.2021 204 170
Additions 0 34
Disposals -204 0
Effect of exchange rate adjustment 0 0
Costs as at 31.12.2021 0 204
Amortisation and impairment losses as at 01.01.2021 109 52
Impairment losses 0 0
Amortisation 66 57
Disposals -175 0
Effect of exchange rate adjustment 0 0
Amortisation and impairment losses as at 31.12.2021 0 109
Carrying amount as at 31.12.2021 0 95
14. Right-of-use assets and lease liabilities
Right-of-use assets - rent facilities 2021 2020
Right-of-use assets as at 1.1.2021 733 985
Additions 0 0
Disposals -544 0
Modifications 0 0
Depreciations -189 -252
Right-of-use assets as at 31.12.2021 0 733
Lease liabilities 31.12.2021 31.12.2020
Non-current 0 532
Current 0 251
Lease liabilities 0 783
Amounts included in the income statement 2021 2020
Interest expense leases 37 64
Depreciation recognised on right-of-use assets 189 251
Amounts included in the income statement 226 315
Consolidated notes
43
16. Derivative financial instruments
On 7 September 2021, the parent company of the group entered into an investment agreement with Skybound
Games Studios (the investor). The investor receives right to subscribe mandatorily and investment shares and
warrants (collectively “rights”) which can be exercised on different dates depending on the tranches. Each right
can be exercised for one share (i.e., 1:1 conversion ratio) and the number of shares that will be issued are
fixed for all these tranches. Upon settlement, the fixed exercise amount in Norwegian kroner (NOK) is settled
by the investor by paying its US dollar (USD) equivalent. The functional and presentation currency of the parent
company and the Group is Danish kroner (DKK). Hence, although the exercise amount is fixed in NOK, the
equivalent amount in DKK is variable depending on the prevailing exchange rate between DKK and USD at
settlement date. This variable amount does not qualify the definition of equity instrument and therefore, these
rights are classified as derivative financial assets / liabilities.
The asset amount DKK 7.7m per 31 December 2021 is variable with the development in exchange rate in
NOK/DKK and the company’s share price. The amount is the calculated fair value that the company would
have received less if the company’s share price and exchange rate NOK/DKK as per 31 December 2021 had
been used in the agreement for the investment Tranches 2-4.
17. Equity
Share capital
As of 31 2021 the company's share capital consists of 127,677,765 shares of DKK 0.05 each. The shares are
fully paid up. The shares are not divided into classes, and no shares enjoy special rights.
Treasury shares
The group held no treasury shares at the end of the 2021 or 2020 reporting periods.
15. Trade Receivables
DKK´000 2021 2020
Trade receivables (gross), beginning of year 633 620
Provision for bad debt 0 0
Change of provision in the year 0 0
Realised losses in the year 0 0
Provision for bad debt, end of year 0 0
Trade receivables (net), end of year 1,924 633
Trade receivables not due (due 0-3 months after the balance sheet date) 1,924 633
Trade receivables due from 0 to 1 month before the balance sheet date 0 0
Trade receivables due more than 1 month before the balance sheet date 0 0
Trade receivables (net), end of year 1,924 633
With the implementation of IFRS 9 “Financial Instruments”, the company has applied the simplified approach to
measure the expected credit loss and a lifetime expected loss allowance for all trade receivables. Historically the
company hasn't recognized losses on receivables. The Group´s customers are predominantly app-stores and
companies like these and therefore the credit risk is very low. There are no overdue receivables as of December
31, 2021. No losses are expected on trade receivables and therefore no loss allowance for trade receivables has
been recognized as of December 31, 2021. No loss allowance was recognized as of January 1, 2020 or
January 1, 2021. Management continues to assess the credit risks in order to ensure the credit risk never
exceeds the loss allowance on trade receivables.
No trade receivables relates to contracts with customers.
Consolidated notes
44
Capital management
The group aims to ensure structural and financial flexibility as well as competitive strength. For that purpose,
the group regularly assesses the appropriate capital structure for the group. Reference is made to the para-
graph “Capital resources” in note 3 and significant accounting estimates and judgments in note 2.
Dividend
It is proposed that no dividend be paid.
19. Contingent liabilities
Based on management’s assessment the group is not involved in any lawsuits, arbitration cases or other
matters which could have a material impact on the group’s financial position or results of operations.
Acquired IP rights / co-productions rights.
As a part of the investment agreement with Skybound Games Studios the company has entered into two co-
production agreements with a total co-funding obligation for the company on USD 5.5m.
As part of the investment <greement, 5th Planet Games has provided certain representations and warranties
to Skybound Games. Should Skybound Games suffer a loss due to certain specific warranties not being true,
accurate and not misleading, Skybound Games will, at its own discretion, have the option of being indemnified
from its loss by exercising up to 2,200,000 warrants (depending on the loss), each warrant entitling Skybound
Games to subscribe for 1 share of nominal DKK 0.05 at par value (the “Indemnification Warrants”). The
potential loss from this warranty is estimated to be unsignificant.
20. Security provided
None.
Share capital development during 2020-2021
Date Type of change
Change in Share
Capital DKK
Per value
DKK
Total share
capital DKK
Number of new
shares
Total number
of shares
31.12.2019 Share capital increase 0.05 2,686,800 53,736,010
25.05.2020 Share capital increase 379,110 0.05 3,065,910 7,582,200 61,318,210
03.08.2020 Share capital increase 2,250,000 0.05 5,315,910 45,000,000 106,318,210
07.09.2021 Share capital increase 1,083,888 0.05 6,399,799 21,677,765 127,995,975
18. Other Payables
DKK´000 31.12.2021 31.12.2020
Non-current:
Payable for use of IP rights 930 1,488
Total non-current other payables 930 1,488
Current:
Payable for use of IP rights 558 558
Holiday pay liability 212 1,581
Discontinued operations 647 0
Other 233 621
Total current other payables 1,650 2,760
Consolidated notes
45
21. Financial risks and financial instruments
Risk management policy
The group's financial risks are managed by the Executive Management. The group has not prepared particular
policies for the identification and handling of risks. Managing the group's risks forms part of the Executive
Management's day-to-day monitoring of the group.
Interest rate risk
The group has no interest-bearing debt. The group is not subject to material credit risks
Credit risk
The maximum credit risk relating to receivables corresponds to the carrying amount. Information about trade
receivables due appears from note 13. The group is not subject to material credit risks.
Currency risk
The group’s exposure to the risk of changes in foreign exchange rates relates primarily to the group’s monetary
assets and liabilities denominated in foreign currencies.
The following tables demonstrate the sensitivity to a reasonably possible change in NOK and USD exchange
rates, with all other variables held constant. The group’s exposure to foreign currency changes for all other
currencies is not material.
Amounts in DKK '000
Effect on loss
before tax
Effect on pre-
tax equity
Year end 31/12 2021
Change in NOK rate
+ 5%
+7
+7
Change in NOK rate
- 5%
-7
-7
Change in USD rate
+5%
+505
+505
Change in USD rate
-5%
-505
-505
Amounts in DKK '000
Effect on loss
before tax
Effect on pre-
tax equity
Year end 31/12 2020
Change in NOK rate
+ 5%
+532
+532
Change in NOK rate
- 5%
-532
-532
Change in USD rate
+5%
-1
-1
Change in USD rage
-5%
+1
+1
Foreign currency risks are managed as part of the Executive Management's day-to-day monitoring of the
group.
Currently, the management is not hedging any currency risks.
Mandatory future capital increases amounting in total to NOK 79.3m, have been agreed with Skybound Games
Studios Inc., cf. Tranches 2-4 of the Skybound investment agreement. The value of the future capital increases,
to be carried out in Q2 2022, Q3 2022, and Q3 2023, is fully exposed of the future development in the NOK/DKK
currency rate, since the proceeds from the capital increases is agreed to be paid in NOK while the group
financial statements are presented in DKK. The financial impact is likely to be material. To demonstrate the
sensitivity, a change in NOK/DKK with 5% could affect the future proceeds measured in DKK with approx.
DKK 4m, with all other variables held consistent. Reference is made to note 16.
Consolidated notes
46
Liquidity risk
The group's liquidity risk covers the risk that the group is not able to meet its liabilities as they fall due. The
maturities of financial liabilities appear from the tables below. All amounts are contractual cash flows, i.e. in-
clusive of interest. Reference is made to the paragraph “Capital resources” in note 3 and significant accounting
estimates and judgments in note 2.
DKK´000
Within 1
year
1-2
year(s)
2-5 years
Over 5
years
Total
As at 31/12 2021
Trade payables 1,746 0 0 0 1,746
Other payables 1,650 558 372 0 2,580
Total as at 31/12 2021 3,396 558 372 0 4,326
As at 31/12 2020
Lease liabilities 251 269 263 0 783
Trade payables 1,374 0 0 0 1,374
Related parties 86 0 0 0 86
Other payables 2,760 558 930 0 4,248
Total as at 31/12 2020 4,471 827 1,193 0 6,491
Consolidated notes
47
23. Fair value measurement of financial instruments
Financial assets and financial liabilities measured at fair value in the consolidated statement of financial posi-
tion are grouped into three levels of a fair value hierarchy. The three levels are defined based on the observ-
ability of significant inputs to the measurement, as follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly
• Level 3: unobservable inputs for the asset or liability.
The following table shows the levels within the hierarchy of financial assets and liabilities measured at fair
value on a recurring basis:
Note 22. Financial assets and liabilities
31 December 2021
DKK´000
Amortised
costs
FVTPL Total
Financial assets - short-term:
Trade receivables 1,924 - 1,924
Other receivables 2,963 - 2,963
Derivative financial instruments - 7,729 7,729
Cash 13,607 - 13,607
Total financial assets 18,494 7,729 26,223
Financial Liabilities:
Non-current other payables 930 - 930
Trade payables 1,746 - 1,746
Other payables 1,650 - 1,650
Total financial liabilities 4,326 0 4,326
31 December 2020
DKK´000
Amortised
costs
FVTPL Total
Financial assets - short-term:
Trade receivables 633 - 633
Other receivables 2,253 - 2,253
Derivative financial instruments - - 0
ash 23,666 - 23,666
Total financial assets 26,552 0 26,552
Financial Liabilities:
Non-current lease liabilities 532 - 532
Non-current other payables 1,488 - 1,488
Trade payables 1,374 - 1,374
Other payables 3,011 - 3,011
Total financial liabilities 6,405 0 6,405
Consolidated notes
48
24. Consolidated companies and related parties
Ownership
The following shareholders are registered in 5th Planet Games’ register as being the owners of 5% or more of
the voting rights or 5% or more of the share capital (1 share equals 1 vote) as of 31 December 2021:
Skybound Game Studios, Inc, 9570 W Pico Blvd. Los Angeles CA 90035, USA
Remuneration for management is disclosed in note 5. The group has not entered into contracts with change
of control clauses.
Equity investments in other companies
Transactions with other related parties
Since September 2021, board Member Henrik Nielsen has worked as Strategic Advisor. In 2021, Henrik Niel-
sen received a payment of DKK 64t and 7,069,064 warrants with a value of DKK 929t expensed in 2021 under
other expenses.
25. Fee to parent company auditors appointed at the general meeting
31 December 2021
DKK´000 Level 1 Level 2 Level 3 Total
Financial assets
Derivative financial instruments 7,729 - - 7,729
Net fair value 7,729 0 0 7,729
31 December 2020
DKK´000 Level 1 Level 2 Level 3 Total
Financial assets
Derivative financial instruments 0 - - 0
Net fair value 0 0 0 0
Municipality of
DKK´000 registred office
5th Planet Games Development ApS 100.0% København K -16,340 -18,414
Ivanoff Interactive A/S 100.0% København K 849 195
*5th Planet Games GmbH 100.0% Berlin -257 362
*Under liquidation
Owner-ship
Equity
31.12. 2021
Result
2021
DKK´000 2021 2020
Grant Thornton
Statutory audit 229 179
Other assurance engagements 148 44
Tax Consultancy 15 12
Other services 0 8
Total fees for the year 392 243
Consolidated notes
49
26. Events occurring after the balance sheet date
No important events have occurred after the end of the financial year.
27. Adoption of the annual report for publication
At the board meeting on 4 April 2022, the Board of Directors approved this annual report for publication. The
shareholders of 5th Planet Games A/S have the power to amend the annual report. The annual report will be
presented to the shareholders for approval at the annual general meeting on 26 April 2022.
28. Discontinued operations
In September 2021, it was decided to close the development studio 5th Planet Games GmbH in Berlin, work-
ing on Adventures of Tintin and Lego Match 3 game.
Revenue and expenses, gains and losses relating to the discontinuation of 5th Planet Games GmbH have
been eliminated from profit and loss from group’s continuing operations and are shown as a single line item in
the statement of profit and loss.
Consolidated income statement for continued, discontinued and total operations for the year:
DKK´000 2021 2020 2021 2020 2021 2020
Revenue 4,809 2,848 2,379 1,071 7,188 3,919
Costs of sales 121 185 326 302 447 487
Gross Profit 4,688 2,663 2,053 769 6,741 3,432
0
Research and development costs 3,998 1,289 7,175 8,717 11,173 10,006
Marketing expenses 0 277 3,631 1,392 3,631 1,669
Other expenses 10,155 6,677 578 377 10,733 7,054
EBITDA -9,465 -5,580 -9,331 -9,717 -18,796 -15,297
Special items 5,262 0 5,262 0
Depreciation and amortisation 339 0 283 309 622 309
Operating loss (EBIT) -15,066 -5,580 -9,614 -10,026 -24,680 -15,606
0
Financial income 8,483 117 0 0 8,483 117
Financial expenses 98 830 37 64 135 894
Loss before tax -6,681 -6,293 -9,651 -10,090 -16,332 -16,383
Tax on loss for the year -78 -292 0 -1,842 -78 -2,134
Loss for the year from operations -6,603 -6,001 -9,651 -8,248 -16,254 -14,249
Continuing operations
Discontinuing
operations
Total
Parent Company
50
PARENT COMPANY ACCOUNTING POLICIES
The financial statements of the parent company 5th Planet Games A/S have been prepared in accordance
with the provisions of the Danish Financial Statements Act on listed companies.
The financial statements are presented in Danish kroner (DKK).
The parent company's accounting policies have been applied consistently with last year.
Differences in relation to the group's accounting policies
The parent company applies the same accounting policies for recognition and measurement as the group with
the exceptions and additions set out below. For a complete description of the parent company's accounting
policies, see note 1 to the consolidated financial statements. The difference between the parent company
equity and the groups equity is due to share-based payments that is not expensed in parent company.
Income statement and balance sheet
Equity investments in subsidiaries
Equity investments in subsidiaries are recognized in the balance sheet at the proportionate share of the com-
panies owned adjusted for any residual value of positive or negative goodwill as well as unrealized intercom-
pany profits and losses.
Profits or losses in subsidiaries are recognized in the income statement in proportion to the shares equivalent
to the equity investments. Newly acquired or newly founded enterprises are recognized in the financial state-
ments as from the time of acquisition. Companies divested or discontinued are recognized until the date of
divestment.
Newly-acquired companies are recognized in accordance with the acquisition method, according to which the
identifiable assets and liabilities of newly-acquired companies are recognized at fair value at the date of ac-
quisition.
The goodwill (positive difference) determined at the date of acquisition is recognized under equity investments
in subsidiaries and amortized according to the straight-line method based on an individual assessment of the
useful life of the asset, the maximum period, however, being 20 years.
Cash flow statement
No cash flow statement is prepared for the parent company, as the parent company is included in the consol-
idated cash flow statement in accordance with the Danish Financial Statements Act, Section 86(4).
Parent Company
51
Parent Company income statement
DKK´000 Note 2021 2020
Other external expenses -1,654 -949
Staff costs 1 -1,322 -586
Other Operating income 6,895 0
Operating profit 3,919 -1,535
Share of loss from equity investments in group companies 2 -17,857 -9,631
Other financial income 3+4 8,560 293
Other financial expenses 3 -77 -822
Total net financials -9,374 -10,160
Loss before tax -5,455 -11,695
Tax on loss 5 85 -454
Nett Loss -5,540 -11,241
Proposed distribution of net loss:
Dividend for the financial year 0 0
Special reserve 0 0
Retained earnings -5,540 -11,241
Total -5,540 -11,241
Parent Company
52
Parent company balance sheet
ASSETS
DKK´000 Note 2021 2020
Equity investments in group companies 2 850 4,529
Total non-current assets 850 4,529
Current Assets:
Receivables from group companies 22,008 0
Tax receivable 6 454
Derivative financials instruments 4 7,729 0
Other receivables 307 155
Total receivables 30,050 609
Cash 10,091 20,916
Total current assets 40,141 21,525
Total assets 40,991 26,054
EQUITY AND LIABILITIES
DKK´000 Note 2021 2020
Equity:
Share Capital 6,400 5,315
Reserves 0 0
Retained earnings 17,034 15,848
Total equity 23,434 21,163
Provisions:
Other provisions 2 16,597 619
Total provisions 16,597 619
Current liabilities:
Payable to group companies 0 4,075
Trade payables 910 167
Other payables 50 30
Total current liabilities 960 4,272
Total Liabilities 960 4,272
Total equity and liabilities 40,991 26,054
Contingent liabilities 6
Security provided 7
Events occurring after the balance sheet date 8
Parent Company
53
Statement of change in equity
Convert-
DKK´000
ible loan
Equity as at 01.01.2021 5,315 0 0 0 15,848 0 21,163
Capital increase Skybound 1,085 8,482 9,567
Costs related to capital increase -1,756 -1,756
Transfer of reserves -13,622 13,622 0
Proposed distribution of net loss -5,540 -5,540
Equity as at 31.12.2021 6,400 0 -6,896 0 23,930 0 23,434
Equity as at 01.01.2020 2,686 0 0 0 4,540 0 7,226
Capital increase by:
Loan conversation 379 0 -379 0
Right issue 2,250 28,962 31,212
Convertible loans issued 1,675 1,675
Convertable loan repaid -4,405 -4,405
Costs related to capital increase -3,292 -3,292
Exchange rate adjustments -12 -12
Transfer of reserves -28,962 3,109 25,853 0
Proposed distribution of net loss -11,241 -11,241
Equity as at 31.12.2020 5,315 0 0 0 15,848 0 21,163
5th Planet
Games
shareholder´s
share of
equity
Share
capital
Reserve
capital
reduction
Share
premium
Retained
Earnings
Proposed
dividend
History of share capital development since incorporation
Date Type of change
Change in Share
Capital DKK
Per value
DKK
Total share
capital DKK
Number of new
shares
Total number
of shares
13.04.2011 Formation 80,000 1.00 80,000 80,000 80,000
09.09.2014 Share capital increase 28,917 1.00 108,917 28,917 108,917
30.12.2015 Conversion to A/S 9,891,083 1.00 10,000,000 9,891,083 10,000,000
06.02.2016 Share split 0 0.50 10,000,000 10,000,000 20,000,000
26.06.2016 Share capital increase 2,500,000 0.50 12,500,000 5,000,000 25,000,000
27.01.2016 Share capital increase 137,074 0.50 12,637,074 274,148 25,274,148
03.08.2016 Share capital increase 10,000,000 0.50 22,637,074 20,000,000 45,274,148
12.04.2017 Share capital increase 2,239,948 0.50 24,877,022 4,479,895 49,754,043
12.06.2017 Share capital increase 31,948,835 0.50 56,825,857 63,897,670 113,651,713
31.10.2017 Share split -22,460,686 0.50 34,365,171 -44,921,371 68,730,342
29.11.2017 Share split -23,000,000 0.50 11,365,171 -46,000,000 22,730,342
01.12.2017 Share capital increase 9,261,680 0.50 20,626,851 18,523,361 41,253,703
01.01.2018 Share capital increase 650,000 0.50 21,276,851 1,300,000 42,553,703
24.01.2018 Share capital increase 485,434 0.50 21,762,285 970,868 43,524,571
23.05.2019 Share capital increase 1,963,865 0.50 23,726,150 3,927,729 47,452,300
24.05.2019 Share capital increase 1,802,451 0.50 25,528,601 3,604,902 51,057,202
27.11.2019 Share size reduction -22,975,741 0.05 2,552,860 0 51,057,202
12.12.2019 Share capital increase 133,940 0.05 2,686,800 2,678,808 53,736,010
25.05.2020 Share capital increase 379,110 0.05 3,065,910 7,582,200 61,318,210
03.08.2020 Share capital increase 2,250,000 0.05 5,315,910 45,000,000 106,318,210
07.09.2021 Share capital increase 1,083,888 0.05 6,399,799 21,677,765 127,995,975
Parent Company
54
PARENT COMPANY NOTES
1. Staff Costs
DKK´000 2021 2020
Wages and salaries 1,322 586
Pensions 0 0
Other social security costs 0 0
Total 1,322 586
Average number of employees during the year 1 1
Remuneration of board of directors and executive management:
Board of directors:
Cash remuneration 200 30
Total 200 30
Executive management:
Gross Salary 762 482
Pension Contribution 0 0
Total 762 482
2. Investments in group companies
DKK´000 2021 2020
Costs at 01/01 2021 88,153 76,153
Additions during the year 0 0
Subsidy to Group company 0 12,000
Disposals during the year 0 0
Costs at 31/12 2021 88,153 88,153
Value adjustments as at 01/01 2021 -84,243 -75,023
Share of loss before amortisation of goodwill during the year -17,857 -9,631
Foreign exchange loss investments group companies 0 -12
Disposals during the year -1,800 423
Value adjusted as at 31/12 2021 -103,900 -84,243
Carrying amount as at 31/12 2021 -15,747 3,910
Group companies with negative equity 16,597 619
Group companies with positive equity 850 4,529
Parent Company
55
4. Derivative financial instruments
On 7 September 2021, the parent company of the group entered into an investment agreement with Skybound
Games Studios (the investor). The investor receives right to subscribe mandatorily and investment shares and
warrants (collectively “rights”) which can be exercised on different dates depending on the tranches. Each right
can be exercised for one share (i.e., 1:1 conversion ratio) and the number of shares that will be issued is fixed
for all these tranches. Upon settlement, the fixed exercise amount in Norwegian kroner (NOK) is settled by the
investor by paying its US dollar (USD) equivalent. The functional and presentation currency of the parent
company and the Group is Danish kroner (DKK). Hence, although the exercise amount is fixed in NOK, the
equivalent amount in DKK is variable depending on the prevailing exchange rate between DKK and USD at
settlement date. This variable amount does not qualify the definition of equity instrument and therefore, these
rights are classified as derivative financial assets / liabilities.
The asset amount DKK 7.7m per 31 December 2021 is variable with the development in exchange rate in
NOK/DKK and the company’s share price. The amount is the calculated fair value that the company would
have received less if the company’s share price and exchange rate NOK/DKK as per 31 December 2021 had
been used in the agreement for the investment Tranches 2-4.
The group companies are:
Municipality of
DKK´000 registred office
5th Planet Games Development ApS 100% København K -16,340 -18,414
Ivanoff Interactive A/S 100% København K 850 195
*5th Planet Games GmbH 100% Berlin -257 362
*Under Liquidation
Owner-ship
Equity
31.12.
2021
Result 2021
3. Financial Items
DKK´000 2021 2020
Financial income includes interest from group enterprises 296 230
Financial expenses include interests to group enterprises 0 0
Total 296 230
Parent Company
56
6. Contingent liabilities
Based on management’s assessment the Company is not involved in any lawsuits, arbitration cases, or
other matters which could have a material impact on the group’s financial position or results of operations.
The parent company has provided the subsidiaries letter of support until 30 March 2023.
7. Security provided
None.
8. Events occurring after the balance sheet date
After the balance sheet date, the parent company has provided the subsidiary company 5th Planet Games
Development ApS with a group contribution of DKK 21.9m.
5. Tax
DKK´000 2021 2020
Current tax for the year 0 0
Prior year adjustments 91 0
Tax credit scheme/joint taxation contributions -6 -454
Change in deferred tax 0 0
Total tax for the year 85 -454
Tax comprises:
Tax on loss for the year 85 -454
Tax on changes in equity 0 0
Total 85 -454