Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 03, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q/A | |
Amendment Flag | true | |
Amendment Description | GAN Ltd, (the “Company”) is filing this Amendment No. 1 on Form 10-Q/A (this “Amendment No. 1”) to amend its Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021, filed with the Securities and Exchange Commission (the “SEC”) on August 16, 2021 (the “Original Form 10-Q”). The purpose of this Amendment No. 1 is to restate our previously issued unaudited interim condensed consolidated financial statements for the three and six months ended June 30, 2021, contained in the Original Form 10-Q (the “Restatement”). | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2021 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-39274 | |
Entity Registrant Name | GAN Limited | |
Entity Central Index Key | 0001799332 | |
Entity Incorporation, State or Country Code | D0 | |
Entity Address, Address Line One | 400 Spectrum Center Drive | |
Entity Address, Address Line Two | Suite 1900 | |
Entity Address, City or Town | Irvine | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92618 | |
City Area Code | (702) | |
Local Phone Number | 964-5777 | |
Title of 12(b) Security | Ordinary shares, par value $0.01 | |
Trading Symbol | GAN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 42,017,684 | |
Entity Information, Former Legal or Registered Name | Not applicable |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash | $ 52,086 | $ 152,654 |
Accounts receivable, net of allowance for doubtful accounts of $197 and $100 at June 30, 2021 and December 31, 2020, respectively | 12,201 | 6,818 |
Prepaid expenses | 2,384 | 1,912 |
Other current assets | 2,099 | 2,112 |
Total current assets | 68,770 | 163,496 |
Capitalized software development costs, net | 10,393 | 6,648 |
Goodwill | 154,534 | |
Intangible assets, net | 41,611 | 468 |
Other assets | 7,647 | 2,634 |
Total assets | 282,955 | 173,246 |
Current liabilities | ||
Accounts payable | 4,146 | 4,926 |
Accrued compensation and benefits | 7,987 | 4,956 |
Accrued expenses | 5,405 | 3,363 |
Liabilities to users | 7,389 | |
Other current liabilities | 3,860 | 4,067 |
Total current liabilities | 28,787 | 17,312 |
Deferred income taxes | 2,192 | |
Other liabilities | 1,548 | 370 |
Total liabilities | 32,527 | 17,682 |
Stockholders’ equity | ||
Ordinary shares, $0.01 par value, 100,000,000 shares authorized, 42,015,674 and 36,635,362 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively | 420 | 365 |
Additional paid-in capital | 315,055 | 203,842 |
Accumulated deficit | (55,135) | (45,766) |
Accumulated other comprehensive loss | (9,912) | (2,877) |
Total stockholders’ equity | 250,428 | 155,564 |
Total liabilities and stockholders’ equity | $ 282,955 | $ 173,246 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 197 | $ 100 |
Ordinary shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Ordinary shares, authorized (in shares) | 100,000,000 | 100,000,000 |
Ordinary shares, issued (in shares) | 42,015,674 | 36,635,362 |
Ordinary shares, outstanding (in shares) | 42,015,674 | 36,635,362 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | ||
Income Statement [Abstract] | |||||
Revenues | $ 34,350 | $ 8,323 | $ 61,468 | $ 15,993 | |
Operating costs and expenses | |||||
Cost of revenues | [1] | 10,356 | 2,123 | 19,075 | 3,815 |
Sales and marketing | 5,480 | 1,642 | 9,581 | 2,505 | |
Product and technology | 4,829 | 5,173 | 10,072 | 6,197 | |
General and administrative | [1] | 12,320 | 7,786 | 22,329 | 10,177 |
Depreciation and amortization | 4,132 | 716 | 8,126 | 1,569 | |
Total operating costs and expenses | 37,117 | 17,440 | 69,183 | 24,263 | |
Operating loss | (2,767) | (9,117) | (7,715) | (8,270) | |
Interest expense, net | 382 | 1 | 390 | ||
Loss before income taxes | (2,767) | (9,499) | (7,716) | (8,660) | |
Income tax provision | 992 | 170 | 1,653 | 315 | |
Net loss | $ (3,759) | $ (9,669) | $ (9,369) | $ (8,975) | |
Loss per share, basic and diluted | $ (0.09) | $ (0.37) | $ (0.22) | $ (0.38) | |
Weighted average ordinary shares outstanding, basic and diluted | 41,931,948 | 26,227,944 | 41,912,285 | 23,870,084 | |
[1] | Excludes depreciation and amortization |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Statement [Abstract] | ||||
Net loss | $ (3,759) | $ (9,669) | $ (9,369) | $ (8,975) |
Other comprehensive income (loss), net of tax | ||||
Foreign currency translation adjustments | 2,443 | 41 | (7,035) | (1,279) |
Comprehensive loss | $ (1,316) | $ (9,628) | $ (16,404) | $ (10,254) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes In Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Total |
Beginning balance, value at Dec. 31, 2019 | $ 215 | $ 40,862 | $ (23,024) | $ (2,908) | $ 15,145 |
Beginning balance (in shares) at Dec. 31, 2019 | 21,486,059 | ||||
Net loss | 694 | 694 | |||
Foreign currency translation adjustments | (1,320) | (1,320) | |||
Share-based compensation expense | 295 | 295 | |||
Issuance of ordinary shares upon exercise of stock options | $ 1 | 86 | 87 | ||
Issuance of ordinary shares upon exercise of stock options (in shares) | 64,908 | ||||
Ending balance, value at Mar. 31, 2020 | $ 216 | 41,243 | (22,330) | (4,228) | 14,901 |
Ending balance (in shares) at Mar. 31, 2020 | 21,550,967 | ||||
Beginning balance, value at Dec. 31, 2019 | $ 215 | 40,862 | (23,024) | (2,908) | 15,145 |
Beginning balance (in shares) at Dec. 31, 2019 | 21,486,059 | ||||
Net loss | (8,975) | ||||
Foreign currency translation adjustments | (1,279) | ||||
Ending balance, value at Jun. 30, 2020 | $ 295 | 102,788 | (34,524) | (4,187) | 64,372 |
Ending balance (in shares) at Jun. 30, 2020 | 29,660,260 | ||||
Beginning balance, value at Mar. 31, 2020 | $ 216 | 41,243 | (22,330) | (4,228) | 14,901 |
Beginning balance (in shares) at Mar. 31, 2020 | 21,550,967 | ||||
Net loss | (9,669) | (9,669) | |||
Foreign currency translation adjustments | 41 | 41 | |||
Share-based compensation expense | 4,225 | 4,225 | |||
Issuance of ordinary shares upon exercise of stock options | $ 6 | 2,104 | 2,110 | ||
Issuance of ordinary shares upon exercise of stock options (in shares) | 678,613 | ||||
Issuance of restricted stock awards | |||||
Issuance of restricted stock units (in shares) | 93,680 | ||||
Proceeds from issuance of shares in initial public offering, net of issuance costs of $7,075 | $ 73 | 55,216 | 55,289 | ||
Proceeds from issuance of shares in initial public offering, net of issuance costs of $7075 (in shares) | 7,337,000 | ||||
Cash consideration paid to GAN plc shareholders | (2,525) | (2,525) | |||
Ending balance, value at Jun. 30, 2020 | $ 295 | 102,788 | (34,524) | (4,187) | 64,372 |
Ending balance (in shares) at Jun. 30, 2020 | 29,660,260 | ||||
Beginning balance, value at Dec. 31, 2020 | $ 365 | 203,842 | (45,766) | (2,877) | 155,564 |
Beginning balance (in shares) at Dec. 31, 2020 | 36,635,362 | ||||
Net loss | (5,610) | (5,610) | |||
Foreign currency translation adjustments | (9,478) | (9,478) | |||
Share-based compensation expense | 1,632 | 1,632 | |||
Issuance of ordinary shares upon exercise of stock options | $ 1 | 314 | 315 | ||
Issuance of ordinary shares upon exercise of stock options (in shares) | 108,222 | ||||
Issuance of ordinary shares as partial consideration in Coolbet acquisition (Note 5) | $ 53 | 106,630 | 106,683 | ||
Issuance of ordinary shares as partial consideration of Coolbet acquisition (Note 4) (in shares) | 5,260,516 | ||||
Fair value of replacement equity awards issued as consideration in Coolbet acquisition (Note 5) | 297 | 297 | |||
Ending balance, value at Mar. 31, 2021 | $ 419 | 312,715 | (51,376) | (12,355) | 249,403 |
Ending balance (in shares) at Mar. 31, 2021 | 42,004,100 | ||||
Beginning balance, value at Dec. 31, 2020 | $ 365 | 203,842 | (45,766) | (2,877) | 155,564 |
Beginning balance (in shares) at Dec. 31, 2020 | 36,635,362 | ||||
Net loss | (9,369) | ||||
Foreign currency translation adjustments | $ (7,035) | ||||
Issuance of ordinary shares upon exercise of stock options (in shares) | 114,618 | ||||
Ending balance, value at Jun. 30, 2021 | $ 420 | 315,055 | (55,135) | (9,912) | $ 250,428 |
Ending balance (in shares) at Jun. 30, 2021 | 42,015,674 | ||||
Beginning balance, value at Mar. 31, 2021 | $ 419 | 312,715 | (51,376) | (12,355) | 249,403 |
Beginning balance (in shares) at Mar. 31, 2021 | 42,004,100 | ||||
Net loss | (3,759) | (3,759) | |||
Foreign currency translation adjustments | 2,443 | 2,443 | |||
Share-based compensation expense | 2,319 | 2,319 | |||
Issuance of ordinary shares upon exercise of stock options | 22 | 22 | |||
Issuance of ordinary shares upon exercise of stock options (in shares) | 6,396 | ||||
Issuance of restricted stock awards | $ 1 | (1) | |||
Issuance of restricted stock units (in shares) | 5,178 | ||||
Ending balance, value at Jun. 30, 2021 | $ 420 | $ 315,055 | $ (55,135) | $ (9,912) | $ 250,428 |
Ending balance (in shares) at Jun. 30, 2021 | 42,015,674 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes In Stockholders' Equity (Unaudited) (Parenthetical) $ in Thousands | 3 Months Ended |
Jun. 30, 2020USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Payments of offering costs | $ 7,075 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Operating Activities | ||
Net loss | $ (9,369) | $ (8,975) |
Adjustments to reconcile net loss to net cash from operating activities: | ||
Amortization of software and intangible assets | 7,624 | 1,439 |
Depreciation on property and equipment and finance lease right-of-use assets | 502 | 122 |
Share-based compensation expense | 3,951 | 4,520 |
Other | 139 | (19) |
Changes in operating assets and liabilities, net of acquisition: | ||
Accounts receivable | (5,354) | (1,239) |
Prepaid expenses | 342 | 118 |
Other current assets | 573 | (634) |
Other assets | 97 | 1,163 |
Accounts payable | (2,094) | 434 |
Accrued compensation and benefits | 1,804 | 4,740 |
Accrued expenses | 2,500 | 307 |
Liabilities to users | 2,204 | |
Other current liabilities | (959) | (477) |
Other liabilities | 1,177 | 209 |
Net cash from operating activities | 3,137 | 1,708 |
Investing Activities | ||
Cash paid for acquisition, net of cash acquired | (92,404) | |
Expenditures for capitalized software development costs | (5,320) | (1,748) |
Payment of content licensing fee | (3,500) | |
Purchases of gaming licenses | (207) | (12) |
Purchases of property and equipment | (1,093) | (630) |
Net cash used in investing activities | (102,524) | (2,390) |
Financing Activities | ||
Proceeds received from issuance of ordinary shares in initial public offering, net | 57,445 | |
Payments of offering costs | (604) | (1,678) |
Proceeds from exercise of stock options | 337 | 2,197 |
Cash consideration paid to GAN plc shareholders | (2,525) | |
Principal payments on finance leases | (54) | (90) |
Net cash from (used in) financing activities | (321) | 55,349 |
Effect of foreign exchange rates on cash | (860) | (888) |
Net increase (decrease) in cash | (100,568) | 53,779 |
Cash, beginning of period | 152,654 | 10,279 |
Cash, end of period | 52,086 | 64,058 |
Supplemental Disclosure of Cash Flow Information: | ||
Ordinary shares issued as partial consideration to acquire all the outstanding shares of Coolbet (Note 5) | 106,683 | |
Issuance of unvested stock options in exchange for unvested stock options of Coolbet (Note 5) | 297 | |
Right-of-use asset obtained in exchange for new operating lease liabilities | $ 252 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 6 Months Ended |
Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS | NOTE 1 — NATURE OF OPERATIONS GAN Limited (the “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 Companies Act of 2006 (“Scheme of Arrangement”) approved by the shareholders of GAN plc, the shareholders of GAN plc exchanged their shares in GAN plc for shares in the Parent, 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”). The Company is a business-to-business (“B2B”) supplier of Internet gambling Software-as-a-Service (“SaaS”) solutions predominately to the U.S. land-based casino industry and a business-to-consumer (“B2C”) developer and operator of an online sports betting and casino platform. The Company has developed a proprietary Internet gambling enterprise software system, GameSTACK™ (“GameSTACK”), which it licenses to land-based casino operators as a turnkey technology solution for regulated real money Internet gambling (“RMiG”), Internet sports gaming, and virtual simulated gaming (“SIM”). The Company operates in two On January 1, 2021, the Company acquired all of the outstanding shares of Vincent Group p.l.c., a Malta public limited company doing business as Coolbet (Note 5). Coolbet is a developer and operator of an online sports betting and casino platform. Coolbet operates a B2C casino and sports-betting platform that is accessible through its website in nine national markets across Northern Europe (Estonia, Finland, Iceland, Norway and Sweden), Latin America (Chile, Ecuador, and Peru) and North America (Canada). |
RESTATEMENT OF PRIOR FINANCIAL
RESTATEMENT OF PRIOR FINANCIAL INFORMATION | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Changes and Error Corrections [Abstract] | |
RESTATEMENT OF PRIOR FINANCIAL INFORMATION | NOTE 2 — RESTATEMENT OF PRIOR FINANCIAL INFORMATION In connection with the preparation of the Company’s consolidated financial statements as of December 31, 2021, the Company has identified errors made in the Company’s historical condensed consolidated financial statements for the three and six months ended June 30, 2021. The errors primarily relate to (i) improperly capitalized costs for non-developers that did not meet the criteria of development activities in accordance with the applicable guidance and (ii) significant customization services provided during the set-up of RMiG instances, previously recognized at a point in time, which are only provided by the company and are not distinct. The related consideration should be allocated to the separately identifiable performance obligation consisting of access to the SaaS platform, recognized over time as the Company provides services to its customer in its delivery of services to the player end user. The impact of correcting the improperly capitalized costs is to reverse the capitalized costs and related amortization expense and recognize the expense within product and technology expense. The impact of correcting the revenues improperly recognized at a point in time is to reverse the revenues and recognize contract liabilities, as well as a pro-rata portion of the fixed fees as revenues for the period of the contract completed to date. The following table summarizes the effect of the Restatement on the condensed consolidated balance sheet as of June 30, 2021: SCHEDULE OF ERROR CORRECTIONS AND PRIOR PERIOD ADJUSTMENTS As Reported Adjustment As Restated Accounts receivable, net of allowance for doubtful accounts of $ 197 $ 11,976 $ 225 $ 12,201 Capitalized software development costs, net 11,555 (1,162 ) 10,393 Total assets 283,892 (937 ) 282,955 Other current liabilities 3,716 144 3,860 Other liabilities 463 1,085 1,548 Total liabilities 31,298 1,229 32,527 Accumulated deficit (52,960 ) (2,175 ) (55,135 ) Accumulated other comprehensive loss (9,921 ) 9 (9,912 ) Total stockholders’ equity 252,594 (2,166 ) 250,428 Total liabilities and stockholders’ equity 283,892 (937 ) 282,955 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) The following table summarizes the effect of the Restatement on the condensed consolidated statement of operations for the three months ended June 30, 2021: As Reported Adjustment As Restated Revenues $ 34,628 $ (278 ) $ 34,350 Product and technology 4,055 774 4,829 General and administrative (1) 12,326 (6 ) 12,320 Depreciation and amortization 4,149 (17 ) 4,132 Total operating costs and expenses 36,366 751 37,117 Operating loss (1,738 ) (1,029 ) (2,767 ) Loss before income taxes (1,738 ) (1,029 ) (2,767 ) Net loss (2,730 ) (1,029 ) (3,759 ) Loss per share, basic and diluted $ (0.07 ) $ (0.02 ) $ (0.09 ) (1) Excludes depreciation and amortization The following table summarizes the effect of the Restatement on the condensed consolidated statement of operations for the six months ended June 30, 2021: As Reported Adjustment As Restated Revenues $ 62,470 $ (1,002 ) $ 61,468 Product and technology 8,905 1,167 10,072 General and administrative (1) 22,337 (8 ) 22,329 Depreciation and amortization 8,112 14 8,126 Total operating costs and expenses 68,010 1,173 69,183 Operating loss (5,540 ) (2,175 ) (7,715 ) Loss before income taxes (5,541 ) (2,175 ) (7,716 ) Net loss (7,194 ) (2,175 ) (9,369 ) Loss per share, basic and diluted $ (0.17 ) $ (0.05 ) $ (0.22 ) (1) Excludes depreciation and amortization The following table summarizes the effect of the Restatement on the condensed consolidated statement of cash flows for the six months ended June 30, 2021: As Reported Adjustment As Restated Net loss $ (7,194 ) $ (2,175 ) $ (9,369 ) Amortization of software and intangible assets 7,610 14 7,624 Accounts receivable (5,129 ) (225 ) (5,354 ) Other current liabilities (1,101 ) 142 (959 ) Other liabilities 92 1,085 1,177 Net cash from operating activities 4,296 (1,159 ) 3,137 Expenditures for capitalized software development costs (6,479 ) 1,159 (5,320 ) Net cash used in investing activities (103,683 ) 1,159 (102,524 ) GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | NOTE 3 — BASIS OF PRESENTATION Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission for interim reporting. The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect all adjustments, in the opinion of management, of a normal recurring nature that are necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented. The financial data and other financial information disclosed in these notes to the condensed consolidated financial statements related to these periods are also unaudited. The results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the year ended December 31, 2021 or for any future annual or interim period. The condensed consolidated balance sheet as of December 31, 2020 included herein was derived from the audited consolidated financial statements as of that date. The accompanying unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 (“2020 Form 10-K”). Share Exchange and Reorganization 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 2,525 2,004 2.32 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 4 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company’s significant accounting policies are included in “Note 3 – Summary of Significant Accounting Policies” of its 2020 Form 10-K. In addition to repeating some of these significant accounting policies, the Company has added significant accounting policies during the six months ended June 30, 2021 below. Use of Estimates The preparation of the condensed 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 condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Due to the inherent uncertainties involved in making estimates, actual results could differ from the original estimates, and may require significant adjustments to these reported balances in the future periods. Principles of Consolidation The condensed consolidated financial statements include the results of the Parent and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Foreign Currency Translation and Transactions 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 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’ 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 condensed consolidated statements of operations as incurred. Foreign currency transaction and remeasurement gains and losses were a net gain (loss) of $ 2,443 and $ (7,035) for the three and six months ended June 30, 2021, respectively. Foreign currency transaction and remeasurement gains and losses were a net gain (loss) of $ 41 and $ (1,279) for the three and six months ended June 30, 2020, respectively. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) Risks and Uncertainties – COVID-19 The coronavirus disease 2019 (“COVID-19”) pandemic, which was declared a national emergency in the United States in March 2020, has significantly impacted the economic conditions and financial markets around the world. The closure of land-based casinos, social distancing, shelter-in-place, and similar restrictions implemented in response to the COVID-19 pandemic led to increases 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, or in certain cases, has increased, following the re-opening of land-based casinos and easing of local restrictions. In certain of its international markets in which the Company’s B2C business has entered into recently (and has experienced significant growth during the first two quarters of 2021), it is not possible for the Company to estimate the impact, if any, the closure and re-opening of land-based casinos may have had, or may have, on its past or future operating results as the Company does not have any pre-COVID-19 comparative information for these markets. Operating results in connection with the Company’s sports betting offerings, which initially declined due to the postponement and cancellation of major sporting events, are trending positively as compared to pre-pandemic levels following the return of sporting events (albeit at limited capacities for certain events). Primarily during the first three quarters of 2020, the cancellation of certain sporting events reduced related sports betting transactions, although the Company did experience slight increases in casino revenues as a result. While most sporting events have now resumed (some of which are held behind closed-doors or at limited capacities in stadiums), uncertainties still remain around these and other upcoming large-scale sporting events which can create higher volatility in the sports betting markets and may adversely impact the Company’s future financial results. While the Company’s iGaming business has proven resilient during the pandemic, the ultimate impact of the pandemic on our 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 reduction to the Company’s sports betting transactions. Significant uncertainties continue to exist as it relates to the magnitude of impact and duration of the COVID-19 pandemic. The Company has considered the impact of COVID-19 on its accounting policies, judgments and estimates as part of the preparation of these condensed consolidated financial 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 condensed consolidated financial statements. The Company has not experienced significant impacts to its liquidity to date. COVID-19 may impact the Company’s ability to access capital to the extent it affects the U.S capital markets. The Company has assessed the extent to which COVID-19 has impacted events after the reporting date and has not identified additional items to disclose as a result. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) Revenue Recognition Platform and Content Fees The Company’s platform and content revenues are generated primarily from its Internet gambling SaaS platform, GameSTACK, that its customers use to provide real money and simulated Internet gaming, and online sports betting. The Company enters into service agreements with its customers, that generally range from three to five years , and includes renewal provisions, under which it charges fees based on a percentage of the operator’s net gaming revenue or net sports win at the time of settlement of an event for real money gaming, considered usage-based fees, or at the time of purchase for in-game virtual credit for simulated gaming. The customers cannot take possession of the hosted software. Further, the Company generates revenues from the licensing of proprietary and third-party branded games (collectively “content licensing services”) hosted on the platform. The Company’s promise to provide the 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 includes fixed and variable consideration and is generally due thirty days from the date of 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. 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 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 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 of the SIM revenues generated from the Company’s platform. At June 30, 2021 and December 31, 2020, the Company has recorded a liability of $ 1,957 and $ 2,520 , respectively, for its customers’ share of the fees within other current liabilities in the condensed consolidated balance sheets. The Company’s RMiG and SIM enterprise software platform offerings include iGaming content licensing services. The GameSTACK platform is capable of supporting, and is available to the customer, for both proprietary and third-party licensed gaming content. The customer, in this case the casino operator, generally controls the determination of which gaming content will be offered in their online casinos. A customer can utilize the Company’s proprietary or licensed gaming content, or a customer can direct the Company to procure third-party gaming content on its behalf. The Company has determined it acts as the principal for providing the content licensing services when the Company controls the gaming 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 content, the Company determined it is deemed an agent for providing the content licensing services, and therefore, records the revenue, net of licensing costs paid to the suppliers of that gaming content, in the consolidated statements of operations. Gaming The Company operates the B2C gaming site www.Coolbet.com outside of the U.S., which is built on 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 events. When a user’s wager wins, the Company pays the user a pre-determined amount known as fixed odds. Revenue from 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 2,000 Peer-to-peer poker offerings allow users to play poker against one another on the Company’s online poker platform for prize money. Revenue from poker is reported at rake, less tournament costs and customer bonuses. 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. Such user incentives are recognized as a reduction to revenue upon redemption or as revenue when the incentive expires. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) Development Services Gaming Development Services 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 Development Services Platform development services consist of fees charged for ongoing development services to provide updates to the RMiG platforms for enhanced functionality or customization. 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 is measured using an input method based on effort expended, which uses direct labor hours incurred. As the performance obligations in these instances relate to the provision of development services over time, this method best reflects the transfer of control as the Company performs. In 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. Computer Hardware Sales The Company resells third-party hardware, such as computing servers and other technical devices, upon which the GameSTACK software platform is installed for its customers, however the platform remains remotely controlled and maintained by the Company. Customers cannot take possession of the platform even when hosted on hardware that is owned by the customer or on third-party hardware. Neither the customer nor the Company retain substantially all of the economic benefits from their use of the hardware. These products are not required to be purchased in order to access the GameSTACK platform but are sold as a convenience to the customer. 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 premises and configured to allow for remote access. The Company has determined that it is acting as the principal in these transactions as it takes responsibility for procuring, delivering, installing and configuring the hardware at the customer’s location and takes control of the 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 hardware. Patent Licensing Revenue 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 accounts together with bilateral transmission of reward points between the Internet gambling technology system and the land-based casino management system present in all 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. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) Contracts with Multiple Performance Obligations 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. Customer contracts can include platform and content services as well as development services or hardware sales. The variable consideration is allocated entirely to the performance obligation for platform and content services as the variable consideration is allocable specifically to the delivery of the services in the period and the allocation is consistent with the allocation objective. For gaming, 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. Cash The Company is required to maintain compensating cash balances to satisfy its liabilities to users. Such balances are included within cash on the condensed consolidated balance sheets and are not subject to creditor claims. At June 30, 2021 the related liabilities to users was $ 7,389 . Goodwill 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 5, the Company has recorded goodwill in connection with the acquisition of Coolbet on January 1, 2021. Goodwill is not amortized, but rather is reviewed for impairment annually or more frequently if facts or circumstances indicate that the carrying value may not be recoverable. The Company has determined that there are two 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. The Company will perform its annual impairment review of goodwill as of October 1 st Long-lived Assets Long-lived assets, except goodwill, consist of property and equipment, and finite lived acquired intangible assets, such as developed software, 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 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 and using amortization methods that reflect the pattern in which the economic benefits of the intangible assets are consumed or otherwise realized. The technology is expected to be completed in the latter part of 2021. 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 value is determined through various techniques, such as discounted cash flow models using probability weighted estimated future cash flows and the use of valuation specialists. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) Capitalized Software Development Costs, net The Company capitalizes certain development costs related to its software 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 three years Liabilities to Users The Company records liabilities for user account balances. User account balances consist of user deposits, promotional awards and user winnings less user withdrawals and user losses. Share-based Compensation Share-based compensation expense is recognized for stock options and restricted stock issued to employees and non-employee members of the Company’s Board of Directors based on the fair value of these awards on the date of grant. The fair value of the stock options is estimated using a Black-Scholes option pricing model and the fair value of the restricted stock (restricted stock awards and restricted stock units) is based on the market price of the Company’s stock on the date of grant. The Company’s stock options and restricted stock issued have service conditions and are considered equity awards. Share-based compensation 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. Reclassifications of Prior Period Amounts Certain prior period amounts have been reclassified to conform to the current period presentation. Specifically, due to the Coolbet acquisition of Vincent Group p.l.c. in 2021, the Company has reclassified certain balances that were previously presented in separate balance sheet captions to other current and noncurrent assets, other accrued expenses, and other current and noncurrent liabilities in the condensed consolidated balance sheet as of December 31, 2020. These reclassifications had no impact on previously disclosed amounts for current assets, current liabilities, total assets and total liabilities. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) |
ACQUISITION OF VINCENT GROUP P.
ACQUISITION OF VINCENT GROUP P.L.C. | 6 Months Ended |
Jun. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITION OF VINCENT GROUP P.L.C. | NOTE 5 — ACQUISITION OF VINCENT GROUP P.L.C. On January 1, 2021, the Company acquired all of the outstanding shares of Vincent Group p.l.c. (“Coolbet”). 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 Europe and Latin America. The following table summarizes the consideration transferred and the recognized amounts of identifiable assets acquired and liabilities assumed at the acquisition date: Fair value of the consideration transferred: SUMMARY OF CONSIDERATION TRANSFERRED Cash paid to Vincent Group shareholders $ 111,118 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 $ 218,098 (1) The share consideration represents 5,260,516 20.28 (2) The replacement equity-based awards consist of options to purchase 67,830 Recognized amounts of identifiable assets acquired and liabilities assumed at fair value: SUMMARY OF FAIR VALUES OF ASSETS ACQUIRED AND LIABILITIES ASSUMED Cash $ 18,714 Prepaid expenses and other current assets 1,512 Property and equipment 343 Operating lease right-of-use assets 416 Intangible assets 48,370 Other noncurrent assets 73 Accounts payable (1,182 ) Liabilities to users (5,373 ) Other current liabilities (1,797 ) Operating lease liabilities (167 ) Deferred income taxes (2,265 ) Noncurrent operating lease liabilities (231 ) Total identifiable net assets 58,413 Goodwill 159,685 Total identifiable assets acquired and liabilities assumed including goodwill, net $ 218,098 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) Identifiable intangible assets acquired as part of the acquisition, including their respective expected useful lives, were as follows: SUMMARY OF INTANGIBLE ASSETS ACQUIRED Estimated useful life (in years) Fair Value Trade names and trademarks 10.0 $ 5,800 Developed technology 3.0 28,100 In-process developed technology — 8,400 Customer relationships 3.0 5,600 Licenses various 470 $ 48,370 The Company has not finalized the purchase price allocation, which is pending further analysis of the net assets acquired. The above cash consideration is subject to adjustment for the final working capital adjustment. Additionally, the Company is continuing to evaluate the tax impacts related to the acquisition. Accordingly, the purchase price allocation shown above could change materially. The Company recorded a net deferred income tax liability of $ 2,265 The Company accounted for the acquisition of Coolbet using the acquisition method. The acquisition is treated as a stock purchase for accounting purposes. 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 platform and Internet casino capability, as a complete turnkey solution or as an alternative sports betting engine to those currently relied upon by customers. 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 not deductible for tax purposes. Goodwill arising from the acquisition has been preliminary assigned as of the acquisition date to the Company’s B2C and B2B segments in the amounts of $ 92,138 67,547 The Company incurred $ 1,309 290 Pro Forma Operating Results The operating results of Coolbet have been included in the condensed consolidated financial statements, beginning on January 1, 2021. The following unaudited pro forma information presents 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 PRO FORMA OPERATING RESULTS Three Months Ended Six Months Ended Revenues $ 13,929 $ 28,744 Net loss (12,510 ) (15,321 ) Loss per share, basic and diluted (0.40 ) (0.53 ) GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) |
CAPITALIZED SOFTWARE DEVELOPMEN
CAPITALIZED SOFTWARE DEVELOPMENT COSTS, NET | 6 Months Ended |
Jun. 30, 2021 | |
Research and Development [Abstract] | |
CAPITALIZED SOFTWARE DEVELOPMENT COSTS, NET | NOTE 6 — CAPITALIZED SOFTWARE DEVELOPMENT COSTS, NET Capitalized software development costs, net at June 30, 2021 and December 31, 2020 consisted of the following: SCHEDULE OF CAPITALIZED COMPUTER SOFTWARE COSTS, NET June 30, 2021 December 31, 2020 (Restated) Capitalized software development costs $ 28,340 $ 26,507 Development in progress 3,668 2,641 Total capitalized software development costs 32,008 29,148 Less: accumulated amortization (21,615 ) (22,500 ) Total $ 10,393 $ 6,648 At June 30, 2021, development in progress primarily represented costs associated with new content and enhancements to the software platform, as well as integration of Coolbet’s sportsbook into the B2B platform, which are expected to be fully placed in service by the end of 2021. Amortization expense related to capitalized software development costs was $ 901 and $ 1,661 for the three and six months ended June 30, 2021, respectively, and $ 615 and $ 1,371 for the three and six months ended June 30, 2020, respectively. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | NOTE 7 — GOODWILL AND INTANGIBLE ASSETS Goodwill The changes in the carrying amount of goodwill, by segment, for the six months ended June 30, 2021 were as follows: SCHEDULE OF GOODWILL B2B B2C Total Balance at December 31, 2020 $ — $ — $ — Goodwill acquired in Coolbet acquisition 67,547 92,138 159,685 Effect of foreign currency translation (2,179 ) (2,972 ) (5,151 ) Balance at June 30, 2021 $ 65,368 $ 89,166 $ 154,534 Intangible Assets Definite-lived intangible assets, net consisted of the following: SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS June 30, 2021 Weighted Average Amortization Period Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology 3.0 $ 27,194 $ (4,532 ) $ 22,662 In-process technology — 8,129 — 8,129 Customer relationships 3.0 5,419 (903 ) 4,516 Trade names and trademarks 10.0 5,966 (630 ) 5,336 Gaming licenses 6.5 2,044 (1,076 ) 968 $ 48,752 $ (7,141 ) $ 41,611 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) December 31, 2020 Weighted Average Amortization Period Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trade names and trademarks 3.0 $ 343 $ (343 ) $ — Gaming licenses 5.3 1,366 (898 ) 468 $ 1,709 $ (1,241 ) $ 468 In-process technology consists of a proprietary technical platform (Refer to Note 5 – Acquisition of Vincent Group p.l.c.). The technology is expected to be completed in the latter part of 2021 and, once completed and placed into service, will be amortized over its estimated useful life. Amortization expense related to intangible assets was $ 2,968 5,963 32 68 5,876 11,761 11,741 706 695 |
ACCRUED EXPENSES
ACCRUED EXPENSES | 6 Months Ended |
Jun. 30, 2021 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | NOTE 8 — ACCRUED EXPENSES Accrued expenses consisted of the following: SCHEDULE OF ACCRUED EXPENSES June 30, December 31, Content licensing fees $ 2,732 $ 1,984 Sales taxes 1,111 756 Income taxes 1,075 17 Other 487 606 Total $ 5,405 $ 3,363 |
OTHER CURRENT LIABILITIES
OTHER CURRENT LIABILITIES | 6 Months Ended |
Jun. 30, 2021 | |
Other Liabilities Disclosure [Abstract] | |
OTHER CURRENT LIABILITIES | NOTE 9 — OTHER CURRENT LIABILITIES Other current liabilities consisted of the following: SCHEDULE OF OTHER CURRENT LIABILITIES June 30, December 31, (Restated) Revenue share due to SIM customers $ 1,957 $ 2,520 Contract liabilities 725 1,083 Operating lease liabilities 508 262 Other 670 202 Total $ 3,860 $ 4,067 Revenue share due to SIM customers represents the fees collected for in-game virtual credit purchases made by end-user players due to SIM casino operator customers for their share of the SIM revenues generated from the Company’s platform. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | NOTE 10 — SHARE-BASED COMPENSATION In April 2020, the Board of Directors established the GAN Limited 2020 Equity Incentive Plan (“2020 Plan”) which has been approved by the shareholders. The 2020 Plan provides for grants of up to 4,400,000 4 st 475,240 Stock Options Stock option awards are granted with an exercise price equal to the fair market value, as determined under the 2020 Plan, of the Company’s ordinary shares on the date of grant. Stock option awards generally vest 25 ten years During the six months ended June 30, 2021, the Board of Directors approved the issuance of options to purchase 1,462,310 In addition, in accordance with the acquisition agreement, the Company issued 67,830 one three years A summary of the stock option activity as of and for the six months ended June 30, 2021 is as follows: SCHEDULE OF SHARE-BASED COMPENSATION, OPTION ACTIVITY Number of Shares Weighted Average Exercise Price Weighted Average Contractual Term Aggregate Intrinsic Value Outstanding at December 31, 2020 3,061,859 $ 8.06 8.5 $ 37,410 Granted 1,530,140 23.01 Exercised (114,618 ) 2.93 Forfeited/expired or cancelled (61,890 ) 24.10 Outstanding at June 30, 2021 4,415,491 $ 13.15 8.4 $ 14,529 Options exercisable at June 30, 2021 2,031,250 $ 4.65 7.6 $ 23,950 The Company recorded share-based compensation expense related to stock-options of $ 1,807 and $ 2,946 for the three and six months ended June 30, 2021, respectively, and $ 4,150 and $ 4,445 for the three and six months ended June 30, 2020, respectively. Such share-based compensation expense is recorded net of capitalized software development costs of $ 57 and $ 7 for the three months ended June 30, 2021 and 2020, respectively, and $ 105 and $ 30 for the six months ended June 30, 2021 and 2020, respectively. Additionally, the share-based compensation expense for the three and six months ended June 30, 2020 includes $ 3,881 from acceleration of vesting of awards in connection with the Company’s initial public offering. At June 30, 2021, there was $ 23,202 of total unrecognized compensation cost related to nonvested stock options. The unrecognized compensation cost is expected to be recognized over a weighted-average period of 3.4 years. The grant date fair value of each stock option grant was determined using the following weighted average assumptions: SCHEDULE OF SHARE BASED COMPENSATION, UNIT ACTIVITY 2021 2020 Six Months Ended 2021 2020 Expected stock price volatility 61.52 % 73.52 % Expected term (in years) 4.94 5.00 Risk-free interest rate 0.74 % 0.33 % Dividend yield 0 % 0 % The weighted average grant date fair value of options granted was $ 9.17 12.10 10.44 9.36 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) 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 at the time of grant. For the period prior to the Company’s initial public offering in May 2020, 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. In addition, in 2020, the Company recorded a liability for social taxes and income taxes related to certain unexercised legacy options at the time of Share Exchange. The Company is accounting for the required cash payment as a cash-settled share-based compensation transaction. The company recorded an expense of $ (88) (181) Restricted Stock Units On March 9, 2021, the Board of Directors approved the issuance of 10,358 one year 25 25.10 5,178 5,180 105 130 130 130 Restricted Stock Awards On June 15, 2020, the Board of Directors approved the issuance of 93,680 one year 18.19 350 770 75 1,704 |
INTEREST EXPENSE, NET
INTEREST EXPENSE, NET | 6 Months Ended |
Jun. 30, 2021 | |
INTEREST EXPENSE, NET | NOTE 11 — INTEREST EXPENSE, NET Interest expense, net consisted of the following: SCHEDULE OF INTEREST EXPENSE, NET 2021 2020 2021 2020 Three Months Ended Six Months Ended 2021 2020 2021 2020 Interest expense (1) $ — $ 385 $ 1 $ 393 Interest income — (3 ) — (3 ) Interest expense, net $ — $ 382 $ 1 $ 390 (1) Interest expense includes interest on a related party loan during the three and six months ended June 30, 2020. Refer to Note 16 – Related Party Transactions. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) |
LOSS PER SHARE
LOSS PER SHARE | 6 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
LOSS PER SHARE | NOTE 12 — LOSS PER SHARE Loss per share is computed by dividing net loss by the weighted average number of ordinary shares outstanding, basic and diluted, during the period. Potentially dilutive securities consisting of certain stock options, nonvested restricted stock awards and restricted stock 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 Three Months Ended Six Months Ended 2021 2020 2021 2020 Stock options 4,415,491 3,044,306 4,415,491 3,044,306 Restricted stock awards — 93,680 — 93,680 Restricted stock units 5,180 — 5,180 — Total 4,420,671 3,137,986 4,420,671 3,137,986 |
REVENUES
REVENUES | 6 Months Ended |
Jun. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | NOTE 13 — REVENUES The following table reflects revenues recognized for the three and six months ended June 30, 2021 and 2020 in line with the timing of transfer of services: SCHEDULE OF REVENUE RECOGNIZED IN LINE WITH THE TIMING OF TRANSFER OF SERVICES Three Months Ended Six Months Ended 2021 2020 2021 2020 (Restated) (Restated) Revenues from services delivered at a point in time $ 24,097 $ 100 $ 41,409 $ 100 Revenues from services delivered over time 10,253 8,223 20,059 15,893 Total $ 34,350 $ 8,323 $ 61,468 $ 15,993 During the three months ended June 30, 2021, revenues recognized at a point in time was $ 24,097 23,982 related to gaming revenues and $ 115 41,409 , of which $ 38,294 related to gaming revenues and $ 3,115 related to development services and other revenues. During the three and six months ended June 30, 2021, the Company had one customer which individually generated revenue greater than 10% of the Company’s total revenue, all of which related to the B2B segment. During the three and six months ended June 30, 2021, the customer generated revenue of $ 3,919 and $ 7,914 and represented 11.4 % and 12.9 % of total revenue, respectively. During the three and six months ended June 30, 2020, the customer generated revenue of $ 3,661 and $ 8,009 , and represented 44.0 % and 50.1 % of total revenue, respectively. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) Costs to Obtain a Contract The Company defers contract costs that are recoverable and incremental 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 condensed consolidated balance sheets. The following table reflects the activity in deferred contract costs for the periods presented: SCHEDULE OF ACTIVITY IN CONTRACT LIABILITIES 2021 2020 Six Months Ended 2021 2020 Balance at the beginning of the period $ 353 $ 86 Capitalized expenditures 82 35 Amortization (44 ) (8 ) Effect of foreign currency translation 3 (5 ) Balance at the end of the period $ 394 $ 108 Contract and Contract-Related Liabilities The Company has four types of liabilities related to contracts with 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 (iv) unpaid winnings and wagers contributions to jackpot. Contract-related liabilities are expected to be recognized as revenue within one year of being purchased, earned or deposited. Such liabilities are recorded in Liabilities to users and Other current liabilities on the condensed consolidated balance sheets. The following table reflects contract liabilities arising from cash consideration received in advance from customers for the periods presented: SCHEDULE OF CONTRACT WITH CUSTOMERS 2021 2020 2021 2020 Three Months Ended Six Months Ended 2021 2020 2021 2020 (Restated) (Restated) Contract liabilities from advance customer payments, beginning of the period $ 1,840 $ 2,095 $ 1,083 $ 3,023 Contract liabilities from advance customer payments, end of the period 1,811 1,865 1,811 1,865 Revenue recognized from amounts included in contract liabilities from advance customer payments at the beginning of the period 103 237 89 1,014 At June 30, 2021, the Company recorded contract liabilities from advance customer payments of $ 725 and $ 1,086 in Other Other |
SEGMENT REPORTING
SEGMENT REPORTING | 6 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | NOTE 14 — SEGMENT REPORTING Effective as of January 1, 2021, the Company changed the structure of its internal organization with the acquisition of the Vincent Group p.l.c. (Note 5), which caused the composition of its reportable segments to change. As such, 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 technology that incorporates comprehensive player registration, account funding and back-office accounting and management tools that enable the casino operator customers to efficiently, confidently and effectively extend their presence online in places that have permitted online real money gambling. The B2C segment, which includes entirely the operations of the Vincent Group p.l.c., beginning on January 1, 2021, develops and operates a B2C online sports betting and casino platform accessible through its website in nine national markets across Northern Europe (Estonia, Finland, Iceland, Norway and Sweden), Latin America (Chile, Ecuador and Peru) and North America (Canada). In conjunction with the new reporting structure, the Company recast the segment disclosures to combine its previous two one Information reported to the Company’s chief executive officer, the chief operating decision maker (“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 CODM evaluates performance and allocates resources based on the segment’s revenue and gross profit. Segment 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 taxes. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) Summarized financial information by reportable segments for the three and six months ended June 30, 2021 and 2020 is as follows: SCHEDULE OF FINANCIAL INFORMATION FOR REPORTABLE SEGMENTS B2B B2C Total B2B B2C Total Three Months Ended June 30, 2021 2020 B2B B2C Total B2B B2C Total (Restated) (Restated) Revenues $ 10,368 $ 23,982 $ 34,350 $ 8,323 $ — $ 8,323 Cost of revenues (1) 2,307 8,049 10,356 2,123 — 2,123 Segment gross profit (1) $ 8,061 $ 15,933 $ 23,994 $ 6,200 $ — $ 6,200 (1) Excludes depreciation and amortization B2B B2C Total B2B B2C Total Six Months Ended June 30, 2021 2020 B2B B2C Total B2B B2C Total (Restated) (Restated) Revenues $ 23,174 $ 38,294 $ 61,468 $ 15,993 $ — $ 15,993 Cost of revenues (1) 5,049 14,026 19,075 3,815 — 3,815 Segment gross profit (1) $ 18,125 $ 24,268 $ 42,393 $ 12,178 $ — $ 12,178 (1) Excludes depreciation and amortization The following table presents a reconciliation of segment gross profit to consolidated loss before income taxes for the three and six months ended June 30, 2021 and 2020: RECONCILIATION OF CONSOLIDATED SEGMENT PROFIT TO CONSOLIDATED INCOME (LOSS) BEFORE INCOME TAXES 2021 2020 2021 2020 Three Months Ended Six Months Ended 2021 2020 2021 2020 (Restated) (Restated) Segment gross profit (1) $ 23,994 $ 6,200 $ 42,393 $ 12,178 Sales and marketing 5,480 1,642 9,581 2,505 Product and technology 4,829 5,173 10,072 6,197 General and administrative (1) 12,320 7,786 22,329 10,177 Depreciation and amortization 4,132 716 8,126 1,569 Interest expense, net — 382 1 390 Loss before income taxes $ (2,767 ) $ (9,499 ) $ (7,716 ) $ (8,660 ) (1) Excludes depreciation and amortization 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. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) The following table disaggregates total revenue by product and services for each segment: SCHEDULE OF DISAGGREGATION OF REVENUE BY PRODUCTS AND SERVICES FOR EACH SEGMENT Three Months Ended Six Months Ended 2021 2020 2021 2020 (Restated) (Restated) B2B: Platform and content fees $ 9,325 $ 6,422 $ 18,509 $ 12,355 Development services and other 1,043 1,901 4,665 3,638 Total B2B $ 10,368 $ 8,323 $ 23,174 $ 15,993 B2C: Sportsbook $ 12,757 $ — $ 19,908 $ — Casino 10,512 — 16,983 — Poker 713 — 1,403 — Total B2C $ 23,982 $ — $ 38,294 $ — Total revenues $ 34,350 $ 8,323 $ 61,468 $ 15,993 Revenue by location of the customer for the three and six months ended June 30, 2021 and 2020 was as follows: SCHEDULE OF REVENUE BY LOCATION OF THE CUSTOMER 2021 2020 2021 2020 Three Months Ended Six Months Ended 2021 2020 2021 2020 (Restated) (Restated) United States $ 8,330 $ 7,044 $ 19,079 $ 13,295 Europe 14,193 1,268 25,257 2,678 Latin America 10,254 — 13,857 — Rest of the world 1,573 11 3,275 20 Total $ 34,350 $ 8,323 $ 61,468 $ 15,993 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 15 — INCOME TAXES The provision for income taxes for the three and six months ended June 30, 2021 and 2020 consisted of the following: SCHEDULE OF INCOME TAX PROVISION Three Months Ended Six Months Ended 2021 2020 2021 2020 Domestic (Bermuda) $ — $ — $ — $ — Foreign (Non-Bermuda) 992 170 1,653 315 Total $ 992 $ 170 $ 1,653 $ 315 The Company’s effective income tax rate was (35.9) % and (21.4) % for the three and six months ended June 30, 2021. The Company’s effective income tax rate was (1.8) % and (3.6) % for the three and six months ended June 30, 2020, respectively. The Company uses an estimated annual effective tax rate to determine the quarterly income tax provision, which is adjusted each quarter based on information available at the end of that quarter. The difference between the statutory tax rate of 0 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 16 — RELATED PARTY TRANSACTIONS In connection with the Share Exchange discussed in Note 3, the Company arranged funding of the cash consideration of the Share Exchange through a loan facility provided by the Parent’s chief executive officer and his father. The loan facility provided for a minimum interest charge of £ 300 15 385 300 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 17 — COMMITMENTS AND CONTINGENCIES Legal Proceedings 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 considered other than routine legal proceedings. The Company believes that the ultimate disposition or resolution of its routine legal proceedings will not have a material adverse effect on its financial position, results of operations or liquidity. Content Licensing Agreements In the second quarter of 2021, the Company entered into Licensing Agreements (the “Agreements”) with two five The Company has acquired individual software licenses in addition to the service arrangement the content providers will provide over the terms of the Agreements. As each license is delivered, the Company will recognize the relative stand-alone value of the license and amortize the asset over the term and accrue service expenses or other costs as incurred. Fixed fees under the Agreements total $ 48.5 3.5 5.0 8.0 8.0 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of the condensed 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 condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Due to the inherent uncertainties involved in making estimates, actual results could differ from the original estimates, and may require significant adjustments to these reported balances in the future periods. |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the results of the Parent and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Foreign Currency Translation and Transactions | Foreign Currency Translation and Transactions 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 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’ 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 condensed consolidated statements of operations as incurred. Foreign currency transaction and remeasurement gains and losses were a net gain (loss) of $ 2,443 and $ (7,035) for the three and six months ended June 30, 2021, respectively. Foreign currency transaction and remeasurement gains and losses were a net gain (loss) of $ 41 and $ (1,279) for the three and six months ended June 30, 2020, respectively. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) |
Risks and Uncertainties – COVID-19 | Risks and Uncertainties – COVID-19 The coronavirus disease 2019 (“COVID-19”) pandemic, which was declared a national emergency in the United States in March 2020, has significantly impacted the economic conditions and financial markets around the world. The closure of land-based casinos, social distancing, shelter-in-place, and similar restrictions implemented in response to the COVID-19 pandemic led to increases 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, or in certain cases, has increased, following the re-opening of land-based casinos and easing of local restrictions. In certain of its international markets in which the Company’s B2C business has entered into recently (and has experienced significant growth during the first two quarters of 2021), it is not possible for the Company to estimate the impact, if any, the closure and re-opening of land-based casinos may have had, or may have, on its past or future operating results as the Company does not have any pre-COVID-19 comparative information for these markets. Operating results in connection with the Company’s sports betting offerings, which initially declined due to the postponement and cancellation of major sporting events, are trending positively as compared to pre-pandemic levels following the return of sporting events (albeit at limited capacities for certain events). Primarily during the first three quarters of 2020, the cancellation of certain sporting events reduced related sports betting transactions, although the Company did experience slight increases in casino revenues as a result. While most sporting events have now resumed (some of which are held behind closed-doors or at limited capacities in stadiums), uncertainties still remain around these and other upcoming large-scale sporting events which can create higher volatility in the sports betting markets and may adversely impact the Company’s future financial results. While the Company’s iGaming business has proven resilient during the pandemic, the ultimate impact of the pandemic on our 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 reduction to the Company’s sports betting transactions. Significant uncertainties continue to exist as it relates to the magnitude of impact and duration of the COVID-19 pandemic. The Company has considered the impact of COVID-19 on its accounting policies, judgments and estimates as part of the preparation of these condensed consolidated financial 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 condensed consolidated financial statements. The Company has not experienced significant impacts to its liquidity to date. COVID-19 may impact the Company’s ability to access capital to the extent it affects the U.S capital markets. The Company has assessed the extent to which COVID-19 has impacted events after the reporting date and has not identified additional items to disclose as a result. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) |
Revenue Recognition | Revenue Recognition Platform and Content Fees The Company’s platform and content revenues are generated primarily from its Internet gambling SaaS platform, GameSTACK, that its customers use to provide real money and simulated Internet gaming, and online sports betting. The Company enters into service agreements with its customers, that generally range from three to five years , and includes renewal provisions, under which it charges fees based on a percentage of the operator’s net gaming revenue or net sports win at the time of settlement of an event for real money gaming, considered usage-based fees, or at the time of purchase for in-game virtual credit for simulated gaming. The customers cannot take possession of the hosted software. Further, the Company generates revenues from the licensing of proprietary and third-party branded games (collectively “content licensing services”) hosted on the platform. The Company’s promise to provide the 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 includes fixed and variable consideration and is generally due thirty days from the date of 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. 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 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 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 of the SIM revenues generated from the Company’s platform. At June 30, 2021 and December 31, 2020, the Company has recorded a liability of $ 1,957 and $ 2,520 , respectively, for its customers’ share of the fees within other current liabilities in the condensed consolidated balance sheets. The Company’s RMiG and SIM enterprise software platform offerings include iGaming content licensing services. The GameSTACK platform is capable of supporting, and is available to the customer, for both proprietary and third-party licensed gaming content. The customer, in this case the casino operator, generally controls the determination of which gaming content will be offered in their online casinos. A customer can utilize the Company’s proprietary or licensed gaming content, or a customer can direct the Company to procure third-party gaming content on its behalf. The Company has determined it acts as the principal for providing the content licensing services when the Company controls the gaming 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 content, the Company determined it is deemed an agent for providing the content licensing services, and therefore, records the revenue, net of licensing costs paid to the suppliers of that gaming content, in the consolidated statements of operations. Gaming The Company operates the B2C gaming site www.Coolbet.com outside of the U.S., which is built on 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 events. When a user’s wager wins, the Company pays the user a pre-determined amount known as fixed odds. Revenue from 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 2,000 Peer-to-peer poker offerings allow users to play poker against one another on the Company’s online poker platform for prize money. Revenue from poker is reported at rake, less tournament costs and customer bonuses. 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. Such user incentives are recognized as a reduction to revenue upon redemption or as revenue when the incentive expires. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) Development Services Gaming Development Services 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 Development Services Platform development services consist of fees charged for ongoing development services to provide updates to the RMiG platforms for enhanced functionality or customization. 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 is measured using an input method based on effort expended, which uses direct labor hours incurred. As the performance obligations in these instances relate to the provision of development services over time, this method best reflects the transfer of control as the Company performs. In 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. Computer Hardware Sales The Company resells third-party hardware, such as computing servers and other technical devices, upon which the GameSTACK software platform is installed for its customers, however the platform remains remotely controlled and maintained by the Company. Customers cannot take possession of the platform even when hosted on hardware that is owned by the customer or on third-party hardware. Neither the customer nor the Company retain substantially all of the economic benefits from their use of the hardware. These products are not required to be purchased in order to access the GameSTACK platform but are sold as a convenience to the customer. 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 premises and configured to allow for remote access. The Company has determined that it is acting as the principal in these transactions as it takes responsibility for procuring, delivering, installing and configuring the hardware at the customer’s location and takes control of the 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 hardware. Patent Licensing Revenue 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 accounts together with bilateral transmission of reward points between the Internet gambling technology system and the land-based casino management system present in all 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. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) Contracts with Multiple Performance Obligations 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. Customer contracts can include platform and content services as well as development services or hardware sales. The variable consideration is allocated entirely to the performance obligation for platform and content services as the variable consideration is allocable specifically to the delivery of the services in the period and the allocation is consistent with the allocation objective. For gaming, 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. |
Cash | Cash The Company is required to maintain compensating cash balances to satisfy its liabilities to users. Such balances are included within cash on the condensed consolidated balance sheets and are not subject to creditor claims. At June 30, 2021 the related liabilities to users was $ 7,389 . |
Goodwill | Goodwill 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 5, the Company has recorded goodwill in connection with the acquisition of Coolbet on January 1, 2021. Goodwill is not amortized, but rather is reviewed for impairment annually or more frequently if facts or circumstances indicate that the carrying value may not be recoverable. The Company has determined that there are two 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. The Company will perform its annual impairment review of goodwill as of October 1 st |
Long-lived Assets | Long-lived Assets Long-lived assets, except goodwill, consist of property and equipment, and finite lived acquired intangible assets, such as developed software, 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 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 and using amortization methods that reflect the pattern in which the economic benefits of the intangible assets are consumed or otherwise realized. The technology is expected to be completed in the latter part of 2021. 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 value is determined through various techniques, such as discounted cash flow models using probability weighted estimated future cash flows and the use of valuation specialists. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) |
Capitalized Software Development Costs, net | Capitalized Software Development Costs, net The Company capitalizes certain development costs related to its software 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 three years |
Liabilities to Users | Liabilities to Users The Company records liabilities for user account balances. User account balances consist of user deposits, promotional awards and user winnings less user withdrawals and user losses. |
Share-based Compensation | Share-based Compensation Share-based compensation expense is recognized for stock options and restricted stock issued to employees and non-employee members of the Company’s Board of Directors based on the fair value of these awards on the date of grant. The fair value of the stock options is estimated using a Black-Scholes option pricing model and the fair value of the restricted stock (restricted stock awards and restricted stock units) is based on the market price of the Company’s stock on the date of grant. The Company’s stock options and restricted stock issued have service conditions and are considered equity awards. Share-based compensation 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. |
Reclassifications of Prior Period Amounts | Reclassifications of Prior Period Amounts Certain prior period amounts have been reclassified to conform to the current period presentation. Specifically, due to the Coolbet acquisition of Vincent Group p.l.c. in 2021, the Company has reclassified certain balances that were previously presented in separate balance sheet captions to other current and noncurrent assets, other accrued expenses, and other current and noncurrent liabilities in the condensed consolidated balance sheet as of December 31, 2020. These reclassifications had no impact on previously disclosed amounts for current assets, current liabilities, total assets and total liabilities. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) |
RESTATEMENT OF PRIOR FINANCIA_2
RESTATEMENT OF PRIOR FINANCIAL INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Changes and Error Corrections [Abstract] | |
SCHEDULE OF ERROR CORRECTIONS AND PRIOR PERIOD ADJUSTMENTS | The following table summarizes the effect of the Restatement on the condensed consolidated balance sheet as of June 30, 2021: SCHEDULE OF ERROR CORRECTIONS AND PRIOR PERIOD ADJUSTMENTS As Reported Adjustment As Restated Accounts receivable, net of allowance for doubtful accounts of $ 197 $ 11,976 $ 225 $ 12,201 Capitalized software development costs, net 11,555 (1,162 ) 10,393 Total assets 283,892 (937 ) 282,955 Other current liabilities 3,716 144 3,860 Other liabilities 463 1,085 1,548 Total liabilities 31,298 1,229 32,527 Accumulated deficit (52,960 ) (2,175 ) (55,135 ) Accumulated other comprehensive loss (9,921 ) 9 (9,912 ) Total stockholders’ equity 252,594 (2,166 ) 250,428 Total liabilities and stockholders’ equity 283,892 (937 ) 282,955 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) The following table summarizes the effect of the Restatement on the condensed consolidated statement of operations for the three months ended June 30, 2021: As Reported Adjustment As Restated Revenues $ 34,628 $ (278 ) $ 34,350 Product and technology 4,055 774 4,829 General and administrative (1) 12,326 (6 ) 12,320 Depreciation and amortization 4,149 (17 ) 4,132 Total operating costs and expenses 36,366 751 37,117 Operating loss (1,738 ) (1,029 ) (2,767 ) Loss before income taxes (1,738 ) (1,029 ) (2,767 ) Net loss (2,730 ) (1,029 ) (3,759 ) Loss per share, basic and diluted $ (0.07 ) $ (0.02 ) $ (0.09 ) (1) Excludes depreciation and amortization The following table summarizes the effect of the Restatement on the condensed consolidated statement of operations for the six months ended June 30, 2021: As Reported Adjustment As Restated Revenues $ 62,470 $ (1,002 ) $ 61,468 Product and technology 8,905 1,167 10,072 General and administrative (1) 22,337 (8 ) 22,329 Depreciation and amortization 8,112 14 8,126 Total operating costs and expenses 68,010 1,173 69,183 Operating loss (5,540 ) (2,175 ) (7,715 ) Loss before income taxes (5,541 ) (2,175 ) (7,716 ) Net loss (7,194 ) (2,175 ) (9,369 ) Loss per share, basic and diluted $ (0.17 ) $ (0.05 ) $ (0.22 ) (1) Excludes depreciation and amortization The following table summarizes the effect of the Restatement on the condensed consolidated statement of cash flows for the six months ended June 30, 2021: As Reported Adjustment As Restated Net loss $ (7,194 ) $ (2,175 ) $ (9,369 ) Amortization of software and intangible assets 7,610 14 7,624 Accounts receivable (5,129 ) (225 ) (5,354 ) Other current liabilities (1,101 ) 142 (959 ) Other liabilities 92 1,085 1,177 Net cash from operating activities 4,296 (1,159 ) 3,137 Expenditures for capitalized software development costs (6,479 ) 1,159 (5,320 ) Net cash used in investing activities (103,683 ) 1,159 (102,524 ) |
ACQUISITION OF VINCENT GROUP _2
ACQUISITION OF VINCENT GROUP P.L.C. (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
SUMMARY OF CONSIDERATION TRANSFERRED | Fair value of the consideration transferred: SUMMARY OF CONSIDERATION TRANSFERRED Cash paid to Vincent Group shareholders $ 111,118 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 $ 218,098 (1) The share consideration represents 5,260,516 20.28 (2) The replacement equity-based awards consist of options to purchase 67,830 |
SUMMARY OF FAIR VALUES OF ASSETS ACQUIRED AND LIABILITIES ASSUMED | Recognized amounts of identifiable assets acquired and liabilities assumed at fair value: SUMMARY OF FAIR VALUES OF ASSETS ACQUIRED AND LIABILITIES ASSUMED Cash $ 18,714 Prepaid expenses and other current assets 1,512 Property and equipment 343 Operating lease right-of-use assets 416 Intangible assets 48,370 Other noncurrent assets 73 Accounts payable (1,182 ) Liabilities to users (5,373 ) Other current liabilities (1,797 ) Operating lease liabilities (167 ) Deferred income taxes (2,265 ) Noncurrent operating lease liabilities (231 ) Total identifiable net assets 58,413 Goodwill 159,685 Total identifiable assets acquired and liabilities assumed including goodwill, net $ 218,098 |
SUMMARY OF INTANGIBLE ASSETS ACQUIRED | Identifiable intangible assets acquired as part of the acquisition, including their respective expected useful lives, were as follows: SUMMARY OF INTANGIBLE ASSETS ACQUIRED Estimated useful life (in years) Fair Value Trade names and trademarks 10.0 $ 5,800 Developed technology 3.0 28,100 In-process developed technology — 8,400 Customer relationships 3.0 5,600 Licenses various 470 $ 48,370 |
PRO FORMA OPERATING RESULTS | PRO FORMA OPERATING RESULTS Three Months Ended Six Months Ended Revenues $ 13,929 $ 28,744 Net loss (12,510 ) (15,321 ) Loss per share, basic and diluted (0.40 ) (0.53 ) |
CAPITALIZED SOFTWARE DEVELOPM_2
CAPITALIZED SOFTWARE DEVELOPMENT COSTS, NET (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Research and Development [Abstract] | |
SCHEDULE OF CAPITALIZED COMPUTER SOFTWARE COSTS, NET | Capitalized software development costs, net at June 30, 2021 and December 31, 2020 consisted of the following: SCHEDULE OF CAPITALIZED COMPUTER SOFTWARE COSTS, NET June 30, 2021 December 31, 2020 (Restated) Capitalized software development costs $ 28,340 $ 26,507 Development in progress 3,668 2,641 Total capitalized software development costs 32,008 29,148 Less: accumulated amortization (21,615 ) (22,500 ) Total $ 10,393 $ 6,648 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF GOODWILL | The changes in the carrying amount of goodwill, by segment, for the six months ended June 30, 2021 were as follows: SCHEDULE OF GOODWILL B2B B2C Total Balance at December 31, 2020 $ — $ — $ — Goodwill acquired in Coolbet acquisition 67,547 92,138 159,685 Effect of foreign currency translation (2,179 ) (2,972 ) (5,151 ) Balance at June 30, 2021 $ 65,368 $ 89,166 $ 154,534 |
SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS | Definite-lived intangible assets, net consisted of the following: SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS June 30, 2021 Weighted Average Amortization Period Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology 3.0 $ 27,194 $ (4,532 ) $ 22,662 In-process technology — 8,129 — 8,129 Customer relationships 3.0 5,419 (903 ) 4,516 Trade names and trademarks 10.0 5,966 (630 ) 5,336 Gaming licenses 6.5 2,044 (1,076 ) 968 $ 48,752 $ (7,141 ) $ 41,611 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) December 31, 2020 Weighted Average Amortization Period Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trade names and trademarks 3.0 $ 343 $ (343 ) $ — Gaming licenses 5.3 1,366 (898 ) 468 $ 1,709 $ (1,241 ) $ 468 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Payables and Accruals [Abstract] | |
SCHEDULE OF ACCRUED EXPENSES | Accrued expenses consisted of the following: SCHEDULE OF ACCRUED EXPENSES June 30, December 31, Content licensing fees $ 2,732 $ 1,984 Sales taxes 1,111 756 Income taxes 1,075 17 Other 487 606 Total $ 5,405 $ 3,363 |
OTHER CURRENT LIABILITIES (Tabl
OTHER CURRENT LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Other Liabilities Disclosure [Abstract] | |
SCHEDULE OF OTHER CURRENT LIABILITIES | Other current liabilities consisted of the following: SCHEDULE OF OTHER CURRENT LIABILITIES June 30, December 31, (Restated) Revenue share due to SIM customers $ 1,957 $ 2,520 Contract liabilities 725 1,083 Operating lease liabilities 508 262 Other 670 202 Total $ 3,860 $ 4,067 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
SCHEDULE OF SHARE-BASED COMPENSATION, OPTION ACTIVITY | A summary of the stock option activity as of and for the six months ended June 30, 2021 is as follows: SCHEDULE OF SHARE-BASED COMPENSATION, OPTION ACTIVITY Number of Shares Weighted Average Exercise Price Weighted Average Contractual Term Aggregate Intrinsic Value Outstanding at December 31, 2020 3,061,859 $ 8.06 8.5 $ 37,410 Granted 1,530,140 23.01 Exercised (114,618 ) 2.93 Forfeited/expired or cancelled (61,890 ) 24.10 Outstanding at June 30, 2021 4,415,491 $ 13.15 8.4 $ 14,529 Options exercisable at June 30, 2021 2,031,250 $ 4.65 7.6 $ 23,950 |
SCHEDULE OF SHARE BASED COMPENSATION, UNIT ACTIVITY | The grant date fair value of each stock option grant was determined using the following weighted average assumptions: SCHEDULE OF SHARE BASED COMPENSATION, UNIT ACTIVITY 2021 2020 Six Months Ended 2021 2020 Expected stock price volatility 61.52 % 73.52 % Expected term (in years) 4.94 5.00 Risk-free interest rate 0.74 % 0.33 % Dividend yield 0 % 0 % |
INTEREST EXPENSE, NET (Tables)
INTEREST EXPENSE, NET (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
SCHEDULE OF INTEREST EXPENSE, NET | Interest expense, net consisted of the following: SCHEDULE OF INTEREST EXPENSE, NET 2021 2020 2021 2020 Three Months Ended Six Months Ended 2021 2020 2021 2020 Interest expense (1) $ — $ 385 $ 1 $ 393 Interest income — (3 ) — (3 ) Interest expense, net $ — $ 382 $ 1 $ 390 (1) Interest expense includes interest on a related party loan during the three and six months ended June 30, 2020. Refer to Note 16 – Related Party Transactions. |
LOSS PER SHARE (Tables)
LOSS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
SCHEDULE OF ANTI-DILUTIVE STOCK EXCLUDED FROM COMPUTATION OF DILUTED EARNINGS PER SHARE | SCHEDULE OF ANTI-DILUTIVE STOCK EXCLUDED FROM COMPUTATION OF DILUTED EARNINGS PER SHARE Three Months Ended Six Months Ended 2021 2020 2021 2020 Stock options 4,415,491 3,044,306 4,415,491 3,044,306 Restricted stock awards — 93,680 — 93,680 Restricted stock units 5,180 — 5,180 — Total 4,420,671 3,137,986 4,420,671 3,137,986 |
REVENUES (Tables)
REVENUES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
SCHEDULE OF REVENUE RECOGNIZED IN LINE WITH THE TIMING OF TRANSFER OF SERVICES | The following table reflects revenues recognized for the three and six months ended June 30, 2021 and 2020 in line with the timing of transfer of services: SCHEDULE OF REVENUE RECOGNIZED IN LINE WITH THE TIMING OF TRANSFER OF SERVICES Three Months Ended Six Months Ended 2021 2020 2021 2020 (Restated) (Restated) Revenues from services delivered at a point in time $ 24,097 $ 100 $ 41,409 $ 100 Revenues from services delivered over time 10,253 8,223 20,059 15,893 Total $ 34,350 $ 8,323 $ 61,468 $ 15,993 |
SCHEDULE OF ACTIVITY IN CONTRACT LIABILITIES | SCHEDULE OF ACTIVITY IN CONTRACT LIABILITIES 2021 2020 Six Months Ended 2021 2020 Balance at the beginning of the period $ 353 $ 86 Capitalized expenditures 82 35 Amortization (44 ) (8 ) Effect of foreign currency translation 3 (5 ) Balance at the end of the period $ 394 $ 108 |
SCHEDULE OF CONTRACT WITH CUSTOMERS | The following table reflects contract liabilities arising from cash consideration received in advance from customers for the periods presented: SCHEDULE OF CONTRACT WITH CUSTOMERS 2021 2020 2021 2020 Three Months Ended Six Months Ended 2021 2020 2021 2020 (Restated) (Restated) Contract liabilities from advance customer payments, beginning of the period $ 1,840 $ 2,095 $ 1,083 $ 3,023 Contract liabilities from advance customer payments, end of the period 1,811 1,865 1,811 1,865 Revenue recognized from amounts included in contract liabilities from advance customer payments at the beginning of the period 103 237 89 1,014 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
SCHEDULE OF FINANCIAL INFORMATION FOR REPORTABLE SEGMENTS | Summarized financial information by reportable segments for the three and six months ended June 30, 2021 and 2020 is as follows: SCHEDULE OF FINANCIAL INFORMATION FOR REPORTABLE SEGMENTS B2B B2C Total B2B B2C Total Three Months Ended June 30, 2021 2020 B2B B2C Total B2B B2C Total (Restated) (Restated) Revenues $ 10,368 $ 23,982 $ 34,350 $ 8,323 $ — $ 8,323 Cost of revenues (1) 2,307 8,049 10,356 2,123 — 2,123 Segment gross profit (1) $ 8,061 $ 15,933 $ 23,994 $ 6,200 $ — $ 6,200 (1) Excludes depreciation and amortization B2B B2C Total B2B B2C Total Six Months Ended June 30, 2021 2020 B2B B2C Total B2B B2C Total (Restated) (Restated) Revenues $ 23,174 $ 38,294 $ 61,468 $ 15,993 $ — $ 15,993 Cost of revenues (1) 5,049 14,026 19,075 3,815 — 3,815 Segment gross profit (1) $ 18,125 $ 24,268 $ 42,393 $ 12,178 $ — $ 12,178 (1) Excludes depreciation and amortization |
RECONCILIATION OF CONSOLIDATED SEGMENT PROFIT TO CONSOLIDATED INCOME (LOSS) BEFORE INCOME TAXES | The following table presents a reconciliation of segment gross profit to consolidated loss before income taxes for the three and six months ended June 30, 2021 and 2020: RECONCILIATION OF CONSOLIDATED SEGMENT PROFIT TO CONSOLIDATED INCOME (LOSS) BEFORE INCOME TAXES 2021 2020 2021 2020 Three Months Ended Six Months Ended 2021 2020 2021 2020 (Restated) (Restated) Segment gross profit (1) $ 23,994 $ 6,200 $ 42,393 $ 12,178 Sales and marketing 5,480 1,642 9,581 2,505 Product and technology 4,829 5,173 10,072 6,197 General and administrative (1) 12,320 7,786 22,329 10,177 Depreciation and amortization 4,132 716 8,126 1,569 Interest expense, net — 382 1 390 Loss before income taxes $ (2,767 ) $ (9,499 ) $ (7,716 ) $ (8,660 ) (1) Excludes depreciation and amortization |
SCHEDULE OF DISAGGREGATION OF REVENUE BY PRODUCTS AND SERVICES FOR EACH SEGMENT | The following table disaggregates total revenue by product and services for each segment: SCHEDULE OF DISAGGREGATION OF REVENUE BY PRODUCTS AND SERVICES FOR EACH SEGMENT Three Months Ended Six Months Ended 2021 2020 2021 2020 (Restated) (Restated) B2B: Platform and content fees $ 9,325 $ 6,422 $ 18,509 $ 12,355 Development services and other 1,043 1,901 4,665 3,638 Total B2B $ 10,368 $ 8,323 $ 23,174 $ 15,993 B2C: Sportsbook $ 12,757 $ — $ 19,908 $ — Casino 10,512 — 16,983 — Poker 713 — 1,403 — Total B2C $ 23,982 $ — $ 38,294 $ — Total revenues $ 34,350 $ 8,323 $ 61,468 $ 15,993 |
SCHEDULE OF REVENUE BY LOCATION OF THE CUSTOMER | Revenue by location of the customer for the three and six months ended June 30, 2021 and 2020 was as follows: SCHEDULE OF REVENUE BY LOCATION OF THE CUSTOMER 2021 2020 2021 2020 Three Months Ended Six Months Ended 2021 2020 2021 2020 (Restated) (Restated) United States $ 8,330 $ 7,044 $ 19,079 $ 13,295 Europe 14,193 1,268 25,257 2,678 Latin America 10,254 — 13,857 — Rest of the world 1,573 11 3,275 20 Total $ 34,350 $ 8,323 $ 61,468 $ 15,993 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
SCHEDULE OF INCOME TAX PROVISION | The provision for income taxes for the three and six months ended June 30, 2021 and 2020 consisted of the following: SCHEDULE OF INCOME TAX PROVISION Three Months Ended Six Months Ended 2021 2020 2021 2020 Domestic (Bermuda) $ — $ — $ — $ — Foreign (Non-Bermuda) 992 170 1,653 315 Total $ 992 $ 170 $ 1,653 $ 315 |
NATURE OF OPERATIONS (Details N
NATURE OF OPERATIONS (Details Narrative) | 6 Months Ended |
Jun. 30, 2021Segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of operating segments | 2 |
SCHEDULE OF ERROR CORRECTIONS A
SCHEDULE OF ERROR CORRECTIONS AND PRIOR PERIOD ADJUSTMENTS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||||||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Accounts receivable, net of allowance for doubtful accounts of $197 June 30, 2021 | $ 12,201 | $ 12,201 | $ 6,818 | ||||||
Capitalized software development costs, net | 10,393 | 10,393 | 6,648 | ||||||
Total assets | 282,955 | 282,955 | 173,246 | ||||||
Other current liabilities | 3,860 | 3,860 | 4,067 | ||||||
Other liabilities | 1,548 | 1,548 | 370 | ||||||
Total liabilities | 32,527 | 32,527 | 17,682 | ||||||
Accumulated deficit | (55,135) | (55,135) | (45,766) | ||||||
Accumulated other comprehensive loss | (9,912) | (9,912) | (2,877) | ||||||
Total stockholders’ equity | 250,428 | $ 249,403 | $ 64,372 | $ 14,901 | 250,428 | $ 64,372 | 155,564 | $ 15,145 | |
Total liabilities and stockholders’ equity | 282,955 | 282,955 | $ 173,246 | ||||||
Revenues | 34,350 | 8,323 | 61,468 | 15,993 | |||||
Product and technology | 4,829 | 5,173 | 10,072 | 6,197 | |||||
General and Administrative Expense | [1] | 12,320 | 7,786 | 22,329 | 10,177 | ||||
Depreciation and amortization | 4,132 | 716 | 8,126 | 1,569 | |||||
Total operating costs and expenses | 37,117 | 17,440 | 69,183 | 24,263 | |||||
Operating loss | (2,767) | (9,117) | (7,715) | (8,270) | |||||
Loss before income taxes | (2,767) | (9,499) | (7,716) | (8,660) | |||||
Net loss | $ (3,759) | $ (5,610) | $ (9,669) | $ 694 | $ (9,369) | $ (8,975) | |||
Loss per share, basic and diluted | $ (0.09) | $ (0.37) | $ (0.22) | $ (0.38) | |||||
Amortization of software and intangible assets | $ 7,624 | $ 1,439 | |||||||
Accounts receivable | (5,354) | (1,239) | |||||||
Other current liabilities | (959) | (477) | |||||||
Other liabilities | 1,177 | 209 | |||||||
Net cash from operating activities | 3,137 | 1,708 | |||||||
Expenditures for capitalized software development costs | (5,320) | (1,748) | |||||||
Net cash used in investing activities | (102,524) | $ (2,390) | |||||||
Previously Reported [Member] | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Accounts receivable, net of allowance for doubtful accounts of $197 June 30, 2021 | $ 11,976 | 11,976 | |||||||
Capitalized software development costs, net | 11,555 | 11,555 | |||||||
Total assets | 283,892 | 283,892 | |||||||
Other current liabilities | 3,716 | 3,716 | |||||||
Other liabilities | 463 | 463 | |||||||
Total liabilities | 31,298 | 31,298 | |||||||
Accumulated deficit | (52,960) | (52,960) | |||||||
Accumulated other comprehensive loss | (9,921) | (9,921) | |||||||
Total stockholders’ equity | 252,594 | 252,594 | |||||||
Total liabilities and stockholders’ equity | 283,892 | 283,892 | |||||||
Revenues | 34,628 | 62,470 | |||||||
Product and technology | 4,055 | 8,905 | |||||||
General and Administrative Expense | 12,326 | 22,337 | |||||||
Depreciation and amortization | 4,149 | 8,112 | |||||||
Total operating costs and expenses | 36,366 | 68,010 | |||||||
Operating loss | (1,738) | (5,540) | |||||||
Loss before income taxes | (1,738) | (5,541) | |||||||
Net loss | $ (2,730) | $ (7,194) | |||||||
Loss per share, basic and diluted | $ (0.07) | $ (0.17) | |||||||
Amortization of software and intangible assets | $ 7,610 | ||||||||
Accounts receivable | (5,129) | ||||||||
Other current liabilities | (1,101) | ||||||||
Other liabilities | 92 | ||||||||
Net cash from operating activities | 4,296 | ||||||||
Expenditures for capitalized software development costs | (6,479) | ||||||||
Net cash used in investing activities | (103,683) | ||||||||
Revision of Prior Period, Adjustment [Member] | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Accounts receivable, net of allowance for doubtful accounts of $197 June 30, 2021 | $ 225 | 225 | |||||||
Capitalized software development costs, net | (1,162) | (1,162) | |||||||
Total assets | (937) | (937) | |||||||
Other current liabilities | 144 | 144 | |||||||
Other liabilities | 1,085 | 1,085 | |||||||
Total liabilities | 1,229 | 1,229 | |||||||
Accumulated deficit | (2,175) | (2,175) | |||||||
Accumulated other comprehensive loss | 9 | 9 | |||||||
Total stockholders’ equity | (2,166) | (2,166) | |||||||
Total liabilities and stockholders’ equity | (937) | (937) | |||||||
Revenues | (278) | (1,002) | |||||||
Product and technology | 774 | 1,167 | |||||||
General and Administrative Expense | (6) | (8) | |||||||
Depreciation and amortization | (17) | 14 | |||||||
Total operating costs and expenses | 751 | 1,173 | |||||||
Operating loss | (1,029) | (2,175) | |||||||
Loss before income taxes | (1,029) | (2,175) | |||||||
Net loss | $ (1,029) | $ (2,175) | |||||||
Loss per share, basic and diluted | $ (0.02) | $ (0.05) | |||||||
Amortization of software and intangible assets | $ 14 | ||||||||
Accounts receivable | (225) | ||||||||
Other current liabilities | 142 | ||||||||
Other liabilities | 1,085 | ||||||||
Net cash from operating activities | (1,159) | ||||||||
Expenditures for capitalized software development costs | 1,159 | ||||||||
Net cash used in investing activities | $ 1,159 | ||||||||
[1] | Excludes depreciation and amortization |
SCHEDULE OF ERROR CORRECTIONS_2
SCHEDULE OF ERROR CORRECTIONS AND PRIOR PERIOD ADJUSTMENTS (Details) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Accounting Changes and Error Corrections [Abstract] | ||
Accounts Receivable, Allowance for Credit Loss | $ 197 | $ 100 |
BASIS OF PRESENTATION (Details
BASIS OF PRESENTATION (Details Narrative) £ / shares in Units, £ in Thousands, $ in Thousands | May 05, 2020USD ($)shares | May 05, 2020GBP (£)£ / sharesshares |
Accounting Policies [Abstract] | ||
Shares issued per share of acquire (in shares) | shares | 4 | 4 |
Cash paid for partial shares | $ 2,525 | £ 2,004 |
Cash paid for partial shares (in pence per share) | £ / shares | £ 2.32 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2021USD ($)Product | Mar. 31, 2021USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Jun. 30, 2021USD ($)SegmentProduct | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Property, Plant and Equipment [Line Items] | |||||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | $ 2,443 | $ (9,478) | $ 41 | $ (1,320) | $ (7,035) | $ (1,279) | |
Amounts Due To Customers, Current | $ 1,957 | $ 1,957 | $ 2,520 | ||||
Number of third-party iGaming products available | Product | 2,000 | 2,000 | |||||
Liabilities to users | $ 7,389 | $ 7,389 | |||||
Number of reporting units | Segment | 2 | ||||||
Software and Software Development Costs [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Estimated useful life (in years) | 3 years | ||||||
Minimum [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Contract With Customer, Duration | 3 years | ||||||
Maximum [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Contract With Customer, Duration | 5 years |
SUMMARY OF CONSIDERATION TRANSF
SUMMARY OF CONSIDERATION TRANSFERRED (Details) - Vincent Group P.L.C. [Member] $ in Thousands | Jan. 02, 2021USD ($) |
Business Acquisition [Line Items] | |
Cash paid to Vincent Group shareholders | $ 111,118 |
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | 106,683 |
Business Combination, Consideration Transferred, Equity Interest Issuable | 297 |
Total | $ 218,098 |
SUMMARY OF CONSIDERATION TRAN_2
SUMMARY OF CONSIDERATION TRANSFERRED (Details) (Parenthetical) - $ / shares | Jan. 02, 2021 | Jun. 30, 2021 |
Business Acquisition [Line Items] | ||
Shares issued as partial consideration for acquisition (in shares) | 5,260,516 | |
Replacement equity-based awards (in shares) | 67,830 | 67,830 |
Vincent Group P.L.C. [Member] | ||
Business Acquisition [Line Items] | ||
Share price of ordinary shares issued (in dollars per share) | $ 20.28 |
SUMMARY OF FAIR VALUES OF ASSET
SUMMARY OF FAIR VALUES OF ASSETS ACQUIRED AND LIABILITIES ASSUMED (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jan. 02, 2021 | Dec. 31, 2020 |
Business Combination and Asset Acquisition [Abstract] | |||
Cash | $ 18,714 | ||
Prepaid expenses and other current assets | 1,512 | ||
Property and equipment | 343 | ||
Operating lease right-of-use assets | 416 | ||
Intangible assets | 48,370 | ||
Other noncurrent assets | 73 | ||
Accounts payable | (1,182) | ||
Liabilities to users | (5,373) | ||
Other current liabilities | (1,797) | ||
Operating lease liabilities | (167) | ||
Deferred income taxes | (2,265) | ||
Noncurrent operating lease liabilities | (231) | ||
Total identifiable net assets | 58,413 | ||
Goodwill | $ 154,534 | 159,685 | |
Total identifiable assets acquired and liabilities assumed including goodwill, net | $ 218,098 |
SUMMARY OF INTANGIBLE ASSETS AC
SUMMARY OF INTANGIBLE ASSETS ACQUIRED (Details) - USD ($) $ in Thousands | Jan. 02, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Fair Value | $ 48,370 | ||
Trademarks and Trade Names [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Estimated useful life (in years) | 10 years | 10 years | 3 years |
Fair Value | $ 5,800 | ||
Developed Technology [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Estimated useful life (in years) | 3 years | ||
Fair Value | $ 28,100 | ||
In-Process Technology [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Fair Value | $ 8,400 | ||
Customer Relationships [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Estimated useful life (in years) | 3 years | 3 years | |
Fair Value | $ 5,600 | ||
License [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Estimated useful life (in years) | 6 years 6 months | 5 years 3 months 18 days | |
Fair Value | $ 470 |
PRO FORMA OPERATING RESULTS (De
PRO FORMA OPERATING RESULTS (Details) - Vincent Group P.L.C. [Member] - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2020 | Jun. 30, 2020 | |
Business Acquisition [Line Items] | ||
Revenues | $ 13,929 | $ 28,744 |
Net loss | $ (12,510) | $ (15,321) |
Loss per share, basic and diluted | $ (0.40) | $ (0.53) |
ACQUISITION OF VINCENT GROUP _3
ACQUISITION OF VINCENT GROUP P.L.C. (Details Narrative) - USD ($) $ in Thousands | Jan. 02, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | |||
Deferred income tax liability | $ 2,265 | ||
Goodwill | 159,685 | $ 154,534 | |
Business To Consumer Segment (B2C) [Member] | |||
Business Acquisition [Line Items] | |||
Goodwill | 89,166 | ||
Business to Business (B2B) [Member] | |||
Business Acquisition [Line Items] | |||
Goodwill | 65,368 | ||
Vincent Group P.L.C. [Member] | |||
Business Acquisition [Line Items] | |||
Deferred income tax liability | 2,265 | ||
Acquisition related costs | 1,309 | $ 290 | |
Vincent Group P.L.C. [Member] | Business To Consumer Segment (B2C) [Member] | |||
Business Acquisition [Line Items] | |||
Goodwill | 92,138 | ||
Vincent Group P.L.C. [Member] | Business to Business (B2B) [Member] | |||
Business Acquisition [Line Items] | |||
Goodwill | $ 67,547 |
SCHEDULE OF CAPITALIZED COMPUTE
SCHEDULE OF CAPITALIZED COMPUTER SOFTWARE COSTS, NET (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Research and Development [Abstract] | ||
Capitalized software development costs | $ 28,340 | $ 26,507 |
Development in progress | 3,668 | 2,641 |
Total capitalized software development costs | 32,008 | 29,148 |
Less: accumulated amortization | (21,615) | (22,500) |
Total | $ 10,393 | $ 6,648 |
CAPITALIZED SOFTWARE DEVELOPM_3
CAPITALIZED SOFTWARE DEVELOPMENT COSTS, NET (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Research and Development [Abstract] | ||||
Capitalized Computer Software, Amortization | $ 901 | $ 615 | $ 1,661 | $ 1,371 |
SCHEDULE OF GOODWILL (Details)
SCHEDULE OF GOODWILL (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Indefinite-lived Intangible Assets [Line Items] | |
Goodwill, beginning balance | |
Goodwill acquired in Coolbet acquisition | 159,685 |
Effect of foreign currency translation | (5,151) |
Goodwill, ending balance | 154,534 |
Business to Business (B2B) [Member] | |
Indefinite-lived Intangible Assets [Line Items] | |
Goodwill, beginning balance | |
Goodwill acquired in Coolbet acquisition | 67,547 |
Effect of foreign currency translation | (2,179) |
Goodwill, ending balance | 65,368 |
Business To Consumer Segment (B2C) [Member] | |
Indefinite-lived Intangible Assets [Line Items] | |
Goodwill, beginning balance | |
Goodwill acquired in Coolbet acquisition | 92,138 |
Effect of foreign currency translation | (2,972) |
Goodwill, ending balance | $ 89,166 |
SCHEDULE OF FINITE-LIVED INTANG
SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | Jan. 02, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 48,752 | $ 1,709 | |
Accumulated Amortization | (7,141) | (1,241) | |
Net Carrying Amount | 41,611 | $ 468 | |
In-Process Technology [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 8,129 | ||
Accumulated Amortization | |||
Net Carrying Amount | $ 8,129 | ||
Developed Technology Rights [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Amortization Period | 3 years | ||
Gross Carrying Amount | $ 27,194 | ||
Accumulated Amortization | (4,532) | ||
Net Carrying Amount | $ 22,662 | ||
Customer Relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Amortization Period | 3 years | 3 years | |
Gross Carrying Amount | $ 5,419 | ||
Accumulated Amortization | (903) | ||
Net Carrying Amount | $ 4,516 | ||
Trademarks and Trade Names [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Amortization Period | 10 years | 10 years | 3 years |
Gross Carrying Amount | $ 5,966 | $ 343 | |
Accumulated Amortization | (630) | (343) | |
Net Carrying Amount | $ 5,336 | ||
License [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Amortization Period | 6 years 6 months | 5 years 3 months 18 days | |
Gross Carrying Amount | $ 2,044 | $ 1,366 | |
Accumulated Amortization | (1,076) | (898) | |
Net Carrying Amount | $ 968 | $ 468 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense related to capitalized development costs | $ 2,968 | $ 32 | $ 5,963 | $ 68 |
Estimated amortization expense, remainder of fiscal year | 5,876 | 5,876 | ||
Estimated amortization expense, 2022 | 11,761 | 11,761 | ||
Estimated amortization expense, 2023 | 11,741 | 11,741 | ||
Estimated amortization expense, 2024 | 706 | 706 | ||
Estimated amortization expense, 2025 | $ 695 | $ 695 |
SCHEDULE OF ACCRUED EXPENSES (D
SCHEDULE OF ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Content licensing fees | $ 2,732 | $ 1,984 |
Sales taxes | 1,111 | 756 |
Income taxes | 1,075 | 17 |
Other | 487 | 606 |
Total | $ 5,405 | $ 3,363 |
SCHEDULE OF OTHER CURRENT LIABI
SCHEDULE OF OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Other Liabilities Disclosure [Abstract] | ||
Revenue share due to SIM customers | $ 1,957 | $ 2,520 |
Contract liabilities | 725 | 1,083 |
Operating lease liabilities | 508 | 262 |
Other | 670 | 202 |
Total | $ 3,860 | $ 4,067 |
SCHEDULE OF SHARE-BASED COMPENS
SCHEDULE OF SHARE-BASED COMPENSATION, OPTION ACTIVITY (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | ||
Number of Shares, Outstanding, beginning balance | 3,061,859 | |
Weighted Average Exercise Price, Outstanding, beginning balance | $ 8.06 | |
Weighted Average Contractual Term, Outstanding | 8 years 4 months 24 days | 8 years 6 months |
Aggregate Intrinsic Value, Outstanding | $ 37,410 | |
Number of Shares, Granted | 1,530,140 | |
Weighted Average Exercise Price, Granted | $ 23.01 | |
Number of Shares, Exercised | (114,618) | |
Weighted Average Exercise Price, Exercised | $ 2.93 | |
Number of Shares, Forfeited/expired or cancelled | (61,890) | |
Weighted Average Exercise Price, Forfeited/expired or cancelled | $ 24.10 | |
Number of Shares, Outstanding, ending balance | 4,415,491 | 3,061,859 |
Weighted Average Exercise Price, Outstanding, ending balance | $ 13.15 | $ 8.06 |
Aggregate Intrinsic Value, Outstanding | $ 14,529 | $ 37,410 |
Number of Shares, Options, exercisable at end of period | 2,031,250 | |
Weighted Average Exercise Price, Options, exercisable at end of period | $ 4.65 | |
Weighted Average Contractual Term, Exercisable | 7 years 7 months 6 days | |
Aggregate Intrinsic Value, Exercisable | $ 23,950 |
SCHEDULE OF SHARE BASED COMPENS
SCHEDULE OF SHARE BASED COMPENSATION, UNIT ACTIVITY (Details) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | ||
Expected stock price volatility | 61.52% | 73.52% |
Expected term (in years) | 4 years 11 months 8 days | 5 years |
Risk-free interest rate | 0.74% | 0.33% |
Dividend yield | 0.00% | 0.00% |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Mar. 09, 2021 | Jan. 02, 2021 | Jun. 15, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Apr. 30, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Replacement equity-based awards (in shares) | 67,830 | 67,830 | ||||||
Capitalized Computer Software, Amortization | $ 901 | $ 615 | $ 1,661 | $ 1,371 | ||||
Share-based Payment Arrangement, Accelerated Cost | $ 3,881 | |||||||
Share-based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount | $ 23,202 | $ 23,202 | ||||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 3 years 4 months 24 days | |||||||
Weighted average grant date fair value of options granted | $ 9.17 | $ 10.44 | $ 12.10 | $ 9.36 | ||||
Decrease in liability for cash-settled share-based compensation | $ (88) | $ (181) | ||||||
Share-based Payment Arrangement, Option [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Expiration period of options | 10 years | |||||||
Options approved for issuance (in shares) | 1,462,310 | |||||||
Share-based compensation expense recognized | 1,807 | $ 4,150 | $ 2,946 | $ 4,445 | ||||
Capitalized Computer Software, Amortization | 57 | $ 7 | $ 105 | 30 | ||||
Share-based Payment Arrangement, Option [Member] | Minimum [Member] | Vincent Group P.L.C. [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Expected period of recognition for replacement stock option awards | 1 year | |||||||
Share-based Payment Arrangement, Option [Member] | Maximum [Member] | Vincent Group P.L.C. [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Expected period of recognition for replacement stock option awards | 3 years | |||||||
Share-based Payment Arrangement, Option [Member] | Share-based Payment Arrangement, Tranche One [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting percentage | 25.00% | |||||||
Restricted Stock Units (RSUs) [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based compensation expense recognized | $ 105 | $ 130 | ||||||
Restricted stock issued | 10,358 | |||||||
Vesting period | 1 year | |||||||
Grant date fair value of restricted stock | $ 25.10 | |||||||
Restricted stock units vested | 5,178 | |||||||
Restricted stock units outstanding | 5,180 | 5,180 | ||||||
Unrecognized share-based compensation expense | $ 130 | $ 130 | ||||||
Fair value of restricted stock units vested | 130 | |||||||
Restricted Stock Units (RSUs) [Member] | Share-Based Payment Arrangement, Tranche Five [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting percentage | 25.00% | |||||||
Restricted Stock [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based compensation expense recognized | $ 350 | 770 | ||||||
Restricted stock issued | 93,680 | |||||||
Vesting period | 1 year | |||||||
Grant date fair value of restricted stock | $ 18.19 | |||||||
Fair value of restricted stock units vested | $ 1,704 | $ 75 | ||||||
2020 Equity Incentive Plan [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares available for grant | 4,400,000 | |||||||
Percentage increase based on prior year's outstanding shares | 4.00% | |||||||
Number of shares remaining for future issuance | 475,240 | 475,240 |
SCHEDULE OF INTEREST EXPENSE, N
SCHEDULE OF INTEREST EXPENSE, NET (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | ||
Interest Expense, Other | [1] | $ 385 | $ 1 | $ 393 | |
Interest income | (3) | (3) | |||
Interest expense, net | $ 382 | $ 1 | $ 390 | ||
[1] | Interest expense includes interest on a related party loan during the three and six months ended June 30, 2020. Refer to Note 16 – Related Party Transactions. |
SCHEDULE OF ANTI-DILUTIVE STOCK
SCHEDULE OF ANTI-DILUTIVE STOCK EXCLUDED FROM COMPUTATION OF DILUTED EARNINGS PER SHARE (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 4,420,671 | 3,137,986 | 4,420,671 | 3,137,986 |
Stock Options [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 4,415,491 | 3,044,306 | 4,415,491 | 3,044,306 |
Restricted Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 93,680 | 93,680 | ||
Restricted Stock Units (RSUs) [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 5,180 | 5,180 |
SCHEDULE OF REVENUE RECOGNIZED
SCHEDULE OF REVENUE RECOGNIZED IN LINE WITH THE TIMING OF TRANSFER OF SERVICES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Total | $ 34,350 | $ 8,323 | $ 61,468 | $ 15,993 |
Transferred at Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total | 24,097 | 100 | 41,409 | 100 |
Transferred over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total | $ 10,253 | $ 8,223 | $ 20,059 | $ 15,893 |
SCHEDULE OF ACTIVITY IN CONTRAC
SCHEDULE OF ACTIVITY IN CONTRACT LIABILITIES (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | ||
Balance at the beginning of the period | $ 353 | $ 86 |
Capitalized expenditures | 82 | 35 |
Amortization | (44) | (8) |
Effect of foreign currency translation | 3 | (5) |
Balance at the end of the period | $ 394 | $ 108 |
SCHEDULE OF CONTRACT WITH CUSTO
SCHEDULE OF CONTRACT WITH CUSTOMERS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | ||||
Contract liabilities from advance customer payments, beginning of the period | $ 1,840 | $ 2,095 | $ 1,083 | $ 3,023 |
Contract liabilities from advance customer payments, end of the period | 1,811 | 1,865 | 1,811 | 1,865 |
Revenue recognized from amounts included in contract liabilities from advance customer payments at the beginning of the period | $ 103 | $ 237 | $ 89 | $ 1,014 |
REVENUES (Details Narrative)
REVENUES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||||||||
Revenues recognized, amount | $ 34,350,000 | $ 8,323,000 | $ 61,468,000 | $ 15,993,000 | ||||
Contract with Customer, Liability | 1,811,000 | 1,865,000 | 1,811,000 | 1,865,000 | $ 1,840,000 | $ 1,083,000 | $ 2,095,000 | $ 3,023,000 |
Other Current Liabilities [Member] | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Contract with Customer, Liability | 725 | 725 | ||||||
Other Liabilities [Member] | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Contract with Customer, Liability | 1,086 | 1,086 | ||||||
Business to Business (B2B) [Member] | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Revenues recognized, amount | $ 10,368,000 | $ 8,323,000 | $ 23,174,000 | $ 15,993,000 | ||||
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Business to Business (B2B) [Member] | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Concentration Risk, Percentage | 11.40% | 44.00% | 12.90% | 50.10% | ||||
Customer One [Member] | Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Business to Business (B2B) [Member] | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Revenues recognized, amount | $ 3,919,000 | $ 3,661,000 | $ 7,914,000 | $ 8,009,000 | ||||
Development Services And Other [Member] | Business to Business (B2B) [Member] | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Revenues recognized, amount | 1,043,000 | 1,901,000 | 4,665,000 | 3,638,000 | ||||
Transferred at Point in Time [Member] | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Revenues recognized, amount | 24,097,000 | $ 100,000 | 41,409,000 | $ 100,000 | ||||
Transferred at Point in Time [Member] | Gaming Revenue [Member] | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Revenues recognized, amount | 23,982,000 | 38,294,000 | ||||||
Transferred at Point in Time [Member] | Development Services And Other [Member] | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Revenues recognized, amount | $ 115,000 | $ 3,115,000 |
SCHEDULE OF FINANCIAL INFORMATI
SCHEDULE OF FINANCIAL INFORMATION FOR REPORTABLE SEGMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | ||
Segment Reporting Information [Line Items] | |||||
Revenues | $ 34,350 | $ 8,323 | $ 61,468 | $ 15,993 | |
Cost of revenues | [1] | 10,356 | 2,123 | 19,075 | 3,815 |
Segment gross profit | 23,994 | 6,200 | 42,393 | 12,178 | |
Business to Business (B2B) [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 10,368 | 8,323 | 23,174 | 15,993 | |
Cost of revenues | 2,307 | 2,123 | 5,049 | 3,815 | |
Segment gross profit | 8,061 | 6,200 | 18,125 | 12,178 | |
Business To Consumer Segment (B2C) [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 23,982 | 38,294 | |||
Cost of revenues | 8,049 | 14,026 | |||
Segment gross profit | $ 15,933 | $ 24,268 | |||
[1] | Excludes depreciation and amortization |
RECONCILIATION OF CONSOLIDATED
RECONCILIATION OF CONSOLIDATED SEGMENT PROFIT TO CONSOLIDATED INCOME (LOSS) BEFORE INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | ||
Segment Reporting [Abstract] | |||||
Segment gross profit | $ 23,994 | $ 6,200 | $ 42,393 | $ 12,178 | |
Sales and marketing | 5,480 | 1,642 | 9,581 | 2,505 | |
Product and technology | 4,829 | 5,173 | 10,072 | 6,197 | |
General and administrative | [1] | 12,320 | 7,786 | 22,329 | 10,177 |
Depreciation and amortization | 4,132 | 716 | 8,126 | 1,569 | |
Interest expense, net | 382 | 1 | 390 | ||
Loss before income taxes | $ (2,767) | $ (9,499) | $ (7,716) | $ (8,660) | |
[1] | Excludes depreciation and amortization |
SCHEDULE OF DISAGGREGATION OF R
SCHEDULE OF DISAGGREGATION OF REVENUE BY PRODUCTS AND SERVICES FOR EACH SEGMENT (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Revenue from External Customer [Line Items] | ||||
Revenues | $ 34,350 | $ 8,323 | $ 61,468 | $ 15,993 |
Business to Business (B2B) [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Revenues | 10,368 | 8,323 | 23,174 | 15,993 |
Business To Consumer Segment (B2C) [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Revenues | 23,982 | 38,294 | ||
Platform And Content Fees [Member] | Business to Business (B2B) [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Revenues | 9,325 | 6,422 | 18,509 | 12,355 |
Development Services And Other [Member] | Business to Business (B2B) [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Revenues | 1,043 | 1,901 | 4,665 | 3,638 |
Sports [Member] | Business To Consumer Segment (B2C) [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Revenues | 12,757 | 19,908 | ||
Casino [Member] | Business To Consumer Segment (B2C) [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Revenues | 10,512 | 16,983 | ||
Poker [Member] | Business To Consumer Segment (B2C) [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Revenues | $ 713 | $ 1,403 |
SCHEDULE OF REVENUE BY LOCATION
SCHEDULE OF REVENUE BY LOCATION OF THE CUSTOMER (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total | $ 34,350 | $ 8,323 | $ 61,468 | $ 15,993 |
UNITED STATES | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total | 8,330 | 7,044 | 19,079 | 13,295 |
Europe [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total | 14,193 | 1,268 | 25,257 | 2,678 |
Latin America [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total | 10,254 | 13,857 | ||
Rest Of The World [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total | $ 1,573 | $ 11 | $ 3,275 | $ 20 |
SEGMENT REPORTING (Details Narr
SEGMENT REPORTING (Details Narrative) - Segment | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | |
Segment Reporting [Abstract] | |||
Number of segments | 1 | 1 | 2 |
SCHEDULE OF INCOME TAX PROVISIO
SCHEDULE OF INCOME TAX PROVISION (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Provision for income taxes | $ 992 | $ 170 | $ 1,653 | $ 315 |
BERMUDA | ||||
Provision for income taxes | ||||
Other Tax Localities [Member] | ||||
Provision for income taxes | $ 992 | $ 170 | $ 1,653 | $ 315 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Operating Loss Carryforwards [Line Items] | ||||
Effective income tax rate | (35.90%) | (1.80%) | (21.40%) | (3.60%) |
BERMUDA | Foreign Tax Authority [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Effective income tax rate | 0.00% | 0.00% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - Chief Executive Officer [Member] £ in Thousands, $ in Thousands | 1 Months Ended | |
May 31, 2020USD ($) | May 31, 2020GBP (£) | |
Related Party Transaction [Line Items] | ||
Interest expense paid to related party | $ 385 | £ 300 |
Interest per annum | 15.00% | 15.00% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2021USD ($) | Jun. 30, 2021USD ($)Gamingmanufacturer | Sep. 30, 2021USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |||
Contractual obligation number of gaming manufacturers | Gamingmanufacturer | 2 | ||
Contractual obligation, term | 5 years | ||
Payment to be made fourth quarter 2021 | $ 8 | ||
Payment to be made 2022 | $ 8 | $ 8 | |
Payment to be made 2023 | 8 | 8 | |
Payment to be made 2024 | 8 | 8 | |
Payment to be made 2025 | 8 | 8 | |
Licensing Agreements [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Payment of contractual obligation | $ 3.5 | 48.5 | |
Additional payment made on content agreement | $ 5 |