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Engage BDR Ltd. – ‘20FR12B/A’ on 4/7/21

On:  Wednesday, 4/7/21, at 7:57pm ET   ·   As of:  4/8/21   ·   Accession #:  1493152-21-8240   ·   File #:  1-39851

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 4/08/21  Engage BDR Ltd.                   20FR12B/A   4/07/21   20:48M                                    M2 Compliance LLC/FA

Document/Exhibit                   Description                      Pages   Size 

 1: 20FR12B/A   Amendment to Registration Statement by a Foreign    HTML   1.66M 
                Non-Canadian Issuer                                              
 2: EX-1.1      Underwriting Agreement or Conflict Minerals Report  HTML    431K 
 3: EX-2.1      Plan of Acquisition, Reorganization, Arrangement,   HTML    295K 
                Liquidation or Succession                                        
 4: EX-3.1      Articles of Incorporation/Organization or Bylaws    HTML      8K 
 5: EX-3.2      Articles of Incorporation/Organization or Bylaws    HTML      8K 
 6: EX-3.3      Articles of Incorporation/Organization or Bylaws    HTML     14K 
 7: EX-3.4      Articles of Incorporation/Organization or Bylaws    HTML     14K 
 8: EX-3.5      Articles of Incorporation/Organization or Bylaws    HTML     14K 
 9: EX-3.6      Articles of Incorporation/Organization or Bylaws    HTML     14K 
10: EX-3.7      Articles of Incorporation/Organization or Bylaws    HTML     14K 
11: EX-4.1      Instrument Defining the Rights of Security Holders  HTML   1.00M 
12: EX-4.2      Instrument Defining the Rights of Security Holders  HTML   1.00M 
13: EX-5.1      Opinion of Counsel re: Legality                     HTML     13K 
14: EX-5.2      Opinion of Counsel re: Legality                     HTML     14K 
15: EX-5.3      Opinion of Counsel re: Legality                     HTML     13K 
16: EX-5.4      Opinion of Counsel re: Legality                     HTML     17K 
17: EX-5.5      Opinion of Counsel re: Legality                     HTML     10K 
18: EX-8.1      Opinion of Counsel re: Tax Matters                  HTML      8K 
19: EX-9        Voting Trust Agreement                              HTML     10K 
20: EX-11       Statement re: the Computation of Earnings Per       HTML     30K 
                Share                                                            

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No.1 to FORM 20-F

(Mark One)

OR

For the fiscal year ended December 31, 2020

OR

For the transition period from            to            

OR

Date of event requiring this shell company report _______________

Commission file number: 001-39001

Engage BDR Ltd

(Exact Name of Registrant as Specified in Its Charter)

N/A

(Translation of Registrant’s Name Into English)

Australia

(Jurisdiction of Incorporation or Organization)

Scottish House Level 4

90 William Street

Melbourne Victoria 300

Australia

(Address of Principal Executive Offices)

Mr. Ted Dhanik Executive Chairman

8581 Santa Monica Blvd. #12

West Hollywood, California

90069

ted@engage-bdr.com

(310) 954-0751

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the registration statement:

As of December 31, 2020, there were 2,370,744,548 ordinary shares issued and outstanding, AU$0.0060 per ordinary share.

As of December 31, 2019, there were 712,394,973 ordinary shares issued and outstanding, AU$0.022 per ordinary share.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

[  ] Yes [X] No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

[  ] Yes [X] No

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

[  ] Yes [X] No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

[X] Yes [  ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. [  ]

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

[  ]

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

[  ] Item 17 [  ] Item 18

If this is an registration statement, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

[  ] Yes [X] No

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

[  ] Yes [  ] No

TABLE OF CONTENTS

INTRODUCTION

Unless otherwise indicated or the context otherwise requires, references in this registration statement on Form 20-F to:

FORWARD-LOOKING STATEMENTS

This registration statement on Form 20-F contains forward-looking statements that reflect our current expectations and views of future events. Known and unknown risks, uncertainties and other factors, including those listed under “Item 3. Key Information—D. Risk Factors”, may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements.

You can identify some of these forward-looking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to,” “potential,” “continue” or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events that we believe may affect our financial condition, results of operations, business strategy and financial needs. Factors that could cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements, include, but are not limited to, the factors summarized below:

You should read this registration statement and the documents that we refer to in this registration statement and have filed as exhibits to this registration statement completely and with the understanding that our actual future results may be materially different from what we expect. Other sections of this registration statement discuss factors which could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We qualify all of our forward-looking statements by these cautionary statements.

You should not rely upon forward-looking statements as predictions of future events. The forward-looking statements made in this registration statement relate only to events or information as of the date on which the statements are made in this registration statement. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION

A. Selected Financial Data

The following table presents the selected consolidated financial information for our business. You should read the following information in conjunction with Item 5 “Operating and Financial Review and Prospects” below. The following data for the years ended

December 31, 2018, 2019 and 2020 and as of December 31, 2018, 2019 and 2020 have been derived from our audited consolidated financial statements for those years, which were prepared in accordance with IFRS, and should be read in conjunction with those statements, which are included in this registration statement beginning on page F-1.

Selected Consolidated Balance Sheet Data: 

Selected Consolidated Statements of Operations Data: 

Selected Consolidated Cash Flow Data:

B. Capitalization and Indebtedness

Not applicable.

C. Reasons for the Offer and Use of Proceeds

Not applicable.

D. Risk Factors

Risks Related to Our Business

An investment in our ordinary shares involves a high degree of risk. You should carefully consider the following information about these risks, together with the other information appearing elsewhere in this registration statement, before deciding to invest in our ordinary shares. The occurrence of any of the following risks could have a material adverse effect on our business, financial condition, results of operations and future growth prospects. In these circumstances, the market price of our ordinary shares could decline, and you may lose all or part of your investment.

We have a limited operating history. There is no assurance that our future operations will result in profitable revenues. If we cannot generate sufficient revenues to operate profitably, we may suspend or cease operations.

Given our limited operating history, there can be no assurance that we can build our business such that we can earn a significant profit or any profit at all. The future of our business will depend upon our ability to obtain and retain customers and when needed, obtain sufficient financing and support from creditors, while we strive to achieve and maintain profitable operations. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the operations that we undertake. There is no history upon which to base any assumption that our business will prove to be successful, and there is significant risk that we will not be able to generate the sales volumes and revenues necessary to achieve profitable operations. To the extent that we cannot achieve our plans and generate revenues which exceed expenses on a consistent basis, our business, results of operations, financial condition and prospects will be materially adversely affected.

Our management team has limited public company experience. We have never operated as a public company in the United States. Our entire management team, as well as other company personnel, will need to devote substantial time to compliance, and may not effectively or efficiently manage our transition into a public company. If we are unable to effectively comply with the regulations applicable to public companies or if we are unable to produce accurate and timely financial statements, which may result in material misstatements in our financial statements or possible restatement of financial results, our stock price may be materially adversely affected, and we may be unable to maintain compliance with the listing requirements of Nasdaq. Any such failures could also result in litigation or regulatory actions by the SEC or other regulatory authorities, loss of investor confidence, delisting of our securities, harm to our reputation and diversion of financial and management resources from the operation of our business, any of which could materially adversely affect our business, financial condition, results of operations and growth prospects. Additionally, the failure of a key employee to perform in his or her current position could result in our inability to continue to grow our business or to implement our business strategy.

We operate in a highly competitive market and the size and resources of many of our competitors may allow them to compete more effectively than we can, preventing us from achieving profitability.

The market for our products is highly competitive. Competition may result in pricing pressures, reduced profit margins or lost market share, or a failure to grow our market share, any of which could substantially harm its business and results of operations. We compete with other companies who are focused on building their brands across multiple product and consumer categories. Across our business, we face competitors who are constantly monitoring and attempting to anticipate consumer tastes and trends, seeking ideas which will appeal to consumers and introducing new products that compete with our products for consumer acceptance and purchase. Many of our competitors have significant competitive advantages, including longer operating histories, larger and broader customer bases, less-costly production, more established relationships with a broader set of suppliers, greater brand recognition and greater financial, research and development, marketing, distribution and other resources than we do.

In addition to existing competitors, the barriers to entry for new participants in the entertainment industry and in the consumer products industry are low, and the increasing importance of digital media, and the heightened connection between digital media and consumer interest, has further increased the ability for new participants to enter our markets, and has broadened the array of companies we may compete with. New participants with a popular product idea or entertainment property can gain access to consumers and become a significant source of competition for our products in a very short period of time. These existing and new competitors may be able to respond more rapidly than us to changes in consumer preferences. Our competitors’ products may achieve greater market acceptance than our products and potentially reduce demand for our products, lower our revenues and lower our profitability.

Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel.

We are highly dependent on the principal members of our executive team listed in this report, the loss of whose services may adversely impact the achievement of our objectives. Recruiting and retaining other qualified employees for our business, including scientific and technical personnel, will also be critical to our success. Competition for skilled personnel is intense and the turnover rate can be high. We may not be able to attract and retain personnel on acceptable terms given the competition among numerous companies for individuals with similar skill sets. The inability to recruit or loss of the services of any executive or key employee could adversely affect our business.

We will need to expand our organization, and we may experience difficulties in managing this growth, which could disrupt our operations.

As of December 31, 2020, we had employees, all of which were full-time employees. As our company matures, we expect to expand our employee base to increase our sales and marketing department. Future growth would impose significant additional responsibilities on our management, including the need to identify, recruit, maintain, motivate and integrate additional employees, consultants and contractors. Also, our management may need to divert a disproportionate amount of its attention away from our day-to- day activities and devote a substantial amount of time to managing these growth activities. We may not be able to effectively manage the expansion of our operations, which may result in weaknesses in our infrastructure, give rise to operational mistakes, loss of business opportunities, loss of employees and reduced productivity among remaining employees. Future growth could require significant capital expenditures and may divert financial resources from other projects, such as the development of our existing or future product candidates. If our management is unable to effectively manage our growth, our expenses may increase more than expected, our ability to generate and grow revenue could be reduced, and we may not be able to implement our business strategy. Our future financial performance and our ability to commercialize our product candidates, if approved, and compete effectively will depend, in part, on our ability to effectively manage any future growth.

We face risks related to health epidemics, severe weather conditions and other outbreaks, in particular, the current escalating coronavirus pandemic.

In recent years, there have been outbreaks of epidemics in various countries. Recently, there was an outbreak of a novel strain of coronavirus (COVID-19), which has spread rapidly to many parts of the world. The outbreak has resulted in quarantines, travel restrictions, and the temporary closure of stores and facilities throughout the world. In March 2020, the World Health Organization declared COVID- 19 a pandemic.

Our results of operations will likely be adversely, and may be materially, affected, to the extent that the COVID-19 or any other epidemic harms the Chinese and global economy in general. Any potential impact to our results will depend on, to a large extent, future developments and new information that may emerge regarding the duration and severity of the COVID-19 outbreak and the actions taken by government authorities and other entities to contain the COVID-19 outbreak or treat its impact, almost all of which are beyond our control. Potential impacts include, but are not limited to, the following:

Because of the uncertainty surrounding the COVID-19 outbreak, the financial impact related to the outbreak cannot be reasonably estimated at this time, but our consolidated results for the full year 2020 may be adversely affected.

In general, our business could be adversely affected by the effects of epidemics, including, but not limited to, COVID-19, avian influenza, severe acute respiratory syndrome (SARS), the influenza A virus, Ebola virus, severe weather conditions such as a snowstorm, flood or hazardous air pollution, or other outbreaks. In response to an epidemic, severe weather conditions, or other outbreaks, government and other organizations may adopt regulations and policies that could lead to severe disruption to our daily operations, including temporary closure of our offices and other facilities. These severe conditions may cause us and/or our partners to make internal adjustments, including but not limited to, temporarily closing down business, limiting business hours, and setting restrictions on travel and/or visits with clients and partners for a prolonged period of time. Various impacts arising from severe conditions may cause business disruption, resulting in material, adverse impact to our financial condition and results of operations.

Risks Related to Intellectual Property

If we are unable to adequately protect our intellectual property rights, or if we are accused of infringing on the intellectual property rights of others, our competitive position could be harmed or we could be required to incur significant expenses to enforce or defend our rights.

Our commercial success will depend in part on our success in obtaining and maintaining issued patents, trademarks and other intellectual property rights and protecting our proprietary technology. If we do not adequately protect our intellectual property and proprietary technology, competitors may be able to use our technologies or the goodwill we have acquired in the marketplace and erode or negate any competitive advantage we may have, which could harm our business and ability to achieve profitability.

We cannot provide any assurances that any of our patents have, or that any of our pending patent applications that mature into issued patents will include, claims with a scope sufficient to protect our products, any additional features we develop for our products or any new products. Other parties may have developed technologies that may be related or competitive to our system, may have filed or may file patent applications and may have received or may receive patents that overlap or conflict with our patent applications, either by claiming the same methods or devices or by claiming subject matter that could dominate our patent position. Our patent position may involve complex legal and factual questions, and, therefore, the scope, validity and enforceability of any patent claims that we may obtain cannot be predicted with certainty. Patents, if issued, may be challenged, deemed unenforceable, invalidated or circumvented. Proceedings challenging our patents could result in either loss of the patent or denial of the patent application or loss or reduction in the scope of one or more of the claims of the patent or patent application. In addition, such proceedings may be costly. Thus, any patents that we may own may not provide any protection against competitors. Furthermore, an adverse decision in an interference proceeding can result in a third party receiving the patent right sought by us, which in turn could affect our ability to commercialize our products.

Though an issued patent is presumed valid and enforceable, its issuance is not conclusive as to its validity or its enforceability and it may not provide us with adequate proprietary protection or competitive advantages against competitors with similar products. Competitors could purchase our products and attempt to replicate some or all of the competitive advantages we derive from our development efforts, willfully infringe our intellectual property rights, design around our patents, or develop and obtain patent protection for more effective technologies, designs or methods. We may be unable to prevent the unauthorized disclosure or use of our technical knowledge or trade secrets by consultants, suppliers, vendors, former employees and current employees.

Our ability to enforce our patent rights depends on our ability to detect infringement. It may be difficult to detect infringers who do not advertise the components that are used in their products. Moreover, it may be difficult or impossible to obtain evidence of infringement in a competitor’s or potential competitor’s product. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded if we were to prevail may not be commercially meaningful.

In addition, proceedings to enforce or defend our patents could put our patents at risk of being invalidated, held unenforceable or interpreted narrowly. Such proceedings could also provoke third parties to assert claims against us, including that some or all of the claims in one or more of our patents are invalid or otherwise unenforceable. If any of our patents covering our products are invalidated or found unenforceable, or if a court found that valid, enforceable patents held by third parties covered one or more of our products, our competitive position could be harmed or we could be required to incur significant expenses to enforce or defend our rights.

The degree of future protection for our proprietary rights is uncertain, and we cannot ensure that:

We rely, in part, upon unpatented trade secrets, unpatented know-how and continuing technological innovation to develop and maintain our competitive position. Further, our trade secrets could otherwise become known or be independently discovered by our competitors.

Litigation or other proceedings or third party claims of intellectual property infringement could require us to spend significant time and money and could prevent us from selling our products or affect our stock price.

Our commercial success will depend in part on not infringing the patents or violating the other proprietary rights of others. Significant litigation regarding patent rights occurs in our industry. Our competitors in both the United States and abroad, many of which have substantially greater resources and have made substantial investments in patent portfolios and competing technologies, may have applied for or obtained or may in the future apply for and obtain, patents that will prevent, limit or otherwise interfere with our ability to make, use and sell our products. We do not always conduct independent reviews of patents issued to third parties. In addition, patent applications can be pending for many years before issuance, or unintentionally abandoned patents or applications can be revived, so there may be applications of others now pending or recently revived patents of which we are unaware. These applications may later result in issued patents, or the revival of previously abandoned patents, that will prevent, limit or otherwise interfere with our ability to make, use or sell our products. Third parties may, in the future, assert claims that we are employing their proprietary technology without authorization, including claims from competitors or from non-practicing entities that have no relevant product revenue and against whom our own patent portfolio may have no deterrent effect. As we continue to commercialize our products in their current or updated forms, launch new products and enter new markets, we expect competitors may claim that one or more of our products infringe their intellectual property rights as part of business strategies designed to impede our successful commercialization and entry into new markets. The large number of patents, the rapid rate of new patent applications and issuances, the complexities of the technology involved, and the uncertainty of litigation may increase the risk of business resources and management’s attention being diverted to patent litigation. We have, and we may in the future, receive letters or other threats or claims from third parties inviting us to take licenses under, or alleging that we infringe, their patents.

Moreover, we may become party to future adversarial proceedings regarding our patent portfolio or the patents of third parties. Patents may be subjected to opposition, post-grant review or comparable proceedings lodged in various foreign, both national and regional, patent offices. The legal threshold for initiating litigation or contested proceedings may be low, so that even lawsuits or proceedings with a low probability of success might be initiated. Litigation and contested proceedings can also be expensive and time-consuming, and our adversaries in these proceedings may have the ability to dedicate substantially greater resources to prosecuting these legal actions than we can. We may also occasionally use these proceedings to challenge the patent rights of others. We cannot be certain that any particular challenge will be successful in limiting or eliminating the challenged patent rights of the third party.

Any lawsuits resulting from such allegations could subject us to significant liability for damages and invalidate our proprietary rights.

Any potential intellectual property litigation also could force us to do one or more of the following:

Any litigation or claim against us, even those without merit, may cause us to incur substantial costs, and could place a significant strain on our financial resources, divert the attention of management from our core business and harm our reputation. If we are found to infringe the intellectual property rights of third parties, we could be required to pay substantial damages (which may be increased up to three times of awarded damages) and/or substantial royalties and could be prevented from selling our products unless we obtain a license or are able to redesign our products to avoid infringement. Any such license may not be available on reasonable terms, if at all, and there can be no assurance that we would be able to redesign our products in a way that would not infringe the intellectual property rights of others. We could encounter delays in product introductions while we attempt to develop alternative methods or products. If we fail to obtain any required licenses or make any necessary changes to our products or technologies, we may have to withdraw existing products from the market or may be unable to commercialize one or more of our products.

If we are unable to protect the confidentiality of our trade secrets, our business and competitive position could be harmed.

In addition to patent protection, we also rely upon copyright and trade secret protection, as well as non-disclosure agreements with our employees, consultants and third parties, to protect our confidential and proprietary information. In addition to contractual measures, we try to protect the confidential nature of our proprietary information using commonly accepted physical and technological security measures. Such measures may not, for example, in the case of misappropriation of a trade secret by an employee or third party with authorized access, provide adequate protection for our proprietary information. Our security measures may not prevent an employee or consultant from misappropriating our trade secrets and providing them to a competitor, and recourse we take against such misconduct may not provide an adequate remedy to protect our interests fully. Unauthorized parties may also attempt to copy or reverse engineer certain aspects of our products that we consider proprietary. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret can be difficult, expensive and time-consuming, and the outcome is unpredictable. Even though we use commonly accepted security measures, trade secret violations are often a matter of state law, and the criteria for protection of trade secrets can vary among different jurisdictions. In addition, trade secrets may be independently developed by others in a manner that could prevent legal recourse by us. If any of our confidential or proprietary information, such as our trade secrets, were to be disclosed or misappropriated, or if any such information was independently developed by a competitor, our business and competitive position could be harmed.

Third parties may assert ownership or commercial rights to inventions we develop.

Third parties may in the future make claims challenging the inventorship or ownership of our intellectual property. We incorporate licensed technology in some of our products. Any infringement claims or lawsuits, even if not meritorious, could be expensive and time consuming to defend, divert management’s attention and resources, require us to redesign our products and services, if feasible, require us to pay royalties or enter into licensing agreements in order to obtain the right to use necessary technologies, and/or may materially disrupt the conduct of our business.

In addition, we may face claims by third parties that our agreements with employees, contractors or consultants obligating them to assign intellectual property to us are ineffective or in conflict with prior or competing contractual obligations of assignment, which could result in ownership disputes regarding intellectual property we have developed or will develop and interfere with our ability to capture the commercial value of such intellectual property. Litigation may be necessary to resolve an ownership dispute, and if we are not successful, we may be precluded from using certain intellectual property or may lose our exclusive rights in that intellectual property. Either outcome could harm our business and competitive position.

Third parties may assert that our employees or consultants have wrongfully used or disclosed confidential information or misappropriated trade secrets.

We may employ individuals who previously worked with other companies, including our competitors or potential competitors. Although we try to ensure that our employees and consultants do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed intellectual property or personal data, including trade secrets or other proprietary information, of a former employer or other third party. Litigation may be necessary to defend against these claims. If we fail in defending any such claims or settling those claims, in addition to paying monetary damages or a settlement payment, we may lose valuable intellectual property rights or personnel. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.

Our computer systems and operations may be vulnerable to security breaches.

We expect that the cloud-based applications embedded in our toys will be an important foundation for establishing our company as a leading source of technology. For that reason, among others, the safety of our network and our secure transmission of information over the internet will be essential to our operations and our services. Our network and our computer infrastructure are potentially vulnerable to physical breaches or to the introduction of computer viruses, abuse of use and similar disruptive problems and security breaches that could cause loss (both economic and otherwise), interruptions, delays or loss of services to our users. It is possible that advances in computer capabilities or new technologies could result in a compromise or breach of the technology we use to protect user transaction data. A party that is able to circumvent our security systems could misappropriate proprietary information, cause interruptions in our operations or utilize our network without authorization. Security breaches also could damage our reputation and expose us to a risk of loss, litigation and possible liability. We cannot guarantee you that our security measures will prevent security breaches.

Risks Related to our Ordinary Shares

An active trading market for our ordinary shares may not be sustained.

Our ordinary shares are being listed on Nasdaq in conjunction with this prospectus, and we cannot assure you that an active trading market for our ordinary shares will be sustained or maintained. The lack of an active trading market may impair the value of your shares and your ability to sell your shares at the time you wish to sell them. An inactive trading market may also impair our ability to raise capital by selling shares of our ordinary shares and enter into strategic partnerships or acquire other complementary products, technologies or businesses by using shares of our ordinary shares as consideration. In addition, if we fail to satisfy exchange continued listing standards, we could be de-listed, which would have a negative effect on the price of our ordinary shares.

We expect that the price of our ordinary shares will fluctuate substantially and you may not be able to sell your shares at or above the price you purchased the shares at.

The market price of our ordinary shares is likely to be highly volatile and may fluctuate substantially due to many factors, including:

In recent years, the stock markets generally have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. Broad market and industry factors may significantly affect the market price of our ordinary shares, regardless of our actual operating performance.

In addition, in the past, class action litigation has often been instituted against companies whose securities have experienced periods of volatility in market price. Securities litigation brought against us following volatility in our stock price, regardless of the merit or ultimate results of such litigation, could result in substantial costs, which would hurt our financial condition and operating results and divert management’s attention and resources from our business.

Our ordinary shares are considered to be penny stock. Trading in penny stocks has certain restrictions and these restrictions could negatively affect the price and liquidity of our ordinary shares.

Our ordinary shares trade below $5.00 per share. The SEC has adopted regulations which generally define a “penny stock” to be any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. As a result, our ordinary shares are considered “penny stock”. A penny stock is subject to rules that impose additional sales practice requirements on broker/dealers who sell securities to persons other than established Members and accredited investors. For transactions covered by these rules, the broker/dealer must make a special suitability determination for the purchase of these securities. In addition, a broker/dealer must receive the purchaser’s written consent to the transaction prior to the purchase and must also provide certain written disclosures to the purchaser. Consequently, the “penny stock” rules may restrict the ability of broker/dealers to sell our ordinary shares, and may negatively affect the ability of holders of shares of our ordinary shares to resell them. These disclosures require you to acknowledge that you understand the risks associated with buying penny stocks and that you can absorb the loss of your entire investment. Penny stocks generally do not have a very high trading volume. Consequently, the price of the stock is often volatile and you may not be able to buy or sell the stock when you want to.

We incur significant additional costs as a result of being a public company, which may adversely affect our business, financial condition and results of operations.

As a public company, we incur significant additional costs associated with corporate governance requirements that apply to us as a public company, including rules and regulations of the SEC, under the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and the Exchange Act, as well as the rules of Nasdaq. Compliance with these rules and regulations will significantly increase our accounting, legal and financial compliance costs and make some activities more time-consuming. We also expect these rules and regulations could make it more expensive for us to obtain and maintain directors’ and officers’ liability insurance. As a result, it may be more difficult for us to attract and retain qualified persons to serve on our board of directors or as executive officers. Accordingly, such increases in costs incurred as a result of becoming a public company may adversely affect our business, financial condition and results of operations.

Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.

We are subject to the periodic reporting requirements of the Exchange Act. We designed our disclosure controls and procedures to provide reasonable assurance that information we must disclose in reports we file or submit under the Exchange Act is accumulated and communicated to management, and recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. We believe that any disclosure controls and procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements due to error or fraud may occur and not be detected.

Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain.

We have never declared or paid cash dividends. We currently intend to retain all of our future earnings, if any, to finance the growth and development of our business. As a result, capital appreciation, if any, of our ordinary shares will be your sole source of gain for the foreseeable future.

Securities analysts may not publish favorable research or reports about our business or may publish no information at all, which could cause our stock price or trading volume to decline.

The trading market for our ordinary shares is influenced to some extent by the research and reports that industry or financial analysts publish about us and our business. We do not control these analysts. As a newly public company, we may be slow to attract research coverage and the analysts who publish information about our ordinary shares will have had relatively little experience with us or our industry, which could affect their ability to accurately forecast our results and could make it more likely that we fail to meet their estimates. If any of the analysts who cover us provide inaccurate or unfavorable research or issue an adverse opinion regarding our stock price, our stock price could decline. If one or more of these analysts cease coverage of us or fail to publish reports covering us regularly, we could lose visibility in the market, which in turn could cause our stock price or trading volume to decline and result in the loss of all or a part of your investment in us.

We qualify as a foreign private issuer and, as a result, we are not be subject to U.S. proxy rules and are subject to Exchange Act reporting obligations that permit less detailed and less frequent reporting than that of a U.S. domestic public company.

We report under the Exchange Act as a non-U.S. company with foreign private issuer status. Because we qualify as a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including (i) the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; (ii) the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and (iii) the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K upon the occurrence of specified significant events. In addition, our officers, directors and principal shareholders are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and the rules thereunder. Therefore, our shareholders may not know on a timely basis when our officers, directors and principal shareholders purchase or sell our ordinary shares. In addition, foreign private issuers are not required to file their registration statement on Form 20-F until 120 days after the end of each fiscal year, while U.S. domestic issuers that are accelerated filers are required to file their registration statement on Form 10-K within 75 days after the end of each fiscal year. Foreign private issuers also are exempt from Regulation Fair Disclosure, aimed at preventing issuers from making selective disclosures of material information. As a result of the above, you may not have the same protections afforded to shareholders of companies that are not foreign private issuers.

If we lose our status as a foreign private issuer, we would be required to comply with the Exchange Act reporting and other requirements applicable to U.S. domestic issuers, which are more detailed and extensive than the requirements for foreign private issuers. We may also be required to make changes in our corporate governance practices in accordance with various SEC and Nasdaq rules. The regulatory and compliance costs to us under U.S. securities laws if we are required to comply with the reporting requirements applicable to a U.S. domestic issuer may be significantly higher than the cost we would incur as a foreign private issuer. As a result, we expect that a loss of foreign private issuer status would increase our legal and financial compliance costs and would make some activities highly time consuming and costly. We also expect that if we were required to comply with the rules and regulations applicable to U.S. domestic issuers, it would make it more difficult and expensive for us to obtain and maintain directors’ and officers’ liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These rules and regulations could also make it more difficult for us to attract and retain qualified members of our board of directors.

As a foreign private issuer, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from Nasdaq corporate governance listing standards. These practices may afford less protection to shareholders than they would enjoy if we complied fully with corporate governance listing standards.

As a foreign private issuer, we are permitted to take advantage of certain provisions in the Nasdaq rules that allow us to follow our home country law for certain governance matters. Certain corporate governance practices in our home country, the Cayman Islands, may differ significantly from corporate governance listing standards. Currently, we do not plan to rely on home country practice with respect to our corporate governance. However, if we choose to follow home country practice in the future, our shareholders may be afforded less protection than they would otherwise enjoy under the Nasdaq corporate governance listing standards applicable to U.S. domestic issuers.

We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.

As discussed above, we are a foreign private issuer, and therefore, we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act. The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter. We would lose our foreign private issuer status if, for example, more than 50% of our ordinary shares are directly or indirectly held by residents of the United States and we fail to meet additional requirements necessary to maintain our foreign private issuer status. If we lose our foreign private issuer status on this date, we will be required to file with the SEC periodic reports and registration statements on U.S. domestic issuer forms, which are more detailed and extensive than the forms available to a foreign private issuer. We will also have to mandatorily comply with U.S. federal proxy requirements, and our officers, directors and principal shareholders will become subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. In addition, we will lose our ability to rely upon exemptions from certain corporate governance requirements under the Nasdaq rules. As a U.S. listed public company that is not a foreign private issuer, we will incur significant additional legal, accounting and other expenses that we will not incur as a foreign private issuer, and accounting, reporting and other expenses in order to maintain a listing on a U.S. securities exchange.

ITEM 4. INFORMATION ON THE COMPANY

Principal activities

engage:BDR is an internet-based marketplace platform and associated technology solution provider. engage:BDR’s proprietary technology is used to optimise the sale of advertising inventory from digital publishers (websites and apps) to advertisers and their agents (brands, agencies and advertising platforms). The ability to optimise the inventory from digital publishers to advertisers and their agents allows engage:BDR to play an active role in managing the ad exchange platform.

engage:BDR allows digital publishers to monetise their available advertising space by making the inventory available to multiple advertisers, as well as providing various related technologies designed to help publishers create additional incremental revenue streams. engage:BDR’s ad exchange platform also allows publishers to sell space for video advertising on webpages that do not have video content. The company was formed on August 17,2017 in Melbourne, Australia.

Dividends

There were no dividends paid, recommended or declared during the current or previous financial year.

Review of operations

The loss for the consolidated entity after providing for income tax amounted to $6,881,027 31 December 2020 (31 December 2019: loss of $1,343,429).

Programmatic display, native and video advertising sales

The Group’s Programmatic advertising sales includes selling display, native and video advertising inventory through the Group’s digital auctioning technology to platforms and marketplaces. The Group developed this product to replace the traditional Non-Programmatic display advertising channel. The adoption of programmatic display advertising sales has proven to be extremely successful in 2020 and opened additional revenue opportunities from the same clients, largely because programmatic buying and selling of advertising is much more efficient and significantly more cost effective to operate, thus increasing the Group’s overall operating and gross profit margins.

The Group’s proprietary programmatic technology significantly increases the Group’s operating margins by reducing payroll and associated sales commissions. With the rapid adoption of programmatic buying, brands, agencies and digital media buyers have moved their budgets to auction-based buying, in contrast to buying from salespeople, individual RFP (request for proposal) and insertion orders. This behavioral change has made the marketplace much more efficient, significantly reducing the staff overhead required to sell advertising in the traditional way.

Advertising buyers, through the Group’s programmatic platform, are essentially bidding for advertising inventory in real time in dynamic auctions, which occur in milliseconds while the relevant mobile or CTV app content is loading. This new engage:BDR format has created significant barriers to entry for new companies looking to enter the digital advertising arena. Companies must realistically own and develop their own proprietary technology to be able to participate in the rapidly developing programmatic advertising ecosystem as licensing third party technologies is cost-prohibitive. engage:BDR has developed its own real-time auctioning and bidding technologies which provide it with a significant competitive advantage. engage:BDR has established thousands of direct publisher relationships which is a key differentiator and competitive advantage for the Group in an ecosystem which is experiencing inventory quality issues, brokers and middlemen.

Adcel, our mobile app buyer mediation platform now fully supports Connected TV (CTV) app monetization through ads and has begun onboarding Connected TV app supply. Connected TV apps that live both on televisions and mobile devices (ad supported streaming video applications) have grown in adoption significantly by consumers who are “cord cutting” (eliminating traditional cable subscriptions) in favor of streaming content and the ability to access content anywhere they are, simply by logging into their streaming service. Accessing supply for CTV is essentially the same as any standard display, video or native inventory and is sold to advertisers in the same fashion as traditional online video ads are sold, through real time bidding. The allure of CTV for advertisers is the opportunity to deliver highly targeted ads to a captive audience across all the screens in their household, versus traditional TV ads; where scale, targeting and pricing efficiency are limited.

As EngageBDR’s entrance into CTV is met with competition, our primary sales strategy is powerful technology combined with quicker payments in comparison to our competitors. A common pain point by publishers historically has been slow payment terms from their monetization partners; net 60+ is commonplace. When working directly with agencies, net 120+. This places significant constraints on publishers who are faced with limited capital to scale their businesses; the inability to pay writers and for content production inhibits growth. EngageBDR’s net zero payment terms allow publishers to get paid immediately upon receipt of their invoice, giving EngageBDR negotiation leverage when setting placement cost, volume availability and positioning in the publisher’s monetization waterfall; allowing us to gain preferential opportunities and incentive to integrate.

EngageBDR’s programmatic advertising inventory is comprised of advertising space which is also commonly referred to as “ad placements” across a publisher’s website or mobile/connected television application. The ad placements are created by the publisher with an and integrated into their site to allow for monetization of their site or apps.

EngageBDR accesses this inventory through a number of different integration methods, ranging from direct JavaScript ad tag placement within the publisher’s ad-server, auction style programmatic header bidding integrations, or direct integrations with the publisher’s ad mediation technology (RTB). All the aforementioned integration types will require a contract to be negotiated prior to engaging in an integration and transacting on their inventory. Upon completion of an integration with a publisher through any of the strategies previously mentioned, EngageBDR will begin to present the publisher’s supply to our advertisers and buyers.

As our publishers receive site visitors, EngageBDR is sent requests to show ads to those visitors in real time. Upon receipt of this ad request, EngageBDR examines the bid request to determine if the user’s location, behavioral profile, time of day, device type, operating systems etc, fit existing targeting parameters set forth by our advertisers. If all conditions are met, EngageBDR will submit a bid price that we are willing to pay, typically within 120MS or less from receiving the initial request. Upon winning the auction, EngageBDR will serve our advertiser’s ad and will bill the advertiser for the served ad impression based on first or second price auction dictated by the publisher.

Collaborative Marketing revenue is all revenue received from our influencer marketing platform Iconic Reach. Programmatic revenue is all revenue that comes from our programmatic marketing platform known as Rexer.

Influencer Marketing

The Group launched its social influencer marketing platform in 2017. It dedicated engineering and account management resources to further develop and refine its technology and client base in 2019. The Group brought in incremental revenue through this platform and further diversification of the Group’s product and service offering. The group paused IconicReach efforts in March 2020, in light of the COVID-19 pandemic and reallocated those resources to its programmatic advertising exchange. The Group anticipates IconicReach to continue to be paused for 2021 and plans to reallocate resources to IconicReach in 2022.

Mobile and Connected Television (CTV) App Ads

The Group expects continued growth in supply and demand integration onboarding specifically within AdCel for 2021, as AdCel's technology has matured to a stage in which it is capable of monetizing inventory across ConnectedTV Apps. In addition to its core competency of App monetization across mobile devices. AdCel is one of the first demand agnostic mediation technologies available for ConnectedTV publishers in the market, solving an inherent problem in the ConnectedTV ecosystem. AdCel enables publishers the unique ability to mediate multiple sources of demand in one platform, utilizing intelligent personalization powered by the AdCel machine learning algorithm to maximize yield and minimize human error and time spent performing manual optimization. As supply and demand partnerships are established and integrated by sales and engineering, revenue is expected to steadily ramp throughout the course of the year. AdCel will continue to focus onboarding significant volumes of new ConnectedTV and mobile App publishers through the group's NetZero payment product, enabling publisher payments the same day the group is invoiced.

Significant changes in the state of affairs

On 17 January 2020, the Company issued 26,975,464 fully paid ordinary shares at $0.017 (1.7 cents) per share in accordance with the terms and conditions of the Convertible Securities Purchase Agreement (Agreement) with Alto Opportunity Master Fund SPC - Segregated Master Portfolio B (Alto). The Company was required to issue replenishment Collateral Shares under the Agreement. On 3 March 2020, the Company issued 30,420,738 replenishment fully paid ordinary shares at $0.013 (1.3 cents) per share in accordance with the terms and conditions of the Agreement with Alto. 

On 13 March 2020, the Company announced a further drawdown of a zero coupon convertible amortising security (ZCS) with a face value of US$450,000 at an issue price of US$382,500. The ZCS was issued to Alto pursuant to the Agreement. The ZCS is secured with a maturity of 31 May 2021. 

The ZCS is convertible at the election of Alto at the rate of one fully paid ordinary share for every A$0.35 (35 cents) of the face value converted, at the US$/A$ exchange rate published by the Reserve Bank of Australia on the day before the conversion.

On 1 April 2020, the Company issued 38,412,579 fully paid ordinary shares for settlement of outstanding creditor balances at a deemed issue price of $0.017 (1.7 cents) per share.

On 1 April 2020, the Company issued 107,500,000 Performance Rights as approved in the General Meeting on 18 March 2020. The Performance Rights were issued in accordance with the Company's Options and Performance Rights Plan.

Furthermore, on 1 April 2020 the Company also issued 17,100,000 unlisted options as approved in the General Meeting on 18 March 2020. The options were split into three equal tranches with the following terms:

The options were issued in accordance with the Company's Options and Performance Rights Plan.

On 27 April 2020, the Company issued 82,000,000 ordinary shares with a nil issue price following achievement of performance hurdles and conversion of performance rights held by executive directors and employees of the Company.

On 7 May 2020, the Company issued 32,123,198 replenishment fully paid ordinary shares at $0.01 (1 cent) per share in accordance with the terms and conditions of the Agreement with Alto.

On 11 June 2020, the Company issued 40,423,775 replenishment fully paid ordinary shares at $0.006 (0.6 cents) per share in accordance with the terms and conditions of the Agreement with Alto.

Furthermore, the Company also issued 30,000,000 fully paid ordinary shares for settlement of outstanding creditor balances at a deemed issue price of $0.008 (0.8 cents) per share.

On 18 June 2020, the Company issued 38,259,130 replenishment fully paid ordinary shares at $0.004 (0.4 cents) per share in accordance with the terms and conditions of the Agreement with Alto.

On 17 July 2020, the Company issued 52,730,441 fully paid ordinary shares at $0.004 (0.4 cents) per share in accordance with the terms and conditions of the Convertible Securities Purchase Agreement (Agreement) with Alto Opportunity Master Fund SPC - Segregated Master Portfolio B (Alto). 

On 17 July 2020, the Company also issued 55,736,356 fully paid ordinary shares for settlement of outstanding creditor balances at a deemed issue price of $0.008 (0.8 cents) per share.

On 28 July 2020, the Company issued 62,646,249 replenishment fully paid ordinary shares at $0.004 (0.4 cents) per share in accordance with the terms and conditions of the Agreement with Alto.

In addition, on 28 July 2020 the Company also issued 61,939,034 fully paid ordinary shares for settlement of outstanding creditor balances at a deemed issue price of $0.009 (0.9 cents) per share.

On 14 August 2020, the Company issued 293,921,246 fully paid ordinary shares at an issue price of $0.0073 (0.73 cents) per share to professional and sophisticated investors in relation to the Placement as announced on 11 August 2020.

On 21 August 2020, the Company issued 80,318,305 replenishment fully paid ordinary shares at $0.005 (0.5 cents) per share in accordance with the terms and conditions of the Agreement with Alto.

On 11 September 2020, the Company issued 85,254,184 replenishment fully paid ordinary shares at $0.005 (0.5 cents) per share in accordance with the terms and conditions of the Agreement with Alto.

On 1 December 2020, the Company has issued 430,888,917 fully paid ordinary shares at an issue price of $0.0055 (0.55 cents) per share to professional and sophisticated investors in relation to Placement announced on 25 November 2020.

On 16 December 2020, the Company issued 216,299,959 SPP shares under the Share Purchase Plan which was announced on 25 November 2020. The Company issued the SPP shares at $0.0055 (0.55 cents) raising $1,189,650. 

There were no other significant changes in the state of affairs of the consolidated entity during the financial year.

Matters subsequent to the end of the financial year

No matter or circumstance has arisen since 31 December 2020 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years.

Likely developments and expected results of operations

Growth of programmatic and mobile app (AdCel) ad revenues the proprietary platforms

With AdCel being one of the first platforms to offer a solution focused for ConnectedTV app mediation and with a number of partnerships both established and in the queue. The Group expects to grow programmatic ConnectedTV and mobile app ad revenues steadily and significantly throughout 2021. These revenues are no longer dependent on third party technologies as they were previously. As a result of our ability to directly represent a publisher's supply through AdCel's mediation, the Group will have the most optimized supply path to a publisher's inventory; creating cost efficiency, and the ability to generate greater scale for the Group's clients. Lastly, this optimized supply path will be key in attracting new demand partnership integrations for AdCel and will provide differentiation in the market stemming from buyers interested in cost efficiency, scale, and unduplicated supply opportunities. As these supply and demand partnerships are integrated by the engineering teams, the revenue is expected to grow steadily throughout the year.

Continued growth of programmatic display, native and video revenue

The Group also expects to see continued growth of its programmatic display, native and video businesses. Through monetisation of existing partnerships and creation of new ones, the Group expects to be able to significantly scale revenue while maintaining its lower cost operations. This enables optimisation of the Group’s existing relationships and the ability to attract new buyers and sellers.

Growth of influencer marketing revenue

The Group brought in incremental revenue through this platform. The Group paused Iconic Reach efforts in March 2020, in light of the COVID-19 pandemic and reallocated resources. The Group anticipates continuing to be paused for the year 2021 and plans to revisit in 2022. Iconic Reach is a self service marketplace which allows brands to collaborate with social media influencers across Tik Tok, Instagram, Youtube, Snapchat and Facebook. Iconic Reach enables brands to partner with powerful, relevant influencers who fit their campaign initiatives through a self service interface, allowing influencers to be sorted by content categories, audience authenticity, reach, location and cost to help eliminate the guesswork involved in contracting with influencers. Iconic Reach bills brands a margin on top of the influencer’s cost for use of the platform. Revenues are received from the advertisers.

1440 influencers joined / 2 new brand beta clients joined in 2020

Environmental regulation

The consolidated entity is not subject to any significant environmental regulation under Australian Commonwealth or State law.

ITEM 4A. UNRESOLVED STAFF COMMENTS

None.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included elsewhere in this registration statement on Form 20-F. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 3. Key Information—D. Risk Factors” or in other parts of this registration statement on Form 20-F.

A. Operating results

Results of Operations

Comparison of Years Ended December 31, 2020 and December 31, 2019

Revenues

Our revenues from 2020 over 2019 decreased by $1,680,705 or 10% as a result of COVID-19. Advertisers reserving their spend due to the unknowns with the economy.

Cost of Revenues

Our cost of revenues from 2020 over 2019 increased by $1,625,820 or 21% as a result of onboarding new publishers for a diverse inventory to accommodate advertisers for the unknown of COVID-19.

Gross Profit

Our gross profit from 2020 over 2019 decreased by $3,306,525 or 36% as a result of COVID-19 unknown factors to the economy. Advertisers reserve on spend while onboarding publishers for a diversity of inventory to accommodate the possibilities of their spend.

Operating Expenses

Our operating expenses from 2020 over 2019 decreased by $346,555 or 31% as a result of adjustments made to adapt to COVID-19 working remotely.

Other income, net

Our other income, net from 2020 over 2019 decreased by $1,884,518 or 65% as a result of revenue loss due to COVID-19.

Income tax expense

Our income tax from 2020 over 2019 remained the same no tax.

Net income

Our net income from 2020 over 2019 decreased by 5,537,598 or 412% as a result of loss of revenue due to the uncertainties of COVID-19. Advertisers holding their spend and minimal advertising being used.

Comparison of Years Ended December 31, 2019 and December 31, 2018

Revenues

Our revenues from 2019 over 2018 increased by $5,635,183 or 49% as a result of onboarding of customers.

Cost of Revenues

Our cost of revenues from 2019 over 2018 increased by $2,162,384 or 38% as a result of onboarding of new customers.

Gross Profit

Our gross profit from 2019 over 2018 increased by $3,472,799 or 60% as a result of onboarding of new customers.

Operating Expenses

Our operating expenses from 2019 over 2018 decreased by $3,972,266 or 92% as a result of reduction of operational expenses and reduced employee/contractor costs.

Other income, net

Our other income, net from 2019 over 2018 decreased by $2,050,633 or 42% as a result of reclassification.

Income tax expense

Our income tax from 2019 over 2018 decreased by $(1,071) or 100% as a result of not income tax as it relates to local tax.

Net income

Our net income from 2019 over 2018 increased by 9,496,769 or 88% as a result of Reduction of operational costs ex. employee/ contractor costs.

B. Liquidity and capital resources

Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and ensuring that all term deposits can be converted to funds in accordance with forecast cash usage. Due to the dynamic nature of the underlying business, flexibility in funding is maintained by ensuring ready access to the cash reserves of the business.

The ongoing maintenance of the Group’s policy is characterized by ongoing cash flow forecast analysis and detailed budgeting processes which, is directed at providing a sound financial positioning for the Group’s operations and financial management activities. In addition, the Group monitors both the debt and equity markets for additional funding opportunities.

Statement of cash flows

During the year ended 31 December 2020, the Group improved its net asset position by settling legacy creditors by a way of share issues. The Group also raised additional capital through a share purchase plan from existing professional and sophisticated investors and zero coupon convertible amortising securities (“ZCSs”) (Refer to note 14). As at the date of this report the directors have assessed that the Group continues to comply with the covenants set under its financing arrangements with its debtor factoring facility and those set by Alto Capital.

Notwithstanding the above the Directors consider the going concern basis to be appropriate giving consideration to:

● Confidence in raising capital as needed;

● Confidence in achieving the group’s forecast revenues and positive operating cash flow in 2021 through continued completion of planned integrations onto the group’s programmatic advertising platform;

● The ability of the Group to settle ZCS note and outstanding creditors via share issue, instead of cash payments;

● Repayment of some or all of secured related party loan receivables;

● The Group’s ability, if required, to seek the support from its founders and major shareholders for the further injection of capital; and

● Its ability to exercise control over discretionary operational cash outflows.

(i) Financial arrangements

The Group had the following borrowing facilities at the end of the reporting period.

* Loan notes were issued on 20 November 2018. On 29 January 2019, a resolution was passed during a shareholder general meeting to issue convertible securities in replacement of the Loan notes. As of 31 December 2019 these have been fully paid.

(ii) Maturities of financial liabilities

The following table summarises the maturity profile of the Group’s financial liabilities based on contractual undiscounted payments.

(iii) Fair value of financial instruments

Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.

Capital management strategy

The Group’s policy is to maintain a capital structure for the business which ensures sufficient liquidity, provides support for business operations, maintains shareholder confidence and positions the business for future growth. The Group manages its capital structure and makes adjustments in light of changes in economic conditions.

The ongoing maintenance of the Group’s policy is characterised by ongoing cash flow forecast analysis and detailed budgeting processes which, combined with continual development of banking relationships, is directed at providing a sound financial positioning for the Group’s operations and financial management activities.

The Group has an ASX-imposed restriction of 15% of total share capital per annum on the amount of share capital it can issue under a placement, which may be increased by a further 10% under a special resolution put to shareholders at its general meetings.

Capital Expenditures

In the years ended December 31, 2020, 2019 and 2018, our capital expenditures were mainly used for our working capital requirements such as staff costs, sales and marketing expenses and research and development costs. We have not had any material commitments for capital expenditures for the last three financial years. We plan to continue to make capital expenditures to meet the needs that result from the expected growth of our business.

C. Research and development, patents and licenses, etc.

Research costs are expensed as incurred. An intangible asset arising from development expenditure on an internal project is recognized only when the Company can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the development and the ability to measure reliably the expenditure attributable to the intangible asset during its development.

D. Trend information

Other than as described elsewhere in this registration statement, we are not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material adverse effect on our revenue, income from continuing operations, profitability, liquidity or capital resources, or that would cause our reported financial information not necessarily to be indicative of future operation results or financial condition.

EngageBDR’s focus on Connected Television is prompted by numerous shifts in consumer attention as traditional cable subscriptions are falling, and consumers are leaning towards lower cost streaming television platforms, such as Netflix, Hulu, Pluto.TV and more. The need to be able to reach these consumers remains important to brands who were previously marketing to through traditional TV advertising campaigns.

As brands are shifting their budgets towards buying connected TV supply, they are recognizing the increase in performance over traditional TV by way of being able to target consumers by their IP addresses and devices within their households. The ability to deliver advertising campaigns to a much more targeted audience has fueled tremendous growth in CTV for the past few years, with the expectation that CTV will grow to an $18 billion dollar market by 2024.

Additionally, According to a November 2020 poll from the Interactive Advertising Bureau (IAB), 60% of US advertisers planned to shift ad dollars from linear TV to either CTV or OTT in 2021. Among those planning to do this, 81% cited targeting and efficiency as a reason, while 55% pointed to incremental reach. As of 2021, Nearly 79% of people in the United States use streaming services to watch TV.

E. Off-balance sheet arrangements

We have no off-balance sheet arrangements including arrangements that would affect our liquidity, capital resources, market risk support and credit risk support or other benefits.

F. Tabular disclosure of contractual obligations

As of December 31, 2020, the future minimum payments under certain of our contractual obligations were as follows:

G. Safe harbor

See “Forward-Looking Statements” on page iii of this registration statement.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. Directors and Senior Management

See disclosure above in this report for directors.

Youqi Li (Chief Technology Officer)

Youqi Li

Chief Technology Officer -

Youqi Li is the Chief Technology Officer at engage:BDR. In his role, he leads the engineering team in Research and Development, planning and execution of the product roadmap, and forecasting technical direction of the organization.

Youqi has over ten years of experience in software development and six years of experience within the digital advertising industry. He joined engage:BDR in its early stages and helped to build the engineering team from the ground up. Prior to that, he worked in multiple startups and research centers, which helped him develop agile and open-minded technical expertise.

Youqi received his Master’s Degree in Computer Science from the University of Southern California.

Engage BDR April 2010 - Present

Andy Dhanik (Chief Revenue Officer)

Andy Dhanik is Chief Revenue Officer for engage:BDR. In his role, he oversees all teams responsible for operational processes including on-boarding and management of clients and campaigns, ongoing maintenance of advertising campaigns across all platforms, managing the campaign management team in optimizations, providing strategic product-specific insight to advertisers, and strategically aligning client needs with internal production teams to innovate and release products that provide value and performance for clients.

Engage BDR March 2011- Present

Denys Kravchenko (Chief Technology Officer - AdCel)

Denys Kravchenko

Chief Technology Officer Adcel

15+ years of experience in engineering, product architecture, big data analysis, business development and strategic expansion.

Currently is responsible for shaping the company’s overall strategic technology direction, including oversight of day-to-day technology and engineering operations at AdCel by engageBDR.

Previously, helped to grow Lovetime.com, the largest dating website in South-Eastern Asia with an audience of 5 million unique users. NetPromoter one-stop service for all things SEO.

Managed teams of 40+ people of back-end/front-end/QA engineers, designers and data scientists. Lead SEOPult Ukraine. By 2012, grew from 0 to $54mm in revenue in 3 years, with 536,000 web sites relying on their technology, and over 17mm keywords used to run SEOPult’s automated SEO platform

Appontops Corp Feb 2015 - May 2019

The Argon Group Oct 2017 - Aug 2018

Acel Oct 2016 - Present

Engage BDR SVP Mobile Aug - 2018 - Present

Ted Dhanik and Andy Dhanik are brothers.

B. Compensation

Employment Agreements, Director Agreements and Indemnification Agreements

Service agreements

Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details of these agreements are as follows:

Key management personnel have no entitlement to termination payments in the event of removal for misconduct.

Compensation of Director and Executive Officers Remuneration report (audited)

The remuneration report details the key management personnel remuneration arrangements for the Group, in accordance with the requirements of the Corporations Act 2001 and its Regulations.

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including all directors.

The remuneration report is set out under the following main headings:

Principles used to determine the nature and amount of remuneration

The objective of the Group’s executive reward framework is to ensure reward for performance is competitive and appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic objectives and the creation of value for shareholders, and it is considered to conform to the market best practice for the delivery of reward. The Board of Directors (‘the Board’) ensures that executive reward satisfies the following key criteria for good reward governance practices:

The Board is responsible for determining and reviewing remuneration arrangements for its directors and executives. The performance of the Group depends on the quality of its directors and executives. The remuneration philosophy is to attract, motivate and retain high performance and high quality personnel.

The Board has structured an executive remuneration framework that is market competitive and complementary to the reward strategy of the Group.

The reward framework is designed to align executive reward to shareholders’ interests. The Board has considered that it should seek to enhance shareholders’ interests by:

Additionally, the reward framework should seek to enhance executives’ interests by:

In accordance with best practice corporate governance, the structure of non-executive director and executive director remuneration is separate.

Non-executive directors remuneration

Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non-executive directors’ fees and payments are reviewed annually by the Board. The Board may, from time to time, receive advice from independent remuneration consultants to ensure non-executive directors’ fees and payments are appropriate and in line with the market.

Executive remuneration

The Group aims to reward executives based on their position and responsibility, with a level and mix of remuneration which has both fixed and variable components.

The executive remuneration and reward framework has four components:

Fixed remuneration, consisting of base salary and non-monetary benefits, is reviewed annually by the Board based on individual and business unit performance, the overall performance of the Group and comparable market remunerations.

Executives may receive their fixed remuneration in the form of cash or other fringe benefits where it does not create any additional costs to the consolidated entity and provides additional value to the executive.

The short-term incentives (‘STI’) program is designed to align the targets of the business units with the performance hurdles of executives. STI payments are granted to executives based on specific annual targets and key performance indicators (‘KPI’s’) being achieved. KPI’s include profit contribution, customer satisfaction, leadership contribution and product management.

In prior year, share based payments (in Engage BDR LLC) had been issued to executives and a non-executive director, which were prior to the IPO. These were issued in respect of services performed for the Group. Refer to Note 30 of the financial report contained within this Registration statement for further details. All Directors and key management personnel did not receive any share based payments in 2018 financial year.

Details of remuneration

The key management personnel of the Group consisted of the following directors and key management personnel:

Amounts of remuneration

Details of the remuneration of key management personnel of the Group are set out in the following tables.