Red Bubble Annual Report 2022

19. Parent entity financial information The financial information for the parent entity, Redbubble Limited, has been prepared on the same basis as the consolidated financial statements except for investments in subsidiaries. They are recognised at cost in the financial statements of the parent entity. (a) Summary financial information Statement of financial position 2022 $’000 2021 $’000 Assets Current assets 81,600 98,041 Non-current assets 19,242 10,465 Total assets 100,842 108,506 Liabilities Current liabilities 8,875 6,122 Non-current liabilities 4,142 364 Total liabilities 13,017 6,486 Equity Contributed equity 162,533 162,559 Share based payment reserve 13,347 11,414 Treasury reserve (4,005) (7,351) Accumulated losses (84,050) (64,602) Total equity 87,825 102,020 Profit/(loss) and other comprehensive income Profit/(loss) for the year (23,173) 23,301 Total comprehensive profit/(loss) (23,173) 23,301 (b) Commitments The parent entity does not have any capital commitments as at 30 June 2022 (2021: In FY2021 the parent entity signed a lease agreement for the new Melbourne office premises that had not yet commenced as at 30 June 2021. The future undiscounted lease payments for the lease contract were $0.9m within one year and $5.4m within five years. At 30 June 2021, the parent entity also had capital commitments of $3.4m relating to fit-out works for the new Melbourne office. These commitments were not recognised as liabilities as the relevant asset had not yet been received. The lease commenced in FY22 and therefore there are no commitments for lease contracts that have not yet commenced. The Group was also due to receive a $2.3m lease incentive for the fit-out works which it received in FY2022. There are no outstanding obligations.) (c) Guarantees entered into by the parent entity A bank guarantee of $0.9m exists as security for the Melbourne office lease. No liability is expected to arise. The parent entity did not enter into any new guarantees for the financial year ended 30 June 2022 (2021: $0.9m). (d) Contingent liabilities of the parent entity Although the Group is strictly a service provider that does not sell or manufacture the products sold on the Redbubble and TeePublic marketplaces, it periodically receives notices alleging infringement of third party copyright, trade marks, other intellectual property rights or publicity rights via the marketplaces or for breach of consumer protection laws. This is not uncommon for marketplaces that host user generated content, nor is it uncommon within the USA business environment where the majority of such claims arise. As at the date of these financial statements there are current lawsuits filed against the Company that relate to alleged intellectual property infringement and / or breach of consumer laws. There is no certainty around the amount or timing of any outflow (or inflow from insurance recoveries) should any of the actions ultimately be successful (at first instance or on appeal, as applicable). The Company does not consider that any of the current actions are likely to have a material adverse effect on the business or financial position of the Company. Notes to the Consolidated Financial Statements continued For the Year Ended 30 June 2022 20. Commitments and contingencies (a) Commitments Other than the commitments mentioned in note 19(b), the Group had no other commitments as at 30 June 2022 (2021: Other than the commitments mentioned in note 19(b), the Group had no other commitments as at 30 June 2021). (b) Contingent liabilities/assets of the Group Legal claim contingencies Although the Group is strictly a service provider that does not sell or manufacture the products sold on the Redbubble and TeePublic marketplaces, it periodically receives notices alleging infringement of third party copyright, trade marks, other intellectual property rights or publicity rights via the marketplaces or for breach of consumer protection laws. This is not uncommon for marketplaces that host user generated content, nor is it uncommon within the USA business environment where the majority of such claims arise. As at the date of these financial statements there are current lawsuits filed against the Company that relate to alleged intellectual property infringement and / or breach of consumer laws. There is no certainty around the amount or timing of any outflow (or inflow from insurance recoveries) should any of the actions ultimately be successful (at first instance or on appeal, as applicable). The Company does not consider that any of the current actions are likely to have a material adverse effect on the business or financial position of the Company. (c) Guarantees Other than the bank guarantees mentioned in note 19(c), the Group has also obtained a bank guarantee of $0.25m as security for office premises in the USA (2021: $nil). No liability is expected to arise. 21. Share-based payments The Group operates equity-settled share-based payment employee share and option schemes. The fair value of the equity to which employees become entitled is measured at grant date and recognised as an expense over the vesting period, with a corresponding increase to an equity account. The fair value of options with a strike price and share appreciation rights are ascertained using industry standard valuation models. A Black-Scholes pricing model is used for options and the Monte Carlo simulation model is used for share appreciation rights. The amount to be expensed is determined by reference to the fair value of the options or shares granted. This expense takes into account any market performance conditions and the impact of any non-vesting conditions but ignores the effect of any service and non-market performance vesting conditions. Non-market vesting conditions are taken into account when considering the number of options expected to vest and at the end of each reporting period, the Group revisits its estimate. Revisions to the prior period estimate are recognised in the income statement and equity. The fair value of zero priced options and restricted stock units approximates the fair market value of a Redbubble Ltd share at the grant date. Critical accounting estimates and judgements Some of the inputs to the pricing models require application of significant judgement. The Black-Scholes and Monte Carlo simulation pricing models require inputs for the expected share price volatility of Redbubble Limited shares for a period similar to the expected life of the options. The Group has used its historical share price volatility to estimate expected future volatility. Options over ordinary shares Redbubble Equity Incentive Plan for Australian and German employees The “Redbubble Equity Incentive Plan” has been established to grant options over ordinary shares to Redbubble Limited employees (including senior executives under the RB Group Executive Compensation Model (RECM)). The options are subject to service conditions and have a predetermined time-based vesting schedule. The grantees of options under this Plan may exercise vested options at any time before the earlier of: (a) a specified expiry date (generally 6 years from the grant date); and (b) 90 days after ceasing to be an employee or contractor for the Group. Some of the options have a zero exercise price, so as to be akin to performance rights or restricted stock units. 2014 Option Plan Options to employees/contractors of the US subsidiaries are granted under this plan. The vesting conditions and expiry period under this plan are akin to the Redbubble Equity Incentive Plan. 83 Redbubble – Annual Report 2022 82 Redbubble – Annual Report 2022

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