Realizing the Potential

REALIZING THE POTENTIAL

ANNUAL20 REPORT20 Otello Corporation ASA Q4 Table of contents $259M $86.1 M Otello Corporation ASA - Annual Report 2020

Group Overview 04

CEO Letter 08

AdColony 10

Bemobi 20

Skyfire 40

Vewd 44 Q3 Shareholder information 48 $172.9M Representation of Board of Directors 52 $63.2M Report from the Board of Directors 54

Otello Group financial statements 72

Parent company financial statements 132

Auditor’s report 156

Declaration of executive compensation policies 162

Principles of corporate governance 166

Q2 $109.7M $54M

Q1 $55.7M Revenue of 2020

2 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 3 2015 ACQUIRED ADQUOTA 2016 LINKEDIN BUSINESS OPERA 1997 2005 2010 2018 2019 2021 2013 CHANGED ACQUIRED FIRST WEB OPERA MINI ACQUIRED BROWSER ADCOLONY NAME TO NOVITECH BROWSER RELEASED ADMARVEL ACQUIRED 2015 BUSINESS SOLD RELEASED SKYFIRE OTELLO ACQUIRED SOLD CORPORATION BEMOBI

1995 2004 2014 2016 2017 OPERA OPERA 2015 MAJORITY SURFEASY ACQUIRED ACQUIRED STAKE IN 2021 SOFTWARE LISTED ON OSLO VEWD SOLD TO ADCOLONY SURFEASY BEMOBI FOUNDED STOCK EXCHANGE SOLD SYMANTEC IPO

holder in Bemobi Brazil with an ownership believers in AdColony, its people and its prod- below 50%. Consequently, Bemobi financials ucts, but also see the need to participate in An exciting journey will not be consolidated into Otello’s accounts a consolidating market where bigger is better going forward but will be booked according to and we believe that Digital Turbine, with its As we entered 2021, two major events oc- the Bovespa stock exchange in Brazil, Febru- the equity method. massive user base, extensive global relation- curred after the reporting period. AdColony ary 9, 2021, and had its first day of trading ships and distribution, will be uniquely posi- was sold to Digital Turbine and the Bemobi on February 10, 2021, on the São Paulo stock AdColony sold to Digital Turbine tioned to benefit via the seamless integration IPO was successfully completed. exchange (“Secondary Greenshoe”) under the On February 26, 2021, it was announced that of AdColony’s mobile video advertising exper- ticker symbol “BMOB3”. The price was set of AdColony was sold to Digital Turbine for a tise and global brand advertiser awareness. Bemobi IPO successfully completed R$22.00 per common share for its Initial Public total estimated consideration of $400 mil- The combination will yield a highly-differen- On February 9, 2021, it was announced that Offering (IPO), determined after completion lion. AdColony has been a very successful tiated and more vertically-integrated solution Bemobi Mobile Tech S.A. (“Bemobi Brasil”), the of the bookbuilding process. Following the turnaround over the last 3 years which was for the mobile advertising industry. We look parent company of Otello’s activities in Brazil successful IPO of Bemobi on Bovespa in Brazil, crowned with 15% YoY growth in 2020 vs 2019 forward to joining Digital Turbine to help nav- and internationally was successfully listed on Otello Corporation ASA is now a major share- and very solid EBITDA margins. We are big igate this innovation.

4 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 5 Realizing the Potential

Realizing the Potential is not only this year’s still volatile. It was encouraging to see the was hit hard by Covid-19 in 2020 as emerging better availability and connectivity to the concept for the Annual Report, but It also Performance Business returning to YoY rev- markets was struggling. Bemobi was a rela- world due to our technology. We believe that reflects Otello’s financial year of 2020 and enue growth in the last quarter of the year, tive winner in the space, and we believe we our long-term strategy has been working the start of 2021. We have seen a year with which sets us up nicely for 2021 The cost for will exit the pandemic with a stronger com- well and that we can now start to climb new a strong growth on the heels of successful AdColony has been lower and the OPEX is re- pany. Based on the continued success of Be- mountains. This past year, we are more than turnaround for AdColony, which posted YoY duced by over 50% the last 3 years and we mobi, Otello have pursued a separate listing happy to have climbed the mountain after growth of 15% in 2020 vs 2019. Even more im- are now at a sustainable level from where of Bemobi in Brazil where did our initial fil- periods in the valley. Otello as a brand and pressive is this growth put into the context we can scale revenue. For Bemobi, we saw ing in 4Q20 and a successful IPO in February a company ended 2020 with a turnaround of a world grappling with a pandemic. For a co-owned channel growth in internation- 2021. Over the past years, we have been on a complete and with growth, and to make sure AdColony this was the first year with growth al markets consistent with our strategy. The journey where Otello has been taking a lead we are ready for the future, we are eager to since 2016. The Brand and Programmatic rev- new voice-based channels and omnichannel within mobile advertising and mobile gam- continue the journey we are on. enue continued the strong growth we saw platform are getting traction in Brazil and are ing. It is all about the digital and mobile life already in 2019, while our Performance is about to begin international rollout. Bemobi we are living. Emerging markets are getting

6 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 7 bile phones, we are in a relatively fortunate tors and has reverted to growth from 3Q20 position. However, as AdColony’s revenue is onwards. Due to Bemobi’s unique position, linked to the advertising spend of companies Otello has for some time been exploring the and Bemobi subscriptions bought by con- possibility to list the company separately. In sumers, the pandemic did negatively impact February 2021, Bemobi went public on a over- revenue and profit in 2020, but it is difficult subscribed listing on the Bovespa in Brazil. to quantify the impact. Otello remains Bemobi’s largest shareholder ADCOLONY and is a firm believer in its prospects. The In 2020, AdColony completed the turn- proceeds from the IPO will enable Bemobi to around we started in 2019, and we exited capitalize on its unique position in the mar- 2020 delivering our strongest quarter in over ket both organically and potentially through 3 years and with over 30% YoY growth in strategic activities. 4Q20 vs 4Q19. AdColony continued to deliver positive results despite continued Covid-19 VEWD pandemic headwinds that have significant- In 2020, the English High Court delivered its ly impacted AdColony’s competitors. Thanks decision on remedies in Otello’s dispute with to industry-leading research, consumer in- MFC over the Vewd business. The Court de- sights, and award-winning campaigns glob- termined that MFC should be required to ally, AdColony has been at the top of the purchase Otello’s shares in Last Lion from conversation about mobile games and how Otello for the sum of $48 million and that they factor into the global consumer mindset MFC should be required to purchase the Loan both in general and in this specific moment Note issued in Otello’s favor by a subsidiary in time. of MFC for $5 million plus accrued interest at the time of purchase. If MFC did not pur- AdColony has invested into its tech platform chase Otello’s shares in Last Lion and the over the last 2 years, and this has enabled Loan Note, all of the shares in the Compa- CEO Letter very strong and scalable growth for our pro- ny were to be sold to a third party by a re- grammatic business which ended the year ceiver. MFC has not purchased the shares, 2020 was a very special year, but I am proud FINANCIAL OVERVIEW with close to 100% growth over 2019. Overall, and Otello agreed to give MFC extra time to to see that we exit 2020 as a stronger orga- Otello had a strong 2020 with 8% YoY growth AdColony’s Brand business has been very re- seek refinancing to raise funds to enable it to nization. Despite Covid-19, Otello saw strong despite the negative impact from Covid-19 silient and grew by over 20% in 2020 vs. 2019. pay in the sums due to Otello, which proved growth in revenue and profit vs. 2019, which and adverse FX impact which impacted Be- Its Performance business stabilized in 2020 to be unsuccessful. On March 17, 2021, MFC is a testament to the resilience of the busi- mobi. We ended the year with 23% growth in after several years of contraction. And Ad- and Otello together with the Vewd Group’s nesses we operate and the hard work and 4Q20 vs 4Q19. Across all metrics, we saw im- Colony’s global organization is ready to take secured lender agreed that as an interim al- dedication of the teams, who were able to provements and we are in particular happy the next step and continue to grow in 2021. ternative to the appointment of a receiver, a adjust to a new “normal” and prosper. with the strong operating cash flow which special committee be appointed to sell the turned a negative OCF of $2.7m in 2019 to On February 26, 2021, Otello entered into an company or raise finance to pay Otello what $19.1m in OCF in 2020, due to improved prof- agreement with Digital Turbine to sell AdCol- it is due. Key financial figures itability, and good cash management. ony for a total estimated consideration of (USD million, except earnings per share) 2020 2019 $400 million that includes an earnout based While 2020 was a challenging year, and 2021 OTELLO on 2021 results. I believe that Digital Turbine also promises to have challenges associat- Revenue 259.0 240.8 Otello has maneuvered adeptly through the will be a great home for AdColony due to ed with the pandemic, I feel that we are in Gross profit 101.9 103.2 pandemic. The primary focus has been the its massive user base, extensive global rela- a good position to create more shareholder 1 Net income (23.3) (22.6) health and safety of our employees. Since tionships and distribution. Together the two value for Otello shareholders in 2021 through 2) Adjusted EBITDA 23.4 19.3 mid-March 2020, the Group entities success- companies will be able to offer a highly-dif- the AdColony earnout, our large stake in Be- EBITDA 13.4 13.2 fully managed to shift the vast majority of ferentiated and more vertically-integrated mobi, and a resolution to the Vewd matter. 3) Normalized EBIT (7.6) (8.0) the operations to home offices. The opera- solution for the mobile advertising industry. EBIT (10.0) (14.9) tional impact has been minimal, and we have EPS (USD) (0.17) (0.16) managed to operate the business as we did BEMOBI EPS, fully diluted (USD) (0.17) (0.16) before the crisis. Due to the nature of our Bemobi, like most emerging market compa- Cash flow from operating activities 19.1 (2.7) business in both AdColony and Bemobi, in nies, was initially hit hard by the pandemic, Cash flow from investment activities (12.4) (16.3) terms of not having physical products and but has rebounded and was a relative win- Cash flow from financing activities 10.5 14.8 being reliant on the use of consumers’ mo- ner in the market for VAS for mobile opera- Lars Boilesen

8 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 9 AdColony AdColony in 2020

AdColony is one of the largest mobile adver- gaming consoles, and PCs than they might tising platforms globally, with a reach of more have on their commute or at the workplace. than 1.5 billion monthly users globally. AdCol- Mobile surged. ony’s mission is to drive business outcomes that matter for advertisers and publishers When AdColony surveyed consumers global- using its best-in-class mobile technology, the ly last year, we found a 50% growth in mobile highest-quality mobile ad experiences, and usage compared to pre-COVID times, includ- leveraging its curated reach. ing a 23% growth in new smartphone gaming activity. Globally, downloads were up every Originally founded in 2008 as a mobile app successive quarter of the year compared to developer, AdColony has been an innovation 2019, according to app store intelligence plat- leader in mobile advertising and monetization forms Sensor Tower and App Annie. since Apple first introduced the App Store. AdColony is passionate about delivering the While “time spent” in other channels, like highest advertising experiences. AdColony is social media, didn’t translate to ad revenue, 23% committed to providing an experience that the mobile games channel exploded. This GROWTH IN NEW makes in-app mobile advertising a win for was not a fad or short-term trend due to SMARTPHONE GAMING ACTIVITY advertisers, developers, and users alike. COVID-19 lockdowns, but an acceleration of global trends over the past decade, and 2021 AdColony is known throughout the mo- will be another strong year for mobile apps bile industry for its unparalleled third-par- and mobile gaming. ty verified viewability rates, exclusive Instant-Play™ and Aurora™ HD video tech- As a direct supplier of in-app inventory in the nologies, rich media formats, global perfor- mobile space, AdColony has a distinct advan- mance advertising business, programmatic tage in the face of upcoming challenges to marketplace, and extensive SDK footprint in the digital targeting status quo by Apple the Top 1000 apps worldwide. (AppTrackingTransparency and SKAdNet- work), as well as ongoing privacy legislation THE MOBILE ADVERTISING INDUSTRY in Europe, Latin America, Asia, and the distinct possibility of a national level privacy AdColony’s Place law in the United States. Unlike middle-man 2020 was a banner year for both AdColony programmatic SSPs, AdColony’s software de- and the mobile games industry in gener- velopment kit (SDK) allows for insights and al. Most consumers globally increased their contextual signals that enable AdColony’s time playing mobile games last year. This is optimization and targeting algorithms to hit despite COVID-19 lockdowns globally giving advertiser KPIs even in this new, more priva- most consumers more access to TV screens, cy-centric landscape.

12 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 13 Run your mobile user acquisition campaign programmatically with the most transpar- ent marketplace on mobile

Unleash the power of our SDK and grow with cutting edge Aurora™ Video & Play- able creatives across thousands of top apps

For Brand Advertisers to gaming app install marketers running ads 2020 Results What we call “brand advertisers” are the to get more installs for their gaming apps. AdColony had a successful year with 15% rev- Sanofi, T-Mobile, Sony PlayStation, Amazon non-gaming ads most non-industry people Fundamentally, the best way for today’s enue growth from FY2019 during an overall Shopping, General Mills, and McDonald’s. think of when they think of digital ads. Ad- hottest mobile games to maintain long-term market downturn across the advertising in- Colony gives today’s most prominent brand growth and financial success is to acquire dustry. Revenue for each quarter increased AdColony also continued its transformation advertisers like Disney, Starbucks, Unilever, users in other apps. AdColony’s vast net- from the same quarter in 2019. from an ad network of mostly proprietary ad Toyota, and many more, the opportunity to work of apps using its SDK for monetization formats to a fully open and programmatic reach consumers where they’re spending the gives user acquisition (UA) managers (Perfor- Revenue per head in 2020 was a significant marketplace for advertisers and developers, most time — on their mobile devices. mance) targeting options to find the perfect increase from previous years, despite AdCol- with full support for most IAB standard for- users for their own apps. 15% ony’s top-line revenue not returning to its mats, making it easier than ever for clients AdColony operates both direct and program- REVENUE GROWTH 2016 peak. Thanks to streamlining and effi- and partners to work with AdColony. This is matically for brands worldwide, giving more For Publishers ciencies in staffing, as well as a concentra- most evident in the share of programmatic options to brands and agencies. Globally, At the heart of AdColony’s advertising busi- tion on hiring and retaining the right talent, rising from 48% of total revenue in Q120, to mobile gamers skew slightly female (51%), ness is its supply, powered primarily by its AdColony’s profitability has returned. This 65% of total revenue in Q420. index higher for average household income SDK. A Software Development Kit (SDK) is leads to a significant increase in profitability (37% higher in the United States), likelihood a package of tools app developers use to for AdColony as a whole, as brand and pro- 2020 was the year that marketers at large to have a bachelor’s degree or higher (nearly perform a task, in the case of AdColony, to grammatic revenue now makes up the great- started to finally pay attention to gamers, 51% 2x!) and identify as the primary household show ads to a user. Promoted by AdColony’s er share of AdColony’s demand mix. gaming, and mobile games specifically. We MOBILE GAMERS SKEW decision-maker almost a third more often international publishing team, AdColony’s expect that this trend will continue during SLIGHTLY FEMALE INDEX than the general population. first-party SDK inventory offers advertisers AdColony’s teams turned conversations 2021 with new, more powerful phones bring- HIGHER FOR AVERAGE access to audiences and optimizations no about mobile games from headwinds, push- ing even more “mainstream” gaming brands HOUSEHOLD INCOME Mobile Gamers are an audience that brand other platform can provide and sets AdCol- ing against growth and succeeding despite and titles like League of Legends out of the advertisers want and need. AdColony has ony apart from other competitors by owning misconceptions, into true tailwinds, push- living room. Likewise, more casual titles will them, and thanks to its strong relationships much of its supply directly. This distinction is ing results ahead and turning exploratory keep growing as people continue to adjust to with brands, agencies, and agency holding important in a more programmatic space and campaigns into ongoing spend from existing more freedom and small gaps of downtime companies, it is the premier mobile ad net- gives AdColony significant value to advertis- partners and many new advertisers that Ad- working from home long-term. AdColony is work for brands on this channel. ers. For publishers, the ability for AdColony’s 30% Colony had never worked with before. During well-positioned to take advantage of both OF CLIENTS SDK to show programmatic demand in addi- FOR ADCOLONY’S 2020, 30% of clients for AdColony’s brand the growth in mobile gaming and the expec- For Mobile App User Acquisition tion to direct-sold campaigns is a huge boost BRAND BUSINESS business were new clients, including well- tation of advertisers embracing mobile gam- The term “performance” for AdColony refers in revenue. WERE NEW CLIENTS known advertisers including Chase Bank, ing and in-app environments more widely.

14 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 15 Other key factors in the improved results partnerships in APAC, and strong reseller for AdColony during 2020 have been the relationships in EMEA also drove growth in increased degree of regional cooperation, those markets. the streamlining of business processes, and a less-siloed, more cooperative business Furthermore, the alignment of all commercial model globally. regions under common leadership during 2020 brought significant improvements n position- Advertising ing, messaging, and shared opportunities AdColony’s primary revenue source is globally that allowed for significant growth in its in-app advertising solutions. In 2019, the face of global pandemic headwinds. AdColony’s brand business began to take a predominant form of revenue, and this Performance business process continued in 2020, with brand ad- AdColony’s Performance business stabilized vertisers continuing to realize the power of during 2020 with total revenues of USD 53.6 mobile. However, Performance advertising million, with almost even distribution across still constitutes a significant portion of Ad- the year thanks to a more streamlined global Colony’s revenue and forms a core part of leadership function and business priorities. its identity and business strategy for the This is a positive change from previous years long term. when performance revenue decreased. Part of this stabilization comes on the back of in- Together, these two advertising solutions vestment made in the data science and en- give AdColony a stronger and more di- gineering team in Poland, and new creative verse demand mix for its publishing part- innovations that led to significantly more ners, allowing the right ad to be delivered effective data signals and more focused al- to the right user, at the right time, with- gorithms, allowing for greater scale and per- out repetitive viewings, keeping the user formance optimization. experience high. Preparation for Apple’s upcoming priva- Brand business cy changes on the performance side of the AdColony’s advertising business had reve- business included the launch of AdColony nues of USD 141.2 million in 2020. Based on BidSheet™, which allows for SKAdNetwork the relationships and momentum gained campaigns, as well as laying the groundwork throughout 2020, we have a very positive for the eventual launch of a self-serve adver- outlook for the brand business in 2021. tising platform in the future.

AdColony’s individual brand regions all had We expect these operational and commercial a successful 2020, with growth of 23.2% alignments to enable AdColony to rebuild its in North America, 49.25% in EMEA and performance business even further in 2021. LATAM, and 7.47% in APAC. This growth is 70 predominantly at the feet of AdColony’s Award-Winning Relationships core product of on-platform, SDK-based One of AdColony’s historical core competen- supply (where business priorities are now cies is its strong ad creative it creates for its decoupled from the performance business, advertising partners. In 2020, AdColony re- see “Supply” update below). As advertisers ceived over 70 awards, including wins from realize the value in working with actual the prestigious industry award shows, includ- supply owners over middlemen, the per- ing MMA Smarties, Mob-Ex, The Drum, The centage of off-platform supply campaigns Wires, and more! AdColony was also named AWARDS RECIEVED run by AdColony has decreased over time, The Network of the Year at MMA Smarties IN 2020 increasing profitability overall. This is par- Turkey and Enabling Technology Company of ticularly true in North America, while key the Year at MMA Smarties APAC.

16 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 17 Supply Update 2020 saw the introduction of our latest SDK leading to significant progress over the year, version 4.3 and 4.4, which expanded sup- including SDK integrations and long-overdue port for display advertising, as well as full updates in apps from Zynga and EA Mobile support for Apple’s SKAdNetwork attribu- and other wins with key integrations Scope- tion solution and AppTrackingTransparency ly, GSN, UNICO, GameHive, and more. (ATT) framework. Product & Engineering Apple’s continued lack of transparency and Last year continued AdColony’s innovation 2020 SAW THE INTRODUCTION OF OUR clarity around its ATT enforcement (delayed and planning to ensure business continuity LATEST SDK VERSION to Spring 2021) remained a roadblock for and growth in several key areas. 4.3 AND 4.4 some upgrades. Still, despite these headwinds, 62% of impressions, 68% of ad spend, After initial hires in 2019, AdColony’s data sci- and 67% of margin revenue across AdColony ence and engineering office in Warsaw, Po- was drawn from SDK versions 4.3 or 4.4 by land, was officially launched and is now Ad- Preparing for Apple’s Privacy Changes • AdColony uses IDFA to bill advertisers. the end of the year, setting up AdColony’s Colony’s fastest-growing office globally, with In June 2020 and Apple announced the App AdColony has implemented new billing supply for success in FY21. more than 20+ engineers and data scientists Tracking Transparency (ATT) framework, pipelines that support Apple’s SKAdNet- and continues to expand. Engineers in this which addresses Apple’s concerns about work (SKAN) attribution framework, al- The growth of advanced mediation amongst office are part of the Data Science, SSP, Ad- Privacy by asking users whether they want lowing advertisers to measure advertising publishers has also greatly benefitted AdCol- Server, SDK, DSP, and Composer teams. This to be tracked across apps and websites on performance without needing an IDFA. ony. AdColony has long been at the forefront new engineering office has provided AdColo- a per-app basis. If users do not consent, Ap- of this space through partnerships with Fyber, ny’s Product & Tech organization with afford- ple’s developer terms of service prohibit any Apple’s restrictions on targeting will impact MoPub, MAX, and Facebook. As the rest of the able and high-efficiency top-shelf engineer- tracking, and iOS itself will not send the de- demographic and audience-based targeting industry has caught up, advanced mediation ing and data science talent that has helped vice’s Identifier for Advertisers (IDFA) to the on iOS devices, but the change is not uni- delivered 46% of all impressions by the end AdColony double-down on development developer, advertisers, or other advertis- versal in scope. All iOS opted-in users will be of the year (up 130% for the year), 61% of ad efforts and accelerate progress towards the ing or measurement parties. Apple recently able to be targeted and measured in exactly spend (up 165% and an astounding 292% in- product vision of becoming an open and announced enforcement and requirements the same way as today. The same is also true crease in margin revenue from 20Q1 to 20Q4. standardized marketplace that turns adver- around its new privacy framework will begin for almost all users in using Google Android tiser goals into outcomes. in “Spring 2021.” devices, which make up only a little less than During 2020, AdColony’s supply business was half of US smartphone users, but three-quar- for the first time truly separated from its Improvements to our advanced bidding sup- This change will impact AdColony in the fol- ters of global users. performance advertising team into a discreet port (referred to as Advanced Bidding 3.0) lowing ways: business unit. This enabled supply business delivered considerable gains in performance As mentioned in the Supply update, AdColo- development to focus on the best supply tar- when bidding in advanced mediation zones • AdColony currently combines the IDFA ny released two SDKs last year (4.3 and 4.4) gets for AdColony’s overall business, rather thanks to new models to bid more efficiently with other device signals to target users. that address the basic functionality required than just those that would also make good in this inventory, resulting in improvements AdColony is working on methodology to to support these changes. With its granular performance advertisers. This has led to a to margin. Thanks to these efficiencies, adjust data science models to bid without bidding, app metadata and contextual data significant uptick in the success of AdColony’s AdColony has seen similar SSP supply growth, an IDFA around contextual targeting algo- partnerships, and proprietary bidding algo- direct supply advertiser relationships, as de- which also operates on a first-price auction rithms. Thanks to AdColony’s SDK based rithms engineered to optimize against con- tailed in the “Advertising” update above. basis. The successful results delivered by new supply system, access to many contextual textual signals, AdColony is confident its ex- models in advanced bidding zones on SDK signals competitive non-SDK-based com- perience in this area will give advertisers an This change has enabled better focus and supply position AdColony to succeed in SSP petitors gives AdColony an advantage in advantage as the industry makes the shift. more streamlining integration conversations, inventory in 2021. this new landscape.

18 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 19 Bemobi Bemobi in 2020

REACHING Bemobi is focused on the distribution and turn offers them to end users. We have part- monetization of applications (apps), games nerships with mobile carriers which charge 2.3bn and mobile digital services in emerging mar- for our services through pre-paid credits MOBILE USERS ket countries. Bemobi’s services are current- and/or through their regular billing features ly integrated and operating with 72 mobile (post-paid mobile bills). We also offer a va- carriers around the world. As of year end riety of microfinance services (as further ex- 2020, we had 33.2 million subscribers in 38 plained below) to enhance the popularity of 38 countries and a potential base of more than digital services. COUNTRIES 2.3 billion users, when considering all mobile phone customers of the mobile carriers with Bemobi has developed its own proprietary which we do business, as well as the locations digital distribution platform, complete with 72 where our services are already available. a low-cost expandable acquisitions channel CARRIERS for new users. This platform is supported by Our business model is based on an inno- a mostly cloud-based framework, with the vative, low-cost subscription in the apps, utilization of artificial intelligence resources games and digital service business lines, that to enhance its effectiveness, exemplified in +33m is tailored to how most of the population the graph below: SUBSCRIBERS in Brazil and in other emerging countries that share similar population profiles access We believe that we are in a strong position digital services. Bemobi operates on a busi- to reduce current barriers that hinder greater ness-to-business-to-consumer (B2B2C) basis, profitability from digital services in emerg- as we offer our services to a company that in ing market countries.

MOBILE MOBILE APP USERS CARRIERS DEVELOPERS

Digital Channel Orchestration Platform Mobile Digital Services APPS SUBSCRIPTION

MICRO FINANCE

COMMUNICATIONS

End-to-end platform connecting mobile users and app & game devs through mobile carriers billing

22 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 23 Subscribers Mobile Carriers Bemobi Apps & Games Devs

Flow of revenue

• End-users sign up to get unlimited • Provides access to carrier billing • Provides and operates the • Licenses the IP of the access to the best premium apps & games • Co-brands and promotes the service end-to-end platform apps & games to Bemobi • Jointly defines pricing and marketing • Life-cycle process management, • Works with Bemobi on Key Roles incl. billing management • Pre-loads the AppsClub app light integration process into its smartphones • Manages the content licensing, app security and revenue share settlement with • Zero-rate data (free) apps & mgames developers

• Pay a recurring subscription fee • Collects the subscription fee • Receieves the net subscription fee • Receives a subscription fee from Bemobi from mobile credit balance • Deducts its revenue share • Deduts costs associated with user aquisition Revenue • Step down payment based on avaiable credit • Pays the balance to Bemobi • Keeps remaining revenue Flow • Price varies by geograpphy • Pays the balance to apps & games developers

Value chain: Bemobi’s point-to-point platform connects Finally, our main focus is the end user, who smartphone users to digital services, apps we believe can access a complete and inno- Growth comes from combining multiple compelling and games in a model that can generate val- vative portfolio of digital services and prod- services with a wide reach of distribution channels ue for all of those involved through revenue ucts at affordable prices with easier forms share agreements. of payment. These are factors that have his- torically curtailed many end users’ access to

Mobile carriers share their access to their mobile entertainment apps. SUBSCRIBER BASE customer income, creating a digital model for the collection of payments that includes Our growth strategy is based on a combina- and is accessible to most of the population tion of the following features: (i) Subscrip- SERVICE’S WITH MULTIPLE CARRIERS Agreements and billing integration with in the countries in which we operate. Their tion Services and (ii) Distribution Channels. carriers to create an addressable market brands are also associated with our services As we launch a subscription service, the ser-

in order to assist in their promotion and com- vice becomes active on a mobile carrier with USERS OF SERVICE ADDRESSABLE MULTIPLE CHANNELS munication, by offering an even more com- which we have a partnership. As a result, Promote services through various digital plete portfolio of services to their customers, subscribers to the mobile carriers become mobile channels to an addressable which in turn generates new revenues and part of the Bemobi customer base. We cur- market increases the profitability from their current rently have a potential base of more than 2.3 customer base. billion users through the 72 partner carriers that hold one or more of our active services. The developers of apps and games obtain their Bemobi’s aim is to expand its customer base value through our recurring incremental reve- as we partner with more mobile carriers, and REACH OF DISTRIBUTION CHANNELS nues based on our digital channels. Digital de- expand into new geographic locations. To velopers benefit from what we believe is our convert these users into paid subscribers, we SUBSCRIPTION SERVICES DISTRIBUTION CHANNELS innovative pricing model and ability to collect use a variety of digital channels. payments pursuant to which we can access a Once service is live with mobile carrier, excisting Distribution channels are needed to promote services significant group of users in an effective man- customers become part of Bemobi’s addressable market to the addressable market at a sustainable lower cost ner, thereby resulting in recurring revenues.

24 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 25 APPS SUBSCRIPTION MICROFINANCE AND COMMUNICATION SERVICES Distribution of standalone packages and the best apps and games in a low cost subcription model

GAMES CLUB KIDS CLUB STANDALONE APPS MICROFINANCE COMMUNICATION

New digital services developed to respond to the needs of pre-paid users at times when their balance is zero (through no credit channels), in addition creation of new monetization opportunities for the carriers.

BEMOBI CURRENTLY HAS THREE LINES OF SERVICES:

Apps and Games subscriptions current conditions, such as the sale of top- Our apps and games subscriptions are our ups through electronic payments, advances APPSCLUB principal line of business. Hundreds of apps on pre-paid credit, advances on data packag- • Top premium paid apps in complete form without ads and games are included in our premium es and advances on calls. With respect to our subscriptions, which contain no advertise- microfinance services, benefits are approved • No need for a credit card ments and provide users with all available and granted immediately to users with zero • More value for money - over US$ 10,000 of premium functions, in exchange for a subscription at a balances, and payment is only collected on apps and in-app purchases for only ~US$1-2 per month fixed and affordable price, without the need the next top-up. • No need for a data plan to download new apps of using credit cards. We run a number of offers that include periods of use that are free Messaging & communications services • 7-day free trial of charge for up to seven days so that cus- We have a point-to-point voice messaging • Complements the existing “Free & Pay per Download” tomers can try out our service. service platform with visual access through model from Google Play apps and/or integrated with the SMS and • Leverages carrier brand, saves on brand marketing Microfinance services WhatsApp platforms, an anti-spam block for We work with mobile carriers through dif- calls and the conversion of voice calls into ferent digital channels that are supported texts based on artificial intelligence. These A subscription model based on by a proprietary technological platform. This services are offered in partnership with mo- real usage provides better platform offers different solutions to pre- bile carriers as an additional service, or in value for consumers paid customers with zero balances. The solu- some cases, may be included in the customer tions are tailored to a customer’s profile and plans offered by such carriers.

26 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 27 INDUSTRY STANDARDS PROPRIETARY CHANNEL PLATFORM

MOBILE CARRIERS PROMOTIONS PAID ONLINE CAMPAIGNS LOOP – AI AND DATA ANALYTICS MOBILE ORCHESTRATION When a deal is signed, the mobile Partnering with leading apps and Bemobi’s turnkey platform that captures users browsing and voice sessions carrier commits to doing marketing web properties in emerging markets when they are out of airtime to create a scalable digital distribution channel and promotion of the new service to promote Bemobi’s service offering

• Messages campaigns • Store promotions • Revenue share based (e.g. Opera Mini) • Data driven (AI/ML) and • NCND portals and interac- (SMS/RCS) and bundles • Paid per acquisition - CPA rule based decision engine tive voice response

engagement engine Omnichannel Right Channel

Align with users micromoments Right Time Loop AI/ML and rule based decision engine

Right Offer

Premium Digital Services, Financial Telecom and Voice Services

BEMOBI CURRENTLY WORKS WITH THREE TYPES OF DISTRIBUTION CHANNELS

Carrier promotions Regarding our partnerships, carriers often run paid campaigns on digital mobile publicity run communication campaigns for our ser- networks, as well as Demand-Side-Platforms vices through their channels in the following (“DSP”) for the conversion of subscribers. ways: (i) by sending SMS messages, (ii) Sat Push and RCS, (iii) placing banners on their Proprietary channels platform websites and the marketplaces for their ser- We developed the Bemobi Loop proprietary vices, (iv) through their self-service apps and channel, which is currently the main distri- (v) by means of sales in their physical stores. bution channel for our digital services. The Bemobi Loop channel allows mobile carriers Online paid campaigns to make good use of events in the daily lives We hold partnerships with mobile apps that of their users to present personalized digital use their platforms to promote our services channels. This creates a better digital experi- to their users, as well as mobile manufactur- ence and generates cross-selling opportuni- ers that pre-load our services in exchange for ties, as well as sales of related services and the sharing of revenues generated. We also incremental services on an expandable basis.

28 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 29 38 72 5 258 COUNTRIES WITH MOBILE LIVE OFFICES EMPLOYEES IN LIVE OPERATIONS CARRIER PARTNERS 15 COUNTRIES

Geographic Presence A large portion of our revenues are gener- Bemobi’s business outside of Brazil has been ated from a subscription-based business expanding at a steady pace. We currently model that was developed through mobile have active operations in 38 countries, with carriers and has an automatic renewal fea- offices in four countries (Brazil, Ukraine, Nor- ture. The renewal may be scheduled to oc- way and India) and development centers in cur weekly or monthly and is paid through Brazil, Ukraine and India. In addition to our mobile credit balances. This service accounts permanent offices, some of our staff were for 81% of all net revenues for the year end- already working remotely from around the ed December 31, 2020. We believe that this world (even prior to the COVID-19 pandemic), service is the significant driving force behind contributing to the diversity of our team. As our track-record of steady growth, as this of year end 2020, we have employees locat- type of contract lowers the default rates for ed in eighteen countries representing fifteen our customers. nationalities. In addition, we offer different solutions to The majority of Bemobi’s employees work at pre-paid customers through our microfi- one of our offices in Brazil (Rio de Janeiro and nance services, tailored to their profiles and São Paulo), where 71% of our total workforce current conditions, including top-up sales is currently located. 15% of our workforce is with electronic payment, advances on pre- located in Ukraine and 4% is located in Nor- paid credits, advances on data packages and way. The rest of the workforce is scattered advances on calls. With respect to our micro- through a variety of countries including In- finance services, benefits are approved and dia, the Philippines, Indonesia, Bangladesh, granted immediately to users with zero bal- Vietnam and Pakistan. ances, and the payment is only collected on the next top-up. Our microfinance services In 2020, our international operations ac- increase the loyalty of our customers, which counted for 40% of our revenues, represent- assists in the development of recurring rev- ing an increase of 20 percentage points since enues. The share of this service in our net 2017. revenues for the year ended December 31, 2020 was 8%. We believe these services have Subscriber Base significant growth potential. We believe that we have a significant and expanding subscriber base for our apps and Finally, our communications services offer a + games, as well as for our messaging and variety of messaging and call services to our 33m communications services. At year end 2020, users, in addition to WhatsApp, which is one SUBSCRIBERS we had 33.2 million subscribers in 38 coun- of the most widely used apps for text mes- tries, representing an increase of almost 24% saging. These services accounted for 11% of since 2018. our net revenues for the year ended Decem- ber 31, 2020.

30 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 31 Free Paid Subscription Paid Ad based ”Unlimited usage” Transactional

Music

Video

Apps & games

Our Services Our services can be divided into three busi- the accounts of pre-paid and post-paid cus- ness lines: (i) apps and games subscriptions; tomers. This allows every user to sign up for FURTHERMORE, OUR SUBSCRIPTION MODEL CONTAINS (ii) microfinance; and (iii) communications. the service, requiring only an Android smart- THE FOLLOWING CHARACTERISTICS: phone and a mobile plan with one of the We focus greatly on the content of our ser- partner carriers. • All content available on the platform Notes: vices. For the services in our apps and games surpasses US$10,000 in premium apps and (1) Titles tagged as editor’s choice by Google business line, we divide them into areas that What we offer to users is simple: as long as in-app purchases; and Apple in their respective apps stores are include games, kids’ entertainment, health, the subscriber continues to pay the service • A model that supplements the current the recommendations of the editors, inde- education and others. The services in the subscription fee, they will have unlimited Google Play model of free and paid by pendent of their audiences or user ratings, microfinance and communications business and uninterrupted access to a set of apps download apps; based on individual title consultations per- lines provide support for mobile users at a with no additional costs. • Marketing with the brand of the carrier; formed by us; certain point in time, tailored to their con- • Free trial period of at least seven days; (2) Titles that reach their top ranking in their sumption cycle. The value of this approach is demonstrated • Segmented offers in complete packages, respective categories for at least one period by the fact that premium apps (which the one for games and another for children. and in the country where they were pub- Apps and Games Subscriptions user would normally have to pay to down- lished, based on consultations performed We believe that we were the first player in load) can be downloaded and accessed at The business model encompasses mobile car- through the service App Annie; the Brazilian market, and one of the earliest no additional cost to customers on our plat- riers, app developers and us. (3) Titles with more than 50 million down- companies in the world to provide apps and form, other than the amount already paid loads on Google Play, based on Google Play games service (from 2013 onwards). Bemobi for the subscription. For the free-to-play The Apps Club content consists of more than information. began its offering with Apps Club, a sub- apps that are downloaded at no cost (with 1,200 carefully selected titles that are avail- scription model offering unlimited access to monetization through advertisements, in- able through approximately 200 partners, Content Partners hundreds of apps which operates on a sub- app purchases, promotional videos, etc.), all including apps, developers and distributors. We currently have approximately 200 con- scription model basis that has already been advertising is removed and additional items tent partners comprised of developers, ed- successfully implemented in the music and that are normally available only through The quality of the content is demonstrat- itors, publishers and distributors handling TV/film industry (e.g., Spotify and Netflix). purchases (extra lives, better weapons, up- ed through indicators that include: (i) titles the supply of more than 1,200 titles. Notable grades, etc.) are available to subscribers at tagged as Editor’s Choice by the traditional among them are brands such as Disney, Rov- This approach offers a more inclusive model no additional cost. In addition, to ensure Apple and Google apps distribution channels; io, Viacom, Square Enix, Toca Boca and Zepto that does not require credit card payments, that our users have a continuous and inter- (ii) titles ranking top in their respective cate- Lab, in addition to others including world-fa- which were required in the early days of the ruption-free experience for both premium gories, in at least one country where they are mous names such as JetpackJoyride, Crossy- services we provided in other business lines. and free to play customers, the redirection available; and (iii) titles with more than 50 Road and AngryBirds, among many others. The payments for the services are handled to external websites (such as Google Play) is million downloads on Google Play. through mobile carriers, entered directly on eliminated for subscribers.

32 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 33 2

No Credit Web Portal No Credit Voice Portal Microfinance With this portfolio, it is possible to monitor Call w/o credit Missed Call Notification New digital services were developed to re- a customer’s activity online (caller ID and engagement engine Browse w/o data Omnichannel Voice Mail Notification Right Channel spond to the needs of pre-paid users at times anti-spam) and offline (voice messages and Voicemail deposit when their balance is zero (through no credit notifications for missed calls). We have a new Missed call 4 B channels), in addition to the creation of new app under development for the integration Data usage alerts Align with users monetization opportunities for the carriers. of these functions. micromoments Right Time Loop AI/ML and rule based Microfinance Portfolio Our Proprietary Distribution Channel – Be- A decision engine Microfinance solutions are directly related to mobi Loop our proprietary distribution channels plat- Over the past few years, we have been form, presented at times when users have no specializing in digital service distribution Right Offer credit to make calls and access the internet. through the development of a proprietary 1. Customer lifecycle and usuage generates Premium Digital Services, They are monetization tools for carriers, re- distribution platform and multichannel man- important events Financial Telecom and Voice Services moving any conflict with “blocked” customers agement of digital services. The aim of this 2. We develop contextualized channels, to that have no credit to use their mobile plan. platform is to deliver the right offers through turn events into revenue opportunities Apps Subscription the right channel, at the right time. 3. The most consistent services are displayed Microfinance The following services constitute this portfolio: to engage users at the right moment Communications This expandable platform offers low acquisi- 4. Users interactions with the offers leads to Plan Migration • Digital top-up – Service for the completion costs to users and is supported by cloud important insights constantly providing 3 tion of top-ups through credit or debit storage and artificial intelligence. feedback to Bemobi Loop which in turn C cards. can then provide more attractive offers • Balance/Credit Advance – Service that Bemobi Loop – Management of multichan- provides a balance/credit advance to be nel offers through artificial intelligence and paid at the next top- up by the custom- data analysis er. Additional fees are charged on the Data Analysis – Our channel platforms man- amounts that were loaned through this age more than half a billion monthly interac- The following example illustrates the functioning of the platform: service. tions, including sales of apps and game sub- • Data Package Advance – Service offering scriptions, messaging and communication A B C a data package advance to be paid at the services, and microfinance transactions. We Maria during its day to day pre- The loop platform is integrated to The loop platform has access to Ma- next top-up by the customer. capture the daily routine of the users of mo- paid mobile journey generates the core of the mobile networks ria’s profile and historical data such • Call Advance – Service offering a min- bile carriers in order to promote our services events that are normally treated as systems and transforms these as top-up history, pre-paid plan, utes-package advance for customers to with low acquisition costs. basic texts messages and/or error events into opportunities to engage service eligibility, past preferences complete calls, to be paid at the next top- messages with Maria through the best avail- and through an AI and Ruled based up by the customer. Designed for mobile carriers – Bemobi Loop able digital channel model recommends the best set of is based on a marketing and data analysis offers and services to Maria The key characteristic of these services is that platform to manage offers that anticipate they are presented to customers at the right individual needs, allowing carriers to offer time, for example, when they are receiving a the best possible experience to every user of call or accessing the internet without credit. their networks. Types of inputs for segmentation Types of Arrangement Inventory Management Our microfinance solutions are a major component for our growth strategy, which has Knowledge of user behavior to recommend Micro-moment By behavior and history Manual Dynamic already provided solid results. the best offer – Bemobi Loop identifies the • Trying to use data/apps • Previous browsing and buying • We and the mobile carriers • Cost Per Click (CPC), effective best offer by understanding the profile and with no credit/balance behavior define the position for each Cost Per Mille (eCPM) and Cost • Trying to call with offering of services Per Acquisition (CPA) with the Communications context of each interaction with customers, • Payment history/Top-up offering the most suitable products within no credit/balance possibility of setting up a budget Dynamic by conversion for each of the above • Missed call Communications Portfolio a specific context, such as top-ups or credit Pre-segmentation Communications services are rendered with- advances when users are making calls with • Products are arranged according • Printing or selling limitation • Eligibility for service to the conversion index in its • Per time period in the context of making and receiving voice no active credits. respective channel • By prepaid mobile plan calls. The Communication 2.0 concept delivers: • Balance availability Personalized multi-channel experience – • By Operating System • Visual Voice Messages (voicemail); Transforming customer voice and data nav- • By Subscription Status • Artificial intelligence that transcribe audio igation points of contact into relationship messages into text; channels and sales of digital and telecom- • Integration with WhatsApp for the deliv- munications products. ery of messages; conversions, together with inventory man- Credit Voice Portal and the No Data No Credit • Notifications for missed calls; and The platform currently supports segmenta- agement. Web Portal are intended to assist in the digi- • Anti-spam and caller ID (By TruecallerTM). tion by different types of data input, with tization of the daily routines of the pre-paid offers arranged by pre-set rules and dynamic Integrated directly with Bemobi Loop, the No customers of carriers when they have credit.

34 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 35 No Credit Voice Portal A call management platform that transforms Brazilian company, Novitech, part of Nuance We believe that the successful completion partnerships and integrated our services, opportunities that are usually lost into a bet- Communications Inc. (one of the global lead- of this transaction demonstrates our experi- collections and distribution channels directly ter user experience for customers, with oppor- ers in voice recognition technology, listed on ence and the quality of our team in identify- with 72 carriers in 38 countries. These part- tunities for incremental revenues for carriers. NASDAQ) in Brazil and Central America. ing desirable assets, negotiating acquisitions nerships provide us with firm control and an The platform supports more than 200 million at reasonable prices, even in competitive initial scale that allows us not only to repli- calls per month, transforming them into sales The acquisition comprised physical assets bidding processes, in addition to fully inte- cate this model with more carriers, but also of telecommunications and digital services. such as hardware, software and intellectual grating our objectives, with positive out- to create new services and channels with our property, commercial agreements with major comes gained in a short period of time. current partners. No Credit No Data Web Portal Brazilian and Latin American mobile carriers, This platform manages internet access at- as well as a certain selected employees. Competitive Advantages Expanding geographical diversification of tempts by customers with zero balances During the time that we have operated in revenues: or attempted accesses that are beyond the Bemobi regards this is an important strategic this business, we have developed a set of Through the development of partnerships es- limits of their data packages. It provides a acquisition in many aspects. It has enhanced competitive advantages that have steered tablished during the past few years, we have personalized portal that allows customers to our channel offer and our current distribu- us along a path of sustainable growth. We developed from a Brazilian company focused access services at the right moment, includ- tion platform, bringing a more diverse set believe that these advantages will be cru- on the Brazilian market into an international ing the sale of top-ups, data packages and of channels to our portfolio beyond the No cial for our future. Those advantages are enterprise with a global presence, leading to digital services. Credit No Data Web Portalby adding the No as follows: revenue diversification. Credit Voice Portal. Further, it considerably Personalized Digital Experience for Pre-Paid raises our service distribution scale for our Business model based on subscriptions, Proprietary digital channels platform that Users – Developed to respond to the specific own services. optimized for emerging countries: generate an intelligent user acquisition demands of each carrier, each portal can be We have developed a business model that model, at low costs and that is expandable: personalized according to the carriers’ brand Together with steady and effective integra- benefits from our experience in subscrip- Our proprietary digital channels platform and layout. There are twenty mobile carriers tion, this acquisition accelerated our learning tions, with pricing tailored to the purchasing (Bemobi Loop) allows mobile carriers to with platforms enabled by us, with approx- curve for voice interface technologies (e.g., power of each income segment, using pre- make good use of events in the daily rou- imately 500 million pre-paid users managed SIP, VoIP, Voice-to-Text, and others), support- paid customer billing mechanisms provided tines of their mobile users in order to present every month. ing the feasibility of expansion and creating by mobile carriers to enable feasible means personalized digital channels, thus creating new channels and services, such as smart, of payment. We have also developed high- a better digital experience and opening up Several acquisition opportunities identified personalized voice portals and microfinance ly competitive products that we believe are opportunities to cross-sell and up-sell ser- to bring value to our market with room for services. These assets and talents have been difficult to replicate, which have been added vices at low costs in expandable ways. This inorganic growth integrated at a steady pace, supporting the to our point-to-point technology platform. approach is a vital comparative advantage, The organic growth of our channels, products feasibility of wider channel diversification as it allows us not only to develop relation- and services during the past few years has for our portfolio, such as the No Credit Voice An extensive base of distribution partnerships and integrate services in greater depth allowed us to pinpoint several opportunities Portal, as well as extending our portfolio ship and expanding market: with our partner carriers, but also supports to increase our expansion, and return to our through the introduction of services that We have an extensive partnership base that the feasibility of an expandable distribution current shareholders, through acquisitions. In could be monetized on our proprietary dis- includes many long-standing relationships. channel that is also predictable at a relative- 2019, Bemobi acquired certain assets from a tribution platform (i.e., Bemobi Loop). During the past few years, we have built ly low cost.

36 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 37 Main drivers for the M&A Strategy is to generate shareholder value through

SERVICES Expanding service offering (e.g., Digital top-up and payments, Micro-financing and games)

KEEP CORE: CHANNELS Emerging market focus Creating or expanding chan- B2B2C model nels, through technology and All Digital platform companies

GEOGRAPHIES Revenue growth accelerating penetra- tion into new geographies (e.g., Africa)

Ability to acquire and integrate new companies: We believe the combination of these two The ample experience of our executives with dimensions is the foundation of our sustain- mergers and acquisitions, added to our re- able growth over the past few years and is cent successful acquisition of assets from the basis of our future growth progress. Nuance Communications puts us in a strong position to pursue new acquisitions that add Our opportunities for expansion are both or- value in a consistent manner. ganic and inorganic. The latter occurs through potential acquisitions that provide leverage Our Strategy for our strong points and the competitive We believe that we hold a strong market po- advantages of our current model (only digi- sition, with the continued expansion of our tal operations, solid B2B2C partnerships, and digital services market in emerging countries. a focus on emerging countries, with propri- Over the past few years, we believe we have etary digital channels). developed a simple growth model that we have been implementing at a steady pace, Our organic growth follows three diverse striving to generate network effects when- paths comprised of: (i) the creation of new ever possible and to utilize gains that justify digital channels; (ii) the launch of new digital higher expenses on research and develop- services; and (iii) the expansion of partner- ment (R&D) to maintain a competitive edge. ships to new carriers in new countries. In its most basic form, the model is based on the following two areas: The additional growth opportunities that we see can be summarized as follows: Subscription Services: Our market grows as we launch more digital • New services: launch of new services that micro-subscription services tailored to mo- provide leverage for cross-selling and/or bile user demands in the emerging countries up-selling opportunities for our current through our B2B2C model with mobile carriers. customer base (i.e., 33.2 million subscribers, who have signed up for our current Digital Channels: digital channels. Parallel to the launching of our services, • New channels: development of new dig- we are integrating our Bemobi Loop pro- ital contact points for mobile customers prietary digital channels platform which al- that could open up new sales opportuni- lows mobile carriers to create and manage ties for services. personalized digital channels, supporting • New geographical areas/carriers: expan- the feasibility of expandable and predict- sion into new countries and new partner- able distribution for the conversion of users ships with carriers. into subscribers.

38 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 39 Skyfire Skyfire in 2020

The need for speed is increasing. Today, typi- to managing the explosion of mobile video cally 60 percent or more of total mobile data data traffic. It is designed for operator de- consumption is video content, putting pressure ployment and it provides operators with an on the operator’s existing network capacity. instant 60 percent boost in bandwidth ca- Skyfire en-ables mobile operators to optimize pacity across smartphones, tablets and lap- its network performance and quality as data tops. Rocket Optimizer allows mobile opera- traffic and the consumption of mobile video tors to leverage cloud computing to optimize is exploding among mobile users. The unique and compress video and other multimedia technology also enables operators to pursue traffic, for example on congested 3G and 4G new business models and revenue streams LTE cell towers, enabling operators to boost while benefiting from increased technological the capacity of their networks significant- flexibility as customer data is compressed. ly while at the same time offering better network performance and quality to their At the same time, mobile operators face in- mobile customers. creasing downward pressure on average voice revenue per subscriber, and as competition In addition to optimization, Rocket Optimiz- heightens, operators around the world are er enables myriad new monetization use cas- looking for new sources of revenue, differenti- es by allowing operators to set and control a ation via data services as well as network per- target video quality for different classes of formance and quality, and solutions to manage users or for different data packages. For ex- the explosion of mobile video and multi-me- ample, an operator might ensure the highest dia data network traffic spurred by the rapid possible video quality for “Gold” users, 480p adoption of smartphones and tablets. quality video for “Silver” users and 360p video for “Bronze” users. Alternatively, a new Fast as a rocket “Free Video Off-Peak” data package could During 2017, Skyfire began marketing itself be introduced that limits video to 480p and under the RocketColony name – a break from allows unlimited video consumption in off- the original Skyfire name just as the company peak hours – thereby winning video-hungry has shifted its focus to new encrypted video customers from competing operators while optimization technologies. Skyfire remains ensuring the network is protected. These the legal name of the company. are just a few examples of the many monetization options enabled by the very flexible Rocket Optimizer is Skyfire’s flagship prod- Rocket Optimizer system. uct addressing operator needs in regards

42 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 43 Vewd In 2020, the English High Court delivered its decision on remedies in Otello’s dispute with MFC over the Vewd business. The Court determined that MFC should be required to purchase Otello’s shares in Last Lion from Otello for the sum of $48 million and that MFC should be required to purchase the Loan Note issued in Otello’s favor by a subsidiary of MFC for $5 million plus accrued interest at the time of purchase. If MFC did not purchase Otello’s shares in Last Lion and the Loan Note, all of the shares in the Company were to be sold to a third party by a receiver. MFC has not purchased the shares, and Otello agreed to give MFC extra time to seek refinancing to raise funds to enable it to pay in the sums due to Otello, which proved to be unsuccessful. On March 17, 2021, MFC and Otello together with the Vewd Group’s secured lender agreed that as an interim alternative to the appointment of a receiver, a special committee be appointed to sell the company or raise finance to pay Otello what it is due.

Vewd in 2020

Vewd Software is the market leader in en- ketplace. Our market-leading products help abling the transition to OTT. Vewd’s suite enable the best streaming video services and of OTT solutions enable our customers and unparalleled user experiences on all types of partners to reliably, seamlessly and efficiently devices for audiences around the world. reach connected device viewers. We help companies like Sony, Verizon, Samsung and TiVo Vewd offers proven and flexible solutions benefit from the growing number of consum- for overcoming the difficult challenges and ers who watch content on connected devices. escalating costs associated with the rapidly evolving OTT space. As experts in developing One size doesn’t fit all Puts the brand in focus With over 15 years experience in the con- software solutions spanning client to cloud, Whether you want a complete turnkey solu- An easy-to-use toolkit allows comprehen- nected TV device and OTT industry, we boast we provide customers and partners the tion, or prefer to mix-and-match from a sive alterations to the look, feel and brand- technological expertise to continuously sat- products they need to connect consumers combination of Vewd’s world-class products ing to make every device portfolio distinct isfy the ever-evolving demands of the mar- with the content they love. and modules, it’s never been easier or more and unique. flexible to build a differentiated and modern Smart TV experience. After-sale monetization The story doesn’t have to end once the TV is Deep analytics sold. Vewd OS lets manufacturers share rev- Gain insights into how viewers interact not enue after the sale, tapping into significant only with the product, but also with the recurring revenue opportunities. apps and content available through Vewd OS. Those analytics can then be used to further test, refine and deploy new user experiences on devices.

46 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 47 Investor Relations

INVESTOR RELATIONS POLICY Communication with shareholders, investors and analysts, both in Norway and abroad, is a high priority for Otello. The company’s objective is to ensure that the financial markets have sufficient information about the company in order to be able to make informed decisions about the company’s underlying value. Otello arranges regular presentations in Europe and the United States and holds frequent meetings with investors and analysts. Important events affecting the company are reported immediately.

KPI [2016-2020] 2016 2017 2018 2019 2020

Revenue ($ million) 532.2* 419.0** 275.4 240.7 259.0 Adjusted EBITDA ($ million) 49.4* 13.5** 9.4 19.4 23.4 Operating cash flow ($ million) 41.4* 6.7** (0.2) (0.2) 19.1

*Excluding the consumer and TV business **Excluding the consumer, TV and SurfEasy businesses

LARGEST SHAREHOLDERS at December 31, 2020 Shares 4.9% 34.9% MERRILL LYNCH INTERNATIONAL 24.5% Sweden-based accounts Norway-based LUDVIG LORENTZEN AS 7.3% 4.6% accounts AREPO AS 5.4% Belgium-based accounts VERDIPAPIRFONDET DNB TEKNOLOGI 5.3% 4.6% GOLDMAN SACHS INTERNATIONAL 4.9% U.S.-based accounts MORGAN STANLEY & CO. INT. PLC. 3.9% SUNDT AS 3.9% 3.3% J.P. MORGAN BANK LUXEMBOURG S.A. 3.5% Luxembourg-based accounts BANK OF AMERICA, N.A. 3.3% 0.9% VERDIPAPIRFONDET NORDEA NORGE VERD 3.0% France.-based accounts 45.0% U.K.-based 1.8% accounts Accounts based elsewhere

2019 Country breakdown shareholders: 2020 36.5 % U.K.-based accounts 45.0 % 44.0 % Norway-based accounts 34.9 % 3.8 % Sweden-based account 4.9 % Company Analyst Telephone 2.0 % Belgium-based accounts 4.6 % 0.9 % U.S.-based accounts 4.6 % 6.8 % Luxembourg-based accounts 3.3 % Arctic Securities ASA Henriette Trondsen +47 21 01 32 84 2.8 % France-based accounts 0.9 % DnB NOR Markets Christoffer Wang Bjørnsen +47 24 16 91 43 3.2 % Accounts based elsewhere 1.8% ABG Sundal Collier Aksel Øverland Engebakken +47 22 01 61 11 Adjusted EBITDA represents EBITDA excluding stock-based compensation expenses, impairment and expenses

48 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 49 Executive Team Otello Corporation ASA

Lars Boilesen Petter Lade Chief Executive Officer Chief Financial Officer

Lars Boilesen is the Chief Executive Officer at Petter Lade was appointed Chief Financial Otello Corporation ASA, a position he has held Officer in January 2017. He is responsible for since 2010. He also serves as CEO of Otello’s the financial management of the Group and subsidiary AdColony, Inc. Lars has extensive oversees financial planning and analysis, experience in the software and tech industry treasury, M&A and investor relations. Pet- and has held executive positions in various ter comes from the position as Director, IR & corporations prior to joining Otello. He was Corporate Development and has held sever- Executive Vice President of Sales & Distri- al key roles within controlling, M&A and IR Lars Boilesen bution at Opera Software ASA from 2000 to since joining Otello in 2006. Chief Executive Officer 2005 and served on the Board of Directors of Opera Software ASA from 2007 to 2009. Before joining Otello, Petter was Finance & Commercial Consultant at Dell EMEA and re- From 2005-2008 he was Chief Executive Of- sponsible for the financial and commercial ficer for the Nordic and Baltic Region at Al- element for pan-EMEA or Global Dell Man- catel-Lucent. Lars started his career in the aged Services (DMS) deals. Prior to that, Pet- LEGO Group as Sales and Marketing Manager ter worked as Business Controller/Bid Analyst for Eastern Europe. After that, he headed the for Dell Norway. He began his career with Northern Europe and Asia Pacific markets for Verdens Gang (Schibsted) as a controller. Tandberg Data. He has been Chairman of the Board of Directors of Napatech since Septem- Petter obtained a Siviløkonom degree (four ber 2017 and currently serves as Chairman of year program in economics and business the Board of Directors at Cobuilder AS. administration consisting of three years at Petter Lade bachelor level and one year at master level) Chief Financial Officer Lars holds a Bachelor’s Degree in Business from BI Norwegian Business School. Economics from Aarhus Business School, and postgraduate diploma from Kolding Business School.

50 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 51 The Board of Directors Otello Corporation ASA

ANDRÉ CHRISTENSEN CHAIRMAN André Christensen Chairman eign listed and unlisted companies. She has substantial experience with transactions and André Christensen has extensive strategic works regularly for reputable financial and and operational experience from the Media, industrial clients in Norway and abroad. Bir- Internet, and High Tech industries across Eu- git holds a Master in law from the University rope, North America and Asia from the last of Bergen, Norway. 25 years. He is currently the CEO and Found- er of the IPTV/OTT entertainment platform Maria Borge Andreassen provider Firstlight Media based in Toronto/ Board Member Los Angeles/Chennai. Prior to this he headed product development for AT&T Enter- Maria Borge Andreassen is Commercial Direc- tainment Group following the acquisition of tor in Jernia AS, a specialist retailer chain in Quickplay Media where he was the COO and Norway with approximately 130 stores. She co-owner. He has also been the SVP Business is leading the departments responsible for Operations and Strategy at Yahoo globally space, category strategy and sourcing. Be- BIRGIT MIDTBUST BOARD MEMBER MARIA BORGE ANDREASSEN BOARD MEMBER LIN SONG BOARD MEMBER after 12 years with McKinsey & Company as fore that, Maria was part of the Executive a partner establishing and leading the Busi- Team in Europris, the largest discount vari- ness Technology practice in Canada as well ety retailer in Norway and listed on the Oslo as the Global Operating Model service line Stock Exchange. In her position as the Direc- Anooj Unarket Lin Song worldwide. Mr. Christensen currently holds tor of Strategy and Business Development, Board Member Board Member a board position with Intermedia in Sunny- Maria was responsible for the overall strat- vale. He has a MSc/DiplKfm degree from egy, including project portfolio, new growth Anooj Unarket is a Senior Member at Sand Lin Song is the Co-CEO at Opera Limited, a University of Mannheim, Germany. initiatives, OMNI channel strategy, digital Grove Capital Management. Prior to Sand NASDAQ listed company, and a former em- roadmap and sustainability. Prior to joining Grove’s inception in 2014, from 2010-2014, he ployee of Otello from its’ former days as Birgit Midtbust Europris, Maria served as Marketing and In- was a Partner and Analyst in the Event Driven Opera Software ASA, beginning at the com- Board Member novation Director in the central unit and as division at Cheyne Capital investing in event pany in 2002. Lin Song has been responsible Corporate Business Advisor to the President driven situations across the capital structure. for various high-profile projects at Opera, Birgit Midtbust is a senior lawyer in Advoka- and CEO of Orkla ASA, the leading Nordic Prior to Cheyne Capital, from 2007-2010, he including holding the position of Director tfirmaet Schjødt AS, the largest law firm in based branded consumer goods company. was a member of the European Mezzanine of Delivery and Engineering in APAC. Prior Norway, and a member of their M&A and She held internal board positions and start- team at GSC Group sourcing and analysing to Opera’s browser and consumer business Capital Markets department. She joined the ed many new growth initiatives. Maria start- investments in subordinated private debt in being privatized and later listed on the NAS- firm in 2007, and specializes in acquisitions ed her career as a consultant in McKinsey & sub-investment grade companies through- DAQ, Lin Song served as its COO responsible and sales of companies, mergers, investment Company, Inc., where she worked with strat- out Europe. He began his career in 2005 at for business operations, and since the listing structures and ownership structures. She has egy and organizational topics, and served Merrill Lynch as an Analyst in the TMT in- has become the Co-CEO of the company. a broad practice area, with main focus on oil clients in many industries in Scandinavia, UK vestment banking team based in London. He graduated in 2004 from the University service, offshore, maritime and technology. and South Africa. Maria holds an MBA from He graduated in 2005 with an MA (Hons) in of International Business and Economics in Birgit has advised on a substantial number INSEAD and a Bachelor in Business Adminis- Economics from Trinity College, University Beijing, China. of transactions involving Norwegian and for- tration from the University of Strathclyde. of Cambridge.

52 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 53 Report from the Board of Directors

In 2020, Otello delivered on its key objec- COMPANY OVERVIEW tives, including making AdColony adjust- Otello Corporation ASA, the parent com- ed EBITDA profitable and getting Bemobi pany of the Group, is domiciled in Norway. ready for a separate listing. The turnaround The Company’s principal offices are locat- in AdColony continued to bear fruit and we ed at Gjerdrums vei 19, Oslo, Norway. The delivered revenue well above the FY 2020 company is a public limited company that is guidance despite the negative impact from listed on the Oslo Stock Exchange under the Covid-19. For AdColony we ended the year ticker OTEC. very strong with growth in 4Q20 up 34% vs 4Q19. For Bemobi we continued on the IPO Otello’s business activities comprise mobile path and in 4Q20 submitted a preliminary advertising via its AdColony business, mo- filing for an IPO. The IPO was significantly bile app subscription services via its Bemobi oversubscribed and IPO went public in Brazil business, and licensing of Rocket Optimizer™ in February 2021. technology via its Skyfire business.

As we enter 2021 the world is still grappling AdColony is a global business headquartered with the direct and indirect impacts of the in the United States, in addition to larg- Covid-19 virus. In this challenging situation, er offices in Turkey and Singapore. Bemobi the primary focus of Otello has been the is headquartered in Brazil, with offices in health and safety of our employees. Since Ukraine and Norway. The Skyfire business is mid-March 2020, the Group entities have based in the United States. successfully managed to shift the vast majority of the operations to remote home The following are Otello’s segments as at De- offices. The operational impact is limited cember 31, 2020: and all business activities continue to op- ADCOLONY erate as before the crisis. Due to the na- AdColony (Mobile Advertising) REACH MORE THAN ture of our business in both AdColony and AdColony is one of the largest mobile adver- Bemobi, in terms of not having physical tising platforms in the world with a reach of 1.5bn products and being reliant on the use of more than 1.5 billion users globally. AdColony USERS GLOBALLY consumers mobile phones, we are in a rel- provides an end-to-end platform for brands, atively fortunate position. However, as our agencies, publishers and application devel- revenue is linked to the advertising spend opers to deliver advertising to consumers on of brands and game developers (AdColony) mobile devices around the world. AdColony and subscriptions bought by consumers delivers highly interactive and engaging ad- (Bemobi), we expect Covid-19 to negative- vertising experiences across all mobile for- ly impact revenue and profit in 2021. At this mats with particular strength in video and stage, it is still too early to tell how great full screen interactive rich media ads. this impact will be. Ultimately, it will be linked to the duration of the crisis and the AdColony revenue is primarily based on the ac- knock-on effect of the changed behavior tivity of mobile users viewing ads through 3rd of our customers. Party Publishers, such as developer applications and mobile websites. Revenue is recog- Due to the turnaround in AdColony and con- nized when advertising services are delivered tinued strong performance from Bemobi, based on the specific terms of the advertising Otello now finds itself in a strong financial contract, which are commonly based on the position having limited debt and a net cash number of ads delivered, or views, clicks or ac- position as we enter 2021. tions by users of mobile advertisements.

54 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 55 Bemobi (Apps & Games) publisher and revenue share cost increasing The cornerstone of Otello’s Bemobi offering is 14%, partly offset by lower payroll and re- Apps Club, a leading subscription-based dis- lated expenses. Otello delivered Adj EBITDA covery service for mobile apps in Latin Amer- (excluding impairment and restructuring ex- ica and beyond. Apps Club offers a unique, penses) of $23.4 million (2019: $19.3 million), “Netflix-style” subscription service for pre- with significant improvement in AdColony. mium Android apps. Working with mobile operators, Bemobi’s proprietary app-wrap- A loss before income taxes (including impair- ping technology allows smartphone users ment and restructuring expenses) of $-18.3 access to unlimited use of premium mobile million was recognized in 2020 (2019: $-12.8 apps for a small daily, weekly or monthly million). Provision for taxes resulted in an fee. Users pay for this service through their expense of $5.0 million in 2020 (2019: $9.8 mobile operator billing systems, making the million) The result after tax was for 2020 was service highly effective in emerging markets, $-23.3 million (2019: $-22.6 million). Basic and where credit-card and debit-card penetra- diluted earnings per share were both $-0.17 tion is low. (2019: $-0.16).

Bemobi revenue is primarily comprised of: i) Revenues subscription revenue when an Android user Otello’s operating revenues grew by 8% to purchases a subscription from a ”co-brand- $259.0 million in 2020 (2019: $240.8 million). ed” mobile store, or a white-label operator-controlled version of the mobile store, In 2020, AdColony showed strong revenue known as Apps Club, and ii) the Bemobi growth of 15% vs 2019 which accelerated Mobile Store (formerly Opera Mobile Store), through the year and came in over 30% in a feature phone platform, when a user pur- 4Q20 vs 4Q19. Bemobi continued its global and services as many operators were reluc- Otello’s cash balance was also impacted pos- chases a premium app. rollout but was also hit hard by Covid-19, in tant to launch new services. Covid-19 also itively in 2020 by the drawing of $15.0 million 8% particular in its home market Brazil. In addi- impacted new sales efforts and made the of its credit facility. The cash balance was im- REVENUE GROWTH See note 1 for further information regarding tion, Bemobi, which has most of its revenue decision process longer for our customers. pacted negatively by the following: capital- revenue recognition. in BRL, was adversely impacted by a much Revenue fell 16% in USD terms, but this was ized R&D of $10.3 million, payment of finan- weaker BRL vs USD in 2020. heavily impacted by weaker BRL vs USD. cial lease liabilities of $2.8 million, capex of Corporate Costs In local currency 2020 was virtually flat vs $1.8 million, interest payments of $1.3 million Corporate costs comprise primarily i) costs AdColony was the largest source of revenue 2019. Adjusted EBITDA fell by 21% in 2020 and share repurchases of $0.4 million. related to personnel working in functions in 2020, as in 2019. AdColony revenues grew vs 2019 also adversely impacted by FX and that serve the Group as a whole including by 15% compared to 2019. The increase in rev- in addition negatively impacted by scaling As of December 31, 2020, the Group had a CEO, Board of Directors, corporate finance enue in AdColony was mainly due to strength of the business to roll out globally. Due to cash balance of $41.9 million (2019: $28.3 mil- and accounting, legal, HR and IT, and ii) cer- in our Brand business and programmatic rev- the launch of new services such as voice lion), and $35.0 million (2019: $20.0 million) in tain costs related to business combinations enue in particular. We also saw stabilization and financial in 2020 we saw solid growth interest-bearing debt and thus, $6.9 million and restructuring processes. As from 2019, in revenue from our Performance business in our subscriber base with a 16 % growth in net cash. the Group has no longer reported Skyfire which has been falling since 2016 and also over 2019. By the end of 2020, Bemobi was (Performance & Privacy) as a separate seg- here delivered YoY growth in 4Q20 vs 4Q19. working with over 70 mobile operators, the Balance sheet ment but rolled this into the Corporate seg- The investments we have made in our prod- majority outside LATAM, and with a total of As of 31 December 2020, the Group had total ment due to its very limited size. ucts paid off in 2020 and we ended the year 34.0 million subscribers, we are well on our assets of $425.3 million (2019: $435.4 million). with over 30% growth in 4Q20 vs 4Q19. Our way to taking this Brazilian success global. Non-current assets represented $286.6 mil- In addition, Otello has retained preferred significant cost focus has lowered the reve- Based on positive feedback from investor lion of this total, and primarily consisted of shares equivalent to 27% of the common eq- nue break-even point substantially. We de- meetings carried out throughout 2020, we goodwill ($219.7 million), deferred tax assets uity of the new parent of Vewd Software AS livered $9.8m in adjusted EBITDA in 2020, evaluated a separate listing of Bemobi. In ($26.1 million) other investments ($18.7 mil- (formerly Opera TV AS). up significantly from 2019. 2020 marked the 4Q20 we submitted our initial filing with lion), intangible assets ($12.8 million). Current end of the turn-around for AdColony and we the CVM in Brazil and Bemobi was success- assets such as cash and receivables repre- FINANCIAL SUMMARY delivered above our annual plan despite the fully listed in Brazil on the Bovespa in Feb- sented $138.7 million of total assets. negative impact from Covid-19. ruary 2021 in a oversubscribed IPO. Income statement The Group had total liabilities of $118.9 mil- Otello’s operating revenues grew by 8% to Bemobi was heavily impacted by Covid-19 Cash flow lion as of 31 December 2020 (2019: $96.3 $259.0 million in 2020 (2019: $240.8 million), in 2020, which reduced the available spend Net cash flow from operating activities in million), of which $116.1 million were current driven by a growth in the AdColony busi- from consumers in emerging markets as 2020 totaled $19.1 million, (2019: $-2.7 mil- liabilities. Shareholders’ equity was $306.4 ness, partly offset by a decrease in Bemobi. well as the closure of physicals shops mak- lion). Otello’s operating cash flow was pos- million at the end of 2020, compared with Operating expenses, excluding impairment ing it more difficult for people to top up itively impacted by growth in EBITDA in $339.1 million at the end of the previous year. and restructuring expenses, increased by 6% their pre-paid cards. The pandemic also im- AdColony and overall good cash collections Otello’s equity ratio at year end was 72% to $268.7 million (2019: $253.4 million), with pacted the speed of rollout of new products and cash management. (2019: 78%).

56 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 57 Performance a more unified vision. AdColony released At AdColony, the term “performance” cur- AdColony SDK 4.4, which fully supports Ap- rently encompasses both our user acquisition ple’s upcoming App Tracking Transparency ADCOLONY OVERVIEW AND PRODUCT UPDATE (UA) business and our publishing monetiza- and SKAdNetwork privacy-focused frame- tion business. For most mobile app develop- works. Combined with SDK version 4.3 AdColony per business area 2020 2019 ers, growing the number of users comes from (which includes basic support for the previ- advertising in other apps, and monetizing ously mentioned features), more than 62% Total revenues 211.4 183.9 those users comes from integrating ads. The of impressions, 68% of ad spend, and 66% of Performance 53.6 61.8 ads AdColony shows to users in those pub- margin revenue as of December 31 are com- Brand-Managed IO 80.2 65.6 lishers’ apps are a mix of both UA and brand. patible with Apple’s latest updates. Brand-Performance 16.6 27.6 Brand-Programmatic 60.9 28.9 AdColony’s performance revenue was $53.6 Brand/Exchange Gross profit 69.1 63.4 million in 2020, down 13% relative to 2019, AdColony has been giving brands like Toyota, Adjusted EBITDA 9.8 0.3 and therefore underperformed during 2019. Marvel, Coca-Cola, and many more well-known EBITDA 10.6 (0.6) This can also be attributed to significant brands the opportunity to reach consumers EBIT (7.2) (21.8) growth in the performance programmatic in- in the fastest-growing consumer channel for dustry, with some partners shifting spend to years thanks to our SDK via both direct-sold AdColony: Financial Overview Performance DSPs. It is a positive sign, how- and particularly open exchange programmat- Overall AdColony’s revenue for 2020 was $211.4 dition to continuing the transition to mov- ever, that we ended 4Q20 with growth over ic channels. Coupled with a strong emphasis million, up by 15 % compared to 2019, and ing non-customer facing roles to lower-cost 4Q19, the first quarterly growth we have on programmatic (built into our monetization above the 10% revenue growth we guided in locations, AdColony continued a heavy focus seen since 2016. SDK) and strong relationships with all the ma- February 2020. Revenue accelerated through on programmatic and automated delivery of jor advertising agency holding companies like 2020 and we delivered 34% YoY growth in our customers’ ad spend. Overall, AdColony’s performance business Havas, Omnicom, Publicis, and more, AdColo- 4Q20 vs 4Q19. AdColony was adjusted EBIT- is looking healthier moving into 2021, with ny’s brand business has never been stronger, DA profitable for 2020 as a whole and ended Adjusted EBITDA amounted to $9.8 million for solid trends in impressions and unique views and is the leading factor in AdColony’s con- 4Q20 with over 10% EBITDA margin. 2020, an improvement vs $0.3 million in 2019. across apps in the Top 100 globally in 4Q20 tinued growth and stability into the next de- Gross margin for 2020 was 32.7% versus 34.5% versus 3Q20 and with the addition of new cade. Overall, the Brand business experienced Total operating expenses continued to de- in 2019. Overall gross margins are impacted publishers onboarded during 2020. The uni- strong growth across all regions in 2020. The cline YoY as AdColony has continued to by the product mix shifting over to more fied commercial structure under a newly primary source of growth was Programmat- streamline the organization, especially in the programmatic revenues which carries slightly appointed Chief Revenue Officer and Chief ic both PMP and Open Exchange. AdColony’s performance business, while investing in the lower gross margins but scales very well and Operating Officer has continued to pay fruit Open Exchange allowed access to a vetted, roles and individuals driving growth. In ad- has a positive contribution to EBITDA. as the business needs have aligned behind high-quality audience for advertisers.

58 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 59 Ongoing work-from-home and other Covid-19 as Advanced Bidding 3.0, launched in 3Q20) precautions around the globe, and especially delivered considerable gains in performance in North America, have continued to give Ad- when bidding in advanced mediation zones Colony’s brand clients opportunities to reach thanks to new models to bid more efficiently their target audiences at scale via mobile in this inventory, resulting in improvements apps, and a general industry warming to the to gross margin. popularity of gaming and ubiquity of mobile gamers within their target audience. The AdColony data science and engineering-focused office in Warsaw, Poland has During 2020, 30% of clients for AdColony’s developed new targeting and optimization brand business were new clients, includ- algorithms that contributed significantly to ing well-known advertisers including Chase the stabilization of AdColony’s performance Bank, Sanofi, T-Mobile, Sony PlayStation, business (see above). In November, AdColony Amazon Shopping, General Mills, McDon- announced BidSheet, a campaign targeting ald’s, and many more. and bidding manager that allows advertisers to set up and manage campaigns quickly and Publishing efficiently using a streamlined UI and bulk Publishing is AdColony’s SDK monetization bid management design. business and the heart of what distinguish- es it from many competitors by directly Work around Apple’s privacy changes was a supplying impressions via its SDK. In addi- significant focus for AdColony’s product and tion to managed demand from brand and engineering teams, with iOS SDK 4.3 and 4.4 performance advertisers alike, AdColony’s both released to address Apple’s latest re- SDK also allows programmatic demand ac- quirements. AdColony designed and began cess to its inventory, giving publishers the implementing SKAdNetwork support via world over access to the highest possible BidSheet™ and plans to launch BidSheet™ demand mix via our open exchange and for SkAdNetwork in Q1 2021. direct-sold campaigns. Apple announced that it will require devel- AdColony released AdColony SDK 4.4, which opers in “early Spring 2021” to use the App fully supports Apple’s upcoming App Tracking Tracking Transparency framework to obtain Transparency and SKAdNetwork privacy-fo- consent for tracking. If users do not consent, cused frameworks. Combined with SDK ver- Apple’s developer terms of service prohibit sion 4.3 (which includes basic support for the any tracking, and iOS itself will not send the previously mentioned features), more than device’s Identifier for Advertisers (IDFA) to 62% of impressions, 68% of ad spend, and the developer, advertisers, or other advertis- 66% of margin revenue as of December 31 are ing or measurement parties. compatible with Apple’s latest updates. BEMOBI OVERVIEW AND PRODUCT UPDATE Apple’s restrictions on targeting will impact These numbers will continue to rise with demographic and audience-based targeting Bemobi 2020 2019 additional support from a more focused on iOS devices, but the change is not uni- publishing team, now separated from the versal in scope. All iOS opted-in users will Total revenues 47.5 56.2 performance team, allowing supply growth be able to be targeted and measured in the Gross profit 32.6 39.0 priorities to be set and accomplished around same way as today. The same is also true for Adjusted EBITDA 18.8 23.9 the best thing for AdColony as a whole, rath- almost all users using Google Android devic- EBITDA 9.4 20.9 er than with a significant bias toward the es, which make up only a little less than half EBIT 4.5 14.6 performance advertising business. of US smartphone users, but three-quarters of global users. Financial Overview longer for our customers. Revenue fell 16% in AdColony continues to add new supply to Bemobi was heavily impacted by Covid-19 USD terms, but this was heavily impacted by support our growth. Key publishers added in Thanks to AdColony’s SDK-based supply sys- in 2020, which reduced the available spend weaker BRL vs USD. In local currency 2020 was 2020 include Scopely, The Chive, GSN, UNICO, tem and access to many contextual signals, from consumers in emerging markets as well virtually flat vs 2019. Adjusted EBITDA fell by EA Mobile, Badoo, and many others. gives AdColony an advantage in this new as the closure of physicals shops making it 21% in 2020 vs 2019 also adversely impacted landscape, even for opted-out users. AdCol- more difficult for people to top up their pre- by FX and in addition negatively impacted by Product update ony’s product team continues to work on paid cards. The pandemic also impacted the scaling of the business to roll out globally. In 2020, AdColony focused on planning and BidSheet™, Composer™, and other products speed of rollout of new products and services innovation to ensure business continuity and to allow clients and partners to achieve their as many operators were reluctant to launch The gross margin for 2020 as a whole was growth in several key areas. Improvements KPIs and AdColony to maintain revenue in new services. Covid-19 also impacted new 68.6%, down from 69.4% for 2019. Gross to our advanced bidding support (referred to this new privacy-centric landscape. sales efforts and made the decision process margins are slightly down due to mix of rev-

60 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 61 enue as well as some negative impact from which services are offered to each user at Covid-19. Gross margin has been positively which time. Through this platform, Bemobi impacted by increased revenue from Voice can scale its subscriber growth at a sustain- (IVR) and Financial services. able cost of acquisition in markets where traditional online media might not provide Business update a payback. The cornerstone of Otello’s Bemobi offering is Apps Club, a leading subscription-based dis- Product update covery service for mobile apps in Latin Amer- Bemobi is bundling some of its key services ica and beyond. Apps Club offers a unique, as an integral part of core telecom data and “Netflix-style” subscription service for pre- voice packages in Brazil, sold by some of the mium Android apps. Working with mobile main carriers in the country. This distribution operators, Bemobi’s proprietary app-wrap- model represents an alternative incremental ping technology allows smartphone users revenue line that helped to drive growth and access to unlimited use of premium mobile diversify the revenue mix. On the new acqui- apps for a small daily, weekly or monthly sition channels development front, Bemobi fee. Users pay for this service through their is investing in expanding its No Credit and mobile operator billing systems, making the No Data web captive portal to include an in- service highly effective in emerging markets, teractive voice portal platform. This new in- where credit-card and debit-card penetra- teractive voice platform is now live in four of tion is low. the largest carriers in Brazil and shows a lot of promise as Bemobi prepares to scale this Bemobi is a so-called B2B2C company. In- new channel internationally. In international stead of selling directly to a consumer, or markets, we continue to launch Apps Clubs traditional B2C, Bemobi typically partners having launched MTN Nigeria in 2020 and with large companies, mostly mobile carriers also rolling out several new products. As per or in some cases smartphone OEMs. Through the end of 2020, 13 Health Clubs have now partnerships with these companies, Bemobi been launched in total along with 18 Kids INVESTMENT IN VEWD SOFTWARE (FORMERLY OPERA TV) can offer its service to consumers. Bemobi Clubs, and we will proceed with launches in ended 2020 with 70 active operator agree- other international markets. In addition, sev- In 2020, the English High Court delivered its pany were to be sold to a third party by a ments, of which 49 are outside LATAM, mak- eral standalone subscription services have decision on remedies in Otello’s dispute with receiver. MFC has not purchased the shares, ing it possible to offer subscription-based been launched in 2020 such as Football Zone MFC over the Vewd business. The Court de- and Otello agreed to give MFC extra time to services providing access to apps and games and Football Fantasy League in Indosat In- termined that MFC should be required to seek refinancing to raise funds to enable it to to over 2.2 billion consumers. In order to ac- donesia, Deals Club in Tele2 Russia and True- purchase Otello’s shares in Last Lion from pay in the sums due to Otello, which proved PROVIDING ACCESS quire new users to its subscription services, caller in Robi Bangladesh. Bemobi has now Otello for the sum of $48 million and that to be unsuccessful. On March 17, 2021, MFC TO APPS AND Bemobi developed and operates in part- launched 16 NDNC portals outside LATAM. MFC should be required to purchase the and Otello together with the Vewd Group’s GAMES TO OVER nership with mobile carriers’ digital channel The expansion of the NDNC portals and the Loan Note issued in Otello’s favor by a sub- secured lender agreed that as an interim al- bn platforms that are highly scalable while at new Voice Portals (both part of the broad- sidiary of MFC for $5 million plus accrued in- ternative to the appointment of a receiver, a 2.2 the same time very targeted. This mobile er Loop platform) are key elements in order terest at the time of purchase. If MFC did special committee be appointed to sell the CONSUMERS digital channel platform is called Bemobi to build a sustainable and profitable growth not purchase Otello’s shares in Last Lion and company or raise finance to pay Otello what Loop and it allows Bemobi to orchestrate model for our subscription services. the Loan Note, all of the shares in the Com- it is due.

62 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 63 CORPORATE OVERVIEW Allocation of the annual profit / believe that people should be treated with Anti-corruption coverage of loss respect and insist on fair, non-discriminative Otello abstains from and works actively to Organization The total comprehensive result for the pe- treatment, regardless of irrelevant factors combat corruption and bribery. Corruption At the close of 2020, the Otello group had riod for the parent company, Otello Cor- such as nationality, political views, religion, distorts economic decision-making, deters 607 full-time employees and equivalents, poration ASA, was a profit of $4.5 million sexual orientation and gender. investment, undermines competitiveness compared to 596 full-time employees and (2019: $ 85.4 million). The Board of Directors and, ultimately, weakens economic growth. 607 equivalents at the end of 2019. recommends that no dividend be paid for We promote cultural diversity and we are FULL-TIME EMPLOYEES the 2020 financial year. The Board proposes proud to have 37 nationalities represent- There is no single, comprehensive, universal- AND EQUIVALENTS 37 Board of Directors composition that of the 2020 total comprehensive in- NATIONALITIES ed within the Group. We pride ourselves in ly accepted definition of corruption. There- At the Annual General Meeting on June 2, come, $-8.9 million is transferred to other REPRESENTED WITHIN being an international organization, where fore, each Otello employee must adhere to 2020, André Christensen was re-elected as equity, and $13.4 million is transferred to the THE GROUP innovation and teamwork take place across the existing laws and regulations in their the chairman of the Board of Directors, and translation reserve. borders and time zones. country of operation. As a minimum, Otello’s Maria Borge Andreassen, Birgit Midtbust and internal regulations apply to all employees. Anooj Unarket were re-elected to the Board Going concern We continually work to improve the gen- Controls are made to ensure that the rules of Directors. Song Lin was elected to the In accordance with section 3-3a of the Nor- der balance in the company. At the end of are followed. Otello has put in place internal Board replacing Frode Jacobsen. wegian Accounting Act, the Board confirms 2020, 37% of the Group’s staff members were guidelines to help employees in their day-to- that the prerequisites for the going con- women. In addition, 2 of the 5 Board of Di- day operations. The following is an extract of Corporate governance cern assumption exist and that the financial rectors of the Group are female. these guidelines. The Company’s guidelines for corporate statements have been prepared based on governance are in accordance with the Nor- the going concern principle. The principles of equal opportunities and Bribery wegian Code of Practice for Corporate Gov- non-discrimination are present throughout No person acting on behalf of Otello shall ernance, dated October 17, 2018, as required Events after the reporting period the organization and in all company activ- attempt to influence someone in the con- by all listed companies on the Oslo Stock For further information on subsequent ities. When recruiting, we use assessment duct of their post, office or commission by Exchange. Furthermore, the guidelines meet events, see note 21 of the “Consolidated fi- methods such as programming tests and offering an improper advantage. Nor shall the disclosure requirements of the Norwe- nancial statements”. test cases to give equal opportunities to all improper advantage be offered to any- gian Accounting Act and the Securities Trad- qualified applicants. Similar approaches are one for the purpose of influencing third ing Act. The guidelines are included separate- For further information, please see the an- exercised when promoting, offering training parties in the conduct of their post, office, ly in the annual report. Please see the section nouncements published on the Oslo Stock opportunities, etc. or commission. This includes all forms of entitled “Principles of corporate governance” Exchange website (www.oslobors.no). facilitation payments. for further information. Labor rights at Otello CORPORATE SOCIAL RESPONSIBILITY Otello respects and observes the fundamen- Correspondingly, no person acting on behalf Shareholders and equity-related issues Creating a responsible and sustainable busi- tal labor rights set out in the international of Otello shall request, accept or receive an As of December 31, 2020, Otello Corpora- ness is an integral part of everything we do conventions, such as the conventions of the improper advantage in connection with his/ tion ASA had 138,477,429 outstanding shares. at Otello. We are committed to the highest International Labor Organization and the her position or assignment or for the pur- As of December 31, 2020, the Group’s eq- standard of social responsibility and believe United Nations. pose of influencing a third party. Improper uity was $306.4 million (parent company: that transparency and openness are key ele- advantage can take different forms, includ- $423.6 million), of which $-0.4 million is ments in obtaining a sustainable and respon- Health and safety ing but not limited to money, objects, cred- owned by Non-controlling interests. See sible operation. At Otello, we strive to offer our staff mem- its, discounts, travel, accommodation and note 16 in the consolidated financial state- bers a safe, healthy and inspiring workplace. other services. ments for further information regarding In this part of the Board of Directors report, We have a highly international workforce, Non-controlling interests. we describe Otello’s effort and results relat- where we combine the responsiveness Gifts ed to corporate social responsibility (CSR). of a flat structure with an extreme fo- It is a normal part of business life to exchange Share Buyback Program Our CSR work is focused around the follow- cus on results and innovation. All employ- business courtesies, such as meals, transpor- During 2020, Otello purchased 388 372 (2019: ing areas: Our employees, anti-corruption ees are expected to comply with safety tation, recreation, facilities or small gifts. 943 691) treasury shares for $0.4 million and the environment. and health regulations that apply to our Such an exchange of business courtesies must (2019: 1.6 million) and sold 38 555 (2019: 152 business activities. always follow local laws and regulations and 691) treasury shares. Our employees not put any Otello employee in the position Otello’s success and innovation springs from Discrimination on the bases of sickness or of a sense of obligation to return the favor, Shareholders the minds and teamwork of its employees. disability shall not occur at Otello. We work compromise professional judgment or create The Company had 4,756 (2019: 3,067) share- Our employees are our most valuable re- hard to meet all our employees’ needs. We the appearance of compromise or corrup- holders at year end. At that time, 45.0% source, and we are committed to interacting offer shorter working hours and other ser- tion. Otello employees should always check (2019: 36.5%) of the shares were held in U.K.- with our employees in the same way as we vices to accommodate our employees with with their manager or the HR department, if 45% based accounts, 34.9% (2019: 44.0%) in Nor- strive to interact with our customers, follow- disabilities or other particular needs. in doubt, and consider whether the exchange OF THE SHARES way-based accounts, 4.9% (2019: 3.8%) in ing the highest ethical standards and respect of business courtesy would be acceptable if WERE HELD IN Sweden-based accounts, 4.6% (2019: 2.0%) in for individuality. Otello had an average rate of absence due to it should become publicly known. U.K.-BASED ACCOUNTS Belgium-based accounts, 4.6% (2019: 0.9%) in sick leave of 1.2% in the parent company in US-based accounts and 6.0% (2019: 6.2%) in Equal opportunities and non-discrimination 2020 (2019: 1.2%), and an estimated rate of No person acting on behalf of Otello is al- accounts based elsewhere. Otello strongly condemns discrimination. We 1.4% for the Group as a whole (2019: 1.4%). lowed to accept any amount of cash or cash

64 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 65 equivalents (such as gift certificates or market Otello’s reputation is created by the conduct securities and similar), regardless of the sum. of each individual staff member. Therefore, Correspondingly, cash or cash equivalents all staff members are obliged to familiarize may never be offered by Otello employees as themselves with the Ethical Code of Conduct a business courtesy, regardless of the sum. when joining the company.

Whistleblowing The Ethical Code of Conduct focuses on the Otello encourages freedom of speech and following key areas: the rights and obliga- blowing the whistle on malpractice, fraud, tions of our employees; a healthy and safe illegality, or breaches of rules, regulations, working environment; anti-corruption; and and procedures or raising health and safety theexternal environment. issues. Any Otello staff member making a whistleblowing report is protected from any A violation of the Ethical Code of Conduct repercussions, such as dismissal and other may result in disciplinary action, up to and forms of reprisal. To secure an effective pro- including termination of employment. Sev- cedure, staff members may blow the whistle eral of the guidelines concern actions that either in person or anonymously to the Work are also punishable offenses. The Human Environment Committee. Resources department is responsible for following up any possible breaches. To improve communication and ensure that issues do not escalate to the point where RISK FACTORS they become a whistleblowing case, Otello Otello has operations across multiple mar- focuses on the following practices: kets and is therefore exposed to a range of risks that may affect its business. • Communicate the Company’s norms, Some key risks areas are discussed and values, and rules and regulations regardin- described below. gethical conduct. • Create an open atmosphere by making Financial risk sure that staff members have the opportunity and possibility to meet and discuss Currency risk issues in formal and informal settings. Both revenue and operating expenses are • Discuss and put questions regarding free- exposed to foreign exchange rate fluc- dom of speech and whistleblowing on the tuations. The majority of revenues and agenda in internal communications. operating expenses are in USD. Although an increasing portion of revenues are in Brazilian real (Bemobi), Danish kroner The Environment and Turkish lira (AdColony EMEA), most of Otello understands the importance of sup- the corresponding publisher and revenue porting the environment and seeks to pre- share costs, and other operating expens- vent any negative environmental impact our es from these operations are denominat- activities might have. Otello has incorporat- ed in the same currency, thereby limiting ed its environmental policy as a part of the Otello’s exposure to some extent. Further, Ethical Code of Conduct. there is some exposure related to fluctuations in the USD v NOK exchange rate due Otello is committed to using environmental- to the amount of operating expenses in ly safe products in the workplace, to evalu- NOK, and certain items in the statement ating the consumption of energy and other of financial position being denominated resources to ensure efficient use, and to en- in NOK. See the tables below for a break- suring the development of environmentally down of revenues and operating expenses protective procedures. by currency.

Otello has implemented the following guide- Credit risk lines and reporting schemes to ensure a high Credit risk is the loss that the Group would ethical standard throughout the organization. suffer if a counterparty fails to perform its financial obligations. The Group’s exposure to The Ethical Code of Conduct is created to help credit risk is mainly related to external receiv- employees, clients and business partners ables. Credit risk is assessed for each specific understand Otello’s values and standards. customer. No single customer accounted for

66 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 67 above amendment of an amount equal to ient during the coronavirus crisis $18.6 million in favour of Pedro Ripper, CEO • The ability of Otello’s partners and cus- of Bemobi, (on behalf of the former owners tomers to meet their obligations to Otello 2020 2019 of Bemobi) was removed. This was carried (including if any governmental actions Revenues per currency [$ million] % [$ million] % out in following the public listing of Otello’s designed to stimulate and support the USD 178.1 68.8% 160.5 66.7% Bemobi business in Brazil. In addition, the telecom sector are introduced) BRL 28.6 11.0% 39.2 16.3% termination date of the RCF was extended DKK 26.3 10.2% 15.0 6.2% to June 30, 2021. External risk factors TRY 15.0 5.8% 13.2 5.5% Our international operations expose us to INR 2.2 0.9% 2.1 0.9% As of December 31, 2020, Otello therefore additional risks that could harm our business, Other 8.7 3.4% 10.7 4.5% had $35.0 million in interest-bearing debt, operating results and financial condition. In and the cash balance was $41.9 million (par- certain international markets, we have lim- Total 259.0 240.8 ent company: $2.7 million). ited operating experience and may not benefit from any first-to-market advantages. Although Otello does invest its money con- Our international operations expose us to servatively, all our investments are subject risks, arising from changes in local political, 2020 2019 to risk. For example, Otello’s cash and other economic, regulatory, social and labor condi- Opex per currency [$ million] % [$ million] % investments placed in Norwegian financial tions, which may adversely harm our opera- institutions are not guaranteed by the gov- tions. Some of the markets in which Otello USD (188.3) 70.1% (178.1) 70.3% ernment above NOK 2 million per institution. operates are emerging economies with po- DKK (19.8) 7.4% (13.1) 5.2% If the financial institution were to go bank- tentially complex and sensitive political and NOK (18.9) 7.0% (12.5) 4.9% rupt, a portion of Otello’s cash or investment social contexts. Further, any restrictions on BRL (17.4) 6.5% (24.0) 9.5% could be lost. foreign ownership and investments, as well TRY (13.5) 5.0% (12.4) 4.9% as stringent foreign-exchange controls might Other (10.8) 4.0% (13.2) 5.2% Operational risk prevent us from repatriating cash earned in Total (268.7) (253.4) certain foreign countries. In certain countries Covid-19 where Otello operates, longer payment cy- In addition to the serious implications for cles than experienced in our principal mar- people’s health and the healthcare services, kets are the norm. the Coronavirus (Covid-19) is having a signif- more than 10% of the Group’s revenue during In May 2018, Otello signed an agreement for icant impact on businesses and economies Otello’s competitors include some of the the financial year. Further, the Group conducts a new 3-year Revolving Credit Facility (RCF) of around the world. Since early 2020, Otello has largest technology, advertising, internet and much of its business with large global com- $100 million with DNB Bank ASA. As at Decem- assessed the potential risks on its business telecommunication companies in the world, panies and has not experienced significant ber 31, 2020, $35 million of the revolving credit activities of Covid-19. As mentioned, Otello with significantly larger financial resources, credit-related losses during this or previous facility had been drawn up. The credit facility expects Covid-19 to negatively impact reve- headcount and broader distribution channels financial years. The Group applies the IFRS 9 has the following financial covenants: i) the nue and profit in 2021. It is too early to have than Otello. These large companies therefore simplified approach to measuring expected Leverage Ratio to be below 2.00:1. ii) the Equi- a firm opinion on how great the impacts will have a greater financial capacity than Otel- credit losses which uses a lifetime expected ty Ratio to hold the minimum level of 35%. The be. The following factors are relevant when lo to make strategic acquisitions, invest in loss allowance for all trade receivables and Group is compliant as of December 31, 2020. assessing this impact: new technology and research and develop- contract assets. To measure the expected cred- ment, market their products, and compete it losses, trade receivables and contract assets In March 2020, Otello signed an amendment • An expected reduction in advertising for customers. have been grouped based on shared credit to the 3-year Revolving Credit Facility (RCF) spend risk characteristics and the days past due. agreement of 2018 with DNB Bank ASA, re- • A reduction in disposable income for Otello’s revenue is dependent on expanding The contract assets relate to unbilled work in ducing the facility to $50 million. However, as Otello’s customers our user base and customer base by devel- progress and have substantially the same risk part of this amendment, Otello has secured • A general worsening of economic conditions oping and marketing products that are more characteristics as the trade receivables for the a payment guarantee of an amount equal • Otello does not sell, market or distribute attractive than our competitors’ products. If same types of contracts. The Group has there- to $18.6 million in favor of Pedro Ripper, CEO physical products the attractiveness of our products does not fore concluded that the expected loss rates for of Bemobi, in order to support the Otello’s • Otello’s ability to serve its customers is continuously improve and evolve to keep trade receivables are a reasonable approxima- earn-out obligations under the agreement not adversely affected by its employees pace with the industry, we will have chal- tion of the loss rates for the contract assets. signed between Bemobi Holding AS, the not being able to operate from their lenges retaining our current user base and Individual assessments per customer are also holding company of Otello’s Bemobi business offices gaining new customers. Our competitors are carried out by financial management. and Bemobi’s originally dated 28 May 2018 • Marketing spend that particularly the constantly improving their products and as- and amended on 10 January 2020. See note AdColony business is reliant upon, tends sociated services. In order to stay competi- Liquidity risk 16 of the consolidated financial statements to return quickly to prior levels following tive, Otello has to invest significant resources Otello considers its liquidity risk to be lim- for further information. financial or similar crises or downturns in research and development. Investing sig- ited. Otello has significant liquidity reserves • Much of Bemobi’s revenue is dependent nificantly in R&D is, however, no guarantee available through credit facilities with its In March 2021, the payment guarantee that on the consumption of services via mobile that consumers and customers will, in fact, primary bank. was signed in March 2020 as part of the phones, which is expected to remain resil- find our products to be attractive enough to

68 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 69 begin or continue using them, as it is impos- AdColony has not received any formal notifi- sible to accurately predict the behavior of cation or complaint from the DPA. AdColony is our consumer and business customers. currently looking into the NCC’s complaint and will provide further information if and when Data risk necessary. Otello has not recognized any con- Many of our products and services are de- tingent liabilities in the interim financial state- pendent on the continuous operation of ments related to this matter. data centers and computer hosting and telecommunications equipment. If Otello’s inter- Regulatory and litigation risk nal or our service provider IT systems fail or Otello’s operations are subject to require- are damaged, or if a third party gains unau- ments through sector-specific laws, regu- thorized access to such systems and data is lations and national licenses. Regulatory lost or compromised, it could have a materi- developments and regulatory uncertainty al impact on Otello’s operations. Downtime could affect the Group’s results and busi- can, for example, hurt our reputation with ness prospects. In several of the countries our customers, as well as increase the risk of where Otello operates, the government has damage claims and monetary penalties from imposed sector-specific taxes and levies, as our customers. If our centers or systems are a measure to improve state finances. The in- subject to a security breach, customers’ con- troduction of, or increase in, sector-specific fidential or personal information could be taxes and levies may impact Otello’s busi- obtained and used by third parties, which ness. Further, it is a challenge for a compa- could have a negative impact on our brand ny the size of Otello to remain updated on and the market perception that we are a re- all the regulatory regimes that may apply to liable company, as well as subjecting us to Otello at any one time. significant regulatory fines or claims or damages from our customers. Otello has many customers, partners and end users around the world, and, as a result, For certain business models, we depend on we can be exposed to lawsuits, government internal systems to collect and produce accu- investigations and other claims or proceed- rate statistics regarding the use of our prod- ings on a global basis. Such lawsuits, inves- ucts and services, especially for products that tigations and proceedings could be related rely on an active user royalty model. Failures to, for example, intellectual property (issues or malfunctioning of these systems can have including trademark and patent suits), labor a significant impact on our financial results. law issues, commercial lawsuits, data protec- Failure to adequately back up our internal tion and privacy matters, consumer law, mar- systems can also have a material impact on keting law, tax issues and so forth. All such defend them and pay their damages. Further- growth and double-digit EBITDA margins. the running of our business. proceedings can have a significant impact more, an adverse judgment could require Otel- We expect what we saw in 2020 to contin- on Otello, whether or not we are ultimately lo to cease using certain technologies in our ue and to accelerate further in 2021 where Otello handles substantial volumes of per- successful, due to the legal cost and the in- products or names for our products, requiring AdColony should see growth from both the sonal data. Loss, alteration or unauthorized ternal resources we would have to employ to Otello to re-engineer or re-name our products. Brand and Performance business. We also ex- disclosure of such information may adverse- defend ourselves. In the event of an adverse Compared to Otello, many of our competitors pect to deliver the revenue growth described ly affect the Group’s business and reputa- result against Otello in such a proceeding, own large numbers of patents and other intel- below with similar gross margins and limited tion. The European Data Protection Regula- Otello could be required to pay significant lectual property rights. Although we do seek increases in OPEX vs 2020, which should lead tion (GDPR), which entered into force in May monetary damages or fines and/or re-design patent protection for certain innovations, we to a very significant jump in profitability and 2018 introduces significant fines for breaches our products or services, causing a material may not have sufficient protection for import- positive free cashflow for 2021. We expect of data protection regulation in Europe. impact on Otello’s business, financial results, ant innovations. Furthermore, because many AdColony to deliver revenue of $250-290mil- operations and cash flow. large companies are able to settle intellectual lion in 2021 (versus $211.4million in 2020), As reported in the media, on January 14, 2020, property lawsuits by cross-licensing each oth- midpoint growth of 28%. the Norwegian Consumer Council (NCC) filed a Intellectual property lawsuits are very com- er’s technology, the fact that our patent port- complaint to the Norwegian Data Protection mon in the market within which Otello oper- folio is not as extensive as our competitors’ Following the successful IPO of Bemobi on Authority (DPA) against Grindr and five other ates. Regardless of the merits of such lawsuits, portfolios could have a negative impact in a Bovespa in Brazil, Otello Corporation ASA companies, including AdColony, who is a sup- they are extremely expensive to defend and cross-licensing situation. (“Otello”) is now a major shareholder in Be- plier to Grindr. The NCC requests that the DPA litigate, and the damages awarded in such mobi Brazil with an ownership below 50% investigate certain alleged breaches of the suits can be high. In addition, Otello has con- OUTLOOK (currently 36%). Consequently, Bemobi fi- General Data Protection Regulation (GDPR) re- tractually undertaken to indemnify certain of 2020 was a turnaround year for AdColony nancials will not be consolidated into Otello’s lating to the processing of personal data about our customers and partners, so, in the event where we returned to growth for both our accounts going forward, but will be booked Grindr users received from Grindr through the they are sued for alleged intellectual proper- Brand and Performance business and end- according to the equity method. Grindr app. As of the date of this notification, ty infringement, Otello would be required to ed with fourth quarter with 30% + revenue

70 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 71 Report from the Board of Directors — Parent company information only

Below, please find financial information and The Company reported a loss before income commentary on Otello Corporation ASA, taxes of $5.7 million (2019: profit of 91.5 mil- the parent company (“Company”) of the lion). The prior year profit was almost entirely Otello Group (“Group”). Please note that due to the dividend received, offset by the im- the numbers and comments below are only pairment loss recognized. The positive effect applicable to the Company and not for the on finance items in 2020 was due to dividends Group. However, the information described received, offset by translation currency losses. above for the Group is also applicable for The Company reported a loss for the period of the Company. $8.9 million (2019: profit of 91.6 million) with the tax expense related to a decrease in de- FINANCIAL SUMMARY ferred tax assets that were not recognized in The Company’s main activities are to serve the statement of financial position. the Group as a whole, through the following functions and services: CEO, Board of Direc- Net cash flow from operating activities in tors, corporate finance and accounting, legal, 2020 totaled $-7.5 million (2019: -9.8 million). HR and IT. The Company charges some of the The Company’s cash balance was impacted costs related to these functions to subsidiaries. negatively in 2020 by operating losses and There was limited operational activity in both loans given to subsidiaries, and positively by 2020 and 2019. The Company had 16 full-time the drawing of $15 million from the credit fa- employees and equivalents in 2020 (2019:14). cility and proceeds from loans received from subsidiaries. The cash balance increased by Operating expenses decreased by 10% in $1.6 million in 2020. As of December 31, 2020, 2020. This is primarily due to a decrease in the Company had a cash balance of $2.7 mil- stock-based compensation expenses and lion (2019: 1.2). legal/audit fees partly offset by an increase in payroll and related expenses as the Com- The Company has $37.5 million in inter- pany’s headcount increased during the year. est-bearing debt at year end, the Company’s The company’s operating loss excluding im- equity ratio was 92% (2019: 93%). pairment and restructuring expenses $-7.0 million (2019: -7.8 million) is in line with op- It is the Board’s opinion that the annual ac- erating expense due to the limited amount counts provide a true and fair view of the of revenues. Company’s activities in 2020.

Oslo, April 23, 2021

Andre Christensen Birgit Midtbust Song Lin Chairman of the Board

Maria Borge Andreassen Anooj Unarket Lars Boilesen CEO

72 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 73 Statement by the Board of Directors and the Chief Executive Officer

The Board of Directors and the Chief Exec- To the best of our knowledge: utive Officer (CEO) have reviewed and ap- • The consolidated financial statements and proved the Board of Directors’ report and the financial statements for the parent the financial statements for Otello Group company for 2020 have been prepared in and Otello Corporation ASA as of December accordance with applicable accounting 31, 2020, (Annual Report for 2020). standards.

The consolidated financial statements and • The consolidated financial statements and the financial statements for the parent the financial statements for the parent company have been prepared in accordance company give a true and fair view of with the International Financial Reporting the assets, liabilities, financial position Standards (IFRS) as adopted by the EU and and profits as a whole as of December accompanying interpretations. The consoli- 31, 2020, for the Group and the parent dated financial statements and the financial company. statements for the parent company also include certain disclosures in order to comply • The Board of Directors’ report for the with certain regulations and paragraphs in group and the parent company includes a the Norwegian Accounting Act and the Secu- true and fair review of: rities Trading Act. • The development and performance of the business and the position of the Group and the parent company • The principal risks and uncertainties the Group and the parent company face

Oslo, April 23, 2021

Andre Christensen Birgit Midtbust Song Lin Chairman of the Board

Maria Borge Andreassen Anooj Unarket Lars Boilesen CEO

74 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 75 CONSOLIDATED STATEMENT 76 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 Note 21: 20: Note Note 19: Note 18: Note 17: Note 16: Note 15: Note 14: Note 13: Note 12: Note 11: Note 10: Note 9: 8: Note Note 7: Note 6: 5: Note Note 4: 3: Note Note 2: Note 1: Consolidated statement of changes inequity Consolidated statement of cashflows Consolidated statement of financialposition Consolidated statement of comprehensive income Otello Corporation ASA Financial Statements 2020 Consolidated Group Events after thereporting period Corporate Structure of Otello Group Related parties Shareholders andshareholder information Other current liabilities Contingent considerations Other investments Right-of-use assets andlease liabilities Property, plantandequipment Intangible assets Goodwill andimpairment testing Earnings pershare Impairment andrestructuring expenses Taxes Other operating expenses Payroll expenses andremuneration to management accounts andother receivables Financial risk,financialinstruments, Operating andsegment information and significantjudgments Critical accounting estimates Summary of significantaccounting principles General information

100 120 129 126 126 128 124 125 122 127 116 118 115 115 112 90 80 89 111 94 84 84 82 78 77 Depreciation andamortization expenses Stock-based compensation expenses Payroll andrelated expenses, excluding stock-based compensation expenses Publisher andrevenue share cost Total operating revenue Revenue (USD million,except per share amounts) Comprehensive Income Consolidated statement of Diluted earnings pershare (USD) Basic earnings pershare (USD) Earnings pershare (profit/loss): Non-controlling interests Owners of Otello Corporation ASA Total comprehensive income (loss) attributable to: Non-controlling interests Owners of Otello Corporation ASA Profit (loss) attributable to: Total comprehensive income (loss) Foreign currency translation differences Items that may orwill betransferred to profit (loss) Other comprehensive income: Profit (loss) Income taxes Profit (loss) before income taxes Net financialitems Share of theprofit (loss) from associated companies Revaluation of contingent consideration FX gains (losses) related to contingent consideration, net Interest expense related to contingent consideration Negative goodwill Other financialincome (expense) Net FXgain (loss) Interest expenses Interest income Operating profit (loss) Impairment losses andrestructuring expenses Operating profit (loss), excluding impairment andrestructuring expenses Total operating expenses Other operating expenses 5, 11,12,13, 14 6, 16 6 5 5 4, Note 10 10 8 15 16 16 16 16 5 5 5 5 9, 11,12 7 5, OTELLO CORPORATION ASA -ANNUAL REPORT 2020 (268.7) (10.0) (23.3) 259.0 259.0 (18.3) (41.9) (32.6) (39.5) (45.9) (23.4) (23.3) (157.1) (18.6) 259.0 259.0 (0.17) (0.17) (8.3) 2020 (0.0) (0.0) (9.7) (0.2) (5.0) (2.4) (9.7) (1.4) (1.4) (6.1) 0.6 0.6 - - - - (253.4) (137.6) (50.9) (26.8) (22.6) (33.0) 240.8 240.8 240.8 240.8 (14.9) (12.8) (23.7) (12.6) (0.16) (0.16) 2019 (27.5) (28.1) (0.6) (9.8) (3.8) (2.3) (1.8) (1.4) (4.1) 2.8 0.7 0.7 1.0 2.1 2.1 1.1 - - - 77

OTELLO CORPORATION CONSOLIDATED STATEMENT 78 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 Total assets Total current assets Cash andcashequivalents Other receivables Lease receviable Accounts receivable Total non-current assets Other non-current assets Other investments Lease receviable Right of use assets Property, plantandequipment Intangible assets Goodwill Deferred taxassets Assets USD million Financial Position Consolidated statement of 5 5 14 5 15 14 14 13 11, 12 11, 12 8 Note 12/31/2020 286.6 425.3 138.7 219.7 89.5 41.9 12.8 18.7 26.1 0.0 0.9 6.0 0.3 6.4 3.0 12/31/2019 435.4 230.7 118.2 317.2 80.9 28.3 22.4 32.2 16.8 8.0 8.6 0.5 0.5 4.6 1.9 Maria Borge Andreassen Chairman of theBoard Andre Christensen Oslo, April 23, 2021 Total equity andliabilities Total liabilities Total current liabilities Contingent consideration, current Other current liabilities Stock-based compensation liability Contract liabilities Public duties payable Taxes payable Accounts payable Lease liabilities Loans andborrowings Total non-current liabilities Contingent consideration, non-current Other non-current liabilities Loans andborrowings Lease liabilities Deferred taxliabilities Liabilities Total equity Non-controlling interests Equity attributable to owners of thecompany Shareholders’ equityandliabilities USD million Financial Position Consolidated statement of Anooj Unarket Birgit Midtbust 16 17 6 5 8 5 14 5 16 5 5 14 8 18 18 Note OTELLO CORPORATION ASA -ANNUAL REPORT 2020 12/31/2020 306.4 306.8 425.3 118.9 35.0 35.0 (0.4) 116.1 25.7 25.7 47.3 2.0 2.8 2.8 0.0 0.0 0.0 0.0 1.3 0.2 CEO Lars Boilesen Song Lin 1.8 1.6 1.2 12/31/2019 435.4 337.2 339.1 20.0 96.3 22.8 41.6 24.1 72.1 0.0 0.0 4.0 0.5 0.5 3.0 1.9 1.4 1.3 1.1 - - 79

OTELLO CORPORATION CONSOLIDATED STATEMENT 80 - of whichincludedintheassets of thedisposal group (assets heldfor sale) - of whichincludedincashandequivalents inthebalance sheet OTELLO CORPORATION ASA -ANNUAL REPORT 2020 2) 1) Changes ininventories, accounts receivable, accounts andother payables Impairment of intangibleassets andgoodwill Net (gain) loss from disposals of PP&E,andintangibleassets Depreciation andamortization expense Income taxes paid Profit (loss) before taxes Cash flow from operating activities USD million Cash Flows Consolidated statement of Cash andcashequivalents Effects of exchange rate changes oncashand cash equivalents Cash andcashequivalents (beginning of period) Net change incashandequivalents Net cashflow from financingactivities Payment of finance lease liabilities, net Repayments of loans andborrowings Proceeds from loans andborrowings Proceeds from issuance of shares, net (incentive program) Purchase of treasury shares Proceeds from exercise of treasury shares (incentive program) Cash flow from financingactivities Net cashflow from investment activities Earnout payments Purchases of subsidiaries andassociated companies, net of cashacquired Proceeds from disposal of subsidiaries andassociated companies, net of cashdisposed Capitalized development costs Purchases of property, plantandequipment(PP&E)intangibleassets Proceeds from saleof property, plant,andequipment(PP&E)intangibleassets Cash flow from investment activities Net cashflow from operating activities Net (gain) loss from disposals of subsidiaries andother share investments FX differences related to changes inbalance sheet items Earnout cost andcost for other contingent payments Share-based remuneration Share of net income (loss) from associated companies Changes inother operating working capital Other net finance items 2017. In 2019, Otello received $5.6 millionof escrow payments. Thiswas the finalpayment from thesaleof SurfEasy to Symantec that took place in Of which$0.8 million(2019: $0.9 million) isrestricted cashasof December 31, 2020. 2) 1) 1) 9, 11 12, 13, 14 8 Note 14 5 5 18 18 18 16 16 12 12, 13 12, 13 16 6 15 5 (12.4) (10.3) (18.3) 2020 (0.0) (0.0) (2.8) (0.4) (0.3) (3.6) (5.4) (1.8) 41.9 10.5 28.3 (1.5) (1.3) 23.4 23.4 41.9 15.0 17.2 19.1 0.0 0.0 0.0 0.0 0.0 9.5 3.5 5.3 1.0 1.6 0.1 0.1 - - - - (10.8) (12.8) (10.7) 2019 (0.0) (0.0) (0.6) (0.5) (8.5) (3.8) (11.1) (2.5) 20.0 20.0 (2.7) 28.3 28.3 (1.5) 14.8 (2.1) (3.1) 27.5 28.1 28.1 0.0 0.0 0.5 3.6 3.6 5.6 1.5 0.1 0.1 0.1 0.1 0.1 - - - - - OTELLO CORPORATION ASA -ANNUAL REPORT 2020 81

OTELLO CORPORATION CONSOLIDATED STATEMENT 82 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 USD million(except number of shares) Changes inEquity Consolidated statement of Other equityconsists of allother transactions, including butnot limited to, total recognized income andexpense for thecurrent period. Other equity with afunctionalcurrency that isnot USD. The translation reserve consists of allforeign currency differences arisingfrom thetranslation of thefinancialstatements of group companies Translation reserve The reserve for theCompany’s own shares comprises theface value cost andexcess value of own shares heldby theCompany. Reserve for treasury shares Other reserves consist of option andRSUcosts recognized according to theequitysettled method. Other reserves The face value of theshares isNOK0.02. Face value of theshares combinations, and0ordinary shares related to anequityincrease. Asof December 31, 2020, Otello owned 894,817 treasury shares. During 2020, Otello issued 0ordinary shares related to theincentive program, 0ordinary shares related to business During 2020, Otello purchased 388,372 treasury shares for $0.4 million,andsold 38,555 treasury shares for $0.1 million. Treasury shares andordinary share 2,769,548.58, andthetotal share count is138,477,429. with theNorwegian Register of Business Enterprises inFebruary 2020, andthe new registered share capitalof theparent company isNOK of theparent company, Otello Corporation by ASA, cancellation of 2,000,000 treasury shares. Theshare capitalreduction hasbeenregistered Reference ismade to theresolution by theannualgeneral meeting onJune4, 2019 where aresolution was passed to reduce theshare capital Share capitaldecrease On May 29, 2018, Otello Corporation ASA divested 11.2%of theshares inBemobiHoldingAS. Please see Note 4for information. further Non-controlling interests Balance asof 12/31/2020 Share-based payment transactions Treasury shares sold Treasury shares purchased Capital decrease Issue of share capital Total comprehensive income for theperiod Foreign currency translation differences Other comprehensive income Profit (loss) Comprehensive income for theperiod Balance asof 12/31/2019 outstanding of shares (million) Number 137.9 137.6 (0.4) 0.0 0.0 Paid-in capital 348.1 348.1 (0.0) - - - reserves Other 64.4 54.9 9.5 - - -

Reserve for treasury shares (69.0) (69.3) (0.4) 0.1 0.1 - - - Translation reserve (30.2) (16.2) (16.2) (14.1) - equity Other (23.3) (23.3) (6.2) 17.2 -

controlling interests Non- (0.4) (2.4) (2.4) 1.9 equity 306.4 (41.9) (23.3) (18.6) 339.1 339.1 Total (0.0) (0.4) 0.0 0.0 9.5 0.1 0.1

USD million(except number of shares) Changes inEquity Consolidated statement of Balance asof 12/31/2019 Share-based payment transactions Treasury shares sold Treasury shares purchased Capital decrease Issue of share capital Total comprehensive income for theperiod Foreign currency translation differences Other comprehensive income Profit (loss) Comprehensive income for theperiod Balance asof 12/31/2018 outstanding of shares (million) Number 138.7 137.9 (0.9) 0.2 Paid-in capital 348.2 348.1 (0.0) ------

reserves Other 54.9 51.6 3.4 3.4 ------

Reserve for treasury shares (69.0) (67.6) (1.6) 0.2 ------Translation reserve (10.3) (14.1) OTELLO CORPORATION ASA -ANNUAL REPORT 2020 (3.8) (3.8) ------equity Other (23.7) (23.7) 40.8 40.8 17.2 ------Non-con- interests trolling (0.3) 0.7 0.7 1.9 1.2 1.1 - - - - - equity (26.8) 363.9 363.9 (22.6) 339.1 339.1 Total (0.0) (1.6) (4.1) 0.0 0.0 0.2 3.4 3.4 83

OTELLO CORPORATION CONSOLIDATED STATEMENT 84 are assumed to have amarket value equalto thecarryingamount. value at theacquisition date according to IFRS 3. Receivables anddebts and liabilities recognized inbusiness combinations are measured at fair er assets orliabilities are subsequently measured at fair value. Assets contingent considerations recognized inbusiness combinations, nooth Except for cash-settled, share-based payment arrangements and the total. of rounding differences, amountsandpercentages may not add upto to thenearest hundred thousand,unless otherwise stated. Asaresult historical cost basis, andare presented in US dollars (USD), rounded The consolidated financialstatements have beenprepared ona Basis of preparation foreseeable future transactions. impact ontheentityincurrent orfuture reporting periodsandon the current reporting period,noneare expected to have amaterial Of new standards andinterpretations that are not mandatory for cantly affect thefuture periods. amounts recognised inpriorperiodsandare not expected to signifi- None of theamendmentslisted above have had any impact onthe OTELLO CORPORATION ASA -ANNUAL REPORT 2020 • • • • • the first timefor thereporting periodcommencing 01.01.2020: The group hasappliedthefollowing standards andamendmentsfor (IFRS) adopted by theGroup New andamendedInternational FinancialReporting Standards Accounting Act andtheSecurities Trading Act. to comply withcertain regulations andparagraphs intheNorwegian idated financialstatements also includecertain disclosures inorder adopted by theEU andaccompanying interpretations. Theconsol- cordance withInternational FinancialReporting Standards (IFRS)as The consolidated financialstatements have beenprepared inac statements Statement of compliance andbasis of theconsolidated financial accounting policies Summary of significant Note 2 Stock Exchange undertheticker OTELLO. Gjerdrums vei 19, Oslo, Norway. Thecompany islisted ontheOslo domiciled inNorway. TheCompany’s principal offices are located at Otello Corporation ASA (the “Company”) isapubliclimited company ating andgeographic segment information various business areas are described inmore details inNote 4–Oper services viaitsBemobibusiness. Theprincipal activities for Otello’s advertising viaitsAdColony business, andmobile-app subscription The Otello Group’s (“Otello”) mainbusiness activities comprise mobile General information General information Note 1

Covid-19-Related Rent Concessions –amendmentsto IFRS16 Revised Conceptual Framework for FinancialReporting and IFRS7 Interest Rate BenchmarkReform –amendmentsto IFRS9, IAS 39 Definition of aBusiness –amendmentsto IFRS3 Definition of Material –amendmentsto IAS 1andIAS 8 - - - which thereplacement awards relate to past and/or future service. with themarket-based value of theacquiree’s awards andtheextent to based onthemarket-based value of thereplacement awards compared sideration transferred inthebusiness combination. Thisdetermination is of theacquiree’s replacement awards isincludedinmeasuringthecon awards) andrelate to past services, of thenalloraportion theamount to beexchanged for awards heldby theacquiree’s employees (acquirer’s When share-based payment awards (replacement awards) are required are recognized inthe profit orloss. subsequent changes to thefair value of thecontingent consideration remeasured, andsettlement isaccounted for withinequity. Otherwise, date. Ifthecontingent consideration isclassified asequity, itisnot consideration payable isrecognized at fair value at theacquisition with abusiness combination are expensed asincurred. Any contingent issue of debt orequity securities that theGroup incurs inconnection Costs related to theacquisition, other thanthose associated withthe • • • The Group measures goodwill at theacquisition date as: rights that currently are exercisable. assessing control, theGroup takes into consideration potential voting policies of anentityso asto obtain benefits from itsactivities. In subsidiary. Control isthepower to govern thefinancialandoperating (acquisition date) anduntilthedate theGroup ceases to control the from thedate theGroup effectively obtains control of thesubsidiary od. Subsidiaries are includedintheconsolidated financialstatements Business combinations are accounted for usingtheacquisition meth- Business combinations: Consolidation principles entities. The accounting policies have beenappliedconsistently by Group to allperiodspresented inthese consolidated financialstatements. The accounting policies set outbelow have beenappliedconsistently Annual General Meeting onJune2,2020. issued by theBoard of Directors onApril23, 2020 for approval by the These consolidated financialstatements have beenapproved and December 31, 2020, comprise theCompany anditssubsidiaries. The consolidated financial statements of the Group for the year ended

assets acquired andliabilities assumed. The net recognized amount(generally, fair value) of theidentifiable fair value of theexisting equityinterest intheacquiree; less acquiree, plusifthebusiness combination isachieved instages, the The recognized amountof any non-controlling interests inthe The fair value of theconsideration transferred; plus

- translation are recognized inthestatement of comprehensive income. rate prevailing onthat date. Foreign exchange differences arisingon date are translated to functionalcurrency at theforeign exchange and liabilities denominated inforeign currencies at thebalance sheet change rate prevailing onthedate of thetransaction. Monetary assets Transactions inforeign currencies are translated at theforeign ex Foreign currency transactions : Foreign currency operating decisionmaker. Seenote 4for information. further determined that theGroup’s executive management group isthechief thus separate financialinformation isavailable. The company has to beallocated to thesegment andto assess itsperformance, and chief operating decisionmaker to make decisionsaboutresources component’s operating results are regularly reviewed by theentity’s with any of theGroup’s other components. Furthermore, theGroup’s expenses, includingrevenues andexpenses that relate to transactions in business activities from whichitmay earnrevenues andincur An operating segment isacomponent of theGroup that engages Segment reporting that there isnoevidence of impairment. eliminated inthesameway asunrealized gains, butonlyto theextent extent of theGroup’s interest intheinvestee. Unrealized losses are ty-accounted investees are eliminated against theinvestment to the statements. Unrealized gains arisingfrom transactions withequi- transactions are eliminated inpreparing the consolidated financial and losses, orincome andexpenses arisingfrom intercompany Intercompany balances andtransactions, any unrealized gains Intercompany balances andtransactions eliminated onconsolidation: equity investment dependingonthe level of influence retained. sequently, itisaccounted for asanequity-accounted investee orasan interest ismeasured at fair value at thedate that control islost. Sub- the Group retains any interest intheprevious subsidiary, thensuch deficit arisingontheloss of control isrecognized inprofit orloss. If other components of equityrelated to thesubsidiary. Any surplusor liabilities of thesubsidiary, any non-controlling interests, andthe Upon theloss of control, theGroup derecognizes theassets and Loss of control: appropriate. are measured at amortized cost withallowances for credit losses as behalf of theinvestee. Otherlong-term investments intheassociate the extent that theGroup hasanobligation orhasmade payments on zero, andtherecognition of losses further isdiscontinued except to counted investee, thecarryingamountof that interest isreduced to When theGroup’s share of losses exceeds itsinterest inanequity-ac those of theGroup. adjustments, andto aligntheaccounting policies of theassociate with the profit orloss andother comprehensive income, after fair value The consolidated financialstatements includetheGroup’s share of cost of theinvestment includes transaction costs. (equity-accounted investees) andare recognized initiallyat cost. The Investments inassociates are accounted for using theequitymethod between 20 and50 percent of thevoting power of another entity. Significant influence ispresumed to exist whentheGroup holds influence, butnot control, over thefinancialandoperating policies. Associates are those entities inwhichtheGroup hassignificant Investments inassociates -associates: on whichcontrol ceases. statements from thedate onwhichcontrol commences untilthedate statements of subsidiaries are includedintheconsolidated financial are exercisable orconvertible are taken into account. Thefinancial activities. Inassessing control, potential voting rightsthat presently and operating policies of anentityso asto obtain benefits from its the Group hasthepower, directly orindirectly, to govern thefinancial Subsidiaries are entities controlled by theGroup. Control exists when Subsidiaries –consolidated financial statements:

- - This isnot related to Financialsub-leases (see details in2.1 above). Payments onsuchleases are recognized asexpenses asthey occur. with anunderlyingvalue of USD10,000 orless whenthey are new. liabilities for short-term leases of equipmentandlow value assets The Group haselected not to recognize theright-of-use assets and Short term leases and leases of low-value assets: cannot bereadily determined, theGroups incremental borrowing rate. discounted usingthe interest rate implicitinthelease, orifthat rate lease payments that are not paid at thecommencement date, The lease liabilityisinitiallymeasured at thepresent value of the impairment losses, ifany. term. Inaddition, theright-of-use asset isperiodicallyreduced by of theuseful life of theright-of-use asset ortheendof thelease line method from thecommencement date to theearlierof theend The right-of-use asset issubsequently depreciated usingthestraight- ment date, plusany initialdirect costs incurred. adjusted for any lease payments made at orbefore thecommence- sured at cost, whichcomprises theinitialamountof thelease liability lease commencement date. Theright-of-use asset isinitiallymea The Group recognizes aright-of-use asset and alease liabilityat the As alessee - theGroup hasthe rightto direct theuse of theasset. benefits from use of theasset thorough theperiodof use, and -theGroup hasthe rightto obtain substantially allof theeconomic identified asset. Ifthesupplierhasasubstitution right,thentheasset isnot represent substantially allof thecapacity of aphysically distinct specified explicitly orimplicitlyandshouldbephysically distinct or -thecontract involves theuse of anidentified asset, thismay be assesses whether: conveys therightto control theuse of anidentifiedasset, theGroup of timeinexchange for consideration. To assess whether acontract conveys therightto control theuse of anidentifiedasset for aperiod or contains, alease. Acontract isorcontains alease ifthecontract At inception of acontract, theGroup assesses whether acontract is, Right of useassets lives, thecomponents are depreciated separately. Where of parts property, plantandequipment have different useful policy regarding impairment). lated depreciation (see below) andimpairment losses (see accounting Property, plantandequipmentare recognized at cost, less accumu- Owned assets Property, plantandequipment are recognized directly inaseparate component of equity. action date. Foreign exchange differences arisingfrom re-translation using theapproximate foreign exchange rates prevailing onthetrans Revenues andexpenses of foreign operations are translated to USD USD at foreign exchange rates prevailing onthebalance sheet date. fair value adjustments arisingfrom consolidation, are translated to The assets andliabilities of foreign operations, includinggoodwill and Foreign operations ment, BRListhefunctionalcurrency. the AdColony segment, whilst for themajorityof theBemobiseg The functionalcurrency for themajorityof thegroup isUSD, including ing onthedate thefair value was determined. at fair value are translated to USDat foreign exchange rates prevail- and liabilities denominated inforeign currencies that are recognized rate prevailing onthedate of thetransaction. Non-monetary assets historical cost inaforeign currency are translated usingtheexchange Non-monetary assets andliabilities that are measured interms of :

OTELLO CORPORATION ASA -ANNUAL REPORT 2020

- - - 85

OTELLO CORPORATION CONSOLIDATED STATEMENT 86 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 Subsequent expenditure oncapitalized intangibleassets iscapitalized Subsequent expenditure: losses (see accounting policyregarding impairment). at cost less accumulated amortization (see below) andimpairment Other intangibleassets that are acquired by theGroup, are recognized Other intangible assets: mates andjudgmentsrelated to development costs. Please see note 3for information further regarding accounting esti- costs are expensed asmaintenance costs. lations, andupdates made to keep pace withthelatest trends. These “bug fixes”, updates made to comply withchanges inlaws andregu- maintain theplatforms’ functionality. Examples of updates include to theimplementation of theongoing updates that are required to ofA significantportion thework that engineeringperforms isrelated velopment costs andamortized onastraight-line basis of upto 5years. will generate probable future economic benefits, are capitalized asde vasive improvements of ormaincomponents parts of core platforms improvements of core platforms, provided that thesignificantandper Cost of buildingnew features, together withsignificantandpervasive period they are incurred. recognized ascosts inthestatement of comprehensive income inthe to scientific ortechnological knowledge andunderstanding, are Expenses related to research activities, whichare expected to lead Research and development: mates andjudgmentsrelated to impairment testing. Please see note 3for information further regarding accounting esti - not belarger thananoperating segment. monitored for internal management purposes. The Group of CGUs may allocated represent thelowest level intheentitywhere goodwill is monitored. Each CGU orGroup of CGUs to whichgoodwill hasbeen management assesses various factors, including how operations are independent of cashflows from other assets (or Groups of assets), identify whether cashflows from anasset (or aGroup of assets) are of cashinflows from other assets orGroups of assets. Inorder to of assets that generates cashinflows that are largely independent policy regarding impairment). ACGU isthesmallest identifiableGroup of CGUs andtested at least annuallyfor impairment (see accounting losses. Goodwillisallocated to cash-generating units(CGU) orgroups Goodwill isrecognized at cost, less any accumulated impairment tion, see above. intangible assets. For themeasurement of goodwill at initialrecogni- Goodwill that arises upontheacquisition of subsidiaries isincludedin Goodwill: Intangible assets The residual value, ifnot insignificant,isreassessed annually. The estimated useful lives are asfollows: useful lives of each of part anitem of property, plantandequipment. Depreciation iscalculated onastraight-line basis over theestimated Depreciation as incurred. of theitem canbemeasured reliably. Allother costs are expensed benefits embodiedwiththeitem willflow to theGroup, andthecost when that cost isincurred, ifitisprobable that thefuture economic ty, plantandequipment,thecost of replacing of part suchanitem The Group recognizes, inthecarryingamountof anitem of proper Subsequent costs: • • • •

.Right of use assets .Fixtures andfittings .Machinery andequipment .Leasehold improvements

Ov Up t Up t Ov er term of contract er term of contract o 5years o 10years

- - - allocated first to reduce thecarryingamount of any goodwill allocat Impairment losses recognized inrespect of cash-generating unitsare income. Impairment losses are recognized inthestatement of comprehensive the acquired companies. Please see note 11for information. further recoverable amount.Thecash-generating unitisconsidered to be of anasset, itscash-generating unitoragroup of unitsexceeds its An impairment loss isrecognized whenever thecarrying amount nevertheless tested annually. assets that are not yet available for use, therecoverable amountis For goodwill, assets that have anindefinite useful life andintangible below). indication exists, theasset’s recoverable amountisestimated (see determine whether there isany indication of impairment. If any such The carryingamountsof theGroup’s assets are reviewed annuallyto Non-financial assets: period was therefore limited to 12months’ expected losses to have low credit risk,andtheloss allowance recognized duringthe All of theentity’s debt investments at amortized cost are considered Loans and leasereceivables per customer are also carriedoutby financialmanagement. tion of theloss rates for thecontract assets. Individualassessments expected loss rates for trade receivables are areasonable approxima same types of contracts. Thegroup hastherefore concluded that the tially thesameriskcharacteristics asthetrade receivables for the contract assets relate to unbilledwork inprogress andhave substan- based onshared credit riskcharacteristics andthedays past due. The credit losses, trade receivables andcontract assets have beengrouped for alltrade receivables andcontract assets. To measure theexpected expected credit losses whichuses alifetime expected loss allowance The group applies the IFRS9simplifiedapproach to measuring Trade receivables Financial assets: Impairment Cash andcashequivalents comprise cashbalances andcalldeposits. Cash and cashequivalents: regarding impairment). less allowance for expected credit losses (see accounting policy Trade andother receivables are recognized at theinvoiced amount Trade and other receivables: sured asdescribed below. to initialrecognition, non-derivative financialinstruments are mea initially measured at fair value withouttransaction costs. Subsequent instruments classified asat fair value through profit orloss, whichare value plustransaction costs, except for those non-derivative financial Non-derivative financialinstruments are initiallymeasured at fair alents, loans andborrowings, andtrade andother payables. and debt securities, trade andother receivables, cashandequiv Non-derivative financialinstruments comprise investments inequity Non-derivative financial instruments: Financial instruments ly tested for impairment at each balance sheet date. will andintangibleassets withindefinite useful lives are systematical- useful lives of intangibleassets, unless suchlives are indefinite. Good- Amortization iscalculated onastraight-line basis over theestimated Amortization: as incurred. specific asset to whichitrelates. Allother expenditures are expensed only whenitincreases thefuture economic benefits embodiedinthe

- - - - IFRS 16, andtherefore use theIBRasadiscount rate ontheopening Otello chose to use themodifiedapproach for implementation of Discount rates: that theGroup willrenew any contracts for more than3years. will renew thecontracts. Itisnot considered asreasonably certain lease valuation ifitisconsidered reasonably certain that theGroup by thelessors. TheGroup includes arenewal of thecontracts inthe The renewal options heldare exercisable onlyby theGroup, andnot Some office leases contain renewal options exercisable by theGroup. Contracts withrenewal options : capitalized. the ROU asset. Short-term andlow value sublease contracts are not the statement of financialposition, withacorresponding reduction in For subleasing contracts, thegroup recognizes alease receivable in Sublease contracts, where theGroup isthelessor of timeinexchange for consideration. conveys therightto control theuse of anidentifiedasset for aperiod is, orcontains alease. Acontract isorcontains alease ifthecontract At theinception of acontract, theGroup assesses whether acontract borrowing rate at January 1,2019. remaining lease payments, discounted usingtheGroup’s incremental The Group measures thelease liabilities at thepresent value of the es according to IAS 17, incompliance withtransition requirements. recognized alease liabilityfor leases classified asoperating leas At thedate of initialapplication of IFRS16, January 1,2019, theGroup Leases classified asoperating leases under IAS17 periods have not beenrestated. leases inthestatement of financialposition asof January 1,2019. Prior Otello isusingthemodifiedapproach and,therefore, onlyrecognize ity isrecognized asanadjustment to theright-of-use asset. term). Generally, theamountof theremeasurement of thelease liabil- in thecase of certain events takingplace (e.g., achange inthelease For subsequent measurement, theGroup remeasures thelease liability recognizing theexpenses inOtheroperating expenses. (ROU asset) andinterest expense onthelease liability, instead of Further, alessee recognizes depreciation of theright-of-use asset low value. a lease term of more than12months, unless theunderlyingasset isof sheets aslease liabilities withcorresponding assets for allleases with IFRS 16requires lessees to recognize most leases ontheirbalance Leasing no impairment loss had beenrecognized. would have beendetermined, net of depreciation oramortization, if the assets carryingamountdonot exceed thecarryingamountthat able amount.Animpairment loss isreversed onlyto theextent that has beenachange intheestimates used to determine therecover With respect to other assets, animpairment loss isreversed ifthere An impairment loss inrespect of goodwill isnot reversed. Reversals of impairment: ing unitto whichtheasset belongs. inflows, therecoverable amountisdetermined for thecash-generat asset. For anasset that does not generate largely independent cash assessments of thetimevalue of money andtherisks specificto the ent value usingapre-tax discount rate that reflects current market use, theestimated future cashflows are discounted to theirpres fair value less cost of disposal andvalue inuse. Inassessing value in The recoverable amountof theGroup’s assets isthegreater of their Calculation of recoverable amount: pro-rata basis. carrying amountof theother assets intheunit(group of units) ona ed to cash-generating units(or group of units) andthento reduce the : :

- - - - risks specificto theliability. assessments of thetimevalue of money and,where appropriate, the pected future cashflows at apre-tax rate that reflects current market effect ismaterial, provisions are determined by discounting theex of economic benefits willberequired to settle theobligation. Ifthe as aresult of apast event, anditisprobable that afuture outflow the Group hasacurrently existing legal orconstructive obligation A provision isrecognized inthestatement of financialposition when Provisions vesting date, discounted. whichisthenfurther current market value reduced by expected dividends paid before the Restricted Stock Unit Plansare measured at thegrant date usingthe is onlydueto share prices not achieving thethreshold for vesting. the actual numberof share options that vest, except where forfeiture granted. The amountrecognized asanexpense isadjusted to reflect into account theterms andconditions uponwhichtheoptions were options granted ismeasured usingtheBlack &Scholes model,taking with theoffsetting amountagainst equity. Thefair value of the which theemployees become unconditionally entitledto theoptions, value ismeasured at grant date andspread over theperiod during employee expense withacorresponding increase inequity. Thefair of theCompany. Thefair value of options granted isrecognized asan The share option program allows Group employees to acquire shares Share-based payment transactions are discounted. settled within12monthsof theendof thereporting period,thenthey recognizes costs for restructuring. Ifbenefits are not expected to be can nolonger withdraw theoffer of those benefits orwhentheGroup Termination benefits are expensed at theearlierof whentheGroup Termination benefits operating losses are not provided for. turing eitherhascommenced orhasbeenpubliclyannounced. Further, approved adetailed andformal restructuring plan,andtherestruc A provision for restructuring costs isrecognized whentheGroup has Restructuring discounted to theirpresent value. the endof theperiodinwhichemployees render theservice are a defined contribution planthat are duemore than12monthsafter refund orareduction infuture payments isavailable. Contributions to contributions are recognized asanasset to theextent that acash the periodsduringwhichservices are rendered by employees. Prepaid are recognized asanemployee benefit expense intheprofit orloss in Obligations for contributions to defined contribution pensionplans will have nolegal orconstructive obligation to pay amounts. further which anentitypays fixed contributions into aseparate entityand A defined contribution planisapost-employment benefit planunder Employee benefits —Defined contribution plans they are declared. Dividends onshares are recognized asaliabilityintheperiodwhich Dividends held. Therange of IBRs used is2.8 %to 16.5 %. difference compared to Norway, where thecredit facility agreement is Rates are modifiedwithacountry riskpremium, andwithaninflation nomic environment inthecountry where thelease isentered into. Interest rates are, therefore, adjusted to take into account theeco- value of alease. Specificcountry-based discount rates are used. a margin of 2.50 %p.a. Themargin hasbeenadjusted according to the facility agreement. Thisbears aninterest rate of LIBOR, 3months plus As abasis for thediscount rate calculation, Otello hasused itscredit readily determined. surement for new contracts, aslongtheimplicitinterest rate isnot balance. Goingforward, theIBRwillbeused for subsequent mea OTELLO CORPORATION ASA -ANNUAL REPORT 2020

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OTELLO CORPORATION CONSOLIDATED STATEMENT 88 advertising. Accordingly, Otello acts astheprincipal inthese arrange - credit risk,aswell asbearing sole responsibility for fulfillmentof the and performing allbillingandcollection activities, includingretaining advertisers, establishing theselling prices of theadvertisements sold Otello isresponsible for identifyingandcontracting withthird-party with both thepublisherandassociated advertisement supplier, ment. For agreements where Otello hasacontractual relationship the analysis of whether Otello istheprimaryobligor in thearrange- versus net revenue recognition, Otello places themost weight on presumptive ordeterminative, inreaching ourconclusions ongross arrangement. Whilenoneof thefactors individuallyare considered involves judgmentandisbased onanevaluation of theterms of each whether Otello isacting asaprincipal oranagent inatransaction agent inourtransactions withadvertisers. Thedetermination of on anassessment of whether Otello isacting astheprincipal oran whether revenue shouldbereported onagross ornet basis isbased in executing transactions withthird parties. Thedetermination of In thenormalcourse of business, Otello acts asanintermediary gross basis. revenue earnedandcosts incurred related to these transactions ona acts astheprincipal inthese arrangements and,therefore, reports responsibility for fulfillmentof theadvertising. Accordingly, Otello tion activities, including retaining credit risk,aswell asbearingsole of theadvertisements sold, andperforming allbillingandcollec contracting withthird-party advertisers, establishing theselling prices actions withadvertisers. Otello isresponsible for identifyingand is reported onagross basis, asOtello istheprincipal inourtrans For therevenue generated through Otello-owned properties, revenue and parameters; Advertising revenue isrecognized based oncertain different events satisfied onapointintimebasis. mobile ad, and/or installs agame. Theperformance obligations are Advertising revenue isrecognized each timeauser views, orclicks a Advertising to direct theuse andobtain thebenefits from thegood orservice customer obtains control of agood orservice andthushastheability Intercompany sales are eliminated. Revenue isrecognized whena goods andservices, net of value-added tax,rebates anddiscounts. Revenue comprises thefair value of theconsideration for thesaleof OTELLO CORPORATION ASA -ANNUAL REPORT 2020 • • The Company hasthefollowing primarysources of revenue: Revenue recognition Trade andother payables are recognized at amortized cost. Trade andother payables related to contingent considerations. informationfurther regarding accounting estimates andjudgments term innature, itisdiscounted to present value. Please see note 3for ity-weighted). Since of apart thecontingent consideration islong- payment amountsandtheirassociated probabilities (i.e., probabil- Contingent consideration ismeasured at fair value usingtheexpected Contingent consideration

Application andcontent Advertising publisher’s inventory, click); i.e. after each instance whenanad isclicked insidethe iv) whenauser clicks onamobilead, based onCPC(cost per pletion, based onCPCV(cost percompleted videoview); iii) whenauser plays amobilevideoad alltheway to com- website); inside thepublisher’s inventory (which canbeamobileappor (cost perthousand)i.e. every 1,000 impressions of amobilead ii) whenamobilead isdelivered to auser, based onCPM per install); advertising, clicks onitandinstalls agame) based onCPI(cost i) whenauser installs agame (i.e. auser plays agame, sees - - it isnolonger probable that therelated taxbenefit willberealized. set canbeutilized. Deferred taxassets are reduced to the extent that ble that future taxable profits will beavailable against whichtheas A deferred taxasset isonlyrecognized to theextent that itisproba tively enacted at thebalance sheet date. amount of assets andliabilities, usingtax rates enacted orsubstan- on theexpected mannerof realization orsettlement of thecarrying taxation purposes. Theamountof deferred taxprovided isbased liabilities for financialreporting purposes andtheamountsused for temporary differences between thecarryingamountsof assets and Deferred taxisprovided usingtheliabilitymethod, providing for years. sheet date, andany adjustment to taxpayable inrespect of previous year, usingtaxrates enacted orsubstantially enacted at thebalance Current taxistheexpected taxpayable onthetaxable income for the recognized directly inequity, inwhichcase itisrecognized inequity. comprehensive income, except to theextent that it relates to items deferred taxes. Income taxisrecognized inprofit orloss orother Income taxontheprofit orloss for theyear comprises current and Income tax right to receive payments isestablished. Dividend income isrecognized onthedate uponwhichtheentity’s Interest income isrecognized usingtheeffective interest method. gains andlosses andchanges inestimate of contingent consideration. Other finance income andcosts comprise primarilyforeign exchange Net financingcosts of business, are classified asother operating income (cost). Material income andcosts, whichare not related to thenormalcourse Other income (costs) third-party suppliers. ated revenue. License costs are thecosts of licenses purchased from recognizes publishercost at thesametimewe recognize theassoci- er’s application orwebsite orasafixed fee for that ad space. Otello advertising revenue we earnfrom mobileads placed onthepublish- typically determined inadvance aseitherafixed percentage of the tising space, inwhichwe deliver mobileads. These payments are agreed-upon payments Otello makes to publishers for theiradver purchased from third-party suppliers. Publisher costs consist of the Cost of goods sold comprises publishercosts andthecost of licenses Publisher andrevenue share costs basis andisrecognized intheperiodwhichtransaction occurs. of revenue withthedeveloper. Therevenue occurs onatransaction tion of therevenue withOtello, whowould inturnshare apercentage ing, where theoperator would collect thepayment andshare apor operator andthedeveloper, ortheuser may use aform of carrierbill- would collect andshare apercentage of therevenue withboth the user may pay usingtheOtello Payment Exchange, inwhichcase Otello version of themobilestore, two payment methods willexist. The When atransaction occurs ina“co-branded” oranoperator-controlled payment andshares apercentage of therevenue withthedeveloper. When atransaction occurs inBemobiMobileStore, Otello collects the (formerly OMS), whenauser purchases apremium app. which isalso known asApps Club, andii)theBemobiMobileStore store, orawhite-label operator-controlled version of themobilestore, when auser purchases asubscription from a“co-branded” mobile Application andContent revenue comprises i)Subscription revenue Application and content obligor anddoes not assume thefulfillmentandcredit risk. er, revenue isrecognized onanet basis, asOtello isnot theprimary the publisherhasadirect contractual relationship withtheadvertis related to these transactions onagross basis. For agreements where ments and,therefore, reports revenue earned,andcosts incurred

- -

- they would lead to animpairment loss isincludedinnote 11. A sensitivity analysis for changes inkey assumptions and whether input for theestimates that are made regarding future cashflows. forecasts used inprioryears iscarriedoutinorder to provide further valuation for reasonableness. Inaddition, aretrospective analysis of Management compares theestimates of value inuse withthemarket third-party expert. into consideration. Discount rates have beensourced from a conditions. For assumptions used, external evidence hasbeentaken capacity of theassets, margins, andassumptions of thefuture market discount rate, estimates of future performance, revenue generating determining appropriate cash-generating units, determining the used, must bebased inpart onmanagement’s evaluations, including Value inuse, whendiscounted particularly cashflow methods are able amounts. cash-generating units. see note 11for information further onrecover mined based onavalue-in-use calculation for themost significant The recoverable amountsof cash-generating unitshave beendeter stances indicate that thecarryingamountmay not berecoverable. are reviewed for impairment whenever events orchanges incircum - has suffered any impairment. Assets that are subjectto amortization In accordance withIAS 36, theGroup tests annuallywhether goodwill Impairment, see note 11 next financialyear are specifiedbelow. adjustment to thecarryingamountsof assets andliabilities withinthe The mainestimates that have asignificantriskof causing amaterial Critical accounting estimates change inthefuture. under thecircumstances, aswell asforecasts asto how these might trends andother methods whichmanagement considers reasonable upon historical results andexperience, consultations withexperts, Estimates andjudgmentsare evaluated onanongoing basis, based affected withinthenext financialyear. material adjustment to thecarryingamountof theasset orliability assumptions andestimates could result inoutcomes that require a the endof thereporting period.However, uncertainty aboutthese assets andliabilities, andthedisclosures of contingent liabilities, at assumptions that affect thereported amountsof revenues, expenses, with IFRSrequires management to make judgmentsestimates and The preparation of consolidated financialstatements inaccordance and significantjudgments Critical accounting estimates Note 3 for itsordinary shares. BasicEPSiscalculated by dividingtheprofit The Group presents basic anddiluted earnings pershare (EPS)data Earnings pershare dividend. are recognized at thesametimeasliabilityto pay therelated Additional income taxes that arise from thedistribution of dividends mates andjudgmentsrelated to deferred taxassets. Please see note 3for information further regarding accounting esti- - - provisions related to contingent considerations have beencalculated. nection withacquisitions. Ananalysis isgiven innote 16of how the The Group hasprevisouly entered into earnoutagreements incon- Contingent considerations, see note 16 expirations dates of these. See note 8for abreakdown of taxloss carry forwards andrelevant the taxeffect of amerger between two Brazilian entities in2018. December 31, 2020, relates to taxloss carryforwards intheUS, and ofpart theUSD31.0 millioninrecognized deferred taxassets asof against whichthese taxloss carryforwards canbeutilized. Themain ered probable that taxable profit willbegenerated infuture periods tax losses inthestatement of financialposition when itisconsid- exercise of judgment.Otello recognizes deferred taxassets related to The recognition of deferred taxassets andliabilities requires the Deferred taxassets, see note 8 These costs are expensed asmaintenance expenses. regulations, andupdates made to keep pace withthelatest trends. “bug fixes”, updates made to comply withchanges inlaws and maintain theplatforms’ functionality. Examples of updates include to theimplementation of theongoing updates that are required to Some of thework that engineeringemployees perform isrelated reviewed by management before beingcapitalized. calculated by usingthetimeallocations made. These calculations are assessed interms of changes inassumptions. Capitalized costs are ing to thecriteria inIAS 38, andpreviously categorized projects are the various projects ismade. Any new projects are assessed accord- projects. Anallocation of apercentage of each employee’s timeacross and begun amortization, and3) research/operations/maintenance feasibility date buthave not yet gone live 2) those that have launched Projects are categorized as1) those that have met thetechnological On aquarterly basis, engineeringwork isassessed onaproject basis. 5 years. as development costs andamortized onastraight-line basis of upto forms willgenerate probable future economic benefits, are capitalized pervasive improvements of ormaincomponents parts of core plat improvements of core platforms, provided that thesignificantand Cost of buildingnew features, together withsignificantandpervasive Capitalized development costs, see note 12 specified below. Significant judgements inapplyingtheentity’s accounting policies are Significant judgments ordinary shares, whichincludeshare options granted to employees. of ordinary shares outstanding for theeffects of alldilutive potential tributable to ordinary shareholders andtheweighted average number period. Diluted EPSisdetermined by adjusting theprofit orloss at weighted average numberof ordinary shares outstanding duringthe or loss attributable to ordinary shareholders of theCompany by the

OTELLO CORPORATION ASA -ANNUAL REPORT 2020 - - 89

OTELLO CORPORATION CONSOLIDATED STATEMENT 90 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 apps. Working with mobileoperators, Bemobi’s proprietary app-wrap- a unique, “Netflix-style” subscription service for premium Android scription-based discovery service for mobileapps. Apps Cluboffers Bemobi’s revenues are primarily generated from Apps Club, asub- Bemobi (Apps &Games) See note 2for information further regarding revenue recognition. advertisements. number of ads delivered, orviews, clicks oractions by users of mobile terms of theadvertising contract, whichare commonly based onthe when Otello’s advertising services are delivered based onthespecific developer applications andmobilewebsites. Revenue isrecognized of mobileusers viewing ads through 3rd publishers, party suchas AdColony’s advertising revenue isprimarilybased ontheactivity ticular strength invideoandfullscreen interactive richmediaads. engaging advertising experiences across allmobileformats withpar devices around theworld. AdColony delivers highlyinteractive and application developers to deliver advertising to consumers onmobile provides anend-to-end platform for brands, agencies, publishers and world withareach of more than1.5billionusers globally. AdColony AdColony is oneof thelargest mobileadvertising platforms inthe AdColony (MobileAdvertising) The following are Otello’s segments asat December 31, 2020: corporate segment. business. Skyfire, dueto materiality, isreported of aspart Otello’s business, andlicensing of Rocket Optimizer™ technology viaitsSkyfire AdColony business, mobile-app subscription services viaitsBemobi The Group’s business activities comprise mobileadvertising viaits Operating andsegment information Note 4 and other factors. withdrawn. Thiscould bedueto market conditions, investor feedback, not certain according to Otello that theplan,orprocess would not be unlikely to bechanged asat December 31, 2020, althoughitwas still 6, aprocess isinplace for anIPOinBrazil, andassuchthat planwas ofments aspart theIPOprocess are not complete. Regarding criteria for immediate saleassuchsince there formal further filingrequire- at December 31, 2020. Regarding criteria 2,theasset isnot available began inOctober 2020, thentheabove criteria 1,3and5are met as It isclearthat since theformal process to work towards anIPO unlikely that theplanwillbesignificantlychanged orwithdrawn. fair value, 6. Actions required to complete theplanindicate that itis actively marketed for saleat asales price reasonable inrelation to its as heldfor sale(subject to limited exceptions), 5. Theasset isbeing ated 4. Thesaleishighlyprobable, within12monthsof classification for immediate sale, 3. Anactive programme to locate abuyer isiniti- 1. Management iscommitted to aplanto sell, 2.Theasset isavailable the conditions that must bemet: as discontinued operations. Further, IFRS5paragraphs 6–8sets out assessment criteria concerning whether anasset shouldbeclassified at December 31, 2020. IFRS5paragraphs 31 and32 set outcertain Non-current Assets Heldfor SaleandDiscontinued Operations as of anasset heldfor saleordiscontinued operations according to IFRS5 Otello hasassessed whether itsinvestment inBrazil meets thecriteria cess whichultimately ledto alisting of theBemobisubsidiary in2021, Due to thefact that Otello’s subsidiary inBrazil, Bemobi,began apro- Discontinued operations - ing to IFRS5asat December 31, 2020. based onanassessment of thefacts andtherelevant criteria accord- should not beclassified asheldfor saleordiscontinued operations Otello is, therefore. of theopinionthat itsinvestment inBemobi 3. 2. 1. restructuring processes. IT, andii)legal andother costs related to business combinations and Board of Directors, corporate finance andaccounting, legal, HRand working infunctionsthat serve theGroup asawhole, includingCEO/ Corporate costs comprise primarilyi)costs related to personnel Corporate costs See note 2for information further regarding revenue recognition. be phased out. Bemobi’s parent Otello from the acquisition of Handster in2011, isto purchases apremium app. Thisfeature phoneplatform, acquired by (formerly Opera MobileStore), afeature phoneplatform, whenauser mobile store, known asApps Club, andii)theBemobiMobileStore mobile store, orawhite-label operator-controlled version of the when anAndroid user purchases asubscription from a”co-branded” Bemobi revenue isprimarilycomprised of: i)subscription revenue its service to consumers. (OEMs). Through partnerships withthese companies, Bemobicanoffer ators orinsome cases originalequipmentmanufacturers smartphone Bemobi typicallypartners withlarge companies, mostly mobileoper a so-called B2B2C company. Instead of selling directly to aconsumer, this service through theirmobileoperator billingsystems. Bemobiis premium mobileapps for adaily, weekly ormonthlyfee. Users pay for ping technology allows users smartphone access to unlimited use of highly probable asat December 31, 2020, given thefollowing: Otello’s assessment isthat itcannot beconcluded that theIPOwas simply beingmore likely to occur thannot. a situation having significantlyhigherprobability of occurring than a certain level of judgmentisneededto conclude what constitutes is backed upby thebasis for conclusion inIFRS5BC81. Itisclearthat likely thannot, ormore thana50 /50 chance of occurring. Thisview be interpreted asrequiring ahigherlevel of probability thanmore assessment. Further, itisOtello’s view that “highlyprobable” should probably at December 31, 2020 isthemost crucialfactor inthisoverall Otello’s view isthat criteria 4, concerning whether anIPOishighly

at December 31, 2020 That nosignificantamountof anchorinvestors was yet inplace as cess had not taken place asat December 31, 2020 That aboard meeting givingformal approval to continue thepro- place asat December 31, 2020 That thesecond of filingaspart theIPOprocess had not taken - See below for reconciliations from Operating profit to EBITDA andAdjusted EBITDA for allperiodspresented. statement of comprehensive income. before financialitems includingimpairment andrestructuring expenses, andcorresponds to Operating profit (loss), (EBIT)intheConsolidated Consolidated statement of comprehensive income. IntheKPIssection of thisreport andthereconciliation below, EBITrepresents earnings forThis isshort Earnings before financialitems. Thisispresented both includingandexcluding impairment andrestructuring expenses inthe EBIT: compensation, andimpairment andrestructuring expenses. to Operating profit (loss), (EBIT)intheConsolidated statement of comprehensive income excluding depreciation and amortization, stock-based This represents EBITDA excluding stock-based compensation, impairment andrestructuring expenses. Adjusted EBITDA corresponds, therefore, Adjusted EBITDA: Consolidated statement of comprehensive income excluding depreciation andamortization expenses. forThis isshort Earnings before financialitems, taxes, depreciation andamortization. EBITDA corresponds to Operating profit (loss), (EBIT)inthe EBITDA: This comprises revenues minuspublisherandrevenue share cost. Gross profit: Alternative performance measures: business operations andto improve comparability between different periods. tive performance measures Adjusted EBITDA andNormalized EBITto provide enhanced insightinto theunderlyingfinancialperformance of the EBITDA andEBITterms are presented asthey are commonly used by investors andfinancialanalysts. Certain items are excluded inthealterna business operations andto improve comparability between periods. investors, financialanalysts andother stakeholders, andare meantto provide anenhanced insightinto thefinancialdevelopment of Otello’s accordance withIFRS. Otello believes that thealternative performance measures provide useful supplemental information to management, Otello discloses alternative performance measures of aspart itsfinancialreporting asasupplementto thefinancial statements prepared in Alternative performance measures Total Group Eliminations Corporate Bemobi (Apps &Games) AdColony (Mobile Advertising) Adjusted EBITDA [USDmillion] Total Group Eliminations Corporate Bemobi (Apps &Games) AdColony (MobileAdvertising) Gross profit [USDmillion] Total Group Eliminations Corporate Bemobi (Apps &Games) AdColony (MobileAdvertising) Revenue [USDmillion] The tablebelow presents key financialfigures for 2020 and2019. OTELLO CORPORATION ASA -ANNUAL REPORT 2020 259.0 101.9 2020 2020 2020 211.4 (0.2) 23.4 (5.3) 32.6 18.8 18.8 47.5 69.1 69.1 0.0 0.0 0.0 9.8 9.8 0.2 0.2 240.8 2019 2019 2019 183.9 103.2 (0.0) (0.3) (5.0) 39.0 39.0 63.4 63.4 23.9 23.9 56.2 19.3 0.0 0.0 0.9 0.9 0.9 0.3 - 91

OTELLO CORPORATION CONSOLIDATED STATEMENT 92 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 products andservices are used by theenduser (partner’s customer). breakdown reflects thelocation of Otello’s customers andpartners. The breakdown above does not accurately reflect where Otello’s derivative The breakdown of revenue by region reflects thecustomer orpartner’s (mobile operator, OEM)country of domicile. Consequently, therevenue Total Norway Americas, excluding USAandBrazil Asia Pacific Brazil excludingEMEA, Norway USA Revenue by region [USDmillion] Revenues Adjusted EBITDA Stock-based compensation expenses Restructuring expenses EBITDA Impairment expenses Depreciation andamortization expenses Operating profit (loss), (EBIT) Reconciliation of operating profit (loss) to EBITDA andadjusted EBITDA [USDmillion] Gross profit Publisher andrevenue share cost Total operating revenue Reconciliation of gross profit [USDmillion] The tablebelow presents areconciliation of profit (loss) to Adjusted EBITDA.

(10.0) 259.0 259.0 259.0 (157.1) 101.9 95.0 95.0 28.6 28.6 2020 2020 2020 91.3 23.4 23.4 28.1 28.1 23.4 23.4 13.4 9.6 9.6 6.3 0.0 0.0 0.2 9.7 9.7 240.8 240.8 (137.6) 240.8 240.8 (14.9) 2019 2019 2019 103.2 86.8 86.8 80.4 80.4 26.0 26.0 39.2 19.3 13.2 28.1 28.1 6.2 2.2 0.0 0.0 3.8 3.8 2.3 The vast majority of thevalue of non-current assets isrelated to acquisitions. Seenote 11and12for information. further The breakdown of non-current assets above does not includefinancialinstruments anddeferred taxassets. Total Non-current assets located inother countries Non-current assets located inUnited States Non-current assets located inNorway Non-current assets by location [USDmillion] Total Corporate (includingparent company) Bemobi (Apps &Games) AdColony Non-current assets by segment [USDmillion] Total Corporate (includingparent company) Bemobi (Apps &Games) AdColony Total assets by segment [USDmillion] Assets Revenues from theCorporate segment (includingSkyfire) are not considered material enoughto bepresented disaggregated. Unsatisfied performance obligations are not material enoughto bedisclosed. Total Africa Norway Americas, excluding USAandBrazil Asia Pacific Brazil excludingEMEA, Norway USA Application andcontent (over time) [USDmillion] Total Norway Americas, excluding USAandBrazil Asia Pacific Brazil excludingEMEA, Norway USA Advertising (point intime) [USDmillion] In thefollowing tables, themajorrevenue types are disaggregated by region asdisclosed above. Disaggreagation of revenues

OTELLO CORPORATION ASA -ANNUAL REPORT 2020

260.5 260.5 425.3 188.0 188.9 213.4 308.1 45.5 49.9 49.9 92.6 30.5 20.5 24.6 24.6 22.6 2020 2020 2020 2020 2020 (0.0) 10.4 51.2 95.0 95.0 86.7 86.7 0.5 17.7 4.1 4.1 5.0 5.0 6.3 2.7

- - 284.9 284.9 296.5 435.4 435.4 199.9 198.5 184.2 2019 2019 2019 2019 2019 113.5 86.2 56.0 56.0 65.8 65.8 65.4 65.4 25.4 25.4 16.0 19.3 75.7 75.7 39.2 10.0 21.1 2.2 0.0 2.0 4.1 4.1 4.6 0.1 - - 93

OTELLO CORPORATION CONSOLIDATED STATEMENT 94 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 [USD million] Revenues andexpenses for thecurrent year recalculated onaconstant currency basis, are presented below: INR TRY DKK BRL into USDyieldsthefollowing average exchange rates: Conversion of theGroup’s revenues from foreign currencies invoicing of customers. These effects are not specifiedinthetablebelow. foreign exchange rate fluctuations. Please note that some revenue numbers are impacted by changes inlocalcurrencies whichare thebasis for The majorityof thefinancialriskthat theGroup isexposed to relates to currency risk.Both revenue andoperating expenses are exposed to Currency risk policies. TheGroup isexposed to market (currency) risk,credit riskandliquidityrisk. lar basis andmanagement determines appropriate strategies related to how these risks are to behandledwithin theGroup undertheapproved Risk management intheGroup iscarriedoutby manamgement andapproved by theBoard of Directors. Potential risks are evaluated onaregu- Financial risk receivables, andfinancialinstruments Financial risk,accounts andother Note 5 Expenses Revenue Revenues percurrency: [USDmillion] USD BRL DKK TRY INR Other Operating expenses (OPEX) percurrency: [USDmillion] Total USD DKK NOK BRL TRY Other Total Recalulated withprior year average rates Revenues (268.7) (188.3) OPEX 259.0 (10.8) (18.9) (19.8) (13.5) (17.4) 178.1 28.6 26.3 15.0 2.2 8.7 2020 2020 (275.8) 270.5 68.8% 10.2% 11.0% 70.1% 0.9% 4.0% 5.0% 6.5% 5.8% 3.4% 7.0% 7.4% % % prior year rates FX effect using

Revenues (253.4) OPEX (178.1) (24.0) 2020 240.8 0.014 (12.5) (12.4) 160.5 (13.2) 0.196 0.139 0.155 (13.1) 39.2 15.0 10.7 13.2 2.1 2019 2019 (7.1) 11.6

Effect in% 66.7% 70.3% 16.3% 0.254 2.6 % 4.5 % 0.014 2019 0.150 0.9% 4.9% 4.9% 6.2% 0.176 4.5% 9.5% 5.2% 5.5% 5.2% % % TRY The accounts receivables are converted, asof December 31, at thefollowing exchange rates: Gross accounts receivable percurrency: Accounts receivable the loss rates for thecontract assets. Individualassessments percustomer are also carriedoutby financialmanagement. same types of contracts. Thegroup hastherefore concluded that theexpected loss rates for trade receivables are areasonable approximation of due. Thecontract assets relate to unbilledwork inprogress andhave substantially thesameriskcharacteristics asthetrade receivables for the expected credit losses, trade receivables andcontract assets have beengrouped based onshared credit riskcharacteristics andthedays past to measuringexpected credit losses whichuses alifetime expected loss allowance for alltrade receivables andcontract assets. To measure the has not experienced significantcredit-related losses duringthisorprevious financialyears. Thegroup applies theIFRS9simplifiedapproach than 10%of theGroup’s revenue duringthefinancialyear. Further, theGroup conducts muchof itsbusiness withlarge global companies and credit riskismainlyrelated to external receivables. Credit riskisassessed for each specific customer. Nosinglecustomer accounted for more Credit riskistheof losses that theGroup would suffer ifacounterparty fails to perform itsfinancialobligations. TheGroup’s exposure to Credit risk regarding thepotential saleof itsminoritystake (see notes 15and21for information). further Other finance income (expense) includes $0.8 million(2019: 1.1) inlegal costs related to thesaleof theTVbusiness andOtello’s ongoing case The tablebelow shows thebreakdwon of FXgains andlosses, andother financialincome andexpense. FX gain (loss) andother financialincome (expense) exchange contracts asof December 31, 2020. During 2020 and2019, theGroup didnot use forward exchange contracts to hedge itscurrency risk,andOtello had not entered into any foreign Foreign exchange contracts The Group aslimited exposure interms of credit riskrelated to loans andreceivables. Total Asia Pacific EMEA Americas Gross accounts receivable perregion: [USDmillion] DKK BRL Loans andreceivables Total Other finance income (expense) FX loss FX gain USD The numbers below are presented inlocalcurrencies (million) TRY DKK BRL Other

2020 63.6 63.6 56.3 38.1 n/a 18.1

gross AR

OTELLO CORPORATION ASA -ANNUAL REPORT 2020 61.6% 13.7% 17.3% % of 0.2% 7.3%

2020 2020 2020 2019 (7.5) 61.8 0.193 0.165 (1.4) 10.4 0.135 (7.7) 27.2 24.1 42.4 24.6 24.6 29.2 31.8 1.6 n/a gross AR 60.0% 13.4% 0.249 11.6% 2019 2019 2019 0.168 % of 0.150 8.3% 6.7% (2.4) (1.8) (5.7) 53.0 27.3 17.8 7.9 5.1 5.1

OTELLO CORPORATION CONSOLIDATED STATEMENT 96 Total More than90days Past due61-90 days Past due31-60 days Past due0-30 days Current Total More than90days Past due61-90 days Past due31-60 days Past due0-30 days Current OTELLO CORPORATION ASA -ANNUAL REPORT 2020 Contract liabilities consist of andprepaid advertising campaigns, andprepaid license/royalty payments. Contract liabilities prepayments. Other receivables consists of payments heldinescrow related to sales andacquisitions, non-trade receivables includingtaxreceivables, and Other receivables date. nized intheyear which was not invoiced to thecustomers at year endandwhichwillbeinvoiced to customers subsequent to thebalance sheet Accounts receivable represent of thepart receivables that isinvoiced to customers butnot yet paid. Contract assets represents revenue recog Total Other receivables Contract assets Accounts receivable (includingprovision for bad debt) Accounts receivables andother receivables [USDmillion] [USD million] Loss allowance asat December 31, 2020 and December 31, 2019 was determined asfollows for both trade receivables andcontract assets: accounts receivable accounts receivable carrying amount- carrying amount- Gross Gross 53.0 61.8 25.0 36.5 13.5 2.0 8.3 4.3 2.4 11.1 2.7 2020 9.1 2019

carrying amount- carrying amount- contract assets contract assets Gross Gross 30.3 30.3 0.0 - - - -

Expected Expected loss rate loss loss rate loss 13.8 % 13.8 16.7 % 15.7 % 0.0 % 0.0 0.0 % 0.0 0.9 % 0.9 0.6 % 0.6 0.2 % 0.5 % 5.9 % 5.9

2020 95.9 29.6 59.9 6.4 allowance allowance 2019 Loss Loss Loss Loss (2.3) (0.0) (0.0) (0.0) (0.8) (0.2) (0.2) (0.4) (1.9) 50.6 30.3 (1.4) (1.3) (0.1) - 8.6 89

sheet date. All financialliabilities, withtheexception of thenon-current of portion lease liabilities, are expected to bepaid within1year of thebalance Financial liabilities As at December 31, 2020, $35 millionof therevolving credit facility had beendrawn up. listing of Otello’s Bemobibusiness inBrazil. Inaddition, thetermination date of theRCF was extended to June30, 2021. favour of Pedro Ripper, CEO of Bemobi,(on behalfof theformer owners of Bemobi)was removed. Thiswas carriedoutinfollowing thepublic In March 2021, thepayment guarantee that was signedinMarch 2020 of aspart theabove amendmentof anamountequalto $18.6 millionin In March 2020, Otello signedanamendmentto that agreement reducing thefacility to $50 million. In May 2018, Otello signedanagreement for anew 3year Revolving Credit Facility (RCF) of $100millionwithDNBBankASA. Credit facility Utilized Long-term cashcredit Credit Facility [USDmillion] Total Other TRY EUR NOK USD BRL Breakdown of cashdeposits by currency [USDmillion] Liquidity reserve Short-term overdraft facility Unutilized credit facilities Unrestricted cash Less restricted funds Cash inhandandondeposit Cash andcashequivalents Liquidity reserve [USDmillion] Liquidity risk 1) OTELLO CORPORATION ASA -ANNUAL REPORT 2020 2020 2020 2020 50.0 41.9 15.0 35.0 10.8 18.0 41.9 15.0 41.1 10.1 0.8 0.8 0.9 1.3 - 100.0 2019 2019 2019 80.0 80.0 20.0 28.3 28.3 15.4 27.3 0.9 4.0 6.4 1.3 0.1 1.1 - 97

OTELLO CORPORATION CONSOLIDATED STATEMENT 98 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 Net cash Gross debt -variable interest rate Gross debt -fixed interest rate Cash andcashequivalents Net cash Lease liabilities Borrowings Cash andcashequivalents [USD million] Neither theCompany nor any of its subsidiaries are subjectto externally imposed capitalrequirements cash flow inthefuture. market confidence andto sustain future development of thebusiness. TheGroup still possesses abusiness modelthat anticipates considerable The Group’s policyhasbeento maintainahighequity-to-asset ratio andto maintainasolid capitalbase so asto maintaininvestor, creditor and Capital management Net debt asof 31/12/2019 Effects of exchange rate changes Cash flow Additions -leases Leasing commitment IFRS16implementation Net debt asof 1/1/2019 [USD million] Net debt asof 31/12/2020 Effects of exchange rate changes Cash flow Additions -leases Net debt asof 1/1/2020 [USD million] The tables below sets outananalysis of net debt andthemovements innet debt for each of theperiods Net debt reconciliation Borrowings Borrowings Liabilities from financingactivites Liabilities from financingactivites (20.0) (20.0) (20.0) (35.0) (15.0) ------Leases Leases (10.0) (4.0) (2.3) (1.2) (7.1) (7.1) -0.1 4.0 4.0 0.3 5.3 - (39.0) (35.0) 2020 (4.0) 41.9 41.9 2.9 2.9 - cash equivalents cash equivalents Cash and Cash and (20.0) 2019 28.3 28.3 (27.1) (0.6) 41.9 (3.6) 28.3 28.3 27.5 (7.1) 17.2 1.2 1.2 1.5 - - - -

Contingent consideration, current 1) Other current liabilities Accounts payable Liabilities -current Other non-current liabilities Loans andborrowings Liabilities -non-current Cash andcashequivalents Accounts receivable Assets -current [USD million] Contingent consideration, current Loans andborrowings in categories for accounting treatment. Aclassification of financialinstruments inOtello ispresented below: Financial instruments, andcontracts accounted for assuch,are includedinseveral lineitems inthestatement of financialposition andclassified Financial instruments Other current liabilities Accounts payable Liabilities -current Other non-current liabilities Loans andborrowings Liabilities -non-current Cash andcashequivalents Accounts receivable Assets -current [USD million] Other current liabilities represents liabilities to entities indiscontinued operations. These were settled in2020. 1) 1) OTELLO CORPORATION ASA -ANNUAL REPORT 2020 Amortised costAmortised Amortised costAmortised 80.9 20.0 89.5 22.8 28.3 35.0 41.9 25.7 0.0 0.0 0.8 0.2 0.5 1.6 2020 2019 1.1 Fair value Fair value 80.9 20.0 89.5 22.8 28.3 35.0 41.9 25.7 0.0 0.0 0.8 0.2 0.5 1.6 1.1 99

OTELLO CORPORATION CONSOLIDATED STATEMENT 100 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 ees vest over three years with1/3each year. Options granted to Otello Corporation andBemobiemployees vest over four years with¼each year, andoptions granted to AdColony employ and replaced in2021. Please see note 16for more information. and have beenrecognized, inaccordance withIFRS2,inthestatement of comprehensive income. However, theRSUAward hasbeenterminated There are nounvested RSUs left for AdColony andOtello employees asof 12/31/2020. TheRSUs granted in2020 hasbeengrantet to Pedro Ripper Otello used to have two equity-based incentives: ordinary stock options andRestricted Stock Units(“RSU”). Share compensation program: An accrual for all2020 bonuses for senior executives hasbeenrecognized intheconsolidated financialstatements. Bonuses willbepaid in2021. program andpredefined targets are approved by theRenumeration committee andtheBoard of Directors. be achieved. Thesize of thebonuspayment isdependentonactual company performance compared to aset of predefined targets. Thebonus A bonusprogram exists for thesenior executive team at Otello. For each individualexecutive, alimitisset for theamountof bonusthat can The Group hasnot given any loans orsecurity deposits to theCEO, theChairmanof theBoard ortheirrelated parties. As of December 31, 2020, there was noexisting severance agreement between Otello andtheChairmanof theBoard. Company. As compensation, theCEO isentitledto receive atermination amountof two years’ base salaryiftheemployment contract isterminated by the nation of employment contracts, etc. The CEO haswaived hisrightsunderSection15-16 of theNorwegian Working Environment Act of 2005 relating to employees’ protection, termi- Compensation to theCEO andChairmanof theBoard follow therequirement asset intheAct. The Norwegian companies intheGroup are obligated to follow theAct onMandatory company pensionsandthese companies pensionschemes Average numberof fulltimeequivalents Total Payments to long-term contractual staff Insurance andother employee benefits Stock-based compensation expense, includingsocial security cost Pension cost Social security cost Salaries andbonuses Payroll expenses [USDmillion] to management Payroll expenses andremuneration Note 6 (55.6) (34.1) 2020 (2.9) (2.6) (9.7) (5.3) (1.0) 613

(54.7) (37.8) 2019 (2.9) (3.8) (5.3) (3.7) 546 (1.1) - The numberandweighted average exercise price of share options inOtello Corporation ASA are asfollows: Weighted average exercise price Options Outstanding at thebeginning of theperiod Outstanding at thebeginning of theperiod Terminated (employee terminations) Terminated (employee terminations) Forfeited duringtheperiod Forfeited duringtheperiod Expired during theperiod Expired duringtheperiod Cancelled during theperiod Cancelled duringtheperiod Exercised duringtheperiod Exercised duringtheperiod Granted during theperiod Granted duringtheperiod Outstanding at theendof theperiod Outstanding at theendof theperiod Exercisable at theendof theperiod Exercisable at theendof theperiod The numberandweighted average exercise price of share options inBemobiHoldingAS are asfollows: Weighted average exercise price tioned outstanding options have beencancelled (2019: nooptions granted). 3 450 000options have beengranted in2020 asreplacement options for theoutstanding ones for therepective employees. Theaforemen- ees, onaverage, are exercising theiroptions 18monthsafter thevesting date. or three years after thevesting date (depending onwhentheoptions were granted), theestimate isbased onanassumption that theemploy sideration whenestimating thecost of theoptions inaccordance withIFRS2.Given that employees have therightto exercise theiroptions one This average attrition rate, andtheemployees responsibility for paying theCompany’s contributions related to theoptions, are taken into con- fair-value measurement. There are nomarket conditions associated withtheshare option grants. Anannualaverage attrition rate of 0%isused. Share options are granted underservice conditions, not market-based conditions. Suchconditions are not taken into account inthegrant date any expected changes to future volatility based onpubliclyavailable information. The expected volatility isbased onhistoric volatility (calculated usingtheweighted average remaining life of theshare options), adjusted for The fair value of services received inreturn for stock options granted ismeasured by usingtheBlack &Scholes option pricingmodel. price 2020 (NOK) price 2020 (NOK) average exercise average exercise Weighted Weighted 9988 9988 9988 9988 20.99 18.99 41.26 46.21 36.91 42.16 ------

(in thousands) (in thousands) options 2020 options 2020 Number of Number of (1 448) 4.090 3450 3728 (590) 2.002 3.934 2 316 0.156 241 ------

average exercise average exercise price 2019 (NOK) price 2019 (NOK) OTELLO CORPORATION ASA -ANNUAL REPORT 2020 Weighted Weighted 9988 9988 9988 40.09 22.08 40.33 41.26 12 ------

(in thousands) (in thousands) options 2019 options 2019 Number of Number of 3.934 0.980 3.934 (80) 2316 (25) 2421 1291 ------

101

OTELLO CORPORATION CONSOLIDATED STATEMENT 102 Total 45.00- 40.00 -45.00 35.00 -40.00 30.00 -35.00 25.00 -30.00 20.00 -25.00 15.00 -20.00 12.30 -15.00 10.00 -12.30 Exercise price Total 45.00- 40.00 -45.00 35.00 -40.00 30.00 -35.00 25.00 -30.00 20.00 -25.00 15.00 -20.00 12.30 -15.00 10.00 -12.30 0.00 -10.00 Exercise price 0.00 -10.00 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 2019: 2020: Nooptions exercised in2020. The tablebelow shows thedate, numberandachieved selling price of options exercised. Exercise price =strike price The tablebelow shows thenumberof options issued by Otello Corporation ASA to employees at various strike prices andexercise dates. 12/10/2019 7/8/2019 Date of exercise Total Outstanding options Outstanding options per 12/31/2020 (in thousands) (in thousands) per 12/31/2019 3 728 3 3 450 3 2 316 1 563 1 538 TOTAL OUTSTANDING OPTIONS TOTAL OUTSTANDING OPTIONS 213 135 65 25 55 ------

average remaining average remaining lifetime (years) lifetime (years) Weighted Weighted 0.20 0.63 0.63 0.87 0.87 0.43 0.43 0.72 0.72 3.67 3.67 3.46 1.72 2.17 1.63 ------

average exercise average exercise 2020 2019 price (NOK) price (NOK) Weighted Weighted 38.50 22.08 20.99 60.75 60.75 18.99 19.28 41.27 41.26 41.61 ------

Vested options Vested options (in thousands) (in thousands) 12/31/2020 12/31/2019 exercised options VESTED OPTIONS VESTED OPTIONS (in thousands) 1291 538 538 241 176 135 Number of 65 25 55 ------

80 average exercise average exercise 25 55

selling price price (NOK) price (NOK) Weighted Weighted Achieved (NOK) 40.04 40.04 40.84 38.50 22.08 60.75 60.75 14.86 40.33 19.28 16.42 46.21 ------

Outstanding at thebeginning of period Restricted Stock Units No RSUs were granted by Otello Corporation ASA to management andemployees in2020 or2019. Restricted stock units Exercise price 2019: Nooptions exercised in2019. 2020: Nooptions exercised in2020. The tablebelow shows thedate, numberandachieved selling price of options exercised. Exercise price =strike price Total 9500- 0.00 -9000 Exercise price Total 9500- 0.00 -9000 The tablebelow shows thenumberof options issued by BemobiHoldingAS to employees at various strike prices andexercise dates. Granted Exercised Released Cancelled Forfeited Expired Adjusted quantity Outstanding at theendof period Performance adjusted Vested RSUs Weighted Average Fair Value of RSUs Granted duringtheperiod Intrinsic value outstanding RSUs at theendof theperiod Intrinsic value vested RSUs at theend of theperiod There are nounvested RSUs left. Outstanding options Outstanding options per 12/31/2020 per 12/31/2020 (in thousands) (in thousands) 4.090 0.000 4.090 3.934 3.934 TOTAL OUTSTANDING OPTIONS TOTAL OUTSTANDING OPTIONS 0

average remaining average remaining lifetime (years) lifetime (years) Weighted Weighted 2.78 3.75 3.75 2.78 3.75 - -

(in thousands) (in thousands) average exercise average exercise Shares Shares 2020 2019 price (NOK) price (NOK) 2020 2020 Weighted Weighted ------

Average Exercise 9988 9 988 9 988 9 988 Price (NOK) - -

Weighted in NOK Value Vested options Vested options ------(in thousands) (in thousands) OTELLO CORPORATION ASA -ANNUAL REPORT 2020

12/31/2020 12/31/2020 (in thousands) (in thousands) VESTED OPTIONS VESTED OPTIONS 0.980 2.002 0.980 2.002 Shares Shares 0 0

(15) 15 2019 2019 ------

Average Exercise average exercise average exercise Price (NOK) price (NOK) price (NOK) Weighted Weighted Weighted in NOK Value 9988 9 988 9 988 9 988 0.02 0.02 0.02 0.02 ------

103

OTELLO CORPORATION CONSOLIDATED STATEMENT 104 No RSUs were granted in2019. Intrinsic value vested RSUs at theendof theperiod Intrinsic value outstanding RSUs at theendof theperiod Weighted Average Fair Value of RSUs Granted duringtheperiod Vested RSUs Outstanding at theendof period Performance adjusted Adjusted quantity Expired Forfeited Cancelled Released Exercised Granted Outstanding at thebeginning of period OTELLO CORPORATION ASA -ANNUAL REPORT 2020 RSUs granted by BemobiHoldingAS to management andemployees in2020 or2019. Restricted stock units (in thousands) (in thousands) Shares Shares 24 24 24 24 24 24 2020 2020 ------

Average Exercise 269,299,820.47 Price (NOK) Weighted 10,686.50 in NOK Value ------

[USD million] Compensation to executive management in2020 Petter Lade, CFO Lars Boilesen, CEO Executive Manangement additional compensation given to directors withregard to specialservices performed outsideof theirnormalfunction. tors from the Company orany business owned by theCompany, except that mentionedabove. In2019 and2020, there hasbeennosignificant There hasbeennocompensation orother economic benefit provided in2019 or2020 to any memberof theExecutive Team orBoard of Direc Members of Executive Management are includedintheCompany’s employee pensionscheme, whichisadefined contribution plan. Presented above are thebonuses earnedin2020 andpaid inboth 2020 and2021, whichare based onthe2020 results. Total Kari Stautland, Member Jakob Iqbal, Member Nils Foldal, Chairman The Nomination Committee Board MemberuntillJune4 Frode Jacobsen, Board Memberfrom June4 Song Lin, Board Member Maria Borge Andreassen, Birgit Midtbust, Board Member Anooj Unarket, Board Member Andre Christensen, Chairman The Board of Directors Remuneration 0.00 0.00 0.02 0.03 0.03 0.07 0.18 0.01 0.01 - - - Salary 0.70 0.48 0.22 ------Bonus 0.59 0.47 0.12 ------compensation Other 0.04 0.00 0.03 ------

compensation Pension OTELLO CORPORATION ASA -ANNUAL REPORT 2020 0.08 0.07 0.01 ------

options/RSUs exercised Benefit 0.00 ------

compensation Total 0.00 0.00 0.00 0.02 0.03 0.03 0.07 0.35 1.58 0.01 0.01 1.05 -

105

OTELLO CORPORATION CONSOLIDATED STATEMENT 106 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 Presented above are thebonuses earnedin2019 andpaid inboth 2019 and2020, whichare based onthe2019 results. [USD million] Compensation to executive management in2019 Lars Boilesen, CEO Executive Manangement Total Kari Stautland, Member Jakob Iqbal, Member Nils Foldal, Chairman The Nomination Committee Board MemberuntilJune5 Sophie Charlotte Moatti, Board Memberfrom June5 Anooj Unarket, Board Memberfrom June5 Maria Borge Andreassen, Birgit Midtbust, Board Member Frode Jacobsen, Board Member until June5, Chairmanfrom June5 Andre Christensen, Board Member Chairman untilJune5 Audun Wickstrand Iversen, The Board of Directors Petter Lade, CFO Remuneration 0.00 0.00 0.06 0.04 0.04 0.22 0.02 0.02 0.03 0.01 - - - Salary 0.20 0.75 0.55 ------Bonus 0.09 0.47 0.38 ------compensation Other 0.00 0.00 0.00 0.01 ------

compensation Pension 0.07 0.07 0.01 ------

exercised options/RSUs Benefit 0.03 0.02 0.01 ------

compensation Total 0.00 0.00 0.00 0.06 0.04 0.04 0.02 0.02 0.03 0.01 1.55 1.02 0.31

Total Petter Lade, CFO Lars Boilesen, CEO Executive Manangement [In thousands of options] related parties. There are noexisting agreements regarding thedispensation of loans orsecurity deposits to key personnel, members of theboard ortheir Options to executive management 2020 Lars Boilesen, CEO Executive Manangement Petter Lade, CFO Total (in thousandsof options andRSUs, cost inUSDmillion) The tablebelow shows option andRSUgrants in2020 andoption andRSUcosts in2020 B —average exercise price for thenumberof options heldby theendof thefinancialyear A —average exercise price for options executed inthefinancialyear 1485 1200 285 285

Opening balance 2650 2 250 250 2 400

(1 105) Granted options (900) (205)

Cancelled options - - - Terminated options (380) (300) (80) (80)

Expired options - - - Exercised options -

- Average exercise price — A (NOK) 2 250 250 2 Granted Options 400 2650 2 250 250 2

400 Closing balance

18.99 18.99 Weighted average exercise price — B (NOK) OTELLO CORPORATION ASA -ANNUAL REPORT 2020 2020 2020 0.40 0.40 Cost Cost 0.07 0.07 0.48 3.67 3.67 3.67 3.67 Weighted average lifetime — C (years)

Weighted average 1.67 1.67 Granted remaining time

RSUs until vesting - - - Intrinsic Value of 0.38 2.52 2.14 outstanding options (USD million) 2020 2020

0.48 0.48 IFRS 2 cost for 0.40 0.40 Cost Cost 0.07 0.07 the period (USD - - - million) 107

OTELLO CORPORATION CONSOLIDATED STATEMENT 108 Total Petter Lade, CFO OTELLO CORPORATION ASA -ANNUAL REPORT 2020 [In thousands of options] related parties. There are noexisting agreements regarding thedispensation of loans orsecurity deposits to key personnel, members of theboard ortheir Options to executive management 2019 Lars Boilesen, CEO Executive Manangement Lars Boilesen, CEO Executive Manangement Petter Lade, CFO Total (in thousandsof options andRSUs, cost inUSDmillion) The tablebelow shows option andRSUgrants in2019 andoption andRSUcosts in2019 B —average exercise price for thenumberof options heldby theendof thefinancialyear A —average exercise price for options executed inthefinancialyear 1490 1200 290

Opening balance - - - Granted options - - - Terminated options (5) (5)

- Exercised options 12.20 12.20 Average exercise - price — A (NOK) 1485 1 200 285 Closing balance Granted Options 40.87 38.22 Weighted average exercise price — B - - -

(NOK) 1.70 1.57 Weighted average 2019 0.04 0.04 Cost Cost 0.19 0.23 lifetime — C (years)

Weighted average 0.35 0.31 remaining time

Granted until vesting RSUs - - - Intrinsic Value of outstanding op- - - - tions (USD million) (0.22) (0.22)

2019 IFRS 2 cost for Cost Cost 0.04 0.23 0.19 the period (USD - million) Name [In thousandsof shares, options andRSUs] Executive Management asof December 31, 2020 Shares, options andRSUs owned by other membersof Name [In thousandsof shares, options andRSUs] and theChief Executive Officer asof December 31, 2020 Shares, options, RSUs owned by membersof theBoard Petter Lade Andre Christensen Birgit Midtbust Maria Borge Andreassen Anooj Unarket Song Lin Lars Boilesen Title Commission CFO Chairman Board Member Board Member Board Member Board Member CEO Shares Shares 260 334 23 51 0 - - 66 66 Options 2 250 2 2 250 2 Options - - - - - 400 400 RSUs 0 0

- - - - - RSUs - - OTELLO CORPORATION ASA -ANNUAL REPORT 2020 2 584 Total 2 510 23 51 - - - options (NOK) strike price - Total Weighted 466 466 average 18.99 Weighted average

- - - - -

options (NOK) strike price - strike price - RSUs (NOK) Weighted average 18.99 ------

109

OTELLO CORPORATION CONSOLIDATED STATEMENT 110 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 Name [In thousandsof shares, options andRSUs] Executive Management asof December 31, 2019 Shares, options andRSUs owned by other membersof Name [In thousandsof shares, options andRSUs] and theChief Executive Officer asof December 31, 2019 Shares, options, RSUs owned by membersof theBoard Petter Lade Andre Christensen Frode Jacobsen Birgit Midtbust Maria Borge Andreassen Anooj Unarket Lars Boilesen Title Commission CFO Chairman Board Member Board Member Board Member Board Member CEO Shares Shares 258 315 24 21 11 - - 65 65 Options 1 200 1 200 Options - - - - - 285 285 RSUs 0

- - - - - RSUs - - Total 1 458 1 515 24 21 11 - - options (NOK) strike price - Total Weighted 350 350 average 40.87 Weighted average

- - - - -

options (NOK) strike price - strike price - RSUs (NOK) Weighted average 38.22 ------

Total Other services Tax advisory services Assurance services Statutory audit Audit fees [USDmillion] ing expenses for theyear to theexternal auditor, PwC. The following tableshows audit fees for thecurrent andprioryear. For allcategories thereported fee istherecognized expense inother operat Auditor remuneration Total Other expenses Bad debt expenses Travel expenses Purchase of equipment,not capitalized Audit, legal andother advisory services Marketing expenses Rent andother office expenses Hosting expenses, excl. depreciation cost Other operating expenses [USDmillion] Other operating expenses Note 7 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 (32.6) (16.3) (0.8) 2020 2020 (0.0) (0.6) (0.6) (0.2) (2.6) (4.2) (4.5) (1.0) (1.8) (1.6) 0.0 0.0 (33.0) (15.6) 2019 2019 (0.0) (0.0) (0.6) (0.4) (2.6) (3.4) (2.7) (4.7) (1.0) (1.7) (5.1) 2.9 - 111

OTELLO CORPORATION CONSOLIDATED STATEMENT 112 combinations that willmost likely not beableto beutilized dueto rules limitingtheamountof acquired losses aparent company canutilize. thatportion itismore likely thannot to not beutilized infuture periods. These amountsrelate to theacquired losses from certain business In thetables below, theset off tax(or valuation allowance) istheamountrecognized that reduces thetaxloss carryforwards in theUSfor the at December 31, 2020. Seebelow for abreakdown of taxloss carryforwards andrelevant expirations dates of these. tax loss carryforwards canbeutilized. Therefore taxloss carryforwards for Norway are not recognised inthestatement of financialposition as Regarding Norway, management does not consider that sufficient future taxable profits willbegenerated infuture periodsagainst whichthese forwards canbeutilized. Themajorityof taxloss carryforwards intheUShave therefore beenrecognized asat December 31, 2020. year. However, management considers that sufficient future taxable profits willbegenerated against whichthemajorityof UStaxloss carry that theamountof $7.3 millionintaxloss carryforwards that were not reognized intheprioryear, shouldalso not berecognized inthecurrent and Norway. Regarding taxloss carryforwards in theUS, management hasassessed forecast taxable profit for thecoming years, andconcluded profit willbegenerated infuture periodsagainst whichthese taxloss carryforwards canbeutilized. Thetaxloss carryforwards are intheUS Otello recognizes deferred taxassets related to taxlosses inthestatement of financialposition whenitisconsidered probable that taxable (2019: 2.3) are netted against deferred taxassets inthesametaxjurisdiction. As of December 31, 2020, deferred taxliabilities related to amortizable excess value from business combinations outsidetheUSof $1.2million All USentities are included inaUSconsolidated taxgroup. Brazil are netted against deferred taxassets inthesameUSandBrazil taxjurisdictions, respectively. Deferred taxliabilities related to amortizable excess value from business combinations outsidetheUS Deferred taxliabilities related to amortizable excess value from business combinations intheUS Deferred taxliabilities related to temporary differences Deferred taxassets related to other temporary differences Deferred taxasset related to merger of entities inBrazil Deferred taxassets related to taxloss carryforwards [USD million] Deferred taxbalances presented inthestatement of financialposition comprise thefollowing: Recognized deferred taxassets andliabilities: Income taxexpense Withholding taxexpense OTELLO CORPORATION ASA -ANNUAL REPORT 2020 1) Changes indeferred taxrelated to changes intaxrates Write down of deferred taxrelated to write down of intangibles from business combinations Changes indeferred taxrelated to amortization of excess values from business combinations Changes indeferred taxes related to non-recognition of certain taxassets Changes indeferred taxes Current tax Income taxexpense recognized inthestatement of comprehensive income: [USD million] Taxes Note 8 Net deferred assets (liabilities) Inthestatement of financialposition, deferred taxliabilities related to amortizable excess value from business combinations intheUSand 1) 1) 1) (5.0) 2020 2020 (0.0) (4.9) (3.7) (1.2) (1.2) 20.7 20.7 26.1 26.1 0.6 0.6 5.2 1.4 4.1 4.1 - - - 2019 2019 (0.0) (0.9) (9.8) (2.3) (1.5) (1.3) 32.2 (7.3) (0.1) 25.2 0.0 0.0 0.0 0.0 2.3 1.2 7.1 7.1 Intangible assets Property, plantandequipment 2019 [USDmillion] in thestatement of financialposition Net deferred taxassets (liabilities) recognized the statement of financialposition Tax loss carryforwards recognized in the statement of financialposition Tax loss carryforwards not recognized in in thestatement of financialposition Net deferred taxassets (liabilities) recognized Set off of tax(valuation allowance) the statement of financialposition Tax loss carryforwards recognized in Tax loss carryforwards the statement of financialposition Tax loss carryforwards not recognized in excess value from business combinations Deferred taxliabilities related to amortizable Set off of tax(valuation allowance) Total related to temporary differences Tax loss carryforwards Other from business combinations Deferred taxliabilities related to amortizable excess value Provisions andaccruals Total related to temporary differences Payroll taxonshare options Other Accounts receivable Provisions andaccruals Intangible assets Payroll taxonshare options Property, plantandequipment 2020 [USDmillion]2020 Deferred taxassets (liabilities) andchanges duringtheyear Accounts receivable Balance Balance 1/1/20 1/1/19 (3.8) (5.8) (2.4) 40.5 (3.4) (5.4) (2.7) 33.6 33.6 32.2 (7.3) 25.2 (2.1) 16.4 14.2 27.8 37.9 37.9 0.6 0.6 0.4 0.4 0.2 0.5 0.3 9.4 9.4 3.2 7.5 7.1 7.1 - to statement of comprehensive comprehensive statement of Posted to income income Posted (0.0) (9.6) (4.8) (8.4) (4.5) (4.4) (0.7) (4.3) (3.4) (2.7) (7.6) (7.3) (0.1) (0.1) (0.1) (0.1) (7.1) 0.3 0.3 4.3 3.3 1.4 1.1 - - -

directly to the the equity directly to Posted Posted equity OTELLO CORPORATION ASA -ANNUAL REPORT 2020 1.5 1.3 1.5 1.5 1.3 1.3 ------

to discontinued discontinued Disposals to operations operations Disposals ------12/31/20 12/31/19 Balance Balance (12.1) (2.4) (0.6) (1.2) (5.4) (5.4) 20.7 20.7 32.2 (7.3) 25.2 38.2 26.1 26.1 (2.1) 37.9 37.9 6.6 6.6 9.4 9.4 0.6 0.6 0.6 0.6 0.4 0.4 0.2 0.3 2.5 3.2 3.7 3.7 0.1 0.1 7.1 7.1 113

OTELLO CORPORATION CONSOLIDATED STATEMENT 114 losses, share-based remuneration costs andother costs. non-deductable Permanent differences comprise changes inthefair value of contingent considerations, amortization of acquired intangibles assets, impairment Permanent differences Effective taxrate Total tax expense for theyear Other effects Effect of non-recognition of certain deferred taxassets Deferred taxassets from previously unrecognized taxlosses Effect of non-taxable items andnon-deductible Effect of taxrates outsideNorway different from 22% /22% OTELLO CORPORATION ASA -ANNUAL REPORT 2020 Effect of changes intaxrates Income taxusingthecorporate income taxrate inNorway (22% in2020 /22% in2019) Profit (loss) before tax Reconciliation of effective taxrate [USDmillion] The Group’s gross taxloss carryforwards expire asfollows: [USDmillion] Total deferred taxes posted directly against theequity Other changes Change indeferred taxasset directly posted against theequitycapital[USDmillion] Total No expiration deadline 2037 2036 2035 2034 2033 2032 2027 2026 1) United States 109.9 43.8 43.8 42.2 11.6 0.4 0.4 5.4 5.4 1.9 1.2 1.3 2.1 Norway 27.5 % (18.3) (5.0) 2020 2020 (0.9) (4.9) (1.2) (2.1) 21.9 21.9 4.0 4.0 1.5 1.5 ------76.8 % 76.8 131.4 Total (12.8) 2019 2019 42.2 65.7 65.7 (9.8) 11.6 (1.4) (7.3) 0.4 0.4 (4.1) 5.4 5.4 1.9 1.2 1.3 2.1 0.0 0.0 0.2 2.8 1.3 1.3 - this reason, there isnodifference between earnings pershare and diluted earnings pershare for these periods. In periodswithnegative net income, thedilutive instruments willhave ananti-dilutive effect whencalculating diluted earnings pershare. For during theperiod. Earnings pershare iscalculated by dividingtheprofit attributable to equityholders of theCompany by theweighted ordinary shares inissue Shares used inearnings pershare calculation, fullydiluted Shares used inearnings pershare calculation Diluted earnings (loss) pershare (USD) Basic earnings (loss) pershare (USD) Earnings (loss) pershare (profit (loss)): Earnings pershare Earnings pershare Note 10 See note 11for information further regarding impairment testing. Total Office restructuring cost Other restructuring expenses Legal andother costs related to business combinations anddisposals Salary restructuring expense Impairment expense Impairment andrestructuring expenses [USDmillion] the release of aprioryear office lease accrual. relate mainlyto costs incurred inrelation to theIPOof theBemobibusiness andnew restructuring projects commenced in2019, offset partly by and for legal andother costs related to business combinations andrestructuring processes. Therestructuring expenses recognised thisyear During 2020, Otello recognized restructuring expenses inconnection withastrategic cost reduction that willbetter aligncosts Impairment andrestructuring expenses Note 9

OTELLO CORPORATION ASA -ANNUAL REPORT 2020 137 731 882 137 731 882 (0.17) (0.17) (0.2) 2020 2020 (0.7) (1.0) 1.4

withr - - evenues, 137 689 419 137 689 419 (0.16) (0.16) 2019 2019 (0.8) (2.3) (1.4) (0.1) - - 115

OTELLO CORPORATION CONSOLIDATED STATEMENT 116 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 plans covering athree year period.Beyond theexplicit forecast period, thecashflows are extrapolated usingconstant nominalgrowth rates. to determine thevalue inuse for allthecash-generating units. Management hasprojected cashflows based onfinancialforecasts and strategy The recoverable amountof assets isthehigherof value inuse andfair value less cost of disposal. Discounted cashflow models have beenapplied Recoverable amount are AdColony andBemobi,are thesameasthese segments aspresented innote 4. Goodwill acquired through business combinations has previously beenallocated to individualcash-generating units. Thecash-generating units Cash-generating units ognized animpairment loss. Theimpairment testing for theBemobiCGU was based onvaluations of carriedoutaspart theBemobiIPOprocess. Otello hascarriedoutimpairment testing asof December 31, 2020, according to IAS 36. Based ontheimpairment testing, theGroup hasnot rec Impairment testing Goodwill andimpairment testing Note 11 [USD million] As of December 31, 2020 Carrying amount [USD million] See impairment testing below for information further regarding CGUs. Accumulated impairment losses asof 12/31/20 FX adjustment Impairment losses Accumulated impairment losses asof 1/1/20 Accumulated impairment losses Acquisition cost asof 12/31/20 FX adjustment Acquisitions through business combinations Acquisition cost asof 1/1/20 Acquisition cost As of December 31, 2019 Carrying amount Acquisition cost asof 12/31/19 FX adjustment Acquisitions through business combinations Acquisition cost asof 1/1/19 Acquisition cost Accumulated impairment losses asof 12/31/19 FX adjustment Impairment losses Accumulated impairment losses asof 1/1/19 Accumulated impairment losses AdColony AdColony (91.0) (91.0) (91.0) (91.0) 182.2 182.2 273.1 273.1 273.1 273.1 ------2020 2019 Bemobi Bemobi (11.0) 48.5 48.5 48.5 (1.8) 50.3 37.6 37.6 37.6 37.6 0.0 0.0 ------(91.0) (91.0) 230.7 230.7 (91.0) (91.0) 310.7 323.4 323.4 219.7 (11.0) 321.7 Total Total 321.7 (1.8) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 - Discount rate after tax: AdColony CGU: equal to the carrying amount.Any changes beyond those described below may, therefore, lead to animpairment loss: For each CGU, thefollowing changes inforecasts andkey assumptions, inisolation, would result intherecoverable amountbeingapproximately Sensitivity analysis related to impairment testing the entityoperates. The growth rates used to extrapolate cashflows intheterminal year are not higherthantheexpected long-term growth inthemarket inwhich based onmanagement’s past experience, andassumptions interms of expectations for themarket development inwhichtheentityoperates. level inthemarket theentityoperates. Thegrowth rates used to extrapolate cashflow projections beyond theexplicit forecast periodare The expected growth rates for acash-generating unitis derived from thelevel experienced over thelast few years to thelong-term growth Growth rates into account gearing, thecorporate taxrate, andtheequitybeta. premiums inaddition to theUSmarket riskpremium are appliedto correct for localrisk.Thediscount rates also take The inflation difference between therespective country of thespecificCGU andtheUSisadded to reflect thelocalriskfree rate. Country risk WACC calculations are based onaGlobal-Local approach, implyingthat aglobal riskfree rate isappliedasabasis (US20Y Government bond). Discount rates are based onWeighted Average Cost of Capital (WACC) derived from theCapital Asset Pricing Model(CAPM) methodology. The Discount rates and expected future market development. Committed orimplemented operational restructuring initiatives are included. The EBITDA margin represents theoperating margin before depreciation andamortization andisestimated based onthecurrent margin level EBITDA Margin growth (average) Revenue growth isestimated based oncurrent levels andexpected future market development. Revenue growth (average) 2) 1) proximately equalto thecarryingamount. No reasonable change inthenominalgrowth rate intheterminal value, inisolation, would result intherecoverable amountbeingap- Nominal growth rate interminal value: amount. No reasonable change infuture cashflows, inisolation, would result intherecoverable amountbeingapproximately equalto thecarrying Future cashflows: An increase by 1650 basis points Discount rate after tax: Bemobi CGU: approximately equalto thecarryingamount. No reasonable change inthenominalgrowth rate intheterminal value, inisolation, would result intherecoverable amountbeing Nominal growth rate interminal value: A decrease by 62% inprojected future cashflows for the3year forecast period Future cashflows: An increase by 740 basis points 2) 1) EBITDA Margin growth (average) and discount rates. Thefollowing key assumptions were used indetermining thevalue inuse: Key assumptions used inthecalculation of value inuse are Revenue andEBITDA margin growth rates, Nominalgrowth rate interminal value, Key assumptions Revenue growth (average) Nominal growth rate interminal value Discount rate before tax Discount rate after tax Discount rate: thechanges above are for thewholeperiod includingterminal value. Represents thecompound annual growth rate during2021-2023 (until theterminal year). Future cashflows: thechanges above are for the3year forecast period and for theextrapolation period (terminal value) Represents theaverage percentage point increase inEBITDA margin during2021-2023. 2) 2) 1) 1) 1) 2) OTELLO CORPORATION ASA -ANNUAL REPORT 2020 AdColony 3.3 points 19.9 % 10.3 % 2.0 % 7.2 % 0.5 points Bemobi 11.6 % 17.5 % 2.0 % 2.3 % 117

OTELLO CORPORATION CONSOLIDATED STATEMENT 118 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 Intangible assets Note 12 [USD million] Useful life Impairment losses for theyear Amortization for theyear Net bookvalue as of 12/31/20 Accumulated amortization andimpairment losses asof 12/31/20 Translation differences Disposal Reclassification Impairment losses Amortization Amortization andimpairment losses asof 1/1/20 Accumulated amortization andimpairment losses Acquisition cost asof 12/31/20 Translation differences Disposal Reclassification Additions Acquisition cost asof 1/1/20 Acquisition cost Amortization plan Development Up to 3years Linear (64.8) (51.0) (14.7) (14.7) (0.0) (1.4) 63.7 63.7 72.5 10.3 0.9 0.9 7.7 7.7 - - - - - Up to 7years 2020 intangible assets (147.0) (143.1) Other Linear 156.7 148.1 (2.8) (2.8) (8.7) 5.0 5.0 6.7 6.7 0.1 0.1 ------

(207.9) (197.9) 220.6 220.6 220.3 (17.5) (17.5) (10.1) Total (0.0) 12.8 10.4 0.0 0.0 7.6 7.6 - - - - judgements related to capitalized R&Dcosts, see note 3. in thefinancialstatement. $10.3 million(2019: 10.8) inresearch anddevelopment costs were capitalized in2020. For additional information on research, development, andmaintenance of platforms and applications. In2020, $14.4 million(2019: 15.2) inengineeringsalaries were expensed Development isaninternally developed intangibleasset. Engineering salaries are theprimaryexpense incurred interms of costs related to Development contracts, proprietary technology andtrademarks. Other intangibleassets relates to prioracquisitions withintheAdColony andBemobibusinesses, andcomprise customer relationships, customer Other intangibleassets [USD million] Useful life Impairment losses for theyear Amortization for theyear Net bookvalue as of 12/31/19 Accumulated amortization andimpairment losses asof 12/31/19 Translation differences Disposal Reclassification Impairment losses Amortization Amortization andimpairment losses asof 1/1/19 Accumulated amortization andimpairment losses Acquisition cost asof 12/31/19 Translation differences Disposal Reclassification Additions Acquisition cost asof 1/1/19 Acquisition cost Amortization plan

Development Up to 3years Linear (36.9) (14.2) (14.2) (51.0) (0.2) 10.8 63.7 63.7 12.7 53.1 0.1 0.1 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 ------Up to 7years 2019 intangible (142.3) assets (147.0) Other Linear 154.4 156.7 (6.3) (6.3) (2.2) 0.0 0.0 4.4 4.4 9.7 9.7 1.6 - - - - -

(197.9) (179.2) (20.6) (20.6) 220.3 207.5 Total (2.4) 22.4 15.2 0.0 0.0 1.8 - - - - - 119

OTELLO CORPORATION CONSOLIDATED STATEMENT 120 Property, plantandequipment[USDmillion] OTELLO CORPORATION ASA -ANNUAL REPORT 2020 Property, plantandequipment Note 13 Useful life Impairment losses for theyear Depreciation for theyear Net bookvalue as of 12/31/20 Accumulated depreciation andimpairment losses asof 12/31/20 Translation differences Disposal Depreciation andimpairment losses Reclassification Depreciation andimpairment losses asof 1/1/20 Accumulated depreciation andimpairment losses Acquisition cost asof 12/31/20 Translation differences Disposal Reclassification Additions Acquisition cost asof 1/1/20 Acquisition cost Depreciation plan Up to 6years and fittings Fixtures Linear (0.0) (0.2) (0.4) (0.4) (1.9) (1.6) 0.0 0.0 0.3 2.5 0.7 2.7 0.1 0.1 - - -

Machinery and Up to 10years equipment Linear (20.1) 2020 (17.8) (0.0) (0.6) (2.3) (2.3) 23.3 23.1 23.1 0.3 3.0 0.1 0.1 - - - - improvements Up to 5years Leasehold Linear (0.2) (0.3) (0.3) (1.0) (1.3) 0.0 0.0 0.0 0.0 2.6 3.6 3.6 2.2 1.1 - - - -

(23.3) (20.5) Total (0.0) (0.9) 29.3 28.5 (3.1) (3.1) 6.0 0.0 0.0 0.2 1.7 - - - Property, plantandequipment[USDmillion] Useful life Impairment losses for theyear Depreciation for theyear Net bookvalue as of 12/31/19 Accumulated depreciation andimpairment losses asof 12/31/19 Translation differences Disposal Depreciation andimpairment losses Reclassification Depreciation andimpairment losses asof 1/1/19 Accumulated depreciation andimpairment losses Acquisition cost asof 12/31/19 Translation differences Disposal Reclassification Additions Acquisition cost asof 1/1/19 Acquisition cost Depreciation plan Up to 6years and fittings Fixtures Linear (0.0) (0.0) (0.4) (0.4) (1.6) (1.3) (0.1) 0.0 0.0 0.9 0.5 2.5 2.1 - - -

Machinery and Up to 10years equipment OTELLO CORPORATION ASA -ANNUAL REPORT 2020 Linear (14.6) (17.8) 2019 (0.0) (0.2) (3.2) (3.2) 20.6 23.3 0.0 0.0 2.9 5.5 - - - - improvements Up to 5years Leasehold Linear (0.0) (0.8) (0.2) (0.2) (1.0) (0.1) 0.0 0.0 2.6 0.7 0.7 1.6 2.1 - - - -

(20.5) (16.7) Total (0.0) (0.3) (3.9) (3.9) 28.5 (0.1) 24.7 24.7 8.0 0.1 0.1 4.1 4.1 - - - 121

OTELLO CORPORATION CONSOLIDATED STATEMENT 122 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 Translation differences arise dueto translation of lease contracts inlocalcurrencies to USD. Balance asof 12/31 Non-current contract assets (more than1year) Current contract assets (less than1year) Of which: Lease receivables asof 12/31 Translation differences Interest income Income from sublease Additions Balance asof 1/1 Lease receivables (USDmillion) asset. Theestimated useful life isconsidered to betheterm of the contract for each leased asset. Depreciation ischarged to thestatement of comprehensive income onastraight-line basis over theestimated useful life of each leased Right of use assets asof 12/31 Translation differences Adjustment for depreciation related to Lease receivables Depreciation Additions Lease receivable asof 1/1 Balance asof 1/1 Right of use assets (USDmillion) Balance asof 12/31 Non-current lease liabilities (more than1year) Current lease liabilities (less than1year) Of which: Lease liabilities asof 12/31 Interest expense onlease liabilities Lease payments Translation differences Additions Balance asof 1/1 Lease liabilities (USDmillion) The movements of theGroup’s rightof use assets, lease receivables andlease liabilities are presented below: ROU asset. subleasing contracts, theGroup hasrecognized alease receivable inthestatement of financialposition, withacorresponding reduction inthe of use (ROU) assets andUSD10.0 millioninlease liabilities. TheROU assets andlease liabilities comprise office lease contracts. For financial IFRS 16was implemented for theGroup witheffect asof January 1,2019. Ontransition to IFRS16, theGroup recognized $10.0 millioninright Right-of-use assets andlease liabilities Note 14 (0.3) (4.2) (4.2) 2020 2020 2020 (1.5) 0.0 0.0 0.9 0.9 0.2 4.6 4.6 2.8 2.4 0.9 0.9 0.9 4.0 4.0 4.0 1.4 3.0 3.0 1.2 1.2 1.2 0.1 0.1 7.1 7.1 - - - 2019 2019 2019 (5.6) (5.4) (1.8) 10.0 10.0 10.0 (4.1) 0.0 0.0 0.0 4.0 4.0 0.5 4.6 4.6 0.3 3.0 3.0 2.4 2.4 2.3 2.3 1.8 1.9 0.1 0.1 0.1 0.1 4.1 4.1 7.1 7.1 7.1 Further information abouttheimpact of IFRS16, ‘Leases’, isprovided inNote 1. office lease inRiodeJaneiro. The majorityof thelease liabilities relate to office leases of AdColony’s offices inSeattle, SanMateo, SanFrancisco andNew York, andBemobi’s Total More thanfive years Between oneto five years Less than oneyear Payments for leases: The future minimum lease payments undernon-cancellable lease contracts are asfollows: Future lease payments Net effect Other Translation differences Net interest expense increased asaresult of recognition of thelease liability Depreciation expense increased asaresult of depreciation of ROU assets Operating lease expenses recognized underoperating expenses decreased IFRS 16effects ontheconsolidated statement of comprehensive income for theyear (USDmillion) OTELLO CORPORATION ASA -ANNUAL REPORT 2020 (0.3) 2020 2020 (2.8) (0.1) (0.1) 0.2 2.8 1.2 4.2 0.1 0.1 2.8 2019 2019 (3.8) 4.0 4.0 0.2 0.3 2.9 3.7 3.7 7.2 0.1 0.1 0.1 0.1 - 123

OTELLO CORPORATION CONSOLIDATED STATEMENT 124 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 shares are recognised at cost. consumers globally, includingintegrated drivingsafety features andtools like Crash Detection andRoadside Assistance. Investments inother capital firminvesting inearlystage technology companies. Life 360 provides location-based services, sharing andnotifications application to has not determined thefair value of these investments, asthey are not material for theGroup. Alliance Venture SpringisaNorwegian venture Labs, Incduring2019. Otello owned shares inZen Labs Incpriorto thismerger. Therecognised value of theshares is$0.8 million.Management Otello owns 6.5% of theshares inAlliance Venture SpringAS and approximately 0.075% of theshares inLife360, Inc,whichmerged withZen Investments inother shares MFC hasbeenordered to pay of aspart theongoing legal proceedings between theparties. Please see note 21for more information. accrued interest of $1.0 million,asat December 31, 2020. Inaddition, Otello hasaccrued £1.25 millionto reflect of thepart theOtello’s cost that The Group entered into aloan agreement in2017 of $5millionwithVewd Software AS (formerly Opera TVAS). Thisloan isoutstanding, withan Loans to associated companies Total at December 31 Elimination Share of theprofit (loss) Adjustment from prioryear FX adjustment Investment duringthefinancialyear At January 1 Carrying value [USDmillion] mates. However, Otello’s 2020 best estimate for thenet profit is$0.0m. Please see note 21for more information. We have received limited information aboutLast LionHoldings Ltd financials. Theprovided information above istherefore onlyuncertain esti- The investment inLast LionHoldings Ltd isrecognized usingtheequitymethod. Otello’s share of equity Equity Current liabilities Non-current liabilities Assets Net profit (loss) EBIT Revenue Information regarding Last LionHoldings Ltd [USDmillion] Last LionHoldings Ltd. Lion Holdco AS. In2017, Opera TVAS changed itsnameto Vewd Software AS. Seenote 21for information further regarding theinvestment in retained anapproximately 27% equityinterest inLast LionHoldings Ltd, through preferred shares, whichindirectly owns Opera TVthrough Last Otello finalized anagreement onDecember 19, 2016 to sell itsTVbusiness (”Opera for TV”) $80 of million.Aspart thisagreement, Otello Investments inassociated companies Total Investments inother shares Loans to associated companies Investments inassociated companies [USD million] The tablebelow gives abreakdown of thetotal amountof other investments recognized. Other investments Note 15 164.4 2020 2020 2020 (0.0) 117.5 18.7 35.3 10.1 37.5 11.0 10.1 10.1 10.1 0.8 0.8 9.3 7.7 7.7 - - - 2019 2019 2019 164.4 20.6 20.6 117.5 16.8 37.5 10.1 10.1 10.1 47.1 47.1 8.0 0.9 0.9 9.3 5.8 5.8 0.1 0.1 2.1 7.7 7.7 - - - Total Options *) RSU award Stock-based compensation expenses by type(USDmillion) with IFRS2,inthestatement of comprehensive income inthe2021 consolidated financialstatements. therefore berecognized asamodification of theRSUAward, andassuchthecosts associated withthegrant willberecognized, inaccordance were granted to BemobiBrazil CEO, Pedro Ripper, isconsidered to beareplacement of theterminated RSUaward. Thisamendmentshould The above-mentioned amendmentto theSecurityHolders agreement made inJanuary 2021, inwhichanadditional of portion 4.88% of shares comprehensive income inthe2020 consolidated financialstatements. Please see thetables below for information. further combination services. Thecosts associated withtheRSUaward have therefore beenrecognized, inaccordance withIFRS2,inthestatement of automatically forfeited ifemployment terminates, isaccording to IFRS2Share-based payments, to berecognized asremuneration for post ing asBemobiCEO asof theapplicablevesting date, to avoid forfeiture. Acontingent consideration arrangement inwhichthepayments are The above-mentioned RSUaward agreement, that was terminated inJanuary 2021, contained vesting conditions tiedto Pedro Ripperremain - Accounting treatment intheconsolidated financialstatements by BemobiHoldingAS. Holding AS entered into aVoting agreement. Thisagreement putinplace a“lockup” of Ripper’s shares andgives himvoting instructions issued if hisemployment terminates. However, BemobiHoldingAS mightchoose to exercise thecalloption. Inaddition, Pedro RipperandBemobi This agreement ensures that shares willbegranted to Pedro RipperuponanIPOof BemobiBrazil. Theshares are not automatically forfeited dro Ripperandtheintermediate holdingcompany of Otello’s Bemobibusiness, BemobiHoldingAS, entered into aShare Call Option agreement. Further, inJanuary 2021, theabove-mentioned RSUAward agreement withBemobiBrazil’s CEO, Pedro Ripperwas agreed to beterminated. Pe- ment for innegotiations hispart of thetransaction andsubsequent agreements withOtello. 16.083%. Theincrease from 11.2%to 16.083% represents anadditional agreed portion withBemobiBrazil’s CEO, Pedro Ripperasacknowledge- Brazil were to receive. Thiswas increased from 11.2%to 16.083% of theshares inBemobiHoldingAS, andshares inBemobiBrazil also equaling At thesametime, theparties renegotiated theSecurityHolders agreement concerning thenumberof shares that theformer owners of Bemobi the reporting date. relating to theoccurrence of amajortransaction are nolonger relevant. For more information regarding theIPO, please see Note 21Events after 15, 2021. Thefixed amountwas unchanged at USD18.6 million.Withtheannouncement of BemobiBrazil’s IPOonFebruary 9, 2021, theclauses option for amajortransaction), andtheconditions regarding transferring theshares inBemobiHoldingAS. Thedeadline was set at February In January 2021, theparties again renegotiated thedeadline for whenanIPOcould occur (at thesametimeremoving aqualifiedsaleasan share-based incentive program. was reached between BemobiHoldingAS, theholdingcompany of Otello’s Bemobibusiness andBemobiBrazil’s CEO, Pedro Ripperregarding a major transaction was set at December 31, 2020, andthefixed amountwas set at USD18.6 million.At thesametime, anRSUAward agreement In January 2020, anamendmentto theSecurityHolders agreement was agreed, regarding thedeadline andfixed amount.Thedeadline for a Bemobi Brazil could require Otello to acquire theshares at afixed amount. qualified saleoranIntitialPublic Offering ”IPO”). Ifsuchamajortransaction didnot take place withincertain deadlines, theformer owners of company BemobiHoldingAS. Theshares were to beheldinescrow untilamajortransaction inrelation to BemobiBrazil shouldtake place (a renegotiated inaSecurityHolders agreement, cashsettlement withapartial of USD20 millionand11.2%shares intheintermediate holding ofAs part theacquisition agreement, agreement anearn-out was entered into withtheformer owners. In2018, agreement thisearn-out was The Group acquired theBrazilian subsidiary BemobiMobileTech S.A (formerly BemobiMidiaeEntretenimento Ltda) (“BemobiBrazil”) in2015. Earn-out agreement andSecurityHolders agreements withBemobiMobileTech S.A Contingent liabilities Note 16 Total Otello AdColony Bemobi Stock-based compensation expenses persegment (USDmillion) Pedro Ripper *) OTELLO CORPORATION ASA -ANNUAL REPORT 2020 (0.0) (8.6) (7.8) 2020 2020 (9.7) (9.7) (1.9) (1.2) 125

OTELLO CORPORATION CONSOLIDATED STATEMENT 126 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 tions, and0(2019: 0) ordinary shares related to anequityincrease. During 2020, Otello issued 0(2019: 0) ordinary shares related to theincentive program, 0(2019: 0) ordinary shares related to business combina As of December 31, 2020, Otello owned 894,817 treasury shares (December 31; 2019: 2545 000). shares for $0.1 million(2019: $0.2 million). During 2020, Otello purchased 388,372 (2019: 943 691) treasury shares for $0.4 million(2019: $1.6 million), andsold 38,555 (2019: 152 691) treasury Treasury shares andordinary shares 2,769,548.58, andthetotal share count is138,477,429. with theNorwegian Register of Business Enterprises inFebruary 2020, and thenew registered share capitalof theparent company isNOK of theparent company, Otello Corporation by ASA, cancellation of 2,000,000 treasury shares. Theshare capitalreduction hasbeenregistered Reference ismade to theresolution by theannualgeneral meeting onJune4, 2019 where aresolution was passed to reduce theshare capital Share capitaldecrease The above authorization isvalid upto andincluding June30, 2021. capital base. acquisitions involving theCompany, to raise fundsfor specificinvestments, for paying down loans, orinorder to strengthen theCompany’s tive schemes, of aspart consideration payable for acquisitions made by theCompany, of aspart consideration for any mergers, demergers or amount isNOK2000. Theshares purchased through theshare buyback program may bedisposed of to meet obligations underemployee incen- NOK 276 954. Theminimumamountwhichmay bepaid for each share acquired pursuant to thispower of attorney isNOK5, andthemaximum shares intheCompany. Themaximumvalue of theshares whichtheCompany may acquire pursuant to theauthorization isatotal face value of The Company’s AnnualGeneral Meeting onJune2,2020, authorized theBoard of Directors of Otello Corporation ASA (the ”Company”) to acquire value of NOK0.02 each (USD0.002). Allordinary shares have equalvoting rightsandtherightto receive dividends. As of December 31, 2020, Otello had ashare capitalof NOK2769 548.58 (USD323 954) dividedinto 138477 429 ordinary shares withanominal Shares andshareholder information Note 18 Total Other current liabilities Accrued restructuring costs Accrued bonuses, commission andother employee benefits Accrued operating expenses Accruals for publisherinvoices not yet received [USD million] Other current liabilities Note 17 2020 32.9 47.3 0.0 0.0 0.4 0.4 8.4 8.4 5.6 5.6 2019 23.5 41.6 - 9.2 5.6 5.6 0.7 0.7 2.7 participate intheGroup’s stock option andRSUprogram (see note 6). Information regarding compensation for executive management andBoard of Directors canbefound innote 3. Executive Management also Group’s voting share asperDecember 31, 2020. Members of theBoard of Directors andExecutive Management of theGroup andtheirimmediate relatives controlled 0.3% (2019: 0.3%) of the Group executive management. The Group hasnot engaged inany related transactions party withany members of theBoard of Directors of Otello Corporation ASA orOtello indirectly owns Vewd Software AS through Last LionHoldco AS. loan isoutstanding asat December 31, 2020. TheGroup holdsa27% equityinterest inLast LionHoldings Ltd, through preferred shares, which The Group, asthecreditor, entered into aloan agreement in2017 of $5millionwithVewd Software AS (formerly Opera TVAS), thedebtor. This Vewd (Opera TV) Please see note 16for details of thetransaction withtheBemobiearnoutparticipants. Agreement withBemobiearnoutparticipants Related parties Note 19 Total numbers of shares Other shareholders Sum VERDIPAPIRFONDET NORDEAAVKASTNING THE BANK OFNEWYORK MELLON SA/NV CLEARSTREAM BANKING S.A. VPF DNBAMNORSKEAKSJER THE BANK OFNEWYORK MELLON SA/NV EUROCLEAR BANK S.A./N.V. SKANDINAVISKA ENSKILDA BANKEN AB CACEIS BANK UBS AG SKANDINAVISKA ENSKILDA BANKEN AB VERDIPAPIRFONDET NORDEANORGE VERD N.A. BANK OFAMERICA, J.P. MORGAN BANK LUXEMBOURG S.A. SUNDT AS MORGAN STANLEY &CO. INT. PLC. GOLDMAN SACHS INTERNATIONAL VERDIPAPIRFONDET DNBTEKNOLOGI AREPO AS LUDVIG LORENTZEN AS MERRILL LYNCH INTERNATIONAL [In thousands of shares] The 20 largest shareholders of Otello Corporation ASA shares asof December 31, 2020, were asfollows: Ownership structure The Board of Directors proposes that the2020 AnnualGeneral Meeting does not approve any dividendpayment. Otello didnot pay adividendin2019 or2020. Dividends Shares 33 896 138 477 10093 111 001 27 476 27 5404 3093 2663 4819 5342 6743 1 308 308 1 7270 4557 3616 1654 7437 1922 1 287 287 1 2312 4141 2211 1231 2020 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 voting share % Owner’s and 100.0 % 80.2 % 24.5 % 19.8 % 0.9 % 0.9 0.9 % 0.9 % 0.9 4.9 % 4.9 3.0 % 3.0 3.9 % 3.9 3.9 % 3.9 2.6 % 2.2 % 5.4 % 5.4 3.5 % 3.3 % 5.3 % 1.9 % 1.6 % 1.4 % 1.2 % 7.3 % 2020 1.7 % voting share % Owner’s and 100.0 % 29.5 % 70.5 % 27.5 % 0.0 % 0.0 0.0 % 0.0 0.0 % 0.0 0.9 % 0.9 2.0 % 2.0 % 0.3 % 4.6 % 4.6 2.9 % 8.5 % 3.8 % 3.8 2.2 % 3.5 % 5.5 % 5.3 % 1.5 % 2019 N/A N/A N/A 127

OTELLO CORPORATION CONSOLIDATED STATEMENT 128 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 1) Apps ClubdeArgentina SRL Mobilike MobilReklam Pazarlama Ve Ticaret A.S Bemobi HoldingAS AdColony HoldingAS Directly owned subsidiaries Otello Corporation ASA Entity name Below isalist of group companies intheOtello group asat December 31, 2020: Corporate Structure of Otello Group Note 20 Apps ClubdeChileSPA Bemobi HoldingPLC Huntmads SA Hunt MobileAds SAdeCV Foriades Park SA Advine MobileAdvertising Network Prorietary Ltd AdColony, Inc. AdColony UK Ltd AdColony Singapore PTE. Ltd AdColony Poland sp.z.o.o AdColony Korea Ltd AdColony Japan LLC AdColony Ireland Ltd AdColony India Private Ltd AdColony Holdings US, Inc. AdColony Holdings Ireland Ltd AdColony GmbH AdColony Beijing Co, Ltd. AdColony AS AdColony ApS AdColony AB AdAurora (Beijing)Technologies Co. Ltd (VIE) Indirectly owned subsidiaries Privacy &Performance Ireland Ltd Apps ClubdeColombia S.A.S. Apps ClubdelEcuador S.A Apps ClubdelMexico SAdeCV Bemobi International AS Bemobi MobileTech S.A. LLC BemobiUkraine Open Markets AS Tulari Spain Sociedad Limitada Skyfire Labs, Inc. These entities are direct orindirect subsidiaries of BemobiHolding AS, of whichOtello owns 88.8% Buenos Aires Istanbul Oslo Oslo Oslo Location Santiago London Buenos Aires Mexico City Montevideo Cape Town Los Angeles London Singapore Warsaw Seoul Tokyo Dublin Gurgaon San Mateo Dublin Berlin Beijing Oslo Copenhagen Stockholm Beijing Dublin Bogotá Quito Mexico Oslo Rio deJaneiro Odessa Oslo Madrid San Mateo Argentina Turkey Norway Norway Norway Country Chile United Kingdom Argentina Mexico Uruguay South Africa United States United Kingdom Singapore Poland Republic of SouthKorea Japan Ireland India United States Ireland Germany China Norway Denmark Sweden China Ireland Colombia Ecuador Mexico Norway Brazil Ukraine Norway Spain United States Bemobi AdColony Bemobi AdColony Corporate Segment Bemobi Bemobi AdColony AdColony AdColony AdColony AdColony AdColony AdColony AdColony AdColony AdColony AdColony AdColony AdColony AdColony AdColony AdColony AdColony AdColony AdColony AdColony Corporate Bemobi Bemobi Bemobi Bemobi Bemobi Bemobi Bemobi Bemobi Corporate voting share Owner and 88.8 % 88.8 % 88.8 88.8 % 88.8 88.8 % 88.8 88.8 % 88.8 88.8 % 88.8 88.8 % 88.8 88.8 % 88.8 88.8 % 88.8 88.8 % 88.8 88.8 % 88.8 Listed 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

Hogan Lovells LLPserved aslegal advisor to Otello inconjunction withthetransaction. April. Thecompletion of thetransaction is subject to customary closing conditions. LUMA Securities LLC acted asexclusive financialadvisor and “EGM”). Thevast majorityof votes represented at theEGM voted infavor of thesale. Thetransaction isexpected to close around theendof submitted thetransaction to theOtello shareholders for approval at anextraordinary general meeting whichtook place onMarch, 26, 2021 (the The transaction issupported by theBoard of Directors of Otello (the “Board”) aswell asthemanagement of Otello andAdColony. TheBoard based onactual results. based onAdColony achieving certain future target net revenue objectives in2021. isnot portion Theearn-out cappedandissubjectto change at closing (2) $100millionincashto bepaid sixmonthsfollowing theclosing, and (3) on-target of earn-out $200 million, to be paid fullyincash, or allof thecashwillbereturned to Otello subjectto theachievement of certain future net revenue targets: (1) $100millionincashto bepaid Total estimated consideration for theacquisition is$400 million,includinganormalized amountof working capitaland$19millionincash.Some is headquartered inAustin, Texas, withglobal offices inArlington, Durham,Mumbai, SanFrancisco, Singapore andTel Aviv. tors andOEMsworldwide, andhasdelivered more thanthree billionapppreloads for tens of thousandsof advertising campaigns. TheCompany operational efficiency, andmonetization opportunities. DigitalTurbine’s technology platform hasbeenadopted by more than40 mobileopera all Android devices. Thecompany’s mediaplatform on-demand powers frictionless appandcontent discovery, use acquisition andengagement, Digital Turbine isaglobal mobiletechnology company, passionate aboutdelivering therightcontent to therightperson at therighttimeacross for atotal estimated consideration of $400 million. Otello announced onFebruary 26, 2021, that ithasentered into adefinitive agreement to sell AdColony to DigitalTurbine, Inc.(Nasdaq: APPS) Definitive agreement to sell AdColony to DigitalTurbine not recognized any contingent liabilities intheinterim financialstatements related to thismatter. the DPA. AdColony iscurrently lookinginto theNCC’s complaint andwillprovide information further ifandwhennecessary. TheCompany has received from Grindrthrough theGrindrapp. Asof thedate of thisreport, AdColony hasnot received any formal notification orcomplaint from tigate certain alleged breaches of theGeneral Data Protection Regulation (GDPR) relating to theprocessing of personal data aboutGrindrusers Authority (DPA) against Grindrandfive other companies, includingAdColony, whoisasupplierto Grindr. TheNCC requests that theDPA inves As reported inthemedia,onJanuary 14, 2020, theNorwegian Consumer Council (NCC) filedacomplaint to theNorwegian Data Protection GDPR tion of thecrisis, andtheknock-on effect of thechanged behaviour of ourcustomers. and profit in2021 asawhole. At thisstage, itistoo earlyto tell how great that impact willbe. Ultimately, that willbedependentonthedura advertising spendof companies (AdColony) andsubscriptions boughtby consumers (Bemobi), we expect Covid-19 to negatively impact revenue rebound for theAdColony business since 2Q20, andarebound since 3Q20 for theBemobibusiness. However, asourrevenue islinked to the the use of consumers mobilephones, we are inrelatively fortunate position. Ourassessment aswe enter 2021 isthat we have seen acontinued before thecrisis. Dueto thenature of ourbusiness inboth AdColony andBemobi,interms of not having physical products andbeingreliant on the operations to remote homeoffices. Theoperational impact hasbeenlimited to aminimumandallbusiness activities continue to operate as has beenthehealthandsafety of ouremployees. Since mid-March, theGroup entities have successfully managed to shift thevast majorityof The world isstill grappling withthedirect andindirect impacts of theCovid -19 virus. Inthischallengingsituation, theprimaryfocus of Otello Impact of COVID-19 according to theequitymethod. an ownership below 50%. Consequently, Bemobifinancialswillnot beconsolidated into Otello’s accounts going forward butwillbebooked Following thesuccessful IPOof BemobionBovespa inBrazil, Otello Corporation ASA (“Otello”) isnow amajorshareholder inBemobiBrazil with Bemobi Brazil (https://www.bemobi.com.br), theBrazilian underwriters, theCVMandSão Paulo stock exchange. Information regarding theIPOof BemobiBrazil, includingtheBrazilian FinalProspectus, willbeavailable inPortuguese onthewebsites of Corporation ASA. million) willbepaid from BemobiBrazil to BemobiHoldingAS, of whichR$362,215,321.83 (approximately USD67 million) willbepaid to Otello ofAs part theuse of proceeds inconnection withtheIPO, adividendandshare proceed payment of R$431,637,688.80 (approx OTELLO CORPORATION ASA -ANNUAL REPORT 2020 - - - 129

OTELLO CORPORATION CONSOLIDATED STATEMENT 130 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 Please see stock exchange announcements for information further onany subsequent events. No events have occurred after thereporting date that would require theinterim financialstatements to beadjusted. orders. ment LLC, together withallsumsdueinrespect of cost orders made duringthecourt proceedings together withaccrued interest onthose cost (2) The face value of $5millionplusaccrued interest thereon inrespect of thesecured promissory note issued to Otello by Last LionManage- (ii)itspro rata share of any saleproceeds, whichever isgreater; and (i)$48millionplusaccrued interest from January 8, 2021 at USPrime interest rate plus1%or (1) For itsshares inLast Lion,either If theSpecialCommittee issuccessful inachieving eitherasaleorrefinancing at asufficient level, Otello willreceive: costs buthasso far failed to doso. If thetotal costs are not agreed, they willbeassessed anddetermined by theCourt. the liabilitystage). MFC was required to make apayment to Otello intheamountof £1.25 millionby 31 December 31, 2020 onaccount of Otello’s MFC hasbeenordered to pay Otello’s costs of of thispart theproceedings (having previously beenordered to pay andhaving paid thecosts of ment willinduecourse berecorded of aspart aCourt order. Special Committee shallbetasked withselling thecompany orraising finance. Theagreement asto theSpecialCommittee’s terms of appoint appointment of areceiver, aspecialcommittee (the ”Special Committee”) of theboard of Last LionHoldings Limited shallbeappointed. The On March 17, 2021, MFC andOtello together withtheVewd Group’s secured lenderreached agreement that asaninterim alternative to the due to itby March 19, 2021. Holdings Limited tasked withselling thecompany orraising finance) would take effect onMarch, 22, 2021, ifOtello hasnot beeenpaid thesums Otello. TheEnglish HighCourt had ordered that theappointmentof areceiver (or alternatively aspecialcommittee of theboard of Last Lion agreement between MFC andOtello to allow timefor further MFC to seek refinancing to raise fundsto enableitto pay infullthesumsdueto had not purchased Otello’s shares inLast LionandtheLoan Note by January 8, 2021. That deadline was extended to March 19, 2021 following applied insatisfaction of MFC’s obligation to purchase theshares andtheLoan Note. Thecourt ordered that areceiver willbeappointed ifMFC pany shallbesold to athird withareceiver party appointed withallnecessary powers to conduct thesalewithnet proceeds of asalebeing In default of compliance by MFC withtheorder for thepurchase of Otello’s shares inLast LionandtheLoan Note, allof theshares intheCom - substantial asset isitsshareholding inLast Lion. MFC for $5millionplusaccrued interest at thetimeof purchase (currently approximately $1million). Itishowever understood that MFC’s only from Otello for thesumof $48millionandthat MFC shouldberequired to purchase theLoan Note issued inOtello’s favour by asubsidiary of order to pursue alternative remedies. TheHighCourt hasnow determined that MFC shouldberequired to purchase Otello’s shares inLast Lion The buyer didnot purchase theshares ontheterms of theexpired Share Purchase Agreement. Otello subsequently restored theproceedings in business. Thejudge granted Otello theinjunctionitsought requiring theBoard to approve thebuyer. by appointees of MFC, to approve thesaleof Otello’s remaining ownership stake inLast Lion,beingapproximately 27% intheVewd Software Moore Frères &Co LLC (”MFC”) andLast LionHoldings Limited (“Last Lion”), arisingfrom therefusal of theBoard of Last Lion,whichiscontrolled As reported to themarket onSeptember 14, 2018, Otello was successful initsclaimtheHighCourt of Justice of England andWales against Otello’s case regarding thepotential saleof Vewd minoritystake - OTELLO CORPORATION ASA -ANNUAL REPORT 2020 131

OTELLO CORPORATION PARENT COMPANY 132 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 Note 14: Note 13: Note 12: Note 11: Note 10: Note 9: 8: Note Note 7: Note 6: 5: Note Note 4: 3: Note Note 2: Note 1: Statement of changes inequity Statement of cashflows Statement of financialposition Statement of comprehensive income Otello Corporation ASA Financial Statements 2020 Parent Company Events after thereporting period Potential saleof Vewd minoritystake Related parties Contingent liabilities Right-of-use assets andlease liabilities Property, plantandequipment Receivables, payables andtransactions Investment insubsidiaries, andother investments Taxes Other operating expenses Payroll expenses andremuneration to management Financial riskandfinancialinstruments Company activities General information andsignificantaccounting principles

140 140 146 148 150 136 154 154 138 145 134 143 155 155 153 152 133 141 Comprehensive Income Statement of Non-controlling interests Owners of Otello Corporation ASA Total comprehensive income (loss) attributable to: Non-controlling interests Owners of Otello Corporation ASA Profit (loss) attributable to: Total comprehensive income (loss) Foreign currency translation differences Items that may orwillbetransferred to profit (loss) Other comprehensive income: Profit (loss) Income taxes Profit (loss) before income taxes Net financialitems Share of profit (loss) from associated companies Profit saleof shares Dividends received Net financialincome (expense) Interest expenses Interest income Operating profit (loss) Impairment andrestructuring expenses Operating profit (loss), excluding impairment andrestructuring expenses Total operating expenses Other operating expenses Depreciation, amortization, andimpairment expenses Stock-based compensation expenses Payroll andrelated expenses, excluding stock-based compensation expenses Cost of goods sold Total operating revenue Revenue USD million 6 7 8 3 8 3, 8 3, 7 5 9 4 4 2, 8 Note OTELLO CORPORATION ASA -ANNUAL REPORT 2020 2020 (0.0) (0.8) (8.9) (8.9) (5.7) (7.0) (7.0) (3.6) (3.2) (0.7) (5.2) (1.2) (1.5) (1.4) (0.1) (7.1) 13.4 0.0 0.0 0.0 0.0 0.0 4.5 2.9 5.8 5.8 4.5 1.3 - - (29.0) (36.8) 2019 128.2 122.5 (0.6) (6.3) (3.3) (1.0) 85.4 85.4 85.4 (7.8) (7.8) (1.5) 91.6 91.6 (1.7) (2.1) 91.5 0.0 0.0 0.0 0.0 0.0 4.0 4.0 0.2 2.2 2.1 - - 133

OTELLO CORPORATION PARENT COMPANY 134 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 Total assets Total current assets Cash andcashequivalents Other receivables from group companies Other receivables Accounts receivable from group companies Accounts receivable Total non-current assets Receivables from group companies Other investments Sublease receivable Right of use assets Investments insubsidiaries Property, plantandequipment Deferred taxassets Assets USD million Financial Position Statement of 3 8 8 3 8 7 10 10 7 9 6 Note 12/31/2020 462.9 459.5 306.2 132.8 18.7 0.0 0.0 0.0 3.4 0.2 0.2 0.3 2.7 1.6 0.1 12/31/2019 448.3 444.2 124.8 297.7 16.8 0.0 0.0 0.0 0.9 2.0 0.3 2.2 2.5 1.2 4.1 Maria Borge Andreassen Chairman of theBoard Andre Christensen Oslo, April 23, 2021 Financial Position Statement of Total equity andliabilities Total liabilities Total current liabilities Contingent consideration, current Other current liabilities Deferred revenue Public duties payable Taxes payable Other current liabilities to group companies Accounts payable to group companies Accounts payable Financial lease liabilities Loans andborrowings Total non-current liabilities Financial lease liabilities Loans andborrowings Non-current liabilities to group companies Liabilities Total equity Non-controlling interests Equity attributable to owners of thecompany Shareholders’ equityandliabilities USD million Anooj Unarket Birgit Midtbust 11 3 3 6 8 8 10 10 3 8 Note OTELLO CORPORATION ASA -ANNUAL REPORT 2020 12/31/2020 CEO Lars Boilesen Song Lin 462.9 423.6 423.6 36.6 39.2 35.0 0.0 0.0 0.0 0.0 0.0 2.6 0.2 2.5 1.3 0.1 0.1 0.1 - - 12/31/2019 448.3 418.4 418.4 20.0 26.0 29.9 0.0 0.0 0.0 0.2 0.2 0.3 4.2 2.4 5.5 1.2 0.1 - - - 135

OTELLO CORPORATION PARENT COMPANY 136 Changes ininventories, accounts receivable, accounts andother payables Other net finance items Dividends received Net (gain) loss from disposals of subsidiaries andother share investments OTELLO CORPORATION ASA -ANNUAL REPORT 2020 2) 1) Impairment of assets Depreciation andamortization expense Income taxes paid Profit (loss) before taxes Cash flow from operating activities USD million Cash Flows Statement of Cash andcashequivalents Effects of exchange rate changes oncashand equivalents Cash andcashequivalents (beginning of period) Net change incashandequivalents Net cashflow from financingactivities Payment of finance lease liabilities, net Repayments of loans andborrowings Proceeds from loans andborrowings Proceeds from issuance of shares, net (equity increase) Purchase of treasury shares Proceeds from exercise of own shares (incentive program) Cash flow from financingactivities Net cashflow from investment activities Loans given to group companies Repayment of loans to group companies Proceeds from loans received from group companies Other investments Earnout andsettlement of earnoutagreement payments Purchases of property, plantandequipment(PP&E)intangibleassets Proceeds from saleof shares Cash flow from investment activities Net cashflow from operating activities FX differences related to changes inbalance sheet items Earnout cost andcost for other contingent payments Share-based remuneration Share of net income (loss) from associated companies Changes inother operating working capital Thisincludes changes inintercompany balances. Seenote 8for information. further Of which$0.2 million(2019: 0.3 million) isrestricted cashasof December 31, 2020. 2) 2) 1) 8 7 7 9 6 Note 10 3 3 7 7 7 11 9 11 4 7 8 1/1 -12/31 (4.0) 2020 (0.0) (0.4) (2.6) (3.9) (5.8) (5.8) (0.7) (7.5) (5.7) (1.2) (1.5) (1.3) (0.1) (0.1) (0.1) 15.0 11.4 13.1 2.7 2.5 0.7 0.7 1.6 1.2 0.1 0.1 1.1 ------1/1 -12/31 (122.5) (12.2) 2019 (10.1) (0.0) (0.0) (9.8) (9.6) (2.2) (3.2) (0.7) 20.0 20.0 29.0 29.0 (1.6) (1.2) (1.4) (0.1) 18.6 (2.1) 12.8 91.5 0.6 0.6 0.2 1.9 1.2 1.7 ------OTELLO CORPORATION ASA -ANNUAL REPORT 2020 137

OTELLO CORPORATION PARENT COMPANY 138 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 USD million Changes inequity Statement of Balance asof 12/31/2019 Profit for theperiod Comprehensive income for theperiod Foreign currency translation differences Other comprehensive income Total comprehensive income for theperiod Issue of share capital Treasury shares acquired Treasury shares sold Share-based payment transactions Balance asof 12/31/2020 Other equityconsists of allother transactions, includingbutnot limited to, total recognized income andexpense for thecurrent period. Other equity with afunctionalcurrency that isnot USD. The translation reserve consists of allforeign currency differences arisingfrom thetranslation of thefinancialstatements of group companies Translation reserve The reserve for theCompany’s own shares comprises theface value cost andexcess value of own shares heldby theCompany. Reserve for own shares Other reserves consist of option andRSUcosts recognized according to theequitysettled method. Other reserves The face value of theshares isNOK0.02. Face value of theshares outstanding of shares (million) Number 137.9 137.6 (0.4) 0.0 0.0 Paid-in capital 358.2 358.2 (0.0) ------reserves Other 43.8 43.8 42.7 1.1 ------Reserve for treasury shares (74.9) (74.5) (0.4) 0.1 0.1 - - - - - Translation reserve (156.8) (170.2) 13.4 13.4 - - - - - equity Other 262.2 253.3 (8.9) (8.9) - - - - - equity 418.4 423.7 423.7 Total (0.0) (8.9) (0.4) 13.4 4.5 0.1 0.1 1.1 USD million Changes inequity Statement of Balance asof 12/31/2018 Profit for theperiod Comprehensive income for theperiod Foreign currency translation differences Other comprehensive income Total comprehensive income for theperiod Issue of share capital Treasury shares acquired Treasury shares sold Share-based payment transactions Balance asof 12/31/2019 outstanding of shares (million) Number 138.7 137.9 (0.9) 0.2 Paid-in capital 358.2 358.2 (0.0) ------reserves Other 42.7 41.1 1.7 ------Reserve for treasury shares (74.5) (73.2) (1.6) OTELLO CORPORATION ASA -ANNUAL REPORT 2020 0.2 - - - - - Translation reserve (163.9) (170.2) (6.3) (6.3) - - - - - equity Other 262.2 170.6 170.6 91.6 91.6 - - - - - equity 332.8 418.4 Total (0.0) 85.4 85.4 (6.3) (1.6) 91.6 0.2 1.7 139

OTELLO CORPORATION PARENT COMPANY 140 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 consolidated financialstatements. The principal activities of theGroup’s business areas are described inmore detail inNote 4Operating andsegment information intheGroup’s rate finance andaccounting, legal, HRandIT. TheCompany charges some of thecosts related to these functionsto subsidiaries. The Company’s mainactivities are to serve theGroup asawhole, through thefollowing functionsand services: CEO/Board of Directors, corpo- Company activities Note 2 deemed to no longer exist. indicate that thecarryingamountmay exceed thefair value of theinvestment. Animpairment loss isreversed iftheimpairment situation is Investments insubsidiaries, associates andjointlycontrolled entities are reviewed for impairment whenever events orchanges incircumstances subsidiaries are reflected inthesameyear that thedividendisapproved by thegeneral meeting. dends exceeding of theportion retained profit after theacquisition are reflected asareduction incost price. Dividend/group contribution from added through capitalincreases orwhengroup contributions are made to subsidiaries. Dividendsreceived are initiallytaken asincome. Divi- For investments insubsidiaries, associates andjointlycontrolled entities, the cost method isapplied.Thecost price isincreased whenfundsare Investments insubsidiaries –parent company consolidated financialstatements willcover theparent company, withtheexception of thebelow. The explanation of theaccounting policies intheConsolidated financialstatements also applies to theparent company, andthenotes to the Annual General Meeting onJune2,2021. These parent company financialstatements have beenapproved andissued by theBoard of Directors onApril23, 2021 for approval by the certain regulations andparagraphs intheNorwegian Accounting Act andtheSecurities Trading Act. by theEU andaccompanying interpretations. Theparent company financialstatements also includecertain disclosures inorder to comply with The parent company financialstatements have beenprepared inaccordance withInternational Financial Reporting Standards (IFRS)asadopted Statement of compliance statements. Executive Management (chief operating decision-makers) andassociated staff functions. Seealso Note 1intheGroup’s consolidated financial These are thefinancialstatements of Otello Corporation whichistheholdingcompany ASA, for theOtello Group andincludes theGroup General information accounting principles General information andsignificant Note 1

As at December 31, 2020, $35 millionof therevolving credit facility had beendrawn up. listing of Otello’s Bemobibusiness inBrazil. Inaddition, thetermination date of theRCF was extended to June30, 2021. favour of Pedro Ripper, CEO of Bemobi,(on behalfof theformer owners of Bemobi)was removed. Thiswas carriedoutinfollowing thepublic In March 2021, thepayment guarantee that was signedinMarch 2020 of aspart theabove amendmentof anamountequalto $18.6 millionin In March 2020, Otello signedanamendmentto that agreement reducing thefacility to $50 million. In May 2018, Otello signedanagreement for anew 3year Revolving Credit Facility (RCF) of $100millionwithDNBBankASA. Credit facility -of whichutilized Long-term cashcredit Credit Facility [USDmillion] Unrestricted cash -of whichrestricted funds Cash andcashequivalents Cash andcashequivalents Liquidity reserve [USDmillion] The Company had thefollowing liquidityreserve andcredit facility asof December 31. Liquidity risk foreign exchange contracts asof December 31, 2020. During 2020 and2019, theCompany didnot use forward exchange contracts to hedge itscurrency risk,andtheCompany had not entered any Foreign exchange contracts Total Other EUR USD NOK Breakdown of cashdeposits by currency The lendingandborrowing activities of theCompany are primarilyinUSD. The majorityof theCompany’s operating expenses are inNOK. The majorityof thefinancialriskthat theCompany isexposed to relates to currency riskdueto exchange rate fluctuations. Currency risk Financial riskandfinancialinstruments Note 3 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 12/31/2020 12/31/2020 2020 50.0 35.0 0.0 0.0 0.0 0.2 2.7 2.5 2.7 2.7 12/31/2019 12/31/2019 100.0 2019 20.0 0.0 0.0 0.2 1.0 1.0 1.2 1.2 0.1 141

OTELLO CORPORATION PARENT COMPANY 142 in categories for accounting treatment. Aclassification of financialinstruments inOtello Corporation ASA ispresented below: Financial instruments, andcontracts accounted for assuch,are includedinseveral lineitems inthestatement of financialposition andclassified Financial instruments statements for more information. In 2020 and2019, theBoard of Directors hasused itsauthorization to purchase treasury shares. Please see note 18intheconsolidated financial cash flow inthefuture. and market confidence andto sustain future development of the business. Otello still possesses abusiness modelthat anticipates considerable The Company’s policyhasbeento maintainahighequity-to-asset ratio andto maintainasolid capitalbase so asto maintaininvestor, creditor Capital management On theundrawn of portion thefacility, acommitment fee of 35% of theMargin willbepaid. The payment guarantee of $18,561,118 bears aninterest rate of 1.25% The RCF of $50 millionbearaninterest rate of LIBOR, 3months+aMargin of 2.50 %p.a. There isnoutilization fee. Other current liabilities Other current liabilities to group companies Accounts payable to group companies Accounts payable Liabilities -current Loans andborrowings Liabilities -non-current Cash andcashequivalents Receivables from group companies Accounts receivable Assets -current [USD million] OTELLO CORPORATION ASA -ANNUAL REPORT 2020 1) Contingent consideration, current Other current liabilities Other current liabilities to group companies Accounts payable to group companies Accounts payable Liabilities -current Loans andborrowings Liabilities -non-current Cash andcashequivalents Receivables from group companies Accounts receivable Assets -current [USD million] Contingent consideration, current Othercurrent liabilities represents liabilities to entities indiscontinued operations. These were settled in2020. 1) 1) Amortised costAmortised Amortised costAmortised 20.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.8 0.2 2.7 1.2 1.2 0.1 2020 2019 - Fair value Fair value 20.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.8 0.2 2.7 1.2 1.2 0.1 - The numberandweighted average exercise price of share options are asfollows: Options For details of share-based compensation, see note 6intheconsolidated financialstatements. Share-based compensation Information aboutremuneration to key management personnel isgiven intheaccompanying note 6intheconsolidated financialstatements. Remuneration to key management personnel (”Obligatorisk Tjeneste Pensjon”). The Company hasincorporated therequirements set outby theMandatory Occupational Pensions Act Average numberof employees Total Payments to long-term contractual staff Insurance andother employee benefits Share-based remuneration includingsocial security cost Pension cost Social security cost Salaries andbonuses Payroll expenses [USDmillion] remuneration to management Payroll expense and Note 4 Outstanding at thebeginning of theperiod Terminated (employee terminations) Forfeited duringtheperiod Expired duringtheperiod Cancelled duringtheyear Exercised duringtheperiod Granted duringtheperiod Outstanding at theendof theperiod Exercisable at theendof theperiod tioned outstanding options have beencancelled. (2019: nooptions granted). 3 450 000options have beengranted in2020 asreplacement options for theoutstanding ones for therespective employees. Theaforemen - price 2020 (NOK) average exercise Weighted 40.84 40.74 18.99 36.72 42.16 19.47 - - -

(in thousands) options 2020 Number of (1 448) 3450 2 050 2 (528) 3 525 3 50 - - -

average exercise price 2019 (NOK) OTELLO CORPORATION ASA -ANNUAL REPORT 2020 Weighted 22.08 40.74 40.74 39.45 39.45 39.25 12.20 - - - -

2020 (0.0) (0.6) (0.2) (4.7) (2.7) (1.2) (0.1) 16 (in thousands) options 2019 Number of 2 050 2 2019 1 100 2 155 (80) (0.2) (0.4) (2.6) (25) (0.1) (0.1) (1.7) (5.1) 14 - - - -

143

OTELLO CORPORATION PARENT COMPANY 144 2019: 2020: Nooptions exercised in2020. The tablebelow shows thedate, numberandachieved selling price of options exercised. Exercise price =strike price Total 45.00- 40.00 -45.00 35.00 -40.00 30.00 -35.00 25.00 -30.00 20.00 -25.00 15.00 -20.00 Exercise price Total 45.00- OTELLO CORPORATION ASA -ANNUAL REPORT 2020 Total 12/10/2019 7/8/2019 Date of exercise 12.30 -15.00 10.00 -12.30 0.00 -10.00 40.00 -45.00 35.00 -40.00 30.00 -35.00 25.00 -30.00 20.00 -25.00 15.00 -20.00 12.30 -15.00 10.00 -12.30 0.00 -10.00 Exercise price The tablebelow shows thenumberof options issued to employees at various strike prices andexercise dates. Outstanding options Outstanding options per 12/31/2020 (in thousands) (in thousands) per 12/31/2019 2 050 050 2 3450 3525 1425 475 475 TOTAL OUTSTANDING OPTIONS TOTAL OUTSTANDING OPTIONS 70 70 25 25 55 55 75 75 ------

average remaining average remaining lifetime (years) lifetime (years) Weighted Weighted 0.20 2.20 0.63 0.63 0.43 0.43 3.67 3.67 1.20 1.66 1.72 3.61 ------

average exercise average exercise 2020 2019 price (NOK) price (NOK) Weighted Weighted 38.50 22.08 60.75 18.99 41.66 41.66 19.28 40.74 19.47 ------

Vested options Vested options (in thousands) (in thousands) 12/31/2020 12/31/2019 exercised options VESTED OPTIONS VESTED OPTIONS (in thousands) 1100 475 475 475 50 50 50 50 70 70 Number of 25 25 55 55 ------

80 80 average exercise average exercise 25 25 55 55

selling price price (NOK) price (NOK) Weighted Weighted Achieved (NOK) 40.04 40.04 40.84 38.50 22.08 40.84 14.86 60.75 16.42 19.28 39.25 ------

There are nounvested RSUs left. Intrinsic value vested RSUs at theendof theperiod Intrinsic value outstanding RSUs at theendof theperiod Weighted Average Fair Value of RSUs Granted duringtheperiod Vested RSUs Outstanding at theendof period Performance adjusted Adjusted quantity Expired Forfeited Cancelled Released Exercised Granted Outstanding at thebeginning of period Total Other services Tax advisory services Assurance services Statutory audit Audit fees [USDmillion] es for theyear to theexternal auditor, PwC. The following tableshows audit fees for 2020 and2019. For allcategories thereported fee istherecognized expense inother operating expens Remuneration to thestatutory auditors Total Other expenses Hosting expenses, excl. depreciation cost Rent andother office expenses Travel expenses Purchase of equipment,not capitalized Audit, legal andother advisory services Other expenses [USDmillion] Other operating expenses Note 5 Restricted Stock Units No RSUs were granted in2020 or2019. Restricted stock units (in thousands) (in thousands) Shares Shares ------2020 2020

Average Exercise Price (NOK) Weighted in NOK Value OTELLO CORPORATION ASA -ANNUAL REPORT 2020 ------

(in thousands) (in thousands) Shares Shares (15) 15 ------(0.3) 2020 2020 (0.0) (0.8) (0.3) (0.3) (0.3) (1.5) (0.1) (0.1) 2019 2019

0.0 0.0 0.0 0.0 Average Exercise Price (NOK) Weighted inNOK Value 2019 2019 0.02 0.02 0.02 (0.0) (0.0) (0.3) (0.3) (0.3) (0.3) (1.6) (0.1) (2.1) 0.0 0.0 0.2 ------

145

OTELLO CORPORATION PARENT COMPANY 146 in thestatement of financialposition Net deferred taxassets (liabilities) recognized in thestatement of financialposition Tax loss carryforwards recognized in thestatement of financialposition Tax loss carryforwards not recognized Tax loss carryforwards in thestatement of financialposition Temporary differences recognized in thestatement of financialposition Temporary differences not recognized Total Provisions andaccruals Accounts receivable OTELLO CORPORATION ASA -ANNUAL REPORT 2020 [USDmillion]2020 Deferred taxassets (liabilities) andchanges duringtheyear can beutilized. Therefore taxloss carryforwards for Norway are not recognised in thestatement of financialposition asat December 31, 2020. not consider that sufficient future taxable profits that willbegenerated infuture periodsagainst whichthetaxloss carryforward of NOK3.8m able profit willbegenerated infuture periodsagainst whichthese taxlosses carryforwards canbeutilized. Regarding Norway, management does CompanyThe recognizes deferred taxassets related to taxlosses inthestatement of financialposition whenitisconsidered probable that tax Net deferred assets (liabilities) Deferred taxassets related to temporary differences Deferred taxassets related to taxloss carryforwards [USD million] Deferred taxbalances presented inthestatement of financialposition comprise thefollowing: Recognized deferred taxassets andliabilities: Total Tax expense related to change intaxrate Changes indeferred taxes Current tax Income taxexpense recognized inthestatement of comprehensive income: [USD million] Taxes Note 6 Balance 1/1/20 0.0 0.0 0.2 0.2 0.2 2.5 2.3 2.3 - - to statement of comprehensive income Posted (0.2) (2.5) (2.3) (3.7) (0.1) (0.1) (0.1) 0.0 0.0 1.4 directly to the Posted equity ------to discontinued operations Disposals 2020 2020 (3.2) (3.2) 0.0 0.0 0.0 0.0 0.0 ------12/31/20 Balance 2019 2019 (3.7) (0.1) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 3.7 3.7 - 0.1 0.1 0.2 0.2 0.2 2.5 2.3 - - in thestatement of financialposition Net deferred taxassets (liabilities) recognized in thestatement of financialposition Tax loss carryforwards recognized in thestatement of financialposition Tax loss carryforwards not recognized Tax loss carryforwards in thestatement of financialposition Temporary differences recognized in thestatement of financialposition Temporary differences not recognized Total Effective taxrate Total tax expense for theyear Effect of non-taxable items andnon-deductible Effect of deferred taxassets not recognized Effect of changes intaxrates Provisions andaccruals 1) Income taxusingthecorporate income taxrate inNorway Profit (loss) before tax Reconciliation of effective taxrate [USDmillion] Accounts receivable 2019 [USDmillion] Permanent differences includeimpairment losses, dividendsreceived, share-based remuneration, costs. andnon-deductible Permanent differences The income tax rate inNorway was 22 %in2020, and22 %in2019. Thetaxrate willremain unchanged in2021. 1) Balance 1/1/19 0.0 0.0 0.2 0.2 0.2 4.3 4.1 4.1 4.1 4.1 - - to statement of comprehensive income Posted (1.8) (1.8) (1.8) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 - directly to the Posted equity OTELLO CORPORATION ASA -ANNUAL REPORT 2020 22.0 % ------to discontinued -54.8 % 2020 (3.2) (4.4) (5.7) operations 0.0 0.0 0.0 1.3 Disposals 22.0 % ------12/31/19 Balance -0.2 % 2019 (20.1) 0.2 0.0 0.0 2.5 0.2 0.2 91.5 2.3 2.3 20.1 20.1 0.0 0.0 0.2 0.2 - - 147

OTELLO CORPORATION PARENT COMPANY 148 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 [USD million] Below isanoverview of theinvestments insubsidiaries directly heldby Otello Corporation ASA asof December 31, 2020. Investments insubsidiaries and other investments Investments insubsidiaries, Note 7 Segment (Group) Acquisition/establishment date Registered office Ownership andvoting share Equity at year end Profit for theyear Information related to carryingvalue: Impairment loss inthecurrent year Impairment loss priorto current year Divestment of 11.2%of theshares, prior year Equity increase inthecurrent year Equity increase priorto current year Acquisition cost Group contribution priorto current year Group contribution inthecurrent year ing AS. Please see note 16of theconsolidated financialstatements for information. further The shares inthesubsidiaries are booked at thecost of acquisition. OnMay 29, 2018, theCompany divested 11.2%of theshares inBemobiHold- Divestment of 11.2%of theshares Group level, Otello Corporation ASA (”the Company”) hasnot recognized animpairment loss. The Group hascarriedoutimpairment testing asof December 31, 2020, according to IAS 36. Based ontheimpairment testing carriedoutat Impairment loss related to theAdColony business Carrying value Translation differences Oslo, Norway Holding AS Holding AS 8/8/2016 Bemobi Bemobi Bemobi 88.8 % 88.8 136.5 (10.5) 112.8 64.6 63.0 63.0 (4.3) 31.4 0.0 0.0 - - - -

Oslo, Norway Holding AS Holding AS AdColony AdColony 6/18/2016 AdColony (422.3) 398.4 398.4 461.0 235.0 235.0 100% 193.1 (11.3) (6.6) 0.0 0.0 0.0 0.0 0.1 0.1 - -

Dublin, Ireland Performance Performance

Ireland Ltd Ireland Ltd Privacy & Privacy & 9/14/2016 Skyfire 100% (0.1) 0.6 0.6 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 - - - -

Holding Plc Holding Plc London, UK 1/24/2019 Bemobi Bemobi Bemobi 100% ------

(422.3) 306.2 298.2 463.1 463.1 (10.5) (15.6) Total (6.6) 0.0 0.0 0.0 0.0 - Please see note 15intheConsolidated financialstatements for information further regarding other investments. Total Investments inother shares Loans to associated companies Investments inassociated companies [USD million] The tablebelow gives abreakdown of thetotal amountof other investments recognized. Other investments 1) AdAurora (Beijing)Technologies Co. Ltd (VIE) Entity name Below isalist of shares insubsidiaries owned by other group companies, and indirectly by theCompany, asat December 31, 2020: Shares insubsidiaries Apps ClubdelMexico SAdeCV Apps ClubdelEcuador S.A Apps ClubdeColombia S.A.S. Apps ClubdeChileSPA Apps ClubdeArgentina SRL Mobilike MobilReklam Pazarlama Ve Ticaret A.S Huntmads SA Hunt MobileAds SAdeCV Foriades Park SA Advine MobileAdvertising Network Proprietary Ltd AdColony, Inc. AdColony UKLtd AdColony Singapore PTE. Ltd AdColony Poland sp.z.o.o AdColony Korea Ltd AdColony Japan LLC AdColony Ireland Ltd AdColony IndiaPrivate Ltd AdColony Holdings US, Inc. AdColony Holdings Ireland Ltd AdColony GmbH AdColony BeijingCo, Ltd. AdColony AS AdColony ApS AdColony AB Skyfire Labs, Inc. Tulari Spain Sociedad Limitada Open Markets AS LLC BemobiUkraine Bemobi MobileTech S.A Bemobi International AS These entities are direct orindirect subsidiaries of BemobiHoldingAS, of whichOtello owns 88.8% Beijing Location Mexico Quito Bogotá Santiago Buenos Aires Istanbul Buenos Aires Mexico City Montevideo Cape Town Los Angeles London Singapore Warsaw Seoul Tokyo Dublin Gurgaon San Mateo Dublin Berlin Beijing Oslo Copenhagen Stockholm San Mateo Madrid Oslo Odessa Rio deJaneiro Oslo AdColony Segment Bemobi Bemobi Bemobi Bemobi AdColony AdColony AdColony AdColony AdColony AdColony AdColony AdColony AdColony AdColony AdColony AdColony AdColony AdColony AdColony AdColony AdColony AdColony AdColony AdColony Corporate Bemobi Bemobi Bemobi Bemobi Bemobi Bemobi China Country Ecuador Colombia Chile Argentina Turkey Argentina Mexico Uruguay South Africa United States United Kingdom Singapore Poland Republic of SouthKorea Japan Ireland India United States Ireland Germany China Norway Denmark Sweden United States Spain Norway Ukraine Brazil Norway Mexico OTELLO CORPORATION ASA -ANNUAL REPORT 2020 2020 18.7 10.1 0.8 0.8 7.7 7.7 voting share Owner and 88.8 % 88.8 % 88.8 % 88.8 % 88.8 88.8 % 88.8 % 88.8 % 88.8 % 88.8 % 88.8 % 88.8 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 2019 16.8 10.1 0.9 0.9 5.8 5.8

149

OTELLO CORPORATION PARENT COMPANY 150 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 [USD million] Other receivables (non-current) The tablebelow presents abreakdown of receivables andpayables withgroup companies. Receivables andpayables Receivables, payables andtransactions Note 8 Total receivables Other entities Bemobi International AS Bemobi HoldingAS AdColony Inc (USA) Receivables from group companies [USDmillion] Total receivables Other entities AdColony ApS (Denmark) AdColony Inc (USA) Receivables from group companies [USDmillion] [USD million] Liabilities (non-current) reporting date. Noneof thebalances are secured. Thebalances outstanding are specified asfollows: All outstanding balances withtherelated parties are priced onanarm’s-length basis andare to besettled incashwithinfive years of the 2020 2020 132.8 2.5 2019 2019 124.8 5.5 [USD million] Accounts receivables [USD million] Accounts payable 126.8 133.2 125.4 133.1 0.0 0.2 0.1 0.1 1.1 2020 2019 2020 2020 Total payables Other entities Performance andPrivacy Ireland Limited Payables to group companies [USDmillion] Total payables Other entities Payables to group companies [USDmillion] Bemobi HoldingAS 0.0 0.2 2019 2019 0.0 0.0 [USD million] Other receivables (current) [USD million] Other liabilities (current) 2020 2020 0.0 0.0 0.1 2019 2019 0.0 0.0 0.0 0.0 2.5 2.0 5.5 2.5 5.5 note of thesameamountthat Performance andPrivacy Ireland Ltd heldagainst theCompany. The Company received dividendstotalling USD5.8 millionfrom Performance andPrivacy Ireland Ltd in2020, whichwas set-off against theloan Loan agreement anddividendpayment Interest expense to related parties Interest income from related parties Intercompany costs of goods sold Intercompany revenue Transactions [USDmillion] Transactions withgroup companies Total GBP EUR SGD NOK USD [USD million] Breakdown of intercompany payables by currency: For thelargest intercompany receivables described indetail above, aninterest rate of 3monthLIBOR +130 basis pointsischarged. Total GBP NOK USD [USD million] Breakdown of intercompany receivables by currency: OTELLO CORPORATION ASA -ANNUAL REPORT 2020 133.2 2020 2020 2020 (0.0) 133.1 (0.1) 0.0 0.0 0.0 2.5 2.5 2.7 0.1 - - - 2019 2019 2019 126.8 125.4 (0.0) (0.3) 0.0 0.0 0.9 0.4 5.5 5.5 3.7 - - - 151

OTELLO CORPORATION PARENT COMPANY 152 Net bookvalue as of 12/31/20 Accumulated depreciation asof 12/31/20 Currency differences Depreciation for theyear Acquisition cost asof 1/1/20 Depreciation andimpairment losses Acquisition cost asof 12/31/20 Currency differences Acquisitions Acquisition cost asof 1/1/20 Acquisition cost [USD million] OTELLO CORPORATION ASA -ANNUAL REPORT 2020 Property, plant&equipment Note 9 Depreciation plan Useful life Net bookvalue as of 12/31/19 Accumulated depreciation asof 12/31/19 Currency differences Depreciation for theyear Acquisition cost asof 1/1/19 Depreciation andimpairment losses Acquisition cost asof 12/31/19 Currency differences Acquisitions Acquisition cost asof 1/1/19 Acquisition cost [USD million] Machinery and Machinery and Up to 10years equipment equipment Linear (0.0) (0.6) (0.6) (4.0) (3.3) (3.3) (2.7) (0.1) 0.0 0.0 2.2 5.6 5.6 5.5 5.5 5.7 5.7 1.6 0.1 0.1 2020 2019 - - Total Total (4.0) (0.0) (3.3) (0.6) (0.6) (3.3) (2.7) (0.1) 0.0 0.0 0.0 0.0 0.0 2.2 5.5 5.6 5.6 5.7 5.7 1.6 5.5 0.1 0.1 Further information about theimpact of IFRS16, ‘Leases’, isprovided in Note 1. The company renewed itsoffice lease contract inOsloduring2019. Total More thanfive years Between oneto five years Less thanoneyear Payments for leased premises: The future minimumlease payments undernon-cancellable lease contracts are asfollows: Future lease payments Depreciations Interest expense IFRS 16effects ontheconsolidated statement of comprehensive income for theyear (USDmillion) Translation differences arise dueto translation of lease contracts inlocalcurrencies to USD. be theterm of thecontract for each leased asset. Depreciation iscalculated onastraight-line basis over theestimated useful life of each leased asset. Theestimated useful life isconsidered to Right of use assets asof 12/31 Translation differences Depreciation Additions Balance asof 1/1 Right of use assets (USDmillion) Balance asof 12/31 Non-current lease liabilities (more than1year) Current lease liabilities (less than1year) Of which: Lease liabilities asof 12/31 Interest expense onlease liabilities Lease payments Translation differences Additions Balance asof 1/1 Lease liabilities (USDmillion) The movements of theCompany’s rightof use assets, contract assets andlease liabilities are presented below: presented below. 2024. Thelease hasabreak clause after 3years, whichhasbeenassumed to beexercised. Thislease hasbeencapitalized, anddetails of thisare During 2019, theCompany signedanew lease agreement for therental of itsOslooffices whichwillrunfrom December 2019 through November Right-of-use assets andlease liabilities Note 10 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 (0.0) 2020 2020 2020 2020 (0.1) (0.1) (0.0) 0.2 0.0 0.0 (0.1) 0.3 0.3 0.2 0.2 0.2 0.1 0.1 0.1 0.1 0.1 - - - (0.0) (0.0) (0.0) (0.0) 2019 2019 2019 2019 0.0 0.0 0.0 0.4 0.4 0.2 0.5 0.3 0.3 0.1 0.1 0.1 0.3 0.3 0.3 - - - 153

OTELLO CORPORATION PARENT COMPANY 154 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 Management also participate intheGroup’s stock option andRSUprogram (see note 6of theconsolidated financialstatements). Compensation for Executive Management andBoard of Directors canbefound innote 6of theconsolidated financialstatements. Executive Group’s voting share asperDecember 31, 2020. Members of theBoard of Directors andExecutive Management of theGroup andtheirimmediate relatives controlled 0.3% (2019: 0.3 %)of the Group executive management. The Group hasnot engaged inany related transactions party withany members of theBoard of Directors of Otello Corporation ASA orOtello See note 8for information regarding transactions withgroup companies. any related transactions, party includingwithany members of theBoard of Directors orExecutive Management. fromApart theabove transactions, andfor transactions withgroup companies inthenormalcourse of business, theCompany didnot engage in which indirectly owns Vewd Software AS through Last LionHoldco AS. This loan isoutstanding asat December 31, 2020. TheCompany holdsa27% equityinterest inLast LionHoldings Ltd, through preferred shares, The Company, asthecreditor, entered into aloan agreement in2017 of $5millionwithVewd Software AS (formerly Opera TVAS), thedebtor. Vewd (Opera TV) Please see note 11for details of thetransaction withtheBemobiearnoutparticipants. Agreement withBemobiearnoutparticipants Related parties Note 12 Please see note 16intheConsolidated financialstatements for information further regarding contingent liabilities. by BemobiHoldingAS. Holding AS entered into aVoting agreement. Thisagreement putinplace a“lockup” of Ripper’s shares andgives himvoting instructions issued if hisemployment terminates. However, BemobiHoldingAS mightchoose to exercise thecalloption. Inaddition, Pedro RipperandBemobi This agreement ensures that shares willbegranted to Pedro RipperuponanIPOof BemobiBrazil. Theshares are not automatically forfeited dro Ripperandtheintermediate holdingcompany of Otello’s Bemobibusiness, BemobiHoldingAS, entered into aShare Call Option agreement. Further, inJanuary 2021, theabove-mentioned RSUAward agreement withBemobiBrazil’s CEO, Pedro Ripperwas agreed to beterminated. Pe- ment for innegotiations hispart of thetransaction andsubsequent agreements withOtello. 16.083%. Theincrease from 11.2%to 16.083% represents anadditional agreed portion withBemobiBrazil’s CEO, Pedro Ripperasacknowledge- Brazil were to receive. Thiswas increased from 11.2%to 16.083% of theshares inBemobiHoldingAS, andshares inBemobiBrazil also equaling At thesametime, theparties renegotiated theSecurityHolders agreement concerning thenumberof shares that theformer owners of Bemobi the reporting date. relating to theoccurrence of amajortransaction are nolonger relevant. For more information regarding theIPO, please see Note 21Events after 15, 2021. Thefixed amountwas unchanged at USD18.6 million.Withtheannouncement of BemobiBrazil’s IPOonFebruary 9, 2021, theclauses option for amajortransaction), andtheconditions regarding transferring theshares inBemobiHoldingAS. Thedeadline was set at February In January 2021, theparties again renegotiated thedeadline for whenanIPOcould occur (at thesametimeremoving aqualifiedsaleasan share-based incentive program. was reached between BemobiHoldingAS, theholdingcompany of Otello’s Bemobibusiness andBemobiBrazil’s CEO, Pedro Ripperregarding a major transaction was set at December 31, 2020, andthefixed amountwas set at USD18.6 million.At thesametime, anRSUAward agreement In January 2020, anamendmentto theSecurityHolders agreement was agreed, regarding thedeadline andfixed amount.Thedeadline for a Bemobi Brazil could require Otello to acquire theshares at afixed amount. qualified saleoranInitialPublic Offering ”IPO”). Ifsuchamajortransaction didnot take place withincertain deadlines, theformer owners of company BemobiHoldingAS. The shares were to beheldinescrow untilamajortransaction inrelation to BemobiBrazil shouldtake place (a renegotiated inaSecurityHolders agreement, cashsettlement withapartial of USD20 millionand11.2%shares intheintermediate holding ofAs part theacquisition agreement, agreement anearn-out was entered into withtheformer owners. In2018, agreement thisearn-out was The Group acquired theBrazilian subsidiary BemobiMobileTech S.A (formerly BemobiMidiaeEntretenimento Ltda) (“BemobiBrazil”) in2015. Earn-out agreement andSecurityHolders agreements withBemobiMobileTech S.A Contingent liabilities Note 11 Please see Note 21intheConsolidated FinancialStatements for information concerning events after thebalance sheet date. Events after thereporting period Note 14 orders. ment LLC, together withallsumsdueinrespect of cost orders made duringthecourt proceedings together withaccrued interest onthose cost (2) The face value of $5millionplusaccrued interest thereon inrespect of thesecured promissory note issued to Otello by Last LionManage- (ii)itspro rata share of any saleproceeds, whichever isgreater; and (i)$48millionplusaccrued interest from January 8, 2021 at USPrime interest rate plus1%or (1) For itsshares inLast Lion,either If theSpecialCommittee issuccessful inachieving eitherasaleorrefinancing at asufficient level, Otello willreceive: costs buthasso far failed to doso. If thetotal costs are not agreed, they willbeassessed anddetermined by theCourt. the liabilitystage). MFC was required to make apayment to Otello intheamountof £1.25 millionby 31 December 31, 2020 onaccount of Otello’s MFC hasbeenordered to pay Otello’s costs of of thispart theproceedings (having previously beenordered to pay andhaving paid thecosts of ment willinduecourse berecorded of aspart aCourt order. Special Committee shallbetasked withselling thecompany orraising finance. Theagreement asto theSpecialCommittee’s terms of appoint appointment of areceiver, aspecial committee (the ”Special Committee”) of theboard of Last LionHoldings Limited shallbeappointed. The On March 17, 2021, MFC andOtello together withtheVewd Group’s secured lenderreached agreement that asaninterim alternative to the due to itby March 19, 2021. Holdings Limited tasked withselling thecompany orraising finance) would take effect onMarch, 22, 2021, ifOtello hasnot beenpaid thesums Otello. TheEnglish HighCourt had ordered that theappointmentof areceiver (or alternatively aspecialcommittee of theboard of Last Lion agreement between MFC andOtello to allow timefor further MFC to seek refinancing to raise fundsto enableitto pay infullthesumsdueto had not purchased Otello’s shares inLast LionandtheLoan Note by January 8, 2021. That deadline was extended to March 19, 2021 following applied insatisfaction of MFC’s obligation to purchase theshares andtheLoan Note. Thecourt ordered that areceiver willbeappointed ifMFC pany shallbesold to athird withareceiver party appointed withallnecessary powers to conduct thesalewithnet proceeds of asalebeing In default of compliance by MFC withtheorder for thepurchase of Otello’s shares inLast LionandtheLoan Note, allof theshares intheCom - substantial asset isitsshareholding inLast Lion. MFC for $5millionplusaccrued interest at thetimeof purchase (currently approximately $1million). Itishowever understood that MFC’s only from Otello for thesumof $48millionandthat MFC shouldberequired to purchase theLoan Note issued inOtello’s favour by asubsidiary of order to pursue alternative remedies. TheHighCourt hasnow determined that MFC shouldberequired to purchase Otello’s shares inLast Lion The buyer didnot purchase theshares ontheterms of theexpired Share Purchase Agreement. Otello subsequently restored theproceedings in business. Thejudge granted Otello theinjunctionitsought requiring theBoard to approve thebuyer. by appointees of MFC, to approve thesaleof Otello’s remaining ownership stake inLast Lion,beingapproximately 27% intheVewd Software Moore Frères &Co LLC (”MFC”) andLast LionHoldings Limited (“Last Lion”), arisingfrom therefusal of theBoard of Last Lion,whichiscontrolled As reported to themarket onSeptember 14, 2018, Otello was successful initsclaimtheHighCourt of Justice of England andWales against Otello’s case regarding thepotential saleof Vewd minoritystake Potential saleof Vewd minoritystake Note 13 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 - 155

OTELLO CORPORATION

Auditor’s To the General Meeting of Otello Corporation ASA report Independent Auditor’s Report Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of Otello Corporation ASA, which comprise:

• The financial statements of the parent company Otello Corporation ASA (the Company), which comprise the financial position as at 31 December 2020, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and

• The consolidated financial statements of Otello Corporation ASA and its subsidiaries (the Group), which comprise the consolidated statement of financial position as at 31 December 2020, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion:

• The financial statements are prepared in accordance with the law and regulations.

• The accompanying financial statements give a true and fair view of the financial position of the Company as at 31 December 2020, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the EU.

• The accompanying consolidated financial statements give a true and fair view of the financial position of the Group as at 31 December 2020, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the EU.

Basis for Opinion

We conducted our audit in accordance with laws, regulations, and auditing standards and practices generally accepted in Norway, including International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company and the Group as required by laws and regulations, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the

PricewaterhouseCoopers AS, Dronning Eufemias gate 71, Postboks 748 Sentrum, NO-0106 Oslo T: 02316, org. no.: 987 009 713 VAT, www.pwc.no State authorised public accountants, members of The Norwegian Institute of Public Accountants, and

authorised accounting firm

156 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 157

Independent uditors eport tello Corporation Independent Auditor's Report - Otello Corporation ASA

contet of our audit of the financial statements as a whole, and in forming our opinion thereon, and we ther infortion do not proide a separate opinion on these matters Management is responsible for the other information. The other information comprises information in he Groups business actiities are largely unchanged compared to last year Conseuently aluation the annual report, except the financial statements and our auditor's report thereon. of oodill and intanible assets carry the same riss as the preious year, and continue to be in our focus Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. ey udit atter ow our audit addressed the ey udit atter In connection with our audit of the financial statements, our responsibility is to read the other aluation of oodill and intanible information and, in doing so, consider whether the other information is materially inconsistent with assets the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. t the balance sheet date, the boo alue We evaluated the appropriateness of management’s of goodwill and intangible assets were allocation of goodwill and intangible assets to CGU’s If, based on the work we have performed, we conclude that there is a material misstatement of this million and respectiely and the Group’s controls over the impairment other information, we are required to report that fact. We have nothing to report in this regard. distributed between two different cash assessment generating units (CGU’s). Our procedures directed at challenging management’s Responsibilities of the ord of iretors nd the nin iretor for the he alues inoled are significant and impairment assessment included discussing and innil tteents constitute a maor part of total assets in considering the suitability of the impairment model the balance sheet o impairment charge The Board of Directors and the Managing Director (Management) are responsible for the preparation and the reasonableness of the assumptions as well as was recognied for in accordance with law and regulations, including a true and fair view of the financial statements in testing of the mathematical accuracy of the model accordance with International Financial Reporting Standards as adopted by the EU, and for such

he group operates within business internal control as management determines is necessary to enable the preparation of financial We assessed the reliability of management’s cash flow sectors that eperience rapid statements that are free from material misstatement, whether due to fraud or error. technological change and maret forecasts through a comparison of actual performance disruptions mobile adertising and apps in previous years to previous year’s forecasts. We In preparing the financial statements, management is responsible for assessing the Company’s and the games e focused on the aluation of obtained eplanations from management to material Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going goodwill and intangible assets allocated deiations e compared estimates on future cash concern and using the going concern basis of accounting unless management either intends to to the mobile adertising business flows to longterm plans approed by the oard of liquidate the Group or to cease operations, or has no realistic alternative but to do so. because aluation to a large etent Directors. Further, we challenged management’s depends on management udgement he epectations on future growth by comparing these Auditor’s Responsibilities for the Audit of the Financial Statements earnings in this part of the business is expectations with historic results for the two CGU’s. We also compared the growth assumptions with releant olatile and reuires considerable use of Our objectives are to obtain reasonable assurance about whether the financial statements as a whole external sources such as PwC’s Global Entertainment & udgement to estimate en incremental are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report edia utloo for growth within mobile adertising in changes to the assumptions and timing of that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee the e assessed the discount rate by comparing the cash flows in the estimate inoled that an audit conducted in accordance with laws, regulations, and auditing standards and practices ey components used with eternal maret data where management udgement could lead to generally accepted in Norway, including ISAs will always detect a material misstatement when it material changes in alue possible e considered that the discount rates were exists. Misstatements can arise from fraud or error and are considered material if, individually or in within an appropriate range e considered the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the ee further information about appropriateness of the related disclosures, including basis of these financial statements. management’s assessment in note 11 and the sensitiities proided for the discount rate and to the financial statements growth epectations As part of an audit in accordance with laws, regulations, and auditing standards and practices generally accepted in Norway, including ISAs, we exercise professional judgment and maintain inally, we considered audit eidence proided by professional scepticism throughout the audit. We also: subseuent eents occurring up to the report date • identify and assess the risks of material misstatement of the financial statements, whether due ased on our testing and considerations, we were able to fraud or error. We design and perform audit procedures responsive to those risks, and to conclude that management’s assumptions were obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one reasonable e ealuated the appropriateness of the resulting from error, as fraud may involve collusion, forgery, intentional omissions, related disclosures and satisfied ourseles that the misrepresentations, or the override of internal control. disclosures appropriately eplained the aluation • obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's or the Group's internal control.

(3)

158 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 159

ndependent uditors eport teo Corporation ndependent uditors eport Otello Corporation

• eauate the appropriateness of accounting poicies used and the reasonaeness of accounting set out registration and documentation of the Company’s accounting information in accordance with estimates and reated discosures made y management the aw and ooeeping standards and practices generay accepted in orway

• conclude on the appropriateness of management’s use of the going concern basis of accounting and ased on the audit eidence otained whether a materia uncertainty eists reated to eents or conditions that may cast significant dout on the Company and the roups aiity to so pri continue as a going concern f we concude that a materia uncertainty eists we are reuired PricewaterhouseCoopers AS to draw attention in our auditor’s report to the related disclosures in the financial statements or if such discosures are inadeuate to modify our opinion ur concusions are ased on the audit eidence otained up to the date of our auditor’s report. However, future events or conditions may cause the Company and the roup to cease to continue as a going concern iind isen tate uthorised uic ccountant • eauate the oera presentation structure and content of the financia statements incuding the discosures and whether the financia statements represent the underying transactions his document is signed eectronicay and eents in a manner that achiees a true and fair iew

• otain sufficient appropriate audit eidence regarding the financia information of the entities or usiness actiities within the roup to epress an opinion on the consoidated financia statements e are responsie for the direction superision and performance of the group audit e remain soey responsie for our audit opinion

e communicate with the oard of irectors regarding among other matters the panned scope and timing of the audit and significant audit findings incuding any significant deficiencies in interna contro that we identify during our audit

e aso proide the oard of irectors with a statement that we hae compied with reeant ethica reuirements regarding independence and to communicate with them a reationships and other matters that may reasonay e thought to ear on our independence and where appicae reated safeguards

rom the matters communicated with the oard of irectors we determine those matters that were of most significance in the audit of the financia statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless aw or reguation precudes puic discosure aout the matter or when in etremey rare circumstances we determine that a matter shoud not e communicated in our report ecause the aderse conseuences of doing so woud reasonay e epected to outweigh the puic interest enefits of such communication

Report on ther eal and Reulator Reuirements

Opinion on the Board of Directors’ report

ased on our audit of the financia statements as descried aoe it is our opinion that the information presented in the Board of Directors’ report and in the statements on Corporate oernance and Corporate ocia esponsiiity concerning the financia statements and the going concern assumption is consistent with the financia statements and compies with the aw and reguations

pinion on Reistration and ocumentation

ased on our audit of the financia statements as descried aoe and contro procedures we hae considered necessary in accordance with the nternationa tandard on ssurance ngagements SA Assurance naements ther than Audits or Reies of istorical Financial nformation it is our opinion that management has fufied its duty to produce a proper and ceary

()

160 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 161 Declaration of executive compensation policies

PART 1: POLICIES AND EXECUTIVE COMPENSA- The most important components of Executive TION EXCEPT SHARE-BASED INCENTIVES Team compensation are as follows: (i) base salary, (ii) cash-incentive bonus and (iii) long- The Board of Directors has, in accordance term, equity-based incentives. Only the state- with the Public Limited Liability Companies ment in Part 2 “Share-based incentives”, be- Act § 6-16a, developed policies regarding low, will be binding for the Board of Directors. compensation for the Executive Team. 1. Base salary The objectives of the Executive Team com- Base salary is typically the primary compo- pensation program are, in particular, to (i) at- nent of Executive Team compensation and tract, motivate, retain and reward the indi- reflects the overall contribution of the exec- viduals on the Executive Team and (ii) ensure utive to the Company. The determination of alignment of the Executive Team with the base salaries for the executives considers a long-term interests of the shareholders. The range of factors, including (i) job scope and Company’s executive compensation program responsibilities, (ii) competitive pay practic- is intended to be performance driven and is es, (iii) background, training and experience designed to reward the Executive Team for of the executive, and (iv) past performance both reaching key financial goals and stra- of the executive at the Company. Adjust- tegic business objectives and enhancing ments to base salary are ordinarily reviewed shareholder value. every 12 months or longer by the Board.

162 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 163 2. Cash incentive bonus The Company uses a cash-incentive bonus to Except for the CEO as described above, the focus the Executive Team members on, and employment agreements for the members of reward the Executive Team members for, the Executive Team have no provisions with achieving key corporate objectives, which respect to severance payments if a member typically involve corporate, financial and of the Executive Team should leave his or her operational performance. Cash-incentive position, whether voluntarily or involuntari- bonuses tied to strategic business objec- ly. Severance payment arrangements, if any, tives, which may be individual to or shared will thus be based on negotiations between among the Executive Team members, may the Company and the relevant member of also be considered as part of the cash-incen- the Executive Team on a case-by-case basis. tive bonus. The determination of the total bonus that can be potentially earned by an 4. Pension executive in a given year is based on, among Members of Executive Team participate in other factors, the executive’s current and regular pension programs available for all expected contributions to the Company’s employees of Company. For members of the performance, his or her position within the Executive Team based in Norway, an addi- Executive Team, and competitive compensa- tional pension agreement is in place. This tion practices. agreement is based on a defined-contribution scheme and contributes 20% of salary In October 2020, members of the Executive over 12G. Team agreed new cash bonus structures where annual, cash bonus in based on 100- PART 2: 200% achievement of targets. The Board SHARE-BASED INCENTIVES may deviate from the 200% cap. As a starting point, the cash-incentive bonus for FY 2020 1. Existing programs for Executive Team members was, or for FY For members of the Executive Team, the 2021 will be, based on business-/operational Company currently has one ordinary stock targets and achievements of these targets. option program in place, as most recently approved at an extraordinary general meeting Further, as a condition for accepting to termi- held 15 January 2021. nate all then existing options and replacing them with new options (as approved by the 2. Vesting criteria for existing options general meeting on 15 January 2021), it was Such options vest over four years with ¼ also agreed that the CEO would be paid NOK each year. 6 million and the CFO would be paid NOK 500,000 in cash bonus for 2019 and 2020, PART 3: 2020 COMPLIANCE where half of the bonus would be considered part of the 2020 bonus and be taken In 2020, the Executive Team received base into account when the Executive’s total 2020 salaries and cash-incentive bonuses in line bonus was determined in early 2021, while with the Executive Compensation Policy as half of the bonus would be considered as an presented to the 2020 Annual General Meet- extraordinary bonus. ing and as set out in Part I, item 2 ”Cash incentive bonus” as described above. 3. Severance-payment arrangements Pursuant to Section 15-16 second subsection Total compensation earned for the Executive of the Norwegian 2005 Act relating to Em- Team in FY 2020 is summarized in note 6 of ployees’ Protection, CEO Lars Boilesen has the consolidated financial statements. waived his rights under Chapter 15 of the Act. As compensation, he is entitled to a sever- During 2020, no deviations from the existing ance payment of two years’ base salary if his share-based compensation programs as pre- employment is terminated by the Company. viously approved were made with respect to If the CEO has committed a gross breach of the Executive Team. New options were ap- his duty or other serious breach of the con- proved by the extraordinary general meeting tract of employment, the employment can held 15 January 2021. be terminated with immediate effect without any right for the CEO to the mentioned severance payment.

164 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 OTELLO CORPORATION ASA - ANNUAL REPORT 2020 165 PRINCIPLES OF CORPORATE GOVERNANCE 166 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 advertising andadvertisers reach theaudi publishers monetize theircontent through nesses, including (i) AdColony whichhelps Otello holdsshares inseveral different busi Otello’s activities bility are inaccordance withthese values. and guidelines oncorporate social responsi- values, and the Company’s ethical guidelines Directors hasdefined Otello’s basic corporate sound corporate governance. TheBoard of and ensures that theCompany implements sibility for corporate governance at Otello The Board of Directors has theoverall respon of corporate governance. will continue to focus onimproving thelevel rate governance asacontinuous process and the development of highstandards of corpo kument/NL/lov/1998-07-17-56 which canbefound at section 3-3c of theNorwegian Accounting Act, and are inaccordance withsection 3-3b and nues.no Stock Exchange. The Code isavailable at www. required for alllisted companies ontheOslo nance (the “Code”), dated October 17, 2018, as gian Code of Practice for corporate gover have beendeveloped inlightof theNorwe Otello’s principles of corporate governance ing high standards of corporate governance. As a result, Otello is committed to maintain- governance creates highershareholder value. pany”) strongly believes that strong corporate Otello Corporation ASA (“Otello” orthe“Com reporting oncorporate governance General principles, implementation and Otello Corporation ASA Corporate Governance at Principles of . Theprinciples are developed further https://lovdata.no/do- . Otello views

------of Otello’s objectives, strategy andrisk profile. ing is considered to be appropriate in terms The Company’s capitalstructure andfinanc Equity, capitalstructure and dividends Directors report for information. further and officers of theGroup. SeetheBoard of ples andguidelines applyto allemployees and the environment. These general princi- employees, human rights, anti-corruption are focused around the following areas: our These guidelines cover arange of topics and rate social responsibility (“CSR”) guidelines. The Board of Directors hasadopted corpo Corporate SocialResponsibility guidelines this commitment. policies are developed inorder to betrueto ness openlyandresponsibly. Ourcorporate ted to developing by conducting ourbusi the world —relationships we are commit ployees, friends, andcommunities allover with customers, partners, investors, em Our business isbased onclose relationships Connected TVspace. (iv) Vewd whichoffers OTT services inthe work solutions for mobileoperators; and (iii) Skyfire whichoffers cloud-based net mobile apps inLatin Americaandbeyond; subscription-based discovery service for through technology and offers aleading which integrate people andmobilecontent Mobile MediaandEntertainment company reach that exceeds 2billion;(ii)Bemobi,a capitalizing onaglobal consumer audience ences that buildvalue for theirbusinesses, OTELLO CORPORATION ASA -ANNUAL REPORT 2020

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OTELLO CORPORATION PRINCIPLES OF CORPORATE GOVERNANCE 168 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 shares intheevent of anincrease inshare of existing shareholders to subscribe for Any decisionto waive thepre-emption rights speak, andvote at theGeneral Meeting. submit items to theagenda, andto meet, eral Meeting. Allshareholders are entitledto authority in the Company through the Gen rights. The shareholders exercise the highest All shares intheCompany carryequalvoting strictions onsaleandoffering of securities). possible exceptions due to foreign law re and allshares are freely transferable (with shareholders. Otello hasoneclass of shares rate governance istheequaltreatment of A key concept inOtello’s approach to corpo transactions withrelated parties Equal treatment of shareholders and the total issued shares asown shares. may not at any timeholdmore than10%of acquiring anddisposing of own shares. Otello which Otello may acquire, and the mode of state thehighest nominalvalue of theshares an authorization to acquire own shares will amount payable for theshares. Inaddition, and willstate themaximumandminimum law applyfor amaximumperiodof 2years, as separate items. Suchauthority may by senting theauthorization to theshareholders eral purposes, theCompany willconsider pre zation to acquire own shares shallcover sev defined purposes. To theextent that authori- acquire own shares willalso berestricted to rizations granted to theBoard of Directors to the authority to acquire own shares. Autho The Board of Directors may also begranted to theshareholders asseparate items. will consider presenting theauthorizations schemes andother purposes, theCompany ance of shares underemployee share option to increase theshare capitalshallcover issu Meeting. To theextent that authorization than thedate of thenext AnnualGeneral will ingeneral belimited intimeto nolater tal willberestricted to defined purposes and rectors to increase theCompany’s share capi Authorizations granted to theBoard of Di ny’s AnnualGeneral Meetings. approval by theshareholders at theCompa levels. Dividend payments will be subject to ing itstargeted growth andcashgeneration distribution aslongtheCompany isreach be met whilealso allowing for adividend tio. Otello believes itsneedsfor growth can Otello’s policy is to maintain a high equity ra ------Any transaction theCompany carries out selling securities. if thisshouldbeused as abasis for buyingor tip to family andfriendsisconsidered illegal, public information. Please note that even a lo employees may have access to suchnon also applies to other companies, where Otel whether to buy orsell securities. Thisrule esting for aninvestor to use whendeciding and thisinformation may bedeemedinter does not yet have access to thisinformation, rial, nonpublicinformation; that is, thepublic securities based oninformation that ismate ployees are prohibited from trading inOtello monitored insidertrading policy. Otello em- The Company hasanestablished andclosely Insider trading the approval of theGeneral Meeting. third party, unless thetransaction requires uation to beobtained from anindependent the Board of Directors willarrange for aval ment orclose associates of any suchparties, the Board of Directors, executive manage- shareholder’s parent company, members of between theCompany andshareholders, a In theevent of not immaterial transactions the market. also as soon as possible publicly disclosed to the Board of Directors, andwhere required Any suchtransaction must beapproved by immediately notify theBoard of Directors. direct vested interest, those concerned shall ciates of these have amaterial direct orin or leading employee of Otello orclose asso Otello or with companies in which a director terial transaction withrelated parties within If theCompany shouldenter into anot imma cial statements for information. further pants. SeeNote 16of theconsolidated finan agreement withtheBemobi earnoutpartici Otello signedanamendmentto the2018 actions withrelated parties. Inearly2020, In 2020 there have beennosignificanttrans nection withtheincrease of thecapital. stock exchange announcement issued incon an explanation willbepubliclydisclosed ina the basis of a mandate granted to the board, tion rights of the existing shareholders on in theshare capitalandwaive thepre-emp of Directors resolves to carryoutanincrease capital willbeexplained. Where theBoard through thestock exchange orat prevailing in itsown shares will becarriedouteither ------and supporting information,and supporting includingin date of themeeting. Proposed resolutions dresses nolater than 21 days priorto the notice to all shareholders withknown ad General Meetings are convened by written Meeting becalled. may demandthat anExtraordinary General least five percent of thetotal share capital ny’s auditor orshareholders representing at Board of Directors at any time. TheCompa General Meetings may becalledby the year before theendof June. Extraordinary The AnnualGeneral Meeting isheldeach meet, speakandvote at General Meetings. are entitledto submititems to theagenda, accordance with the Code. All shareholders the Company. General Meetings are heldin holders exercise thehighest authority in Through theGeneral Meeting, theshare General Meetings share entitles theholderto onevote. ty of shares andhasoneclass of shares. Each Otello hasnolimitations onthetransferabili- Freely negotiable shares other way. stock exchange prices ifcarriedoutinany - - - - of theGeneral Meeting andunderevery will beset asclose aspossible to thedate the notice for themeeting. Such deadline the meeting orvote by proxy willbeset in to give notice of theirintention to attend separately. Afinaldeadline for shareholders proxy-holder to cast votes for each item be nominated. Proxy forms willallow the behalf of shareholders astheirproxy will a person who will be available to vote on are encouraged to participate by proxy and Shareholders whoare unableto bepresent, be considered inthemeeting. shareholders to form aview onallmatters to tailed, comprehensive andspecificto allow informationsupporting are sufficiently de- ments free of charge. Resolutions and the request theCompany to mailsuchattach who wishto receive theattachments may shareholders by ordinary mail.Shareholders ed on the Company’s website and not sent to tachments to the calling notice may be post to theCompany’s of Articles Association, at later thanthedate of thenotice. According erally made available to theshareholders no pose items for theGeneral Meeting, isgen meeting, vote by proxy andtherightto pro formation onhow to berepresented at the OTELLO CORPORATION ASA -ANNUAL REPORT 2020 - - - - - 169

OTELLO CORPORATION PRINCIPLES OF CORPORATE GOVERNANCE 170 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 holder whoalso isrepresented at theBoard Committee isarepresentative of ashare ed that thechairperson of the Nomination executive management, however it is not independent of the Board of Directors and members of the Nomination Committee are person), Kari Stautland andJakob Iqbal. The ination Committee are Simon Davies (Chair ary 2021, thecurrent members of theNom extraordinary general meeting held15Janu period butmay bere-elected. Following the Nomination Committee serve for atwo-year ed by the General Meeting. Members of the The members andthechairperson are elect and shallconsist of three to five members. lished pursuant to of the Articles Association The Nomination Committee isa body estab Nomination Committee possible after theendof themeeting. has beenheldwillbemade publicassoon as held. Information that aGeneral Meeting 15 days after theGeneral Meeting hasbeen posted ontheCompany’s website within The minutes from General Meetings willbe General Meeting. ings andwillconsider thisbefore each electronic participation inGeneral Meet The Board of Directors may decideto allow bers are elected by theGeneral Meeting. any other corporate bodies to whichmem- Directors, theNomination Committee and each candidate for electionfor theBoard of Meeting willnormallyvote separately on cided by theGeneral Meeting. TheGeneral pany’s of Articles Association, are to bede separate proposal or according to the Com decides suchother matters whichby law, by rectors, approves theannualaccounts and ation of themembers of theBoard of Di representatives), determines theremuner the Board of Directors (excluding employee The General Meeting electsthemembers of meetings are available onOtello’s website. pendent. Notice, enclosures andprotocol of Chairman for the meeting isgenerally inde they have valid reasons to beabsent. The be present at themeeting inperson, unless CEO, CFO andtheauditor are allrequired to Chairman of theNomination Committee, The members of theBoard of Directors, Companies Act. ciples of section 5-3 of thePublic Limited circumstance, inaccordance withtheprin ------

tively asacollegial body. At least half of the of any specialinterests andfunctioneffec Board of Directors canoperate independently making, andwiththeaimof ensuringthat the expertise, capacity andbalanced decision of an evaluation of the Company’s need for of theBoard of Directors are selected inlight and executive management. Themembers governing mechanismbetween shareholders Meeting, theBoard of Directors is thecentral Appointed by Shareholders at theGeneral The Board of Directors should not have acorporate assembly. Meeting in2010 approved, that theCompany the employees have voted, andtheGeneral Otello does not have a corporate assembly as Corporate assembly mittee willbeposted onOtello’s website. Board of Directors and theNomination Com deadlines for proposals for members to the the General Meeting. Information regarding ination Committee willbedetermined by Remuneration of themembers of theNom- nual General Meeting heldonJune14, 2011. Committee guidelines, asadopted by theAn- ther described intheCompany’s Nomination tasks of theNomination Committee are fur than 21days before theGeneral Meeting. The candidates willnormallybegiven, nolater explained, andinformation aboutproposed tors. Its recommendations will normally be tion of themembers of theBoard of Direc recommendations regarding theremunera rectors. Further, theCommittee shallmake candidates for theCompany’s Board of Di not propose itsown Committee members as the Board of Directors. TheCommittee can- work onproposing candidates for electionto ny’s Chief Executive Officer as ofpart its ers, theBoard of Directors andtheCompa encouraged to have contact withsharehold- Committee. TheNomination Committee is Directors and members of the Nomination holder-elected members of theBoard of to propose candidates for electionasshare The tasks of theNomination Committee are of theBoard of Directors. mittee canalso simultaneouslybeamember ciation, nomemberof theNomination Com of Directors. Pursuant to of theArticles Asso Board of Directors shallbeindependentof the of theshareholder-elected members of the its mainbusiness connections. At least two pendent of theCompany’s management and members of Board of Directors shallbeinde OTELLO CORPORATION ASA -ANNUAL REPORT 2020 ------171

OTELLO CORPORATION PRINCIPLES OF CORPORATE GOVERNANCE 172 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 • • • • • • • • • • the Board of Directors are outlinedbelow: major developments. Theprincipal tasks of its oversight functionandclosely monitors Otello’s Board of Directors diligently performs Otello Board of Directors meets these criteria. Company’s mainshareholder(s). Thecurrent lished a Remuneration Committee and an The Board of Directors estab hasfurther holders of Otello. by theBoard of Directors and/ or theshare rules andguidelines relevant to andadopted cedure asapplicableat any time, andother plied inconjunction withtheRules of Pro The Code of Conduct shouldberead andap avoidance of conflict of interest that follow. the standards of loyalty, good faith, andthe and thedirectors are expected to adhere to of Directors hasadopted aCode of Conduct fair, diligent andethical manner. TheBoard and business affairs of Otello inanhonest, responsible for theoversight of theassets The Board of Directors is entrusted with and

the-board-of-directors-of-otello board-of-directors/rules-of-procedure-for- site: https://www.otellocorp.com/ir/ of Procedure section ontheOtello web- Board’s duties canbefound intheRules A more in-depth description of the communications Overseeing theprocess of disclosure and and makingchanges asneeded nance practices underwhichitoperates Monitoring theeffectiveness of thegover appropriate systems of control are inplace. and financialreporting systems, andthat Ensuring theintegrity of Otello’s accounting transactions. porate assets andabuse inrelated party and shareholders, includingmisuse of cor flicts of interest of management, Directors Monitoring andmanaging potential con- neration Reviewing key executive andBoard remu- seeing succession planning sary, replacing key executives andover Selecting, monitoring, and,whenneces major capitalexpenditures. corporate performance; andoverseeing jectives; monitoring implementation and business plans;setting performance ob- major plansof action, annualbudget and Reviewing andguiding corporate strategy, ent stakeholders Considering theinterests of Otello’s differ Ensuring compliance withapplicablelaws . ------ber of theBoard of Directors. matters willbechaired by some other mem tors is, orhasbeen,personally involved, such in whichtheChairmanof theBoard of Direc sideration of matters of amaterial character In order to ensure amore independentcon tate theevaluation of itsown work. whether to use anexternal person to facili tee. TheBoard of Directors willalso consider made available to thenomination commit vant extracts there from shouldnormallybe for publication. However, any reports orrele be more comprehensive ifitisnot intended objectives set outfor itswork. Any report will individually andasagroup, inrelation to the manner inwhichitsmembers function,both tion of thecomposition of theBoard andthe out, itwould normallyalso includeanevalua To theextent that suchaprocess iscarried work, performance andexpertise annually. out self-evaluation processes, evaluating its The Board of Directors willconsider carrying Remuneration Committee. regarding thetasks to beperformed by the the Executive Personnel” for information below underthesection “Remuneration of sion makinginallsuchmatters. Please see Directors maintainsresponsibility anddeci independence of theauditor. TheBoard of auditor, andreviewing andmonitoring the ing continuous contact with the appointed internal control andriskmanagement, hav process,porting monitoring the systems for include following uponthefinancialre The Audit Committee’s mainresponsibilities this requirement. the Company’s view both members fulfil cations withinaudit oraccounting, andin of theAudit Committee shallhave qualifi bility Companies Act, at least onemember Further, according to thePublic Limited Lia quirements for independence are thusmet. of theRemuneration Committee. There person), andBirgit Midtbust are members Committee, andAndre Christensen (Chair Borge Andersen are members of theAudit ly, AnoojUnarket (Chairperson) andMaria the reasons inourAnnualReport. Current pendence are not met, Otello willexplain the Company. Iftherequirements for inde Committee shouldbeindependentfrom the Code, amajorityof themembers of each each consists of two members. According to ation Committee and the Audit Committee Audit Committee. Currently, theRemuner ------

OTELLO CORPORATION ASA -ANNUAL REPORT 2020 173

OTELLO CORPORATION PRINCIPLES OF CORPORATE GOVERNANCE 174 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 • • • • Board of Directors willensure that: vision of thebusiness activities of Otello, the are subjectto adequate control. Initssuper activities, accounts, andasset management responsible for ensuringthat theCompany’s financial position of theCompany, andbe ny’s activities, keep itself informed onthe draw upplansandbudgets for theCompa the Company’s day-to-day management, activities are soundly organized, supervise things, ensure that theCompany’s business lo. TheBoard of Directors shall,amongother procedures of theBoard of Directors of Otel set outrules onthework andadministrative The purpose of these rules of procedure is to cedure for theBoard of Directors of Otello. ties. TheBoard hasdrawn uptherules of pro and exercise control of the Company’s activi This includes aresponsibility to supervise bility for themanagement of theCompany. The Board of Directors hasoverall responsi Risk management andinternal control

exposure. a satisfactory overview of Otello’s risk management, whichcontinuously provide trol systems, includingsystems for risk and effective management andcon- The Chief Executive Officer uses proper Otello hasacompetent finance depart and social responsibility. health, safety andworking environment, to ethical behavior, conformity to law, opted by theBoard of Directors inrelation follow-up of principles andguidelines ad- There exist satisfactory routines to ensure reduce extraordinary riskexposure. and that necessary measures are taken to The control functions work asintended ------• of exposure to riskanditsinternal control view of the Company’s most areas important Board of Directors carries outanannualre- lines for corporate social responsibility. The porate values, ethical guidelines andguide systems also encompass theCompany’s cor the specificcontrol. Theinternal controls and ly, quarterly oryearly basis, dependingon tions. The controls are executed on a month- control descriptions andprocess descrip the Company andhasestablished written performed ascoping of thefinancial risks in the Company’s activities. TheCompany has ate inrelation to theextent andnature of tems for risk management that are appropri Company hassound internal control andsys The Board of Directors hasensured that the gy for theGroup. ters, andthe corporate development strate marketing, financialandorganizational mat strategy meeting focuses onproducts, sales, egy meeting withtheBoard of Directors. The The Executive Team conducts anannualstrat their dutyof confidentiality. of themembers of theExecutive Team and is to clarifythepowers andresponsibilities Company. Thepurpose of these instructions instructions for theExecutive Team of the Otello’s Board of Directors hasdrawn up Executive Team

reports producing reliable andon-time financial ment andaccounting systems, capable of ommendations are given proper attention. obeyed andthat theexternal auditor’s rec Directives from theexternal auditor are ------ing. Aseries of riskassessment andcontrol ensure quality assurance of financial report and avariety of control measures that will comply. TheGroup hasestablished processes ments with which local reporting units must dures andprocesses detailing therequire finance provides department aset of proce ing principles andtheBoard’s guidelines. The accounting standards, established account isinaccordanceporting withapplicable laws, reporting for theGroup andensures that re- The finance prepares department financial into theCFO. corporate andbusiness controllers report Board of Directors and Executive Team. The cesses andinternal controls reporting to the to coordinate planningandbudgeting pro- ny’s value-based management system and group’s activities, to administer the Compa assessment andriskmonitoring across the other things, to perform management’s risk rate andbusiness controller tasks are, among porate andbusiness controllers. Thecorpo been established consisting of thegroup cor function and risk management function has information, a centralized corporate control importance of providing accurate financial lished ontheOsloStock Exchange. Given the to theannualreport. Thefinancialsare pub four interim financialstatements inaddition ment andinternal control. Otello publishes Group’s control functions for risk manage- The Group’s CFO isresponsible for the their directorship. with theCode of Conduct duringtheterm of confirmed that they had read and complied arrangements. In 2020, all Board members ------nization andactivities. Allmonthlyandquar financial functionsare adapted to theorga units have theirown management, andthe local laws andrequirements. Allreporting ments andfor ensuringcompliance with in accordance withspecified group require appropriate andeffective internal controls financial reporting, and (iii)implementing the riskof significanterrors intheGroup’s (ii) identifying,assessing andmonitoring to prevent errors inthefinancialreporting, and for implementingsufficient procedures sible for (i)theongoing financialreporting and leaders of the reporting units are respon- The CFO, theGroup Chief Accounting Officer and authorization. segregation of duties, management review tion, e.g., control types suchasreconciliation, to ensure the correctness of the consolida numbers. Several controls are established finance consolidates department theGroup ported numbers from thereporting units, the the financialstatements. Based onthere identifying any significantmisstatements in the reporting package withthe purpose of and the business controllers have reviewed ing unitshave submitted theirgroup reports, following internal meetings whenthereport nicated to thereporting unitseach month, ments. Reporting instructions are commu tion with the preparation of financial state measures have beenestablished inconnec on the financial reporting and business re The Executive Team analyzes and comments historical trends. assessed relative to budgets, forecasts and terly operations reports are analyzed and OTELLO CORPORATION ASA -ANNUAL REPORT 2020 ------

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OTELLO CORPORATION PRINCIPLES OF CORPORATE GOVERNANCE 176 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 compensation from Otello other thanor ciated with suchmember) hasreceived any and nosuchmember(or any company asso beyond what isdescribed in this document, have assumed specialtasks for theCompany such member) elected by theshareholders of Directors (or any company associated with tasks ingeneral. Nomembers of theBoard time commitment andthecomplexity of the tion reflects theresponsibility, qualifications, the Annual General Meeting. The remunera the Nomination Committee andapproved at Directors isafixed annualsumproposed by Remuneration for members of theBoard of Remuneration of theBoard of Directors understanding of ouroperations. parties in the securities market, to enhance for investors, lenders andother interested reliable, timelyandbalanced information ital-market players andshareholders with lations activities isto provide investors, cap policy. Aprimarygoal of Otello’s investor re rectors has approved an Investor Relations of information, theCompany’s Board of Di well asensuringequaltreatment andflow that correct information bemade public, as ticipants inthesecurities market. To ensure requirement for equaltreatment of allpar on openness and taking into account the sults andother relevant information based Otello iscommitted to reporting financialre Investor relations policy bilities, training, contingency plans, etc. covering information security roles, responsi Otello hasguidelines andinformation policies Information security guidelines tional guidelines. and guidelines, Otello hasdrawn up addi As anextension of thegeneral principles Other guidelines andpolicies Board of Directors. ments, which ultimately are approved by the the quarterly andannualfinancialstate The Audit Committee performs areview of agement systems are operating effectively. Group’s internal controls andtheriskman of financial reporting andensures that the The Audit Committee oversees theprocess action plansare putinplace, ifnecessary. utilization of resources are identified,and development of thebusiness andoptimal ical issues andevents that affect thefuture sults of the Group onaquarterly basis. Crit ------

locorp.com/ir Otello’s company website ( vestment community. to enhance ourcommunication withthein value. The Company continually seeks ways and, inturn,thegeneration of shareholder for a fair valuation of the Company’s shares information to themarket isaprerequisite Company believes that objective andtimely and analysts isahighpriorityfor Otello. The Communication withshareholders, investors Information andcommunications the AnnualReport. tive Team isincludedinaseparate section to on thecompensation policies of theExecu- addition, the Board of Directors’ declaration on each of these aspectsof theguidelines. In ing willnormallybeableto vote separately which, ifany, are binding.TheGeneral Meet aspects of theguidelines are advisory and pany will also normally make clear which agenda for theGeneral Meeting. TheCom - Team willbeaseparate appendixto the ment ontheremuneration of theExecutive eral Meeting. TheBoard of Directors’ state- Executive Team will be presented to the Gen- ment regarding remuneration policies for the of thePublic Limited Companies Act, astate- employees, and,pursuant to section 6-16 a) is informed aboutincentive programs for conditions once ayear. TheGeneral Meeting Directors assesses theCEO andhisterms and is subjectto anabsolute limit.TheBoard of lated remuneration to executive personnel 6 to theAnnualReport. Theperformance-re- ing theCEO’s remuneration, are given inNote utive personnel, includingalldetails regard Details concerning remuneration of theexec responsibility anddecisionmaking. for whichtheBoard of Directors maintains procedures, which,ineach case, are matters Otello’s corporate governance policies and er members of theExecutive Team and(ii) (i) thecompensation of theCEO andoth for theBoard of Directors withrespect to Committee shall act asa preparatory body tablished by theBoard of Directors. The A Remuneration Committee has been es Remuneration of executive personnel disclosed inNote 6to theAnnualReport. remuneration to theBoard of Directors is dinary Board of Directors remuneration. All including acomprehensive investor relations munity with information about the Company, ) provides theinvestment com OTELLO CORPORATION ASA -ANNUAL REPORT 2020 https://www.otel------177

OTELLO CORPORATION PRINCIPLES OF CORPORATE GOVERNANCE 178 OTELLO CORPORATION ASA -ANNUAL REPORT 2020 agreement with the bidder that acts to limit over bidsfor Otello’s activities orshares. Any tors willnot seek to hinder orobstruct take In theevent of anoffer, theBoard of Direc lines for possible takeovers. and theCode, theBoard hasadopted guide In accordance with theSecurities Trading Act quiring theCompany’s shares. limitations or defense mechanisms on ac Association donot contain any restrictions, mendations of the Code. Otello’s of Articles The Board of Directors endorses therecom Takeovers scope of theGeneral Meeting. with shareholders and others beyond the lished an investor relations policy for contact The Board of Directors estab hasfurther in terms of content andtiming. information isdisclosed to recipients equally https://www.otellocorp.com/ir with applicablelegislation andposted on to theOsloStock Exchange inaccordance ing theCompany are reported immediately tors and analysts. events Important affect in addition to holding meetings with inves sentations inEurope andtheUnited States, ment team. Otello also arranges regular pre to askquestions of theCompany’s manage shareholders andtheinvestment community annual financialresults, there isaforum for During the announcement of quarterly and relevant information. view of upcoming investor events, andother information, a financial calendar, an over announcements, share price andshareholder ly reports, press releases andstock exchange investor relations policy, annual and quarter section. Thissection includes theCompany’s . Allmaterial ------given inNote 7to theAnnualReport. other thantheannual audit, anddetails are and for fees paid to theauditor for services engagement andremuneration of the auditor eral Meeting isinformed abouttheCompany’s Directors uponthe auditor’s request. The Gen at least once each year, aswillthe Board of ber of theexecutive management ispresent the Board of Directors during which no mem self available uponrequest for meetings with for improvement. Theauditor willmake him- including identifiedweaknesses andproposals observations duringthe conduct of theaudit, dit. Theauditor also reports oninternal control plan for thework related to theCompany’s au or discussions withmanagement, aswell asa ing theareas that caused themost attention ities in theprevious fiscal year andhighlight Committee areport outliningtheaudit activ Every year, theauditor presents to theAudit al accounts, aswell asuponspecialrequest. Board of Directors that dealwiththeannu The auditor participates inmeetings of the Auditor independent expert. will normally arrange for a valuation from an should ornot accept theoffer and mendation as to whether theshareholders the Board of Directors willmake arecom If anoffer ismade for theshares of Otello, of animpendingbidispublished. than at thesame timeastheannouncement the bidwillbepubliclydisclosed nolater are material to themarket’s evaluation of between theCompany andthebidderthat Information aboutagreements entered into interest of theCompany anditsshareholders. where theBoard believes itisinthecommon the Company’s shares will only be entered into the Company’s ability to arrange other bids for ------OTELLO CORPORATION ASA -ANNUAL REPORT 2020 179

OTELLO CORPORATION CONCEPT, TEXT, DESIGN, PROJECT MANAGEMENT, PHOTO, ILLUSTRATIONS: COXIT // COXIT.NO

Otello Corporation ASA Gjerdrums vei 19 NO-0484 OSLO

Tel: +47 9190 9145 www.otellocorp.com