5th Planet Games A/S - Interim report, H1 2022 Page 1
Copenhagen, 30 August 2022
INTERIM REPORT 1
st
Half year 2022
Six months ended 30 June 2022
Table of Content:
- Company announcement No. 35-2022 2
- CEO Letter: H1 2022 3
- Guidance 2022 5
- Key Figures and Financial Performance 6
- 5th Planet Games at a glance 8
- Statement by the Board of Directors and the Executive Board 9
- Independent Auditor’s review report 10
- Consolidated statement of comprehensive income 12
- Consolidated balance sheet 13
- Consolidated statement of changes in equity 14
- Consolidated cash flow statement 15
- Notes 16
5th Planet Games A/S - Interim report, H1 2022 Page 2
Company announcement No. 35-2022
Announcement no. 35
Copenhagen, Date August 30
th
, 2022
5th Planet Games increase H1 2022 YoY revenue with 360% and improve H1 2022 YoY performance on all
core financial metrics
COPENHAGEN, August 30, 2022: 5th Planet Games A/S (OAX: FIVEPG) is pleased to announce that we can
now see the positive impact of the work that has been done over the last 9 months; with all financial core
metrics now heading in a positive direction. By half year’s end we had a cash position of DKK 34m with a
future guaranteed cash inflow of another DKK 37m to total cash position of DKK 71m, which leave us
complete freedom to execute on our strategy.
Almost DKK 3m in H1 2022 revenue has arrived from Before Your Eyes royalties, and we have recently
signed co-publishing agreements for Escape Academy (already released), WrestleQuest (to be released in
2023) and VICE NDRCVR (to be released in 2023).
Looking into the next half year, the most significant events are the financial performance of Before Your
Eyes and Escape Academy together with expected signing of more (co-)publishing agreements; the biggest
being based on “The Walking Dead” IP.
Highlights:
- Revenue H1 2022 was DKK 4.7m, which is 360% higher than DKK 1.3m in H1 2021.
- EBITDA H1 2022 was DKK -1.1m, which is an improvement of DKK 5.6m from DKK -6.7m in H1 2021.
- Cashflow positive H1 2022 by DKK 20.2m, which is an improvement of DKK 32.8m from DKK -12.6m
in H1 2021
Guidance 2022:
- Revenue maintains guidance of DKK 10m to 20m (mainly from Before Your Eyes and Escape
Academy) for the full year of 2022.
- EBITDA guidance is adjusted up to a level between DKK +0.1m to +2.0m for the full year of 2022 as
we expect to deliver a positive EBITDA in H2 2022.
5th Planet Games A/S - Interim report, H1 2022 Page 3
CEO-letter: H1 2022
For the first time, we can now clearly see the positive impact of the hard work that has been done over the
last year in the financial performance of the company; with the core financial metrics all now heading in a
positive direction.
In reviewing our financial results for H1 2022, I note the following highlights:
- Revenue H1 2022 was DKK 4.7m, which is 360% higher than DKK 1.3m in H1 2021.
- EBITDA H1 2022 was DKK -1.1m, which is an improvement of DKK 5.6m from DKK -6.7m in H1 2021.
- Cashflow positive H1 2022 by DKK 20.2m, which is an improvement of DKK 32.8m from DKK -12.6m
in H1 2021.
- Net profit / loss exclusive loss from fair value of derivative financials instruments was a profit of
DKK 0.1m in Q2 2022 against a loss of DKK-6.4 in Q2 2021 (on a half year basis H1 2022 was DKK -
0.4m, which is an improvement of DKK 12.4m from DKK -12.8m in H1 2021).
As we have a future guaranteed cash inflow of DKK 37m, technical accounting rules dictate a change in fair
value of derivative financials instruments by DKK -42.7m, which then gives a net loss Q2 2022 of DKK
42.6m. These DKK 42.7m and another DKK 17.9m from Q1 2022 will come positive back into the accounting
books before the last payment in September 2023.
BUT - despite the technical accounting in Q2 2022 to reflect the hypothetical value it is very clear that from
an operational perspective, the company is now quickly heading to a position of profitability, which is also
our guidance for H2 2022 and for the full year of 2022
We have seen in H1 2022 a very significant revenue contribution from Before Your Eyes, one of the titles
that was signed as part of our ongoing partnership with Skybound; the title continues to attract
outstanding critical acclaim, with royalties of DKK 3m in the first 6 months of this year. On top, we
announced a major new distribution agreement with Netflix to make the game available for mobile devices.
The royalty income from Before Your Eyes now makes a significant contribution to the business, and my
expectation is that it will continue to do so for many years to come.
In recognising the contribution of Before Your Eyes, we have similar hopes for the other titles that we have
recently announced; Escape Academy, which has already released and WrestleQuest and VICE NDRCVR
both of which will release in 2023. Royalty income from these new titles will start to contribute to 5
th
Planet
Games from the end of this year, and like Before Your Eyes, all of these games come are being developed by
outstanding teams with a proven track record.
I am also pleased to see that our back catalogue of mobile games is still viable, its managed in a pro-active
way and it continues to make a net positive contribution to our finances.
5th Planet Games A/S - Interim report, H1 2022 Page 4
Our business development teams have continued to work hard through the Spring and early Summer
months, and as a result, we expect to have an even bigger pipeline of new opportunities with more games
and distribution agreements to announce in H2 2022.
Yours sincerely,
Mark Stanger, Interim CEO, 5th Planet Games A/S
5th Planet Games A/S - Interim report, H1 2022 Page 5
Guidance 2022
- Revenue maintains guidance of DKK 10m to 20m (mainly from Before Your Eyes and Escape
Academy) for the full year of 2022.
- EBITDA guidance is adjusted up to a level between DKK +0.1m to +2.0m for the full year of 2022 as
we expect to deliver a positive EBITDA in H2 2022.
5th Planet Games A/S - Interim report, H1 2022 Page 6
Key figures and financial performance
- Revenue for Q2 2022 amounted to DKK 1.8m, a 202% increase from DKK 0,6m in Q2 2021 (continued
operations).
- Gross profit for Q2 2022 amounted to DKK 1.8m, a 239% increase from DKK 0.5m in Q2 2021
(continued operations).
- Costs for Q2 2022 decreased by DKK 1.2m (continued operations). Development expenses in Q2 2022
amounted to DKK 0.0m a decrease from DKK 1.1m in Q2 2021 (continued operations). Other expenses
were in Q2 2022 on same level as in Q2 2021 (continued operations).
- EBITDA before special items was a loss of DKK 0.7m in Q2 2022 against a loss of DKK 3.1m in Q2 2021
(continued operations). The increase was mainly driven by increase in revenue.
- Financial income was an income of DKK 1.0m, covering financial income from exchange rate
adjustments.
- Financial expenses were a cost of DKK 42.7m covering an interest expense of DKK 0.1 and calculated
change in loss from derivative financials instruments of DKK 42.6m. The amount DKK 42.6m is the fair
calculated value change of Tranche 2-4 from the investment agreement with Skybound. These DKK
42.6m and another DKK 18.0m from Q1 2022 will come positive back into the accounting books before
the last payment in September 2023. For further explanation please see note 4.
- Loss before tax amounted to DKK 42.7m in Q2 2022 an increase from DKK -3.3m in Q2 2021
(continued operations).
Q2 Q2 H1 H1 FY
DKK ´000 2022 2021 2022 2021 2021
*Revenue 1,813 601 4,727 1,314 4,809
*Gross profit 1,775 523 4,634 975 4,688
*Loss before special items (EBITDA) -656 -3,144 -1,118 -6,656 -9,465
*Operating profit/loss (EBIT) -925 -3,144 -1,652 -6,656 -15,066
*Net Financials exclusive change in derivative instruments 1,010 -96 1,221 -144 656
Change in derivative financials instruments, fair value -42,652 0 -68,282 0 7,729
Loss from discontinued operations 0 -3,322 0 -6,864 -9,651
Profit / loss for the year -42,567 -6,382 -68,713 -12,797 -16,254
Profit / loss exclusive fair value of derivative financials instruments 85 -6,382 -431 -12,797 -23,983
Total assets 51,764 16,448 51,764 16,448 28,359
Investments other equipment 0 0 0 0 0
Capitalized development costs 14,089 0 14,089 0 0
Equity -27,328 10,674 -27,328 10,674 23,461
Equity exclusive fair value derivative financials instruments 33,226 10,674 33,226 10,674 15,732
*Figures for Q2 2021, H1 2021 and FY2021 are only for continued operations.
5th Planet Games A/S - Interim report, H1 2022 Page 7
- Profit / loss exclusive change in fair value of derivative financials instruments was a profit of DKK
0.1m (DKK -42.7m + DKK 42.6m) in Q2 2022 compared to a loss of DKK -3.3m in Q2 2021 (continued
operations).
- Cash flows from operating activities. Cash flows from operating activities was positive with DKK 16.1
in Q2 2022 against an outflow of DKK 6.0m in Q2 2021.
- Cash flows from investing activities. Cash flows from investing activities was DKK 14.1 in Q2 2022
against DKK 0.0m in Q2 2021. The investment amount is development projects in progress regarding
the Co-productions agreements with Skybound.
- Cash flows from financing activities. Cash flows from financing activities was DKK 16.6 in Q2 2022
against DKK 0.0m in Q2 2021. The amount is the net proceed regarding trance 2 in Investment
Agreement with Skybound Games Studios Inc received in April 2022.
- Cash position as of 30 June 2022 amounted to DKK 33.9m against DKK 11.0m as of 30 June 2021.
- The Group’s equity as of 30 June 2022 amounted DKK -27.3m. The reason for the negative equity as of
30 June 2022 is that the calculated value of the derivative financials instruments amounts DKK -60.6m
as of 30 June 2022. Without the calculated value of the derivative financials instruments the group´s
equity would have been positive by DKK 33.3m.
5th Planet Games A/S - Interim report, H1 2022 Page 8
5th Planet Games at a glance
- 5th Planet Games A/S, Gothersgad e 11 , 1123 C openhagen K , Denmark , CVR no.: 3359 714 2 .
- Interim CEO Mark Stanger, E-mail: mstanger@5thplan etgames.c om , Phone: +44 78 33690674 .
- An international, publicly traded games development company founded in 2011.
- A company that finances and publishes games on 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 genuine joy to people for years.
- Enters into strategic partnerships with global IP holders for increased visibility, awareness and games
performance.
- Focused on games of the highest quality and a publishing function managed by an experienced
executive team from Europe and the USA
5th Planet Games A/S - Interim report, H1 2022 Page 9
Statement by the Board of Directors and the Executive Board
Executive Board
Board of Directors
5th Planet Games A/S - Interim report, H1 2022 Page 10
Independent Auditor’s review report
The Board of Directors’ and the Management’s responsibility for the interim consolidated financial
statements
Auditors’ responsibility
Conclusion
5th Planet Games A/S - Interim report, H1 2022 Page 11
Company reg. no. 34209936
MNE-nr 35423 MNE-nr. 47837
5th Planet Games A/S - Interim report, H1 2022 Page 12
Consolidated statement of comprehensive income
DKK´000 Note Q2 2022 Q2 2021 H1 2022 H1 2021 FY 2021
Revenue 2 1,813 601 4,727 1,314 4,809
Costs of sales 38 78 93 339 121
Gross Profit 1,775 523 4,634 975 4,688
Research and development costs -34 1,068 537 2,248 3,998
Marketing expenses 0 0 0 0 0
Other expenses 2,465 2,599 5,215 5,383 10,155
Loss before special items, deprecation and amortisation (EBITDA) -656 -3,144 -1,118 -6,656 -9,465
Special items 0 0 0 0 5,262
Depreciation and amortisation 269 0 534 0 339
Operating loss (EBIT) -925 -3,144 -1,652 -6,656 -15,066
Financial income 1,029 -120 1,264 313 8,483
Financial expenses 42,671 24 68,325 54 98
Loss before tax -42,567 -3,288 -68,713 -6,397 -6,681
Tax on loss for the year 0 -228
Loss for the year from continuing operations -42,567 -3,060 -68,713 -5,933 -6,603
Loss for the year from discontinued operations 0 -3,322 0 -6,864 -9,651
Loss for the year -42,567 -6,382 -68,713 -12,797 -16,254
Other comprehensive income 0 0 0 0 0
Comprehensive income -42,567 -6,382 -68,713 -12,797 -16,254
Distribution of comprehensive income:
Parent company´s shareholders -42,567 -6,382 -68,713 -12,797 -16,254
Non-controlling interests 0 0 0 0
Total -42,567 -6,382 -68,713 -12,797 -16,254
Basic earnings per share:
From Continued operations (DKK) 3 -0.275 -0.029 -0.486 -0.056 -0.058
From discontinued operations (DKK) 3 0.000 -0.031 0.000 -0.065 -0.069
Total DKK) -0.275 -0.060 -0.486 -0.120 -0.127
Diluted earnings per share:
From Continued operations (DKK) 3 -0.275 -0.029 -0.486 -0.056 -0.058
From discontinued operations (DKK) 3 0.000 -0.031 0.000 -0.065 -0.069
Total DKK) -0.275 -0.060 -0.486 -0.120 -0.127
5th Planet Games A/S - Interim report, H1 2022 Page 13
Consolidated balance sheet
DKK´000 Note 30.06.2022 30.06.2021 31.12.2021
Non-current assets
Acquired rights 1,280 0 1,814
Completed development projects 0 0 0
Development projects in progress 14,089 0 0
Plant and equipment 0 71 0
Right-of-use assets 0 607 0
Income tax receivables 0 1,664 0
Total non-current assets 15,369 2,342 1,814
Current Assets:
Trade receivables 2,219 828 1,924
Income tax receivable 152 2,196 52
Other receivables 5 50 2,911
Accrual expenses 159 0 322
Derivative financials instruments 4 0 0 7,729
Cash 33,860 11,032 13,607
Total current assets 36,395 14,106 26,545
Total assets 51,764 16,448 28,359
EQUITY AND LIABILITIES
DKK´000 Note 30.06.2022 30.06.2021 31.12.2021
Equity:
Share capital 8,207 5,316 6,400
Reserves 0 0 0
Retained earnings -35,535 5,358 17,061
Total Equity -27,328 10,674 23,461
Non-current liabilities
Lease liabilities 0 400 0
Other payables 372 930 930
Total non-current liabilities 372 1,330 930
Current liabilities
Lease liabilities 0 260 0
Received prepayments 0 0 0
Accrual income 409 0 572
Derivative financials instruments 4 60,554 0 0
Trade payables 16,347 1,394 1,746
Other payables 1,410 2,790 1,650
Total current liabilities 78,720 4,444 3,968
Total Liabilities 79,092 5,774 4,898
Total equity and liabilities 51,764 16,448 28,359
5th Planet Games A/S - Interim report, H1 2022 Page 14
Consolidated statement of changes in equity
Other
DKK´000 reserves
Equity as at 01.01.2022 6,400 0 0 17,061 23,461
Net Loss -68,713 -68,713
Other comprehensive income 0
Comprehensive income 0 0 0 -68,713 -68,713
Capital increase 1,807 15,084 16,891
Costs related to capital increase -332 -332
Share-based payments 1,365 1,365
Transfer of reserves -14,752 14,752 0
Transactions with owners 1,807 0 0 16,117 17,924
Equity as at 30.06.2022 8,207 0 0 -35,535 -27,328
Equity as at 01.01.2021 5,316 0 0 15,573 20,889
Net Loss -12,797 -12,797
Other comprehensive income 0 0 0
Comprehensive income 0 0 0 -12,797 -12,797
Capital increases 0
Costs related to capital increase 0
Share-based payment 0 2,582 2,582
Transfer of reserves 0
Transactions with owners 0 0 0 2,582 2,582
Equity as at 30.06.2021 5,316 0 0 5,358 10,674
Total equity
Share capital
Share premium
Retained
earnings
Reserves
5th Planet Games A/S - Interim report, H1 2022 Page 15
Consolidated cash flow statement
DKK´000 Q2 2022 Q2 2021 H1 2022 H1 2021 FY 2021
Loss before tax -42,567 -7,207 -68,713 -14,438 -16,332
Depreciation, amortisation and impairment losses 269 70 534 150 5,364
Share-based payments 691 1,103 1,365 2,582 4,360
Financial income, reversed -1,026 0 -1,264 -313 -8,484
Financial expenses, reversed 42,671 157 68,325 80 135
Change in working capital 16,134 -84 17,679 -469 -4,523
Operating cash flow 16,172 -5,961 17,926 -12,408 -19,480
Financial income, received 0 0 0 0 0
Financial expenses, paid -19 -37 -43 -80 -135
Income tax received -100 -15 -100 -23 2,222
Cash flow generated from operations 16,053 -6,013 17,783 -12,511 -17,393
Purchase of intangible assets -14,089 0 -14,089 0 0
Sale of right of use assests 0 0 0 0 544
Purchase of IP rights 0 0 0 0 -6,895
Cash flow from investing activities -14,089 0 -14,089 0 -6,351
Proceeds from cash capital increase 16,559 0 16,559 0 7,573
Purchase of IP rights financed by issue of warrants 0 0 0 0 6,895
Lease liabilities, repayment 0 -62 0 -123 -783
Cash flow from financing activities 16,559 -62 16,559 -123 13,685
Total cash flow for the period 18,523 -6,075 20,253 -12,634 -10,059
Cash, beginning of period 15,337 17,107 13,607 23,666 23,666
Net foreign exchange difference 0 0 0 0 0
Cash, end of period 33,860 11,032 33,860 11,032 13,607
5th Planet Games A/S - Interim report, H1 2022 Page 16
Notes:
1. Basis of preparation
The interim report has been prepared in accordance with IAS 34 Interim financial reporting, as adopted by
the EU, and additional Danish interim reporting requirements for listed companies.
The interim report does not include all the information and disclosures required in the annual consolidated
financial statements and should be read in conjunction with the Group’s annual consolidated financial
statements as at 31 December 2021.
The accounting policies adopted in the preparation of the interim report are consistent with those followed
in the preparation of the Group’s annual consolidated financial statements for the year ended 31
December 2021.
Significant accounting estimates and judgments
The most significant accounting estimates and judgments in the interim consolidated financial statements
remain unchanged compared to those used in Annual Report 2021. The principles and key assumptions are
described in the Annual Report 2021 in note 2.
2. Revenue
3. Earnings per share
DKK´000 Q2 2022 Q2 2021 H1 2022 H1 2021 FY 2021
Sales of games and advertising for mobile devices 344 204 771 446 1,205
License income 1,320 397 3,807 868 3,589
Other revenue 149 0 149 0 15
Total 1,813 601 4,727 1,314 4,809
2. Earnings per share
DKK´000 Q2 2022 Q2 2021 H1 2022 H1 2021 FY 2021 Q2 2022 Q2 2021 H1 2022 H1 2021 FY 2021
Net loss for the period -42,567 -3,060 -68,713 -5,933 -6,603 0 -3,322 0 -6,864 -7,797
Average number of shares (in thousands) 154,892 106,318 141,444 106,318 113,148 127,996 106,318 141,444 106,318 113,148
Average number of treasury shares 0 0 0 0 0 0 0 0 0 0
Average number of shares in circulation 154,892 106,318 141,444 106,318 113,148 127,996 106,318 141,444 106,318 113,148
Diluted average number of shares in circulation 154,892 106,318 141,444 106,318 113,148 127,996 106,318 141,444 106,318 113,148
Earnings per share of DKK 0,05 each (in DKK) -0.275 -0.029 -0.486 -0.056 -0.058 0.000 -0.031 0.000 -0.065 -0.069
Diluted earnings per share of DKK 0,05 each (in DKK) -0.275 -0.029 -0.486 -0.056 -0.058 0.000 -0.031 0.000 -0.065 -0.069
Discontinued operations
Continued operations
5th Planet Games A/S - Interim report, H1 2022 Page 17
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 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 technical accounting liabilities amount to DKK 60.6m as per 30 June 2022 is a variable amount that
incorporates the development in exchange rate between NOK and DKK together with 5
th
Planet Games’
share price. The amount DKK 42.6m is the fair calculated value change of Tranche 2-4 from the investment
agreement with Skybound. These DKK 42.6m and another DKK 18.0m from Q1 2022 will come positive back
into the accounting books before the last payment in September 2023.
Capital resources
The company will resolve the tranche 3 payment from the Skybound agreement of DKK 20m end August
2022. According to most recent budgets and plans the existing capital resources are sufficient to continue
the operation.
Events occurring after the balance sheet date
Following the decrease in the share price in August 2022, the company is at the date of this report no
longer in a situation with capital loss.
The capital loss as of 30 June 2022 is due to the technical accounting principles related to the fair value of
the derivative financial instruments, and does not affect the groups capital recourses, cash position or
future outflow of cash. This technical accounting situation is only temporary and will end when Investment
Tranche 4 has been executed September 2023 as the mentioned DKK 42.6m and DKK 18.0m will come
positive back into the accounting books before the last payment in September 2023.
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.
5th Planet Games A/S - Interim report, H1 2022 Page 18
Acquired IP rights / co-productions rights
As a part of the investment agreement with Skybound 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 agreement, 5th Planet Games has provided certain representations and
warranties to Skybound. Should Skybound suffer a loss due to certain specific warranties not being true,
accurate and not misleading, Skybound 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.