Not Applicable | ||||||||||||||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I. R. S. Employer Identification No.) |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Exhibit Number | Description | |||||||
99.1 | ||||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
Date: August 16, 2021 | GAN Limited | ||||
/s/ Karen E. Flores | |||||
Karen E. Flores | |||||
Chief Financial Officer |
GAN Limited | ||||||||||||||||||||
Key Financial Highlights | ||||||||||||||||||||
(Unaudited, in thousands unless otherwise specified) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
June 30, 2021 | March 31, 2021 | June 30, 2020 | ||||||||||||||||||
Revenues | ||||||||||||||||||||
B2B | $ | 10,646 | $ | 13,530 | $ | 8,323 | ||||||||||||||
B2C | 23,982 | 14,312 | — | |||||||||||||||||
Total revenues | $ | 34,628 | $ | 27,842 | $ | 8,323 | ||||||||||||||
Profitability Measures | ||||||||||||||||||||
B2B segment gross profit (1) | $ | 8,339 | $ | 10,788 | $ | 6,200 | ||||||||||||||
B2C segment gross profit (1) | $ | 15,933 | $ | 8,335 | $ | — | ||||||||||||||
B2B segment gross profit margin (1) | 78.3 | % | 79.7 | % | 74.5 | % | ||||||||||||||
B2C segment gross profit margin (1) | 66.4 | % | 58.2 | % | N/A | |||||||||||||||
Net loss | $ | (2,730) | $ | (4,464) | $ | (9,669) | ||||||||||||||
Adjusted EBITDA (7) | $ | 4,642 | $ | 1,700 | $ | 1,638 | ||||||||||||||
Key Performance Indicators | ||||||||||||||||||||
B2B Gross Operator Revenue (2) (in millions) | $ | 221.4 | $ | 214.2 | $ | 129.1 | ||||||||||||||
B2B Active Player-Days (3) (days, in millions) | 9.1 | 9.5 | 5.6 | |||||||||||||||||
B2B ARPDAU (4) (in whole dollars) | $ | 24.38 | $ | 22.48 | $ | 23.02 | ||||||||||||||
B2C Active Customers (5) (number of customers) | 186,942 | 111,566 | N/A | |||||||||||||||||
B2C Marketing Spend Ratio (6) | 12 | % | 14 | % | N/A |
GAN Robert Shore VP, Investor Relations & Capital Markets (610) 812-3519 rshore@GAN.com | Alpha IR Group Ryan Coleman or Ashley Gruenberg (312) 445-2870 GAN@alpha-ir.com |
GAN Limited | ||||||||||||||||||||
Condensed Consolidated Statements of Operations | ||||||||||||||||||||
(Unaudited, in thousands, except share and per share amounts) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
June 30, 2021 | March 31, 2021 | June 30, 2020 | ||||||||||||||||||
Revenues | $ | 34,628 | $ | 27,842 | $ | 8,323 | ||||||||||||||
Operating costs and expenses | ||||||||||||||||||||
Cost of revenues (1) | 10,356 | 8,719 | 2,123 | |||||||||||||||||
Sales and marketing | 5,480 | 4,101 | 1,642 | |||||||||||||||||
Product and technology | 4,055 | 4,850 | 5,173 | |||||||||||||||||
General and administrative (1) | 12,326 | 10,011 | 7,786 | |||||||||||||||||
Depreciation and amortization | 4,149 | 3,963 | 716 | |||||||||||||||||
Total operating costs and expenses | 36,366 | 31,644 | 17,440 | |||||||||||||||||
Operating loss | (1,738) | (3,802) | (9,117) | |||||||||||||||||
Interest expense, net | — | 1 | 382 | |||||||||||||||||
Loss before income taxes | (1,738) | (3,803) | (9,499) | |||||||||||||||||
Income tax provision | 992 | 661 | 170 | |||||||||||||||||
Net loss | $ | (2,730) | $ | (4,464) | $ | (9,669) | ||||||||||||||
Loss per share, basic and diluted | $ | (0.07) | $ | (0.11) | $ | (0.37) | ||||||||||||||
Weighted average ordinary shares outstanding, basic and diluted | 41,931,948 | 41,986,083 | 26,227,944 | |||||||||||||||||
GAN Limited | ||||||||||||||
Condensed Consolidated Balance Sheets | ||||||||||||||
(Unaudited, in thousands, except share amounts) | ||||||||||||||
June 30, 2021 | December 31, 2020 | |||||||||||||
ASSETS | ||||||||||||||
Current assets | ||||||||||||||
Cash | $ | 52,086 | $ | 152,654 | ||||||||||
Accounts receivable, net | 11,976 | 6,818 | ||||||||||||
Prepaid expenses | 2,384 | 1,912 | ||||||||||||
Other current assets | 2,099 | 2,112 | ||||||||||||
Total current assets | 68,545 | 163,496 | ||||||||||||
Capitalized software development costs, net | 11,555 | 6,648 | ||||||||||||
Goodwill | 154,534 | — | ||||||||||||
Intangible assets, net | 41,611 | 468 | ||||||||||||
Other assets | 7,647 | 2,634 | ||||||||||||
Total assets | $ | 283,892 | $ | 173,246 | ||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||
Current liabilities | ||||||||||||||
Accounts payable | $ | 4,146 | $ | 4,926 | ||||||||||
Accrued compensation and benefits | 7,987 | 4,956 | ||||||||||||
Accrued expenses | 5,405 | 3,363 | ||||||||||||
Liabilities to users | 7,389 | — | ||||||||||||
Other current liabilities | 3,716 | 4,067 | ||||||||||||
Total current liabilities | 28,643 | 17,312 | ||||||||||||
Deferred income taxes | 2,192 | — | ||||||||||||
Other noncurrent liabilities | 463 | 370 | ||||||||||||
Total liabilities | 31,298 | 17,682 | ||||||||||||
Stockholders' equity | ||||||||||||||
Ordinary shares, $0.01 par value, 100,000,000 shares authorized, 42,015,675 and 36,635,362 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively | 420 | 365 | ||||||||||||
Additional paid-in capital | 315,055 | 203,842 | ||||||||||||
Accumulated deficit | (52,960) | (45,766) | ||||||||||||
Accumulated other comprehensive loss | (9,921) | (2,877) | ||||||||||||
Total stockholders' equity | 252,594 | 155,564 | ||||||||||||
Total liabilities and stockholders' equity | $ | 283,892 | $ | 173,246 |
GAN Limited | ||||||||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||||||
(Unaudited, in thousands) | ||||||||||||||
Six Months Ended June 30, | ||||||||||||||
2021 | 2020 | |||||||||||||
Operating Activities | ||||||||||||||
Net loss | $ | (7,194) | $ | (8,975) | ||||||||||
Adjustments to reconcile net loss to net cash from operating activities | 12,202 | 6,062 | ||||||||||||
Changes in operating assets and liabilities, net of acquisition | (712) | 4,621 | ||||||||||||
Net cash from operating activities | 4,296 | 1,708 | ||||||||||||
Investing Activities | ||||||||||||||
Cash paid for acquisition, net of cash acquired | (92,404) | — | ||||||||||||
Expenditures for capitalized software development costs | (6,479) | (1,748) | ||||||||||||
Payment of content licensing fee | (3,500) | — | ||||||||||||
Purchases of gaming licenses | (207) | (12) | ||||||||||||
Purchases of property and equipment | (1,093) | (630) | ||||||||||||
Net cash used in investing activities | (103,683) | (2,390) | ||||||||||||
Financing Activities | ||||||||||||||
Proceeds received from issuance of ordinary shares in initial public offering, net | — | 57,445 | ||||||||||||
Payments of offering costs | (604) | (1,678) | ||||||||||||
Proceeds from exercise of stock options | 337 | 2,197 | ||||||||||||
Cash consideration paid to GAN plc shareholders | — | (2,525) | ||||||||||||
Principal payments on finance leases | (54) | (90) | ||||||||||||
Net cash from (used in) financing activities | (321) | 55,349 | ||||||||||||
Effect of foreign exchange rates on cash | (860) | (888) | ||||||||||||
Net increase (decrease) in cash | (100,568) | 53,779 | ||||||||||||
Cash, beginning of period | 152,654 | 10,279 | ||||||||||||
Cash, end of period | $ | 52,086 | $ | 64,058 |
GAN Limited | ||||||||||||||||||||
Segment Revenues and Gross Profit | ||||||||||||||||||||
(Unaudited, in thousands) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
June 30, 2021 | March 31, 2021 | June 30, 2020 | ||||||||||||||||||
B2B | ||||||||||||||||||||
Platform and content fees | $ | 9,325 | $ | 9,184 | $ | 6,422 | ||||||||||||||
Development services and other | 1,321 | 4,346 | 1,901 | |||||||||||||||||
Total B2B revenues | 10,646 | 13,530 | 8,323 | |||||||||||||||||
B2C | ||||||||||||||||||||
Gaming | 23,982 | 14,312 | — | |||||||||||||||||
Total B2C revenues | 23,982 | 14,312 | — | |||||||||||||||||
Total revenues | $ | 34,628 | $ | 27,842 | $ | 8,323 | ||||||||||||||
B2B | ||||||||||||||||||||
Revenues | $ | 10,646 | $ | 13,530 | $ | 8,323 | ||||||||||||||
Cost of revenues (1) | 2,307 | 2,742 | 2,123 | |||||||||||||||||
B2B segment gross profit (1) | 8,339 | 10,788 | 6,200 | |||||||||||||||||
B2B segment gross profit margin (1) | 78.3 | % | 79.7 | % | 74.5 | % | ||||||||||||||
B2C | ||||||||||||||||||||
Revenues | 23,982 | 14,312 | — | |||||||||||||||||
Cost of revenues (1) | 8,049 | 5,977 | — | |||||||||||||||||
B2C segment gross profit (1) | 15,933 | 8,335 | — | |||||||||||||||||
B2C segment gross profit margin (1) | 66.4 | % | 58.2 | % | — | |||||||||||||||
Total segment gross profit (1) | $ | 24,272 | $ | 19,123 | $ | 6,200 | ||||||||||||||
Total segment gross profit margin (1) | 70.1 | % | 68.7 | % | 74.5 | % | ||||||||||||||
(1) Excludes depreciation and amortization |
GAN Limited | ||||||||||||||||||||
Revenues by Geography | ||||||||||||||||||||
(Unaudited, in thousands) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
June 30, 2021 | March 31, 2021 | June 30, 2020 | ||||||||||||||||||
Revenues by geography * | ||||||||||||||||||||
United States | $ | 8,608 | $ | 11,473 | $ | 7,044 | ||||||||||||||
Europe | 14,193 | 11,064 | 1,268 | |||||||||||||||||
Latin America | 10,254 | 3,603 | — | |||||||||||||||||
Rest of the world | 1,573 | 1,702 | 11 | |||||||||||||||||
Total | $ | 34,628 | $ | 27,842 | $ | 8,323 | ||||||||||||||
* Revenue is segmented based on the location of the Company's customer. |
GAN Limited | ||||||||||||||||||||
Adjusted EBITDA | ||||||||||||||||||||
(Unaudited, in thousands) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
June 30, 2021 | March 31, 2021 | June 30, 2020 | ||||||||||||||||||
Net loss | $ | (2,730) | $ | (4,464) | $ | (9,669) | ||||||||||||||
Income tax provision | 992 | 661 | 170 | |||||||||||||||||
Interest expense, net | — | 1 | 382 | |||||||||||||||||
Depreciation and amortization | 4,149 | 3,963 | 716 | |||||||||||||||||
Share-based compensation and related expense | 2,231 | 1,539 | 7,762 | |||||||||||||||||
Initial public offering transaction related | — | — | 2,277 | |||||||||||||||||
Adjusted EBITDA | $ | 4,642 | $ | 1,700 | $ | 1,638 |
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