Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 22, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
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 | (833) | ||
Local Phone Number | 565-0550 | ||
Title of 12(b) Security | Ordinary Shares, par value $0.01 per share | ||
Trading Symbol | GAN | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
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 Public Float | $ 118.1 | ||
Entity Common Stock, Shares Outstanding | 43,138,935 | ||
Documents Incorporated by Reference | Certain portions, as expressly described in this report of the registrant’s definitive Proxy Statement for the 2023 Annual Shareholder Meeting, to be filed within 120 days of December 31, 2022, are incorporated by reference into Part III, Items 10-14 of this Annual Report on Form 10-K | ||
ICFR Auditor Attestation Flag | false | ||
Auditor Location | Los Angeles, California | ||
Auditor Name | Grant Thornton LLP | ||
Auditor Firm ID | 248 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash | $ 45,920 | $ 39,477 |
Accounts receivable, net of allowance for doubtful accounts of $250 and $120 at December 31, 2022 and 2021, respectively | 13,808 | 8,110 |
Prepaid expenses | 4,861 | 3,498 |
Other current assets | 3,041 | 3,337 |
Total current assets | 67,630 | 54,422 |
Capitalized software development costs, net | 6,749 | 14,430 |
Goodwill | 146,142 | |
Intangible assets, net | 24,955 | 35,893 |
Other assets | 3,746 | 10,023 |
Total assets | 103,080 | 260,910 |
Current liabilities | ||
Accounts payable | 6,437 | 5,268 |
Accrued compensation and benefits | 8,750 | 10,961 |
Accrued content license fees | 2,214 | 2,402 |
Liabilities to users | 10,683 | 8,984 |
Other current liabilities | 4,448 | 5,418 |
Total current liabilities | 32,532 | 33,033 |
Deferred income taxes | 4,218 | 1,791 |
Long-term debt | 28,157 | |
Content licensing liabilities | 15,280 | |
Other liabilities | 2,125 | 2,049 |
Total liabilities | 82,312 | 36,873 |
Commitments and contingencies (Note 16) | ||
Shareholders’ equity | ||
Ordinary shares, $0.01 par value, 100,000,000 shares authorized, 42,894,211 and 42,250,743 shares issued and outstanding at December 31, 2022 and 2021, respectively | 429 | 422 |
Additional paid-in capital | 328,998 | 319,551 |
Accumulated deficit | (274,861) | (76,360) |
Accumulated other comprehensive loss | (33,798) | (19,576) |
Total shareholders’ equity | 20,768 | 224,037 |
Total liabilities and shareholders’ equity | $ 103,080 | $ 260,910 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Accounts receivable allowance for credit loss, current | $ 250 | $ 120 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 42,894,211 | 42,250,743 |
Common stock, shares outstanding | 42,894,211 | 42,250,743 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Income Statement [Abstract] | |||
Revenue | $ 141,528 | $ 124,163 | |
Operating costs and expenses | |||
Cost of revenue | [1] | 41,634 | 41,373 |
Sales and marketing | 28,095 | 22,266 | |
Product and technology | 26,345 | 22,548 | |
General and administrative | [1] | 46,906 | 48,881 |
Impairment | 166,010 | 3,500 | |
Restructuring | 1,771 | ||
Depreciation and amortization | 23,276 | 16,808 | |
Total operating costs and expenses | 334,037 | 155,376 | |
Operating loss | (192,509) | (31,213) | |
Other loss (income), net | 1,047 | (408) | |
Loss before income taxes | (193,556) | (30,805) | |
Income tax expense (benefit) | 3,942 | (211) | |
Net loss | $ (197,498) | $ (30,594) | |
Loss per share, basic and diluted | $ (4.66) | $ (0.73) | |
Weighted average ordinary shares outstanding, basic and diluted | 42,359,523 | 42,023,327 | |
[1]Excludes depreciation and amortization expense |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||
Net loss | $ (197,498) | $ (30,594) |
Other comprehensive loss, net of tax | ||
Foreign currency translation adjustments | (14,222) | (16,699) |
Comprehensive loss | $ (211,720) | $ (47,293) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Total |
Balance at Dec. 31, 2020 | $ 365 | $ 203,842 | $ (45,766) | $ (2,877) | $ 155,564 | |
Balance, shares at Dec. 31, 2020 | 36,635,362 | |||||
Net loss | (30,594) | (30,594) | ||||
Foreign currency translation adjustments | (16,699) | (16,699) | ||||
Share-based compensation | 7,876 | 7,876 | ||||
Restricted share activity | $ 1 | 54 | 55 | |||
Restricted stock activity, shares | 69,012 | |||||
Repurchase of restricted shares to pay tax liability (Note 9) | ||||||
Repurchase of restricted shares to pay tax liability, Shares | (3,627) | |||||
Issuance of ordinary shares upon exercise of share options | $ 3 | 852 | 855 | |||
Issuance of ordinary shares upon exercise of stock options, shares | 289,480 | |||||
Issuance of ordinary shares as partial consideration in Coolbet acquisition | $ 53 | 106,630 | 106,683 | |||
Issuance of ordinary shares as partial consideration in Coolbet acquisition (Note 4) , shares | 5,260,516 | |||||
Fair value of replacement equity awards issued as consideration in Coolbet acquisition | 297 | 297 | ||||
Balance at Dec. 31, 2021 | $ 422 | 319,551 | (76,360) | (19,576) | 224,037 | |
Balance, shares at Dec. 31, 2021 | 42,250,743 | |||||
Net loss | (197,498) | (197,498) | ||||
Foreign currency translation adjustments | (14,222) | (14,222) | ||||
Share-based compensation | 7,611 | 7,611 | ||||
Restricted share activity | $ 5 | 134 | 139 | |||
Restricted stock activity, shares | 471,489 | |||||
Repurchase of restricted shares to pay tax liability (Note 9) | $ (1) | (268) | (269) | |||
Repurchase of restricted shares to pay tax liability, Shares | (140,141) | |||||
Issuance of ordinary shares upon exercise of share options | $ 4 | 718 | $ 722 | |||
Issuance of ordinary shares upon exercise of stock options, shares | 375,416 | 375,416 | ||||
Accrued liability settled through issuance of shares | 913 | $ 913 | ||||
Repurchases of ordinary shares | (1,006) | (1,006) | ||||
Repurchases of ordinary shares, shares | (303,113) | |||||
Ordinary share retirement | $ (3) | 1,006 | (1,003) | |||
Issuance of ordinary shares upon ESPP purchases | $ 2 | 339 | 341 | |||
Issuance of ordinary shares upon ESPP purchases, shares | 239,817 | |||||
Balance at Dec. 31, 2022 | $ 429 | $ 328,998 | $ (274,861) | $ (33,798) | $ 20,768 | |
Balance, shares at Dec. 31, 2022 | 42,894,211 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash Flows From Operating Activities | ||
Net loss | $ (197,498) | $ (30,594) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization of software and intangible assets | 21,747 | 15,732 |
Depreciation on property and equipment and finance lease right-of-use assets | 1,529 | 1,077 |
Amortization of debt discount and debt issuance costs | 582 | |
Share-based compensation expense | 7,070 | 8,136 |
Deferred income tax | 3,250 | (422) |
Impairment | 166,010 | 3,500 |
Change in contingent consideration | (3,000) | |
Other | 147 | 591 |
Changes in operating assets and liabilities, net of acquisition: | ||
Accounts receivable | (5,934) | (1,503) |
Prepaid expenses | (1,320) | (806) |
Other current assets | 41 | (779) |
Other assets | 3,114 | (9,038) |
Accounts payable | 1,383 | (783) |
Accrued compensation and benefits | (1,708) | 3,782 |
Accrued content license fees | 471 | |
Liabilities to users | 2,199 | 4,177 |
Other current liabilities | (939) | 156 |
Other liabilities | 2,078 | 1,300 |
Net cash used in operating activities | (1,249) | (5,003) |
Cash Flows From Investing Activities | ||
Cash paid for acquisition, net of cash acquired | (92,724) | |
Expenditures for capitalized software development costs | (10,058) | (11,588) |
Payments for content licensing arrangements | (6,000) | |
Purchases of gaming licenses | (1,115) | (433) |
Purchases of property and equipment | (1,930) | (1,929) |
Net cash used in investing activities | (19,103) | (106,674) |
Cash Flows From Financing Activities | ||
Proceeds from issuance of long-term debt | 30,000 | |
Payments of offering costs | (604) | |
Proceeds from exercise of share options | 722 | 855 |
Proceeds from issuance of ordinary shares upon ESPP purchase | 341 | |
Principal payments on finance leases | (82) | |
Repurchases of ordinary shares | (1,006) | |
Repurchase of restricted shares to pay tax liability | (184) | |
Payment of debt issuance costs | (2,425) | |
Net cash provided by financing activities | 27,448 | 169 |
Effect of foreign exchange rates on cash | (653) | (1,669) |
Net increase (decrease) in cash | 6,443 | (113,177) |
Cash, beginning of period | 39,477 | 152,654 |
Cash, end of period | 45,920 | 39,477 |
Supplemental Cash Flow Information | ||
Interest | 2,444 | |
Income taxes | 728 | 93 |
Intangible assets acquired in business acquisition included in current and long-term liabilities | 24,876 | |
Accrued liability settled through issuance of shares | 913 | |
Ordinary shares issued as partial consideration to acquire all the outstanding shares of Coolbet | 106,683 | |
Issuance of unvested share options in exchange for unvested share options of Coolbet | 297 | |
Right-of-use asset obtained in exchange for new operating lease liabilities | $ 252 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2022 | |
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. The Company is a business-to-business (“B2B”) supplier of a proprietary gaming system, GameSTACK™ (“GameSTACK”), which is used predominately by the U.S. land-based casino industry. For its B2B customers, GameSTACK is a turnkey technology solution for regulated real money internet gambling (“real money iGaming” or “RMiG”), online sports gaming, and virtual simulated gaming (“SIM”). In addition, the Company’s B2B segment offers GAN Sports, an in-house online and retail sports betting technology platform, through internet connected self-service kiosks deployed at casino properties and mobile solutions. The Company is also a business-to-consumer (“B2C”) developer and operator of an online sports betting and casino platform under its “Coolbet” brand, providing international users with access through www.coolbet.com to its sportsbook, casino games and poker products. The Company operates its B2C segment in markets across Northern Europe, Latin America, and Canada. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated financial statements include the results of the Parent and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Liquidity The accompanying consolidated financial statements have been prepared on the going concern basis. As of December 31, 2022, the Company had an accumulated deficit of $ 274.9 45.9 10.7 197.5 136.9 19.1 10.0 1.2 30.0 27.6 Additionally, the Company’s current financial condition, liquidity resources and planned near-term cash flows from operations are sensitive to changes in macro-economic conditions and the substantial variability inherent in the Company’s wager-based revenues streams. These factors along with the potential covenant breaches indicate uncertainty related to the ability of the Company to meet its current obligations as they come due. In the fourth quarter of 2022, the Company initiated plans to address its liquidity needs and improve its operations and cash position primarily by (i) reducing and deferring personnel and operational costs for non-strategic initiatives, (ii) amending the Credit Facility to reduce cash interest obligations and amend financial covenants, (iii) identifying sources of additional capital, (iv) continuing investment in the growth areas of the Company’s consolidated operations, (v) continuing cost saving initiatives first implemented during the year ended December 31, 2022, and (vi) initiating a strategic review process to assess a range of strategic alternatives. On April 13, 2023, a subsidiary of the Company executed agreements to amend the Credit Facility to waive all events of default, amend certain financial covenants, assign the rights to the Credit Facility from its existing lender to a third party, and increase the principal balance from $ 30.0 42.0 8.0 10.0 To the extent that the Company’s current resources, including its ability to generate operating cash flows, are insufficient to satisfy its cash requirements, the Company may seek additional equity or debt financing. The Company’s ability to do so depends on prevailing economic conditions and other factors, many of which are beyond management’s control. The Company does not currently have any such credit facilities or similar debt arrangements in place, outside of the Amended Credit Facility as described above, and cannot provide any assurance as to the availability or terms of any future financing that it may require to support its operations. If the needed financing is not available, or if the terms of financing are less desirable than expected, the Company may be forced to decrease its level of investment in new products and technologies, discontinue further expansion of the business, scale back its existing operations, or divest of assets, any of which could have an adverse impact on the Company and its financial prospects. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Due to the inherent uncertainties involved in making estimates, actual results could differ from the original estimates, and may require significant adjustments to these reported balances in future periods. 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 shareholders’ equity. Gains and losses arising from transactions denominated in a currency other than the functional currency are included in general and administrative expense in the consolidated statements of operations as incurred. Foreign currency transaction and remeasurement gains and losses were a net loss of $ 969 993 Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of its cash and trade receivables. The Company holds cash deposits in foreign countries, primarily in Northern Europe and Latin America, of approximately $ 36.8 Risks and Uncertainties Macroeconomic conditions can materially adversely affect the Company’s business, results of operations and financial condition. Recent adverse macroeconomic conditions, including inflation, higher interest rates, slower growth or recession, the strengthening of the U.S. dollar, and corresponding currency fluctuations can have an adverse material impact on the Company’s future results of operations, cash flows, and financial condition, particularly with respect to foreign currency adjustments relating to our international operations. Such conditions may also affect consumers’ willingness to make discretionary purchases, and therefore the Company, along with its casino operator customers, may experience a decline in wagering. A downturn in the economic environment can also lead to increased credit and collectibility risk on the Company’s trade receivables, limitations on the Company’s ability to issue new debt, and reduced liquidity. GAN LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share amounts) Revenue Recognition Revenue from B2B Operations The Company’s revenue from its B2B operations are primarily from its internet gaming Software-as-a-Service (“SaaS”) platform, GameSTACK, that its customers use to provide real money internet gambling (“RMiG”), online sports gaming and simulated internet gaming (“SIM”) to its end users. The Company enters into contracts with its customers that generally range from three to five years and include renewal provisions. These contracts generally include provision of the internet gaming platform, content consisting of proprietary and third-party games, development services and support and marketing services. In certain cases, the contract may include computer hardware to be procured on behalf of the customer. The customers cannot take possession of the hosted GameSTACK software and the Company does not sell or license the GameSTACK software. The Company charges fees as consideration for use of its internet gaming system, game content, support and marketing services based on a fixed percentage of the casino operator’s net gaming revenue or net sportsbook win, at the time of settlement of an event for RMiG contracts, considered usage-based fees, or at the time of purchase for in-game virtual credit for SIM contracts. The determination of the fee charged to its customers is negotiated and varies significantly. Certain of these RMiG contracts provide the Company with a minimum monthly revenue guarantee in relation to the Company’s share of the casino operator’s net gaming revenue or net sportsbook win. At December 31, 2022 and 2021, the remaining unsatisfied performance obligations related to fixed minimum guaranteed revenue totaled $ 3.9 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 customers 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 billed monthly with the amount due generally thirty days from the date of the invoice. Variable consideration is allocated entirely to the period in which consideration is earned as the variable amounts relate specifically to the customer’s usage of the platform that day and allocating the usage-based fees to each day is consistent with the allocation objective, primarily that the change in amounts reflect the changing value to the customer. The Company’s internet gaming system, game content, support and marketing services are provided equally throughout the term of the contract. These services are made up of a daily requirement to provide access and use of the internet gaming system and optional support and marketing services to the customer over the same period of time. The series of distinct services represents a single performance obligation that is satisfied over time. Purchases of virtual credits within a transaction period on the SIM platform, generally a monthly convention, are earned over time, and are typically billed monthly 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 its SIM customers, the fees collected by the Company from third-party payment processors for the purchases of in-game virtual credits made by end-users include the SIM customer’s portion. The Company records the SIM customer’s portion as a liability as cash is collected and remits payment to the SIM customer for their share of the SIM revenues monthly. At December 31, 2022 and 2021, the Company has recorded a liability due to its customers for their share of the fees of $ 1,628 2,171 The Company uses third-party content providers in supplying game content in its performance of providing game content on its platform to its customers. A customer has access to the Company’s propriety and licensed game content and additionally, the customer can direct the Company to procure third-party game content on its behalf. The Company has determined it acts as the principal for providing the game content when the Company controls the game content, and therefore presents the revenue on a gross basis in the consolidated statements of operations. When the customer directs the Company to procure third-party game content, the Company determined it is deemed an agent for providing such game content, and therefore, records the revenue, net of the costs of content license fees, in the consolidated statements of operations. GAN LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share amounts) The Company also provides ongoing development services involving updates to the RMiG platforms for enhanced functionality or customization. Ongoing development services are typically billed monthly, at a daily rate, for services performed. Revenue from RMiG platform development services that are identified as distinct performance obligations and enhance or create an asset the customer controls as the Company performs the services are recognized over time as services are performed. This revenue is measured using an input method based on effort expended, which uses direct labor hours incurred. These services have primarily related to post-launch development of third-party application integration software in the customer’s environment. Separately, the revenue generated from customers for development services that are distinct performance obligations and the customer benefits from the integrated SaaS offering are deferred over the license service term. These services have primarily related to enhancements to the Company’s platforms that do not enhance or create an asset the customer controls. In customer contracts that require a portion of the consideration to be received in advance, or at the commencement of the contract, such amounts are recorded as a contract liability. Other services include the resale of a third-party computer hardware, such as servers and other related hardware devices, upon which the GameSTACK software is installed for its customers. These products are not required to be purchased in order to access the GameSTACK platform but are sold as a convenience to the customer. The Company procures the computer hardware on the customer’s behalf for a fee determined based on cost of the computer hardware plus a markup. The Company charges a hardware deployment fee which is a one-time fee for installation, testing and certification of the computer hardware at the gaming hosting facility. Revenue is recognized at the point in time when control of the hardware transfers to the customer. Control is transferred after the hardware has been procured, delivered, installed at the customer’s premises and configured to allow for remote access. The Company has determined that it is acting as the principal in providing computer hardware and related services as it assumes 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 computer hardware and related services. The Company generates revenue from time to time from the licensing of its U.S. patent, which governs the linkage of on-property reward cards to their counterpart internet gaming accounts together with bilateral transmission of reward points between the internet gaming 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. 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. Contracts with its customers may include platform and licensing of game content services, as well as development services and computer hardware services. The variable consideration generated from the platform and the licensing of game content is allocated entirely to the performance obligations for platform and licensing of game content services and the remaining fixed fees for development services and computer hardware would be allocated to each of the remaining performance obligation based on their relative stand-alone selling prices. The variable consideration relates entirely to the effort to satisfy the platform and licensing game content services and the fixed consideration relates to the remaining performance obligations which is consistent with the allocation objective. GAN LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share amounts) Revenue from Gaming Operations The Company operates the B2C gaming site www.coolbet.com outside of the U.S., which contains proprietary software and includes the following product offerings: sportsbook, poker, casino, live casino and virtual sports. The Company manages an online sportsbook allowing users to place various types of wagers on the outcome of sporting events conducted around the world. The Company operates as the bookmaker and offers fixed odds wagering on such events. When a user’s wager wins, the Company pays the user a pre-determined amount known as fixed odds. Revenue from online sportsbook is reported net after deduction of player winnings and bonuses. Revenue from wagers is recognized when the outcome of the event is known. The Company offers live casino through its digital online casino offering in select markets, allowing users to place a wager and play games virtually at retail casinos. The Company offers users a catalog of over 3,000 Peer-to-peer poker offerings allow users to play poker against one another on the Company’s online poker platform for prize money. Revenue is recognized as a percentage of the reported rake. Additionally, the Company offers tournament poker which allows users to buy-in for a fixed price for prize money. For tournament play, revenue is recognized for the difference between the entry fees collected and the amounts paid out to users as prizes and winnings. In each of the online gaming products, a single performance obligation exists at the time a wager is made to operate the games and award prizes or payouts to users based on a particular outcome. Revenue is recognized at the conclusion of each contest, wager, or wagering game hand. Additionally, certain incentives given to users, for example, that allow the user to make an additional wager at a reduced price, may provide the user with a material right which gives rise to a separate performance obligation. The Company allocates a portion of the user’s wager to incentives that create material rights that are redeemed or expired in the future. The allocated revenue for gaming wagers is primarily recognized when the wagers occur because all such wagers settle immediately. The Company applies a practical expedient by accounting for revenue from gaming on a portfolio basis because such wagers have similar characteristics, and the Company reasonably expects the effects on the financial statements of applying the revenue recognition guidance to the portfolio to not differ materially from that which would result if applying the guidance to an individual wagering contract. Cost of Revenue Cost of revenue consists primarily of variable costs. These include mainly (i) content license fees, (ii) payment processing fees and chargebacks, (iii) platform technology, software, and connectivity costs directly associated with revenue generating activities, (iv) gaming duties, and (v) sportsbook feed / provider services. The Company incurs payment processing fees on B2C user deposits, withdrawals, and deposit reversals from payment processors. Cost of revenue excludes depreciation of the servers on which the Company’s gaming platforms reside as well as amortization of intangible assets including internally developed software. Sales and Marketing Sales and marketing expense primarily consists of general marketing and advertising costs, B2C user acquisition expenses and personnel costs within our sales and marketing functions. Sales and marketing costs are expensed as incurred. Product and Technology Product and technology expenses consist primarily of personnel costs associated with development and maintenance activities that are not capitalized. These costs primarily represent employee expenses (including but not limited to, salaries, bonus, employee benefits, employer tax expenses, and stock-based compensation) for personnel and contractors involved in the design, development, and project management of our proprietary technologies as well as developed and licensed content. General and Administrative General and administrative expenses consist of costs, including gaming operations costs, not related to sales and marketing, product and technology or revenue. General and administrative costs include professional services (including legal, regulatory and compliance, audit, and consulting expenses), rent, contingencies, insurance, allowance for credit losses, foreign currency transaction gains and losses, and costs related to the compensation of executive and non-executive personnel, including stock-based compensation. Content Licensing Fees Content licensing fees are paid to third parties for gaming content which are expensed as incurred. Content licensing fees are calculated as a percentage of net gaming revenues in respect of the third-party games, as stipulated in the third-party agreements. GAN LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share amounts) Share-based Compensation Share-based compensation expense is recognized for share options and restricted shares issued to employees and non-employee members of the Company’s Board of Directors. The Company’s issued share options and restricted shares, which are primarily considered equity awards and include only service conditions, are valued based on the fair value of these awards on the date of grant. The fair value of the share options is estimated using a Black-Scholes option pricing model and the fair value of the restricted shares (restricted share awards and restricted share units) is based on the market price of the Company’s shares on the date of grant. Certain restricted share units awards issued to non-employee members of the Company’s Board of Directors permit shares upon vesting to be withheld, as a means of meeting the non-employee director’s tax withholding requirements, and paid in cash to the non-employee director. The Company additionally incurs share-based compensation expense under compensation arrangements with certain of its employees under which the Company will settle bonuses for a fixed dollar amount by issuing a variable number of shares based on the Company’s stock price on the settlement date. These awards are classified as liability-based awards which are measured based on the fair value of the award at the end of each reporting period until settled. Related compensation expense is recognized based on changes to the fair value over the applicable service period. Share-based compensation 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. Loss Per Share, Basic and Diluted Basic loss per share is calculated by dividing the net loss by the weighted average number of ordinary shares outstanding during the year. In periods of loss, basic and diluted per share information are the same. Cash Cash is comprised of cash held at the bank and third-party service providers. The Company is required to maintain compensating cash balances to satisfy its liabilities to users. Such balances are included within cash in the consolidated balance sheets and are not subject to creditor claims. At December 31, 2022 and 2021, the related liabilities to users were $ 10,683 8,984 Accounts Receivable, net Accounts receivable are stated at invoiced amounts and are unsecured, non-interest bearing and generally have 30-day payment terms. The Company maintains an allowance for doubtful accounts that reduces receivables to amounts expected to be collected. Management estimates the allowance for doubtful accounts by assessing the probability of non-payment of the receivable. On confirmation that the account receivable will not be collected, the gross carrying value of the asset is written off against the related allowance for doubtful accounts. The provision for credit losses on accounts receivable is recorded in general and administrative expense in the accompanying consolidated statements of operations. GAN LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share amounts) The activity in the allowance for doubtful accounts was as follows: SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS 2022 2021 Year Ended December 31, 2022 2021 Beginning balance $ 120 $ 100 Provision for expected credit losses (34 ) 246 Write-offs, net of recoveries 164 (226 ) Ending balance $ 250 $ 120 Capitalized Software Development Costs, net The Company capitalizes certain development costs related to its internet gaming platforms during the application development stage. Costs associated with preliminary project activities, training, maintenance and all other post implementation stage activities are expensed as incurred. Software development costs are capitalized when application development begins, it is probable that the project will be completed, and the software will be used as intended. The Company capitalizes certain costs related to specific upgrades and enhancements when it is probable that expenditures will result in additional functionality of the platform to its customers. The capitalization policy provides for the capitalization of certain payroll and payroll related costs for employees who spent time directly associated with development and enhancements of the platform. Capitalized software development costs are amortized on a straight-line basis over their estimated useful lives, which generally ranges from three to five years, and are included within depreciation and amortization expense in the accompanying consolidated statements of operations. 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. The Company has recorded goodwill primarily from its acquisition of Coolbet in January 2021. Goodwill is not amortized, but rather is reviewed for impairment annually (as of October 1st) or more frequently if facts or circumstances indicate that it is more-likely-than-not the fair value of a reporting unit may be below its carrying amount. The Company has determined that it has two reporting units: B2C and B2B. In its goodwill impairment testing in each segment, the Company has the option to perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of the reporting unit, including goodwill, is less than its carrying amount prior to performing the quantitative impairment test. The qualitative assessment evaluates various events and circumstances, such as macro-economic conditions, industry and market conditions, cost factors, relevant events and financial trends that may impact a reporting unit’s fair value. If it is determined that the estimated fair value of the reporting unit is more-likely-than not less than its carrying amount, including goodwill, the quantitative goodwill impairment test is required. Otherwise, no further analysis would be required. If the quantitative impairment test for goodwill is deemed necessary, this quantitative impairment analysis compares the fair value of the Company’s reporting unit to its related carrying value. If the fair value of the reporting unit is less than its carrying amount, goodwill is written down to the fair value and an impairment loss is recognized. If the fair value of the reporting unit exceeds its carrying amount, no further analysis is required. Fair value of the reporting unit is determined using valuation techniques, primarily using discounted cash flow analysis. ASC Topic 350 requires that goodwill be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company performed a qualitative and quantitative impairment test as of June 30, 2022 which resulted in an impairment to goodwill of $ 28.9 In December 2022, the Company revised its 2023 budget and long-term plan as a result of material reductions in its expected future cash flows from its B2B segment, a strategic decision not to pursue and invest further in its original content strategy, and a re-assessment of its growth strategy related to its B2C segment. As a result, the Company identified negative market indicators and trends related to the value of its reporting units. These events and circumstances indicated impairment may be probable and an additional quantitative goodwill impairment assessment as of December 31, 2022 was performed. The Company estimated the fair value of all reporting units utilizing both a market approach and an income approach (discounted cash flow) and the significant assumptions used to measure fair value include discount rate, terminal value factors, revenue and EBITDA multiples, and control premiums. The income approach used to test the Company’s reporting units includes the projection of estimated operating results and cash flows, discounted using a weighted-average cost of capital (“WACC”) that reflects current market conditions appropriate to each reporting unit. Those projections involve the Company’s best estimates of economic and market conditions over the projected period, including growth rates in revenues and costs and best estimates of future expected changes in operating margins and cash expenditures. Other significant assumptions and estimates used in the income approach include terminal value growth rates, future estimates of capital expenditures and changes in future working capital requirements. In addition, the WACC utilized to discount estimated future cash flows is sensitive to changes in interest rates and other market rates in place at the time the assessment is performed. The market approach used to test the Company’s reporting units included the review of revenue and EBITDA multiples from other publicly traded companies in the industry used to derive their enterprise values and the application of those multiples to the relevant earnings streams within each reportable segment of the Company. The Company confirmed the reasonableness of the estimated reporting unit fair values under the income and market approaches by reconciling those fair values to its enterprise value and market capitalization. Data points from other market participants were additionally used which indicated that the lower end of valuation ranges related to our B2C segment may be indicated until regulatory uncertainties were clarified. As a result of its impairment test performed as of December 31, 2022, the Company recognized an impairment to goodwill of $ 108.0 million. During the year ended December 31, 2022, the Company recognized total impairment to goodwill of $ 136.9 million. No such impairment was recognized during the year ended December 31, 2021. GAN LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share amounts) 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. Gaming licenses include license applications fees and market access payments in connection with agreements that the Company enters into with strategic partners. The market access arrangements authorize the Company to offer online gaming and online sports betting in certain regulated markets. These costs are capitalized and amortized on a straight-line basis over their estimated useful lives, beginning with the commencement of operations. The fair value of the acquired intangible assets is primarily determined using the income approach. In performing these va |
ACQUISITION
ACQUISITION | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITION | NOTE 3 — ACQUISITION Content licensing agreement with Ainsworth Game Technology In the second quarter of 2021, the Company entered into a Content Licensing Agreement (the “Agreement”) with Ainsworth Game Technology, a third-party gaming content provider (the “Content Provider”) specializing in developing and licensing interactive games. The Agreement grants the Company exclusive rights to use and distribute the online gaming content in North America, and the Content Provider is committed to developing a minimum number of games for the Company’s exclusive use over a five-year term, subject to extensions. On April 5, 2022, the Company amended and restated the Agreement. In accordance with the restated arrangement, the Company amended certain commercial terms, which included obtaining the contractual right to lease the remote gaming servers, taking possession of the related software, and obtaining a service contract from the Content Provider for the duration of the arrangement. The total fixed fees remaining under the amended arrangement totaled $ 25.0 10.0 5.0 The amended and restated Agreement is accounted for as a business combination as the assets acquired and the liabilities assumed under the arrangement constitute a business in accordance with ASC 805, Business Combinations. Consideration transferred is comprised of the present value of the Company’s total expected fixed payments under the Agreement, the net assets recognized under the original agreement, as well as a contingent consideration. The following table summarizes the fair value of the consideration transferred: SUMMARY OF CONSIDERATION TRANSFERRED Present value of future fixed fee payments $ 18,808 Net assets recognized under original agreement 3,067 Contingent consideration 3,000 Total $ 24,875 The contingent consideration represents additional amounts which the Company expects to pay to the Content Provider if the Company’s total revenue generated from the arrangement exceed certain stipulated annual and cumulative thresholds during the contract term. The maximum amount of the payment is unlimited as it is determined based on the Company’s performance over the related games revenue over the arrangement term. The fair value of the contingent consideration is determined using Level 3 inputs, since estimating the fair value of this contingent consideration requires the use of significant and subjective inputs that may and are likely to change over the duration of the liability with related changes in internally generated anticipated games revenue as well as external market factors. The contingent consideration was valued using a Monte Carlo simulation based on management’s anticipated annual games revenue forecasts. Identifiable assets and liabilities assumed at fair value were entirely comprised of intangible assets acquired as part of the content licensing arrangement. The fair values of intangible assets were estimated using inputs classified as Level 3 under the income approach using either the royalty income method (content licenses) or the multi-period excess earnings method (customer relationships). In December 2022, the Company finalized its purchase price allocation which resulted in a measurement period adjustment to the initial amounts recorded, including a decrease to the contingent liability by $ 1,369 931 438 116 234 Identifiable intangible assets, including their respective expected useful lives, and liabilities assumed were as follows: SUMMARY OF INTANGIBLE ASSETS ACQUIRED Estimated useful Fair Value Content licenses intangible asset 4.6 $ 22,007 Customer relationships intangible asset 4.0 2,868 Total identifiable net assets $ 24,875 In addition to these assets acquired, a service contract was entered into with the Content Provider valued at approximately $ 1.4 five years GAN LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share amounts) |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 4 PROPERTY AND EQUIPMENT, NET Property and equipment, net is recorded in other assets in the consolidated balance sheets at December 31, 2022 and 2021 and consisted of the following: SCHEDULE OF PROPERTY AND EQUIPMENT Life (in years) 2022 2021 Estimated Useful December 31, Life (in years) 2022 2021 Fixtures, fittings and equipment 3 5 $ 4,136 $ 2,935 Platform hardware 5 2,313 2,054 Total property and equipment, cost 6,449 4,989 Less: accumulated depreciation (3,599 ) (2,444 ) Total $ 2,850 $ 2,545 Depreciation expense related to property and equipment was $ 1,427 989 |
CAPITALIZED SOFTWARE DEVELOPMEN
CAPITALIZED SOFTWARE DEVELOPMENT COSTS, NET | 12 Months Ended |
Dec. 31, 2022 | |
Research and Development [Abstract] | |
CAPITALIZED SOFTWARE DEVELOPMENT COSTS, NET | NOTE 5 CAPITALIZED SOFTWARE DEVELOPMENT COSTS, NET Capitalized software development costs, net at December 31, 2022 and 2021 consisted of the following: SCHEDULE OF CAPITALIZED COMPUTER SOFTWARE COSTS, NET 2022 2021 December 31, 2022 2021 Capitalized software development costs $ 6,857 $ 26,127 Development in progress 732 5,910 Total capitalized software development, cost 7,589 32,037 Less: accumulated amortization (840 ) (17,607 ) Total $ 6,749 $ 14,430 In December 2022, the Company revised its 2023 budget and long-range plan as a result of material reductions in its expected future cash flows from its B2B segment, a strategic decision not to pursue and invest further in its original content strategy, and a re-assessment of its growth strategy related to its B2C segment. In connection with these initiatives, the Company began planning to sunset certain of its legacy GameSTACK technology (the “Legacy Technology”) following the launch of GAN Sports and the rollout of newer GameSTACK technology developed after its acquisition of Coolbet. These events and circumstances indicated that the carrying amount of the Company’s capitalized development costs may not be recoverable and the Company tested these long-lived assets for impairment. The Company compared the undiscounted cash flows expected from capitalized development cost asset groups over their remaining useful lives and determined the Legacy Technology was not recoverable. During the year ended December 31, 2022, the Company recognized an impairment to its capitalized software development costs of$ 10.0 At December 31, 2022, development in progress primarily represents costs associated with GAN Sports, costs associated with its newer GameSTACK technology, and enhancements to the Company’s proprietary B2C software platform. Amortization expense related to capitalized software development costs was $ 6,166 3,444 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | NOTE 6 GOODWILL AND INTANGIBLE ASSETS Goodwill The changes in the carrying amount of goodwill, by segment, for the year ended December 31, 2022 were as follows: SCHEDULE OF GOODWILL B2B B2C Total Balance at January 1, 2022 $ 72,230 $ 73,912 $ 146,142 Impairment (67,338 ) (69,567 ) (136,905 ) Effect of foreign currency translation (4,892 ) (4,345 ) (9,237 ) Balance at December 31, 2022 $ — $ — $ — The Company performs its annual goodwill impairment test as of October 1 and monitors for interim triggering events on an ongoing basis as events occur or circumstances change that would more likely than not reduce the fair value below its carrying amount. Goodwill is reviewed for impairment utilizing either a qualitative assessment or a quantitative goodwill impairment test. Due to the significant and sustained decline in share price and market capitalization of the Company since the Coolbet acquisition, interim quantitative goodwill impairment assessments were performed as of June 30, 2022 and September 30, 2022. The Company estimated the fair value of all reporting units utilizing both a market approach and an income approach (discounted cash flow) and the significant assumptions used to measure fair value include discount rate, terminal value factors, revenue and EBITDA multiples, and control premiums. The Company confirmed the reasonableness of the estimated reporting unit fair values by reconciling those fair values to its enterprise value and market capitalization. As a result of its interim impairment test performed as of June 30, 2022, the Company recognized an impairment to goodwill of $ 28.9 In December 2022, the Company revised its 2023 budget and long-term plan as a result of material reductions in its expected future cash flows from its B2B segment, a strategic decision not to pursue and invest further in its original content strategy, and a re-assessment of its growth strategy related to its B2C segment. As a result, the Company identified negative market indicators and trends related to the value of its reporting units which resulted in a downward revision to its 2023 budget and long-range plan. These events and circumstances indicated impairment may be probable and an additional quantitative goodwill impairment assessment as of December 31, 2022 was performed. The Company estimated the fair value of all reporting units utilizing both a market approach and an income approach (discounted cash flow) and the significant assumptions used to measure fair value include discount rate, terminal value factors, revenue and EBITDA multiples, and control premiums. The Company confirmed the reasonableness of the estimated reporting unit fair values by reconciling those fair values to its enterprise value and market capitalization. As a result of its additional impairment test performed as of December 31, 2022, the Company recognized an additional impairment to goodwill of $ 108.0 During the year ended December 31, 2022, the Company recognized total impairment to goodwill of $ 136.9 No GAN LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share amounts) Intangible Assets Definite-lived intangible assets, net consisted of the following: SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS Period (in years) Amount Amortization Amount Weighted December 31, 2022 Average Gross Amortization Carrying Accumulated Net Carrying Period (in years) Amount Amortization Amount Developed technology 3.9 $ 33,443 $ (17,570 ) $ 15,873 Customer relationships 3.1 6,788 (3,426 ) 3,362 Trade names and trademarks 10.0 5,347 (1,312 ) 4,035 Gaming licenses 6.7 3,149 (1,464 ) 1,685 $ 48,727 $ (23,772 ) $ 24,955 Period (in years) Amount Amortization Amount Weighted December 31, 2021 Average Gross Amortization Carrying Accumulated Net Carrying Period (in years) Amount Amortization Amount Developed technology 3.0 $ 27,390 $ (9,130 ) $ 18,260 In-process technology — 8,142 — 8,142 Customer relationships 3.0 5,460 (1,820 ) 3,640 Trade names and trademarks 10.0 5,699 (882 ) 4,817 Gaming licenses 6.4 2,219 (1,185 ) 1,034 $ 48,910 $ (13,017 ) $ 35,893 In-process technology consisted of a proprietary technical platform which was under development at the time of acquisition until its completion in September 2022. Following its completion and the launch of GAN Sports, the developed technology was placed in service and is currently being amortized over an estimated useful life of 5 In March 2023 the Company amended and restated its Content Licensing Agreement with the Content Provider which resulted in a reduced contract term. Accordingly, the Company evaluated the ongoing value of the intangible assets associated with its content licensing arrangement. Based on this evaluation, the Company determined that the third-party content licenses with a carrying amount of $ 18.4 million were no longer recoverable and wrote them down in full. Additionally, the Company determined that the related customer relationships intangible assets with a carrying amount of $ 2.3 million were no longer recoverable and wrote them down to their estimated fair value of $ 1.6 million. Fair value was based on the expected future cash flows using Level 3 inputs under ASC 820 as well as expected contract term. The cash flows are those expected to be generated by the market participants, discounted at the risk-free rate of interest. Because negotiations have not yet concluded, it is reasonable possible that the estimate of the expected future cash flows may change in the near term resulting in the need to adjust the determination of fair value. Amortization expense related to intangible assets was $ 15,581 12,289 Estimated amortization expense for the next five years is as follows: SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS, FUTURE AMORTIZATION EXPENSE Amount 2023 $ 13,455 2024 2,986 2025 2,837 2026 2,408 2027 1,670 Thereafter 1,599 GAN LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share amounts) |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 7 DEBT On April 26, 2022, a subsidiary of the Company entered into a fixed term credit facility (the “Credit Facility”) which provides for $ 30.0 1 9.5 October 26, 2026 The Company incurred $ 2.4 27.6 Debt Covenants The Credit Facility contains affirmative and negative covenants, including certain financial covenants associated with the Company’s financial results. The negative covenants include restrictions regarding the incurrence of liens and indebtedness, certain merger and acquisition transactions, asset sales and other dispositions, other investments, dividends, share purchases and payments affecting subsidiaries, changes in nature of business, fiscal year or organizational documents, transactions with affiliates, and other matters. The financial covenants’ first test period is on March 31, 2023. The Company was in compliance with all financial covenants as of December 31, 2022, however given the Company’s cash flow and net losses for the year ended December 31, 2022, historical performance, and reasonably estimable near-term future cash flows, it is possible that the Company could violate financial covenants in the future. The Credit Facility contains customary events of default, including, among others: non-payments of principal and interest; breach of representations and warranties; covenant defaults; the existence of bankruptcy or insolvency proceedings; certain events under ERISA; gaming license revocations in material jurisdictions; material judgments; and a change of control. If an event of default occurs and is not cured within any applicable grace period or is not waived, the administrative agent and the lender are entitled to take various actions, including, without limitation, the acceleration of all amounts due and the termination of commitments under the Credit Facility. Subsequent Amendment On April 13, 2023, a subsidiary of the Company executed agreements to amend the Credit Facility to waive all events of default, amend certain financial covenants, assign the rights to the Credit Facility from its existing lender to a third party, and increase the principal balance from $ 30.0 42.0 8.0 The carrying values of the Company’s long-term debt consist of the following: SCHEDULE OF LONG TERM DEBT Effective As of Credit Facility Principal 14.63 % $ 30,000 Less unamortized debt issuance costs (1,843 ) Long-term debt, net $ 28,157 During the year ended December 31, 2022, the Company incurred $ 3,026 582 |
SHAREHOLDERS_ EQUITY
SHAREHOLDERS’ EQUITY | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
SHAREHOLDERS’ EQUITY | NOTE 8 SHAREHOLDERS’ EQUITY Ordinary Shares GAN Limited’s authorized share capital consists of 100 0.01 During the year ended December 31, 2022 and 2021, the Company issued an aggregate of 375,416 289,480 722 855 2021 Share Repurchase Program On May 31, 2022, the Board of Directors re-authorized and extended the share repurchase program initially authorized on November 30, 2021, which permitted the Company to purchase up to $ 5.0 303,113 1.0 GAN LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share amounts) |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | NOTE 9 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 Company’s shareholders. The 2020 Plan initially provides for grants of up to 4,400,000 4 7,559,574 864,009 Share Options A summary of the share option activity as of and for the year ended December 31, 2022 is as follows: SCHEDULE OF SHARE-BASED COMPENSATION, STOCK OPTION ACTIVITY Weighted Average Weighted Average Aggregate Number of Exercise Contractual Intrinsic Shares Price Term Value Outstanding at December 31, 2021 4,138,215 $ 13.05 8.05 $ 11,229 Granted 1,048,852 0.03 Exercised (375,416 ) 1.92 Forfeited/expired or cancelled (1,364,496 ) 16.03 Outstanding at December 31, 2022 3,447,155 $ 9.12 6.59 $ 1,139 Options exercisable at December 31, 2022 2,372,222 $ 8.69 5.61 $ 346 The Company recorded share-based compensation expense related to share options of $ 3,194 6,184 306 235 7,278 2.7 During the years ended December 31, 2022 and 2021 the Company received proceeds from the exercise of stock options of $ 722 855 485 4,902 Share option awards generally vest 25 after one year and then monthly over the next 36 months thereafter and have a maximum term of ten years. 1,048,852 1,045,852 0.01 3.89 11.49 SCHEDULE OF SHARE-BASED COMPENSATION, FAIR VALUE ASSUMPTIONS Year Ended December 31, 2022 2021 Expected share price volatility 55.03 % 58.84 % Expected term (in years) 4.26 4.80 Risk-free interest rate 1.36 % 0.74 % Dividend yield 0 % 0 % GAN LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share amounts) The fair value of each share option award is estimated on the date of grant using the Black-Scholes option pricing model that uses the assumptions noted above. Estimating the grant date fair values for employee share options requires management to make assumptions regarding expected volatility of the value of those underlying shares, the risk-free rate of the expected life of the share options and the date on which share-based compensation is expected to be settled. Expected volatility is determined by reference to volatility of certain identified peer group share trading information and share prices on the Nasdaq stock exchange. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The expected term of the options is based on historical data and represents the period of time that options granted are expected to be outstanding. Restricted Share Units Restricted share units are issued to non-employee directors and employees. For equity-classified restricted share units, the fair value of restricted share units is valued based on fair market value of the Company’s ordinary shares on the date of grant and is amortized on a straight-line basis over the vesting period. In January 2022, the Board of Directors approved the issuance of 108,720 four years 25 In March 2022, the Board of Directors approved the issuance of 1,117,437 four years 73,446 In June 2022, the Board of Directors approved the issuance of 28,754 four years 25 In August 2022, the Board of Directors approved the issuance of 34,659 four years 25 In September 2022, the Board of Directors approved the issuance of 50,317 four year 25 In November 2022, the Board of Directors approved the issuance of 18,954 four year 25 64,935 GAN LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share amounts) The Company withholds a portion of the restricted share units granted to its officers and non-employee directors upon vesting in order to remit a cash payment to the officers and directors equal to their tax expense. The liabilities are recorded in accrued compensation and benefits in the consolidated balance sheets. During the year ended December 31, 2022, 386,005 140,141 The Company recorded share-based compensation expense related to restricted share units of $ 3,553 621 74 5,136 3.1 A summary of the restricted share unit activity as of and for the year ended December 31, 2022 is as follows: SCHEDULE OF SHARE BASED COMPENSATION, RESTRICTED STOCK UNIT ACTIVITY Weighted Average Number of Grant Date Shares Fair Value Outstanding at December 31, 2021 369,140 $ 10.78 Granted 1,497,222 5.03 Vested (471,489 ) 8.07 Forfeited/expired or cancelled (223,502 ) 6.01 Outstanding at December 31, 2022 1,171,371 $ 5.43 Restricted Share Awards In December 2021, the Company issued 51,654 9.68 The Company recorded share-based compensation expense related to the restricted share awards of $ 167 951 153 0.9 167 GAN LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share amounts) Employee Bonuses Issued in Shares In 2021, the Company entered into agreements with certain executive employees which allowed for a portion, or all, of their annual bonus for the year ended December 31, 2021 to be paid in the form of the Company’s shares. During the year ended December 31, 2022, the Company settled approximately $ 913 189,959 0.01 2020 Employee Stock Purchase Plan The Board of Directors established the 2020 Employee Stock Purchase Plan, or the ESPP, which was approved by the Company’s shareholders in July 2021. The ESPP is intended to qualify under Section 423 of the U.S. Internal Revenue Service Code of 1986, as amended. The ESPP provides initially for 300,000 The ESPP is designed to allow eligible employees to purchase ordinary shares, at quarterly intervals, with their accumulated payroll deductions. The participants are offered the option to purchase ordinary shares at a discount during a series of successive offering periods. The option purchase price may be the lower of 85 239,817 156 GAN LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share amounts) |
LOSS PER SHARE
LOSS PER SHARE | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
LOSS PER SHARE | NOTE 10 DEFINED CONTRIBUTION PLANS U.S. employees and non-U.S. employees are eligible to participate in defined contribution plans by contributing a portion of their compensation, which provides for certain matching contributions by the Company. Matching contributions for the U.S. defined contribution plan are 50% 4% 579 614 NOTE 11 LOSS PER SHARE Loss per ordinary share, basic and diluted, are computed by dividing net loss by the weighted average number of ordinary shares outstanding during the period. Potentially dilutive securities consisting of certain share options, nonvested restricted shares and restricted share 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 2022 2021 Year Ended December 31, 2022 2021 Share options 3,447,155 4,138,215 Restricted shares 17,218 34,436 Restricted share units 1,171,371 369,140 Total 4,635,744 4,541,791 |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | NOTE 12 REVENUE The following table reflects revenue recognized for the years ended December 31, 2022 and 2021 in line with the timing of transfer of services: SCHEDULE OF REVENUE RECOGNIZED IN LINE WITH THE TIMING OF TRANSFER OF SERVICES Year Ended December 31, 2022 2021 Revenue from services delivered at a point in time $ 88,331 $ 80,237 Revenue from services delivered over time 53,197 43,926 Total $ 141,528 $ 124,163 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 contributed to jackpots. 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 in the 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 2022 2021 Year Ended December 31, 2022 2021 Contract liabilities from advance customer payments, beginning of the period $ 1,874 $ 1,083 Contract liabilities from advance customer payments, end of the period ( 1 ) 2,117 1,874 Revenue recognized from amounts included in contract liabilities from advance customer payments at the beginning of the period 841 152 (1) Contract liabilities from advance customer payments, end of period consisted of $ 913 261 1,204 1,613 GAN LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share amounts) |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | NOTE 13 — SEGMENT REPORTING The Company’s reportable segments are B2B and B2C. The B2B segment develops, markets and sells instances of GameSTACK, GAN Sports, and iSight Back Office technology that incorporates comprehensive player registration, account funding and back-office accounting and management tools that enable the casino operators to efficiently, confidently and effectively extend their presence online in places that have permitted online real money gaming. The B2C segment, which includes the operations of Coolbet, develops and operates a B2C online sports betting and casino platform that is accessible through its website in markets across Northern Europe, Latin America and Canada. Information reported to the Company’s Chief Executive Officer, the CODM, for the purpose of resource allocation and assessment of the Company’s segmental performance is primarily focused on the origination of the revenue streams. The CODM evaluates performance and allocates resources based on the segment’s revenue and contribution. Segment contribution represents the amounts 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. Summarized financial information by reportable segments for the years ended December 31, 2022 and 2021 is as follows: SCHEDULE OF FINANCIAL INFORMATION FOR REPORTABLE SEGMENTS B2B B2C Total B2B B2C Total Year Ended December 31, 2022 2021 B2B B2C Total B2B B2C Total Revenue $ 54,045 $ 87,483 $ 141,528 $ 45,569 $ 78,594 $ 124,163 Cost of revenue (1) 11,248 30,386 41,634 11,600 29,773 41,373 Segment contribution $ 42,797 $ 57,097 $ 99,894 $ 33,969 $ 48,821 $ 82,790 (1) Excludes depreciation and amortization expense During the year ended December 31, 2022 and 2021, one customer in the B2B segment individually accounted for 20.9 14.8 The following table presents a reconciliation of segment contribution to the consolidated loss before income taxes for the years ended December 31, 2022 and 2021: RECONCILIATION OF CONSOLIDATED SEGMENT CONTRIBUTION TO CONSOLIDATED INCOME (LOSS) BEFORE INCOME TAXES 2022 2021 Year Ended December 31, 2022 2021 Segment contribution ( 1 ) $ 99,894 $ 82,790 Sales and marketing 28,095 22,266 Product and technology 26,345 22,548 General and administrative ( 1 ) 46,906 48,881 Impairment 166,010 3,500 Restructuring 1,771 — Depreciation and amortization 23,276 16,808 Other loss (income), net 1,047 (408 ) Loss before income taxes $ (193,556 ) $ (30,805 ) (1) Excludes depreciation and amortization expense 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 CONSOLIDATED FINANCIAL STATEMENTS (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 2022 2021 Year Ended December 31, 2022 2021 B2B: Platform and content license fees $ 43,519 $ 36,935 Development services and other 10,526 8,634 Total B2B revenue 54,045 45,569 B2C: Sportsbook 37,902 34,167 Casino 46,888 41,652 Poker 2,693 2,775 Total B2C revenue 87,483 78,594 Total revenue $ 141,528 $ 124,163 Revenue by location of the customer for the years ended December 31, 2022 and 2021 was as follows: SCHEDULE OF REVENUE BY LOCATION OF THE CUSTOMER 2022 2021 Year Ended December 31, 2022 2021 United States $ 45,615 $ 37,791 Europe 45,092 47,309 Latin America 44,078 32,434 Rest of the world 6,743 6,629 Total revenue $ 141,528 $ 124,163 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 14 INCOME TAXES GAN Limited was incorporated in Bermuda solely for the purpose of acting as the new group parent company and public vehicle for investors. Bermuda, the Company’s country of domicile, imposes no taxes on profits, income, dividends, or capital gains. The Company’s loss before income taxes for the years ended December 31, 2022 and 2021 consisted of the following: SCHEDULE OF INCOME BEFORE INCOME TAX, DOMESTIC AND FOREIGN 2022 2021 Year Ended December 31, 2022 2021 Domestic $ (5,504 ) $ (1,555 ) Foreign (188,052 ) (29,250 ) Loss before income taxes $ (193,556 ) $ (30,805 ) GAN LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share amounts) The components of income tax expense (benefit) for the year ended December 31, 2022 and 2021 consisted of the following: SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) 2022 2021 Year Ended December 31, 2022 2021 Current: Domestic $ — $ — U.S. Federal and State 48 494 Foreign 644 604 Total current expense 692 1,098 Deferred: Domestic — — U.S. Federal and State 864 (864 ) Foreign 2,386 (445 ) Total deferred expense (benefit) 3,250 (1,309 ) Total income tax expense (benefit) $ 3,942 $ (211 ) The following is a reconciliation of income taxes computed at the statutory income tax rate to the Company’s income tax expense (benefit) for the year ended December 31, 2022 and 2021: SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION 2022 2021 Year Ended December 31, 2022 2021 Income (loss) before income taxes multiplied by the statutory tax rate of 0 $ — $ — Effects of tax rates in foreign jurisdictions (19,629 ) (5,868 ) Share-based compensation 802 (434 ) Nondeductible officers compensation 660 1,145 Valuation allowance 10,200 9,203 Unrecognized tax benefit 674 191 Intra-group transfer — (723 ) Change in tax rates 8 (3,962 ) Foreign withholding taxes 148 151 Goodwill impairment 6,805 — Return to provision 325 (110 ) Tax on unremitted earnings 3,030 — Other 919 196 Total income tax expense (benefit) $ 3,942 $ (211 ) GAN LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share amounts) Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the net deferred taxes at December 31, 2022 and 2021 are as follows: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES 2022 2021 December 31, 2022 2021 Deferred tax assets: Net operating loss carryforwards $ 13,533 $ 14,810 Share-based compensation 1,314 1,567 Fixed assets and intangibles 8,178 — Accruals and allowances 299 663 Interest 998 — Other 13 34 Total deferred tax assets 24,335 17,074 Valuation allowance (24,094 ) (15,542 ) Total deferred tax assets, net of valuation allowance 241 1,532 Deferred tax liabilities: Fixed assets and intangibles (1,157 ) (1,879 ) Prepayments (37 ) (506 ) Tax on unremitted earnings (3,061 ) — Other (13 ) (37 ) Total deferred tax liabilities (4,268 ) (2,422 ) Net deferred tax liabilities $ (4,027 ) $ (890 ) The net deferred tax liability of $ 4,027 4,218 191 At December 31, 2022 and 2021, the Company’s valuation allowance was $ 24,094 15,542 During 2022, we increased our valuation allowance by $ 8,552 24,094 At December 31, 2022, the Company had federal, state, and foreign cumulative net operating loss carryforwards generated of $ 13,463 , $ 14,436 and $ 39,373 , respectively. The federal and foreign net operating loss carryforwards do not expire. The state net operating loss carryforwards will begin to expire in 2032 if not utilized. Due to concerns raised around our liquidity as of December 31, 2022, the Company has determined it cannot indefinitely reinvest any of its unremitted foreign earnings and has accrued $ 3,061 GAN LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share amounts) A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: SCHEDULE OF UNRECOGNIZED TAX BENEFITS Year Ended December 31, 2022 2021 Unrecognized tax benefits — January 1 $ 197 $ 39 Additions for tax positions taken in a prior year 470 94 Additions for tax positions taken in current year 142 64 Reductions for tax positions taken in the prior year due to statutes lapsing (4 ) — Other reductions for tax positions taken in the prior year (39 ) — Unrecognized tax benefits — December 31 $ 766 $ 197 The liability for unrecognized tax benefits, including potential interest and penalties, were recorded within other liabilities in the consolidated balance sheets. The Company, including its subsidiaries, files tax returns with U.S. and foreign jurisdictions. The Company is subject to U.K. examinations by tax authorities for the 2020 tax year. The Company is subject to U.S. examinations by federal tax authorities for years 2019 to 2021 and by state tax authorities for years 2018 to 2021. The tax returns in Malta, Israel, and Bulgaria are still within the examination window of the local tax authorities. Based on the information currently available, we do not anticipate a significant increase or decrease to our unrecognized tax benefits within the next 12 months. Audit outcomes and the timing of audit settlements are subject to significant uncertainty. Although the Company believes that adequate provision has been made for such issues, there is the possibility that the ultimate resolution of such issues could have an adverse effect on the Company’s earnings. If recognized, the total amount of unrecognized tax benefits would impact the effective tax rate. |
RESTRUCTURING
RESTRUCTURING | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Restructuring Abstract | |
RESTRUCTURING | NOTE 15 RESTRUCTURING In January 2022, we implemented a strategic reduction of our existing worldwide global workforce to simplify and streamline our organization and strengthen the overall competitiveness of our B2B segment. As a result of this initiative, we incurred $ 1.8 GAN LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share amounts) |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 16 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 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 Content Licensing Agreements (the “Agreements”) with two third-party gaming content providers (“Content Providers”) specializing in developing and licensing interactive games. The Agreements grant the Company exclusive rights to use and distribute the online gaming content in North America. Each of the Content Providers is committed to developing a minimum number of games for the Company’s exclusive use over the five-year term, subject to extensions, of the respective Agreement. In exchange, the Company is required to pay fixed fees, totaling $ 48.5 8.5 On January 27, 2022, the Company served a termination notice, for cause, to a Content Provider as certain conditions precedent associated with the completion of contractual obligations had not been satisfied by the agreed upon period in 2021. In accordance with the agreement, termination for cause results in a return of the initial payment of $ 3.5 3.0 3.0 3.5 On April 5, 2022, the Agreement with the remaining Content Provider was amended and restated. Prior to the amendment, the Company accounted for the hosting arrangement as a service contract and expensed service fees of $ 1.5 25.0 10.0 5.0 GAN LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share amounts) The amended and restated Agreement is accounted for as a business combination. The consideration transferred in exchange for the identifiable intangible assets is comprised of the present value of the Company’s total expected fixed payments under the Agreement, the net assets recognized under the original agreement, as well as a contingent consideration. The contingent consideration represents additional amounts which the Company expects to pay to the Content Provider if the Company’s total revenue generated from the arrangement exceeds certain stipulated annual and cumulative thresholds during the contract term. The fair value of the contingent liability is determined using Level 3 inputs, since estimating the fair value of this contingent liability requires the use of significant and subjective inputs that may and are likely to change over the duration of the liability with related changes in internally generated anticipated games revenue as well as external market factors. The contingent consideration was valued using a Monte Carlo simulation based on management’s anticipated annual games revenue forecasts. The fair value of the contingent consideration was initially recognized upon execution of the amendment to the Agreement. At December 31, 2022 the Company concluded the fair value of the contingent consideration to be zero. Refer to Note 2 – Summary of Significant Accounting Policies and Note 3 – Acquisition for further detail. At December 31, 2022 the present value of the remaining fixed fee payments remaining under the agreement of $ 15.3 1,247 In March 2023 the Company amended and restated its Content Licensing Agreement with the Content Provider which resulted in a reduced contract term and a reduction in the fixed fees payable under the arrangement by $ 15 million. Refer to Note 17 – Subsequent Events for further detail. Chile Operations Coolbet’s B2C casino and sports-betting platform is accessible in Chile. Since June 1, 2020, foreign digital service suppliers that provide services to individuals in Chile have been required to register for value-added tax (“VAT”) purposes. On September 20, 2021, the Company submitted an inquiry to the Chilean Internal Revenue Service (“SII”) for clarification on the basis to apply VAT. In December 2021, the SII issued a general resolution as a response to another iGaming platform operator stating the Tax Administration’s position that fees paid by users for entertainment services provided through online gaming and betting platforms are subject to VAT in Chile. The SII clarified its interpretation that the VAT tax rate of 19% On May 13, 2022, the SII issued a resolution stating that unregistered foreign digital service providers will be subject to 19 On March 14, 2023, the SII issued a resolution stating that, although the SII lacks the power to qualify an activity as legal or illegal (which had been noted in previous SII resolutions), the SII is not empowered to register taxpayers for the simplified VAT regime who carry out activities that have been declared illegal by other State authorities that do have the power to qualify an activity as legal or illegal. It then notes that the SII has been informed by the Superintendency of Gambling Casinos that the offering of games of chance is only expressly authorized in certain instances under Chilean law, and thus taxpayers without domicile or residence in Chile that offer them are doing so illegally. As a result, the SII has excluded these taxpayers from the simplified VAT regime, effectively contradicting past guidance that stated the digital VAT law must be applied to online gaming and betting platforms. The Company does not believe its activities in Chile are illegal based on external legal opinions obtained in previous years, and updated external legal opinions supporting the Company’s assertions. The Company had previously not registered for the Chilean VAT on digital service providers as the Company believed the application of VAT on gross customer deposits, as previously clarified by the SII, prior to the March 2023 resolution, did not represent a reasonable application of the law to the economic substance of the Company’s services; this previous application would have resulted in a material loss to the Company. The Company believes that Chilean tax laws and regulations support that only the fees directly charged by the Company’s platform, primarily poker fees, should be the taxable base for the Chilean digital VAT and has obtained an external legal opinion supporting this position, the application of which would not have a material impact to the Company’s financial statements. However, as a result of the SII excluding the Company’s activities from the digital VAT registration, we no longer believe a liability is probable for the past activities as of December 31, 2022 as the Company is now effectively prevented from complying with the digital VAT law. However, there is uncertainty as to the regulated environment, what amounts may be ultimately due on our previous activities and the ability to operate in this jurisdiction until the SII resolves the position. Resolution of this matter may result in fines, penalties, additional expenses or require us to exit the market. Revenues from Chile represented 28.0 25.8 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 17 SUBSEQUENT EVENTS Content Licensing Agreement On March 29, 2023, the Company amended and restated its Content Licensing Agreement (the “Amended Agreement”) with the Content Provider which resulted in a reduced contract term ending March 31, 2024 and a reduction in the fixed fees payable under the arrangement by $ 15 million. Under the Amended Agreement, the fixed fee payment schedule was adjusted such that the remaining $ 4.0 0.2 million per calendar month, with the first installment being due in April 2023. The remaining $ 1.6 million outstanding at the expiration of the Amended Agreement will be reconciled against amounts payable by the Content Provider to the Company for revenue generated from the Company’s distribution of the content. In consideration for the execution of the Amended Agreement, in March 2023 the Company entered into a Subscription Agreement with the Content Provider, under which the Content Provider has subscribed to 1,250,000 of the Company’s ordinary shares. Synthetic Equity Pursuant to the binding term sheet previously entered into with Red Rock Resorts, Inc, the Company entered into the Master Gaming Services Agreement with Station Casinos LLC (“Station”) on March 30, 2023, to launch GameSTACK and GAN Sports RMiG and sportsbook solutions at its properties through self-service kiosks as well as through on-premises and statewide mobile versions in Nevada, subject to applicable licensure. As an additional incentive for Station to support the commercial success of the launch in Nevada, the Master Gaming Services Agreement includes a Synthetic Equity Addendum which would require that the Company make a payment to Station in the event of a change of control in the Company (the “Change of Control Payment”), subject to certain conditions outlined in the Synthetic Equity Addendum. The Change of Control Payment is payable only in the event that a change of control occurs during the first ten years of the initial term of the Master Gaming Services Agreement and that the Company’s market capitalization has increased during that time, calculated as proscribed by the Synthetic Equity Addendum, which the amount of such payment ranging from 2.5 5 5.0 Credit Facility On April 13, 2023, a subsidiary of the Company executed agreements to amend its existing Credit Facility to waive all events of default, amend certain financial covenants, assign the rights to the Credit Facility from its existing lender to a third party, and increase the principal balance from $ 30.0 million to $ 42.0 8.0 % per year (“together forming the “Amended Credit Facility”). The Amended Credit Facility becomes effective upon cash settlement of payments initiated on April 13, 2023, which is probable to occur within one week of initiation. The Amended Credit Facility matures on the third anniversary of its effective date and is fully guaranteed by the Company. There are no scheduled principal payments due under the Amended Credit Facility until maturity. The principal balance, accrued PIK interest, and an exit fee of 2.5 % are due at maturity. The Amended Credit Facility stipulates that outstanding amounts will mature and be due and payable on the third anniversary of its effective date, or in the event of a change in control transaction. The Company incurred an estimated $ 3.1 million in debt issuance costs in connection with the Amended Credit Facility. The Amended Credit Facility contains customary negative covenants, a financial covenant requiring minimum liquidity of $ 10.0 million, as well as other financial covenants to be tested solely in the event the Company raises junior debt during the term of the Amended Credit Facility. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated financial statements include the results of the Parent and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Liquidity | Liquidity The accompanying consolidated financial statements have been prepared on the going concern basis. As of December 31, 2022, the Company had an accumulated deficit of $ 274.9 45.9 10.7 197.5 136.9 19.1 10.0 1.2 30.0 27.6 Additionally, the Company’s current financial condition, liquidity resources and planned near-term cash flows from operations are sensitive to changes in macro-economic conditions and the substantial variability inherent in the Company’s wager-based revenues streams. These factors along with the potential covenant breaches indicate uncertainty related to the ability of the Company to meet its current obligations as they come due. In the fourth quarter of 2022, the Company initiated plans to address its liquidity needs and improve its operations and cash position primarily by (i) reducing and deferring personnel and operational costs for non-strategic initiatives, (ii) amending the Credit Facility to reduce cash interest obligations and amend financial covenants, (iii) identifying sources of additional capital, (iv) continuing investment in the growth areas of the Company’s consolidated operations, (v) continuing cost saving initiatives first implemented during the year ended December 31, 2022, and (vi) initiating a strategic review process to assess a range of strategic alternatives. On April 13, 2023, a subsidiary of the Company executed agreements to amend the Credit Facility to waive all events of default, amend certain financial covenants, assign the rights to the Credit Facility from its existing lender to a third party, and increase the principal balance from $ 30.0 42.0 8.0 10.0 To the extent that the Company’s current resources, including its ability to generate operating cash flows, are insufficient to satisfy its cash requirements, the Company may seek additional equity or debt financing. The Company’s ability to do so depends on prevailing economic conditions and other factors, many of which are beyond management’s control. The Company does not currently have any such credit facilities or similar debt arrangements in place, outside of the Amended Credit Facility as described above, and cannot provide any assurance as to the availability or terms of any future financing that it may require to support its operations. If the needed financing is not available, or if the terms of financing are less desirable than expected, the Company may be forced to decrease its level of investment in new products and technologies, discontinue further expansion of the business, scale back its existing operations, or divest of assets, any of which could have an adverse impact on the Company and its financial prospects. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Due to the inherent uncertainties involved in making estimates, actual results could differ from the original estimates, and may require significant adjustments to these reported balances in future periods. |
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 shareholders’ equity. Gains and losses arising from transactions denominated in a currency other than the functional currency are included in general and administrative expense in the consolidated statements of operations as incurred. Foreign currency transaction and remeasurement gains and losses were a net loss of $ 969 993 |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of its cash and trade receivables. The Company holds cash deposits in foreign countries, primarily in Northern Europe and Latin America, of approximately $ 36.8 |
Risks and Uncertainties | Risks and Uncertainties Macroeconomic conditions can materially adversely affect the Company’s business, results of operations and financial condition. Recent adverse macroeconomic conditions, including inflation, higher interest rates, slower growth or recession, the strengthening of the U.S. dollar, and corresponding currency fluctuations can have an adverse material impact on the Company’s future results of operations, cash flows, and financial condition, particularly with respect to foreign currency adjustments relating to our international operations. Such conditions may also affect consumers’ willingness to make discretionary purchases, and therefore the Company, along with its casino operator customers, may experience a decline in wagering. A downturn in the economic environment can also lead to increased credit and collectibility risk on the Company’s trade receivables, limitations on the Company’s ability to issue new debt, and reduced liquidity. GAN LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share amounts) |
Revenue Recognition | Revenue Recognition Revenue from B2B Operations The Company’s revenue from its B2B operations are primarily from its internet gaming Software-as-a-Service (“SaaS”) platform, GameSTACK, that its customers use to provide real money internet gambling (“RMiG”), online sports gaming and simulated internet gaming (“SIM”) to its end users. The Company enters into contracts with its customers that generally range from three to five years and include renewal provisions. These contracts generally include provision of the internet gaming platform, content consisting of proprietary and third-party games, development services and support and marketing services. In certain cases, the contract may include computer hardware to be procured on behalf of the customer. The customers cannot take possession of the hosted GameSTACK software and the Company does not sell or license the GameSTACK software. The Company charges fees as consideration for use of its internet gaming system, game content, support and marketing services based on a fixed percentage of the casino operator’s net gaming revenue or net sportsbook win, at the time of settlement of an event for RMiG contracts, considered usage-based fees, or at the time of purchase for in-game virtual credit for SIM contracts. The determination of the fee charged to its customers is negotiated and varies significantly. Certain of these RMiG contracts provide the Company with a minimum monthly revenue guarantee in relation to the Company’s share of the casino operator’s net gaming revenue or net sportsbook win. At December 31, 2022 and 2021, the remaining unsatisfied performance obligations related to fixed minimum guaranteed revenue totaled $ 3.9 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 customers 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 billed monthly with the amount due generally thirty days from the date of the invoice. Variable consideration is allocated entirely to the period in which consideration is earned as the variable amounts relate specifically to the customer’s usage of the platform that day and allocating the usage-based fees to each day is consistent with the allocation objective, primarily that the change in amounts reflect the changing value to the customer. The Company’s internet gaming system, game content, support and marketing services are provided equally throughout the term of the contract. These services are made up of a daily requirement to provide access and use of the internet gaming system and optional support and marketing services to the customer over the same period of time. The series of distinct services represents a single performance obligation that is satisfied over time. Purchases of virtual credits within a transaction period on the SIM platform, generally a monthly convention, are earned over time, and are typically billed monthly 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 its SIM customers, the fees collected by the Company from third-party payment processors for the purchases of in-game virtual credits made by end-users include the SIM customer’s portion. The Company records the SIM customer’s portion as a liability as cash is collected and remits payment to the SIM customer for their share of the SIM revenues monthly. At December 31, 2022 and 2021, the Company has recorded a liability due to its customers for their share of the fees of $ 1,628 2,171 The Company uses third-party content providers in supplying game content in its performance of providing game content on its platform to its customers. A customer has access to the Company’s propriety and licensed game content and additionally, the customer can direct the Company to procure third-party game content on its behalf. The Company has determined it acts as the principal for providing the game content when the Company controls the game content, and therefore presents the revenue on a gross basis in the consolidated statements of operations. When the customer directs the Company to procure third-party game content, the Company determined it is deemed an agent for providing such game content, and therefore, records the revenue, net of the costs of content license fees, in the consolidated statements of operations. GAN LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share amounts) The Company also provides ongoing development services involving updates to the RMiG platforms for enhanced functionality or customization. Ongoing development services are typically billed monthly, at a daily rate, for services performed. Revenue from RMiG platform development services that are identified as distinct performance obligations and enhance or create an asset the customer controls as the Company performs the services are recognized over time as services are performed. This revenue is measured using an input method based on effort expended, which uses direct labor hours incurred. These services have primarily related to post-launch development of third-party application integration software in the customer’s environment. Separately, the revenue generated from customers for development services that are distinct performance obligations and the customer benefits from the integrated SaaS offering are deferred over the license service term. These services have primarily related to enhancements to the Company’s platforms that do not enhance or create an asset the customer controls. In customer contracts that require a portion of the consideration to be received in advance, or at the commencement of the contract, such amounts are recorded as a contract liability. Other services include the resale of a third-party computer hardware, such as servers and other related hardware devices, upon which the GameSTACK software is installed for its customers. These products are not required to be purchased in order to access the GameSTACK platform but are sold as a convenience to the customer. The Company procures the computer hardware on the customer’s behalf for a fee determined based on cost of the computer hardware plus a markup. The Company charges a hardware deployment fee which is a one-time fee for installation, testing and certification of the computer hardware at the gaming hosting facility. Revenue is recognized at the point in time when control of the hardware transfers to the customer. Control is transferred after the hardware has been procured, delivered, installed at the customer’s premises and configured to allow for remote access. The Company has determined that it is acting as the principal in providing computer hardware and related services as it assumes 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 computer hardware and related services. The Company generates revenue from time to time from the licensing of its U.S. patent, which governs the linkage of on-property reward cards to their counterpart internet gaming accounts together with bilateral transmission of reward points between the internet gaming 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. 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. Contracts with its customers may include platform and licensing of game content services, as well as development services and computer hardware services. The variable consideration generated from the platform and the licensing of game content is allocated entirely to the performance obligations for platform and licensing of game content services and the remaining fixed fees for development services and computer hardware would be allocated to each of the remaining performance obligation based on their relative stand-alone selling prices. The variable consideration relates entirely to the effort to satisfy the platform and licensing game content services and the fixed consideration relates to the remaining performance obligations which is consistent with the allocation objective. GAN LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share amounts) Revenue from Gaming Operations The Company operates the B2C gaming site www.coolbet.com outside of the U.S., which contains proprietary software and includes the following product offerings: sportsbook, poker, casino, live casino and virtual sports. The Company manages an online sportsbook allowing users to place various types of wagers on the outcome of sporting events conducted around the world. The Company operates as the bookmaker and offers fixed odds wagering on such events. When a user’s wager wins, the Company pays the user a pre-determined amount known as fixed odds. Revenue from online sportsbook is reported net after deduction of player winnings and bonuses. Revenue from wagers is recognized when the outcome of the event is known. The Company offers live casino through its digital online casino offering in select markets, allowing users to place a wager and play games virtually at retail casinos. The Company offers users a catalog of over 3,000 Peer-to-peer poker offerings allow users to play poker against one another on the Company’s online poker platform for prize money. Revenue is recognized as a percentage of the reported rake. Additionally, the Company offers tournament poker which allows users to buy-in for a fixed price for prize money. For tournament play, revenue is recognized for the difference between the entry fees collected and the amounts paid out to users as prizes and winnings. In each of the online gaming products, a single performance obligation exists at the time a wager is made to operate the games and award prizes or payouts to users based on a particular outcome. Revenue is recognized at the conclusion of each contest, wager, or wagering game hand. Additionally, certain incentives given to users, for example, that allow the user to make an additional wager at a reduced price, may provide the user with a material right which gives rise to a separate performance obligation. The Company allocates a portion of the user’s wager to incentives that create material rights that are redeemed or expired in the future. The allocated revenue for gaming wagers is primarily recognized when the wagers occur because all such wagers settle immediately. The Company applies a practical expedient by accounting for revenue from gaming on a portfolio basis because such wagers have similar characteristics, and the Company reasonably expects the effects on the financial statements of applying the revenue recognition guidance to the portfolio to not differ materially from that which would result if applying the guidance to an individual wagering contract. |
Cost of Revenue | Cost of Revenue Cost of revenue consists primarily of variable costs. These include mainly (i) content license fees, (ii) payment processing fees and chargebacks, (iii) platform technology, software, and connectivity costs directly associated with revenue generating activities, (iv) gaming duties, and (v) sportsbook feed / provider services. The Company incurs payment processing fees on B2C user deposits, withdrawals, and deposit reversals from payment processors. Cost of revenue excludes depreciation of the servers on which the Company’s gaming platforms reside as well as amortization of intangible assets including internally developed software. |
Sales and Marketing | Sales and Marketing Sales and marketing expense primarily consists of general marketing and advertising costs, B2C user acquisition expenses and personnel costs within our sales and marketing functions. Sales and marketing costs are expensed as incurred. |
Product and Technology | Product and Technology Product and technology expenses consist primarily of personnel costs associated with development and maintenance activities that are not capitalized. These costs primarily represent employee expenses (including but not limited to, salaries, bonus, employee benefits, employer tax expenses, and stock-based compensation) for personnel and contractors involved in the design, development, and project management of our proprietary technologies as well as developed and licensed content. |
General and Administrative | General and Administrative General and administrative expenses consist of costs, including gaming operations costs, not related to sales and marketing, product and technology or revenue. General and administrative costs include professional services (including legal, regulatory and compliance, audit, and consulting expenses), rent, contingencies, insurance, allowance for credit losses, foreign currency transaction gains and losses, and costs related to the compensation of executive and non-executive personnel, including stock-based compensation. |
Content Licensing Fees | Content Licensing Fees Content licensing fees are paid to third parties for gaming content which are expensed as incurred. Content licensing fees are calculated as a percentage of net gaming revenues in respect of the third-party games, as stipulated in the third-party agreements. GAN LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share amounts) |
Share-based Compensation | Share-based Compensation Share-based compensation expense is recognized for share options and restricted shares issued to employees and non-employee members of the Company’s Board of Directors. The Company’s issued share options and restricted shares, which are primarily considered equity awards and include only service conditions, are valued based on the fair value of these awards on the date of grant. The fair value of the share options is estimated using a Black-Scholes option pricing model and the fair value of the restricted shares (restricted share awards and restricted share units) is based on the market price of the Company’s shares on the date of grant. Certain restricted share units awards issued to non-employee members of the Company’s Board of Directors permit shares upon vesting to be withheld, as a means of meeting the non-employee director’s tax withholding requirements, and paid in cash to the non-employee director. The Company additionally incurs share-based compensation expense under compensation arrangements with certain of its employees under which the Company will settle bonuses for a fixed dollar amount by issuing a variable number of shares based on the Company’s stock price on the settlement date. These awards are classified as liability-based awards which are measured based on the fair value of the award at the end of each reporting period until settled. Related compensation expense is recognized based on changes to the fair value over the applicable service period. Share-based compensation 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. |
Loss Per Share, Basic and Diluted | Loss Per Share, Basic and Diluted Basic loss per share is calculated by dividing the net loss by the weighted average number of ordinary shares outstanding during the year. In periods of loss, basic and diluted per share information are the same. |
Cash | Cash Cash is comprised of cash held at the bank and third-party service providers. The Company is required to maintain compensating cash balances to satisfy its liabilities to users. Such balances are included within cash in the consolidated balance sheets and are not subject to creditor claims. At December 31, 2022 and 2021, the related liabilities to users were $ 10,683 8,984 |
Accounts Receivable, net | Accounts Receivable, net Accounts receivable are stated at invoiced amounts and are unsecured, non-interest bearing and generally have 30-day payment terms. The Company maintains an allowance for doubtful accounts that reduces receivables to amounts expected to be collected. Management estimates the allowance for doubtful accounts by assessing the probability of non-payment of the receivable. On confirmation that the account receivable will not be collected, the gross carrying value of the asset is written off against the related allowance for doubtful accounts. The provision for credit losses on accounts receivable is recorded in general and administrative expense in the accompanying consolidated statements of operations. GAN LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share amounts) The activity in the allowance for doubtful accounts was as follows: SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS 2022 2021 Year Ended December 31, 2022 2021 Beginning balance $ 120 $ 100 Provision for expected credit losses (34 ) 246 Write-offs, net of recoveries 164 (226 ) Ending balance $ 250 $ 120 |
Capitalized Software Development Costs, net | Capitalized Software Development Costs, net The Company capitalizes certain development costs related to its internet gaming platforms during the application development stage. Costs associated with preliminary project activities, training, maintenance and all other post implementation stage activities are expensed as incurred. Software development costs are capitalized when application development begins, it is probable that the project will be completed, and the software will be used as intended. The Company capitalizes certain costs related to specific upgrades and enhancements when it is probable that expenditures will result in additional functionality of the platform to its customers. The capitalization policy provides for the capitalization of certain payroll and payroll related costs for employees who spent time directly associated with development and enhancements of the platform. Capitalized software development costs are amortized on a straight-line basis over their estimated useful lives, which generally ranges from three to five years, and are included within depreciation and amortization expense in the accompanying consolidated statements of operations. |
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. The Company has recorded goodwill primarily from its acquisition of Coolbet in January 2021. Goodwill is not amortized, but rather is reviewed for impairment annually (as of October 1st) or more frequently if facts or circumstances indicate that it is more-likely-than-not the fair value of a reporting unit may be below its carrying amount. The Company has determined that it has two reporting units: B2C and B2B. In its goodwill impairment testing in each segment, the Company has the option to perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of the reporting unit, including goodwill, is less than its carrying amount prior to performing the quantitative impairment test. The qualitative assessment evaluates various events and circumstances, such as macro-economic conditions, industry and market conditions, cost factors, relevant events and financial trends that may impact a reporting unit’s fair value. If it is determined that the estimated fair value of the reporting unit is more-likely-than not less than its carrying amount, including goodwill, the quantitative goodwill impairment test is required. Otherwise, no further analysis would be required. If the quantitative impairment test for goodwill is deemed necessary, this quantitative impairment analysis compares the fair value of the Company’s reporting unit to its related carrying value. If the fair value of the reporting unit is less than its carrying amount, goodwill is written down to the fair value and an impairment loss is recognized. If the fair value of the reporting unit exceeds its carrying amount, no further analysis is required. Fair value of the reporting unit is determined using valuation techniques, primarily using discounted cash flow analysis. ASC Topic 350 requires that goodwill be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company performed a qualitative and quantitative impairment test as of June 30, 2022 which resulted in an impairment to goodwill of $ 28.9 In December 2022, the Company revised its 2023 budget and long-term plan as a result of material reductions in its expected future cash flows from its B2B segment, a strategic decision not to pursue and invest further in its original content strategy, and a re-assessment of its growth strategy related to its B2C segment. As a result, the Company identified negative market indicators and trends related to the value of its reporting units. These events and circumstances indicated impairment may be probable and an additional quantitative goodwill impairment assessment as of December 31, 2022 was performed. The Company estimated the fair value of all reporting units utilizing both a market approach and an income approach (discounted cash flow) and the significant assumptions used to measure fair value include discount rate, terminal value factors, revenue and EBITDA multiples, and control premiums. The income approach used to test the Company’s reporting units includes the projection of estimated operating results and cash flows, discounted using a weighted-average cost of capital (“WACC”) that reflects current market conditions appropriate to each reporting unit. Those projections involve the Company’s best estimates of economic and market conditions over the projected period, including growth rates in revenues and costs and best estimates of future expected changes in operating margins and cash expenditures. Other significant assumptions and estimates used in the income approach include terminal value growth rates, future estimates of capital expenditures and changes in future working capital requirements. In addition, the WACC utilized to discount estimated future cash flows is sensitive to changes in interest rates and other market rates in place at the time the assessment is performed. The market approach used to test the Company’s reporting units included the review of revenue and EBITDA multiples from other publicly traded companies in the industry used to derive their enterprise values and the application of those multiples to the relevant earnings streams within each reportable segment of the Company. The Company confirmed the reasonableness of the estimated reporting unit fair values under the income and market approaches by reconciling those fair values to its enterprise value and market capitalization. Data points from other market participants were additionally used which indicated that the lower end of valuation ranges related to our B2C segment may be indicated until regulatory uncertainties were clarified. As a result of its impairment test performed as of December 31, 2022, the Company recognized an impairment to goodwill of $ 108.0 million. During the year ended December 31, 2022, the Company recognized total impairment to goodwill of $ 136.9 million. No such impairment was recognized during the year ended December 31, 2021. GAN LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share amounts) |
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. Gaming licenses include license applications fees and market access payments in connection with agreements that the Company enters into with strategic partners. The market access arrangements authorize the Company to offer online gaming and online sports betting in certain regulated markets. These costs are capitalized and amortized on a straight-line basis over their estimated useful lives, beginning with the commencement of operations. The fair value of the acquired intangible assets is primarily determined using the income approach. In performing these valuations, the Company’s key underlying assumptions used in the discounted cash flows were projected revenue, gross margin expectations and operating cost estimates. There are inherent uncertainties and management judgment is required in these valuations. 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. In December 2022, the Company revised its 2023 budget and long-range plan as a result of material reductions in its expected future cash flows from its B2B segment, a strategic decision not to pursue and invest further in its original content strategy, and a re-assessment of its growth strategy related to its B2C segment. In connection with these initiatives, the Company began planning to sunset certain of its legacy GameSTACK technology (the “Legacy Technology”) following the launch of GAN Sports and the rollout of newer GameSTACK technology developed after its acquisition of Coolbet. These events and circumstances indicated that the carrying amount of the Company’s long-lived assets may not be recoverable and the Company tested these assets for impairment. During the year ended December 31, 2022 the Company recognized an impairment to its intangible assets and capitalized software development costs of $ 19.1 10.0 |
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. |
Legal Contingencies and Litigation Accruals | Legal Contingencies and Litigation Accruals On a quarterly basis, the Company assesses potential losses in relation to pending or threatened legal matters. If a loss is considered probable and the amount can be reasonably estimated, the Company recognizes an expense for the estimated loss. Estimates of any such loss are subjective in nature and require the evaluation of numerous facts and assumptions as to future events, including the application of legal precedent which may be conflicting. To the extent these estimates are more or less than the actual liability resulting from the resolution of these matters, the Company’s financial results will increase or decrease accordingly. |
Debt | Debt Debt issuance costs incurred in connection with the issuance of new debt are recorded as a reduction to the long-term debt balance on the consolidated balance sheets, and amortized over the term of the loan commitment as interest expense in the accompanying consolidated statements of operations. The Company calculates amortization expense on capitalized debt issuance costs using the effective interest method in accordance with Accounting Standards Codification (“ASC”) 470, Debt. GAN LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share amounts) |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company applies the provisions of ASC 820, Fair Value Measurements and Disclosures, which provides a single authoritative definition of fair value, sets out a framework for measuring fair value and expands on required disclosures about fair value measurement. Fair value represents the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company uses the following hierarchy in measuring the fair value of the Company’s assets and liabilities, focusing on the most observable inputs when available: ● Level 1 Quoted prices in active markets for identical assets or liabilities. ● Level 2 Observable inputs other than Level 1 quoted prices, such as quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active for identical or similar assets and liabilities, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3 Valuations are based on the inputs that are unobservable and significant to the overall fair value measurement of the assets or liabilities. Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Valuation techniques used to measure the fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The Company does not hold any Level 1 or Level 2 financial instruments. The Company’s contingent content liability initially recognized in April 2022 is the Company’s only Level 3 financial instrument. The contingent content liability represents additional amounts which the Company expects to pay to Ainsworth Game Technology, a third-party gaming content provider (“the Content Provider”) if the Company’s total revenue generated from its Content Licensing Agreement with the Content Provider exceeds certain stipulated annual and cumulative thresholds during the contract term. The fair value of the contingent content liability is determined using Level 3 inputs, since estimating the fair value of this contingent content liability requires the use of significant and subjective inputs that may and are likely to change over the duration of the liability with related changes in internally generated anticipated games revenue as well as external market factors. The contingent content liability was valued using a Monte Carlo simulation based on management’s anticipated annual games revenue forecasts. The fair value of the contingent content liability was initially recognized in April 2022 in connection with its modified arrangement with the Content Provider on April 5, 2022. Contingent consideration is revalued at each reporting period. In the fourth quarter of 2022, the Company entered into negotiations with the Content Provider and in March 2023 amended and restated its Content Licensing Agreement with the Content Provider which resulted in a reduced contact term. As a result, the Company concluded the fair value of the contingent consideration was not probable of being met and reduced to zero based upon the remaining contract term and related expected future cash flows, recorded within other income, net on the accompanying consolidated statements of operations. Refer to Note 3 – Acquisition and Note 17 – Subsequent Events for further detail. The following table provides a reconciliation of the Company’s contingent content liability that is measured at fair value on a recurring basis using significant and subjective inputs (Level 3) as required by ASC 820 as of December 31, 2022: SCHEDULE OF FAIR VALUE OF ASSETS AND LIABILITIES ON RECURRING BASIS Contingent Balance as of January 1, 2022 $ — Contingent consideration for content licensing agreement 3,000 Reduction in fair value of contingent consideration (3,000 ) Balance as of December 31, 2022 $ — GAN LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share amounts) |
Income Taxes | Income Taxes The Company is subject to income taxes in the United States, U.K., Bulgaria, Israel, Canada, and Malta. The Company records an income tax expense for the anticipated tax consequences of the reported results of operations using the asset and liability method. Under this method, deferred income tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, as well as for loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. The effect on deferred income tax of a change in tax rates are recorded in the period of the enactment. Deferred tax assets are reduced, through a valuation allowance, if necessary, by the amount of such benefits that are not expected to be realized based on current available evidence. In evaluating the Company’s ability to recover deferred tax assets in the jurisdiction from which they arise, all available positive and negative evidence is considered, including results of recent operations, scheduled reversals of deferred tax liabilities, projected future taxable income, and tax-planning strategies. The Company records a valuation allowance to reduce its deferred tax assets to the net amount that it believes is more likely than not to be realized. The Company recognizes tax benefits from uncertain tax positions only if management believes that it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. Although the Company believes that it has adequately provided for uncertain tax positions, no assurance can be given that the final tax outcome of these matters would not be materially different. Adjustments are made when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences would affect the provision for income taxes in the period in which such determination is made and could have a material impact on the Company’s financial condition and operating results. The Company recognizes penalties and interest related to income tax matters in income tax expense. |
Segments | Segments The Company operates in two operating segments, B2B and B2C. Operating segments are defined as components of an enterprise where separate financial information is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and assess the Company’s performance. The Company’s CODM is the Chief Executive Officer. The CODM allocates resources and assesses performance based upon discrete financial information at the operating segment level. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In October 2021, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers GAN LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share amounts) |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS | The activity in the allowance for doubtful accounts was as follows: SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS 2022 2021 Year Ended December 31, 2022 2021 Beginning balance $ 120 $ 100 Provision for expected credit losses (34 ) 246 Write-offs, net of recoveries 164 (226 ) Ending balance $ 250 $ 120 |
SCHEDULE OF FAIR VALUE OF ASSETS AND LIABILITIES ON RECURRING BASIS | The following table provides a reconciliation of the Company’s contingent content liability that is measured at fair value on a recurring basis using significant and subjective inputs (Level 3) as required by ASC 820 as of December 31, 2022: SCHEDULE OF FAIR VALUE OF ASSETS AND LIABILITIES ON RECURRING BASIS Contingent Balance as of January 1, 2022 $ — Contingent consideration for content licensing agreement 3,000 Reduction in fair value of contingent consideration (3,000 ) Balance as of December 31, 2022 $ — |
ACQUISITION (Tables)
ACQUISITION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
SUMMARY OF CONSIDERATION TRANSFERRED | The following table summarizes the fair value of the consideration transferred: SUMMARY OF CONSIDERATION TRANSFERRED Present value of future fixed fee payments $ 18,808 Net assets recognized under original agreement 3,067 Contingent consideration 3,000 Total $ 24,875 |
SUMMARY OF INTANGIBLE ASSETS ACQUIRED | Identifiable intangible assets, including their respective expected useful lives, and liabilities assumed were as follows: SUMMARY OF INTANGIBLE ASSETS ACQUIRED Estimated useful Fair Value Content licenses intangible asset 4.6 $ 22,007 Customer relationships intangible asset 4.0 2,868 Total identifiable net assets $ 24,875 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY AND EQUIPMENT | Property and equipment, net is recorded in other assets in the consolidated balance sheets at December 31, 2022 and 2021 and consisted of the following: SCHEDULE OF PROPERTY AND EQUIPMENT Life (in years) 2022 2021 Estimated Useful December 31, Life (in years) 2022 2021 Fixtures, fittings and equipment 3 5 $ 4,136 $ 2,935 Platform hardware 5 2,313 2,054 Total property and equipment, cost 6,449 4,989 Less: accumulated depreciation (3,599 ) (2,444 ) Total $ 2,850 $ 2,545 |
CAPITALIZED SOFTWARE DEVELOPM_2
CAPITALIZED SOFTWARE DEVELOPMENT COSTS, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Research and Development [Abstract] | |
SCHEDULE OF CAPITALIZED COMPUTER SOFTWARE COSTS, NET | Capitalized software development costs, net at December 31, 2022 and 2021 consisted of the following: SCHEDULE OF CAPITALIZED COMPUTER SOFTWARE COSTS, NET 2022 2021 December 31, 2022 2021 Capitalized software development costs $ 6,857 $ 26,127 Development in progress 732 5,910 Total capitalized software development, cost 7,589 32,037 Less: accumulated amortization (840 ) (17,607 ) Total $ 6,749 $ 14,430 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF GOODWILL | The changes in the carrying amount of goodwill, by segment, for the year ended December 31, 2022 were as follows: SCHEDULE OF GOODWILL B2B B2C Total Balance at January 1, 2022 $ 72,230 $ 73,912 $ 146,142 Impairment (67,338 ) (69,567 ) (136,905 ) Effect of foreign currency translation (4,892 ) (4,345 ) (9,237 ) Balance at December 31, 2022 $ — $ — $ — |
SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS | Definite-lived intangible assets, net consisted of the following: SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS Period (in years) Amount Amortization Amount Weighted December 31, 2022 Average Gross Amortization Carrying Accumulated Net Carrying Period (in years) Amount Amortization Amount Developed technology 3.9 $ 33,443 $ (17,570 ) $ 15,873 Customer relationships 3.1 6,788 (3,426 ) 3,362 Trade names and trademarks 10.0 5,347 (1,312 ) 4,035 Gaming licenses 6.7 3,149 (1,464 ) 1,685 $ 48,727 $ (23,772 ) $ 24,955 Period (in years) Amount Amortization Amount Weighted December 31, 2021 Average Gross Amortization Carrying Accumulated Net Carrying Period (in years) Amount Amortization Amount Developed technology 3.0 $ 27,390 $ (9,130 ) $ 18,260 In-process technology — 8,142 — 8,142 Customer relationships 3.0 5,460 (1,820 ) 3,640 Trade names and trademarks 10.0 5,699 (882 ) 4,817 Gaming licenses 6.4 2,219 (1,185 ) 1,034 $ 48,910 $ (13,017 ) $ 35,893 |
SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS, FUTURE AMORTIZATION EXPENSE | Estimated amortization expense for the next five years is as follows: SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS, FUTURE AMORTIZATION EXPENSE Amount 2023 $ 13,455 2024 2,986 2025 2,837 2026 2,408 2027 1,670 Thereafter 1,599 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF LONG TERM DEBT | The carrying values of the Company’s long-term debt consist of the following: SCHEDULE OF LONG TERM DEBT Effective As of Credit Facility Principal 14.63 % $ 30,000 Less unamortized debt issuance costs (1,843 ) Long-term debt, net $ 28,157 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
SCHEDULE OF SHARE-BASED COMPENSATION, STOCK OPTION ACTIVITY | A summary of the share option activity as of and for the year ended December 31, 2022 is as follows: SCHEDULE OF SHARE-BASED COMPENSATION, STOCK OPTION ACTIVITY Weighted Average Weighted Average Aggregate Number of Exercise Contractual Intrinsic Shares Price Term Value Outstanding at December 31, 2021 4,138,215 $ 13.05 8.05 $ 11,229 Granted 1,048,852 0.03 Exercised (375,416 ) 1.92 Forfeited/expired or cancelled (1,364,496 ) 16.03 Outstanding at December 31, 2022 3,447,155 $ 9.12 6.59 $ 1,139 Options exercisable at December 31, 2022 2,372,222 $ 8.69 5.61 $ 346 |
SCHEDULE OF SHARE-BASED COMPENSATION, FAIR VALUE ASSUMPTIONS | SCHEDULE OF SHARE-BASED COMPENSATION, FAIR VALUE ASSUMPTIONS Year Ended December 31, 2022 2021 Expected share price volatility 55.03 % 58.84 % Expected term (in years) 4.26 4.80 Risk-free interest rate 1.36 % 0.74 % Dividend yield 0 % 0 % |
SCHEDULE OF SHARE BASED COMPENSATION, RESTRICTED STOCK UNIT ACTIVITY | A summary of the restricted share unit activity as of and for the year ended December 31, 2022 is as follows: SCHEDULE OF SHARE BASED COMPENSATION, RESTRICTED STOCK UNIT ACTIVITY Weighted Average Number of Grant Date Shares Fair Value Outstanding at December 31, 2021 369,140 $ 10.78 Granted 1,497,222 5.03 Vested (471,489 ) 8.07 Forfeited/expired or cancelled (223,502 ) 6.01 Outstanding at December 31, 2022 1,171,371 $ 5.43 |
LOSS PER SHARE (Tables)
LOSS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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 2022 2021 Year Ended December 31, 2022 2021 Share options 3,447,155 4,138,215 Restricted shares 17,218 34,436 Restricted share units 1,171,371 369,140 Total 4,635,744 4,541,791 |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
SCHEDULE OF REVENUE RECOGNIZED IN LINE WITH THE TIMING OF TRANSFER OF SERVICES | The following table reflects revenue recognized for the years ended December 31, 2022 and 2021 in line with the timing of transfer of services: SCHEDULE OF REVENUE RECOGNIZED IN LINE WITH THE TIMING OF TRANSFER OF SERVICES Year Ended December 31, 2022 2021 Revenue from services delivered at a point in time $ 88,331 $ 80,237 Revenue from services delivered over time 53,197 43,926 Total $ 141,528 $ 124,163 |
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 2022 2021 Year Ended December 31, 2022 2021 Contract liabilities from advance customer payments, beginning of the period $ 1,874 $ 1,083 Contract liabilities from advance customer payments, end of the period ( 1 ) 2,117 1,874 Revenue recognized from amounts included in contract liabilities from advance customer payments at the beginning of the period 841 152 (1) Contract liabilities from advance customer payments, end of period consisted of $ 913 261 1,204 1,613 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
SCHEDULE OF FINANCIAL INFORMATION FOR REPORTABLE SEGMENTS | Summarized financial information by reportable segments for the years ended December 31, 2022 and 2021 is as follows: SCHEDULE OF FINANCIAL INFORMATION FOR REPORTABLE SEGMENTS B2B B2C Total B2B B2C Total Year Ended December 31, 2022 2021 B2B B2C Total B2B B2C Total Revenue $ 54,045 $ 87,483 $ 141,528 $ 45,569 $ 78,594 $ 124,163 Cost of revenue (1) 11,248 30,386 41,634 11,600 29,773 41,373 Segment contribution $ 42,797 $ 57,097 $ 99,894 $ 33,969 $ 48,821 $ 82,790 (1) Excludes depreciation and amortization expense |
RECONCILIATION OF CONSOLIDATED SEGMENT CONTRIBUTION TO CONSOLIDATED INCOME (LOSS) BEFORE INCOME TAXES | The following table presents a reconciliation of segment contribution to the consolidated loss before income taxes for the years ended December 31, 2022 and 2021: RECONCILIATION OF CONSOLIDATED SEGMENT CONTRIBUTION TO CONSOLIDATED INCOME (LOSS) BEFORE INCOME TAXES 2022 2021 Year Ended December 31, 2022 2021 Segment contribution ( 1 ) $ 99,894 $ 82,790 Sales and marketing 28,095 22,266 Product and technology 26,345 22,548 General and administrative ( 1 ) 46,906 48,881 Impairment 166,010 3,500 Restructuring 1,771 — Depreciation and amortization 23,276 16,808 Other loss (income), net 1,047 (408 ) Loss before income taxes $ (193,556 ) $ (30,805 ) (1) Excludes depreciation and amortization expense |
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 2022 2021 Year Ended December 31, 2022 2021 B2B: Platform and content license fees $ 43,519 $ 36,935 Development services and other 10,526 8,634 Total B2B revenue 54,045 45,569 B2C: Sportsbook 37,902 34,167 Casino 46,888 41,652 Poker 2,693 2,775 Total B2C revenue 87,483 78,594 Total revenue $ 141,528 $ 124,163 |
SCHEDULE OF REVENUE BY LOCATION OF THE CUSTOMER | Revenue by location of the customer for the years ended December 31, 2022 and 2021 was as follows: SCHEDULE OF REVENUE BY LOCATION OF THE CUSTOMER 2022 2021 Year Ended December 31, 2022 2021 United States $ 45,615 $ 37,791 Europe 45,092 47,309 Latin America 44,078 32,434 Rest of the world 6,743 6,629 Total revenue $ 141,528 $ 124,163 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
SCHEDULE OF INCOME BEFORE INCOME TAX, DOMESTIC AND FOREIGN | The Company’s loss before income taxes for the years ended December 31, 2022 and 2021 consisted of the following: SCHEDULE OF INCOME BEFORE INCOME TAX, DOMESTIC AND FOREIGN 2022 2021 Year Ended December 31, 2022 2021 Domestic $ (5,504 ) $ (1,555 ) Foreign (188,052 ) (29,250 ) Loss before income taxes $ (193,556 ) $ (30,805 ) |
SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) | The components of income tax expense (benefit) for the year ended December 31, 2022 and 2021 consisted of the following: SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) 2022 2021 Year Ended December 31, 2022 2021 Current: Domestic $ — $ — U.S. Federal and State 48 494 Foreign 644 604 Total current expense 692 1,098 Deferred: Domestic — — U.S. Federal and State 864 (864 ) Foreign 2,386 (445 ) Total deferred expense (benefit) 3,250 (1,309 ) Total income tax expense (benefit) $ 3,942 $ (211 ) |
SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION | The following is a reconciliation of income taxes computed at the statutory income tax rate to the Company’s income tax expense (benefit) for the year ended December 31, 2022 and 2021: SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION 2022 2021 Year Ended December 31, 2022 2021 Income (loss) before income taxes multiplied by the statutory tax rate of 0 $ — $ — Effects of tax rates in foreign jurisdictions (19,629 ) (5,868 ) Share-based compensation 802 (434 ) Nondeductible officers compensation 660 1,145 Valuation allowance 10,200 9,203 Unrecognized tax benefit 674 191 Intra-group transfer — (723 ) Change in tax rates 8 (3,962 ) Foreign withholding taxes 148 151 Goodwill impairment 6,805 — Return to provision 325 (110 ) Tax on unremitted earnings 3,030 — Other 919 196 Total income tax expense (benefit) $ 3,942 $ (211 ) |
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES | Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the net deferred taxes at December 31, 2022 and 2021 are as follows: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES 2022 2021 December 31, 2022 2021 Deferred tax assets: Net operating loss carryforwards $ 13,533 $ 14,810 Share-based compensation 1,314 1,567 Fixed assets and intangibles 8,178 — Accruals and allowances 299 663 Interest 998 — Other 13 34 Total deferred tax assets 24,335 17,074 Valuation allowance (24,094 ) (15,542 ) Total deferred tax assets, net of valuation allowance 241 1,532 Deferred tax liabilities: Fixed assets and intangibles (1,157 ) (1,879 ) Prepayments (37 ) (506 ) Tax on unremitted earnings (3,061 ) — Other (13 ) (37 ) Total deferred tax liabilities (4,268 ) (2,422 ) Net deferred tax liabilities $ (4,027 ) $ (890 ) |
SCHEDULE OF UNRECOGNIZED TAX BENEFITS | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: SCHEDULE OF UNRECOGNIZED TAX BENEFITS Year Ended December 31, 2022 2021 Unrecognized tax benefits — January 1 $ 197 $ 39 Additions for tax positions taken in a prior year 470 94 Additions for tax positions taken in current year 142 64 Reductions for tax positions taken in the prior year due to statutes lapsing (4 ) — Other reductions for tax positions taken in the prior year (39 ) — Unrecognized tax benefits — December 31 $ 766 $ 197 |
SCHEDULE OF ALLOWANCE FOR DOUBT
SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Accounting Policies [Abstract] | ||
Beginning balance | $ 120 | $ 100 |
Provision for expected credit losses | (34) | 246 |
Write-offs, net of recoveries | 164 | (226) |
Ending balance | $ 250 | $ 120 |
SCHEDULE OF FAIR VALUE OF ASSET
SCHEDULE OF FAIR VALUE OF ASSETS AND LIABILITIES ON RECURRING BASIS (Details) - Fair Value, Inputs, Level 3 [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |
Balance as of January 1, 2022 | |
Contingent consideration for content licensing agreement | 3,000 |
Reduction in fair value of contingent consideration | (3,000) |
Balance as of December 31, 2022 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) $ in Thousands | 1 Months Ended | 6 Months Ended | 12 Months Ended | |||
Apr. 13, 2023 USD ($) | Apr. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) Integer | Dec. 31, 2021 USD ($) | Apr. 12, 2023 USD ($) | |
Subsequent Event [Line Items] | ||||||
Accumulated deficit | $ 274,861 | $ 76,360 | ||||
Cash | 45,920 | 39,477 | ||||
Liabilities to users | 10,683 | 8,984 | ||||
Net loss | 197,498 | 30,594 | ||||
Goodwill impairment | $ 28,900 | 136,905 | 0 | |||
Impairment of intangible assets | 19,100 | |||||
Impairment of capitalized software development costs | 10,000 | |||||
Net cash used in operating activities | 1,249 | 5,003 | ||||
Proceeds from issuance of long-term debt | $ 30 | 30,000 | ||||
Proceeds from line of credit | $ 27,600 | |||||
Line of credit | 27,600 | |||||
Net gain loss foreign currency transaction | 969 | 993 | ||||
Insured amount | 36,800 | |||||
Revenue remaining performance obligation | 3,900 | 3,900 | ||||
Amounts due to customers current | $ 1,628 | 2,171 | ||||
Number of third party gaming products available | Integer | 3,000 | |||||
Goodwill, Impairment Loss, Net of Tax | $ 108,000 | |||||
Impairment of intangible assets | 166,010 | $ 3,500 | ||||
Licenses [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Impairment of intangible assets | 19,100 | |||||
Software Development [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Impairment of intangible assets | $ 10,000 | |||||
Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Line of credit | $ 42,000 | $ 30,000 | ||||
Credit facility interest rate | 8% | |||||
Financial covenant requirement minimum liquidity | $ 10,000 |
SUMMARY OF CONSIDERATION TRANSF
SUMMARY OF CONSIDERATION TRANSFERRED (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Business Combination, Consideration Transferred [Abstract] | |
Present value of future fixed fee payments | $ 18,808 |
Net assets recognized under original agreement | 3,067 |
Contingent consideration | 3,000 |
Total | $ 24,875 |
SUMMARY OF INTANGIBLE ASSETS AC
SUMMARY OF INTANGIBLE ASSETS ACQUIRED (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible assets | $ 24,875 |
Content Licenses [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible assets acquired, estimated useful life (in years) | 4 years 7 months 6 days |
Intangible assets | $ 22,007 |
Customer Relationships [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible assets acquired, estimated useful life (in years) | 4 years |
Intangible assets | $ 2,868 |
ACQUISITION (Details Narrative)
ACQUISITION (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Apr. 05, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Payment to acquire business | $ 25,000 | ||
Payment of content licensing liability fixed fees | $ 10,000 | ||
Amortization of intangible assets | 15,581 | $ 12,289 | |
Content Provider [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Service contract asset | $ 1,400 | ||
Assets acquired with expected future expenses term | 5 years | ||
Customer Relationships [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Adjustment to decrease in value of intangible assets | $ 438 | ||
Content Licensing Agreement [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Payment to acquire business | $ 25,000 | ||
Contingent liability | 1,369 | ||
Acquired right of use lease asset and liability assumed | 116 | ||
Amortization of intangible assets | 234 | ||
Content Licensing Agreement [Member] | Content Licenses [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Adjustment to decrease in value of intangible assets | 931 | ||
2023 Through 2025 [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Payment of content licensing liability fixed fees | $ 5,000 |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, cost | $ 6,449 | $ 4,989 |
Less: accumulated depreciation | (3,599) | (2,444) |
Total | 2,850 | 2,545 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, cost | $ 4,136 | 2,935 |
Furniture and Fixtures [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment useful life | 3 years | |
Furniture and Fixtures [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment useful life | 5 years | |
Platform Hardware [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, cost | $ 2,313 | $ 2,054 |
Property plant and equipment useful life | 5 years |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expenses | $ 1,427 | $ 989 |
SCHEDULE OF CAPITALIZED COMPUTE
SCHEDULE OF CAPITALIZED COMPUTER SOFTWARE COSTS, NET (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Research and Development [Abstract] | ||
Capitalized software development costs | $ 6,857 | $ 26,127 |
Development in progress | 732 | 5,910 |
Total capitalized software development, cost | 7,589 | 32,037 |
Less: accumulated amortization | (840) | (17,607) |
Total | $ 6,749 | $ 14,430 |
CAPITALIZED SOFTWARE DEVELOPM_3
CAPITALIZED SOFTWARE DEVELOPMENT COSTS, NET (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Impairment of intangible assets | $ 166,010 | $ 3,500 |
Amortization expense | 6,166 | $ 3,444 |
Software Development [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Impairment of intangible assets | $ 10,000 |
SCHEDULE OF GOODWILL (Details)
SCHEDULE OF GOODWILL (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Indefinite-Lived Intangible Assets [Line Items] | |||
Balance at January 1, 2022 | $ 146,142 | $ 146,142 | |
Impairment | (28,900) | (136,905) | $ 0 |
Effect of foreign currency translation | (9,237) | ||
Balance at December 31, 2022 | 146,142 | ||
Business to Business (B2B) [Member] | |||
Indefinite-Lived Intangible Assets [Line Items] | |||
Balance at January 1, 2022 | 72,230 | 72,230 | |
Impairment | (67,338) | ||
Effect of foreign currency translation | (4,892) | ||
Balance at December 31, 2022 | 72,230 | ||
Business to Consumer (B2C) [Member] | |||
Indefinite-Lived Intangible Assets [Line Items] | |||
Balance at January 1, 2022 | $ 73,912 | 73,912 | |
Impairment | (69,567) | ||
Effect of foreign currency translation | (4,345) | ||
Balance at December 31, 2022 | $ 73,912 |
SCHEDULE OF FINITE-LIVED INTANG
SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Indefinite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 48,727 | $ 48,910 |
Finite-Lived Intangible Assets, Accumulated Amortization | (23,772) | (13,017) |
Finite-Lived Intangible Assets, Net | $ 24,955 | $ 35,893 |
Weighted Average Amortization Period | 5 years | |
Developed Technology Rights [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period | 3 years 10 months 24 days | 3 years |
Customer Relationships [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period | 3 years 1 month 6 days | 3 years |
Trademarks and Trade Names [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period | 10 years | 10 years |
License [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period | 6 years 8 months 12 days | 6 years 4 months 24 days |
Developed Technology Rights [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 33,443 | $ 27,390 |
Finite-Lived Intangible Assets, Accumulated Amortization | (17,570) | (9,130) |
Finite-Lived Intangible Assets, Net | 15,873 | 18,260 |
Customer Relationships [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 6,788 | 5,460 |
Finite-Lived Intangible Assets, Accumulated Amortization | (3,426) | (1,820) |
Finite-Lived Intangible Assets, Net | 3,362 | 3,640 |
Trademarks and Trade Names [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 5,347 | 5,699 |
Finite-Lived Intangible Assets, Accumulated Amortization | (1,312) | (882) |
Finite-Lived Intangible Assets, Net | 4,035 | 4,817 |
License [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 3,149 | 2,219 |
Finite-Lived Intangible Assets, Accumulated Amortization | (1,464) | (1,185) |
Finite-Lived Intangible Assets, Net | $ 1,685 | 1,034 |
In-Process Technology [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 8,142 | |
Finite-Lived Intangible Assets, Accumulated Amortization | ||
Finite-Lived Intangible Assets, Net | $ 8,142 |
SCHEDULE OF FINITE-LIVED INTA_2
SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS, FUTURE AMORTIZATION EXPENSE (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 | $ 13,455 |
2024 | 2,986 |
2025 | 2,837 |
2026 | 2,408 |
2027 | 1,670 |
Thereafter | $ 1,599 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Details Narrative) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |||
Impairement of goodwill | $ 28,900 | $ 136,905 | $ 0 |
Additional impairement of goodwill | $ 108,000 | ||
Intangible assets estimated useful life | 5 years | ||
Finite-lived intangible assets, net | $ 24,955 | 35,893 | |
Amortization expense intangible assets | 15,581 | $ 12,289 | |
Content Licensing Agreement [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense intangible assets | 234 | ||
Content Licenses [Member] | Content Licensing Agreement [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, net | $ 18,400 | ||
Customer Relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets estimated useful life | 3 years 1 month 6 days | 3 years | |
Customer Relationships [Member] | Content Licensing Agreement [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, net | $ 2,300 | ||
Fair value of intangible assets | $ 1,600 |
SCHEDULE OF LONG TERM DEBT (Det
SCHEDULE OF LONG TERM DEBT (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Apr. 26, 2022 | Dec. 31, 2021 |
Debt Disclosure [Abstract] | |||
Principal | $ 30,000 | $ 30,000 | |
Effective interest rate | 14.63% | ||
Less unamortized debt issuance costs | $ (1,843) | ||
Long-term debt, net | $ 28,157 |
DEBT (Details Narrative)
DEBT (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||||
Apr. 13, 2023 | Apr. 26, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Apr. 12, 2023 | |
Offsetting Assets [Line Items] | |||||
Debt principal amount | $ 30,000 | $ 30,000 | |||
Interest rate | 9.50% | ||||
Maturity date | Oct. 26, 2026 | ||||
Debt issuance costs | 2,400 | ||||
Line of credit | 27,600 | ||||
Interest expense | 3,026 | ||||
Amortization of debt issuance costs | $ 582 | ||||
Subsequent Event [Member] | |||||
Offsetting Assets [Line Items] | |||||
Line of credit | $ 42,000 | $ 30,000 | |||
Credit facility interest rate | 8% | ||||
Interest Rate Floor [Member] | |||||
Offsetting Assets [Line Items] | |||||
Interest rate | 1% |
SHAREHOLDERS_ EQUITY (Details N
SHAREHOLDERS’ EQUITY (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | May 31, 2022 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Ordinary shares, authorized | 100,000,000 | 100,000,000 | ||
Ordinary shares par value | $ 0.01 | $ 0.01 | ||
Stock issued during period shares stock options exercised | 375,416 | |||
Proceeds from stock options exercised | $ 722 | $ 855 | ||
Stock repurchased during period value | $ 1,006 | |||
Board of Director [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Stock repurchase program authorized amount | $ 5,000 | |||
Stock repurchased during period shares | 303,113 | |||
Stock repurchased during period value | $ 1,000 | |||
Ordinary Shares [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Stock issued during period shares stock options exercised | 375,416 | 289,480 | ||
Proceeds from stock options exercised | $ 722 | $ 855 |
SCHEDULE OF SHARE-BASED COMPENS
SCHEDULE OF SHARE-BASED COMPENSATION, STOCK OPTION ACTIVITY (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | ||
Number of Shares, Outstanding, beginning balance | 4,138,215 | |
Weighted Average Exercise Price, Outstanding, beginning balance | $ 13.05 | |
Weighted average contractual term, outstanding ending | 6 years 7 months 2 days | 8 years 18 days |
Aggregate intrinsic value, outstanding | $ 11,229 | |
Number of Shares, Granted | 1,048,852 | |
Weighted Average Exercise Price, Granted | $ 0.03 | |
Number of Shares, Exercised | (375,416) | |
Weighted Average Exercise Price, Exercised | $ 1.92 | |
Number of Shares, Forfeited/expired or cancelled | (1,364,496) | |
Weighted Average Exercise Price, Forfeited/expired or cancelled | $ 16.03 | |
Number of Shares, Outstanding, ending balance | 3,447,155 | 4,138,215 |
Weighted Average Exercise Price, Outstanding, ending balance | $ 9.12 | $ 13.05 |
Aggregate intrinsic value, outstanding | $ 1,139 | $ 11,229 |
Number of Shares, Options, exercisable at end of period | 2,372,222 | |
Weighted Average Exercise Price, Options, exercisable at end of period | $ 8.69 | |
Weighted average contractual term, option exercisable | 5 years 7 months 9 days | |
Aggregate intrinsic value, Options, exercisable at end of period | $ 346 |
SCHEDULE OF SHARE-BASED COMPE_2
SCHEDULE OF SHARE-BASED COMPENSATION, FAIR VALUE ASSUMPTIONS (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | ||
Expected share price volatility | 55.03% | 58.84% |
Expected term (in years) | 4 years 3 months 3 days | 4 years 9 months 18 days |
Risk-free interest rate | 1.36% | 0.74% |
Dividend yield | 0% | 0% |
SCHEDULE OF SHARE BASED COMPENS
SCHEDULE OF SHARE BASED COMPENSATION, RESTRICTED STOCK UNIT ACTIVITY (Details) - Restricted Stock Units (RSUs) [Member] | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of Shares Outstanding, Beginning Balance | shares | 369,140 |
Weighted Average Grant Date Fair Value, Beginning Balance | $ / shares | $ 10.78 |
Number of Shares, Granted | shares | 1,497,222 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | $ 5.03 |
Number of Shares, Vested | shares | (471,489) |
Weighted Average Grant Date Fair Value, Vested | $ / shares | $ 8.07 |
Number of Shares, Forfeited/expired or cancelled | shares | (223,502) |
Weighted Average Grant Date Fair Value, Forfeited/expired or cancelled | $ / shares | $ 6.01 |
Number of Shares Outstanding, Ending Balance | shares | 1,171,371 |
Weighted Average Grant Date Fair Value, Ending Balance | $ / shares | $ 5.43 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||||
Nov. 30, 2022 | Sep. 30, 2022 | Aug. 31, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Jan. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Apr. 30, 2020 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Proceeds from stock options exercised | $ 722 | $ 855 | ||||||||
Stock options exercised, Intrinsic value | $ 485 | $ 4,902 | ||||||||
Shares granted | 1,048,852 | |||||||||
Exercise price | $ 1.92 | |||||||||
Weighted average grant date fair value of options | 3.89 | $ 11.49 | ||||||||
Weighted average exercise price, vested | $ 0.03 | |||||||||
Employee Bonuses [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Settlement of an employee liability | $ 913 | |||||||||
Vested options | 189,959 | |||||||||
Weighted average exercise price, vested | $ 0.01 | |||||||||
Capitalized Software Development Costs [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Allocated share based compensation expense | $ 74 | |||||||||
Share-Based Payment Arrangement, Option [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Allocated share based compensation expense | 3,194 | $ 6,184 | ||||||||
Unrecognized compensation cost | $ 7,278 | |||||||||
Weighted average period | 2 years 8 months 12 days | |||||||||
Restricted vested units, granted percentage | 25% | |||||||||
Vesting term, description | after one year and then monthly over the next 36 months thereafter and have a maximum term of ten years. | |||||||||
Share-Based Payment Arrangement, Option [Member] | Software Development [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Allocated share based compensation expense | $ 306 | 235 | ||||||||
Restricted Stock Units (RSUs) [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Allocated share based compensation expense | $ 3,553 | 621 | ||||||||
Weighted average period | 3 years 1 month 6 days | |||||||||
Restricted stock vested | 471,489 | |||||||||
Unrecognized compensation cost | $ 5,136 | |||||||||
Fair value of restricted stock | $ 5.03 | |||||||||
Restricted Stock Units (RSUs) [Member] | Employees [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Restricted vested units, granted percentage | 25% | 25% | 25% | 25% | 25% | |||||
Restricted ordinary shares | 18,954 | 50,317 | 34,659 | 28,754 | 1,117,437 | 108,720 | ||||
Restricted vested units, term | 4 years | 4 years | 4 years | 4 years | 4 years | 4 years | ||||
Restricted Stock Units (RSUs) [Member] | Non-Employee Directors [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Restricted ordinary shares | 64,935 | 73,446 | ||||||||
Restricted Stock Units (RSUs) [Member] | Officers And Non Employee Directors [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Restricted stock vested | 386,005 | |||||||||
Share-based payment arrangement, shares withheld for tax withholding obligation | 140,141 | |||||||||
Restricted Stock [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Allocated share based compensation expense | $ 167 | $ 951 | ||||||||
Weighted average period | 10 months 24 days | |||||||||
Unrecognized compensation cost | $ 153 | |||||||||
Unrecognized compensation cost | $ 167 | |||||||||
Restricted Stock [Member] | Silverback Gaming [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Restricted ordinary shares | 51,654 | |||||||||
Fair value of restricted stock | $ 9.68 | |||||||||
2020 Equity Incentive Plan [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Granted ordinary shares | 7,559,574 | 4,400,000 | ||||||||
Granted ordinary shares, increased percentage | 4% | |||||||||
Granted ordinary shares, future issuance | 864,009 | |||||||||
2020 Plan [Member] | Share-Based Payment Arrangement, Option [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Shares purchased | 1,048,852 | |||||||||
2020 Plan [Member] | Share-Based Payment Arrangement, Option [Member] | European Based Employees [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Shares granted | 1,045,852 | |||||||||
Exercise price | $ 0.01 | |||||||||
2020 Employee Stock Purchase Plan [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Employee stock purchase plan, description | The ESPP provides initially for 300,000 ordinary shares to be sold and increases on February 1, 2022 and on each subsequent February 1 through and including February 1, 2030, equal to the lesser of (i) 0.25 percent of the number of ordinary shares issued and outstanding on the immediately preceding December 31, (ii) 100,000 ordinary shares, or (iii) such number of ordinary shares as determined by the Board of Directors. | |||||||||
Shares to be sold | 300,000 | |||||||||
Purchase price, rate | 85% | |||||||||
Shares issued employee stock purchase plan | 239,817 | |||||||||
Share-based compensation expenses | $ 156 |
SCHEDULE OF ANTI-DILUTIVE STOCK
SCHEDULE OF ANTI-DILUTIVE STOCK EXCLUDED FROM COMPUTATION OF DILUTED EARNINGS PER SHARE (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 4,635,744 | 4,541,791 |
Share-Based Payment Arrangement, Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 3,447,155 | 4,138,215 |
Restricted Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 17,218 | 34,436 |
Restricted Stock Units (RSUs) [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 1,171,371 | 369,140 |
LOSS PER SHARE (Details Narrati
LOSS PER SHARE (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Earnings Per Share [Abstract] | ||
Defined contribution plan employer percent | 50% | |
Defined contribution plan employee, percent | 4% | |
Defined benefit plan contributions by employer | $ 579 | $ 614 |
SCHEDULE OF REVENUE RECOGNIZED
SCHEDULE OF REVENUE RECOGNIZED IN LINE WITH THE TIMING OF TRANSFER OF SERVICES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Total | $ 141,528 | $ 124,163 |
Transferred at Point in Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total | 88,331 | 80,237 |
Transferred over Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total | $ 53,197 | $ 43,926 |
SCHEDULE OF CONTRACT WITH CUSTO
SCHEDULE OF CONTRACT WITH CUSTOMERS (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | |||
Revenue from Contract with Customer [Abstract] | ||||
Contract liabilities from advance customer payments, beginning of the period | $ 1,874 | [1] | $ 1,083 | |
Contract liabilities from advance customer payments, end of the period () | [1] | 2,117 | 1,874 | |
Revenue recognized from amounts included in contract liabilities from advance customer payments at the beginning of the period | $ 841 | $ 152 | ||
[1]Contract liabilities from advance customer payments, end of period consisted of $ 913 261 1,204 1,613 |
SCHEDULE OF CONTRACT WITH CUS_2
SCHEDULE OF CONTRACT WITH CUSTOMERS (Details) (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Contract with customer, liability | $ 2,117 | [1] | $ 1,874 | [1] | $ 1,083 |
Other Current Liabilities [Member] | |||||
Contract with customer, liability | 913 | 261 | |||
Other Liabilities [Member] | |||||
Contract with customer, liability | $ 1,204 | $ 1,613 | |||
[1]Contract liabilities from advance customer payments, end of period consisted of $ 913 261 1,204 1,613 |
SCHEDULE OF FINANCIAL INFORMATI
SCHEDULE OF FINANCIAL INFORMATION FOR REPORTABLE SEGMENTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Segment Reporting Information [Line Items] | |||
Revenue | $ 141,528 | $ 124,163 | |
Cost of revenue | [1] | 41,634 | 41,373 |
Segment contribution | [2] | 99,894 | 82,790 |
Business to Business (B2B) [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 54,045 | 45,569 | |
Cost of revenue | [3] | 11,248 | 11,600 |
Segment contribution | 42,797 | 33,969 | |
Business to Consumer (B2C) [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 87,483 | 78,594 | |
Cost of revenue | [3] | 30,386 | 29,773 |
Segment contribution | $ 57,097 | $ 48,821 | |
[1]Excludes depreciation and amortization expense[2]Excludes depreciation and amortization expense[3]Excludes depreciation and amortization expense |
RECONCILIATION OF CONSOLIDATED
RECONCILIATION OF CONSOLIDATED SEGMENT CONTRIBUTION TO CONSOLIDATED INCOME (LOSS) BEFORE INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Segment Reporting [Abstract] | |||
Segment contribution () | [1] | $ 99,894 | $ 82,790 |
Sales and marketing | 28,095 | 22,266 | |
Product and technology | 26,345 | 22,548 | |
General and administrative () | [2] | 46,906 | 48,881 |
Impairment | 166,010 | 3,500 | |
Restructuring | 1,771 | ||
Depreciation and amortization | 23,276 | 16,808 | |
Other loss (income), net | 1,047 | (408) | |
Loss before income taxes | $ (193,556) | $ (30,805) | |
[1]Excludes depreciation and amortization expense[2]Excludes depreciation and amortization expense |
SCHEDULE OF DISAGGREGATION OF R
SCHEDULE OF DISAGGREGATION OF REVENUE BY PRODUCTS AND SERVICES FOR EACH SEGMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue from External Customer [Line Items] | ||
Total revenue | $ 141,528 | $ 124,163 |
Business to Business (B2B) [Member] | ||
Revenue from External Customer [Line Items] | ||
Total revenue | 54,045 | 45,569 |
Business to Consumer (B2C) [Member] | ||
Revenue from External Customer [Line Items] | ||
Total revenue | 87,483 | 78,594 |
Platform and Content License Fees [Member] | Business to Business (B2B) [Member] | ||
Revenue from External Customer [Line Items] | ||
Total revenue | 43,519 | 36,935 |
Development Services and Other [Member] | Business to Business (B2B) [Member] | ||
Revenue from External Customer [Line Items] | ||
Total revenue | 10,526 | 8,634 |
Sportsbook [Member] | Business to Consumer (B2C) [Member] | ||
Revenue from External Customer [Line Items] | ||
Total revenue | 37,902 | 34,167 |
Casino [Member] | Business to Consumer (B2C) [Member] | ||
Revenue from External Customer [Line Items] | ||
Total revenue | 46,888 | 41,652 |
Poker [Member] | Business to Consumer (B2C) [Member] | ||
Revenue from External Customer [Line Items] | ||
Total revenue | $ 2,693 | $ 2,775 |
SCHEDULE OF REVENUE BY LOCATION
SCHEDULE OF REVENUE BY LOCATION OF THE CUSTOMER (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenue | $ 141,528 | $ 124,163 |
UNITED STATES | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenue | 45,615 | 37,791 |
Europe [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenue | 45,092 | 47,309 |
Latin America [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenue | 44,078 | 32,434 |
Rest of the World [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenue | $ 6,743 | $ 6,629 |
SEGMENT REPORTING (Details Narr
SEGMENT REPORTING (Details Narrative) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
One Customer [Member] | Revenue [Member] | B2B Segment [Member] | ||
Revenue, Major Customer [Line Items] | ||
Revenue percentage | 20.90% | 14.80% |
SCHEDULE OF INCOME BEFORE INCOM
SCHEDULE OF INCOME BEFORE INCOME TAX, DOMESTIC AND FOREIGN (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Domestic | $ (5,504) | $ (1,555) |
Foreign | (188,052) | (29,250) |
Loss before income taxes | $ (193,556) | $ (30,805) |
SCHEDULE OF COMPONENTS OF INCOM
SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Domestic | ||
U.S. Federal and State | 48 | 494 |
Foreign | 644 | 604 |
Total current expense | 692 | 1,098 |
Domestic | ||
U.S. Federal and State | 864 | (864) |
Foreign | 2,386 | (445) |
Total deferred expense (benefit) | 3,250 | (1,309) |
Total income tax expense (benefit) | $ 3,942 | $ (211) |
SCHEDULE OF EFFECTIVE INCOME TA
SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Income (loss) before income taxes multiplied by the statutory tax rate of 0% | ||
Effects of tax rates in foreign jurisdictions | (19,629) | (5,868) |
Share-based compensation | 802 | (434) |
Nondeductible officers compensation | 660 | 1,145 |
Valuation allowance | 10,200 | 9,203 |
Unrecognized tax benefit | 674 | 191 |
Intra-group transfer | (723) | |
Change in tax rates | 8 | (3,962) |
Foreign withholding taxes | 148 | 151 |
Goodwill impairment | 6,805 | |
Return to provision | 325 | (110) |
Tax on unremitted earnings | 3,030 | |
Other | 919 | 196 |
Total income tax expense (benefit) | $ 3,942 | $ (211) |
SCHEDULE OF EFFECTIVE INCOME _2
SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION (Details) (Parenthetical) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Effective statutory tax rate | 0% | 0% |
SCHEDULE OF DEFERRED TAX ASSETS
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 13,533 | $ 14,810 |
Share-based compensation | 1,314 | 1,567 |
Fixed assets and intangibles | 8,178 | |
Accruals and allowances | 299 | 663 |
Interest | 998 | |
Other | 13 | 34 |
Total deferred tax assets | 24,335 | 17,074 |
Valuation allowance | (24,094) | (15,542) |
Total deferred tax assets, net of valuation allowance | 241 | 1,532 |
Fixed assets and intangibles | (1,157) | (1,879) |
Prepayments | (37) | (506) |
Tax on unremitted earnings | (3,061) | |
Other | (13) | (37) |
Total deferred tax liabilities | (4,268) | (2,422) |
Net deferred tax liabilities | $ (4,027) | $ (890) |
SCHEDULE OF UNRECOGNIZED TAX BE
SCHEDULE OF UNRECOGNIZED TAX BENEFITS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Unrecognized tax benefits, Beginning Balance | $ 197 | $ 39 |
Additions for tax positions taken in a prior year | 470 | 94 |
Additions for tax positions taken in current year | 142 | 64 |
Reductions for tax positions taken in the prior year due to statutes lapsing | (4) | |
Other reductions for tax positions taken in the prior year | (39) | |
Unrecognized tax benefits, Ending Balance | $ 766 | $ 197 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||
Deferred tax liabilities, net | $ 4,027 | $ 890 |
Deferred tax liabilities, noncurrent | 4,218 | |
Deferred tax asset net noncurrent | 191 | |
Deferred tax assets, valuation allowance | 24,094 | 15,542 |
Operating loss carryforwards, valuation allowance | 8,552 | |
Deferred foreign taxes | 3,061 | |
Domestic Tax Authority [Member] | ||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||
Operating Loss Carryforwards | 13,463 | |
State and Local Jurisdiction [Member] | ||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||
Operating Loss Carryforwards | 14,436 | |
Foreign Tax Authority [Member] | ||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||
Operating Loss Carryforwards | 39,373 | |
Deferred foreign taxes | $ 3,061 | |
Maximum [Member] | ||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||
Operating loss carryforwards, valuation allowance | $ 24,094 |
RESTRUCTURING (Details Narrativ
RESTRUCTURING (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Jan. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disclosure Restructuring Abstract | |||
Restructuring charges | $ 1,800 | $ 1,771 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||
Apr. 05, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | May 13, 2022 | Apr. 25, 2022 | Jan. 27, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | |
Product Liability Contingency [Line Items] | ||||||||
Payment to acquire business | $ 25,000 | |||||||
Payment of content licensing liability fixed fees | $ 10,000 | |||||||
CHILE | ||||||||
Product Liability Contingency [Line Items] | ||||||||
Percentage of revenue | 28% | 25.80% | ||||||
Internal Revenue Service (IRS) [Member] | ||||||||
Product Liability Contingency [Line Items] | ||||||||
Value added tax rate | 19% | |||||||
Witholding on payment rate | 19% | |||||||
2023 Through 2025 [Member] | ||||||||
Product Liability Contingency [Line Items] | ||||||||
Payment of content licensing liability fixed fees | $ 5,000 | |||||||
Content Licensing Agreements [Member] | ||||||||
Product Liability Contingency [Line Items] | ||||||||
Present value of remaining content licensing liability fixed fees | 15,300 | |||||||
Interest expense | 1,247 | |||||||
Content Licensing Agreement [Member] | ||||||||
Product Liability Contingency [Line Items] | ||||||||
Payment to acquire business | $ 25,000 | |||||||
Increase decrease in content licensing liability fixed fees | $ 15,000 | |||||||
Service [Member] | ||||||||
Product Liability Contingency [Line Items] | ||||||||
Service fees | 1,500 | |||||||
Licensing Agreements [Member] | ||||||||
Product Liability Contingency [Line Items] | ||||||||
Contractual obligation | $ 3,000 | $ 3,000 | $ 48,500 | |||||
Initial payment | $ 3,500 | |||||||
Impairment loss | $ 3,500 | |||||||
Licensing Agreements [Member] | Execution [Member] | ||||||||
Product Liability Contingency [Line Items] | ||||||||
Payment of contractual obligation | $ 8,500 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) $ in Millions | 1 Months Ended | 11 Months Ended | |||||
Apr. 13, 2023 | Mar. 30, 2023 | Mar. 29, 2023 | Mar. 31, 2023 | Dec. 29, 2022 | Apr. 12, 2023 | Dec. 31, 2022 | |
Subsequent Event [Line Items] | |||||||
Line of credit | $ 27.6 | ||||||
Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Increase in market capitalization payment | $ 5 | ||||||
Line of credit | $ 42 | $ 30 | |||||
Credit facility interest rate | 8% | ||||||
Debt instrument exit fees rate | 2.50% | ||||||
Debt Issuance Costs, Net | $ 3.1 | ||||||
Financial covenant requirement minimum liquidity | $ 10 | ||||||
Subsequent Event [Member] | Minimum [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Percentage of market capitalization | 2.50% | ||||||
Subsequent Event [Member] | Maximum [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Percentage of market capitalization | 5% | ||||||
Content Licensing Agreement [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Increase decrease in content licensing liability fixed fees | $ 15 | ||||||
Content Licensing Agreement [Member] | Customer Relationships [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Impairment of intangible asset finite lived statement of income or comprehensive income extensible enumeration not disclosed flag | $ 1.6 | ||||||
Content Licensing Agreement [Member] | Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Increase decrease in content licensing liability fixed fees | $ 15 | ||||||
Content licensing liability fixed fees remaining payment | 4 | ||||||
Content licensing liability periodical payment | $ 0.2 | ||||||
Subscription Agreement [Member] | Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Stock issued during period, shares, new issues | 1,250,000 |