Empowering
entertainment
discovery
everywhere
Annual report 2021
Table of contents
Introduction
About Linkfire 4
What we do 5
Building a market leader 6
Who we are 7
Key events and highlights
in 2021 8
Letter from the CEO 9
Letter from the Chairman 11
Financial statements
Consolidated statement of
comprehensive income 43
Consolidated statement of
financial position 44
Consolidated statement of
changes in equity 45
Cash flow statement 46
Notes - Consolidated 47
Parent Company statement
income statement 69
Parent Company statement
of financial position 70
Parent Company statement
of changes in equity 71
Notes - Parent Company 72
Statement by Management 79
Independent Auditor’s report 80
Glossary and
Company information 83
Management’s review
Market update 13
Our solutions, key strengths
and competitive advantage 14
Our growth strategy 16
Growing commission revenue 17
A scalable and flexible
business model 18
Financial targets 20
Financial performance
and key figures 20
Outlook for 2022 22
Financial review 23
Sustainability
Sustainability 27
Corporate Governance
The share and shareholders 30
Risk management 32
Board of Directors 35
Executive management
team 37
Leadership team 38
Corporate governance 39
Letter from
the CEO
Our growth strategy Sustainability The Linkfire
share
Management Commentary Financial statements
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MANAGEMENT’S REVIEW SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO
Contents
Empowering entertainment discovery
everywhere
Since 2014, we’ve become a trusted partner to
the music industry’s biggest names, as well as
thousands of soon-to-be biggest names. Linkfire
is headquartered in Copenhagen, with offices in
New York City, Los Angeles, Lisbon and Accra.
Read more about Linkfire at https://www.linkfire.com
ABOUT LINKFIRE
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About Linkfire
EMPOWERING ENTERTAINMENT DISCOVERY EVERYWHERE
What we do
Music has the unique power to unite us all. It transcends cultures, languages,
and borders. The music and entertainment industries are however transforming
in a way that has left companies within and around these industries in a
constantly uncertain and changing operating environment. In addition to
the industry transformation, the market is fragmented and split across many
different platforms and services.
Consumer connections
1.6 billion
In 2021, 1.6 billion consumers were connected through Linkfire. We
help consumers make fast, safe and wise decisions in a complex
market and present them with contextual, bespoke and curated
options, so that music and entertainment discovery can happen
anywhere. We empower everyone from major labels to independent
artists with unparalleled audience insights.
Headquartered
Copenhagen
We are headquartered in Copenhagen, Denmark, with offices in
New York City and Los Angeles, United States, Lisbon, Portugal and
Accra, Ghana.
Listed
LINKFI
Linkfire is listed on Nasdaq First North Premier Growth Market,
Sweden with the trading code LINKFI.
Marketing efforts have traditionally been
built on past behavior, but in an increas-
ingly complex digital marketing world,
insight on the consumers’ willingness to
pay for content, their interest in engaging
with multiple mediums simultaneously
and a shift towards short-form content
have become crucial.
In this new operating environment,
consumers and fans want to engage with
bespoke content on their own terms, and
digital technology makes it easier than
ever. Since we started, we’ve become a
trusted partner to the music industry’s
biggest names, as well as thousands of
soon-to-be biggest names.
We empower entertainment discovery
everywhere by simplifying it. For this
purpose, we have built leading digital
marketing solutions for the entertain-
ment and music industries. Linkfire ena-
bles entertainment discovery everywhere
by simplifying music and entertainment
discovery for consumers and supporting
traffic generation for digital music and
entertainment content providers.
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What we do
EMPOWERING ENTERTAINMENT DISCOVERY EVERYWHERE
Building a market leader
Linkfire is founded and the
first version of the marke-
ting platform was developed
in collaboration with Danish
record labels.
Going international. The
platform became widely
used throughout Denmark
and Europe. All three major
music labels - Universal
Music Group, Sony Music
Group, and Warner Music
Group – joined Linkfire.
Conquering the US.
Linkfire opened
its first US offices,
followed by a quick
increase of adop-
tion by the big US
record labels.
Building a market
leader. Linkfire
secures its position
as the global mar-
ket leader by con-
necting more fans
with music than any
other competitor.
Scaling up. Inde-
pendent record
labels, independent
musicians, podca-
sters, and the first
large US film studio
started using Link-
fire.
Linkfire is listed
and becomes a
publicly listed com-
pany on Nasdaq
First North Premier
Growth Market in
Sweden
2014 - 2015
2016 - 2017 2018 2019 2020 2021
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Building a market leader
Who we are
Music and entertainment has
the unique power to transcend
cultures, languages, and borders -
and Linkfire is immensely proud to
embrace that same spirit across our
global organization.
We’re a passionate team of
developers, engineers, product
managers, and more, drawn from
every corner of the globe. All of us
live and breathe music, so when we
say “we rock,” we really do mean it.
Listed on Nasdaq First
North Premier Growth:
2021
Read more about our
people on page 28
Founded in 2014 by the
current CEO and CCO,
who wanted to simplify
the marketing workflows
within the increasingly
fragmented digital music
industry.
Founded
2014
Employees
100+
Listed
2021
EMPOWERING ENTERTAINMENT DISCOVERY EVERYWHERE
Read more about Linkfire at https://www.linkfire.com
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Who we are
Key events and highlights
in 2021
Q2Q1 Q3 Q4
In June, Linkfire was listed on
Nasdaq First North Premier
Growth Market in Sweden.
In January, Linkfire renewed
the agreement for providing
its SaaS Marketing Platform
to Universal Music Group
globally.
In August, Linkfire collaborated
with Apple to launch new feature
in Apple for Artists service and
announced a multi-year renewal
of agreement with Sony Music.
In August, Linkfire renewed the
agreement for providing its SaaS
Marketing Platform to Sony
Music Entertainment globally.
In November, Linkfire opened a local
office in Accra, Ghana, as part of
Linkfire’s ambition to grow its position
and increase traffic in fast-growing
markets like Africa and Asia.
In November, Linkfire also partnered
with smartURL, the pioneer in the
music smart linking space.
In December, Linkfire renewed
the agreement for providing SaaS
Marketing Platform to Warner Music
globally.
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Key events and highlights
Letter from the CEO
2021 got off to a strong start with solid growth throughout the business and key performance
indicators, and a successful listing on Nasdaq First North Premier Growth Market in Sweden.
This year we have seen significant growth within commission revenue and RPM*. The 2021 numbers
are a strong statement that, despite COVID-19 still impacting the entertainment industry at large,
the underlying growth in digitalization of music consumption is continuing.
The listing in June 2021 was an exciting
step for Linkfire and it has supported us
in our continued growth journey, the scal-
ing of our operations and the expansion
of our market position globally. Sweden
has a strong standing in the global music
and entertainment industry and a listing
in Stockholm takes us closer to that.
Following the completion of the IPO, our
focus has been set on scaling the busi-
ness. During the year we have been work-
ing with expanding our offering and our
geographic presence, both organically
and through pursuing M&A opportunities.
In line with our strategy to grow traffic
monetisation, we continuously strive to
improve and expand upon our affiliate
agreements with partners.
Linkfire has seen a very promising devel-
opment in both the business and in the
markets. Traffic continues to grow as the
output of new music and content in our
markets sustains a high level.
At the same time, we have achieved
improvements in traffic monetization,
measured in RPM. RPM increased by 92
percent year-on-year and commission
revenues grew by 108 percent, compared
to the previous year.
During 2021, continuous optimization
and development of new offerings for the
music and entertainment industry along-
side industry partnerships, have been
key drivers in Linkfire’s growth. Since the
listing in June, the ambition has been and
still is, to hire top talent to support the
underlying commercial drivers. The ef-
fects of these investments have revealed
their potential during the year. Initiatives
in product optimization led to higher
conversion rates as the main driver which
contributed to the strong RPM growth.
A clear signal of the company gaining
return on its continued investments in
* see glossary on page 83
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Letter from the CEO
product optimization, which can lead to
further monetization improvements and
growth. These improvements come at a
high gross margin and are scalable as
Linkfire utilizes its own data and traffic
to continue to optimize.
A milestone is that we have expanded
our operations to Sub-Saharan Africa,
as we established a local office in Accra,
Ghana. The expansion is part of Linkfire’s
ambition to grow in position and increase
traffic in fast-growing markets like Africa
and Asia. Strategically well located close
to other key markets like Nigeria, Ghana
is a fast-growing entertainment market
in itself. And the trend is clear: songs re-
leased from Africa are not only consumed
on the continent, but also outside by a
global audience.
We continue to be excited over the fast
growth that happens in the music and
entertainment industries. Covid has
brought along an expedited technological
development and maturity in many areas
across the music and entertainment
industries. Every day, 60,000 songs are
uploaded to streaming services, which
cements the market volume Linkfire is
approaching. And that’s just the songs.
Entertainment, music and spoken word
has become ubiquitous. Across social
media, messaging, websites, games, even
the metaverse, we see users listening,
viewing and engaging with entertain-
ment. To meet these trends, we signed
an agreement to acquire smartURL, the
pioneer in the music smart linking space,
and all related assets from Gupta Media,
LLC. SmartURL’s strong position and
expertise in the global entertainment
ecosystem and their passion for servic-
ing labels, artists and consumers makes
them an ideal acquisition for Linkfire.
We’ve been competing head-to-head
with smartURL for years now and have
continuously been impressed by their
prominent industry position and foothold.
The acquisition further solidifies our
position as one of the leading marketing
platforms for music and entertainment.
I would like to send
my thanks to all our
shareholders, customers,
colleagues and business
partners for contributing
to the prosperity of our
growth. Linkfire now
expects to be profitable in
2023 and I invite you all to
be a part of our exciting
journey!
Lars Ettrup, CEO & Co-founder
As the supply of content and the enter-
tainment ecosystem grows, it’s our job to
empower consumers to navigate quickly
and securely to this content. Linkfire is
uniquely positioned to provide immense
value for consumers, artists, labels and
other stakeholders within entertainment
as this market grows and becomes even
more complex. This is constituted by
our market position, unparalleled part-
nerships and premium technology. The
acquisitions, expansions and growth of
the year strengthens our position as a
trusted and reliable partner for enter-
tainment and music discovery worldwide.
I am impressed and proud of the dedi-
cated work performed at Linkfire. Hence,
I would like to send my thanks to all our
shareholders, customers, colleagues
and business partners for contributing
to the prosperity of our growth. Linkfire
now expects to be profitable in 2023 and
I invite you all to be a part of our exciting
journey!
Best regards
Lars Ettrup, CEO & Co-founder
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Letter from the Chairman
Since it was founded in 2014, Linkfire has made an impressive and convincing journey. The team
has built an impressive business and have taken a key position in the marketing ecosystem for
music and entertainment globally.
In 2021 Linkfire took a major step in our growth journey when we had our initial listing on the
Stockholm Nasdaq First North Premier. The listing was a success and Linkfire managed to raise
capital to continue our journey and expand even more rapidly.
Another of the main events of 2021 was
the acquisition of smartURL, our first
major acquisition as a listed compa-
ny. The acquisition further solidified
Linkfire’s market position, as Linkfire’s
unparalleled features and monetization
capabilities have elevated the combined
offering to the next level.
We also expanded into new geographical
areas, most recently by opening a new
office in Accra, Ghana. Ghana was the
chosen location to strategically place
ourselves in the midst of the African
market, which contains strong growth
opportunities for Linkfire, with Ghana
and Nigeria as key markets.
The past year was in many ways unprec-
edented. Despite this, Linkfire succeed-
ed in both proving the strength of our
strategy and business model, as well as
delivered a resilient performance in an
ever-changing market environment.
In the beginning of 2022, Linkfire was
ranked #8 amongst the top 100 Danish
startups in 2021 in Leap’s yearly report
based on digital marketing performance
– another indication of the great work
that has and will be done by the compa-
ny.
As Chairman, I look forward to supporting
Linkfire on its continued development as
a listed company.
Best regards
Jesper Møller, Chairman of the board
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Letter from the Chairman
Management’s review
MARKET UPDATE OUR SOLUTIONS, KEY STRENGTHS AND COMPETITIVE ADVANTAGE OUR GROWTH STRATEGY GROWING COMMISSION REVENUE
A SCALABLE AND FLEXIBLE BUSINESS MODEL FINANCIAL TARGETS FINANCIAL PERFORMANCE AND KEY FIGURES OUTLOOK FOR 2022
FINANCIAL REVIEW
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Management’s review
Market update
As the digital landscape continues to transform and new
consumption behaviors evolve, the opportunity to help
consumers discover music and entertainment arises. Besides
music being on the rise, the consumption of spoken word
as a content form is reaching all-time highs, creating new
opportunities for marketing and experience-sharing.
The growing and changing entertainment
market represents promising growth
opportunities for Linkfire, which has a
strong and unique market position to
provide immense value for consumers,
artists, labels and other stakeholders
within entertainment, as this market
grows and becomes even more complex.
In addition to our market position, this is
enabled by our unparalleled partnerships
and our premium technology.
The thrill of discovering a new song for
the first time has not changed, but the
path guiding consumers to their favorite
content is. Music and entertainment still
has the ability to communicate to others
how a person is feeling in a specific
moment.
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Market update
Our solutions, key strengths
and competitive advantage
We have built two products that globally provide seamless connections to music and
entertainment. Our offering consists of the Marketing Platform and the Discovery Network.
The Linkfire Marketing Platform is a
SaaS marketing platform allowing labels
and artists, its customers, to create
Smart Links for music products such as
songs, albums, tickets and merchan-
dise, which can be shared on websites
and applications. The Smart Links route
consumers to a landing page from which
they can easily engage further with the
content.
Furthermore, the platform offers complex
data insights, helping Linkfire’s custom-
ers to better understand their target
audiences, and consumer journeys.
The Linkfire Discovery Network is a
network of Smart Links on partner web-
sites and applications as well as traffic
channels, which connects consumers
to music products. The service enables
Linkfire’s Traffic Partners to have the
Smart Linking technology deeply inte-
grated in the partner application. The
discovery network is currently among
others integrated in the multi-messaging
application Snapchat.
In other words, Linkfire simplifies music
discovery for consumers and supports
traffic and lead generation for Digital
Service Providers such as Apple Music,
Spotify and Pandora.
Subscription revenue is generated from
customers using the Linkfire Market-
ing Platform and commission revenue
whenever a potential consumer signs up
for or transacts at Digital Service Provid-
ers, with whom Linkfire has an affiliate
agreement, through a Linkfire link.
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Our solutions
Key strengths and competitive advantage
A leader and
consolidator in
a fast growing
music and
entertainment
market
Linkfire’s Smart Links are
driving billions of consumer
connections, more than any
of its direct competitors. The
recorded music industry is
estimated to double in size
by 2030. Linkfire is uniquely
positioned to join the growth.
Strong
partnership
network
Linkfire has a unique partner-
ship network, with partners
including Apple Music,
Youtube, Deezer, Snapchat
and Ticketmaster among
many others.
A large and
broad customer
base
Linkfire works with the
largest music labels world-
wide, its marketing platform
encompasses over 85,000
users and is used by the vast
majority of Billboard’s Top
100 artists and their teams.
A scalable and
flexible business
model
Linkfire’s business model is
highly scalable – the output
of new revenue contracts
vastly supersedes the cost of
contract acquisition. You can
read more about our business
model under the heading A
scalable and flexible business
model.
A privacy-first
service offering
Linkfire links and landing
pages do not rely on cookies,
which lowers the barriers
for entering a commercial
discussion with Linkfire, and
future-proofs the business.
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Our growth strategy
Linkfire has a unique offering to penetrate the market, operates in a nascent, fast growing market with multifaceted
growth opportunities and has a solid foundation for future growth. Our growth strategy is divided into growing
subscription revenue, and growing commission revenue.
Entering and expanding
into new geographies
Linkfire believes that there is significant poten-
tial to increase subscription revenue by expan-
ding in new geographies. A number of territories
is used as a potential upsell argument when
negotiating with enterprise customers. Further-
more, localisation is essential when expanding
into new geographies, for example by ensuring
the platform is well adopted to non-English-spe-
aking customers, or creating a local presence by
opening offices in new geographies. Moreover,
M&A opportunities are consistently evaluated as
a way of entering new geographies.
Growing subscription revenue
There are two main ways of growing subscription revenue: by adding new clients and by increasing user monetisation.
Expanding the
customer base
We aim to grow our customer base both through
inbound leads and through lead acquisition
which it has initiated. The Linkfire Marketing
Platform currently has 85,000 users, which can
be compared with the total number of artists
with content on Spotify of 8.0 million, signaling a
large upside. In the coming years, the estimation
is that most upside in subscription revenue will
originate from signing new customers.
Adding value to
our customers
The way to remain relevant for the market and
our customers is by ensuring that our platform
is innovative, market-leading and compliant. We
believe if we keep adding value to our customers’
business, we are able to grow our own. We expect
subscription contract renegotiations to account
for a substantial part of our growth in the near
term.
Expanding into
adjacent verticals
Linkfire has, since 2021, explored the opportuni-
ties of expanding into adjacent verticals within
the entertainment industry.
1 2 3 4
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Our growth strategy
Acquiring traffic
Linkfire will likely have opportunities to engage
in M&A activity or paid acquisition of traffic on
occasion. The main motives for engaging in M&A
or paid acquisition would be to buy consumer
traffic. Linkfire sees potential in acquiring
undervalued inventory which is currently not,
or not optimally monetised on, and making it
profitable. There are also intangible benefits of
acquiring competitors, including better offering
for partnerships, and a higher market share and
influence over the Smart Linking market. By uti-
lising website traffic data, the Company deems it
would be reliable and relatively simple to deter-
mine the value of potential acquisitions.
Increasing revenue per mille
(RPM)
Improving Linkfire’s key monetisation metric,
RPM, is very important for growing commission
revenues. RPM can be improved by increasing
the commission rates. Linkfire currently focuses
on two tactics: signing new deals (e.g. affiliate
payment on user leads from a Digital Service
Provider that Linkfire did not have an agreement
with in the first place), and negotiating better
deals. Possibilities include increased commis-
sion rates, wider trigger points (e.g. moving from
paid sign-up to lead) and more trigger points
(e.g. adding win-backs as a commissionable ac-
tion – users that revisit the sign-up flow through
a Linkfire link and sign up).
Improving algorithmic opti-
misation in the discovery layer
Linkfire is actively working to optimise the algo-
rithmic that successfully arranges Digital Service
Providers in discovery layers and on Linkfire
landing pages. This is eventually to increase re-
levance and conversion rates. The product devel-
opment will also allow for increased placement
options on the inventory, allowing for a maturati-
on of Linkfire’s advertising efforts.
Entering partnerships with new
Traffic Partners
In 2021, Linkfire continued expanding upon its
roster of Traffic Partners. Traffic Partners are using
music as engagement in their offering, and are
overall divided into two segments - web partners
and enterprise applications. Linkfire obtained a
foothold into the latter by operating Snapchat and
Twitch during 2021. While Snapchat and Twitch
have 250 million DAU and 150 million MAU respe-
ctively, there are several other potential Traffic
Partners with even more users that could generate
additional user traffic. Enterprise applications is a
long term focus of Linkfire’s.
Web partners are direct integrations of Linkfire’s
technology into existing websites and applications.
These integrations are lighter than the enterpri-
se applications and Linkfire is developing a shelf
product to cater for this market based on the
integrated partners in 2021. Entering new traffic
partnerships is expected to affect traffic generation
exponentially, which in turn may generate revenue.
Furthermore, partnerships with additional traffic
channels improve the Company’s client offering and
position when negotiating other partnerships.
Growing commission revenue
Commission revenue has two components: commission rates and traffic. Thus, to improve it, the Company needs to influence either one or both of the components.
1 2 3 4
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Growing commision revenue
Marketing Platform Discovery Network
Music production
Warner
Republic
Sony
EMI
Universal
Atlantic
Artists and labels
Music distribution and marketing
Instagram
Facebook
Snapchat
TikTok
Twitter
Traffic channels
Music industry
Music consumption
Apple
Music
Ticket-
master
Amazon
Deezer
Youtube
Music
Pandora
Music content providers
A scalable and flexible business model
Linkfire’s business of providing a digital marketing platform and generating leads is highly scalable. As a digital product, the cost of
adding one more user to the platform or redirecting one more consumer to a streaming service is minimal.
Linkfire currently focuses mainly on the
music industry, the service offering is
flexible, and the company is exploring
its options to address adjacent verticals
such as video on demand, podcasts,
audiobooks and video gaming.
Linkfire’s services could easily be tailored
to suit needs in these industries, which
together make up for a total addressa-
ble market of over USD 400 billion. This
market size refers to total music market,
total film industry, US podcast market,
gaming video content market and book
market.
At the core of Linkfire’s services is its
SaaS marketing platform. The platform
enables artists and record labels to
create Smart Links that automatically
Linkfire’s two offerings both
connect consumers to music
and entertainment
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A scalable and flexible business model
personalize the experience for consumers,
so that every click is unique and contextu-
al to that consumer journey. These Smart
Links are versatile in nature and can be
shared on any website or application.
When clicked, they connect consumers
directly to a range of music and entertain-
ment products across streaming services,
ticketing vendors and e-commerce stores
though Smart Links landing pages. Link-
fire’s customers can view detailed insights
on consumer journeys and specific behav-
iors such as service click-through, down-
loads, purchases, streams and more.
Linkfire is remunerated through subscrip-
tion fees and commission fees. Subscrip-
tion fees are generated from customers
subscribing to the marketing platform.
Commission fees are generated from
consumers signing up for or transacting
at a Digital Service Provider, with whom
Linkfire has an affiliate agreement, via a
Linkfire Smart Link.
The business model is supported by an ef-
ficient and scalable technology platform,
enabling rapid expansion of the customer
base, extension of partnerships and an
easy integration of the services with vari-
ous applications.
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Financial
targets
Financial performance
and key figures
Linkfire has set the following Mid-term*
financial targets:
Growth
Organic revenue shall grow at
a compounded annual growth
rate between 50-70 percent
Gross profit
The gross margin shall
amount to approximately 80
percent
* Mid-term is 3-5 years from IPO
+42%
Revenue Growth
42% growth on a constant
currency basis to DKK 34.5M
Subscription revenue grew 22%
Commission revenue grew 108%
36% recorded revenue growth to
DKK 33.7M
72%
Gross Margin
36% growth on a constant
currency basis to DKK 25.0M
Gross margin on a constant
currency basis of 72%
1,604M
Consumer Connections
1,604M consumers were
connected to entertainment
9% growth in consumer
connections
Mainly driven by an uptake in
Platform traffic
DKK 7.27
RPM
Revenue Per Mille Consumer
Connections of DKK 7.27
92% growth year over year
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Financial targets Financial performance and key figures
2017 2018 2019 2020 2021
406
576
835
1,475
1,604
2017 2018 2019 2020 2021
10.4
12.2
15.2
18.7
22.8
2017 2018 2019 2020 2021
0.4
1.4
1.7
5.6
11.6
DKK’000 Note 2021 2020 2019
Local GAAP
not CCB
2018*
Local GAAP
not CCB
2017*
Key Metrics
Consumer connections (Traffic) 1,603,957,986 1,475,350,156 834,577,974 575,707,449 406,011,000
y/y Growth (%) 9% 77% 45% 42% -%
Revenue on constant currency basis 34,521 24,348 17,003 13,665 10,924
Revenue Growth (%) 42% 43% 24% 25% 111%
Organic Revenue Growth (%) 42% 43% 24% 25% 111%
Subscription Revenue, on constant currency basis 22,853 18,745 15,268 12,254 10,464
y/y Growth (%) 22% 23% 25% 17% 102%
Commission Revenue, on constant currency basis 11,667 5,603 1,736 1,411 460
y/y Growth (%) 108% 223% 23% 207% -%
Commission Revenue per Mille (RPM)*, on constant currency basis in DKK 7.27 3.80 2.08 2.45 1.1 3
y/y Growth (%) 92% 83% -15% 116% -%
Gross Margin (%), on constant currency basis 72% 76% 61% 81% 80%
* Commission Revenue per thousand consumerconnections
Income Statement
Recognized Revenue 5 33,697 24,699 17,227 13,665 10,924
Operating loss before interest, depreciation & amortisation (EBITDA) (30,512) (8,371) (10,243) (9,658) (4,545)
Operating loss before interest & taxes (EBIT) (39,425) (14,193) (12,993) (10,065) (4,950)
Operating loss before interest & taxes (EBIT) excl. IPO Cost (32,558) - - - -
Result of financial items (1,652) (3,796) (16,002) (13,430) (6,983)
Profit after tax (35,577) (13,461) (11,850) (9,952) (4,163)
Balance Sheet
Intangible Assets 12 69,876 51,503 42,163 30,894 19,595
Additions, property, plant and equipment 13 634 173 41 92 142
Cash and cash equivalents 45,946 783 3,539 291 1,341
Total assets 140,201 63,786 60,408 39,551 25,599
Equity 87,126 4,909 10,026 (10,525) (574)
Financial Ratios
Operating profit before interest, depreciation & amortisations (EBITDA) margin (%) -91% -34% -59% -71% -42%
Operating profit margin (EBIT) (%) -117% -57% -75% -74% -45%
Financial performance and key figures (continued)
CONSUMER CONNECTIONS
Million
SUBSCRIPTION REVENUE
DKK mio.
COMMISSION REVENUE
DKK mio.
21 / 84
LINKFIRE A/S ANNUAL REPORT 2021
CONTENTS INTRO MANAGEMENT’S REVIEW SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTS
Outlook for 2022
Revenue guidance
In 2022, Linkfire expects continued rev-
enue growth and guides revenue in the
range between DKK 50-60M for the full
financial year. This is corresponding to a
yearly growth of 48-78%.
In order to achieve our guidance, per-
formance on the following key drivers is
required:
• Continued strong RPM performance
• Traffic growth and expansion of the
discovery network
• Continued product innovation and
development
• Continued inflow of new subscription
customers and ability to upsell to ex-
isting customers
We maintain our mid-term financial tar-
get of 50-70% organic revenue growth.
EBITDA guidance
In 2022, Linkfire expects continued
investments into reaching our mid-
term growth target in accordance with
the announced growth strategy in the
IPO prospectus. As a consequence of
those investments we expect an EBITDA
ranging between negative DKK 22-32M.
Possible deviations from the guided
range depend on investments into new
strategic opportunities supporting our
announced growth strategy.
EBITDA guidance is based on key as-
sumptions drawing from the announced
use of proceeds including continued
investments into product development,
sales and marketing initiatives and cor-
porate matters.
Strategy execution
In 2022, Linkfire will continue execut-
ing on our growth strategy and focus on
expansion of the discovery network as
well as RPM improving initiatives such as
increasing the number of affiliate part-
ners. We will continue to innovate and
develop our product offerings in both the
marketing platform and for our partner
integrations.
Linkfire will continue the market expan-
sion efforts in emerging markets across
Africa and Asia namely out of Accra,
Ghana and specifically focused on Japan.
Lastly, we are actively seeking develop-
ment opportunities into adjacent enter-
tainment verticals especially focused
on the share-of-ear industries such as
podcasts and audiobooks.
Forward-looking statements
Statements about the future expressed
in the annual report reflect Linkfire’s
current expectations for future events
and financial results. The nature of
these statements is affected by risk
and uncertainties. Therefore, the
company’s actual results may differ
from the expectations expressed in the
management commentary.
22 / 84 LINKFIRE A/S ANNUAL REPORT 2021
CONTENTS INTRO MANAGEMENT’S REVIEW SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTS
Outlook
2017 2018 2019 2020 2021
10.9
13.6
1 7. 0
24.3
34.5
2017 2018 2019 2020 2021
(0.5)
(10.5)
10.0
4.9
8 7. 1
Financial review
Revenue
Revenue increased by DKK 8,998 thou-
sand, or 36 per cent, from DKK 24,699
thousand in all the quarters of 2020 to
DKK 33,697 thousand in the quarters of
2021. The fastest growing revenue line,
Commissions, increased by DKK 6,067
thousand, or 109 per cent compared to
FY 2020, while Subscriptions increased
by DKK 2,931 thousand, or 15 per cent.
Cost
Cost of sales increased by DKK 3,325
thousand, or 55 per cent, from DKK 5,995
thousand during 2020 to DKK 9,320 thou-
sand FY 2021. The increase is mainly re-
lated to improved server and hosting cost
to ensure premium service delivery, as
well as an increase in traffic and users.
External expenses increased by DKK
10,240 thousand, or 155 per cent, from
DKK 6,613 thousand in 2020 to DKK
16,853 in 2021. The notable increase in
expenses relates to one-off expenses to
new hires and increased staff globally
as well as new premises in the US. The
continued and rising employment of
freelance staff supporting the hybrid re-
mote model contributes to the increase.
Cost related to being listed brought up
the baseline cost as well along with
increased expense related to market
expansion.
Other external expenses are attributable
to costs in connection with the listing
on Nasdaq First North Premier Growth
Market in Stockholm during the second
quarter.
Staff costs increased by DKK 10,709
thousand, or 52 per cent, from DKK
20,461 thousand in 2020 to DKK 31,170
thousand in 2021. As a percentage of
revenue, staff costs increased from 83
per cent to 93 per cent. The increase in
staff costs was primarily driven by new
hires during the year. Linkfire is at a dif-
ferent stage of scale than a year ago, and
investments into attracting and retaining
top talent and excellent leadership has a
strategic focus when driving our contin-
ued growth.
Earnings
Depreciation and amortisation increased
by DKK 3,090 thousand, or 53 per cent,
from DKK 5,823 thousand in 2020 to DKK
8,913 thousand FY 2021. This represents
an increase in relation to revenue from
24 per cent in 2020 to 26 per cent FY
2021. The increase was primarily due to
an increase in amortisation of intangible
assets. Increased amortisation mainly
derives from the final release of, and cus-
tomer migration to, the relaunched Link-
fire Platform holding extensive scalability
and functionality improvements.
Operating loss increased by DKK 25,232
thousand, or 158 per cent, from DKK
14,193 thousand in 2020 to DKK 39,425
thousand in 2021. This represents a
increased in relation to revenue from (57)
REVENUE
DKK mio.
EQUITY
DKK mio.
23 / 84
LINKFIRE A/S ANNUAL REPORT 2021
CONTENTS INTRO MANAGEMENT’S REVIEW SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTS
Financial review
per cent in 2020 to (117) per cent in FY
2021. The increase was primarily due to
increased cost, especially related to the
transaction cost in connection with the
IPO and one-off hiring cost.
Net financial items
Financial income increased by DKK 4,091
thousand, or 498 percent, from DKK 509
thousand in 2020 to DKK 4,600 thousand
FY 2021.
Financial expenses increased by DKK
1,947 thousand, or 45 per cent, from DKK
4,305 thousand in 2020 to DKK 6,252
thousand in 2021.
Income tax
The tax for the year, which comprises
deferred tax recognised in the income
statement, increased by DKK 972 thou-
sand, or 21 per cent, from DKK 4,528
thousand FY 2020 to DKK 5,500 thousand
FY 2021. Income tax benefits for all four
quarters relate to tax credit for research
and development expenses at the appli-
cable tax rate under the Danish Corpo-
rate Income Tax Act.
Net Profit/(loss)
Loss for the period increased by DKK
22,116 thousand, or 164 per cent, from
DKK (13,461 thousand) in the four quar-
ters of 2020 to DKK (35,577 thousand) in
the four quarters of 2021. This represents
a decrease in relation to revenue from
(55) per cent in FY 2020 to (106) per cent
FY 2021.
Balance Sheet
Total assets amounted to DKK 140,201
thousand (FY 2020: DKK 63,786 thou-
sand), with an equity of DKK 87,126 thou-
sand (2020: DKK 4,909 thousand).
Intangible assets increased by DKK
18,373, or 36 per cent, from DKK 51,503
thousand in 2020 to DKK 69,876 thou-
sand in 2021. The increase is driven by
prepaid intangible assets relating to
the acquisition of smartURL as well as
capitalization of internal development
projects during the year.
24 / 84 LINKFIRE A/S ANNUAL REPORT 2021
CONTENTS INTRO MANAGEMENT’S REVIEW SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTS
Subsequent Events
On January 11, 2022 the company completed the acquisition of global
competitor smartURL with a planned share issuance of 1,192,864 new
shares. The share price in the issuance of 8.4451 SEK per share has been
determined via a five-day pre-signing and a five-day post-signing volume-
weighted average price (”VWAP”) in Linkfire’s share. The agreement was
signed on November 4, 2021. The issuance corresponds to a dilution of
2% increasing the number of shares and voting rights in Linkfire from
58,339,222 to 59,532,086. The newly issued shares are subject to a lock-up
period of 12 months.
No further matters, which would influence the evaluation of the annual
report, have occurred.
Cash increased by DKK 45,163 thousand,
or 5,768 per cent, from DKK 783 thousand
in 2020 to DKK 45,946 thousand in 2021.
The increase is mainly related to the suc-
cessful capital raise in connection with
the company’s listing on Nasdaq First
North Premier Growth Market in Stock-
holm in June 2021.
Total equity increased by DKK 82,616
thousand, or 1,683 per cent, from DKK
4,909 thousand in 2020 to DKK 87,126
thousand in 2021. The increase is mainly
related to the successful capital raise in
connection with the company’s listing
on Nasdaq First North Premier Growth
Market in Stockholm in June 2021.
Non-current interest bearing liabilities
decreased by DKK 12,224 thousand, or 36
per cent, from DKK 33,617 thousand in
2020 to DKK 21,496 thousand in 2021. The
decrease is mainly related to the par-
tial repayment of loans from the Danish
Growth Fund.
Cash flow and financing
Cash flow from operations for FY 2021
was DKK (35,716 thousand) (FY 2020:
DKK 3,832 thousand).
Investment activities reduced cash flow
with DKK 26,233 thousand in FY 2021 (FY
2020: DKK 13,840 thousand).
Cash flow from financing activities for
FY 2021 was DKK 106,073 thousand (FY
2020: DKK 15,205 thousand), mainly
affected by the proceeds from capital
increase in connection with the IPO.
Parent company
Linkfire A/S, Denmark, is the parent
company of the Group, which consists
of two further subsidiaries in the US and
Portugal.
The development in parent company
activities is in all material aspects cov-
ered in the financial review of the group
figures.
Uncertainty in recognition and measurement
Development projects in progress and completed development projects
have a net value of DKK 0 million (2020: DKK 2.6 million) respectively DKK
61.6M (2020: DKK 48.9 million) in the annual report. Development projects
are measured at cost price reduced with amortization and write-downs.
The measurement of development projects are dependable on future
earnings, which there is a natural uncertainty related to.
25 / 84 LINKFIRE A/S ANNUAL REPORT 2021
CONTENTS INTRO MANAGEMENT’S REVIEW SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTS
Sustainability
27 / 84 LINKFIRE A/S ANNUAL REPORT 2021
MANAGEMENT’S REVIEW SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO
Sustainability
28 / 84 LINKFIRE A/S ANNUAL REPORT 2021
MANAGEMENT’S REVIEW SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO
Our People
Corporate governance
THE SHARE AND SHAREHOLDERS RISK MANAGEMENT BOARD OF DIRECTORS
EXECUTIVE MANAGEMENT TEAM LEADERSHIP TEAM CORPORATE GOVERNANCE
29 / 84 LINKFIRE A/S ANNUAL REPORT 2021
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Corporate Governance cover
The share and shareholders
30 / 84 LINKFIRE A/S ANNUAL REPORT 2021
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The share and shareholders
31 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
Risk management
32 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
Risk management
33 / 84 LINKFIRE A/S ANNUAL REPORT 2021
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34 / 84 LINKFIRE A/S ANNUAL REPORT 2021
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35 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
Board of Directors
36 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
37 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
Executive management team
38 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
Leadership team
39 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
Corporate governance
40 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
Read more about Linkfire at
https://www.linkfire.com
41 / 84 LINKFIRE A/S ANNUAL REPORT 2021
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Financial statements
CONSOLIDATED FINANCIAL STATEMENT
PARENT COMPANY STATEMENT
STATEMENT BY MANAGEMENT
INDEPENDENT AUDITOR’S REPORT
GLOSSARY AND COMPANY INFORMATION
42 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
Financial statements cover
Consolidated statement of comprehensive income
DKK’000 Note 2021 2020
Revenue 5 33,697 24,699
Cost of sales (9,320 ) (5,995 )
Gross profit 24,378 18,704
External expenses (16,853 ) (6,613 )
Other external expenses (6,867 ) -
Staff costs 6 (31,170 ) (20,461 )
Depreciation and amortisation 8 (8,913 ) (5,823 )
Operating profit/(loss) (39,425 ) (14,193 )
Financial income 9 3,091 509
Financial expenses 10 (4,743 ) (4,305 )
Profit/(loss) before tax (41,077 ) (17,989 )
Tax for the year 11 5,500 4,528
Profit/(loss) for the year (35,577 ) (13,461 )
Attributable to:
Earnings per share (DKK) (0.77 ) (1.27 )
Earnings per share, diluted (DKK) (0.76 ) (1.13 )
DKK’000 Note 2021 2020
Other comprehensive income
Other comprehensive income that may be reclassified to profit
or loss in subsequent periods (net of tax):
Exchange differences on translation of foreign operations (476 ) 166
Other comprehensive income for the year, net of tax (476 ) 166
Total comprehensive income for the year (36,053 ) (13,295 )
43 / 84 LINKFIRE A/S ANNUAL REPORT 2021
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CON Statement of comprehensive income
Consolidated statement of financial position
DKK’000 Note 31/12/21 31/12/20
Assets
Non-current assets
Intangible assets 12 69,876 51,503
Property, plant and equipment 13 669 168
Right-of-use assets 14 8,688 3,226
Deposits 15 1,153 427
Total non-current assets 80,386 55,324
Current assets
Trade receivables 16 6,238 2,195
Income tax receivables 5,500 4,528
Other receivables 543 664
Prepayments 1,588 292
Cash 45,946 783
Total current assets 59,815 8,462
Total assets 140,201 63,786
DKK’000 Note 31/12/21 31/12/20
Equity and liabilities
Equity
Share capital 18 584 108
Retained earnings 86,464 (73 )
Translation reserve (352 ) 124
Other capital reserve 20 429 4,750
Total equity 87,126 4,909
Non-current liabilities
Interest bearing liabilities 19 21,496 33,617
Lease liabilities 14 4,958 1,809
Total non-current liabilities 26,454 35,426
Current liabilities
Interest-bearing liabilities 19 7,200 3,995
Contract liabilities 5 6,166 5,702
Lease liabilities 14 3,836 1,487
Trade payables 4,831 2,888
Other payables 4,588 9,379
Total current liabilities 26,621 23,451
Total liabilities 53,075 58,877
Total equity and liabilities 140,201 63,786
44 / 84 LINKFIRE A/S ANNUAL REPORT 2021
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CON Statement of financial position
Consolidated statement of changes in equity
DKK’000
Share
capital
Retained
earnings
Translation
reserve
Other
capital
reserve Total
2021
Balance at 1 January, 2021 108 (73 ) 124 4,750 4,909
Net profit/(loss) for the period - (35,577 ) - - (35,577 )
Other comprehensive income - - (476 ) - (476 )
Total comprehensive income 108 (35,650 ) (352 ) 4,750 (31,144 )
Capital increase 476 125,489 - - 125,965
Transaction cost - (8,259 ) - - (8,259 )
Share-based payments - 4,884 - (4,321 ) 563
Balance at 31 December, 2021 584 86,464 (352 ) 429 87,125
During the period no dividend was paid.
The capital increase for the year is paid in full.
DKK’000
Share
capital
Retained
earnings
Translation
reserve
Other
capital
reserve Total
2020
Balance at 1 January, 2020 104 6,912 (83 ) 3,093 10,026
Net profit/(loss) for the period - (13,622 ) - - (13,622 )
Other comprehensive income - 142 207 - 349
Total comprehensive income 104 (6,568 ) 124 3,093 (3,247 )
Capital increase 4 6,495 - - 6,499
Share-based payments - - - 1,657 1,657
Balance at 31 December, 2020 108 (73 ) 124 4,750 4,909
During the period no dividend was paid.
45 / 84 LINKFIRE A/S ANNUAL REPORT 2021
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CON Statement of changes in equity
Cash flow statement
DKK’000 Note 2021 2020
Operating loss (39,425 ) (14,193 )
Depreciation and amortisation 8,913 5,823
Change in working capital 17 (7,603 ) 2,114
Share-based payment expense 7 563 1,657
Gain on disposal - (6 )
Cash flow from ordinary operating activities (37,552 ) (4,606 )
Income taxes received 4,528 4,176
Interest received 1,557 0
Interest paid (4,020 ) (3,403 )
Cash flow from operating activities (35,487 ) (3,832 )
Development expenditures 12 (16,573 ) (13,658 )
Prepaid intellectual property rights (8,298 ) -
Investments in property, plant and equipment 13 (634 ) (173 )
Change in deposits (728 ) (10 )
Cash flow from investing activities (26,233 ) (13,840 )
DKK’000 Note 2021 2020
Proceeds from borrowings 19 - 12,058
Repayment of borrowings 19 (8,916 ) (1,668 )
Payment of principal portion of lease liabilities 14 (2,424 ) (1,667 )
Transaction cost from capital increase (8,259 ) -
Proceeds from capital increase 125,489 6,481
Cash flow from financing activities 105,890 15,205
Change in cash and cash equivalents
Net cash flow 44,169 (2,468 )
Net foreign exchange difference 994 (288 )
Cash, Begin 783 3,539
Cash, End 45,946 783
46 / 84 LINKFIRE A/S ANNUAL REPORT 2021
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CON Cash flow statement
Notes to the consolidated financial statements
1. Accounting policies
2. Adoption of new and amended standards
3. Critical accounting judgements and
key sources of estimation uncertainty
4. Segment information
5. Revenue
6. Staff costs
7. Share-based payments
8. Depreciation and amortisation
9. Financial income
10. Financial expenses
11. Tax for the year
12. Intangible assets
13. Property, plant and equipment
14. Right-of-use assets
15. Deposits
16. Trade receivables
17. Working capital changes
18. Share capital and earnings per share
19. Interest-bearing liabilities
20. Other capital reserve
21. Financial risks
22. Liabilities arising from financing activities
23. Related parties
24. Events after the reporting period
25. Guarantees, contingent liabilities and collateral
47 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
CON Notes contents
General information
incorporated in Denmark . The parent company
and its subsidiaries (referred to as the “Group” or
“Linkfire”) are on a mission to frictionlessly con-
nect fans to the world of entertainment. Linkfire
is a technology company providing marketing
and promotional services within the music and
entertainment industries.
Basis of preparation
The financial statements are presented in Danish
kroner (DKK). All amounts have been rounded to
nearest DKK thousand, unless otherwise indica-
ted. The financial statements have been prepa-
red on a going concern basis and in accordance
with the historical cost convention, except where
IFRS explicitly requires use of other values.
For the purpose of clarity, the financial state-
ments and the notes to the financial statements
are prepared using the concepts of materiality
and relevance. This means that line items not
considered material in terms of quantitative and
qualitative measures or relevant to financial
statement users are aggregated and presented
together with other items in the financial sta-
tements. Similarly, information not considered
material is not presented in the notes.
The accounting policies, except as described
below, have been applied consistently during the
financial year and for the comparative figures.
Basis of consolidation
The consolidated financial statements com-
prise the financial statements of Linkfire A/S
(the Parent) and subsidiaries which are entities
controlled by Linkfire A/S. The Group controls an
entity when it directly or indirectly owns more
than 50% of the voting rights or may otherwise
exercise a controlling influence.
Name Country Ownership
Linkfire Inc. USA 100%
Linkfire Sociedade
Unipeossal Lda.
Portugal 100%
Principles of consolidation
The consolidated financial statements are pre-
pared on the basis of the financial statements of
the Parent and its subsidiaries.
The consolidated financial statements are
prepared by combining items of a uniform nature
and subsequently eliminating intercompany
transactions, internal shareholdings and balan-
ces and unrealised intercompany gains or losses.
The financial statements used for consolidation
are prepared in accordance with the Group’s
accounting policies.
The accounting items of subsidiaries are recogni-
sed 100% in the consolidated financial state-
ments. Investments in subsidiaries are offset by
the interest’s share of subsidiaries’ net assets at
the acquisition date at fair value.
Accounting policies are described in full in this
note below.
Foreign currency translation
Transactions denominated in currencies other
than the functional currency are considered
transactions in foreign currency.
On initial recognition, transactions denomina-
ted in foreign currencies are translated to the
functional currency applying the exchange rates
at the transaction date. Foreign exchange rate
adjustments arising between the transaction
date and the date of payment are recognised in
the income statement under financial income or
financial expenses.
Monetary assets and liabilities denominated in
foreign currencies are translated at the exchan-
ge rates at the reporting date. The difference
between the exchange rates at the reporting date
and at the date of transaction or the exchange
rate in the latest financial statements is recog-
nised in the income statement under financial
income or financial expenses.
Cash flow statement
The cash flow statement is presented using the
indirect method and shows cash flows from
operating, investing and financing activities for
the year as well as the Group’s cash and cash
equivalents at the beginning and end of the
financial year.
Cash flows from operating activities are calcula-
ted based on operating profit/loss, adjusted for
the cash flow effect of non-cash operating items,
working capital changes, financial expenses paid
and income tax paid.
Cash flows from investing activities comprise
payments in connection with the acquisition and
sale of non-current intangible assets, property,
plant and equipment as well as financial assets.
Notes to the consolidated financial statements
. Accounting policies
48 / 84 LINKFIRE A/S ANNUAL REPORT 2021
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CON Note 1
Notes to the consolidated financial statements
. Accounting policies (continued)
Cash flows from financing activities comprise
payments arising from changes in the size or
composition of the Group’s share capital and di-
vidend paid. Cash and cash equivalents comprise
cash at bank and in hand.
Income statement
Revenue
The Group recognizes revenue from the fol-
lowing major sources being subscriptions and
commissions. Revenue mainly derives from
subscription fees charged for customers’ access
to the Group’s marketing platform software. For
software contracts, the total contract sum is al-
located to the separate performance obligations
for the purpose of revenue recognition.
Revenue recognition requires an agreement
with the customer, which creates enforceable
rights and obligations between the parties, has
commercial substance, and identifies payment
terms. In addition, it must be probable that the
consideration determined in the contract will be
collected.
Revenue is measured based on the consideration
to which the Group expects to be entitled in a
contract with a customer and exclude amounts
collected on behalf of third parties. The Group
recognises revenue when it transfers control of
the licence or service to a customer. All revenue
is derived from contracts with customers.
Subscription fees
Subscription fees cover licence, hosting and
maintenance, as is standard in the software as
a service subscription offering. The licence is
not distinct from the hosting service, revenue is
therefore recognised over time, as the customers
are receiving and consuming the benefits of the
Group‘s perfor- mance while performing. The
hosting service and maintenance is therefore
bundled to one performance obligation together
with the licence.
Revenue is recognized over the duration of the
contract.
Commissions
Affiliate partners are creating tokens and sup-
plying these to Linkfire, which allows the affiliate
partners to track referrals from Linkfire. Linkfire
is implementing the tokens in their infrastructu-
re, and in return the affiliate partners are paying
commissions based on the result of approved
transactions and qualifying purchases. Commis-
sions are treated as one performance obligation,
as they constitute a series of services. Revenue
is recognized on a running basis because the af-
filiate partner receives and consumes the bene-
fits of the Group‘s performance while performing.
The recognition point in time is when the revenue
generating conversion, according to individual
contract, is earned by the affiliate partner.
Cost to obtain a contract
The Group pays sales commission to its emplo-
yees based on the contracts that they obtain for
sales of licences. The commissions are expen-
sed when incurred as the underlying customer
contracts have a duration of less than a year.
These are one-off payments directly related to
specific sales, and are as such to be recognized
as incremental costs.
Cost of sales
Cost of sales comprise costs incurred to achieve
the year’s revenue including hosting and transac-
tion costs.
External expenses
Other external expenses comprise sales and
marketing costs, external consultancy costs,
other employee-related costs, IT and software
costs, investor relations costs, loss allowances
for doubtful trade receivables and other admini-
strative expenses.
Other external expenses
Other external expenses comprise expenses of
an extraordinary nature. The expenses recogni-
zed in 2021 relate to the First North listing and
associated consultancy expenses.
Staff costs
Staff costs consist of salaries, sales commis-
sions, bonuses, pensions and social costs,
share-based payments, vacation pay, and other
benefits. Salaries, bonuses, pensions and social
costs, share-based payments, vacation pay, and
other benefits are recognised in the year in which
the associated services are rendered by the
employees.
Share-based payments
The Board of Directors, the Board of Manage-
ment and other employees have been granted
warrants. The warrants are measured at fair
value at the grant date and are recognized as an
expense in staff costs over the vesting period.
Expenses are set off against equity (equity-sett-
49 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
Notes to the consolidated financial statements
. Accounting policies (continued)
led share-based payments). The fair value of the
warrants is measured using the Black & Scholes
valuation method or other generally accepted
valuation techniques. The calculation takes into
account the terms and conditions under which
the warrants are granted. Fair value is not subse-
quently remeasured. If subsequent modifications
to a warrant program increase the value of the
warrants granted, measured before and after the
modification, the increase is recognized as an
expense. If the modification occurs before the
vesting period, the increase in value is recogni-
zed as an expense over the period for services to
be received. If the modification occurs after the
vesting date, the increase in value is recogni-
zed as an expense immediately. Consideration
received for warrants sold is recognized directly
in equity.
Financial income and financial expenses
Financial income and expenses include interest
income, interest expense, amortisation of bor-
rowing issue costs and realised and unrealised
exchange gains and losses.
Tax
Tax on the profit/loss for the year comprises the
year’s current tax and changes in deferred tax.
The tax expense relating to the profit/loss for
the year is recognised in the income statement,
and the tax expense relating to items recognised
in other comprehensive income and directly in
equity, respectively, is recognised in other com-
prehensive income or directly in equity. Exchange
rate adjustments of deferred tax are recognised
as part of the adjustment of deferred tax for the
year.
Current tax payable and receivable is recognised
in the balance sheet as the expected tax on the
taxable income for the year, adjusted for tax paid
on account. The current tax charge for the year
is calculated based on the tax rates and rules
enacted at the balance sheet date.
Deferred tax is calculated using the liability
method on all temporary differences between
the accounting and taxable values of assets and
liabilities.
Deferred tax assets are assessed yearly and only
recognised to the extent that it is more likely
than not that they can be utilised. Deferred tax
assets, including the tax value of tax losses car-
ried forward, are recognised as other non-current
assets and measured at the amount at which
they are expected to be realised, either by setting
off deferred tax liabilities or by setting off tax on
future earnings within the same legal entity or a
jointly taxed entity.
Deferred tax is measured based on the tax legi-
slation and statutory tax rates in the respective
countries that will apply under the legislation
in force on the balance sheet date when the
deferred tax asset is expected to crystallise as
current tax. Changes in deferred tax resulting
from changes in tax rates are recognised in the
income statement.
The Group recognises deferred tax assets rela-
ting to losses carried forward when Management
finds that these can be offset against taxable
income in the foreseeable future. An assessment
is made taking into consideration the effect of
restrictions in utilisation in local tax legislation.
Future taxable income is assessed based on
budgets as well as Management’s expectations
regarding growth and operating margin in the
coming years.
Balance sheet
Intangible assets
Intangible assets with determinable useful lives
comprises completed and in progress develop-
ment projects and are measured at cost less
accumulated amortization and impairment
losses. Completed development projects by the
Group are recognised as an asset if the cost
of development is reliably measurable and an
analysis shows that future economic benefits
from using the software exceed the cost. Cost is
defined as development costs incurred to make
the software ready for use and consists primarily
of direct salaries and other directly attributable
development costs.
Once a software application has been developed,
the cost is amortised over the expected useful
life on a straight-line basis. If the useful life
cannot be estimated, it is tested for impairment
yearly or if indications of impairment arise.
Amortisation and impairment charges are recog-
nised in the income statement.
The amortization periods used are 5 -10 years.
50 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
Notes to the consolidated financial statements
. Accounting policies (continued)
Expected useful lives are reassessed regu-
larly. The Group regularly reviews the carrying
amounts of its finite-lived intangible assets to
determine whether there is an indication of an
impairment loss.
Intangible assets are tested for impairment if in-
dications of impairment exist. Intangible assets
are written down to their recoverable amount if
the carrying amount exceeds the higher of the
fair value less costs to sell and the value in use.
Depreciation and impairment charges are recog-
nized in the income statement.
Property, plant and equipment
Property, plant and equipment comprises other
fixtures and fittings, tools and equipment and
are measured at cost less accumulated depre-
ciation and accumulated impairment. Other
fixtures and fittings, tools and equipment are
depreciated on a straight-line basis over the
expected useful lives of the finite-lived assets,
which are as follows:
Other fixtures and fittings, tools and equipment
– 3-5 years
Property, plant and equipment is tested for
impairment if indications of impairment exist.
Property, plant and equipment is written down
to its recoverable amount if the carrying amount
exceeds the higher of the fair value less costs to
sell and the value in use. Depreciation and im-
pairment charges are recognised in the income
statement.
Leases
When entering into an agreement, the Group
assesses whether an agreement is a lease agree-
ment or contains a lease element.
The right-of-use asset is measured at cost,
which is calculated as the present value of the
lease obligation plus any direct costs related to
the entering into of the lease and prepaid lease
payments.
The right-of-use asset is depreciated on a
straight-line basis over the shorter of the lease
term and the useful life of the asset.
The Group leases properties which include a
service element in the payments to the lessor.
This service is deducted from the lease payment
when measuring the lease obligation. Where
the Group cannot reliably separate lease and
non-lease items, it is considered a single lease
payment.
Short leases with a maximum lease term of 12
months and leases where the underlying asset
has a low value are not recognised in the state-
ment of financial position.
The lease term is defined as the non-cancellable
period of a lease together with periods covered
by options to extend the lease if it is reasonably
certain that the options will be exercised and
periods covered by options to terminate the
lease if it is reasonably certain that the options
will not be exercised. A number of leases contain
extension and termination options in order to
guarantee operational flexibility in managing the
leases.
The lease obligation, which is recognised under
“Lease liabilities”, is measured at the present va-
lue of the remaining lease payments, discounted
by the Group’s incremental loan interest rate, if
the implicit interest rate is not stated in the lease
agreement or cannot reasonably be determined.
The lease obligation is subsequently adjusted if:
• The value of the index or interest rate on which
the lease payments are based changes.
• There is a change in the exercise of options to
extend or shorten the lease period due to a ma-
terial event or a material change in circumstan-
ces which is within the control of the lessee.
• The lease term is changed as a result of exer-
cising an option to extend or shorten the lease
term.
Subsequent adjustments of the lease obligation
are recognised a correction to the right-of-use
asset. However, if the right-of-use asset has a
value of DKK 0, a negative reassessment of the
right-of-use asset is recognised in the income
statement.
Deposits
On initial recognition, deposits are measured at
fair value and subsequently at amortised cost
less impairment losses, if any.
51 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
Trade receivables
For trade receivables, the Group applies a simp-
lified approach in calculating expected credit
losses (ECLs). Therefore, the Group does not
track changes in credit risk, but instead recog-
nises a loss allowance based on lifetime ECLs at
each reporting date. Provisions for bad debts are
determined on the basis of an individual assess-
ment of each receivable, and, in respect of trade
receivables, a general provision is also made
based on its historical credit loss experience,
adjusted for forward-looking factors specific to
the debtors and the economic environment.
However, in certain cases, the Group may also
consider a financial asset to be in default when
internal or external information indicates that
the Group is unlikely to receive the outstanding
contractual amounts in full before taking any
credit enhancements held by the Group into ac-
count. Trade receivables are written off when all
possible options have been exhausted and there
is no reasonable expectation of recovery.
The cost of allowances for expected credit
losses and write-offs for trade receivables are
recognised in the income statement under other
external expenses.
Notes to the consolidated financial statements
. Accounting policies (continued) . Adoption of new and amended standards
Implementation of amended standards and
interpretation effective for the financial year
2021 have had no impact on the annual report
for 2021. The new and amended standards and
interpretations that have been issued, but are
not yet effective, up to the date of issuance of
Linkfire’s financial statements are disclosed
below. Linkfire intends to adopt these new and
amended standards and interpretations, if appli-
cable, when they become effective.
• Amendments to IFRS 16 Leases: Covid-19-
Related Rent Concessions beyond 30 June
2021, effective 1 April 2021.
• Amendments to IFRS 3 Business Combinations:
Reference to the Conceptual Framework, effec-
tive 1 January 2022.
• Amendments to IAS 16 Property, Plant and
Equipment: Proceeds before Intended Use,
effective 1 January 2022.
• Amendments to IAS 37 Provisions, Contingent
Liabilities and Contingent Assets: Onerous Con-
tracts – Cost of Fulfilling a Contract, effective
1 January 2022.
• Annual Improvements 2018-2020, effective
1 January 2022.
• Amendments to IAS 1 Presentation of Financial
Statements: Classification of Liabilities as Cur-
rent or Non-current, effective 1 January 2023.
• Amendments to IAS 1 Presentation of Finan-
cial Statements and IFRS Practice Statement
2: Disclosure of Accounting policies, effective
1 January 2023.
• Amendments to IAS 8 Accounting policies,
Changes in Accounting Estimates and Errors:
Definition of Accounting Estimates, effective
1 January 2023.
• Amendments to IAS 12 Income Taxes: Deferred
Tax related to Assets and Liabilities arising
from a Single Transaction, effective 1 January
2023.
Linkfire does not expect that the amended
standards will have a significant impact on the
financial statements of Linkfire.
The maximum exposure to credit risk at the
reporting date is the carrying value of trade
receivables in note 16. The Group does not hold
collateral as security.
Prepayments
Prepayments comprise incurred costs relating
to subsequent financial years. Prepayments are
measured at cost.
Interest-bearing liabilities
Debt to credit institutions and other inte-
rest-bearing liabilities. Interest-bearing liabiliti-
es are measured at amortized cost.
Trade payables and other payables
Other payables include bonus and commission
accruals, vacation pay obligations, payroll taxes
and VAT. Payables are measured at cost.
52 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
CON Note 2
Notes to the consolidated financial statements
. Critical accounting judgements and key sources of estimation uncertainty
As part of the preparation of the financial state-
ments, Management makes a number of accoun-
ting estimates and assumptions as a basis for
recognising and measuring the Group’s assets,
liabilities, income and expenses as well as judge-
ments made in applying the entity’s accounting
policies. The estimates, judgements and assump-
tions made are based on experience gained and
other factors that are considered prudent by
Management in the circumstances, but which are
inherently subject to uncertainty and volatility.
The assumptions may be incomplete or inaccura-
te, and unforeseen events or circumstances may
occur, for which reason the actual results may dif-
fer from the estimates and judgements made. The
accounting policies are described in detail in note
1 to the financial statements to which we refer.
Management considers the following accounting
estimates and judgements to be significant in
the preparation of the financial statements.
Development costs
The Group capitalises costs for software develop-
ment projects. Initial capitalisation of costs is ba-
sed on management’s judgement that technologi-
cal and economic feasibility is confirmed, usually
when a product development project has reached
a defined milestone according to an established
project management model. In determining the
amounts to be capitalised, management makes
assumptions regarding the expected future cash
generation of the project and the expected period
of benefits. At 31 December 2021, the carrying
amount of capitalised development costs was
DKK 69,875k (2020: DKK 51,503k). In 2021, DKK
16,573 thousand were capitalised.
Determining the lease term of contracts with
renewal and termination options – Group as
lessee
The Group determines the lease term as the
non-cancellable term of the lease, together with
any periods covered by an option to extend the
lease if it is reasonably certain to be exercised,
or any periods covered by an option to terminate
the lease, if it is reasonably certain not to be
exercised. The Group applies judgement in evalu-
ating whether it is reasonably certain whether or
not to exercise the option to renew or terminate
the lease.
Share-based payments
Estimating fair value for share-based payment
transactions requires determination of the most
appropriate valuation model, which depends
on the terms and conditions of the grant. This
estimate also requires determination of the
most appropriate inputs to the valuation model,
including the expected life of the share option
or appreciation right, volatility and dividend
yield and making assumptions about them. The
assumptions and models used for estimating fair
value for share-based payment transactions are
disclosed in note 7.
The assumptions may be incomplete or inaccura-
te, and unforeseen events or circumstances may
occur, for which reason the actual results may
differ from the estimates and judgements made.
At 31 December 2021, the carrying amount of
share-based payments was DKK 429 thousand
(2020: DKK 4,750k).
Deferred tax
Linkfire has not accounted for deferred tax
assets related to tax losses carried forward.
Linkfire’s tax losses can be carried forward
indefinitely. The deferred tax assets shall be
recognized based on expected earnings for the
next 3-5 years and the possibility to utilize the
deferred tax assets to be offset against positive
taxable income in each jurisdiction.
The Group has concluded that the deferred tax
assets will not be fully recoverable using the
estimated future taxable income based on busi-
ness plans and budgets for the Group. Deferred
tax assets not recognized has a total value of
DKK 4,100 thousand (2020: 2,075 thousand).
. Segment information
For management purposes and based on internal
reporting information, Linkfire is organised in
only one operating segment, as the information
reported includes operating results at a conso-
lidated level only. The company setup and costs
related to the main nature of the business are
not attributable to any specific revenue stream
or customer type and are therefore borne cen-
trally. The results of the single reporting segment
are shown in the statement of comprehensive
income.
For the split of revenue per business segment,
please refer to note 5.
53 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
CON Note 3 CON Note 4
Notes to the consolidated financial statements
. Revenue
DKK’000 2021 2020
Revenue by business stream
Subscriptions 22,079 19,148
Commissions 11,618 5,551
Total 33,697 24,699
%-split
Subscriptions 66 78
Commissions 34 22
Total 100 100
Geographic Information
As an online platform, the Group generates revenue from customers located worldwide. For this purpose,
internal reporting divides revenue according to the NAM (Northern America), the EMEA region (Europe,
Middle East and Africa) as well as APAC (Asia and Oceania) and LATAM (Latin America and the Caribbe-
an), which represent approximately 58%, 28%, 12% and 2% (2020: 38%, 51%, 9% and 1%), respectively, of
revenue.
2021 2020
tDKK
NAM 19,441 9,496
EMEA 9,573 12,623
APAC 4,129 2,311
LATAM 554 268
Total 33,697 24,699
%-split
NAM 58 38
EMEA 28 51
APAC 12 9
LATAM 2 1
Total 100 100
In 2021, two customers exceeded 10% of total revenue and accumulated for 39%.
54 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
CON Note 5
. Revenue (continued)
DKK’000 2021 2020
Contract balances (liability)
Cost at 1 January 5,702 8,691
Recognised during the year (22,079) (19,148)
Additions 22,543 16,159
Cost at 31 December 6,166 5,702
Management expects that 96.0% of the transaction price allocated to the unsatisfied contracts as of
the year ended 2021 will be recognised as revenue during the next reporting period (DKK 6.0 million). The
remaining 4.0%, DKK 0.2 million, will be recognised in the financial year 2023.
. Staff costs
DKK’000 2021 2020
Gross salaries 38,071 29,319
Share-based payments 562 1,657
Other social security costs 1,314 383
Other staff costs 2,728 120
42,675 31,479
Capitalized salaries (11,506) (11,018)
Total 31,170 20,461
Average numbers of employees during the year 68 53
Board of Directors and Key Management Personnel
Salaries 5,106 4,907
Share-based payments 532 791
Other social security costs 79 61
Other staff costs 412 10
Total 6,129 5,769
Employment contracts for members of the Key Management Personnel contain terms and conditions
that are common to those of their peers in similar companies, including terms of notice and non-
competitive clauses.
Notes to the consolidated financial statements
55 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
CON Note 6
. Share-based payments
DKK’000 2021 2020
Cost of share-based payments 562 1,657
Total 562 1,657
Costs of share-based payments are recognised as staff costs with a corresponding effect in equity.
Consideration received for warrants sold is recognised directly in equity. The share-based incentive pro-
grams will only be settled in shares and no cash.
The board of directors was authorised on
1. 11 September 2015 to issue warrants to a number of the Company’s board members and key emplo-
yees. The Warrant Terms entitle the Warrant Holders to subscribe for up to a total of 8,873 shares of
nominal DKK 0.01 each.
The warrants are granted to the Warrant Holder at the signing of the issued subscription agreement.
The warrants are to be vested until February 2020 and exercised until January 2028.
The authorisation was exercised in full in connection with the public listing in June 2021.
2. 27 February 2020 to issue warrants to a number of the Company’s board members and key employees.
The Warrant Terms entitle the Warrant Holders to subscribe for up to a total of 956 shares of nominal
DKK 0.01 each.
The warrants are granted to the Warrant Holder at the signing of the issued subscription agreement.
The warrants are to be vested until May 2020 and exercised until February 2028.
The authorisation was exercised in full in connection with the public listing in June 2021.
3. 28 February 2020 to issue warrants to all employees in the company. The warrant terms entitle the
Warrant Holders to subscribe for up to a total of 5,732 shares of nominal DKK 0.01 each.
The warrants are granted to the Warrant Holder at the signing of the issued subscription agreement.
The warrants are to be vested linearly from 24 to 36 months after the grant date.
The authorisation was exercised in full in connection with the public listing in June 2021.
Notes to the consolidated financial statements
4. 15 June 2021 to issue warrants to key employees, consultants and members of executive manage-
ment in the company. The warrant terms entitle the Warrant Holders to subscribe for up to a total of
3,010,764 shares of nominal DKK 0.01 each.
The warrants are granted to the Warrant Holder at the signing of the issued subscription agreement.
The warrants are to be vested linearly over 36 months after the grant date.
Specification of outstanding warrants:
Number of warrants
Weighted
average
exercise
price DKK
Boards of
Directors
Key
Management
Personell
Employees
& Advisors Total
Outstanding at 1 January 2020 14.57 75 494 760 1,329
Granted 16.47 4 4
Exercised - -
Cancelled 16.47 (29) (46) (75)
Outstanding at 31 December 2020 14.45 75 465 718 1,258
Corporate conversion 1 200 1,250 1,928 3,378
Granted 8.20 849 - - 849
Transferred 4.47 (168) - 168 -
Exercised 3.71 (112) (1,639) (2,642) (4,392)
Cancelled 4.47 (107) (76) (172) (355)
Outstanding at 31 December 2021 8.77 737 - - 737
56 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
CON Note 7
. Share-based payments (continued)
Outstanding warrants have the following charasteristics
Warrants outstanding
Weighted
average
exercise
price DKK
Vesting
period
Exercise
period 2021 2020
Warrants granted in 2015-2018
(exercised at IPO)
3.54 Jan 19
- Feb 20
Jan 19
- Jan 28
- 687
Warrants granted in 2019
(exercised at IPO)
15.49 Sep 19
- Mar 23
Jan 20
- Jan 28
- 567
Warrants granted in 2020
(exercised at IPO)
16.47 Jan 20
- Apr 23
Jan 22
- Jan 28
- 4
Warrants granted in 2021 8.77 Jul 21
- Jun 24
Jun 24
- Jun 26
737 -
Outstanding at 31 December 737 1,258
DKK’000 2021 2020
Average remaining life of outstanding warrants at 31 December (years) 5 3.3
Exercise price for outstanding warrants at 31 December (DKK) 8.77 1-16.47
The fair value of the warrants issued is measured at calculated market price at the grant date based
on the Black & Scholes valuation method. The calculation is based on the following assumptions at the
grant date:
Warrants
granted in
2021
Warrants
granted in
2020
Warrants
granted in
2019
Warrants
granted in
2015-2018
Average share price (DKK) 8.77 16.47 16.47 5.38
Expected volatility rate (% p.a.) 0.54 0.40 0.40 0.40
Risk-free interest rate (% p.a.) - - - -
Expected warrant life (no. years) 5.00 5.00 5.00 6 - 8
Exercise price (DKK) 8.77 16.47 13.17 - 16.47 1 - 9
Fair value all warrants, after dilution (DKK’000)
Expected volatility rate is applied based on the annualised volatility on relevant peer groups derived from
the standard deviation of daily observations over 12 months ending June 2021.
Notes to the consolidated financial statements
57 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
Notes to the consolidated financial statements
. Depreciation and amortisation
DKK’000 2021 2020
Amortisation of intangible assets 6,499 4,317
Depreciation of property plant and equipment 134 45
Depreciation of right-of-use assets 2,280 1,461
Total 8,913 5,823
. Financial income
DKK’000 2021 2020
Foreign exchange income and other adjustments 1,534 509
Other financial income 1,557 -
Total 3,091 509
. Financial expenses
DKK’000 2021 2020
Interest expenses 4,249 3,314
Foreign exchange losses and other adjustments 313 802
Interest on lease liabilities 181 189
Total 4,743 4,305
. Tax for the year
DKK’000 2021 2020
Current tax for the year income 5,500 4,528
Changes in deferred tax
Recognised as receivable tax credit 5,500 4,528
Income tax benefits for both the years 2021 and 2020 relate to tax credits for research and development
expenses at the applicable tax rate under the Danish Corporate Income Tax Act.
DKK’000 2021 2020
Tax calculated as 22% of profit/loss before tax 9,036 3,958
Non-capitalised tax assets (2,025) 1,140
Non-deductible expenses (1,511) (570)
Effective tax 5,500 4,528
Tax rate for the year (%) 13.8% 25.2%
Due to uncertainty of utilisation of the tax loss carry-forward, the Group has not recognised any deferred
tax assets.
Deferred tax asset not recognized has a total value of DKK 4,100 thousand (2020: 2,075 thousand).
58 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
CON Note 8-11
Notes to the consolidated financial statements
. Intangible assets
DKK’000
Prepaid
Intellectual
Property
Rights
Completed
development
projects
Development
projects in
progress Total
2021
Cost at 1 January - 55,764 2,642 58,406
Transfers - 19,215 (19,215) -
Additions 8,298 - 16,573 24,871
Cost at 31 December 8,298 74,979 - 83,277
Amortisation and impairment at 1 January - (6,903) - (6,903)
Amortisation during the year - (6,499) - (6,499)
Amortisation and impairment at 31 December - (13,402) - (13,402)
Carrying amount at 31 December 8,298 61,577 - 69,875
2020
Cost at 1 January - 18,050 26,699 54,990
Transfers - 37,714 (37,714) -
Additions - - 13,657 3,416
Cost at 31 December - 55,764 2,642 58,406
Amortisation and impairment at 1 January - (5,276) - (5,276)
Amortisation during the year - (1,627) - (1,627)
Amortisation and impairment at 31 December - (6,903) - (6,903)
Carrying amount at 31 December - 48,861 2,642 51,503
Completed development projects comprise software development costs related to development of the
existing software. The software is under continuous development for the use of customers and partners
and is sold as i) a license to use the software for a given period, and ii) as an integration component on
websites and in applications. Users have access to upgrades and new functionalities during the contract
period.
Development costs for the year cover both development of the front-end and the back-end part of the
software solution. Both parts are to increase the user experience, functionalities within the software as
well as expand upon the technical applications of the software in order to increase the Group’s revenue
by maintaining existing customers and partners and acquire new customers and partners.
It is Management’s assessment that the expected useful lives of the finite-lived assets, as well as the
expected future revenue streams from the assets, are sufficient to cover the value of recognised devel-
oped software at the reporting date.
In 2021, Linkfire expensed DKK 10,141 thousand (2020: 4,057 thousand) for development projects not
meeting the recognition criteria applicable to internally generated intangible assets.
Prepaid intellectual property rights relate to the acquisition of smartURL. The prepaid amount is part of
the total acquisition price which includes the prepayment as an upfront element, the share issue descri-
bed in note 24, and an earn-out element that is dependent on future performance of the assets.
A total consideration of up to USD 4.8 million, has been agreed between the parties, as disclosed to the
market on 4 November 2021.
59 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
CON Note 12
Notes to the consolidated financial statements
. Property, plant and equipment
DKK’000
Other
fictures and
fittings,
tools and
equipment
Leasehold
improve-
ments Total
2021
Cost at 1 January 200 121 321
Additions 634 - 634
Disposals - - -
Cost at 31 December 834 121 955
Depreciation at 1 January (33) (119) (152)
Depreciation during the year (132) (2) (134)
Depreciation at 31 December (165) (121) (286)
Carrying amount at 31 December 669 - 669
2020
Cost at 1 January 33 121 154
Additions 173 - 173
Disposals -6 0 (6)
Cost at 31 December 200 121 321
Depreciation at 1 January (11) (102) (113)
Depreciation during the year (22) (17) (39)
Depreciation at 31 December (33) (119) (152)
Carrying amount at 31 December 167 2 169
. Right-of-use assets
DKK’000 Offices Vehicles Equipment Total
2021
Cost at 1 January 5,060 - 975 6,035
Additions 7,548 81 113 7,742
Cost at 31 December 12,608 81 1,088 13,777
Depreciation at 1 January (2,368) - (441) (2,809)
Depreciation during the year (1,887) (47) (346) (2,280)
Depreciation at 31 December (4,255) (47) (787) (5,089)
Carrying amount at 31 December 8,353 34 301 8,688
2020
Cost at 1 January 4,969 - 737 5,706
Additions 91 - 238 329
Cost at 31 December 5,060 - 975 6,035
Depreciation at 1 January (1,224) - (123) (1,347)
Depreciation during the year (1,144) - (318) (1,462)
Depreciation at 31 December (2,368) - (441) (2,809)
Carrying amount at 31 December 2,692 - 534 3,226
60 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
CON Note 13-14
Notes to the consolidated financial statements
. Right-of-use assets (continued)
Carrying amounts of lease liabilities and movements during the period:
DKK’000 2021 2020
At 1 January 3,296 4,444
Additions 7,742 329
Accrual of interest 181 189
Payments (2,424) (1,667)
Exchange rate adjustments (1) 1
At 31 December 8,794 3,296
Non-Current 4,958 1,487
Current 3,836 1,809
The following amounts have been recognised in the income statement:
DKK’000 2021 2020
Depreciation expense of right-of-use assets 2,280 1,461
Interest expense on lease liabilities 181 189
Expense relating to short-term leases (included in other external expenses) -
Total amount recognised in the income statement 2,461 1,650
The Group had total outflow for leases of DKK 2,424 thousand (2020: DKK 1,667 thousand).
The Group leases offices, and lease terms are negotiated on an individual basis and contain different
terms and conditions. As part of COVID-19, no rent concession has been received.
. Deposits
DKK’000 2021 2020
Cost at 1 January 427 417
Additions 81 10
Cost at 31 December 508 427
61 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
CON Note 15
Notes to the consolidated financial statements
. Trade receivables
DKK’000
31 dec.
2021
31 dec.
2020
Trade receivables 6,238 2,195
Write-downs - -
Total 6,238 2,195
Expected credit loss
The following table details the maturity of trade receivables. The Group has assessed their expected
credit losses on an individual level, and has deemed their expected losses immaterial, for which reason
there has not been made a matrix for expected credit loss on groups of receivables, furthermore the
historical losses on trade receivables are limited as shown in the maturity analysis.
DKK’000
Not past
due
Overdue by
0-15 days
Overdue by
16-30 days
Overdue by
>30 days
Write-
downs
Carrying
amount of
receivables
31 december 2021
Trade receivables 5,516 112 3 607 - 6,238
31 december 2020
Trade receivables 421 1,702 7 65 - 2,195
1 januar 2020
Trade receivables 4,949 35 - 112 - 5,096
. Working capital changes
DKK’000 2021 2020
Change in receivables and prepayments (5,219) 2,562
Change in trade payables and other debt etc (2,384) (449)
Total (7,603) 2,113
. Share capital and earnings per share
At 31 December 2021, the share capital consisted of 58,339,222 (2020: 10,808,661) shares with a nominal
value of DKK 0.01 each.
The shares are not divided into classes and carry no right to fixed income.
DKK’000 2021
Issued and fully paid shares:
At 1 January 2020, 10,413,893 shares of DKK 0.01 each 104
Capital increase 4
At 31 December 2020 108
Corporate conversion 292
Capital increase 183
Share capital at 31 December 2021 583
62 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
CON Note 16-18
Notes to the consolidated financial statements
. Share capital and earnings per share (continued)
DKK’000 2021 2020
Earnings per share
The calculation of earnings per share is based on the following:
Profit/(loss) for the year (35,577) (13,461)
Average number of ordinary shares for calculation of earnings per share: 46,318,136 10,533,664
Average diluted effect of outstanding share options 695,065 1,234,761
Average number of shares for calculation of diluted earnings per share: 47,013,201 11,768,425
Earnings per share (EPS) (0.77) (1.28)
Earnings per share, diluted (DEPS) (0.77) (1.14)
. Interest-bearing liabilities
DKK’000 2021 2020
Non-current borrowings
Debt to credit institutions 19,385 31,610
Other 2,111 2,007
Total 21,496 33,617
Current borrowings
Debt to credit institutions 7,200 3,995
Convertible loan - -
Total 7,200 3,995
For a specification of the debt that is due after 5 years please refer to note 21 of the notes to the consoli-
dated financial statements.
. Other capital reserve
Other capital reserve is used to recognise the value of equity-settled share-based payments provided
to employees, including Key Management Personnel, as part of their remuneration. Refer to note 7 for
further details of these plans.
63 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
CON Note 19-20
Notes to the consolidated financial statements
. Financial risks
Capital Management
The Group manages its capital to ensure that it will be able to continue as a going concern while maxi-
mising the return to shareholders through the optimisation of the debt and equity balances. The capital
structure of the Group consists of net debt and equity. Management reviews the capital structure con-
tinually to consider if the current capital structure is in accordance with the Group’s and shareholders’
interests.
Financial risk management
Due to the nature of its operations, investments, and financing, the Group is exposed to a number of
financial risks. It is Group policy to operate with a low risk profile so that currency risk, interest rate risk
and credit risk only occur in commercial relations. The scope and nature of the Group’s financial instru-
ments appear from the income statement and statement of financial position in accordance with the
accounting policies applied. Provided below is information about factors that may influence amounts,
time of payment, or the reliability of future payments, where such information is not provided directly in
the financial statements. This note addresses only financial risks directly related to the Group’s financial
instruments.
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations towards the Group, resulting in
a financial loss. The Group is exposed to credit risk primarily related to its trade and other receivables,
receivables from group enterprises, contract assets and cash held at financial institutions. The Group
considers accounts receivables in default when they are due more than 90 days, and the outstanding
amount is written off when there is a court order of bankruptcy from the counterparty. The maximum
exposure to credit risk at the reporting date is the carrying value of each class of financial assets.
Foreign currency risk
Currency risk is the risk that arises from changes in exchange rates and affects the Group’s result.
The general objective of the Group’s currency risk management is to limit and delay any adverse impact
of exchange rate fluctuations on earnings and cash flows and thus increase the predictability of the
financial results. The Group also aims at balancing incoming and outgoing payments in local currency as
much as possible as well as monitoring the development in exchange rates and adjust price lists when
required.
The greatest exposure in foreign currency is to USD, and in 2021, 84% (2020: 76%) of the Group’s revenue
was denominated in USD. In order to minimise the currency risk related to transactions in USD, the
Company’s revenues are mainly invoiced in USD, while the majority of the Group’s expenses, such as
employee costs, are denominated in DKK. The Group is thus offering as much as possible revenue in EUR
to match the main cost driver, as DKK is tied to EUR. Meanwhile optimising cost placements in USD to
utilise incoming USD payments. However, currency fluctuations could cause currency transaction losses
or gains which the Company cannot predict, and if the currency fluctuations are detrimental to the
Group, it could have a material adverse effect on the Group’s business, results of operations and finan-
cial position. Furthermore, fluctuations in the value of USD and other foreign currencies may make the
Group’s subscriptions more expensive for international customers, which could harm its business.
DKK’000 2021 2020
Sensitivity to a 10% increase in USD exchange rate
Effect on profit before tax 3,691 1,914
Effect on pre-tax equity 3,691 1,914
64 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
CON Note 21
Notes to the consolidated financial statements
. Financial risks (continued)
The carrying amount of the Group’s foreign currency denominated monetary assets and monetary liabili-
ties at the reporting date is as follows:
Assets Liabilities Net assets
DKK’000 31 Dec 2021 31 Dec 2020 31 Dec 2021 31 Dec 2020 31 Dec 2021 31 Dec 2020
Currency
USD 23,179 2,850 1,174 7,733 22,005 (4,883)
EUR 3,137 201 209 930 2,928 (729)
Other 1,394 3 60 1,334 3
Liquidity risk
The Group ensures sufficient liquidity resources by liquidity management. In order to limit the Group’s
counterparty risk, deposits are only made in well-reputed banks.
At 31 December 2021, the Group’s cash and cash equivalents amounted to DKK 45,946k (2020: DKK
783k).
The cash reserve and expected cash flow for 2022 are considered to be adequate to meet the obligations
of the Group as they fall due.
The table below summarises the maturity profile of the Group’s financial liabilities based on contractual
undiscounted payments which include estimated interest payments:
DKK’000
Less than
3 months
3 to 12
months
1 to 5
years > 5 years Total
Year ended on 31 December 2021
Interest-bearing liabilities 3,600 3,600 18,758 2,738 28,696
Lease liabilities 959 2,876 4,959 - 8,794
Trade and other payables 7,843 1,576 - - 9,419
Total 12,402 8,052 23,717 2,738 46,909
Year ended on 31 December 2020
Interest-bearing liabilities 172 5,418 31,170 2,858 39,618
Lease liabilities - 1,486 2,015 - 3,501
Trade and other payables 3,415 5,169 372 19 8,795
Total 3,587 12,073 33,557 2,877 51,914
Interest rate risk
Interest rate risk arises in relation to interest-bearing assets and liabilities.
The Group’s interest-bearing debt to credit institutions of DKK 16,590 thousand (2020: DKK 26,112
thousand) at 31 December 2021 is subject to a variable rate of interest based on a 3-month CIBOR plus a
premium, whereas DKK 12,106 thousand (2020: DKK 11,500 thousand) has a fixed interest rate of 5%.
65 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
Notes to the consolidated financial statements
. Financial risks (continued)
If market interest rates increased by one percentage point, the interest rate sensitivity as calculated
based on the loan balance to credit institutions as per the end of 2021 would result in a yearly increase in
interest expenses of DKK 287 thousand (2020: DKK 376 thousand). A corresponding decrease in market
interest rates would have the opposite impact.
Financial instruments
DKK’000 2021 2020
Financial assets measured at amortised cost
Deposits 1,153 427
Trade receivables 6,238 2,195
Other receivables 543 664
Cash 45,946 783
Total 53,880 4,069
Financial liabilities measured at amortised cost
Interest-bearing loan 28,696 37,612
Trade payables 4,831 2,888
Other payables 4,588 9,379
Total 38,115 49,879
Classification of financial assets measured at amortised cost
Since the Group’s financial instruments measured at amortised cost are either short-term and/or
exposed to floating interest rates, Management has assessed that the carrying amount is a reasonable
approximation of fair value.
. Liabilities arising from financing activities
DKK’000
Other
borrowings
Lease
liabilities Total
2021
Liabilities at 1 January 48,587 3,296 51,883
Adjustment to 1 January balance* (10,975) - (10,975)
Loans raised - 7,742 7,742
Repayments (8,916) (2,424) (11,340)
Foreign exchange rate movements - (1) (1)
Other - 181 181
Liabilities at 31 December 28,696 8,794 37,490
2020
Liabilities at 1 January 37,037 4,444 41,481
Loans raised 12,356 329 12,685
Repayments (2,432) (1,667) (4,099)
Foreign exchange rate movements - 1 1
Other 1,626 189 1,815
Liabilities at 31 December 48,587 3,296 51,883
* Beginning balance included Trade payables and Other payables which is incorrect.
There is no ultimate Parent, as no owner holds the majority of the voting rights.
66 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
CON Note 22
Notes to the consolidated financial statements
. Related parties
Shareholders
Registered
office
Basis of
influence
Rocket Group ApS Copenhagen
NCP-IVS Fund III K/S Hellerup
Faurfelt Invest ApS Copenhagen
There is no ultimate Parent, as no owner holds the majority of the voting rights.
Other related parties
Other related parties of the Group with significant influence comprise the Board of Directors and the
Executive Board and their related parties. The transactions with the Board of Directors and the Executive
Board only consist of normal remuneration as disclosed in note 6, other than transactions mentioned below.
All agreements relating to these transactions are based on market price (arm’s length). The Company has
the outstanding balances with related parties as per the below table:
DKK’000 2021 2020
Ettrup Invest ApS
Interest-bearing liabilities - 4
Lars Ettrup
Interest-bearing liabilities 13 6
Jeppe Faurfelt
Interest-bearing liabilities - 373
. Events after the reporting period
On January 11, 2022 the company completed the acquisition of global competitor smartURL with a plan-
ned share issuance of 1,192,864 new shares. The share price in the issuance of 8.4451 SEK per share has
been determined via a five-day pre-signing and a five-day post-signing volume-weighted average price
(”VWAP”) in Linkfire’s share. The agreement was signed on November 4, 2021. The issuance corresponds
to a dilution of 2% increasing the number of shares and voting rights in Linkfire from 58,339,222 to
59,532,086. The newly issued shares are subject to a lock-up period of 12 months.
No further matters, which would influence the evaluation of the annual report, have occurred.
. Guarantees, contingent liabilities and collateral
The group has provided a bank guarantee to Euroclear of DKK 145k.
In order to secure the Company’s balance with Danish Growth Fund, a mortgage has been granted with
mortgages in simple receivables, operating inventories and equipment and intellectual property rights at
a total book value of DKK 76,630 (2020: DKK 53,794k).
67 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
CON Note 23-24
Parent company income statement
DKK’000 Note 2021 2020
Revenue 33,697 24,699
Cost of sales (9,320) (5,995)
External expenses (32,835) (15,658)
Other external expenses (6,867) -
Gross profit (15,325) 3,045
Staff costs 2 (17,754) (11,648)
Other Operating Income (0) -
Depreciation and amortisation 3 (6,576) (4,351)
Operating profit/(loss) (39,655) (12,954)
Financial income 4 1,888 508
Financial expenses 5 (4,232) (4,109)
Profit/(loss) before tax (41,998) (16,556)
Tax for the year 6 5,500 4,528
Profit/(loss) for the year (36,498) (12,027)
Proposed distribution of profit and loss:
Proposed dividend 0 0
Retained earnings (36,498) (12,027)
Profit/(loss) for the year (36,498) (12,027)
69 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
PAR Income statement
Parent company statement of financial position
DKK’000 Note 31/12/21 31/12/20
Assets
Completed development projects 61,578 48,861
Development projects in progress 0 2,642
Prepaid intellectual property rights 8,298 -
Total intangible assets 7 69,876 51,503
Other fixtures and fittings, tools and equipment 516 94
Leasehold improvements - 2
Total property, plant and equipment 8 516 96
Deposits 508 427
Investments in subsidiaries 0 -
Total fixed asset investments 9 508 427
Total fixed assets 70,900 52,026
Trade receivables 6,238 2,195
Other receivables 448 489
Income tax receivables 5,500 4,528
Prepayments 1,588 280
Total receivables 13,774 7,492
Cash 45,083 700
Total current assets 58,858 8,192
Total assets 129,758 60,218
DKK’000 Note 31/12/21 31/12/20
Equity and liabilities
Share capital 583 108
Reserve for development costs 61,578 51,503
Retained earnings 23,110 (47,256)
Total equity 85,271 4,356
Interest bearing liabilities 21,496 32,780
Total non-current liabilities 10 21,496 32,780
Current portion of non-current liabilities other than provisions 10 7,200 3,120
Interest bearing liabilities - 3,995
Prepayments from customers 6,166 5,702
Trade payables 4,800 2,886
Payables to group enterprises 1,258 1,764
Other payables 3,567 5,615
Total current liabilities 22,990 23,082
Total liabilities 44,487 55,862
Total equity and liabilities 129,758 60,218
70 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
PAR Statement of financial position
Parent company statement of changes in equity
DKK’000
Share
capital
Share
premium
Reserve for
develop-
ment costs
Retained
earnings Total
2021
Equity beginning of period 108 - 51,503 (47,255) 4,356
Increase of capital 475 125,489 - (292) 125,672
Transferred from share premium - (125,489) - 125,489 -
Transfer to reserves - - 10,075 (10,075) -
Transaction cost from capital
increase
- - - (8,259) (8,259)
Proposed dividend - - - - -
Profit/(loss) for the period - - - (36,498) (36,498)
Equity end of period 583 - 61,578 23,110 85,271
DKK’000
Share
capital
Share
premium
Reserve for
develop-
ment costs
Retained
earnings Total
2020
Equity beginning of period 104 - 42,163 (32,384) 9,883
Increase of capital 4 6,495 - - 6,499
Transferred from share premium - (6,495) - 6,495 -
Transfer to reserves - - 9,340 (9,340) -
Transaction cost from capital
increase
- - - - -
Proposed dividend - - - - -
Profit/(loss) for the period - - - (12,027) (12,027)
Equity end of period 108 - 51,503 (47,256) 4,356
71 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
PAR Statement of changes in equity
Notes to the parent financial statements
1. Accounting policies
2. Staff costs
3. Depreciation and amortisation
4. Other financial income
5. Other financial expenses
6. Tax on profit/loss for the year
7. Intangible assets
8. Property, plant and equipment
9. Financial assets
10. Interest-bearing liabilities
11. Unrecognised rental and lease commitments
12. Guarantees, contingent liabilities and collateral
13. Subsequent events
72 / 84 LINKFIRE A/S ANNUAL REPORT 2021
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PAR Notes contents
The separate parent financial statements have
been incorporated in the annual report because a
separate set of financial statements is requi-
red for the Parent under the Danish Financial
Statements Act requirements for annual reports
of reporting class B enterprises with additions of
certain provisions for reporting class C.
The accounting policies applied for these
financial statements are consistent with those
applied last year.
Recognition and measurement
Assets are recognised in the balance sheet when
it is probable as a result of a prior event that
future economic benefits will flow to the Entity,
and the value of the asset can be measured
reliably. Liabilities are recognised in the balance
sheet when the Entity has a legal or constructive
obligation as a result of a prior event, and it is
probable that future economic benefits will flow
out of the Entity, and the value of the liability
can be measured reliably. On initial recogniti-
on, assets and liabilities are measured at cost.
Measurement subsequent to initial recognition
is effected as described below for each financial
statement item. Anticipated risks and losses that
arise before the time of presentation of the an-
nual report and that confirm or invalidate affairs
and conditions existing at the balance sheet date
are considered at recognition and measurement.
Income is recognised in the income statement
when earned, whereas costs are recognised by
the amounts attributable to this financial year.
Cash flow statement
Referring to section 86(4) of the Danish Financial
Statements Act, no cash flow statement have
been prepared.
Income statement
Gross profit or loss
Gross profit or loss comprise revenue, own work
capitalised, other operating income, cost of sales
and external expenses with reference to section
32 of the Danish Financial Statements Act.
Revenue
Revenue from the sale of services is recognised
in the income statement when delivery is made
to the buyer. Revenue is recognised net of VAT,
duties and sales discounts and is measured at
the fair value of the consideration fixed.
Cost of sales
Cost of sales comprises goods consumed in the
financial year measured at cost, adjusted for
ordinary inventory write-downs.
External expenses
Other external expenses comprise sales and
marketing costs, external consultancy costs,
other employee-related costs, IT and software
costs, investor relations costs, loss allowances
for doubtful trade receivables and other admini-
strative expenses.
Other external expenses
Other external expenses comprise expenses of
an extraordinary nature. The expenses recogni-
zed in 2021 relate to the First North listing and
associated consultancy expenses.
Staff costs
Staff costs comprise salaries and wages, and
social security contributions, pension contributi-
ons, etc for entity staff.
Depreciation and amortisation
Depreciation and amortisation relating to pro-
perty, plant and equipment and intangible assets
comprise Depreciation and amortisation for the
financial year, and gains and losses from the
sale of intangible assets and property, plant and
equipment.
Other financial income
Other financial income comprises dividends etc
received on other investments, interest income,
including interest income on receivables from
group enterprises, net capital or exchange
gains on securities, payables and transactions
in foreign currencies, amortisation of financial
assets, and tax relief under the Danish Tax Pre-
payment Scheme etc.
Other financial expenses
Other financial expenses comprise interest
expenses, including interest expenses on payab-
les to group enterprises, net capital or exchange
losses on securities, payables and transactions
in foreign currencies, amortisation of financial
liabilities, and tax surcharge under the Danish
Tax Prepayment Scheme etc.
Tax on profit/loss for the year
Tax for the year, which consists of current tax for
the year and changes in deferred tax, is recogni-
sed in the income statement by the portion attri-
butable to the profit for the year and recognised
directly in equity bythe portion attributable to
entries directly in equity.
Notes to the parent financial statements
. Accounting policies
73 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
PAR Note 1
Balance sheet
Intellectual property rights etc
Intellectual property rights etc comprise devel-
opment projects completed and in progress with
related intellectual property rights, acquired
intellectual property rights and prepayments for
intangible assets.
Development projects on clearly defined and
identifiable products and processes, for which
the technical rate of utilisation, adequate
resources and a potential future market or
development opportunity in the enterprise can
be established, and where the intention is to
manufacture, market or apply the product or pro-
cess in question, are recognised as intangible as-
sets. Other development costs are recognised as
costs in the income statement as incurred. When
recognising development projects as intangible
assets, an amount equalling the costs incurred
less deferred tax is taken to equity under reserve
for development costs that are reduced as the
development projects are amortised and written
down.
The cost of development projects comprises
costs such as salaries and amortisation that
are directly and indirectly attributable to the
development projects. Completed development
projects are amortised on a straight-line basis
using their estimated useful lives which are de-
termined based on a specific assessment of each
development project. If the useful life cannot be
estimated it is impairment testet yearly.
For development projects protected by intel-
lectual property rights, the maximum period of
amortisation is the remaining duration of the re-
levant rights. The amortization periods used are
5 -10 years. Intellectual property rights etc are
written down to the lower of recoverable amount
and carrying amount.
Property, plant and equipment
Other fixtures and fittings, tools and equipment
are measured at cost less accumulated de-
preciation and impairment losses. Land is not
depreciated. Cost comprises the acquisition
price, costs directly attributable to the acquisi-
tion and preparation costs of the asset until the
time when it is ready to be put into operation. The
basis of depreciation is cost less estimated resi-
dual value after the end of useful life. Straight-li-
ne depreciation is made on the basis of the
following estimated useful lives of the assets:
Other fixtures and fittings, tools
and equipment 3 years
Leasehold improvements 5 years
For leasehold improvements and assets subject
to finance leases, the depreciation period cannot
exceed the contract period. Estimated useful
lives and residual values are reassessed annu-
ally. Items of property, plant and equipment are
written down to the lower of recoverable amount
and carrying amount.
Investments in group enterprises
Investments in group enterprises are measured
at cost. Investments are written down to the low-
er of recoverable amount and carrying amount.
Receivables
Receivables are measured at amortised cost,
usually equalling nominal value less write-downs
for bad and doubtful debts.
Income tax payable or receivable
Current tax payable or receivable is recognised
in the balance sheet, stated as tax computed on
this year’s taxable income, adjusted for prepaid
tax.
Prepayments
Prepayments comprise incurred costs relating
to subsequent financial years. Prepayments are
measured at cost. Cash comprises cash in hand
and bank deposits.
Other financial liabilities
Other financial liabilities are measured at amor-
tised cost, which usually corresponds to nominal
value.
Notes to the parent financial statements
. Accounting policies (continued)
74 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
Notes to the parent financial statements
. Staff costs
DKK’000 2021 2020
Wages and salaries 26,776 21,597
Other social security costs 361 138
Other staff costs 2,123 931
29,260 22,666
Staff costs classified as assets (11,506) (11,018)
Total 17,754 11,648
Average numbers of employees at balance sheet date 46 39
For information about remuneration to Board of Directors and Key Management Personnel and Share-
based payments please refer to note 6 and 7 in the notes to the consolidated financial statements
. Depreciation and amortisation
DKK’000 2021 2020
Amortisation of intangible assets 6,499 4,317
Depreciation of property plant and equipment 76 34
Total 6,575 4,351
. Other financial income
DKK’000 2021 2020
Foreign exchange gains 1,210 507
Other financial income 678 1
Total 1,888 508
. Other financial expenses
DKK’000 2021 2020
Other interest expenses 3,864 3,314
Foreign exchange losses and other adjustments 212 712
Other financial expenses 156 83
Total 4,232 4,109
. Tax on proft/loss for the year
DKK’000 2021 2020
Current tax (5,500) (4,528)
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SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
PAR Note 2-6
. Intangible assets
DKK’000
Prepaid
Intellectual
Property
Rights
Completed
devel-
opment
projects
Devel-
opment
projects in
progress Total
2021
Cost at 1 January - 55,764 2,642 58,406
Transfers - 19,215 (19,215) -
Additions 8,298 - 16,573 24,871
Cost at 31 December 8,298 74,979 - 83,277
Amortisation and impairment at 1 January - (6,903) - (6,903)
Amortisation during the year - (6,499) - (6,499)
Amortisation and impairment at 31 December - (13,402) - (13,402)
Carrying amount at 31 December 8,298 61,577 - 69,875
2020
Cost at 1 January - 18,050 26,699 44,749
Transfers - 37,714 (37,714) -
Additions - - 13,657 13,657
Cost at 31 December - 55,764 2,642 58,406
Amortisation and impairment at 1 January - (2,586) - (2,586)
Amortisation during the year - (4,317) - (4,317)
Amortisation and impairment at 31 December - (6,903) - (6,903)
Carrying amount at 31 December - 48,861 2,642 51,503
Notes to the parent financial statements
Please refer to the description in note 12 in the consolidated financial statements.
Development costs for the year cover both development of the front-end and the back-end part of the
software solution. Both parts are to increase the user experience and functionalities within the software
in order to increase the Group’s revenue by maintaining existing customers and acquire new customers.
Development projects in progress and completed development projects have a net value of DKK 61,577k
and DKK 0 (2020: DKK 48,861k and DKK 2,642k) in the annual report. Development projects are measured
at cost reduced by amortisation and write-downs. The measurement is subject to considerable uncer-
tainty.
In 2021, Linkfire expensed DKK 10,141 thousand (2020: 4,057 thousand) for development projects not
meeting the recognition criteria applicable to internally generated intangible assets.
Prepaid intellectual property rights relate to the acquisition of smartURL. The prepaid amount is part of
the total acquisition price which includes the prepayment as an upfront element, the share issue descri-
bed in note 24, and an earn-out element that is dependent on future performance of the assets.
A total consideration of up to USD 4.8 million, has been agreed between the parties, as disclosed to the
market on 4 November 2021.
76 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
PAR Note 7
. Property, plant and equipment
DKK’000
Other
fictures and
fittings,
tools and
equipment
Leasehold
improve-
ments Total
2021
Cost at 1 January 116 121 237
Additions 498 498
Disposals - -
Cost at 31 December 614 121 735
Depreciation at 1 January (22) (119) (141)
Depreciation during the year (75) (2) (77)
Depreciation at 31 December (97) (121) (218)
Carrying amount at 31 December 517 - 517
2020
Cost at 1 January 33 121 154
Additions 89 - 89
Disposals -6 0 (6)
Cost at 31 December 116 121 237
Depreciation at 1 January (11) (102) (113)
Depreciation during the year (11) (17) (28)
Depreciation at 31 December (22) (119) (141)
Carrying amount at 31 December 94 2 96
. Financial assets
DKK’000
Investments
in group
enterprises Deposits
2021
Cost at 1 January - 426
Additions - 82
Cost at 31 December - 508
Name Country Ownership
Linkfire Inc. USA 100%
Linkfire Sociedada Unipeossal Lda. Portugal 100%
Notes to the parent financial statements
77 / 84 LINKFIRE A/S ANNUAL REPORT 2021
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PAR Note 8-10
Notes to the parent financial statements
. Guarantees, contingent liabilities and collateral
The group has provided a guarantee to Euroclear of DKK 145k.
In order to secure the Company’s balance with Danske Bank, a mortgage has been granted with mortga-
ges in simple receivables, operating inventories and equipment and intellectual property rights at a total
book value of DKK 76,630 (2020: DKK 53,794k).
. Subsequent events
On January 11, 2022 the company completed the acquisition of global competitor smartURL with a plan-
ned share issuance of 1,192,864 new shares. The share price in the issuance of 8.4451 SEK per share has
been determined via a five-day pre-signing and a five-day post-signing volume-weighted average price
(”VWAP”) in Linkfire’s share. The agreement was signed on November 4, 2021. The issuance corresponds
to a dilution of 2% increasing the number of shares and voting rights in Linkfire from 58,339,222 to
59,532,086. The newly issued shares are subject to a lock-up period of 12 months.
No further matters, which would influence the evaluation of the annual report, have occurred.
. Interest-bearing liabilities
DKK’000 2021 2020
Non-current borrowings
Debt to credit institutions 19,385 31,610
Other 2,111 2,007
Total 21,496 33,617
Current borrowings
Debt to credit institutions 7,200 3,995
Convertible loan - -
Total 7,200 3,995
For a specification of the debt that is due after 5 years please refer to note 21 of the notes to the consoli-
dated financial statements.
. Unrecognised rental and lease commitments
DKK’000 2021 2020
Liabilities under rental or lease agreements until maturity in total 335 998
78 / 84 LINKFIRE A/S ANNUAL REPORT 2021
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PAR Note 11-13
Copenhagen, 6 April 2022
Board of Directors
Statement
by Management
Executive Management
79 / 84 LINKFIRE A/S ANNUAL REPORT 2021
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Statement by Management
Independent auditor’s report
Opinion
Basis for opinion
Statement on the management
commentary
80 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
Independent auditor’s report
Management’s responsibilities
for the consolidated financial
statements and the parent
financial statements
Auditor’s responsibilities for
the audit of the consolidated
financial statements and the
parent financial statements
81 / 84 LINKFIRE A/S ANNUAL REPORT 2021
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CVR No. 33963556
Identification No (MNE) mne33712
82 / 84 LINKFIRE A/S ANNUAL REPORT 2021
SUSTAINABILITY CORPORATE GOVERNANCE FINANCIAL STATEMENTS STATEMENTSCONTENTS INTRO MANAGEMENT’S REVIEW
Company information
The Company
Linkfire A/S
Artillerivej 86, 3.
2300 København S
Business Registration No.: 35 83 54 31
Registered office: Copenhagen
Date of incorporation: 15.04.2014
Financial year: 01.01.2021 - 31.12.2021
Board of Directors
Jesper Møller, Chairman
Thomas Weilby Knudsen
Charlotte Klinge
Thomas Rudbeck
Executive Board
Lars Wiberg Ettrup
Tobias Demuth
Auditors
Deloitte Statsautoriseret
Revisionspartnerselskab
Glossary
Subscription Revenue
Subscription revenue is generated from recurring subscription fees which customers
pay to use the Company’s platform.
Commission Revenue
When consumers discover music and are funnelled from the Linkfire discovery layer
to various Digital Service Providers, Linkfire in some cases generates commission
revenue through affiliate partnerships.
Digital Service Providers
Stores and/or services where consumers play music, purchase other related content,
or sign up for subscriptions, e.g. Apple Music, Amazon, Ticketmaster, etc.
Consumer Connections
Represent the number of unique visitors on Linkfire’s smart links and are a key driver
for Commission revenue in conjunction with the ability to monetize traffic, reflected in
the RPM.
Commission Revenue per Mille (RPM)
RPM is an important metric to Linkfire. It represents the commission revenue genera-
ted per thousand consumer connections for the period.
Constant Currency
Figures on a constant currency basis are an important measure to Linkfire as the ma-
jority of revenue is made in USD. This measure highlights the clean growth, adjusted
for exchange rate impact in period-to-period comparison.
83 / 84 LINKFIRE A/S ANNUAL REPORT 2021
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Glossary Company information
Linkfire A/S • Artillerivej 86, 3. • 2300 København S • CVR no. 35 83 54 31