Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | May 08, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2023 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2023 | |
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 $0.01 | |
Trading Symbol | GAN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 44,683,390 | |
Entity Information, Former Legal or Registered Name | Not applicable |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash | $ 40,755 | $ 45,920 |
Accounts receivable, net of allowance for doubtful accounts of $119 and $250 at March 31, 2023 and December 31, 2022, respectively | 13,873 | 13,808 |
Prepaid expenses | 5,333 | 4,861 |
Other current assets | 3,111 | 3,041 |
Total current assets | 63,072 | 67,630 |
Capitalized software development costs, net | 7,756 | 6,749 |
Intangible assets, net | 22,167 | 24,955 |
Other assets | 3,642 | 3,746 |
Total assets | 96,637 | 103,080 |
Current liabilities | ||
Accounts payable | 5,603 | 6,437 |
Accrued compensation and benefits | 8,864 | 8,750 |
Accrued content license fees | 1,748 | 2,214 |
Liabilities to users | 9,663 | 10,683 |
Other current liabilities | 5,115 | 4,448 |
Total current liabilities | 30,993 | 32,532 |
Deferred income taxes | 4,107 | 4,218 |
Long-term debt | 28,483 | 28,157 |
Content licensing liabilities | 6,389 | 15,280 |
Other liabilities | 2,058 | 2,125 |
Total liabilities | 72,030 | 82,312 |
Commitments and contingencies (Note 14) | ||
Shareholders’ equity | ||
Ordinary shares, $0.01 par value, 100,000,000 shares authorized, 43,280,958 and 42,894,211 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively | 433 | 429 |
Additional paid-in capital | 330,366 | 328,998 |
Accumulated deficit | (273,360) | (274,861) |
Accumulated other comprehensive loss | (32,832) | (33,798) |
Total shareholders’ equity | 24,607 | 20,768 |
Total liabilities and shareholders’ equity | $ 96,637 | $ 103,080 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Accounts receivable allowance for credit loss, current | $ 119 | $ 250 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 43,280,958 | 42,894,211 |
Common stock, shares outstanding | 43,280,958 | 42,894,211 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Income Statement [Abstract] | |||
Revenue | $ 35,129 | $ 37,494 | |
Operating costs and expenses | |||
Cost of revenue (1) | [1] | 10,161 | 11,700 |
Sales and marketing | 7,184 | 6,098 | |
Product and technology | 9,578 | 8,954 | |
General and administrative (1) | [2] | 10,006 | 9,392 |
Restructuring | 1,059 | ||
Depreciation and amortization | 4,201 | 4,413 | |
Total operating costs and expenses | 41,130 | 41,616 | |
Operating loss | (6,001) | (4,122) | |
Interest expense (income), net | 1,716 | (9) | |
Other income, net | (9,292) | ||
Income (loss) before income taxes | 1,575 | (4,113) | |
Income tax expense | 74 | 386 | |
Net income (loss) | $ 1,501 | $ (4,499) | |
Earnings (loss) per share, basic and diluted | $ 0.03 | $ (0.11) | |
Weighted average ordinary shares outstanding | |||
Basic | 42,982,255 | 42,252,661 | |
Diluted | 47,200,182 | 42,252,661 | |
[1]Excludes depreciation and amortization expense[2]Excludes depreciation and amortization expense |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Net income (loss) | $ 1,501 | $ (4,499) |
Other comprehensive income (loss), net of tax | ||
Foreign currency translation adjustments | 966 | (4,264) |
Comprehensive income (loss) | $ 2,467 | $ (8,763) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Total |
Balance at Dec. 31, 2021 | $ 422 | $ 319,551 | $ (76,360) | $ (19,576) | $ 224,037 |
Balance, shares at Dec. 31, 2021 | 42,250,743 | ||||
Net income (loss) | (4,499) | (4,499) | |||
Foreign currency translation adjustments | (4,264) | (4,264) | |||
Share-based compensation | 1,316 | 1,316 | |||
Restricted share activity | |||||
Restricted share activity, shares | 2,365 | ||||
Accrued liability settled through issuance of shares | 444 | 444 | |||
Balance at Mar. 31, 2022 | $ 422 | 321,311 | (80,859) | (23,840) | 217,034 |
Balance, shares at Mar. 31, 2022 | 42,253,108 | ||||
Balance at Dec. 31, 2022 | $ 429 | 328,998 | (274,861) | (33,798) | 20,768 |
Balance, shares at Dec. 31, 2022 | 42,894,211 | ||||
Net income (loss) | 1,501 | 1,501 | |||
Foreign currency translation adjustments | 966 | 966 | |||
Share-based compensation | 1,382 | 1,382 | |||
Restricted share activity | $ 4 | 4 | |||
Restricted share activity, shares | 377,944 | ||||
Repurchase of restricted shares to pay tax liability (Note 7) | $ (1) | (78) | (79) | ||
Repurchase of restricted shares to pay tax liability, Shares | (49,157) | ||||
Issuance of ordinary shares upon ESPP purchases | $ 1 | 64 | 65 | ||
Issuance of ordinary shares upon ESPP purchases, shares | 57,960 | ||||
Balance at Mar. 31, 2023 | $ 433 | $ 330,366 | $ (273,360) | $ (32,832) | $ 24,607 |
Balance, shares at Mar. 31, 2023 | 43,280,958 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash Flows From Operating Activities | ||
Net income (loss) | $ 1,501 | $ (4,499) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Amortization of software and intangible assets | 3,835 | 4,082 |
Depreciation on property and equipment and finance lease right-of-use assets | 365 | 331 |
Amortization of debt discount and debt issuance costs | 326 | |
Share-based compensation expense | 1,362 | 1,222 |
Gain on extinguishment of content liability | (9,292) | |
Deferred income tax | (194) | |
Other | (181) | |
Changes in operating assets and liabilities, net of acquisition: | ||
Accounts receivable | 143 | 237 |
Prepaid expenses | (404) | (670) |
Other current assets | (32) | (267) |
Other assets | 39 | 238 |
Accounts payable | (916) | 591 |
Accrued compensation and benefits | (7) | (2,885) |
Accrued content license fees | (498) | |
Liabilities to users | (1,213) | 22 |
Other current liabilities | 660 | (183) |
Other liabilities | 331 | (243) |
Net cash used in operating activities | (4,175) | (2,024) |
Cash Flows From Investing Activities | ||
Expenditures for capitalized software development costs | (1,343) | (3,543) |
Purchases of gaming licenses | (165) | (16) |
Purchases of property and equipment | (254) | (429) |
Net cash used in investing activities | (1,762) | (3,988) |
Cash Flows From Financing Activities | ||
Proceeds from issuance of ordinary shares upon ESPP purchase | 65 | |
Repurchase of restricted shares to pay tax liability | (112) | |
Net cash used in financing activities | (47) | |
Effect of foreign exchange rates on cash | 819 | 118 |
Net decrease in cash | (5,165) | (5,894) |
Cash, beginning of period | 45,920 | 39,477 |
Cash, end of period | 40,755 | 33,583 |
Supplemental Cash Flow Information | ||
Interest | 1,068 | 2,444 |
Income taxes | 36 | 728 |
Intangible assets acquired in business acquisition included in current and long-term liabilities | 24,876 | |
Accrued liability settled through issuance of shares | $ 913 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 3 Months Ended |
Mar. 31, 2023 | |
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 | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the results of the Parent and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect all adjustments, in the opinion of management, of a normal recurring nature that are necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented. The financial data and other financial information disclosed in these notes to the condensed consolidated financial statements related to these periods are also unaudited. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ended December 31, 2023 or for any future annual or interim period. The condensed consolidated balance sheet as of December 31, 2022 included herein was derived from the audited consolidated financial statements as of that date. The accompanying unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) Liquidity The accompanying condensed consolidated financial statements have been prepared on a going concern basis. As of March 31, 2023, the Company had an accumulated deficit of $ 273.4 40.8 9,663 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 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 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 condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Due to the inherent uncertainties involved in making estimates, actual results could differ from the original estimates, and may require significant adjustments to these reported balances in 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 condensed consolidated statements of operations as incurred. Foreign currency transaction and remeasurement gains and losses were a net loss of $ 624 867 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 $ 36.9 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) 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. Revenue Recognition Revenue from B2B Operations The Company’s revenue from its B2B operations are primarily from its internet gaming Software-as-a-Service platform (“SaaS”), GameSTACK, that its customers use to provide RMiG, online sports gaming and SIM services 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 March 31, 2023 the remaining unsatisfied performance obligations related to fixed minimum guaranteed revenue totaled $ 9.7 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, and not a specified amount of services. The series of distinct services represents a single performance obligation that is satisfied over time. Purchases of virtual credits within a transaction period on the SIM platform, generally a monthly convention, are earned 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 March 31, 2023 and December 31, 2022, the Company has recorded a liability due to its customers for their share of the fees of $ 1,582 1,628 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) 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. Additionally 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. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) Contracts with Multiple Performance Obligations For customer contracts that have more than one performance obligation, the transaction price is allocated to the performance obligations in an amount that depicts the relative stand-alone selling prices of each performance obligation. Judgment is required in determining the stand-alone selling price for each performance obligation. In determining the allocation of the transaction price, an entity is required to maximize the use of observable inputs. When the stand-alone selling price of a good or service is not directly observable, an entity is required to estimate the stand-alone selling price. 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. 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 4,700 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. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) 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 share-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 share-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. 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 share 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. Earnings Per Share, Basic and Diluted Basic earnings per share is calculated by dividing earnings 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 condensed consolidated balance sheets and are not subject to creditor claims. At March 31, 2023 and December 31, 2022, the related liabilities to users were $ 9,663 10,683 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) Capitalized Software Development Costs, net The Company capitalizes certain development costs related to its 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 condensed consolidated statements of operations. 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. During the three months ended March 31, 2023, there was no triggering event that would cause the Company to believe the value of its long-lived assets should be impaired. 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 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. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) 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 condensed consolidated balance sheets, and amortized over the term of the loan commitment as interest expense in the accompanying condensed 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. 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 significant Level 2 or Level 3 financial instruments. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) Income Taxes The Company is subject to income taxes in the United States, U.K., Bulgaria, Israel, Canada, Estonia, Malta, and Mexico. 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, |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 3 PROPERTY AND EQUIPMENT, NET Property and equipment, net is recorded in other assets in the condensed consolidated balance sheets at March 31, 2023 and December 31, 2022 and consisted of the following: SCHEDULE OF PROPERTY AND EQUIPMENT Life (in years) 2023 2022 Estimated Useful March 31, December 31, Life (in years) 2023 2022 Fixtures, fittings and equipment 3 5 $ 4,460 $ 4,136 Platform hardware 5 2,333 2,313 Total property and equipment, cost 6,793 6,449 Less: accumulated depreciation (4,012 ) (3,599 ) Total $ 2,781 $ 2,850 Depreciation expense related to property and equipment was $ 365 310 |
CAPITALIZED SOFTWARE DEVELOPMEN
CAPITALIZED SOFTWARE DEVELOPMENT COSTS, NET | 3 Months Ended |
Mar. 31, 2023 | |
Research and Development [Abstract] | |
CAPITALIZED SOFTWARE DEVELOPMENT COSTS, NET | NOTE 4 CAPITALIZED SOFTWARE DEVELOPMENT COSTS, NET Capitalized software development costs, net at March 31, 2023 and December 31, 2022 consisted of the following: SCHEDULE OF CAPITALIZED COMPUTER SOFTWARE COSTS, NET March 31, December 31, 2023 2022 Capitalized software development costs $ 8,588 $ 6,857 Development in progress 514 732 Total capitalized software development, cost 9,102 7,589 Less: accumulated amortization (1,346 ) (840 ) Total $ 7,756 $ 6,749 At March 31, 2023, 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 $ 486 1,162 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 5 INTANGIBLE ASSETS Intangible Assets Definite-lived intangible assets, net consisted of the following: SCHEDULE OF FINITE -LIVED INTANGIBLE ASSETS Period (in years) Amount Amortization Amount Weighted March 31, 2023 Average Gross Amortization Carrying Accumulated Net Carrying Period (in years) Amount Amortization Amount Developed technology 4.0 $ 34,103 $ (20,498 ) $ 13,605 Customer relationships 3.1 6,890 (4,057 ) 2,833 Trade names and trademarks 10.0 5,455 (1,469 ) 3,986 Gaming licenses 6.6 3,361 (1,618 ) 1,743 $ 49,809 $ (27,642 ) $ 22,167 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 Acquired 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 years. Amortization expense related to intangible assets was $ 3,349 2,920 Estimated amortization expense for the next five years is as follows: SCHEDULE OF FINITE -LIVED INTANGIBLE ASSETS, AMORTIZATION EXPENSE Amount Remainder of 2023 $ 10,351 2024 3,072 2025 2,921 2026 2,490 2027 1,709 Thereafter 1,624 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 6 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 contained affirmative and negative covenants, including certain financial covenants associated with the Company’s financial results. The negative covenants included 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 Credit Facility contained 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 occurred and was not cured within any applicable grace period or was not waived, the administrative agent and the lender were entitled to take various actions, including, without limitation, the acceleration of all amounts due and the termination of commitments under the Credit Facility. As of March 31, 2023, the Company was in compliance with or obtained waivers for all covenants related to 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 Interest Rate As of March 31, 2023 Credit Facility Principal 15.46 % $ 30,000 Less unamortized debt issuance costs (1,517 ) Long-term debt, net $ 28,483 During the three months ended March 31, 2023, the Company incurred $ 1,394 326 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | NOTE 7 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 9,275,342 1,468,604 Share Options A summary of the share option activity as of and for the three months ended March 31, 2023 is as follows: SCHEDULE OF SHARE-BASED COMPENSATION, STOCK OPTION ACTIVITY Weighted Weighted Average Average Aggregate Number of Exercise Contractual Intrinsic Shares Price Term Value Outstanding at December 31, 2022 3,447,155 $ 9.12 6.59 $ 1,139 Granted 367,870 0.01 Exercised — — Forfeited/expired or cancelled (245,151 ) 14.31 Outstanding at March 31, 2023 3,569,874 $ 7.83 6.86 $ 1,356 Options exercisable at March 31, 2023 2,402,269 $ 7.87 5.95 $ 436 The Company recorded share-based compensation expense related to share options of $ 655 and $ 383 for the three months ended March 31, 2023 and 2022, respectively. At March 31, 2023, there was total unrecognized compensation cost of $ 279 related to nonvested share options. The unrecognized compensation cost is expected to be recognized over a weighted-average period of 2.8 years. 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 367,870 0.01 1.70 6.12 SCHEDULE OF SHARE-BASED COMPENSATION, FAIR VALUE ASSUMPTIONS 2022 Three Months Ended March 31, 2022 Expected share price volatility 61.20 % Expected term (in years) 5.00 Risk-free interest rate 1.74 % Dividend yield 0 % For options granted during the three months ended March 31, 2023, t he 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. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) In March 2023, the Board of Directors approved the issuance of 1,009,086 four years 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 condensed consolidated balance sheets. During the three months ended March 31, 2023, 149,801 49,157 The Company recorded share-based compensation expense related to restricted share units of $ 647 and $ 924 for the three months ended March 31, 2023 and 2022, respectively. Such share-based compensation expense was recorded net of capitalized software development costs of $ 58 for the three months ended March 31, 2023. At March 31, 2023, there was total unrecognized compensation cost of $ 428 related to non-vested restricted share units. The unrecognized compensation cost is expected to be recognized over a weighted-average period of 3.4 years. A summary of the restricted share unit activity as of and for the three months ended March 31, 2023 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, 2022 1,171,371 $ 5.43 Granted 1,009,086 1.50 Vested (328,787 ) 4.72 Forfeited/expired or cancelled (21,962 ) 5.47 Outstanding at March 31, 2023 1,829,708 $ 3.51 Restricted Share Awards Restricted share awards are issued to non-employee directors and certain key employees. The value of a restricted stock award is based on the market value of the Company’s ordinary shares at the date of the grant. The Company recorded share-based compensation expense related to the restricted share awards of $ 42 111 0.7 no 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 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) 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 57,960 18 Content Provider Issuance On March 29, 2023, the Company amended and restated its commercial agreement with a content provider. In conjunction with this agreement, the Company entered into a Subscription Agreement with the content provider, under which the content provider has subscribed to 1,250,000 |
DEFINED CONTRIBUTION PLANS
DEFINED CONTRIBUTION PLANS | 3 Months Ended |
Mar. 31, 2023 | |
Retirement Benefits [Abstract] | |
DEFINED CONTRIBUTION PLANS | NOTE 8 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 4 178 173 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 9 EARNINGS PER SHARE Earnings per share is computed by dividing earnings by the weighted average number of ordinary shares outstanding during the period. Basic and diluted earnings per share is calculated as follows: SCHEDULE OF WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES OUTSTANDING 2023 2022 Three Months Ended March 31, 2023 2022 Numerator–basic and diluted: Net income (loss) $ 1,501 $ (4,499 ) Denominator Basic weighted average ordinary shares outstanding 42,982,255 42,252,661 Effect of dilutive securities (1) Share options outstanding (1) 1,121,001 — Ordinary shares issued in connection with Content Provider Agreement (1) 1,250,000 — Restricted shares (1) 1,829,708 — Restricted share units (1) 17,218 — Diluted weighted average ordinary shares 47,200,182 42,252,661 Basic earnings (loss) per share $ 0.03 $ (0.11 ) Diluted earnings (loss) per share $ 0.03 $ (0.11 ) (1) For the three months ended March 31, 2023, 2,448,873 5,649,593 |
REVENUE
REVENUE | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | NOTE 10 REVENUE The following table reflects revenue recognized for the three months ended March 31, 2023 and 2022 in line with the timing of transfer of services: SCHEDULE OF REVENUE RECOGNIZED IN LINE WITH THE TIMING OF TRANSFER OF SERVICES 2023 2022 Three Months Ended March 31, 2023 2022 Revenue from services delivered at a point in time $ 23,895 $ 24,424 Revenue from services delivered over time 11,234 13,070 Total $ 35,129 $ 37,494 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 condensed consolidated balance sheets. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) The following table reflects contract liabilities arising from cash consideration received in advance from customers for the periods presented: SCHEDULE OF CONTRACT WITH CUSTOMERS 2023 2022 Three Months Ended March 31, 2023 2022 Contract liabilities from advance customer payments, beginning of the period $ 2,117 $ 1,874 Contract liabilities from advance customer payments, end of the period (1) 2,655 2,095 Revenue recognized from amounts included in contract liabilities from advance customer payments at the beginning of the period 223 296 (1) Contract liabilities from advance customer payments, end of period consisted of $ 1,599 720 1,056 1,375 |
SEGMENT REPORTING
SEGMENT REPORTING | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | NOTE 11 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 three months ended March 31, 2023 and 2022 is as follows: SCHEDULE OF FINANCIAL INFORMATION FOR REPORTABLE SEGMENTS B2B B2C Total B2B B2C Total Three Months Ended 2023 2022 B2B B2C Total B2B B2C Total Revenue $ 11,279 $ 23,850 $ 35,129 $ 13,070 $ 24,424 $ 37,494 Cost of revenue (1) 1,995 8,166 10,161 3,903 7,797 11,700 Segment contribution $ 9,284 $ 15,684 $ 24,968 $ 9,167 $ 16,627 $ 25,794 (1) Excludes depreciation and amortization expense During the three months ended March 31, 2023 and 2022, one customer in the B2B segment individually accounted for 16.1 16.6 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) The following table presents a reconciliation of segment gross profit to the consolidated loss before income taxes for the three months ended March 31, 2023 and 2022: RECONCILIATION OF CONSOLIDATED SEGMENT CONTRIBUTION TO CONSOLIDATED INCOME (LOSS) BEFORE INCOME TAXES 2023 2022 Three Months Ended March 31, 2023 2022 Segment contribution (1) $ 24,968 $ 25,794 Sales and marketing 7,184 6,098 Product and technology 9,578 8,954 General and administrative (1) 10,006 9,392 Restructuring — 1,059 Depreciation and amortization 4,201 4,413 Interest expense (income), net 1,716 (9 ) Other income, net (9,292 ) — Income (loss) before income taxes $ 1,575 $ (4,113 ) (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. 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 2023 2022 Three Months Ended March 31, 2023 2022 B2B: Platform and content license fees $ 8,627 $ 10,702 Development services and other 2,652 2,368 Total B2B revenue 11,279 13,070 B2C: Sportsbook 9,967 11,184 Casino 13,189 12,579 Poker 694 661 Total B2C revenue 23,850 24,424 Total revenue $ 35,129 $ 37,494 Revenue by location of the customer for the three months ended March 31, 2023 and 2022 is as follows: SCHEDULE OF REVENUE BY LOCATION OF THE CUSTOMER 2023 2022 Three Months Ended March 31, 2023 2022 United States $ 8,516 $ 11,491 Europe 12,677 12,564 Latin America 11,270 12,225 Rest of the world 2,666 1,214 Total revenue $ 35,129 $ 37,494 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 12 INCOME TAXES The Company’s effective income tax rate was 4.7 (9.4) Our country of domicile is Bermuda, which effectively has a 0 0 |
RESTRUCTURING
RESTRUCTURING | 3 Months Ended |
Mar. 31, 2023 | |
Disclosure Restructuring Abstract | |
RESTRUCTURING | NOTE 13 RESTRUCTURING In January 2022, the Company implemented a strategic reduction of its existing worldwide global workforce to simplify and streamline our organization and strengthen the overall competitiveness of its B2B segment. As a result of this initiative, the Company incurred $ 1.1 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 14 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 granted 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 was 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 The amended and restated Agreement was accounted for as a business combination. The consideration transferred in exchange for the identifiable intangible assets was 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 expected 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. 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. Based on this update, as of December 31, 2022, the Company determined that the intangible assets associated with the Agreement with a carrying amount of $ 18.4 2.3 1.6 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 $ 15.0 4.0 million payable is due in equal installments of $ 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. The stock subscription represents a liability as of March 31, 2023 until such time as the additional shares are registered and issued to the Content Provider. The 9.3 million related to the extinguishment of the fixed fees recognized in other income, net during the three months ended March 31, 2023, net of the value of the stock subscription obligation recorded within accrued liabilities on the accompanying condensed consolidated balance sheets as of March 31, 2023. In the second quarter of 2023, the Company issued and registered the shares in connection with an S-1 resale registration statement. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) Chile VAT 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 29 31 Synthetic Equity Pursuant to the binding term sheet previously entered into with Red Rock Resorts, Inc. , 2.5 5 2.00 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 15 SUBSEQUENT EVENTS Amended Credit Facility On April 13, 2023, a subsidiary of the Company executed the Amended Credit Facility 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 42.0 8.0 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 3.1 10.0 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the results of the Parent and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect all adjustments, in the opinion of management, of a normal recurring nature that are necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented. The financial data and other financial information disclosed in these notes to the condensed consolidated financial statements related to these periods are also unaudited. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ended December 31, 2023 or for any future annual or interim period. The condensed consolidated balance sheet as of December 31, 2022 included herein was derived from the audited consolidated financial statements as of that date. The accompanying unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) |
Liquidity | Liquidity The accompanying condensed consolidated financial statements have been prepared on a going concern basis. As of March 31, 2023, the Company had an accumulated deficit of $ 273.4 40.8 9,663 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 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 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 condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Due to the inherent uncertainties involved in making estimates, actual results could differ from the original estimates, and may require significant adjustments to these reported balances in 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 condensed consolidated statements of operations as incurred. Foreign currency transaction and remeasurement gains and losses were a net loss of $ 624 867 |
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 $ 36.9 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) |
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. |
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 platform (“SaaS”), GameSTACK, that its customers use to provide RMiG, online sports gaming and SIM services 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 March 31, 2023 the remaining unsatisfied performance obligations related to fixed minimum guaranteed revenue totaled $ 9.7 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, and not a specified amount of services. The series of distinct services represents a single performance obligation that is satisfied over time. Purchases of virtual credits within a transaction period on the SIM platform, generally a monthly convention, are earned 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 March 31, 2023 and December 31, 2022, the Company has recorded a liability due to its customers for their share of the fees of $ 1,582 1,628 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) 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. Additionally 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. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) Contracts with Multiple Performance Obligations For customer contracts that have more than one performance obligation, the transaction price is allocated to the performance obligations in an amount that depicts the relative stand-alone selling prices of each performance obligation. Judgment is required in determining the stand-alone selling price for each performance obligation. In determining the allocation of the transaction price, an entity is required to maximize the use of observable inputs. When the stand-alone selling price of a good or service is not directly observable, an entity is required to estimate the stand-alone selling price. 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. 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 4,700 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. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) |
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 share-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 share-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. |
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 share 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. |
Earnings Per Share, Basic and Diluted | Earnings Per Share, Basic and Diluted Basic earnings per share is calculated by dividing earnings 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 condensed consolidated balance sheets and are not subject to creditor claims. At March 31, 2023 and December 31, 2022, the related liabilities to users were $ 9,663 10,683 GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) |
Capitalized Software Development Costs, net | Capitalized Software Development Costs, net The Company capitalizes certain development costs related to its 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 condensed consolidated statements of operations. |
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. During the three months ended March 31, 2023, there was no triggering event that would cause the Company to believe the value of its long-lived assets should be impaired. |
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. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except share and per share amounts) |
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 condensed consolidated balance sheets, and amortized over the term of the loan commitment as interest expense in the accompanying condensed 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. |
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 significant Level 2 or Level 3 financial instruments. GAN LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (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, Estonia, Malta, and Mexico. 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 Adopted Accounting Pronouncements | Recently Adopted 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 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY AND EQUIPMENT | Property and equipment, net is recorded in other assets in the condensed consolidated balance sheets at March 31, 2023 and December 31, 2022 and consisted of the following: SCHEDULE OF PROPERTY AND EQUIPMENT Life (in years) 2023 2022 Estimated Useful March 31, December 31, Life (in years) 2023 2022 Fixtures, fittings and equipment 3 5 $ 4,460 $ 4,136 Platform hardware 5 2,333 2,313 Total property and equipment, cost 6,793 6,449 Less: accumulated depreciation (4,012 ) (3,599 ) Total $ 2,781 $ 2,850 |
CAPITALIZED SOFTWARE DEVELOPM_2
CAPITALIZED SOFTWARE DEVELOPMENT COSTS, NET (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Research and Development [Abstract] | |
SCHEDULE OF CAPITALIZED COMPUTER SOFTWARE COSTS, NET | Capitalized software development costs, net at March 31, 2023 and December 31, 2022 consisted of the following: SCHEDULE OF CAPITALIZED COMPUTER SOFTWARE COSTS, NET March 31, December 31, 2023 2022 Capitalized software development costs $ 8,588 $ 6,857 Development in progress 514 732 Total capitalized software development, cost 9,102 7,589 Less: accumulated amortization (1,346 ) (840 ) Total $ 7,756 $ 6,749 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
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 March 31, 2023 Average Gross Amortization Carrying Accumulated Net Carrying Period (in years) Amount Amortization Amount Developed technology 4.0 $ 34,103 $ (20,498 ) $ 13,605 Customer relationships 3.1 6,890 (4,057 ) 2,833 Trade names and trademarks 10.0 5,455 (1,469 ) 3,986 Gaming licenses 6.6 3,361 (1,618 ) 1,743 $ 49,809 $ (27,642 ) $ 22,167 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 |
SCHEDULE OF FINITE -LIVED INTANGIBLE ASSETS, AMORTIZATION EXPENSE | Estimated amortization expense for the next five years is as follows: SCHEDULE OF FINITE -LIVED INTANGIBLE ASSETS, AMORTIZATION EXPENSE Amount Remainder of 2023 $ 10,351 2024 3,072 2025 2,921 2026 2,490 2027 1,709 Thereafter 1,624 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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 Interest Rate As of March 31, 2023 Credit Facility Principal 15.46 % $ 30,000 Less unamortized debt issuance costs (1,517 ) Long-term debt, net $ 28,483 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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 three months ended March 31, 2023 is as follows: SCHEDULE OF SHARE-BASED COMPENSATION, STOCK OPTION ACTIVITY Weighted Weighted Average Average Aggregate Number of Exercise Contractual Intrinsic Shares Price Term Value Outstanding at December 31, 2022 3,447,155 $ 9.12 6.59 $ 1,139 Granted 367,870 0.01 Exercised — — Forfeited/expired or cancelled (245,151 ) 14.31 Outstanding at March 31, 2023 3,569,874 $ 7.83 6.86 $ 1,356 Options exercisable at March 31, 2023 2,402,269 $ 7.87 5.95 $ 436 |
SCHEDULE OF SHARE-BASED COMPENSATION, FAIR VALUE ASSUMPTIONS | SCHEDULE OF SHARE-BASED COMPENSATION, FAIR VALUE ASSUMPTIONS 2022 Three Months Ended March 31, 2022 Expected share price volatility 61.20 % Expected term (in years) 5.00 Risk-free interest rate 1.74 % Dividend yield 0 % |
SCHEDULE OF SHARE BASED COMPENSATION, RESTRICTED STOCK UNIT ACTIVITY | A summary of the restricted share unit activity as of and for the three months ended March 31, 2023 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, 2022 1,171,371 $ 5.43 Granted 1,009,086 1.50 Vested (328,787 ) 4.72 Forfeited/expired or cancelled (21,962 ) 5.47 Outstanding at March 31, 2023 1,829,708 $ 3.51 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
SCHEDULE OF WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES OUTSTANDING | SCHEDULE OF WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES OUTSTANDING 2023 2022 Three Months Ended March 31, 2023 2022 Numerator–basic and diluted: Net income (loss) $ 1,501 $ (4,499 ) Denominator Basic weighted average ordinary shares outstanding 42,982,255 42,252,661 Effect of dilutive securities (1) Share options outstanding (1) 1,121,001 — Ordinary shares issued in connection with Content Provider Agreement (1) 1,250,000 — Restricted shares (1) 1,829,708 — Restricted share units (1) 17,218 — Diluted weighted average ordinary shares 47,200,182 42,252,661 Basic earnings (loss) per share $ 0.03 $ (0.11 ) Diluted earnings (loss) per share $ 0.03 $ (0.11 ) (1) For the three months ended March 31, 2023, 2,448,873 5,649,593 |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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 three months ended March 31, 2023 and 2022 in line with the timing of transfer of services: SCHEDULE OF REVENUE RECOGNIZED IN LINE WITH THE TIMING OF TRANSFER OF SERVICES 2023 2022 Three Months Ended March 31, 2023 2022 Revenue from services delivered at a point in time $ 23,895 $ 24,424 Revenue from services delivered over time 11,234 13,070 Total $ 35,129 $ 37,494 |
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 2023 2022 Three Months Ended March 31, 2023 2022 Contract liabilities from advance customer payments, beginning of the period $ 2,117 $ 1,874 Contract liabilities from advance customer payments, end of the period (1) 2,655 2,095 Revenue recognized from amounts included in contract liabilities from advance customer payments at the beginning of the period 223 296 (1) Contract liabilities from advance customer payments, end of period consisted of $ 1,599 720 1,056 1,375 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
SCHEDULE OF FINANCIAL INFORMATION FOR REPORTABLE SEGMENTS | Summarized financial information by reportable segments for the three months ended March 31, 2023 and 2022 is as follows: SCHEDULE OF FINANCIAL INFORMATION FOR REPORTABLE SEGMENTS B2B B2C Total B2B B2C Total Three Months Ended 2023 2022 B2B B2C Total B2B B2C Total Revenue $ 11,279 $ 23,850 $ 35,129 $ 13,070 $ 24,424 $ 37,494 Cost of revenue (1) 1,995 8,166 10,161 3,903 7,797 11,700 Segment contribution $ 9,284 $ 15,684 $ 24,968 $ 9,167 $ 16,627 $ 25,794 (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 gross profit to the consolidated loss before income taxes for the three months ended March 31, 2023 and 2022: RECONCILIATION OF CONSOLIDATED SEGMENT CONTRIBUTION TO CONSOLIDATED INCOME (LOSS) BEFORE INCOME TAXES 2023 2022 Three Months Ended March 31, 2023 2022 Segment contribution (1) $ 24,968 $ 25,794 Sales and marketing 7,184 6,098 Product and technology 9,578 8,954 General and administrative (1) 10,006 9,392 Restructuring — 1,059 Depreciation and amortization 4,201 4,413 Interest expense (income), net 1,716 (9 ) Other income, net (9,292 ) — Income (loss) before income taxes $ 1,575 $ (4,113 ) (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 2023 2022 Three Months Ended March 31, 2023 2022 B2B: Platform and content license fees $ 8,627 $ 10,702 Development services and other 2,652 2,368 Total B2B revenue 11,279 13,070 B2C: Sportsbook 9,967 11,184 Casino 13,189 12,579 Poker 694 661 Total B2C revenue 23,850 24,424 Total revenue $ 35,129 $ 37,494 |
SCHEDULE OF REVENUE BY LOCATION OF THE CUSTOMER | Revenue by location of the customer for the three months ended March 31, 2023 and 2022 is as follows: SCHEDULE OF REVENUE BY LOCATION OF THE CUSTOMER 2023 2022 Three Months Ended March 31, 2023 2022 United States $ 8,516 $ 11,491 Europe 12,677 12,564 Latin America 11,270 12,225 Rest of the world 2,666 1,214 Total revenue $ 35,129 $ 37,494 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) $ in Thousands | 3 Months Ended | 36 Months Ended | |||||
Mar. 31, 2023 USD ($) Integer | Mar. 31, 2022 USD ($) | Apr. 14, 2026 | Apr. 14, 2023 USD ($) | Apr. 13, 2023 USD ($) | Dec. 31, 2022 USD ($) | Apr. 26, 2022 USD ($) | |
Accumulated deficit | $ 273,360 | $ 274,861 | |||||
Cash | 40,755 | 45,920 | |||||
Liabilities to users | 9,663 | 10,683 | |||||
Debt principal amount | 30,000 | $ 30,000 | |||||
Net gain loss foreign currency transaction | 624 | $ 867 | |||||
Revenue remaining performance obligation | 9,700 | ||||||
Amounts due to customers current | $ 1,582 | $ 1,628 | |||||
Number of third party gaming products available | Integer | 4,700 | ||||||
Northern Europe And Latin America [Member] | |||||||
Cash deposits | $ 36,900 | ||||||
Forecast [Member] | |||||||
Credit facility interest rate | 8% | ||||||
Subsequent Event [Member] | |||||||
Debt principal amount | $ 42,000 | ||||||
Financial covenant requirement minimum liquidity | $ 10,000 |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, cost | $ 6,793 | $ 6,449 |
Less: accumulated depreciation | (4,012) | (3,599) |
Total | 2,781 | 2,850 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, cost | $ 4,460 | 4,136 |
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 | $ 2,333 | $ 2,313 |
Property plant and equipment useful life | 5 years |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expenses | $ 365 | $ 310 |
SCHEDULE OF CAPITALIZED COMPUTE
SCHEDULE OF CAPITALIZED COMPUTER SOFTWARE COSTS, NET (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Research and Development [Abstract] | ||
Capitalized software development costs | $ 8,588 | $ 6,857 |
Development in progress | 514 | 732 |
Total capitalized software development, cost | 9,102 | 7,589 |
Less: accumulated amortization | (1,346) | (840) |
Total | $ 7,756 | $ 6,749 |
CAPITALIZED SOFTWARE DEVELOPM_3
CAPITALIZED SOFTWARE DEVELOPMENT COSTS, NET (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Research and Development [Abstract] | ||
Amortization expense | $ 486 | $ 1,162 |
SCHEDULE OF FINITE -LIVED INTAN
SCHEDULE OF FINITE -LIVED INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Indefinite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 49,809 | $ 48,727 |
Accumulated Amortization | (27,642) | (23,772) |
Net Carrying Amount | $ 22,167 | $ 24,955 |
Developed Technology Rights [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period | 4 years | 3 years 10 months 24 days |
Customer Relationships [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period | 3 years 1 month 6 days | 3 years 1 month 6 days |
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 7 months 6 days | 6 years 8 months 12 days |
Developed Technology Rights [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 34,103 | $ 33,443 |
Accumulated Amortization | (20,498) | (17,570) |
Net Carrying Amount | 13,605 | 15,873 |
Customer Relationships [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 6,890 | 6,788 |
Accumulated Amortization | (4,057) | (3,426) |
Net Carrying Amount | 2,833 | 3,362 |
Trademarks and Trade Names [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 5,455 | 5,347 |
Accumulated Amortization | (1,469) | (1,312) |
Net Carrying Amount | 3,986 | 4,035 |
License [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 3,361 | 3,149 |
Accumulated Amortization | (1,618) | (1,464) |
Net Carrying Amount | $ 1,743 | $ 1,685 |
SCHEDULE OF FINITE -LIVED INT_2
SCHEDULE OF FINITE -LIVED INTANGIBLE ASSETS, AMORTIZATION EXPENSE (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of 2023 | $ 10,351 |
2024 | 3,072 |
2025 | 2,921 |
2026 | 2,490 |
2027 | 1,709 |
Thereafter | $ 1,624 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense intangible assets | $ 3,349 | $ 2,920 |
SCHEDULE OF LONG TERM DEBT (Det
SCHEDULE OF LONG TERM DEBT (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Apr. 26, 2022 |
Debt Disclosure [Abstract] | |||
Principal | $ 30,000 | $ 30,000 | |
Effective interest rate | 15.46% | ||
Less unamortized debt issuance costs | $ (1,517) | ||
Long-term debt, net | $ 28,483 | $ 28,157 |
DEBT (Details Narrative)
DEBT (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 8 Months Ended | 36 Months Ended | |||
Apr. 26, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Apr. 14, 2026 | Apr. 14, 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 | |||||
Proceeds from credit facility | $ 27,600 | |||||
Interest expense | 1,394 | |||||
Amortization of debt issuance costs | $ 326 | |||||
Forecast [Member] | ||||||
Offsetting Assets [Line Items] | ||||||
Credit facility interest rate | 8% | |||||
Subsequent Event [Member] | ||||||
Offsetting Assets [Line Items] | ||||||
Debt principal amount | $ 42,000 | |||||
Interest Rate Floor [Member] | ||||||
Offsetting Assets [Line Items] | ||||||
Interest rate | 1% |
SCHEDULE OF SHARE-BASED COMPENS
SCHEDULE OF SHARE-BASED COMPENSATION, STOCK OPTION ACTIVITY (Details) $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) $ / shares shares | |
Share-Based Payment Arrangement [Abstract] | |
Number of Shares, Outstanding, beginning balance | shares | 3,447,155 |
Weighted Average Exercise Price, Outstanding, beginning balance | $ / shares | $ 9.12 |
Weighted average contractual term, outstanding beginning | 6 years 7 months 2 days |
Aggregate intrinsic value, outstanding | $ | $ 1,139 |
Number of Shares, Granted | shares | 367,870 |
Weighted Average Exercise Price, Granted | $ / shares | $ 0.01 |
Number of Shares, Exercised | shares | |
Weighted Average Exercise Price, Exercised | $ / shares | |
Number of Shares, Forfeited/expired or cancelled | shares | (245,151) |
Weighted Average Exercise Price, Forfeited/expired or cancelled | $ / shares | $ 14.31 |
Number of Shares, Outstanding, ending balance | shares | 3,569,874 |
Weighted Average Exercise Price, Outstanding, ending balance | $ / shares | $ 7.83 |
Weighted average contractual term, outstanding ending | 6 years 10 months 9 days |
Aggregate intrinsic value, outstanding | $ | $ 1,356 |
Number of Shares, Options, exercisable at end of period | shares | 2,402,269 |
Weighted Average Exercise Price, Options, exercisable at end of period | $ / shares | $ 7.87 |
Weighted average contractual term, option exercisable | 5 years 11 months 12 days |
Aggregate intrinsic value, Options, exercisable at end of period | $ | $ 436 |
SCHEDULE OF SHARE-BASED COMPE_2
SCHEDULE OF SHARE-BASED COMPENSATION, FAIR VALUE ASSUMPTIONS (Details) | 3 Months Ended |
Mar. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Expected share price volatility | 61.20% |
Expected term (in years) | 5 years |
Risk-free interest rate | 1.74% |
Dividend yield | 0% |
SCHEDULE OF SHARE BASED COMPENS
SCHEDULE OF SHARE BASED COMPENSATION, RESTRICTED STOCK UNIT ACTIVITY (Details) - Restricted Stock Units (RSUs) [Member] | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of Shares Outstanding, Beginning Balance | shares | 1,171,371 |
Weighted Average Grant Date Fair Value, Beginning Balance | $ / shares | $ 5.43 |
Number of Shares, Granted | shares | 1,009,086 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | $ 1.50 |
Number of Shares, Vested | shares | (328,787) |
Weighted Average Grant Date Fair Value, Vested | $ / shares | $ 4.72 |
Number of Shares, Forfeited/expired or cancelled | shares | (21,962) |
Weighted Average Grant Date Fair Value, Forfeited/expired or cancelled | $ / shares | $ 5.47 |
Number of Shares Outstanding, Ending Balance | shares | 1,829,708 |
Weighted Average Grant Date Fair Value, Ending Balance | $ / shares | $ 3.51 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | |||
Mar. 29, 2023 | Mar. 31, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | Apr. 30, 2020 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Exercise price | |||||
Weighted average grant date fair value of options | $ 1.70 | $ 6.12 | |||
Capitalized Software Development Costs [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Allocated share based compensation expense | $ 58 | ||||
Share-Based Payment Arrangement, Option [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Allocated share based compensation expense | 655 | $ 383 | |||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 279 | $ 279 | |||
Weighted average period | 2 years 9 months 18 days | ||||
Vesting 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 | ||||
Restricted Stock Units (RSUs) [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Allocated share based compensation expense | $ 647 | $ 924 | |||
Weighted average period | 3 years 4 months 24 days | ||||
Restricted stock issued | 1,009,086 | ||||
Restricted stock vested | 328,787 | ||||
Unrecognized compensation cost | $ 428 | $ 428 | |||
Restricted Stock Units (RSUs) [Member] | Employees [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Restricted stock issued | 1,009,086 | ||||
Restricted vested units, term | 4 years | ||||
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 | 149,801 | ||||
Share-based payment arrangement, shares withheld for tax withholding obligation | 49,157 | ||||
Restricted Stock [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Allocated share based compensation expense | $ 42 | ||||
Weighted average period | 8 months 12 days | ||||
Unrecognized compensation cost | $ 111 | $ 111 | |||
Unrecognized compensation cost | $ 0 | ||||
2020 Equity Incentive Plan [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Granted ordinary shares | 9,275,342 | 9,275,342 | 4,400,000 | ||
Granted ordinary shares, increased percentage | 4% | ||||
Granted ordinary shares, future issuance | 1,468,604 | 1,468,604 | |||
2020 Plan [Member] | Share-Based Payment Arrangement, Option [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Shares purchased | 367,870 | ||||
2020 Plan [Member] | Share-Based Payment Arrangement, Option [Member] | European Based Employees [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
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, or (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 | 57,960 | ||||
Share-based compensation expenses | $ 18 | ||||
2020 Employee Stock Purchase Plan [Member] | Subscription Agreement [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Number of shares issued | 1,250,000 |
DEFINED CONTRIBUTION PLANS (Det
DEFINED CONTRIBUTION PLANS (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Retirement Benefits [Abstract] | ||
Defined contribution plan employer percent | 50% | |
Defined contribution plan employee, percent | 4% | |
Defined benefit plan contributions by employer | $ 178 | $ 173 |
SCHEDULE OF WEIGHTED AVERAGE NU
SCHEDULE OF WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES OUTSTANDING (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Net income (loss) | $ 1,501 | $ (4,499) | |
Basic weighted average ordinary shares outstanding | 42,982,255 | 42,252,661 | |
Diluted weighted average ordinary shares | 47,200,182 | 42,252,661 | |
Basic earnings (loss) per share | $ 0.03 | $ (0.11) | |
Diluted earnings (loss) per share | $ 0.03 | $ (0.11) | |
Share-Based Payment Arrangement, Option [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Restricted share units | [1] | 1,121,001 | |
Common Stock [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Restricted share units | [1] | 1,250,000 | |
Restricted Stock [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Restricted share units | [1] | 1,829,708 | |
Restricted Stock Units (RSUs) [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Restricted share units | [1] | 17,218 | |
[1]For the three months ended March 31, 2023, 2,448,873 5,649,593 |
SCHEDULE OF WEIGHTED AVERAGE _2
SCHEDULE OF WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES OUTSTANDING (Details) (Parenthetical) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Restricted Stock [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Restricted shares | 2,448,873 | 5,649,593 |
SCHEDULE OF REVENUE RECOGNIZED
SCHEDULE OF REVENUE RECOGNIZED IN LINE WITH THE TIMING OF TRANSFER OF SERVICES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Total | $ 35,129 | $ 37,494 |
Transferred at Point in Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total | 23,895 | 24,424 |
Transferred over Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total | $ 11,234 | $ 13,070 |
SCHEDULE OF CONTRACT WITH CUSTO
SCHEDULE OF CONTRACT WITH CUSTOMERS (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Revenue from Contract with Customer [Abstract] | |||
Contract liabilities from advance customer payments, beginning of the period | $ 2,117 | $ 1,874 | |
Contract liabilities from advance customer payments, end of the period | [1] | 2,655 | 2,095 |
Revenue recognized from amounts included in contract liabilities from advance customer payments at the beginning of the period | $ 223 | $ 296 | |
[1]Contract liabilities from advance customer payments, end of period consisted of $ 1,599 720 1,056 1,375 |
SCHEDULE OF CONTRACT WITH CUS_2
SCHEDULE OF CONTRACT WITH CUSTOMERS (Details) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | ||
Contract with customer, liability | $ 2,655 | [1] | $ 2,117 | $ 2,095 | [1] | $ 1,874 |
Other Current Liabilities [Member] | ||||||
Contract with customer, liability | 1,599 | 720 | ||||
Other Liabilities [Member] | ||||||
Contract with customer, liability | $ 1,056 | $ 1,375 | ||||
[1]Contract liabilities from advance customer payments, end of period consisted of $ 1,599 720 1,056 1,375 |
SCHEDULE OF FINANCIAL INFORMATI
SCHEDULE OF FINANCIAL INFORMATION FOR REPORTABLE SEGMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Segment Reporting Information [Line Items] | |||
Revenue | $ 35,129 | $ 37,494 | |
Cost of revenue | [1] | 10,161 | 11,700 |
Segment contribution | [2] | 24,968 | 25,794 |
Business to Business (B2B) [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 11,279 | 13,070 | |
Cost of revenue | [3] | 1,995 | 3,903 |
Segment contribution | 9,284 | 9,167 | |
Business to Consumer (B2C) [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 23,850 | 24,424 | |
Cost of revenue | [3] | 8,166 | 7,797 |
Segment contribution | $ 15,684 | $ 16,627 | |
[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 | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Segment Reporting [Abstract] | |||
Segment contribution | [1] | $ 24,968 | $ 25,794 |
Sales and marketing | 7,184 | 6,098 | |
Product and technology | 9,578 | 8,954 | |
General and administrative | [1] | 10,006 | 9,392 |
Restructuring | 1,059 | ||
Depreciation and amortization | 4,201 | 4,413 | |
Interest expense (income), net | 1,716 | (9) | |
Other income, net | (9,292) | ||
Income (loss) before income taxes | $ 1,575 | $ (4,113) | |
[1]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 | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenue from External Customer [Line Items] | ||
Total revenue | $ 35,129 | $ 37,494 |
Business to Business (B2B) [Member] | ||
Revenue from External Customer [Line Items] | ||
Total revenue | 11,279 | 13,070 |
Business to Consumer (B2C) [Member] | ||
Revenue from External Customer [Line Items] | ||
Total revenue | 23,850 | 24,424 |
Platform and Content License Fees [Member] | Business to Business (B2B) [Member] | ||
Revenue from External Customer [Line Items] | ||
Total revenue | 8,627 | 10,702 |
Development Services and Other [Member] | Business to Business (B2B) [Member] | ||
Revenue from External Customer [Line Items] | ||
Total revenue | 2,652 | 2,368 |
Sportsbook [Member] | Business to Consumer (B2C) [Member] | ||
Revenue from External Customer [Line Items] | ||
Total revenue | 9,967 | 11,184 |
Casino [Member] | Business to Consumer (B2C) [Member] | ||
Revenue from External Customer [Line Items] | ||
Total revenue | 13,189 | 12,579 |
Poker [Member] | Business to Consumer (B2C) [Member] | ||
Revenue from External Customer [Line Items] | ||
Total revenue | $ 694 | $ 661 |
SCHEDULE OF REVENUE BY LOCATION
SCHEDULE OF REVENUE BY LOCATION OF THE CUSTOMER (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenue | $ 35,129 | $ 37,494 |
UNITED STATES | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenue | 8,516 | 11,491 |
Europe [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenue | 12,677 | 12,564 |
Latin America [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenue | 11,270 | 12,225 |
Rest of The World [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenue | $ 2,666 | $ 1,214 |
SEGMENT REPORTING (Details Narr
SEGMENT REPORTING (Details Narrative) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
One Customer [Member] | Revenue [Member] | B2B Segment [Member] | ||
Revenue, Major Customer [Line Items] | ||
Revenue percentage | 16.10% | 16.60% |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Effective income tax rate | 4.70% | (9.40%) |
Statutory tax rate | 0% | |
BERMUDA | ||
Effective income tax rate | 0% | 0% |
RESTRUCTURING (Details Narrativ
RESTRUCTURING (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disclosure Restructuring Abstract | ||
Restructuring charges | $ 1,059 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 3 Months Ended | 12 Months Ended | |||||||
Mar. 29, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Mar. 30, 2023 | May 13, 2022 | Apr. 25, 2022 | Jan. 27, 2022 | Jun. 30, 2021 | |
Product Liability Contingency [Line Items] | |||||||||
Finite-lived intangible assets, net | $ 22,167 | $ 24,955 | |||||||
Extinguishment of debt | $ 9,292 | ||||||||
Price per share | $ 2 | ||||||||
Minimum [Member] | |||||||||
Product Liability Contingency [Line Items] | |||||||||
Percentage of market capitalization | 2.50% | ||||||||
Maximum [Member] | |||||||||
Product Liability Contingency [Line Items] | |||||||||
Percentage of market capitalization | 5% | ||||||||
CHILE | |||||||||
Product Liability Contingency [Line Items] | |||||||||
Percentage of revenue | 29% | 31% | |||||||
Internal Revenue Service (IRS) [Member] | |||||||||
Product Liability Contingency [Line Items] | |||||||||
Value added tax rate | 19% | ||||||||
Witholding on payment rate | 19% | ||||||||
Content Licensing Agreement [Member] | |||||||||
Product Liability Contingency [Line Items] | |||||||||
Fixed fees payable | $ 15,000 | ||||||||
Remaining payment | 4,000 | ||||||||
Content licensing liability periodical payment | 200 | ||||||||
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 | ||||||||
Content Licenses [Member] | Content Licensing Agreement [Member] | |||||||||
Product Liability Contingency [Line Items] | |||||||||
Finite-lived intangible assets, net | 18,400 | ||||||||
Customer Relationships [Member] | Content Licensing Agreement [Member] | |||||||||
Product Liability Contingency [Line Items] | |||||||||
Finite-lived intangible assets, net | 2,300 | ||||||||
Fair value of intangible assets | $ 1,600 | ||||||||
Licensing liability remaining outstanding | $ 1,600 | ||||||||
Stock Issued During Period, Shares, New Issues | 1,250,000 | ||||||||
Extinguishment of debt | $ 9,300 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) $ in Thousands | 36 Months Ended | ||||
Apr. 14, 2026 | Apr. 14, 2023 | Apr. 13, 2023 | Mar. 31, 2023 | Apr. 26, 2022 | |
Subsequent Event [Line Items] | |||||
Debt principal amount | $ 30,000 | $ 30,000 | |||
Forecast [Member] | |||||
Subsequent Event [Line Items] | |||||
Credit facility interest rate | 8% | ||||
Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Debt principal amount | $ 42,000 | ||||
Debt instrument exit fees rate | 2.50% | ||||
Debt issuance costs, net | $ 3,100 | ||||
Financial covenant requirement minimum liquidity | $ 10,000 |