EX-99.1 2 tm2523322d1_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

 

 

BRAGG GAMING GROUP INC.

 

INTERIM UNAUDITED CONDENSED 

CONSOLIDATED FINANCIAL STATEMENTS

 

Three and six-month periods ended June 30, 2025 and June 30, 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 June 30,   Six Months Ended June 30, 
   Note   2025   2024   2025   2024 
Revenue   3, 19    26,079    24,861    51,584    48,672 
Cost of revenue   3    (12,336)   (12,457)   (23,557)   (24,391)
Gross Profit        13,743    12,404    28,027    24,281 
                          
Selling, general and administrative expenses   3    (16,091)   (13,702)   (31,898)   (26,089)
Loss on remeasurement of derivative liability   4    —    38    —    (140)
Gain on settlement of convertible debt   4    —    —    —    65 
Gain (Loss) on remeasurement of deferred consideration   3, 9, 17    —    45    (157)   (600)
Operating Loss        (2,348)   (1,215)   (4,028)   (2,483)
                          
Net interest expense and other financing charges   3, 18    (14)   (930)   (360)   (1,522)
Loss Before Income Taxes        (2,362)   (2,145)   (4,388)   (4,005)
                          
Income taxes (expense) recovery   20    533    (255)   (81)   (299)
Net Loss        (1,829)   (2,400)   (4,469)   (4,304)
                          
Items to be reclassified to net loss:                         
Cumulative translation adjustment        (2,680)   387    (4,103)   4 
                          
Net Comprehensive Loss        (4,509)   (2,013)   (8,572)   (4,300)
                          
Basic Loss Per Share        (0.07)   (0.10)   (0.18)   (0.18)
Diluted Loss Per Share        (0.07)   (0.10)   (0.18)   (0.18)
                          
         Millions     Millions     Millions     Millions  
Weighted average number of shares - basic        25.2    24.0    25.1    23.6 
Weighted average number of shares - diluted        25.2    24.0    25.1    23.6 

 

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 
       June 30,   December 31, 
    Note    2025    2024 
Cash and cash equivalents        4,242    10,467 
Trade and other receivables   12, 17    24,983    20,072 
Prepaid expenses and other assets        4,141    2,624 
Total Current Assets        33,366    33,163 
Property and equipment        1,299    1,341 
Right-of-use assets   10    3,152    3,510 
Intangible assets   11    31,011    35,859 
Goodwill   8    31,235    32,722 
Investments in associates        500    — 
Other assets        378    — 
Total Assets        100,941    106,595 
                
Trade payables and other liabilities   13, 17    26,639    19,946 
Income taxes payable   20    445    463 
Lease obligations on right of use assets   14    867    882 
Deferred consideration   9    —    1,244 
Share appreciation rights liability   7    525    — 
Loans payable   15    1,696    6,579 
Total Current Liabilities        30,172    29,114 
Deferred income tax liabilities   20    594    680 
Lease obligations on right of use assets   14    2,376    2,815 
Share appreciation rights liability   7    437    — 
Other non-current liabilities        487    487 
Total Liabilities        34,066    33,096 
                
Share capital   5    133,253    131,729 
Contributed surplus        18,104    17,680 
Accumulated deficit        (85,679)   (81,210)
Accumulated other comprehensive income        1,197    5,300 
Total Equity        66,875    73,499 
Total Liabilities and Equity        100,941    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  4  2,704  —  —  —  —  2,704 
Shares issued as deferred consideration  9  5,630  (3,491) —  —  —  2,139 
Exercise of restricted share units  7  1,799  —  (1,799) —  —  — 
Exercise of deferred share units  7  764  —  (764) —  —  — 
Exercise of stock options  7  493  —  (199) —  —  294 
Share-based compensation  7  —  —  604  —  —  604 
Net loss for the period     —  —  —  (4,304) —  (4,304)
Other comprehensive income     —  —  —  —  4  4 
Balance as at June 30, 2024     131,405  —  17,729  (80,367) 2,921  71,688 
                       
Balance as at January 1, 2025     131,729  —  17,680  (81,210) 5,300  73,499 
Shares issued as deferred consideration  9  1,380  —  —  —  —  1,380 
Exercise of stock options  7  144  —  (94) —  —  50 
Share-based compensation  7  —  —  518  —  —  518 
Net loss for the period     —  —  —  (4,469) —  (4,469)
Other comprehensive loss     —  —  —  —  (4,103) (4,103)
Balance as at June 30, 2025     133,253  —  18,104  (85,679) 1,197  66,875 

 

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)

 

       Six Months Ended June 30, 
   Note   2025   2024 
Operating Activities               
Net loss        (4,469)   (4,304)
Add:               
Net interest expense and other financing charges   3, 18    360    1,522 
Depreciation and amortization   3    9,689    7,871 
Share based compensation   7    1,585    604 
Loss on remeasurement of derivative liability   4    —    140 
Gain on settlement of convertible debt   4    —    (65)
Loss on remeasurement of deferred consideration   3, 9, 17    157    600 
Unrealized foreign exchange (gain) loss        (152)   8 
Income taxes expense   20    81    299 
         7,251    6,675 
Change in working capital   18    (35)   (3,925)
Income taxes paid   20    (142)   (653)
Cash Flows From Operating Activities        7,074    2,097 
                
Investing Activities               
Purchases of property and equipment        (219)   (521)
Additions of intangible assets   11    (6,407)   (5,349)
Loan receivables        (375)   — 
Investment in associates        (200)   — 
Cash Flows Used In Investing Activities        (7,201)   (5,870)
                
Financing Activities               
Proceeds from exercise of stock options   7    50    294 
Repayment of convertible debt        —    (455)
Repayment of lease liability   14    (570)   (350)
Proceeds from (repayment of) loan   15    (4,410)   6,532 
Interest and financing fees        (248)   (412)
Cash Flows (Used In) Generated From Financing Activities        (5,178)   5,609 
                
Effect of foreign currency exchange rate changes on cash and cash equivalents        (920)   218 
Change In Cash And Cash Equivalents        (6,225)   2,054 
Cash and cash equivalents at beginning of period        10,467    8,796 
Cash And Cash Equivalents At End Of Period        4,242    10,850 

 

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 AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024 

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

 

1GENERAL 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.

 

2MATERIAL 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 August 13, 2025.

 

 

6

 

BRAGG GAMING GROUP INC. 

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024 

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

 

3LOSS BEFORE INCOME TAXES CLASSIFIED BY NATURE

 

The loss before income taxes is classified as follows:

 

       Three Months Ended June 30,   Six Months Ended June 30, 
   Note   2025   2024   2025   2024 
Revenue   19    26,079    24,861    51,584    48,672 
Cost of revenue        (12,336)   (12,457)   (23,557)   (24,391)
Gross Profit        13,743    12,404    28,027    24,281 
                          
Salaries and subcontractors        (5,738)   (5,333)   (12,312)   (10,240)
Share based compensation   7    (739)   (420)   (1,585)   (604)
Total employee costs        (6,477)   (5,753)   (13,897)   (10,844)
Depreciation and amortization        (4,969)   (3,994)   (9,689)   (7,871)
IT and hosting        (1,372)   (1,192)   (2,653)   (2,260)
Professional fees        (1,189)   (1,518)   (2,275)   (2,393)
Corporate costs        (122)   (101)   (254)   (276)
Sales and marketing        (290)   (533)   (587)   (1,092)
Bad debt expense   12    (748)   (121)   (879)   (103)
Travel and entertainment        (433)   (217)   (764)   (432)
Other operational costs        (491)   (273)   (900)   (818)
Selling, General and Administrative Expenses        (16,091)   (13,702)   (31,898)   (26,089)
                          
Loss on remeasurement of derivative liability   4    —    38    —    (140)
Gain on settlement of convertible debt   4    —    —    —    65 
Gain (Loss) on remeasurement of deferred consideration   9    —    45    (157)   (600)
Operating Loss        (2,348)   (1,215)   (4,028)   (2,483)
                          
Interest income        5    —    9    — 
Accretion on liabilities   9    (95)   (579)   (168)   (1,110)
Foreign exchange gain        283    (88)   318    (44)
Interest and financing fees        (207)   (263)   (519)   (368)
Net Interest Expense and Other Financing Charges        (14)   (930)   (360)   (1,522)
Loss Before Income Taxes        (2,362)   (2,145)   (4,388)   (4,005)

 

 

7

 

BRAGG GAMING GROUP INC. 

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024 

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

 

4CONVERTIBLE 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 and six months ended June 30, 2024, an accretion expense of EUR 409 and EUR 805 was recognised in net interest expense and other financing charges in respect of the Host Debt component. For the three and six months ended June 30, 2024, a gain of EUR 38 and loss of EUR 140 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 8.750, 5-day VWAP of between CAD 6.910 and 8.827, expected life of between 0.06 to 0.56 years, annual risk-free rate of between 5.17% and 5.54%

 

During the three and six months ended June 30, 2024, 288,067 and 504,215 shares, respectively, were issued upon exercise of convertible debt representing USD 2,500 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 and six months ended June 30, 2024, EUR 1,393 and EUR 2,314 was transferred from the host debt liability and EUR 243 and EUR 390 from derivative liability, respectively, to share capital in the interim unaudited condensed consolidated statements of changes in equity for a total of EUR 1,636 and EUR 2,704, respectively.

 

 

8

 

BRAGG GAMING GROUP INC. 

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024 

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

 

5SHARE 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 June 5, 2024  Shares issued upon exercise of convertible debt  4   504,215   2,704 
June 1, 2024  Shares issued upon settlement of deferred consideration for Spin acquisition      369,516   2,139 
June 2, 2024  Shares issued upon settlement of deferred consideration for Wild Streak acquisition      393,111   3,491 
April 1, 2024 to June 27,2024  Issuance of share capital upon exercise of FSOs  7   108,682   493 
May 1, 2024 to May 29,2024  Issuance of share capital upon exercise of DSU  7   148,900   764 
May 1, 2024 to May 14,2024  Issuance of share capital upon exercise of RSU  7   418,000   1,799 
June 30, 2024  Balance      24,945,976   131,405 
                
January 1, 2025  Balance      25,042,982   131,729 
February 6, 2025  Exercise of FSO  7   25,000   124 
June 5, 2025  Shares issued upon settlement of deferred consideration for Spin acquisition      371,496   1,380 
June 30, 2025  Exercise of FSO  7   10,000   20 
June 30, 2025  Balance      25,449,478   133,253 

 

The Company’s common shares have no par value.

 

6WARRANTS

 

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 
June 30, 2024   Balance   979,048 
          
January 1, 2025   Balance   979,048 
June 30, 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 

 

 

9

 

BRAGG GAMING GROUP INC. 

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024 

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

 

6WARRANTS (CONTINUED)

 

Warrants issued upon completion of Financing Arrangement

 

On September 5, 2022, the Company issued 979,048 warrants, each exercisable at CAD 9.28 for one common share and expiring five years from issuance. The warrants include acceleration clauses based on the Company’s share price performance, which may result in partial or full expiry if not exercised within a specified period.

 

As the combined fair value of the host debt liability and derivative liability exceeded the transaction price, no value was allocated to the warrants 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 
Granted  -   -   -   165,000   6.69 
Exercised  (148,900)  (418,000)  -   (108,682)  3.97 
Expired  —   —   —   (50,000)  5.00 
Forfeited / Cancelled  (49,588)  —   —   (114,209)  9.67 
Balance as at June 30, 2024  26,666   80,000   —   1,669,547   8.56 
                     
Balance as at January 1, 2025  26,666   280,000   1,329,082   1,602,346   8.81 
Granted  —   —   144,529   15,000   2.30 
Exercised  —   —   —   (35,000)  2.30 
Forfeited / Cancelled  —   —   —   (5,029)  8.30 
Balance as at June 30, 2025  26,666   280,000   1,473,611   1,577,317   8.90 

 

 

10

 

BRAGG GAMING GROUP INC. 

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 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 June 30, 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   10,000   4.68 
5.01 - 8.62  1,128,582   2   7.72   1,026,928   7.75 
8.63 - 15.00  427,183   5   12.11   427,173   12.11 
15.01 - 33.30  1,552   1   33.30   1,552   33.30 
   1,577,317   3   8.90   1,465,653   9.02 

 

The following table summarizes information about the outstanding share options as at June 30, 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  95,825   1   2.30   95,825   2.30 
5.01 - 8.62  1,139,558   4   7.72   892,277   7.82 
8.63 - 15.00  432,612   6   12.09   418,321   12.21 
15.01 - 33.30  1,552   2   33.30   1,552   33.30 
   1,669,547   4   8.56   1,407,975   8.75 

 

Fixed Stock Options (“FSOs”)

 

During the three and six months ended June 30, 2025, a share-based compensation charge of EUR 86 and EUR 184 (three and six months ended June 30, 2024: EUR 51 and EUR 149) has been recognized in the interim unaudited condensed consolidated statements of loss and comprehensive loss.

 

During the three and six months ended June 30, 2025, 25,000 and 35,000 common shares of the Company were issued upon exercise of FSOs (three and six months ended June 30, 2024: 108,682). Upon exercise of FSOs, for the three and six months ended June 30, 2025, EUR 7 and EUR 94 (three and six months ended June 30, 2024: EUR 199) was transferred from contributed surplus to share capital in the interim unaudited condensed consolidated statements of changes in equity. Cash proceeds upon exercise of FSOs during the three and six months ended June 30, 2025, totaled EUR 13 and EUR 50 (three and six months ended June 30, 2024: EUR 294).

 

 

11

 

BRAGG GAMING GROUP INC. 

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 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 and six months ended June 30, 2025, a share-based compensation charge of EUR nil (three and six months ended June 30, 2024: EUR 2 and EUR 5) has been recognized in the interim unaudited condensed consolidated statements of loss and comprehensive loss.

 

During the three and six months ended June 30, 2025, no common shares were issued upon exercise of DSUs (three and six months ended June 30, 2024: 148,900). For the three and six months ended June 30, 2025, upon exercise of DSUs, EUR nil (three and six months ended June 30, 2024: EUR 764) was transferred from contributed surplus to share capital in the interim unaudited condensed consolidated statements of changes in equity.

 

Restricted Share Units (“RSUs”)

 

During the three and six months ended June 30, 2025, a share-based compensation charge of EUR 64 and EUR 334 (three and six months ended June 30, 2024: EUR 367 and EUR 450) 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 management, which provided incentive compensation based on the appreciation in the value of the Company’s shares, thereby providing additional incentive for their efforts in promoting the continued growth and success of the business. 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 SAR units granted on December 29, 2024 totaled 1,329,082, with an issue price of CAD 5.00 per unit, based on the market price of the Company’s stock on the date of grant. An additional 144,529 units were granted on June 26, 2025, at an issue price of CAD 6.06 per unit, also based on the market price 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

 

 

12

 

BRAGG GAMING GROUP INC. 

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024 

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

 

7SHARE BASED COMPENSATION (CONTINUED)

 

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

 

   As at   As at 
   June 30,   December 31, 
   2025   2024 
Total carrying amount of liabilities for SARs   962    — 

 

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.

 

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

 

   As at 
   June 30, 
   2025 
Expected dividend yield (%)   — 
Expected share price volatility (%)   70.80 
Risk-free interest rate (%)   3.79 
Expected life of options (years)   5.0 
Share price (CAD)   5.88 
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 and six months ended June 30, 2025, a share-based compensation charge of EUR 589 and EUR 1,067 (three and six months ended June 30, 2024: EUR nil) has been recognized in the interim unaudited condensed consolidated statements of loss and comprehensive loss.

 

8GOODWILL

 

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   (1,487)
As at June 30, 2025   31,235 

 

 

13

 

BRAGG GAMING GROUP INC. 

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024 

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

 

8GOODWILL (CONTINUED)

 

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.

 

9DEFERRED 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   168 
Loss on remeasurement of deferred consideration   157 
Shares issued as deferred consideration   (1,380)
Effect of movement in exchange rates   (189)
Balance as at June 30, 2025   — 

 

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 and six months ended June 30, 2025, an accretion expense of EUR 95 and EUR 168 (three and six months ended June 30, 2024: EUR 170 and EUR 305) was recorded in the interim unaudited condensed consolidated statements of loss and comprehensive loss.

 

In the three and six months ended June 30, 2025, a loss on remeasurement of deferred consideration of EUR 157 (three months ended June 30, 2024: gain of EUR 45 and loss of EUR 600) was recorded in the interim unaudited condensed consolidated statements of loss and comprehensive loss.

 

As at June 30, 2025, the Company has EUR nil deferred consideration payable (December 31, 2024: EUR 1,244 in current liabilities), being fully settled on June 5, 2025, with the issuance of 371,496 shares.

 

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 AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024 

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

 

10RIGHT 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   78 
Balance as at December 31, 2024   4,877 
Additions   130 
Modification   4 
Disposal   (24)
Effect of movement in exchange rates   (145)
Balance as at June 30, 2025   4,842 
      
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   429 
Disposal   (24)
Effect of movement in exchange rates   (82)
Balance as at June 30, 2025   (1,690)
      
Carrying Amount     
Balance as at December 31, 2024   3,510 
Balance as at June 30, 2025   3,152 

 

In the three and six months ended June 30, 2025, depreciation expense of EUR 215 and EUR 429 was recognized within selling, general and administrative expenses (three and six months ended June 30, 2024: EUR 147 and EUR 373).

 

 

15

 

BRAGG GAMING GROUP INC. 

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024 

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

 

11INTANGIBLE 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  410   5,976   —   —   21   6,407 
Effect of movement in exchange rates  (980)  (487)  (2,460)  (98)  (32)  (4,057)
Balance as at June 30, 2025  18,705   38,696   23,623   2,103   287   83,414 
                         
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  1,316   5,978   1,614   76   40   9,024 
Effect of movement in exchange rates  (268)  (372)  (1,050)  (108)  (28)  (1,826)
Balance as at June 30, 2025  12,434   25,880   11,713   2,103   273   52,403 
                         
Carrying Amount                        
Balance as at December 31, 2024  7,889   12,933   14,934   66   37   35,859 
Balance as at June 30, 2025  6,271   12,816   11,910   —   14   31,011 

 

In the three and six months ended June 30, 2025, amortization expense of EUR 4,635 and EUR 9,024 was recognized within selling, general and administrative expenses (three and six months ended June 30, 2024: EUR 3,787 and EUR 7,355).

 

 

16

 

BRAGG GAMING GROUP INC. 

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024 

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

 

12TRADE AND OTHER RECEIVABLES

 

Trade and other receivables comprises:

 

   As at   As at 
   June 30,   December 31, 
   2025   2024 
Trade receivables   23,929    19,558 
Sales tax   1,054    514 
Trade and other receivables   24,983    20,072 

 

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

 

   As at   As at 
   June 30,   December 31, 
   2025   2024 
Less than one month   23,090    18,984 
Between two and three months   1,085    660 
Greater than three months   3,130    2,411 
    27,305    22,055 
Provision for expected credit losses   (3,376)   (2,497)
Trade receivables   23,929    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   879 
Balance as at June 30, 2025   3,376 

 

13TRADE PAYABLES AND OTHER LIABILITIES

 

Trade payables and other liabilities comprises:

 

   As at   As at 
   June 30,   December 31, 
   2025   2024 
Trade payables   9,916    3,236 
Accrued liabilities   15,974    16,666 
Other payables   749    44 
Trade payables and other liabilities   26,639    19,946 

 

 

17

 

BRAGG GAMING GROUP INC. 

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 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:

 

   June 30,   December 31, 
   2025   2024 
Balance as at beginning of the period   3,697    3,277 
Additions   130    161 
Modification   4    836 
Accretion of interests   52    123 
Payments   (570)   (790)
Effect of movement in exchange rates   (70)   90 
Balance as at end of period   3,243    3,697 

 

The maturity analysis of lease liabilities are disclosed below:

 

   June 30, 2025 
   Present value   Total 
   of the minimum   minimum 
   lease payments   lease payments 
Within 1 year   867    909 
After 1 year but within 2 years   864    927 
After 2 years but within 5 years   1,512    1,603 
    3,243    3,439 
Less: Total future interest expenses        (196)
         3,243 

 

 

18

 

BRAGG GAMING GROUP INC. 

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024 

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

 

14LEASE LIABILITIES (CONTINUED)

 

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

 

   Three Months Ended June 30,   Six Months Ended June 30, 
   2025   2024   2025   2024 
Amortization expense on right of use assets   215    147    429    373 
Gain on lease modification   —    —    101    — 
Interest expense on lease liabilities   25    26    52    60 
Total amount recognized in the income statement   240    173    582    433 

 

15LOANS 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 matured on April 24, 2025, with an extension agreed to September 15, 2025. It bears an interest at an annual rate of 14%, payable quarterly.

 

   June 30,   December 31, 
   2025   2024 
Balance as at beginning of the period   6,579    — 
Promissory note issued   —    6,532 
Interest on promissory note   328    617 
Repayment of interest of promissory note   (436)   (454)
Repayment of promissory note   (4,410)   — 
Effect of foreign currency exchange rate   (365)   (116)
Balance as at end of period   1,696    6,579 

 

In the three and six months ended June 30, 2025, interest expense of EUR 104 and EUR 328 was recognized within net interest expense and other financing charges (three and six months ended June 30, 2024: 170).

 

During the three months ended June 30, 2025, the Company repaid a total of USD 5.0m of the outstanding USD 7.0m secured promissory note.

 

 

19

 

BRAGG GAMING GROUP INC. 

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024 

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

 

16RELATED 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 June 30,   Six Months Ended June 30, 
   2025   2024   2025   2024 
Salaries and subcontractors   (745)   (760)   (1,523)   (1,317)
Share based compensation   (427)   (450)   (1,051)   (586)
    (1,172)   (1,210)   (2,574)   (1,903)

 

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 
   June 30,   December 31, 
   2025   2024 
Accrued liabilities   (626)   (1,321)
Net related party payable   (626)   (1,321)

 

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  Six Months Ended June 30, 
   2025   2024 
Exercise of DSUs, RSUs and FSO's          
Contributed surplus   (87)   (195)
Share capital   124    465 
Net movement in equity   37    270 

 

 

20

 

BRAGG GAMING GROUP INC. 

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 2024 

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

 

16RELATED 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 June 30,   Six Months Ended June 30, 
   2025   2024   2025   2024 
Proceeds from exercise of options   —    270    37    270 
    —    270    37    270 

 

17FINANCIAL 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 
   June 30,   December 31, 
   2025   2024 
Trade receivables   23,929    19,558 

 

Financial Liabilities

 

   Financial liabilities as subsequently 
   measured at amortized cost 
   June 30,   December 31, 
   2025   2024 
Trade payables   9,916    3,236 
Accrued liabilities   15,974    16,666 
Other liabilities   749    44 
Loans payable   1,696    6,579 
    28,335    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 AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 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.

 

   June 30, 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   4,242    —    —    4,242    10,467    —    —    10,467 
                                         
Financial liabilities                                        
Fair value through profit and loss:                                        
Deferred consideration   —    -    —    -    —    1,244    —    1,244 
Share appreciation rights liability   —    962    —    962    —    —    —    — 

 

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

 

During the three and six months ended June 30, 2025, a loss of EUR 157 (three and six months ended June 30, 2024: gain of EUR 45 and loss of EUR 600), 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 and six months ended June 30, 2025, a share-based compensation charge of EUR 589 and EUR 1,067 (three and six months ended June 30, 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 AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 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 June 30, 2025:

 

   2025   2026   2027   2028   Thereafter   Total 
Trade payables and other liabilities   26,639    —    —    —    —    26,639 
Lease obligations on right of use assets   909    927    864    477    262    3,439 
Loans payable   1,849    —    —    —    —    1,849 
Share appreciation rights liability   1,382    1,382    1,382    —    —    4,146 
Other non-current liabilities   4    3    19    23    438    487 
    30,783    2,312    2,265    500    700    36,560 

 

During the three months ended June 30, 2025, the Company repaid a total of USD 5.0m of the outstanding USD 7.0m secured promissory note.

 

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 AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 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 June 30, 2025:

 

       Aging (months)     
   Note   <1   1 - 3   >3   Total 
Gross trade receivable   12    23,090    1,085    3,130    27,305 
Expected credit loss rate        4.08%    19.79%    70.88%    12.36% 
Expected credit loss provision   12    942    215    2,219    3,376 

 

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 and six months ended June 30, 2025, one customer (three and six months ended June 30, 2024: one customer) contributed more than 10% each to the Company’s revenues. Aggregate revenues from this customer totaled EUR 4,436 and EUR 8,675, respectively, for the three and six months ended June 30, 2025 (three and six months ended June 30, 2024: EUR 5,461 and EUR 11,870).

 

As at June 30, 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 2,823 (December 31, 2024: EUR 4,247).

 

 

24

 

BRAGG GAMING GROUP INC.

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 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:

 

   Six Months Ended June 30, 
Cash flows arising from movement in:  2025   2024 
Trade and other receivables   (4,911)   (638)
Prepaid expenses and other assets   (1,517)   (1,096)
Trade payables and other liabilities   6,393    (2,191)
Changes in working capital   (35)   (3,925)

 

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

 

   Six Months Ended June 30, 
   2025   2024 
Investing Activity          
Settlement of deferred consideration for Spin through share issuance   (1,380)   (2,139)
           
Financing Activity          
Settlement of convertible debt through share issuance   —    (2,704)

 

During the six months ended June 30, 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:

 

   Six Months Ended June 30, 2025   Six Months Ended June 30, 2024 
   Cash   Non-cash   Total   Cash   Non-cash   Total 
Interest and financing fees   (248)   (210)   (458)   (308)   —    (308)
Foreign exchange gain (loss)   —    318    318    (44)   —    (44)
Lease interest expense   —    (52)   (52)   (60)   —    (60)
Accretion expense on deferred consideration   —    (168)   (168)   —    (305)   (305)
Accretion expense on convertible debt   —    —    —    —    (805)   (805)
    (248)   (112)   (360)   (412)   (1,110)   (1,522)

 

 

25

 

BRAGG GAMING GROUP INC.

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 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 June 30,   Six Months Ended June 30, 
   2025   2024   2025   2024 
Malta   6,037    6,054    10,588    10,647 
Netherlands   3,935    6,774    10,285    14,570 
United States   1,793    1,094    4,836    2,279 
Brazil   2,612    —    4,714    — 
Curaçao   1,819    5,372    4,406    10,615 
Marshall Islands   2,200    —    3,750    — 
Belgium   1,259    1,160    2,492    2,310 
Croatia   1,053    1,026    2,146    2,130 
Czech Republic   926    303    1,801    679 
Isle of Man   1,202    492    1,373    565 
Other   3,243    2,586    5,193    4,877 
Revenue   26,079    24,861    51,584    48,672 

 

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 
   June 30,   December 31, 
   2025   2024 
United States   62,679    69,201 
Other   4,896    4,231 
Non-current assets   67,575    73,432 

 

 

26

 

BRAGG GAMING GROUP INC.

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 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 
   June 30,   December 31, 
   2025   2024 
Income taxes payable   (445)   (463)
Deferred income tax liabilities   (594)   (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 June 30,   Six Months Ended June 30, 
   2025   2024   2025   2024 
Current income taxes expense (recovery)   (490)   120    167    453 
Deferred income taxes expense (recovery)   (43)   135    (86)   (154)
Total income taxes expense (recovery)   (533)   255    81    299 

 

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

 

   As at   As at 
   June 30,   December 31, 
   2025   2024 
Deferred tax assets          
Lease obligations on right of use assets   717    777 
Non-capital losses carried forward   13    39 
           
Deferred tax liabilities          
Goodwill and intangible assets   (595)   (681)
Right-of-use assets   (697)   (776)
Property and equipment   (32)   (39)
Deferred income tax liabilities   (594)   (680)

 

 

27

 

BRAGG GAMING GROUP INC.

NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2025 AND JUNE 30, 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:

 

   Six Months Ended June 30, 
   2025   2024 
Consolidated loss before income taxes   (4,388)   (4,005)
Effective tax rate   26.5%   26.5%
Effective income taxes recovery   (1,163)   (1,061)
Effect of tax rate in foreign jurisdictions   610    8 
Non-deductible and non-taxable items   441    400 
Change in tax benefits not recognized   451    952 
Adjustment of prior year tax payable   (258)   — 
Total income taxes expense   81    299 

 

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.