EX-99.1 2 tm2515028d1_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

 

BRAGG GAMING GROUP INC.

 

INTERIM UNAUDITED CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

 

Three-month period ended March 31, 2025 and March 31, 2024

 

Presented in Euros (Thousands)

 

 

 

 

TABLE OF CONTENTS

 

INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS 1
INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION 2
INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY 3
INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 4

 

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  
     
1 GENERAL INFORMATION 5
2 MATERIAL ACCOUNTING POLICIES 5
3 LOSS BEFORE INCOME TAXES CLASSIFIED BY NATURE 6
4 CONVERTIBLE DEBT 7
5 SHARE CAPITAL 8
6 WARRANTS 8
7 SHARE BASED COMPENSATION 9
8 GOODWILL 12
9 DEFERRED CONSIDERATION 13
10 RIGHT OF USE ASSETS 14
11 INTANGIBLE ASSETS 15
12 TRADE AND OTHER RECEIVABLES 16
13 TRADE PAYABLES AND OTHER LIABILITIES 16
14 LEASE LIABILITIES 17
15 LOANS PAYABLE 18
16 RELATED PARTY TRANSACTIONS 19
17 FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT 20
18 SUPPLEMENTARY CASHFLOW INFORMATION 24
19 SEGMENT INFORMATION 25
20 INCOME TAXES 26
21 CONTINGENT LIABILITIES 27
22 SUBSEQUENT EVENTS 27

 

1 

 

BRAGG GAMING GROUP INC.

INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

 

       Three Months Ended March 31, 
   Note   2025   2024 
Revenue   3, 19    25,505    23,811 
Cost of revenue   3    (11,221)   (11,934)
Gross Profit        14,284    11,877 
                
Selling, general and administrative expenses   3    (15,807)   (12,387)
Loss on remeasurement of derivative liability   4    —    (178)
Gain on settlement of convertible debt   4    —    65 
Loss on remeasurement of deferred consideration   3, 9, 17    (157)   (645)
Operating Loss        (1,680)   (1,268)
                
Net interest expense and other financing charges   3, 18    (346)   (592)
Loss Before Income Taxes        (2,026)   (1,860)
                
Income taxes expense   20    (614)   (44)
Net Loss        (2,640)   (1,904)
                
Items to be reclassified to net loss:               
Cumulative translation adjustment        (1,423)   (383)
                
Net Comprehensive Loss        (4,063)   (2,287)
                
Basic Loss Per Share        (0.11)   (0.08)
Diluted Loss Per Share        (0.11)   (0.08)

 

         Millions     Millions  
Weighted average number of shares - basic        25.1    23.5 
Weighted average number of shares - diluted        25.1    23.5 

 

See accompanying notes to the interim unaudited condensed consolidated financial statements.

 

2 

 

BRAGG GAMING GROUP INC.

INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

 

             
       As at   As at 
       March 31,   December 31, 
   Note   2025   2024 
Cash and cash equivalents        10,815    10,467 
Trade and other receivables   12, 17    21,517    20,072 
Prepaid expenses and other assets        2,708    2,624 
Total Current Assets        35,040    33,163 
Property and equipment        1,295    1,341 
Right-of-use assets   10    3,247    3,510 
Intangible assets   11    33,507    35,859 
Goodwill   8    32,182    32,722 
Other assets        351    — 
Total Assets        105,622    106,595 
                
Trade payables and other liabilities   13, 17    22,118    19,946 
Income taxes payable   20    951    463 
Lease obligations on right of use assets   14    855    882 
Deferred consideration   9    1,467    1,244 
Share appreciation rights liability   7    257    — 
Loans payable   15    6,322    6,579 
Total Current Liabilities        31,970    29,114 
Deferred income tax liabilities   20    637    680 
Lease obligations on right of use assets   14    2,473    2,815 
Share appreciation rights liability   7    214    — 
Other non-current liabilities        487    487 
Total Liabilities        35,781    33,096 
                
Share capital   5    131,853    131,729 
Contributed surplus        17,961    17,680 
Accumulated deficit        (83,850)   (81,210)
Accumulated other comprehensive income        3,877    5,300 
Total Equity        69,841    73,499 
Total Liabilities and Equity        105,622    106,595 

 

See accompanying notes to the interim unaudited condensed consolidated financial statements.

 

Approved on behalf of the Board

 

Matevž Mazij Holly Gagnon
Chief Executive Officer Chair of the Board of Directors

 

3 

 

BRAGG GAMING GROUP INC.

INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

 

                       Accumulated     
                       other     
       Share   Shares to   Contributed   Accumulated   comprehensive   Total 
   Note   capital   be issued   surplus   Deficit   income (loss)   Equity 
Balance as at January 1, 2024        120,015    3,491    19,887    (76,063)   2,917    70,247 
Shares issued upon exercise of convertible debt        1,068    —    —    —    —    1,068 
Share-based compensation   7    —    —    184    —    —    184 
Net loss for the year        —    —    —    (1,904)   —    (1,904)
Other comprehensive loss        —    —    —    —    (383)   (383)
Balance as at March 31, 2024        121,083    3,491    20,071    (77,967)   2,534    69,212 
                                    
Balance as at January 1, 2025        131,729    —    17,680    (81,210)   5,300    73,499 
Exercise of stock options   7    124    —    (87)   —    —    37 
Share-based compensation   7    —    —    368    —    —    368 
Net loss for the year        —    —    —    (2,640)   —    (2,640)
Other comprehensive loss        —    —    —    —    (1,423)   (1,423)
Balance as at March 31, 2025        131,853    —    17,961    (83,850)   3,877    69,841 

 

See accompanying notes to the interim unaudited condensed consolidated financial statements.

 

4 

 

BRAGG GAMING GROUP INC.

INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

 

       Three Months Ended March 31, 
   Note   2025   2024 
Operating Activities               
Net loss        (2,640)   (1,904)
Add:               
Net interest expense and other financing charges   3, 18    346    592 
Depreciation and amortization   3    4,720    3,877 
Share based compensation   7    846    184 
Loss on remeasurement of derivative liability   4    —    178 
Gain on settlement of convertible debt   4    —    (65)
Loss on remeasurement of deferred consideration   3, 9, 17    157    645 
Unrealized foreign exchange (gain) loss        (38)   8 
Income tax expense   20    614    44 
         4,005    3,559 
Change in working capital   18    643    (659)
Income tax paid   20    (154)   (151)
Cash Flows Generated from Operating Activities        4,494    2,749 
                
Investing Activities               
Purchases of property and equipment        (80)   (112)
Additions of intangible assets   11    (2,874)   (2,641)
Loan receivables        (350)   — 
Cash Flows Used In Investing Activities        (3,304)   (2,753)
                
Financing Activities               
Proceeds from exercise of stock options   7    37    — 
Repayment of convertible debt        —    (455)
Repayment of lease liability   14    (344)   (171)
Interest and financing fees        (249)   (61)
Cash Flows Used In Financing Activities        (556)   (687)
                
Effect of foreign currency exchange rate changes on cash and cash equivalents        (286)   (358)
Change in Cash and Cash Equivalents        348    (1,049)
Cash and cash equivalents at beginning of year        10,467    8,796 
Cash and Cash Equivalents at end of year        10,815    7,747 

 

See accompanying notes to the interim unaudited condensed consolidated financial statements.

 

5 

 

BRAGG GAMING GROUP INC.

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2025 AND MARCH 31, 2024

PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

 

1   GENERAL INFORMATION

 

Nature of operations

 

Bragg Gaming Group Inc. and its subsidiaries (collectively, “Bragg” or the “Company”) are, primarily and collectively, a business-to-business (“B2B”) online gaming technology platform and casino content aggregator.

 

The registered and head office of the Company is located at 130 King Street West, Suite 1955, Toronto, Ontario, Canada M5X 1E3.

 

2   MATERIAL ACCOUNTING POLICIES

 

The interim unaudited condensed consolidated financial statements (“interim financial statements”) were prepared using the same basis of presentation, accounting policies and methods of computation, and using the same significant estimates and judgments in applying the accounting policies as those of the audited consolidated financial statements for the year ended December 31, 2024, which are available at www.sedarplus.ca.

 

Statement of compliance and basis of presentation

 

The accompanying interim financial statements have been prepared in accordance with International Accounting Standards (“IAS”) 34 Interim Financial Reporting and do not include all of the information required for annual consolidated financial statements and should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2024.

 

These interim financial statements are prepared on a historical cost basis except for financial instruments classified at fair value through profit or loss (“FVTPL”) or fair value through other comprehensive income (“FVOCI”) which are measured at fair value. The material accounting policies set out in note 2 of the audited consolidated financial statements for the year ended December 31, 2024 have been applied consistently in the preparation of the interim financial statements for all periods presented.

 

These interim financial statements were, at the recommendation of the audit committee, approved and authorized for filing by the board of directors of the Company (the “Board”) on May 15, 2025.

 

6 

 

BRAGG GAMING GROUP INC.

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2025 AND MARCH 31, 2024

PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

 

3   LOSS BEFORE INCOME TAXES CLASSIFIED BY NATURE

 

The loss before income taxes is classified as follows:

 

       Three Months Ended March 31, 
   Note   2025   2024 
Revenue   19    25,505    23,811 
Cost of revenue        (11,221)   (11,934)
Gross Profit        14,284    11,877 
                
Salaries and subcontractors        (6,574)   (4,907)
Share based compensation   7    (846)   (184)
Total employee costs        (7,420)   (5,091)
Depreciation and amortization        (4,720)   (3,877)
IT and hosting        (1,281)   (1,068)
Professional fees        (1,086)   (875)
Corporate costs        (132)   (175)
Sales and marketing        (297)   (559)
Bad debt recovery (expense)   12    (131)   18 
Travel and entertainment        (331)   (215)
Other operational costs        (409)   (545)
Selling, General and Administrative Expenses        (15,807)   (12,387)
                
Loss on remeasurement of derivative liability   4    —    (178)
Gain on settlement of convertible debt   4    —    65 
Loss on remeasurement of deferred consideration   9    (157)   (645)
Operating Loss        (1,680)   (1,268)
                
Interest income        4    — 
Accretion on liabilities   9    (73)   (531)
Foreign exchange gain        35    44 
Interest and financing fees        (312)   (105)
Net Interest Expense and Other Financing Charges        (346)   (592)
Loss Before Income Taxes        (2,026)   (1,860)

 

7 

 

BRAGG GAMING GROUP INC.

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2025 AND MARCH 31, 2024

PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

 

4 CONVERTIBLE DEBT

 

On September 5, 2022, the Company entered into a Funding Agreement for an investment of EUR 8,770 (USD 8,700) with Lind in the form of a Convertible Debt with a face value of EUR 10,081 (USD 10,000), bearing interest at an inherent rate of 7.5% maturing 24 months after issuance. Net proceeds after deducting transaction fees were EUR 8,053. The face value of the Convertible Debt has a 24-month maturity date and can be paid in cash or be converted into common shares of the Company ("Shares") at a conversion price equal to 87.5% of the five-day volume weighted average price ("VWAP") immediately prior to each conversion. Shares issued upon conversion are subject to a 120-day lock-up period following deal close.

 

   Convertible debt   Derivative liability   Total 
Balance as at January 1, 2024   2,445    471    2,916 
Accretion expense   1,298    —    1,298 
Loss on remeasurement of derivative liability   —    94    94 
Gain on settlement of convertible debt   —    (169)   (169)
Shares issued upon exercise of convertible debt   (2,314)   (390)   (2,704)
Repayment of convertible debt   (1,377)   —    (1,377)
Effect of movement in exchange rates   (52)   (6)   (58)
Balance as at December 31, 2024   —    —    — 

 

On August 7, 2024, the convertible debt has been settled in full.

 

For the three months ended March 31, 2024, an accretion expense of EUR 396 was recognised in net interest expense and other financing charges in respect of the Host Debt component and a loss of EUR 178 on remeasurement of derivative liability was recognised in the interim unaudited condensed consolidated statements of loss and comprehensive loss.

 

Immediately prior to any conversion, the embedded derivative liability is remeasured at fair value through profit and loss. Key valuation inputs and assumptions used are closing stock price on dates of conversion of between CAD 6.910 and 7.260, 5-day VWAP of between CAD 6.910 and 7.306, expected life of between 0.06 to 0.56 years, annual risk-free rate of between 5.17% and 5.54%

 

During the three months ended March 31, 2024, 216,148 shares were issued upon exercise of convertible debt (representing USD 1,000 of the total face value of USD 10,000). The Company also elected to settle USD 500 of the debt in cash upon delivery of a cash in-lieu of shares conversion notice for a total of USD 515.

 

Derivative and host debt balances representing the fair value of the converted debt are subsequently transferred to the share capital account in the interim unaudited condensed statements of changes in equity. Upon exercise, during the three months ended March 31, 2024, EUR 921 and EUR 147 was transferred from the host debt liability and derivative liability, respectively, to share capital in the interim unaudited condensed consolidated statements of changes in equity for a total of EUR 1,068.

 

8 

 

BRAGG GAMING GROUP INC.

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2025 AND MARCH 31, 2024

PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

 

5    SHARE CAPITAL

 

Authorized - Unlimited Common Shares, fully paid

 

The following is a continuity of the Company’s share capital:

 

      Note   Number   Value 
January 1, 2024  Balance        23,003,552    120,015 
February 5, 2024 to March 5, 2024  Shares issued upon exercise of convertible debt   6    216,148    1,068 
March 31, 2024  Balance        23,219,700    121,083 
                   
January 1, 2025  Balance        25,042,982    131,729 
February 6, 2025  Exercise of FSO   6    25,000    124 
March 31, 2025  Balance        25,067,982    131,853 

 

The Company’s common shares have no par value.

 

6   WARRANTS

 

The following are continuities of the Company’s warrants:

 

      Warrants 
      issued as part of 
Number of Warrants     convertible debt 
January 1, 2024  Balance   979,048 
March 31, 2024  Balance   979,048 
         
January 1, 2025  Balance   979,048 
March 31, 2025  Balance   979,048 

 

Each unit consists of the following characteristics:

 

   Warrants 
   issued as part of 
   convertible debt 
Number of shares   1 
Number of Warrants   — 
Exercise price of unit (CAD)   9.28 

 

Warrants issued upon completion of Financing Arrangement

 

Upon completion of the Financing Arrangement on September 5, 2022, 979,048 warrants were issued with an exercise price of CAD 9.28 per warrant, each convertible to one common share of the Company and expiring 5 years after the issuance date. Under the acceleration provisions of the warrants agreement, if the Company’s common shares trade at or above CAD 11.60 for 30 consecutive trading days, the Company has the right to issue an exercise notice to warrant holders to exercise their warrants before the end of 21 days, otherwise 50% of the warrants expire.

 

9 

 

BRAGG GAMING GROUP INC.

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2025 AND MARCH 31, 2024

PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

 

6WARRANTS (CONTINUED)

 

Similarly, if the Company’s common shares trade at or above CAD 18.56 for 30 consecutive trading days, the Company has the right to issue an exercise notice to warrant holders to exercise all their warrants before the end of 21 days, otherwise all the warrants expire.

 

Upon allocating the transaction price of the Financing Arrangement between its components of host debt liability, derivative liability and warrants, the combined fair value of the host debt liability and derivative liability exceeded the transaction price. Therefore, no residual fair value was allocated to the warrant component of the instrument in the consolidated statements of changes in equity.

 

7SHARE BASED COMPENSATION

 

The Company maintains an Omnibus Incentive Equity Plan (“OEIP”) for certain employees and consultants. The plan was approved at an annual and special meeting of shareholders on November 27, 2020.

 

The following table summarizes information about the OEIP.

 

   DSU   RSU   SAR   FSO 
                   Weighted 
   Outstanding   Outstanding   Outstanding   Outstanding   Average 
   DSUs   RSUs   SARs   FSOs   Exercise 
   (Number of   (Number of   (Number of   (Number   Price / Share 
   of shares)   of shares)   of shares)   of shares)   CAD 
Balance as at January 1, 2024   225,154    498,000    —    1,777,438    8.43 
Expired   —    —    —    (50,000)   5.00 
Forfeited / Cancelled   —    —    —    (162)   10.07 
Balance as at March 31, 2024   225,154    498,000    —    1,727,276    8.52 
                          
Balance as at January 1, 2025   26,666    280,000    1,329,082    1,602,346    8.81 
Granted   —    —    —    5,000    2.30 
Exercised   —    —    —    (25,000)   2.30 
Forfeited / Cancelled   —    —    —    (2,530)   (10.07)
Balance as at March 31, 2025   26,666    280,000    1,329,082    1,579,816    8.89 

 

10 

 

BRAGG GAMING GROUP INC.

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2025 AND MARCH 31, 2024

PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

 

7SHARE BASED COMPENSATION (CONTINUED)

 

The following table summarizes information about the outstanding share options as at March 31, 2025:

 

   Outstanding   Exercisable 
       Weighted   Weighted       Weighted 
       Average   Average       Average 
   FSOs   Remaining   Exercise   FSOs   Exercise 
Range of exercise  (Number   Contractual   Price / Share   (Number   Price / Share 
prices (CAD)  of shares)   Life (Years)   CAD   of shares)   CAD 
2.30 - 5.00   20,000    10    4.68    —    — 
5.01 - 8.62   1,131,081    2    7.72    947,740    7.77 
8.63 - 15.00   427,183    6    12.11    427,173    12.11 
15.01 - 33.30   1,552    1    33.30    1,552    33.30 
    1,579,816    3    8.89    1,376,465    9.15 

 

The following table summarizes information about the outstanding share options as at March 31, 2024:

 

   Outstanding   Exercisable 
       Weighted   Weighted       Weighted 
       Average   Average       Average 
   FSOs   Remaining   Exercise   FSOs   Exercise 
Range of exercise  (Number   Contractual   Price / Share   (Number   Price / Share 
prices (CAD)  of shares)   Life (Years)   CAD   of shares)   CAD 
2.30 - 5.00   148,200    1    2.63    148,200    2.63 
5.01 - 8.62   1,118,018    4    7.76    960,168    7.88 
8.63 - 15.00   459,506    6    12.21    409,027    12.28 
15.01 - 33.30   1,552    2    33.30    1,552    33.30 
    1,727,276    4    8.52    1,518,947    8.58 

 

 

Fixed Stock Options (“FSOs”)

 

During the three months ended March 31, 2025, a share-based compensation charge of EUR 98 (three months ended March 31, 2024: EUR 98) has been recognized in the interim unaudited condensed consolidated statements of loss and comprehensive loss.

 

During the three months ended March 31, 2025, 25,000 common shares of the Company were issued upon exercise of fixed stock options (three months ended March 31, 2024: nil). Upon exercise of fixed stock options, for the three months ended March 31, 2025, EUR 87 (three months ended March 31, 2024: EUR nil) was transferred from contributed surplus to share capital in the interim unaudited condensed consolidated statements of changes in equity. Cash proceeds upon exercise of fixed stock options during the three months ended March 31, 2025, totaled EUR 37 (three months ended March 31, 2024: nil).

 

11 

 

BRAGG GAMING GROUP INC.

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2025 AND MARCH 31, 2024

PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

 

7SHARE BASED COMPENSATION (CONTINUED)

 

Deferred Share Units (“DSUs”)

 

Exercises of grants may only be settled in shares, and only when the employee or consultant has left the Company. Under the OEIP, the Company may grant options of its shares at nil cost that vest immediately.

 

During the three months ended March 31, 2025, a share-based compensation charge of EUR nil (three months ended March 31, 2024: EUR 3) has been recognized in the interim unaudited condensed consolidated statements of loss and comprehensive loss.

 

Restricted Share Units (“RSUs”)

 

During the three months ended March 31, 2025, a share-based compensation charge of EUR 270 (three months ended March 31, 2024: EUR 83) has been recognized in the interim unaudited condensed consolidated statements of loss and comprehensive loss.

 

Share Appreciation Rights (“SARs”)

 

On December 29, 2024, the Company granted a Share Appreciation Rights plan for key members of the management which provided incentive compensation, based on the appreciation in the value of Company’s shares thereby providing additional incentive for their efforts in promoting the continued growth and success of the business of the Company. The amount of the cash payment is determined based on the increase in the share price of the Company between the grant date and the time of the exercise.

 

The aggregate number of units granted in respect of SARs totalled 1,329,082 with an issue price of CAD 5.00 per unit, based on market price of the Company’s stock on the date of grant. These SAR units, which have a term of not exceeding five years, will vest as follows:

 

·1/3 on the first anniversary of the grant date

 

·1/3 on the second anniversary of the grant date

 

·1/3 on the third anniversary of the grant date

 

Details of the liabilities arising from the SARs were as follows:

 

   As at   As at 
   March 31,   December 31, 
   2025   2024 
Total carrying amount of liabilities for SARs      471         — 
Total intrinsic value of liabilities for vested benefits   —    — 

 

The fair value of the SARs has been measured using Black-Scholes formula. Service and non-market performance conditions attached to the arrangements were not taken into account in measuring fair value.

 

12 

 

BRAGG GAMING GROUP INC.

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2025 AND MARCH 31, 2024

PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

 

7SHARE BASED COMPENSATION (CONTINUED)

 

The inputs used in the measurement of the fair values at the measurement date of the SARs were as follows:

 

   As at 
   March 31, 
   2025 
Expected dividend yield (%)   — 
Expected share price volatility (%)   81.00 
Risk-free interest rate (%)   3.96 
Expected life of options (years)   5.0 
Share price (CAD)   6.00 
Forfeiture rate (%)   — 

 

Expected volatility has been based on an evaluation of the historical volatility of the Company’s share price, particularly over the historical period commensurate with the expected term. The expected term of the instruments has been based on historical experience and general option holder behaviour.

 

During the three months ended March 31, 2025, a share-based compensation charge of EUR 478 (three months ended March 31, 2024: EUR nil) has been recognized in the interim unaudited condensed consolidated statements of loss and comprehensive loss.

 

8   GOODWILL

 

The following is a continuity of the Company’s goodwill:

 

As at January 1, 2024   31,921 
Effect of Movement in exchange rates   801 
As at December 31, 2024   32,722 
      
Effect of movements in exchange rates   (540)
As at March 31, 2025   32,182 

 

The carrying amount of goodwill is attributed to the acquisitions of Oryx, Wild Streak and Spin. The Company completed its annual impairment tests for goodwill as at December 31, 2024 and concluded that there was no impairment.

 

13 

 

BRAGG GAMING GROUP INC.

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2025 AND MARCH 31, 2024

PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

 

9   DEFERRED CONSIDERATION

 

The following is a continuity of the Company’s deferred consideration:

 

Balance as at January 1, 2024   2,939 
Accretion expense   428 
Gain on remeasurement of deferred consideration   (132)
Shares issued as deferred consideration   (2,139)
Effect of movement in exchange rates   148 
Balance as at December 31, 2024   1,244 
      
Accretion expense   73 
Loss on remeasurement of deferred consideration   157 
Effect of movement in exchange rates   (7)
Balance as at March 31, 2025   1,467 

 

On June 1, 2022, the Company acquired Spin Games LLC. The Company agreed deferred consideration payments in common shares of the Company over three years from the effective date recorded with a present value of EUR 4,003. The discount for lack of marketability (DLOM) on June 1, 2022, was determined by applying Finnerty’s average-strike put option model (2012) with a volatility of between 71.4% and 80.9%, an annual dividend rate of 0% and time to maturity of 1-3 years.

 

In the three months ended March 31, 2025, an accretion expense of EUR 73 (three months ended March 31, 2024: EUR 135) was recorded in the interim unaudited condensed consolidated statements of loss and comprehensive loss.

 

In the three months ended March 31, 2025, a loss on remeasurement of deferred consideration of EUR 157 (three months ended March 31, 2024: loss of EUR 645) was recorded in the interim unaudited condensed consolidated statements of loss and comprehensive loss.

 

As at March 31, 2025, the Company measured the present value of deferred consideration to be paid in common shares of EUR 1,467 recorded in current liabilities (December 31, 2024: EUR 1,244 in current liabilities).

 

The fair value of deferred consideration as at March 31, 2025 is measured by determining the period-end share price and the discount for lack of marketability (“DLOM”) applying Finnerty’s average-strike put option model (2012) applying a annual dividend rate of 0.0% and volatility of 69.2% resulting in a DLOM of 6.50% for the third anniversary settlement of consideration.

 

The fair value of deferred consideration as at December 31, 2024 is measured by determining the period-end share price and the discount for lack of marketability (DLOM) applying Finnerty’s average-strike put option model (2012). The assumptions include applying an annual dividend rate of 0.0% and volatility of 63.7% resulting in a DLOM of 9.3% for the third anniversary settlement of consideration

 

14 

 

BRAGG GAMING GROUP INC.

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2025 AND MARCH 31, 2024

PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

 

10   RIGHT OF USE ASSETS

 

   Right of use 
   Properties 
Cost     
Balance as at December 31, 2023   4,434 
Additions   161 
Modifications   836 
Disposal   (633)
Effect of movement in exchange rates   79 
Balance as at December 31, 2024   4,877 
Modification   (20)
Disposal   (24)
Effect of movement in exchange rates   (52)
Balance as at March 31, 2025   4,781 
      
Accumulated Depreciation     
Balance as at December 31, 2023   1,201 
Depreciation   806 
Disposal   (633)
Effect of movement in exchange rates   (7)
Balance as at December 31, 2024   1,367 
Depreciation   214 
Disposal   (24)
Effect of movement in exchange rates   (23)
Balance as at March 31, 2025   1,534 
      
Carrying Amount     
Balance as at December 31, 2024   3,510 
Balance as at March 31, 2025   3,247 

 

In the period ended March 31, 2025, depreciation expense of EUR 214 was recognized within selling, general and administrative expenses (period ended March 31, 2024: EUR 226).

 

15 

 

 

BRAGG GAMING GROUP INC.

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2025 AND MARCH 31, 2024

PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

 

11   INTANGIBLE ASSETS

 

       Deferred                 
   Intellectual   Development   Customer             
   Property   Costs   Relationships   Brands   Other   Total 
Cost                              
Balance as at December 31, 2023   18,096    21,595    24,758    2,148    299    66,896 
Additions   648    11,461    —    —    —    12,109 
Effect of movement in exchange rates   531    151    1,325    53    (1)   2,059 
Balance as at December 31, 2024   19,275    33,207    26,083    2,201    298    81,064 
Additions   156    2,718    —    —    —    2,874 
Effect of movement in exchange rates   (359)   (177)   (894)   (35)   9    (1,456)
Balance as at March 31, 2025   19,072    35,748    25,189    2,166    307    82,482 
                               
Accumulated Amortization                              
Balance as at December 31, 2023   8,445    11,270    7,452    1,430    166    28,763 
Amortization   2,755    8,962    3,246    663    88    15,714 
Effect of movement in exchange rates   186    42    451    42    7    728 
Balance as at December 31, 2024   11,386    20,274    11,149    2,135    261    45,205 
Amortization   625    2,875    829    39    21    4,389 
Effect of movement in exchange rates   (45)   (147)   (364)   (34)   (29)   (619)
Balance as at March 31, 2025   11,966    23,002    11,614    2,140    253    48,975 
                               
Carrying Amount                              
Balance as at December 31, 2024   7,889    12,933    14,934    66    37    35,859 
Balance as at March 31, 2025   7,106    12,746    13,575    26    54    33,507 

 

In the period ended March 31, 2025, amortization expense of EUR 4,389 was recognized within selling, general and administrative expenses (period ended March 31, 2024: EUR 3,568).

 

16 

 

BRAGG GAMING GROUP INC.

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2025 AND MARCH 31, 2024

PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

 

12TRADE AND OTHER RECEIVABLES

 

Trade and other receivables comprises:

 

   As at   As at 
   March 31,   December 31, 
   2025   2024 
Trade receivables   20,942    19,558 
Sales tax   575    514 
Trade and other receivables   21,517    20,072 

 

The following is an aging of the Company’s trade receivables:

 

   As at   As at 
   March 31,   December 31, 
   2025   2024 
Less than one month   19,035    18,984 
Between two and three months   1,364    660 
Greater than three months   3,171    2,411 
    23,570    22,055 
Provision for expected credit losses   (2,628)   (2,497)
Trade receivables   20,942    19,558 

 

The following is a continuity of the Company’s provision for expected credit losses related to trade receivables:

 

Balance as at December 31, 2023   2,059 
Net increase in provision for doubtful debts   438 
Balance as at December 31, 2024   2,497 
Net increase in provision for doubtful debts   131 
Balance as at March 31, 2025   2,628 

 

13   TRADE PAYABLES AND OTHER LIABILITIES

 

Trade payables and other liabilities comprises:

 

   As at   As at 
   March 31,   December 31, 
   2025   2024 
Trade payables   3,020    3,236 
Accrued liabilities   19,073    16,666 
Other payables   25    44 
Trade payables and other liabilities   22,118    19,946 

 

17 

 

BRAGG GAMING GROUP INC.

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2025 AND MARCH 31, 2024

PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

 

14LEASE LIABILITIES

 

The Company leases various properties mainly for office buildings. Rental contracts are made for various periods ranging up to six (6) years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants, but leased assets may not be used as security for borrowing purposes.

 

In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option. Extension options are only included in the lease term if the lease is reasonably certain to be extended (or not terminated). The assessment is reviewed if a significant event or a significant change in circumstances occurs which affects this assessment and that is within the control of the Company as a lessee.

 

Set out below are the carrying amounts of the lease liabilities and the movements for the period:

 

   March 31,   December 31, 
   2025   2024 
Balance as at beginning of the period   3,697    3,277 
Additions   —    161 
Modification   (20)   836 
Accretion of interests   27    123 
Payments   (344)   (790)
Effect of movement in exchange rates   (32)   90 
Balance as at end of period   3,328    3,697 

 

The maturity analysis of lease liabilities are disclosed below:

 

   March 31, 2025 
   Present value   Total 
   of the minimum   minimum 
    lease payments    lease payments 
Within 1 year   855    891 
After 1 year but within 2 years   846    909 
After 2 years but within 5 years   1,583    1,697 
After 5 years   44    45 
    3,328    3,542 
Less: Total future interest expenses        (214)
         3,328 

 

18 

 

BRAGG GAMING GROUP INC.

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2025 AND MARCH 31, 2024

PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

 

14 LEASE LIABILITIES (CONTINUED)

 

The following are the amounts recognized in the interim unaudited condensed consolidated statement of loss and comprehensive loss:

 

   Three Months Ended March 31, 
   2025   2024 
Amortization expense on right of use assets   214    226 
Gain on lease modification   101    — 
Interest expense on lease liabilities   27    34 
Total amount recognized in the income statement   342    260 

 

15 LOANS PAYABLE

 

On April 24, 2024, the Company obtained a secured promissory note in the principal amount of USD 7.0m from a member of management. The secured promissory note matures on April 24, 2025 and bears interest at an annual rate of 14%, payable quarterly.

 

   March 31,   December 31, 
   2025   2024 
Balance as at beginning of the period   6,579    — 
Promissory note issued   —    6,532 
Interest on promissory note   224    617 
Repayment of interest of promissory note   (227)   (454)
Effect of foreign currency exchange rate   (254)   (116)
Balance as at end of period   6,322    6,579 

 

In the three months ended March 31, 2025, interest expense of EUR 224 was recognized within net interest expense and other financing charges (three months ended March 31, 2024: nil).

 

Subsequent to March 31, 2025, the Company paid USD 5.0m of the principal amount while an extension of maturity date to June 6, 2025 has been agreed with respect to the remaining principal balance of USD 2.0m (see Note 22).

 

19 

 

BRAGG GAMING GROUP INC.

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2025 AND MARCH 31, 2024

PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

 

16    RELATED PARTY TRANSACTIONS

 

The Company’s policy is to conduct all transactions and settle all balances with related parties on market terms and conditions for those in the normal course of business. Transactions between the Company and its consolidated entities have been eliminated on consolidation and are not disclosed in this note.

 

Key Management Personnel

 

The Company’s key management personnel are comprised of members of the Board and the executive team.

 

Transactions with Shareholders, Key Management Personnel and Members of the Board

 

Transactions recorded in the interim unaudited condensed consolidated statements of loss and comprehensive loss between the Company and its shareholders, key management personnel and members of the Board are set out in aggregate as follows:

 

   Three Months Ended March 31, 
   2025   2024 
Salaries and subcontractors   (778)   (557)
Share based compensation   (624)   (136)
    (1,402)   (693)

 

Balances due to/from shareholders, key management personnel and members of the Board are set out in aggregate as follows:

 

Interim unaudited condensed consolidated statements of financial position

 

   As at   As at 
   March 31,   December 31, 
   2025   2024 
Other liabilities   (899)   (1,857)
Net related party payable   (899)   (1,857)

 

Transactions recorded in the interim unaudited condensed consolidated statements of changes in equity between the Company and its shareholders, key management personnel and members of the Board are set out in aggregate as follows:

 

Interim unaudited condensed consolidated statements of changes in equity

 

   Three Months Ended March 31, 
   2025   2024 
Exercise of DSUs, RSUs and FSO's        
Contributed surplus   (87)   — 
Share capital   124    — 
Net movement in equity   37    — 

 

20 

 

BRAGG GAMING GROUP INC.

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2025 AND MARCH 31, 2024

PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

 

16    RELATED PARTY TRANSACTIONS (CONTINUED)

 

Transactions recorded in the interim unaudited condensed consolidated statements of cash flows between the Company and its shareholders, key management personnel and members of the Board are set out in aggregate as follows:

 

Interim unaudited condensed consolidated statements of changes in cash flow

 

   Three Months Ended March 31, 
   2025   2024 
Proceeds from exercise of options   37    — 
    37    — 

 

17   FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT

 

The financial instruments measured at amortized cost are summarized below:

 

Financial Assets

 

   Financial assets as subsequently 
   measured at amortized cost 
   March 31,   December 31, 
   2025   2024 
Trade receivables   20,942    19,558 

 

Financial Liabilities

 

   Financial liabilities as subsequently 
   measured at amortized cost 
   March 31,   December 31, 
   2025   2024 
Trade payables   3,020    3,236 
Accrued liabilities   19,073    16,666 
Other liabilities   25    44 
Loans payable   6,322    6,579 
    28,440    26,525 

 

The carrying values of the financial instruments approximate their fair values.

 

21 

 

BRAGG GAMING GROUP INC.

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2025 AND MARCH 31, 2024

PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

 

17   FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (CONTINUED)

 

Fair Value Hierarchy

 

The following table presents the fair values and fair value hierarchy of the Company’s financial instruments.

 

   March 31, 2025   December 31, 2024 
   Level 1   Level 2   Level 3   Total   Level 1   Level 2   Level 3   Total 
Financial assets                                        
Fair value through profit and loss:                                        
Cash and cash equivalents   10,815    —    —    10,815    10,467    —    —    10,467 
                                         
Financial liabilities                                        
Fair value through profit and loss:                                        
Deferred consideration   —    1,467    —    1,467    —    1,244    —    1,244 
Share appreciation rights liability   —    471    —    471    —    —    —    — 

 

There were no transfers between the levels of the fair value hierarchy during the periods.

 

During the three month ended March 31, 2025, a loss of EUR 157 (three month ended March 31, 2024: loss of EUR 645), was recognized in the interim unaudited condensed consolidated statements of loss and comprehensive loss on remeasurement of deferred consideration (Note 9) for financial instruments designated as FVTPL.

 

During the three months ended March 31, 2025, a share-based compensation charge of EUR 478 (three months ended March 31, 2024: EUR nil) relating to share appreciation rights liability has been recognized in the interim unaudited condensed consolidated statements of loss and comprehensive loss

 

As a result of holding and issuing financial instruments, the Company is exposed to certain risks. The following is a description of those risks and how the exposures are managed.

 

Liquidity risk

 

Liquidity risk is the risk that the Company is unable to generate or obtain sufficient cash and cash equivalents in a cost-effective manner to fund its obligations as they come due. The Company will experience liquidity risks if it fails to maintain appropriate levels of cash and cash equivalents, is unable to access sources of funding or fails to appropriately diversify sources of funding. If any of these events were to occur, they could adversely affect the financial performance of the Company.

 

The Company has a planning and budgeting process in place by which it anticipates and determines the funds required to support its normal operating requirements. The Company coordinates this planning and budgeting process with its financing activities through its capital management process. The Company holds sufficient cash and cash equivalents and working capital, maintained through stringent cash flow management, to ensure sufficient liquidity is maintained. The Company is not subject to any externally imposed capital requirements.

 

22 

 

BRAGG GAMING GROUP INC.

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2025 AND MARCH 31, 2024

PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

 

17   FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (CONTINUED)

 

The following are the undiscounted contractual maturities of significant financial liabilities and the total contractual obligations of the Company as at March 31, 2025:

 

   2025   2026   2027   2028   Thereafter   Total 
Trade payables and other liabilities   22,118    —    —    —    —    22,118 
Lease obligations on right of use assets   891    909    898    537    307    3,542 
Loans payable   6,700    —    —    —    —    6,700 
Share appreciation rights liability   1,426    1,426    1,426    —    —    4,278 
Other non-current liabilities   4    3    19    23    438    487 
    31,139    2,338    2,343    560    745    37,125 

 

Subsequent to March 31, 2025, the Company paid USD 5.0m of the principal amount while an extension of maturity date to June 6, 2025 has been agreed with respect to the remaining principal balance of USD 2.0m (see Note 22).

 

FOREIGN CURRENCY EXCHANGE RISK

 

The Company is exposed to foreign currency risk, which includes risks related to its revenue and operating expenses denominated in currencies other than EUR, which is both the reporting currency and primary contracting currency of the Company’s customers. Accordingly, changes in exchange rates may in the future reduce the purchasing power of the Company’s customers thereby potentially negatively affecting the Company’s revenue and other operating results.

 

The Company has experienced and will continue to experience fluctuations in its net loss as a result of translation gains or losses related to revaluing certain current asset and current liability balances that are denominated in currencies other than the functional currency of the entities in which they are recorded.

 

Credit risk

 

The Company is exposed to credit risk resulting from the possibility that counterparties could default on their financial obligations to the Company including cash and cash equivalents, other assets and accounts receivable. Failure to manage credit risk could adversely affect the financial performance of the Company.

 

The Company mitigates the risk of credit loss relating to accounts receivable by evaluating the creditworthiness of new customers and establishes a provision for expected credit losses. The Company applies the simplified approach to provide for expected credit losses as prescribed by IFRS 9, Financial Instruments, which permits the use of the lifetime expected loss provision for all accounts receivable. The expected credit loss provision is based on the Company’s historical collections and loss experience and incorporates forward-looking factors, where appropriate.

 

23 

 

BRAGG GAMING GROUP INC.

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2025 AND MARCH 31, 2024

PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

 

17   FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (CONTINUED)

 

The provision matrix below shows the expected credit loss rate for each aging category of accounts receivable as at March 31, 2025:

 

       Aging (months)     
   Note   <1   1 - 3   >3   Total 
Gross trade receivable   12    19,035    1,364    3,171    23,570 
Expected credit loss rate        3.57%   5.95%   58.87%   11.15%
Expected credit loss provision   12    680    81    1,867    2,628 

 

The provision matrix below shows the expected credit loss rate for each aging category of accounts receivable as at December 31, 2024:

 

       Aging (months)     
   Note   <1   1 - 3   >3   Total 
Gross trade receivable   12    18,984    660    2,411    22,055 
Expected credit loss rate        2.88%   5.75%   79.32%   11.32%
Expected credit loss provision   12    547    38    1,913    2,497 

 

Gross accounts receivable includes the balance of accrued income within the aging category of less than one month.

 

Concentration risk

 

For the three months ended March 31, 2025, one customer (three months ended March 31, 2024: one customer) contributed more than 10% each to the Company’s revenues. Aggregate revenues from this customer totaled EUR 4,239 for the three months period ended March 31, 2025 (three months ended March 31, 2024: EUR 6,409).

 

As at March 31, 2025, one customer (December 31, 2024: one customer) constituted more than 10% to the Company’s accounts receivable. The balance owed by this customer totaled EUR 2,707 (December 31, 2024: EUR 4,247).

 

24 

 

BRAGG GAMING GROUP INC.

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2025 AND MARCH 31, 2024

PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

 

18SUPPLEMENTARY CASHFLOW INFORMATION

 

Cash flows arising from changes in non-cash working capital are summarized below:

 

   Three Months Ended March 31, 
Cash flows arising from movement in:  2025   2024 
Trade and other receivables   (1,445)   222 
Prepaid expenses and other assets   (84)   25 
Trade payables and other liabilities   2,172    (906)
Changes in working capital   643    (659)

 

Significant non-cash transactions from financing activities are as follows:

 

   Three Months Ended March 31, 
   2025   2024 
Financing Activity          
Settlement of convertible debt through share issuance   —    (1,068)

 

During the three months ended March 31, 2025 and 2024, the Company incurred both cash and non-cash interest expense and other financing charges. The following table shows the split as included in the interim unaudited condensed consolidated statement of loss and comprehensive loss:

 

   Three Months Ended March 31, 2025   Three Months Ended March 31, 2024 
   Cash   Non-cash   Total   Cash   Non-cash   Total 
Interest and financing fees   (249)   (32)   (281)   (71)   —    (71)
Foreign exchange gain (loss)   —    35    35    44    —    44 
Lease interest expense   —    (27)   (27)   (34)   —    (34)
Accretion expense on deferred consideration   —    (73)   (73)   —    (135)   (135)
Accretion expense on convertible debt   —    —    —    —    (396)   (396)
    (249)   (97)   (346)   (61)   (531)   (592)

 

25 

 

BRAGG GAMING GROUP INC.

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2025 AND MARCH 31, 2024

PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

 

19   SEGMENT INFORMATION

 

Operating

 

The Company has one reportable operating segment, B2B online gaming.

 

Geography – Revenue

 

Revenue from continuing operations was generated from contracted customers in the following jurisdictions:

 

   Three Months Ended March 31, 
   2025   2024 
Netherlands   6,350    7,796 
Malta   4,551    4,593 
United States   3,044    1,185 
Curaçao   2,587    5,243 
Brazil   2,102    — 
Marshall Islands   1,550    — 
Belgium   1,233    1,150 
Croatia   1,093    1,104 
Czech Republic   875    376 
Other   2,120    2,364 
Revenue   25,505    23,811 

 

This segmentation is not correlated to the geographical location of the Company’s worldwide end-user base.

 

Geography – Non-Current Assets

 

Non-current assets are held in the following jurisdictions:

 

   As at   As at 
   March 31,   December 31, 
   2025   2024 
United States   66,205    69,201 
Other   4,377    4,231 
Non-current assets   70,582    73,432 

 

26 

 

BRAGG GAMING GROUP INC.

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2025 AND MARCH 31, 2024

PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

 

20   INCOME TAXES

 

The components of income taxes recognized in the interim unaudited condensed consolidated statements of financial position are as follows:

 

   As at   As at 
   March 31,   December 31, 
   2025   2024 
Income taxes payable   (951)   (463)
Deferred income tax liabilities   (637)   (680)

 

The components of income taxes recognized in the interim unaudited condensed consolidated statements of loss and comprehensive loss are as follows:

 

   Three Months Ended March 31, 
   2025   2024 
Current income taxes expense   657    333 
Deferred income tax recovery   (43)   (289)
Total income tax expense   614    44 

 

There is no income tax expense recognized in other comprehensive loss.

 

   As at   As at 
   March 31,   December 31, 
   2025   2024 
Deferred tax assets          
Lease obligations on right of use assets   736    777 
Non-capital losses carried forward   20    39 
           
Deferred tax liabilities          
Goodwill and intangible assets   (639)   (681)
Right-of-use assets   (718)   (776)
Property and equipment   (36)   (39)
Deferred income tax liabilities   (637)   (680)

 

27 

 

BRAGG GAMING GROUP INC.

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2025 AND MARCH 31, 2024

PRESENTED IN EUROS (THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

 

20   INCOME TAXES (CONTINUED)

 

The effective income tax rates in the interim unaudited condensed consolidated statements of loss and comprehensive loss were reported at rates different than the combined Canadian federal and provincial statutory income tax rates for the following reasons:

 

   Three Months Ended March 31, 
   2025   2024 
Consolidated loss before taxes   (2,026)   (1,774)
Effective tax rate   26.5%   26.5%
Effective income tax expense (recovery)   (537)   (470)
Effect of tax rate in foreign jurisdictions   296    13 
Non-deductible and non-taxable items   246    179 
Change in tax benefits not recognized   609    331 
Adjustment of prior year tax payable   —    (9)
Total income tax expense (recovery)   614    44 

 

21CONTINGENT LIABILITIES

 

In the ordinary course of business, the Company is involved in and potentially subject to, legal actions and proceedings. In addition, the Company is subject to tax audits from various tax authorities on an ongoing basis. As a result, from time to time, tax authorities may disagree with the positions and conclusions taken by the Company in its tax filings or legislation could be amended or interpretations of current legislation could change, any of which events could lead to reassessments.

 

22SUBSEQUENT EVENTS

 

Subsequent to March 31, 2025, the Company paid USD 5.0m of the principal amount while an extension of maturity date to June 6, 2025 has been agreed with respect to the remaining principal balance of USD 2.0m.

 

On April 10, 2025, the Company acquired a 20% strategic equity stake for a consideration of EUR 500 in Brazilian game developer RapidPlay Ltd and signed an exclusive content distribution partnership, which enables Bragg to offer RapidPlay's localized online casino games to Brazilian and Latin American operators through its platform.