Guild Esports . Regulatory News (GILD)

Guild Esports 

Carleton Curtis

Executive Chairman

Kal Hourd

Chief Executive

Neil Thapar

Investor Relations

via Tancredi +44 207 887 7633

+44 7876 455 323

Tennyson Securities

Corporate Broker

Peter Krens

+44 207 186 9030

Zeus Capital

Corporate Broker

John Goold

Benjamin Robertson 

Jamie Peel

+44 203 829 5000

Tancredi Intelligent Communication

Media Relations

Salamander Davoudi

salamander@tancredigroup.com

Emma Valgimigli 

emma@tancredigroup.com

Helen Humphrey

helen@tancredigroup.com

+44 7957 549 906

+44 7727 180 873

+44 7449 226 720

30 September 2020

28 January 2021

Viewership

Guild fans

- Individuals who have opted into Guild channels (e.g. YouTube, Instagram, Twitter, Twitch etc.)

25k

97k

Guild network

- Individuals subscribed to the network of Guild teams, influencers and content creators

0.5m

1.86m

- Guild social reach on David Beckham's channels

123m

125m

Social impressions

- Display of Guild content on individuals' social feeds

7.6m

59.0m

Video views

- Views of videos on Guild channels

0.6m

9.4m

Viewership of Guild events

- Views of live Guild events (online)

148k

207k

Period

ended

30 September

2020

Notes

£

Operating and administrative expenses

(2,727,324)

Operating loss

3

(2,727,324)

Interest received

6

129

Loss before taxation

(2,727,195)

Taxation

7

-

Loss and total comprehensive income for the period

(2,727,195)

Earnings per share attributable to equity owners

8

Basic and diluted earnings per share (pence)

(1.70)

The income statement has been prepared on the basis that all operations are continuing operations.

There are no recognised gains or losses other than those passing through the income statement.

2020

Notes

£

Non-current assets

Intangible assets

10

36,001

Property, plant and equipment

11

4,342

Total non-current assets

40,343

Current assets

Trade and other receivables

12

2,065,626

Cash and cash equivalents

2,517,734

Total current assets

4,583,360

Total assets

4,623,703

Current liabilities

Trade and other payables

14

2,092,720

Net current assets

2,490,640

Total liabilities

2,092,720

Net assets

2,530,983

Equity

Share capital

15

264,617

Share premium

15

4,880,511

Share-based payment reserve

113,050

Retained deficit 

(2,727,195)

Total equity

2,530,983

The financial statements were approved by the board of directors and authorised for issue on 28 January 2021 and are signed on its behalf by:

Mr J Savage

Finance Director

Company Registration No. 12187837

Share capital

Share premium

Share-based payment reserve

Retained deficit

Total

Notes

£

£

£

£

£

Balance at 3 September 2019

-

-

-

-

-

Period ended 30 September 2020:

Loss and total comprehensive income

-

-

-

(2,727,195)

(2,727,195)

Issue of share capital

15

264,617

5,034,923

-

-

5,299,540

Share-based payments

-

-

113,050

-

113,050

Share issue costs

-

(154,412)

-

-

(154,412)

Balance at 30 September 2020

264,617

4,880,511

113,050

(2,727,195)

2,530,983

2020

Notes

£

£

Cash flows from operating activities

Cash used by operations

20

(2,439, 079)

Net cash outflow from operating activities

(2,439,079)

Investing activities

Purchase of intangible assets

(39,078)

Purchase of property, plant and equipment

(4,466)

Interest received

129

Net cash used in investing activities

(43,415)

Financing activities

Proceeds from issue of shares (net of issue costs)

5,000,228

Net cash generated from financing activities

5,000,228

Net increase in cash and cash equivalents

2,517,734

Cash and cash equivalents at beginning of period

-

Cash and cash equivalents at end of period

2,517,734

1

Accounting policies

Company information

Guild Esports PLC is a public limited company incorporated in England and Wales and domiciled in the United Kingdom. The registered office is Craven House, 16 Northumberland Avenue, London, WC2N 5AP. The Company's principal activities and nature of its operations are disclosed in the directors' report.

1.1

Basis of preparation

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the European Union and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, except as otherwise stated.

The financial statements are prepared in sterling, which is the functional currency of the Company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

The Company applied IFRS 16 Leases and IFRIC 23 Uncertainty over Income Tax Treatments for the first time from 3 September 2019. The nature and effect of these changes as a result of the adoption of these new standards did not have an impact on the financial statements of the Company and, hence, have not been disclosed. The Company has not early adopted any standards, interpretations or amendments that have been issued but are not yet effective.

1.2

Going concern

The preparation of financial statements requires an assessment on the validity of the going concern assumption.

The directors have a reasonable expectation that the Company has adequate cash resources to continue in operational existence for a period of at least one year from date of approval of these financial statements. The Company therefore has adopted the going concern basis in preparing its financial statements.

The directors have reviewed the ongoing situation with Covid-19 and do not consider its effects to have a material impact on the Company's going concern. The directors note that esports tournaments which would have normally taken place in a physical location, have been adapted to take place virtually, in light of the practical restrictions enforced by regulations. The directors have also noted that during this period of "lock-down", esports viewership numbers have increased.

1.3

Reporting period

The Company was incorporated on 3 September 2019. The figures in these financial statements therefore represent the period from 3 September 2019 to 30 September 2020. There are consequently no comparative figures presented in these financial statements and related notes.

1.4

Intangible assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives. Website costs are amortised on a 33% per annum, straight-line basis.

1.5

Property, plant and equipment

Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Office equipment

33% straight-line per annum

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.

1.6

Impairment of tangible and intangible assets

At each reporting end date, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.7

Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand and demand deposits with banks and other financial institutions, that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value. The Company monitors both short-term and long-term credit ratings of the financial institutions it banks with. NatWest Group Plc has a high rating from Fitch Ratings Inc, being 'F1' short-term and 'A' long-term.

1.8

Financial assets

Financial assets are recognised in the Company's statement of financial position when the Company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.

At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.

Financial assets at fair value through profit or loss

When any of the above-mentioned conditions for classification of financial assets is not met, a financial asset is classified as measured at fair value through profit or loss. Financial assets measured at fair value through profit or loss are recognized initially at fair value and any transaction costs are recognised in profit or loss when incurred. A gain or loss on a financial asset measured at fair value through profit or loss is recognised in profit or loss, and is included within finance income or finance costs in the statement of income for the reporting period in which it arises.

Financial assets held at amortised cost

Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (eg trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary.

Financial assets at fair value through other comprehensive income

Debt instruments are classified as financial assets measured at fair value through other comprehensive income where the financial assets are held within the Company's business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A debt instrument measured at fair value through other comprehensive income is recognised initially at fair value plus transaction costs directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognised through other comprehensive income are directly transferred to profit or loss when the debt instrument is derecognised.

Impairment of financial assets

Financial assets, other than those measured at fair value through profit or loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

1.9

Financial liabilities

The Company recognises financial debt when the Company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.

Financial liabilities at fair value through profit or loss

Financial liabilities are classified as measured at fair value through profit or loss when the financial liability is held for trading. A financial liability is classified as held for trading if:

· it has been incurred principally for the purpose of selling or repurchasing it in the near term, or

· on initial recognition it is part of a portfolio of identified financial instruments that the Company manages together and has a recent actual pattern of short-term profit taking, or

· it is a derivative that is not a financial guarantee contract or a designated and effective hedging instrument.

Financial liabilities at fair value through profit or loss are stated at fair value with any gains or losses arising on remeasurement recognised in profit or loss.

Other financial liabilities

Other financial liabilities, including trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

Derecognition of financial liabilities

Financial liabilities are derecognised when, and only when, the Company's obligations are discharged, cancelled, or they expire.

1.10

Equity and reserves

The share capital reserve represents the nominal value of equity shares. The share premium reserve is the amount subscribed for share capital in excess of nominal value. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction from the proceeds. Share based payments relating to incentive schemes or advisor warrants have been recognised at their fair value at grant within the share based payment reserve in line with IFRS2. The retained earnings reserve represents the cumulative net gains and losses and other transactions with equity holders not recognised elsewhere.

1.11

Financial risk management

Equity instruments issued by the Company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the Company. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Financial risk factors

The Company's activities expose it to a variety of financial risks: market risk (price risk), credit risk and liquidity risk. The Company's overall risk management programme seeks to minimise potential adverse effects on the Company's financial performance. The Company has no borrowings but is exposed to market risk in terms of foreign exchange risk. Risk management is undertaken by the board of directors.

Market risk - price risk

The Company is exposed to price risk primarily for the costs of operating in the Esports industry.

Credit risk

Credit risk arises from outstanding receivables. Management does not expect any losses from non-performance of these receivables. The amount of exposure to any individual counter party is subject to a limit, which is assessed by the board. The Company considers the credit ratings of banks in which it holds funds in order.

Liquidity risk

Liquidity risk arises from the Company's management of working capital. It is the risk that the Company will encounter difficulty in meeting its financial obligations as they fall due. Controls over expenditure are carefully managed, in order to maintain its cash reserves.

Capital risk management

The Company's objectives when managing capital is to safeguard the Company's ability to continue as a going concern, in order to provide returns for shareholders and benefits for other stakeholders, and to maintain an optimal capital structure. The Company has no borrowings. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares. The Company monitors capital on the basis of the total equity held by the Company,.

1.12

Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the Company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.13

Share-based payments

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black-Scholes option pricing model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.

When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.

Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.

2

Critical accounting estimates and judgements

In the application of the Company's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

There are currently no estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities.

3

Operating loss

2020

£

Operating loss for the period is stated after charging:

Fees payable to the Company's auditor for the audit of the financial statements

23,500

Fees payable to the Company's auditor for work in respect of the IPO

60,000

Depreciation of property, plant and equipment

124

Amortisation of intangible assets (included within administrative expenses)

3,077

Share-based payments

113,050

4

Employees

The average monthly number of persons (excluding directors) employed by the Company during the period was Nil. Amounts paid to Directors during the period are disclosed in note 18.

5

Directors' remuneration

2020

£

Remuneration for qualifying services

247,157

Remuneration disclosed above include the following paid to the highest-paid director:

Remuneration for qualifying services

58,157

6

Finance income

2020

£

Interest income

Bank deposits

129

Total interest income for financial assets that are not held at fair value through profit or loss was £129.

7

Taxation

The charge for the period can be reconciled to the loss per the income statement as follows:

2020

£

Loss before taxation

(2,727,195)

Expected tax credit based on a corporation tax rate of 19%

(518,167)

Effect of expenses not deductible in determining taxable profit

57,562

Unutilised tax losses carried forward

440,036

Permanent capital allowances in excess of depreciation

(911)

Share based payment charge

21,480

Taxation credit for the period

-

The Company has tax losses of £2,315,978 available to be carried forward against trading profits arising in future periods. At this time, a deferred tax asset has not been recognised due to insufficient certainty over the level of future profits to utilise against this amount.

8

Earnings per share

The basic earnings per share is calculated by dividing the loss attributable to equity shareholders by the weighted average number of shares in issue.

2020

No.

Number of shares

Weighted average number of ordinary shares for basic earnings per share

160,342,559

Earnings

£

Loss for the period from continued operations

(2,727,195)

Earnings for basic and diluted earnings per share being net profit attributable to equity shareholders of the Company for continued operations

(2,727,195)

Earnings per share for continuing operations

Basic and diluted earnings per share

(1.70) pence

Outstanding warrants are non-dilutive given the loss for the period.

9

Share-based payments

The following warrants over ordinary shares have been granted by the Company and are outstanding:

Options/warrants

Grant date

Expiry period

Exercise price

Outstanding at 30 September 2020

Exercisable at 30 September 2020

Warrants

3 December 2019

3 months from admission

£0.01

3,000,000

-

Warrants

18 February 2020

24 months from the first anniversary of admission

£0.01

3,250,000

-

Warrants

13 March 2020

36 months from the first vesting date

£0.01

75,000

-

Warrants

30 March 2020

36 months

£0.01

1,000,000

500,000

Warrants

9 June 2020

36 months

£0.01

250,000

250,000

Warrants

12 June 2020

Upon admission

£0.01

2,500,000

2,500,000

Warrants

18 June 2020

36 months from the first vesting date

£0.06

5,000,000

-

Warrants

19 June 2020

Five years from issue

£0.06

6,963,000

6,963,000

Warrants

29 June 2020

36 months from the first vesting date

£0.06

250,000

-

Warrants

7 July 2020

36 months from the first vesting date

£0.06

225,000

-

Warrants

5 August 2020

36 months

£0.06

250,000

-

Warrants

7 August 2020

36 months from the first vesting date

£0.06

500,000

-

Warrants

14 August 2020

36 months from the first vesting date

£0.06

750,000

-

Warrants

17 August 2020

36 months from the first vesting date

£0.06

1,000,000

-

Warrants

20 August 2020

36 months from the first vesting date

£0.06

1,000,000

-

Warrants

28 August 2020

36 months from the first vesting date

£0.06

150,000

-

26,163,000

10,213,000

9

Share-based payments

Number of options and warrants

Weighted average exercise price

2020

2020

No.

£

At incorporation

-

-

Granted in the period

26,163,000

0.04

Forfeited in the period

-

-

Exercised in the period

-

-

Expired in the period

-

-

Outstanding at 30 September 2020

26,163,000

0.04

Exercisable at 30 September 2020

10,213,000

0.04

At the grant date, the fair value of the warrants issued have been determined using the Black-Scholes option pricing model. Volatility was calculated based on data from comparable esports companies, with an appropriate discount applied due to being an unlisted entity at the grant date. Risk-free interest has been based on UK Government Gilt rates. The weighted average remaining life of warrants as at the balance sheet date was 2.6 years.

10

Intangible assets

Website costs

£

Cost

Additions

39,078

At 30 September 2020

39,078

Amortisation and impairment

Charge for the period

3,077

At 30 September 2020

3,077

Carrying amount

At 30 September 2020

36,001

11

Property, plant and equipment

Office equipment

£

Cost

Additions

4,466

At 30 September 2020

4,466

Accumulated depreciation and impairment

Charge for the period

124

At 30 September 2020

124

Carrying amount

At 30 September 2020

4,342

12

Trade and other receivables

2020

£

VAT recoverable

579,288

Prepayments

1,486,338

2,065,626

The directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value. No significant receivable balances are impaired at the reporting date.

13

Financial instruments

2020

£

Financial assets measured at amortised cost

2,517,734

Financial liabilities measured at amortised cost

2,092,720

The directors consider the carrying amounts of financial instruments in the financial statements approximate to their fair values.

14

Trade and other payables

2020

£

Trade payables

79,746

Accruals

227,974

Other payables

1,785,000

2,092,720

Other payables relates to amounts received in advance for share capital issued post-period end.

15

Share capital and premium

Number of shares

Share capital

Share premium

Total

No.

£

£

£

At incorporation

1,000

1

-

1

Issue of ordinary shares (13/09/2019)

99,999,000

99,999

-

99,999

Issue of ordinary shares (21/10/2019)

27,500,000

27,500

247,500

275,000

Issue of ordinary shares (28/10/2019)

3,000,000

3,000

27,000

30,000

Issue of ordinary shares (30/12/2019)

1,250,000

1,250

11,250

12,500

Issue of ordinary shares (30/03/2020)

7,500,000

7,500

67,500

75,000

Issue of ordinary shares (19/05/2020)

1,600,000

1,600

14,400

16,000

Issue of ordinary shares (12/06/2020)

52,700,029

52,700

474,300

527,000

Issue of ordinary shares (30/06/2020)

64,600,667

64,601

3,811,439

3,876,040

Issue of ordinary shares (17/07/2020)

5,133,333

5,133

302,867

308,000

Issue of ordinary shares (27/08/2020)

1,333,333

1,333

78,667

80,000

Share issue costs deducted from share premium

-

-

(154,412)

(154,412)

At 30 September 2020

264,617,362

264,617

4,880,511

5,145,128

On incorporation, the Company issued 1,000 ordinary shares for a total consideration of £1. On 13 September 2019, 99,999,000 shares were issued for consideration of £0.001 each, at par value. Between 21 October 2019 and 12 June 2020, the Company issued a total of 93,550,029 Ordinary shares for a consideration of £0.01 each, at a premium of £0.009. Of this amount, 14,490,000 shares were issued for non-cash consideration in respect of service fees, including Directors fees as disclosed in note 18. Between 30 June 2020 and 27 August 2020, the Company issued a total of 71,067,333 Ordinary shares for consideration of £0.06 each, at a premium of £0.059. All shares are authorised, issued and fully paid.

16

Financial commitments

During the period, the Company entered into an influencer agreement with Footwork Productions Limited. Pursuant to this agreement, Footwork will procure that David Beckham provides certain personal services to the Company, including personal appearances and social media posts. In addition Footwork will provide the Company with a non-exclusive, non-transferable licence to use David Beckham's name, voice, biography, image and likeness and signature to advertise and promote the Company for a five-year term. In consideration for these services the Company will pay Footwork an annual fee equal to 15% of the net proceeds of all of the Company's merchandising sales and 15% of all sponsorship revenue received in respect of contracts entered into during the term. Such payments will be subject to a minimum payment of £2,250,000 in the first twelve-month period, and further annual minimum payments of £2,500,000 in the second year, £3,000,000 in the third year, £3,500,000 in the fourth year and £4,000,000 in the final year of the term. Of these amounts, £13,000,000 is remaining as payable over the next four years.

The Company has not entered into any long-term commitments other than that outlined above.

17

Controlling party

The directors do not consider there to be an ultimate controlling party.

18

Related-party transactions

During the period, remuneration was paid to the directors, as set out below:

Fees settled by cash

Fees settled by shares

Share-based incentives

£

£

£

Carleton Curtis (Executive chairman)

58,157

-

4,875

Kal Hourd (CEO)

35,000

20,000

-

James Savage (CFO)

30,000

12,000

907

Andrew Drake (Non-executive director)

30,000

20,000

-

Derek Lew (Non-executive director)

9,000

18,000

-

David Gardner

-

-

12,863

Jonathan Bixby (Director - resigned 03/12/19)

5,000

-

-

Timothy Le Druillenec (Director - resigned 30/03/20)

-

3,000

-

Simon Walters

3,500

-

390

Christopher Sullivan

3,500

-

418

The Company issued to Andrew Drake 1,500,000 warrants exercisable at £0.01 each pursuant to a warrant instrument dated 3 December 2019 for advisory services rendered to the Company prior to Andrew becoming a director. The warrants are conditional on admission and expire three months from the date of admission. These warrants are not subject to any provisions. The warrant was exercised post year-end.

During the period to 30 September 2020, Bad Moon Talent LLC, a company for which Andrew Drake (non-executive director of Guild Esports plc) is the CEO and 55% shareholder provided esports consulting services to the Company. The total amount was £110,000 and no amounts remained payable at the period end. The consulting agreement with Bad Moon Talent LLC ended on 31 December 2020.

The Company issued to Derek Lew 1,500,000 warrants exercisable at £0.01 each pursuant to a warrant instrument dated 3 December 2019 for advisory services rendered to the Company prior to Derek becoming a director. The warrants are conditional on admission and expire three months from the date of admission. These warrants are not subject to any lock-in provisions. The warrant was exercised post year-end.

19

Events after the reporting date

On 2 October 2020, in the Company's initial public offering, 250,000,000 ordinary shares were issued at £0.08 each (premium of £0.079 per share). Subsequent to the period end, a further 4,000,000 ordinary shares were issued, including 3,000,000 in Director warrants as disclosed in note 18. As at the date of this document, the total number of ordinary shares in issue is 518,617,362.

On 19 October 2020, the Company announced its first sponsorship deal, with a new European fintech company serving esports fans. Under the terms of the agreement, the sponsor will pay a guaranteed fee of £3.6m over a three-year period. On 28 January 2021, HyperX (a leading gaming peripherals brand of Kingston Technology Company Inc, the world's largest independent manufacturer of memory products), signed a two-year contract as a peripherals sponsor of Guild, which includes consideration in cash (75%) and gaming hardware (25%).

20

Cash absorbed by operations

2020

£

Loss for the period after tax

(2,727,195)

Adjustments for:

Investment income

(129)

Amortisation and impairment of intangible assets

3,077

Depreciation and impairment of property, plant and equipment

124

Services settled by issue of shares

144,900

Services settled by issue of warrants

113,050

Movements in working capital:

Increase in trade and other receivables

(2,065,626)

Increase in trade and other payables

2,092,720

Cash absorbed by operations

(2,439,079)