Annual Report (ESEF) • Apr 21, 2022
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Download Source FileUntitled 2 GROUP ANNUAL REPORT 2021 3 4 5 6 7 11 12 13 14 15 16 17 8 9 18 27 32 87 105 110 Our mission, our vision, our values About Kahoot! The engagement brand Our brands Market environment Facts and gures Kahoot! at Work Kahoot! at School Kahoot! Academy Kahoot! at Home Clever Stakeholder impact Our timeline and founding story A look at 2021 and to our future Corporate Governance Report Board of Directors report Financial statements consolidated Financial statements parent company Auditor’s report Responsibility statement 3 8 11 9 17 18 INTRODUCTION AND OVERVIEW THE KAHOOT! JOURNEY 2021 IN REVIEW LETTER FROM THE CEO SUSTAINABILITY AND SOCIAL RESPONSIBILITY REPORTS AND STATEMENTS 2 3 GROUP ANNUAL REPORT 2021 TO BUILD THE LEADING LEARNING PLATFORM IN THE WORLD WE ARE PLAYFUL WE ARE CURIOUS WE ARE INCLUSIVE INTRODUCTION AND OVERVIEW TO MAKE LEARNING AWESOME 4 GROUP ANNUAL REPORT 2021 KAHOOT! IS A GLOBAL LEARNING AND AUDIENCE ENGAGEMENT PLATFORM COMPANY THAT AIMS TO EMPOWER EVERYONE, INCLUDING CHILDREN, STUDENTS, AND EMPLOYEES, TO UNLOCK THEIR FULL LEARNING POTENTIAL. 4 INTRODUCTION AND OVERVIEW Kahoot! is on a mission to make learning awesome! We want to empower everyone, including children, students, and employees to unlock their full learning potential. Our learning platform makes it easy for any individual or corporation to create, share, and host learning sessions that drive compelling engagement. In addition, the Kahoot! Group includes Clever, the leading US K-12 EdTech learning platform, together with the learning apps DragonBox, Poio, Drops, Kahoot! offers free and paid plans, as well as a massive library of ready-to-use content, designed for use in the classroom, at work— whether in-person or virtual—or at home for social use or self-study. Today, Kahoot! is used by over 9 million teachers globally, hundreds of millions of students and families, and in 97% of Fortune 500 companies. In the last 12 months, more than 300 million sessions have been hosted on the Kahoot! platform with 2 billion non-unique participants in 200 countries and regions. Kahoot! currently serves over one million paying users from its US, the UK, France, Finland, Estonia, Denmark and Spain. Kahoot! is listed on the Oslo Stock Exchange under the ticker KAHOT. Let’s play! GROUP ANNUAL REPORT 2021 5 GROUP ANNUAL REPORT 2021 Since 2013, Kahoot! has built a globally recognized brand for learning and engagement at work, at school and at home. With billions of participants across more than 200 countries and regions, and different user segments and learning contexts, the Kahoot! brand is reaching and touching the lives of many. A 2021 report by brand consultancy Interbrand echoed this, showing Kahoot!’s Global Brand Strength as one of three main valuation parameters with long- established global brands such as YouTube, Nintendo and Sony. The report cited passionate users, clear direction and innovation as key attributes that set Kahoot! apart and contribute to its strong brand value. According to Interbrand’s analysis, “there is a deeper sense of connection that users feel with Kahoot!” beyond the they love more than competitors across different segments.” A steady drumbeat of user-centric innovation was also highlighted as a standout factor in building Kahoot!’s strong brand. Surveys conducted for the report showed US and UK respondents describing Kahoot! as, in some cases, up to 30% more innovative than the competitor average in each segment. Continuing to leverage and build on these attributes that resonate with users will be a key priority for the Kahoot! Group going forward as we progress on our strategic roadmap, and we believe this leads us to an exciting future ahead. Interbrand concluded: “The market opportunity for Kahoot! is huge, with the EdTech market set to grow substantially, along with hybrid working soon to become the norm. In a highly fragmented market, Kahoot! is well placed to take advantage of these tailwinds.” INTRODUCTION AND OVERVIEW 6 GROUP ANNUAL REPORT 2021 THE KAHOOT! GROUP CONSISTS OF THE FOLLOWING BRANDS: The Kahoot! brand represents the original Kahoot! learning platform that is synonymous with learning and engagement, no matter the subject, age, audience or context. Clever brings schools, teachers, students and education application developers together in a single sign-on digital Organizations can connect and engage their work teams with Actimo and Motimate, our employee engagement and learning platforms. Learners of all ages can make language learning natural with immersive visuals and play through our Drops apps. The Kahoot! DragonBox series of apps takes math learning to a new level, while the Kahoot! Poio Read app empowers children to learn to read through play. Whiteboard., the online whiteboard, provides powerful learning tools for educators, teachers and classrooms worldwide. 6 INTRODUCTION AND OVERVIEW 7 GROUP ANNUAL REPORT 2021 and the accelerated adoption of digital tools continued both in the educational sector and in employee engagement and learning. Kahoot! has seen continued adoption and application realized across its expanding subscriber bases in all segments and geographies, while also serving 2 billion (non-unique) participants over the last 12 months alone. However, the competitive market remains fragmented across our main segments. In the educational sector, the growth in adoption has shown educators and learners how much value technology can bring to increase learning outcomes and engagement. These structural changes have scale across institutions. Kahoot!, with our leading toolbox of learning and district buyers look to deploy best-in-class technology – with Clever simplifying the distribution and deployment in a fragmented market. Corporations globally are struggling with retaining and attracting talent, combined with challenges introduced by the remote or hybrid way of working. This puts a stronger emphasis on the importance of building company culture, increasing employee’s engagement levels and upskilling the current workforce. We expect to see the demand for Kahoot!’s at work products continue to grow as a result of these underlying megatrends. INTRODUCTION AND OVERVIEW 7 8 GROUP ANNUAL REPORT 2021 More commercial offerings, and over 675K paid subscriptions platform service Acquisition of Actimo and Drops 200+ employees and contractors More features and over 1.1M paid subscriptions Available in over 11 languages Acquisition of Whiteboard., Motimate and Clever 500+ employees and contractors New commercial subscription editions for all segments Reaching 170K paid subscriptions Acquisition of Poio and DragonBox 120+ employees and contractors Launched September 2013 Top 3 tool in US education Launched rst commerical editions with 40K paid subscription 75+ employees and contractors INTRODUCTION AND OVERVIEW 2013-18 2019 2020 2021 Kahoot! was founded in 2012 by Morten Versvik, Johan Brand, and Jamie Brooker who, in a joint project with the Norwegian University of Science and Technology (NTNU), teamed up with Professor Alf Inge Wang, and were later joined by entrepreneur Åsmund Furuseth. Using technology based on Kahoot! co-founder Morten Versvik’s research for his Master’s thesis at NTNU, the Kahoot! beta was rolled out at in September 2013, which marked the arrival of a new way to ensure attention, create engagement and provide knowledge in classrooms. Through 2018, Kahoot! was on a fast growth trajectory with a focus on the U.S. K-12 education market. versions of Kahoot! for school and corporate audiences, as well as mobile apps for iOS and Android. Since then, the Kahoot! Group has expanded with the acquisition of seven companies, most recently Clever, one of the most widely-used digital learning platforms in the U.S. Kahoot! has become an ultimate learning destination for all ages, trusted by educators, professionals and families to bring engagement to learning, whether in-person or remotely. The world is rapidly reimagining the future of work and learning, and Kahoot! is well positioned and committed to delivering solutions through continuous innovation and keeping our users at the heart of everything we do. Kahoot! began trading on the Oslo Stock Exchange main list on March 18, 2021, after being listed on Euronext Growth on October 10, 2019. 2013 2014 2015 2016 2017 2018 2019 1 billion 2 billion 3 billion 4 billion 7 billion 20212020 8 DEVELOPMENT OF UNIQUE PLAYERS SINCE LAUNCH 9 GROUP ANNUAL REPORT 2021 2021 was a year of achieving milestones, solid growth and expansion for the Kahoot! Group. As the world continues to experience pressing challenges and re-imagine the future of learning and work, we at Kahoot! have stayed committed to our mission of making learning awesome for everyone, worldwide. This mission fuels our work at Kahoot! every day as we continue to deliver robust solutions and impactful experiences for all our users, whether at work, at school or at home. Adoption of Kahoot! reached new heights in 2021 with record-level activity and continued strong organic growth on the core Kahoot! platform. After steady growth through our 9-year history, we brought 2021 to a close with 7 billion non-unique participants since launch and 2 billion non-unique participants in 2021 alone. We have also seen Kahoot!’s presence increase globally, with 14 languages now supported making Kahoot! more accessible for learners of all ages around the world. Kahoot! is now used in more than 200 countries and regions, with North America continuing to grow as our largest market, as well as in European markets such as Germany and Spain and in APAC, including Japan. EXPANDING THE KAHOOT! GROUP AND STRATEGIC INITIATIVES Throughout 2021, the Kahoot! team continued to execute on our strategy and ambitious roadmap towards our vision of building the world’s leading learning platform. We progressed in building our globally recognized brand with a viral distribution model, based on a scalable technology platform. We have made key progress in strategic initiatives at Kahoot!, including the commercialization of Kahoot! Academy—our global knowledge platform, online community and marketplace—with the launch of the subscription service Kahoot!+ AccessPass. emerging global digital marketplace on Kahoot!, which will enable learning content creators to join the growing creator economy and share their knowledge with learners around the world. Made possible by the singular viral growth and scale of the Kahoot! brand and platform, these developments serve to strategically position Kahoot! to reach a captive and vast global market of educators and learners. Over the course of the year, we further strengthened our offerings in our work, school and home segments by acquiring three companies – employee engagement and learning platform Motimate, online whiteboard and learning tool Whiteboard., and our largest acquisition to date: Clever, a single-sign-on education network and a leading U.S. K-12 EdTech learning platform. for the Kahoot! Group. Together, Kahoot! and Clever will provide improved digital learning solutions and offerings for educators, students, parents, schools and districts globally, helping learners unleash their full learning potential. By joining forces with Clever, we are continuing to add value to Kahoot!’s already strong presence in the U.S. education sector and similarly LETTER FROM THE CEO GROUP ANNUAL REPORT 2021 10 GROUP ANNUAL REPORT 2021 LETTER FROM THE CEO will provide the opportunity to extend Clever’s platform across Kahoot!’s existing global reach in the years to come. Our continuous focus on realizing synergies across the Group’s diverse portfolio has yielded solid results in a year where we further expanded our audience engagement offerings for all customer groups, launching a host of new innovative features and products. A FORCE FOR GOOD Throughout the Kahoot! Group, we maintain a culture that is passionate about making learning more accessible, equitable and inclusive for all. The global challenges of 2021 made this goal more important than ever, and we were already set up to support and empower both educators and learners of all ages. As the Omicron variant led to worldwide teacher shortages, we launched the Kahoot! EDU Support Program, designed to help teachers and school administrators keep their students connected and engaged in learning in the classroom or remotely by offering free 60-day site licenses for all staff members in any school or district. Additionally, we introduced a number of new features to enable more inclusive learning, including our Read Aloud feature to assist younger learners not and provide a friendly and stress-free experience for learners with reading and visual impairments. We also added support for multiple new languages, making it easier for learners around the world to navigate the In the workplace, as many employees returned to the served to help employees reconnect, build teamwork and strengthen company culture, as well as creating experiences where remote team members could feel included, engaged and heard, no matter their location. The pandemic-era employee exodus known as the “Great Resignation” has led to a rising focus on retaining and attracting talent in companies globally, in addition to a growing interest in upskilling among professionals. With Kahoot! at Work, Actimo and Motimate, we are offering both businesses and professionals dynamic solutions to keep teams connected, energized and engaged, and to create company cultures of learning that support employees from onboarding to career advancement and lifelong learning. Read our Stakeholder Impact Report to learn more about how Kahoot! is working to make a positive difference for learners of all ages globally. ONWARDS TO AWESOME LEARNING IN 2022 brought us, I’m proud of what we have achieved together, as a team with focus and ambition to put magic learning every day by the passion of our K!rew members to support educators and learners of all ages in everything we do. Looking toward the year ahead, I’m excited to continue collaborating with our team members across the Kahoot! Group, as well as partners and stakeholders, to equip our users with the solutions they need to bring their boundless creativity and enthusiasm for learning to life. On this road to making learning awesome, we believe we are just getting started. Sincerely, EILERT GIERTSEN HANOA CEO 11 GROUP ANNUAL REPORT 2021 2021 IN REVIEW 9M+ ACTIVE EDUCATORS ON THE KAHOOT! PLATFORM IN 2021 500+ K!REW MEMBERS AND CONTRACTORS ACROSS THE GLOBE 45+ NATIONALITIES ACROSS THE TEAM $107M INVOICED REVENUE FOR 2021, GROWING 137% YOY 30M+ ACTIVE ACCOUNTS IN 2021 200+ COUNTRIES AND REGIONS THAT HAVE USED KAHOOT! OFFERINGS 2B PARTICIPANTS IN 2021 AND 7B SINCE 2013 100M+ KAHOOTS 1.1M+ PAID SUBSCRIPTIONS 300M+ SESSIONS HOSTED ON KAHOOT! IN 2021 HQ 12 GROUP ANNUAL REPORT 2021 2021 IN REVIEW ANYTIME, ANYWHERE Used in 97% of Fortune 500 companies, Kahoot! occupies a bespoke space at the intersection of employee engagement, corporate learning, training and culture building. some of its largest commercial deals to date, while continuing to expand and enrich its offering with the ongoing integration of mobile learning app, Motimate, and employee engagement app, Actimo. Kahoot!’s bespoke enterprise offering, Kahoot! 360 Spirit, saw the effect of its enhanced offerings, including the newly launched Kahoot! Courses uptake in subscriptions, reaching 490,000 subscriptions in Q4 2021. In 2021, we also introduced the Kahoot! Zoom App and integrated with Hopin to bring even more engagement and learning to virtual meetings and events. Professionals gathered to learn about employee engagement and the future of internal communication at our virtual WorkMeetup events. Additionally, we shared insights into the current state of company culture in our Workplace Culture Report, which showed how essential connection and engagement is to maintaining a happy and productive team. The Kahoot! at Work business area stands optimally positioned to respond to multiple workplace scenarios we have seen evolve thanks to a diverse portfolio of solutions and plans that deliver the elements to support thriving corporate cultures now, and in the future of work. See kahoot.com/business for customer references 97% OF THE FORTUNE 500 ARE USING KAHOOT! 490K PAID USERS IN THE WORK SEGMENT With Kahoot!, we now have exciting new communications possibilities. CARMEN SALCIDO PROJECT LEADER AT COPPEL My team has been using Kahoot! for years – even before I joined. Kahoot! is a key part of our toolbox, and it works really well for our audience as they’re young and love Kahoot! ALESSANDRO FERRARIO CANDIDATE ENGAGEMENT SPECIALIST AT THE ADECCO GROUP 12 13 GROUP ANNUAL REPORT 2021 2021 IN REVIEW ENGAGING STUDENTS OF ALL AGES IN THE CLASSROOM AND BEYOND Educators across the world make learning awesome with Kahoot! by tapping into the vast, inherent potential for playful education experiences to unlock every student’s learning potential. During a period of disruption and uncertainty due to the Omicron variant for educators and students globally, Kahoot! further evolved its offerings to more than 9 million teachers (LTM), hundreds of millions of students and thousands of schools, campuses, universities and districts, reaching 365,000 subscriptions in Q4 2021 . Kahoot!’s EDU offering was enriched with features such as Team mode— designed to increase collaboration, and particularly relevant during forced hybrid and remote learning circumstances—and the launch of Math Labs by DragonBox, which were well received by educators and students worldwide. We were also thrilled to connect with over 30,000 educators at the second annual Kahoot! EDU Summit in June, as well as the Kahoot! EDU Meetups in spring and fall, to support them with resources, knowledge and inspiration. Last year, we welcomed Whiteboard. to the Kahoot! family of learning platforms, and introduced a variety of highly- anticipated features, including the single screen option, the read aloud feature and Courses for educators. We also unveiled the much- requested integration with Microsoft PowerPoint and collaborated with Google Search to bring Kahoot! math practice problems right to the Google Search results page. See kahoot.com/schools for customer references 9M ACTIVE TEACHERS ON THE PLATFORM 10K+ EDUCATIONAL INSTITUTIONS KAHOOT! TEACHER LICENSES ...even as a university lecturer, I myself felt motivated by the competition. I thought, I want my students to get that experience. DR. FATMA ALZAHRAA A. ELKHAMISY LECTURER OF PATHOLOGY AT HELWAN UNIVERSITY, FACULTY OF MEDICINE, EGYPT Kahoot! has always been much more than an assessment and review tool for me. I’ve been actively using it to teach, and it’s been extremely helpful when my entire class has been fully remote. JENNIFER VAN BLAIR 5TH GRADE TEACHER IN CALIFORNIA, USA 13 14 GROUP ANNUAL REPORT 2021 2021 IN REVIEW CONNECTING MILLIONS AND ENABLING ONE OF THE LARGEST GLOBAL CREATOR COMMUNITIES IN LEARNING Kahoot! Academy is a global knowledge platform, online community and marketplace which enables anyone to access premium learning content and high-quality learning resources publishers and content creators. Each month, more than 40 million non- unique participants globally engage with ready-to-use learning content from trusted content creators and partners such as Disney, NASA, Minecraft, Microsoft collections and courses for business users, such as the popular anger management course from Angry Birds. Kahoot! Academy’s commercialization with the launch of the subscription service Kahoot!+ AccessPass. This on Kahoot!’s global digital marketplace, can monetize premium content. By enabling a marketplace, Kahoot!’s platform opens itself to be harnessed by the burgeoning global creator community to promote, sell and monetize their quality content and expertise. After a year of social distancing made connection and community more important than ever, we launched Kahoot! Academy Connect, enabling educators and publishers to join and create learning communities of their own, as well as providing parents and learners globally with easier access to learning content from the educators and brands they love. Made possible by the singular viral growth and scale of the Kahoot! brand and platform, these developments serve to strategically position Kahoot! to reach a captive and vast global market of educators, professionals and learners. 40M+ PARTICIPANTS MONTHLY 270M+ OF KAHOOTS BY VERIFIED EDUCATORS Kahoot! Academy gives us the opportunity to create content that is fun and entertaining while keeping kids thinking and asking questions. KATY FENN DIRECTOR, WILD CLASSROOM AT WORLD WILDLIFE FUND, A KAHOOT! ACADEMY PARTNER Explicit teaching of SEL skills is core to student success, as is making learning fun! Kahoot! helps us do both. ELAD GRAIVER PRINCIPAL PRODUCT MANAGER AT MICROSOFT EDUCATION, A KAHOOT! ACADEMY PARTNER 14 15 GROUP ANNUAL REPORT 2021 2021 IN REVIEW BRINGING FAMILIES AND FRIENDS TOGETHER FOR LEARNING FUN Spearheaded by the Kahoot!+ offering and encompassing award-winning Kahoot! apps by DragonBox, Poio and Drops, Kahoot!’s ad-free platform and apps enable families, students and children to connect and learn in an engaging way at home, either through self-study or family fun. In the last 12 months, more than 10 million families and social users have played over 100 million kahoots, and Kahoot! at Home & Study reached 255,000 paid subscriptions in Q4 2021. segment’s commercialization progress marked by the launches of the Kahoot!+ premium subscription plans, Kahoot!+ Study and Kahoot! Kids. The Kahoot!+ offering gives families a new way to engage kids with studying at home, unleash learning during family time and connect with friends and loved ones whether in-person or virtually. We also renewed our commitment to supporting learners of all ages with two new tailored offerings. Kahoot!+ Study seeks to make study more fun, impactful and effective for higher education students, leveraging Kahoot!’s position as a trusted learning tool for hundreds of millions of participating students. Additionally, Kahoot! Kids, a safe and exploratory experience for young learners within the Kahoot! app, expands Kahoot!’s demographic relevance with a bespoke, pedagogically robust product to engage a family audience. Users have also been able to be more creative than ever with their learning sessions through our integration with GIPHY, and now with Kahoot! supporting Apple’s SharePlay in FaceTime, it’s even easier for families and friends to play together from anywhere. 10M+ ARE USING KAHOOT! AT HOME 100M+ GAMES PLAYED BY FAMILIES Even when I was studying on my own time, I wanted to see how many points I could get and how long I could keep a streak going. ZOË GREBLUNAS STUDENT FROM NEW JERSEY, USA To quote as my daughter said, ‘I love kahoot because it gives me some entertainment, knowledge and fun time with my friends.’ SANDHYA PARENT FROM SANTA CLARITA, CA 15 16 GROUP ANNUAL REPORT 2021 2021 IN REVIEW UNLOCKING NEW WAYS TO LEARN FOR ALL STUDENTS WITH CLEVER Born of the desire to save valuable time in the classroom and afford more space for innovative teaching and learning, Clever is a single sign-on portal for teachers and students, and one of the most widely used digital learning platforms by the U.S. K-12 schools. half of the 21-22 school year, with over 60% of all U.S. K-12 schools using the single sign-on platform, featuring more than 740 app partners, whereof approximately 450 are paying. The ongoing focus for Clever remains to lay a robust foundation for growth and commercial added-value for its vast network, including the launch of the click-to-buy App Store and international expansion in 2022. As educators and students across the U.S. returned to the classroom, Clever helped to make this transition as smooth as possible, with 1.4 million monthly active teachers and 22 million monthly active students using Clever. More than 765,000 free and freemium applications were downloaded by teachers in the Clever library. Clever and Kahoot! continue to extract synergies and explore opportunities, with Kahoot! seeking to expand its considerable footprint across K-12 schools in the U.S.. Similarly, efforts will continue to realize the vast potential for Clever to leverage Kahoot!’s global viral footprint to deliver its platform to educators globally. 22M+ MONTHLY ACTIVE STUDENTS 96 OF THE TOP 100 DISTRICTS IN THE U.S. USE CLEVER Clever really is this magical place where students can go and everything they need is just one click away. DOUG LAING GLENDALE UNIFIED SCHOOL DISTRICT GLENDALE, CA 16 GROUP ANNUAL REPORT 2021 17 GROUP ANNUAL REPORT 2021 SUSTAINABILITY AND SOCIAL RESPONSIBILITY WE BELIEVE ENGAGING LEARNING IS THE KEY TO DEVELOPMENT AND EMPOWERMENT AT SCHOOL, AT HOME AND AT WORK. KAHOOT!’S FOCUS AS A COMPANY IS TO OPERATE IN A SUSTAINABLE WAY, IN ALIGNMENT WITH THE UNITED NATIONS SUSTAINABLE DEVELOPMENT GOALS. Kahoot!’s mission to make learning awesome is an electric current that runs through our organization, our products and our employees. The awareness of our role in empowering education globally across all learning demographics is in our DNA. As such, the Kahoot! Group remains abundantly aware of the responsibilities we bear in contributing to the global education of millions in schools, homes, and workplaces. This is evidenced by our commitment to advancing in particular Sustainable Development Goal 4 through the growing accessibility of our platform, innovating impactful new solutions, and tangibly supporting educators wherever we can have the greatest impact. Learn more about how Kahoot! is taking action to support brighter futures for all by reading our Stakeholder Impact Report. The Stakeholder Impact Report refers to the report. The contents of the report complies with the Norwegian Accounting Act section 3-3c and reporting on the Ten Principles of the UN Global Compact (“UNGC”). The report represents CoP”) to the UN Global Compact, where Kahoot! ASA became a participant in March 2021. Additionally included in the Stakeholder Impact Report is our published work on gender pay gap analysis, in accordance with reporting requirements that came into force as of 1 January 2020, as part of the Norwegian Equality and Anti-Discrimination Act. To ensure inclusive and equitable quality education and promote lifelong learning opportunities for all by 2030 SUSTAINABLE DEVELOPMENT GOAL 4 18 GROUP ANNUAL REPORT 2021 INTRODUCTION Kahoot! ASA (“Kahoot!” or the “Company”, and together with its direct and indirect subsidiaries, the “Group”) is a public limited liability company established under Norwegian law. Kahoot! where the Group conducts business. Kahoot! was admitted to trading on Oslo Stock Exchange on 18 March 2021. As an issuer of shares, Kahoot! complies with and operates in accordance with rules governing the Norwegian stock exchange, including the at any time applicable rules on Continuing Obligations of Listed Companies as approved by Oslo Børs ASA, with reference to the Norwegian Code of Practice for Corporate Governance (the “Code”) in its latest edition of 14 October 2021, issued by the Norwegian Corporate Governance Board. The Code is available at http://www.nues.no/. This corporate governance report (the “Report”) follows the system used in the Code. The corporate governance principles and practices as required by section 3-3b of the Norwegian Accounting Act and the details of how Kahoot! complies with the Code are accounted for in this Corporate Governance Report. The Articles of Association do not contain provisions that deviate from Chapter 4 and 5 of the Norwegian Public Limited Liability Companies Act. The information requirements in the Norwegian Accounting Act are integrated into the statement below where appropriate. This also applies to information about shareholder matters. This report on corporate governance for 2021 was approved by the board of directors of Kahoot! on 20 April 2022. CORPORATE GOVERNANCE REPORT 18 19 GROUP ANNUAL REPORT 2021 CORPORATE GOVERNANCE REPORT 1. IMPLEMENTATION AND REPORTING ON CORPORATE GOVERNANCE Kahoot!’s corporate governance policy is based on the Code, and as such designed to establish a basis for good corporate governance to support achievement of the Company’s core objectives on behalf of its shareholders, By pursuing the principles of corporate governance, the board of directors and management contributes to achieving open communication, equal rights for all shareholders and good control and corporate governance mechanisms. The board of directors assesses and discusses Kahoot!’s corporate governance policy on a yearly basis. Kahoot! aspire to comply with the recommendations of the Code. If the Code is deviated from, the deviation is described and explained in the relevant section of this statement. Deviations from the Code: No deviations from the Code. 2. BUSINESS Kahoot!’s articles of association are available on Kahoot!’s website (https://kahoot.com/investor/ resources/#governance). Kahoot!’s business scope is clearly described in section 3 of the articles of association which sets clear limits for its content: The company will offer technology and other concepts applicable to an educational environment, as well as any other activity naturally associated with these objectives. Kahoot! is a global educational technology (EdTech) and enterprise software as a service (SaaS) company that develops a digital learning and engagement platform (the “Kahoot! platform”). The Group has a comprehensive offering of engaging tools for all kinds of learning and audience interaction that is used in schools and universities as well as in business and in any social and learning context, whether in person or virtually. Kahoot!’s mission is to make learning awesome and Kahoot!’s vision is to become the world’s leading learning platform. The Group’s strategic focus is to continuously improve the value proposition within its product offerings and accelerate user growth, engagement and number of paid subscriptions. The Group pursues both an organic and a non-organic route to develop a steadily more comprehensive and synergetic offering of products and tools to all users of the Kahoot! platform. To support its strategic goals Kahoot! will focus on product development, operational excellence, and people development initiatives. These initiatives are seen as crucial parts of the Group’s strategy to secure main risks and risk management principles are presented in the annual report, see also section 9 below. Furthermore, sustainability and environmental, social, and governmental (“ESG”) initiatives is central in Kahoot!’s business strategy. Kahoot! believes that engaging learning is the key to development and empowerment on an individual and group or team level, at school, at home and at work. Kahoot!’s focusses on operating in a sustainable way, in alignment with the United Nations Sustainable Development Goals and aims at having a positive impact on learning around the world. Furthermore, Kahoot! believes that learning should include everyone, and Kahoot! works to eliminate barriers to education. Kahoot! therefore foster partnerships with organizations and institutions that both share its vision for positive social impact and which have important content to offer the youth audience – our future game-changers. Partnerships include organizations as the United Nations, UNICEF, Common Sense Education, Amnesty International, the National Institutes of Health, the Marine Stewardship Council, and many more are examples of our strong shared commitment to this vision. Kahoot! has implemented guidelines and procedures in accordance with section 3-3c of the Accounting Act, including code of conduct and policy on anti- corruption which are made available on the Kahoot! Trust webpage). Kahoot!’s Stakeholder impact Report is provided on the Company’s webpage. evaluated by the board of directors on an annual basis in connection with the annual risk assessment. The board also reviews the Group’s performance in Environmental, Social and Governance (ESG) and evaluates the risk Deviations from the Code: No deviations from the Code. 3. EQUITY AND DIVIDENDS Equity As of 31 December 2021, the Group’s equity was USD 581.5 million, which is equivalent to 73% of total assets and the share capital of Kahoot! amounted to NOK 48,658,147.90 20 GROUP ANNUAL REPORT 2021 CORPORATE GOVERNANCE REPORT divided into 486,581,479 shares, each with a nominal value of NOK 0.10. The Group did not have interest bearing debt. The board of directors considers that the Group has a capital structure that is appropriate for Dividends The Company is in a growth phase and is not planning to pay any dividends for the next few years. The Company has December 2019, 2020, and 2021. In deciding whether to propose a dividend and in determining the dividend amount, the Board will comply with the legal restrictions set out in the Norwegian Public Limited Liabilities Companies Act and take into account the Company’s capital requirements, including capital expenditure requirements, the Company’s restrictions that its contractual arrangements in place at the time of the dividend may place on its ability to pay dividend The board of directors has not been granted any authorisation to approve distribution of dividends. Board authorisations At the annual general meeting on 8 June 2021, the board of directors was granted the following authorisations: (i) In order for the board of directors to be able to resolve the issuance of new shares in connection with mergers and acquisitions, and to raise new equity, the board of directors was granted an authorisation to increase the share capital with an amount up to NOK 6,130,000 corresponding to 12.9% of the then current share capital. The authorisation covered share capital increases against contribution in kind and share capital increase in connections with mergers. The shareholders’ preferential rights to new shares could be deviated from. This authorisation is valid until the earlier of the annual general meeting in 2022 and 30 June 2022. (ii) The board of directors was granted an authorisation to increase the share capital up to NOK 3,500,000 to be used in connection with the issuance of new shares under the company’s option program. The shareholders’ preferential rights to new shares could be deviated from. The authorisation is valid until the earlier of the annual general meeting in 2022 and 30 June 2022. (iii) The board of directors was granted an authorisation to acquire shares in the Company with a nominal value of up to NOK 1,418,000, corresponding to approx. 3% of the then current share capital. This authorisation connection with acquisitions, incentive arrangements be sold to strengthen the Company’s equity or be deleted. This authorisation is valid until the earlier of the annual general meeting in 2022 and 30 June 2022. Deviations from the Code: Pursuant to the Code, authorisations to be granted to the board of directors shall be intended for a dened purpose and should be limited in time to no later than the date of the next general meeting. The board of directors’ authorisation to increase the share capital with an amount up to NOK 6,130,000 can be used for several purposes. Kahoot! believes that this authorisation is important in order to allow the board of directors, in the interest of time, to act quickly in connection with a transaction or other corporate events where it is in the shareholders and Kahoot!’s interest to increase the share capital. The authorisation has been used in connection with issuance of consideration shares in connection to the Group’s acquisitions and to raise equity through private placements. 4. EQUAL TREATMENT OF SHAREHOLDERS AND TRANSACTIONS All shareholders shall be treated on an equal basis unless there is just cause for treating them differently. In the event of share capital increases through the issue of new shares, deviations from the existing shareholders’ pre-emptive rights have been, and will continue to be, publicly disclosed in a stock exchange announcement issued in connection with the share issuance. In 2021, certain share issuances were made to meet its obligations to pay consideration shares in connection with its acquisitions and employee share incentive program, where existing shareholders’ pre-emptive rights were waived. Kahoot! did not carry out any transactions in its own Deviations from the Code: No deviations from the Code. 5. FREELY NEGOTIABLE SHARES The shares in Kahoot! are freely negotiable and there are no restrictions on any party’s ability to own, trade or vote for the share in Kahoot! There are no general restrictions on the purchase or sale of shares by members of the Company’s 21 GROUP ANNUAL REPORT 2021 CORPORATE GOVERNANCE REPORT management and board members as long as they comply with the regulations on insider trading in applicable law. In connection with the Kahoot! Group’s acquisitions, a part of the consideration paid by the Company was settled by issuance of shares in Kahoot! In this respect, the previous owners of these companies, which are existing shareholders of Kahoot!, have undertaken lock-up commitments in favour of Kahoot! that prevents these shareholders from carrying out a sale of the shares held by the respective shareholders. Any such lock-up arrangements have been publicly disclosed in stock exchange announcements. Kahoot! has only one class of shares. Each share grants the holder one vote and there are no structures granting disproportionate voting rights. Deviations from the Code: No deviations from the Code. 6. GENERAL MEETINGS The board of directors will ensure that as many of the Company’s shareholders as possible can participate in the general meeting. The Covid-19 pandemic has necessitated electronic solutions due to restrictions on meetings and physical presence. In 2021, Kahoot! arranged for webcast solution for all participants attending the general meeting. The annual general meeting will take place on 27 May and in the investor relations section of Kahoot!’s website. The board of directors will further ensure that: notices for the general meetings are sent to all shareholders individually, or to their depository banks, at least 21 days in advance, that all matters to be considered by the meeting are made available on the Company’s website; the resolutions and any supporting documentation understand and form a view on all matters to be considered at the general meeting; the CEO, the chair of the board of directors and the chair of the nomination committee are present at the general meeting; and the general meeting is able to elect an independent chair for the general meeting. The articles of association of Kahoot! does not provide for any deadline for the shareholders to give notice of their attendance at the general meeting. Shareholders who are unable to participate in the general meeting will be given the opportunity to vote by proxy or through written voting in a period prior to the general meeting. The Company will in this respect provide information on the procedure and prepare a proxy form/written voting form. The Company will nominate a person to act as proxy. All board members and members of the nomination committee are encouraged, but not obliged, to be present at the annual general meeting. Kahoot! has chosen not to follow the recommendation to vote separately on each candidate nominated for the board of directors and the nomination committee. The process of the nomination committee is focused on the combined to the board of directors and the nomination committee and the voting should therefore also be combined. Deviations from the code: Voting on members to the board of directors and the nomination committee takes place as a combined vote. Pursuant to the Code, the board of directors should ensure that all board members attend the general meeting. Kahoot! does not require all board members to attend, however, in accordance with the Norwegian Public Limited Liability Companies Act, Kahoot! requires the CEO, the chair of the board of directors and the chair of the nomination committee to attend the general meeting. 7. NOMINATION COMMITTEE According to section 8 of Kahoot!’s articles of association, the Company shall have a nomination committee consisting of two or three members in accordance with the decision of the general meeting. The members of the nomination committee are elected by the general meeting. The general meeting has also approved guidelines for the duties of the nomination committee, elected the chairperson and determined the remuneration of the members of the committee. The nomination committee comprises the following members, both of whom were elected on the annual general meeting held 8 June 2021: Harald Arnet / Chair / Elected in 2021 for the period until the annual general meeting in 2023; and 22 GROUP ANNUAL REPORT 2021 CORPORATE GOVERNANCE REPORT Fredrik Cassel / Committee member / Elected in 2021 for the period until the annual general meeting in 2023. The members of the nomination committee have been elected to take into account the interests of shareholders in general. The members are independent of the executive management. The nomination committee shall make recommendations to the general meeting for the election of shareholder elected board members and members of the nomination committee, and the remuneration of the board of directors and the nomination committee. When nominating shareholder representatives to the board of directors, the nomination committee presents relevant information about the candidates, together with an evaluation of their independence. In connection with the nomination committee’s work with proposing candidates, and to ensure that the candidates represent a broad group of the company’s shareholders, the nomination committee is in contact with the board of directors, the CEO and major shareholders. Furthermore, the nomination committee ensures that the board of directors is composed to comply with legal requirements and the corporate governance code. board of directors. While the nomination committee presents relevant information about each candidate separately, the nomination committee focuses on the combined of the board of directors when presenting its proposal to the general meeting. Information on how to propose candidates is available on Kahoot!’s webpage and attached to the notice of the annual general meeting for 2022. Deviations from the Code: The nomination committee justies its proposals combined and not separately for each board member. 8. COMPOSITION AND INDEPENDENCE OF THE BOARD OF DIRECTORS Pursuant to the articles of association, the board of directors shall consist of between four and eight board members, as decided by the general meeting. The directors and two employee-appointed board members. Each employee-appointed board member also has an employee-appointed deputy. The chairperson of the board of directors and board members are currently elected by the general meeting for a one-year term. The composition of the board of directors is considered to attend to the common interests of all shareholders and meet the company’s need for expertise, capacity and diversity. Three of the board members are women, and none of the members of the Company’s executive management are members of the board of directors. The board of directors is composed so that it can act independently of any special interests. All board members are independent of the Company’s executive management and no members of the executive management serves on the board of directors. Except for Andreas Hansson and Akshay Naheta who are not considered independent from the Company’s larger shareholders representing SoftBank, all board members are independent of the Company’s larger shareholders (shareholders holding more than 10% of the shares) and material business associates. Further information on each of the board members is presented at www.kahoot.com. Members of the board of directors are encouraged to own shares in the Company. The shareholding of each board member can be found in Note 21 to the Deviations from the Code: No deviations from the Code. 9. THE WORK OF THE BOARD OF DIRECTORS The board of directors’ work follows an annual plan, with particular focus on objectives and strategy in addition to operational implementation. The plan is evaluated and approved around the beginning of each calendar year. The board of directors annually assesses its performance and expertise, the assessment is presented to the nomination committee. The board of directors has implemented instructions for the board of directors and the executive management, which are focused on determining allocation of internal responsibilities and duties. The objectives, responsibilities and functions of the board of directors and the CEO are in compliance with rules and standards applicable to the Group. The board of directors have also implemented procedures to ensure that members of the board of directors and executive personnel make the Company aware of any material interests that they may have in items to be considered by the board of directors. The board of directors will also be 23 GROUP ANNUAL REPORT 2021 CORPORATE GOVERNANCE REPORT chaired by some other member of the board if the board is to consider matters of a material character in which the chair of the board is, or has been, personally involved. The board of directors held 26 board meetings in 2021. In the event of a not immaterial transaction between the company and its shareholders, a shareholder’s parent company, members of the board, executive management, or closely related parties of any such parties, the board will arrange for a valuation to be obtained from an independent third party. In 2021, there were no transaction between the company and related parties, except for ordinary commercial transactions at arm’s length market terms. For information regarding related party transactions, please see The board of directors has established an audit committee and a remuneration committee and instructions for such committees have been implemented. The audit committees’ objectives are to act as a preparatory and advisory body in connection with the board of directors’ supervisory roles in connection with of the Company’s internal control system. The audit committee shall consist of two to three members, who shall be elected by, and among, members of the board of directors. Currently, Lori Wright is chair and Andreas Hansson is a member of the audit committee. The audit committee shall meet as often as it deems necessary, but minimum four times per year to prepare the approval of The remuneration committees’ objectives are to act as a preparatory and advisory body in relation to the Company’s strategy for the remuneration of its executive management. The remuneration committee shall consist of two or three members. Currently, Stefan Blom is chair and Joanne Bradford is a member of the remuneration committee. The remuneration committee shall meet as it deems necessary. Deviations from the Code: No deviations from the Code. 10. RISK MANAGEMENT AND INTERNAL CONTROL It is ultimately the responsibility of the board of directors to ensure that the Company has sound and appropriate internal control systems and risk management systems Sound risk management is an important tool to create trust, ensure good environment, health and safety standards and enhance value creation. Internal control should ensure effective operations and prudent management of its targets. Kahoot!’s internal controls and systems also cover the company’s corporate values, ethical guidelines and standards to ensure good performance in ESG. Kahoot! complies with laws and regulations that apply to the Group’s business activities. The Group’s Code of Conduct sets out the overall ethical guidelines, which apply to all Kahoot! employees, members of the board of directors as well as those acting on Kahoot!’s behalf. The Company has procedures covering all material aspects of managing the operational business. The procedures and manuals are revised annually, unless circumstances initiate more frequent revision, such as from experience or adopted through regulations. The board of directors assesses management’s annual in-depth review of the company’s most important areas of exposure to risk and such areas’ internal control arrangements. In addition, management presents quarterly updates on the most important areas of exposure to risk and risks in addition to a bi-annual risk report. A summary of the main risks is presented in the annual report for 2021. The board of directors describes the main features of the Company’s internal control and risk management systems Company’s annual report. This covers the culture of control, risk assessment, controlling activities and information, communication and follow-up. The board of directors is obligated to ensure that it is updated on the Company’s the Company’s equity and liquidity are adequate in terms of the risk from, and the scope of, the Company’s activities, and shall immediately take necessary actions if it is demonstrated at any time that the company’s capital or liquidity is inadequate. The Company focuses on frequent and relevant management reporting to the board of directors. The reports contain matters related to health and safety, market development, operations and making and can respond quickly to changing conditions or important incidents. Board meetings are held regularly, and management reports are provided to the board monthly. 24 GROUP ANNUAL REPORT 2021 CORPORATE GOVERNANCE REPORT Kahoot! ASA has purchased and maintains a Directors and a reputable, specialized insurer with appropriate rating. Deviations from the Code: No deviations from the Code. 11. REMUNERATION OF THE BOARD OF DIRECTORS The remuneration to the board of directors is determined by the shareholders at the annual general meeting based on a proposal from the nomination committee. The remuneration to the board of directors for 2021 was resolved by the general meeting based on a proposal from the nomination committee. The level of remuneration to the board of responsibility, expertise, the complexity of the company and its business, as well as time spent and the level of activity in both the board of directors and any board committees. The remuneration of the board of directors is not linked to the company’s performance. On 23 February 2021, the general meeting resolved to grant in total 11,556 restricted share units (“RSUs”) to each of the board members Lori Wright and Joanne Bradford, which at the time of the general meeting amounted to USD 150 thousand. Each RSU gives the right and obligation to subscribe for one new share at a subscription price equal to NOK 0.10, subject to satisfaction of the vesting conditions attached to the RSUs. The RSUs are non-transferable, except for transfers to wholly owned companies. One board member (Christer Stefan Blom) has been granted 300,000 share options in connection with work performed by him as a consultant prior to being appointed board member. None the board members, or companies associated assignments for the company in addition to their appointments as members of the board of directors. The remunerations for the period from the annual general meeting in 2021 until the annual general meeting in 2022 are as follows: Board of directors: Andreas Hansson: USD 75,000 Akshay Naheta and Stefan Blom: Each USD 50,000 Lori Wright: USD 50,000 and RSUs worth USD 150,000 Joanne Bradford: USD 50,000 and RSUs worth USD 150,000 Alexander Remen and Sarah Blystad (employee- appointed board members): Each NOK 150,000 Patrik Jandusik and Emilia Samborska (employee-appointed deputy board members): NOK 10,000 per board meeting attended. Deviations from the Code: Stefan Blom holds share options in the Company which he received by virtue of his position as a consultant prior to being appointed board member in the Company. 12. REMUNERATION OF LEADING PERSONNEL The board of directors prepares guidelines for the remuneration of leading management which support Kahoot!’s prevailing strategy and values. These guidelines include the main principles for the Company’s remuneration policy and contribute to aligning the interests of the shareholders and the executive management. The guidelines were approved by the annual general meeting in 2021. A report on the remuneration of executive personnel for 2021 has been prepared, setting out how the Company adhered to the approved guidelines. Updated guidelines in accordance with the Norwegian Public Limited Liability Companies Act section 6-16 a will be presented to the annual general meeting in 2022 to be approved. The executive personnel may be offered performance- Such performance-based bonus shall be agreed on an individual basis if applicable. Currently, the Group does not have any general bonus schemes for its employees or executive personnel. However, Group’s sales team have entered into sales commission and bonus agreements. Commission and bonus are calculated on the basis of achieved sales, provided that the sales team has reached a predetermined budget and the respective employee achieves predetermined sales goals, and is paid on a monthly and quarterly basis, respectively. Deviations from the Code: No deviations from the Code. 25 GROUP ANNUAL REPORT 2021 CORPORATE GOVERNANCE REPORT 13. INFORMATION AND COMMUNICATION Kahoot! is under an obligation to continuously provide its with timely and precise information about the Company and its operations. Relevant information is given in the form of annual reports, quarterly reports, press releases, notices to the stock exchange and investor presentations in accordance with what is deemed appropriate from time to time. Kahoot! maintains an open and proactive policy for investor relations and has given regular presentations in connection with annual and quarterly results. The goal is that Kahoot!’s information work shall be in accordance with best practice at all times and all communications with shareholders shall be in compliance with the provisions of applicable laws and regulations and in consideration of the principle of equal treatment of the company’s shareholders. calendar with an overview of dates for important events, such public presentations and payment of dividends, if applicable. In addition to the board of directors’ dialogue with the Company’s shareholders at general meetings, the board of directors promotes suitable arrangements for shareholders to communicate with the Company at other times. The board of directors have delegated this task to the executive management team. Kahoot! has held regular presentations in connection with each of the quarterly presentations in 2021 and participated on several investor conferences. Due to the Covid-19 pandemic, most of the investor meetings and conferences have taken place on various electronic platforms. The plan is to continue to arrange regular presentations to keep the market up-to-date about the company’s development, goals and strategies. Deviations from the Code: No deviations from the Code. 14. Kahoot! has no shareholder controlling more than approx. 17% of the shares as of 31 December 2021. Kahoot! has not been subject to any takeover bids in 2021. In the event of a takeover bid, the board of directors and executive management each have an individual responsibility to ensure that the company’s shareholders are treated equally and that there are no unnecessary interruptions to the Company’s business activities. The board of directors has a particular responsibility in ensuring that the shareholders In the event of a take-over process, the board of directors shall abide by the principles of the Code, and also ensure that the following take place: the board of directors will not seek to hinder or obstruct any takeover offer for the Company’s operations or shares unless they have valid and particular reasons for doing so; the board of directors shall not exercise mandates or pass any resolutions with the intention of obstructing the takeover offer unless this is approved by the general meeting following announcement of the offer; the board of directors shall not undertake any actions intended to give shareholders or others an unreasonable advantage at the expense of other shareholders or the company; the board of directors shall not enter into an agreement with any offeror that limits the Company’s ability to arrange other offers for the Company’s shares, unless it is self-evident that such an agreement is in the common interest of the Company and its shareholders; the board of directors and executive management shall not institute measures with the intention of protecting the personal interests of its members at the expense of the interests of the shareholders; and the board of directors must be aware of the particular duty it has for ensuring that the values and interests of the shareholders are protected. In the event of a take-over offer, the board of directors will, in addition to complying with relevant legislation and regulations, seek to comply with the recommendations in the Code. This includes obtaining a valuation from an independent expert. On this basis, the board of directors will make a recommendation as to whether or not the shareholders should accept the offer. A takeover process gives rise to a particular duty of care to disclose information, where openness is an important tool for the board of directors to ensure equal treatment of all shareholders. The board of directors shall strive to ensure that neither inside information about the Company, nor any other information that must be assumed to be relevant for shareholders in a bidding process, remains unpublished. There are no other written guidelines for procedures to be followed in the event of a takeover offer. The 26 GROUP ANNUAL REPORT 2021 THE BOARD OF DIRECTORS OF KAHOOT! ASA Oslo, 20 April 2022 ANDREAS HANSSON Chair of the Board EILERT HANOA CEO STEFAN BLOM Board member JOANNE KUHN BRADFORD Board member ALEXANDER REMEN Board member AKSHAY NAHETA Board member LORI VARNER WRIGHT Board member SARAH BLYSTAD Board member Company has not found it appropriate to draw up any explicit basic principles for Kahoot!’s conduct in the event of a take-over offer, other than the actions described above. The board of directors otherwise concurs with what is stated in the Code regarding this issue. Deviations from the Code: No deviations from the Code. 15. AUDITOR The board of directors is responsible for ensuring that the board and of the auditor. In this regard, the board of directors and management ensured that the auditor submitted the main features of the plan for the audit of the company to the audit committee in 2021. Further, the board of directors invited the auditor to participate in the board meeting that dealt with the annual accounts. At these meetings, the auditor (i) reports on any material changes in the company’s accounting principles and key aspects of the audit, (ii) comments on matters, if any, on which there has been disagreement between the auditor and the executive management of the Company. Once a year, the board of directors reviews the company’s internal control procedures with the auditor, including potential weaknesses a review of the Company’s internal control procedures with the auditor, for improvement, was carried out by the board of directors in 2021. In order to ensure the auditor’s independence of the company’s executive management, the board of directors has established guidelines in respect of the use of the auditor by the management for services other than the audit. Deviations from the Code: No deviations from the Code. GROUP ANNUAL REPORT 2021 CORPORATE GOVERNANCE REPORT Sign Sign Sign Sign Sign Sign Sign Sign 27 GROUP ANNUAL REPORT 2021 OVERVIEW Kahoot! is on a mission to make learning awesome! We want to empower every child, student and employee to unlock their full learning potential. Our learning platform makes it easy for any individual or corporation to create, share, and host learning sessions that drive compelling engagement. Our vision is to build the leading learning platform in the world. Kahoot! ASA is the parent company of the Kahoot! Group and has since March 2021 been admitted for trading on the main list on the Oslo Stock Exchange. The Kahoot! Group the UK, France, Finland, Estonia, Denmark and Spain. Kahoot! is a global learning and engagement platform company, used for all kinds of learning and in a variety of settings – in school or university classrooms, settings, and cultural events. The Kahoot! Group includes Clever, the leading US K-12 EdTech learning platform, together with the learning apps DragonBox, Throughout 2021, Kahoot! continued to execute on the strategy and ambitious roadmap towards the vision of building the world’s leading learning platform. 2021 was a year of achieving milestones, solid growth and expansion for the Group. As the world continues to experience pressing challenges and re-imagine the future of learning and work, Kahoot! has stayed committed to the mission of making learning awesome for everyone, worldwide. This mission fuels the work at Kahoot! every day as we continue to deliver robust solutions and impactful experiences for all our users, whether at work, at school or at home. One of the key aspects of the Kahoot!’s business operations is its viral business model, which allows the company to promote the Kahoot! platform through its user groups, being individuals, learning institutions and organizations without New users registered on the Kahoot! platform is a direct result of existing users’ use of the Kahoot! platform and its content, which in turn promotes the platform. The products and services made available by the Kahoot! Group are all connected to the main product areas, Kahoot! at Home, Kahoot! at School, Kahoot! at Work, Kahoot! Academy and Clever. KAHOOT! AT WORK Used in 97% of Fortune 500 companies, Kahoot! occupies a bespoke space at the intersection of employee engagement, corporate learning, training and culture building. In 2021, BOARD OF DIRECTORS REPORT 27 28 GROUP ANNUAL REPORT 2021 BOARD OF DIRECTORS REPORT we continued to expand and enrich the offering with the ongoing integration of mobile learning app, Motimate, and employee engagement app, Actimo. Kahoot!’s bespoke enterprise offering, Kahoot! 360 Spirit, saw the effect of its enhanced offerings, including the newly launched Kahoot! Courses. Kahoot! at Work stands well positioned to respond to multiple workplace scenarios we have seen evolve thanks to a diverse portfolio of solutions and plans that deliver the elements to support thriving corporate cultures now, and in the future of work. KAHOOT! AT HOME Spearheaded by the Kahoot!+ offering, encompassing award-winning Kahoot! DragonBox and Poio apps, Kahoot!’s ad-free platform and apps enables families, students and children to connect and learn in an engaging way at home, either through self-study or family fun. In 2021, the Kahoot! at Home commercialization progress marked by the launches of Kahoot!+ Study, and Kahoot! Kids. The former seeks to make study more fun, impactful and effective, leveraging Kahoot!’s position as a trusted learning tool for hundreds of millions of participating students, while the latter expands Kahoot!’s demographic relevance with a bespoke, pedagogically robust product to engage a family audience which has played 100 million kahoots in the last 12 months. KAHOOT! AT SCHOOL Educators across the world make learning awesome with Kahoot! by tapping into the vast, inherent potential for playful education experiences to unlock every student’s learning potential. During a period of disruption and uncertainty due to the pandemic for educators and students globally, Kahoot! further evolved its offerings to more than 9 million educators in 2021, hundreds of millions of students and thousands of schools, campuses, universities and districts. Kahoot!’s EDU offering was enriched with features such as Team mode - designed to increase collaboration, and particularly relevant during forced hybrid and remote learning circumstances - and the launch of Math Labs by DragonBox, which was well received by educators and students worldwide. KAHOOT! ACADEMY Kahoot! Academy is a global knowledge platform, online community and marketplace which enables anyone to access premium learning content and high-quality learning content creators. Kahoot! Academy’s commercialization was at the end of 2021 marked by the launch of the subscription commercial service on Kahoot!’s global digital marketplace, content. By enabling a marketplace, Kahoot!’s platform opens itself to be harnessed by the burgeoning global creator community to promote, sell and monetize their quality content and expertise. Made possible by the singular viral growth and scale of the Kahoot! brand and platform, these developments serve to strategically position Kahoot! to reach a captive and vast global market of educators and learners. CLEVER Born of the desire to save valuable time in the classroom and afford more space for innovative teaching and learning, Clever is a single sign-on portal for teachers and students, and one of the most widely used digital learning platforms by the U.S. K-12 schools, with over 60% of all U.S. K-12 Schools using the Single sign-on platform, featuring more than 740 app partners, whereof approx. 450 paying app partners. The ongoing focus for Clever remains to lay a robust foundation for growth and commercial added-value for its vast network, including the launch of the click-to-buy App Store and international expansion in 2022. Clever and Kahoot! continue to explore synergies and possibilities, with Kahoot! seeking to expand its considerable footprint across K12 schools in the U.S. Similarly, efforts will continue to realize the vast potential for Clever to leverage Kahoot!’s global viral footprint to deliver its platform to educators globally. MARKET DEVELOPMENT 2021 was a year with continued strong adoption of digital tools both in the educational sector and in employee engagement and learning. In the educational sector, the growth in adoption has shown educators and learners how much value technology can bring to increase learning outcomes and engagement. These structural changes have at a larger scale across institutions. Kahoot!, with our leading toolbox of learning and engagement solutions, is positioned deploy best-in-class technology – with Clever simplifying the distribution and deployment in a fragmented market. Corporations globally are struggling with retaining and attracting talent, combined with challenges introduced by the remote or hybrid way of working. This puts a stronger emphasis on the importance of building company culture, increasing employee’s engagement levels and upskilling the current workforce. We expect to 29 GROUP ANNUAL REPORT 2021 see the demand for Kahoot!’s at work products continue to grow as a result of these underlying megatrends. REVIEW OF THE CONSOLIDATED ANNUAL ACCOUNTS During 2021, Kahoot! acquired digital learning platform company Clever, corporate learning app provider Motimate and classroom engagement tool Total revenues and operating income in 2021 for the Kahoot! Group were $91.3 million, up 211% from $29.3 million for increased number of paid subscriptions for the Group’s products and contribution from acquired companies. In 2021, total operating expenses excluding depreciation and amortization were $86.6 million, whereof calculated share-based compensation expenses and related payroll taxes deriving from Kahoot!’s share option program, acquisition-related expenses and listing cost preparations accounted for $9.6 million, and $5.0 million was attributable to an accounting treatment effect for the acquisition of Clever as described below. Accounting treatment of deferred consideration for the Clever acquisition Due to a revised interpretation of IFRS3 – Business Combinations, paragraph B55(a) and associated IFRIC (IFRS Interpretation Committee) agenda decision, a portion of the deferred consideration for the Clever acquisition, relating to the prior equity scheme in Clever, shall be treated as a post business combination expense regardless of the unconditional obligation to settle the consideration liability. The accounting effect reduces the Clever acquisition consideration by $14.9 million (approx. 3% of the total consideration for Clever) on 1 September 2021 (“Closing”) with corresponding reduction of the liability. The unconditional obligation to settle the $14.9 million acquisition consideration represents an off-balance sheet liability as of Closing. The off- balance sheet liability is expensed as share-based payment over time, whereof $5.0 million for 2021, $7.5 million for 2022 and $2.4 million for later periods. The total consideration payable for the Clever acquisition remains unchanged. Reported EBITDA in 2021 was $4.7 million compared to -$17.6 million for 2020. EBITDA adjusted for calculated share-based compensation expenses and related payroll taxes, acquisition-related expenses and listing cost preparations was $19.3 million, up $18.6 million compared to 2020. Depreciation and amortization in 2021 were $10.2 million compared to $2.6 million for 2020. The increase is mainly due to amortization of intangible assets from acquired companies. During 2021, total assets increased by $417.9 million to $796.1 million. The increase was primarily attributable to acquisitions. Per the end of 2021, non-current assets accounted for $671.3 million, up from $115.7 million by the end of 2020. The increase is attributable to goodwill and intangible assets from the acquisitions of Clever, million whereof cash and cash equivalents represented $107.8 million. Total liabilities increased during 2021 by $122.4 million to $214.6 million per the end of the year, whereof deferred tax liability represents $46.3 million and contract liabilities (deferred revenue) $60.8 million. Equity ratio for the Kahoot! Group as of 31 December 2021 was 73%. The expensed cost related to research and development amounted to $10.3 million in 2021. The liquidity for the Kahoot! Group is satisfactory with cash and cash equivalents of $107.8 million as of 31 preparations and payroll taxes for share-based payment), was $31.3 million in 2021, up from $17.4 million in 2020. REVIEW OF THE PARENT COMPANY’S ANNUAL ACCOUNTS The annual accounts for the parent company have been prepared according to Norwegian Generally Accepted Accounting Principles (NGAAP). As of 1 January 2021, the parent company Kahoot! ASA changed its functional currency from Norwegian Krone (NOK) to U.S. dollar (USD). The change in functional currency was the result of a review of the primary economic environment in which the entity operates, considering both current and prospective economic substance of the underlying transactions entered into by the company. Revenue for the parent company Kahoot! ASA was $55.0 company was $631.5 million as of 31 December 2021. BOARD OF DIRECTORS REPORT 30 GROUP ANNUAL REPORT 2021 ALLOCATION OF NET PROFIT IN THE PARENT COMPANY The parent company Kahoot! ASA recorded a net The Board of Directors (the “Board”) proposes the GOING CONCERN In the view of the Board, Kahoot! Group has a solid the prerequisites for the going-concern assumption prepared based on a going-concern basis. EXECUTIVE COMPENSATION REPORT The Board of Directors’ guidelines for determination of salary and other remuneration to executive personnel in Kahoot! ASA pursuant to section 6-16a the Norwegian Public Limited Liability Companies Act was presented to the Annual General Meeting on 8 June 2021. Kahoot!’s report on salary and other remuneration to executive personnel for 2021 pursuant to section 6-16b the Norwegian Public Limited Liability Companies Act is published as a separate document, available on kahoot.com/investor. WORKING ENVIRONMENT The working environment is considered good. Relying on highly skilled and motivated employees to succeed, Kahoot! is constantly working to maintain an attractive and rewarding working environment. For due to sickness in the parent company was 2%. No accidents or injuries occurred during the year. EQUAL OPPORTUNITIES, DISCRIMINATION, IMPACT ON EXTERNAL ENVIRONMENT At the end of 2020, the parent company Kahoot! ASA had 104 employees, of which 33% were women. The market in which Kahoot! operates is somewhat overrepresented by male employees, however, the Kahoot! environment. Women are represented in most of the company’s departments and the ratio between men and women will continue to be monitored. Kahoot! strongly respects and supports diversity in general and see this as a competitive advantage to create value for the company and its shareholders. Kahoot! has a policy that includes the principle of equal opportunities for equal work, implying that every employee will have the same rights, salary and career options in the same position, all other factors being equal which will continue to be monitored. Inclusivity is one of Kahoot!’s core values, and the Company is committed to team diversity as a driver of success. The Group’s global team includes members of more than 40 nationalities with different cultural and ethnic backgrounds. Kahoot!’s reporting pursuant to chapter 4 of the Gender Equality and Discriminatory Act (Equality Report 2021) is included in the Stakeholder Impact Report. For a description of Kahoot!’s impact on external environment, please see Kahoot!’s Stakeholder Impact Report, which is published as a separate document, available on kahoot.com/investor which also complies with Kahoot!’s compliance obligations pursuant to section 3-3c of the Norwegian Accounting Act (corporate social responsibility). RISK AND RISK MANAGEMENT Risk management for the Kahoot! Group is based on the principle that risk evaluation is an integral part of all business activities, where the ability to implement the Group’s strategic and operational plans and operational risk factors summarized below. Market risk The Kahoot! Group is exposed to several market related risks, including but not limited to; access and ability used in product development, cyber threats, ability to keep the user engagement and brand awareness, change in user pattern for existing and new users of the products offered by the Group, ability to convert non-paying users to paying subscribers, relative competitiveness in the markets where the Group operates, global or regional economic market conditions. Credit risk The Group’s credit risk arises from cash and cash equivalents as well as outstanding receivables. The Group does not have risk for its customers before transactions are entered as the majority of customers are either invoiced through automated sales with immediate credit card payments or subscriptions invoiced with credit terms are mostly prepaid upfront. The counterparties for the Group’s cash deposits are large banks 31 GROUP ANNUAL REPORT 2021 Oslo, 20 April 2022 AKSHAY NAHETA Board member LORI VARNER WRIGHT Board member SARAH BLYSTAD Board member EILERT HANOA CEO STEFAN BLOM Board member JOANNE KUHN BRADFORD Board member ALEXANDER REMEN Board member ANDREAS HANSSON Chair of the Board BOARD OF DIRECTORS REPORT GROUP ANNUAL REPORT 2021 which are considered to be very low credit risk. The Group’s assessment is that there are no material credit risks associated with these cash deposits. Currency risk The Group operates in Denmark, Estonia, Finland, France, Norway, Spain, United Kingdom and the United States and have costs in local currencies while a major part of the Group’s revenues are in USD. With different functional currencies, the Group will be exposed to currency gains and losses on receivables between the companies, which will affect rates between NOK, USD, DKK, EUR and GBP could materially and adversely affect the Group’s business, and prospects. The Group does currently not have any currency hedging arrangements in place to Interest risk The Group holds no long-term borrowings and no interest-bearing debt. Lease contracts resulting in a recognized lease liability are not subject to change in payments derived from Liquidity risk The Group monitors liquidity centrally across the and cash equivalents to at any time fund operations and investments according to the Group’s strategic plans. The Group monitors its liquidity risk through a short-term and a long-term liquidity forecast to manage the target of a minimum position of cash imposed by the Board of Directors. Kahoot! and does not have any interest-bearing debt. DIRECTORS’ & OFFICERS’ LIABILITY INSURANCE Kahoot! ASA has purchased and maintains The insurance policy is issued by a reputable, specialized insurer with appropriate rating. OUTLOOK 2022 AND EVENTS AFTER THE END OF THE FINANCIAL YEAR The Kahoot! Group’s main markets are characterised by technological advance, change in customer requirements and frequent new product introductions and improvements. As the world continues to experience pressing challenges and re-imagine the future of learning and work, Kahoot! will stay attractive and relevant for its users through maintaining a persistent focus on innovation and creativity to retain its users’ brand loyalty and attract further interest within all user categories. Kahoot! is thus well positioned for continued growth and success. Sign Sign Sign Sign Sign Sign Sign Sign 32 GROUP ANNUAL REPORT 2021 33 GROUP ANNUAL REPORT 2021GROUP ANNUAL REPORT 2021 33 CONSOLIDATED GROUP ANNUAL FINANCIAL STATEMENTS 2021 FINANCIAL STATEMENTS | CONSOLIDATED GROUP Consolidated statement of prot or loss Restated USD in thousands Note 2021 2020 Revenue from contracts with customers 5 91,016 29,143 Other operating income 249 175 Total revenue and other operating income 91,265 29,318 Cost of sales 3 7,029 3,717 Employee benet expenses 4, 6, 17 43,235 31,625 Other operating expenses 7 36,351 11,553 Amortization of intangible assets 10 8,848 1,897 Depreciation 12, 13 1,357 685 Operating prot/(loss) (5,555) (20,159) Financial income 432 372 Financial expenses (205) (329) Net change in fair value of nancial instruments 19 2,594 848 Net foreign exchange gains (losses) 20 (984) (15,908) Net nancial income (expenses) 1,837 (15,017) Prot/(loss) before income tax (3,718) (35,176) Income tax 8 (1,838) (656) Prot/(loss) for the year (1,880) (34,520) Prot/(loss) for the year attributable to: Equity holders of Kahoot! ASA (1,880) (34,520) Earnings (loss) per share in USD Basic earnings (loss) per share 9 (0.00) (0.09) Diluted earnings (loss) per share 9 (0.00) (0.09) Consolidated statement of comprehensive prot or loss Restated USD in thousands 2021 2020 Prot/(loss) for the year (1,880) (34,520) Other comprehensive prot/(loss): Items that might be subsequently reclassied to prot or loss: Exchange differences on translation of foreign operations (8,751) (1,927) Item that are not reclassied to prot or loss: Exchange difference on translation to another presentation currency - 17,413 Total comprehensive prot/(loss) for the year (10,631) (19,034) Total comprehensive prot/(loss) attributable to: Equity holders of Kahoot! ASA (10,631) (19,034) Consolidated statement of prot or loss Consolidated statement of comprehensive prot or loss 34 GROUP ANNUAL REPORT 2021 FINANCIAL STATEMENTS | CONSOLIDATED GROUP GROUP ANNUAL REPORT 2021 Oslo, 20 April 2022 AKSHAY NAHETA Board member LORI VARNER WRIGHT Board member SARAH BLYSTAD Board member EILERT HANOA CEO STEFAN BLOM Board member JOANNE KUHN BRADFORD Board member ALEXANDER REMEN Board member ANDREAS HANSSON Chair of the Board Consolidated balance sheet Restated USD in thousands Note 31.12.2021 31.12.2020 ASSETS Non-current assets Goodwill 11 494,430 77,757 Intangible assets 10 173,284 34,373 Property, plant and equipment 12 633 409 Right-of-use assets 13 2,928 3,165 Total non-current assets 671,275 115,704 Current assets Trade receivables 14 11,764 3,157 Other current assets 15 5,304 3,247 Cash and cash equivalents 16 107,765 256,120 Total current assets 124,833 262,524 TOTAL ASSETS 796,108 378,228 EQUITY AND LIABILITIES Equity Share capital 18 5,707 5,228 Share premium 18 651,581 357,383 Share-based payments reserves 18 16,963 5,542 Foreign currency translation reserves 18 (10,728) (1,977) Accumulated decit 18 (82,008) (80,128) Total equity 18 581,515 286,048 Non-current liabilities Lease liabilities 13 2,044 2,312 Deferred tax liability 8 46,288 5,843 Other non-current liabilities 19,20 40,565 15,447 Total non-current liabilities 88,897 23,602 Current liabilities Lease liabilities 13 1,007 964 Current tax liabilities 4 - Trade payables 19, 20 5,359 1,817 Contract liabilities 5 60,772 30,686 Other current liabilities 19, 20 58,554 35,111 Total current liabilities 125,696 68,578 Total liabilities 214,593 92,180 TOTAL EQUITY AND LIABILITIES 796,108 378,228 Consolidated balance sheet Sign Sign Sign Sign Sign Sign Sign Sign 35 GROUP ANNUAL REPORT 2021 FINANCIAL STATEMENTS | CONSOLIDATED GROUP ¹ 2020: The translation differences arising from the translation to the presentation currency are presented directly as part of the corresponding categories of equity. These translation Consolidated statement of changes in equity Share Share Share-based payments Foreign currency translation Accumulated Total USD in thousands Note capital premium reserves reserves decit equity Balance at 1 January 2020 (as reported) 1,473 92,621 2,095 (50) (40,113) 56,026 Correction of opening balance 1 - - - - (716) (716) Balance at 1 January 2020 (restated) 1,473 92,621 2,095 (50) (40,829) 55,310 Prot/(loss) for the year - - - - (34,520) (34,520) Currency translation differences 1 334 21,480 378 (1,927) (4,779) 15,486 Total comprehensive prot/(loss) for the year 334 21,480 378 (1,927) (39,299) (19,034) Issuance of shares 18 3,421 253,520 - - - 256,941 Transaction costs on equity issues 18 - (10,238) - - - (10,238) Share option program 17 - - 3,069 - - 3,069 Balance at 31 December 2020 (restated) 5,228 357,383 5,542 (1,977) (80,128) 286,048 Prot/(loss) for the year - - - - (1,880) (1,880) Currency translation differences 1 - - - (8,751) - (8,751) Total comprehensive prot/(loss) for the year - - - (8,751) (1,880) (10,631) Issuance of shares 18 479 302,700 - - - 303,179 Transaction costs on equity issues 18 - (8,502) - - - (8,502) Share option program 17 - - 11,421 - - 11,421 Balance at 31 December 2021 5,707 651,581 16,963 (10,728) (82,008) 581,515 Consolidated statement of changes in equity 36 GROUP ANNUAL REPORT 2021 FINANCIAL STATEMENTS | CONSOLIDATED GROUP Consolidated statement of cash ows Restated USD in thousands Note 2021 2020 Cash ows from operating activities Prot/(loss) before income tax (3,718) (35,176) Adjustments for: Depreciation and amortization 10, 12, 13 10,205 2,582 Share-based payments expense 4, 6 11,421 3,069 Change in trade receivables (781) (280) Change in contract liabilities 15,757 15,879 Change in trade payables 2,752 591 Change in other current assets and other liabilities (14,965) 30,720 Taxes paid (6) - Interest received 432 372 Financial expenses (205) (329) Net cash ow from operating activities 20,892 17,428 Cash ows from investing activities Payment for acquisition of subsidiary, net of cash acquired 4 (364,145) (34,227) Payment for intangible assets 10 (562) - Payment for property, plant and equipment (216) (214) Net cash outow from investing activities (364,923) (34,441) Cash ows from nancing activities Proceeds from issuance of ordinary shares 18 205,077 241,931 Transaction costs on issuance of ordinary shares (8,502) (10,237) Repayments of lease liabilities 13 (991) (537) Paid interest on lease liabilities 13 (89) (78) Net cash inow from nancing activities 195,495 231,079 Net increase in cash and cash equivalents (148,536) 214,066 Cash and cash equivalents as of 1 January 16 256,120 40,851 Effects of exchange rate changes on cash and cash equivalents 181 1,203 Cash and cash equivalents as of 31 December 107,765 256,120 Consolidated statement of cash ows 37 GROUP ANNUAL REPORT 2021GROUP ANNUAL REPORT 2021 37 CONSOLIDATED GROUP ANNUAL FINANCIAL STATEMENTS 2021 NOTES FINANCIAL STATEMENTS | CONSOLIDATED GROUP NOTE 1 GENERAL INFORMATION Kahoot! ASA (the Company or Kahoot!), the parent company of the Kahoot! Group (the Group) is a public limited liability company incorporated and domiciled in Norway, with its head is listed on Oslo Stock Exchange has the ticker “KAHOT”. The Group is on a mission to make learning awesome! The Group wants to empower every child, student and employee based learning platform makes it easy to create, share and play learning games driving compelling engagement. In addition, the Group’s family of apps takes math learning to a new level and empowers children to learn to read through play. Launched in 2013, the Group’s vision is to build the leading learning platform in the world. for issuance by the Board of Directors on 20 April 2022. Restated consolidated statement of prot or loss As reported Kahoot! Drops Restated USD in thousands Note 2020 Adj 2020 Adj 2020 2020 Revenue from contracts with customers A 30,859 (1,720) 4 29,143 Other operating income 175 - - 175 Total revenue and other operating income 31,034 (1,720) 4 29,318 Cost of sales A 3,790 (73) - 3,717 Employee benefit expens es 31,625 - - 31,625 Other operating expens es 11,553 - - 11,553 Amortization of intangible assets 1,897 - - 1,897 Depreciation 685 - - 685 Operating profit/(loss) (18,516) (1,647) 4 (20,159) Financial income 372 - - 372 Financial expenses (329) - - (329) Net change in fair value of financial instruments 848 - - 848 Net foreign exchange gains (los ses ) B (17,510) 1,602 - (15,908) Net financial income (expenses ) (16,619) 1,602 - (15,017) Profit/(loss) before income tax (35,135) (45) 4 (35,176) Income tax (656) - - (656) Profit/(loss) for the period (34,479) (45) 4 (34,520) As rep orted Kahoot! Drops Restated USD in thousands Note 2020 Adj 2020 Adj 2020 2020 Profit/(loss) for the period (34,479) (45) 4 (34,520) Other comp rehens ive income/(los s): Items that might be subsequently reclassified to profit or loss: Exchange differences on translation of foreign operations B (325) (1,602) - (1,927) Item that are not reclassified to profit or loss: Exchange difference on translation to another presentation currency 17,413 - - 17,413 Total comprehensive income/(loss) for the period (17,391) (1,647) 4 (19,034) Restated consolidated statement of comprehensive income or loss 38 GROUP ANNUAL REPORT 2021 FINANCIAL STATEMENTS | CONSOLIDATED GROUPNOTE 1 CONTINUED Restated consolidated balance sheet As reported Kahoot! Kahoot! Drops Res tated USD in thousands Note 31.12.2020 Adj. OB'20 Adj 2020 Adj 2020 31.12.2020 ASSETS Goodwill C 77,745 - - 12 77,757 Intangible assets 34,373 - - - 34,373 Property, plant and equipment 409 - - - 409 Right-of-use assets 3,165 - - - 3,165 Deferred tax as set - - - - - Total non-current assets 115,692 - - 12 115,704 Trade receivables C 2,671 - - 486 3,157 Other curren t as s ets A, C 3,316 - 73 (143) 3,247 Cash and cash equivalents 256,120 - - - 256,120 Total current assets 262,108 - 73 343 262,524 TOTAL ASSETS 377,800 - 73 355 378,228 EQUITY AND LIABILITIES Share capital 5,228 - - - 5,228 Share premium 357,383 - - - 357,383 Share-b as ed payments res erves 5,542 - - - 5,542 Foreign currency translation reserves B (375) - (1,602) - (1,977) Accumulated deficit A-C (79,373) (716) (45) 4 (80,130) Total equity 288,406 (716) (1,647) 4 286,048 Lease liabilities 2,312 - - - 2,312 Deferred tax liability 5,843 - - - 5,843 Other non-current liabilities 15,447 - - - 15,447 Total non-current liabilities 23,602 - - - 23,602 Lease liabilities 964 - - - 964 Trade payables 1,817 - - - 1,817 Contract liabilities (d eferred revenue) A, C 27,899 716 1,720 351 30,686 Other current liabilities 35,111 - - - 35,111 Total current liabilities 65,791 716 1,720 351 68,578 Total liabilities 89,393 716 1,720 351 92,181 TOTAL EQUITY AND LIABILITIES 377,800 - 73 355 378,228 39 GROUP ANNUAL REPORT 2021 NOTE 1 CONTINUED Restated consolidated statement of cash ows FINANCIAL STATEMENTS | CONSOLIDATED GROUP As reported Kahoot! Drops Restated USD in thousands Note 2020 Adj 2020 Adj 2020 2020 Cash flows from operating activities Profit/(loss) before income tax A, C (35,135) (45) 4 (35,176) Adjustments for: - - - Depreciation and amortization 2,582 - - 2,582 Share-based payments expense 3,069 - - 3,069 Change in trade and other receivables A, C 279 (73) (486) (280) Change in contract liabilities (deferred revenue) A, C 13,807 1,720 351 15,879 Change in trade payables 591 - - 591 Change in other current assets and other liabilities B, C 32,191 (1,602) 131 30,720 Interes t received 372 - - 372 Financial expenses (329) - - (329) Net cash flow from operating activities 17,426 - - 17,426 Cash flows from investing activities Payment for acquisition of subsidiary, net of cash acquired (34,227) - - (34,227) Payment for intangible assets - - - Payment for property, plant and equipment (214) - - (214) Net cash from investing activities (34,441) - - (34,441) Cash flows from financing activities Proceeds from issuance of ordinary shares 241,931 - - 241,931 Transaction costs on issuance of ordinary shares (10,237) - - (10,237) Repayments of lease liabilities (537) - - (537) Paid interest on lease liabilities (78) - - (78) Net cash from financing activities 231,079 - - 231,079 Net increase/(decrease) in cash and cash equivalents 214,064 - - 214,064 Cash and cash equivalents beginning of the period 40,851 - - 40,851 Effects of exchange rate changes on cash and cash equiv. 1,205 - - 1,205 Cash and cash equivalents as of end of period 256,120 - - 256,120 Notes to the reconciliation of changes from reported to restated gures for 2020 A) Correction to the accounting estimate for deferred revenue During the second half of 2021, the Group updated and revised the model for estimating the recognition of revenue over time. within the month in which a sale occurred, compared to the model used for previously reported periods. The effect of the retrospective change resulted in an increase in the contract liabilities (deferred revenue) and a corresponding reduction in revenue for the previously reported period. The updated model had no effect on cash balances as per 31 December 2020. 40 GROUP ANNUAL REPORT 2021 NOTE 1 CONTINUED FINANCIAL STATEMENTS | CONSOLIDATED GROUP B) Correction of foreign exchange differences on goodwill and Intangible assets from acquisitions in 2020 For 2020, currency translation differences relating to goodwill and intangible assets arising from the acquisitions of Actimo and Drops were included in loss instead of as exchange differences on translation of foreign operations under consolidated statement of comprehensive income or loss. Goodwill increased by $12 thousand as per 31 December 2020 Trade receivables increased by $486 thousand as per 31 December 2020 Other current assets reduced by $143 thousand as per 31 December 2020 Contract liabilities (deferred revenue) increased by $351 thousand as per 31 December 2020 Net effect was a positive net income contribution for the period of The impact on basic loss per share and diluted loss per share was $0.00 and $0.00 respectively. The effect of the correction to the accounting estimate for deferred revenue can be summarized as follows: Opening balance 2020: Contract liabilities (deferred revenue) increased by $716 FY 2020: Contract liabilities (deferred revenue) increased by $1,716 thousand as per 31 December 2020, offset as reduced recognized revenue (revenue from contracts with customers) of $1,716 thousand in 2020. Other current asset Increased by $73 thousand as per 31 December 2020, offset as reduced cost of sales of $73 thousand. Net effect was an Increased loss for the period of $1,647 thousand, The impact on basic loss per share and diluted loss per share was $0.00 and $0.00 respectively. As a result, net foreign exchange losses were overstated by $ 1,602 thousand, whereas exchange differences on translation of foreign operations were understated by $1,602 on basic loss per share and diluted loss per share was $0.00 and $0.00 respectively. C) Correction of balance sheet Items relating to Drops During 2021, the Group updated and revised the model for converting Drops from local GAAP to IFRS. The effect of the retrospective change resulted in an increase in the goodwill, trade receivables and contract liabilities (deferred revenue) and a the Group’s ownership period (28 November 2020 to 31 December 2020) was $4 thousand. The correction had no effect on cash balances as per 31 December 2020. The effect of the change can be summarized as follows: 41 GROUP ANNUAL REPORT 2021 NOTE 2 | NOTE 3 FINANCIAL STATEMENTS | CONSOLIDATED GROUP The acquisitions of Whiteboard on 23 February 2021, Motimate on 22 April 2021 and Clever on 1 September 2021, (see note 4) resulted in recognition of goodwill, technology, customer relationships and brand. NOTE 2 SIGNIFICANT EVENTS IN THE CURRENT REPORTING PERIOD by the following events and transactions during the reporting period: NOTE 3 GENERAL ACCOUNTING PRINCIPLES The general accounting policies applied in the preparation of accounting principles are described in the relevant notes. Basis of preparation accordance with International Financial Reporting Standards (IFRS) as endorsed by the European Union (EU) and additional disclosure requirements in the Norwegian Accounting Act as effective 31 December 2021. have been rounded to the nearest thousand unless otherwise stated. Foreign currency Functional currency, presentation currency and consolidation The Group’s presentation currency is USD, which is the parent company’s functional currency (the functional currency of the parent company was NOK in 2020 – see section change in functional currency below). For consolidation purposes, all subsidiaries with a different functional currency than the parent company (USD) are translated at the rate applicable at the reporting that approximates the prevailing rate at the date of transaction. The cumulative Monetary balances in foreign currencies are translated into the functional currency at the exchange rates on the date of the balance sheet. Foreign exchange gains and losses 42 GROUP ANNUAL REPORT 2021 NOTE 3 CONTINUED resulting from the settlement of such transactions, and from the translation of monetary to a presentation currency different from the parent company’s functional currency. The Group’s consolidated balance sheet was re-translated to its presentation currency (USD) at the rate applicable at the reporting date. Share transactions during the reporting period were presented at the exchange rate at the date of the transaction. at the average exchange rate that approximates the prevailing rate at the date of transaction. The translation differences arising from the translation to the presentation currency are presented directly as part of the corresponding categories of equity (share Change in functional currency As of 1 January 2021, the parent company Kahoot! ASA changed its functional currency from NOK to USD. The change in functional currency was the result of a review of the primary economic environment in which the entity operates, considering both current and prospective economic substance of the underlying transactions entered into by the company. The effect of a change in functional currency is recognized prospectively from the date of change, considered to be 1 January 2021. Kahoot! ASA translated all items into the new functional currency using the exchange rate at the date of the change. The resulting translated amounts for non-monetary items are treated as their historical cost. For the translation of equity items to the new functional currency the exchange rate at the date of the change of functional currency were applied. This means that no additional exchange differences arise on the date of the change. For the subsequent changes, equity items will be translated using their transaction date rate. FINANCIAL STATEMENTS | CONSOLIDATED GROUP Principles of consolidation Subsidiaries Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity, and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. Intercompany transactions, balances and unrealized gains on transactions between group companies are eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Figures from subsidiaries with different accounting policies are amended to ensure consistent accounting policies for the Group are used. If the Group loses control over a subsidiary it derecognizes the assets, recognized in other comprehensive loss in relation to the subsidiary. Classication of current and non-current items in the Group’s normal operating cycle, or falls due or is expected to be realized within 12 normal operating cycle of the Group or are expected to be settled within 12 months of the end of the reporting period, or if the Group does not have an unconditional right to postpone settlement for at least 12 months after the balance sheet date. Segments An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses. The Company has determined that the Board of Directors are the chief operating decision maker. 43 GROUP ANNUAL REPORT 2021 The segment information is reported in accordance with the reporting to the Board of Directors (the chief operating decision makers) and is consistent with direction and strategy, resource allocation and acquisition activities. The Group Cost of sales Cost of sales relate directly to costs incurred on the Company’s sales through the websites or through app stores. The Company partners with the payment gateway providers and app stores as a marketing channel to sell their products. The payment gateways charge fees for processing and collecting payments from website sales and app stores collect a percentage ranging from 6% to 30% of revenues earned from the Kahoot! app store sales as a fee for payment collections services provided to the Company. Critical accounting judgements and key sources of estimation uncertainty in applying the Group’s accounting policies In applying the Group’s accounting policies, which are described in the following notes below, the directors are required to make judgements (other than those involving estimations) that about the carrying amounts 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 recognized 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. (a) Critical accounting judgements Critical accounting judgements, apart from those involving estimations (which are presented separately below), that the directors have made in the process of applying the Group’s disclosures for additional details on the critical accounting judgements applied. Business combinations, note 4 (b) Signicant estimation uncertainty The key assumptions concerning the future, and other key sources of estimation material adjustment to the carrying amounts of assets and liabilities within the Business combinations, note 4 Goodwill and impairment, note 11 NOTE 3 CONTINUED FINANCIAL STATEMENTS | CONSOLIDATED GROUP 44 GROUP ANNUAL REPORT 2021 NOTE 4 BUSINESS COMBINATIONS Accounting principles The acquisition method of accounting is used to account for all business combinations. The consideration transferred in a business combination comprises the fair values of the assets transferred, liabilities incurred to the former owners of the acquired business, equity interests issued by the Group, fair value of any asset or liability resulting from a contingent consideration arrangement and fair value of any pre-existing equity interest in the subsidiary. business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. The Group recognizes any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value, or at the non- Acquisition-related costs are expensed as incurred. Goodwill arising on business combinations is recognized as an asset measured at the excess of the sum of the consideration transferred, the fair value of any previously held equity interests and the amount of any non-controlling interests in the acquired entity If, after reassessment, the Group’s interest in the net fair value of the acquired entity’s Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar borrowing If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the business combination is re-measured to fair value at the acquisition date. Any gains or Business combinations 2021 The business combinations required the use of critical accounting judgements and estimates when identifying and valuing the intangible assets of the acquired entities. technology, brand and customer relationship. The customer relationship relates to existing customers for Clever and Motimate and existing subscribers for Whiteboard. Signicant estimation uncertainty The relief-from-royalty method has been applied to measure the fair value of the technology and the brand. The relief-from-royalty method considers the discounted estimated royalty payments that are expected to be avoided as a result of the patents about churn, attrition and multiplied by a royalty rate (cost saving from owning the technology and brand). The multi-excess earnings-method has been applied to measure the fair value of the customer relationships. The multi-excess-earnings-method considers the contributory asset charge that an intangible asset would have been charged by a hypothetical third-party to use the intangible asset. The valuation is based on projected asset charge (costs of renting intangible assets from a hypothetical third-party). NOTE 4 FINANCIAL STATEMENTS | CONSOLIDATED GROUP 45 GROUP ANNUAL REPORT 2021 In estimating the fair value of the technology and the brand, cost savings are discounted using a discount rate between 8.5%-12.8%. The royalty rate for technologies is assumed to be between 10.0%-30.0% and for the brands between 2.0%-4.0%. after contributory asset charges are discounted using a discount rate between 8.5%- of seven to eight years and customer relationship a useful life of ten years. The valuation of intangible assets in business combinations are particularly sensitive to changes in royalty rates, churn and discount rates. Description of 2021 business combinations Clever Clever Inc (“Clever”) was acquired by a purchase of 100% of the shares effective from 1 September 2021. Clever, one of the most widely-used digital learning platforms in U.S. K-12 education was acquired for enterprise value (EV) of $435 – 500 million on a cash and debt- free basis, including a performance-based element for 2021-2022 of which elements are compensation for Clever employees’ whom prior to the acquisition was part of the Clever Inc. share-based payment plan (“Clever Options”). This element of compensation vest consideration was settled by a combination of cash ($254,842 thousand) and issuance of 7,300,765 shares in Kahoot! ASA at a subscription price of NOK 64.77 per share. The performance-based element (see also note 19) relating to Clever is determined based on certain operational metrics at the end of 2021 and end of 2022. With respect to the elements of compensation to employees who are part of the Clever Options, they will also need to continue to be employees of Clever at the time the performance- based elements are met. If an employee should forfeit on the Clever Options, the amount forfeited are to be redistributed between the prior shareholders of Clever. In other words, the vesting condition in the case of the Clever Options have no impact on the total amount to be paid in connection with the business combination. Given the contingent consideration will be determined and settled in the future, the nominal value is discounted to present value. Present value of the contingent consideration relating to the acquisition was initially recognized 1 September 2021 at $63,033 thousand, whereof $47,877 thousand was current. The main three factors used in assessing the fair value of the Clever was 8.5%. As of 31 December 2021, the fair value of the contingent consideration relating to the acquisition was $47,524 thousand, whereof $32,144 thousand was current. The amount attributable to the Clever Options is $14,874 thousand, and relates to the portion of unvested share-based payment awards, subject to forfeitures. The amount accretes over time (included respect to the portion not related to the unvested Clever Options, the changes in fair value attributable to 2021 were settled in December 2021 and February 2022. The performance- based elements attributable to 2022 targets are expected to be settled in February 2023. In December 2021, the second payment was settled by a combination of cash ($100,427 thousand) and issuance of 3,121,747 shares in Kahoot! ASA, whereof 2,605,887 shares at a subscription price of NOK 64.77 per share, and 515,860 shares at a subscription price of NOK 48.08 per share. In February 2022, the third payment was settled by a combination of cash ($27,737 thousand) and issuance of 1,617,710 shares in Kahoot! ASA, whereof 1,571,345 shares at subscription price of NOK 31.63 per share, 43,650 shares at subscription price at NOK 64.77 per share and 2,715 shares at subscription price at NOK 48.08 per share. Provisional purchase price allocation - assets acquired and liabilities assumed The amounts recognized at the date of business combinations in respect of below, using the exchange rate as of 1 September 2021 for Clever. Goodwill from the business combinations with Clever are attributable to synergies, and will lead to additional value for the Group’s subscription-based product offering when combined with the Kahoot! products and marketing as one product going forward. NOTE 4 CONTINUED FINANCIAL STATEMENTS | CONSOLIDATED GROUP 46 GROUP ANNUAL REPORT 2021 1 The earn-out will be settled by a combination of cash and shares. The liabilities incurred includes the earned portion of unvested share-based payment awards of $20,575 thousand. These liabilities were incurred by compensating, upon acquisition, equity-settled share-based payment awards held by employees of Clever Inc. with cash-settled and equity settled share-based payment awards, which are subject to forfeiture. The respective liabilities represent the portion of the replacement awards that relates to pre-acquisition services provided by the acquiree’s employees and were measured at the fair value and will be settled by a combination of cash and shares. NOTE 4 CONTINUED FINANCIAL STATEMENTS | CONSOLIDATED GROUP USD in thousands Clever Purchase consideration Cash consideration 368,212 Shares issued 76,128 Contingent consideration liability / earnout 1 48,159 Total purchase consideration 492,499 Brand 72,647 Technology 31,339 Customer relationships 32,172 Property, plant and equipment 344 Trade and other receivables 8,480 Cash and cash equivalents 9,657 Deferred tax liability (40,629) Trade payables and other current liabilities (16,855) Total net identifiable assets acquired at fair value 97,154 Total purchase consideration 492,499 Goodwill 395,345 Net cash outflow arising on acquisition Cash consideration 254,842 Less: cash and cash equivalents acquired 9,657 Total cash consideration 245,185 Transaction costs of $2,877 thousand arose as a result of the acquisition. These have been IFRS 3 – Business Combinations paragraph B55(a) and associated IFRIC (“IFRS Interpretation Committee”) agenda decision, requiring that amounts that an individual employee would forfeit were they to leave service immediately after the acquisition are not part of the business combination, and should instead be recognised as a post-combination expense. The amount attributable to the Clever Options $14,874, related to the portion of unvested share-based payment awards, subject to forfeitures, is therefore not included in the purchase consideration below, but are to accrete over time (included as part Since the acquisition date 1 September 2021, Clever has contributed with $15,305 thousand to the Group’s revenue and negative net income 47 GROUP ANNUAL REPORT 2021 1 The earn-out will be settled by a combination of cash and shares. Motimate Motimate AS (“Motimate”) was acquired by a purchase of 100% of the shares effective from 22 April 2021. Motimate, an employee engagement and learning app provider for organizations – $27 million on a cash and debt-free basis, including a 2021 performance-based element. The initial consideration was settled by a combination of cash ($ 9,759 thousand) and issuance of 1,104,994 shares in Kahoot! ASA at a subscription price of NOK 93.90 per share. The performance-based element (see also note 19) relating to Motimate is determined based on certain operational metrics at the end of 2021. Given the contingent consideration liability will be determined and settled in the future, the nominal value is discounted to present value. Present value of the contingent liability (earnout) relating to the acquisition was initially recognized 22 April 2021 at $1,814 thousand, whereof all is current. The main level and discount rate. The discount rate applied for Motimate was 12.5%. As of 31 December 2021, the fair value of the contingent consideration relating to the acquisition was $1,972 thousand, whereof all was current. The change in fair value from initial recognition to year- In December 2021, the second payment (deferred payment) was settled by a combination of cash ($1,978 thousand) and issuance of 274,357 shares in Kahoot! ASA at a subscription price of NOK 93.90 per share. and issuance of 277,599 shares in Kahoot! ASA at a subscription price of NOK 38.24 per share. Provisional purchase price allocation – assets acquired and liabilities assumed The amounts recognized at the date of business combinations in respect of below, using the exchange rate as of 22 April 2021 for Motimate. Goodwill from the business combinations with Motimate are attributable to synergies, and will lead to additional value for the Group’s subscription-based product offering when combined with the Kahoot! products and marketing as one product going forward. Acquisition costs of $275 thousand arose as a result of the transaction. These have been Since the acquisition date 22 April 2021, Motimate has contributed with $2,999 thousand to the Group’s revenue and negative net income NOTE 4 CONTINUED FINANCIAL STATEMENTS | CONSOLIDATED GROUP USD in thousands Motimate Purchase consideration Cash consideration 11,866 Shares issued 15,050 Contingent consideration liability / earnout 1 1,814 Total purchase consideration 28,730 Brand 4,085 Technology 3,448 Customer relationships 998 Property, plant and equipment 4 Trade and other receivables 476 Cash and cash equivalents 2,522 Deferred tax liability (1,361) Trade payables and other current liabilities (1,225) Total net identifiable assets acquired at fair value 8,947 Total purchase consideration 28,730 Goodwill 19,783 Net cash outflow arising on acquisition Cash consideration 9,759 Less: cash and cash equivalents acquired 2,522 Total cash consideration 7,237 48 GROUP ANNUAL REPORT 2021 NOTE 4 CONTINUED FINANCIAL STATEMENTS | CONSOLIDATED GROUP 1 The earn-out will be settled by a combination of cash and shares. Digital Teaching Tools Finland Ltd (Whiteboard.) that helps engage students both in the physical classroom and through remote learning was acquired for an initial consideration of $6 million, in addition to a performance- based element up to $6 million depending on Whiteboard’s performance in 2021-2022. The initial consideration was settled by a combination of cash ($3,600 thousand) and 184,892 new Kahoot! ASA shares at a subscription price of NOK 110.39 per share. based on invoiced revenue targets in 2021 and 2022 subject to EBITDA margin and a net cash and settled in the future, the nominal value is discounted to present value. Present value of the contingent consideration liability (earnout) relating to the acquisition was initially recognized 23 February 2021 at $4,314 thousand, of which $2,702 thousand was non-current. The main level three inputs used in assessing the fair value of the earnout is forecast of 12.8%. %. As of 31 December 2021, the fair value of the contingent consideration relating to the acquisition was $2,975 thousand, whereof $1,227 thousand was current. The change in fair value from initial recognition to year-end is recognized as net change in fair value based elements attributable to 2021 was settled in February 2022 and the performance- based elements attributable to 2022 targets is expected to be settled in February 2023. In February 2022, the last payment was settled by a combination of cash ($768 thousand) and issuance of 139,653 shares in Kahoot! ASA at a subscription price of NOK 32.34 per share. Provisional purchase price allocation - assets acquired and liabilities assumed The amounts recognized at the date of business combinations in respect of below, using the exchange rate as of 23 February 2021 for Whiteboard. Goodwill from the business combinations with Whiteboard are attributable to synergies, and will lead to additional value for the Group’s subscription-based product offering when combined with the Kahoot! products and marketing as one product going forward. Acquisition costs of $241 thousand arose as a result of the transaction. These have been with $697 thousand to the Group’s revenue and positive net income USD in thousands Whiteboard.fi Purchase consideration Cash consideration 3,600 Shares issued 2,402 Contingent consideration liability / earnout 1 4,314 Total purchase consideration 10,316 Brand 982 Technology 1,188 Customer relationships 341 Property, plant and equipment 12 Trade and other receivables 68 Cash and cash equivalents 293 Deferred tax liability (502) Trade payables and other current liabilities (312) Total net identifiable assets acquired at fair value 2,069 Total purchase consideration 10,316 Goodwill 8,246 Net cash outflow arising on acquisition Cash consideration 3,600 Less: cash and cash equivalents acquired 293 Total cash consideration 3,307 49 GROUP ANNUAL REPORT 2021 Unaudited pro-forma business combinations 2021 If the acquisitions in 2021 had occurred on 1 January 2021, the unaudited pro- forma revenue for the Group would have been $118,027 thousand and the Group’s unaudited pro-forma loss would have been $5,627 thousand. Description of 2020 business combinations Actimo Actimo ApS (“Actimo”) was acquired by a purchase of 100% of the shares effective on 5 October 2020. Actimo, an employee engagement platform that empowers organizations interaction with the workforce was acquired for a total consideration of $26 million on a debt and cash free basis including an additional performance-based element. The performance-based element (see also note 19) requires the Group to settle an additional consideration of an estimated $6.285 million in a combination of shares and cash before 30 April 2021 in the event Actimo’s achieves a certain revenue target for the year ended 31 March 2021. The fair value of the contingent consideration of $6.285 The potential undiscounted amount of all future payments that Kahoot! could be required to make under the contingent consideration arrangement is between USD nil and $7 million. The performance-based element was fully settled in May 2021. The total initial consideration was settled by a combination of cash and 1,114,963 new Kahoot! ASA Shares at a subscription price of NOK 46.82 per share. In May 2021, the performance-based element was settled by a combination of cash ($4,734 thousand) and issuance of 186,039 shares in Kahoot! ASA at a subscription price of NOK 86.62 per share. Purchase price allocation - assets acquired and liabilities assumed The amounts recognized at the date of business combinations in respect of below, using the exchange rate as of 5 October 2020 for Actimo. Goodwill from the business combinations with Actimo are attributable to synergies, and will lead to additional value for the Group’s subscription-based product offering when combined with the Kahoot! products and marketing as one product going forward. Acquisition costs of USD 266 thousand have been recognized as part of other Following the acquisition date 5 October 2020, Actimo contributed $1,125 thousand to the Group’s revenue and a loss of $556 thousand to the Group’s total loss in 2020. NOTE 4 CONTINUED FINANCIAL STATEMENTS | CONSOLIDATED GROUP USD in thousands Actimo Purchase consideration Cash consideration 21,034 Shares issued 5,643 Contingent liability / earn-out 6,285 Total purchase consideration 32,962 Brand 332 Technology 7,953 Customer relationships - Property, plant and equipment - Trade and other receivables 1,559 Cash and cash equivalents 1,503 Deferred tax liability (1,049) Trade payables and other current liabilities (3,459) Total net identifiable assets acquired at fair value 6,839 Total purchase consideration 32,962 Goodwill 26,123 Net cash outflow arising on acquisition Cash consideration 21,034 Less: cash and cash equivalents acquired 1,503 Total cash consideration 19,531 50 GROUP ANNUAL REPORT 2021 PlanB Labs Oü (Drops) PlanB Labs Oü (“Drops”, hereafter referred to as Drops) was acquired by a purchase of 100% of the shares effective on 28 November 2020. Drops, a growing language learning company was acquired for an initial consideration of $21 million on a debt and cash free basis in addition to a performance-based element estimated to be $20.673 million depending on Drops’ performance for the years ended 31 December 2020, 2021 and 2022. The initial consideration was settled by a combination of cash and 859,169 new Kahoot! ASA Shares at a subscription price of NOK 62.63 per share. The performance-based element (see also note 19) relating to Drops is determined based condition. Given the contingent consideration liability will be determined and settled in the future, the nominal value is discounted to present value. Present value of the contingent consideration liability (earnout) relating to the acquisition was initially recognized 28 November 2020 at $20,637 thousand, of which $15,037 thousand was non-current as at acquisition date 28 November 2020. The potential undiscounted amount of all future payments that Kahoot! could be required to make under the contingent consideration arrangement is between USD 10 million and USD 29 million. The main level three inputs discount rate. The discount rate applied for Drops was 12.5%. The performance-based elements attributable to the 2020 targets was settled in February 2021, whereas the performance-based elements attributable to the 2021 targets was settled in February 2022. The performance-based elements attributable to 2022 targets is expected to be settled in February 2023. As of 31 December 2020, the fair value of the contingent consideration relating to the acquisition was $20,882 thousand, whereof $15,182 thousand was non- current. As of 31 December 2021, the fair value of the contingent consideration relating to the acquisition was $12,993 thousand, whereof $7,993 thousand was non-current. The change in fair value from initial recognition to year-end is recognized as net change In February 2021, the second payment was settled by a combination of cash ($4,109 thousand) and issuance of 121,618 shares in Kahoot! ASA at a subscription price of NOK 116.30 per share. In February 2022, the third payment was settled by a combination of cash ($3,570 thousand) and issuance of 344,840 shares in Kahoot! ASA at a subscription price of NOK 36.42 per share. Purchase price allocation - assets acquired and liabilities assumed The amounts recognized at the date of business combinations in respect of below, using the exchange rate as of 28 November 2020 for Drops. Goodwill from the business combinations with Drops are attributable to synergies, and will lead to additional value for the Group’s subscription-based product offering when combined with the Kahoot! products and marketing as one product going forward. Acquisition costs of USD 275 thousand have been recognized as part of other Following the acquisition date 28 November 2020, Drops contributed USD 726 thousand to the Group’s revenue and a negative net income contribution of $104 thousand to the Group’s total loss in 2020. NOTE 4 CONTINUED FINANCIAL STATEMENTS | CONSOLIDATED GROUP 51 GROUP ANNUAL REPORT 2021 NOTE 4 CONTINUED FINANCIAL STATEMENTS | CONSOLIDATED GROUP USD in thousands Drops Purchase consideration Cash consideration 16,372 Shares issued 6,073 Contingent liability / earn-out 20,673 Total purchase consideration 43,118 Brand 1,067 Technology 17,057 Customer relationships - Property, plant and equipment 45 Trade and other receivables 1,769 Cash and cash equivalents 1,676 Deferred tax liability (3,625) Trade payables and other current liabilities (3,851) Total net identifiable assets acquired at fair value 14,138 Total purchase consideration 43,118 Goodwill 28,980 Net cash outflow arising on acquisition Cash consideration 16,372 Less: cash and cash equivalents acquired 1,676 Total cash consideration 14,696 Unaudited pro-forma business combinations 2020 If the acquisitions in 2020 had occurred on 1 January 2020, the unaudited pro-forma revenue for the Group would have been $39,211 thousand and the Group’s unaudited pro-forma loss would have been $35,972 thousand. 52 GROUP ANNUAL REPORT 2021 NOTE 5 REVENUE Accounting principles The revenue in the Group is generated from different subscriptions. The accounting principles for the different categories of revenue are described below. Sale of subscriptions Subscriptions are sold either through the Group’s websites or through apps. The app itself is for free, but it is possible to sign up for different subscriptions based on a monthly price (through an in-app purchase). These subscriptions are cloud-based. They are presented in different ways for the different customer-types, but the underlying products are the same. The subscriptions are not customized to the individual customers. Subscriptions are mostly prepaid, typically by twelve months or on a monthly basis. Certain subscriptions are sold with a lifetime payment. Life-time payment means a one- time payment for lifetime access. The subscriptions are mainly paid upfront by credit cards based on the contractually agreed subscription period. and content without notifying the customers and customers are exposed to any positive or negative effects from these possible changes. The transaction price is the agreed subscription fee. The subscriptions are the only performance obligation. The design and the content might change during the subscription period and the customers have an expectation that the products will be updated. The Group delivers a subscription which gives the customer access to the subscribed services. Revenue from the subscriptions is recognized over time, over the subscription period. Revenue from lifetime subscriptions is recognized over time based on the expected customer use period of a lifetime subscription. The Group has estimated the expected customer use period to be two years. The expected use period of an active user has been calculated based on the history of the annual subscriptions and customer retention. The Group has As the Group develop and acquire new businesses, these products are over time integrated in relevant subscriptions as part of a customer’s access to the Kahoot! platform. Sale of access to a digital platform - app providers The Group provide app providers access to a digital platform used by schools to provide the students a digital classroom. The customer is the app provider, who get access to their users through the digital platform. The access to the platform is the only performance obligation. The transaction price is a monthly fee (prepaid 12 months up-front) based on the number of schools that are connected to the customer’s (i.e. the app providers) application. The fee is determined based on the number of included connections. If actual connections exceed the number of included connections, the app provider will be invoiced for the actual number of connections and for the remaining number of months in the subscription period. Sale of access to a digital platform – corporate The Group has subscriptions on different products that grant the customers access to platforms that enables the corporate customer to educate, communicate and support their employees. The subscriptions are invoiced through a subscription fee (either invoiced as prepaid 12 months or invoiced on a monthly basis). The services include several performance obligations such as SaaS services, SMS-services, customer support services support, content production and consultancy hours. Setup services differs between the products. Where the set-up services cannot be performed by other providers, the set-up is not a separate performance obligation, but included in the subscription. If the set-up services can be performed by other providers, set- up services are considered to be a separate distinct performance obligation. The subscriptions delivered are cloud-based and the service cannot be used without access to the platforms through the internet. The transaction price is allocated to the different performance obligation according to their fair value. Variable consideration relates to additional services. Revenue from the subscriptions is recognized over NOTE 5 FINANCIAL STATEMENTS | CONSOLIDATED GROUP 53 GROUP ANNUAL REPORT 2021 time according to the subscription period. SMS services and customer support services are recognized over time according to consumption. Revenue related to any additional SMS services, set-up services, content production, support or consultancy services are recognized when the service is performed (point in time recognition). Partner sales Subscriptions are also sold via a third party (though a Partner agreement). The Group provides its subscription to customers from the Partner’s network in exchange for over the services provided to the end customer the Group is considered as the principal for the services delivered. Revenue from partner sales is recognized on a gross basis with any related expenses recognized separately as cost of sales. Sale of apps Kahoot! offers stand-alone apps that customers can purchase through app stores. At the time of purchase the apps are sold and customers have access to the apps with no time limit. The considered a separate performance obligation. Customers are granted a right to use the subscription and the revenue is recognized at a point in time. The sales price is the amount paid in the app store. The app stores are collecting the payment on behalf of the Group. The revenue related to app purchases is recognized at a point in time Sale to schools The Group provides a learning tool to schools which was further developed and transformed in 2021. The subscription includes a locally installed software and a SaaS service that enable the teachers to analyze progress, providing online learning and interaction, including managing access. Further, the student can store its progress and continue working at any computer. Without the cloud functionality the school will not be able to train and follow up their students in a digital way. The contract has been determined to have one performance obligation The subscriptions are recognized over time according to the subscription period. Contract liabilities Contract liabilities relate to advances from customers for licenses paid in advance. Description NOTE 5 CONTINUED FINANCIAL STATEMENTS | CONSOLIDATED GROUP Disaggregating of revenue Res tated USD in thousands 2021 2020 Subscription revenue - recognized over time 90,081 26,030 Other revenue - recognized at point in time 935 3,113 Total revenue from contracts with customers 91,016 29,143 Other operating income 249 175 Total revenue and other operating income 91,265 29,318 Contract assets and contract liabilitie s Res tated USD in thousands 2021 2020 Contract liabilities at 1 January 30,686 6,788 Acquisition of business (note 4) 15,075 5,881 New contract liabilities 104,962 22,370 Revenue reco gniz ed in current year (89,190) (3,943) Exchange dif ferences (761) (410) Contract liabilities at 31 December 60,772 30,686 Disaggregating of revenue Contract assets and contract liablities 54 GROUP ANNUAL REPORT 2021 No contract assets were recognized for the years then ended. Information about major customers The Company does not have single customers that generate 10% or more of the entity’s total revenue. Revenue by geography In presenting the geographic information, revenue has been based on the geographic location of customers. NOTE 5 CONTINUED | NOTE 6 FINANCIAL STATEMENTS | CONSOLIDATED GROUP Revenue by geography Res tated USD in thousands 2021 2020 USA and Canada 49,305 13,242 Europe 28,594 11,639 Asia Pacific 8,185 2,474 Latin America and The Caribbean 3,524 1,227 Africa, The Middle East, and India 1,659 737 Total revenue and other operating income 91,265 29,318 Revenue by geography NOTE 6 EMPLOYEE BENEFIT EXPENSE Accounting principles Pension plans The Group’s Norwegian entities are obligated to follow the stipulations in the Norwegian Mandatory Occupational Pensions Act. The Group’s pension scheme adheres to the requirements, as set in the Act. The pension rights of the Group’s employees vary between the legal entities. plans had 246 members in 2021 and 172 in members in 2020. 2 See note 17 for further description of share-based payments. 3 See note 4 for further description of Clever Options. Specication of employee expense USD in thousands 2021 2020 Salaries and wages 29,910 11,875 Social security tax 1 (4,267) 15,690 Share based payments 2 10,517 3,069 Share based payments Clever Options 3 5,023 - Pens ion expenses 595 304 Other benefits 1,457 687 Total 43,235 31,625 1 Of which social security tax related to share based payments (7,552) 14,210 Average full-time employees 291 139 55 GROUP ANNUAL REPORT 2021 NOTE 7 OTHER OPERATING EXPENSES NOTE 7 | NOTE 8 FINANCIAL STATEMENTS | CONSOLIDATED GROUP Specication of auditor’s fees Other operating cost consists of the following: Other operating cost consists of the following: USD in thousands 2021 2020 IT and hosting services 8,847 3,833 Consulting services 11,062 5,040 Other operating expens es 9,824 1,687 Transaction costs 3,608 540 Listing preparation cost 3,011 453 Total other operating expenses 36,351 11,553 Specification of auditors' fees: USD in thousands 2021 2020 Statutory audit (Deloitte) 1,646 29 Statutory audit (Others) 11 - Other ass u rance s ervices (D eloitte) 53 42 Tax advisory services (Deloitte) 4 4 Other advis ory services (D eloitte) 196 - Total 1,910 75 NOTE 8 INCOME TAX Accounting principles loss, except to the extent that it relates to items recognized in other comprehensive loss or directly in equity. Current tax The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The group measures its tax balances either based on the most likely amount or the expected value, depending on which method provides a better prediction of the resolution of the uncertainty. Deferred tax Deferred tax assets and liabilities are calculated on the basis of temporary differences basis, together with tax losses carried forward at the balance sheet date. Deferred tax assets and liabilities are calculated based on the tax rates and tax legislation that are expected to apply when the assets are realized or the liabilities are settled, based on the tax rates and tax legislation that have been enacted or substantially enacted on the balance sheet date. Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that, at the time of the transaction, affects neither accounting nor available, against which the assets can be utilized. Deferred tax assets and liabilities are not discounted. 56 GROUP ANNUAL REPORT 2021 NOTE 8 CONTINUED FINANCIAL STATEMENTS | CONSOLIDATED GROUP Specication of income tax Specication of deferred tax assets/liabilities recognized in the consolidated balance sheet Specification of income tax USD in thousands 2021 2020 Income tax credit (270) (324) Deferred tax in come (1,568) (331) Total income tax (1,838) (656) USD in thousands Opening balance 2021 Charged to income Business combination Foreign exchange Closing balance 2021 Fixed ass ets (3) (53) (102) - (158) Receivables 18 (21) 2 - (1) Soc. sec. cost share-based payments 3,982 (2,357) - (67) 1,558 Tax losses carried forward 16,104 (2,246) 9,739 (555) 23,042 Intangible assets (5,843) 1,568 (42,493) 480 (46,288) Net deferred tax ass ets /(liabilities ) 14,258 (3,109) (32,854) (142) (21,847) Non-recogniz ed deferred tax as s ets (20,101) 4,677 (9,639) 622 (24,441) Net tax liability (5,843) 1,568 (42,493) 480 (46,288) USD in thousands Opening balance 2020 Charged to income Business combination Foreign exchange Closing balance 2020 Fixed ass ets (7) 4 - - (3) Receivables (1) 19 - - 18 Soc. sec. cost share-based payments 1,061 2,620 - 301 3,982 Tax losses carried forward 7,680 7,373 805 246 16,104 Intangible assets (1,346) 331 (4,674) (154) (5,843) Net deferred tax ass ets /(liabilities ) 7,387 10,347 (3,869) 394 14,258 Non-recogniz ed deferred tax as s ets (8,733) (10,016) (805) (547) (20,101) Net tax liability (1,346) 331 (4,674) (154) (5,843) Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred taxes assets and liabilities relate to income taxes levied by the same taxation authority statements are subject to income tax in the countries where they are domiciled. 57 GROUP ANNUAL REPORT 2021 NOTE 8 CONTINUED FINANCIAL STATEMENTS | CONSOLIDATED GROUP Re conciliation of e ffective tax rate Restated USD in thousands 2021 2020 Profit/(loss) before income tax (3,718) (35,176) Expected income tax assessed at the tax rate for the Parent company 22 % (818) (7,739) Adjusted for the tax effect of the following items: Non-deductible expenses 973 93 Non-taxable income (965) (3) Income tax cred it (270) (324) Share-based payments 3,419 675 Change in unrecogn. deferred tax asset adjusted for business comb. (4,158) 6,514 Change in valuation of acquired deferred tax benefit - 117 Other (19) 11 Income tax (1,838) (656) Effective tax rate 49.4 % 1.9 % Remaining lifetime of tax losses (net tax value) USD in thousands 2021 2020 Denmark 1,128 1,076 Finland 306 267 Norway 10,808 12,691 UK 1,382 1,402 US 9,418 668 Total 23,042 16,104 USD in thousands 2021 2020 0-10 years 306 267 10-20 years 4,114 249 Without time limit 18,622 15,588 Total 23,042 16,104 Reconciliation of effective tax rate Remaining lifetime of tax losses (net tax value) 58 GROUP ANNUAL REPORT 2021 NOTE 9 FINANCIAL STATEMENTS | CONSOLIDATED GROUP NOTE 9 Accounting principles (loss) attributable to ordinary equity holders of the parent company by the weighted average number of ordinary shares outstanding during the period. The calculation of diluted earnings per share is consistent with the calculation of the basic loss per share, but at the same time gives effect to all dilutive potential ordinary shares that were outstanding during the period, by outstanding for the effects of all dilutive potential shares, for example: of the parent company shares is adjusted for changes that would result from the conversion of the dilutive potential ordinary shares. The weighted average number of shares is increased by the weighted average number of additional ordinary shares that would have been outstanding, assuming the conversion of all dilutive potential ordinary shares. 1 The Company has 25,098,471 potential dilutive shares from share options outstanding, that can become dilutive in future periods (2020: 20,081,975). Restated (USD in thousands except share and per share amounts) 2021 2020 Basic earnings (loss) per share (0.00) (0.09) Diluted earnings (loss) per share (0.00) (0.09) Profit/(loss) for the year Used for calculating basic earnings (loss) per share (1,880) (34,520) Used for calculating diluted earnings (loss) per share (1,880) (34,520) Weighted average number of shares used as the denominator in calculating basic earnings (loss) per share 465,851,001 403,356,633 Weighted average number of shares outstanding for diluted earnings (loss) per s hare 1 465,851,001 403,356,633 Description The calculations of earnings (loss) per share attributable to the ordinary equity holders of Kahoot! ASA are based on the below net loss and share data. 59 GROUP ANNUAL REPORT 2021 NOTE 10 INTANGIBLE ASSETS Accounting principles accumulated amortization and any impairment charges. Amortization is calculated on a straight-line basis over the assets’ expected useful life and adjusted for any impairment Internally generated intangible assets Expenditures on research activities, undertaken with the prospect of gaining new Expenditures on development activities are capitalized, if, and only if, all of the following conditions have been demonstrated: the technical feasibility of completing the intangible asset so that it will be available for use or sale; the intention to complete the intangible asset and use or sell it; the ability to use or sell the intangible asset; complete the development and to use or sell the intangible asset; and the ability to measure reliably the expenditure attributable to the intangible asset during its development Capitalized development costs include costs directly attributable to development of the intangible, such as personnel expenses and consultancy services. Otherwise, such expenses are expensed as and when incurred. The amount initially recognized for the internally generated asset is the sum of expenditure above. Where no internally generated intangible asset can be recognized, development expenditure is recognized in the income statement in the period in which it is incurred. The continual enhancement of the Kahoot! platforms is a key strategy to achieve the Group’s goals, as the Kahoot! Group operates in a competitive environment, with well-funded and innovative competitors. Failure to maintain the pace of change and technology development would lead to a reduction in economic returns. The Kahoot! Group continues to invest in the functionality of its products and to improve the experience for all of its users and there is judgment in how to account for this subsequent expenditure on its existing intangible assets. Judgment is required in evaluating whether subsequent development expenditure is to be capitalized as an internally generated intangible asset or expensed as incurred. The key elements of judgment are whether the development project will generate incremental an increase in revenues or reduction in costs. Only those projects that are a substantial The expensed cost related to research and development amounted to USD 10,329 thousand in 2021 (USD 5,574 thousand in 2020). NOTE 10 FINANCIAL STATEMENTS | CONSOLIDATED GROUP 60 GROUP ANNUAL REPORT 2021 NOTE 10 CONTINUED FINANCIAL STATEMENTS | CONSOLIDATED GROUP USD in thousands Internally gen erated intangible assets Technology Brands Cus tomer relationships Other Total Cost Cost at 1 January 2020 4,400 4,216 2,108 - 266 10,990 Additions - - - - - - Acquisition of business (note 4) - 25,010 1,399 - - 26,409 Exchange differences 128 960 107 - 8 1,203 Cost at 31 December 2020 4,528 30,186 3,614 - 274 38,602 Additions 1,477 1,801 - - - 3,278 Acquisition of business (note 4) - 35,975 77,714 33,511 104 147,304 Exchange differences (159) (2,394) (469) (77) (1) (3,100) Cost at 31 December 2021 5,846 65,568 80,859 33,434 377 186,084 Amortization and impairment Accumulated at 1 January 2020 1,760 200 - - 127 2,087 Amortization for the year 821 1,030 28 - 18 1,897 Exchange differences 136 100 2 - 7 245 Accumulated at 31 December 2020 2,717 1,330 30 - 152 4,229 Amortization for the year 1,718 5,723 218 1,164 25 8,848 Exchange differences (19) (243) (12) (3) - (277) Accumulated at 31 December 2021 4,416 6,810 236 1,161 177 12,800 Carrying amount at 31 December 2020 1,811 28,856 3,584 - 122 34,373 Carrying amount at 31 December 2021 1,430 58,758 80,623 32,273 200 173,284 Amortization method Linear Linear Linear Linear Linear Estimated useful life 3-5 years 5-8 years 5 years - Indefinite 10 Years 10 Years 61 GROUP ANNUAL REPORT 2021 NOTE 11 FINANCIAL STATEMENTS | CONSOLIDATED GROUP NOTE 11 GOODWILL AND IMPAIRMENT Accounting principles Goodwill the synergies of the combination that gave rise to the goodwill. A cash-generating As of 31 December 2021, goodwill relates entirely to the acquired companies. Goodwill in the acquisitions of Dragonbox, Poio, Actimo, Drops, Whiteboard and Motimate are all allocated to Kahoot! Group level. Synergies from these acquisitions are expected to be realized at Kahoot! Group level through the integration of these products in the Kahoot! subscriptions. Goodwill in the acquisition of Clever is allocated to Clever and Kahoot! Group level. As of 31 December 2021 Actimo, Drops, Whiteboard and Motimate are separate cash-generating units, but for the purpose of goodwill impairment stemming from the Kahoot! product (Kahoot! excluding acquired business). Clever is a separate cash-generating unit that is tested separately. Impairment of assets Cash-generating units to which goodwill has been allocated, are tested for impairment annually or more frequently if there is any indication that the cash-generating unit may be impaired. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value, generating unit to which the asset belongs. If the recoverable amount of the cash-generating reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. If it is not possible to estimate the recoverable amount of an individual asset, the group determines the recoverable amount of the cash-generating unit to which the asset belongs. An impairment loss recognized for goodwill is not reversed in a subsequent period. are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. available for use are tested for impairment annually by comparing its carrying amount with its recoverable amount. and whenever there is an indication at the end of a reporting period that the asset may be impaired. Description The Group had goodwill and intangible assets related to the acquisitions of DragonBox and Poio in 2019, Actimo and Drops in 2020 and Whiteboard, Motimate and Clever in 2021, see note 4. The Group has also acquired brands as part its intangible assets. Brands continually sell products under the respective acquired brands. 62 GROUP ANNUAL REPORT 2021 NOTE 11 CONTINUED FINANCIAL STATEMENTS | CONSOLIDATED GROUP I mpairment test 2021 Goodwill was tested for impairment at the end of 2021. No impairment losses were Signicant estimation uncertainty growth model with the perpetual growth of 1.5%). The net discounted cash business plans set up by the management based on the business plans resulting in the group’s strategic long-term plans, adjusted for relevant recent changes in internal short-term forecasts. The main input parameters in the model were: Invoiced revenue Operational cost base. Invoiced revenue is the amount invoiced to customers in the relevant period. The model input uses Invoiced revenue of $195 million in 2022, growing to $500 million in 2025. The implied compound annual growth rate in the period 2022 to 2025 is 38%. For 2026, invoiced revenue is estimated growing with approximately 30%. The revenue growth thereafter is captured in the terminal value, see description above on applied method USD in thousands 2020 Acquisition Exchange difference 2021 Kahoot! 77,745 148,687 (6,701) 219,731 Clever - 274,699 - 274,699 Total goodwill 77,745 423,386 (6,701) 494,430 Intangible assets - brands 2,169 77,714 (358) 79,524 The carrying amounts of goodwill and intangible assets operational cost base is derived from the internal business plan set up by management adjusted for relevant changes in internal short-term forecasts, such as actual operational cost base at year-end 2021. The implied compound annual growth rate in the period 2022 to 2026 is 31%. The lower compound annual growth rate on operational cost base compared to invoiced revenue is due to scalability of the business model. The implied cost base for the relevant period) for 2022 through 2026 ranges from 33 to 40%. The required rate of return was calculated using the WACC method. The input data of the WACC was chosen by an individual assessment of each parameter. Information from representative sources and peer groups was used to determine the best estimate. The WACC was calculated to be 8.6% (2020: 8.5%). The same forecast period of the business cases. The following parameters were applied: Risk-free interest rate: 1.4%. Based on weighted 10-year governmental bond derived and weighted from the markets in which Kahoot! derives its revenue from Beta: 1.2. Based on an estimated unlevered beta for peer companies chosen on basis of industry sector levered to the group’s structure. Market Risk Premium: 6.0% (post tax). Based on market sources. Sensitivity analysis The Group has prepared a sensitivity analysis of the impairment tests to changes in the key assumptions which are terminal growth rate and discount rate. Any reasonably possible changes in the key assumptions would not cause the aggregate carrying amount exceeding the recoverable amount. 63 GROUP ANNUAL REPORT 2021 NOTE 12 FINANCIAL STATEMENTS | CONSOLIDATED GROUP NOTE 12 PROPERTY, PLANT AND EQUIPMENT Accounting principles Property, plant and equipment are stated at historical cost, less accumulated depreciation and any impairment charges. Depreciation is calculated on a straight-line basis over the assets’ expected useful life and adjusted for any impairment charges. Ordinary repairs and comparing the disposal proceeds with the carrying amount and are included in operating Property, plant and equipment are reviewed for potential impairment whenever events or changes in circumstances indicate that the carrying amount of an asset exceeds its recoverable amount. The difference between the asset’s carrying amount and its recoverable Property, plant and equipment that have suffered impairment are reviewed for possible reversal of the impairment at each reporting date. USD in thousands Equipment and fixtu res Cost at 1 January 2020 490 Additions 214 Acquisition of business (note 4) 45 Exchange differences (20) Cost at 31 December 2020 729 Additions 216 Acquisition of business (note 4) 361 Exchange differences (12) Cost at 31 December 2021 1,294 Depreciation Accumulated at 1 January 2020 177 Depreciations for the year 125 Exchange differences 18 Accumulated at 31 December 2020 320 Depreciations for the year 351 Exchange differences (10) Accumulated at 31 December 2021 661 Carrying amount at 31 December 2020 409 Carrying amount at 31 December 2021 633 Depreciation meth od Linear Estimated useful life 3 to 5 years 64 GROUP ANNUAL REPORT 2021 NOTE 13 FINANCIAL STATEMENTS | CONSOLIDATED GROUP NOTE 13 LEASING Accounting policies Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices. The lease agreements do not impose any covenants. Assets and liabilities arising from a lease are initially measured on a present value The lease payments are discounted using the lessee’s incremental borrowing rate, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions. To determine the incremental borrowing rate, the Group uses a build-up approach that starts with a risk-free interest rate similar to the length of the lease adjusted for margin relevant for the company and the assets held by the Group. The Group is exposed to potential future increases in variable lease payments based on an index, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset. Lease rate of interest on the remaining balance of the liability for each period. Right-of-use assets are measured at cost comprising the amount of the initial measurement of lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs. Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. The right-of-use assets are reviewed for potential impairment whenever events or changes in circumstances indicate that the carrying amount of the asset exceeds its recoverable amount. Payments associated with short-term leases and all leases of low-value assets term leases are leases with a lease term of 12 months or less. Low-value will need more space going forward and no extension is expected. IT and hosting services are expensed as part of other operating expenses. Hosting agreements for physical servers are within scope of IFRS 16 and deemed to be short-term leases as the contracts can be cancelled within a few months by both parties with no substantial economic penalty. Cloud storage agreement contracts have been evaluated by Description term leases and not recognized as part of the right-of-use assets and lease liabilities. 65 GROUP ANNUAL REPORT 2021 NOTE 13 CONTINUED FINANCIAL STATEMENTS | CONSOLIDATED GROUP Carrying amount of right-of-use assets by class of underlying asset USD in thousands 31.12.2021 31.12.2020 Buildings 2,909 3,165 Cars 19 - Total right-of-use assets 2,928 3,165 Useful life 2-7 years 7 years Depreciation meth od Straight-line Straight-line Carrying amount of right-of-use assets by class of underlying asset $1,542 thousand). Additions to right-of-use assets were $677 thousand in 2021 ($439 thousand in 2020). Lease liabilities Amounts recognized in the consolidated statement of prot or loss Le ase liabilities USD in thousands 31.12.2021 31.12.2020 Current 1,007 964 Non-current 2,044 2,312 Total lease liabilities 3,051 3,276 Amounts recognized in the consolidated statement of profit or loss USD in thousands 2021 2020 Depreciation of right of use asset 1,006 560 Interes t expens e 89 78 Expens es relating to s hort-term leas es 1,247 922 Expenses relating to leases of low-value 10 6 Reconciliation of lease nancing liabilities cash and non-cash changes activities Maturity prole lease liability Maturity profile lease liability USD in thousands Less than 1 year 1-3 years 3-5 years Over 5 years Total contractual cash flows Leas e liabilities 31 Decemb er 20 2 1 2,152 4,358 3,518 1,164 11,192 Leas e liabilities 31 Decemb er 20 2 0 980 1,418 1,070 - 3,468 Reconciliation of lease financing liabilities cash and non-cash changes activities USD in thousands 2021 2020 Opening balance 1 January 3,276 3,162 Cash changes Repayments of lease liabilities (991) (537) Paid interest on lease liabilities (89) (78) Non-cash changes Initial recognition of new leases 677 439 Index regulation 172 166 Accrued in teres t 89 78 Currency translation effects (83) 46 Clos ing balance 31 D ecember 3,051 3,276 66 GROUP ANNUAL REPORT 2021 NOTE 14 FINANCIAL STATEMENTS | CONSOLIDATED GROUP NOTE 14 TRADE RECIEVABLES Accounting policies Trade receivables are initially measured at fair value. Trade receivables are non-interest bearing and trading as current. The receivables are subsequently measured at amortized cost using the effective interest method, if the amortization effect is material, less loss allowance. Due to the short-term nature of the trade receivables, their carrying amount is considered to be the same as the transaction price. Loss allowance and risk exposure measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables. and customer contracts in the previous years. The majority of the Group’s revenue is invoiced annually in advance with immediate payment through automated sales. Receivables are grouped into categories and the collecting once receivables are overdue. Description USD in thousands 2021 2020 Trade receivab les 12,187 3,204 Loss allowance (423) (47) Total trade receivab les , net 11,764 3,157 USD in thousands 2021 2020 Trade receivab les 12,187 3,204 Loss allowance (423) (47) Total trade receivab les , net 11,764 3,157 The basis for the loss allowance was determined as follows: The basis for the loss allowance was determined as follows: 31 December 2021 USD in thousands Current More than 30 days past due More than 60 days past due More than 120 days past due Total Expected los s rate 1.0 % 2.0 % 5.0 % 50.0 % Gross carrying amount - trade receivables 10,427 610 598 553 12,187 Los s allowance - trade receivables 104 12 30 277 423 31 December 2020 USD in thousands Current More than 30 days past due More than 60 days past due More than 120 days past due Total Expected los s rate 1.0 % 2.0 % 5.0 % 50.0 % Gross carrying amount - trade receivables 2,810 234 145 15 3,204 Los s allowance - trade receivables 28 5 7 8 47 Movements in provis ion for expected credit los s es USD in thousands 2021 2020 Balance at the beginning of the year 47 57 Provis ion for expected credit loss es 550 375 Business combinations (note 4) 254 - Amounts written off during the year as uncollectable (426) (375) Impairmen t los s es revers ed (1) (10) Balance at the end of the period 423 47 Movements in provision for expected credit losses 67 GROUP ANNUAL REPORT 2021 NOTE 15 | NOTE 16 FINANCIAL STATEMENTS | CONSOLIDATED GROUP NOTE 15 OTHER CURRENT ASSETS Other current assets consist of the following: Deferred cost of sales relates to app store costs where the related revenue is deferred. Other current assets consist of the following: Res tated USD in thousands 2021 2020 Deferred cos t of s ales 1,706 1,085 Inventory 103 95 Prepaid expens es 2,200 1,320 Other receivables 1,295 747 Total other current assets 5,304 3,247 NOTE 16 CASH AND CASH EQUIVALENTS Accounting policies Cash and cash equivalents include bank deposits. Cash and cash equivalents in foreign currencies are translated at closing rate. The consolidated Cash and cash equivalents USD in thousands 2021 2020 Bank deposits 107,765 256,120 Total cash and cash equivalents 107,765 256,120 Restricted cash included in the above: Withholding tax in relation to employee benefits 698 538 Depos its 703 470 Cash and cash equivalents 68 GROUP ANNUAL REPORT 2021 NOTE 17 FINANCIAL STATEMENTS | CONSOLIDATED GROUP NOTE 17 Accounting policies Share-based payment Equity-settled, share-based payments are measured at fair value (excluding the effect of non-market-based vesting conditions) at the grant date. expense, with a corresponding increase in equity. The vesting period is the At the end of each period, the Group revises its estimates of the number of options that are expected to vest, based on the non-market vesting conditions. It recognizes the impact of the revision to original estimates, The fair value at the grant date is determined using the Black-Scholes-Merton option pricing model, which takes into account the exercise price, the life of the option, the current price of the underlying shares, the expected volatility of the share price, any dividends expected on the shares and risk-free interest rate for the life of the option. The expected share price volatility is based on historical volatility for a selection of comparable listed companies adjusted with a premium taking into account the maturity of the peers compared to the Group. The risk-free interest rate is based on zero-coupon government bonds with a term equal to the expected term of the option being valued. Social security contributions payable in connection with an option grant are considered an integral part of the grant itself. The charges are treated as cash- settled, share-based payments and re-measured at each reporting date. When the options are exercised, the appropriate number of shares are transferred to the employee. The proceeds received from the exercise of the options (net of any directly attributable transaction costs) are credited directly to equity. Share-based payment Clever Options requirements following IFRS 3 – Business Combinations paragraph B55(a) and associated IFRIC (“IFRS Interpretation Committee”) agenda decision, requiring that amounts that an individual employee would forfeit were they to leave service immediately after the acquisition are not part of the business combination, and should instead be recognised as a post-combination expense. The amount attributable to the Clever Options $14,874 thousands, related to the portion of unvested share-based payment awards, subject to forfeitures. The amount accretes over time (included Components of share-based payments in profit and loss USD in thousands 2021 2020 Share options - equity settled (note 6) 10,517 3,069 Share options - Clever options (note 4) 5,023 - Social security tax related to share based payments (note 6) (7,552) 14,210 Total 7,988 17,279 Granted instruments 2021 2020 Quantity 31.12 (instruments) 9,082,000 7,630,500 Quantity 31.12 (shares) 9,082,000 7,630,500 Contractual life 1 4.71 4.63 Exercis e price (NOK) 1 48.42 47.59 Share price (NOK) 1 55.69 42.99 Expected lifetime 1 3.04 2.76 Volatility 1 45% 47% Interes t rate 1 0.91% 0.20% FV per instrument (NOK) 1 20.53 14.48 Vesting conditions service service 1 Weighted average p arameters at grant of ins trument Components of share-based payments in prot and loss 69 GROUP ANNUAL REPORT 2021 NOTE 17 CONTINUED FINANCIAL STATEMENTS | CONSOLIDATED GROUP Components of share-based payments in profit and loss USD in thousands 2021 2020 Share options - equity settled (note 6) 10,517 3,069 Share options - Clever options (note 4) 5,023 - Social security tax related to share based payments (note 6) (7,552) 14,210 Total 7,988 17,279 Granted instruments 2021 2020 Quantity 31.12 (instruments) 9,082,000 7,630,500 Quantity 31.12 (shares) 9,082,000 7,630,500 Contractual life 1 4.71 4.63 Exercis e price (NOK) 1 48.42 47.59 Share price (NOK) 1 55.69 42.99 Expected lifetime 1 3.04 2.76 Volatility 1 45% 47% Interes t rate 1 0.91% 0.20% FV per instrument (NOK) 1 20.53 14.48 Vesting conditions service service 1 Weighted average p arameters at grant of ins trument Share-based payments The Company has had a long-term share incentive scheme for employees in the Company and its subsidiaries since 2015. Employees are, on an individual basis, granted rights to acquire shares (options). Each option gives the holder the right to, but not the obligation, to subscribe to or purchase (at the Company’s choice) one ordinary share in The exercise prices are set by the Company. The share options vest over a four-year period, provided the employee is still employed by the Group. 1 Weighted average parameters at grant of instrument 70 GROUP ANNUAL REPORT 2021 NOTE 17 CONTINUED FINANCIAL STATEMENTS | CONSOLIDATED GROUP 1 share split in June 2020, as further described in note 18. 2 Weighted average remaining contractual life of options outstanding at end of period. 3 Exercise price is determined on basis of price quoted for trades in the Company’s shares prior to the date of the Company’s annual general meeting in 2022. Outstanding instruments: Grant Year Exercis e price (NOK) Number of instruments outstanding 1 Remaining contractual life 2 Number of instruments outstanding 1 Remaining contractual life 2 2017 1.67 7,548,675 0.75 10,471,725 1.75 2018 3.33 223,000 1.75 233,000 2.75 2018 6.67 855,130 1.87 1,029,250 2.87 2019 8.33 467,000 2.67 522,500 3.67 2019 10.00 51,000 2.92 82,500 3.92 2019 13.33 - 0.00 15,000 3.92 2019 16.00 904,250 2.25 1,022,250 3.25 2019 16.67 150,000 2.92 150,000 3.92 2020 20.00 1,248,750 2.37 1,284,750 3.37 2020 28.00 300,000 3.43 300,000 4.43 2020 31.00 75,999 3.51 82,499 4.51 2020 36.00 50,416 3.69 50,416 4.69 2020 37.00 1,403,495 3.76 1,509,744 4.76 2020 50.00 208,998 3.87 208,998 4.87 2020 56.00 2,042,083 3.92 2,414,083 4.92 2020 58.32 685,675 3.92 705,260 4.92 2021 41.00 1,688,250 4.54 - - 2021 48.00 4,575,000 4.25 - - 2021 50.00 296,250 4.92 - - 2021 59.00 1,247,250 4.44 - - 2021 3) 1,077,250 4.92 - - Total 25,098,471 20,081,975 Quantity and weighted average prices Activity As of 1 January 20,081,975 19.68 18,292,125 2.38 Granted during the year 9,082,000 48.42 7,630,500 47.51 Exercised during the year 2 (3,195,100) 2.77 (5,539,347) 1.82 Forfeited during the year (870,404) 44.82 (301,303) 3.93 Outstanding at 31 December 25,098,471 31.37 20,081,975 19.68 Ves ted per 31 D ecember 11,050,863 9,190,141 31 December 2021 31 December 2020 2021 2020 Number of instruments 1 Weighted average exercis e price (NOK) Number of instruments 1 Weighted average exercis e price (NOK) Outstanding instruments 71 GROUP ANNUAL REPORT 2021 NOTE 17 CONTINUED FINANCIAL STATEMENTS | CONSOLIDATED GROUP Outstanding instruments: Grant Year Exercis e price (NOK) Number of instruments outstanding 1 Remaining contractual life 2 Number of instruments outstanding 1 Remaining contractual life 2 2017 1.67 7,548,675 0.75 10,471,725 1.75 2018 3.33 223,000 1.75 233,000 2.75 2018 6.67 855,130 1.87 1,029,250 2.87 2019 8.33 467,000 2.67 522,500 3.67 2019 10.00 51,000 2.92 82,500 3.92 2019 13.33 - 0.00 15,000 3.92 2019 16.00 904,250 2.25 1,022,250 3.25 2019 16.67 150,000 2.92 150,000 3.92 2020 20.00 1,248,750 2.37 1,284,750 3.37 2020 28.00 300,000 3.43 300,000 4.43 2020 31.00 75,999 3.51 82,499 4.51 2020 36.00 50,416 3.69 50,416 4.69 2020 37.00 1,403,495 3.76 1,509,744 4.76 2020 50.00 208,998 3.87 208,998 4.87 2020 56.00 2,042,083 3.92 2,414,083 4.92 2020 58.32 685,675 3.92 705,260 4.92 2021 41.00 1,688,250 4.54 - - 2021 48.00 4,575,000 4.25 - - 2021 50.00 296,250 4.92 - - 2021 59.00 1,247,250 4.44 - - 2021 3) 1,077,250 4.92 - - Total 25,098,471 20,081,975 Quantity and weighted average prices Activity As of 1 January 20,081,975 19.68 18,292,125 2.38 Granted during the year 9,082,000 48.42 7,630,500 47.51 Exercised during the year 2 (3,195,100) 2.77 (5,539,347) 1.82 Forfeited during the year (870,404) 44.82 (301,303) 3.93 Outstanding at 31 December 25,098,471 31.37 20,081,975 19.68 Ves ted per 31 D ecember 11,050,863 9,190,141 31 December 2021 31 December 2020 2021 2020 Number of instruments 1 Weighted average exercis e price (NOK) Number of instruments 1 Weighted average exercis e price (NOK) Quantity and weighted average prices 1 share split in June 2020, as further described in note 18. 2 The instruments were exercised at a share price of NOK 64.00 in 2021 and NOK 35.50 and NOK 46.00 in 2020 72 GROUP ANNUAL REPORT 2021 NOTE 18 FINANCIAL STATEMENTS | CONSOLIDATED GROUP NOTE 18 EQUITY Share capital and share premium Kahoot! ASA only has one class of shares and all shares have the same voting rights. The shareholders are entitled to receive dividends as and when declared and are entitled to one vote per share at General Meetings of the Company. The share capital is fully paid and has a par value of NOK 0.10. At the Annual General Meeting of Kahoot! ASA on 8 June 2021, the Board of Directors were authorized to increase the share capital by up to NOK 9.63 million through the issuance of up to 96.3 million new shares in connection with mergers, acquisitions, equity raises and exercise of share options. The Board of Directors were authorized to acquire treasury shares with a total nominal value of up to NOK 1.4 million. Information relating to the Group’s Employee Option Plan, including details of options issued, exercised and lapsed Total number of shares authorized, issued and outstanding Share capital (NOK) Share capital (USD) Balance at 1 January 2020 129,359,496 12,935,950 1,473,293 Issued during the year 316,732,471 31,673,247 3,420,652 Currency effects from translation of equity - - 334,145 Balance at 31 December 2020 446,091,967 44,609,197 5,228,090 Issued during the year 40,489,512 4,048,951 479,265 Balance at 31 December 2021 486,581,479 48,658,148 5,707,355 Share-based payments reserves The share-based payments reserve represents the offsetting amount to employee expense and any related foreign translation effects. The reserve is fully distributable. Foreign currency translation reserves Exchange differences arising from the translation of the foreign entities are recognized in other comprehensive income and accumulated in a separate reserve within or loss upon disposal of the net investment. 73 GROUP ANNUAL REPORT 2021 The table below shows the development in the Company’s share capital in 2020 and 2021: 1) Transfer from other equity to share capital. Share split 1:3 creating 258,718,992 new shares. 2) Private placement directed towards selected investors (7,500,000 shares were subscribed for at a subscription price of NOK 35.5) and exercise of options for employees (46,875 shares were subscribed for at a subscription price of NOK 6.6667, 15,000 shares were subscribed for at a subscription price of NOK 3.3333, 3,819,900 shares were subscribed for at a subscription price of NOK 1.6667 and 30,000 shares were subscribed for at a subscription price of NOK 1). 3) Share option exercise with NOK strike price: 46/8.3333/6.6667/1.6667/0.58 4) Share option exercise with NOK strike price: 31/20/17.13/16.06/16/13.3333/10/8.3333/6.6667/1.6667 5) Share issue with NOK subscription price: 93.90/64.77/48.08 6) Share issue with NOK subscription price: 64.77/48.08/47.06/38.24/36.42/34.55/32.34/31.63 Date of registration Type of change Change in share capital (NOK) New share capital (NOK) Nominal value (NOK) Total number of shares authorized, issued and outstanding Subscription price per share (NOK) 8 Jun 20 Share capital increase and share split 25,871,899 38,807,849 0.1 388,078,488 1) 16 Jun 20 Share capital increase 1,141,178 39,949,026 0.1 399,490,263 2) 6 Oct 20 Share capital increase 111,496 40,060,523 0.1 400,605,226 46.82 13 Oct 20 Share capital increase 4,462,757 44,523,280 0.1 445,232,798 3) 4 Dec 20 Share capital increase 85,917 44,609,197 0.1 446,091,967 62.63 24 Feb 21 Share capital increase 12,162 44,621,359 0.1 446,213,585 116.30 9 Mar 21 Share capital increase 18,489 44,639,848 0.1 446,398,477 110.39 27 Apr 21 Share capital increase 110,499 44,750,347 0.1 447,503,471 93.90 3 May 21 Share capital increase 18,604 44,768,951 0.1 447,689,510 86.62 20 May 21 Share capital increase 2,500,000 47,268,951 0.1 472,689,510 68.00 10 Sep 21 Share capital increase 319,510 47,588,461 0.1 475,884,610 4) 17 Sep 21 Share capital increase 730,077 48,318,538 0.1 483,185,375 64.77 16 Dec 21 Share capital increase 339,610 48,658,148 0.1 486,581,479 5) 01 Mar 22 Share capital increase 256,967 48,915,115 0.1 489,151,150 6) NOTE 18 CONTINUED FINANCIAL STATEMENTS | CONSOLIDATED GROUP 74 GROUP ANNUAL REPORT 2021 NOTE 19 FINANCIAL ASSETS AND FINANCIAL LIABILITIES Accounting principles Financial liabilities regularly give rise to a redemption obligation in cash or the obligation underlying the liability is discharged, canceled or expired. Determination of fair value of nancial instruments sheet date in an active market, if such markets exist. If an active market does not exist, fair value is established by using valuation techniques that are expected to provide a reliable estimate of the fair value. Financial instruments measured at fair Level 1: Fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Fair value measurements are those derived from inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices). Level 3: Fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are unobservable market data. Critical accounting estimates Measurement of the contingent liabilities relating to the business combinations in 2021 and 2020 required the use of critical accounting estimates when valuing the fair value of the liability. The fair value of contingent liabilities is determined by certain criteria and thresholds achieved after the close of the business combination. The earnout relating to Whiteboard is determined based on invoiced revenue targets churn on existing customer base at the time of acquisition. The earnout relating to Clever is determined based on invoiced revenue and cash-from-operations targets as launching an updated version of the messaging system within the Platform. The earnout relating to Actimo is determined based on the Annual Recurring Revenue (ARR) as of 31 March 2021. The earnout relating to Drops is determined based on invoiced Given the contingent consideration liability will be settled in the future, the discounted discount rate is estimated using the risk-free rate in which the acquired companies operate, market premium, asset beta, small stock and country risk premium. It is NOTE 19 FINANCIAL STATEMENTS | CONSOLIDATED GROUP 75 GROUP ANNUAL REPORT 2021 NOTE 19 CONTINUED FINANCIAL STATEMENTS | CONSOLIDATED GROUP Contingent consideration is presented within other current liabilities and other non-current change in fair value for the year ended 2021 was $2,594 thousand (2020: $848 thousand) The main level 3 inputs used in assessing the fair value of the earnout is forecast of Sensitivity analysis The sensitivity of the fair value of the earnout based on a 25% increase or decrease USD in thousands 25% increas e 2 5 % d ecreas e Change in probability of cash outflow 3,992 (15,301) Change in discount rate (575) 597 Restated USD in thousands 2021 2020 Trade payables 5,359 1,817 Other current liabilities: Contingent consideration (note 4) 40,983 12,162 Deferred cons ideration (note 4 ) 1,757 - Clever options (note 4) 1,299 - Provision for social security tax share based-payment (note 17) 7,080 21,065 Other current payables 7,435 1,884 Total trade payables other current liabilities 63,913 36,928 Other current liabilities: Contingent consideration (note 4) 24,998 15,182 Deferred cons ideration (note 4 ) 15,323 - Other non-current liabilities 244 265 Total other non-current liabilities 40,565 15,447 Description 76 GROUP ANNUAL REPORT 2021 NOTE 19 CONTINUED FINANCIAL STATEMENTS | CONSOLIDATED GROUP Financial instruments Res tated USD in thousands 2021 2020 Financial instruments measured at amortized cost: Trade receivab les 11,764 3,157 Cash and cash equivalents 107,765 256,120 Other current as sets 5,304 3,247 Trade payable (5,359) (1,817) Other non-current liabilities (see note 19) (7,587) (265) Other current liabilities (s ee note 1 9 ) (25,551) (22,949) Net financial instruments measured at amortized cost 86,336 237,493 Financial instruments measured at amortized cost: Other non-current liabilities (see note 19) (24,998) (15,182) Other current liabilities (s ee note 1 9 ) (40,983) (12,162) Net financial instruments measured at fair value through profit or loss (65,981) (27,344) Total net financial instruments 20,355 210,149 77 GROUP ANNUAL REPORT 2021 NOTE 20 FINANCIAL RISK MANAGEMENT liquidity risk and market risk related to foreign exchange rate risk, described further below. Management performs continuous evaluations of these risks and related processes established to manage them within the Group. Market Risk Market Risk - Foreign exchange Estonia, Finland, France, Norway, Spain, United Kingdom and the United States and have costs in local currencies while a major part of the Group’s revenues are in USD. With different functional currencies, the Group will be exposed to currency gains and loss. Fluctuations in exchange rates between NOK, USD, DKK, EUR and GBP could NOTE 20 FINANCIAL STATEMENTS | CONSOLIDATED GROUP Market risk - foreign exchange Future commercial transactions. Recognized and liabilities not denominated in the functional currency. Sensitivity analysis. Credit risk Cash and cash equivalents, and trade receivables Aging analysis. Credit ratings. Liquidity risk Current liability Risk Exposure arising from Measurement The carrying amounts of the foreign currency denominated monetary assets and liabilities at the reporting date are presented in the table below. Foreign currency denominated monetary different than the functional currency of the respective consolidated entities. Monetary assets comprise of trade receivables, other current assets and cash and cash equivalents. Monetary liabilities comprise of trade payables and other liabilities (current and non-current). USD in thousands 2021 2020 EUR 4,416 702 GBP 2,655 58 NOK 9,536 62 SEK 64 96 USD 98 181,259 Total monetary assets 16,769 182,177 USD in thousands 2021 2020 DKK 18 - EUR 995 747 GBP 306 - NOK 10,069 - SEK 75 - USD 12,993 21,150 Total monetary liabilities 24,456 21,897 The aggregate net foreign exchange gains /los ses recogniz ed in profit or loss were: Restated USD in thousands 2021 2020 Exchange gains 17,451 4,973 Exchange loss (18,435) (20,881) (984) (15,908) Total net foreign exchange (losses) recognized in profit before income tax for the period 78 GROUP ANNUAL REPORT 2021 The net foreign exchange loss in 2020 was primarily caused by exchange rate losses on foreign currency cash balances held by the parent company. As of 1 January 2021 (see note 3), the functional currency of the parent Sensitivity analysis If the following currencies had strengthened/weakened against the functional currency of the respective consolidated entities, it would NOTE 20 CONTINUED FINANCIAL STATEMENTS | CONSOLIDATED GROUP The aggregate net foreign exchange gains /loss es recognized in profit or los s were: Restated USD in thousands 2021 2020 Exchange gains 17,451 4,973 Exchange loss (18,435) (20,881) (984) (15,908) Effect on profit or loss: Currency Change in rate 2021 2020 DKK +/- 7 % (1) - EUR +/- 7 % 239 (3) GBP +/- 7 % 164 4 NOK +/- 7 % (37) 4 SEK +/- 7 % (1) 7 USD +/- 7 % (903) 11,208 Effect on equity: Currency Change in rate 2021 2020 DKK +/- 7 % (1) - EUR +/- 7 % 187 (2) GBP +/- 7 % 128 3 NOK +/- 7 % (29) 3 SEK +/- 7 % (1) 5 USD +/- 7 % (704) 8,742 Total net foreign exchange (losses) recognized in profit before income tax for the period USD in thousands USD in thousands The aggregate net foreign exchange gains /loss es recognized in profit or los s were: Restated USD in thousands 2021 2020 Exchange gains 17,451 4,973 Exchange loss (18,435) (20,881) (984) (15,908) Effect on profit or loss: Currency Change in rate 2021 2020 DKK +/- 7 % (1) - EUR +/- 7 % 239 (3) GBP +/- 7 % 164 4 NOK +/- 7 % (37) 4 SEK +/- 7 % (1) 7 USD +/- 7 % (903) 11,208 Effect on equity: Currency Change in rate 2021 2020 DKK +/- 7 % (1) - EUR +/- 7 % 187 (2) GBP +/- 7 % 128 3 NOK +/- 7 % (29) 3 SEK +/- 7 % (1) 5 USD +/- 7 % (704) 8,742 Total net foreign exchange (losses) recognized in profit before income tax for the period USD in thousands USD in thousands Effect on prot or loss Effect on equity Credit risk The Group’s credit risk arises from cash and cash equivalents as well as outstanding before transactions are entered as the majority of customers are either invoiced through automated sales with immediate credit card payments or subscriptions invoiced with credit terms are mostly prepaid upfront. Historic credit losses are low, see also note 14. Cash and cash equivalents: The counterparties for the Group’s cash deposits are large banks which are considered to be very low credit risk. The Group’s assessment is that there are no material credit risks associated with these cash deposits. Liquidity risk The Group monitors liquidity centrally across the group. It is the Group’s strategy to have to the company’s strategic plans. The Group monitors its liquidity risk through a short-term and a long-term liquidity forecast to manage the target of a minimum position of cash and other current liabilities. Public duties relate to accrued payroll expenses and social security taxes payable on employee stock options, where most trade payables and accrued payroll expenses are paid within one year. The maturity of social security taxes payable is dependent on the exercise of employee stock options, for additional details see note 6. USD in thousands 2021 2020 EUR 4,416 702 GBP 2,655 58 NOK 9,536 62 SEK 64 96 USD 98 181,259 Total monetary assets 16,769 182,177 USD in thousands 2021 2020 DKK 18 - EUR 995 747 GBP 306 - NOK 10,069 - SEK 75 - USD 12,993 21,150 Total monetary liabilities 24,456 21,897 The aggregate net foreign exchange gains /los ses recogniz ed in profit or loss were: Restated USD in thousands 2021 2020 Exchange gains 17,451 4,973 Exchange loss (18,435) (20,881) (984) (15,908) Total net foreign exchange (losses) recognized in profit before income tax for the period 79 GROUP ANNUAL REPORT 2021 NOTE 20 CONTINUED | NOTE 21 FINANCIAL STATEMENTS | CONSOLIDATED GROUP NOTE 21 RELATED PARTIES Balances and transactions between the Company and its subsidiaries, which are related parties to the Company, have been eliminated on consolidation, and are not disclosed in this note. Transactions with related parties are carried out on an arm’s length basis, as also required the Public Limited Liability Companies Act, Sections 3-8 and 3-9 respectively. The amounts in the table above are presented within other operating expenses. The Group did not have any related party transactions that are recognized in the balance sheet at the end of each year presented herein. The CEO has 6 months’ notice period and 6 months’ severance pay. In addition to the above, paid remuneration and fees to the Board of directors were $246 thousand in 2021 role in the Board and additional remuneration for any board committee the respective director takes part in. USD in thousands Related party Relationship Type o f s ervices 2021 2020 Glitrafjord AS Owned by the CEO Consulting services 380 285 Hermia AS Owned by member of nomination committee Consulting services 29 27 Total related party profit or loss items 410 312 Key management remuneration USD in thousands CEO Other key mgmt. CEO Other key mgmt. Short-term employee b enef its 290 1,123 187 664 Po s t-employment benef its 3 37 3 11 Other benefits 1 105 1 12 Share bas ed paymen ts received 0 720 0 4,839 Total key management comp. 294 1,985 190 5,525 2020 2021 Key management remuneration Capital management The Group’s objectives for capital management are with regards to cash and cash equivalents in order to support its business and obligations as well as investment opportunities. The Group manages its capital structure in light of changes in economic and actual conditions, and the development in the Group’s underlying business. The Group’s equity ratio was 73% as of 31 December 2021 (76% as of 31 December 2020). The equity ratio is calculated as total equity divided by total assets. The Group does not have any interest-bearing loans or 80 GROUP ANNUAL REPORT 2021 NOTE 21 CONTINUED FINANCIAL STATEMENTS | CONSOLIDATED GROUP 1 Hanoa holds shares through Glitrafjord AS, which is controlled by Hanoa. 2 Furuseth holds shares through Newbrott AS, which is controlled by Furuseth. 3 Håvaldsrud holds shares through Jems Holding AS, which is controlled by Håvaldsrud. 4 Grønntun holds shares through Eikum AS, which is controlled by Grønntun. 5 Rebsdorf holds shares through MREB Invest AS, which is controlled by Rebsdorf. 6 Hansson and Naheta are close associates of SoftBank. SoftBank held 82,269,397 shares as of 31 December 2021. Stefan Blom, member of the board, holds 300,000 options (2020: 300,000 options). Lori Wright and Joanne Bradford, both members of the boards, holds 11,566 Restricted Share Units (RSU) each. Number of shares by key management personnel and the Board of Directors 2021 2020 Shares Shares Eilert Hanoa (CEO) 1 41,208,910 39,208,910 Åsmund Furuseth (CPO) 2 7,606,000 7,606,000 Jostein Håvaldsrud (CTO) 3 370,097 N/A Lars Erik Grønntun (COO-CMO) 4 1,119,960 1,119,960 Ken Østreng (CFO) 45,000 45,000 Mads Rebsdorf (CRO) 5 100,000 100,000 Andreas Hansson (chairman of the Board) 6 - - Akshay Naheta (member of the Board) 6 - - Lori Wright (member of the Board) - - Joanne Bradford (member of the Board) - - Stefan Blom (member of the Board) 50,000 50,000 Sarah Blystad (employee representative member of the Board) - - Alexander Remen (employee repres entative member of the Board) - - The numbers are reflecting the 1:20 share split in July 2018, and 1:3 share split in June 2020. Share options 2021 Granted Vested Exercised Total outstanding Whereof exercise price not decided Weighted average exercise price 2 Remaining contractual life 1 Eilert Hanoa (CEO) - 237,500 - 750,000 - 27.0 2.48 Åsmund Furuseth (CPO) - 50,000 100,000 100,000 - 56.0 3.92 Jostein Håvaldsrud (CTO) 500,000 - - 500,000 125,000 59.0 4.39 Lars Erik Grønntun (COO-CMO) - 312,500 - 750,000 - 24.8 2.37 Ken Østreng (CFO) - 250,000 - 600,000 - 21.3 2.25 Mads Rebsdorf (CRO) - 133,333 - 400,000 - 42.3 3.75 Share options 2020 Granted Vested Exercised Total outstanding Whereof exercise price not decided Weighted average exercise price 2 Remaining contractual life 1 Eilert Hanoa (CEO) 600,000 37,500 - 750,000 150,000 19.2 3.48 Morten Versvik (CTO) 100,000 118,750 (750,000) 250,000 - 23.4 3.02 Åsmund Furuseth (CPO) 100,000 75,000 (500,000) 200,000 - 28.8 3.34 Lars Erik Grønntun (CMO-COO) 750,000 - - 750,000 93,750 20.0 3.37 Ken Østreng (CFO) 600,000 - - 600,000 75,000 16.0 3.25 Mads Rebsdorf (CRO) 400,000 - - 400,000 100,000 37.0 4.75 Number of shared by key management personnel and the Board of Directors 81 GROUP ANNUAL REPORT 2021 Share options held by management For a description of the share-option program, see note 17. 1 Weighted average remaining contractual life of options outstanding at end of period. 2 For outstanding share options where the share option exercise price (NOK) is determined. Exercise price for remaining share options will be based on 20 days Weighted average exercise price (VWAP) prior to the date of the Company’s annual general meeting in 2022 (2020: annual general meeting in 2021). NOTE 21 CONTINUED FINANCIAL STATEMENTS | CONSOLIDATED GROUP Number of shares by key management personnel and the Board of Directors 2021 2020 Shares Shares Eilert Hanoa (CEO) 1 41,208,910 39,208,910 Åsmund Furuseth (CPO) 2 7,606,000 7,606,000 Jostein Håvaldsrud (CTO) 3 370,097 N/A Lars Erik Grønntun (COO-CMO) 4 1,119,960 1,119,960 Ken Østreng (CFO) 45,000 45,000 Mads Rebsdorf (CRO) 5 100,000 100,000 Andreas Hansson (chairman of the Board) 6 - - Akshay Naheta (member of the Board) 6 - - Lori Wright (member of the Board) - - Joanne Bradford (member of the Board) - - Stefan Blom (member of the Board) 50,000 50,000 Sarah Blys tad (employee representative member of the Board) - - Alexander Remen (employee repres entative member of the Board) - - The numbers are reflecting the 1:20 share split in July 2018, and 1:3 share split in June 2020. Share options 2021 Granted Vested Exercis ed Total outstanding Whereof exercis e price not decided Weighted average exercise price 2 Remaining contractual life 1 Eilert Hanoa (CEO) - 237,500 - 750,000 - 27.0 2.48 Åsmund Furuseth (CPO) - 50,000 100,000 100,000 - 56.0 3.92 Jostein Håvaldsrud (CTO) 500,000 - - 500,000 125,000 59.0 4.39 Lars Erik Grønntun (COO-CMO) - 312,500 - 750,000 - 24.8 2.37 Ken Østreng (CFO) - 250,000 - 600,000 - 21.3 2.25 Mads Rebsdorf (CRO) - 133,333 - 400,000 - 42.3 3.75 Share options 2020 Granted Vested Exercis ed Total outstanding Whereof exercis e price not decided Weighted average exercise price 2 Remaining contractual life 1 Eilert Hanoa (CEO) 600,000 37,500 - 750,000 150,000 19.2 3.48 Morten Versvik (CTO) 100,000 118,750 (750,000) 250,000 - 23.4 3.02 Åsmund Furuseth (CPO) 100,000 75,000 (500,000) 200,000 - 28.8 3.34 Lars Erik Grønntun (CMO-COO) 750,000 - - 750,000 93,750 20.0 3.37 Ken Østreng (CFO) 600,000 - - 600,000 75,000 16.0 3.25 Mads Rebsdorf (CRO) 400,000 - - 400,000 100,000 37.0 4.75 82 GROUP ANNUAL REPORT 2021 NOTE 22 INVESTMENTS IN SUBSIDIARIES NOTE 22 FINANCIAL STATEMENTS | CONSOLIDATED GROUP Company Year of acquisition/ incorporation Regis tered office Voting share Ownership share Kahoot! EDU Ltd. 2014 United Kingdom 100% 100% Kahoot! EDU Inc. 2015 United States 100% 100% Poio AS 2019 Norway 100% 100% Kahoot DragonBox AS 2019 Norway 100% 100% Dragonbox Finland Oy 2019 Finland 100% 100% We Want to Know S.a.r.l 2019 France 100% 100% Kahoot! Denmark ApS 2020 D enmark 100% 100% Actimo Communications SL 2020 Spain 100% 100% PlanB Labs Oü 2020 Estonia 100% 100% Kahoot! International AS 2020 Norway 100% 100% Kahoot! International 2 AS 2021 Norway 100% 100% Motimate AS 2021 Norway 100% 100% Digital Teaching Tools Finland Ltd 2021 Finland 100% 100% Clever, Inc 2021 United States 100% 100% 83 GROUP ANNUAL REPORT 2021 NOTE 23 SHAREHOLDER INFORMATION Ownership structure All shares have equal voting rights. NOTE 23 | NOTE 24 FINANCIAL STATEMENTS | CONSOLIDATED GROUP Shareholders Number of shares % of shares Glitrafjord AS 41,208,910 8.5 % The Bank Of New York Mellon Sa/Nv 28,128,472 5.8 % Datum AS 28,000,000 5.8 % Bnp Paribas 20,000,000 4.1 % Creandum Iii Lp 20,000,000 4.1 % J.P. Morgan Securities Plc 20,000,000 4.1 % State Street Bank And Trust Comp 19,903,666 4.1 % State Street Bank And Trust Comp 13,695,091 2.8 % Citigroup Global Markets Inc. 13,500,000 2.8 % Folketrygdfondet 11,561,078 2.4 % Versvik Invest AS 11,338,076 2.3 % The Northern Trust Comp, London Br 9,668,295 2.0 % Newbrott AS 7,606,000 1.6 % Datum Invest AS 7,347,610 1.5 % Euroclear Bank S.A./N.V. 6,919,909 1.4 % State Street Bank And Trust Comp 6,534,777 1.3 % Citibank, N.A. 5,968,704 1.2 % Jpmorgan Chase Bank, N.A., London 5,958,178 1.2 % J.P. Morgan Bank Luxembourg S.A. 5,728,782 1.2 % Nordnet Bank AB 5,373,238 1.1 % Total remaining shareholders 198,140,693 40.7 % Total number of shares 486,581,479 100% Largest shareholders as of 31 December 2021 NOTE 24 CONTINGENCIES AND LEGAL CLAIMS Accounting principles contingent liabilities are disclosed, with the exception of contingent liabilities where the probability of the liability occurring is remote. Description As at 20 April 2022, Kahoot! is involved in two legal proceedings, an employee who was summary dismissal and claiming compensation, and a patent infringement suit in the USA. The outcomes of these proceedings are subject to uncertainty. While acknowledging the uncertainties related to these matters, Kahoot! is of the opinion that based on the information currently available, and as advised by its legal counsel, these matters will be resolved without any material adverse effect individually or in the aggregate on the company in the Group is involved in or has received notice that it may be involved in any Notwithstanding the foregoing, as a result of the nature of its business, Kahoot! and other companies within the Group may from time to time be party to various legal claims and proceedings that arise in the ordinary course of business, including customer, employee, tax and VAT related claims, in which third parties are seeking payment for alleged damages, reimbursement for losses, or indemnity. Furthermore, similar to most technology companies with international presence, Kahoot!’s international operations expose the Group to differences in foreign trademark, trade dress, copyright, patent and other laws concerning proprietary rights and degree of protection, and may from time to time be subjected to claims and allegation for infringement of third party intellectual property rights in the jurisdictions in which it operates. Management with the assistance of legal counsel in various jurisdictions 84 GROUP ANNUAL REPORT 2021 NOTE 24 CONTINUED | NOTE 25 FINANCIAL STATEMENTS | CONSOLIDATED GROUP In line with the accounting principles, and the analysis made regarding the Group’s legal disputes described above, Kahoot! has not accrued provisions for the potential outcome of these matters and the Group considers that no material loss is expected to result from these claims and legal proceedings. NOTE 25 EVENTS AFTER THE REPORTING PERIOD On 28 February 2022, Kahoot! issued at total of 2,569,671 shares in connection with the deferred and contingent considerations arising from the acquisitions in 2020 and 2021. Following the share issue, total number of shares in Kahoot! is 489,151,150. See also note 18. On 18 March 2022, Kahoot! announced the suspension of commercial services and sales in Russia. In addition, Kahoot! is committed to supporting Ukraine and Ukrainian students, schools and educators by offering Kahoot! Edu solutions for free for one year for both K-12 and higher education institutions in Ukraine. Ukraine prior to the invasion and the overwhelming majority of users in both countries are teachers and students using Kahoot!’s free services. Kahoot! assesses 85 GROUP ANNUAL REPORT 2021 NOTE 26 FINANCIAL STATEMENTS | CONSOLIDATED GROUP NOTE 26 NEW AND AMENDED STANDARDS NOT YET ADOPTED BY THE GROUP The amendments to IFRS and new IFRS standards applicable to Kahoot! that have been issued but were not yet effective as of the balance sheet date are listed below. Kahoot! will implement the new standards from their effective date, subject to endorsement a result of any new amendments or standards that are effective for 2022. The impact of changes which are effective from 2023 and beyond are not yet assessed. Amendments to IFRS 3 – Reference to the Conceptual Framework The amendments are effective for annual periods beginning on or after 1 January 2022. They add an exception to the recognition principle of IFRS 3 to avoid the issue of potential “day 2” gains or losses arising for liabilities and contingent liabilities that would be within the scope of IAS 37 Provisions, Contingent Liabilities and Contingent Assets or IFRIC 21 Levies, if incurred separately. The exception requires entities to apply the criteria in IAS 37 or IFRIC 21, respectively, instead of the Conceptual Framework, to determine whether a present obligation exists at the acquisition date. At the same time, the amendments add a new paragraph to IFRS 3 to clarify that contingent assets do not qualify for recognition at the acquisition date. Amendments to IAS 16 – Proceeds before Intended Use The amendments are effective for annual periods beginning on or after 1 January 2022. The amendments prohibit entities from deducting from the cost of an item of property, plant and equipment (PP&E), any proceeds of the sale of items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity recognizes the proceeds Amendments to IAS 37 – Costs of Fullling a Contract The amendments are effective for annual periods beginning on or after 1 January 2022. The Amendments to IAS 1 – Classication of Liabilities as Current or Non-current The amendment is effective for annual periods beginning on or after 1 January noncurrent, depending on the rights that exist at the end of the reporting period. reporting date (e.g. the receipt of a waver or a breach of covenant). The amendment Amendments to IAS 1 – Disclosure of Accounting Policies The amendment is effective for annual periods beginning on or after 1 January 2023. IAS information’ and explain how to identify when accounting policy information is material. They further clarify that immaterial accounting policy information does not need to be disclosed. If it is disclosed, it should not obscure material accounting information. Amendments to IAS 8 – Denition of accounting estimates The amendments are effective for annual periods beginning on or after 1 January 2023. policies from changes in accounting estimates. The distinction is important, because changes in accounting estimates are applied prospectively to future transactions and other future events, but changes in accounting policies are generally applied retrospectively to past transactions and other past events as well as the current period. 86 GROUP ANNUAL REPORT 2021 Amendments to IAS 12 – Deferred Tax related to Assets and Liabilities arising from a Single Transaction The amendments are effective for annual periods beginning on or after 1 January 2023. The amendment requires companies to recognize deferred tax on transactions that, on initial recognition, give rise to equal amounts of taxable and deductible temporary differences. They will typically apply to transactions such as leases of lessees and decommissioning obligations and will require the recognition of additional deferred tax assets and liabilities. Management anticipates that these standards and interpretations will be adopted at the dates stated above provided that the standards and interpretations are NOTE 26 CONTINUED FINANCIAL STATEMENTS | CONSOLIDATED GROUP 87 GROUP ANNUAL REPORT 2021GROUP ANNUAL REPORT 2021 87 PARENT COMPANY ANNUAL FINANCIAL STATEMENTS 2021 FINANCIAL STATEMENTS | PARENT COMPANY USD in thousands Restated Note Operating revenue and operating expenses 2021 2020 3 Operating revenue 55,032 24,504 4 Cost of sales 3,452 2,096 5 Payroll an d related expens es 10,867 23,624 6 Oth er operating expenses 22,465 11,020 Total op erating expens es 36,784 36,740 Operating profit/(loss) before depr. and amortiz. (EBITDA) 18,248 (12,236) 8 D epreciation tangible as s ets 158 110 7 Depreciation intangible assets 1,008 823 Operating profit/(loss) (EBIT) 17,082 (13,169) Financial income and expenses Financial income 1,219 345 9 Interest income from group companies 4,497 154 Financial expenses (15) (186) Net foreign exchange gains (los ses) (1,433) (16,632) Net finan cial income (expens e) 4,268 (16,319) Profit/(loss) before income tax 21,350 (29,488) 13 Income tax 9,509 (5,898) Profit/(loss) for the year 11,841 (23,590) Allocations and transfers 2 Transferred to/from other equity 11,841 (23,590) Total allocations transfers 11,841 (23,590) Parent company statement of prot or loss 88 GROUP ANNUAL REPORT 2021 FINANCIAL STATEMENTS | PARENT COMPANY GROUP ANNUAL REPORT 2021 USD in thousands Restated Note ASSETS 2021 2020 7 Research and development 1,120 1,811 7 Technology 1,801 - 7 Domain 102 204 13 D eferred tax as sets 6,680 14,373 Total intangible assets 9,703 16,388 8 Fixtures and fittings 326 330 Total tangible fixed assets 326 330 9 Investments in subsidiaries 112,634 68,113 9 Loans to group companies 471,107 25,643 Total financial non-current assets 583,741 93,756 Total non-current assets 593,770 110,474 10 Accounts receivables 2,817 944 Prepaid expenses and other current assets 1,794 1,223 11 Cash and cash equivalents 84,150 251,274 Total current assets 88,761 253,441 TOTAL ASSETS 682,531 363,915 EQUITY AND LIABILITIES 2,12 Share capital 5,707 5,228 2.12 Share premium 655,991 359,977 2 Other paid-in equity 17,366 8,497 Total paid-in equity 679,064 373,702 2,12 Other equity (47,600) (59,441) Total equity 631,464 314,261 14 Other non-current liabilities 1,748 - Total non-current liabilities 1,748 - 3 D eferred reven ue 31,729 23,328 9 Liabilities payable to group companies 234 77 14 Accounts payable 3,083 1,524 14 Public duties payable 6,879 16,522 14 Other current liabilities 7,394 8,203 Total current liabilities 49,319 49,654 Total liabilities 51,067 49,654 TOTAL EQUITY AND LIABILITIES 682,531 363,915 Parent company balance sheet Oslo, 20 April 2022 AKSHAY NAHETA Board member LORI VARNER WRIGHT Board member SARAH BLYSTAD Board member EILERT HANOA CEO STEFAN BLOM Board member JOANNE KUHN BRADFORD Board member ALEXANDER REMEN Board member ANDREAS HANSSON Chair of the Board Sign Sign Sign Sign Sign Sign Sign Sign 89 GROUP ANNUAL REPORT 2021 FINANCIAL STATEMENTS | PARENT COMPANY Parent company statement of cash flows USD in thousands Restated Cash flow from operating activities Note 2021 2020 Profit/(loss) before tax 21,351 (29,488) Depreciation and amortization 7,8 1,166 933 Share-based payments expense 5 4,093 1,960 Change in trade receivables 10 (1,873) 212 Change in trade payables 1,559 616 Changes in public duties payable (9,643) 9,686 Changes in intercompany balances (1,174) (1,294) Changes in deferred revenue 8,401 15,280 Changes in other current assets (571) (73) Changes in other liabilities 245 3,449 Items classified as effects of currency rate changes on cash and cash 231 15,544 Net cash flow from operating activities 23,785 16,825 Cash flow from investing activities: Purchases of fixed assets 8 (154) (153) Outflows due to purchases of intangibles 7 (562) - Cash payments acquisitions subsidiaries (20,751) (21,319) Net cash flow from investing activities (21,467) (21,472) Cash flow from financing activities: Change in intercompany loan financing 9 (366,901) (22,902) Net proceeds from equity is s ue 2 196,575 231,693 Net cash flow from financing activities (170,326) 208,791 Effects of currency rate changes on cash and cash equivalents 884 7,692 Net change in bank deposits, cash and equivalents (167,124) 211,836 Bank deposits, cash and equivalents at 1 January 11 251,274 39,438 Bank deposits, cash and equivalents at 31 December 84,150 251,274 Parent company statement of cash ows 90 GROUP ANNUAL REPORT 2021GROUP ANNUAL REPORT 2021 90 PARENT COMPANY ANNUAL FINANCIAL STATEMENTS 2021 NOTES FINANCIAL STATEMENTS | PARENT COMPANY NOTE 1 PARENT COMPANY ACCOUNTING PRINCIPLES General information Kahoot! ASA (the Company or Kahoot!) is a public limited liability company plass 7, 0160 Oslo. Kahoot! ASA is the parent company in the Kahoot! Group, and is listed on Oslo Stock Exchange has the ticker “KAHOT”. Basis of preparation Norwegian Accounting Act and generally accepted accounting principles Change in functional currency As of 1 January 2021, the parent company Kahoot! ASA changed its functional currency from NOK to USD. The change in functional currency was the result of a review of the primary economic environment in which the entity operates, considering both current and prospective economic substance of the underlying transactions entered into by the company. The effect of a change in functional currency is recognized prospectively from the date of change, considered to be 1 January 2021. Kahoot! ASA translated all items into the new functional currency using the exchange rate at the date of the change. The resulting translated amounts for non-monetary items are treated as their historical cost. For the translation of equity items to the new functional currency the exchange rate at the date of the change of functional currency were applied. This means that no additional exchange differences arise on the date of the change. For the subsequent changes, equity items will be translated using their transaction date rate. Classication and evaluation of balance sheet Items Current assets as well as current liabilities include items which fall due for payment of acquisition cost and fair value. Fixed assets are evaluated to acquisition cost and depreciated over the expected economic lifetime. In case of permanent Tangible assets Tangible assets are stated at historical cost less depreciation and adjustments for impairment losses. assessed functional standard of the asset, and the expenses can be measured reliably. All other costs are expensed in the income statement as they occur. Depreciations are charged to the income statement using the straight-line method over estimated utilized lifetime. 91 GROUP ANNUAL REPORT 2021 Intangible assets Expenses relating to the development of intangible assets, including research and development expenses, are capitalized when it becomes probable the company, and the cost of the assets can be reliably measured. Intangible assets that are acquired separately, are recognized at historical cost. Intangible assets with a limited economic life are amortized on a systematic basis. Intangible assets are written down to the recoverable amount if the expected economic Subsidiaries Subsidiaries are valued by the cost method. The investment is valued as cost of acquired shares in the subsidiary, providing that write down is not required. Write down to fair value will be carried out if the reduction in value is caused by circumstances which may not be regarded as incidental. Write downs are reversed when the cause of the initial write down are no longer present. Dividend and other distributions are recognized in the same year as accrued for in the subsidiary. Accounts receivables Accounts receivables and other receivables are recognized at their anticipated realizable value, which is the original invoice amount less an estimated allowance for impairment loss on these receivables. Individual considerations are made with respect to customer receivables and other receivables. Cash and cash equivalents Cash and cash equivalents comprise cash at bank, inclusive of restricted holdings. Foreign currency Foreign currency receivables and liabilities are converted using the year-end exchange rates. Foreign currency transactions are recorded at the exchange rate on the transaction date. Revenue recognition Revenues from software licenses (subscriptions) are recognized in the income statement based on the duration of the contract period. Operational leases Leases for which most of the risk rests with the other contracting party, are costs and charged to the income statement over the contract period. Pension contributions Commitments to contribute pension arrangements to employees are charged to the income statement when they occur. Provisions A provision is recognized when the Company has a present liability (legal or implicit) resulting from a past event and it is probable that a contribution of resources entailing economic payment will be required to settle the liability, and a reliable estimate of the amount of the liability can be made. Provisions are reviewed at each balance sheet date and adjusted to equal to the size of the expense necessary to be free of the liability. When the effect of time Income tax expense The income tax consists of tax payable and changes to deferred tax. Income taxes are recognized in the income statement with exception of taxes from items recognized directly to equity. applicable tax rates at the balance date, and adjustments (if any) of payable taxes from previous years. Provisions are made for deferred taxes based on the balance- oriented liability method, considering temporary differences between the carrying amount and the tax bate of assets and liabilities. Provisions for deferred taxes are based on expected settlements of balance values of assets and liabilities and are calculated with the tax rates approved for future periods at the balance date. NOTE 1 CONTINUED FINANCIAL STATEMENTS | PARENT COMPANY 92 GROUP ANNUAL REPORT 2021 Deferred tax assets are recognized when it is probable that the Company will assets are reduced if it is no longer likely that the asset may be utilized. Cash ow statement Use of estimates the measurement of assets and liabilities and the disclosure of contingent assets and liabilities on the balance sheet date. Actual results can differ from these estimates. Share-based payments and description of accounting policy regarding the share option program in Change in accounting principles Warrants statement prior to 1 January 2020. The effects from the warrants issued and exercised have been adjusted for in the opening balance as of 1 January 2020. The effects are as follows: Other paid in capital relating to warrants is recognized with $575 thousand. loss if the warrants had been recognized in prior periods. No effect on cash balances Deferred revenue During the second half of 2021, the Kahoot! updated and revised the model for estimating the timing within the month in which a sale occurred, compared to the model used for previously reported periods. The effect of the retrospective change in these accounting estimates is an overall deferral in the timing of the revenue recognition that resulted in an increase in the contract liabilities (deferred revenue) and a corresponding decrease in revenue for previously reported period. The updated model had no effect on cash balances. The effect of the change in accounting estimates can be summarized as follows: Opening balance 2020: Contract liabilities (deferred revenue) increased by $716 thousand, offset to other equity of $716 thousand. FY 2020: Deferred revenue increased by $1,720 thousand as per 31 December 2020, offset as reduced recognized revenue (operating revenue) of $1,720 thousand in 2020. Other current asset Increased by $73 thousand as per 31 December 2020, offset as reduced cost of sales of $73 thousand Net effect was an Increased loss for the period (2020) of $1,647 thousand, allocated to other equity with $1,647 thousand. NOTE 1 CONTINUED FINANCIAL STATEMENTS | PARENT COMPANY 93 GROUP ANNUAL REPORT 2021 NOTE 2 FINANCIAL STATEMENTS | PARENT COMPANY NOTE 2 EQUITY USD in thousands Equity Share capital Share premium Other paid-in equity Other equity Total equity Equity at 1 January 2020 1,473 92,621 2,022 (31,972) 64,144 Correction opening balance (see note 1) - - 575 (1,291) (716) Share issuance 3,421 245,876 - - 249,297 Share-based payments - - 5,435 - 5,435 Profit/(loss) of the year - - - (23,590) (23,590) Currency translation differences 334 21,480 465 (2,588) 19,691 Equity at 31 December 2020 5,228 359,977 8,497 (59,441) 314,261 Share issuance 479 296,014 - - 296,493 Share-based payments - - 8,869 - 8,869 Profit/(loss) of the year - - - 11,841 11,841 Equity at 31 December 2021 5,707 655,991 17,366 (47,600) 631,464 94 GROUP ANNUAL REPORT 2021 NOTE 3 FINANCIAL STATEMENTS | PARENT COMPANY NOTE 3 REVENUE Over 90% of revenue in Kahoot! is prepaid annual contracts on software licenses (subscriptions). Revenues from software licenses (subscriptions) are recognized in the income statement based on the duration of the contract period. All deferred revenue will recognized as operating revenue in within twelve months following the sale. Restated USD in thousands 2021 2020 Subscription revenue 55,032 24,504 Total operating revenue 55,032 24,504 Restated USD in thousands 2021 2020 USA and Canada 29,211 12,725 Europe 15,202 7,694 Asia Pacific 6,576 2,326 Latin America and The Caribbean 2,558 1,043 Africa, The Middle East, and India 1,485 716 Total operating revenue 55,032 24,504 NOTE 4 COST OF SALES Cost of sales relate directly to costs incurred on the Company’s sales through the websites or through app stores. The Company partners with payment gateway providers and app stores as a marketing channel to sell their products. The payment gateways charge fees for processing and collecting payments from website sales and app stores collect a percentage ranging from 15% to 30% of revenues earned from the Kahoot! app store sales as a fee for payment collections services provided to the Company. 95 GROUP ANNUAL REPORT 2021 NOTE 5 | NOTE 6 FINANCIAL STATEMENTS | PARENT COMPANY NOTE 5 PAYROLL COSTS, NUMBER OF EMPLOYEES AND BENEFITS The CEO has 6 months’ notice period and 6 months’ severance pay. The CEO was not granted any share options in 2021 (2020: 600,000 share options) and has 750,000 share options outstanding as of 31 December 2021 (2020: 750,000 share options). Reference is made to note 21 in the consolidated In addition to the above, paid remuneration and fees to the Board of Directors were $246 thousand in 2021 (2020: No board remuneration was paid). For details regarding the share option program in Kahoot! Group, The company is obligated to follow the stipulations in the Norwegian Mandatory Occupational Pensions Act. The company’s pension scheme adheres to the requirements, USD in thousands 2021 2020 Wages and salaries 10,695 7,658 Social security tax 4,553 13,238 Pension costs 221 149 Share-based payment (5,081) 1,959 Other personnel costs 479 620 Total payroll exp ens es 10,867 23,624 Average full-time employees 106 83 CEO and Directors' remuneration Salary Pensions Other benefits CEO 290 3 1 NOTE 6 OPERATING EXPENSES Other operating expenses by main category Other operating cost consists of the following: Other operating cost consists of the following: USD in thousands 2021 2020 Consulting 9,227 3,624 Of fice rent 1,102 723 IT and hosting services 5,713 3,688 Other operating expen s es 2,797 963 Intercompany expenses 3,626 2,022 Total 22,465 11,020 Au dit fees USD in thousands 2021 2020 Statutory audit 1,585 22 Other as s urance services 50 41 Tax s ervices - 4 Other advis ory s ervices 194 - Total 1,829 67 Other operating cost consists of the following: USD in thousands 2021 2020 Consulting 9,227 3,624 Of fice rent 1,102 723 IT and hosting services 5,713 3,688 Other operating expen s es 2,797 963 Intercompany expenses 3,626 2,022 Total 22,465 11,020 Au dit fees USD in thousands 2021 2020 Statutory audit 1,585 22 Other as s urance services 50 41 Tax s ervices - 4 Other advis ory s ervices 194 - Total 1,829 67 Specication of auditor’s fees Remuneration to Deloitte: 96 GROUP ANNUAL REPORT 2021 NOTE 7 FINANCIAL STATEMENTS | PARENT COMPANY NOTE 7 INTANGIBLE ASSETS In the second half of 2021, Kahoot! acquired Intellectual Property Rights (IPR) to technology in the table above. The acquired IPR was not ready for use at the end of 2021 and as such there has been no amortization charged in 2021. USD in thousands R&D Technology D omain Total Cost at 1 January 2020 4,400 - 199 4,599 Additions - - - - Exchan ge differences 128 - 5 133 Cost at 31 December 2020 4,528 - 204 4,732 Additions 215 1,801 - 2,016 Exchan ge differences - - - - Cost at 31 December 2021 4,743 1,801 204 6,748 Accumulated at 1 January 2020 1,760 - - 1,760 Amortization for the year 2020 823 - - 823 Exchan ge differences 134 - - 134 Accumulated at 31 December 2020 2,717 - - 2,717 Amortization for the year 906 - 102 1,008 Exchan ge differences - - - - Accumulated at 31 December 2021 3,623 - 102 3,725 Carrying amount at 31 December 2020 1,811 - 204 2,015 Carrying amount at 31 December 2021 1,120 1,801 102 3,023 Estimated useful life 3-5 years 3-5 years 10 years Amortization method Lin ear Linear Linear 97 GROUP ANNUAL REPORT 2021 NOTE 8 FINANCIAL STATEMENTS | PARENT COMPANY NOTE 8 PROPERTY, PLANT AND EQUIPMENT USD in thousands IT equipment Fittings and fixtures Total Cost at 1 January 2020 143 218 361 Additions 121 39 160 Exchange differences 8 6 14 Cost at 31 December 2020 272 264 535 Additions 154 - 154 Exchange differences - - - Cost at 31 December 2021 426 264 689 Accumulated depreciation at 1 January 2020 48 35 83 Depreciation for th e year 62 48 110 Exchange differences 7 5 12 Accumulated depreciation at 31 December 2020 117 88 205 Depreciation for th e year 105 53 158 Exchange differences - - - Accumulated depreciation at 31 December 2021 222 141 363 Carrying amount at 31 December 2020 155 176 330 Carrying amount at 31 December 2021 204 123 326 Estimated useful life 3 years 5 years Depreciation meth od Linear Linear 98 GROUP ANNUAL REPORT 2021 NOTE 9 FINANCIAL STATEMENTS | PARENT COMPANY NOTE 9 INVESTMENT IN SUBSIDIARIES AND TRANSACTIONS AND BALANCES WITH RELATED PARTIES 1 Net result included from the date of acquisition for companies acquired during the year. Net result is translated to USD using average foreign exchange rate for the year. 2 Equity is translated to USD using the closing foreign exchange for the year. Transactions with related parties are carried out on an arm’s length basis; cf. also the Public Limited Liability Companies Act, Sections 3-8 and 3-9. USD in thousands Company Year of acquisition Regis tered office Own ers hip/ voting share Equity 2021 2 Net res ult 2021 1 Book value Kahoot! EDU Ltd 2014 UK 100% 222 16 137 Kahoot! EDU Inc 2015 US 100% (2,141) 49 687 Poio AS 2019 Norway 100% (696) (41) 6,959 Kahoot Dragonbox AS 2019 Norway 100% (4,229) (1,701) 22,506 Kahoot! Denmark ApS 2020 Denmark 100% 3,013 86 38,923 Kahoot! International AS 2020 Norway 100% 1,508 3,621 1,000 Kahoot! International 2 AS 2021 Norway 100% (4,569) (4,507) 2,347 Motimate AS 2021 Norway 100% 2,993 (833) 29,419 Digital Teaching Tools Finland Ltd 2021 Finland 100% 204 154 10,656 USD in thousands Company Receivables Liabilities Interes t Kahoot! EDU Ltd - (227) - Kahoot! EDU Inc 44 - - Poio AS 730 - 16 Kahoot Dragonbox AS 2,540 - 49 Actimo ApS - (7) - Kahoot! International AS 29,151 - 601 Kahoot! International 2 AS 438,642 - 3,831 Total 471,107 (234) 4,497 USD in thousands Company Year of acquisition Regis tered office Ownership/ voting share Equity 2021 2 Net res ult 2021 1 Book value Kahoot! EDU Ltd 2014 UK 100% 222 16 137 Kahoot! EDU Inc 2015 US 100% (2,141) 49 687 Poio AS 2019 Norway 100% (696) (41) 6,959 Kahoot Dragonbox AS 2019 Norway 100% (4,229) (1,701) 22,506 Kahoot! Denmark ApS 2020 Denmark 100% 3,013 86 38,923 Kahoot! International AS 2020 Norway 100% 1,508 3,621 1,000 Kahoot! International 2 AS 2021 Norway 100% (4,569) (4,507) 2,347 Motimate AS 2021 Norway 100% 2,993 (833) 29,419 Digital Teaching Tools Finland Ltd 2021 Finland 100% 204 154 10,656 USD in thousands Company Receivables Liabilities Interes t Kahoot! EDU Ltd - (227) - Kahoot! EDU Inc 44 - - Poio AS 730 - 16 Kahoot Dragonbox AS 2,540 - 49 Actimo ApS - (7) - Kahoot! International AS 29,151 - 601 Kahoot! International 2 AS 438,642 - 3,831 Total 471,107 (234) 4,497 99 GROUP ANNUAL REPORT 2021 NOTE 10 TRADE RECEIVABLES NOTE 10 | NOTE 11 FINANCIAL STATEMENTS | PARENT COMPANY USD in thousands 2021 2020 Accounts receivables 2,857 985 Provisions for bad debt (40) (41) Total 2,817 944 NOTE 11 CASH AND CASH EQUIVALENTS USD in thousands 2021 2020 Cash and cash equivalents 84,150 251,274 Whereof res tricted cas h (1,187) (906) Non res tricted cas h 82,963 250,368 100 GROUP ANNUAL REPORT 2021 NOTE 12 SHARE CAPITAL AND SHAREHOLDER INFORMATION The share capital in the company as of 31 December 2021 consists of: NOTE 12 FINANCIAL STATEMENTS | PARENT COMPANY Total number of shares authorized, issued and outstanding Share capital (NOK) Share capital (USD) Balance at 1 January 202 0 129,359,496 12,935,950 1,473,293 Issued during the year 316,732,471 31,673,247 3,420,652 Currency effects from translation of equity - - 334,145 Balance at 31 December 2020 446,091,967 44,609,197 5,228,090 Issued during the year 40,489,512 4,048,951 479,265 Balance at 31 December 2021 486,581,479 48,658,148 5,707,355 101 GROUP ANNUAL REPORT 2021 NOTE 13 FINANCIAL STATEMENTS | PARENT COMPANY NOTE 13 TAX 1 Prior year corrections for 2020 relates to tax effect of restates described in note 1. $1,647 thousand with tax rate 22% is $361 thousand. Prior year correction for 2021 relates to the timing of taxable deduction of transactions costs arising between 2017 and 2019. 2 As mandated in Norway, all taxable income in Norway must be converted and reported in NOK. Kahoot! ASA from 1 January 2021 has USD as its functional currency (see note 1), as such foreign exchange currency translation difference occur when converting USD to NOK for tax reporting purposes. For 2021 the foreign exchange currency translation resulted in additional taxable income of $19.5 million (NOK 168 million). The effect on income tax was $4.4 million. USD in thousands Specification of income tax: 2021 2020 Changes in deferred tax over profit and loss 9,509 (5,898) Income tax 9,509 (5,898) Reconciliation from nominal to real income tax rate: 2021 2020 Profit/(loss) before taxation 21,350 (29,488) Estimated income tax according to nominal tax rate (22%) 4,697 (6,487) The tax effect of the following items: Share-based payments 900 431 Non-deductible expenses 173 26 Change in valuation earn-out (non-taxable/non-deductible) (175) - Prior year corrections 1 (471) 361 Other items 2 4,385 (229) Income tax 9,509 (5,898) Effective income tax rate 45% 20% Specification of the tax effect of temporary differences and losses carried forward USD in thousands Benefit Liability Benefit Liability Fixed as sets - 4 - 3 Receivables 8 - 566 - Social security contribution on share-based payments 1,301 - 3,332 - Losses carried forward 5,375 - 10,478 - Total 6,684 4 14,376 3 Off-balance s heet deferred tax benefits - - Net deferred benefit/liability in the balance s heet 6,680 14,373 2021 2020 102 GROUP ANNUAL REPORT 2021 Changes in deferred taxes assets in the balance sheet is $7,693 thousand year-on- thousand and changes in deferred tax over equity of negative $1,816 thousand. In 2021, company has achieved a strong revenue growth as result of successful commercial development of the Kahoot! offerings. Kahoot!’s net income included in the balance sheet on the basis of future taxable income. NOTE 13 CONTINUED FINANCIAL STATEMENTS | PARENT COMPANY USD in thousands Specification of income tax: 2021 2020 Changes in deferred tax over profit and loss 9,509 (5,898) Income tax 9,509 (5,898) Reconciliation from nominal to real income tax rate: 2021 2020 Profit/(loss) before taxation 21,350 (29,488) Estimated income tax according to nominal tax rate (22%) 4,697 (6,487) The tax effect of the following items: Share-based payments 900 431 Non-deductible expenses 173 26 Change in valuation earn-out (non-taxable/non-deductible) (175) - Prior year corrections 1 (471) 361 Other items 2 4,385 (229) Income tax 9,509 (5,898) Effective income tax rate 45% 20% Specification of the tax effect of temporary differences and losses carried forward USD in thousands Benefit Liability Benefit Liability Fixed as sets - 4 - 3 Receivables 8 - 566 - Social security contribution on share-based payments 1,301 - 3,332 - Losses carried forward 5,375 - 10,478 - Total 6,684 4 14,376 3 Off-balance s heet deferred tax benefits - - Net deferred benefit/liability in th e balance s heet 6,680 14,373 2021 2020 Specication of the tax effect of temporary differences and losses carried forward 103 GROUP ANNUAL REPORT 2021 NOTE 14 FINANCIAL STATEMENTS | PARENT COMPANY NOTE 14 FINANCIAL LIABILITIES Contingent consideration (earnout) relates to acquisitions in 2021 and 2020. The contingent consideration relating to 2020 was fully settled in 2021. The current part 2023. For details and description of accounting policy regarding the contingent USD in thousands 2021 2020 Trade payables 3,083 1,524 Other current liabilities Contingent consideration 3,938 6,814 Provision for social security tax share-based payment 5,721 15,145 Other current payables 4,614 2,766 Total trade payables other current liabilities 17,356 26,249 Other non-current liabilities Contingent consideration 1,748 - Total other non-current liabilities 1,748 - 104 GROUP ANNUAL REPORT 2021 ALTERNATIVE PERFORMANCE MEASURES FINANCIAL STATEMENTS | ALTERNATIVE PERFORMANCE MEASURES GROUP ANNUAL REPORT 2021 104 In order to enhance the understanding of the Kahoot! Group’s performance, the Group presents certain measures and ratios considered as alternative performance measures Invoiced Revenue, Monthly Recurring Revenue (MRR), Annual Recurring Revenue These APMs are presented as the Group considers them to be important supplemental Group’s operating activities. Please see at right further description of these APMs. to customers in the relevant period. Group expects to receive on a monthly basis from customers. the applicable month multiplied by twelve. income (expenses), income tax, depreciation, and amortization. operating items are material expenses and other material transactions of either a non-recurring nature or special in nature compared to ordinary operational income or expenses and include adjustments for share-based compensation expenses and related payroll taxes, acquisition-related expenses, and listing cost preparations. listing cost and cash effects related to share-based payment. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities (collectively, the “Deloitte organization”). DTTL ( also referred to as “Deloitte Global”) and each of its member firms and related entities are legally separate and independent entities, which cannot obligate or bind each other in respect of third parties. DTTL and each DTTL m ember firm and related entity is liable only for its own acts and omissions, and not those of e ach other. DTTL does not provide services to clients. Please see www.deloitte.no to learn more. © Deloitte AS Registrert i Foretaksregisteret Medlemmer av Den norske Revisorforening Organisasjonsnummer: 980 211 282 Deloitte AS Dronning Eufemias gate 14 Postboks 221 Sentrum NO -0103 Oslo Norway Tel: +47 23 27 90 00 www.deloitte.no To the General Meeting of Kahoot! ASA INDEPENDENT AUDITOR’S REPORT Report on the Audit of the Financial Statements Opinion We have audited the financial statements of Kahoot! ASA, which comprise: • The financial statements of the parent company Kahoot! ASA (the Company), which comprise the balance sheet as at 31 December 2021, the income statement and cash flow statement for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and • The consolidated financial statements of Kahoot! ASA and its subsidiaries (the Group), which comprise the balance sheet as at 31 December 2021, the income statement, statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion: • the financial statements comply with applicable statutory requirements, • the financial statements give a true and fair view of the financial position of the Company as at 31 December 2021, and its financial performance and its cash flows for the year then ended in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway, and • the financial statements give a true and fair view of the financial position of the Group as at 31 December 2021, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the EU. Our opinion is consistent with our additional report to the Audit Committee. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company and the Group as required by laws and regulations and the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit Regulation (537/2014) Article 5.1 have been provided. The Company was listed in March 2021. We were the independent auditor of the Company prior to the listing. We have been the independent auditor of the Company for 1 year after the listing, including the year of listing. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial page 2 Independent Auditor's Report - Kahoot! ASA statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Business Combination – Clever Inc. Key audit matter How the matter was addressed in the audit During 2021 the Group acquired three businesses. These acquisitions varied in size and complexity. With reference to disclosures in note 4, the acquisitions of Clever Inc. (“Clever”) was the most significant and also the most complex transaction. The acqui sition of Clever was closed on September 1, 2021, for a consideration of USD 492.5 million. Management has completed a provisional purchase price allocation for Clever (“PPA”), in order to allocate the consideration between the various assets and liabilit ies recognised following the transactions. Identifiable assets and liabilities acquired in the busines s combination are recognised at fair values on the acquisition date. Judgment is required when identifying and valuing the assets and liabilities acquired, including valuing the intangible assets. Management engaged external fair value specialist to perform the valuation of certain assets of Clever. With respect to the acquisition of Clever, acquired intangible as sets included technology valued at USD 31 million, brand valued at USD 73 million and customer relations valued at USD 32 million. The goodwill arising for the acquisition amounted to USD 395.3 million. The key judgments in determining the fair value of th e intangible assets acquired in the transaction were Weighted Average Cost of Capital, Churn and Royalty Rate. We assess the purchase price allocations to be a key audit matter due to the significant judgment required related to identification and valuatio n of intangible assets acquired. • In responding to the identified key audit matter, we completed the following audit procedures: • we evaluated the process used by management to identify and value the assets and liabilities acquired including assessing the design and implementation of relevant controls over business acquisitions. • we obtained the purchase agreements and assessed whether the transactions have been accounted for in accordance with IFRS 3 Business Combinations. • we obtained and assessed the work performed on the purchase price allocation by management’s external fair value specialist, focusing on the valuation of intangible assets as follows; • we assessed the fair value adjustments and reconciled back to the purchase price allocation, • with the assistance of our internal value specialists, we assessed the valuation methodology and assumptions used, • we recalculated the values provided by management’s external fair value specialist utilizing our internal valuation models, and • we have assessed management’s external fair value specialist’s requisite competency and experience to assist management in the preparation of the purchase price allocations. • We have also reviewed the disclosures included in note 3 and 4 of the consolidated financial statements. Goodwill Key audit matter How the matter was addressed in the audit In the Group’s consolidated financial statements as of December 31, 2021, the carrying value of goodwill amounted to USD 494.4 million. For further information and a description of estimates and judgments involved related to assessments of the carrying va lue of goodwill, refer We assessed the design and implementation of the controls established by management related to assessment of the recoverability of goodwill. We assessed and challenged, by reference to past performance, externally derived data and forecast for economic factors, the reasonableness of management’s judgements, in particular: page 3 Independent Auditor's Report - Kahoot! ASA to note 11 in the Group’s consolidated financial statements. According to IFRS as adopted by the EU, the goodwill is required to be tested for impairment annually or whenever events or changes in circumstances indicate that the carr ying value may not be recoverable. The recoverability of the goodwill is dependent on assumptions about forecast of future cash flows, specifically forecast revenue, operating margin and long -term growth rates along with discount rates. The outcome of imp airment assessments could vary significantly if different assumptions were applied. We assessed goodwill to be a key audit matter due to the importance of assumptions and level of uncertainties and judgements involved . • the cash flow forecast; • the long-term growth rate; and We have evaluated the assumptions and methodologies used and tested the mathematical integrity of the models. We utilized our internal fair value specialists to assess the discount rates used. We have also reviewed the disclosures included in note 11 of the consolidated financial statements. Other Information The Board of Directors and the Managing Director (management) are responsible for the information in the Board of Directors’ report and the other information accompanying the financial statements. The other information comprises information in the annual report, but does not include the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the information in the Board of Directors’ report nor the other information accompanying the financial statements. In connection with our audit of the financial statements, our responsibility is to read the Board of Directors’ report and the other information accompanying the financial statements. The purpose is to consider if there is material inconsistency between the Board of Directors’ report and the other information accompanying the financial statements and the financial statements or our knowledge obtained in the audit, or whether the Board of Directors’ report and the other information accompanying the financial statements otherwise appears to be materially misstated. We are required to report if there is a material misstatement in the Board of Directors’ report or the other information accompanying the financial statements. We have nothing to report in this regard. Based on our knowledge obtained in the audit, it is our opinion that the Board of Directors’ report • is consistent with the financial statements and • contains the information required by applicable legal requirements. Our opinion on the Board of Director’s report applies correspondingly to the statements on Corporate Governance and Corporate Social Responsibility. Responsibilities of Management for the Financial Statements Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway, and for the preparation and true and fair view of the consolidated financial statements of the Group in accordance with International Financial Reporting Standards as adopted by the EU, 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 and the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern. The financial statements of the Company use the going concern basis of accounting insofar as it is not likely that the enterprise will cease operations. The consolidated financial statements of the Group use the going concern basis of accounting page 4 Independent Auditor's Report - Kahoot! ASA unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about 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 will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment 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. We 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 or the Group'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, 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 and the Group'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 and the Group to cease to continue as a going concern. • evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves a true and fair view. • obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with the Board of Directors 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. We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the Board of Directors, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. page 5 Independent Auditor's Report - Kahoot! ASA Report on Other Legal and Regulatory Requirements Report on compliance with Regulation on European Single Electronic Format (ESEF) Opinion We have performed an assurance engagement to obtain reasonable assurance that the financial statements with file name 2549004957SZTRN8CW77-2021-12-31-en.zip have been prepared in accordance with Section 5-5 of the Norwegian Securities Trading Act (Verdipapirhandelloven) and the accompanying Regulation on European Single Electronic Format (ESEF). In our opinion, the financial statements have been prepared, in all material respects, in accordance with the requirements of ESEF. Management’s Responsibilities Management is responsible for preparing, tagging and publishing the financial statements in the single electronic reporting format required in ESEF. This responsibility comprises an adequate process and the internal control procedures which management determines is necessary for the preparation, tagging and publication of the financial statements. Auditor’s Responsibilities Our responsibility is to express an opinion on whether the financial statements have been prepared in accordance with ESEF. We conducted our work in accordance with the International Standard for Assurance Engagements (ISAE) 3000 – “Assurance engagements other than audits or reviews of historical financial information”. The standard requires us to plan and perform procedures to obtain reasonable assurance that the financial statements have been prepared in accordance with the European Single Electronic Format. As part of our work, we performed procedures to obtain an understanding of the company’s processes for preparing its financial statements in the European Single Electronic Format. We evaluated the completeness and accuracy of the iXBRL tagging and assessed management’s use of judgement. Our work comprised reconciliation of the financial statements tagged under the European Single Electronic Format with the audited financial statements in human- readable format. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Oslo, 20 April 2022 Deloitte AS Reidar Ludvigsen State Authorised Public Accountant This document is signed electronically. 105 GROUP ANNUAL REPORT 2021 for the year ended 31 December 2021 have been prepared in accordance with the Norwegian Accounting Act, that they of the Company and the Group and includes a description of the principle risks and uncertainties that they face. RESPONSIBILITY STATEMENT 20 April 2022 AKSHAY NAHETA Board member LORI VARNER WRIGHT Board member SARAH BLYSTAD Board member EILERT HANOA CEO STEFAN BLOM Board member JOANNE KUHN BRADFORD Board member ALEXANDER REMEN Board member ANDREAS HANSSON Chair of the Board Sign Sign Sign Sign Sign Sign Sign Sign 106 GROUP ANNUAL REPORT 2021 Kahoot! ASA Fridtjof Nansens plass 7 0160 OSLO Norway www.kahoot.com Incorporated in: Norway Domicile: Norway GROUP ANNUAL REPORT 2021 2549004957SZTRN8CW772021-01-012021-12-312549004957SZTRN8CW772020-01-012020-12-312549004957SZTRN8CW772021-12-312549004957SZTRN8CW772020-12-312549004957SZTRN8CW772019-12-31ifrs-full:IssuedCapitalMemberifrs-full:PreviouslyStatedMember2549004957SZTRN8CW772019-12-31ifrs-full:IssuedCapitalMemberifrs-full:IncreaseDecreaseDueToChangesInAccountingPolicyAndCorrectionsOfPriorPeriodErrorsMember2549004957SZTRN8CW772019-12-31ifrs-full:IssuedCapitalMember2549004957SZTRN8CW772020-01-012020-12-31ifrs-full:IssuedCapitalMember2549004957SZTRN8CW772020-12-31ifrs-full:IssuedCapitalMember2549004957SZTRN8CW772019-12-31ifrs-full:SharePremiumMemberifrs-full:PreviouslyStatedMember2549004957SZTRN8CW772019-12-31ifrs-full:SharePremiumMemberifrs-full:IncreaseDecreaseDueToChangesInAccountingPolicyAndCorrectionsOfPriorPeriodErrorsMember2549004957SZTRN8CW772019-12-31ifrs-full:SharePremiumMember2549004957SZTRN8CW772020-01-012020-12-31ifrs-full:SharePremiumMember2549004957SZTRN8CW772020-12-31ifrs-full:SharePremiumMember2549004957SZTRN8CW772019-12-31ifrs-full:ReserveOfSharebasedPaymentsMemberifrs-full:PreviouslyStatedMember2549004957SZTRN8CW772019-12-31ifrs-full:ReserveOfSharebasedPaymentsMemberifrs-full:IncreaseDecreaseDueToChangesInAccountingPolicyAndCorrectionsOfPriorPeriodErrorsMember2549004957SZTRN8CW772019-12-31ifrs-full:ReserveOfSharebasedPaymentsMember2549004957SZTRN8CW772020-01-012020-12-31ifrs-full:ReserveOfSharebasedPaymentsMember2549004957SZTRN8CW772020-12-31ifrs-full:ReserveOfSharebasedPaymentsMember2549004957SZTRN8CW772019-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMemberifrs-full:PreviouslyStatedMember2549004957SZTRN8CW772019-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMemberifrs-full:IncreaseDecreaseDueToChangesInAccountingPolicyAndCorrectionsOfPriorPeriodErrorsMember2549004957SZTRN8CW772019-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember2549004957SZTRN8CW772020-01-012020-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember2549004957SZTRN8CW772020-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember2549004957SZTRN8CW772019-12-31ifrs-full:RetainedEarningsMemberifrs-full:PreviouslyStatedMember2549004957SZTRN8CW772019-12-31ifrs-full:RetainedEarningsMemberifrs-full:IncreaseDecreaseDueToChangesInAccountingPolicyAndCorrectionsOfPriorPeriodErrorsMember2549004957SZTRN8CW772019-12-31ifrs-full:RetainedEarningsMember2549004957SZTRN8CW772020-01-012020-12-31ifrs-full:RetainedEarningsMember2549004957SZTRN8CW772020-12-31ifrs-full:RetainedEarningsMember2549004957SZTRN8CW772019-12-31ifrs-full:PreviouslyStatedMember2549004957SZTRN8CW772019-12-31ifrs-full:IncreaseDecreaseDueToChangesInAccountingPolicyAndCorrectionsOfPriorPeriodErrorsMember2549004957SZTRN8CW772019-12-312549004957SZTRN8CW772021-01-012021-12-31ifrs-full:IssuedCapitalMember2549004957SZTRN8CW772021-12-31ifrs-full:IssuedCapitalMember2549004957SZTRN8CW772021-01-012021-12-31ifrs-full:SharePremiumMember2549004957SZTRN8CW772021-12-31ifrs-full:SharePremiumMember2549004957SZTRN8CW772021-01-012021-12-31ifrs-full:ReserveOfSharebasedPaymentsMember2549004957SZTRN8CW772021-12-31ifrs-full:ReserveOfSharebasedPaymentsMember2549004957SZTRN8CW772021-01-012021-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember2549004957SZTRN8CW772021-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember2549004957SZTRN8CW772021-01-012021-12-31ifrs-full:RetainedEarningsMember2549004957SZTRN8CW772021-12-31ifrs-full:RetainedEarningsMemberiso4217:USDiso4217:USDxbrli:shares
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