Årsrapport 30700228 EY Godkendt Revisionspartnerselskab Dirch Passers Allé 36 Postboks 250, 2000 Frederiksberg 2022-01-01 2022-12-31 2021-01-01 2021-12-31 32081193 Vivino ApS Njalsgade 21G, 5. 2300 København S 2009-03-19 København www.vivino.com Danske Bank EY Godkendt Revisionspartnerselskab 30700228 Dirch Passers Allé 36 2000 Frederiksberg 2023-06-23 Heini Zachariassen Regnskabsklasse C, mellemstor virksomhed Revisionspåtegning Grundlag for konklusion Konklusion true 2023-06-23 2023-06-23 CaseWare Working Papers Copenhagen Heini Zachariassen Copenhagen Kennet Hartmann Rikke Buchholt State Authorised Public Accountant mne40036 State Authorised Public Accountant mne46359 36760000 20072000 -5369000 -18587000 -19335000 -43661000 -19375000 -18931000 11648000 -5295000 -7055000 -7070000 -24668000 -50716000 39985000 34930000 23571000 320085000 0 -770000 0 0 -152531000 -145461000 -120793000 69 53 57 77570439 26618195 112198386 87506399 577306 471627 -35205253 -61359831 5197592 322852 24572225 19254089 -54579886 -80291068 0 0 -54579886 -80291068 688152 788703 470268 626937 1158420 1415640 1501667 1446198 1501667 1446198 2660087 2861838 13673764 8582995 13673764 8582995 2400186 5000365 14852118 24911332 5500000 0 3478271 3760363 1640974 1053178 27871549 34725238 14557787 32876979 56103100 76185212 58763187 79047050 354695 354695 -287756607 -233176721 -287401912 -232822026 303677050 274701641 4415224 4325223 308092274 279026864 134232 177369 15661000 12197425 8157862 4213669 9930288 11510156 4189443 4743593 38072825 32842212 346165099 311869076 58763187 79047050 354695 -152885653 -80291068 354695 -233176721 -54579886 354695 -287756607 -54579886 -80291068 14418194 15961816 22205723 95331765 -17955969 31002513 320086 961251 -320086 -961251 -18276055 30041262 32699610 2658348 14423555 32699610 101522014 79979530 7588309 5470659 952953 623372 2135110 1432838 112198386 87506399 143 114 380536 291981 4719372 30871 97684 0 6677246 4222681 0 86282 17894979 14945126 1973844 783345 320085 0 2293929 783345 1185141 156408 420636 156669 1605777 313077 688152 470268 354695 354695 354695 303677050 0 303677050 303770782 4415224 0 4415224 4415224 -54579886 -80291068 577306 471627 261861 458781 -13579027 -15031408 5090769 -4653930 6782342 -12829212 -21157415 -104585481 -643265 -1078434 14557787 32876979 134232 177369 Today, the Executive Board has discussed and approved the annual report of Vivino ApS for the financial year 1 January - 31 December 2022. The annual report is prepared in accordance with the Danish Financial Statements Act. In my opinion, the financial statements give a true and fair view of the financial position of the Company at 31 December 2022 and of the results of the Company's operations and cash flows for the financial year 1 January - 31 December 2022. Further, in my opinion, the Management's review gives a fair review of the matters discussed in the Management's review. I recommend that the annual report be approved at the annual general meeting. To the shareholder of Vivino ApS We have audited the financial statements of Vivino ApS for the financial year 1 January - 31 December 2022, which comprise income statement, balance sheet, statement of changes in equity, cash flow statement and notes, including accounting policies. The financial statements are prepared in accordance with the Danish Financial Statements Act. In our opinion, the financial statements give a true and fair view of the financial position of the Company at 31 December 2022 and of the results of the Company's operations as well as the cash flows for the financial year 1 January - 31 December 2022 in accordance with the Danish Financial Statements Act. We conducted our audit in accordance with International Standards on Auditing (ISAs) and the additional requirements applicable in Denmark. Our responsibilities under those standards and requirements are further described in the "Auditor's responsibilities for the audit of the financial statements" section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the Company in accordance with the International Ethics Standards Board for Accountants' International Code of Ethics for Professional Accountants (IESBA Code) and the additional ethical requirements applicable in Denmark, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the Danish Financial Statements Act and for such internal control as Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, Management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting in preparing the financial statements unless Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Our objectives are to obtain reasonable assurance as to whether the financial statements as a whole are free from material misstatement, whether due to fraud or error and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. As part of an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management. Conclude on the appropriateness of Management's use of the going concern basis of accounting in preparing the financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern. Evaluate the overall presentation, structure and contents of the financial statements, including the note disclosures, and whether the financial statements represent the underlying transactions and events in a manner that gives a true and fair view. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Management is responsible for the Management's review. Our opinion on the financial statements does not cover the Management's review, and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the Management's review and, in doing so, consider whether the Management's review is materially inconsistent with the financial statements or our knowledge obtained during the audit, or otherwise appears to be materially misstated. Moreover, it is our responsibility to consider whether the Management's review provides the information required under the Danish Financial Statements Act. Based on the work we have performed, we conclude that the Management's review is in accordance with the financial statements and has been prepared in accordance with the requirements of the Danish Financial Statement Act. We did not identify any material misstatement of the Management's review. For terms and definitions, please see the accounting policies. Vivino is the world's largest online wine marketplace and most downloaded wine app, powered by a community of millions. Vivino’s unique wine shopping experience uses community data to suggest personalized wine recommendations, making wine discovery and purchase fun, accessible, and effortless for wine drinkers of every level. The Company's objective is to keep developing and driving mobile and web services, including apps, for online sale and promotion of wine. The income statement for 2022 shows a loss of DKK 54,580 thousand against a loss of DKK 80,291 last year, and the balance sheet at 31 December 2022 shows a negative equity of DKK 287,402 thousand. The loss in the year is lower than expected in the outlook in the 2021 annual report (an expected loss between 130-155 million DKK). In 2022 the Company agreed to split the IP between Vivino, Inc and Vivino ApS at a rate of 50 %, which resulted in a transfer pricing adjustment of 85 million DKK (income). This income was not included in last year's outlook. As described in note 2 to the financial statements, the Company's shareholder, Vivino Inc., has issued a letter of support committing the shareholder to provide necessary financing covering the period up to and including 31 December 2023 and that the Company does not have to repay payables to Vivino Inc. until the Company has enough liquidity to redeem the loan. Moreover, the Company's capital is expected to be re-established through either ordinary operations over a number of years or by additional funding from the parent company. The Company’s ability to compete successfully depends heavily upon its ability to ensure a continual and timely flow of competitive products, services, and technologies to the marketplace. The Company continues to develop new technologies to enhance existing products and services, and to expand the range of its offerings through R&D. No events materially affecting the Company's financial position have occurred subsequent to the financial year-end. In 2022 Vivino has gone through a restructure of its workforce and cost reduction measures to reflect the current economic situation and growth of the Company. Management expects the Company to continue to reduce expenses in the coming year, while revenue will remain stable year over year. On this basis, a loss in the range of 65-80 million DKK is expected. The annual report of Vivino ApS for 2022 has been prepared in accordance with the provisions in the Danish Financial Statements Act applying to medium-sized reporting class C entities. The accounting policies used in the preparation of the financial statements are consistent with those of last year. Reporting currency The financial statements are presented in Danish kroner (DKK). On initial recognition, transactions denominated in foreign currencies are translated at the exchange rate at the transaction date. Foreign exchange differences arising between the exchange rates at the transaction date and the date of payment are recognised in the income statement as financial income or financial expenses. Receivables and payables and other monetary items denominated in foreign currencies are translated at the exchange rate at the balance sheet date. The difference between the exchange rates at the balance sheet date and the date at which the receivable or payable arose or was recognised in the most recent financial statements is recognised in the income statement as financial income or financial expenses. The Company has chosen IAS 11/IAS 18 as interpretation for revenue recognition. The Company's revenue is generated primarily from the sale of products and services. Product revenue primarily consists of wine sales. Services and other revenue primarily consist of revenue generated from the sale of marketing and subscription services. The Company recognises revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the seller's price to the buyer is fixed or determinable, and collectibility is reasonably assured. In instances where final acceptance of the product is required, revenue is deferred until all the acceptance criteria have been met. All revenue is recorded net of discounts and sales taxes collected on behalf of governmental authorities. Revenue from product sales is recognised generally upon transfer of title to the customer, provided that no significant obligations remain and collection of the receivable is reasonably assured. Revenue from the sale of marketing and subscription services is recognised as the services are rendered, typically evenly over the contract term. Revenue is measured at the fair value of the agreed consideration excluding VAT and taxes charged on behalf of third parties. All discounts and rebates granted are recognised in revenue. The items revenue, cost of sales, other operating income and external expenses have been aggregated into one item in the income statement called gross profit in accordance with section 32 of the Danish Financial Statements Act. Other operating income comprise items of a secondary nature relative to the Company's core activities, including income from investment tax credits. Other operating expenses comprise items of a secondary nature relative to the Company's core activities, including losses on the sale or disposal of fixed assets. Cost of sales includes the cost of goods and services used in generating the year's revenue. Other external expenses include the year's expenses relating to the Company's core activities, including expenses relating to distribution, sale, advertising, administration, premises, bad debts, payments under operating leases, etc. Staff costs include wages and salaries, including compensated absence and pension to the Company's employees, as well as other social security contributions, etc. The item is net of refunds from public authorities. The item comprises depreciation of property, plant and equipment. Where individual components of an item of property, plant and equipment have different useful lives, they are accounted for as separate items, which are depreciated separately. The basis of depreciation, which is calculated as cost less any residual value, is depreciated on a straight line basis over the expected useful life. The expected useful lives of the assets are as follows: Other fixtures and fittings, tools and equipment 3-5 years The estimated useful live of leasehold improvements are either asset's useful life or remaining lease period, whichever is shorter. Depreciation is based on the residual value of the asset and is reduced by impairment losses, if any. The depreciation period and the residual value are determined at the acquisition date and are reassessed annually. Where the residual value exceeds the carrying amount of the asset, no further depreciation charges are recognised. In the case of changes in the depreciation period or the residual value, the effect on the depreciation charges is recognised prospectively as a change in accounting estimates. Financial income and expenses are recognised in the income statements at the amounts that concern the financial year. Net financials include interest income and expenses, allowances and surcharges under the advance-payment-of-tax scheme, as well as exchange gains and losses. Tax for the year includes current tax on the year's expected taxable income and the year's deferred tax adjustments. The portion of the tax for the year that relates to the profit/loss for the year is recognised in the income statement, whereas the portion that relates to transactions taken to equity is recognised in equity. Development costs are expensed as incurred. Property, plant and equipment Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses. Cost includes the acquisition price and costs directly related to the acquisition until the time at which the asset is ready for use. Inventories are measured at cost in accordance with the FIFO method. Where the net realisable value is lower than cost, inventories are written down to this lower value. Goods for resale are measured at cost, comprising purchase price plus delivery costs. The net realisable value of inventories is calculated as the sales amount less costs necessary to make the sale and is determined taking into account marketability, obsolescence and development in expected selling price. The Company has chosen IAS 39 as interpretation for impairment write-down of financial receivables. Receivables are measured at amortised cost. An impairment loss is recognised if there is objective evidence that a receivable or a group of receivables is impaired. If there is objective evidence that an individual receivable has been impaired, an impairment loss is recognised on an individual basis. Receivables in respect of which there is no objective evidence of individual impairment are tested for objective evidence of impairment on a portfolio basis. Prepayments recognised under "Assets" comprise prepaid expenses regarding subsequent financial reporting years. Other payables Other payables are measured at net realisable value. Deferred income Deferred income recognised as a liability comprises payments received concerning income in subsequent financial reporting years. The cash flow statement shows the Company's net cash flows broken down according to operating, investing and financing activities, the year's changes in cash and cash equivalents as well as the cash and cash equivalents at the beginning and the end of the year. Cash flows from operating activities are calculated as the profit/loss for the year adjusted for non cash operating items, changes in working capital and paid corporate income tax. Cash flows from investing activities comprise payments in connection with property, plant and equipment. Cash flows from financing activities comprise changes in the size or composition of the Company's share capital and related expenses as well as raising of loans, repayment of interest bearing debt and payment of dividends to shareholders. Cash and cash equivalents comprise cash and short term bank loans. The financial ratios stated under "Financial highlights" have been calculated as follows: Operating profit/loss Profit/loss before financial items adjusted for other operating income and other operating expenses The Company's shareholder, Vivino Inc., has issued a letter of support committing the shareholder to provide necessary financing covering the period up to and including 31 December 2023 and not to repay payables to Vivino Inc. until the Company has enough liquidity to redeem the loan. On this basis, it is the Executive Board's opinion that it is appropriate to prepare the financial statements based on a going concern assumption. Moreover, the Company's capital is expected to be re-established either through ordinary operations over a number of years or from additional funding from the parent company. No events materially affecting the Company's financial position have occurred subsequent to the financial year-end. Total remuneration to Management is based on the estimated time related Directorship activities and amount to DKK 32 thousand (2021: DKK 80 thousand). The Executive Board and other individuals employed by the Company are participating in an Equity Incentive Plan of the ultimate parent Company, Vivino Inc. The Equity Incentive Plan provides for the granting of different types of stock awards. Share options are granted subject to the fulfilment of certain performance targets, both in the short and in the long run. Stock awards under the Plan may be granted with an exercisable date of no more than ten years from the date of its grant. The exercise price will not be less than 100% of the fair value of the shares on the date of the grant as determined by the Board. The vesting of options granted or restricted awards given are determined individually with each option grant. Generally, 25% of the granted amount will vest upon the first anniversary of the option grant, with the remainder vesting ratably on the anniversary of the grant date for the following 36 calendar months. No exercise of rights is allowed prior to the vesting date of those rights. All cost related to the Equity Incentive Program is paid by the parent Company, Vivino Inc. Prepayments comprise prepayment of costs incurred relating to subsequent financial years, including software of DKK 987 thousand, hosting of DKK 564 thousand, and other prepayments of DKK 91 thousand. The Company's share capital has remained DKK 354,695 over the past 5 years. The above long-term payables to Vivino Inc. does not fall due for payment until the Vivino ApS has enough liquidity to redeem the loan. Deferred income, DKK 4.189 thousand (2021: DKK 4.744 thousand), consists of payments received from customers that may not be recognised until the subsequent financial year. Other contingent liabilities DKK 2022 2021 Rent liabilities 6,490,294 9,374,869 6,490,294 9,374,869 The Company is part in legal cases for which Management does not expect any cash outflow. The Company has issued a bank guarantee to the Swedish tax authorities, amounting to DKK 70.037. The bank guarantee covers excise tax on distance wine selling. No other assets were pledged as collateral or otherwise charged at 31 December 2022. Parties exercising control Related party Domicile Basis for control Vivino Inc. San Francisco, USA Parent Company Information about consolidated financial statements Parent Domicile Requisitioning of the parent company's consolidated financial statements Vivino Inc. San Francisco, USA Requisitioning of the parent company's consolidated financial statements is not possible as there is no requirement to publish the consolidated financial statements. Related party transactions The Company solely discloses related party transactions that have not been carried out on an arm's length basis, cf. section 98c(7) of the Danish Financial Statements Act. All transactions have been carried out on an arm's length basis. Information on the remuneration to management Information on the remuneration to Management appears from note 4, "Staff costs". 32081193 2022-01-01 2022-12-31 32081193 2022-01-01 32081193 2021-12-31 32081193 2022-12-31 32081193 2021-01-01 32081193 2022-12-31 1 32081193 2022-01-01 2022-12-31 1 32081193 2022-01-01 2022-12-31 2 32081193 2022-01-01 2022-12-31 1 32081193 2022-01-01 2022-12-31 e:RetainedEarningsMember 32081193 2021-01-01 2021-12-31 e:RetainedEarningsMember 32081193 2022-01-01 e:FixturesFittingsToolsAndEquipmentMember 32081193 2022-01-01 2022-12-31 e:FixturesFittingsToolsAndEquipmentMember 32081193 2022-12-31 e:FixturesFittingsToolsAndEquipmentMember 32081193 2022-01-01 e:LeaseholdImprovementsMember 32081193 2022-01-01 2022-12-31 e:LeaseholdImprovementsMember 32081193 2022-12-31 e:LeaseholdImprovementsMember 32081193 2021-01-01 e:ContributedCapitalMember 32081193 2022-01-01 e:ContributedCapitalMember 32081193 2022-12-31 e:ContributedCapitalMember 32081193 2022-01-01 e:RetainedEarningsMember 32081193 2022-01-01 2022-12-31 e:RetainedEarningsMember 32081193 2022-12-31 e:RetainedEarningsMember 32081193 2021-01-01 e:RetainedEarningsMember 32081193 2021-01-01 2021-12-31 e:RetainedEarningsMember 32081193 2021-01-01 2021-12-31 32081193 2022-01-01 2022-12-31 d:TwoYearsAgoMember 32081193 2022-12-31 d:TwoYearsAgoMember 32081193 2022-01-01 2022-12-31 d:ThreeYearsAgoMember 32081193 2022-12-31 d:ThreeYearsAgoMember 32081193 2022-01-01 2022-12-31 d:FourYearsAgoMember 32081193 2022-12-31 d:FourYearsAgoMember 32081193 2022-12-31 e:LongtermPayablesToGroupEnterprisesMember 32081193 2022-12-31 e:OtherLongtermPayablesMember 32081193 2021-12-31 1 xbrli:shares iso4217:DKK xbrli:pure