~~☒ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

☐ ~~TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

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

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☐ ☒ No ☐

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

The aggregate market value of the registrant’s voting and non-voting ordinary shares held by non-affiliates as of June 30, ~~2020,~~2021, based on last sale price as reported on The Nasdaq Capital Market on that date, was approximately ~~$613.8~~$653.9 million.

At March ~~25, 2021,~~9, 2022, there were ~~42,017,117~~42,250,743 ordinary shares outstanding.

Certain portions, as expressly described in this report of the registrant’s definitive Proxy Statement for the 2022 Annual Shareholder Meeting, to be filed within 120 days of December 31, 2021, are incorporated by reference into Part III, Items 10-14 of this Annual Report on Form 10-K.

Except as otherwise required by the context, references to “GAN,” “GAN Limited,” “the Company,” “we,” “us” and “our” are to ~~(1)~~(i) GAN (UK) Limited, a private limited company organized under the laws of England and Wales (formerly GAN plc, a public limited company organized under the laws of the England and Wales), and its subsidiaries, for all periods prior to the completion of the May 2020 share exchange and reorganization, and ~~(2)~~(ii) GAN Limited, a Bermuda exempted company limited by shares, and its subsidiaries, or GAN Limited, for all periods after the completion of the May 2020 share exchange and reorganization. References to “Coolbet” are to Vincent Group p.l.c., a Malta public limited company and its subsidiaries, which was acquired by GAN Limited on January 1, 2021.

This Annual Report on Form 10-K contains certain statements that are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that reflect our current expectations and views of future events. These forward-looking statements can be identified by words or phrases such as “may,” “will,” “expect,” “should,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to” or other similar expressions. These forward-looking statements include, among other things, statements relating to our goals and strategies, our competitive strengths, our expectations and targets for our results of operations, our business prospects and our expansion strategy. We have based these forward-looking statements largely on current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Although we believe that we have a reasonable basis for each forward-looking statement, we caution you that these statements are based on our projections of the future that are subject to known and unknown risks and uncertainties and other factors that may cause our actual results, level of activity or performance expressed or implied by these forward-looking statements, to differ.

The forward-looking statements are subject to risks, uncertainties and assumptions about our Company. Our actual results of operations may differ materially from the forward-looking statements as a result of risk factors described under “Item 1A. Risk Factors” in this Annual Report on Form 10-K, including, among other things:

The foregoing factors should not be construed as an exhaustive list and should be read in conjunction with other cautionary statements that are included in this Annual Report on Form 10-K as well as the items set forth under “Item 1A. Risk Factors.” If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. Moreover, we operate in an evolving environment and new risk factors emerge from time to time. It is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause our actual results to differ materially from those contained in any forward-looking statement.

You should not rely upon forward-looking statements as predictions of future events. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements. These forward-looking statements speak only as of the date on which it is made. We do not intend to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, unless the securities laws require us to do so.

GAN Limited is a Bermuda exempted holding company and through its subsidiaries, isconsists of two lines of business. We are a business-to-business (“B2B”) supplier of enterprise Software-as-a-Service (“SaaS”) solutions for online casino gaming, commonly referred to as iGaming, and online sports betting applications. ~~Our~~Beginning with our acquisition of Coolbet in January 2021, we are also a business-to-consumer (“B2C”) developer and operator of an online sports betting and casino platform, which offers individuals located in select markets in Northern Europe, Latin America and Canada access to a digital portal for engaging in sports betting, online casino games and poker.

In our B2B segment, we feature our technology platform, which we market as the GameSTACK™ ~~Internet~~internet gaming ~~ecosystem~~ platform (“GameSTACK”)~~, has been deployed~~. Our GameSTACK platform and related support services are geared towards casino operators, with an emphasis on land-based commercial and tribal casinos in ~~both Europe and~~ the United ~~States. However,~~States, although we have deployed our platform in other geographies such as the United Kingdom, Italy, and Australia and are currently preparing to deploy in Canada. We also market our platform to gaming partners, such as online sportsbooks and gaming content developers, who provide us with an indirect channel into casino operators. This segment is primarily focused on enabling the U.S. casino industry’s ongoing digital transformation, which is accelerating following the repeal of a federal ban on sports betting in May 2018. Our customers rely on our ~~software~~platform to run their online casinos and sportsbooks legally, profitably and with engaging content. ~~Additionally, following~~GameSTACK enables us to offer a turnkey technology solution for regulated real money internet gambling (“real money iGaming” or “RMiG”), online sports betting and virtual simulated gaming (“simulated gaming” or “SIM”). In addition, we believe that our acquisition of Coolbet provides us with the opportunity to integrate proprietary online sports betting technology to enable us to offer a turnkey technology solution.

Our B2C segment commenced on January 1, 2021, when we completed the acquisition of Vincent Group p.l.c., a Malta public limited company doing business as “Coolbet.” This acquisition enabled us to operate a B2C casino and sports betting platform that is accessible for gambling through the website www.coolbet.com in markets across Northern Europe, Latin America and Canada. Coolbet.com launched in May 2016 and as of January 1, 2022, had over 790,000 registered customers. Coolbet holds gambling licenses in Estonia, Malta, Sweden, and Canada. The majority of Coolbet’s website traffic comes from mobile customers and each region features customized interfaces with localized product offerings and local language support teams. For 2021, ~~an award-winning developer and operator of a legal~~our total B2C revenue was generated 53% from online casino games, 43% from online sports betting and 4% from online peer-to-peer poker. B2C revenue increased 121% from $35.5 million in 2020 to $78.6 million in 2021. Coolbet’s results of operations are included in our financial results beginning on January 1, 2021. In addition to providing complementary technology to our B2B segment, we believe our B2C segment provides diversification of revenue streams and growth opportunities in international markets.

We were an early pioneer of online gaming. We commenced operations in 2002 in the United Kingdom and first generated revenue in December 2002. Our initial product allowed end user residents of the United Kingdom to create an online account, deposit money into that account and to compete against each other online in competitions of skill. We offered online games of skill to residents of the United Kingdom under the operation of the United Kingdom’s applicable legislation, the Lotteries & Amusements Act 1976 (s.14), which permitted competitions of skill.

Beginning in 2004, we secured our first major customers in the United Kingdom and subsequently launched our first real money casino gambling games through a license procured from the United Kingdom Gambling Commission following the passage of the Gambling Act 2005 which permitted companies in the United Kingdom to develop software intended for enabling internet gambling. In 2008 we began securing our first major customers in Italy and deployed our technology platform in Rome, Italy and served internet gaming content to several major Italian operators of regulated internet sports betting and gaming.

In 2010 we released the first version of our GameSTACK enterprise software platform for our first platform customer to launch a new internet gambling business in Europe as a complement to existing retail bingo gaming business, and following the launch of an internet casino for a casino operator customer operating on the GameSTACK platform in the State of New Jersey in 2013, we were the first technology platform provider to accept and process a deposit online in the State of New Jersey and processed the first legal online bet on our proprietary blackjack game. Our casino operators have continued to rely on GameSTACK to launch their online casinos in new and existing U.S. states following applicable legislation.

In May 2020, GAN Limited completed a reorganization and share exchange pursuant to which we acquired all of the outstanding ordinary shares of GAN plc and became the parent company of GAN plc. Subsequently, GAN plc changed its name to GAN (UK) Limited. Additionally, in May 2020, we completed our U.S. initial public offering through which we sold an aggregate of 7,337,000 ordinary shares at a price per share of $8.50 and received gross proceeds of $62.4 million.

In November 2020, we entered into a share exchange agreement (the “Share Exchange Agreement”), pursuant to which we agreed to acquire all of the outstanding equity in Vincent Group p.l.c., a Malta public limited company doing business as “Coolbet” in exchange for cash and ordinary shares. In December 2020, we completed a secondary public offering, issuing 6,790,956 ordinary shares in exchange for net proceeds of $98.5 million after underwriting discounts and commissions, and other offering expenses. We used the proceeds from this offering to fund the cash portion of the purchase price payable to the former Coolbet shareholders. On January 1, 2021, we completed the acquisition of Coolbet for a total purchase price of $218.1 million, comprised of a cash payment of $111.1 million, the issuance of 5,260,516 ordinary shares (valued at $106.7 million) and the issuance of replacement equity awards (valued at $0.3 million).

On May 14, 2018, the Supreme Court of the United States overturned the Professional and Amateur Sports Protection Act (“PASPA”), which since 1992 had prevented U.S. states, aside from Nevada, Delaware and Oregon from engaging in the regulation and taxation of sports betting activities at the intrastate level. The ruling paved the way for U.S. states to elect individually whether to allow for regulated sports betting and, by extension, real money iGaming within their borders. Prior to the Supreme Court of the United States overturning PASPA, U.S. casino operators were largely limited to retail slot and table gaming operations and, in the online channel, to simulated gaming operations offering no prospect for real money winnings.

As of December 31, 2021, 32 U.S. states have approved legalized sports betting: Arizona, Arkansas, Colorado, Connecticut, Delaware, Illinois, Indiana, Iowa, Louisiana, Maryland, Michigan, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Virginia, Washington, West Virginia, Wisconsin and Wyoming, along with Washington D.C. Real money iGaming is also presently legal in seven states: Connecticut, Delaware, Michigan, Nevada, New Jersey, Pennsylvania and West Virginia. Each state has unique regulatory and licensure requirements, and our ability to rapidly customize deployments and submit expeditiously for individual state gaming licensure has been a vital contributor to our success in the U.S. market. We enable our customers to deploy iGaming and online sportsbook offerings to their end users quickly, capturing valuable early-mover advantages in their relevant markets, such as the January 2021 launch in Michigan. We are presently licensed or approved to operate our RMiG platform in New Jersey, Pennsylvania, Indiana, West Virginia, Colorado, Michigan, Tennessee, and Connecticut. We plan to continue to evaluate new opportunities to provide services in additional U.S. states and expect to expand in Canada and additional U.S. states, consisting of Mississippi and Arkansas in 2022 and beyond.

Online sports betting deployment models can vary widely due to state-specific regulatory and licensing mandates. However, licensed casino operators with land-based retail facilities tend to partner with online sportsbook operators in order to accelerate online customer acquisition. These operators generally rely on a technology platform, such as GameSTACK, for player onboarding, player account management, payment processing and various back-office tools designed to maintain regulatory compliance and real-time reporting. Additionally, our technology for online sportsbooks incorporates a sports betting engine for pricing, trade execution and risk management.

In order to monetize online and offline players in a coherent manner, casino operators pursue omnichannel marketing strategies that require deep integration of hardware and software elements, including computing infrastructure, customer relationship management, casino management system and loyalty program management. Because of the complexity in deploying and maintaining iGaming and online sports betting infrastructures, casino operators may rely on third-party service providers to operate and maintain all or part of the technology infrastructure on their behalf.

Our product strategy for GameSTACK is to provide a unified, flexible and highly scalable platform that can be rapidly deployed for SIM, RMiG, and online sports betting. In addition to our platform, we ~~now~~ offer a range of development, marketing and customer support services designed to fast-track deployments and provide ongoing operational support following commercial launch.

Our GameSTACK platform and related support services are designed to help our customers ~~a digital portal for engaging in sports betting,~~rapidly launch and scale their iGaming and online sportsbook operations. Our iGaming offerings support both social, or “freemium,” simulated online casino ~~games~~gaming in regulated and ~~peer-to-peer poker.~~unregulated markets as well as RMiG for deployment in regulated markets. We measure the level of player engagement through key performance measures including Gross Operator Revenue, which we define as the sum of our B2B corporate customers’ gross revenue from SIM, gross gaming revenue from RMiG, and gross sports win from sportsbook offerings, which we track for both SIM and RMiG operations.

Our GameSTACK customer base in the United States includes large regional operators as well as individual tribal casino operators that, combined, operate over 100 retail casino properties, racetracks and online sportsbooks. Our customers in the United States that are outside of the states with regulated online casino or sports betting markets generally operate on our social casino or simulated gambling applications. The largest portion of our U.S. business is in real money ~~Internet~~internet gambling ~~(“real money iGaming” or “RMiG”)~~ with operators in the U.S. states where either (or both) ~~Internet~~internet casino gaming and sports betting are permitted by regulation.

We believe there is a large and growing number of additional potential new customers for GameSTACK in selected U.S. states that have formally passed online sports betting but have not yet implemented a regulatory framework for governing online real money iGaming in these states. Also, we believe that as newly regulated U.S. states such as Michigan generate real tax revenue for their respective state treasuries that more states will evaluate, develop, and pass online gaming legislation. The Company has the unique ability to absorb and support this expansion. For example, in January 2021, we simultaneously launched three operators online in Michigan, including our existing customer, FanDuel Group Inc.’s (“FanDuel”) online casino and two new customers, Churchill Downs’ brand TwinSpires and Wynn Resorts’ WynnBET.

As of December 31, 2021, we have instances of GameSTACK deployed inside data centers located in Nevada, New Jersey, Pennsylvania, Michigan, Connecticut, West Virginia, Guernsey (U.K. Channel Islands) and Italy.

Our principal B2C offerings are real-money online sports betting, online casino and peer-to-peer poker. We offer these products directly to the end customer through our website, which is also available on tablet and mobile devices inmarkets predominantly across Northern Europe and Latin America. In order to attract and retain customers, we seek to provide a high-quality customer experience through a high speed mobile website, excellent customer service and attractive odds. With our own technology and sportsbook software, and in cooperation with recognized providers for odds data and game content, we strive to provide the best online sportsbook and iGaming offering available, and believe that positive word of mouth referrals allowed us to increase our revenues and acquire customers at a lower cost than our competitors.

GameSTACK is a turnkey platform comprising proprietary enterprise software, computer hardware and ~~related managed services are designed to help~~specific proprietary software components such as our iSight Back Office tool (“iSight”) and the iBridge Framework. GameSTACK is a comprehensive proprietary software platform providing our customers ~~rapidly launch~~with account set-up, customer services facilitation, comprehensive player marketing tools, and ~~scale their iGaming~~the ability to deliver converged gambling across land-based retail casinos and ~~online sportsbook operations.~~the internet. GameSTACK supports both real money and social casino offerings through a common code base and user interface, providing our SIM customers a path to rapid market entry into real money gambling. Our ~~iGaming offerings support both social, or “freemium,” simulated online casino gaming (“simulated gaming” or “SIM”) as well as RMiG for deployment in regulated markets. Like RMiG,~~operator customers’ players also experience a consistent user experience throughout the evolution to permitted real money gambling. While SIM ~~is a~~implementations of GameSTACK generate revenue ~~center~~ for our customers, the SIM application is predominantly employed as a marketing platform by operators in ~~non-regulated~~anticipation of rolling out an RMiG offering.

While developing GameSTACK, we remained fully committed to building an evergreen and agile software architecture forged from a single code base, ensuring that developments in game mechanics, new back-office functionalities and integrations with leading third-party software could be capitalized on by our customers across all gameplay modalities. Importantly, we developed our code to operate in multiple jurisdictions and under different regulatory requirements, giving us the ability to leverage different configurations quickly to comply with newly regulated markets. We measure the level of player engagement through key performance measures including Active Player-Days, Gross Operator Revenue, and Average Revenue per Daily Active User, which we track for both SIM and RMiG operations. For more information, refer to the Segment Results section of our Management’s Discussion and Analysis of Financial Condition and Results of Operations.

GameSTACK ~~forms~~serves as the technical hub of our ~~casino operator~~ customers’ online gaming presence. The platform provides the foundational technology and back-office tools necessary for a successful consumer experience, including intuitive player account activation, sophisticated payment services, geolocation, marketing, loyalty club linking and real-time analytics and reporting. The core of the GameSTACK platform is its player account management system, in which highly sensitive consumer and player activity data is stored and processed. This information is the layer of any casino operator’s online technology deployment that becomes the focal point of regulatory licensure since it is the fortified vault of player data and privacy. We are the trusted custodian of player transactional data and provide direct visibility into wagering activity, which allows us to deploy proprietary ~~plater~~player analysis models to ~~help~~assist our casino operator customers ~~predict~~in predicting and ~~identify,~~identifying, over time, their highest-value players. Our casino operator customers can rely on our data models to best direct their retention marketing investments towards specific customer profiles, thereby optimizing player loyalty and therefore player value. GameSTACK also relies on a flexible integration services layer in order to integrate easily with other essential third-party systems such as casino management systems, remote gaming servers, sports betting engines, and marketing services applications.

Our RMiG instances of GameSTACK incorporate comprehensive player registration, account funding and back-office accounting and management tools that enable our casino operator customers to efficiently, confidently and effectively extend their presence online. For the individual players, our software enables them to create a regulatory-compliant iGaming account online, have their credentials properly validated in order to activate their account, deposit money into their account and proceed to wager that money on any content we provide on the relevant casino operator’s website or mobile app. The online content may comprise a casino game such as roulette, blackjack or a casino slot machine game. Content may also comprise a myriad of sporting events on which the diverse outcomes can be wagered on.

We have optimized GameSTACK for RMiG, and in particular, U.S. internet casino gaming with geolocation tracking, Know-Your-Customer processes and a market-leading U.S. payments platform. Payment aggregation services within GameSTACK integrate with a wide range of third-party payment processors while simultaneously allowing our casino operators to accept cash deposits onsite within their retail casino properties, which are credited to the players’ online account.

Our RMiG instances of GameSTACK augment our SIM product to further incorporate more comprehensive player registration, account funding and back-office accounting and management tools. In ~~addition~~the United States, real money iGaming applications must comply with the Unlawful Internet Gambling Enforcement Act of 2006 and with the federal Wire Act of 1961. Consequently, our RMiG customers must physically deploy our platform within their state’s borders, typically inside their retail casino premises in order to comply with intrastate regulatory mandates. Our customers generally procure the computer hardware on which our ~~growth opportunity within~~software is deployed inside of our ~~existing core markets,~~customers’ data centers.

Our SIM product is custom-designed for the U.S. casino operators seeking to bring their retail brand online and create a new internet gaming experience delivered as an amenity to their players and leveraging their on-property rewards program.

For SIM implementations, we ~~see~~design the casino operator’s mobile application and website with a ~~large~~branded experience that is consistent with the casino operator’s brand and ~~growing universe~~market positioning. Our iSight technology provides management tools and streamlines player registration and account funding. We generally host our customers’ SIM operations on a combination of ~~additional potential new customers for~~proprietary and cloud servers. GameSTACK features a gaming content engine that serves both internally developed slot and table games as well as third-party gaming content through a technical ‘abstraction layer’ that permits third-party games to be published to end user players through GameSTACK. SIM deployments of GameSTACK allow casino operators to put their offers, games and unique brand experience in ~~selected U.S. states that have formally passed~~their players’ hands 24/7. GameSTACK incorporates our proprietary iSight technology, which captures online player activity, giving marketers the equivalent visibility of 100% rated play.

For online sports betting ~~but have not yet implemented a regulatory framework for governing online real money iGaming in their states. We believe that as newly regulated U.S. states~~applications, we integrate our RMiG version of GameSTACK with third-party services such as ~~Michigan generate real tax revenue~~sports betting engines and the sportsbook operator’s user interface and user experience. To date, we have integrated sports betting engines for customers at their ~~respective state treasuries that more~~request, including IGT Sports, Kambi and Amelco.

GAN Sports, our newest product offering following the acquisition of Coolbet, will be offered as an online and retail solution to U.S. casino operators as a complete turnkey solution across future regulated states, or as a replacement to existing sports betting technology currently relied on by operators. The GAN Sports retail solution will ~~evaluate, develop,~~allow our customers to launch and ~~pass online gaming legislation. GAN has~~operate their sportsbooks on their properties, with the ~~unique~~ ability to absorb and support this expansion. For example, in January 2021, we simultaneously launched three operator clients online in Michigan, including FanDuel Group Inc.’s (“FanDuel”) online casino and two new clients, Churchill Downs’ brand TwinSpires and Wynn Resorts’ WynnBET.add an on-premise mobile platform delivered through self-service kiosk technology to prepare for statewide mobile sports betting.

GameSTACK may also be configured as a “super” remote gaming server (“Super RGS”), otherwise known as ~~an RGS~~a remote gaming server aggregator, ~~when~~which can be deployed on behalf of existing ~~Internet~~internet casino operators ~~(for example,~~ in various U.S. states ~~such as New Jersey, Pennsylvania and Michigan)~~ that are operating on their own proprietary or third-party platform. Super RGS provides these operators with access to all of our ~~own~~proprietary games, ~~as well as 29~~our current (and all future) remote gaming server integrations, as well as our content library of more than 1,000 ~~Internet~~internet casino games. Super RGS creates a technical and commercial vehicle for us to deliver our proprietary casino content and third-party game content across the entirety of the relevant U.S. intrastate markets. Our Super RGS provides for a cost and time savings for new and existing market operators to more efficiently manage their game content.

~~On January 1, 2021, we completed the acquisition of all outstanding shares of Vincent Group p.l.c., a Malta public limited company doing business as “Coolbet.”~~ Coolbet operates a business-to-consumer (“B2C”) casino and sports-betting platform that is accessible for gambling via its website Coolbet.com in eight national markets across Northern Europe (Estonia, Finland, Iceland, Norway and Sweden), Latin America (Chile and Peru) and North America (Canada). Coolbet.com launched in May 2016 and as of January 1, 2021, had over 375,000 registered customers. Coolbet holds gambling licenses in Estonia, Malta and Sweden. The majority of Coolbet’s traffic comes from mobile customers and each region features customized interfaces with localized product offerings and local language support teams. The largest revenue stream for 2020 came from sports betting (50% of total revenue), followed by online casino games (45% of total revenue) and online peer-to-peer poker across various operators in real-time select markets (5% of total revenue). Revenue increased 50% in 2020 from $23.6 million in 2019 to $35.5 million in 2020. Coolbet’s results of operations for 2019 and 2020 are not included in our financial results due to the fact that the acquisition closed on January 1, 2021.

We were an early pioneer of online gaming. We commenced operations in 2002 in the United Kingdom and first generated revenues in December 2002. Our initial product allowed end user residents of the United Kingdom to create an online account, deposit money into that account and to compete against each other online in competitions of skill. We offered online games of skill to residents of the United Kingdom under the operation of the United Kingdom’s applicable legislation, the Lotteries & Amusements Act 1976 (s.14), which permitted competitions of skill.

In May 2020, GAN Limited completed a reorganization and share exchange pursuant to which we acquired all of the outstanding ordinary shares of GAN plc and became the parent company of GAN plc. Subsequently, GAN plc changed its name to GAN (UK) Limited. On May 7, 2020, we completed our U.S. initial public offering under which we sold an aggregate of 7,337,000 ordinary shares at a price per share to the public of $8.50 and raised gross proceeds of $62.4 million.

On November 16, 2020 we entered into a share exchange agreement (the “Share Exchange Agreement”), pursuant to which we agreed to acquire all of the outstanding equity in Vincent Group p.l.c., a Malta public limited company doing business as “Coolbet” in exchange for cash and ordinary shares. On December 21, 2021 we completed a secondary public offering, issuing 6,790,956 ordinary shares in exchange for net proceeds of $98.5 million after underwriting discounts and commission and other offering expenses. We used the proceeds from this offering to fund the cash portion of the purchase price payable to the Coolbet shareholders. On January 1, 2021, we completed the acquisition of Coolbet in exchange for a purchase price of $218.6 million comprised of a cash payment of $111.6 million, the issuance of 5,260,516 ordinary shares (valued at $106.7 million) and the issuance of replacement equity awards (valued at $0.3 million).

Our GameSTACK platform and related managed services are geared towards casino operators, with an emphasis on land-based commercial and tribal casinos in the United States, although we have deployed our solutions in other geographies such as the United Kingdom, Italy, and Australia. We also market our platform technology to gaming ecosystem partners, such as online sportsbooks and gaming content developers, who provide us with an indirect channel into casino operators.

On May 14, 2018, the Supreme Court of the United States overturned the Professional and Amateur Sports Protection Act (“PASPA”), which since 1992 had prevented U.S. states, aside from Nevada, Delaware and Oregon from engaging in the regulation and taxation of sports betting activities at the intrastate level. The ruling paved the way for states to elect individually whether to allow for regulated sports betting and, by extension, real money iGaming within their borders. Prior to the Supreme Court of the United States overturning PASPA, U.S. casino operators were largely limited to retail slot and table gaming operations and, in the online channel, to simulated gaming operations offering no prospect for real money winnings.

Between May 2018 and March 2021, 21 U.S. states enacted and approved some form of real money gaming legislation, with 14 of those states approving online sports betting or iGaming. Each state has unique regulatory and licensure requirements, and our ability to rapidly customize deployments and submit expeditiously for individual state gaming licensure has been a vital contributor to our success in the U.S. market. We enable our customers to deploy iGaming and online sportsbook offerings to their end users quickly, capturing valuable early-mover advantages in their relevant markets, such as for the recent launch in Michigan in January 2021. We are presently licensed or approved to operate our RMiG platform in New Jersey, Pennsylvania, Indiana, West Virginia, Colorado, Michigan, and Tennessee. Following the November 2020 election, three additional states (Louisiana, Maryland, and South Dakota) legalized online sports betting and we are monitoring several additional states (Ohio, Massachusetts, New York) that currently have some legislative momentum for possible legalization in 2021. We plan to and will pursue licensure in these additional states in 2021 and beyond.

Full scale Internet sports betting launched in New Jersey on August 3, 2018; West Virginia on December 27, 2018; Pennsylvania on May 28, 2019; Oregon on October 16, 2019; and in New Hampshire on December 30, 2019. As of December 3, 2020, 25 states have approved legalized sports betting: New York, New Jersey, West Virginia, Pennsylvania, Indiana, Iowa, Arkansas, Mississippi, Rhode Island, Delaware, Oregon, Nevada, New Hampshire, Colorado, Illinois, Michigan, Tennessee, Montana, North Carolina, New Mexico, Louisiana, Maryland, South Dakota, Virginia and Washington, along with Washington D.C. Real money iGaming is also presently legal in six states: New Jersey, Pennsylvania, Michigan, West Virginia, Nevada and Delaware.

Online sports betting deployment models can vary widely due to state-specific regulatory and licensing mandates. However, licensed casino operators with land-based retail facilities tend to partner with online sportsbook operators in order to accelerate online customer acquisition. These operators generally rely on a technology platform, such as GameSTACK, for player onboarding, player account management, payment processing and various back-office tools designed to maintain regulatory compliance and real-time reporting. Additionally, the technology ecosystem for online sportsbooks incorporates a sports betting engine for pricing, trade execution and risk management, which we now own following our acquisition of Coolbet in January 2021.

In order to monetize players both online and offline in a coherent manner, casino operators pursue omni-channel marketing strategies necessitating deep integration of hardware and software elements, including computing infrastructure, customer relationship management, casino management system and loyalty program management. Because of the complexity in deploying and maintaining iGaming and online sports betting infrastructures, casino operators may rely on third-party managed services providers to stand up, operate and maintain all or part of the technology infrastructure.

Our overarching product strategy for GameSTACK is to provide a unified, flexible and highly scalable platform that can be rapidly licensed and deployed for SIM, RMiG and online sports betting. In addition to our platform, we offer a range of professional and managed services designed to fast-track deployments and provide ongoing operational support following commercial launch.

Our SIM and RMiG offerings share a common code base and user interface within GameSTACK, providing our SIM customers with a readily accessible upgrade path to RMiG. In developing GameSTACK, we remained fully committed to building an evergreen and agile software architecture forged from a single code base, ensuring that developments in metagame mechanics, new back-office functionalities and integrations with leading third-party software could be capitalized on by our customers across all gameplay modalities. Importantly, we developed our code to operate in multiple jurisdictions and under different regulatory requirements, giving us the ability to leverage quickly different configurations to comply with newly regulated markets.

As of December 31, 2020, we had ten instances of GameSTACK deployed inside data centers – one located in Nevada, three in New Jersey, three in Pennsylvania, one in Oklahoma, one in Guernsey (U.K. Channel Islands) and one in Italy.

GameSTACK is a turnkey platform comprising proprietary enterprise-level software, hardware and specific proprietary components such as our iSight Back Office tool (“iSight”) and the iBridge Framework that has developed, evolved and hardened over a period of 17 years. GameSTACK is a comprehensive platform providing our customers with account set up, customer services facilitation, comprehensive player marketing tools, and the ability to deliver converged gambling across land-based retail casinos and the Internet. GameSTACK supports both real money and social casino offerings through a common code base and user interface, providing our SIM customers a path to rapid market entry into real money gambling. Our operators’ players also experience a consistent user experience throughout the evolution to permitted real money gambling. While SIM implementations of GameSTACK generate revenue for our customers, the SIM application is predominantly employed as a marketing platform by operators in anticipation of rolling out an RMiG offering.

GameSTACK provides operators with a range of day-to-day back-office management tools along with integration application program interfaces for third-party casino management systems. With the iSight management tool, our casino operators have complete control over their content selection, player communications, website layout, process automation and real-time analytics.

Our proprietary iBridge Framework is a core feature of our platform, enabling operators to engage online players with innovative loyalty offers. iBridge provides our operator customers the ability to automatically verify whether a new online player is part of an existing offline loyalty database. iBridge allows operators to unite in-casino complimentary items and services, loyalty points and other offers with online play. This enables casino operators to engage their customers online, reinforcing brand loyalty, as well as encouraging online players to visit retail properties. Our platform integrates with a variety of third-party casino management systems, eliminating the need for operators to create and maintain two disparate databases as their online businesses ~~grow in scale.~~grows.

Because we are the trusted custodian of our customers’ end user players’ aggregated and anonymized transactional data originated and stored within our platform, we have direct visibility into a players’ activity and can predict which characteristics will contribute to a player becoming amongst the highest-value players of our customers over time. This helps our customers to direct their retention marketing investments to specific player profiles. Over the course of our history, we have accumulated large data sets from which we have extracted substantial analytical insights for the benefit of our customers, who rely on our reporting and analytics capabilities to help them to optimize their marketing spend as well as to maximize the value of their loyalty programs.

Our RMiG instances of GameSTACK incorporate comprehensive player registration, account funding and back-office accounting and management tools that enable our casino operator customers to efficiently, confidently and effectively extend their presence online. For the individual players, our software enables them to create a regulatory-compliant iGaming account online, to have their credentials properly validated in order to activate their account, to deposit money into their account and proceed to gamble that money on any content we publish on the relevant casino operator’s website or mobile app. Content might comprise a casino game such as roulette, blackjack or a casino slot machine game. Content might also comprise a myriad of sporting events on which the diverse outcomes can be wagered on.

We ~~have optimized GameSTACK~~develop custom games for use on our RMiG and ~~in particular U.S. Internet casino~~SIM platforms. Additionally, we provide platform development services, which consist of initial deployment of gaming ~~with geolocation tracking, Know-Your-Customer processes~~hosting facilities and ~~a market-leading U.S. payments platform. Payment aggregation~~ongoing development services ~~within GameSTACK integrate with a wide range of third-party payment processors while simultaneously allowing our casino operators~~ to ~~accept cash deposits onsite within their retail casino properties, which are credited~~provide updates to the ~~players’ online account.~~software for enhanced functionality or customization.

Our RMiG instances of GameSTACK augment our SIM product to further incorporate more comprehensive player registration, account funding and back-office accounting and management tools. In the United States, real money iGaming applications must comply with the Unlawful Internet Gambling Enforcement Act of 2006 and with the federal Wire Act of 1961. Consequently, our RMiG customers must physically deploy our platform within their state’s borders, typically inside their retail casino premises in order to comply with intrastate regulatory mandates. Our customers generally procure the hardware computing resources on which our software is deployed inside of our customers’ data centers. Payment aggregation services within GameSTACK integrate with a wide range of third-party payment processors while simultaneously allowing operators to accept cash deposits onsite within their retail casino properties, which are credited to the players’ online account.Customer Support Services

Our B2B SIM solution is custom-designed for U.S. casino operators seeking to bring their retail brand online and create a new Internet gaming experience delivered as an amenity to their players and leveraging their on-property rewards program.

For SIM implementations, we design the casino operator’s mobile application and website with a branded experience that is consistent with the casino operator’s brand and market positioning. Our iSight technology provides management tools and streamlines player registration and account funding. We generally host our customers’ SIM operations on a combination of proprietary and cloud servers. GameSTACK features a gaming content engine that serves both internally developed slot and table games as well as third-party gaming content via a technical ‘abstraction layer’ that permits third party games to be published to end user players via GameSTACK. SIM deployments of GameSTACK allow casino operators to put their offers, games and unique brand experience in their players’ hands around the clock. GameSTACK incorporates our proprietary iSight technology, which captures online player activity, giving marketers the equivalent visibility of 100% rated play.

In September 2020, we substantially augmented the SIM deployment by adding a ‘simulated sports betting’ capability, launched on PlayJACK.com for JACK Entertainment, a leading casino operator in Ohio. With real money regulated Internet sports betting anticipated in 2021, this added product experience of sports betting, offered alongside simulated Internet casino gaming, has enabled JACK Entertainment to engage with sports betting enthusiasts online in Ohio substantially in advance of real money Internet sports betting being made available. Simulated sports betting is relevant to all clients of SIM and will be rolled-out to additional clients in 2021 and beyond, as a demonstrable vehicle for acquiring sports betting enthusiasts’ online information substantially in advance of regulation of real money Internet sports betting.

For online sports betting applications, we integrate our RMiG version of GameSTACK with third-party services such as sports betting engines and the sportsbook operator’s user interface and user experience. To date, we have integrated sports betting engines for customers at their request, including IGT Sports, Kambi and Amelco. The revenue from these services is recorded as part of RMiG revenue share.

Following our announced acquisition of Coolbet, a technical integration between the sports betting engine of Coolbet and GameSTACK was commenced, with a view to offering Coolbet’s sports betting engine, at customer request, as an alternate to the existing engines already integrated by us. This new sports betting engine product offering will be made available to all existing customers operating Internet sports betting in existing operational states, as well as future states into which existing customers seek to expand.

We provide a range of term-based operational services to support our customers’ online gaming activities. Our premier offering is a full turnkey combination of marketing services and customer support services. Our managed services teams provide user acquisition, customer retention management, and customer functions for our operator customers to help them in acquiring and retaining ~~players (“Managed Services”). The Managed Services we provide~~players. These services are designed to fast-track deployments and provide ongoing operational support following commercial launch for our customers. We ~~sell~~offer marketing and customer services to our casino operator customers to support their deployment of our ~~RMG~~RMiG and SIM solutions. ~~Customer and marketing service revenues are typically in the form of a per month charge, which we recognize over the time during which the services are provided.~~ Our tailored ~~managed~~customer support services include player customer support across email, phone and live chat, marketing agency services and network management with 24/7 uptime guarantee. ~~We also provide custom game theme development services in select engagements where customers seek to differentiate with gaming content unique to a customer’s branded experience.~~

Since our acquisition of Coolbet in January 2021, we ~~operate~~have operated the B2C gaming site www.coolbet.com, which ~~currently~~predominantly operates in ~~selected~~select Northern Europe ~~Latin America~~ and ~~North~~Latin America markets. The site offers sports betting, poker, casino, live casino and virtual sports. Coolbet.com is built on proprietary software, including a proprietary sportsbook engine and risk management tools, enabling ~~Coolbet~~us to offer a highly differentiated entertainment experience when compared to other B2C ~~vendors~~gaming sites who rely on third-party technology stacks. Because ~~Coolbet~~we predominantly ~~relies~~rely on in-house technology, ~~Coolbet~~we can rapidly enter new international markets with deeply local and ~~tailormade~~tailor made content. ~~Coolbet~~Our B2C product offerings include:

We manage an award-winning online sportsbook allowing customers to place various types of ~~bets~~wagers on the outcome of sporting events around the world. ~~Coolbet operates~~We operate as the bookmaker and ~~offers various multiple odds-scenarios-based~~offer a large variety of betting types in a given ~~match,~~event, including both pre-match and in-play (placed after a sports event has begun) betting types. ~~Coolbet offers~~We offer all major sports including soccer, basketball, baseball, American football, ice hockey and tennis, as well as ~~across smaller sports and~~ emerging sports such as ~~eSports.~~eSports and smaller sports. Coolbet’s proprietary sportsbook features specialist odds compiled by ~~their~~ in-house product experts, which leads to more attractive odds and offers on local sports events and a ~~better~~higher value proposition for customers.

We offer thousands of digital and live dealer casino games provided by recognized game content creators, integrated into our proprietary technology. The casino product features many proprietary features and functionalities driving customer engagement. Live Casino, ~~via~~through its digital online casino offering in selected markets, ~~allowing~~allows customers to place ~~bets~~wagers and play games ~~virtually at retail casinos via~~through a real-time streaming video solution. ~~Coolbet~~Coolbet.com offers customers a catalog of over ~~1,600~~2,700 third-party iGaming titles across skill-based games such as Poker ~~and Blackjack,~~ and chance-based games, such as digital slot machines and table games such as Blackjack and Roulette.

Poker allows registered customers to play poker against each other in cash games and tournaments directly on ~~Coolbet’s online poker network~~the website www.coolbet.com in real-time.

In August 2020, we soft-launched a new product offering branded Super RGS. This product delivers our market-leading portfolio of casino games, which includes both third-party casino games developed inherently within our platform as well as aggregated content from multiple remote gaming server providers. Super RGS is significant because it creates a technical and commercial vehicle for us to deliver our proprietary casino content across the entirety of the relevant U.S. intrastate markets, and not just to the websites and mobile applications operating on our own GameSTACK. Super RGS includes our content library of over 1,000 casino games, is currently available in New Jersey, Pennsylvania, and Michigan.

Supporting our existing B2B customers as they continue to scale up their respective iGaming and online sportsbook and retail gaming operations. Gross Operator Revenue generated on our ~~technology~~ platform in ~~2020~~2021 increased by ~~73%~~69% to $921.1 million in 2021, up from $545.2 million in ~~2020, up from $315.8 million in 2019.~~2020. As our customers’ online businesses continue to grow, we intend to deploy the necessary additional internal resources to support their ~~evolving~~omnichannel requirements. We will, for instance, continue to invest in ~~the~~our GameSTACK platform’s functionality by expanding ~~our~~the gaming content library and third-party integrations, and will move expeditiously to obtain regulatory approvals to operate in new ~~states our existing customers do not yet operate in.~~U.S. states. In 2022, we anticipate introducing two new B2B product offerings in GAN Sports, which will allow us to compete as a full enterprise solution. Furthermore, we will continue to engage our SIM installed base in pursuit of opportunities to upgrade these customers to RMiG customers as the regulatory environment develops.

Continue to grow our B2C revenues. Coolbet’s revenue was $78.6 million in 2021. We intend to further augment this growth by increasing market share in our existing markets through increased brand building and marketing efficiencies while continuing to add: (i) new and increasingly popular wagering options, (ii) more localized sporting event content in our existing jurisdictions, and (iii) innovative and popular games in our casino library.

Securing new B2B casino operator customers in existing and new regulated markets. We continuously engage with new casino operators, whether in existing U.S. states or U.S. states that have yet to adopt regulated forms of RMiG and online sports betting. We intend to engage these new customers with the relevant opportunities within our enterprise solution, currently our Super RGS or SIM ~~offering,~~offerings, creating a path to RMiG deployments over time. In U.S. states with regulated online ~~gambling~~wagering markets, we are investing in sales and marketing initiatives to aggressively pursue new deployment opportunities, including the Super RGS content offering. This offering creates a technical and commercial vehicle for us to deliver our proprietary casino ~~content~~games across the entirety of the relevant U.S. intrastate markets, and not just to the websites and mobile applications of GameSTACK ~~clients. When successfully commercialized, we~~customers. We believe that the Super RGS will ~~develop~~generate additional Gross Operator Revenue ~~as well as generate~~and yield high margin content licensing revenues.

~~Expanding our gaming content development capabilities.~~ In addition to distributing online facsimiles of third-party physical machine-based slots and table games via GameSTACK, we publish proprietary casino games that we display in both our SIM and RMiG online environments. We will invest in our gaming development capabilities in order to expand our library of high-quality, in-house content, which we will strategically serve within GameSTACK to optimize our margin profile.

Growing our international business. In addition to our focus on the U.S. market, ~~through B2B opportunities,~~ we intend to expand primarily in regulated markets ~~primarily~~ in ~~Europe,~~Canada and Latin America ~~and Australia~~ through both B2B and B2C opportunities. The acquisition of Coolbet in January 2021, which has ~~been operating~~operated a B2C model at scale primarily in Northern Europe and Latin America, provides us with a fast-growing international strategy incremental to our existing international market activity. We currently provide our GameSTACK platform and services in relation to RMiG in Italy, which comprised 15% of total revenues for the year ended December 31, 2020. During the year ended December 31, 2020 our RMiG business in Italy grew revenues 13% when compared to 2019. We expect our Italian business to continue to grow as we onboard additional operators and expand through our revenue share agreements with our existing operators. We also deliver SIM to an operator in Australia as a precursor to potential legalization of Australian RMiG.presence. Additionally, we are exploring ~~selected~~select Latin American ~~regulated~~ markets for potential expansion. With the addition of ~~Coolbet’s Nordic~~European, Latin American and ~~Latin American~~Canadian B2C activities, we expect to continue to grow our international business.

Expanding our gaming content development capabilities. In addition to distributing online third-party content, consisting of slot machines and table games, through GameSTACK, we offer proprietary casino games that we display in both our SIM and RMiG online environments. We will continue to invest in our development of game content in order to expand our library of high-quality, in-house content, which will strategically fit within GameSTACK. The acquisition of Silverback Gaming in December 2021 will bolster our Super RGS offering in the coming months and years with an exclusive portfolio of online casino gaming experiences, which the Company expects will include 50 unique new games in the next three years. Silverback Gaming’s existing portfolio of online games recently launched within our Super RGS content suite in Europe, and will launch in the U.S. commencing in the first half of 2022.

Integration of Coolbet. We continue to expect that our combination with Coolbet should drive significant value for our customers and our shareholders. We believe that the integration of our GameSTACK and Coolbet platforms should be done efficiently, and that the combination should result in one of the most comprehensive, best-in-class product offerings in the iGaming space. We are now in the position to offer to U.S. customers an omnichannel enterprise solution, enabling iGaming and sports betting in retail and online channels. This combination of platforms should also result in a diversification of revenue streams, customer bases and markets. We intend to continue to operate in the United States solely as a B2B provider to casino operators. The addition of a proprietary sports betting engine will give us the ability to offer a “one-stop” solution to our U.S. retail casino operators, while at the same time preserving the flexibility to incorporate third-party solutions when specified.

Executing a selective merger &and acquisition and commercial licensing strategy. We intend to pursue a prudent inorganic growth strategy aimed at strengthening and expanding our competitive position in the markets where we compete. ~~The Coolbet acquisition should substantially complete our~~Our U.S. B2B ~~offering.~~product offerings will be complete following the integration of Coolbet’s sportsbook into the B2B platform. However, we will continue to pursue opportunities to acquire selective elements of the ~~iGaming~~industrial ecosystem as well as a myriad of content ~~assets~~ to bolster our product offerings, both through commercial licensing as well as through acquisition.

~~Integration with Coolbet.~~ We expect that the combination with Coolbet will drive significant value for our customers and our shareholders. We believe that the integration of our GameSTACK and Coolbet platforms will be done efficiently, and that the combination will result in one of the most comprehensive, best-in-class product offerings in the iGaming space. We anticipate being able to offer U.S. customers a fully integrated iGaming and sports betting offering in the second half of 2021 without material integration costs in excess of current resources. The combination would also result in a diversification of revenue streams, customer bases and markets for the combined company. For the year ended December 31, 2020, we generated 83% of its revenues from its B2B business in the United States, with additional revenues coming primarily from Italy, the United Kingdom and Australia. During the same period, Coolbet’s revenues were generated primarily in Northern Europe (Estonia, Finland, Iceland, Norway and Sweden), Latin America (Chile and Peru) and Canada. We intend to continue to operate in the United States solely as a B2B provider to casino and other operators. The addition of a proprietary sports betting engine would give us the ability to offer a “one-stop” solution to our U.S. retail casino operators, while at the same time preserving the flexibility to incorporate third-party solutions when specified.Competition

We operate in a global and dynamic market and compete with a variety of organizations that offer services similar to those that we offer. WeOur B2B operations face competition primarily from: ~~(1)~~(i) online casino operators that provide competing content direct to consumers; ~~(2)~~(ii) retail casino operators that develop their own proprietary online gaming capabilities; and ~~(3)~~(iii) other similar existing or developing technology providers that develop competing platforms.

We believe the principal competitive factors in our ~~business~~B2B operations include rapid deployment, ease of integration with existing and future content and gaming, ease of user registration and conversion, regulatory compliance, data security, back office management systems, reliability, and platform extensibility.

Our B2C operations compete against a variety of online sportsbook and casino operators, which range from large international organizations with greater advertising and marketing resources to local players that provide specific opportunities in local markets.

We believe the principal competitive factors in our B2C operations include the overall customer mobile and online experience, better and more reliable oddsmaking, ease of use and our customer service.

Our principal B2B customers are retail casino operators who require a ~~regulatorily~~regulatory compliant and complete technology solution provider for setting up, launching and operating an ~~Internet gambling~~internet gaming business to drive incremental and complementary revenues to their existing retail gaming business.

When a U.S. casino needs to move online, there is a small group of potential technology vendors available to serve their needs, and an even smaller subset of companies which are ~~B2B only~~B2B-only business and fully licensed for U.S. ~~Internet gambling.~~internet gaming. We believe we are one of the few companies whose operational know-how and proven track record of excellence represent a substantial competitive advantage together with our strategic U.S. patent governing the important linkage of an iGaming account with a land-based casino rewards account.

The GAN family of casino operator customers represents leading U.S. ~~gambling~~gaming groups, both online and retail. Our customer base is comprised of casino operators, which contract with us for our ability to deliver RMiG and social casino gaming as well as provide dedicated services ~~pre-and~~pre and post-product launch. These casino operators span over 100 retail locations. Today, the GAN family of casino operator customers operate tens of thousands of slot machine units on their casino gaming floors and possess millions of dedicated loyalty club card holding players within their loyalty program databases.

In addition to customer relationships with retail casino operators, we have assembled a wide range of relationships with casino equipment manufacturers seeking to bring their machine-based casino slot games online and distribute them into permitted U.S. markets and into selected regulated markets internationally.

For sports betting content, we proactively integrated three third-party sports betting systems into our platform. We remain capable of integrating any third-party sports betting system nominated by an existing or future customer, in order to publish sports betting content alongside gaming content on our customers’ operating websites and mobile applications. Beyond content, we have brought together ~~world-leading~~leading service providers spanning payment processing, pre-paid card services, age and identity verification, ~~geo-location,~~geolocation, and fraud detection.

~~During~~For the year ended December 31, ~~2020,~~2021, one of our customers, FanDuel, accounted for ~~more than 10%~~14.8% of our ~~revenues (42.6%).~~total revenue. Beginning in 2013, we partnered with FanDuel’s majority shareholder, Flutter Entertainment plc (formerly known as PaddyPower Betfair plc), to support FanDuel’s rapid deployment of online sports betting sites in selected states ~~having~~that had legalized single-game sports betting. Under ~~the~~our current commercial agreements, we ~~license~~provide access to the GameSTACK platform and provide development and ~~operational~~ support services ~~in exchange for a percentage of Internet gambling revenues and fees for development and other services.~~to FanDuel.

~~FanDuel’s~~Our agreement with usFanDuel provides that FanDuel, upon notice and payment of certain fees, can migrate user accounts ~~away~~ from our digital wallet technology to its own proprietary solution. ~~In the nine months ended September 30, 2020,~~ FanDuel exercised ~~this~~its option in 2020 and migrated its New Jersey, Pennsylvania and Indiana wallets from ~~our digital wallet technology~~us to its own proprietary solution. We stopped ~~receiving~~generating revenue ~~share with respect to~~from FanDuel’s sports betting operations on August 31, 2020. ~~The right of migration does not affect~~We continue to generate revenue from FanDuel’s RMiG operations.

Additionally, our ~~revenue share generated from RMiG operations with FanDuel.~~

~~Our~~ agreement with FanDuel provides that we ~~will be~~are the exclusive provider of their casino gaming operations for the initial three years following a launch ~~date.~~date, which exclusivity period will end in January 2023. Following that exclusivity period, FanDuel will have the right to use other casino gaming solutions, subject to a requirement to pay us revenue ~~shares of~~calculated as a ~~minimum~~certain percentage of their net gaming revenue from RMiG operations. Upon the expiration of exclusivity, we could experience a significant decline in our revenue. We currently support FanDuel’s RMiG casino operations in the U.S. states of Pennsylvania, New Jersey, Michigan, West Virginia and ~~Michigan. The~~Connecticut. Our current contract with FanDuel expires in January 2025.

Additionally, ~~Coolbet operates~~beginning January 2021, we operate a B2C casino and ~~sports-betting~~sports betting platform that is accessible for ~~legal gambling via its~~wagering through the website ~~Coolbet.com~~www.coolbet.com in ~~eight national~~ markets across Northern Europe, ~~(Estonia, Finland, Iceland, Norway and Sweden),~~ Latin America ~~(Chile~~ and ~~Peru) and North America (Canada).~~Canada. Coolbet.com originally launched May 2016 and as of January 1, ~~2021,~~2022, had over ~~375,000~~790,000 registered customers. The majority of ~~Coolbet’s~~website traffic comes from mobile customers and each region features customized interfaces with localized product offerings and local language support teams.

Our online sports betting operations experience seasonality based on the relative popularity of certain sporting events, in particular with respect to local and international football seasons and high-profile international and regional tournaments. This seasonality could be exacerbated by cancellation of sporting events due to the COVID-19 pandemic or other adverse health events but can also provide increased volume during high-volume events such as the World Cup.

We rely on a combination of patent, copyright, trademark and trade secret laws in the United States and other jurisdictions, as well as license agreements and other contractual protections, to protect our proprietary technology. We also rely on a number of registered and unregistered trademarks to protect our brand.

As of December 31, ~~2020,~~2021, we had one registered patent in the United States and two registered trademarks in the United Kingdom relating to our ~~owned~~proprietary technology. We hold a U.S. patent, which expires in 2034, that covers the integration of a retail casino’s on-property rewards and loyalty program with an ~~Internet gambling~~internet wagering experience, whether offered for real money or virtual-based social casino gaming. Because of the tendency for non-licensed states to implement social casino gaming as an alternative or precursor to RMiG, and our ability to legitimately and comprehensively integrate the unique ability to connect existing retail rewards program with an online gaming ~~and gambling~~ experience, we believe that our intellectual property provides a key competitive advantage.

We seek to protect our intellectual property rights by implementing a policy that requires our employees and independent contractors involved in development of intellectual property to enter into agreements acknowledging that all intellectual property generated or conceived by them on our behalf are our property, and assigning to us any rights that they may claim or otherwise have in those works or property, to the extent allowable under applicable law. Despite our efforts to protect our technology and proprietary rights through intellectual property registrations, licenses and contractual protections, unauthorized parties may still copy or otherwise obtain and use our software and technology. We may also face allegations in the future that we have infringed the intellectual property rights of third parties, including our competitors and non-practicing entities.

We are subject to various U.S. and foreign laws and regulations that affect our ability to operate in the gaming and entertainment industry, in particular in the online gaming industry. These industries are generally subject to extensive and evolving regulations that could change based on political and social norms and that could be interpreted or enforced in ways that could negatively impact our business. Regulatory agencies in each of our operating markets continue to examine a wide variety of issues impacting the iGaming and sports betting industries, and consequently the laws and regulations governing our business could be modified or could be interpreted differently in the future, or new laws and regulations could be enacted. Material changes, new laws or regulations, or material differences in interpretations by courts or governmental authorities could cause us to incur substantial additional compliance costs and adversely affect our operating results. The ~~gaming industry~~primary means of enforcement of such regulations is ~~highly regulated, and we must secure licenses to conduct our gaming operations. We~~through regulatory licenses.

Our B2B operations are licensed and regulated by the United Kingdom (“U.K.”) Gambling Commission, the ~~Alderney Gambling Control~~Amministrazione autonoma dei monopoli di Stato (Autonomous Administration of State Monopolies) in Italy, the Alcohol and Gaming Commission of Ontario in Canada, the New Jersey Division of Gaming Enforcement, the Pennsylvania Gaming Control Board, the Indiana Gaming Commission, the West Virginia Lottery, the Michigan Gaming Control Board, the Tennessee Education Lottery Corporation, ~~and~~ the Colorado Department of Revenue Division of ~~Gaming.~~ Gaming, and the Arizona Department of Gaming, the Connecticut Department of Consumer Protection — Gaming Division. Entry into new geographies will require us to engage with additional regulatory authorities.

Our ~~software is also certified by the Amministrazione autonoma dei monopoli di Stato (Autonomous Administration of State Monopolies) in Italy, we~~B2C operations are also approved by GambleAware, which is a leading U.K. charity advising and assisting those with a gambling problem. All of our games are certified and tested by the New Jersey Division of Gaming Enforcement’s technical testing laboratory and/or Gaming Laboratories International, which is a leading industry provider for online gaming testing and certification.

~~Coolbet holds~~required to hold licenses in several jurisdictions. We hold gaming licenses in Estonia, Malta, Sweden, and ~~Sweden. Coolbet’s~~Ontario, Canada. Our B2C sportsbook technology and technical platform is certified by an accredited ~~third party~~third-party according to the licensing requirements of the regulatory authorities of Estonia, Malta and Sweden. ~~Coolbet~~We also ~~has~~have customers in jurisdictions that ~~are~~ currently ~~unregulated, including Norway, Finland, Iceland, Chile, Canada and Peru.~~do not have a local licensing scheme. A number of these jurisdictions are evaluating the adoption of ~~regulations~~a local licensing scheme for the online sports betting and gaming operations that ~~Coolbet~~we currently ~~offers.~~offer. If regulations requiring licensure are adopted in those jurisdictions, ~~Coolbet intends~~we intend to apply for licensing, but we cannot be assured that itwe will receive licenses in each instance or that changes in regulation will not adversely impact ~~its~~our business.

We are required to secure licenses to operate in each new jurisdiction where we conduct business and will need to secure additional licenses in order to expand operations to new markets. In newly regulated markets, new licensing regimes may impose licensing conditions, such as the requirement to locate significant technical infrastructure within the relevant territory or establish real-time data interfaces with the regulator that present operational challenges or may stop the licensee from being able to offer the full range of our products.

We Certain jurisdictions require us to hold a distributor license, while in other jurisdictions we need to qualify for a vendor license to supply our ~~products to operators in~~licensed customers. The licensing process can be burdensome and lengthy, depending on the ~~online gaming industry whose~~local jurisdiction and their relative ability to ~~operate in any jurisdiction may be impacted by changes in regulations. Regulatory agencies in each of~~move quickly, which is outside our operating markets continue to examine a wide variety of issues impacting the iGaming and sports betting industries, and consequently the laws and regulations governing our business could be modified or could be interpreted differently in the future, or new laws and regulations could be enacted. Material changes, new laws or regulations, or material differences in interpretations by courts or governmental authorities could causecontrol. Some jurisdictions will allow us to ~~incur substantial additional compliance costs~~operate on a provisional license while the regulators process our applications. Other jurisdictions require full licensure prior to commencing operations. Accordingly, even as new regulated markets emerge, it is difficult to predict how quickly we will be able to derive revenues in such jurisdictions.

In addition to regulations governing gaming, we are also subject to substantial regulations concerning money laundering. We process a number of financial transactions daily and are subject to a number of financial regulations, including anti-money laundering laws and regulations in the United States and other jurisdictions. We are required to conduct due diligence on our customers and report certain suspicious activity where we know, suspect or have reason to suspect that transactions involve, among other things, funds from illegal activity or are intended to evade federal regulations or avoid reporting requirements or have no business or lawful purpose. We occasionally experience attempts to conduct fraudulent activity on customer accounts, including deposits from stolen credit cards and debit cards.

As part of our operations, we establish player accounts and receive personal and financial information. Accordingly, our operations are subject to privacy and data protection regulation in the United States, the U.K., the European Union, Asia Pacific, and elsewhere. These laws are rapidly developing and changing. The European Union adopted a comprehensive General Data Protection Regulation (“GDPR”), which came into effect in May 2018, as supplemented by any national laws (such as ~~in the U.K.,~~ the Data Protection Act ~~2018)~~2018 in the U.K.) and further implemented through binding guidance from the European Data Protection Board. In the United States, several states have adopted revised legislation to expand data breach notification rules and to mirror some of the protections provided by the GDPR. Some states, including California, have adopted data protection legislation that requires companies to make significant changes in their data processing operations.

We have developed and implemented an internal compliance program designed to ensure that we comply with legal and regulatory requirements imposed on us in connection with our gaming operations. Our internal compliance program focuses, among other things, on ensuring we comply with applicable licensing requirements and local gaming regulations. In addition, we plan to introduce a dedicated data protection officer and compliance officer to strengthen the overall compliance capabilities of the organization.

Additionally, we use various methods and tools across our operations such as geolocation blocking, which restricts access based on a user’s geographical location determined through a series of data points such as mobile devices and Wi-Fi networks; age verification to ensure our users are of a certain age to participate; routine monitoring of user activity; and risk-based user due diligence to ensure player funds are legitimately derived. We have a zero-tolerance approach to money laundering, terrorist financing, fraud and collusion. All of our games and platforms are certified and tested by various private accreditation organizations, such as, the New Jersey Division of Gaming Enforcement’s technical testing laboratory and the Gaming Laboratories International, which is a leading industry provider for online gaming testing and certification.

While we are firmly committed to full compliance with all applicable laws and have developed appropriate policies and procedures to comply with the requirements of the evolving regulatory regimes, we cannot provide assurance that our compliance program will prevent all violations of applicable laws or regulations, or that a violation by us or our personnel will not result in a monetary fine or suspension or revocation of one or more of our licenses.

We maintain an open, honest and responsible approach towards our stakeholders, which include our employees, suppliers, customers, investors and the wider community. As both a B2B provider of games of skill and chance in regulated ~~intra-state Internet gambling~~intrastate internet gaming markets, we have placed our responsible ~~gambling~~gaming policies and tools at the core of our vision to provide industry-leading entertainment in a socially responsible fashion. Our GameSTACK software platform has a myriad of features for detection and prevention of problem gambling as well as offering tools to end user players to limit their ~~gambling~~gaming activities online, in compliance with the challenging technical requirements of ~~New Jersey, Pennsylvania and Indiana~~the U.S. states we are licensed in, as well as the ~~United Kingdom~~U.K. and other jurisdictions.

Our platform services enable our casino operators to offer their players an array of tools to control their spending, including deposit limits, wagering value limits, wagering frequency limits, time limits, definable self-exclusion and/or cooling-off periods. This, coupled with sophisticated reporting and analytics, allows operators to identify potentially compulsive behavior and take the required action to ensure the protection of any vulnerable players in line with their operating requirements in the relevant ~~intra-state gambling~~intrastate gaming market. Our teams are extensively trained in the area of responsible ~~gambling,~~gaming, to assist end user players displaying signs of gambling addiction and guide them in the correct direction to seek assistance. We also, in conjunction with our customers and third-party service partners, provide robust age verification processes to ensure that no minors can access the ~~gambling~~gaming opportunities provided on our customer’s websites.

We are committed to investing in our employees while nurturing an innovative and vibrant work environment. Our leadership team actively works to attract, develop, and retain talent from a range of backgrounds and experiences in order to benefit from diverse perspectives. ~~The Company and its employees are committed to helping our communities thrive through charity activities throughout the year.~~

~~Approximately 74%~~As of ~~our~~December 31, 2021, we had 682 total employees, ~~at year-end 2020~~of which approximately 82% of these employees were located outside the United States. The majority of our employees are working within the operations function, which includes the majority of the technical and product employees. The charts below show our global employee population by region and operational function.

Attracting, developing and retaining a pool of diverse and highly skilled talent is critical to our ability to continue achieving sustainable growth. As we continue to ~~buildout~~build out the Human Capital function, learning and development will be created to provide ongoing support and resources to our teams worldwide to ensure that the skills of our employees evolve with our business needs, industry trends, and human capital management best practices. Additionally, the Human Capital function is working on tools and ~~processed~~processes to enable increased productivity, peak performance, and career growth.

A diverse global workforce and an equality, inclusive, and belonging culture is our commitment to the current and future employees. We are committed to promote diversity and inclusion in all our policies, practices, and actions such as hiring, purchasing, and general business practices. We seek to establish an environment of respect and understanding in the workplace and a culture that values and reflects the diverse components of our employees and the communities in which we operate. We also work to ensure that a welcoming and professional environment is maintained in the workplace for all of our employees.

With our recent growth and success, we ~~have moved forward with~~continue to update our ~~updated~~ compensation philosophy to offer market-based, competitive wages and benefits in all markets where we compete for talent. ~~All of our employees were paid above the applicable legal minimum wage at year-end 2020.~~ The pay structure has ~~been changed~~evolved to be positioned around the market median within each market, with variances based on knowledge, skills, years of experience, and performance. We regularly evaluate pay equity, expanding our review ~~in 2020~~ to include race/ethnicity in addition to ~~gender, and we make adjustments to compensation where needed.~~gender.

In addition to base wages, our compensation and benefit programs, which vary by country, include short-term incentives, long-term incentives (e.g., cash and share-based awards), employee savings plans with ~~company match,~~providers for Company matching, healthcare and insurance benefits (in the United States), health savings spending accounts with ~~company match~~providers for Company matching (in the United States), ~~generous~~ paid time off, leave options, flexible work arrangements, and employee assistance programs.

Furthermore, we ~~kicked off a wellness program~~implemented tools and programs to support our employees through the COVID-19 pandemic. ~~The program included highlighting support for~~These offerings focus on supporting mental wellness, intellectual wellness, physical wellness, and social wellness through activities, blogs, and training. In particular, we instituted a day of wellness, where employees worldwide may choose a day to focus on their physical and mental well-being. All employees are also provided with a free subscription to the Calm app, which provides assistance with finding ways to de-stress. We ~~have created moving challenges~~further provide a monthly reimbursement for fitness related expenses, and in 2022 we anticipate expanding this benefit to get our employees up and active by walking, running, and/or biking 100 miles in a month. The moving challenges also includes a charity component in that GAN pledges $0.50 per mile to Souls4Soles charity.include wellness related expenses.

We also respect our employees’ needs for flexibility and balance between work and life. We support a flexible working model where employees may work from the office or from home. Recently, we implemented a reimbursement policy for work related expenses, which provides employees an allowance to purchase office equipment when working from home.

AsWhen the COVID-19 pandemic occurred, we ~~work hard~~worked to ensure all our offices were following the strict protocols of local, federal, country-specific, and global requirements. We quickly closed all our offices and ~~moved the~~required our entire workforce to work ~~from home~~remotely for the majority of 2020. The health and safety of our employees is the upmost importance now and in the future. Throughout 2020, we ~~kept our eye on~~continued to review the safety protocols to determine when it ~~was~~would be safe to reopen our ~~office spaces. And once~~offices. We eventually reopened ~~we continued~~our offices in 2021. We continue to be diligent in our safety protocols as well as re-closing the offices, when necessary, when it was no longer safe to ~~stay~~remain open. We maintain open lines of communication with employees on safety procedures when working in our offices.

With the majority of 2020 forcing closures and stay at home orders, it was important for us to find ways to engage and support our employees even when we could no longer be together. We know how important an engaged workforce is to the health of the organization as well as our employee population. Engaged employees provides a more innovative, productive, and satisfied workforce and promotes retention while minimizing employee turnover.

Throughout ~~2020,~~2021, we conducted global employee engagement surveys to ensure our employees had ~~everything~~what they needed to do their job ~~at home, get~~remotely, obtain the support ~~from~~of their teams and management, and receive the communication and guidance they needed from the ~~company,~~Company, as well as ~~take care of~~attend their own ~~wellbeing~~well-being and as the ~~wellbeing~~well-being of those who may be living with them. ~~We received glowing scores from our employees and were able to identify and take action on areas where our employees needed more support and areas noted that were in need of improvement.~~

While employee engagement is the result of many factors, we believe the changes we have implemented in ~~2020~~2021 and plans for the future ~~will~~should help us grow a more engaged workforce. Our goal is to provide an environment where our employees can be the best versions of themselves and have the support they need to deliver extraordinary results for themselves and our ~~company.~~Company.

Our segment and geographic revenue information is described in Note 1316 to the Consolidated Financial Statements in Item 8 of this report.

We are an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We intend to take advantage of all of these exemptions.

In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards, and delay compliance with new or revised accounting standards until those standards are applicable to private companies. We have elected not to take advantage of the benefits of this extended transition period.

We could be an emerging growth company until the last day of the first fiscal year following the fifth anniversary of our first common equity offering, although circumstances could cause us to lose that status earlier if our annual revenues exceed $1.07 billion, if we issue more than $1.0 billion in non-convertible debt in any three-year period, if, at the end of any fiscal year in which the market value of our common stock held by non-affiliates exceeded $700 million as of the end of the second quarter of that fiscal year, or if we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act.

We also qualify as a “smaller reporting company” under Rule 12b-2 of the Exchange Act, which is defined as a company with a public equity float of less than $250 million. To the extent that we remain a smaller reporting company at such time as we are no longer an emerging growth company, we will still have reduced disclosure requirements for our public filings, some of which are similar to those of an emerging growth company, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and the reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.

We make available free of charge (other than an investor’s own ~~Internet~~internet access charges) through our ~~Internet~~internet website (https://www.investors.gan.com) our Annual Report on Form 10-K and other reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (“SEC”). We are not including the information contained on our website as part of or incorporating it by reference into, this Annual Report on Form 10-K. In addition, the SEC maintains an ~~Internet~~internet site, sec.gov, that includes filings of and information about issuers that file electronically with the SEC.

You should carefully consider the risks and information below. We describe below risks that we currently believe are the material risks in connection with our operations. These are not the only risks we face; we are subject to risks that are currently unknown to us, or that we may currently believe are remote or immaterial. If any of these risks or events occurs, our business, financial condition and operating results could be harmed.

The summary risk factors described above should be read together with the text of the full risk factors below and the other information set forth in this Annual Report on Form 10-K, including our consolidated financial statements and the related notes, as well as in other documents that we file with the SEC. If any such risks and uncertainties actually occur, our business, prospects, financial condition and results of operations could be materially and adversely affected. The risks summarized above, or described in full below, are not the only risks that we face. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial may also materially adversely affect our business, prospects, financial condition and results of operations.

We have incurred net losses in the past with negative cash flows and may not be able to generate and sustain profitability.

Since our inception, we have typically operated at a loss. At December 31, ~~2020~~2021 we had an accumulated deficit of ~~$45.8~~$76.4 million. ~~The year~~We incurred a net loss of $30.6 million and $20.2 million for the years ended December 31, ~~2019 was the first time in recent years that our revenues were sufficient to meet our operating expenses,~~2021 and 2020, respectively, although we generated net income of $2.0 ~~million. For~~million for the year ended December 31, ~~2020, we incurred a net loss of $20.2 million.~~

A significant portion of our operating expenses are fixed. We anticipate, due to increased administrative expenses associated with our US listing and related regulations, as well as increased expenses associated with our recent acquisition of Coolbet in January 2021, that we will again operate at a loss.2019. Additional losses would impair our liquidity and may require us to raise additional capital or to curtail certain of our operations in an effort to preserve capital. Incurring additional losses could also erode investor confidence in our ability to manage our business effectively and result in a decline in the price of our ordinary shares.

We operate in a rapidly evolving industry and if we fail to successfully develop, market or sell new products or adopt new technology platforms, it could materially adversely affect our results of operations and financial condition.

Our GameSTACK platform and other software products compete in a market characterized by rapid technological advances, evolving standards in software technology and frequent new product introductions and enhancements that may render existing products and services obsolete. Competitors and operators are continuously upgrading their product offerings with new features, functions and gaming content. In addition, we continuously refine our software and technology platform to address regulatory changes in the markets in which we operate or plan to operate. In order to remain competitive, we will need to continuously modify and enhance our technology platform and service offerings.

We cannot assure you that we will be able to respond to rapid technological changes in our industry. In addition, the introduction of new products or updated versions of existing products has inherent risks, including, but not limited to, risks concerning:

Because we commit substantial resources to developing new software products and services, if the markets for these new products or services do not develop as anticipated, or demand for our products and services in these markets does not materialize or materializes later than we expect, we will have expended substantial resources and capital without realizing sufficient offsetting or resulting revenue, and our business and operating results could be materially adversely affected. Developing, enhancing and localizing software is expensive, and the investment in product development may involve a long payback cycle. Our future plans include significant additional investments in development of our software and other intellectual property. We believe that we must continue to dedicate a significant amount of resources to our development efforts to maintain our competitive position. However, we may not receive significant revenue from these investments for several years, if at all. In addition, as we or our competitors introduce new or enhanced products, the demand for our products, particularly older versions of our products may decline.

The online gaming industry is highly competitive, and if we fail to compete effectively, we could experience price reductions, reduced margins or loss of market share.

The online gaming industry is highly competitive. A number of companies offer products that are similar to our products and target the same markets as we do. Certain of our current and potential competitors have longer operating histories, significantly greater financial, technical and marketing resources, greater name recognition, broader or more integrated product offerings, larger technical staffs and a larger installed customer base than we do. These competitors may be able to respond more quickly to new or emerging technologies and changes in customer requirements, develop superior products, and devote greater resources to the development, promotion and sale of their products than we can.

Because of the rapid growth of our industry, and the relatively low capital barriers to entry in the software industry, we expect additional competition from other established and emerging companies. Some of our customers are land-based casinos that use our GameSTACK platform for rapid access to the online iGaming and sports betting markets. As these customers become more experienced or successful they may look to develop their own proprietary solutions or may look more aggressively at competing platforms. Additionally, our competitors could combine or merge to become more formidable competitors or may adapt more quickly than we can to new technologies, evolving industry trends and changing customer requirements. If we fail to compete effectively, (a) we could be compelled to reduce prices in order to be competitive, which could reduce margins and profitability, or (b) we would lose market shares any of which could materially adversely affect our strategy, our business, results of operations and financial condition.

Our business operations are subject to substantial variability, which may make it more difficult for us to forecast our financial results, and may negatively impact how investors review our results or prospects.

Our B2B revenues are ~~driven by its~~generated from our SIM and RMiG ~~revenues generated on a B2B basis with~~customers which are casino operators, primarily in the United States. Our business growth is substantially dependent on new customer launches ~~licensing transactions~~in existing markets, and customer launches in new ~~market launches.~~markets. Each of these transactions can have a significant impact both on our ~~revenues~~revenue and expenses. The process for each of these is complex involving sales cycles, licensing requirements, product planning and development and marketing coordination. The success of our efforts to secure a new customer, obtain the necessary licensing and launch in a new market can have a significant impact on our financial position and results of operations. Any failure or delay could cause our ~~revenues~~revenue or operating results to differ substantially from our operating budget, guidance or analysts’ expectations. It could also render period to period analysis of our operating results more difficult, leading to an increased risk of volatility in the trading price ~~for~~of our ~~common stock.~~ordinary shares.

Our B2C revenue is generated primarily from its ~~B2C~~ sportsbook operations in Northern ~~Europe.~~Europe, Latin America and other international markets. Our B2C revenues can vary depending on seasonality of sporting events and our profitability can be affected by event-specific outcomes outside of our control. Following the consummation of the Coolbet acquisition, we have been operating under a new business model, an enhanced technology platform, new product offerings and an expanded base of customers and markets. Accordingly, it may be more difficult for us to forecast our future financial results and there may be an increased risk that our actual results of operations may vary materially from any guidance that we provide. Our more complex business model and offerings may also make it more difficult for analysts to assess our future prospects. Should our future operating results fall below any future guidance that our management may issue or any third-party analyst reports or consensus, it could negatively affect investors’ perceptions, which could decrease demand for our ordinary shares or result in increased volatility in the trading price ~~for~~of our ordinary shares.

Under our revenue ~~shares~~ arrangements, if existing customers do not continue the use of our products or services, our results of operations could be materially adversely affected.

In our ~~RMiG~~B2B segment, we generate ~~revenues~~revenue under contracts with casino operators that contemplate ongoing revenue ~~sharing arrangements.~~arrangements that depend in part on the revenues of casino operators. The success of our business depends on our ability to retain our existing installed base of customers and to increase the scale of gaming and transactions that they run on our platform. We may experience the loss of a customer if the customer determines to close its operations, elects to develop its own online platform, or elects to contract with one of our competitors. In ~~2020, FanDuel provided notice~~addition, casino operators that utilize our Super RGS platform may choose to ~~us that it was deploying its own proprietary digital wallet for its sports gaming business,~~contract directly with content providers. Such events could materially and ~~therefore was migrating away from~~adversely affect our ~~digital wallet technology. Sports gaming revenues from FanDuel ceased on August 31, 2020.~~revenues.

If our customers terminate their ~~license agreements~~contracts with us, we will incur a reduction in ~~revenues~~revenue unless we are able to secure new customers in amounts sufficient to offset the loss. The sales cycle for our platform can be long, and there are no assurances that we will be able to rapidly replace the loss of a significant customer. A substantial portion of our expenses are fixed, and a loss of revenue would have a material adverse impact on our profitability and our financial position.

We have historically relied on a small number of customers for a substantial portion of our ~~revenues.~~revenue.

For the year ended December 31, 2021 and 2020, our largest customer FanDuel accounted for 14.8% and 42.6%, respectively, of our total revenue. ~~For~~While the ~~year ended December 31, 2019,~~acquisition of Coolbet dramatically reduced this percentage on a Company-wide basis, our revenues from FanDuel ~~accounted~~in our B2B segment began to decline with FanDuel’s migration to its own player wallet for ~~46.3%~~its sports gaming business during the third quarter of 2020, and may further decline when our ~~revenue and WinStar accounted for 19.8%~~rights as their exclusive provider of ~~our revenue.~~casino gaming operations ends in January of 2023. Customer concentration in our B2B segment will tend to be more pronounced as we expand our ~~revenues~~revenue from a smaller base.

Our business strategy encompasses securing a diverse customer base including attempting to expand the amount of business with our current customers and expand into new customer accounts as we enter new geographic markets. ~~On January 1,~~While our 2021 ~~we completed the~~ acquisition of Coolbet ~~which will~~ substantially ~~diversify~~diversified our customer ~~base. However,~~base, we operate in a dynamic industry, in which regulatory restrictions and enabling technologies are changing rapidly. As such, certain of our customers may experience more rapid growth than other customers, resulting in a concentration of revenue from time to time in one or a few significant customers.

At any time that we experience significant customer concentration, the loss of a key customer, for any reason, would have a significant impact on our ~~revenues,~~revenue, our ability to fund operating expenses, and our financial position. In addition, the loss of aany material ~~customers~~customer could significantly decrease our market share and harm our reputation, which could affect our ability to grow and take advantage of new markets, access resulting data from such markets, and secure funding to invest into development of new products.

Our ~~Coolbet~~ B2C sports betting ~~operation~~operations exposes us to losses as a result of a failure to determine accurately the odds in relation to any particular event and/or any failure of its sports risk management processes.

~~Coolbet’s~~Our fixed-odds ~~betting products~~wagering contracts involve betting where winnings are paid on the basis of the amount wagered and the odds quoted. ~~Coolbet’s~~Our sports betting operation is designed to set odds at a level that will provide the bookmaker with an average return over a large number of events. However, there can be significant variation in the gross win percentage for a single event or fixed period of time.

~~Coolbet has~~Our systems and controls that seek to reduce the risk of daily losses occurring on a gross-win basis, but there can be no assurance that these will be effective in all situations, and consequently ~~Coolbet’s faces~~we face exposure to risk relating to ~~improperly setting~~its failure to set accurate odds or managing its sports betting risk. ~~Coolbet~~We may experience significant losses with respect to individual events or betting outcomes, in particular if large individual bets are placed on an event or betting outcome or series of events or betting outcomes.

Odds compilers and risk managers are capable of human error, thus even allowing for the fact that a number of betting products are subject to capped pay-outs, significant volatility can occur. In addition, it is possible that there may be such a high volume of trading during any particular period that even automated systems would be unable to address and eradicate all risks. Any significant losses could have a material adverse effect on our business, financial condition and results of operations.

A reduction in discretionary consumer spending, from an economic downturn or disruption of financial markets or other factors, could negatively impact our financial performance.

iGaming and sports betting that we and our customers offer represent discretionary expenditures. Players’ participation in those activities may decline if discretionary consumer spending declines, including during economic downturns, when consumers generally earn less disposable income. Changes in discretionary consumer spending or consumer preferences are driven by factors beyond our control, such as:

During periods of economic contraction, our revenues may decrease while most of our costs remain fixed and some costs even increase, resulting in decreased earnings.

We face the risk that players may attempt or commit fraud or theft or cheat in order to increase winnings. Such risks include stolen credit or charge cards and hacked or stolen customer accounts. Failure to discover such acts or schemes in a timely manner could result in losses in our operations. Negative publicity related to such acts or schemes could have an adverse effect on our reputation, potentially causing a material adverse effect on our business.

We face cyber security risks that could result in damage to our reputation and/or subject us to fines, payment of damages, lawsuits and restrictions on our use of data.

We rely extensively on computer systems to process transactions, maintain information and manage our businesses. In addition, our business involves the collection, storage, processing, and transmission of end users’ personal data, including financial information and information about how they interact with our games and platform. We have built our reputation, in part, on the sophistication and security of our payment and financial processing.

Our information systems and data, including those we maintain with our third-party service providers, may be subject to cyber security breaches in the future. Computer programmers and hackers may be able to penetrate our network security and misappropriate, copy or pirate our confidential information or that of third parties, create system disruptions or cause interruptions or shutdowns of our internal systems and services. Our website may become subject to denial of service attacks, where a website is bombarded with information requests eventually causing the website to overload, resulting in a delay or disruption of service. Computer programmers and hackers also may be able to develop and deploy viruses, worms and other malicious software programs that attack our products or otherwise exploit any security vulnerabilities of our products. Also, there is a growing trend of advanced persistent threats being launched by organized and coordinated groups against corporate networks to breach security for malicious purposes.

Disruptions in the availability of our computer systems, through cyber-attacks or otherwise, could damage our computer or telecommunications systems, impact our ability to service our customers, adversely affect our operations and the results of operations, and have an adverse effect on our reputation. The costs to us to eliminate or alleviate security problems, bugs, viruses, worms, malicious software programs and security vulnerabilities could be significant, and the efforts to address these problems could result in interruptions, delays, cessation of service and loss of existing or potential customers and may impede our sales, distribution and other critical functions. We may also be subject to regulatory penalties and litigation by customers and other parties whose information has been compromised, all of which could have a material adverse effect on our business, results of operations and cash flows.

Systems failures and resulting interruptions in the availability of our websites, applications, products, or services could harm our business.

The full-time availability and expeditious delivery of our products and services is a critical part of our solution offering to our consumers. Our systems may experience service interruptions or degradation because of hardware and software defects or malfunctions, distributed denial-of-service and other cyberattacks, human error, earthquakes, hurricanes, floods, fires, and other natural disasters, power losses, disruptions in telecommunications services, fraud, military or political conflicts, terrorist attacks, computer viruses or other malware, or other events. Some of our systems are not fully redundant, and our disaster recovery planning may not be sufficient for all eventualities. In addition, as a provider of payments solutions, we are subject to heightened scrutiny by regulators that may require specific business continuity, resiliency and disaster recovery plans, and more rigorous testing of such plans, which may be costly and time-consuming and may divert our resources from other business priorities.

We also rely on facilities, components, and services supplied by third parties, including data center facilities and cloud storage services. If these third parties cease to provide the facilities or services, experience operational interference or disruptions, breach their agreements with us, fail to perform their obligations and meet our expectations, or experience a cybersecurity incident, our operations could be disrupted or otherwise negatively affected, which could result in customer dissatisfaction and damage to our reputation and brands, and materially and adversely affect our business. We do not carry business interruption insurance sufficient to compensate us for all losses that may result from interruptions in our service as a result of systems failures and similar events.

A prolonged interruption in the availability or reduction in the availability, speed, or functionality of our products and services will result in a loss of revenue and could materially harm our business. Frequent or persistent interruptions in our services could cause current or potential customers to believe that our systems are unreliable, leading them to switch to our competitors or to avoid or reduce the use of our products and services, and could permanently harm our reputation and brands. Moreover, if any system failure or similar event results in damages to our customers or their business partners, these customers or partners could seek significant compensation or contractual penalties from us for their losses, and those claims, even if unsuccessful, would likely be time-consuming and costly for us to address.

Our business strategy anticipates substantial growth, and if we fail to adequately scale product offerings and manage our entry into new territories, our business and reputation may be harmed.

Our business strategy contemplates substantial growth in our customer base, attempting to capture a larger share of a dynamic and growing iGaming and sports betting market, primarily in the United States but internationally as well. Our growth has placed, and is expected to continue to place, a significant strain on our managerial, administrative, operational and financial resources, and our infrastructure. Our future success will depend, in part, upon the ability of our ~~senior~~ management to manage growth effectively. This will require us to, among other things:

Failure to accomplish any of these requirements could adversely affect our ability to deliver our product and service offerings in a timely fashion, fulfill existing customer commitments or attract and retain new customers.

Our business plan includes the evaluation and potential integration of acquisitions, which if not done successfully could adversely affect our operating results and result in charges to earnings, impairing our financial condition.

On January 1, 2021, we completed the acquisition of ~~Coolbet and~~Coolbet. We may look to acquire additional software technologies, platforms or gaming content through strategic transactions. Acquisitions involve numerous risks, any of which could harm our business, including:

We will incur costs in connection with executing any acquisition strategy, including the time of our management and employees as wells as amounts to professional service firms and advisers during the evaluation of possible acquisition targets. All fees relating to our acquisition strategy are expensed as incurred, whether or not we complete the acquisition. We may also record a significant amount of other charges to our operating results that are directly related to our acquisitions, including those acquisitions that are deemed to be operationally or strategically successful, including: the amortization of intangible assets acquired; charges to our operating results due to the accounting for contingent payments made in connection with acquisitions; costs incurred to combine the operations of companies we acquire, such as employee retention, redeployment or relocation expenses; charges to our operating results to eliminate certain duplicative pre-acquisition activities, to restructure our combined operations or to reduce our cost structure; charges to our operating results due to changes in deferred tax asset valuation allowances and liabilities related to uncertain tax positions after the measurement period of any given acquisition has ended; and charges to our operating results due to the expensing of certain equity awards assumed in an acquisition.

The accounting for acquisitions requires consideration paid, assets, and liabilities to be stated at their acquisition date fair value, which generally results in an increase being recorded to the historic value of net assets, including recording the fair value of acquired assets such as identified intangible assets and ~~goodwill, and also including a reduction in the value of acquired deferred revenue.~~goodwill. The increased value of net assets generally results in lower post-acquisition earnings when compared to the pre-acquisition earnings of the acquired businesses as a result of the increased amortization costs. These costs, when and if recorded, could be material and could differ substantially from similar costs recorded in prior years. In addition, intangible assets and goodwill are periodically required to be evaluated for impairment, which ~~can~~could result in charges against earnings.

If our goodwill and other intangible assets become impaired, we may experience significant non-cash impairment charges to our results of operations in the future.

Goodwill is reviewed for impairment annually, or more frequently if an event occurs or circumstances change that may indicate that fair value of our reporting units may be below their carrying value. We determine fair value considering both the income and market approaches. Definite-lived intangible assets are evaluated for impairment if an event or change occurs such that the carrying amount may not be recoverable. We have completed a significant acquisition which has resulted in significant amounts of goodwill and other intangible assets on our balance sheet. Unfavorable changes in the business climate or competitive environment, our revenue forecasts, our market capitalization, capital structure, capital expenditure levels, operating cash flows, as well as adverse legal or regulatory actions or developments could cause changes in our estimated fair values.

We rely on relationships with ~~third party~~third-party content ~~partners~~providers for a significant portion of our revenue.

We currently license gaming content from third-party software providers for inclusion in our online games and content offerings. We license these rights to provide our customers with access to online version of popular casino-based games, reduce our development costs, to expand our content offerings and to shorten our time to market with new products and solutions. Our B2B business model is predicated on sharing revenue with our casino operators. If we were to lose access to popular game titles and content, our casino operators may experience a decline in wagering, reducing their revenue and ours. We could be compelled to pay higher prices for licenses, or incur increased expenses in an effort to develop our ~~own~~ proprietary content, but there are no guarantees that we would be successful in either approach. The loss of compelling content could also make our solution and product offering less competitive, and our ~~operator~~operators’ customers may look for alternative vendors with access to different content.

In addition, a significant portion of customers are introduced to us by our network of content ~~manufacturer partners.~~manufacturers. These content ~~manufacturer partners~~manufacturers include casino equipment manufacturers and casino gaming content designers, which do not manufacture physical gaming equipment. We may experience difficulty in maintaining or establishing third-party relationships with our content ~~manufacturer partners.~~manufacturers. If we are unable to maintain good relations with our content ~~manufacturer partners,~~manufacturers, our ability to organically grow our business could be harmed, which may materially adversely affect operating results and financial condition. Additionally, we are exposed to the risk that the content ~~manufacturer partners~~manufacturers through which we indirectly promote our products and services will not devote sufficient time, attention and resources to learning our products, markets and potential customers and may promote and sell competing products and services.

If we are unable to protect our intellectual property and proprietary rights, our competitive position and our business could be materially adversely affected.

The iGaming and online sports betting industries are subject to rapid technological change and we and a number of our competitors are developing technology and intellectual property that we believe is unique and provides us with a commercial advantage. We regard the protection of our developed technologies and intellectual property rights as a competitive differentiation and an important element of our business operations and crucial to our success. Unauthorized use of our intellectual property and proprietary rights may reduce our revenue, devalue our brands and property and harm our reputation.

We rely primarily on a combination of patent laws, trademark laws, copyright laws, trade secrets, confidentiality procedures and contractual provisions to protect our proprietary technology. As of December 31, ~~2020,~~2021, we held one issued U.S. patent (patent number 8,821,296 dated September 2, 2014) with multiple claims within that single patent. We generally require our employees, consultants and advisors to enter into invention contribution and confidentiality agreements. Our efforts to protect our proprietary rights may not be adequate to prevent misappropriation of our intellectual property. We may not be able to detect unauthorized use of, or take appropriate steps to enforce, our intellectual property rights. Further, the laws of many countries, including countries where we conduct business, do not protect our proprietary rights to as great an extent as do the laws of the United States and European countries. The failure of our patent, or our reliance upon copyright and trade secret laws to adequately protect our technology, might make it easier for our competitors to offer similar products or technologies.

We may in the future need to initiate infringement claims or litigation. Litigation can be expensive and time-consuming and may divert the efforts of our technical staff and managerial personnel, which could harm our business. In addition, litigation is inherently uncertain, and thus we may not be able to stop our competitors from infringing upon our intellectual property rights.

We face the risk that third parties will claim that we infringe on their intellectual property rights, which could result in costly license fees or expensive litigation.

While we respect third parties’ intellectual property rights and have procedures designed to avoid the inadvertent use of third-party intellectual property, we may face claims from our competitors that the products or solutions that we develop, or those provided to us by third parties or used by our customers, infringe on third parties’ intellectual property rights. Some of our competitors have substantially greater resources than we do and are able to sustain the costs of complex intellectual property litigation to a greater degree and for longer periods of time than we could. In addition, patent holding companies that focus solely on extracting royalties and settlements by enforcing patent rights may target us.

Any such claim may seek to prohibit our use of the ~~third party’s~~third-party’s intellectual property rights or may require us to obtain licenses from the holders of the patents or other intellectual property rights. We cannot assure you that we will be able to obtain any such licenses on commercially favorable terms, or at all. If we do not obtain such licenses, we could, for example, be required to cease or materially alter our product offerings and our business, operating results and financial condition could be materially adversely affected.

Future litigation may be necessary to defend ourselves, our customers or our partners by determining the scope, enforceability and validity of third-party proprietary rights or to establish our proprietary rights. Regardless of whether the infringement claims have any merit, defense of intellectual property litigation is time-consuming, costly to evaluate and defend, and could:

In addition, many of our contracts provide our customers or partners with indemnification with respect to their use of our intellectual property. We cannot predict whether any existing or future third-party intellectual property rights would require us to alter our technologies, obtain licenses or cease certain activities.

We face risks related to health epidemics and other widespread outbreaks of contagious disease, which could disrupt our operations and impact our operating results.

Significant outbreaks of contagious diseases, and other adverse public health developments, could have a material impact on our business operations and operating results.

The impact of ~~the COVID-19 on our business~~public health threats or outbreaks of communicable diseases is ~~ongoing.~~uncertain. Although our business has proven resilient during the COVID-19 pandemic, ~~(for example, with closures of land-based casinos driving more revenue to our online iGaming offerings),~~ it is uncertain whether this trend will continue, as the economic disruption and uncertainty caused by the COVID-19 pandemic may ~~cause~~be repeated in the event of future severe outbreaks or variants. In the event of a ~~general decline in gambling~~public health crisis, government authorities may, from time to time, implement various mitigation measures, including travel restrictions, limitations on business operations, stay-at-home orders and iGaming over time. In addition, the cancellation of sporting events has reduced sports betting transactions and it is uncertain when the number of live sporting events will return to pre-pandemic levels. Any of these consequences may adversely impact player activity on our platforms, which would negatively impact our business.

~~We continue to monitor the global spread of COVID-19 and have put in place and will continue to put in place measures as appropriate and necessary for our business.~~social distancing protocols. Any prolonged deviations from normal daily operations could negatively impact our business. Additionally, any prolonged disruption of our content providers, customers, players or regulatory reviewers could delay regulatory approvals or conclusions related to new products or the finalization of new contracts entered into by us.

We are subject to risks related to corporate social responsibility, responsible gaming, reputation and ethical conduct.

Many factors influence our reputation and the value of our brands, including the perception held by our customers, business partners, investors, other key stakeholders and the communities in which we operate, such as our social responsibility, corporate governance and responsible gaming practices. We have faced, and will likely continue to face, increased scrutiny related to social, governance and responsible gaming activities, and our reputation and the value of our brands can be materially adversely harmed if we fail to act responsibly in a number of areas, such as diversity and inclusion, workplace conduct, responsible gaming, human rights, philanthropy and support for the local communities. Any harm to our reputation could impact employee engagement and retention, and the willingness of customers and partners to do business with us, which could have a materially adverse effect on our business, results of operations and cash flows.

We believe that our reputation is critical to our role as a leader in the online ~~and~~ gaming ~~industries~~industry and as a publicly traded company. Our Board has adopted a Code of Business Conduct as well as other related policies and procedures, and management is heavily focused on the integrity of our directors, officers, senior management, employees, other personnel and third-party suppliers and partners. Illegal, unethical or fraudulent activities perpetrated by any of such individuals, suppliers or partners for personal gain could expose us to potential reputational damage and financial loss.

The online gaming industry is heavily regulated and the Company’s failure to obtain or maintain applicable licensure or approvals, or otherwise comply with applicable requirements, could be disruptive to our business and could adversely affect our operations.

We and our officers, directors, major shareholders, key employees and business partners are generally subject to the laws and regulations relating to online gaming of the jurisdictions in which we conduct business, as well as the general laws and regulations that apply to all e-commerce businesses, such as those related to privacy and personal information, tax and consumer protection. With each new regulated market we enter, we are generally required to secure a gaming license. These laws and regulations vary from one jurisdiction to another and future legislative and regulatory action, court decisions or other governmental action, which may be affected by, among other things, political pressures, attitudes and climates, as well as personal biases, may have a material impact on our operations and financial results.

Gaming authorities have broad discretion in determining whether to grant, or not to grant, a gaming license and/or whether to impose conditions or limitations upon such gaming license. The process of submitting applications may be expensive and time-consuming and the outcome is not assured. Regulatory regimes imposed upon gaming providers vary by jurisdiction. Typically, however, most regulatory regimes include the following elements:

If we fail to obtain the necessary gaming license in a given jurisdiction, we would likely be prohibited from distributing and providing our product offerings in that particular jurisdiction altogether. If we fail to seek, do not receive, or receive a suspension or revocation of a license in a particular jurisdiction for our product offerings (including any related technology and software) then we cannot offer the same in that jurisdiction and our gaming licenses in other jurisdictions may be impacted. Furthermore, some jurisdictions require license holders to obtain government approval before engaging in some transactions, such as business combinations, reorganizations, ~~stock~~share offerings and repurchases. We may not be able to obtain all necessary gaming licenses in a timely manner, or at all. Delays in regulatory approvals or failure to obtain such approvals may also serve as a barrier to entry to the market for our product offerings. If we are unable to overcome the barriers to entry, it will materially affect our results of operations and future prospects.

To the extent new online gaming jurisdictions are established or expanded, we cannot guarantee we will be successful in penetrating such new jurisdictions or expanding our business or customer base in line with the growth of existing jurisdictions. As we directly or indirectly enter into new markets, we may encounter legal, regulatory and political challenges that are difficult or impossible to foresee and which could result in an unforeseen adverse impact on planned revenues or costs associated with the new market opportunity. If we are unable to effectively develop and operate directly or indirectly within these new markets or if our competitors are able to successfully penetrate geographic markets that we cannot access or where we face other restrictions, then our business, operating results and financial condition could be impaired. Our failure to obtain or maintain the necessary regulatory approvals in jurisdictions, whether individually or collectively, would have a material adverse effect on our business.

Once a gaming license is granted violations of any gaming related requirements could result in the revocation of a gaming license, the imposition of fines, conditions, or limitations, all of which could adversely affect our operations and financial viability.

Once we have been granted a gaming license, we are required to comply with the applicable statutory and/or regulatory requirements, policy directives, and license conditions and/or limitations. Failure to comply with any of such, could result in a gaming regulator bringing a disciplinary action against us. We have previously been assessed fines related to failure to comply with license conditions and codes of practice. We cannot predict the outcome of any current or future regulatory review.

Disciplinary action could range from the imposition of fines, further conditions or limitations imposed upon the gaming license, to the revocation of previously granted gaming licenses. The imposition of any such disciplinary actions could adversely affect our operations in that jurisdiction and its financial viability. Further, the disciplinary action in one jurisdiction could result in separate disciplinary action being brought by another gaming regulator, which could further adversely affect our operations in those jurisdictions and its financial viability.

The online gaming industry is rapidly expanding and evolving, which the proliferation of new and changing regulatory frameworks increases costs and increases the risk of non-compliance.

The online gaming and interactive entertainment industries are relatively new and continue to evolve. As additional jurisdictions initiate regulation, legal and regulatory developments (such as passing new laws or regulations or extending existing laws or regulations to online gaming and related activities), taxation of gaming activities, data and information privacy, anti-money laundering and ‘know your customer’ laws and regulations, and payment processing laws and regulations, are continuing to evolve in ways we are unable to predict and which are beyond our control.

Given the dynamic evolution of these industries, it can be difficult to plan strategically, including as it relates to product launches in new or existing jurisdictions, which may be delayed or denied, and it is possible that competitors will be more successful than us at adapting to change and pursuing business opportunities. Additionally, as the online gaming industry advances, including with respect to regulation in new and existing jurisdictions, we will become subject to additional compliance-related costs, including regulatory infractions, licensing and taxes. Consequently, we cannot provide assurance that our online and interactive offerings will grow at the rates expected or be successful in the long term.

~~Coolbet generates~~Our B2C operations generate a significant portion of its revenues from “unregulated” markets and changes in regulation in those markets could result in ~~Coolbet~~us losing business in those markets or incurring additional expenses in order to comply with any new regulatory scheme.

~~Coolbet~~Our B2C operations currently ~~generates~~generate a significant portion of its revenues in markets that ~~are~~ currently ~~unregulated~~do not have a local licensing scheme, including ~~Norway and~~ Latin America. Those markets, or other markets where ~~Coolbet~~we may operate in the future could adopt regulations that require registration and regulatory ~~compliance, which~~compliance. The adoption of regulations and licensing requirements may increase costs, reduce net gaming revenue or require ~~Coolbet~~us to cease operations depending on the range of unforeseen possible changes to the statutes governing online ~~gambling~~gaming in the international markets in which ~~Coolbet~~we currently ~~operates.~~operate.

Compliance with evolving data privacy regulations may cause us to incur additional expenses, and any violation could result in damage to our reputation and/or subject us to fines, payment of damages, lawsuits and restrictions on our use of data.

We collect and process information relating to our employees, our customer operators, our customers’ end user players, and others for various business purposes, including payment processing, marketing and promotional purposes. The collection and use of personal data are governed by privacy laws and regulations enacted by the various U.S. states, ~~the United States~~ and other jurisdictions around the world. Privacy laws and regulations continue to evolve and on occasion may be inconsistent between jurisdictions. Various federal, state and foreign legislative or regulatory bodies may enact or adopt new or additional laws and regulations concerning privacy, data retention, data transfer, and data protection. For example, the European Union has adopted a data protection regulation known as ~~GDPR,~~the General Data Protection Regulation, or “GDPR”, which became fully enforceable in May 2018, that includes operational and compliance requirements with significant penalties for non-compliance. In addition, California has enacted a new privacy law, known as the California Consumer Privacy Act of 2018, which became effective in 2020 and provides some of the strongest privacy requirements in the United States.

Compliance with applicable privacy laws and regulations may increase our operating costs and/or adversely impact our ability to provide and market our products, properties and services. In addition, non-compliance with applicable privacy laws and regulations by us (or in some circumstances non-compliance by third parties engaged by us), including accidental loss, inadvertent disclosure, unapproved dissemination or a breach of security on systems storing our data may result in damage to our reputation and/or subject us to fines, payment of damages, lawsuits or restrictions on our use or transfer of data. We rely on proprietary and commercially available systems, software, and tools to provide security for processing of customer and employee information, such as payment card and other confidential or proprietary information. Our data security measures are reviewed and evaluated regularly; however, they might not protect us against increasingly sophisticated and aggressive threats including, but not limited to, computer malware, viruses, hacking and phishing attacks by third parties.

Any violation of the Bank Secrecy Act or other similar anti-money laundering laws and regulations could have a negative impact on us.

Our operations are subject to reporting and anti-money laundering (“AML”) regulations in various jurisdictions. In recent years, governmental authorities have been increasingly focused on AML policies and procedures, with a particular focus on the gaming industry. Any violation of AML laws or regulations could result in fines, administrative expenses, and have a negative effect on our business reputation, ability to secure and retain gaming licenses, and have a negative effect on our results of operations.

We ceased to be a foreign private issuer on December 31, 2020, which ~~will result~~resulted in significant additional costs and expenses related to our compliance with U.S. securities laws.

As a public company in the United States, we are incurring significant legal, insurance, accounting and other expenses. We have invested, and plan to continue to invest, resources to comply with evolving laws, regulations and standards, and this investment will result in increased general and administrative expenses and may divert management’s time and attention away from product development and other commercial activities.

We determined that, as of June 30, 2020, we no longer ~~qualify~~qualified as a foreign private issuer. Accordingly, effective January 1, 2021, we ~~are~~were required to comply with all U.S. federal securities laws that apply to ~~domestic~~ U.S. reporting companies, including enhanced periodic reporting, proxy requirements, and our officers, directors and principal shareholders are subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. We are required to file periodic reports and registration statements on U.S. domestic issuer forms containing financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), with the SEC, which are more detailed and extensive than the forms available to a foreign private issuer. In addition, we became subject to the Nasdaq corporate governance requirements, which are more strenuous than the corporate governance requirements under Bermuda law. As a result, we expect that our regulatory and compliance costs ~~will~~would continue to be ~~significantly higher beginning in 2021.~~significant.

We have ~~previously~~ identified a material ~~weakness~~weaknesses in connection with our internal control over financial ~~reporting.~~reporting which, if not remediated, could adversely affect our business, reputation and stock price.

As previously disclosed, in connection with the audit of the consolidated financial statements included in the registration statements on Form F-1 that we filed in connection with our initial public offering and follow-on offering in 2020, our management and ~~independent registered public accounting firm~~audit committee concluded that we ~~had a combination of control deficiencies~~have material weaknesses in our internal control over financial reporting. Specifically, certain time and functions previously reported as attributable to software development were not applied consistently with applicable accounting principles. In addition, the Company evaluated the accounting for revenue from contracts with customers that include significant customization services, previously recognized upon launch, that only the Company can perform and are necessary for the set-up of instances of the RMiG platform, concluding the services are not distinct and the related contract consideration should be allocated to the single performance obligation consisting of the right to access the SaaS platform, recognized over time during the estimated term of the arrangement. The Company also identified deficiencies in the design of the control environment whereby the Company did not maintain effective risk assessment over segregation of duties, certain finance users were granted “super user” access and security administration rights to the financial reporting systems, the activity of these users with elevated access were not actively monitored, and no segregation of duties over journal entry preparation and approval within the B2C segment existed. The effects of the capitalized software development and revenue recognition errors resulted in an overstatement of capitalized software development costs, net, and an overstatement of development revenue resulting in a restatement of our quarterly reports on Form 10-Q for each of the periods ended March 31, 2021, June 30, 2021 and September 30, 2021, as management determined that the aggregate effect of ~~December 31, 2019 that comprised a~~the individual errors in each period was material ~~weakness, primarily relating to:~~to the unaudited condensed consolidated financial statements for such quarters. Please see Item 9A - Control and Procedures for more information about identified material weaknesses.

A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

We are ~~currently not required~~in the process of designing and implementing measures to comply with Section 404 of the Sarbanes-Oxley Act, and are therefore not required to make an assessment of the effectiveness of our internal control over financial reporting. Further, our independent registered public accounting firm has not been engaged to express, nor have they expressed, an opinion on the effectiveness of our internal control over financial reporting. Had we and our independent registered public accounting firm performed an evaluation ofimprove our internal control over financial reporting ~~in accordance~~to remediate the material weaknesses described above, primarily by formalizing and documenting our policies and procedures surrounding capitalized software development costs and revenue recognition, designing and implementing training for the employees whose roles and activities may qualify for capitalization, instituting monthly meetings with the ~~provisions~~development leadership team to assess the status of all projects, formalizing the customer contract review process, and enhancing the scrutiny and precision of the ~~Sarbanes-Oxley Act, additional control deficiencies may have been identified by our~~ management ~~or independent registered public accounting firm,~~review controls over the capitalization of software development and ~~those control deficiencies could have~~revenue recognition process. We also ~~represented one or more~~expect to implement appropriate controls to segregate journal entry preparation and approvals and to actively monitor finance users with elevated rights.While we are designing and implementing measures to remediate the material weaknesses, ~~which~~we cannot predict the success of such measures or the outcome of our assessment of these measures at this time. We can give no assurance that these measures will remediate the weakness in internal control or that additional material weaknesses or significant deficiencies in our internal control over financial reporting will not be identified in the future. Our failure to implement and maintain effective internal control over financial reporting could ~~negatively impact~~result in errors in our ~~business~~financial statements that may lead to additional restatements of our financial statements or cause us to fail to meet our reporting obligations. Any such failure could also lead to reputational damage and ~~reputation.~~a decrease in the market price of our stock.

We have business operations located in many countries and a significant level of operations outside of the U.S., which subjects us to additional costs and risks that could adversely affect our operating results.

A significant portion of our customer base and operations are located outside of the United States. Compliance with international and U.S. laws and regulations that apply to our international operations increases our cost of doing business. As a result of our international operations, we are subject to a variety of risks and challenges in managing an organization operating in various countries, including those related to:

If we are unable to effectively staff and manage our global operations, we may not realize, in whole or in part, the anticipated benefits from ~~these initiatives (including lower development expenses),~~our international operations which in turn could materially adversely affect our business, financial condition, and results of operations.

Our results of operations may be adversely affected by fluctuations in foreign currency values.

As a result of our global operations, we ~~operate across various geographies, in addition to transacting in U.S. Dollars~~generate a portion of our ~~revenues~~revenue and incur a portion of our expenses in currencies other than the U.S. dollar. Our primary currency exposures are ~~transacted in~~the British ~~Pounds~~Pound, Euro, Bulgarian Lev, Israeli Shekel, and ~~Euros. As~~Australian Dollar. For example, we have a ~~large~~significant amount of our Euro-denominated transactions associated with revenue, a devaluation of the Euro relative to the U.S. ~~Dollar~~dollar would adversely affect our results of operations reported in the U.S. ~~Dollars.~~dollar. As ~~the~~our transactions in British Pounds are primarily expenses, a decline of the U.S. ~~Dollar~~dollar relative to the British ~~pound~~Pound would negatively impact our results of operations reported in the U.S. ~~Dollars. We also maintain intercompany balances~~dollar. The financial condition, results of operations and cash balances that are subject to currency remeasurement, and for which a change in currency exchanges rates between U.S. Dollars, Euros, British Pounds, Bulgarian Lev, Israeli Shekel and Australian Dollar could result in an adverse charge being recorded to our income statement. Our currency remeasurement gains and losses are charged against earnings in the period incurred. Following our acquisitionflows of ~~Coolbet on January 1, 2020, we anticipate a relative increase in the percentage~~some of our ~~revenues transacted~~operating entities are reported in currencies other than the U.S. ~~Dollars.~~dollar and then translated into U.S. dollars at the applicable exchange rate for inclusion in our consolidated financial statements. As a result, appreciation of the U.S. dollar against those other currencies generally will have a negative impact on our reported revenue and profits while depreciation of the U.S. dollar against other currencies will generally have positive effect on reported revenue and profits. Any significant decline in the value of these currencies as compared to the U.S. dollar would have a material adverse impact on our results of operations.

The expansion of our business, will subject us to taxation in a number of jurisdictions and changes in, or new interpretation of, tax laws, tax rulings or their application by tax authorities could result in additional tax liabilities and could materially affect our financial condition and results of operations.

We pay U.S. federal, state and international taxes due to ~~the~~our global ~~nature of our business~~operations and the locations in which we operate. ~~With the Coolbet acquisition, we~~We are ~~now~~ subject to taxation in a number of ~~additional~~ international jurisdictions. The tax laws applicable to our business are myriad, and are subject to interpretation, and significant judgment ~~will be~~is required in determining our ~~worldwide~~ provision for income taxes. In the course of our business, there ~~will be~~are many transactions and calculations where the ultimate tax determination is uncertain. Consequently, our results may differ from previous estimates and may materially affect our consolidated financial statements.

The gaming industry represents a significant source of tax revenue to the jurisdictions in which we will operate. Gaming companies and ~~business-to-business~~B2B providers in the gaming industry (directly and/or indirectly by way of their commercial relationships with operators) are currently subject to significant taxes and fees in addition to normal corporate income taxes, and those taxes and fees are subject to increase at any time. In addition, any worsening of economic conditions and the large number of jurisdictions with significant current or projected budget deficits could intensify the efforts of governments to raise revenues through increases in gaming taxes and/or other taxes. It is not possible to determine with certainty the likelihood of changes in tax laws or in the administration or interpretation or enforcement of such laws. Any material increase, or the adoption of additional taxes or fees, could have a material adverse effect on our business, financial condition, results of operations and prospects.

We are subject to periodic review and audit by domestic and foreign tax authorities. Tax authorities may disagree with certain tax positions that ~~GAN or Coolbet has~~we have taken or that we will take, and any adverse outcome of such a review or audit could have a negative effect on our business, financial condition and results of operations. Although we believe that our income tax provisions, positions and estimates are reasonable and appropriate, tax authorities may disagree with certain positions we have taken. In addition, economic and political pressures to increase tax revenue in various jurisdictions may make resolving tax disputes favorably more difficult.

A change in our tax residence could have a negative effect on our future profitability.

We are organized under the laws of Bermuda, a British overseas territory that is an island located off the coast of the United States, and we are a resident in Bermuda for tax purposes. It is possible that in the future, whether as a result of a change in law or the practice of any relevant tax authority or as a result of any change in the conduct of our affairs following a review by our directors or for any other reason, we could become, or be regarded as having become, a resident in a jurisdiction other than Bermuda.

Similarly, if the tax residency of any of our subsidiaries were to change from their current jurisdiction for any of the reasons listed above, we may be subject to a local tax charge. Furthermore, while we expect that our non-U.S. subsidiaries will qualify for the benefits of the Double Tax Convention (“Tax Treaties”) with the United States, ~~of America,~~ we have not sought or obtained a ruling from the U.S. Internal Revenue Service, local tax authorities or an opinion of counsel addressing the issue, and there can be no assurances we or our non-U.S. subsidiaries will qualify for the benefits of the Tax Treaties.

U.S. Holders of our ordinary shares could be subject to material adverse tax consequences if we are considered a Passive Foreign Investment Company for U.S. federal income tax purposes.

There is a risk that we ~~will~~could be classified as a Passive Foreign Investment Company (“PFIC”), for U.S. federal income tax purposes. Our status as a PFIC could result in a reduction in the after-tax return to U.S. Holders of our ordinary shares and may cause a reduction in the value of our ordinary shares. A corporation is classified as a PFIC for any taxable year in which either (i) at least 75% of its gross income is “passive income” or (ii) at least 50% of the average quarterly value of all its assets consists of assets that produce, or are held for the production of, passive income. For this purpose, passive income generally includes among other things, dividends, interest, certain rents and royalties, annuities, certain gains from the sale of stock and securities, and certain gains from commodities transactions.

Based on the projected composition of our income and valuation of our assets, we do not believe we ~~were~~would have been a PFIC in any previous taxable year, and we do not expect to become a PFIC in the foreseeable future, although there can be no assurance in this regard. The U.S. Internal Revenue Service or a U.S. court could determine that we are or were a PFIC in any past, current, or future taxable years. The determination of whether we are a PFIC is a fact-intensive determination made on an annual basis applying principles and methodologies, which in some circumstances are unclear and subject to varying interpretation. If we were classified as a PFIC, U.S. Holders of our ordinary shares could be subject to greater U.S. income tax liability than might otherwise apply, imposition of U.S. income tax in advance of when tax would otherwise apply and detailed tax filing requirements that would not otherwise apply. The PFIC rules are complex and a U.S. holder of our ordinary shares is urged to consult ~~such holder’s own~~its tax advisors regarding the possible application of the PFIC ~~rules to its particular circumstances.~~rules.

Ownership in our ordinary shares is restricted by gaming laws and our ~~bye-laws,~~by-laws, and persons found “unsuitable” may be required to dispose of their shares.

Gaming authorities have the right to investigate any individual or entity having a relationship to, or involvement with, our Company or any of its subsidiaries, to determine whether such individual or entity is suitable as a business associate of ours. Many jurisdictions also require any person who acquires beneficial ownership of more than a certain percentage of voting securities of a gaming company and, in some jurisdictions, non-voting securities, sometimes 5%, to report the acquisition to the gaming authorities, and the gaming authorities may require such holders to apply for qualification or a finding of suitability, subject to limited exceptions for “institutional investors” that hold a company’s voting securities for investment purposes only. Subject to certain administrative proceeding requirements, gaming authorities have broad discretion to deny any application or limit, condition, restrict, revoke or suspend any license, registration, finding of suitability or approval, or fine any person licensed, registered or found suitable or approved, for any cause deemed reasonable by the gaming authorities.

Any person found unsuitable by a gaming authority may not hold directly or indirectly ownership of any voting security or the beneficial or record ownership of any nonvoting security or any debt security of any public corporation which is registered with the relevant gaming authority beyond the time prescribed by the relevant gaming authority. Our ~~bye-laws~~by-laws include certain provisions to ensure that we comply with applicable gaming laws. These provisions provide, among other things, that GAN Limited is prohibited from carrying on Gaming or Gaming Activities (as defined therein) itself and that our Board of Directors has the right to cause a forced sale of the ordinary shares held by an unsuitable person. Any such forced sale may negatively affect the trading price of our ordinary shares and may negatively affect the liquidity of our ordinary shares.

We are a Bermuda company and it may be difficult for you to enforce judgments against us or certain of our directors or officers.

We are a Bermuda exempted company. As a result, the rights of holders of our ordinary shares will be governed by Bermuda law and our memorandum of association and ~~bye-laws.~~by-laws. The rights of shareholders under Bermuda law may differ from the rights of shareholders of companies incorporated in other jurisdictions. Bermuda legislation regarding companies is largely based on English corporate law principles. However, there can be no assurance that Bermuda law will not change in the future or that it will serve to protect investors in a similar fashion afforded under corporate law principles in the United States, which could adversely affect the rights of investors. ~~Most~~Certain of our directors and officers ~~and some of the named experts~~ are not residents of the United States, and a substantial portion of our assets are located outside the United States. As a result, it may be difficult for investors to effect service of process on those persons in the United States or to enforce in the United States, judgments obtained in U.S. courts against us or those persons based on the civil liability provisions of the U.S. federal securities laws. We have been advised by our special Bermuda counsel that uncertainty exists as to whether courts in Bermuda will enforce judgments obtained in other jurisdictions, including the United States, or entertain action in Bermuda against us or our directors or officers.

Furthermore, we have been advised by our special Bermuda counsel that Bermuda courts will not recognize or give effect to U.S. federal securities laws that such Bermuda courts consider to be procedural in nature, are revenue or penal laws or the application of which would be inconsistent with public policy in Bermuda. Certain remedies available under the laws of U.S. jurisdictions, including certain remedies under U.S. federal securities laws, will not be recognized or given effect to in any action brought before a court of competent jurisdiction in Bermuda where the application of such remedies would be inconsistent with public policy in Bermuda. Further, no claim may be brought in Bermuda against us or our directors and officers in the first instance for violations of U.S. federal securities laws because those laws do not have the force of law in Bermuda. A Bermuda court may, however, impose civil liability on us or our directors and officers if the facts alleged in a complaint constitute or give rise to a cause of action under Bermuda law.

Shareholders of a Bermuda company may have a cause of action against us or our directors for breach of any duty in the ~~bye-laws~~by-laws or any shareholders’ agreement owed personally by us to the shareholder. Directors of a Bermuda company may be liable to the company for breach of their duties as directors to the company under the Bermuda Companies Act, and under common law. Such actions must, as a general rule, be brought by the company. Where the directors have carried on an act which is ultra vires or illegal, then the shareholder has the right, with leave of the court, to bring a derivative action to sue the directors on behalf of the company with any damages awarded going to the company itself. Shareholders are also able to take action against a company if the affairs of the company are being conducted in a manner which is oppressive or unfairly prejudicial to the shareholders or some number of them, and to seek either a winding-up order or an alternative remedy if a winding-up order would be unfairly prejudicial to them.

Our ~~bye-laws~~by-laws restrict shareholders from bringing legal action against our officers and directors.

Our ~~bye-laws~~by-laws contain a broad waiver by our shareholders of any claim or right of action, both individually and on our behalf, against any of our officers or directors. The waiver applies to any action taken by an officer or director, or the failure of an officer or director to take any action, in the performance of his or her duties, except with respect to any matter involving any fraud or dishonesty on the part of the officer or director or any claims of violations of the Securities Act of 1933 or the Securities Exchange Act of 1934 the waiver of which would be prohibited by Section 14 of the Securities Act and Section 29(a) of the Exchange Act. This waiver limits the right of shareholders to assert claims against our officers and directors unless the act or failure to act involves fraud or dishonesty.

We have provisions in our ~~bye-laws~~by-laws that may discourage a change of control.

Our ~~bye-laws~~by-laws contain provisions that could make it more difficult for a ~~third party~~third-party to acquire us without the consent of our Board of Directors. These provisions include, among others:

These provisions could make it more difficult for a ~~third party~~third-party to acquire us, even if the ~~third party’s~~third-party’s offer may be considered beneficial by many shareholders. As a result, shareholders may be limited in their ability to obtain a premium for their shares.

Our corporate headquarters is located at 400 Spectrum Center Drive, Suite 1900, Irvine, California 92618. In addition to our corporate headquarters, we have regional offices in Nevada and Florida in the United States, and in the countries of the United Kingdom, Bulgaria, Israel and ~~Israel.~~Estonia. We lease our corporate headquarters and each of our regional offices. We believe that our current facilities are adequate to meet our needs for the near future and that suitable additional or alternative space will be available on commercially reasonable terms to accommodate our foreseeable future operations.

The Company may be subject to legal actions and claims arising from contracts or other matters from time to time in the ordinary course of business. Management is not aware of any pending or threatened litigation, which are ~~not currently a party to any~~considered other than routine legal proceedings. The Company believes the ultimate disposition or resolution of its routine legal proceedings ~~that, in the opinion of our management, are likely to~~will not have a material adverse effect on ~~our business. Regardless~~its financial position, results of ~~outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.~~operations or liquidity.

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our ordinary shares have been listed on The Nasdaq Capital Market under the symbol “GAN” since May 7, 2020. Prior to that date, our predecessor entity, GAN plc, was a public limited company incorporated under the laws of England and Wales. Since 2013 through the date of our initial public offering, the ordinary shares of GAN plc traded on AIM, a market operated by the London Stock Exchange under the symbol “GAN.”

On May 5, 2020, we affected a reorganization and share exchange in which ~~approximately~~ 21,593,910 ordinary shares of GAN Limited, together with cash consideration in the aggregate amount of £2.0 million, were issued to the shareholders of GAN plc in exchange for all of the outstanding ordinary shares of GAN plc, after which time GAN plc became a wholly-owned subsidiary of GAN Limited.

On March ~~25, 2021,~~9, 2022, we had ~~42,017,117 shares of ordinary shares, $0.01 par value, outstanding and 388~~133 holders of record of our ordinary shares. A substantially greater number of holders are beneficial owners whose shares are held of record banks, brokers and other nominees. The transfer agent and registrar for our ordinary shares is Continental Stock Transfer and Trust Company.

Our initial public offering of ordinary shares was effected through a Registration Statement on Form F-1 (File No. 333-237372) that was declared effective by the SEC on May 4, 2020. On May 7, 2020, we issued and sold 7,337,000 ordinary shares at an initial public offering price of $8.50 per share for aggregate gross offering proceeds of $62.4 million. B. Riley FBR, Inc., Macquarie Capital (USA) Inc., and Craig-Hallum Capital Group LLC, acted as the managers for the offering. The offering terminated following the closing of the initial public offering.

We paid to the underwriters, underwriting discounts and commissions totaling ~~approximately~~ $4.9 million, in connection with the offering. In addition, through December 31, 2020, we incurred additional costs of $2.2 million in connection with the offering which, when added to the underwriting discounts and commissions paid by us, resulted in total expenses of $7.1 million related to the offering. Accordingly, the net offering proceeds to us, after deducting underwriting discounts and commissions, and other offering expenses, were ~~approximately $55.3 million.~~$55.3 million. No offering expenses were paid directly or indirectly to any of our directors or officers (or their associates) or persons owning ten percent or more of any class of our equity securities or to any other affiliates.

~~There~~All proceeds from our initial public offering have been utilized and there were no material changes in our use of the net proceeds from those described in the prospectus dated May 4, 2020.

We have never declared or paid any cash dividends on our ordinary shares. We currently intend to retain our future earnings, if any, to finance the operation and expansion of our business. We do not expect to pay cash dividends on our ordinary shares in the foreseeable future. Our payment of dividends in the future, if any, will be determined by our Board of Directors and will be paid out of funds legally available for that purpose.

There have been no repurchases of our ordinary shares either on the open market or by private transaction during the quarter ended December 31, ~~2020.~~2021.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with the Company’s consolidated financial statements and the related notes thereto. Some of the information contained in this discussion and analysis or set forth elsewhere, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should review the “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” sections for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

GAN Limited is a Bermuda exempted holding company and through its subsidiaries, operates in two lines of business. We are ~~an award-winning provider~~a business-to-business (“B2B”) supplier of enterprise ~~software~~Software-as-a-Service (“SaaS”) solutions ~~designed~~for online casino gaming, commonly referred to ~~accelerate the casino industry’s digital transformation towards Internet casino gambling~~as iGaming, and online sports ~~betting.~~

~~We began~~betting applications. Beginning with our ~~operations in Europe~~January 2021 acquisition of Vincent Group p.l.c., a Malta public limited company (“Coolbet”), we are also a business-to-consumer (“B2C”) developer and ~~have since deployed our solutions in the United States, U.K., Italy, and Australia. However, over the past several years we have had~~operator of an ~~emphasis on supporting land-based commercial and tribal casinos in the United States with their~~ online sports betting and ~~real money gambling operating~~casino platform, which offers consumers in select markets in Northern Europe, Latin America and Canada a digital portal for engaging in sports betting, online casino games and poker. These two lines of business are also the ~~United States. On May 14, 2018, the Supreme Court~~Company’s reportable segments.

The B2B segment develops, markets and sells instances of and GameSTACK technology and iSight Back Office that incorporates comprehensive player registration, account funding and back-office accounting and management tools that enable casino operators to efficiently, confidently and effectively extend their online presence. In 2021, we won three prestigious industry awards from EGR North America – Best Freeplay Gaming Supplier, Best Full-Service Platform Provider and Best White Label Partner of the ~~United Sates overturned~~Year – in recognition of our expertise and commitment for delivering industry-leading gaming solutions to land-based casinos.

Beginning January 1, 2021, the ~~PASPA, which since 1992 had prevented U.S. states, aside from Nevada, Delaware~~B2C segment includes the operations of Coolbet. Coolbet develops and ~~Oregon, from engaging in the regulation and taxation of sports betting activities at the intrastate level. The ruling paved the way for states to elect individually whether to allow for regulated~~operates an online sports betting and ~~by extension, real money iGaming within their borders. Between May 14, 2018~~casino platform that is accessible through its website in markets across Northern Europe, Latin America and ~~November 20, 2020, 21 U.S. states,~~Canada. In 2021, Coolbet won two prestigious awards at the ~~District~~International Gaming Awards in London – Mobile Sports Product of ~~Columbia~~the Year and ~~Puerto Rico enacted laws legalizing some form~~Innovator of ~~retail and/or online sports betting. Four~~the Year – in recognition of ~~these states also legalized real money iGaming, joining Nevada and Delaware, which were~~our significant impact in the ~~only states with full scale online gambling regulations in place prior to May 2018. We are actively targeting expansion into additional states as they adopt regulations around legalized~~mobile sports betting industry.

To meet this demand and ~~real money iGaming.~~serve our growing number of U.S. casino operator clients, we continue to invest in our software engineering capabilities and expand our operational support. The most significant component of our operating costs generally relate to our employee salary costs and benefits. We have increased our global headcount from 440 employees at January 1, 2021, to 682 employees at December 31, 2021. Also, operating costs include technology and corporate infrastructure related-costs, as well as marketing expenditures with a focus on increasing and retaining B2C end-users.

~~During~~Our net loss was $30.6 million and $20.2 million for the years ended December 31, 2021 and 2020, respectively. Our results of operations for the year ended December 31, ~~2020 our revenues derived from customers in~~2021 includes the ~~United States was $29.4 million, increasing by $8.5 million, or 40.7% from our prior year revenues~~financial results of $20.9 million. These increased revenues, in part, are directly related to the legalization of real money iGaming and sports betting in the United States, with $3.8 million, or 14.8% of our total RMiG revenues coming from expansions during the year into new jurisdictions with our existing customers. We simultaneously launched three operator customers live in the state of Michigan in January 2021, and we anticipate additional states such as Louisiana, Maryland, North Carolina, South Dakota, and Washington will allowCoolbet for the ~~operation~~entire period, and accordingly, are not directly comparable to our consolidated results of ~~real money iGaming during 2021, which will further increase our total addressable market in the United States, along with other states that may regulate real money iGaming in the future.~~

As regulation continues to advance in the United States, we have proven to be well-positioned to capitalize on the expanding group of states regulating real money iGaming within their borders. Our software platform enables our customers to rapidly setup and launch an Internet gaming and/or sports betting business by publishing websites and mobile apps to end user residents in these highly regulated markets, each of which have their own technology requirements driven by state specific regulation. Importantly, our GameSTACK platform, adheres to stringent regulatory mandates, giving our customers peace of mind when deploying RMiG products. In August 2020, we delivered two major client launches only days apart, with Cordish Group’s RMiG website at playlive.com in Pennsylvania launched in just 72 days following the execution of a definitive agreement, underscoring the time-to-market advantage gained by our casino operator customers who use our platformoperations for ~~Internet gambling.~~

In September 2020, we substantially augmented our SIM deployment by adding a ‘simulated sports betting’ capability, launched on PlayJACK.com for JACK Entertainment, a leading casino operator in Ohio. With real money regulated Internet sports betting anticipated in 2021, this added product experience of sports betting, offered alongside simulated Internet casino gaming, has enabled JACK Entertainment to engage with sports betting enthusiasts online in Ohio substantially in advance of real money Internet sports betting being made available. Simulated sports betting is relevant to all clients of SIM and will be rolled-out to additional clients in 2021 and beyond, as a demonstrable vehicle for acquiring sports betting enthusiast’s online information substantially in advance of regulation of real money Internet sports betting.

We also sell support, development and maintenance services for software and hardware systems. Support and maintenance service agreements consist of fees for providing software updates, when and if available, and for providing technical support for software products for a specified term. Development services typically consist of fees for the initial deployment of the iGaming solution for our customers, as well as development services provided on an ongoing basis for our customers. During the year ended December 31, ~~2020 we generated $4.2 million in development revenues,~~2020.

We believe that our current technology is highly scalable and can support the launch of ~~which $0.6 million was from implementations of RMiG and SIM operations~~our product offerings for new customers ~~with future implementations ongoing for existing RMiG customers such as Churchill Downs Incorporated~~ and in new ~~SIM customers such as the Seneca Gaming Corporation and Gila River Gaming Enterprises.~~jurisdictions. We expect to improve our profitability through increased revenues from:

~~At the end of 2018, we entered into~~We hold a ~~binding agreement to license our~~ strategic U.S. patent, ~~to a major U.S. Internet gambling operator and their affiliated land-based U.S. casino group. This patent~~which governs the linkage of on-property reward cards to their counterpart ~~Internet~~internet gambling accounts together with bilateral transmission of reward points between the ~~Internet gambling~~internet gaming technology system and the land-based casino management system present in all U.S. casino properties. In February 2021, we reached an agreement to license our U.S. patent to a second major U.S. casino operator group and we may license our patent to other major U.S. ~~Internet gambling~~internet gaming operators in the future.

On January 1, 2021, we completed the acquisition of all outstanding shares of Vincent Group p.l.c., a Malta public limited company doing business as “Coolbet.” Coolbet, a developer and operator of a legal online sports betting and casino platforms, operates a B2C casino and sports-betting platform that is accessible via its website in eight national markets across Northern Europe (Estonia, Finland, Iceland, Norway and Sweden), Latin America (Chile and Peru) and North America (Canada). We acquired Coolbet to take advantage of Coolbet’s user interface and proprietary technical platform, to quickly integrate and offer a proprietary sportsbook offering to our land-based casino operators in the United States. As a result of the acquisition, we expect our revenue footprint to expand into other international locations and become more diversified as Coolbet’s revenues are primarily derived from countries within northern Europe and South America, with additional revenues in North America (Canada).

On May 5, 2020, GAN Limited completed a share exchange and reorganization pursuant to a Scheme of Arrangement whereby the shareholders of the previous parent, GAN plc, agreed to exchange their shares, on a basis of four ordinary shares to one ordinary share, for shares in GAN Limited, plus a pro rata portion of an aggregate £2.0 million or 2.32 pence per share in cash. After the reorganization, GAN plc was renamed GAN (UK) Limited and became a wholly-owned subsidiary of GAN Limited.

On May 7, 2020, GAN Limited completed its U.S. initial public offering under which it sold an aggregate of 7,337,000 ordinary shares at a price per share to the public of $8.50 and raised gross proceeds of $62.4 million (net proceeds of $55.3 million).

On December 21, 2020, GAN Limited completed a follow-on public offering under which it sold 6,790,956 of ordinary shares at a price per share of $15.50 and raised gross proceeds of ~~$98,541~~$98.5 million (net proceeds of $98.5 million). The net proceeds from the offering were used to fund the cash portion of the purchase price ~~payable~~for the acquisition of Coolbet that was paid to the ~~Coolbet~~former shareholders pursuant to the Share Exchange Agreement, ~~with Coolbet.~~dated November 15, 2020 (“Share Exchange Agreement”).

On January 1, 2021, GAN Limited completed its acquisition of ~~Vincent Group p.l.c., a Malta public limited company (“Coolbet”),~~Coolbet, in accordance with the terms of the Share Exchange ~~Agreement, dated as of November 15, 2020, between GAN Limited and Coolbet.~~Agreement.

~~At the closing, under the Share Exchange Agreement,~~ GAN Limited acquired all of the outstanding equity in Coolbet in exchange for a purchase price of ~~$218.6~~$218.1 million, ~~comprised of~~which included a cash payment of ~~$111.6~~$111.1 million, the issuance of 5,260,516 ordinary shares (valued at $106.7 million) and the issuance of replacement equity awards (valued at $0.3 million). ~~The purchase price was calculated on a “cash-free, debt-free” basis, subject to adjustment based on the actual “net cash” position to be established within 120 days following the closing.~~

Our ~~consolidated~~accounting policies are more fully described in Note 3 – Summary of Significant Accounting Policies of our Notes to Consolidated Financial Statements included in this report. As disclosed in Note 3, the preparation of financial statements ~~are prepared~~ in accordance with ~~U.S. GAAP. In connection with preparing our consolidated financial statements, we are required to make assumptions~~accounting principles generally accepted in the United States requires the use of judgments and ~~estimates about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue and expense, and the related disclosures.~~estimates. We base our ~~assumptions,~~ estimates and judgments on historical experience, current trends and other factors that management believes to be relevant at the time we prepare our consolidated financial statements. On a regular basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our consolidated financial statements are presented fairly and in accordance with U.S. GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ materially from our assumptions and estimates.

On an ongoing basis, management evaluates its estimates, including those related to revenue recognition, share-based compensation, capitalization and impairment of internally generated intangible assets, and taxes. We base our estimates and judgments on historical experience and on various other ~~factors~~assumptions that we believe to be reasonable under ~~the~~current circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily ~~apparent~~available from other sources. Actual results may ~~materially~~ differ from these estimates. We consider the following to be our most critical accounting estimates ~~under different assumptions or conditions.~~that involve significant judgment:

~~For further discussion of accounting policies refer to Note 3 – Summary of Significant Accounting Policies.~~

Our revenue recognition policies described in Note 3 – Summary of Significant Accounting Policies, require us to make significant judgments and estimates. Accounting Standards Codification (“ASC”) 606 requires that we apply judgments or estimates to determine the performance obligations, the stand-alone selling prices of our performance obligations to customers, allocation of the transaction price, and the timing of transfer of control of the respective performance obligations. The evaluation of each of these criteria considering contract specific facts and circumstances is naturally judgmental, but certain judgments could significantly affect the amount or timing of revenue recognized if we were to reach a different ~~conclusion than~~conclusion. The critical judgments we ~~have including:~~are required to make in our assessment of contracts with customers that could significantly affect the timing or amount of revenue recognized are:

~~Performance Obligations~~. In our commercial arrangements related to enterprise software platform services for B2B iGaming and sportsbook services, our performance obligation is limited to the provision of our software to our customer – the casino operator. The casino operator controls the URL for the online casino, controls its trademarks and branding, controls the gaming content and maintains ownership of the player database and loyalty programs related to players in the online casino. Accordingly, our revenues are the payments that we receive from our customer for those services, including any amounts owed to us as a share of net gaming revenue generated from the customer’s online casino.

Stand-Alone Selling Price and Allocation of Transaction Price. ASC 606 requires that we determine the stand-alone selling price for our goods and services as a basis for allocating the transaction price to the identified distinct performance obligations in our contracts with customers. Because we often bundle the selling price for hardware or services or we may license systems for which the solutions we provide are highly customized and therefore the prices vary, the determination of a stand-alone selling price requires significant judgment.

For performance obligations that involve multiple products or services, we allocate the transaction price to be applied to each ~~performan~~ceperformance obligation based on an estimation of the stand-alone selling price. We typically determine the stand-alone selling price based on the amounts that we charge when sold separately in similar circumstances to similar customers. In instances where the stand-alone selling price cannot be determined using an adjusted market assessment approach, we have used other allocation methods in accordance with ASC 606, including a residual approach to allocate a stand-alone selling price.

We account for business combinations in accordance with ASC 805, Business Combinations. This standard requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction and establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed in a business combination.

Determining the fair value of assets acquired and liabilities assumed requires management judgment and often involves the use of significant estimates and assumptions with respect to the timing and amounts of future cash inflows and outflows, discount rates, market prices and asset lives, among other items. These estimates are based on information obtained from management of the acquired company and historical experience and are generally made with the assistance of an independent valuation firm. These estimates can include, but are not limited to, the cash flows that an asset is expected to generate in the future, and the cost savings expected to be derived from acquiring an asset. Any changes in the underlying assumptions can impact the estimates of fair value by material amounts, which can in turn materially impact our results of operations. These estimates are inherently uncertain and unpredictable, and, if different estimates were used, the purchase price for the acquisition could be allocated to the acquired assets and liabilities differently from the allocation that we have made. In addition, unanticipated events and circumstances may occur which affect the accuracy or validity of such estimates, and, if such events occur, we may be required to record a ~~patent licensing performance obligation~~charge against the value ascribed to an acquired asset or an increase in ~~2019~~the amounts recorded for assumed liabilities.

If the subsequent actual results and updated projections of the underlying business activity change compared with the assumptions and projections used to develop these fair values, we may have to record impairment charges in the future. In addition, we have estimated the useful lives of certain acquired assets, and these lives are used to compute depreciation and amortization expense. If our estimates of the useful lives change, depreciation and amortization expense may be required to be accelerated or decelerated.

Goodwill is reviewed for impairment annually as of October 1st, or more frequently if indicators of impairment exist. A significant amount of judgment is involved in determining if an indicator of goodwill impairment has occurred. Such indicators may include, among others: a significant decline in expected future cash flows; a significant adverse change in legal factors or in the business climate; unanticipated competition; and the testing for recoverability of a significant asset group within a reporting unit. Our goodwill impairment analysis also includes a comparison of the aggregate estimated fair value of all reporting units to our total market capitalization. Therefore, our shares may trade below our book value and a significant and sustained decline in our share price and market capitalization could result in goodwill impairment charges. Any adverse change in these factors could have a significant impact on the recoverability of these assets and could have a material impact on our consolidated financial statements.

Goodwill impairment testing involves a comparison of the estimated fair value of a reporting unit to its respective carrying amount, which may be performed utilizing either a qualitative or quantitative assessment. A reporting unit is defined as an operating segment or one level below an operating segment. The qualitative assessment evaluates various events and circumstances, such as macro-economic conditions, industry and market conditions, cost factors, relevant events and financial trends that may impact a reporting unit’s fair value. If it is determined that the estimated fair value of the reporting unit is more-likely-than-not less than the carrying amount, including goodwill, a quantitative assessment is required. Otherwise, no further analysis is necessary.

In a quantitative assessment, the fair value of a reporting unit is determined and then compared to its carrying value. A reporting unit’s fair value is determined based upon consideration of various valuation methodologies, including the income approach, which utilizes projected future cash flows discounted at rates commensurate with the risks involved, and multiples of current and future earnings. If the fair value of a reporting unit is less than its carrying value, a goodwill impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized cannot exceed the total amount of goodwill allocated to that reporting unit.

The income approach used to test our reporting units includes the projection of estimated operating results and cash flows, discounted using a weighted-average cost of capital (“WACC”) that reflects current market conditions appropriate to each reporting unit. Those projections involve management’s best estimates of economic and market conditions over the projected period, including growth rates in revenues and costs and best estimates of future expected changes in operating margins and cash expenditures. Other significant assumptions and estimates used in the income approach include terminal value growth rates, future estimates of capital expenditures and changes in future working capital requirements. In addition, the WACC utilized to discount estimated future cash flows is sensitive to changes in interest rates and other market rates in place at the time ~~we had not yet established a price for~~the assessment is performed. Future changes in our ~~patent licensing. This was~~estimates or assumptions or in interest rates could have a significant ~~management estimate, impacting~~impact on the ~~revenue allocation to each performance obligation~~estimated fair value of reporting units and ~~the period~~result in ~~which the revenue was recognized. With respect to our patent licensing revenues in 2019, we concluded~~a goodwill impairment charge that the license of our patent was at a transaction price of $4.0 million, with the remainder of the transaction price outlined in the contract being related to the other performance obligation of platform development services.

~~Transfer of Control~~~~. ASC 606 requires that we recognize revenue when or as control over a performance obligation transfers to a customer.~~ In 2019, we entered into an arrangement for B2C iGaming enterprise software platform services with a commercial partner customer, whereby our performance obligations included the operation of RMiG sites on behalf of such customer. Management has concluded that, under this arrangement, our commercial partner customer controls the relationship with the end-user players and owns the player database and that we act as an agent for this commercial partner customer in providing services to end-user players. As such, in this instance of B2C RMiG enterprise software platform services, we recognize revenue as we earn the revenue from our commercial partner customer rather than the revenues earned by the customer from its end-user players. This is consistent with our principal revenue recognition for B2B iGaming and sportsbook as described above and with our revenue recognition policy as described in the notescould be material to our consolidated financial statements. ~~The arrangement with our commercial partner was subsequently exited and revenues associated with the B2C operations in 2020 were recognized on a principal basis.~~

Our RMiG and SIM enterprise software platform offerings include iGaming content licensing services. The GameSTACK platform is capable of supporting, and we make available to our customers, both proprietary and third-party licensed gaming content. Our casino operator customers generally control the determination of which gaming content will be offered in their online casinos.

Where a casino operator customer directs us to provide our proprietary gaming content, we act as principal in providing the content licensing services, recording the related revenue as gross. In accordance with ASC 606, where the casino operator customer directs us to procure third party gaming content, we are deemed to be the agent in providing the content licensing services, recording the corresponding revenue net of licensing costs paid to the owners of that content.

We act as principal in a majority of our SIM and Italy-based RMiG content licensing service arrangements and are primarily agent in a majority of our U.S.-based real money iGaming content licensing service arrangements.

Management measures ~~equity settled~~equity-classified share-based awards at fair value at the date of grant and expenses the cost on a straight-line basis over the requisite service period of the entire award, generally defined as the vesting period, along with a corresponding increase in equity. Forfeitures are recorded in the period in which they occur with the impact, if any, recognized in the consolidated statements of operation with a corresponding adjustment to equity.

The fair value of share options is determined using a Black-Scholes model, taking into consideration management’s best estimate of the expected life of the option and the estimated number of shares that will eventually vest. Application of the option-pricing model involves the use of estimates, judgment and assumptions that are highly complex and subjective and are outlined below as they pertain to grants subsequent to our initial public offering.

Expected Term – represents the period of time that awards granted are expected to be outstanding. In determining the expected term of the award, future exercise and forfeiture patterns are estimated from historical employee exercise behavior. These patterns are also affected by the vesting conditions of the award. Changes in the future exercise behavior of employees or in the vesting period of the award could result in a change in the expected term. An increase in the expected term would result in an increase to our expense.

Volatility – a measure of the amount by which the price of our ordinary shares is expected to fluctuate each year during the expected term of the award. Our expected volatility is determined by reference to volatility of certain identified peer groups, share trading information and ~~stock~~share prices on the Nasdaq. The implied volatilities from traded options are impacted by changes in market conditions. An increase in the volatility would result in an increase in our expense.

Expected Dividend Yield – is based on our historical dividend yield, which is zero – as we have not historically paid dividends. If we were to begin paying dividends, the dividend yield would increase and result in a decrease in our expense.

Risk-Free Interest Rate – is based on the U.S. Treasury yield curve in effect at time of grant. As the risk-free interest rate increases, the expected term increases, resulting in an increase in our expense.

Where the Company has decided to cover the social taxes and income taxes related to ~~equity settled~~equity-classified share-based awards for the option holders, we recognize a tax expense for the future cash payment as a ~~cash settled~~liability-classified share-based compensation expense. At each reporting period, management measures tax liabilities associated with our share-based compensation based on the intrinsic value of the options using our share price at each date of measurement. The impact of the revision of the original estimates, if any, is recognized in profit or loss with a corresponding increase or reduction to the corresponding liability. Where the Company does not cover employee social taxes and income taxes, we recognize employer tax expenses in the period when the respective holder exercises their options.

Management reviews expenditures, including wages and benefits for employees, incurred on development activities and, based on their judgment of the costs incurred, assesses whether the expenditure meets the capitalization criteria set out in ASC 350 and the intangible assets accounting policy within the notes to our consolidated financial statements. Management specifically considers if additional expenditure on projects relates to maintenance or new development projects. In addition, the useful life of capitalized development costs is determined by management at the time the software is brought into use and is regularly reviewed for appropriateness. For unique software products we control and develop, the life is based on historical experience with similar products as well as anticipation of future events, which may impact their useful economic life, such as changes in technology.

Management reviews intangible assets at each reporting period to determine potential impairment whenever events or changes in circumstances indicate that the carrying amount of an intangible asset may not be fully recoverable. Recoverability is measured by comparing the carrying amount of the intangible asset with the future undiscounted cash flows the asset is expected to generate. Management must make estimates related to future cash flows and discount rates that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If such assets are considered impaired, an impairment loss would be measured by comparing the amount by which the carrying value exceeds the fair value of the intangible asset.

~~The useful life of capitalized development costs is determined by management at the time the software is brought into use~~jurisdictions and ~~is regularly reviewed for appropriateness. For unique software products controlled and developed by us, the life~~our effective tax rate is based on ~~historical experience with similar products~~our income, statutory tax rates, tax planning opportunities and transfer pricing policies in the various jurisdictions in which we operate. Judgment is required in respect of the interpretation of state, federal and international tax law and practice as e-commerce and tax continues to evolve. Our income tax rate is significantly affected by the tax rates that apply to our foreign earnings.

Deferred tax assets represent amounts available to reduce income taxes payable in future years. Such assets arise from temporary differences between the financial reporting and tax basis of assets and liabilities, as well as ~~anticipation of future events, which may impact their useful economic life, such as changes in technology.~~

from net operating losses and tax credit carryforwards. Deferred tax assets are recognized to the extent that it is probable future taxable profits will be available against which the temporary differences can be utilized. ~~The key area of judgement is our~~This assessment of ~~whether it is probable that there will be sufficient~~future taxable profits ~~against which any~~relies heavily on estimates that are based on a number of factors, including historical results and future business forecasts. To the extent deferred tax assets ~~can~~are not expected to be ~~utilized. We operate in~~realized, we record a number of international tax jurisdictions. Judgement is required in respect of the interpretation of state, federal and international tax law and practices as e-commerce and tax continues to evolve. We file our tax returns and duty calculations and estimate our tax and indirect tax provisions based on current tax rules and practices and our transfer pricing policy, together with advice received from professional advisors and believe that our accruals for tax liabilities are adequate. Further details of our accounting policy in relation to deferred tax assets is discussed in the notes to our consolidated financial statements.valuation allowance.

Research and development tax relief is recognized as an asset once there is sufficient evidence that any amount we may claim will be received. A key judgement arises with respect to the likelihood of a claim being successful when a claim has been quantified but has not been received. In making this judgement, we consider the nature of the claim and in particular the track record of success of previous claims.

We are subject to income taxes in numerous jurisdictions and there are transactions for which the ultimate tax determination cannot be assessed with certainty in the ordinary course of business. We recognize a provision for situations that might arise in the foreseeable future based on an assessment of the probabilities as to whether additional taxes will be due. An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred.

On January 1, 2021, we completed our acquisition of Coolbet which was accounted for as a business combination under ASC 805, Business Combinations. The following ~~table sets forth~~discussion of our results of operations for the year ended December 31, ~~2020 and 2019:~~

~~The increase in RMiG revenue is directly related to~~Coolbet for the ~~legalization of real money iGaming and sports betting in the United States and our launch of iGaming solutions~~entire period. Our B2B segment results for ~~new and existing customers in those jurisdictions. During~~ the year ended December 31, 2020 we generated $3.8 million in revenues from RMiG in new jurisdictions for existing customers and $1.5 million in RMiG revenues from new customers. These new customer and jurisdictional launches represented 20.6%are comprised of our ~~total RMiG revenues~~legacy business operations prior to the acquisition of Coolbet.

The following table sets forth our consolidated results of operations for the ~~year ended December 31, 2020.~~periods indicated:

The following table sets forth our consolidated revenue by geographic region, for the periods indicated:

We expect revenue growth from other customers to increase more rapidly, increasing our customer diversity and resulting in FanDuel being a substantially lower portion of our overall revenues moving forward. Such expected revenue growth in our RMiG segment is based on anticipated revenues from new customers such as Cordish Gaming Group as a RMiG client in Pennsylvania and Churchill Downs Incorporated as a RMiG and online sports betting client to be rolled out in New Jersey, Pennsylvania, Indiana, Michigan, Colorado, and Tennessee. Additionally, we entered into a 10-year agreement with Wynn Resorts to provide the software platform for RMiG and online sports betting business in Michigan and we simultaneously launched RMiG for FanDuel, Churchill Downs and Wynn Resorts online in Michigan in January 2021.

During the year ended December 31, 2020, FanDuel deployed its own proprietary digital wallet for its sports gaming business, and our sports gaming revenues from FanDuel accordingly ceased on August 31, 2020. For the year ended December 31, 2020 and 2019, the Company derived $2.6 million and $3.0 million from FanDuel’s sports gaming operations, respectively. The Company still maintains its RMiG casino business with FanDuel.

~~For the year ended December 31, 2020, RMiG services and other revenue~~Revenue was ~~$7.6 million, as compared to $8.8~~$124.2 million for the year ended December 31, ~~2019. This decrease~~2021, an increase of $89.0 million from the comparable period in ~~revenues of $1.2 million~~2020. The increase was primarily ~~a result~~attributable to revenue from our B2C operations of increased hardware sales to customers of $1.6 million, largely in relation to the anticipated regulation of real money gambling in new U.S. states, as well as increased development revenues of $1.7 million recognized as a result of FanDuel’s migration to their own player wallets, $0.6$78.6 million in ~~development services associated~~2021. The remaining increase in revenue was primarily driven by real-money gaming growth, of which $9.3 million related to increases in platform and content license fees in the U.S. and $2.2 million related to similar increases in Italy, combined with an increase in simulated gaming revenue of $2.3 million due to new ~~casino launches and $0.3 million in game development revenues.~~customer launches. These ~~increased revenues in 2020~~increases were ~~primarily~~partially offset by a decrease in ~~patent licensing~~sportsbook revenue of $2.5 million primarily from FanDuel’s migration to its own player wallet during the third quarter of 2020.

Revenue increased across our international markets primarily as a result of the Coolbet acquisition, which accounted for $40.1 million of the increased revenues in Europe, the full $32.4 million in Latin America, and substantially all of ~~$4.0 million, which were recognized~~our revenues in ~~2019 and did not recur~~all other non-U.S. markets. The increase in ~~2020.~~

~~For~~revenue in the ~~year ended December 31, 2020, SIM platform revenue was $8.2 million,~~United States as compared to ~~$4.6~~the prior period was the result of increased RMiG revenues within the B2B segment primarily driven by the expansion into newly regulated U.S. states and the annualized impact of clients launched in 2020.

Cost of revenue was $41.4 million for the year ended December 31, ~~2019. Of this~~2021, an increase ~~existing customers~~of $30.9 million from the comparable period in 2020. The increase was attributable to our B2C operations’ cost of gaming of $29.8 million. Cost of revenue for our B2B segment increased $1.1 million due to an increase in content license fees of $1.9 million driven by higher RMiG revenues in Italy, increased simulated gaming revenues and a $0.5 million increase in processing fees due to an increase in the number of instances of our platform and end users. These increases were ~~responsible~~partially offset by a $1.4 million decrease in cost of development services and other revenues, primarily as a result of decreased hardware sales and a $0.6 million decrease in regulatory fees and gaming duties as compared to the prior year. The extent to which we engage in hardware sales is driven by individual operator circumstances and are not necessarily consistent from period to period.

Sales and marketing expense was $22.3 million for ~~increases of $1.6 million with new customers contributing $2.0 million. During~~ the year ended December 31, ~~2020, new SIM customers included companies such~~2021, an increase $17.2 million from the comparable period in 2020. Of the increase, $14.9 million was attributable to our B2C operations’ sales and marketing. We expect sales and marketing expense to continue to increase in our B2C segment as ~~the Snoqualmie Indian Tribe~~we seek to attract additional end-users. Sales and marketing expenses related to our B2B business increased $2.3 million primarily due to an increase in ~~Washington (May 2020), Penn National Gaming, which operates 41 properties~~personnel costs of $1.4 million, excluding increases in ~~19 states (August 2020),~~related share-based compensation expenses of $0.3 million, driven by increased headcount within our sales and ~~Laguna Development Corporation in New Mexico (August 2020).~~marketing functions.

~~During~~Product and technology expense was $22.5 million for the year ended December 31, 2021, an increase of $11.5 million from the comparable period in 2020, ~~with the exception~~due to higher net salaries and related employee costs of ~~the U.K. and Channel Islands, revenues increased across each of our geographies when compared to the year ended December 31, 2019.~~

~~Revenues derived from customers in the United States increased $8.4~~$11.7 million or 40.2%, driven primary by the legalization of real money iGaming and sports betting in additional U.S. states and our launch of iGaming solutions for new and existing customers in those jurisdictions.

~~In the U.K., we saw~~(excluding a decrease in revenue in our RMiG segment of $4.1 million. Substantially all of the RMiG revenue we received in the U.K. for 2019 was attributable to the operations of an online B2C gaming website that we operated for WinStar Casino. Effective December 31, 2019, we acquired ownership of the online casino and customer database from WinStar Casino. We entered into a license to continue to operate under the WinStar Casino brand through March 30, 2020, at which time we transitioned the online casino to our proprietary brand and website www.ReelsRoyale.com. Through September 30, 2020, we operated the online casino as a proprietary B2C online casino under our U.K. gaming license without a marketing budget to drive awareness and traffic to the online casino, as we pursued an alternative sponsor or provider of marketing capital. As a sponsor was not identified in the desired timeframe, it was determined to wind down the ReelsRoyale site, as the company does not intend to pursue a B2C product offering in the U.K. As a result of the changes related ~~to the WinStar Casino and ReelsRoyale site, revenues for the U.K. declined substantially from 2019 levels, totaling $0.3 million in 2020.~~

Revenues derived from customers in other geographies are primarily comprised of game development revenues for games we were contracted to develop on behalf of our customers, which are now hosted natively on our iGaming platform. These revenues are associated with a certain number of games we delivered during the period, with further game development revenues anticipated under our contractual arrangements to be recognized when the remaining games are delivered.

Following the closing of our acquisition of Coolbet in January 2021, we expect our revenue footprint to expand into other international locations and become more diversified as Coolbet’s revenues are primarily derived from countries within northern Europe and South America, with additional revenues in North America (Canada).

During the year ended December 31, 2020, cost of platform and content fees increased $1.2 million compared to the prior year, primarily attributable to increased royalty expenses of $1.3 million. Cost of development services and other increased by $2.2 million compared to the prior year, driven primarily by increased costs of hardware revenue of $1.6 million.

~~During the year ended December 31, 2020, sales and marketing expenses increased by $1.6 million, or 44.7% compared to the prior year, driven by personnel expenses (including $0.6 million of~~ share-based compensation ~~expense for key personnel during 2020) associated with our marketing and customer service initiatives in line with our customer acquisitions and new jurisdictions served.~~

During the year ended December 31, 2020, product and technology expenses increased by $7.6 million, or 223.2% compared to the prior year, driven by personnel and related costs (including $3.9 million in share-based compensation expense for key personnel during 2020)of $2.4 million) as we ramped up our team and invested in our platform to serve our new and existing ~~customers.~~customers for the B2B segment and $1.9 million from the inclusion of Coolbet in our operating results.

General and administrative expense increased $24.1 million of which $16.6 million was attributable to Coolbet. Exclusive of Coolbet, the remaining increase was driven by an increase of $2.8 million in professional fees related to legal fees, recruiting costs, professional consulting costs, and public company compliance costs, a $2.1 million increase in personnel and related costs (excluding a decrease in related share-based compensation expense of $1.1 million) in functions such as management, legal, human resources and finance to enhance our back-office infrastructure, a $1.2 million increase relating to unfavorable currency fluctuations, a $1.3 million increase relating to insurance costs reflecting the 2021 full year impact of directors and officers and business insurance, and a $1.0 million increase in software-related costs to support the Company’s growth. These increases were partially offset by other immaterial changes totaling $0.2 million.

Within our operating expenses, share-based compensation and related expenses across sales and marketing, product and technology, and general and administrative expenses increased by $16.4 million, or 194.3% compared to the prior year, primarily attributable to (i) personnel and related costs of increasing from approximately 141 to 241 employees ($6.9 million), (ii) share-based compensation for directors and key personnel ($4.9 million during 2020), and (iii) increased professional services related to capital markets advisory, consulting, accounting advisory, tax advisory and legal expenses incurred in connection with our initial public offering, corporate infrastructure and expansion projects ($5.8 million), (iv) additional compliance requirements as a result of becoming a public company in the United States in May 2020 ($1.3 million), and (v) costs incurred with respect to the acquisition of Coolbet ($1.0 million).

~~During the year ended December 31, 2020, depreciation and amortization expenses~~ decreased by ~~$1.1~~$2.0 million ~~or 24.5% compared~~ to the prior year, due to the mix of support versus development activities and prior capitalized assets becoming fully amortized during 2019 and 2020, not fully offset by new capitalized development costs to amortize in the future.

During the year ended December 31, 2020, interest expense, net increased by $0.4 million, driven by financing costs for the loan facility we entered into with related parties in the second quarter of 2020 in connection with the Share Exchange.

~~Income tax expense decreased by $0.2 million, or 38.5%, from $0.6~~$8.1 million for the year ended December 31, ~~2019~~2021. The decrease was primarily due to expenses of $7.3 million recognized during the year ended December 31, 2020 in relation to (i) the acceleration of vesting of outstanding grants at the time of our initial public filing in May 2020 of $3.9 million and (ii) the recognition of cash-settled share-based compensation expense in relation to taxes associated with U.K. options during the same period of $3.4 million (as compared to a benefit of $0.5 million in the current year period). The decrease was primarily offset by expenses of $4.2 million related to new awards issued in 2021, an expense $0.9 million related to a change in the incentive compensation structure made effective in 2021 which allowed for certain executives to receive their incentive compensation in the form of share-based compensation. In addition, we incurred share-based compensation expenses of $0.6 million related replacement share option awards to continuing employees of Coolbet and restricted shares issued in the acquisition of Silverback.

We recorded an impairment charge of $3.5 million during the year ended December 31, 2021 related to the termination notice we served to a content provider in January 2022 as certain conditions precedent associated with the certification of their remote gaming server had not been satisfied pursuant to the terms of the agreement in the period ended December 31, 2021. In accordance with the agreement, termination for cause results in a return of the initial payment of $3.5 million, however in response to our termination notice, the content provider responded with a notice to the Company of its material breach of the agreement, disputing the validity of the termination.

Depreciation and amortization expense was $16.8 million for the year ended December 31, 2021, an increase of $13.6 million from the comparable period in 2020. The increase was due to the amortization expense on intangible assets recorded in the acquisition of Coolbet on January 1, 2021.

We recorded income tax benefit of $0.2 million for the year ended December 31, 2021, reflecting an effective tax rate of 0.7%, compared to income tax expense of $0.4 million for the year ended December 31, ~~2020.~~2020, reflecting an effective tax rate of (1.8)%. Our country of domicile is Bermuda, which effectively has a 0% statutory tax rate as it does not impose taxes on profits, income, dividends, or capital gains. The ~~decrease~~difference between this 0% tax rate and the effective income tax rate for the years ended December 31, 2021 and 2020 was due primarily to a mix of earnings in foreign jurisdictions that are subject to current tax, taking into account foreign loss carryforwards in certain jurisdictions that are not expected to be recognized.

We report our operating results by segment in accordance with the “management approach.” The management approach designates the internal reporting used by our Chief Operating Decision Maker (“CODM”), who is ~~primarily the result of a decrease~~our Chief Executive Officer, for making decisions and assessing performance of our ~~accrual in relation to GAN UK’s estimated uncertain tax benefit during the period.~~reportable segments.

Year Ended December 31, ~~2020~~2021 Compared to Year Ended December 31, ~~2019~~2020

~~Segment~~The following table sets forth our segment results for the periods indicated:

B2B revenue increased $10.4 million primarily due to an increase in platform and content fee revenue of $10.7 million. Of this increase, RMiG jurisdictions in the United States contributed an increase of $9.3 million during the year ended December 31, 2021, including new U.S. states which launched in 2021 such as in Michigan following the launch of RMiG in January 2021, in addition to contributions beginning in May 2021 in West Virginia and October 2021 in Connecticut. Further contributing to the increase was an increase of $2.2 million in RMiG revenues in Italy and an increase of $2.0 million in simulated gaming revenue as compared to the prior year period. The increases were partially offset by a $2.5 million decrease in sportsbook revenue primarily as a result of FanDuel’s migration to its own player wallet during the third quarter of 2020.

Additionally, B2B development services and other revenue decreased $0.3 million, of which $2.2 million related to a decrease in development revenue, primarily related to prior year revenues associated with FanDuel’s migration to its own player wallet platform in 2020 and a $1.0 million decrease primarily related to lower hardware sales. The decrease was partially offset by $3.0 million in revenues attributable to patent licensing fee revenue recognized during the year ended December 31, 2021

B2B cost of revenue increased $1.1 million primarily due to a $1.9 million increase in content license fees due to higher sales in Italy and simulated gaming revenue and a $0.5 million increase in processing fees due to an increase in the number instances of our platform and end users. This increase was partially offset by decrease in costs of development services and other revenues of $1.4 million, primarily as a result of lower hardware sales compared to the prior year period.

Segment gross profit margin for B2B, which excludes depreciation and amortization expense, increased by 37.6% primarily driven by an increase in platform and ~~is a measure~~content fee revenue and an increase in the gross margin for development services and other revenue from 70.0% in 2020 to 85.3% in 2021. The increase in gross margin for development services and other revenue was due to patent revenue of $3.0 million which did not occur in the prior year period and lower cost of hardware relative to its sales in the current period when compared to the prior year period.

Segment gross profit for B2C, which excludes depreciation and amortization expense, was ~~$18.1~~$48.8 million, or 62.1% as a percentage of segment revenue, for the year ended December 31, ~~2020 (70.8% segment profit margin), as compared to $18.8 million for the~~2021. Prior year ended December 31, 2019 (77.5% segment profit margin). Key factors impacting comparisons between periods were a $4.0 million license of our patent in 2019 (as compared to no patent license fees in 2020)revenue and ~~$4.5 million~~costs of revenue are not included in ~~2019 related~~our financial results due to the ~~WinStar Casino and ReelsRoyale site, both~~timing of the Coolbet acquisition, which ~~are not present in 2020.~~closed January 1, 2021.

~~Segment results for SIM, which excludes depreciation and amortization and is~~Adjusted EBITDA

Management uses the non-GAAP measure of Adjusted EBITDA to measure its financial performance. Specifically, it uses Adjusted EBITDA (i) as a measure to compare our operating performance from period to period, as it removes the effect of ~~gross profit, was $6.6 million for~~items not directly resulting from our core operations, and (ii) as a means of assessing our core business performance against others in the ~~year ended December 31, 2020 (68.7% segment profit margin), as compared to $3.5 million for~~industry, because it eliminates some of the ~~year ended December 31, 2019 (60.5% segment profit margin). The increased segment results of $3.1 million was attributable to new customer launches~~effects that are generated by differences in capital structure, depreciation, tax effects and ~~organic growth.~~unusual and infrequent events.

~~Adjusted EBITDA is a non-GAAP financial measure that is provided as supplemental disclosure, which is defined~~ as net income (loss) before ~~interest expense,~~other (income) loss, net, income ~~taxes,~~tax expense (benefit), depreciation and amortization, impairments, share-based compensation expense and related expense, initial public offering related costs and other items which our Board of Directors considers to be infrequent or unusual in nature.

Management uses Adjusted EBITDA to measure its financial performance. Specifically, it uses Adjusted EBITDA (1) as a measure to compare its operating performance from period to period, as it removes the effect of items not directly resulting from core operations and (2) as a means of assessing its core business performance against others in the industry, because it eliminates some of the effects that are generated by differences in capital structure, depreciation, tax effects and unusual and infrequent events. The presentation of Adjusted EBITDA is not intended to be used in isolation or as a substitute for any measure prepared in accordance with U.S. ~~GAAP. Adjusted EBITDA, as defined, may not be comparable to similarly titled measures used by other companies in the industry,~~GAAP and Adjusted EBITDA may exclude financial information that some investors may consider important in evaluating our performance. Because Adjusted EBITDA is not a U.S. GAAP measure, the ~~Company’s performance.~~way we define Adjusted EBITDA may not be comparable to similarly titled measures used by other companies in the industry.

Below is a reconciliation toof Adjusted EBITDA ~~from~~to net ~~income (loss)~~loss, the most comparable U.S. GAAP measure, as presented in the consolidated statements of operations for the years specified:

⁽¹⁾Includes $7.9 million and $6.8 million in equity-classified expense for the years ended December 31, 2021 and 2020, respectively, and $0.4 million and $3.4 million in liability-classified (benefit) expense, for the years ended December 31, 2021 and 2020, respectively. Such amounts excluded capitalized amounts. Refer to Note 11 – Share-based Compensation for further details.

Our management uses the following key performance indicators (“KPIs”) as indicators of trends and results of the business. These KPIs give our management an indication of the level of engagement between the player and the Company’s platforms. No estimation is necessary in quantifying these KPIs, nor do they represent U.S. GAAP based measurements. These KPIs are subject to various risks such as customer concentration, competition, licensing and regulation, and macroeconomic conditions. Refer to “Item 1A. Risk Factors” for further risks associated with our business which would affect these KPIs.

⁽¹⁾B2C operating results of Coolbet have been included in the consolidated financial statements beginning on January 1, 2021.

~~The Company defines~~We define B2B Gross Operator Revenue as the sum of ~~its~~our B2B corporate customers’ gross revenue from SIM, gross gaming revenue from RMiG, and gross sports win from ~~real money regulated sports betting.~~sportsbook offerings. B2B Gross Operator Revenue, which is not comparable to financial information presented in conformity with U.S. GAAP, gives management and users of our financial statements an indication of the extent of transactions processed through ~~the Company’s~~our B2B corporate customers’ platforms and allows management to understand the extent of activity that ~~the Company’s~~our platform is processing.

The increase in ~~gross operator revenue~~Gross Operator Revenue for the year ended December 31, ~~2020,~~2021, as compared to the year ended December 31, ~~2019,~~2020, was driven primarily ~~attributable to~~by expanded legalization of RMiG and sports betting in additional U.S. states and our launch of RMiG solutions for new and existing customers in those jurisdictions, the ~~continued expansion~~most significant of ~~existing and new U.S. customers and business, coupled with a shift towards~~which was Michigan in January 2021. Additional increases in Europe of RMiG and SIM ~~which experienced substantial~~were driven by organic growth ~~since~~from new and existing customers.

We define B2B Take Rate as a quotient of B2B net revenue retained by the ~~COVID-19 outbreak began disrupting retail casino operations~~Company over the total gross revenue generated by our B2B corporate customers. B2B net revenue is calculated by deducting from gross revenue, the statutory taxes, promotional bonuses, and ~~the sports betting calendar.~~

~~Expansion of existing and new customers in Pennsylvania combined with an annualized impact of~~ our 2019 expansion into New Jersey contributed towards increases in RMiG gross operator revenues, while new customers and optimization of our platform since the COVID-19 outbreak drove growth in SIM gross operator revenues.

The Company defines Active Player-Days as unique individuals who log on and wager each day (either wagering with real money or playing with virtual credits used in simulated gaming), aggregated during the respective period. By way of illustrative example: one (1) unique individual logging in and wagering each day in a single calendar year would, in aggregate, represent 365 Active Player-Days. Active Player-Days provides an indicator of consistent and daily interaction that individuals have with the Company’s platforms. Active Player-Days allowsB2B customer’s share defined by commercial agreements. B2B Take Rate gives management and users ~~to understand not only total users who interact with the platform but gives~~of our financial statements an ~~idea~~indication of the ~~frequency to which users are interacting with~~impact of the ~~platform, as someone who logs~~statutory terms and the efficiency of the commercial terms on ~~and wagers multiple days are weighted heavier during~~ the ~~period than the user who only logs on and wagers one day.~~business.

The ~~increase~~decrease in ~~Active Player-Days~~B2B Take Rate for the year ended December 31, ~~2020,~~2021, as compared to the year ended December 31, ~~2019,~~2020, was ~~primarily attributable to the continued expansion of existing and new U.S. customers and business, coupled with~~driven by a shift ~~towards~~in revenue from SIM to RMiG and SIM, which experienced substantial growth since the COVID-19 outbreak began disrupting retail casino operations and the sports betting calendar. As those markets further recover from their COVID-induced interruptions, the major boosts seenthat inherently has a lower take rate; an increase in RMiG and ~~SIM has started~~sports betting revenue from U.S. states with higher taxes, specifically Pennsylvania and Michigan; and increased promotional bonuses by certain B2B customers in new jurisdictions, such as Wynn in Michigan and FanDuel in Michigan, West Virginia, and Connecticut.

We define B2C Active Customers as a user that places a wager during the period. This metric allows management to ~~subside, though record levels~~monitor the customer segmentation, growth drivers, and ultimately creates opportunities to identify and add value to the user experience. This metric allows management and users of ~~revenue continue~~the financial statements to ~~be achieved.~~measure the platform traffic and track related trends.

~~The Company defines Average Revenue per Daily Active User (“ARPDAU”)~~We define B2C Marketing Spend Ratio as ~~Gross Operator Revenue~~the total B2C direct marketing expense for the period divided by the ~~identified number of Active Player-Days.~~total B2C revenues. This ~~measure~~metric allows management to measure the ~~value per daily~~success of marketing costs during a given period. Additionally, this metric allows management to compare across jurisdictions and other subsets, as an additional indication of return on marketing investment.

We define B2C Sports Margin as the ratio of wagers minus winnings to total amount wagered, adjusted for open wagers at period end. Sports betting involves a user ~~and track user interaction~~placing a bet on the outcome of a sporting event with the ~~platforms, which helps both~~chance to win a pre-determined amount, often referred to as fixed odds. Our B2C sportsbook revenue is generated by setting odds that are intended to provide a built-in theoretical margin in each sports bet offered to our users. This metric allows management to measure sportsbook performance against its expected outcome.

Our primary uses of ~~financial statements understand the value per user that is driven by marketing efforts~~cash include funding our ongoing working capital needs, content licensing discussed below, developing and ~~data analysis obtained from the Company’s~~maintaining our proprietary software platforms.

~~The increase in ARPDAU in~~During the year ended December 31, ~~2020,~~2021, we entered into Content Licensing Agreements (the “Agreement”) with a third-party gambling content provider specializing in developing and licensing interactive games. The Agreement grants us exclusive right to use and distribute the online gaming content in North America. The content provider is committed to developing a minimum number of games for our exclusive use over the five-year term, subject to extensions. In exchange, we are required to pay fixed fees, totaling $30.0 million, of which $5.0 million was due upon execution of the Agreement, and the remaining fixed fees are paid systematically over the initial five-year term. Additional payments could be required if our total revenue generated from the licensed content exceed certain stipulated thresholds. In the event that the Agreement is terminated, actual cash outlays could be less than currently contemplated.

We expect our capital expenditures to continue to increase in the immediate future, as ~~compared~~we seek to expand our business through organic growth and potential business acquisitions. Specifically, the key elements of our growth strategy include, but are not limited to, the ~~year~~expansion of our gaming content on our platform, primarily through the Agreements, our anticipated launch of the integrated B2B sportsbook technology solution in North America in the fourth quarter of 2022, the continued integration of Coolbet’s sports betting technology and international B2C operations, the launch of regulated gaming in new U.S. states and potential business acquisitions.

The execution of our growth strategy will require continued significant capital expenditures. We expect to continue investing in our products and technologies as we seek to scale our business.

We incurred capital expenditures of $14.0 million and $5.9 million for the years ended December 31, ~~2019, was primarily~~2021 and 2020, respectively. Of these expenditures, purchases related to internally developed capitalized software represented $11.6 million and $4.4 million, respectively, property and equipment (including licenses for internal use software) represented $1.9 million and $1.2 million, respectively, and intangible assets (including licenses to operate in related jurisdictions) represented $0.4 million and $0.2 million, respectively, for the result of higher growth in revenue in our highest-yield segment, which is U.S. RMiG platform, compared to growth in our simulated iGaming platform revenues. Additionally, the increase in ARPDAU in 2020 versus 2019 was primarily the result of improved marketing efforts which increased the amount of money paid by players. Both Active Player-Days and Gross Operator Revenue expanded during the period, but Gross Operator Revenue expanded quicker than Active Player-Days. Based on expanded data obtained from the platform, we were able to adjust our product offerings to provide more popular and in-demand gaming content driving up the average value per player as the players were more satisfied with the product provided.

~~As of December 31, 2020, we had an accumulated deficit of $45.8 million, as a result of incurred losses~~generated from operations and cash on hand. In May 2020, we completed our U.S. initial public offering under which we sold an aggregate of 7,337,000 ordinary shares for net ~~operating~~proceeds of $57.4 million and in December 2020, we conducted a follow-on offering under which we sold 6,790,956 ordinary shares for net proceeds of $98.5 million. In January 2021, we completed the acquisition of Coolbet for a purchase price of $218.1 million, including the issuance of 5,260,516 ordinary shares, replacement equity-based awards valued at $0.3 million and cash ~~outflows in prior years. We believe~~of $111.1 million, which was funded from the follow-on offering proceeds and available cash on hand.

Our primary source of liquidity for our working capital is cash flows generated from operations and our cash on hand ~~and~~of $39.5 million at December 31, 2021.

We believe cash generated from operations and cash on hand will be sufficient to meet our ~~liquidity needs. Our primary~~working capital and capital expenditure requirements for ~~liquidity~~at least the next twelve months. We may also seek to enhance our competitive position through additional complementary acquisitions in both existing and ~~capital are~~new markets. Therefore, from time to time, we may access the equity or debt markets to raise additional funds to finance ~~working capital, capital expenditures and general corporate purposes. Our capital expenditure consists primarily of technology development costs, computer equipment, and costs to enter contracts.~~ potential acquisitions.

In the ~~event~~longer term, to the extent that we are unable to sustain positive cash flow from operations and/or raise adequate financing, future operations may need to be scaled back by delaying hiring or reducing headcount. Our success will depend in part onour current resources, including our ability to ~~continue~~generate operating cash flows, are insufficient to ~~attract new customers, retain existing customers,~~satisfy our cash requirements, we may seek additional equity or debt financing. Our ability to do so depends on prevailing economic conditions and ~~market~~other factors, many of which are beyond our ~~products and services. There can be no assurance that we will be able to achieve any or all of these success factors.~~control.

On January 1, 2021, we acquired Coolbet for a purchase price of $218.6 million comprised of a cash payment of $111.6 million, the issuance of 5,260,516 ordinary shares (valued at $106.7 million) and the issuance of replacement equity awards (valued at $0.3 million). We anticipate a level of increased development costs following the acquisition in order to integrate Coolbet’s sports technology within our B2B offering. Certain of these development costs associated with the integration may qualify for capitalization in accordance with our accounting policies.

~~A summary of our operating, investing and financing activities is shown in the following table:~~

Net cash used in operating activities increased $11.9 million, or 213.6%, from a $5.6 million net inflow during the year ended December 31, 2019 to a $6.3 million net outflow for the year ended December 31, 2020. The increase in net cash used in operating activities is the result of an increase in net loss of $22.2 million from $2.0 million net income in 2019 to $20.2 million net loss in 2020, due to increased administrative costs as described above.

Net cash used in investing activities increased $2.9 million, or 99.4%, from a $3.0 million net outflow during the year ended December 31, 2019 to a $5.9 million net outflow for the year ended December 31, 2020. The increase is the result of a $1.6 million increase in capitalized software development costs associated with new customer launches and future launches, a $1.0 million increase in purchases of property and equipment and a $0.3 million increase in the acquisition of licenses to operate in new jurisdictions.

Net cash provided by financing activities increased $154.5 million from a $0.2 million net inflow during the year ended December 31, 2019 to a $154.7 million net inflow for the year ended December 31, 2020. The increase is mainly the result of proceeds from our U.S. initial public offering in May 2020 ($57.4 million), follow-on public offering in December 2020 ($99.4 million) and cash proceeds on the exercise of employee share options ($2.1 million increase compared to the prior period); offset by the payment of offering costs of ($2.0 million) and cash consideration paid to the previous shareholders of the Company plc (£2 million or $2.5 million) pursuant to the May 2020 Scheme of Arrangement.

We do not currently have any credit facilities or similar capital resources in place. We believe cash on hand and cash generated from operations will be sufficient to meet our liquidity needs. To the extent that we are unable to sustain positive cash flow from operations, we expect to raise additional capital through the sale of debt ~~or equity securities. There are no~~ arrangements in place ~~for any such financing at this time. We~~and cannot provide any assurance as to the availability or terms of any future financing that we may require to support our operations. If the needed financing is not available, or if the terms of financing are less desirable than we expect, we may be forced to decrease our level of investment in new products and technologies, discontinue further expansion of our business, or scale back our existing operations, any of which could have an adverse impact on our business and financial prospects.

A summary of our operating, investing and financing activities is shown in the following table:

Net cash used in operating activities decreased $1.3 million primarily resulting from a decrease in net loss after adjustments to reconcile net loss to cash flows from operations of ~~$5.9~~$8.1 million. The decrease in cash used in operating activities was offset by an unfavorable change in operating assets and liabilities, primarily due to payments totaling $8.5 million to third-party gambling content providers for the rights to use and ~~$3.0~~distribute their online gaming content in North America.

Net cash used in investing activities increased $100.8 million primarily as a result of $92.7 million cash paid for the acquisition of Coolbet, net of cash acquired and a $7.2 million increase in spend for capitalized software development costs primarily related to $4.3 million invested in relation to new B2B customer launches, product enhancements, and new features, $1.6 million for the B2B sportsbook technology solution in North America, and $1.3 million invested in relation to new B2C product enhancements and features.

Net cash provided by financing activities decreased by $154.5 million primarily due to $57.4 million in proceeds from our U.S. initial public offering in May 2020 and $99.4 million in proceeds from the issuance of ordinary shares in a follow-on public offering in December 2020 that did not recur during the year ended December 31, ~~2020~~2021, and ~~2019, respectively. Of these expenditures, purchases related to intangible assets (including licenses to operate~~a decrease in ~~related jurisdictions) represented $0.2~~cash proceeds on the exercise of employee share options of $1.6 million. The decrease was partially offset by decreased payments of offering costs of $1.4 million and $0, respectively, internally developed capitalized software represented $4.4 million and $2.7 million, respectively, and property and equipment (including licenses for internal use software) represented $1.2 million and $0.2 million, respectively, forcash consideration paid to the ~~year ended December 31,~~previous shareholders of GAN plc pursuant to the May 2020 ~~and 2019.~~Scheme of Arrangement of $2.5 million.

As a smaller reporting company as defined by Item 10 of Regulation S-K, the Company is not required to provide the information required by this Item.

We have audited the accompanying consolidated balance ~~sheets~~sheet of GAN Limited (a Bermuda corporation) and subsidiaries (the “Company”) as of December 31, ~~2020 and 2019,~~2021, the related consolidated statements of operations, comprehensive ~~income (loss),~~loss, changes in ~~stockholders’~~shareholders’ equity, and cash flows for ~~each of~~ the ~~two years in the period~~year ended December 31, ~~2020,~~2021, and the related notes (collectively referred to as the ~~“consolidated financial~~“financial statements”). In our opinion, the ~~consolidated~~ financial statements present fairly, in all material respects, the financial position of the Company atas of December 31, ~~2020 and 2019,~~2021, and the results of its operations and its cash flows for ~~each of~~ the ~~two years in the period~~year ended December 31, ~~2020,~~2021, in conformity with accounting principles generally accepted in the United States of America.

These ~~consolidated~~ financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s ~~consolidated~~ financial statements based on our ~~audits.~~audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our ~~audits~~audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

We have audited the accompanying consolidated balance sheet of GAN Limited (the “Company”) as of December 31, 2020, the related consolidated statements of operations, comprehensive loss, changes in shareholders’ equity, and cash flows for the year ended December 31, 2020, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2020, and the results of its operations and its cash flows for the year ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our ~~audits~~audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our ~~audits~~audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our ~~audits provide~~audit provides a reasonable basis for our opinion.

We have served as the Company’s auditor ~~since 2013.~~from 2013 through 2021.

The accompanying notes are an integral part of these consolidated financial statements.

~~Consolidated Statements of Operations~~CONSOLIDATED STATEMENTS OF OPERATIONS

The accompanying notes are an integral part of these consolidated financial statements.

~~Consolidated Statements of Comprehensive Income (Loss)~~CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

The accompanying notes are an integral part of these consolidated financial statements.

~~Consolidated Statements of Changes in Stockholders’ Equity~~CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

The accompanying notes are an integral part of these consolidated financial statements.

~~Consolidated Statements of Cash Flows~~CONSOLIDATED STATEMENTS OF CASH FLOWS

The accompanying notes are an integral part of these consolidated financial statements.

~~Notes to the Consolidated Financial Statements~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

GAN Limited (the ~~“Parent”~~“Parent,” and with its subsidiaries, collectively the “Company”) is an exempted company limited by shares, incorporated and registered in Bermuda. GAN plc, the previous parent, began its operations in the United Kingdom (“U.K.”) in 2002 and listed its ordinary shares on the AIM, the London Stock Exchange’s market for smaller companies, in 2013. In May 2020, pursuant to a statutory Scheme of Arrangement under Part 26 of ~~U.K~~U.K. Companies Act of 2006 (“Scheme of Arrangement”) approved by the shareholders of GAN plc, ~~as further discussed below,~~ the shareholders of GAN plc exchanged their shares in GAN plc for shares in the Parent, ~~plus cash consideration~~ thereby migrating the Company’s jurisdiction of organization from the U.K. to Bermuda. Thereafter, GAN Limited became the parent company of GAN plc. GAN plc was renamed GAN (UK) Limited (“GAN UK”).

~~On May 7,~~ In 2020, the Company ~~completed its U.S.~~effected an initial public offering ~~whereby 7,337,000 ordinary~~on the NASDAQ exchange.

On January 1, 2021, the Company acquired all of the outstanding shares ~~were issued~~of Vincent Group p.l.c. (“Vincent Group”), a Malta public limited company doing business as “Coolbet” (Note 4). Coolbet is a developer and ~~sold at a public offering price~~operator of ~~$8.50 per share.~~ an online sports betting and casino platform that is accessible through its website in markets across Northern Europe, Latin America and Canada.

The Company ~~received net proceeds of $55,289 after deducting the underwriters’ discounts and commissions of $4,920 and other offering expenses of $2,155.~~

~~GAN Limited and its subsidiaries (collectively the “Company”)~~ is a ~~leading~~ business-to-business (“B2B”) supplier of ~~Internet gambling Software-as-a-Service~~a proprietary gaming system, GameSTACK™ (“~~SaaS”~~GameSTACK”) ~~solutions~~, which is used predominately toin the U.S. land-based casino industry. ~~The Company has developed a proprietary Internet gambling enterprise software system, GameSTACK™ (“GameSTACK”), which it licenses to land-based casino operators as~~For its B2B customers, GameSTACK is a turnkey technology solution for regulated real money ~~Internet~~internet gambling (“~~RMiG”~~real money iGaming” or “RMiG”), ~~Internet~~online sports gaming, and virtual simulated gaming (“SIM”). The Company is also a business-to-consumer (“B2C”) developer and operator of an online sports betting and casino platform, providing international users with access through www.coolbet.com to its sportsbook, casino games and poker products. The Company operates in 2operating segments – B2B and B2C.

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

On May 5, 2020, GAN Limited completed a share exchange and reorganization pursuant to a Scheme of Arrangement, whereby the shareholders of GAN plc agreed to exchange their ordinary shares, on a basis of four ordinary shares to one ordinary share, for shares of GAN Limited, plus a pro rata portion of an aggregate ~~$2,525 (~~£$2,525 (£2,004or 2.32 pence per share) in cash (“Share Exchange”) ~~in cash.~~. Immediately subsequent to the Share Exchange, the shareholders of GAN Limited held the same economic interest as they had in GAN plc prior to the Share Exchange. Holders of share options in GAN plc also received reciprocal share options as applicable, in GAN Limited. ~~After the reorganization, GAN plc became a wholly-owned subsidiary of GAN Limited.~~

The consolidated financial statements have been prepared as if GAN Limited had been the parent entity ~~throughout~~for the periods presented. ~~The consolidated financial statements for the periods prior to the share exchange and reorganization reflect the historical operations of GAN plc. Additionally, all~~All share and per share amounts prior to the date of the share exchange and reorganization in these consolidated financial statements have been retroactively adjusted to give effect to the Share Exchange.

~~Note 3. Summary of Significant Accounting Policies~~NOTE 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Due to the inherent ~~uncertainty~~uncertainties involved in making estimates, actual results ~~reported in the future periods may be based upon amounts that~~ could differ from ~~those estimates.~~the original estimates, and may require significant adjustments to these reported balances in future periods.

The consolidated financial statementsinclude the results of the Parent and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

The Company’s reporting currency is the U.S. Dollar while the Company’s foreign subsidiaries use their local currencies as their functional currencies. The assets and liabilities of foreign subsidiaries ~~that use the local currency as their functional currency~~ are translated to U.S. Dollars based on the current exchange rate prevailing at each reporting period. Revenue and expenses are translated into U.S. Dollars using the average exchange rates prevailing for each period presented. Translation adjustments that arise from translating a foreign subsidiary’s financial statements from their functional currency to U.S. Dollars are reported as a separate component of accumulated other comprehensive loss in ~~stockholders’~~shareholders’ equity.

Gains and losses arising from transactions denominated in a currency other than the functional currency are included in general and administrative expense in the consolidated statements of operations as incurred. Foreign currency transaction and remeasurement gains and losses were a net gain (loss) of ~~$207~~ $993 and ~~net loss of $414~~$(207) for the ~~year~~years ended December 31, 2021 and 2020, respectively.

Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of its cash and ~~2019, respectively.~~trade receivables. The Company holds cash deposits in foreign countries, primarily in Northern Europe and Latin America, of approximately $35.4 million, which are subject to local banking laws and may bear higher or lower risk than cash deposited in the United States. Cash held in the United States is maintained in a major financial institution in excess of federally insured limits. As part of our cash management processes, the Company performs periodic evaluations of the credit standing of the financial institutions and we have not sustained any credit losses from instruments held at these financial institutions. Additionally, the Company maintains an allowance for potential credit losses, but historically has not experienced any significant losses related to individual customers or groups of customers in any particular geographic area.

The coronavirus disease 2019 (“COVID-19”) pandemic, which was declared a national emergency in the United States in March 2020, ~~continues to create extensive disruptions to~~significantly impacted the ~~United States and global~~ economic conditions and financial markets ~~and to businesses and the lives of individuals throughout~~around the world. Federal and state governments have taken, and continue to take, unprecedented actions to contain the spread of the disease, including quarantines, travel bans, shelter-in-place orders, closures of businesses and schools, fiscal stimulus, and legislation designed to deliver monetary aid and other relief for businesses and individuals impacted by the pandemic.

~~Although the Company’s business has proven resilient during the pandemic (for example, with closures~~The closure of land-based casinos, ~~shifting increased revenue~~social distancing, shelter-in-place, and similar restrictions implemented in response to the COVID-19 pandemic led to an increase in the Company’s existing and new player activity in its online iGaming offerings as compared to historic trends, primarily at the start of the second quarter of 2020. Player activity in connection with the iGaming business has generally returned to pre-pandemic levels following the re-opening of land-based casinos and easing of local restrictions.

The ultimate impact of the pandemic on the Company’s future operating results is unknown and will depend, in part, on the length of time COVID-19 disruptions exist and the subsequent behavior of players after restrictions are fully lifted. A recurrence of COVID-19 cases or an emergence of additional variants could adversely impact the Company’s future financial results, though results from the Company’s iGaming business may partially offset any potential reduction to the Company’s ~~online iGaming offerings), it is uncertain whether this trend will continue, as~~sports betting transactions resulting from the ~~economic disruption and uncertainty caused by COVID-19 may cause a general decline in iGaming and gambling in general over time and therefore,~~suspension or cancellation of sporting events. The Company has considered the impact of COVID-19 on ~~the Company’s business is ongoing. The cancellation of certain sporting events has reduced sports betting transactions~~its accounting policies, judgments and it is uncertain when the number of live sporting events will return to pre-pandemic levels. Any of these consequences may adversely impact player activity on the Company’s platforms, which would negatively impact the business. Asestimates as part of the preparation of these consolidated financial ~~statements, the Company has considered the impact of COVID-19 on the accounting policies and judgments and estimates.~~statements.

Management and the Board of Directors are monitoring the impacts of COVID-19 on the Company’s operations and have not identified any major operational challenges through the date of issuance of these consolidated financial statements. The Company has not experienced significant impacts to its liquidity to date. COVID-19 ~~impacts~~may impact the Company’s ability to access capital to the extent it ~~effects~~affects the ~~U.S~~U.S. capital markets. The Company has assessed the extent to which ~~the~~ COVID-19 ~~impacts~~has impacted events after the reporting date and ~~have~~has not identified additional items to disclose as a result. ~~Currently, significant uncertainties exist concerning the magnitude of impact~~

(in thousands, except share and ~~duration of the COVID-19 pandemic.~~per share amounts)

The Company’s ~~revenues~~revenue from its B2B operations are ~~generated~~ primarily from its ~~Internet gambling SaaS cloud-based~~internet gaming Software-as-a-Service platform, GameSTACK, that its customers use to provide real money internet gambling (“RMiG”), online sports gaming and simulated ~~Internet~~internet gaming ~~and online sports betting.~~(“SIM”) to its end users. The Company enters into ~~service agreements~~contracts with its customers that generally range from 3three to 5five years and ~~includes~~include renewal ~~provisions, under which~~provisions. These contracts generally include provision of the internet gaming platform, content consisting of proprietary and third-party games, development services and support and marketing services. In certain cases, the contract may include computer hardware to be procured on behalf of the customer. The customers cannot take possession of the hosted GameSTACK software and the Company does not sell or license the GameSTACK software.

The Company charges fees as consideration for it ~~charges fees~~use of its internet gaming system, game content, support and marketing services based on a fixed percentage of the casino operator’s ~~gross or~~ net gaming revenue or net ~~sports~~sportsbook win, at the time of settlement of an event for ~~real money gaming~~RMiG contracts, considered usage-based fees, or at the time of purchase for in-game virtual credit for ~~simulated gaming. Further, the Company generates revenues from the licensing of proprietary and third-party branded games (collectively “content licensing services”) hosted on the platform.~~

~~In certain service agreements with~~ SIM ~~customers, the Company receives the fees for in-game virtual credit purchases made by end-user players and remits payment to the SIM casino operator (customer) for their share~~contracts. The determination of the ~~SIM revenues generated from the Company’s platform. At December 31, 2020~~fee charged to its customers is negotiated and ~~2019, the Company has recorded a liability of $2,520 and $561, respectively, for its customers’ share of the fees within other current liabilities in the consolidated balance sheets.~~varies significantly.

The Company’s promise to provide the ~~software-as-a service cloud-based~~RMiG SaaS platform and content licensing services on the hosted software is a single performance obligation. This performance obligation is recognized over time, as the Company provides services to its customer in its delivery of services to the player end user. The Company’s customers simultaneously receive and consume the benefits provided by the Company as it delivers services to its customers. Usage based fees are considered variable consideration as the service is to provide unlimited continuous access to its hosted application and usage of the hosted system is primarily controlled by the player end user. The transaction price ~~is considered~~includes fixed and variable consideration and is billed monthly with the amount due generally ~~due~~ thirty days from the date of the invoice.

Variable consideration is allocated entirely to the period in which consideration is earned as the variable amounts relate specifically to the customer’s usage of the platform that day and allocating the usage-based fees to each day is consistent with the allocation objective, primarily that the change in amounts reflect the changing value to the customer. The Company’s ~~RMiG~~internet gaming system, game content, support and ~~SIM enterprise software platform offerings include iGaming content licensing services. The GameSTACK platform is capable~~marketing services are provided equally throughout the term of ~~supporting,~~the contract. These services are made up of a daily requirement to provide access and ~~is available~~use of the internet gaming system and support services to the customer over a period of time, as well as provide marketing services, and not a specified amount of services. The series of distinct services represents a single performance obligation that is satisfied over time.

Purchases of virtual credits within a transaction period on the SIM platform, generally a monthly convention, are earned at a point in time, upon the close of the respective period as the credit has no monetary value, cannot be redeemed, exchanged, transferred or withdrawn, represents solely a device for ~~both proprietary~~tracking game play during the month, does not obligate the Company to provide future services and the arrangements with the customer and player end user have no substantive termination penalty.

In certain service agreements with its SIM customers, the Company receives fees for the purchases of in-game virtual credit made by end-users and remits payment to the SIM customer for their share of the SIM revenues. At December 31, 2021 and 2020, the Company has recorded a liability due to its customers for their share of the fees of $2,171 and $2,520, respectively, within other current liabilities in the consolidated balance sheets.

The Company uses third-party ~~licensed gaming content. The customer,~~content providers in ~~this case the casino operator, generally controls the determination~~supplying game content in its performance of ~~which gaming~~providing game content ~~will be offered in their online casinos.~~

on its platform to its customers. A customer ~~can utilize~~has access to the Company’s ~~proprietary or~~propriety and licensed ~~gaming~~game content ~~or a~~and additionally, the customer can direct the Company to procure third-party ~~gaming~~game content on its behalf. The Company has determined it acts as the principal for providing the game content ~~licensing services~~ when the Company controls the ~~gaming~~game content, and therefore presents the revenue on a gross basis in the consolidated statements of operations. When the customer directs the Company to procure third-party ~~gaming~~game content, the Company determined it is deemed an agent for providing ~~the~~such game content, ~~licensing services,~~ and therefore, records the revenue, net of ~~licensing~~the costs ~~paid to the suppliers~~ of ~~that gaming~~ content license fees, in the consolidated statements of operations.

~~Revenue is generated from fees for development of games for use on its RMiG and SIM platforms.~~ The ~~development revenue is recognized at the point in time when control of the game is transferred, typically the earlier of the customer’s acceptance or upon receipt of the certification of the game.~~

~~Platform~~Company also provides development services ~~consist of fees charged~~ for ~~initial deployment of iGaming solutions, as well as~~ ongoing development services to provide updates to the ~~software~~RMiG platforms for enhanced functionality or customization. ~~Development services fees for the initial deployments of the iGaming solutions are typically charged at a fixed fee.~~ Ongoing ~~platform~~ development services are typically billed monthly, at a daily rate, for services performed. Revenue from RMiG platform development services are considered additional distinct promises to the customer as they access the platform in a single-tenant architecture, the added features provide new, discrete capabilities independent of the original features and provide independent value to the customer. Revenue is recognized over time as the Company performs the services. ~~For development services charged at a daily rate, revenue~~Revenue is measured using an input method based on effort expended, which uses direct labor hours incurred. As the performance ~~obligations in these instances relate~~obligation relates to the provision of development services over time, this method best reflects the transfer of control as the Company performs. In customer contracts that require a portion of the consideration to be received in advance, at the commencement of the contract, such advance payment is initially recorded as a contract liability.

~~The Company resells~~Other services include the resale of a third-party computer hardware, such as ~~computing~~ servers and other ~~technical~~related hardware devices, upon which the GameSTACK software ~~platform~~ is installed for its customers. These products are not required to be purchased in order to access the GameSTACK platform but are sold as a convenience to the customer. The Company procures the computer hardware on the customer’s behalf for a fee determined based on cost of the computer hardware plus a markup. The Company charges a hardware deployment fee which is a one-time fee for installation, testing and certification of the computer hardware at the gaming hosting facility. Revenue is recognized at the point in time when control of the hardware transfers to the customer. Control is transferred after the hardware has been procured, delivered, installed at the ~~client’s~~customer’s premises and configured to allow for remote access.

The Company has determined that it is acting as the principal in ~~these transactions~~providing computer hardware and related services as it ~~takes~~assumes responsibility for procuring, delivering, installing and configuring the hardware at the customer’s location and takes control of the ~~hardware.~~hardware, prior to transfer. Revenue is presented at the gross amount of consideration to which it is entitled from the customer in exchange for the computer hardware ~~in development services~~ and ~~other revenue in the consolidated statements of operations.~~related services.

The Company generates revenue from time to time from the licensing of its U.S. patent, which governs the linkage of on-property reward cards to their counterpart ~~Internet gambling~~internet gaming accounts together with bilateral transmission of reward points between the ~~Internet gambling~~internet gaming technology system and the land-based casino management system present in all ~~U.S~~U.S. casino properties. The nature of the promise in transferring the license is to provide a right to use the patent as it exists. The Company does not have to undertake activities to change the functionality of the patent during the license period and the license has significant stand-alone functionality. Therefore, the Company recognizes the revenue from the license of the patent, at the point in time when control of the license is transferred to the customer. Control is determined to transfer at the point in time the customer is able to use and benefit from the license.

In 2019, the Company licensed its U.S. patent to a major U.S. Internet gambling operator and their affiliated land-based U.S. casino group. In this case, the license granted the operator the right to use the patent as it exists at the time the license was granted. Accordingly, revenue from the license of the patent was recognized at the point in time that control of the license was transferred to the customer. In 2019, patent licensing revenue totaled $4,000 and is recorded in development services and other revenue in the consolidated statements of operations.

For customer contracts that have more than one performance obligation, the transaction price is allocated to the performance obligations in an amount that depicts the relative stand-alone selling prices of each performance obligation. Judgment is required in determining the stand-alone selling price for each performance obligation. In determining the allocation of the transaction price, an entity is required to maximize the use of observable inputs. When the stand-alone selling price of a good or service is not directly observable, an entity is required to estimate the stand-alone selling price. ~~When a customer contract, includes~~Contracts with its customers may include platform and licensing of game content services, ~~and~~as well as development services ~~the~~and computer hardware services. The variable consideration ~~for~~generated from the platform and ~~content services~~the licensing of ~~the transaction price~~game content is allocated entirely to the performance obligation for platform and licensing of game content ~~services.~~

~~In situations when~~services and the ~~stand-alone selling price is not directly observable~~remaining fixed fees for development services and ~~is either highly variable or uncertain, the transaction price is~~computer hardware would be allocated to each of the remaining performance obligation based on ~~the residual approach. During the year ended December 31, 2019, the Company used the residual approach for a customer contract that included a license of a patent and, platform and content services.~~their relative stand-alone selling prices. The ~~Company allocated the~~ variable consideration ~~for platform and content services of the transaction price~~relates entirely to the ~~performance obligation for~~effort to satisfy the platform and licensing game content services and the fixed consideration relates to the remaining performance obligations which is consistent with the ~~remainder of the transaction price allocated to the performance obligation for the patent license.~~allocation objective.

~~Marketing costs include user acquisition expenses to attract new players to the Company’s B2C operated online casino. Sales and marketing expenses are expensed as incurred.~~

~~Notes to the Consolidated Financial Statements~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company operates the B2C gaming site www.coolbet.com outside of the U.S., which is proprietary software and includes the following product offerings: sportsbook, poker, casino, live casino and virtual sports.

The Company manages an online sportsbook allowing users to place various types of wagers on the outcome of sporting events conducted around the world. The Company operates as the bookmaker and offers fixed odds wagering on such events. When a user’s wager wins, the Company pays the user a pre-determined amount known as fixed odds. Revenue from online sportsbook is reported net after deduction of player winnings and bonuses. Revenue from wagers is recognized when the outcome of the event is known.

The Company offers live casino through its digital online casino offering in select markets, allowing users to place a wager and play games virtually at retail casinos. The Company offers users a catalog of over 2,700 third-party iGaming products such as digital slot machines and table games such as blackjack and roulette. Revenue from casino games is reported net after deduction of winnings, jackpot contribution and customer bonuses.

Peer-to-peer poker offerings allow users to play poker against one another on the Company’s online poker platform for prize money. Revenue is recognized as a percentage of the reported rake. Additionally, the Company offers tournament poker which allows users to buy-in for a fixed price for prize money. For tournament play, revenue is recognized for the difference between the entry fees collected and the amounts paid out to users as prizes and winnings.

In each of the online gaming products, a single performance obligation exists at the time a wager is made to operate the games and award prizes or payouts to users based on a particular outcome. Revenue is recognized at the conclusion of each contest, wager, or wagering game hand. Additionally, certain incentives given to users, for example, that allow the user to make an additional wager at a reduced price, may provide the user with a material right which gives rise to a separate performance obligation.

The Company allocates a portion of the user’s wager to incentives that create material rights that are redeemed or expired in the future. The allocated revenue for gaming wagers is primarily recognized when the wagers occur because all such wagers settle immediately.

The Company applies a practical expedient by accounting for revenue from gaming on a portfolio basis because such wagers have similar characteristics, and the Company reasonably expects the effects on the financial statements of applying the revenue recognition guidance to the portfolio to not differ materially from that which would result if applying the guidance to an individual wagering contract.

Sales and marketing expense primarily consists of general marketing and advertising costs, B2C user acquisition expenses and personnel costs within our sales and marketing functions. Sales and marketing costs are expensed as incurred.

Content licensing fees are paid to third parties for gaming content which are expensed as incurred. ~~Royalty expenses~~Content licensing fees are calculated as a percentage of net gaming revenues in ~~accordance with agreements on a monthly basis and are based on net online gaming revenues.~~respect of the third-party games, as stipulated in the third-party agreements.

Share-based compensation ~~cost~~expense is recognized for ~~equity-settled stock~~share options and restricted ~~stock awards~~shares issued to employees and non-employee members of the Company’s Board of ~~Directors~~Directors. The Company’s issued share options and restricted shares, which are primarily considered equity awards and include only service conditions, are valued based on the fair value of these awards on the date of grant. The fair value of the ~~stock~~share options is estimated using a Black-Scholes option pricing model and the fair value of the restricted ~~stock~~shares (restricted share awards and restricted share units) is based on the market price of the Company’s ~~stock at~~shares on the date of grant.

Certain restricted share units awards issued to non-employee members of the Company’s Board of Directors permit shares upon vesting to be withheld, as a means of meeting the non-employee director’s tax withholding requirements, and paid in cash to the non-employee director. The Company additionally incurs share-based compensation expense under compensation arrangements with certain of its employees under which the Company will settle bonuses for a fixed dollar amount by issuing a variable number of shares based on the Company’s stock price on the settlement date. These awards are classified as liability-based awards which are measured based on the fair value of the award at the end of each reporting period until settled. Related compensation expense is recognized based on changes to the fair value over the applicable service period

Share-based compensation ~~cost~~ is recorded over the requisite service period, generally defined as the vesting period. For awards with graded vesting and only service conditions, compensation cost is recorded on a straight-line basis over the requisite service period of the entire award. Forfeitures are recorded in the period in which they occur.

Basic ~~income (loss)~~loss per share is calculated by dividing the net ~~income (loss)~~loss by the weighted average number of ordinary shares outstanding during the year. In periods of income, diluted income per share is calculated by dividing the net income by the weighted average number of ordinary shares outstanding during the year plus the assumed conversion of all dilutive potential ordinary shares. In periods of loss, basic and diluted per share information isare the same.

Cash is comprised of cash held at the bank and third-party service providers. The Company is required to maintain compensating cash balances to satisfy its liabilities to users. Such balances are included within cash in the consolidated balance sheets and are not subject to creditor claims. At December 31, 2021 the related liabilities to users was $8,984.

Accounts receivable are stated at invoiced amounts and are unsecured, non-interest bearing and generally have 30-day payment terms. Other receivables at December 31, 2020 includes VAT recoverable of $510 and income tax receivable of $665. Other receivables at December 31, 2019 includes VAT recoverable of $98 and income tax receivable of $354.

The Company maintains an allowance for doubtful accounts that reduces receivables to amounts expected to be collected. Management estimates the allowance for doubtful accounts by assessing the probability of non-payment of the receivable. This probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected credit loss for the account receivable. Balances are reviewed for collectability on an individual basis as well as by reference to the extent that they become overdue. The Company considers factors such as delinquency in payment, financial difficulties, payment history of the debtor as well as certain forward-looking macroeconomic indicators in the countries in which the Company and its customers operate, including inflation, gross domestic product and unemployment, as well as the ~~outbreak~~impact of COVID-19. On confirmation that the account receivable will not be collected, the gross carrying value of the asset is written off against the related allowance for doubtful accounts. The provision for credit losses on accounts receivable is recorded in general and administrative ~~expenses~~expense in the consolidated statements of operations. ~~The Company adopted Accounting Standards Update (“ASU”) No. 2016-13,~~ ~~Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,~~ ~~on January 1, 2019. The impact of the new accounting standard was not significant.~~

~~Notes to the Consolidated Financial Statements~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company purchases hardware to sell to their customers to support the platform developed. Inventory is stated at the lower of cost or net realizable value, using the first-in, first out (“FIFO”) method. Inventory was $276 and $883 at December 31, 2020 and 2019, respectively, and is included in other current assets in the consolidated balance sheets.

Property and equipment are stated at cost less accumulated depreciation. Depreciation is generally computed on a straight-line basis over the estimated useful lives of the assets. Maintenance and repairs are charged to expense in the period they are incurred. When items of property or equipment are sold or retired, the related cost and accumulated depreciation are removed from the accounts, and any gain or loss is included in the statement of operations.

The Company capitalizes certain development costs related to its ~~software platform~~internet gaming platforms during the application development stage. Costs associated with preliminary project activities, training, maintenance and all other post implementation stage activities are expensed as incurred. Software development costs are capitalized when application development begins, it is probable that the project will be completed, and the software will be used as intended. The Company capitalizes certain costs related to specific upgrades and enhancements when it is probable that expenditures will result in additional functionality of the platform to its customers. The capitalization policy provides for the capitalization of certain payroll and payroll related costs for employees who spent time directly associated with development and enhancements of the ~~software~~ platform.

Capitalized software development costs are amortized on a straight-line basis over their estimated useful lives, which is generally ranges from three to five years, and are included within depreciation and amortization expense in the consolidated statements of operations.

Goodwill represents the excess of the fair value of the consideration transferred over the estimated fair values of the identifiable assets acquired and liabilities assumed on the acquisition date. As disclosed in Note 4, the Company has recorded goodwill primarily from its acquisition of Coolbet. Goodwill is not amortized, but rather is reviewed for impairment annually (as of October 1st) or more frequently if facts or circumstances indicate that it is more-likely-than-not the fair value of a reporting unit may be below its carrying amount.

The Company has determined that it has two reporting units: B2C and B2B. In its goodwill impairment testing, the Company has the option to perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of the reporting unit, including goodwill, is less than its carrying amount prior to performing the quantitative impairment test. The qualitative assessment evaluates various events and circumstances, such as macro-economic conditions, industry and market conditions, cost factors, relevant events and financial trends that may impact a reporting unit’s fair value. If it is determined that the estimated fair value of the reporting unit is more-likely-than not less than its carrying amount, including goodwill, the quantitative goodwill impairment test is required. Otherwise, no further analysis would be required.

If the quantitative impairment test for goodwill is deemed necessary, this quantitative impairment analysis compares the fair value of the Company’s reporting unit to its related carrying value. If the fair value of the reporting unit is less than its carrying amount, goodwill is written down to the fair value and an impairment loss is recognized. If the fair value of the reporting unit exceeds its carrying amount, no further analysis is required. Fair value of the reporting unit is determined using valuation techniques, primarily using discounted cash flow analysis.

Long-lived assets, ~~such as~~except goodwill, consist of property and equipment, and ~~capitalized~~finite lived acquired intangible assets, such as developed software, ~~development costs~~gaming licenses, trademarks, trade names and customer relationships. Intangible assets are amortized on a straight-line basis over their estimated useful lives. The Company considers the period of expected cash flows and underlying data used to measure the fair value of the intangible assets when selecting the estimated useful lives.

The fair value of the acquired intangible assets is primarily determined using the income approach. In performing these valuations, the Company’s key underlying assumptions used in the discounted cash flows were projected revenue, gross margin expectations and operating cost estimates. There are inherent uncertainties and management judgment is required in these valuations.

Acquired in-process technology consists of a proprietary technical platform. The Company reviews the in-process technology for impairment at least annually or more frequently if an event occurs creating the potential for impairment, until such time as the in-process technology efforts are completed. When completed, the developed technology will be amortized over its estimated useful life based on an amortization method that reflects the pattern in which the economic benefits of the intangible assets are consumed or otherwise realized. The integrated technology is expected to be completed in the fourth quarter of 2022.

Long-lived assets, except goodwill, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group to be tested for possible impairment, the Company compares the undiscounted cash flows expected to be generated by that asset or asset group to their carrying amount. If the carrying amount of the long-lived asset or asset group are not recoverable on an undiscounted cash flow basis, an impairment charge is recognized to the extent that the carrying amount exceeds fair value. Fair ~~values of long-lived assets are~~value is determined through various techniques, such as ~~applying~~discounted cash flow models using probability weighted ~~expected present value calculations to the~~ estimated future cash flows ~~using assumptions a market participant would utilize, or through~~and the use of ~~a third-party independent appraiser or~~ valuation ~~specialist. Refer~~specialists.

The Company records liabilities for ~~a discussion~~user account balances. User account balances consist of ~~the 2019 impairment charge.~~user deposits, promotional awards and user winnings less user withdrawals and user losses.

Deferred offering costs, consisting primarily of legal, accounting and other direct and incremental fees and costs related to the Company’s public offerings, are deferred in the period in which anthe offering is deemed probable. ~~The~~These costs ~~are~~were offset against such proceeds received from the offerings upon the closing of the offering (refer to Note 710 – ~~Stockholders’~~Shareholders’ Equity). All costs incurred until such event are expensed as incurred and are included in general and administrative expenses. Other indirect and non-incremental costs incurred in connection with such offerings were expensed as incurred and included in general and administrative expenses in the consolidated statements of operations.

Business combinations are accounted for using the acquisition method at the acquisition date, which is the date on which control is transferred to the Company. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value. Identifiable assets acquired, liabilities assumed, and any noncontrolling interest in the acquiree is recognized at their acquisition-date fair values at the acquisition date. The excess of the consideration transferred over the fair value of the net identifiable assets acquired is recorded as goodwill. Acquisition-related costs are expensed as incurred within general and administrative ~~expenses.~~expense.

On a quarterly basis, the Company ~~assess~~assesses potential losses in relation to pending or threatened legal matters. If a loss is considered probable and the amount can be reasonably estimated, the Company recognizes an expense for the estimated loss. Estimates of any such loss are subjective in nature and require the evaluation of numerous facts and assumptions as to future events, including the application of legal precedent which may be conflicting. To the extent these estimates are more or less than the actual liability resulting from the resolution of these matters, the Company’s financial results will increase or decrease accordingly.

The Company is subject to income taxes in the United States, U.K., Bulgaria, Israel, and ~~Israel.~~Malta. The Company records an income tax expense (benefit) for the ~~anticipate~~anticipated tax consequences of the reported results of operations using the asset and liability method. Under this method, deferred income tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, as well as for loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. The effect on deferred income tax of a change in tax rates are recorded in the period of the enactment. Deferred tax assets are reduced, through a valuation allowance, if necessary, by the amount of such benefits that are not expected to be realized based on current available evidence. In evaluating the Company’s ability to recover deferred tax assets in the jurisdiction from which they arise, all available positive and negative evidence is considered, including results of recent operations, scheduled reversals of deferred tax liabilities, projected future taxable income, and tax-planning strategies. The Company records a valuation allowance to reduce its deferred tax assets to the net amount that it believes is more likely than not to be realized.

The Company recognizes tax benefits from uncertain tax positions only if management believes that it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. Although the Company believes that it has adequately provided for uncertain tax positions, no assurance can be given that the final tax outcome of these matters ~~will~~would not be materially different. Adjustments are made when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences ~~will~~would affect the provision for income taxes in the period in which such determination is made and could have a material impact on the Company’s financial condition and operating results. The Company recognizes penalties and interest related to income tax matters in income tax expense.

The Company benefits from the U.K. research and development small or medium-sized tax credit regime and is able to surrender some of its trading losses that arise from its research and development activities for a cash rebate of up to 33.35% of eligible research and development expenditure. Research and development taxation relief is recognized once management considers it probable that any amount claimable will be received.Segments

The Company operates in two operating segments, ~~RMiG~~B2B and ~~SIM.~~B2C. Operating segments are defined as components of an enterprise where separate financial information is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and ~~assessing~~assess the Company’s performance. The Company’s CODM is the ~~chief executive officer.~~Chief Executive Officer. The CODM allocates resources and assesses performance based upon discrete financial information at the operating segment level.

Certain prior period amounts have been reclassified to conform to the current period presentation. Specifically, due to the Coolbet acquisition in 2021, the Company reclassified certain balances that were previously presented in separate balance sheet captions to other current assets, other assets, accrued expenses, other current liabilities and other liabilities in the consolidated ~~level.~~

~~Property and equipment, net at~~balance sheet as of December 31, ~~2020~~2020. These reclassifications had no impact on previously disclosed amounts for current assets, current liabilities, total assets and ~~2019 consisted of~~total liabilities.

In October 2021, the ~~following:~~Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. ASU 2021-08 requires an acquirer to measure and recognize contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contracts with Customers, rather than using fair value on the acquisition date. This amendment is effective for fiscal years beginning after December 15, 2022, including interim periods within those annual periods, and should be applied prospectively to business combinations occurring on or after the effective date. Early adoption is permitted. The Company will apply the amended guidance on a prospective basis to business combinations that occur on or after January 1, 2023.

~~Notes to the Consolidated Financial Statements~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On January 1, 2021, the Company acquired all of the outstanding shares of Vincent Group p.l.c. (“Coolbet”). The business was acquired for a purchase price of $218.1 million, after the final working capital adjustment and excluding acquisition related costs. The cash portion of the purchase price was funded from proceeds received from issuance of ordinary shares in the Company’s follow-on offering in December 2020 and available cash on hand. The Company acquired Coolbet to take advantage of Coolbet’s user interface and proprietary technical platform, to quickly integrate and offer a proprietary sportsbook offering to land-based casino operators in the U.S. The Company intends to continue to operate in the U.S. solely as a B2B provider to casinos and other operators. The addition of a proprietary sports betting engine will give the Company the ability to offer a “one-stop” solution to U.S. retail casino operators, while at the same time preserving the flexibility to incorporate third-party solutions when specified. The Company expects that its technology platform and expansive library of proprietary and third-party gaming content should enable it to add additional casino gaming content and platform support for the Company’s B2C offering in Northern Europe, Latin America and Canada.

The following table summarizes the consideration transferred and the recognized amounts of identifiable assets acquired and liabilities assumed at the acquisition date:

Recognized amounts of identifiable assets acquired and liabilities assumed at fair value:

Identifiable intangible assets acquired as part of the acquisition, including their respective expected useful lives, were as follows:

The Company accounted for the acquisition of Coolbet using the acquisition method. The acquisition is treated as a stock purchase. The goodwill is primarily attributable to the expected incremental revenue and profit to be derived from the Company’s introduction of Coolbet’s sports betting engine technology and intellectual technology to B2B customers in the U.S. and the assembled workforce of Coolbet. The Company intends to offer the Coolbet sports betting engine and associated capability to existing and new customers alongside its existing internet gaming system, as a complete turnkey solution or as an alternative sports betting engine to those currently relied upon by customers. Goodwill recognized in the acquisition is not deductible for tax purposes.

In the third quarter of 2021, an adjustment to increase goodwill by $50 was made to the initial amounts recorded, which relates to additional consideration paid by the Company to the seller as part of the final working capital adjustment. Additionally, there was a net adjustment to decrease goodwill by $2,092 and increase to the values assigned to the intangible assets by $2,200, comprised of a $1,500 increase to developed technology, $400 increase to in-process developed technology and a $300 increase to customer relationships, and a resulting increase to deferred tax liabilities of $108. The changes in the value of the intangible assets resulted in an increase in amortization expense of $591 during the year ended December 31, 2021. In the fourth quarter of 2021, a net adjustment was made to increase goodwill by $300 and increase certain estimated employer liabilities.

Giving effect to these adjustments, the Company recorded a net deferred income tax liability of $2,373 related to the intangible assets recorded in the acquisition accounting. Goodwill of $159,685was recorded at the time of acquisition and was adjusted to $157,643 during the third quarter of 2021 and subsequently adjusted to $157,943 during the fourth quarter of 2021. Goodwill arising from the acquisition has been assigned to the Company’s B2C and B2B segments. The Company expects the B2B segment to benefit from the synergies of the combination. Following the acquisition, Coolbet’s operations are reported in the B2C segment. Refer to Note 16 for the revenue and segment results of Coolbet since the acquisition date.

The Company incurred total acquisition-related costs of $1,309, of which $290 were recorded during the year ended December 31, 2021. The remaining costs were incurred in 2020.

On December 8, 2021, the Company completed the acquisition of Silverback Gaming Limited (“Silverback Gaming”) for cash consideration of $270. Silverback Gaming is a start-up software company that develops online casino slot games. The Company’s strategy was to acquire the start-up business to obtain the skilled workforce and launch a content studio. Silverback Gaming had minimal assets and liabilities and therefore, the Company recorded goodwill of $270on the acquisition date. Goodwill arising from the acquisition is deductible for tax purposes. The selling shareholders became employees of the Company and were issued 51,654 restricted shares under a share-based compensation arrangement. The restricted shares vest one-third on the acquisition date and one-third on each the first and second anniversary dates.

The operating results of Coolbet have been included in the consolidated financial statements, beginning on January 1, 2021. The following unaudited pro forma information presents the consolidated financial information as if the Coolbet acquisition had occurred on January 1, 2020. The unaudited pro forma results reflect certain adjustments related to the acquisition, such as amortization expense resulting from the intangible assets acquired, share-based compensation related to unvested replacement awards and an adjustment to reflect the Company’s income tax rate. Acquisition costs of $1,309 are also included as a nonrecurring charge. Such pro forma operating results were prepared for comparative purposes only and do not purport to be indicative of what would have occurred had the acquisition been made as of January 1, 2020 or of the results that may occur in the future.

Property and equipment, net is recorded in other assets in the consolidated balance sheets at December 31, 2021 and 2020 and consisted of the following:

Depreciation expense related to property and equipment was ~~$278~~$989 and ~~$126~~$278 for the ~~year~~years ended December 31, ~~2020~~2021 and ~~2019,~~2020, respectively.

~~Note 5. Capitalized Software Development Costs, net~~NOTE 6— CAPITALIZED SOFTWARE DEVELOPMENT COSTS, NET

Capitalized software development costs, net at December 31, ~~2020~~2021 and ~~2019~~2020 consisted of the following:

At December 31, ~~2020,~~2021, development in progress primarily represents costs associated with new proprietary content, ~~and~~ enhancements to the B2B software platform, ~~as well as~~and the development ~~projects related to new U.S. states which have regulated iGaming that are~~of GAN Sports. The GAN Sports B2B sportsbook technology is expected to be ~~fully~~ placed in service ~~by the end of 2021.~~

The Company recorded an impairment charge of $626 during the year ended December 31, 2019 which related to capitalized software costs for certain business-to-consumer technology that was being developed to provide online gaming for a particular customer and became impaired as a result of the termination of the customer contract, effective December 31, 2019. This impairment charge was recorded in the ~~RMiG segment.~~fourth quarter of 2022.

Amortization expense related to capitalized software development costs was ~~$2,729~~ $3,443 and ~~$3,893~~$2,729 for the years ended December 31, 2021 and 2020, respectively.

The changes in the carrying amount of goodwill, by segment, for the year ended December 31, ~~2020 and 2019, respectively.~~2021 were as follows:

In-process technology consists of a proprietary technical platform (refer to Note 4 – Acquisitions). The integrated technology is expected to be completed and placed in service in the fourth quarter of 2022, after which it will be amortized over its estimated useful life.

Amortization expense ~~of definite-lived~~related to intangible assets was ~~$128~~$12,289 and ~~$203~~$128 for the ~~year~~years ended December 31, 2021 and 2020, ~~and 2019,~~ respectively.

Estimated amortization expense for the next five years is as follows: ~~2021: $138; 2022: $118; 2023: $98; 2024: $64; 2025: $50.~~

Revenue share due to SIM customers represents the fees collected for in-game virtual purchases made by end-user players which are due to the ~~Consolidated Financial Statements~~customers for their share of the SIM revenues generated from the Company’s platform.

GAN Limited was incorporated in Bermuda on December 13, 2019. On December 18, 2019, GAN Limited issued and sold 10,000 ordinary shares to the ~~chief executive officer~~Chief Executive Officer of the Parent for consideration of ~~$100,~~$100, which shares were repurchased for the same price upon the completion of the Share Exchange as discussed below.

As previously discussed in Note 1 -– Nature of Operations and Note 2 -– Basis of Presentation, each shareholder of GAN plc, agreed to exchange four ordinary shares for issuance of one ordinary share of the Parent plus a pro rata portion of an aggregate ~~$2,525~~$2,525 (£2,004 or 2.32 pence per share) in cash.Immediately subsequent to the Share Exchange, GAN Limited shareholders held the same economic interest as they had in GAN plc prior to the Share Exchange. Holders of share options in GAN plc also received reciprocal share options, as applicable, in GAN Limited. Refer to Note 811 – Share-based Compensation.

Also, in connection with the Share Exchange, the Board of Directors adopted a bonus program, providing for additional fees to all directors, in their capacities as such, upon the successful completion of the Share Exchange and an U.S. initial public offering. The directors had the option to receive all or any portion of their awards in restricted ~~stock~~shares or cash. The total award was paid in cash in 2020, which totaled ~~$608.~~$608.

The ordinary share capital and additional paid-in capital accounts have been retrospectively adjusted to give effect to the Share Exchange and the remaining equity accounts reflect the historical activity of GAN plc prior to the Share Exchange. The cash disbursed as part of the Share Exchange was accounted for as a dividend since the amounts paid to each shareholder were made to them in their capacity of equity holders and in proportion of their respective interests.

GAN Limited’s authorized share capital consists of 100 million ordinary shares, par value ~~$0.01~~$0.01 per share. Holders of ordinary shares are entitled to one vote per share on all matters submitted to a vote of holders of ordinary shares. In addition, the ordinary shares have no right to redemption, conversion or sinking fund rights. Each ordinary share is entitled to dividends if, as and when dividends are declared by the Board of Directors and subject to a resolution of members, subject to the rights of any other class of shares (if any) and to the provisions of the Bermuda Companies Act. In the event of liquidation, dissolution or winding up, the holders of ordinary shares are entitled to share equally and ratably in the assets, if any, remaining after the payment of debt and liabilities.

On May 7, 2020, the Company completed its U.S. initial public offering whereby 7,337,000 ordinary shares were issued and sold at a public offering price of $8.50 per share. The Company received net proceeds of $55,289 after deducting the underwriters’ discounts and commissions of $4,920 and other offering expenses of $2,155.

On December 21, 2020, GAN Limited issued and sold 6,790,956 of ordinary shares in a follow-on public offering. The public offering price per share was ~~$15.50~~$15.50 per share. The Company received proceeds of ~~$98,541~~$98,541 from the offering, after deducting the underwriters’ discounts and commissions of ~~$5,818~~$5,818 and other offering expenses of ~~$901.~~$901. The follow-on offering also included the sale of 383,500 ordinary shares by the selling ~~stockholders,~~shareholders, giving effect to the exercise of 163,500 options to purchase ordinary shares. The Company did not receive any proceeds from the sale of ordinary shares by the selling ~~stockholders~~shareholders other than the ~~$214~~$214 in proceeds from the exercise of ~~stock~~share options.

During the year ended December 31, 2021 and 2020, the Company issued an aggregate of 289,480 and 927,667 ordinary shares for the exercise of ~~stock~~share options for gross proceeds of ~~$2,474.~~$855 and $2,474, respectively.

~~During 2019,~~On January 1, 2021, the Company issued 5,260,516 ordinary shares to the previous shareholders of Coolbet. Refer to Note 4 – Acquisitions.

On November 30, 2021, the Board of Directors approved a share repurchase program under which the Company is authorized to repurchase up to an aggregate of ~~183,509~~$5.0 million of the Company’s outstanding ordinary shares ~~for~~on the ~~exercise~~NASDAQ Capital Market. The Company may purchase the ordinary shares at the prevailing market price at the time of ~~stock options for gross proceeds~~purchase. The Company is not obligated to acquire any particular number of ~~$332.~~shares and repurchases may be suspended or terminated at any time. The share repurchase program will expire on May 31, 2022. As of December 31, 2021, there were 0 shares repurchased under this program.

~~Notes to the Consolidated Financial Statements~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~Prior to~~In April 2020, the Share Exchange, as discussed in Note 7 – Stockholders’ Equity, the following GAN UK options were outstanding (“GAN UK Options”): 2,560,279 stock options pursuant to the 2017 GAN plc Share Option Plan; 19,750 stock options pursuant to the 2013 GAN plc Share Option Plan; and 292,500 stock options pursuant to the 2019 GAN plc Share Option Plan. As partBoard of ~~the Share Exchange, all outstanding GAN UK Options in GAN plc were exchanged for stock options under~~Directors established the GAN Limited 2020 Equity Incentive Plan (“2020 Plan”). However, for GAN UK Options that had been granted under the UK Enterprise Management Incentive regime (“EMI Options”), in order to preserve the U.K. specific tax advantages for those options, option holders could choose to retain the previously applicable vesting schedule. Due to an administrative error, some of these option grants were not properly registered with the U.K. tax authority. The Company has decided to cover the social taxes and income taxes related to these awards for the option holders. The Company is accounting for the required cash payment as a cash-settled share-based compensation transaction. During the year ended December 31, 2020, the Company recognized related cash-settled expenses of $2,534 within its consolidated statements of operations. The related liability for the future cash payment related to employee and employer taxes on outstanding unexercised EMI Options of $826 at December 31, 2020 was recognized within accrued compensation and benefits. Excluding these EMI Options, the Company records the liability for employer tax expenses in the period when the respective holder exercises their options. ~~The total employer tax expense recognized on exercises during the year ended December 31, 2020 was $830.~~

The holders of outstanding GAN UK Options, except the EMI Options, received stock options on the same exchange ratio as the exchange of ordinary shares disclosed in Note 7 – Stockholders’ Equity. To ensure the aggregate market value of the Company’s ordinary shares subject to the stock options immediately following the exchange was materially the same as the aggregate market value of the ordinary shares subject to the GAN UK Options immediately prior to the exchange, the exercise price for each Company’s ordinary share was established to be four times the exercise price that would otherwise have been payable for each GAN plc ordinary share. Then, the stock options issued were accelerated and became fully vested upon completion of the Share Exchange. In all other respects, the terms of the exchanged stock options remained the same as the terms of GAN UK Options subject to the exchange. The Company has discontinued issuing awards under the previous GAN plc plans.

~~In connection with the Share Exchange, the Board of Directors established the 2020 Plan in April 2020,~~ which has been approved by the shareholders. ~~On July 2, 2020, the 2020 Plan was amended to clarify the definition of fair market value as applied therein.~~ The 2020 Plan initially provides for ~~the grant~~grants of up to 4,400,000 ordinary shares, which then increases through 2029, by the lesser of 4% of the previous year’s total outstanding ordinary shares on December 31^st or as determined by the Board of Directors, for ordinary shares, incentive ~~stock~~share options, nonqualified ~~stock~~share options, ~~stock~~share appreciation rights, restricted ~~stock~~share grants, ~~stock~~share units, and other equity awards for issuance to employees, ~~consultant~~consultants or non-employee directors. ~~The share-based~~At December 31, 2021, the 2020 Plan provided for grants of up to 5,865,414 ordinary shares and there were 200,184 ordinary shares available for future issuance under the 2020 Plan.

Share option awards are ~~issued at no less than~~granted with an exercise price equal to the fair market value of anthe Company’s ordinary ~~share~~shares on the date of grant. ~~All stock~~Share option awards ~~have a maximum term of ten years and~~ generally vest 25% after one year and then monthly over the next 36 months ~~thereafter. At~~thereafter and have a maximum term of ten years.

During the year ended December 31, ~~2020, there are 3,223,120 shares remaining available for future issuance under the 2020 Plan.~~

~~After the Company’s initial public offering in May~~2021 and 2020, the Board of Directors approved the issuance of options to purchase ~~1,008,200~~1,730,310 and 1,350,700 ordinary shares, respectively, to employees under the 2020 Plan.

~~Activity~~In addition, in accordance with the ~~stock~~acquisition agreement, the Company issued 67,830 replacement share option awards to continuing employees of Coolbet. The fair value of the replacement share options ~~outstanding~~is recognized ratably over the remaining service period, ranging from one to three years.

A summary of the share option activity as of and for the year ended December 31, 2021 is as follows:

The Company recorded share-based compensation expense related ~~information~~to share options of $6,184 and $5,883 for the years ended December 31, 2021 and 2020, respectively. Such share-based compensation expense for the year ended December 31, 2021 and 2020 was recorded net of $235 and $56, respectively, that was recorded in capitalized software development costs. Additionally, the share-based compensation expense for the year ended December 31, 2020 ~~and 2019~~included $3,881 from the acceleration of vesting of awards upon the Company’s initial public offering. At December 31, 2021, there was total unrecognized compensation cost of $18,567 related to nonvested share options. The unrecognized compensation cost is ~~as follows:~~expected to be recognized over a weighted-average period of 3.0 years.

~~Notes to the Consolidated Financial Statements~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The weighted average grant date fair value of ~~the~~ options granted was ~~$9.47~~$11.49 and ~~$1.67~~$9.47 for the ~~year~~years ended December 31, 2021 and 2020, respectively. The grant date fair value of each share option grant was determined using the following weighted average assumptions:

The fair value of each share option award is estimated on the date of grant using the Black-Scholes option pricing model that uses the assumptions noted above. Estimating the grant date fair values for employee share options requires management to make assumptions regarding expected volatility of the value of those underlying shares, the risk-free rate of the expected life of the share options and ~~2019, respectively.~~ the date on which share-based compensation is expected to be settled.

Expected volatility is determined by reference to volatility of certain identified peer group share trading information and share prices on the Nasdaq. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The expected term of the options is based on historical data and represents the period of time that options granted are expected to be outstanding.

For the period prior to the Company’s initial public offering in May 2020, ~~the grant-date fair value of each stock option grant was estimated using the Black-Scholes option pricing model with the following weighted average assumptions:~~

~~Expected~~expected volatility was determined by reference to the historic volatility of GAN UK’s share price on the AIM, the London Stock Exchange. The risk-free interest rate for the expected term of the option was based on the U.K. Gilt yield curve in effect at the time of grant. The expected term of the options is based on historical data and represents the period of time that options granted are expected to be outstanding.

~~Subsequent~~In 2020, the Company recorded a liability for social and income taxes related to the Company’s initial public offering, the grant-date fair value of each stock option grant was estimated using the Black-Scholes option pricing model. Expected volatility is determined by reference to volatility of certain ~~identified peer group share trading information and stock prices on the Nasdaq. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect~~unexercised legacy options at the time of ~~grant.~~the Share Exchange. The ~~grant-date~~Company accounted for the required cash payment as a cash-settled share-based compensation transaction. The related liability for the future cash payment related to employee and employer taxes on outstanding unexercised legacy share options of $291 and $826 at December 31, 2021 and 2020, respectively, is recorded in accrued compensation and benefits in the consolidated balance sheets. The Company recorded an expense (benefit) of $(519) and $3,364 related to these share options during the years ended December 31, 2021 and 2020, respectively.

Restricted share units are issued to non-employee directors and employees. For those share-settled restricted share units, the fair value of ~~each stock option~~restricted share units is valued based on fair market value of the Company’s ordinary shares on the date of grant ~~was determined using~~and is amortized on a straight-line basis over the ~~following weighted average assumptions:~~

~~The Company recorded equity-settled share-based compensation expense related to stock options of $5,883 (includes $3,881 from acceleration of~~ vesting of awards) and $367 for the year ended December 31, 2020 and 2019, respectively. Such amounts were recorded net of $56 and $80 in capitalized software development costs for the year ended December 31, 2020 and 2019, respectively. At December 31, 2020, there was $9,511 of total unrecognized compensation cost related to nonvested stock options granted under the 2020 Plan. The unrecognized cost related to nonvested stock options is expected to be recognized over a weighted average period of 3.38 years.

~~On June 15, 2020,~~In March 2021, the Board of Directors approved the issuance of ~~93,680 of~~10,358 restricted ~~stock awards~~share units to ~~the chief executive officer and~~its non-employee directors. The restricted ~~stock awards~~share units vest over one year from the date of grant with 25% vesting per quarter.

In October 2021, the Board of Directors approved the issuance of 24,500 restricted share units to its non-employee directors, of which 7,000 restricted share units vested on December 31, 2021. The remaining 17,500 restricted share units vest one year ~~after~~from the grant date.

In October and November 2021, the Board of Directors approved the issuance of 84,050 restricted share units to employees. The restricted share units vest over four years from the date of grant with 25% vesting per year on the anniversary of the grant date.

In December 2021, the Board of Directors approved the issuance of 267,590 restricted share units to employees. The restricted share units vest one year from the grant date.

In December 2021 the Company modified all outstanding restricted stock units held by three of its non-employee directors to withhold a portion of the restricted stock units upon vesting in order to remit a cash payment to the directors equal to their tax expense incurred upon vesting. The Company is not statutorily obligated to withhold taxes for non-employee directors and the modification resulted in a change in classification of the outstanding restricted stock units from equity-classified to liability-classified awards. The modification did not result in any incremental compensation cost at the date of modification. In December 2021, 9,590 restricted stock units held by the Company’s non-employee directors vested and the Company repurchased 3,627 of the shares to cover the tax expense incurred by the directors. At the settlement date the Company recognized $55 in additional paid-in capital related to the restricted share activity in the consolidated statements of changes in shareholders’ equity. At December 31, 2021, the Company recognized a liability for outstanding and nonvested restricted stock units held by non-employee directors of $27 and has recognized $33 payable to the directors for the taxes on vested options. The liabilities are recorded in accrued compensation and benefits in the consolidated balance sheets.

The Company recorded share-based compensation expense related to restricted share units of $621 for the year ended December 31, 2021. At December 31, 2021, there was total unrecognized compensation cost of $3,594 related to nonvested restricted share units The unrecognized compensation cost is expected to be recognized over a weighted-average period of 1.7 years. The total fair value of the restricted share units that vested during the year ended December 31, 2021 was $360.

A summary of the restricted share unit activity as of and for the year ended December 31, 2021 is as follows:

Restricted share awards are issued to non-employee directors and certain key employees. The value of a restricted stock award is based on the market value of the Company’s ordinary shares at the date of the grant.

In June 2020, the Board of Directors approved the issuance of 93,680 restricted share awards to the Chief Executive Officer and non-employee directors. The restricted share awards vested in June 2021, one year from the date of grant. The ~~aforementioned~~ restricted ~~stock~~share awards were issued with a grant date fair value of ~~$18.19~~$18.19 per share.

In December 2021, the Company issued 51,654 restricted ordinary shares to the selling shareholders of Silverback Gaming. The restricted share awards vest one-third on the acquisition date and one-third on each the first and second anniversary dates. The restricted share awards were issued with a grant date fair value of $9.68 per share.

The Company recorded share-based compensation expense related to restricted share awards of $951 and $934 for the years ended December 31, 2021 and 2020, respectively. At December 31, 2021, there was total unrecognized compensation cost of $319 related to the nonvested shares granted. The cost is expected to be recognized over a weighted average period of 1.9 years. The total fair value of the restricted share awards that vested during the year ended December 31, 2021 was $1,871.

In 2021, the Company entered into agreements with certain executive employees which allowed for a portion, or all, of their annual bonus to be paid in the form of the Company’s shares. The Company will settle approximately $1,053 of the total bonus by issuing a variable number of shares based on the stock price at the time of settlement. The Company recorded share-based compensation expense related to the ~~restricted stock awards~~portion of ~~$934~~ bonus which will be settled in shares of $899 for the year ended December 31, ~~2020. At~~2021. The Company accounts for the share-based compensation as a liability-classified award and the related liability is recorded in accrued compensation and benefits in the consolidated balance sheet at December 31, 2021.

The Board of ~~total unrecognized compensation cost related to nonvested restricted stock awards granted under~~Directors established the 2020 ~~Plan.~~Employee Stock Purchase Plan, or the ESPP, which was approved by the Company’s shareholders in July 2021. The ~~remaining cost~~ESPP is ~~expected~~intended to qualify under Section 423 of the U.S. Internal Revenue Service Code of 1986, as amended. The ESPP provides initially for 300,000 ordinary shares to be ~~recognized~~sold and increases on February 1, 2022 and on each subsequent February 1 through and including February 1, 2030, equal to the lesser of (i) 0.25 percent of the number of ordinary shares issued and outstanding on the immediately preceding December 31, or (ii) 100,000 ordinary shares, or (iii) such number of ordinary shares as determined by the Board of Directors.

The ESPP is designed to allow eligible employees to purchase ordinary shares, at quarterly intervals, with their accumulated payroll deductions. The participants are offered the option to purchase ordinary shares at a discount during a series of successive offering periods. The option purchase price may be the lower of 85% of the closing trading price per share of the Company’s ordinary shares on the first trading date of an offering period in ~~2021.~~which a participant is enrolled or 85% of the closing trading price per share on the purchase date, which will occur on the last trading day of each offering period. Currently, an offering period is defined as a three-month duration commencing on or about January, April, July and October of each year. Also, one purchase period is included within each offering period. The Company plans to commence its first offering period and first purchase period in 2022.

~~Note 9. Defined Contribution Plans~~NOTE 12 — DEFINED CONTRIBUTION PLANS

U.S. employees and non-U.S. employees are eligible to participate in defined contribution plans by contributing a portion of their compensation, which provides for certain matching contributions by the Company. Matching contributions for the U.S. defined contribution plan are 50% of up to 4% of an employee’s salary contribution. Most often, non-U.S. matching contributions are statutory amounts required by law. The Company’s contributions to the retirement plans were ~~$345~~$614 and ~~$175~~$345 for the ~~year~~years ended December 31, 2021 and 2020, ~~and 2019,~~ respectively.

Loss per ordinary share, isbasic and diluted, are computed by dividing ~~the~~ net ~~income (loss)~~loss by the weighted average number of ordinary shares outstanding during the period. ~~Diluted income per ordinary~~Potentially dilutive securities consisting of certain share ~~further includes any ordinary~~options, nonvested restricted shares ~~available to be issued upon the exercise of outstanding stock option~~ and restricted ~~stock awards if such inclusions would be dilutive. The Company determines the potentially dilutive ordinary shares using the treasury stock method. In periods of a net loss, basic and diluted per~~ share information is the same because the potentially dilutive ordinary shares would be anti-dilutive. The following table sets forth the computation of basic and diluted income (loss) per share for the year ended December 31, 2020 and 2019:

~~Certain stock options and nonvested restricted stock awards~~units were excluded from the computation of diluted weighted average ordinary shares outstanding as inclusion would be anti-dilutive, are summarized as follows:

SCHEDULE OF ANTI-DILUTIVE STOCK EXCLUDED FROM COMPUTATION OF DILUTED EARNINGS PER SHARE

The following table reflects revenue recognized for the ~~year~~years ended December 31, ~~2020~~2021 and ~~2019~~2020 in line with the timing of transfer of ~~services (i.e.,~~services:

During the year ended December 31, 2021, revenue ~~from services transferred to customers~~recognized at a point in time was $83,237, of which $78,594 related to gaming revenue and ~~revenue from~~$4,643 related to development services ~~transferred over time):~~and other revenue. Revenue recognized at a point in time during the year ended December 31, 2020 were related to development services and other revenue.

The Company ~~defers contract costs that are recoverable and incremental~~has four types of liabilities related to ~~obtaining sales~~ contracts with its customers. Contract costs, consisting primarily of sales commissions, are amortized on a systemic basis that is consistent with the transfer to the customer of the services to which the asset relates. Contract costs are periodically reviewed for impairment. An impairment exists if the carrying amount of the asset exceeds the amount of the consideration the entity expects to receive in exchange for providing the services, less the remaining costs that relate directly to providing those services. Deferred contract costs are recorded in other current assets and other assets in the consolidated balance sheets. The following table reflects the activity in deferred contract costs for the periods indicated:

~~Contract liabilities is mainly comprised of~~customers: (i) cash consideration received in advance from customers related to development services not yet performed or hardware deliveries not yet completed, (ii) incentive program obligations, which represents the deferred allocation of revenue relating to incentives in the online gaming operations, (iii) user balances, which are funds deposited by customers before gaming play occurs and ~~therefore revenue has not been recognized. This balance will~~(iv) unpaid winnings and wagers contributed to jackpots. Contract related liabilities are expected to be recognized as revenue aswithin one year of being purchased, earned or deposited. Such liabilities are recorded in liabilities to users and other current liabilities in the ~~services are performed, which is generally expected to occur over a period up to a year.~~ consolidated balance sheets.

The following table reflects ~~the activity~~contract liabilities arising from cash consideration received in ~~contract liabilities~~advance from customers for the periods ~~indicated:~~presented:

~~Notes to the Consolidated Financial Statements~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Effective January 1, 2021, the Company changed the structure of its internal organization with the acquisition of Coolbet (See Note ~~13. Segment Reporting~~4), which caused the composition of its reportable segments to change. Accordingly, the Company implemented a segment reorganization in order to more closely align its segment reporting with its current operating structure. The Company’s new reportable segments are B2B and B2C. The B2B segment develops, markets and sells instances of iSight Back Office and GameSTACK that incorporates comprehensive player registration, account funding and back-office accounting and management tools that enable the casino operators to efficiently, confidently and effectively extend their presence online in places that have permitted online real money gaming. The B2C segment includes the operations of Coolbet, since January 1, 2021, develops and operates a B2C online sports betting and casino platform that is accessible through its website in markets across Northern Europe, Latin America and Canada.

The segment information has been recast to conform to the reporting structure in effect after the segment reorganization that was effective January 1, 2021. The Company has combined its previous two reportable segments, RMiG and SIM, into one reportable segment, B2B, for the year ended December 31, 2020.

Information reported to the ~~Parent’s chief executive officer,~~Company’s Chief Executive Officer, the CODM, for the purpose of resource allocation and assessment of the Company’s segmental performance is primarily focused on the origination of the revenue streams. The ~~Company’s reportable segments are as follows:~~

~~The~~ CODM evaluates performance and allocates resources based on ~~segment~~the segment’s revenue and ~~segment results.~~gross profit. Segment ~~results represent~~gross profit represents the gross profit earned by each segment without allocation of each segment’s share of depreciation and amortization expense, sales and marketing expense, product and technology expense, general and administrative expense, interest costs and income tax expense. These results are not necessarily indicative of the results of operations that would have occurred had each segment been an independent, stand-alone entity during the periods presented. The accounting policies of the reportable segments follow the same policies as disclosed in Note 3.taxes.

~~Financial~~Summarized financial information by reportable segments for the ~~year~~years ended December 31, 2021 and 2020 ~~and 2019~~ is ~~included in the following summary:~~as follows:

During the year ended December 31, ~~2020, the Company had revenue from~~2021, one customer ~~which totaled $14,988 or 42.6%~~in the B2B segment individually accounted for 14.8% of total ~~revenue, all of which related to RMiG.~~revenue. During the year ended December 31, ~~2019,~~2020, one customer in the ~~Company had revenue from two customers, which totaled $19,812 or 66.1%,~~B2B segment accounted for 42.6% of ~~which $18,223 related to RMiG and $1,589 related to SIM.~~total revenue.

The following table presents a reconciliation of ~~consolidated~~ segment gross profit to the consolidated ~~income (loss)~~loss before income taxes for the ~~year~~years ended December 31, ~~2020~~2021 and ~~2019:~~2020:

RECONCILIATION OF CONSOLIDATED SEGMENT PROFIT TO CONSOLIDATED INCOME (LOSS) BEFORE INCOME TAXES

Assets and liabilities are not separately analyzed or reported to the CODM and are not used to assist in decisions surrounding resource allocation and assessment of segment performance. As such, an analysis of segment assets and liabilities has not been included in this financial information.

~~Revenue by location of the customer for the year ended December 31, 2020 and 2019 was as follows:~~

The Company attributes its long-lived assets, which primarily consist of property and equipment, and lease right-of-use assets, to a country based on the physical location of the assets. Aggregate property and equipment, net, and lease right-of-use assets, net, by geographic area were as follows:

~~Notes to the Consolidated Financial Statements~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table disaggregates total revenue by product and services for each segment:

Revenue by location of the customer for the years ended December 31, 2021 and 2020 was as follows:

GAN Limited was incorporated in Bermuda solely for the purpose of acting as the new group parent company and public vehicle for investors. GAN Limited completed the Share Exchange by which it acquired GAN plc and, on May 7, 2020, GAN Limited completed its U.S. initial public offering. ~~The tax rate in~~ Bermuda, the Company’s country of domicile, ~~as of December 31, 2020, is zero percent.~~ imposes no taxes on profits, income, dividends, or capital gains.

The Company’s effective tax rate for December 31, 2019 is reconciled to the U.K. statutory tax rate of 19% as that was the statutory rate of the Company’s predecessor company GAN plc (a subsidiary domiciled in the U.K).

~~Income (loss)~~loss before income taxes for the ~~year~~years ended December 31, ~~2020~~2021 and ~~2019~~2020 consisted of the following:

~~The components of the income tax expense for the year ended December 31, 2020 and 2019 consisted of the following:~~GAN LIMITED

~~The following is a reconciliation of the income taxes computed at the statutory federal income tax rate to the income tax expense for the year ended December 31, 2020 and 2019:~~

The components of income tax expense (benefit) for the year ended December 31, 2021 and 2020 consisted of the following:

The following is a reconciliation of income taxes computed at the statutory income tax rate to the Company’s income tax expense (benefit) for the year ended December 31, 2021 and 2020:

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. ~~The significant~~Significant components of the net deferred ~~tax assets and liabilities~~taxes at December 31, ~~2020~~2021 and ~~2019~~2020 are as follows:

The net deferred tax liability of $890agrees to the balance sheet when considering the noncurrent deferred tax liability presented of $1,791 and the noncurrent deferred tax asset of $901 presented in other assets on the consolidated balance sheets.

At December 31, 2021 and 2020, the Company’s valuation allowance was $15,542 and $6,490, respectively. A valuation allowance is recognized if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax asset will not be realized. Management must analyze all available positive and negative evidence regarding realization of the deferred tax assets, such as cumulative income and losses from prior years, and make an assessment of the likelihood of sufficient future taxable income. The Company has provided a valuation allowance on the ~~domestic and~~ foreign deferred tax assets that were not deemed realizable based upon the weight of the objectively verifiable negative evidence of cumulative losses over the recent three-year period.

~~On the basis of this evaluation, a~~ During 2021, we increased our valuation allowance ~~of $6,490 and $3,245 has been recorded as of December 31, 2020 and December 31, 2019, respectively,~~ by $9,052 to ~~recognize only the portion of the deferred tax assets~~$15,542 primarily due to foreign loss carryforwards that ~~is more likely than~~are not expected to be ~~realized.~~recognized. The amount of the deferred tax assets considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence, such as the Company’s forecast for growth.

At December 31, ~~2020,~~2021 and ~~2019,~~2020, the Company has cumulative carryforward tax losses generated of ~~$26,575~~ $59,240 and ~~$20,143,~~$26,575, respectively, which have been generated in the U.K. ~~Subject to any relevant restrictions, the Company expects to be able to carry forward the tax losses and offset against future operating profits.~~ The net operating losses can be carryforward indefinitely.

As ~~an entity that carries out development activities,~~of December 31, 2021, the Company ~~benefits from the U.K. research and development small or medium-sized enterprise tax credit regime and~~has not provided for deferred foreign income taxes on cumulative foreign earnings of approximately $12,093primarily related to earnings in Estonia that are able to surrender some of its trading losses that arise from research and development activities for a cash rebate of up to 33.35% of eligible research and development expenditure. If the Company were to no longer qualify as a small or medium-sized company, the Company may instead be eligible for a research and development expenditure credit under the U.K. large company regime, worth up to approximately 10%not taxed unless distributed out of the eligible research and development expenditure (after tax). Research and development taxation relief is recorded once management considers it probable that any amount claimable will be realized. During the year endedcountry. The unrecognized deferred tax liability associated with these earnings was approximately $1,738 as of December 31, ~~2018, the Company recorded a research and development tax credit receivable of $1,079 and further increased it by $48 in 2019 to $1,127. The cash rebate was received in 2020.~~2021.

~~Notes to the Consolidated Financial Statements~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

The liability for ~~uncertain~~unrecognized tax ~~liabilities,~~benefits, including potential interest and penalties, were recorded within other ~~noncurrent~~ liabilities in the consolidated balance sheets.

The Company, including its subsidiaries, files tax returns with domestic and foreign jurisdictions. The Company is ~~no longer~~ subject to U.K. examinations by tax authorities for ~~years before 2018~~the 2019 tax year and U.S. examinations by federal and state tax authorities for years ~~before 2016.~~2018 to 2020. The tax returns in Israel and Bulgaria are still within the examination window of the local tax authorities. The Company believes that it is reasonably possible that the unrecognized tax benefits will not significantly change within the next 12 months. Audit outcomes and the timing of audit settlements are subject to significant uncertainty. Although the Company believes that adequate provision has been made for such issues, there is the possibility that the ultimate resolution of such issues could have an adverse effect on the Company’s earnings. If recognized, the total amount of unrecognized tax benefits would impact the effective tax rate.

~~The Company has adopted ASU No. 2016-02,~~ ~~Leases (Topic 842)~~ as of January 1, 2019. ASC 842 requires a lessee to recognize the following for all leases, except short-term leases, at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASC 842 also expanded the disclosure requirements.

The Company adopted ASC 842 as of January 1, 2019 using the transition method, which allows entities to apply the new guidance at the adoption date and record a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. The adoption of the standard resulted in the recognition of operating lease right-of-use assets of $1,335 and operating lease liabilities of $1,261, and financing lease right-of-use assets of $349 and financing lease liabilities of $390. The adoption of the standard had no effect on retained earnings at January 1, 2019 and did not have a significant impact on the consolidated statements of operations and statements of cash flows in 2019.

The Company elected to apply the package of practical expedients upon transition, which includes no reassessment of whether existing contracts are or contain leases and allowed for the lease classification for existing leases to be retained. The Company did not elect the practical expedient to use hindsight in determining the lease term. The Company elected the practical expedient to not separate non-lease components from the lease components contained in the lease agreements but instead combine them and account for them as a single lease component and will continue to do so for its real estate operating leases and finance leases of equipment hosting of the Company’s platform software. The Company has also elected not to recognize leases with original lease terms of 12 months or less (i.e., short-term leases) on the consolidated balance sheets.NOTE 18 — LEASES

The Company determines if an arrangement is a lease and classifies as operating or finance lease at the lease commencement date. A lease is defined as a contract, or part of contract, that conveys the right to control the use of an asset for a time period in exchange for consideration. At December 31, ~~2020,~~2021, the Company’s lease portfolio consists of operating leases related to office facilities in Estonia, Nevada, and Bulgaria and finance leases for equipment in hosting its software platform. At December 31, ~~2019,~~2020, the Company’s operating lease portfolio ~~additionally consisted of operating leases related to~~did not include its office facilities in ~~the U.K. and New Jersey.~~Estonia. The lease terms range from one to five years. Options to extend or terminate a lease are included in the lease term when it is reasonably certain that the Company will exercise such options. In some jurisdictions it is customary for lease contracts to provide for payments to increase each year by inflation, or to be reset periodically to market rental rates or the periodic rent is fixed over the lease term. Lease payments for operating leases, consisting of fixed payments for base rent, is recognized on a straight-line basis over the lease term.

The following table discloses the operating and finance asset and liability balances at December 31, ~~2020~~2021 and ~~2019:~~2020:

The Company uses its incremental borrowing rate at lease commencement to calculate the present value of lease payments when the rate implicit in a lease is not known. The incremental borrowing rate is based on the Company’s credit rating based on its market valuation metrics and corporate yield curves observed for public companies with similar credit ratings.

The components of lease cost for the ~~year~~years ended December 31, ~~2020~~2021 and ~~2019~~2020 were as follows:

Maturities of lease liabilities, including reconciliation to the lease liabilities, based on required contractual payments, are as follows:

Other information related to leases as of and for the ~~year~~years ended December 31, ~~2020~~2021 and ~~2019~~2020 was as follows:

Year Ended
December 31,

2020 2019
Finance lease weighted-average remaining lease term (years) 0.67 1.67
Finance lease weighted-average discount rate 9.36 % 9.77 %

Operating lease weighted-average remaining lease term (years) 2.34 2.68
Operating lease weighted-average discount rate 4.60 % 4.57 %

Cash paid for the amounts included in the measurement of lease liabilities
Operating cash flows from operating leases $ 464 $ 601
Operating cash flow from finance leases $ 10 $ 28
Financing cash flows from finance leases $ 154 $ 86

	Year Ended December 31,
	2021			2020
Finance lease weighted-average remaining lease term (years)		0.00			0.67
Finance lease weighted-average discount rate		0	%		9.36	%

Operating lease weighted-average remaining lease term (years)		1.50			2.34
Operating lease weighted-average discount rate		4.80	%		4.60	%

Cash paid for the amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	533		$	464
Operating cash flow from finance leases		—			10
Financing cash flows from finance leases		82			154

~~GAN Limited~~

~~Notes to the Consolidated Financial Statements~~NOTE 19 — RELATED PARTY TRANSACTIONS

~~(in thousands, except share and per share amounts)~~

~~Note 16. Related Party Transactions~~

~~The Board of Directors adopted a bonus program, providing for additional fees to all directors, in their capacities as such, in~~In connection with the Share ~~Exchange. The Board of Directors received payment of additional fees of $608. Refer to~~Exchange and Reorganization disclosed in Note ~~7 – Stockholders’ Equity.~~

~~Also, in connection with the Share Exchange,~~2, the Company arranged funding of the cash consideration of the Share Exchange through a loan facility provided by the Parent’s ~~chief executive officer~~Chief Executive Officer and his father. The loan facility provided for a minimum interest charge of ~~£300,~~£300, and any funds borrowed thereunder would have been unsecured and borne interest at 15% per annum. Such facility was available for a term of six months. Ultimately, the facility was not used, and the cash consideration of the Share Exchange was paid from the Company’s operating cash. The minimum interest charge of ~~$385 (or £300)~~$385 (or £300) was paid in May 2020 and recorded in ~~interest expense,~~other (income) loss, net in the consolidated statements of operations.

~~At December 31, 2019, included within accounts~~

GAN LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and other receivables of the consolidated balance sheet, is $138 inclusive of interest, due from the Parent’s chief executive officer. The amount due was paid in March 2020. The interest earned on the amount due is included in interest expense, net in the consolidated statements of operations.per share amounts)

~~Note 17. Commitments and Contingencies~~NOTE 20 — COMMITMENTS AND CONTINGENCIES

Legal Proceedings

Content Licensing Agreements

In the second quarter of 2021, the Company entered into Content Licensing Agreements (the “Agreements”) with two third-party gaming content providers (“Content Providers”) specializing in developing and licensing interactive games. The Agreements grant the Company exclusive rights to use and distribute the online gaming content in North America. Each of the Content Providers is committed to developing a minimum number of games for the Company’s exclusive use over the five-year term, subject to extensions, of the respective Agreement. In exchange, the Company is ~~a party~~required to ~~a wrongful termination claim made by a former employee and director to the U.K. Employment Tribunal in 2019. Currently, the parties are communicating regarding key parts~~pay fixed fees, totaling $48.5 million, of which $8.5 million were due upon execution of the ~~claim~~Agreements, and ~~responses to requests for particular details of~~ the ~~claim. Subsequent to December 31, 2020,~~remaining fixed fees are paid systematically over the ~~Company reached an agreement in principle to settle~~initial five-year terms. Additional payments could be required if the ~~matter. Based upon~~Company’s total revenue generated from the licensed content exceed certain stipulated thresholds. Under the terms of the ~~settlement agreement,~~Agreements, the Content Providers are to remit the cash flows from the online gaming content with its existing customers to the Company ~~has recorded~~during the exclusivity period.

On January 27, 2022, the Company served a ~~liability~~termination notice, for cause, to a Content Provider as certain conditions precedent associated with the completion of ~~$412 within~~contractual obligations had not been satisfied by the agreed upon period in 2021. In accordance with the agreement, termination for cause results in a return of the initial payment of $3.5 million. In response to the Company’s termination notice, the Content Provider responded in February 2022 alleging the Content Provider had met its contractual obligations, thereby obligating the Company to make an additional $3.0 million payment. In March, the Content Provider served the Company a demand letter notifying of its material breach of the agreement, disputing the validity of the termination. The Company asserts that all contractual obligations to the Content Provider have been relieved as a result of the termination and will vigorously defend any claims made by the Content Provider. The Company further recognized an impairment loss related to the initial payment of $3.5 million in the statement of operations for the year ended December 31, 2021.

The Agreement for the remaining Content Provider provides that the games software will reside and be deployed from the suppliers’ remote gaming servers. Although the Company could run the games software on its platform, the Company does not have the contractual right to take possession of the software and ownership of the software does not transfer to the Company. The Company is accounting for the hosting arrangement as service contract. Total fixed service fees under the remaining Agreement, net of payments received from the Content Provider, will be expensed ratably over the term of the Agreement commencing upon initial access to the remote gaming servers. Any variable payments required upon reaching certain revenue milestones to the Content Provider will be expensed in the period incurred. The Company received access to one of the remote gaming servers in December 2021 and expensed service fees of $0.5 million to cost of revenue in the consolidated statement of operations for the year ended December 31, 2021. At December 31, 2021, the Company had prepaid services fees of $5.1 million in other ~~accrued expenses~~assets in the consolidated balance ~~sheet at December 31, 2020. Refer~~sheet.

The Company expects to ~~Note 18 – Subsequent Events for further discussion.~~make fixed payments totaling $10.0 million in 2022, $5.0 million in each of the years 2023 through 2025.

~~Note 18. Subsequent Events~~Chile VAT

~~Acquisition of Vincent Group p.l.c.~~

On January 1, 2021, the Company completed the acquisition of all outstanding shares of Vincent Group p.l.c., a Malta public limited company doing business as “Coolbet.” Coolbet is a developer and operator of a legal online sports betting and casino platform. Coolbet operates aCoolbet’s B2C casino and sports-betting platform ~~that~~ is accessible ~~via its website~~ in ~~eight~~Chile. Since June 1, 2020, foreign digital service suppliers that provide services to individuals in Chile have been required to register for value-added tax (VAT) purposes. In December 2021, the Chilean Tax Administration issued a general resolution as a response to another iGaming platform operator stating the Tax Administration’s position that fees paid by users for entertainment services provided through online gaming and betting platforms are subject to VAT in Chile. Comprehensive legislation for online gambling was filed in Chile’s Chamber of Deputies on March 7, 2022, which would allow for an unlimited number of licenses to be granted by Chile’s national ~~markets across Northern Europe (Estonia, Finland, Iceland, Norway and Sweden), Latin America (Chile and Peru) and North America (Canada).~~casino gaming authority. The Company ~~acquired Coolbet~~will continue to ~~take advantage~~engage with the Chilean Tax Administration on the VAT matter while monitoring the status of the proposed online gambling legislation. The Company does not believe a liability is probable as the application of VAT on customer deposits would be unreasonable due to the nature of Coolbet’s user interface and proprietary technical platform, to quickly integrate and offer a proprietary sportsbook offering to the Company’s land-based casino operators in the United States. The Company intends to continue to operate in the United States solely as a B2B provider to casinos and other operators. The addition of a proprietary sports betting engine will give the Company the ability to offer a “one-stop” solution to the Company’s U.S. retail casino operators, while at the same time preserving the flexibility to incorporate third party solutions when specified. The Company expects that its technology platform and expansive library of proprietary and third-party gaming content will to add additional casino gaming content and platform support for Coolbet’s B2C offering in Europe and Latin America.operations.

GAN ~~Limited~~LIMITED

~~Notes to the Consolidated Financial Statements~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

NOTE 21 — SUBSEQUENT EVENTS

~~The following table summarizes~~On January 27, 2022, the ~~consideration transferred:~~

Cash paid to Vincent Group shareholders $ 111,620
Value of restricted ordinary shares issued to Vincent Group shareholders⁽¹⁾ 106,683
Value of replacement equity-based awards to holders of Vincent Group equity-based awards⁽²⁾ 297
Total $ 218,600

	⁽¹⁾	The share consideration represents 5,260,516 ordinary shares issued to Vincent Group shareholders multiplied by the Company’s share price of $20.28 on the acquisition date. Each former Coolbet shareholder has agreed to a contractual lock-up of ninety (90) days before these ordinary shares can be transferred or sold. For certain executive management personnel of Coolbet, the lock-up period is 180 days.
	⁽²⁾	~~In accordance~~Company served a termination notice to a Content Provider as certain conditions precedent associated with applicable accounting guidance, the fair value of replacement equity-based awards attributable to pre-combination service is recorded as part of the consideration transferred in the acquisition, while the fair value of replacement equity-based awards attributable to post-combination service is recorded separately from the business combination and recognized as compensation cost in the post-acquisition period over the remaining service period. The fair value of the replacement stock options was estimated using the Black-Scholes valuation model utilizing various assumptions.

~~The following table summarizes~~ the ~~preliminary fair values~~certification of their remote gaming server had not been satisfied pursuant to the terms of the ~~assets acquired and liabilities assumed~~agreement in the ~~acquisition:~~

Cash and cash equivalents
$
18,633

Accounts receivable 457
Other current assets 1,055
Property, plant and equipment 343
Operating lease right-of-use assets 416
Other noncurrent assets 73
Accounts payable (883 )
Other current liabilities (7,570 )
Noncurrent operating lease liabilities (231 )
Total identifiable net assets 12,293
Goodwill 206,307
Total purchase price $ 218,600

The Company has not finalized the purchase price allocation, which is pending further analysis of the net assets acquired, particularly in regard to the valuation of the intangible assets. As a consequence, intangible assets have been subsumed into goodwill in this preliminary purchase price allocation. Additionally, the Company is continuing to evaluate the tax impacts related to the acquisition. Accordingly, the purchase price allocation shown above could change materially as the Company finalizes its assessment of the allocation and the fair value of the net tangible and intangible assets acquired, some of which are dependent on the finalization of valuations being performed by independent valuation specialists and further analysis by tax specialists. Additionally, the above cash consideration is subject to adjustment for the final working capital adjustment.

~~GAN Limited~~

~~Notes to the Consolidated Financial Statements~~

~~(in thousands, except share and per share amounts)~~

The goodwill is primarily attributable to the expected incremental revenue and profit to be derived from the Company’s introduction of Coolbet’s sports betting engine technology and intellectual technology to B2B customers in the United States. The Company intends to offer the Coolbet sports betting engine and associated capability to existing and new customers alongside its existing platform and Internet casino capability, as a complete turnkey solution or as an alternative sports betting engine to those currently relied upon by customers. The Company accounted for the acquisition of Coolbet using the acquisition method. The acquisition is treated as a stock purchase for accounting purposes. Goodwill is not amortized, but is reviewed for impairment at least annually or if an event occurs or circumstances change that would more likely than not indicate the goodwill could be impaired. Goodwill recognized in the acquisition is expected to be deductible for tax purposes.

The operating results of Coolbet will be included in the Company’s consolidated financial statements beginning January 1, 2021. The Company incurred $1,019 of acquisition-related costs, which were included in general and administrative expense for the yearperiod ended December 31, ~~2020.~~2021. See Note 20 for further discussion.

~~Share-Based Compensation~~

On ~~February 26, 2021,~~April 5, 2022, the ~~Board of Directors approved the issuance of options to purchase 1,155,110 ordinary shares with an exercise price of $25.33 to executives~~Company amended and ~~certain key employees. The options vest 25% after one year and then monthly over the next 36 months thereafter.~~

On March 9, 2021, the Board of Directors approved the issuance of 15,537 restricted stock awards to non-executive Directors. The restricted stock awards vest over one year after the grant date with 25% vesting per quarter. The restricted stock awards were issuedrestated its arrangement with a ~~fair value of $25.10 per share.~~

~~Legal Proceedings~~

separate Content Provider. In ~~January 2021,~~accordance with the restated arrangement, the Company ~~entered into a settlement agreement with respect~~obtained the contractual right to lease the ~~wrongful termination claim made by a former employee and director to~~remote gaming servers from the ~~U.K. Employment Tribunal disclosed in Note 17 – Commitments and Contingencies. The settlement agreement provides~~Content Provider for a cash payment of $74 and issuance of 16,675 ordinary shares (market price of $20.28 per share at December 31, 2020) as compensation for unvested stock options that were canceled upon termination. The full amountthe duration of the ~~settlement~~arrangement and amended other commercial terms. The total fixed fees remaining under the arrangement total $25.0 million, of ~~$412 was recorded at December 31, 2020.~~which $10.0 million is due in 2022, and $5.0 million in each of the years 2023 through 2025. Additional payments could be required if the Company’s total revenue generated from the arrangement exceed certain stipulated thresholds.

7285

~~None.~~ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

~~We maintain disclosure~~Disclosure controls and procedures ~~that~~ are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to ~~our~~ management, including our chief executive officer and chief financial officer (together, the “Certifying Officers”), as appropriate, to allow for timely decisions regarding required disclosure.

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance, not absolute assurance, of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements will not occur or that all control issues, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. The design of any system of controls is based, in part, upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

As required by SEC Rule 13a-15(b), we carried out an evaluation, under the supervision and with the participation of our management, including ~~our chief executive officer and chief financial officer,~~the Certifying Officers, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, ~~our chief executive officer and chief financial officer~~the Certifying Officers concluded that our disclosure controls and procedures were not effective at the reasonable assurance level as of December 31, ~~2020.~~

~~As previously disclosed,~~2021. The Certifying Officers based their conclusion on the fact that the Company has identified material weaknesses in ~~connection with the audit~~controls over financial reporting, detailed below. In light of the consolidated financial statements included in the registration statement on Form F-1 (File No. 333-237372) that we filed in connection with our initial public offering and in the registration statement on Form F-1 (File No. 333-253163) that we filed in connection with a follow-on public offering,this fact, our management has performed additional analyses, reconciliations, and ~~independent registered public accounting firm~~other procedures and have concluded that, ~~we had a combination of control deficiencies~~notwithstanding the material weaknesses in our internal control over financial reporting, asthe consolidated financial statements for the periods covered by and included in this Form 10-K fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with GAAP.

Material weaknesses were identified in the Company’s internal control over financial reporting for the year ended December 31, ~~2019 that comprised a material weakness, primarily relating to:~~

2021. A material weakness is a ~~control~~ deficiency, or combination of deficiencies, in internal control over financial reporting such that ~~results in more than~~there is a ~~remote likelihood~~reasonable possibility that a material misstatement of ~~our~~the Company’s interim or annual condensed consolidated financial statements ~~would~~will not be prevented or detected on a timely ~~basis by our employees~~basis.

During the course of management’s year-end procedures, the Company examined employee costs attributed to capitalized software development costs, net and concluded that certain time previously evaluated as capitalizable was not a direct cost of software development and accounted for inconsistently with applicable accounting principles. In addition, the Company evaluated the accounting for revenue from contracts with customers that include significant customization services, previously recognized upon launch, that only the Company can perform and are necessary for the set-up of instances of the RMiG platform, concluding the services are not distinct and the related contract consideration should be allocated to the single performance obligation consisting of the right to access the SaaS platform, recognized over time during the estimated term of the arrangement. Accordingly, management undertook a review of the cost capitalization and revenue recognition errors. The Company also identified deficiencies in the ~~normal course~~design of ~~performing their assigned functions.~~the control environment whereby certain finance users were granted “super user” access and security administration rights to the financial reporting systems, the activity of these users with elevated access were not actively monitored, and no segregation of duties over journal entry preparation and approval within the B2C segment existed.

~~In 2020, we continued our investment in~~The Company’s management and audit committee of the ~~finance organization~~board of directors determined that material weaknesses exist related to the design and operating effectiveness of internal controls over the completeness and accuracy of accounting for, and disclosure of, capitalized software development costs, net and revenue recognition. Specifically, the Company did not (i) ~~meet~~design appropriate management review controls to properly identify the ~~increased need from the business~~appropriate costs of employee time allocated to ~~support our rapid operational expansion~~capitalized software development costs, net, and (ii) ~~enhance our earnings release functions due~~did not have sufficiently formalized policies and procedures with respect to the ~~faster cadence~~capitalized software development process. In addition, the Company (i) did not design adequate procedures for customer contract reviews, (ii) had inadequate controls to appropriately apply the revenue recognition policy and (iii) had inadequate resources to properly evaluate technical aspects of revenue recognition, in each case with respect to contracts with customers.

The Company’s management and audit committee of the board of directors also determined that the fact that the Company did not design appropriate controls to evaluate risks to the entity from improper segregation of duties, review user access rights, monitor activities of finance users with elevated rights within the financial reporting system, and maintain manual controls at ~~which we now report our results as~~ a ~~U.S. listed company. During~~level of precision to mitigate potential misstatements that could be present through the ~~third~~lack of segregation of journal entry preparation and ~~fourth quarters~~approval within certain financial reporting systems constituted an additional material weakness.

We are evaluating measures to remediate the identified material weaknesses. These measures include formalizing and documenting its policies and procedures surrounding capitalized software development costs and revenue recognition, designing and implementing training for the employees whose roles and activities may qualify for capitalization, instituting monthly meetings with the development leadership team to assess the status of ~~2020, our finance function developed more robust financial close processes and management has initiated a more rigorous month-end~~all projects, formalizing the customer contract review process and enhancing the scrutiny and precision of the management review controls over the capitalization of ~~quarter end financial reporting. In addition~~software development and revenue recognition process. We also expect to implement appropriate controls to segregate journal entry preparation and approvals and to actively monitor finance users with elevated rights.

We intend to continue to take steps to remediate the material weakness described above and further evolving our ~~investment in knowledgeable staff~~accounting processes, controls, and ~~consultants,~~reviews. The Company plans to continue to assess its internal controls and procedures and intends to take further action as necessary or appropriate to address any other matters it identifies or are brought to its attention. We will not be able to fully remediate this material weakness until these steps have been completed and have been operating effectively for a sufficient period of time.

The actions that we ~~have launched our new ERP, which provides~~are taking are subject to ongoing senior management review, ~~and approval workflows~~ as well as ~~other controls over financial information expected~~audit committee oversight. We will not be able to ~~be present within an effective control environment. Lastly,~~conclude whether the steps we ~~engaged a technical advisory firm to assist management in its remediation efforts to ensure that an effective controls environment existed as of December 31, 2020.~~

~~Based on the evaluation completed in the fourth quarter of 2020, our management has concluded that these control improvements~~ are ~~properly designed and operating effectively as of December 31, 2020, and that~~taking will fully remediate the material weakness ~~existing as~~in our internal control over financial reporting until we have completed our remediation efforts and subsequent evaluation of ~~December 31, 2019 has been remediated.~~their effectiveness. We may also conclude that additional measures may be required to remediate the material weakness in our internal control over financial reporting, which may necessitate further action.

~~This annual report does not include a report of management’s assessment regarding~~Our management is responsible for establishing and maintaining adequate internal control over financial reporting or(as defined in Rule 13a-15(f) under the Exchange Act) for the Company. Our management, under the supervision and with the participation of the Certifying Officers, assessed the effectiveness of the design and operation of our internal controls over financial reporting as of December 31, 2021, based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework (2013). Based on this assessment and because of the material weaknesses identified above, management concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2021.

This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm ~~due~~regarding internal control over financial reporting. Management’s report was not subject to ~~a transition period established~~attestation by ~~the~~our independent registered public accounting firm pursuant to rules of the SEC ~~for newly public companies.~~that permit us to provide only management’s report in this Annual Report on Form 10-K.

Except for the control deficiencies discussed above that have been assessed as a material weakness ~~remediation efforts discussed above,~~as of December 31, 2021, there were no changes in our internal control over financial reporting during the quarter ended December 31, ~~2020,~~2021, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.

On March 25, 2021, the Company entered into a new employment agreement with each of Dermot S. Smurfit, President and Chief Executive Officer (the “New Smurfit Agreement”), Karen Flores, Executive Vice President and Chief Financial Officer (the “New Flores Agreement”) and Todd McTavish, Executive Vice President, Chief Legal Officer and Corporate Secretary, each effective March 1, 2021 (the “New McTavish Agreement,” and together with the New Smurfit Agreement and new Flores Agreement, the “New Employment Agreements”).

The New Smurfit Agreement provides for an annual base salary of $620,000, the New Flores Agreement provides for an annual base salary of $375,000 and the New McTavish Agreement provides for an annual base salary $325,000 (each, the “Base Salary”). Each New Employment Agreement provides that each executive shall have an annual target cash bonus opportunity equal to 100% of executive’s Base Salary, based on the achievement of Company and individual performance objectives to be determined in good faith by the compensation committee or the Board (each, a “Target Bonus”). Additionally, each executive will be entitled to an annual equity award, in an amount established by the compensation committee based upon a review of peer company and peer position annual executive compensation equity grants, with such terms and conditions as the compensation committee may determine.

The New Employment Agreements also include standard benefits, as well as customary non-solicitation, intellectual property/invention assignment and confidentiality provisions. Each New Employment Agreement provides for a term ending on such date that the employee is no longer employed by the Company. The New Employment Agreements include one-year non-compete restrictions. In exchange for executive’s non-compete covenant, the Company shall continue to pay executive’s Base Salary during the non-compete period (“Garden Leave Compensation”). The Company shall not pay Garden Leave Compensation after the executive begins employment with another company.

In the event the Company terminates an executive for Cause (as defined in the New Employment Agreements) or an executive voluntary terminates their employment without Good Reason (as defined in the New Employment Agreements), each executive shall be entitled to receive (i) all earned, but unpaid, Base Salary; (ii) all earned, but unpaid, Target Bonuses; (iii) all earned and vested equity awards; (iv) accrued and earned, but unused, vacation days; and (v) payment of any outstanding reimbursable business expenses submitted to the Company in accordance with the Company’s policies and procedures (collectively, “Accrued Payments”).

In the event the Company terminates the executive without Cause or such executive terminates their employment for Good Reason, the executive shall be entitled to (a) the Accrued Payments, (b) a cash severance payment in an amount equal to one (1) times (or one and a half (1.5 times), in the case of Mr. Smurfit) the sum of executive’s then-current Base Salary and Target Bonus, (c) a pro rata bonus payment in a pro rata amount equal to the Target Bonus for the year in which the termination occurs (the “Pro Rata Bonus”), (d) the pro-rated acceleration of the vesting provisions of all outstanding equity awards, based on the portion of the vesting period of the applicable equity award during which executive was an active employee of the Company and (e) COBRA premiums for a period of 12 months (or 18 months in the case of Mr. Smurfit).

If a Change-in-Control (as defined in the New Employment Agreements) occurs, the Company shall pay to the executive a transaction bonus in an amount equal to one hundred percent (100%) of executive’s Base Salary (the “Transaction Bonus”). Additionally, if executive’s employment is terminated by the Company without Cause or by executive for Good Reason within three (3) months before or two (2) years after a Change-in-Control occurs, (a) all of executive’s equity awards shall accelerate and become fully vested and (b) (i) in lieu of any cash amounts payable as set forth above, the Company will provide to the executive a cash severance payment in an amount equal to one and one-half (1.5) times (or two and a half (2.5 times), in the case of Mr. Smurfit) the sum of executive’s then-current Base Salary and Target Bonus, (ii) the Pro Rata Bonus; and (iii) COBRA premiums for a period of (18) months (or 30 months in the case of Mr. Smurfit).

The foregoing description of the New Employment Agreements are not complete and are qualified in their entirety by reference to the full text of the New Employment Agreements, copies of which are filed as Exhibits 10.6, 10.7 and 10.8 to this Annual Report on Form 10-K and are incorporated by reference herein.

As permitted by Question 101.01 of the Compliance and Disclosure Interpretations for Exchange Act Form 8-K, the foregoing information is disclosed under Item 9B of this report instead of under Item 5.02(e) of a separate Current Report on Form 8-K.

~~Directors and Executive Officers~~ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this item is set forth under the following ~~table sets forth information about~~captions in our ~~directors, executive officers and other key employees as~~proxy statement to be filed with respect to our 2022 Annual Meeting of ~~March 25, 2021.~~

~~The address of each of our executive officers and directors is c/o GAN Limited, 400 Spectrum Center Drive, Suite 1900, Irvine, CA 92618.~~

~~Dermot S. Smurfit~~ is our President, Chief Executive Officer, and a member of our Board of Directors. Mr. Smurfit joined GAN as a Director in 2003 and became Chief Executive Officer in 2010. He previously worked in the European Investment Banking team of SoundView Technology Group. He has operational and management experience in online gaming through his experience with GAN, together with M&A, strategic advisory and private equity financing experience in the gaming technology industry. Mr. Smurfit is a qualified (non-practicing) U.K. lawyer specialized in corporate finance. His education encompasses an LLB in Law from Exeter University, the Legal Practice Course from the College of Law (U.K.Shareholders (the “proxy statement”) and the Investment & Corporate Finance advisory qualification from the U.K.’s Financial Conduct Authority. Mr. Smurfit was selected to serve on our Board of Directors due to his tenure with our company and his industry experience.

~~Karen Flores~~ is our Executive Vice President, Chief Financial Officer since January 2020, and is a member of our Board of Directors since June 2020. Ms. Flores has over 15 years’ experience in senior financial management roles. Immediately prior to joining GAN, Ms. Flores served as Vice President, Corporate Finance and Analysis of Alorica, Inc. from June 2017 to January 2020. From March 2016 to May 2017, she served as Senior Director of Financial Planning and Analysis for the Walt Disney Company, following Disney’s acquisition of Maker Studios Inc., where she was serving as its Senior Vice President, Finance from September 2011 to March 2016. Additional senior financial roles include positions with MySpace Music and Napster. Ms. Flores began her career as a financial analyst with Microsoft. Ms. Flores holds a Bachelor of Science, Finance, from San Jose State University. Ms. Flores was selected to serve on our Board of Directors due to her industry experience and experience in senior financial management roles.

~~Simon Knock~~ is our Executive Vice President, Chief Information Officer, serving in that role since July 2016. Mr. Knock joined GAN in September 2010 as Technical Director and has nearly twenty years of Internet gambling industry experience. Prior to GAN, Mr. Knock held various technology development and management roles with U.K. gaming operator William Hill plc and operations roles with Canadian online gaming software developer CryptoLogic, Inc. Mr. Knock has a software engineering background, originally developing U.K. Government revenue systems and private sector logistics products. Mr. Knock attended Sheffield Hallam University in the United Kingdom and graduated with HND Computing in 1999.

~~Jeffrey Berman~~ is our Executive Vice President, Chief Commercial Officer, serving in that role since February 2018 in his second stint with GAN, having previously spent four years with the company between 2009-2012 as our General Manager, North America. Mr. Berman was a Vice President, Advanced Development of Sentient Technologies from February 2016 to January 2017 and was a Vice President, Business Development of Zepp Labs, Inc. from January 2014 to February 2016. Mr. Berman has more than 25 years in the sports and entertainment sectors, having previously held key leadership roles at leading companies such as StubHub, Ticketmaster, CBS Sports, and Sentient Technologies. Mr. Berman additionally founded and subsequently sold VSX, a stock market portfolio tool, to Dow Jones & Company. Mr. Berman received his Bachelor of Art from Duke University and his MBA from Georgetown University.

~~Donald Ryan~~ is our Executive Vice President, Chief Operating Officer, serving in that role since April 2020. Prior to joining the Company, Mr. Ryan served as the Chief Executive Officer for Sports Information Group LLC from April 2018 to December 2019, the Senior Vice President of Gaming Development for Greenwood Gaming & Entertainment Inc. from April 2015 to April 2018, and the Senior Vice President of Gaming for Betfair Interactive US LLC from March 2014 to April 2015. Mr. Ryan has extensive experience in online and mobile consumer products and services (with a particular focus on gaming and gambling), leveraging a range of business models including regulated transactions, affiliate partnerships, online subscriptions, e-commerce, white-label distribution, online advertising, virtual currencies and micro-transactions. Mr. Ryan holds a Bachelor of Science, Electrical Engineering from University of Alaska Fairbanks and an MBA from Northwestern University – Kellogg School of Management.

~~Todd F. McTavish~~ is our Executive Vice President, Chief Legal Officer and Corporate Secretary, serving in that role since June 2020. Mr. McTavish has over 20 years of legal experience in M&A, corporate governance, commercial transactions, litigation, compliance and licensing, with over 12 years-experience advising public and private gaming companies. Immediately prior to GAN, Mr. McTavish served as Chief Legal Officer of Tekkorp Capital LLC from October 2018 to June 2020. Before that, he served as Chief Legal Officer and Corporate Secretary of NYX Gaming Group Limited (TSX.V: NYX) from January 2017 to April 2018 before it was sold to Scientific Games Corp., and before that EVP & General Counsel of Mozido, Inc., and prior to that from 2012 to 2014 he was SVP, General Counsel, Chief Compliance Officer and Corporate Secretary of Multimedia Games Holding Company, Inc. (Nasdaq: MGAM) before it was sold to Everi Gaming, and also General Counsel of Video Gaming Technologies, Inc., which was sold to Aristocrat Leisure Limited. Prior to gaming, Mr. McTavish held roles at PricewaterhouseCoopers and PepsiCo, Inc. in the Tax Department. Mr. McTavish began his career at the New York law firm of Cadwalader Wickersham & Taft LLP. Mr. McTavish holds a Bachelor of Art from West Virginia University, J.D. from Touro College Law Center, and a Masters of Law in banking and finance from Fordham School of Law.

~~Seamus McGill~~ is a member of our Board of Directors and serves as our Chairman. Mr. McGill joined the Board of GAN in April 2014. He has 25 years’ experience in the gaming and technology industries and most recently was President of JOINGO, a mobile software company in San Jose, California from December 2013 to October 2015. Prior to JOINGO, Mr. McGill spent five years at Aristocrat Technologies Limited as Chief Operating Officer and helped deliver 20% year-on-year growth in the Americas for the second largest manufacturer of slot machines and gaming solutions in the world. Prior to Aristocrat, Mr. McGill was President of Cyberview Technology, Inc. before selling the company to International Game Technology plc. Mr. McGill held senior positions at WMS Gaming Inc. and oversaw the global growth of the company. He started his career in gaming with Mikohn Gaming Corporation. Mr. McGill was selected to serve on our Board of Directors due to his industry experience and his tenure with our company.

~~Michael Smurfit Jr.~~ is a member of our Board of Directors. Mr. Smurfit Jr. joined the Board of GAN in June 2003. He is Chief Executive Officer of SF Investments, a privately-held company that manages world-wide investments on behalf of the Smurfit family. Mr. Smurfit Jr. is a director of a number of companies, including Inflection Biosciences, UCD Graduate School of Business and K Club Ltd. since 2015. He previously held a number of senior positions within the Jefferson Smurfit Group both in Europe and the United States. He graduated from UCD Michael Smurfit Graduate Business School with an MBA. Mr. Smurfit Jr. was selected to serve on our Board of Directors due to his industry experience and his tenure with our company.

~~David Goldberg~~ is a member of our Board of Directors. Mr. Goldberg joined GAN in December 2018. He is an experienced public company and startup CEO, board member and advisor with extensive experience in gaming, entertainment and sports. He currently serves as a senior adviser to TPG Capital, one of the world’s largest private equity firms, beginning in March 2017. From April 2014 to April 2018, he was a board and audit committee member at Trans World (OTCQB: TWOC), which operates casinos in the Czech Republic and was sold in mid-2018, and previously was the CEO of Youbet.com (Nasdaq: UBET) which was at the time the United States’ largest online wagering company. In 2012, Federated Sports and Gaming, Inc. a company to which Mr. Goldberg was the co-Chief Executive Officer, filed a petition for voluntary reorganization under Chapter 11 of the U.S. Bankruptcy Code. Mr. Goldberg was Chief Executive Officer of ScoreBig, Inc., owner and operator of ScoreBig.com, which made a general assignment for the benefit of creditors under California law in October 2016. Mr. Goldberg holds a Bachelor of Art in Economics from Northwestern University and an MBA from the University of Chicago Booth School of Business. Mr. Goldberg was selected to serve on our Board of Directors due to his industry experience and his experience as a public company and startup CEO and board member.

~~We have adopted a written Code of Business Conduct, which outlines the principles of legal and ethical business conduct under which we do business. The Code of Business Conduct applies to~~ all of ~~our directors, officers and employees. A copy of our Code of Business Conduct~~which is available on our corporate website at https://investors.gan.com/websites/gan/English/4100/corporate-governance-information.html. We do not incorporate the information on our website into this report and you should not consider any such information that can be accessed through our website as part of this report. Any amendments or waivers from the provisions of the Code of Business Conduct for our executive officers or directors will be made only after approvalincorporated by ~~a committee consisting of a majority of our independent directors and will be disclosed on our corporate website promptly following the date of such amendment or waiver.~~

The members of our audit committee are Seamus McGill, Michael Smurfit Jr. and David Goldberg. David Goldberg is the chair of the audit committee. Our Board of Directors has determined that all members of our audit committee meet the requirements for financial literacy under the applicable rules and regulations of the SEC and the Nasdaq listing rules and that David Goldberg is an “audit committee financial expert” (within the meaning of applicable SEC regulations). Each of the members of the audit committee are independent pursuant to applicable Nasdaq listing standards.

~~There have been no material changes to the procedures by which our shareholders may recommend nominees to the Board of Directors.~~

reference: “Directors;” “Executive Officers;” “Corporate Governance;” “Additional Information - Delinquent Section 16(a) ~~Reports~~

~~Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers~~Reports;” and ~~directors,~~“Director Nominations and ~~persons who beneficially own more than 10% of our company’s securities, to file initial reports of ownership and reports of changes~~Shareholder Proposals for Inclusion in ownership with the SEC. Based solely upon a review of the copies of the forms furnished to our company and information involving securities transactions of which the company is aware, all of our officers, directors and holders of more than 10% of the outstanding securities of the company complied with the filing requirements pursuant to Section 16(a) of the Exchange Act with the exception of late Form 4 filings by (i) each of Messrs. Berman, Knock, McTavish, Ryan and Smurfit and Ms. Flores with respect to a stock option received by each such reporting person under the 2020 Plan on February 26, 2021, and (ii) each of Messrs. Goldberg, McGill, and Smurfit Jr., with respect to a restricted stock award received by each such reporting person under the 2020 Plan on March 9, 2021. The aforementioned late Form 4 filings were all filed on March 29, 2021.GAN Limited’s 2023 Proxy Materials.”

The information required by this item is set forth under the following captions in our proxy statement, all of which is incorporated by reference: “Executive Officers - Summary Compensation ~~and Employment Agreements~~

~~The following table sets forth, in thousands, information regarding compensation awarded~~Table, Narrative Disclosure to ~~and earned by our named executive officers for services rendered to us in all capacities during our year ended December 31, 2020 and 2019.~~

~~(1) Represents the aggregate grant date fair value of stock option awards and restricted stock awards granted to the NEOs in each fiscal year, computed in each case in accordance with ASC 718 –~~ ~~Compensation—Stock~~Summary Compensation~~. Refer to the~~ Table, Outstanding Equity Awards ~~table below for details of these grants. Assumptions used to calculate these amounts are described in Note 8 – Share-based~~and Year End;” Directors - Director Compensation ~~to our annual financial statements for the year ended December 31, 2020.~~Table.”

(2) Represents amounts paid with respect to global health insurance and housing allowances. Housing allowances ended in August 2020 as per the terms of Dermot S. Smurfit’s previous employment agreement with the Company.

~~Employment Agreements and Termination of Employment & Change in Control Arrangements~~

~~Dermot S. Smurfit.~~ Mr. Smurfit entered into an employment agreement with the Company, dated March 26, 2019, which was supplemented by an offer letter (collectively, the “Prior Smurfit Agreement”). Pursuant to the Prior Smurfit Agreement, Mr. Smurfit was employed as the Chief Executive Officer of the Company at an annual base salary of $424,320. In addition, Mr. Smurfit was eligible for bonus and incentive compensation as approved by the Company’s Board.

On March 25, 2021, Mr. Smurfit entered into a new employment agreement with the Company (the “New Smurfit Agreement”). The terms of the New Smurfit Agreement are described in “Item 9B. Other Information” above.

~~Karen Flores.~~ Ms. Flores had an Employment Agreement with the Company effective as of January 13, 2020, which was supplemented by an offer letter and a’ Variation to Employment Agreement’ (collectively, the “Prior Flores Agreement”). Pursuant to the Prior Flores Agreement, Ms. Flores was employed as the Chief Financial Officer and Executive Director of the Company at an annual base salary of $350,000. Ms. Flores was also eligible for an annual bonus equal to 50% and was issued 150,000 share options which began vesting on June 1, 2020.

On March 25, 2021, Ms. Flores entered into a new employment agreement with the Company (the “New Flores Agreement”). The terms of the New Flores Agreement are described in “Item 9B. Other Information” above.

~~Todd McTavish.~~ Mr. McTavish entered into an Employment Agreement with the Company dated June 15, 2020, which was supplemented by an offer letter (the “Prior McTavish Agreement”). Pursuant to the Prior McTavish Agreement, Mr. McTavish was employed as the Chief Legal Officer and Corporate Secretary of the Company at an annual base salary of $275,000. Mr. McTavish was also eligible for an annual bonus equal to 75% of his annual base salary and was issued 200,000 share options.

On March 25, 2021, Mr. McTavish entered into a new employment agreement with the Company (the “New McTavish Agreement”). The terms of the New McTavish Agreement are described in “Item 9B. Other Information” above.

We have entered into indemnification agreements with each of our directors and executive officers that will provide our directors and executive officers with additional protection regarding the scope of the indemnification set forth in our bye-laws. Pursuant to these agreements, we will indemnify each such person (to the fullest extent permitted by Bermuda law) against all costs and expenses, including expense advances, incurred in connection with any claim by reason or arising out of any event or occurrence relating to the fact that such person is our director or executive officer or is serving at our request at another corporation or entity, or by reason of any activity or inactivity while serving in such capacity. However, we are not obligated to indemnify our directors or executive officers under these agreements if:

The Company maintains a defined contribution plan, or 401(k) plan, for our U.S. employees. The 401(k) plan is intended to qualify as a tax-qualified plan under Section 401(k) of the Internal Revenue Code so that contributions to the 401(k) plan, and income earned on such contributions, are not taxable to participants until withdrawn or distributed from the 401(k) plan. Matching contributions for the U.S. defined contribution plan are 50% of up to 4% of an employee’s salary contribution, subject to statutory limits.

~~The following tables set forth information concerning outstanding equity awards held by our named executive officers as of December 31, 2020.~~

We believe that although a portion of the compensation provided to our executive officers and other employees is performance-based, our executive compensation program does not encourage excessive or unnecessary risk taking.

This is primarily due to the fact that our compensation programs are designed to encourage our executive officers and other employees to remain focused on both short-term and long-term strategic goals. As a result, we do not believe that our compensation programs are reasonably likely to have a material adverse effect on us.

~~The following table sets forth, in thousands, information concerning the compensation earned during the year ended December 31, 2020 by each of our non-employee directors:~~

(1) On December 30, 2019, our Board of Directors adopted a bonus program, providing for compensation to each member of the Board of Directors contingent upon the successful completion of the share exchange and reorganization in May 2020. The bonus program was comprised of an aggregate of up to £454 to be allocated among the directors as awards. The total award was paid in cash in May 2020 which totaled $608.

Our non-executive directors serve pursuant to the terms of a standard letter of appointment, which acts as a service contract. The letter of appointment contemplates that the non-employee director will serve a three-year term, subject to re-election by the Company’s shareholders at the annual general meeting, and regulatory compliance. The letter of appointment also allows for termination by the Company or the director, at the discretion of either, upon three month’s written notice; however, the Board of Directors can require a director to resign immediately if it determines that a director’s position becomes untenable due to a conflict of interest. Non-executive directors are required to devote sufficient time necessary to fulfill their duties. The letter of appointment provides for payment of an annual cash fee, which is paid monthly in arrears. Non-executive directors are eligible for discretionary share-based payment awards. Directors are also reimbursed for expenses reasonably incurred in the performance of their duties. We do not maintain any service contracts with our directors that provide monetary benefits, such as cash termination payments, upon our directors’ termination of service with us.

~~Securities authorized for issuance~~ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this item is set forth under ~~equity compensation plans~~

~~The~~the following ~~table provides information relating to~~captions in our ~~equity compensation plans as~~proxy statement, all of ~~December 31, 2020. As of December 31, 2020, we had the GAN Limited 2020~~which is incorporated by reference: “Additional Information - Equity ~~Incentive~~Compensation Plan ~~which was approved by our Board of Directors and our shareholders.~~

~~The following table sets forth certain information known to us regarding beneficial ownership of our ordinary shares outstanding as of March 25, 2021 for:~~

~~We have determined beneficial ownership in accordance with the rules of the SEC,~~ and the information is not necessarily indicative of beneficial ownership for any other purpose. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities as well as any ordinary shares that the person has the right to acquire within 60 days of March 25, 2021 through the exercise of stock options or other rights. These shares are deemed to be outstanding and beneficially owned by the person holding those options for the purpose of computing the percentage ownership of that person, but they are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Unless otherwise indicated, the persons or entities identified in this table have sole voting and investment power with respect to all shares shown as beneficially owned by them. Each individual or entity shown on the table has furnished information with respect to beneficial ownership.Management.”

~~The percentage of beneficial ownership in the table below is based on 42,017,117 ordinary shares deemed to be outstanding as of March 25, 2021.~~

~~There are no transactions or series of transactions since January 1, 2018 to which we were or will be a party,~~ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this item is set forth under the following captions in ~~which:~~

~~Compensation arrangements for~~ our ~~named executive officers and our directors are described elsewhere in this Annual Report under “Director Compensation” and “Executive Compensation.”~~

From time to time in the ordinary course of our business we contract for services from companies in which certain of our executive officers or directors may serve as director or advisor. The cost of these services is negotiated on an arm’s length basis and none of these arrangements is material to us.

At December 31, 2019, our director and Chief Executive Officer Dermot S. Smurfit owed us $135, inclusive of $3 of interest, which was included within trade and other receivables on our consolidated balance sheet. The interest earned by us is included within interest expense, net within the consolidatedproxy statement, ~~of comprehensive income (loss). On March 20, 2020, the outstanding loan and interest was repaid in full.~~

On March 5, 2020, GAN Limited secured the cash consideration for the share exchange contemplated by the May 2020 scheme of arrangement with GAN plc through a loan from Dermot S. Smurfit, our chief executive officer, and his father Dermot F. Smurfit. The loan was unsecured and bore interest at 15% per annum subject to a minimum interest fee of £300 (approximately $384). GAN Limited never drew down on the loan but paid the minimum interest fee in full promptly following the reorganization from existing cash resources of GAN plc (£30 (approximately $37)all of which ~~was paid to Mr. Dermot S. Smurfit).~~

is incorporated by reference: “Corporate Governance - Review and Approval of Related Party Transactions” and “Corporate Governance - Director ~~Independence~~Independence.”

Under the Nasdaq listing rules, independent directors must comprise a majority of a listed company’s board of directors within twelve months from the date of listing. In addition, the Nasdaq listing rules require that, subject to specified exceptions, each member of a listed company’s audit, compensation and nominating and governance committees be independent within twelve months from the date of listing. Audit committee members must also satisfy additional independence criteria, including those set forth in Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the Exchange Act), and compensation committee members must also satisfy the independence criteria set forth in Rule 10C-1 under the Exchange Act. Under Nasdaq listing rules, a director will only qualify as an “independent director” if, in the opinion of that company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In order to be considered independent for purposes of Rule 10A-3 under the Exchange Act, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors or any other board committee: (1) accept, directly or indirectly, any consulting, advisory or other compensatory fee from the listed company or any of its subsidiaries, other than compensation for board service; or (2) be an affiliated person of the listed company or any of its subsidiaries. In order to be considered independent for purposes of Rule 10C-1, the board of directors must consider, for each member of a compensation committee of a listed company, all factors specifically relevant to determining whether a director has a relationship to such company which is material to that director’s ability to be independent from management in connection with the duties of a compensation committee member, including, but not limited to: the source of compensation of the director, including any consulting advisory or other compensatory fee paid by such company to the director, and whether the director is affiliated with the company or any of its subsidiaries or affiliates.

Our board of directors has determined that Messrs. McGill, Smurfit Jr. and Goldberg are independent directors, including for purposes of Nasdaq and SEC rules. In making that determination, our board of directors considered the relationships that each director has with us and all other facts and circumstances the board of directors deemed relevant in determining independence.

~~BDO LLP served as~~The information required by this item is set forth under the ~~Company’s independent auditor for the year ended December 31, 2020. The~~ following ~~table presents fees billed,~~captions in ~~thousands, for professional audit services rendered~~our proxy statement, all of which is incorporated by ~~BDO LLP in connection with its audits~~reference: “Additional Matters - Report of the ~~Company’s annual financial statements for the year ended December 31, 2020.~~Audit Committee.”

~~As used in the table above, the following terms have the meanings set forth below.~~

The fees for professional services rendered in connection with the audit of the Company’s annual financial statements, for the review of the financial statements included in the Company’s interim reports and for services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements.

The fees for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements. These amounts included services performed in relation to the Company’s initial public offering and follow-on offerings which closed in May 2020 and December 2020, respectively.

~~The fees for professional services rendered for tax compliance, tax advice and tax planning.~~

~~The fees for products and services provided, other than for the services reported under the headings “Audit Fees,” “Audit Related Fees” and “Tax Fees.”~~

The audit committee of the Company has procedures in place to ensure that the Company’s independent accounting firm is not allowed to perform any service which may have the effect of jeopardizing the registered public accountant’s independence. Without limiting the foregoing, the independent accounting firm shall not be retained to perform the following:

~~All audit and permitted non-audit services must be pre-approved by the audit committee.~~

The following consolidated financial statements of GAN Limited are included in Item 8 of this report:

The exhibits required by Item 601 of Regulation S-K are included under Item 15(b) below.

** Furnished herewith. This certification is being furnished solely to accompany this report pursuant to 18 U.S.C. 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

KNOW ALL PERSONS BY THESE PRESENTS, that each individual whose signature appears below constitutes and appoints each of Dermot S. Smurfit and Karen E. Flores as his or her true and lawful attorney and agent, with full power of substitution and re-substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to the Registrant’s Annual Report on Form 10-K for the ~~fiscal~~ year ended December 31, ~~2020,~~2021, and to file the same with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney and agent may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Title of Each Class		Trading ~~Symbol~~Symbol(s)		Name of Each Exchange on which Registered
Ordinary Shares, par value $0.01 per share		GAN		The Nasdaq ~~Capital~~ Stock Market LLC

		Page
	PART I
Item 1.	Business	4
Item 1A.	Risk Factors	1617
Item 1B.	Unresolved Staff Comments	3135
Item 2.	Properties	3135
Item 3.	Legal Proceedings	3135
Item 4.	Mine Safety Disclosures	3135
	PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	3136
Item 6.	~~Selected Financial Data~~[Reserved]	3236
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3237
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	4450
Item 8.	Financial Statements and Supplementary Data	4653
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	7386
Item 9A.	Controls and Procedures	7386
Item 9B.	Other Information	7488
Item 9C.	~~PART III~~Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	88
	PART III
Item 10.	Directors, Executive Officers and Corporate Governance	7589
Item 11.	Executive Compensation	7889
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	8189
Item 13.	Certain Relationships and Related Transactions, and Director Independence	8389
Item 14.	Principal Accountant Fees and Services	8489
	PART IV
Item 15.	Exhibits and Financial Statement Schedules	8590
Item 16.	Form 10-K Summary	8691

SIGNATURES		8792

	●	our ability to ~~successfully meet anticipated revenue levels from sales~~generate and sustain profitability in light of ~~our software licenses;~~the incurrence of net losses and negative cash flows;
	●	our ability to successfully develop, market or sell new products or adopt new technology platforms;
	●	risks related to competition;
	●	our ability to ~~continue to grow through acquisitions or investments~~manage the substantial variability in ~~other companies or technologies;~~our business operations and forecast our financial results in light of such variability;
	●	risks related to our customer contracts, pursuant to which our revenues fluctuate with the use of our products or services;
	●	risks related to our historical reliance on a small number of customers for a substantial portion of our revenues;
	●	our ability to realize the anticipated benefits of our consummated acquisitions or investments in other companies, ~~included~~including our acquisition of Coolbet in January 2021;
	●	~~risks related to the January 2021 acquisition of Coolbet and the Coolbet business;~~
	●	risks related to the continued uncertainty in the global financial markets and unfavorable global economic conditions, including as a result of the global outbreak of the novel coronavirus (“COVID-19”) pandemic;
	●	~~our installed customer base continuing to license additional products, renew maintenance agreements and purchase additional professional services;~~
	●	our ability to attract and retain qualified personnel;
	●	~~our ability to adequately manage our growth;~~
	●	risks related to ~~competition;~~the heavily regulated online gaming industry;
	●	our ability to maintain good relations with our channel partners;
	●	risks associated with our international operations and fluctuations in currency values;
	●	risks related to unanticipated performance problems or bugs in our software product offerings; and
	●	our ability to protect our intellectual property and proprietary rights.

Workforce by Region:
~~Bulgaria~~Europe	~~102~~
~~Israel~~	10
~~United Kingdom~~	~~108~~512
United States	68125
Latin America	14
Rest of World	31

Workforce by Function:
Operations	7990	%
~~Non-Operations~~Non-operations	2110	%

~~Workforce by Type of Employment:~~
~~Full-Time~~	84	%
~~Part-Time/Temporary~~	2	%
~~Contractor~~	14	%15

	Large accelerated filer ☐	☐		Accelerated filer ☐	☐
Non-accelerated filer ☒	☒		Smaller reporting company	☒
				Emerging growth company	☒

~~Workforce by Gender:~~
~~Male~~ ~~(75% in 2019)~~	70	%
~~Female~~ ~~(25% in~~ ~~2019)~~	30	%

	●	We have incurred net losses in the past with negative cash flows and may not be able to generate and sustain profitability.
	●	We operate in a rapidly evolving industry and if we fail to successfully develop, market or sell new products or adopt new technology platforms, it could materially adversely affect our results of operations and financial condition.
	●	The online gaming industry is highly competitive, and if we fail to compete effectively, we could experience price reductions, reduced margins or loss of market share.
	●	Our business operations are subject to substantial variability, which may make it more difficult for us to forecast our financial results, and may negatively impact how investors review our results or prospects.
	●	Under our revenue arrangements, if existing customers do not continue the use of our products or services, our results of operations could be materially adversely affected.
	●	We have historically relied on a small number of customers for a substantial portion of our revenues.
	●	A reduction in discretionary consumer spending, from an economic downturn or disruption of financial markets or other factors, could negatively impact our financial performance.
	●	We face the risk of fraud, theft, and cheating.

	●	We face cyber security risks that could result in damage to our reputation and/or subject us to fines, payment of damages, lawsuits and restrictions on our use of data.
	●	Systems failures and resulting interruptions in the availability of our websites, applications, products, or services could harm our business.
	●	Our business strategy anticipates substantial growth, and if we fail to adequately scale product offerings and manage our entry into new territories, our business and reputation may be harmed.
	●	Our business plan includes the evaluation and potential integration of acquisitions, which if not done successfully could adversely affect our operating results and result in charges to our earnings, impairing our financial condition.
	●	We rely on relationships with third-party content providers for a significant portion of our revenue.
	●	If we are unable to protect our intellectual property and proprietary rights, our competitive position and our business could be materially adversely affected.
	●	We face the risk that third parties will claim that we infringe on their intellectual property rights, which could result in costly license fees or expensive litigation.
	●	We face risks related to health epidemics and other widespread outbreaks of contagious disease, which could disrupt our operations and impact our operating results.
	●	We are subject to risks related to corporate social responsibility, responsible gaming, reputation and ethical conduct.
	●	The online gaming industry is heavily regulated and the Company’s failure to obtain or maintain applicable licensure or approvals, or otherwise comply with applicable requirements, could be disruptive to our business and could adversely affect our operations.
	●	Once a gaming license is granted, or conditionally approved, violations of any gaming related requirements could result in the imposition of fines, penalties, conditions, or limitations, up to and including the revocation of a gaming license for material and/or repeated violations, all of which could adversely affect our operations and financial viability.
	●	The online gaming industry is rapidly expanding and evolving, which the proliferation of new and changing regulatory frameworks increases costs and the risk of non-compliance.
	●	Our B2C operations generate a significant portion of our revenue from “unregulated” markets and changes in regulation in those markets could result in us losing business in those markets or incurring additional expenses in order to comply with any new regulatory scheme.
	●	Compliance with evolving data privacy regulations may cause us to incur additional expenses, and any violation could result in damage to our reputation and/or subject us to fines, payment of damages, lawsuits and restrictions on our use of data.
	●	Any violation of the Bank Secrecy Act or other similar anti-money laundering laws and regulations could have a negative impact on us.
	●	We have business operations located in many countries and a significant level of operations outside of the U.S., which subjects us to additional costs and risks that could adversely affect our operating results.
	●	Our results of operations may be adversely affected by fluctuations in currency values.
	●	The expansion of our business will subject us to taxation in a number of jurisdictions and changes in, or new interpretation of, tax laws, tax rulings or their application by tax authorities could result in additional tax liabilities and could materially affect our financial condition and results of operations.
	●	A change in our tax residence could have a negative effect on our future profitability.
	●	Ownership in our ordinary shares is restricted by gaming laws and our by-laws, and persons found “unsuitable” may be required to dispose of their shares.
	●	We are a Bermuda company and it may be difficult for you to enforce judgments against us or certain of our directors or officers.
	●	Our bye-laws restrict shareholders from bringing legal action against our officers and directors and contain provisions that may discourage a change in control.

	●	product quality, including the possibility of software defects, which could result in claims against us or the inability to sell our software products;
	●	the accuracy of our estimates of customer demand, and the fit of the new products and features with customers’ needs;
	●	the need to educate our sales, marketing and services personnel to work with the new products and features, which may strain our resources and lengthen sales cycles;
	●	market acceptance of initial product releases; and
	●	competitor product introductions, in-house customer solutions or regulatory changes that render our new products obsolete.

	●	perceived or actual general economic conditions;
	●	fears of recession and changes in consumer confidence in the economy;
	●	high energy, fuel and other commodity costs;
	●	the potential for bank failures or other financial crises;
	●	a soft job market;
	●	an actual or perceived decrease in disposable consumer income and wealth;
	●	increases in taxes, including gaming taxes or fees; and
	●	terrorist attacks or other global events.

	●	implement additional management information systems;
	●	further develop our operating, administrative, legal, financial and accounting systems and controls;
	●	hire additional qualified personnel and develop human capital;
	●	comply with additional regulatory regimes, securing licenses and permits; and
	●	maintain close coordination among our engineering, operations, legal, finance, sales and marketing and customer service and support organizations.

	●	difficulties in integrating the operations, technologies, services and personnel of acquired businesses;
	●	cultural challenges associated with integrating employees from an acquired company into our organization;
	●	ineffectiveness or incompatibility of acquired technologies or services;
	●	additional financing required to complete acquisitions;
	●	potential loss of key employees of acquired businesses;
	●	inability to maintain the key business relationships and the reputations of acquired businesses;
	●	diversion of management’s attention from other business concerns;
	●	inability to maintain our standards, controls, procedures and policies;
	●	litigation for activities of the acquired company, including claims from terminated employees, customers, former shareholders or other third parties;
	●	in the case of acquisitions made across multiple geographic areas, the need to integrate operations across different cultures and languages and to address the particular economic, currency, political and regulatory risks associated with specific countries;
	●	failure to successfully further develop ~~the~~ acquired technology; and
	●	increased fixed costs.

	●	adversely affect our relationships with our current or future customers or partners;
	●	cause delays or stoppages in providing new sales of our products;
	●	cause us to have to cease use of certain technology or ~~products~~products;
	●	require technology changes that would cause us to incur substantial cost;
	●	require us to enter into royalty or licensing agreements on unfavorable terms; and
	●	divert management’s attention and resources.

	●	the opportunity to apply for one or more gaming licenses for one or more categories of products, whether as part of a general round of license issuance (for example, Spain) or as and when the applicant chooses to apply;
	●	a requirement for gaming license applicants to make detailed and extensive disclosures as to their beneficial ownership, their source of funds, the probity and integrity of certain persons associated with the applicant, the applicant’s management competence and structure and business plans, the applicant’s proposed geographical territories of operation and the applicant’s ability to operate a gaming business in a socially responsible manner in compliance with applicable laws and regulations;
	●	interviews and assessments by the relevant gaming authority intended to inform a regulatory determination of the suitability of applicants for gaming licenses;
	●	assessments by the relevant gaming authority intended to inform a regulatory determination of the continued suitability of gaming license holders;
	●	ongoing reporting and disclosure obligations, both on a periodic and ad hoc basis in response to material issues affecting the business;
	●	the testing and certification of software and systems, generally designed to confirm such things as the fairness of the gaming products offered by the business, their genuine randomness and ability accurately to generate settlement instructions and recover from outages;
	●	the need to account for applicable gaming duties and other taxes and levies, such as fees or contributions to bodies that organize the sports on which bets are offered, as well as contributions to the prevention and treatment of problem gaming; and
	●	social responsibility obligations.

	●	the lack of a sufficient number of personnel with an appropriate level of knowledge and experience in the application of International Financial Reporting Standards and International Accounting Standards and Interpretations as issued by the International Accounting Standards Board (“IASB”), commensurate with our previous financial reporting requirements at the time; and
	●	the design and operation of our accounting and financial reporting close functions, in which required policies and procedures either were not designed or were not operating effectively at period end, resulting in a number of adjustments to our consolidated financial statements during the course of the audit.

	●	challenges caused by distance as well as language and cultural differences;
	●	general economic conditions in each country or region;
	●	regulatory changes;

	●	political unrest, terrorism and the potential for other hostilities;
	●	public health risks, particularly in areas in which we have significant operations;
	●	longer payment cycles and difficulties in collecting accounts receivable;
	●	overlapping or changes in tax regimes;
	●	difficulties in transferring funds from certain countries;
	●	laws such as the U.K. Bribery Act 2010 and the U.S. Foreign Corrupt Practices Act, and local laws which also prohibit corrupt payments to governmental officials; and
	●	reduced protection for intellectual property rights in some countries.

	●	restrictions on the time period in which directors may be nominated;
	●	the prohibition of cumulative voting in the election of directors;
	●	the requirement for shareholders wishing to propose a person for election as a director (other than persons proposed by our Board of Directors) to give advance written notice of nominations for the election of directors; and
	●	certain provisions to ensure that we comply with applicable gaming laws, which provide, among other things, that our Board of Directors has the right to cause a forced sale of the ordinary shares held by an “unsuitable” person (see the risk factor above entitled “Ownership in our ordinary shares is restricted by gaming laws and our ~~bye-laws,~~by-laws, and persons found “unsuitable” may be required to dispose of their shares”).

	●	organic growth of our existing casino operators,
	●	expansion into newly regulated jurisdictions with existing and new customers,
	●	margin expansion driven by the integration of Coolbet’s sports betting technology in our B2B product offerings,
	●	revenue expansion from the roll-out of our Super RGS content offering to B2C operators who are not already clients, and
	●	organic growth of our B2C business in existing and new jurisdictions.

	Year Ended December 31,					Change 2019 to 2020
	2020			2019		Amount			%
(in thousands, except percentages)
Revenue
Platform and content fees	$	26,208		$	20,011	$	6,197			31.0	%
Development services and other		8,951			9,960		(1,009	)		(10.1	)%
Total revenue		35,159			29,971		5,188			17.3	%
Operating costs and expenses
Cost of platform and content fees⁽¹⁾		7,787			6,630		1,157			17.5	%
Cost of development services and other⁽¹⁾		2,684			473		2,211	��		467.4	%
Impairment of capitalized software		—			626		(626	)		(100.0	)%
Sales and marketing		5,046			3,487		1,559			44.7	%
Product and technology		11,032			3,413		7,619			223.2	%
General and administrative⁽¹⁾		24,825			8,435		16,390			194.3	%
Depreciation and amortization		3,257			4,316		(1,059	)		(24.5	)%
Total operating costs and expenses		54,631			27,380		27,251			99.5	%
Operating income (loss)		(19,472	)		2,591		(22,063	)		(851.5	)%
Interest expense, net		392			13		379			n.m.
Income (loss) before income taxes		(19,864	)		2,578		(22,442	)		(870.5	)%
Income tax expense		353			574		(221	)		(38.5	)%
Net income (loss)	$	(20,217	)	$	2,004	$	(22,221	)		n.m.

	⁽¹⁾	~~Excludes depreciation and amortization.~~
	~~n.m. = not meaningful~~

	Year Ended December 31,				As a percentage of revenue						Change 2019 to 2020
	2020		2019		2020			2019			Amount			%
(in thousands, except percentages)
RMiG
Revenue
Platform and content fees	$	18,030	$	15,396		51.2	%		51.3	%	$	2,634			17.1	%
Development services and other		7,580		8,832		21.6	%		29.5	%		(1,252	)		(14.2	)%
Total RMiG Revenue		25,610		24,228		72.8	%		80.8	%		1,382			5.7	%

SIM
Revenue
Platform and content fees		8,178		4,615		23.3	%		15.4	%		3,563			77.2	%
Development services		1,371		1,128		3.9	%		3.8	%		243			21.5	%
Total SIM revenue		9,549		5,743		27.2	%		19.2	%		3,806			66.3	%
Total revenue	$	35,159	$	29,971		100.0	%		100.0	%	$	5,188			17.3	%

	Year Ended December 31,						Change
	2021			2020			Amount			Percent
(dollars in thousands)
Revenue	$	124,163		$	35,159		$	89,004			n.m.
Operating costs and expenses
Cost of revenue⁽¹⁾		41,373			10,471			30,902			n.m.
Sales and marketing		22,266			5,046			17,220			n.m.
Product and technology		22,548			11,032			11,516			n.m.
General and administrative⁽¹⁾		48,881			24,825			24,056			96.9	%
Impairment		3,500			—			3,500			n.m.
Depreciation and amortization		16,808			3,257			13,551			n.m.
Total operating costs and expenses		155,376			54,631			100,745			n.m.
Operating loss		(31,213	)		(19,472	)		(11,741	)		(60.3	)%
Other (income) loss, net		(408	)		392			(800	)		n.m.
Loss before income taxes		(30,805	)		(19,864	)		(10,941	)		(55.1	)%
Income tax expense (benefit)		(211	)		353			(564	)		n.m.
Net loss	$	(30,594	)	$	(20,217	)	$	(10,377	)		(51.3	)%

	Year Ended December 31,				Percentage of Revenue						Change
	2021		2020		2021			2020			Amount		Percent
(dollars in thousands)
United States	$	37,791	$	29,351		30.4	%		83.5	%	$	8,440		28.8	%
Europe		47,309		5,759		38.1	%		16.4	%		41,550		n.m.
Latin America		32,434		—		26.1	%		—	%		32,434		n.m.
Rest of the world		6,629		49		5.4	%		0.1	%		6,580		n.m.
Total revenue	$	124,163	$	35,159		100.0	%		100.0	%	$	89,004		n.m.

	Year Ended December 31,				As a percentage of revenue						Change 2019 to 2020
	2020		2019		%			%			Amount			%
(in thousands, except percentages)
United States	$	29,351	$	20,935		83.5	%		69.9	%	$	8,416			40.2	%
Italy		5,191		4,599		14.8	%		15.3	%		592			12.9	%
U.K. and Channel Islands		263		4,359		0.7	%		14.5	%		(4,096	)		(94.0	)%
Rest of the world		354		78		1.0	%		0.3	%		276			353.8	%
Total revenue	$	35,159	$	29,971		100.0	%		100.0	%	$	5,188			17.3	%

	Year Ended December 31,				As a percentage of segment revenue						Change 2019 to 2020
	2020		2019		2020			2019			Amount			%
(in thousands, except percentages)
Revenue	$	25,610	$	24,228		100.0	%		100.0	%	$	1,382			5.7	%
Cost of revenue⁽¹⁾		7,486		4,833		29.2	%		19.9	%		2,653			54.9	%
Impairment of capitalized software		—		626		—	%		2.6	%		(626	)		(100.0	)%
Segment results	$	18,124	$	18,769		70.8	%		77.5	%	$	(645	)		(3.4	)%

	Year Ended December 31,				Percentage of Segment Revenue						Change
	2021		2020		2021			2020			Amount		Percent
(dollars in thousands)
B2B
Revenue	$	45,569	$	35,159		100.0	%		100.0	%	$	10,410		29.6	%
Cost of revenue⁽¹⁾		11,600		10,471		25.5	%		29.8	%		1,129		10.8	%
B2B segment gross profit	$	33,969	$	24,688		74.5	%		70.2	%	$	9,281		37.6	%
B2C
Revenue	$	78,594	$	—		100.0	%		—	%	$	78,594		n.m.
Cost of revenue⁽¹⁾		29,773		—		37.9	%		—	%		29,773		n.m.
B2C segment gross profit	$	48,821	$	—		62.1	%		—	%	$	48,821		n.m.

	Year Ended December 31,				As a percentage of segment revenue						Change 2019 to 2020
	2020		2019		2020			2019			Amount		%
(in thousands, except percentages)
Revenue	$	9,549	$	5,743		100.0	%		100.0	%	$	3,806		66.3	%
Cost of revenue⁽¹⁾		2,985		2,270		31.3	%		39.5	%		715		31.5	%
Segment results	$	6,564	$	3,473		68.7	%		60.5	%	$	3,091		89.0	%

							2021			2020
	December 31,						December 31,
	2020			2019			2021			2020
ASSETS
Current assets
Cash	$	152,654		$	10,279		$	39,477		$	152,654
Accounts and other receivables, net		8,056			5,604
Accounts receivable, net of allowance for doubtful accounts of $120 and $100 at December 31, 2021 and 2020, respectively								8,110			6,818
Prepaid expenses		1,912			575			3,498			1,912
Research and development tax credit receivable		-			1,127
Other current assets		874			1,181			3,337			2,112
Total current assets		163,496			18,766			54,422			163,496

Property and equipment, net		1,320			303
Capitalized software development costs, net		6,648			4,784			14,430			6,648
Operating lease right-of-use assets		577			1,051
Goodwill								146,142			—
Intangible assets, net		468			348			35,893			468
Other assets		737			934			10,023			2,634
Total assets	$	173,246		$	26,186		$	260,910		$	173,246

LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	4,707		$	2,645		$	5,268		$	4,926
Accrued expenses:
Compensation and benefits		4,956			1,402
Royalties		1,984			1,294
Other		1,598			461
Contract liabilities		1,083			3,023
Operating lease liabilities		262			289
Accrued compensation and benefits								10,961			4,956
Accrued expenses								4,669			3,363
Liabilities to users								8,984			—
Other current liabilities		2,722			1,179			3,151			4,067
Total current liabilities		17,312			10,293			33,033			17,312

Operating lease liabilities		313			693
Other noncurrent liabilities		57			55
Deferred income taxes								1,791			—
Other liabilities								2,049			370
Total liabilities		17,682			11,041			36,873			17,682
Commitments and contingencies (Note 17)
Stockholders’ equity
Ordinary shares, $0.01 par value, 100,000,000 shares authorized, 36,635,362 and 21,486,059 shares issued and outstanding at December 31, 2020 and 2019, respectively		365			215
Commitments and contingencies (Note 20)
Shareholders’ equity
Ordinary shares, $0.01 par value, 100,000,000 shares authorized, 42,250,743 and 36,635,362 shares issued and outstanding at December 31, 2021 and 2020, respectively								422			365
Additional paid-in capital		203,842			40,862			319,551			203,842
Accumulated deficit		(45,766	)		(23,024	)		(76,360	)		(45,766	)
Accumulated other comprehensive loss		(2,877	)		(2,908	)		(19,576	)		(2,877	)
Total stockholders’ equity		155,564			15,145
Total liabilities and stockholders’ equity	$	173,246		$	26,186
Total shareholders’ equity								224,037			155,564
Total liabilities and shareholders’ equity							$	260,910		$	173,246

	Shares			Amount		Capital		Deficit			Loss			Equity
	Ordinary Shares					Additional Paid-in		Accumulated			Accumulated Other Comprehensive			Total Shareholders’
	Shares			Amount		Capital		Deficit			Loss			Equity

Balance at January 1, 2020		21,486,059		$	215	$	40,862	$	(23,024	)	$	(2,908	)	$	15,145
Net loss		—			—		—		(20,217	)		—			(20,217	)
Foreign currency translation adjustments		—			—		—		—			31			31
Share-based compensation		—			—		6,826		—			—			6,826
Restricted share activity
Restricted share activity, Shares
Repurchase of restricted shares to pay tax liability (Note 11)
Repurchase of restricted shares to pay tax liability (Note 11), Shares
Issuance of ordinary shares as partial consideration in Coolbet acquisition (Note 4)
Issuance of ordinary shares as partial consideration in Coolbet acquisition (Note 4), Shares
Fair value of replacement equity awards issued as consideration in Coolbet acquisition (Note 4)
Issuance of restricted share awards		93,680			—		—		—			—			—
Proceeds from issuance of shares in initial public offering, net of issuance costs of $7,075 (Note 10)		7,337,000			73		55,216		—			—			55,289
Proceeds from issuance of shares in follow-on offering, net of issuances costs of $6,719 (Note 10)		6,790,956			68		98,473		—			—			98,541
Cash consideration paid to GAN plc shareholders (Note 10)		—			—		—		(2,525	)		—			(2,525	)
Issuance of ordinary shares upon exercise of share options		927,667			9		2,465		—			—			2,474
Balance at December 31, 2020		36,635,362		$	365	$	203,842	$	(45,766	)	$	(2,877	)	$	155,564
Balance		36,635,362		$	365	$	203,842	$	(45,766	)	$	(2,877	)	$	155,564
Net loss		—			—		—		(30,594	)		—			(30,594	)
Foreign currency translation adjustments		—			—		—		—			(16,699	)		(16,699	)
Share-based compensation		—			—		7,876		—			—			7,876
Restricted share activity		69,012			1		54		—			—			55
Repurchase of restricted shares to pay tax liability (Note 11)		(3,627	)		—		—		—			—			—
Issuance of ordinary shares upon exercise of share options		289,480			3		852		—			—			855
Issuance of ordinary shares as partial consideration in Coolbet acquisition (Note 4)		5,260,516			53		106,630		—			—			106,683
Fair value of replacement equity awards issued as consideration in Coolbet acquisition (Note 4)		—			—		297		—			—			297
Balance at December 31, 2021		42,250,743		$	422	$	319,551	$	(76,360	)	$	(19,576	)	$	224,037
Balance		42,250,743		$	422	$	319,551	$	(76,360	)	$	(19,576	)	$	224,037

										Accumulated
					Additional					Other			Total
	Ordinary Shares				Paid-in		Accumulated			Comprehensive			Stockholders’
	Shares		Amount		Capital		Deficit			Loss			Equity
Balance at January 1, 2019		21,302,550	$	213	$	40,081	$	(25,028	)	$	(3,286	)	$	11,980
Net income		-		-		-		2,004			-			2,004
Share-based compensation expense		-		-		451		-			-			451
Issuance of ordinary shares upon exercise of stock options		183,509		2		330		-			-			332
Foreign currency translation adjustments		-		-		-		-			378			378
Balance at December 31, 2019		21,486,059		215		40,862		(23,024	)		(2,908	)		15,145
Net loss		-		-		-		(20,217	)		-			(20,217	)
Share-based compensation expense		-		-		6,826		-			-			6,826
Issuance of restricted stock awards		93,680		-		-		-			-			-
Proceeds from issuance of shares in initial public offering, net of issuance costs of $7,075 (Note 7)		7,337,000		73		55,216		-			-			55,289
Proceeds from issuance of shares in follow-on offering, net of issuances costs of $6,719 (Note 7)		6,790,956		68		98,473		-			-			98,541
Cash consideration paid to GAN plc shareholders (Note 7)		-		-		-		(2,525	)		-			(2,525	)
Issuance of ordinary shares upon exercise of stock options		927,667		9		2,465		-			-			2,474
Foreign currency translation adjustments		-		-		-		-			31			31
Balance at December 31, 2020		36,635,362	$	365	$	203,842	$	(45,766	)	$	(2,877	)	$	155,564

	Estimated	December 31,
	Useful Life	2020			2019
Fixtures, fittings and equipment	3-5 years	$	1,294		$	731
Platform hardware	5 years		1,517			771
Total property and equipment, cost			2,811			1,502
Less: accumulated depreciation			(1,491	)		(1,199	)
Total		$	1,320		$	303


Cash paid to Vincent Group shareholders	$	111,168
Restricted ordinary shares issued to Vincent Group shareholders⁽¹⁾		106,683
Replacement equity-based awards to holders of Vincent Group equity-based awards⁽²⁾		297
Total	$	218,148


Cash	$	18,714
Prepaid expenses and other current assets		1,512
Property and equipment		343
Operating lease right-of-use assets		416
Intangible assets		50,570
Other assets		73
Accounts payable		(1,182	)
Liabilities to users		(5,373	)
Other current liabilities		(2,097	)
Operating lease liabilities		(167	)
Deferred income taxes		(2,373	)
Noncurrent operating lease liabilities		(231	)
Total identifiable net assets		60,205
Goodwill		157,943
Total identifiable assets acquired and liabilities assumed including goodwill, net	$	218,148